February 8 - Gold $403.20 - Silver $6.25 Silver Squeeze!/Eliott Spitzer/ Silver Letters "The national budget must be balanced. The public debt must be reduced; the arrogance of the authorities must be moderated and controlled. Payments to foreign governments must be reduced, if the nation doesn't want to go bankrupt. People must again learn to work, instead of living on public assistance."
--Marcus Tullius Cicero, c 55 B.C. Recently, I have received some queries about the silver squeeze I have been discussing for over a month. Some Café members have invested in silver stocks in anticipation of such an event. Others would like me to clarify what I am talking about and why. First regard the weekly silver chart: http://futures.tradingcharts.com/chart/SV/W It all began with a complete change in the way silver was trading in October, 2003 It went from trading very heavily, to trading lightly. The tone change was noticed by some of the Café’s Comex floor contacts and was reported to the Café membership. At the time, silver was trading a bit below $5.20. To comprehend how important this change was, you need only review the monthly silver chart: http://futures.tradingcharts.com/chart/SV/M Not since Warren Buffet accumulated silver in 1997 has silver moved up so sharply so fast. The comparison is striking. What is important to appreciate is what Warren Buffet saw then is even more apropos almost six years later (Mr. Buffet is known for his long-term thinking). I am no expert on the silver fundamentals like Ted Butler or David Morgan, but I know the market has been in a supply/demand deficit all these years and the silver market has been managed just like gold has. The Gold Cartel needed to keep the silver price suppressed to make sure there was no undue focus on what they were doing to gold. It wouldn’t look right to have gold at $280 and silver at $8. Where and how the bad guys found enough physical silver to facilitate their scheme is beyond me. We just know they did find adequate supply, but more importantly, they used the derivatives paper market to keep silver under control. We know this because of the size of the commercial short position, which is concentrated in only a very few players and dwarfs the amount of physical supply available to bring to market. This is why GATA is supporting Ted Butler’s effort to expose the silver scam – one that has hurt so many investors and THE PEOPLE in silver producing countries such as Mexico. The recent change in the way silver has been trading for many years tells me the Silver Cabal has hit the wall. They are running out of physical silver supply to continue their scam. They will be tapioca if enough buyers ask for delivery of Comex silver because they won’t be able to make the deliveries without driving the price to the moon. Why could this occur in the near future vis-a-vis months gone by? Think of the confirming information flow sent your way by MIDAS thanks to the input from some very thoughtful Café members. Let us review a fair amount of it as it came in: December 23 - Gold $410.65 up 55 cents - Silver $5.71 up 2 cents A STALKER Of A Gold/Silver Tale For Christmas Time Hi Bill,
A gold and silver dealer that I know told me today that he recently spoke with a very large coin and bullion dealer that he deals with, who told him last week that Warren Buffet has been buying a lot of silver. Buffett is also buying futures and plans to take delivery. This large dealer said that he expects a short squeeze by Buffett soon. My dealer stressed that he has dealt with this large dealer for twenty years and he is not prone to exaggerate…..-END- January 13, 2004 - Gold $423.50 down $2.60 - Silver $6.56 unchanged GATA Love That Silver Dear Bill
You will probably remember that when the gold was struggling with the $325 I sent you information that a big European fund which bought 2.6 billions worth of gold. This information came to me from a friend, a banker which took an active part of the purchasing process hence was total 100% reliable. At the time, the fund's target was $380 at which point it intended to exit. Well, they are still in.
But, he now tells me that this fund switched some of it's gold to silver in the first 10 days of January - worth 250 millions dollar. Searching the world they couldn't find the 40 millions silver ounces they wanted, so some of it went into derivatives. January 14, 2004 - Gold $421.40 down $2.10 - Silver $6.40 down 16 cents An Ominous Close For The Cabal And Gold Shorts Some more input from my friend in Europe. The European fund I told you about few days ago, bought most of the silver in future contracts in Comex due to lack of physical supply. Most contracts are due in few months. China is buying physical silver in a big and consistent way. These purchases started some weeks ago. January 15, 2004 - Gold $408.30 down $13.10 - Silver $6.19 down 21 cents Ouch! Gold Cartel Wins A Battle Bill
A follow-up from my report to café members yesterday on the unavailability of silver bars in the UK:
I phoned Chard, my previous supplier, today. Here is our dialogue:
Q Lilly: 'I note you are sold out altogether on silver bars'.
Chard:' yes, there is great interest in silver bars recently'
Q: will you be getting any more in'?
Chard: 'yes ......... IN ABOUT 3 MONTHS'
Q: 'how much do think you'll be able to get hold of'?
Chard: ' 6 kilogram, IF we'll get it'
Q: 'when did you last get a delivery in'?
Chard: '6 weeks ago'.
Q: 'how much did you get'?
Chard :'16 KILO. WE HAD ACTUALLY ASKED FOR 100 KILOGRAM'.
Q: 'and when did you order before that?'
Chard: 12 months ago. 100 kilograms, we got that straight away. No
problems'.
I.e. : there WAS SO LITTLE DEMAND until recently, THAT 100 KG LASTED
THEM 10 1/2 months!
AND NOW THEY CAN'T GET ANY!!
Lilly Stuart, London January 18, 2004 - Gold $406.40 - Silver $6.30 The First Clear Chink In The Gold Cartel’s Armor!!! Hi Bill,
Thanks so much for your daily commentary; without it I would feel lost. Just to back up what you were saying about a potential short squeeze in Silver, I wanted to share this with you. I contacted my broker at REFCO about purchasing silver call options at a strike price of $7.00. He gave me the following prices for MAR and MAY:
March $650
May $2,400
Obviously, something big is going to happen before the May options expire. Feel free to spread the word in MIDAS if you feel it is worth mentioning.
Kirk A. January 21, 2004 - Gold $410.90 down $1.80 - Silver $6.19 down 11 cents Conflict At The Bundesbank Dear Bill
My friend is telling me that a giant Swiss company took a position of 3.2 billion dollars in gold and silver.
No doubt the big money is going into the precious metals. (MIDAS note: this company is a household name) February 2, 2004 - Gold $398.40 down $3.60 - Silver $6.01 down 22 cents GATA To Aggressively Support Ted Butler’s Effort To Expose Silver Market Manipulation! But now for silver: two weeks ago I ordered this bank by telephone from The Netherlands the delivery of 5 kilograms of silver. They affirmed the purchase at € 216 ($270) per kilo (20% Tax Adjusted Value included) and we agreed on delivery in my holiday last week. When I visited the bank on january 28th they handed over to me this 5 kilobars (inscription: OEGUSSA / 999,7 / feinsilber / 1000 gr). I liked them so much, that I ordered at the same moment the purchase of another 5 kilobars and went skiing. At the end of the afternoon I returned to the bank. The girl reacted rather embarrassed: she had been calling several times to (I think) the national headquarters of the BTV and maybe other addresses. And had got the message that there was no silver for sale anymore. I asked her if my price limit had been the problem, but she said no, she just received the message over and over that therr was no silver available for selling for any price (The message she got was: ‘Es ist sehr knapp’. In english: ‘It is very scarce.’) A higher bid price I gave her appeared not to be able the solution. The answer kept coming on the day’s after (january 29th and 30th ): ‘ there is no silver for sale, and (ATTENTION!!!) there will not be for the coming two or three weeks.’ The girl excused herself to me, and promised to keep trying in the coming month. But she said to have few confidence in succeeding in the short future. Is this a signal for a silver squeeze or isn’t it! My preparedness to bid higher prices could not lead to a purchase. I am beginning to have a strange feeling that, although silver is finished, the powers of the cabal succeed in maintaining low prices?! Even while they have to admit not to be able to deliver! -END- Then, THIS weekend a completely different source informed me another investment firm (or bank) is going to buy "ALL THE SILVER IN EUROPE" and plans to do so by sometime this spring. What is even more interesting, they have notified the regulatory authorities and told them what they are up to. I repeat: the authorities KNOW what is coming!!!! The buying firm has gone out of its way to notify the regulators they are going to buy a great deal of silver and do not wish to be chastised for doing so. I am sure they have done so to give the authorities time to put the shorts on notice. Therefore, there can be no official repercussions to the buying firm. That is how confident the buyers are!!! OK, so take a gander back at silver's weekly/monthly charts and note the price action recently as compared to the past. Something HAS changed DRAMATICALLY. I don’t have any "inside" information about a silver squeeze. However, I have been an extremely large commodities trader in the past (limit positions at times) and do know something about the markets. The easiest and best way to confirm fundamental market input is to observe (over time) the technical action of the market itself. The recent action IS confirming what I am hearing from a variety of informed sources. Does it guarantee a SQUEEZE, which is very rare? Nope! Yet, I think the odds are 60-40 in our favor, and those are extraordinarily high odds for such an event. In 1987 silver went bananas in March, rallying $3 per ounce in a very short period of time, like in a week. I was heavily long at the time. Took the profits and bought thousands of cheap copper options. Copper went from 59 cents to $1.46 by the end of the year. Had I sold out then, I would have ridden out into the sunset and you never would have heard of me. Fortunately, I survived my eventual debacle for another day, with one more big play in me before I have no choice but to ride into the sunset. This time I intend to watch The Gold Cartel being carried out instead of letting them carry me out. Anyway, back to silver. Yes, I think a squeeze is coming. There is just too much legitimate smoke out there. Has to lead to a coming fire in the not too distant future. However, the real squeeze, should there be one, might not come until May. No way to predict that. Regardless, the "unusual" silver trading action of late suggests something BIG is brewing! One thing to keep an eye on is how the European silver premiums behave relative to the US. If they go to a sharp premium due to extraordinary European demand, silver will leave the US for Europe, exacerbating potential Comex delivery problems. Stay tuned. I am sure we have not heard the last from a very sophisticated group of Café informants! Chuck checks in: Just stopped by the newsstand to look at the call-put ratios on gold from Thursday. If these figures are correct, they probably make the highest ratio of puts to calls that I have seen. 27,000 puts to just over 7,000 calls. This probably accounts for the sharp reversal yesterday. It will be interesting to see if there was heavy shorting into yesterday's rise. Thinking of writing of how to handle a blow-out. Chuck Less world gold supply: Russia reduces gold exports 21.5% in 2003
MOSCOW. Feb 4 (Interfax) - Russia reduced gold exports 21.5% from 191 tonnes in 2002 to 150 tonnes in 2003, Valery Braiko, head of the Gold Producers' Union, said at the Gold 2004 conference in Moscow. Explaining the drop, Braiko said there was a rush to export gold in 2002 because the 5% export duty on the metal had just been lifted. In addition, Russia hardly increased gold production last year: mine output rose just 0.8% to 159.915 tonnes. Silver exports, though, soared from 514 tonnes in 2002 to 800 tonnes in 2003. Russia raised gold production 3.5% to 176.903 tonnes in 2003, the Union has said. Mine production edged up 0.8% or 1.2698 tonnes to 159.915 tonnes and incidental or by-product gold output grew 4% or 387 kg to 10.153 tonnes… -END- Never did I think the recent bear market rally in US stocks would last so long. This comment in a recent Frank Veneroso commentary caught my attention and might explain where our stock market bear camp got it wrong – to-date that is: - Vernon Smith, a recent Nobel Laureate in behavioral finance, has provided evidence that, when bubbles burst, there follows a rally which is an echo of the bubble. In the echo bubble rally psychology remains more or less the same as what it was at the peak of the prior bubble, despite the pain of the intervening bear market. Smith’s evidence indicates that psychology does not truly change until the echo bubble bursts. Only then does the market revert to a semblance of rational pricing.
-END- "Echo bubble" – love it! The finance ministers and central bankers issued the following after their G-7 meeting concluded Saturday afternoon:
BOCA RATON, Fla., Feb. 7 (Reuters) The global economic recovery has strengthened significantly since our meeting in Dubai and risks have diminished. Growth projections for 2004 have been revised upward to their highest in three years. Fiscal and monetary policies have helped bring about these welcome changes.
Yet much more remains to be done. The pace of growth among our economies remains uneven. In our Agenda for Growth initiative, we emphasize supply-side structural policies that increase flexibility and raise productivity growth and employment. Today we released a progress report on our Agenda for Growth. This agenda and sound fiscal policies over the medium term are key to addressing global current account imbalances. We outlined strategies for sustained medium-term fiscal consolidation as economies recover. International trade is vital; we call for further efforts and for countries to take the steps to resume the Doha round, which is pivotal to global growth and the alleviation of world poverty.
We reaffirm that exchange rates should reflect economic fundamentals. Excess volatility and disorderly movements in exchange rates are undesirable for economic growth. We continue to monitor exchange markets closely and cooperate as appropriate. In this context, we emphasize that more flexibility in exchange rates is desirable for major countries or economic areas that lack such flexibility to promote smooth and widespread adjustments in the international financial system, based on market mechanisms.
To combat terrorist financing, we urge all countries to strengthen their asset freezing regimes and to combat abuse of the informal financial sector and non-profit organizations. The IMF/World Bank should make permanent and comprehensive their assessments of countries' efforts to combat terrorism.
We are committed to further enhance transparency and supervisory standards in financial markets, in particular non-compliant offshore centers.
We have a shared interest in seeing strengthened economic growth in the greater Middle East. We had a productive meeting with our counterparts from Afghanistan and Iraq. We welcome the completion of the currency exchange in Iraq and the removal of interest rate controls, and we look forward to the approval of the new central bank law. We welcome progress on reform and reconstruction in Afghanistan and the renewed efforts to collect revenues from the provinces. We call on others to join us in reducing the debt burdens of Iraq and Afghanistan. We welcome the plans of the IMF and the World Bank to provide financial and technical assistance to Iraq and Afghanistan. -END- What strikes me is how little is said about the issue concerning most of the investment world, which is the currency one. Clearly, they would have preferred not to have held this meeting at all. The Japanese are petrified of their currency going higher and are actively intervening just like the US does in manipulating the gold price. The Europeans are concerned a sinking dollar will hurt their exports, but can’t see lowering their own rates as a solution. Snow says the US still has a strong dollar policy while President Bush is desperate to see the dollar go low enough to begin to turn around the dismal American job picture. Someone whom I have the utmost respect for who runs a significant gold fund told me his number one position is X-Cal Resources, which I also own. I could not be happier when I heard this. Sean Kennedy, X-Cal CEO, was there for GATA in a substantial way when you few others would even take our phone calls. Congrats Sean. Your forward thinking is paying off all over the place!
I hope everyone has done their part and contacted Eliot Spitzer, or the appropriate precious metals authorities. You never know what letter or email could win the day by pushing them over "The Tipping Point." Regarding Eliot Spitzer: A number of Café members don’t believe he will do anything – that he will only go after the small fish to get a name for himself. There is something to that. When he had a chance to go after Sandy Weill (Citi-Group chairman and someone I used to work for at Shearson, Hayden, Stone), he backed off. Many say the eventual fines levied on Wall Street were relatively small potatoes compared to what they have been raking in due to dubious sales and trading practices. Perhaps he won’t do anything. But, nothing ventured nothing gained. The Comex is in New York State, under his jurisdiction. We want all of us to put him on notice something is very wrong regarding silver. He has formed a campaign committee, most likely to run for Governor in 2006 and is already collecting campaign funds! The silver market will have blown sky high by then. Along with a soaring gold price, it might cause the financial community some severe stress. If he fails to at least look into what is going on, when put on notice by so many people, it could be a real blight on his record. It won’t do him any good to look into wrongdoing after the horse has left the barn. We know he is willing to take some action (unlike others, to his huge credit). The financial chaos caused by the gold/silver rig is likely to be a headliner by 2006. Why not give Spitzer a heads up of what is going to happen and why and let him know how he can use it for his political benefit? Regarding the Comex/NYMEX regulatory authorities: They have been derelict in their duties. They are running out of time to fulfill their fiduciary role to the public. If they fail to act before silver blows, our camp will demand a witch hunt to expose this dereliction of duty. If they receive thousands of emails and letters, they won’t have any wiggle room for excuses. It is time to put some fear into them. I am passing information on to you that the European authorities have been put on notice about what is coming in silver. The executives at the Comex/NYMEX MUST have heard the same too by now. POUND away at these bureaucrats! BEAT the arrogant ones! I will be so disappointed in every Café member who did not take 10 minutes to do something to help yourselves. Might as well do something now. I will be on this relentlessly for weeks. There is no excuse not to at least send an email, a letter is better. You can even use many of the examples presented in MIDAS commentary this past week. A few more of them: The Honorable Eliot Spitzer
Attorney General
State of New York
120 Broadway
New York, NY 10271 Dear Mr. Spitzer: I encourage you to investigate the egregious conduct being carried on by certain participants in the Comex silver market. When "paper" manipulators can control a supposedly free market, it destroys any opportunity for small investors such as myself. You have distinguished yourself as a friend of the little man and I trust you will continue your good work on our behalf. From what I can tell, the misconduct is so blatant in silver, where short sellers are nowhere near being able to deliver into their positions, that you should be able to quickly ascertain the misdeeds and those who are perpetrating them. I am but a small investor and I cannot put into technical words the exact description of the misdeeds. However, I am including a report by a noted and respected observer of the silver market, namely, Mr. Ted Butler. Very truly yours,
John W. Black Greetings Chairman Viola, This email follows my continued observation of price manipulation and market activity in the New York silver markets - physical and paper. I echo the concerns of Mr. Ted Butler. I have signed the silver petition at signature # 1516. Your office is well aware of the assertions and they will not be repeated here. This email will also be available to responsible parties as evidence of additional NOTICE when your FAILURE TO ACT results in market disruptions. The time is long past when ignorance may be asserted regarding the ongoing action of un-economic short selling and that practice in price manipulation. Your duty calls and action is required. Respectfully,
David and Anna Larson Title: How can this happen in american democracy ?
Dear Mr. chairman Vincent Viola,
my name is Karl Bernhard Möllmann from munich in good old germany. I was born in 1947, right after my country was freed from the Nazi dictatorship with the help from your great people. So I learned to love freedom, as I learned to love justice.
>From my late mother I learned to invest in the equity markets as well as in commodities like gold and silver.
What is going on in the american gold and silver market right now reminds me of our darkest hours under Nazi oppression - please make sure you don't get stuck in that criminal trap it really is.
You should know much better than I, that there is criminal manipulation going on in the USA right now, covered up from high places.
But from our german experience with criminal government I can tell you, you will be much better off in the long run, if you choose the honest and legal side the sooner the better.
All the best
Karl Bernhard Möllmann
I mailed this letter today Bill. The Honorable Eliot Spitzer
Attorney General
State of New York
120 Broadway
New York, NY 10271 Thank you Mr. Spitzer for what you have been doing to hold the corrupt and illegal financial market manipulators accountable. I know that you have been well informed by now concerning the equally illegal and egregious activities of the silver trade on the Comex. The clear manipulation in the price of silver must come to an end, and the perpetrators must be brought to justice. If you will investigate the massive silver short positions, I believe that you will see that there is abundant evidence of illegal market activities by a small group of commercial Comex silver traders. Please seriously study the evidence Mr. Spitzer. Small investors who have looked to gold and silver as a hedge against the destructive powers of the monetary printing press have suffered far too long. Unfortunately, the longer this goes on, the more destruction there will be for the entire economic system of the United States. Sincerely,
Kirk Conklin The Rumor Mill News Reading Room
http://www.rumormillnews.com To Eliot Spitzer Re: Precious Metals Manipulation Posted By: faction3
Date: Saturday, 7 February 2004, 3:24 p.m. February 3, 2004 To The Honorable Eliot Spitzer
Attorney General
State of New York
120 Broadway
New York, NY 10271
http://www.oag.state.ny.us/online_forms/email_ag.jsp To The Honorable Eliot Spitzer: A crime is taking place at the COMEX. A default is about to occur in both the gold markets and the silver markets. The crime is the creation of excessive and fraudulent paper promises to deliver gold and silver that does not exist. This is a crime of fraud that will hurt market participants as follows: Imagine if you ordered silver bullion from a local coin dealer, and sent in your money, waiting a week for your bullion to arrive, and then, during that week you watch as silver rises from $5-$10/oz. Imagine your happiness as you realize you made the correct investment decision, only, then imagine if you were told that they don't have the silver for you because they have run out. Then, imagine as your money was returned to you, when silver was $10/oz. Your money was not refunded, but you just lost half your money in the form of silver bullion, and then, you'd not be able to buy silver anywhere, as the market seizes up, and really takes off in price from $10/oz. to $50/oz. or higher, due to the default!!! That is the exact situation that I believe will hit the entire silver market due to the un-backed sales of futures contracts. Millions of silver investors who trusted the integrity of the markets in the U.S. will be devastated because these un-backed promises were allowed to be made, unchecked, and unregulated by the regulation authorities who are either stupid or have been bribed and paid off, or threatened with harm if they did their jobs. Last year, I wrote to Michael Gorham, Director of Market Oversight U.S. CFTC (Commodity Futures Trading Commission) and to Neal Wolkoff, Executive Vice President and Chief Operating Officer New York Mercantile Exchange. Their writings reflect that they recognize the problem, and yet, they refused to act. It is time to end the criminal activity, and end the lack of action by the market regulators that allow this crime to go unpunished. According to the Coin Act of 1792, it was a crime worthy of death to debase the coinage. Penalty of Death for de-basing the coins. Section 19. And be it further enacted, That if any of the gold or silver coins which shall be struck or coined at the said mint shall be debased or made worse as to the proportion of the fine gold or fine silver therein contained, or shall be of less weight or value than the same out to be pursuant to the directions of this act, through the default or with the connivance of any of the officers or persons who shall be employed at the said mint, for the purpose of profit or gain, or otherwise with a fraudulent intent, and if any of the said officers or persons shall embezzle any of the metals which shall at any time be committed to their charge for the purpose of being coined, or any of the coins which shall be struck or coined at the said mint, every such officer or person who shall commit any or either of the said offenses, shall be deemed guilty of felony, and shall suffer death. Therefore, surely, it is a crime to allow the continuation of the debasement of our coinage as is occuring through the Federal Reserve System of paper money. We must do something to stop the crime of endless paper promises that interfere with the free market process that stimulate competition that produces an efficient economy and prosperity for all. Such endless paper promises, whether futures contracts, or paper dollars, wreck havoc in our entire economy. I am acting to stop the fraud, by using the freedom of the press. I write articles on the internet about the fraud and I tell people to stop being deceived by the paper promises. Hundreds of people have written to me to thank me for writing so clearly and for explaining the fraud that is taking place. Four of my best and most appropriate articles to help you present your case against those who are manipulating the markets in gold and silver, are the following:
Rising Gold Prices will Help the Economy
Letter To Authorities of Silver Markets - 06 January 2003
http://www.gold-eagle.com/editorials_03/hommel010603.html
Response by the CFTC to Mr. Hommel's "Open Letter To the Authorities of the Silver Markets"
The Moral Failures of the Paper Longs
Unlike myself, who, at the present time, can only write, and promote my writings, a man in your position has a greater responsibility to do more to help the people of the United States of America, and the whole world, who is being deceived and defrauded. You can prosecute and lay criminal charges of conspiracy, racketeering, market manipulation, fraud, and perhaps more, and put away the criminals for good. May your actions be a preview of this prophecy about the whore who leads the nations astray, and how she is ultimately destroyed by the strength of the kings of the nations. Rev 17:16 And the ten horns which thou sawest upon the beast, these shall hate the whore, and shall make her desolate and naked, and shall eat her flesh, and burn her with fire. I pray to God that you will do the right thing, and that you will not be intimidated by the evil. I pray that you will not fear man, nor allow your self to be blackmailed or scared away from doing the right thing. May God grant you the courage, the wisdom, and the boldness, to end the evil of fraud that is plaguing our land and destroying our economy. Sincerely, Jason Hommel
goldismoney.com
bibleprophesy.org cc
James E. Newsome
Chairman
Three Lafayette Centre
1155 21st Street, NW
Washington DC 20581
jnewsome@cftc.gov -------------------------- We can also email: Vincent Viola
Chairman
Vviola@nymex.com Michael Steinhause
Vice-Chairman
Msteinhause@nymex.com Christopher Bowen
General Counsel
Cbowen@nymex.com Thomas Lasala
VP - Chief Regulatory Officer
tlasalla@nymex.com *** Gentleman,
I, and thousands of others, would be grateful if you would deal with this blatant manipulation of free market forces in the silver price.
My wife, children...and my co-workers at the office know what's going on...and I know you do to.
Thank you.
Edward Steer
Edmonton, Alberta
Canada 04 February 2004 The Honorable Eliot Spitzer
New York State Attorney General
120 Broadway
New York, NY 10271
U.S.A. Subject: The Silver Market Dear Sir: I am writing to you on an issue which, by now, you are more than familiar…the suppression of the silver price on the NYMEX/COMEX by the ‘eight or less’ traders. It is more than obvious, even to the casual observer, that the price of silver is controlled, and has been for more than a decade. Some people say that the price of silver has never been free, particularly since the appearance of the Silver Users Association in 1947. I know that your office…plus the authorities at the CFTC and the NYMEX/COMEX…are all more than aware of that as well. The 8 largest COMEX traders are net (naked) short more than 7 times the annual silver mine production of the US, the world's 4th largest producer (source - Silver Institute). You can be sure that the Chairman of the CFTC, James Newsome…an ex-cattleman… would never allow 8 traders to be short anything approaching total US cattle production, to say nothing of 7 times US cattle production. That the CFTC protects these silver shorts is deplorable. The CFTC has been informed of this issue many times over the last fifteen years, and have done nothing to stop it. Up until now, I have refused to believe that the CFTC is complicit in this matter, but I have now changed my mind to the belief that they are. In a related Dow Jones story today, I see that the SEC and NASD have both taken drastic action to tighten one of its rules governing illegal naked short selling. Let me quote this article... "Known as affirmative determination, the NASD rule stipulates that brokers and dealers engaged in a short sale transaction must make sure that shares can be delivered by settlement time, three days later."
"We closed a loophole," said Steve Luparello, executive vice president of Market Regulation at NASD. Until now, non-NASD members, like specialists, option markets and foreign brokers, weren't covered under the affirmative determination rule." "New Rule 3370 goes into effect on February 20th 2004. This new rule could become the Holy Grail for bulletin board traded companies. The Rule requires NASD member firms to treat non-member broker dealers as if they were regular customers as regards delivery of any shares that have been sold through a US registered broker/dealer."
"A short seller typically borrows stock from a broker to sell it into the market, betting that the share price will fall so that he can buy the stock back at a lower price and pocket
the difference." End. Mr. Sptizer, you and I and James Newsome all know that the ‘eight or less traders’ that are suppressing the silver price have little or no silver backing their obvious naked short positions. They are allowed to sell naked short any amount they wish, in order to control the price…without a word from the CFTC. This is not only illegal…it is outrageous as well…and entirely against regulations of the NYMEX/COMEX. It also makes a mockery of the belief that the U.S. markets are free and fair. This is obviously not the case with silver…plus a great many other things that are beyond the scope of this letter. If the SEC and the NASD have decided to put their foot down on naked short sales in this area, then it is long overdue that the CFTC take similar action in the silver market. Silver expert Ted Butler (www.butlerresearch.com/archive_free.html) has previously provided a fair solution (to the CFTC) that will fix any threat of a delivery default and eliminate the silver manipulation problem at the same time. In fact, it would work in all commodity markets. The CFTC must mandate that all longs in futures contracts must have the full cash value of their contracts deposited in their accounts by first delivery day. And likewise, all shorts must have COMEX warehouse receipts deposited by first delivery day. Mr. Spitzer, the CFTC is deathly afraid to even debate this, because they know it has great merit. You and I know it too. You and your department have done most excellent work in the past number of years bringing financial wrong-doings to light. I urge you to the honourable thing, and end this manipulation now. I know you have the power, and I also hope that you have the will to do what is necessary and right. In closing, I wish you well in your continued endeavors. I also enclose a copy of silver expert Ted Butler’s latest essay "Business as Usual?" taken from his web site mentioned above, or available directly from the URL (www.investmentrarities.com/02-02-04.html) If you have any further questions, or require more information, you can contact me directly, or speak with the expert on this issue…former commodities trader, Mr. Ted Butler. His e-mail address is fasttedb@aol.com. He is the real expert in these matters, and would gladly meet with you at your convenience, and at a time and location of your choosing. Best personal wishes, Ed Steer
Edmonton, Alberta
Canada T6K 2H4 e-mail: edsteer48@shaw.ca emhs/mtf cc James Newsome
Chairman, CFTC
jnewsome@cftc.gov Dr. Michael Gorham
Director of Market Oversight, CFTC
mgorham@cftc.gov Vincent Viola
Chairman, NYMEX
vviola@nymex.com Michael Steinhause
Vice-Chairman, NYMEX
msteinhause@nymex.com Christopher Bowen
General Counsel, NYMEX
cbowen@nymex.com Thomas Lasala, VP Chief Regulatory Officer, NYMEX
tlasalla@nymex.com File – four page letter…Eliot Spitzer enclosures (1- Six pages) Essay by Ted Butler: Business as Usual? Vincent Viola
Chairman
Vviola@nymex.com
Michael Steinhause
Vice-Chairman
Msteinhause@nymex.com
Christopher Bowen
General Counsel
Cbowen@nymex.com ATTACK! GATA BE IN IT TO WIN IT! MIDAS PS: to Café members: GATA, as presented, is on a campaign to support Ted Butler’s efforts to expose the fraudulent manipulation of the silver market. Therefore, for the first time since The Café opened, I am putting this commentary out to some other prominent gold web sites only days after putting another MIDAS out there. I promised Ted Butler we would do what we could to help him win the day and want as much exposure of our efforts as possible. GATA urges ALL GOLD/SILVER INVESTORS to stand up and be counted, which will obviously accrue to all Café members who own gold and silver investments. Take action this weekend by sending an email or letter to assist Ted Butler’s brilliantly sustained efforts to defeat the Wall Street arrogants who have fleeced us all these years. It is time to BURY these abusive elitists! Please don’t be one of those complainers who talk/criticize and never do anything. I urge everyone to join the GATA ARMY and step up to the plate. BILL MURPHY
CHAIRMAN
GOLD-ANTI TRUST ACTION COMMITTEE
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