The late Lamar Hunt was best known as the owner of the Kansas City Chiefs of the NFL, but the Texas-born mogul and his brothers Nelson and Herbert nearly lost their fortunes in an attempt to corner the global market for l ‘money.
The ill-fated business began in the 1970s as the US economy faced runaway inflation amid the Vietnam War and the OPEC oil embargo of 1973. Given the volatility of the dollar American and laws prohibiting the acquisition of gold, the Hunt brothers began to purchase massive amounts of silver, relying on loans and borrowed money to finance the purchases.
In 1979, the Hunt brothers owned up to two-thirds of the world’s private money supply, according to Priceonomics. A global shortage of precious metal has caused prices to rise sharply. Nelson and Herbert Hunt, as well as Lamar Hunt, who held a smaller silver position, made hundreds of millions of dollars in profit on paper.
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However, the bubble burst following changes in the early 1980s by federal commodity regulators, which limited the use of borrowed money to buy silver. Two months later, the price of silver slumped to $ 10.80 after peaking at $ 50.35 an ounce, when the Hunt family failed to make a margin call from $ 100 million or a request for a deposit to cover the losses of a key lender, depending on the New York Times.
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The collapse, known as “Silver Thursday,” disrupted U.S. trade and undermined the Hunt family’s fortunes. The family’s silver positions have lost more than $ 1 billion, by some estimates, and have come under closer scrutiny by regulators.
In 1988, a federal civil court determined that the Hunt brothers had participated in a racketeering plan to corner the money market and ordered them to pay $ 130 million in damages to Minpeco SA, a commodities company. base owned by the Peruvian government.
Throughout the trial, the brothers maintained that their silver acquisitions were not an attempt to manipulate the market, but rather a hedge against the struggling US dollar. The Hunts have not been the subject of any criminal charges.
Nelson and Herbert Hunt were convicted of several counts, including violations of antitrust rules and participation in a racketeering scheme to corner the money market. The court found that Lamar Hunt did not commit racketeering but was responsible for other charges.
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In September 1988, following significant losses in their money and oil holdings, the Hunt brothers filed for bankruptcy (Chapter 11).
The silver program has become a footnote in Lamar Hunt’s legendary career in professional sports. The longtime Chiefs owner has played a pivotal role in the development of the NFL as a major sports league and has been credited with coining the phrase “Super Bowl.” He was also an original investor in Major League Soccer.
When Lamar Hunt passed away in 2006, his family, including his son Clark Hunt, assumed ownership and operational control of the Chiefs.
The Hunt family will be in attendance on Sunday when the Chiefs return to the Super Bowl for the first time in five decades.
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