Give a very brief description of how the Hunt brothers were able to manipulate the silver...

Give a very brief description of how the Hunt brothers were able to manipulate the silver market in 1979-1980.

Solutions

Expert Solution

Hunt brother were amonst the most rich men in the country at that time period. They inherited huge amount of money from their father. They were keen to invest that money in the commodity and purchase gold. But they were not able to do that because of the law against U.S. citizens owning the precious metal. So they decided to hoard silver.

They bought silver even bought future contracts on in silver and eventually they accumulated a large amount of silver with them reducing the supply and creating shortage in the market for the commodity. Due to this the price of silver rose exponentially high and reached to $49.84 per ounce Jan'1980

This activity raised the eyes of the Fed and eventually they stepped in and suspended the trading the silver. Due to which there is a huge sell off happened and the price of silver dropped to $10.80 in Mar'1980.

This is selloff happend on Thursday so this event is know as "Silver Thursday"

jeff jeffy answered 1 year ago

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