Gambling on Silver - The Rise and Fall of the Hunt Brothers

The Hunt brothers of Texas were certainly responsible for some of the all-time great quotes to a congressional committee. Bunker Hunt is quoted to have said, "A billion dollars is not what it used to be." When prompted to reveal his total wealth by Chairman Benjamin Rosenthal, Bunker answered: "I don't have the figures in my head. People who know how much they're worth aren't usually worth that much." The Hunt brothers' quirky, individualistic nature followed that of their father, H.L. Hunt. He was a logger, mule-skinner and card shark before his very big oil strike in East Texas made him one of the richest men in the country.

In the early 1970s, Libya nationalized the Hunt's eight million acres of oil holdings. Qaddafi's demands, and the threat of accelerating inflation, prompted Hunter and Herbert Hunt to look at silver as a hedge against paper money. U.S. citizens could not hold gold at this time. Starting in 1973, the Hunts bought huge quantities of silver. Silver's price was $1.95/oz. rising to $3/oz. by year's end. By 1979 the price had risen to $5/oz. The brothers now turned to wealthy Arab investors to form a silver-buying pool. At its peak in 1980, silver reached $54/oz. and the Hunts had amassed over 200 million ounces of silver and cornered over one third of the world silver supply. The Hunt brothers owned huge quantities of physical silver and stored it in Switzerland, and warehouses in New Jersey and Illinois.

Late to the game, outside investors tried to join in, but the New York Metals Market (COMEX), and the Federal Reserve took action by altering trading rules. By March, 1980 the silver price had dived to $10.80/oz. The Hunt brothers found it difficult to borrow their way out of bankruptcy. In 1987 they owed 2.5 billion dollars against 1.5 billion in assets. Federal Reserve Chairman Paul Volcker approved a bank bailout plan for the Hunts, but they were convicted of conspiracy to control the silver market. (D.H.)

Retired museum designer, graphic designer and friend, Deb Hewitt, now writes for Gianna's Gems.

While having a small home in western Massachusetts and an even tinier cabin in New Hampshire, Deb travels to find vintage and antique jewelry at shows, shops, flea markets and in private collections. Her last trip to New York City included a fabulous tribal silver jewelry show at the "Museum of Arts and Design," and she expresses her thoughts on this wonderful collection. I am proud to have Deborah on our team!

Look for a link to Deborah's photographs soon to be entered onto Gianna's Gems for a look into her travels, finds and thoughts along the way!

The Diminishing Supply of Ethnic Silver Jewelry

The bulk of a tribal woman’s jewelry was acquired when she married, through wedding gifts and dowry money. More might be purchased by her husband or her during the course of their marriage, but a woman’s jewelry was made new for her and not often passed down. There was a long tradition of jewelry being melted to make way for the new, but traditional patterns were followed.  

A number of socio-economic shifts around the world have led to the further scarcity of authentic ethnic silver jewelry. Here are a few of them: 

Long the staple for dowry jewelry, silver has been replaced by gold as metal of choice in many areas. Silver was being seen as old-fashioned and less attractive by the more urbane. Just the weight alone of tribal silver jewelry was intimidating, sometimes being many kilos for a full costume.

The economic disruption of war has always been a major reason for peoples to sell their jewelry. The displacement of tribal peoples by conflict also threatens the continuity of ethnic traditions. The Vietnam War, as an example, adversely affected nearby Laos, which was unable to maintain neutrality. It became a battlefield between North Vietnam and the United States. Many peoples were forced to flee their villages into refugee camps, and then flee the country, by the threat of Communist takeover. Laos is still recovering.

Interest in ethnic jewelry as a collectible has raised the prices and put pressure on women to sell their possessions. Jewelry dealers--“jewelry hunters”--who scour the globe for handmade ethnic jewelry, have depleted the supply. Ethnic peoples are accustomed to selling silver jewelry by weight. Craftsmanship is not factored. However, the end price for a beautiful piece can be substantial.

In the 1960s, movie stars began wearing ethnic jewelry, particularly Native American. This led to an interest in tribal jewelry which has not disappeared. Great demand and cheap production costs have seen more and more ethnic-style jewelry made for export, having little to do with tribal use. A great quantity of silver jewelry is even misrepresented. It may be called Native American jewelry, but was made in China, India, Indonesia, Mexico, or the Philippines. It may not even contain silver.

A lot of the world’s silver jewelry still exists today, but in the form of silver bars. “The Great Silver Melt of 1980,” really encompassed the years 1979 and 1980. However, the aggressive melting of silver, in the USA for example, began in the 1960s, when the silver supply for coins diminished and led to jumps in the silver market. By 1964, no silver was used in minting US coins and hoarding and melting began. A staggering amount of silver was melted during the "Great Silver Melt." Millions and millions of silver objects were scrapped for cash conversion around the world. Estimates vary, but approximately 10 to 25 per cent of old silver coins are thought to remain intact in collections today.

We are now faced with the dilemma of whether to hold our own old gold jewelry or “cash it in.” The payout can be high, but buying new gold jewelry is prohibitive. Perhaps the important thing to consider is that once that jewelry is smashed and melted, it’s forever gone. (D.H.)