Comment Text:
10-005
COMMENT
CL-02435
From:
Sent:
To:
Subject:
[email protected]
Sunday, April 4, 2010 7:50 AM
Metals Hearing
metals position limits
Timothy Effertz
11600 20
th
Ave. S.E.
Minot, ND 58701
Commodity Futures Trading Commission (CTFC)
RE: Meeting on March 26, 2010 metals position limits
April 4, 2010.
Members of the Commission:
I wrote you dated April 1, 2010, and I submitted a copy to an intelligent reader who encouraged me to
resubmit a summary letter. I will title the subject:
COMMODITIES BACKED CURRENCY through (metals position limits)
FACTS (FROM MY PERSPECTIVE):
1. CTFC is presently failing in its assigned MISSION because it allows fraud by speculators to
prevent finding an honest price set by real parties interested in physical commodities, and results
in a pyramid scheme.
2. If CTFC would force the derivative market out of the exchange by eliminating bidders who do not
take or deliver physical commodities, those bidders are likely to bid in foreign derivative markets.
3. If CTFC would eliminate the price influence of speculative bidders who would not make delivery
or take delivery, a fair price for each exchange commodity would be established.
4. Conversely and more important (than item directly above),
the value of our
US Dollar
would be
established in terms of physical commodities
giving the dollar actual backing by real and easily
measured commodities. (Contemplate a true commodity index value, which is also the dollar
index value in commodities.)
5. If the CTFC let the speculators invest in foreign markets if they wish, and allowed the true price
of commodities and dollars to be established, Physical commodities would be held in the US, and
the fake paper derivative commodities would go abroad.
6. Per item immediately above, The US would automatically replace the silver and gold that has
been sold to foreign countries and no longer backs the dollar, by having a commodity related
dollar price established by the Commodity Futures Market based upon an assortment of real
physical worldwide commodities.
7. Should the CTFC want to retain the derivative exchange market, it could be separated from the
physical exchange, and it might force the speculators to closely follow the real physical market
price, which would be good for all honest participants who realize that they are really just trading
a promise to deliver dollars not commodities like silver or corn at some later date. Those activities
are those of a casino.
Remember that the people voted for change in the demeanor of government when we changed
presidents. I encourage his newly appointed members of the Commission to step up and take their10-005
COMMENT
CL-02435
MISSION seriously, and to consider using its powers to eliminate the fraud causing the pyramid
derivative markets. Doing so in a careful way would do for the United States what the FED has failed to
do, namely
support our currency with something with real value,
to limit hidden inflation or
deflation. It would not require the commodities to be stored in Fort Knox, or to be guarded, except that
the CTFC would have to keep out the speculators while establishing a true price between mainly
interested parties who deal physical commodities, but still
allow access by small holders and buyers
in
order to avoid collusion between the big players. Just think what it would do for the price of oil and the
result in our economy!
Appropriate action by the CTFC could be the
most effective and least costly
method to stabilize the
world economy. The CTFC could go so far as to include bidding in any foreign currency, thereby
establishing a fair price for every currency included. The currency indexes are presently filled with
speculators who never let the true price of each currency to be established. By evaluating each currency,
through establishing its value in real commodities, the true as well as comparative
values of each
currency would be transparently established.
I suggest that the CTFC require either actual delivery or actual receipt of commodities in a
majority of trades.
There are other measures that could work, but we should not need to establish a
"commodities trading police" if the
rules are
appropriately written so they are
self-enforced, to
publicly record delivery and receipts within 30 days
in order to have the privilege to participate in the
market ever again. The market must be transparent, at least to the Commission, in order to honestly
function.
Banks and speculators who profit by the pyramid and derivative schemes and who charge for currency
swaps will scorn this "commodity supported currency scheme". The FED will cry foul as it loses its
power. The Treasury will be elated. The United States citizens will in general be elated to see one arm of
the government actually function for the good of all of the people. China and India might continue to
hold dollars rather than buy our physical metals; which will crash the USDollar if no changes are made
by CTFC. The Chinese currency would be forced to adjust against commodities instead of follow
dollars, improving our trade balance.
The true physical prices on the Exchange could be the rock that ties the world economy together
without establishing a world government and a world currency.
The exchange would detect
worthless currency immediately and shut out the players who cannot timely deliver. It will be really hard
on the bankers who caused the present moderate dip in the economy with derivative house loan funds. I
would be able to say to myself that my social security disability payment is "x" bushels of Hard Amber
Durum, "y" barrels of crude oil, "z" ounces of silver, or "Q" pounds of sugar. What a fine way to
measure true inflatio!!
Thank you for doing your fiduciary duty.
Tim
