About Silber (and Gold) manipulation

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goldsilber_IHB

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Dear Sir or Madame,



I live in Germany and apologize for my english.

I'm trying since months now to get an answer from the CFTC to some questions, but I got none till now.



I wrote to the following recipients:

Silverinquiry@cftc.gov, Wlukken@cftc.gov, Mdunn@cftc.gov, BChilton@CFTC.gov, Jsommers@cftc.gov, Alavik@cftc.gov, Sobie@cftc.gov



Each question can be answered with a simple number.

I don't ask for an answer from a commissioner. It'd be enough from a member of their staff.



Mr. Chris Powell of GATA informed me, that the CFTC has answered many questions about this issue posed by US citizens.

Maybe the CFTC think that the manipulation of the silver prise is an US issue.

I think, not only US citizens have a right to know what is going on at the Comex.



That is the reason why I'm begging someone of you to pose these questions to the CFTC, and then, in the case of an answer, to be informed about it.



I thank you in advance for your help.

Best regards

Marco







Following my mail to the CFTC:





Dear Sir or Madame,



As of August 5, 2008, one or two U.S. banks were short 33,805 contracts.

33,805 contracts are the equivalent of <u>20-25% of the annual world mine production</u>.

According to the February Bank Participation report, two or three U.S. banks held a record net short position equal to <u>15% of total world annual production </u>of gold, a staggering and unprecedented number, exceeded only by the absurd percentage in silver (currently 20%).

a) How much gold or silver should one bank sell (naked) short, for you to think about a manipulation of the market and begin spontaneously an investigation?



On December 2, as silver closed at $9.57, exactly 2 U.S. banks held a net short positioning of 24,555 contracts. The CFTC reports that as of the same date all traders classed as commercial held a net short positioning of 24,894 contracts. So, the 2 U.S. banks, with one particular Fed member bank probably holding almost all of it, held a sickening <u>98.64% of all the collective commercial net short positioning on the COMEX silver futures market</u>.

According to the monthly CFTC Bank Participation in Futures and Options Market report released Friday, February 6, two large reporting U.S. banks held zero long and 27,189 short futures positions in COMEX silver futures as of February 3. All commercial traders as a group held a net short silver position of 33,173 contracts that same day; so just two banks held <u>81.96% of all the COMEX commercial net short positioning for silver</u>.

b) Is this not a infringement against the CFTC?s anti-concentration rules?



As of the close of business Jan 20, a new multi-year record was set in the percentage of the silver futures market held by the 4 largest short traders, at 48%. And when all spreads are removed from both the non-commercial and commercial categories, as is proper, the true net short position of the 4 largest traders runs over 66% of the entire COMEX futures market, the largest silver market in the world. In other words, <u>4 traders hold two-thirds of all the true short positions on the COMEX</u>.

c) How big should be the concentration on the short side of the Comex, for you to stop inquiring and intervene?



According to the monthly CFTC Bank Participation in Futures and Options Market report released Friday, February 6, just three U.S. banks held a collective net short position in the COMEX gold market of 111,190 contracts while all commercial traders as a group reported a net short positioning of 177,589 contracts. So, three U.S. banks represent a shockingly large 60.57% of all the commercial net short positioning on the COMEX for gold.

As the February BP report indicates, <u>one or two U.S. banks held a 29% share of the COMEX silver market and two or three U.S banks held a 32.1% share of COMEX gold futures.</u>As large as the current gold and silver percentages of the market held by one, two or three U.S. banks may be, those percentages are grossly understated because spread positions are included in open interest totals. <u>Remove all spread positions (non-commercial and commercial) and the share of the market held by one or two U.S. banks in silver rises to 41.5%, and not 29%. In gold, the share of the market held by two or three US banks is really 45%, not 32.1%.</u>

d) How big should be the concentration in the net share of a market of the Comex for you to suspect a manipulation and begin spontaneously, that means without the pressure of investors or of the Congress, an investigation?



Between January 6 and February 3, the COT indicates that the total commercial short position increased by 2253 contracts, with the big 4 category increasing by 2256 contracts, once again accounting for more than the entire increase in the commercial category. The Bank Participation Reports corresponding to January 6 and February 3 indicate that the two U.S. banks increased their net short position by 2500 contracts in that same time period. This proves, at least during this specific period of time, that one or two U.S. banks accounted for more than 100% of all the commercial short selling and all the selling in the big 4 category.

e) Why the fact that one or two banks accounting for more than 100% of all commercial short selling for at least a month, is not manipulation?





Best regards

... ...
 
The newest raising of precious metals praises happened just after GATA invited the gold community to write to their representatives.



Couldn't it be that someone is leaving preises to go up in order to sweep away suspects of an on going manipulation?
 
[quote author="goldsilber" date=1235021665]The newest raising of precious metals praises happened just after GATA invited the gold community to write to their representatives.



Couldn't it be that someone is leaving preises to go up in order to sweep away suspects of an on going manipulation?</blockquote>


No
 
I have added a further question for the CFTC:



Between January 6 and February 3, the COT indicates that the total commercial short position increased by 2253 contracts, with the big 4 category increasing by 2256 contracts, once again accounting for more than the entire increase in the commercial category. The Bank Participation Reports corresponding to January 6 and February 3 indicate that the two U.S. banks increased their net short position by 2500 contracts in that same time period. This proves, at least during this specific period of time, that one or two U.S. banks accounted for more than 100% of all the commercial short selling and all the selling in the big 4 category.

e) Why the fact that one or two entities accounting for more than 100% of all total short selling for more than a month, is not manipulation?
 
In his latest newsletter (http://news.silverseek.com/TedButler/1236702001.php) Mr. Butler suggest to write to the following recipients too:



hotline@oig.treas.gov

Dean.payton@cmegroup.com

Jamie.dimon@jpmchase.com



I hope many will follow his advice.
 
If some major players, (maybe the bullion banks), have been involved in a conspiracy to keep the price of gold down for many years, why has the price of gold risen every year for the last seven years? If they are conspiring to keep the price down, they are doing a terrible job of it, and I would encourage them to keep trying.
 
From the latest newsletter of Mr. Butler:



<<The new weekly Commitment of Traders Report (COT) and the monthly Bank Participation Report (BPR) for March have been released, for positions as of March 3. There were some stunning new manipulative milestones recorded in both reports, in terms of concentration by the big short(s). Since there was a sharp sell-off in price for the week ending March 3, I was expecting the big shorts to have reduced their short position. That?s what they normally do. That they actually added to their short position was a shock to me. Clearly, their selling caused prices to drop. This is Manipulation 101.



In the COT, the reported net percent of the market held by the four largest shorts rose to the highest level (51.7%) since 2002. In "true-net" terms, with all spreads removed (as discussed last week), the big 4 were still over 70% short the entire market. The CFTC is on their third silver investigation within five years, while at the same time reporting that the short concentration has grown to the highest level in that time. This is akin to tripping over and not seeing the dead body in a murder investigation.



The March BPR recorded the largest percent (33%) of the market held short by one or two U.S. banks in silver ever. To my knowledge, this also may be the largest percent held by U.S. banks in any major market, long or short, ever. Please remember, this percent of the markets held by one or two U.S. banks is before removing spreads, and thus understates the true net percentage, which is more than 45%. The reported short position is equal to 154,190,000 oz of silver, or 23% of total annual world mine production.



The most disturbing aspect of the data just released is that almost all the short selling in COMEX silver over the past two months has come from the big short(s). From January 6, when silver closed around $11.10, to March 3, when silver closed around $12.85, the net increase in the total commercial short position was 7784 contracts. Of those 7784 net new contracts sold short, the big 4 accounted for 7490 contracts, or 96.2%. Of the 7490 contracts sold short by the big 4, the one or two U.S. banks accounted for 6149 contracts, or 82%.



The message of these data should be clear. The vast majority of the additional short selling over the past two months was concentrated new short selling by those already holding a large concentrated short position. The most plausible explanation for this new selling was to cap the price and limit damage caused by rising prices to an already existing large short position. This is manipulation, pure and simple. If the price of silver were at a fair and free level, there would be many different participants competing to sell contracts, not just one to four. As it stands, there are very many traders buying and looking to buy, while the sell side is populated primarily by one big U.S. bank.



As I write this article, the big short(s) is attempting to rig the silver and gold markets lower to trip off technical fund selling below the 50 day moving averages. Will that attempt succeed? I don?t know. What I do know is that this is market rigging of the highest order. I also know that the big short is becoming increasingly isolated and more learn of the manipulation daily.



[...]



In the case of silver, while the manipulation has been ongoing for many years, the criminality kicked into high gear when JP Morgan took over Bear Stearns, at the government?s request, last March. Bear Stearns was the holder of the large concentrated short silver position and it was inherited by Morgan. In JP Morgan?s defense, it does not appear they initiated the concentrated silver short position. It was excess baggage from the forced takeover of Bear. The Treasury Department and Federal Reserve backstopped Morgan and agreed to hold them harmless for financial losses and for criminal involvement in the silver manipulation. The financial system was weak enough at the time of Bear Stearns? failure, that a blowup in silver had to be avoided. JP Morgan was given the go-ahead to "manage" and control Bear Stearns? silver short position directly by the Treasury.



While it is understandable that JP Morgan would accept the Treasury Department?s request, and that the avoidance of a potential financial panic is always a good thing, panics are short-term events. A year has now passed, and the manipulation is still in force, stronger than ever. What started as a temporary remedy for a short-term emergency, has evolved into a continuance of the long-term silver manipulation. This is wrong on every level. The U.S. is a nation governed by the rule of law. No one is above the law. Not the Treasury Department, not JP Morgan, not the CFTC. If my findings are accurate, then the passage of time indicates that there is potential real criminality here.



As far as the CFTC, it is a weak agency, incapable of over-ruling a directive from the Treasury Department. They had no choice but to allow the silver market to continue to be manipulated by allowing the transfer of the concentrated short position from Bear Stearns to JP Morgan. Besides, the CFTC already dropped the ball by allowing the concentrated short position to come into existence at Bear Stearns in the first place and denying for years that the silver manipulation existed. They had no choice but to go along. They couldn?t stand up to Treasury if they wanted to.>>
 
From:

http://www.stockhouse.com/Columnists...ot-Gold-Report





U.S. banks dominate the COMEX



"While those of us with a long bias can take some comfort in the larger reductions of net short positioning by the commercial traders (covered in the full Got Gold Report), we need to remember that as of right now the short side of the market is literally dominated by just two big U.S. banks. When the regulators, the Commodities Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC), consent to allow just two traders to take overly large positioning on either side of a particular market, it leads to mistrust and angst among the public and market commentators.



[..]



According to the latest Bank Participation in Futures and Options Markets report, as of March 3, 2009, two U.S. banks held zero long and 30,838 contracts short with silver then at $12.83 and with 93,051 COMEX 5,000-ounce contracts open. So, just two banks held net short positions equal to 33.14% of all the open contracts on the largest futures bourse in the world.



According to CFTC COT reports, during that 3/3 reporting week all COMEX commercial traders as a group ? all of them - were collectively net short a total of 38,704 contracts, so just two very large U.S. banks held a shocking 79.68% of all the commercial net short positioning on the COMEX.



One potential problem with allowing overly-large positioning by just a few players is the potential for those elite traders to get into the position of having to trade in a particular direction in order to protect their position. The incentive for a trader running 1,000 contracts to try to move the market with the weight of his own trading would certainly be much less than a trader (or two traders in this case) with 30,000 contracts of one-way exposure.



[..]



With that in mind, in an era when regulators allowed the Bernard Madoff scam to go unchecked for many years, even though they were handed the scamster on a silver platter by others in the same business eight or nine years ago, a scam ruining hundreds or thousands of innocent investors; in a period when ANY silver product being sold on the street carries with it extremely high premiums due to overwhelming public demand; in a period when investors have had their confidence severely shaken in all markets; can the COMEX continue to allow such one-sided and concentrated trading action to continue? Perhaps more to the point, shouldn?t the COMEX explain publicly why it has allowed that very concentrated short positioning by just two U.S. banks?



Perhaps with more clarity would come more confidence."
 
By Patrick A. Heller,

March 17, 2009



"On Friday, March 6, gold lease rates turned negative for the day. What that means is that anyone who wanted to lease gold would actually be paid a fee in addition to getting a free gold loan.



No sane person would choose to lose money loaning physical gold, in addition to the risk of never getting the gold back from the other party. However, if someone (such as the U.S. government) wanted to suppress the price of gold, this is one tactic to try to accomplish that purpose.



I can come to no other conclusion than that a large quantity of physical gold surreptitiously appeared on the market on March 6 with the sole purpose to drive down the price of gold. The quantities were large enough that they almost certainly could not come from private parties. With most of the world's central banks now being net buyers of gold reserves, they would not be the source of this gold. By process of elimination, the suspicion falls upon the U.S. government as the ultimate party responsible for this blatant action to manipulate the price of gold.



Of course, the U.S. government would not want to be identified as the cause of this leasing anomaly. Instead, such manipulation was almost certainly conducted by multiple trading partners of the U.S. government.



[...]



The U.S. Mint is so far behind at meeting demand for bullion gold and silver American Eagle issues that it last week announced an indefinite suspension of plans to strike 2009-dated proof and uncirculated versions for collectors. Even further, the U.S. Mint also announced that it would not even accept orders from primary distributors for any gold or silver Eagles this week.



On the wholesale market, supplies of gold and silver American Eagles quickly disappeared. The premiums of these coins shot upward. Some retailers now have to decline orders as they don't know when they might be able to fill them or what premiums they will have to pay to acquire merchandise. My earlier prediction that by the end of April it would become almost impossible to find any physical gold or silver bullion-priced items for reasonable delivery is starting to come true."
 
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