Comment Text:
ALOHA!!
Chairman Gensler and fellow Commissioners:
I would 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.
I would suggest a 1,000 contract (5 million ounce) position limit for silver.
The reputation and confidence of the COMEX and your management is at stake here. We cannot allow bullion banks to instigate unfair practices and rules that reduce free market price discovery to fraud. The CFTC should have gotten a clue a long time ago from the Blanchard Coin legal action against JP Morgan. It's way past time to set a new precedence.
Best Regards,
Stephen Wellman
