Nelson Bunker Hunt

Nelson Bunker Hunt (born February 22, 1926, in El Dorado, Arkansas) is an American businessman. He is notable for having participated in cornering the world silver market during Jimmy Carter's presidency and the high inflationary period of the late 1970's and 1980. His actions caused the price first to rise almost ten-fold, and then to plummet shortly thereafter,^* which ultimately led to his bankruptcy.

Background

The son of Texas oil billionare H. L. Hunt, who was believed to be the richest man in the world at the time of his death, Nelson Bunker Hunt also entered the oil business. His explorations led to a partnership with British Petroleum and the discovery of the Sarir Field in Libya in 1961. In December 1972, the government of Muammar al-Qaddafi moved against Hunt and demanded a 50-percent participation in its operations. When Hunt refused, the property was nationalized by the government in 1973. That same year, the members of the Hunt family, possibly the richest family in America at the time, decided to buy precious metals as a hedge against inflation. The Hunts bought silver in enormous quantity.

The road to 'Silver Thursday'

Nelson Bunker and brother William Herbert Hunt, together with two wealthy Arab investors, formed a company called International Metals Investment Company Ltd. with the intent of cornering the world silver market. Through their brokers on the Commodity Exchange (COMEX), Alvin Brodsky and Mark Denberg, they quickly amassed more than 200 million ounces of silver, equivalent to half the world's deliverable supply. When the Hunt brothers began accumulating silver in 1973 the price was $1.95 per ounce. Early in 1979 the price was about $5, and in 1980 the price peaked at $49.45 per ounceHistorical silver prices.

Once the silver market was cornered, outsiders joined the chase. As things heated up, the number of contracts being traded in a month equaled the total amount of silver available for delivery in the exchange warehouses, and many traders, including the Hunt Brothers, were taking delivery on their contracts. Members of the board at COMEX, many of whom had substantial silver short positions, moved to check this cornering of the silver market by lowering the number of contracts investors could hold, and raising margin requirements. The highly leveraged Hunt Brothers were unable to meet their margin calls, and were forced to sell. A combination of changed trading rules on the New York Metals Market (COMEX) that allowed only liquidation (sell) orders, and the intervention of the Federal Reserve to bail out the brothers put an end to the silver run. The price began to slide, culminating in a 50% one-day decline, known as Silver Thursday, on March 27, 1980 as the price plummeted from $21.62 to $10.80.

The collapse of the silver market meant huge losses for speculators. The Hunt brothers declared bankruptcy. By 1987 their liabilities had grown to nearly $2.5 billion against assets of $1.5 billion. Nelson Bunker Hunt declared bankruptcy and was convicted in August 1988 of conspiring to manipulate the marketThe Hunt Brothers and the Silver Bubble.

Later history

He has donated millions to Christian groups such as Promise Keepers, Campus Crusade for Christ, Christian World Liberation Front, Moral Majority, Christian Broadcasters Network, Strategies to Eliminate Poverty (STEP). At one point, he was active in a number of organizations, including the John Birch Society and the International Association for the Advancement of Ethnology and Eugenics.

A thoroughbred horse racing enthusiast, Nelson Bunker Hunt is a three-time Eclipse Award winner as the United States' leading breeder. He owned Dahlia, ranked No. 50 all time in The Blood-Horse ranking of the top 100 U.S. thoroughbred champions of the 20th Century, as well as Exceller who is ranked No. 96.

Representations in fiction

Elements of the real-life history of the Hunts were used for the fictional Ewings of the Dallas saga on television. The two stories quickly lost any connection with each other.

Notes

References

Great Silver Bubble by Stephen Fay, 1982. (Out of print book.)

External links

Details of the man
'H.L. Hunt's Boys and the Circle K Cowboys' by Larry LaBorde
Great Silver Bubble (book for sale second-hand)
Production Capitalism vs. Financial Capitalism - a Norwegian 'workshop' from 1998 that puts the 'Silver Bubble' in context