February 15, 2013
Commissioners Gensler and Chilton,
While working on taxes and reading an article, I happened by an old letter to the CFTC that Adrian Douglas composed 3 years ago. When Adrian spoke, I generally listened, and saved what I could to review later. It really makes a point for those investors like myself that are enjoying the “collateral damage” that we are witnessing today. Maybe this isn’t May 1st, 2011, but under the current conditions of Central Banks buying gold, investment silver demand with silver bullion shortages everywhere, Apple production in Asia, the US mint stopping Eagle production after the 3rd highest monthly sales of all time…., one might want to understand how an extreme shortage in supply means an extreme reduction in price. Bottlenecks in contract expiry can occur, but this trend is rather routine to exist as an abnormality. It would be humorous if not having to witness the unrealized losses. Yet another paper price assault on silver as I speak driving the price of silver below $30 in the face of these shortages.
A company, rogue hedge fund, or powerful interest is getting great prices to cover, yet they appear to be the same entities or affiliated entities that triggered the selloff. Certainly, it might be an opportunity for ordinary investors to buy on the dips, but its disturbing when the commercial traders that create the selloffs have the precise information to get the best price on the long side. A reasonable ordinary prudent rational investor might tend to go long paper silver when no Eagles are for sale, and Apple Computer lacks just-in-time inventory for computer manufacturing. Of course, the silver market is anything but reasonable, ordinary, or rational. Maybe there is a reason for that?
Please consider, there are honest investors that suffer collateral damage when these paper charades occur.
The Mission of the CFTC is to Protect Market Users and the Public from Fraud, Manipulation and Abusive Practices related to the Sale of Commodity Futures and Options and to Foster Open Competitive and Financially Sound Commodity Futures and Options Markets.
Per the late Adrian Douglas 10-21-10:
I have read the Washington Post article covering the comments of CFTC Judge
Painter who declares that his colleague Judge Levine has been responsible
for covering up manipulation and has consciously and deliberately abused
complainants in willful miscarriage of justice. If the Judge Painter’s
allegations are true, this is scandalous beyond belief.