Comment Text:
10-005
COMMENT
CL-02436
From:
Sent:
To:
Subject:
Richard Bawden
Saturday, April 3, 2010 11:58 PM
Metals Hearing
metals position limits
Dear Sir,
Thank you for the opportunity to comment on the comex metal exchange in
particular as relates to silver.
I have followed silver and gold as a lay person for a number of years
and have only recently started to understand the workings of the
exchange.
My information has come from the internet as I was never in a position
to learn this material before. The first light bulb moment came when I
discovered that futures could be settled with dollars which took quite a
while for me to discover. It appears to me that the driving force for
the setting of the price for silver and gold is based on futures prices
which are based on cash not on the actual metal. Let me say that I am
opposed to this practice as I think a metals exchange should be to
exchange metals and not have it as a betting establishment which usually
deals in cash.
Having got that one out of the way if the cash settlement system is to
continue then I think it is imperative that no single entity or
associated group should be able to control the flow of funds to the
exchange, ie there needs to be position limits to control this.
The Hunt brothers were the classic example, but my reading of the
current situation is that a few of the larger banks are now doing a
similar thing.
All the best with this enquiry. I think that this current state of
affairs needs to be rectified and let a free market with sensible rules
do its thing.
Yours faithfully
Richard Bawden
3 Nirvana Court
Frankston
Vic 3199
Australia
