We are coming to the end of this silver price
manipulation very soon, perhaps in November.
I will be buying every ounce of silver I can get from
here on, and will not be selling except
special
orders from the mint drop shipped to my customers.
OPEN LETTER TO THE CFTC
October
29, 2013
Commodities
Futures Trading Commission
3 Lafayette Center
1155 21st St. NW Washington, DC 50581
3 Lafayette Center
1155 21st St. NW Washington, DC 50581
Re:
Illegal COMEX Price Setting
ATTN: CFTC Commissioners:
In
a stunning admission last week at The Silver Summit in Spokane, Washington, CPM
Group's President Jeffrey Christian, a long time opponent of silver market
rigging claims, admitted that the price of silver was being illegally set on the
COMEX trading floor. This admission came during his attempt to prove that there
was no silver market manipulation taking place.
Christian's
assertion was that the wild swings in the price of silver were not being caused
by rogue market riggers but by multiple computer algorithms and High Frequency
Trading programs firing at the same time in the COMEX silver exchange based on
the same program triggers. Christian claims that the simultaneous nature of
these trades spring from all trading houses using the same algorithms they
learned in the same colleges. Trading volumes on the COMEX supports this
assertion as the COMEX is on track to trade over 80B equivalent ounces of silver
derivatives in 2013 which is 1,800x the amount of Registered Physical Silver in
the COMEX inventories(44M oz).
Unfortunately
for Christian and the CME, what he describes is an artificial price setting
mechanism for silver in an exchange that is specifically regulated such that it
does not "set" silver prices but rather is a "price discovery" exchange. What
Christian describes is ILLEGAL and the CME Group who owns the COMEX should
immediately shut down all HFT's and computer trading programs stopping this
continued distortion of silver prices.
Regulating
the futures and options markets such that they DO NOT set an artificial price of
a commodity is specifically why the CFTC hires Economists to oversee the Silver
derivative markets(futures and options are derivatives). Weighing the stable
supply/demand dynamics of the silver industry(0-5% annual volatility range)
against the volatile COMEX trading activity and price fluctuations(over 100%
annual volatility swings) is the proof that the price of silver is being
artificially determined by derivatives as Christian suggests.
The
legal concept is fairly simple, the trading of futures and options should not be
the overriding price influence in setting the price of any commodity as it does
not reflect the true supply/demand dynamics of the underlying commodity being
traded.
Jeffrey
Christian is the leading authority on commodity derivatives with experience in
advising the largest players in the paper/electronic silver space such as the
IMF, World Gold Council, Central Banks, Bullion Banks and Global Mining
Companies. Before CPM Group spun off from Goldman Sachs in the 1980's, Christian
worked with Robert Rubin who advocated and developed Gold Leasing Programs for
Central Banks and National Treasuries(although Germany is still trying to unwind
their leased gold). In the 1990's Christian advised companies on how to properly
hedge their gold production(although massive Billion dollar write downs were
taken as the price of gold rose in the 2000's). Christian is currently leading
the charge to restart miner hedging programs as he advocates hedging once again
to offset the price volatility on the COMEX...
WAIT! This silver price volatility is caused,
according to Christian, by multiple computer algorithms and High Frequency
Trading programs firing at the same time and is NOT a freely traded price of
silver!
Any hedging on false COMEX price discovery is an
accident waiting to happen...AGAIN!
It
is imperative that the CFTC investigate and stop such illegal price influencing
actions on the COMEX as it is destroying the true price discovery mechanism for
silver. Companies and individuals are making bad decisions based on faulty price
data originating out of the COMEX.
Silver
investors should demand an explanation from the CFTC and the CME as to Jeffrey
Christian's claim that price fluctuations in silver are being initiated and
caused by computer driven trading that artificially influences the "Fair Market
Value" of silver.
I
want to thank Jeffrey Christian for bringing this to the attention of all who
attended the Silver Summit as it explains WHY the price of silver is so volatile
in an underlying industry that should, by all accounts present at the Summit, be
stable and predictable.
Sincerely,
Bix Weir
www.RoadtoRoota.com
www.RoadtoRoota.com
