Comment Text:
Dear Chairman Gensler and fellow Commissioners:
There is little time left for the CFTC to get ahead of the coming default in COMEX silver. Better to be perceived as late to the party but with good intentions, than some of the alternatives. Honest and just actions you take now will not be the cause of the COMEX default, although some disingenuous participants may label such actions as cause. Rather, the reality is that default is already baked into the cake and the cause is manipulation and fraud on the part of those disingenuous participants.
By taking honest and just actions and being willing to prosecute fraud where it truly exists (not scapegoats, the real perpetrators regardless of connections), you may still have the opportunity to keep the coming default somewhat orderly. You may also still have the opportunity to keep the image of the CFTC as an independent agency interested in market fairness alive.
What follows are Ted Butler's suggestions on limits, etc. It's a good place to start.
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. The current formula would result in a position limit of over 5,000 contracts for any single speculator, on an all-months-combined basis. 5,000 contracts is the equivalent of 25 million ounces of silver. This is too high of a threshold in light of the realities of the world silver market.
There are only three mining companies in the world who produce more than 25 million ounces of silver per year and only a similar number of industrial consumers using more than that amount. 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.
Please institute a 1500 contract (7.5 million ounce) position limit for silver.
Sincerely Submitted,
Steve Kootstra
