Some questions to the CFTC about silver manipulationSubmitted by goldsilber on Wed, 02/11/2009 - 17:53
Dear Sir or Madame,
I live in Germany and apologize for my english.
I'm trying since months now to get an answer from the CFTC to some questions, but I got none till now.
I wrote to the following recipients:
Silverinquiry@cftc.gov, Wlukken@cftc.gov, Mdunn@cftc.gov, BChilton@CFTC.gov, Jsommers@cftc.gov, Alavik@cftc.gov, Sobie@cftc.gov, Jamie.firstname.lastname@example.org, Dean.email@example.com, firstname.lastname@example.org.
Each question can be answered with a simple number.
I don't ask for an answer from a commissioner. It'd be enough from a member of their staff.
Mr. Chris Powell of GATA informed me, that the CFTC has answered many questions about this issue posed by US citizens.
Maybe the CFTC think that the manipulation of the silver prise is an US issue.
I think, not only US citizens have a right to know what is going on at the Comex.
That is the reason why I'm begging someone of you to pose these questions to the CFTC, and then, in the case of an answer, to be informed about it.
I thank you in advance for your help.
Following my mail to the CFTC:
Dear Sir or Madame,
As of August 5, 2008, one or two U.S. banks were short 33,805 contracts.
33,805 contracts are the equivalent of 20-25% of the annual world mine production.
According to the February Bank Participation report, two or three U.S. banks held a record net short position equal to 15% of total world annual production of gold, a staggering and unprecedented number, exceeded only by the absurd percentage in silver (currently 20%).
a) How much gold or silver should one bank sell short (maybe naked short), for you to think about a manipulation of the market and begin spontaneously an investigation?
On December 2, as silver closed at $9.57, exactly 2 U.S. banks held a net short positioning of 24,555 contracts. The CFTC reports that as of the same date all traders classed as commercial held a net short positioning of 24,894 contracts. So, the 2 U.S. banks, with one particular Fed member bank probably holding almost all of it, held a sickening 98.64% of all the collective commercial net short positioning on the COMEX silver futures market.
According to the monthly CFTC Bank Participation in Futures and Options Market report released Friday, February 6, two large reporting U.S. banks held zero long and 27,189 short futures positions in COMEX silver futures as of February 3. All commercial traders as a group held a net short silver position of 33,173 contracts that same day; so just two banks held 81.96% of all the COMEX commercial net short positioning for silver.
b) Is this not a infringement against the CFTC’s anti-concentration rules?
As of the close of business Jan 20, a new multi-year record was set in the percentage of the silver futures market held by the 4 largest short traders, at 48%. And when all spreads are removed from both the non-commercial and commercial categories, as is proper, the true net short position of the 4 largest traders runs over 66% of the entire COMEX futures market, the largest silver market in the world. In other words, 4 traders hold two-thirds of all the true short positions on the COMEX.
c) How big should be the concentration on the short side of the Comex, for you to stop inquiring and intervene?
According to the monthly CFTC Bank Participation in Futures and Options Market report released Friday, February 6, just three U.S. banks held a collective net short position in the COMEX gold market of 111,190 contracts while all commercial traders as a group reported a net short positioning of 177,589 contracts. So, three U.S. banks represent a shockingly large 60.57% of all the commercial net short positioning on the COMEX for gold.
As the February BP report indicates, one or two U.S. banks held a 29% share of the COMEX silver market and two or three U.S banks held a 32.1% share of COMEX gold futures.
As large as the current gold and silver percentages of the market held by one, two or three U.S. banks may be, those percentages are grossly understated because spread positions are included in open interest totals. Remove all spread positions (non-commercial and commercial) and the share of the market held by one or two U.S. banks in silver rises to 41.5%, and not 29%. In gold, the share of the market held by two or three US banks is really 45%, not 32.1%.
d) How big should be the concentration in the net share of the short side of the Comex for you to suspect a manipulation and begin spontaneously, that means without the pressure of investors or of the Congress, an investigation?
Between January 6 and February 3, the COT indicates that the total commercial short position increased by 2253 contracts, with the big 4 category increasing by 2256 contracts, once again accounting for more than the entire increase in the commercial category. The Bank Participation Reports corresponding to January 6 and February 3 indicate that the two U.S. banks increased their net short position by 2500 contracts in that same time period. This proves, at least during this specific period of time, that one or two U.S. banks accounted for more than 100% of all the commercial short selling and all the selling in the big 4 category.
e) Why the fact that one or two banks accounting for more than 100% of all commercial short selling for at least a month, is not manipulation?