States seek currencies made of silver and gold

OPEN LETTER TO THE CFTC

February 16, 2012
Commodities Futures Trading Commission
3 Lafayette Center
1155 21st St. NW Washington, DC 50581
Re: Flawed Investigations and Breaking The Law
Dear Commissioners:
For over 2 decades a large group of silver investors have been yelling and screaming at the CFTC to stop the rampant downward manipulation of the COMEX silver market. On May 14, 2004 the CFTC released the results of their 1st investigation by Michael Gorham, Director of Market Oversight, saying they have not found any evidence of silver market manipulation.
http://www.cpmgroup.com/free_library1/COUNTER-ARGUMENTS_TO_SILVER_CONSPIRACY_THEORIES/CFTC_Silver_Letter_May_2004.pdf
Dr. Gorham, who once worked at the Federal Reserve Bank, resigned only 3 weeks after releasing this report:
http://www.cftc.gov/opa/press04/opa4935-04.htm
As a truly REMARKABLE twist of fate, or not, Mr. Gorham now serves on the Probable Cause and Business Conduct Committees of the CME who were supposed to be overseeing MF Global before it imploded:
http://www.marketswiki.com/mwiki/Michael_Gorham
Then in May 2008 the CFTC released another report on the same topic stating again that the silver market was not being manipulated. This time the CFTC decided NOT to put anyone's name on the report:
http://www.cftc.gov/ucm/groups/public/@newsroom/documents/file/silverfuturesmarketreport0508.pdf
This report piggy backed off the 2004 report in reinforcing the main argument why there was no manipulation in the silver market...
"Staff in 2004 also examined the relationship between NYMEX silver futures prices and cash market silver prices to determine whether NYMEX prices appeared to be unusually or significantly out of line with cash prices."
"NYMEX silver futures prices tend to track closely the price of physical silver...This analysis shows that there is not a downward bias in the NYMEX futures price vis-a-vis the LBMA price, which, as noted, is widely regarded as the benchmark value in the marketplace."
In BOTH reports the CFTC cites the "cash prices" as the prices for silver on the London Bullion Market(LBMA). It is absolutely important that the NYMEX (COMEX) prices stay in line with the "cash prices" of silver otherwise it would prove that the futures and options trading was SETTING the price for physical silver which is illegal. The PROBLEM with the CFTC's analysis is that they are comparing the NYMEX prices to a massively flawed proxy for the price of physical silver.
I'd like to direct your attention to the CFTC hearing on the silver market manipulation issue. Jeffery Christian of the CPM Group points out clearly that the LBMA really has NOTHING TO DO WITH THE "PHYSICAL MARKET" IN SILVER.
http://www.bullionbullscanada.com/index.php?option=com_community&view=videos&task=video&userid=330&videoid=43&Itemid=114
As a matter of fact Mr. Christian points out that the physical silver related to LBMA contracts amounts to only 1/100th of the silver market. This is supported (and even vastly understated) by the MASSIVE volumes traded daily and annually on the London Bullion Market in excess of 50B ounces per year (NET!) when annual global mine production is only 550M oz. The TOTAL VOLUME of yearly trades on a gross level is likely 5x this number or 250B oz.
The argument used twice by the CFTC that silver cannot be manipulated because this price matches the "physical price" as determined at the LBMA is patently absurd.
Now we come to the 3rd investigation into the manipulation of silver that began over 3 years ago that still has no resolution. We have supplied a whistle blower (Andrew McGuire), new regulatory authorities (Dodd-Frank Law), an admission by a CFTC Commissioner that manipulation has transpired (Bart Chilton) and a silver price that relentlessly continues to rise without any significant decrease in the concentrated short position held by a small handful of banks or even one single bank.
WHAT MORE DO YOU NEED?
On January 17, 2010 the CFTC was required BY LAW to implement position limits in the COMEX silver market. This date was not a suggestion by Congress but a hard fact of law. On January 18, 2010 the CFTC was in full violation of this law. I submit that the current CFTC Commissioners, Summers and O'Malia, who have blocked the implementation of position limits at every turn should be removed from their post immediately. The actions of the CFTC have baffled the "free market" and leaves market participants standing dumbfounded with a very simple question...
Under what legal authority does the CFTC have the ability to disobey the laws of the US Congress?
Our patience with the CFTC has long gone. We have endured 2 botched silver investigations, one NEVER ENDING silver investigation that should have been a slam dunk and now the blatant violation of Federal Law all the while silver market participants are being ROBBED DAILY BY CRIMINALS ON THE COMEX after making the very sound decision to invest in silver.



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