Comment Text:
Dear Commissioner Gensler and colleagues:
We need position limits to prevent manipulation of the precious metals markets. But what should the limit be? A speculator with silver derivatives greater than 50% of a year's production and demand would be able to manipulate the price of silver at will, the more so the higher the percentage. Some believe JP Morgan has derivatives in place higher than this level, on the order of 80% or more even, giving them inordinate power to drive the price of silver as they see fit. The purpose of speculative position limits is to prevent such a circumstance. A reasonable limit would be a 1000 contract (5 million ounce) position limit for silver. JP Morgan will complain about this, probably because this would limit their ability to manipulate the silver market. Also, please do not grandfather any company. People are worried that the commission is in the pocket of JP Morgan and other big players, rather than serving the interests of the people and free markets. Some people worry that JP Morgan and other primary dealers are actually doing this at the behest of the Fed to put a lid on precious metals prices, because silver and gold run the risk of posing an alternative money to the US dollar. But it is not in the long term interests of the United States to artificially manipulate its markets. In the short run this might create the appearance of a non-devaluated dollar. But in the long run, we run the risk of undermining the best sides of capitalism in this country, which are its free markets. Every instance of centrally planned economic planning in the past has eventually performed worse than a free market model. Manipulation of the silver market is potentially an indirect form of central planning. By allowing this we are hurting our own markets and thus our country. Please prove that these worries are not so by imposing strict position limits for silver especially.
Sincerely,
Peter Tse
