Comment Text:
10-005
COMMENT
CL-00648
From:
Sent:
To:
Cc:
Subject:
Gordon Burkett
Tuesday, April 13, 2010 10:57 PM
Metals Hearing
gb.gb
Dear Sir;
Thank you for the opportunity to comment on the issue of position limits for
precious metals. I am writing to urge you to establish a meaningful speculative
position limit in COMEX silver.
As a computer programmer, I am not familiar with the complexities of the
financial markets, so my investments are modest and simple. But the past two
years have demonstrated that the speculations of the well-connected few can
have dramatic negative effects on the general population - folks like me.
So I strongly urge you to exercise your regulatory powers to resolve a precarious
situation that has been building for a long time.
CONTEXT
In its own words, the New York Mercantile Exchange (which owns the COMEX) is
the world's largest physical commodity futures exchange and the preeminent
trading forum for energy and precious metals. As such, the NYMEX/COMEX is a
financial institution whose stability is important to the interests of our nation.
The most careful regulatory attention should be placed on anything which
threatens that stability.
According to the Commitment of Traders Report, which is regularly published by
the CFTC, there has been a large and growing concentration on the short side of
silver. I understand that this has reached the point where one entity has sold
obligations to supply an immense quantity of silver, a proportion of annual
production that is unprecedented in any other commodity.
Such a huge short position risks the possibility of default. And if that single
dominant entity defaults, the chaotic market reaction could be as unprecedented
as the size of its position.10-005
COMMENT
CL-00648
RESOLUTION
Please stop the unprecedented levels of short-side concentration in COMEX silver
futures.
This may require a phase-in period for the huge number of open short contracts
to settle without creating chaos. This is not about preventing sharply higher
silver prices. (Once the downward pressure of these huge shorts is removed,
such a price rise is inevitable.) Rather it is about defusing a potentially explosive
situation, which demands deliberate haste.
Please move promptly and decisively to resolve this situation.
Sincerely,
Gordon Burkett
1311 NE Knott St
Portland, OR
