Before the CFTC inevitably ignores the following inquiry from Chris Marcus et al, I would remind its Chairman and the CFTC attorneys that the CFTC and its agents are public servants — their function is to serve the public. The compensation paid to the CFTC’s Chairman and Commissioners, and to its entire staff, is funded by the United States’ taxpayers.
From GATA by way of introduction to Chris Marcus asking for an explanation of the CFTC’s effort to help suppress the price of silver in the Comex futures market:
In an open letter to the acting chairman of the U.S. Commodity Futures Trading Commission, Rostin Behnam, Chris Marcus of Arcadia Economics asks for an explanation of a comment Behnam made on March 18 that seemed to applaud and implicate the commission in the suppression of silver futures prices.
“In a video posted on March 18 from the International Futures Industry Conference: Keynote Fireside Chat with Acting CFTC Chairman Rostin Benham
you made the following statement: ‘The resiliency and the market structure of the futures market was able to tamp down what could have been a much worse situation in the silver market.
Also at the conference Behnam appears to have congratulated the commission “for utilizing its authority and some of the tools it has within the margin space to control the price and volatility of the silver contracts.”
Marcus also asks Behnam to explain an assertion made on CNBC in February by the research chief for the Goldman Sachs commodities desk, Jeff Currie, who, in regard to silver, said: “The shorts are the ETFs [exchange-traded funds]. The ETFs buy the physical, they turn around and they sell on the Comex to be able to hedge that physical position like any other corporate”: Jeff Currie Says ETFs Like SLV Hedge Thus Do Not Track The Silver Price
But if silver ETFs are just accumulations of metal held for the benefit of their investors so their investment can track the silver price, why do the ETFs need to hedge against the metal’s price? If silver ETFs are hedging their own silver, they are nullifying its potential for price appreciation and essentially rigging the market surreptitiously against their own investors.
The use of gold and silver ETFs to short the monetary metals markets for price suppression at strategic moments long has been suspected by many in the GATA camp. Marcus’ letter itemizes much more evidence of improprieties in the silver market, but some of them would be explained by manipulative trading undertaken by, at the behest of, or with the approval of the U.S. government if such trading is legal and outside the commission’s jurisdiction.
Marcus’ letter to Behnam is posted at Arcadia Economics here: Arcadia Economics’ Letter To The CFTC