Chilton Claims Massive Silver Concentration Has Been Distributed Amongst 4 Large Traders
Recently, a subscriber sent me an email he got from CFTC Commissioner Bart Chilton as a response to another scathing email he had sent the CFTC in regards to the obvious silver manipulation. I'd like to present this email to the Road to Roota subscribers and follow it up with my comments. Here's the email:
From: Chilton, Bart [mailto:BChilton@CFTC.gov]
Sent: Sunday, August 14, 2011 7:12 PM
To: Xxxx
Subject: Hi
Like you, I remain concerned about financial markets and how they have morphed. Massive passive traders (see my speeches if you'd like more on these) and the high frequency traders (those I call cheetahs, due to their speed) have at times moved markets in ways that I think nobody anticipated. Still, some disagree that they may have an impact. That is why, since 2008, I have supported the improvisation of mandatory position limits. They are the law of the land now and I am hopeful that my colleagues will agree that we need to implement them soon. In this regard, I am hopeful that we will approve such a position limit rule within the next 6-8 weeks. That doesn't mean it will actually be implemented as you and I would like (it may not be effective for another few months). However, the passage of a position limit rule is a key step to actually having such limits implemented soon.
With regard to the cheetahs, I think they need to be tested, registered and potentially limited. On May 1st, as you know, the price of silver dropped 12% in 13 minutes on a Sunday evening in electronic trading. That certainly seems suspect. By the way, on June 7th in the evening, the price of natural gas dropped 7% in -- get this -- 14 seconds. Seconds! I mentioned to a reporter the other day that I think the cheetah trading is parasitical. I'm not sure of the value to the markets of such trading. I think when there is spare liquidity (like on those two dates) that a cheetah or just a few other traders may be able to move markets significantly. I will continue to work on how to best handle this circumstance. The new financial reform law (Dodd Frank) does not require the agency to regulate the cheetahs, but here is an example where I believe the regulator needs to be proactive and do something positive.
Finally, I wanted to let you know that I while I am disappointed in the pace of our silver investigation (as I said last October in a public statement), that it is still ongoing. I meet on silver regularly. A day does not pass when I don't have a conversation about silver. If the agency does not say something publicly by the third week of September, I will do so (yet again). That may not be an comfort to you, which is understandable, but I am doing what I can as one of five commissioners at the CFTC.
I did want to included the graph below showing the price of gold and silver. I thought you might be interested. Furthermore, this week's Commitment of Traders data was just released -- as of Tuesday, August 9, the four largest longs in COMEX silver (all futures and options combined) accounted for 16.1% of open interest, with the four largest shorts accounting for 30.4% of open interest. This data covers both commercial and non-commercial traders together. No longer do we see one trader with a huge concentrated short, although it does go over 10% of the open interest at times…why we need limits.
B
There is a lot of very good information in here that needs a little more exploring and analysis as it relates to END of the silver manipulation scam. Although Bart is the only CFTC Commissioner to respond to the public's emails on a consistent basis, the CFTC is NOT being truthful and honest with the American people about what is REALLY going on. Bart is being presented as "The People's Commissioner" but I believe it is being done to deflect the people's anger from the Commission as they continue to assist in the rigging of the markets.
The second sentence of his email is infuriating...
"Massive passive traders (see my speeches if you'd like more on these) and the high frequency traders (those I call cheetahs, due to their speed) have at times moved markets in ways that I think nobody anticipated."
What? Nobody anticipated??? For YEARS I have sent the CFTC emails and letters showing how computer market rigging works. I even went so far as to TELL them how to do their job properly...
New CFTC Gold/Silver Regulatory Framework
//www.roadtoroota.com/public/207.cfm
Did you catch points number 15 and 16?...
15) Ban High Volume Computer Trading -- High speed computer trading makes a mockery of the entire free market concept. Allowing individual firms or a small collection of firms to make millions of trades back and forth every second has done more to distort the price of commodities than any other pricing dynamic. Bernie Madoff's firm specialized in trades like these and there are other firms still in operation rigging the markets today.
16) Daily Volume Limits and Public Disclosure -- Although position limits are important in order to stop market manipulation, limits on daily trade volumes and public disclosure of participant trades is also vital in making sure no manipulation is taking place. A company that buys and sells tens of thousands of contracts each day but settles out near even won't stand out as having a manipulative concentration but is clearly manipulating the price. Transparency is key to a free and open market and should trump the desire to hide proprietary trading positions.
When Bart says that NOBODY ANTICIPATED how computers can move markets he is making a mockery of his entire organization. Oh...and here's a blast from the past. I even told them WHO is doing it and why way back in January 2008!
Who's The Little Man Behind The Curtain
//www.roadtoroota.com/public/133.cfm
Ok. So maybe the computer market rigging operation SHOULD HAVE BEEN ANTICIPATED.
But let's move on.
In the 3rd paragraph Bart gives us a little update on the Silver Investigation that has been going on for 3 years. According to Bart the investigation is STILL ongoing! This is amazing as they even have a WHISTLEBLOWER in Andrew Maguire that exposed a silver market manipulation BEFORE it happened! How much proof do you need??? And this was not some little guys trying to make a buck. This was done by the largest silver player IN THE WORLD...JP Morgan! You know...that bank that is the custodian of all the physical silver for those suckers who "invested" in the silver ETF (SLV). Just imagine the LIABILITY for all the players involved in this scam. JPM, BlackRock, Barclays, Bank of New York Melon and more.
I think that Mr. Maguire will be quite a RICH MAN when this is all over as the new Whistleblower Law can compensate "the blower" for up to 30% of the fraud amount. Let me tell you...he deserves it!
Now we get to the final part of Bart's email where he states...
"No longer do we see one trader with a huge concentrated short, although it does go over 10% of the open interest at times..."
Wow! Did he just claim that JP Morgan is no longer that massive concentrated short? How did they shrink that short without the price going skyward? What does this mean?
Here's my take...
The CFTC has taken 3 years to conclude the silver investigation to give JPM time to reduce their short. JPM used all the silver volatility lately to DISGUISE that they were spreading this short around to other members of the banking cabal...and there are MANY. The reality is that the COMEX silver short position is just another SILVER DERIVATIVE with no real linkage to physical silver. Truthfully, it doesn't matter if 1 bank holds it or 10 banks hold it as they work together to CONTROL the price of silver. The concentration issue may disappear by spreading out the shorts to other members of the banking cabal but the manipulation issue is alive and well. Computer programs should not be allowed to trade in a "Free Market" as they are primarily used to manipulate the price rather than discover the price.
All this is being done to try and MANAGE THROUGH THE COMING MONETARY COLLAPSE.
Of course it won't work. A freely traded silver market would DESTROY anything left of an un-backed fiat monetary system. When this nightmare is all over people will DEMAND the truth from the CFTC but they are clearly not ready to come clean. Basically, they are saying the same thing to the public that Jack Nicholson famously said in the movie "A Few Good Men"...
YOU CAN'T HANDLE THE TRUTH!
May the Road you choose be the Right Road.
Bix Weir www.RoadtoRoota.com