Comment Text:
Dear Chairman Gensler and fellow Commissioners:
The proposed position limit for silver comes out way too high, over 5,000 contracts. It’s too high because it gives speculators too much dominance over real world producers and consumers. 5,000 contracts is the equivalent of 25 million ounces of silver. There are only three mining companies in the world who produce more than 25 million ounces of silver a year. In addition, there are only a handful of silver consumers in the world who consume more than 25 million ounces a year. There are hundreds of important miners and consumers who produce or consume less than 25 million ounces of silver a year. Therefore, it makes no sense to empower any speculator who comes along with the ability to hold, long or short, more than the amounts most of the important world producers and consumers make or use in a year. Any speculator holding an amount of silver derivatives greater than what 99% of the world’s silver producers and consumers make or use in a year would have inordinate pricing power. The purpose of speculative position limits is to prevent such a circumstance.
I urge you to approve the staff’s proposal on position limits, including limiting exemptions to bona fide hedgers. I would ask you, however, to readjust the proposed formula in silver to a more reasonable 1500 contract (7.5 million ounce) position limit for silver.
Respectfully submitted,
Gerry Desorcy
