ABG

Will COMEX Default on Gold and Silver?

I would also note that you are not making an effort to understand the allegations of the conspiracy theorists. That is a mistake no prosecutor should make, when a victim, however confused, comes for help. Conspiracy theorists are saying that a few of the clearing members, themselves, are engaged in the alleged fraud. Allegedly, they take positions for their own account, to manipulate the market - not merely on behalf of clients.

The accused short-sellers, and their short position, are in the commercial category, NOT the speculative. Therefore, whether or not clearing members have controls on the type of speculators they accept in their prime brokerages, for example, is irrelevant.

I take a practical view. I think that conspiracy theory should certainly be properly investigated, which it has never been. However, conspiracy theories should prevent people from gaining the practical benefit of buying their gold and silver at wholesale on COMEX and NYSE-Liffe. That being said, contrary to what you are implying, CFTC certainly has the responsibility to enforce its own rules.

Other cheap no-premium markets, like the London Bullion Exchange, are closed to small investors. They make it very difficult for people to buy from them, because of incredibly high minimum purchase requirements, and a dearth of consumer-oriented information.

The futures markets, in contrast, corrupt or not, have become excellent places to buy cheap and force delivery upon the short sellers. They are completely open to middle class investors. Right now, there is no better place to buy precious metal, so long as the buyer does not succumb to the siren song of speculation fever.

As a side effect, if the conspiracy theorists are correct, mass demands for physical delivery will end alleged gold and silver pricing fraud more quickly than any CFTC investigation.


On Dec 22 04:39 PM Donatella wrote:

> Having lived through every imaginable commodity scenario in my 30+
> years in the commodity business, I can say that the information listed
> above is confused. Sorry to say. It suggests that the onus of
> preventing defaults on physical deliveries on the commodity exchanges
> is in the hands of the CFTC. It is not. It is controlled by the
> exchanges themselves...