Comment Text:
10-005
COMMENT
CL-02450
From:
Sent:
To:
Subject:
efrpco@srt.com
Friday, April 2, 2010 10:12 AM
Metals
Hearing
metals position limits
Timothy Effertz
11600 20th Ave. S.E.
Minot, ND 58701
Commodity Futures Trading Commission (CTFC)
RE: Meeting on March 26, 2010 metals position limits
April 1, 2010.
Members of the Commission:
I have studied the metals market wondering why the big banks were
being allowed to manipulate the metals market with impunity. I had
presumed you were appointments carried right through changes in
elected officials. You have had adequate time to question who
"Madof~
~'
with the metals and left us with less than 6% actual silver
to back the paper silver. Your meeting on March 26 documents the
fraud by the big banks, which have been rigging the silver price. It
is time to fulfill your mission since you have been in charge a year now!
THE MISSION OF THE CFTC IS TO PROTECT MARKET USERS AND THE PUBLIC
FROM FRAUD, MANIPULATION, AND ABUSIVE PRACTICES RELATED TO THE SALE
OF COMMODITY FUTURES AND OPTIONS, AND TO FOSTER OPEN, COMPETITIVE,
AND FINANCIALLY SOUND COMMODITY FUTURES AND OPTION MARKETS.
I think the Commission is presently failing on each part of its
mission. Such a situation is very like the derivative housing
finance market that caused the economy to go into a mild recession
recently. It amounts to a pyramid scheme wherein the first
participants investing eventually are paid by the investment of those
on
the bottom of the pyramid, and the first investors are the only
ones to recover their investment. The original participants "Madoff"
with the value invested by those who bought in later. Bernard Madoff
left proportionally more equity than remains to protect the paper
silver market. This situation is more egregious than the scheme of
Social Security and Medicare, wherein no money remains in the fund to
pay the benefits but the government is obligated to tax to pay the benefits.
The result of the manipulation of the value of precious metals by our
metals bankers/speculators through commodity futures manipulation
allows the USDollar to appear to have more value than it does,
leaving it likely to lose its value in only a few days once enough
people and nations decide to move to a more secure investment
currency or commodity. China and India are already moving that
direction. The US government prints dollars to pay its obligations
rather than tax us to keep solvent. The good faith and credit of the
US is diluted with each additional dollar printed. Social benefits
are increased based upon only the recognized inflation which is
somewhere near 50% of real inflation. It makes the amount of our
social benefits appear to increase in spite of the decrease in real10-005
COMMENT
CL-02450
value paid. The buying po~ver of my disability benefits decreases
every year because I am on the bottom of the pyramid.
The CTFC has a fiduciary duty to prevent fraud by the big players in
the futures market even if these speculators happen to be the best
friends of the operators of the government. As a nation ~ve ~vill not
be able to ~vithstand the crash of the USDollar in parallel ~vith the
ensuing second lot of bank failures resulting from excessive
commercial properties derivatives. The FDIC does not have the assets
to cover the losses, and the USA ~vill again have to print more TARP
money. The ensuing explosion of the pyramid scheme in the metals
futures speculative market ~vill insure complete devaluation of the USDollar.
You have a duty to find a solution that will allow the metal value of
the USDollar to equate slowly to the non-manipulated value of
physical metals. I would suggest that you insist on 20% metal backing
of derivatives through 2010, and that the percent of metals backing
derivatives be increased each six months by 10% until the derivatives
are backed 80% by actual metals held. If the C TFC would show "good
faith" it would support the dollar during the crash in the making,
and possibly avert the crash. There will be economic pain for us all
if we continue to enlarge the pyramid scheme, and we will be awarded
equal pain if the CTFC causes an orderly transition away from
derivatives in precious metals and other commodities. The difference
will be whether the US as a nation will survive for our grandchildren.
This is your golden opportunity to do your fiduciary duty to stop the
fraud in the futures trading of derivatives. Manipulation of any
market to control the perceived value is actual fraud. A derivative
that promises to deliver a commodity that does not exist and cannot
be delivered is actual fraud. Taking a profit by trading derivatives
without owning the real commodities is constructive fraud. CFTC
should act quickly to ban passive investment in the commodities
derivatives markets. It might be advisable to require the big
speculators to take actual delivery at least 50% of the trades.
Alternatively, you have the tools to entirely separate the real
silver market from the paper silver market, letting each market find
a price separately. There are already separate prices for physical
metals verses paper metals. Paper should sell for less because it is
much less hassle than delivering and protecting real silver.
The true buyers and receivers of commodities should set the price
based upon supply and demand. Speculators add nothing towards
determining a fair price, but they absorb the energy that should let
the demand and supply set the price over the short term. Speculation
causes the price of commodities to increase based upon loss of
confidence in the USDollar causing the currency to inflate without
being recognized by the skewed methods used by the government
analysts. If the value of the dollar was based on the real value of
commodities, it would be rock solid.
I submit that you have knowledge of the fraud, and a fiduciary duty
to fulfill your mission immediately before the poor performance of
past commission members causes the metals derivative market to bring
down our dollar and crash the world economy irrecoverably.
You have a duty to bring the value of the dollar and the value of
physical silver and other commodities slowly together to avert the10-005
COMMENT
CL-02450
explosion of this pyramid scheme causing collapse of the world
economy. Yes experts say the paper silver market will slowly move
overseas, and the physical market will slowly move to the United
States. Do we have to even consider which we would rather have to
support the good faith and credit of the United States? At first
paper silver and real silver will be competitive, and as we gather
real silver and sell the paper silver the US will become more secure
while the holders of the paper will decline.
No, I have never lived in a real city, am I am not an economist, and
I have no loans to pay. I live by the theory that it is not too
important how much money I take in, but it is extremely important to
control how much I spend. With that philosophy, our government could
also be financially sound. My government is printing away my wealth
by allowing the dollar to be diluted by derivatives. That amounts to fraud!
With proper CTFC regulation you could cause the USDollar to be
supported by actual commodities of all types, but you will have to
expeditiously move the US away from derivatives towards physical
commodities of any type. This is your time to get your 15 minutes of
fame by saving the value of the USDollar and the world economy. You
have real commodities to support our dollar, and you can replace the
FED, which has no real commodity to back the currency. The FED relies
upon the good faith and credit of the US, which is directly
proportional to the real value of real commodities and property. You
are charged with setting a fair price in dollars for those
commodities, and you have failed by allowing derivatives to unfairly
affect the dollar price of physical commodities on the exchange.
Thank you.
Tim
Timothy Effertz
11600 20 Ave. SE
Minot, ND 58701-2635
