“They broke the ascent by basically outlawing the buying of silver,” said Knight, who blogs at slopeofhope.com. “Only liquidation orders would be accepted. It’s almost criminal what they did.”
The silver price hit a high of $49.45 an ounce that month. By March 18, it was $16.60.
Hunt traveled to France and then Saudi Arabia with the idea of selling bonds backed by his silver hoard. Time magazine said at the time that the Hunts were trying to sell silver without selling silver.
Then came the margin call.
Traders had to cover their bets every day. If they couldn’t, they had to start selling. Those were the exchange rules.
Silver Thursday
On March 27, 1980 -- what came to be known as “silver Thursday” -- Comex asked Bache Group, the Hunts’ broker, for $134 million. The three Hunt brothers had $4.5 billion in silver holdings, $3.5 billion of it pure profit, Knight said. But they didn’t have $134 million.
“An administrative glitch” was the reason, according to Jeffrey Christian, who was a reporter at Metals Week at the time. The only person who could authorize the funds transfer to pay the margin call was Bunker Hunt, and he was overseas and unreachable, Christian said.
“Bache had no discretion to do anything but liquidate the position,” said Christian, who’s now managing partner at CPM Group LLC, a New York-based commodities research and consulting company. “All Hunt had to do was make a phone call.”
The price of silver dropped that day to $10.80 an ounce from $15.70.