Hunt Brothers’ Attempt to Corner Silver

In the 1970’s, the Hunt brothers tried to ‘corner’ the market in silver.  They realized that the market was extremely small and if they could start taking delivery of enough physical metal tied to futures contracts, it would cause a physical shortage and the price would shoot up.  So, with the help of financial backing from Sheik Khalid bin Mahfouz of Saudi Arabia and his discrete offshore company in Bermuda, International Metals Investment Company, they embarked on a strategy to gain control of and profit from their silver scheme.

As they continued taking delivery of their futures contracts, their silver inventory increased and silver prices began surging. The managers of the COMEX were so concerned, they enlisted the help of regulators to stop the brothers’ attempt to control the silver market. The CME and CFTC ended up changing the rules to limit the number of contracts any one individual or institution could hold, thus having the immediate result of halting silver’s price surge.  It’s interesting to note that today, regulators are not taking the same steps to halt the same kind of manipulation on the short side of the silver market.

Part 1

Part 2