Few individuals have lived lives large enough to be immediately associated with a particular commodity. Think oil and J.D. Rockefeller; steel and Andrew Carnegie; and diamonds and the Oppenheimer family. For silver, it’s the Hunt brothers of Texas and Nelson Bunker Hunt in particular, who died on Oct. 21 at age 88 in Dallas of cancer and dementia.
Bunker is said to have died in modest circumstances, but in many ways that is how he lived even in the early 1970s as one of the world’s richest men: wearing cheap suits, driving an old Cadillac and often flying economy. He was a non-smoking, teetotaller with a jovial spirit and taste for gambling, who favoured burger joints and tipped the scales at 275 pounds.
His net worth peaked at US$16 billion, having been built on his billionaire father H.L. Hunt’s vast oil and gas holdings in Texas, and Bunker’s own spectacular success in Libya’s emerging Sarir oilfields before Muammar Ghadafi’s nationalization of the Hunts’ assets in 1973. (H.L. Hunt, a bigamist with 15 children by three wives who were at first unknown to each other, was the inspiration behind the J.R. Ewing character on the TV show Dallas.) Bunker also owned 5 million acres of ranchland in Australia, 1,000 thoroughbred racehorses, cattle, office towers, mining assets, fine art and ancient coins.
But Bunker and brothers Herbert and Lamar Hunt made it into the annals of silver lore when they tried to corner the silver market starting in 1973 using margin purchases, borrowed money and the help of two Saudi princes. By 1974, they had quietly bought up rights to 55 million oz. silver.
Having been stung by the Libyan nationalization, Bunker had said he wanted to own something “you could hold.” And because U.S. citizens could not trade in gold until 1977, silver was the next best thing. With his libertarian and Baptist apocalyptic mindset, he reportedly feared the U.S. was shifting hard to the left, and economic collapse would soon follow, with silver prices benefiting from the inevitable runaway inflation.
By January 1980, as the Hunt brothers gained control over 195 million oz. silver, or up to half the world’s deliverable silver (15% of total silver worldwide, including government reserves), their silver holdings were briefly worth US$10 billion on paper when silver prices hit US$50.35 an oz., up from US$6 per oz. in 1979.
Two months later, silver prices had collapsed to US$10.80 an oz. and the brothers suddenly owed US$1.7 billion. On the infamous “Silver Thursday” of March 27, 1980, the brothers couldn’t meet a US$100-million margin call, which sent shockwaves through U.S. financial markets, brokerage houses and banks, leading to U.S. banks stepping in with an emergency US$1.1-billion line of credit.
“A billion dollars ain’t what it used to be,” Bunker said at the time, as well as, “a billion here, a billion there, and pretty soon you’re talking about real money.”
Speaking later before a congressional committee looking into the silver debacle, Bunker also uttered the famous phrase in response to a question about his wealth: “I don’t have the figures in my head. People who know how much they are worth generally aren’t worth much.”
The brothers avoided criminal charges for their silver misadventure, but the ensuing years were marked by lawsuits, civil charges, fines and damage claims. The brothers were hit with a lifetime ban on commodities trading and a US$10-million penalty by the U.S. Commodity Futures Trading Commission.
As the 1980s progressed — ironically, thanks to Reaganomics — the Hunts’ fortune further shrivelled as prices for oil, land and other commodities slid.
Bunker Hunt filed for bankruptcy protection in 1988, and much of his fortune was liquidated to pay creditors and the U.S. Internal Revenue Service. He emerged from bankruptcy a year later with US$10 million in assets (although some of the Hunts’ oil trusts were protected from creditors and not subject to bankruptcy), and vast debts. He then headed back to his first loves: oil and horses.
Bunker did keep his hand in mining, most recently with his 90% ownership of Hemco and its Bonanza gold-silver mine in Nicaragua, which was sold in March 2013 to Colombia’s Mineros SA.
Brother Herbert returned to the lists of America’s known billionaires in 2013 when, at age 84, he sold his 43% stake in Petro-Hunt LLC and its Bakken oil assets for US$1.5 billion to Houston-based Halcon Resources.