Just what we need more government control of metals!

goingbroke

"I believe we're going to do something," Bart Chilton, one of the four CFTC commissioners, said in a recent interview. "I would be extremely surprised if we don't take some action to set hard limits" on energy futures contracts held by speculators, as well as those in metals. scarry!

ttown

Hey they need to restrict the paper markets. Haven't you noticed the physical goods are now selling for much more than their paper counterparts? You shouldn't be able to put down a small fraction of money to control large quanties of product that causes it to go high or low depending on the swing. These computer trading programs are going to be the death of us. JMO

jmski52

They'll restrict everyone else, and give an exemption to Goldman Sachs. Next question.

roadrunner

They already allow silver futures of over 15,000 contracts (75 MILL ounces) per bank while limiting many other commodities to 6,000 or less contracts. Silver contracts to 1500 limit would make a lot more sense, esp for banks who aren't exactly hedging miners. If these 2 banks had to deliver on all their shorts, the Comex would not have enough silver to cover it. Rather than having 2 banks hedge 25% of annual world production, and >100% of total US annual production, something a little more reasonable should be in order. If this were done the gold/silver ratio would drop much closer to 20:1 than to its current 68:1.

The CFTC June bank settlement report shows just 2 banks holding short futures of 32,407 contracts vs. longs of 527. Without these 2 banks playing, the silver futures would be relatively balanced. As it is, 2 banks control 33% of the total short action. If one excludes spread positions, it rises to 40%. It's odd that just 2 US banks have over 50% of the total commercial short position which includes every other type of silver hedger in the world. Interestingly, there are no US banks shown playing in the silver options (just one bank in gold options).

There used to be contract limits for precious metals but they were taken out decades ago so as to reduce the competition against the dollar and to make it easier to paper up the price. A change would be a good thing and lead to a realistic price discovery in the PM's....something that they do not do now. That's what futures were supposed to be for, honest price discovery, not the polluted manipulation one sees today. The CFTC has needs to get back into the job of regulation rather than abstinence.

roadrunner

Norseman88

<< <i>They'll restrict everyone else, and give an exemption to Goldman Sachs. Next question. >>



Don't forget JP Morgan Chase.

Norseman88

<< <i>They already allow silver futures of over 15,000 contracts (75 MILL ounces) per bank while limiting many other commodities to 6,000 or less contracts. Silver contracts to 1500 limit would make a lot more sense, esp for banks who aren't exactly hedging miners. If these 2 banks had to deliver on all their shorts, the Comex would not have enough silver to cover it. Rather than having 2 banks hedge 25% of annual world production, and >100% of total US annual production, something a little more reasonable should be in order. If this were done the gold/silver ratio would drop much closer to 20:1 than to its current 68:1.

The CFTC June bank settlement report shows just 2 banks holding short futures of 32,407 contracts vs. longs of 527. Without these 2 banks playing, the silver futures would be relatively balanced. As it is, 2 banks control 33% of the total short action. If one excludes spread positions, it rises to 40%. It's odd that just 2 US banks have over 50% of the total commercial short position which includes every other type of silver hedger in the world. Interestingly, there are no US banks shown playing in the silver options (just one bank in gold options).

There used to be contract limits for precious metals but they were taken out decades ago so as to reduce the competition against the dollar and to make it easier to paper up the price. A change would be a good thing and lead to a realistic price discovery in the PM's....something that they do not do now. That's what futures were supposed to be for, honest price discovery, not the polluted manipulation one sees today. The CFTC has needs to get back into the job of regulation rather than abstinence.

roadrunner >>



You have provided an answer as to why there will be no changing the rules in the precious metals markets, the government has no intention to make it easier for metals to compete with the dollar.