"He said, 'well, we're out of money.', and I said 'well, how much is it?' and it was something like $200 million, and I said 'my God that's a lot of money.'"
On March 27th, 1980, the silver market was turned upside down by an attempt to corner the market, leading to the dramatic rise and fall of prices. This day has gone down in history and is now infamously known as "Silver Thursday".
In this On The Rocks Rewind, we are traveling back in time with guest Jim Culver to discuss the events of this famous day. Jim recalls his point of view on the event, as he was in the middle of the action as it happened.
Silver Thursday began as the Hunt brothers had borrowed massively to accumulate a third of the global silver supply, trying to profit as prices rose from $6/oz in 1979 to nearly $50 by early 1980. But on March 27, the exchange raised margins, causing a panic. Prices plunged from $20 to below $10 within minutes! The Hunts got margin calls they couldn't meet, and eventually had to forfeit their hoard as silver stabilized around $5/oz.
Image: Historic silver prices, including the dramatic Silver Thursday Drop. SilverPrice.Org
Silver Thursday burst the speculative bubble and crushed those trying to manipulate prices. It led to new regulations to limit commodity speculation. In the aftermath, silver prices were again tied to supply and demand fundamentals. Mining innovations increased silver production over the years. At the same time, industrial demand grew, especially for electronics and solar panels. This dynamic has driven price fluctuations since.
During the time of this episode, the famous Gamestop Short was happening as well. Jim and Emily dig into how this event was similar to Silver Thursday, and how trading technology is changing the way investing is made possible. They also discuss opportunities for mining investment, and it's importance.
Grab your favorite scotch or bourbon, and dig into this blast from the past!