Comment Text:
Dear CFTC,
I'm a new Silver investor that became interested in Precious Metals after Bill Murphy's deposition in front of the CFTC in March of 2010. In his deposition he spoke of a London based metals trader named Andrew Maguire who provided convincing evidence that JPMorgan and other Bullion banks actively manipulate the Silver market.
It is my understanding they are able to do this through Position Limit exemptions. Supposedly these are legitimate exemptions because JPMorgan claims to be hedging real long positions. While this may have happened in the past I find it hard to believe this is the case now. Silver mines have largely stopped hedging their future production in anticipation of rising prices. Furthermore JPMorgan routinely attacks the Silver price through massive short positions. A legitimate hedger WOULD NOT DO THIS. Someone who was hedged would not want the price to go down if they had bought Silver from a miner. If anything they would want the price of Silver TO GO UP.
But we don't see this from JPMorgan. They write Silver contracts to every long out there and then some. How does this match up with their Silver long position from miners? It doesn't appear that the CFTC has even looked into this. Why hasn't the CFTC done a legitimate study on this? I find it hard to believe that JPMorgan has a real offsetting Long Position to every Short position they write on the Comex.
For arguments sake say JPMorgan does have a legitimate long position for every Short. Wouldn't imposing a lower Position Limit on JPMorgan just allow another bullion bank to take up the slack? In other words by lowering Position Limits for JPMorgan more banks would help spread the risk. Isn't this a good thing? If we've determined anything from the past few years it's that Too Big To Fail is dangerous. Wouldn't imposing a lower Position Limit on JPMorgan make our financial system safer? What is there to lose except reducing JPMorgan's over sized profits?
Thank You for your Time,
John Nilson
