Things That Make You Go Hmmm.... Such As The CFTC's "Endless" Investigation Of Silver Manipulation

Tyler Durden's picture

From Grant Williams' "Things That Make You Go Hmmm"

...The CFTC proposals stipulate the following: "Spot-month position limit levels set at 25% of deliverable supply for a given commodity, with a conditional spot month limit of five times that amount for entities with positions exclusively in cash-settled contracts What this essentially means is that anybody that has no intention of taking physical delivery of a commodity will NOT be allowed to build a position that is greater then 125% of the total deliverable supply while anybody looking to buy physical metal can only buy 25% of that same supply. They also threw in this little grenade: "Exemptions for bona fide hedging transactions (based on the Dodd-Frank Act’s new requirements for such transactions) and for positions that are established in good faith prior to the effective date of specific limits adopted pursuant to the proposed regulations." In other words, the existing short positions allegedly held by JPMorgan and HSBC amongst others about which the complaints were made, are unaffected by the new rules as they were already established. The WHAT?? Far from being the dog that didn’t bark, the CFTC have become the dog that held the door open for the burglars while they ransacked the house. Elsewhere though, there is another type of barking to be heard as the physical stocks of silver on the COMEX continue to dwindle - from 87,000,000 ounces in 2009 to a little over 32,000,000 ounces a mere 2 years later and sooner or later, if the volatility in silver continues, the answer to the CFTC’s investigation will be discovered not behind closed doors, but in the full glare of the spotlight as the amount of silver available to settle futures expiry gets dangerously close to a shortfall. The  more demand we see for physical silver from the likes of China, the more dangerous it gets to allow huge structural shorts to persist. Perhaps that’s why Commissioner Bart Chilton spoke this week in urgent tones about the need to address the issue of position limits? Silver now seems to have stabilized and, with first day notice for the July contract rapidly approaching, it looks as though the battle will once again be joined as silver continues to build a base between $33 and $35. One thing is for certain, the current trend simply CANNOT continue as the stocks of available silver in the COMEX warehouses continue to plummet regardless of fluctuations in the paper price. Sooner or later either the CFTC dog barks, or the market dog will - and THAT will be quite something to hear.

Full note (pdf)

Hmmm May 22 2011

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MikeNYC's picture

Pirhanas only take little bites at a time, anyway.

nope-1004's picture

As long as investors continue to play the paper game, the Crimex and CFTC will act criminal and manipulate.  If you take physical delivery, then all this shit about position limits and margin requirements means nothing.


Oracle of Kypseli's picture

Pay the extra commission and buy coins and bars direct from several oulets. What's the problem? Why bother with the thieves? it will cost you time and money.

Michael Victory's picture


agreed, stack it.

Why buy silver bullion?

How about because it won't ever go to zero.


Papasmurf's picture

Why is that website registered to a nonexistent address?   Seems to be registered to Michael V.


I guess that makes your remark SPAM.

mrgneiss's picture

Alright, what loser junked this post...........WTF is wrong with you???  Rhetorical.......

disabledvet's picture

"there is no interest on it." in effect the CME is acting as a "shadow Fed" and by raising margin (interest) rates is in my view "confirming what we already know is a problem in Europe" namely that "interest rates still matter" at a minimum in determining risk profile--but "at a maximum" in both "determining an end" although perhaps "simply providing a return." Sovreign defaults have historically been unheard of (just print your way out of it!) but since Argentina of only a decade ago defaulted suddenly "it's appearing everywhere and all at the same time." Gold and silver is of course money.  But so is God.  And in America as we all know "God is oil."

Questionmark's picture

Sorry for highjacking this top spot but I just saw this video on facebook and wanted to share it with zerohedge. It seems pretty relevant these days and made me lol.

DoChenRollingBearing's picture

I too regret hijacking this prime real estate, but...  Please don't kick me off, Tyler, for this...


I am considering writing a blog.  This has been going around in my head now for a few days, I have had a lot of time to THINK because my wife has been out of town for over a week. If you are still interested in what I am writing here, please read on...  The below is "cut & pasted" from my one page or so outline of article ideas and other thoughts re my blog.  This IS kind of long, but you will get the general idea of what I have in mind.  PLEASE, PLEASE, PLEASE let me know of any interest.  If I do not get anyone interested, I will not go forward...  Please send any comments to my name (moniker) at gmail dot com.  Thank you!  And please read on...

My blog will be about a wide variety of subjects of interest to me, but that I hope would be of at least passing interest to some of you.  I intend to write on a fairly wide range of subjects, many of which are listed below.  That list is likely to grow, I hope it does.  I would like to state upfront that I am not really an expert on ANYTHING, really.   One of the purposes of my blog would be to draw into the discussions the opinions of experts.  There are many things I would hope to learn from experts as well as all of you, my friends, virtual friends, family and readers.  YES, I want have a robust Comments Section after each article, because I am NOT an expert on ANYTHING!  I want to learn as well as entertain all of you.  I want Comments on my blog!  Lots and lots of Comments, because you, my dear readers, are a vastly intelligent and knowledgeable group.

My blog will not be in any kind of competition with any other blog, because I can claim only modest expertise on almost any subject I will address.  Below are some topics that may very well be written about soon.  Many of these I know interest SOME of you!  Please be reassured that I do not expect ANYONE to be interested in them all.

Gold, precious metals and “Freegold”

The Really Lousy Economic Situation (“TRLES”)

Wine / beer / liquor

Tai Chi and related

SHTF / TEOTWAWKI (likely to be a crowd pleaser…)

“Personal stories of my life” (funny or nice anecdotes, E & C know many)

Blogging (introductory)

Poetry & Haiku (yes!)


Jokes and humor in general (yes!)

“Guest Posts” (that is, I would like to have YOU to write some of YOUR stuff!)

Ball bearings and similar

Guns & ammo & general military stuff


Evil Banksters (probably another popular one!) / Wall St. Fraud / Evil Empire

South Carolina

Texas and which County is the best!    <--- (could be real hornets’ nest…)


Tourism in Italy!

Tourism in France!

Tourism in Peru!

Tourism in general

Art, music and opera

Astronomy & geology ("Dummies" level, geology includes volcanoes and earthquakes)

Math (yes!)

Fiction (yes!  Some of you know I like to read.)  popular and classic

History (yes!)

Politics in general!

Computer stuff (at the “Dummies” level, for example topics like Facebook, etc.)

Language / Linguistics / Foreign languages

The oil business

The mining business

The banking business (oh wait, I took care of this under banksters above, let me KNOW if you made it this far, LOL)

The Middle East

Europe and Asia in general

Conspiracy theories / Tinfoil Hat stuff (extremely limited, perhaps humorous only)

Nutrition and health

Other topics can be suggested… 


Michael's picture

I'm repeating my comments from the Greece thread in case you missed it. Check out that thread for the time stamps.

They just mentioned this article on CNBC World in the last few minutes.

I am totally appalled at this.

They have no right to elevate themselves to our level of understanding using us in that manner.



I bought a 2750sf new house for next to nothing paid in cash 10c on the dollar with no mortgage using the knowledge from this site and others on the Internet.

I'm buying hand over fist silver at $35 thanks to CNBC for helping drive the price down for me.

Not a word mentioned from them on the way up to $50, but they sure cheered it on the way down to $35 where I need it to be for a little while longer.

Please don't let them discover the silver bears videos on this site. Please!

CNBC World just mentioned Zero Hedge again in the last couple of minutes. Arrrgh! Can't we keep any secretes of counter deception tactics to ourselves for one freaking minute?

Michael's picture

Am I the only freaking person on the planet who realizes the reporters on CNBC are employees of the world central banking cartel? Throw me a freaking bone here. You cant be serious thinking they are independent journalists. Really!

acrabbe's picture

no, you are not alone. cnbc is pure entertainment. it can be enraging at times, but i have learned to zen myself in this bizarro world. fvck cnbc.

macholatte's picture

I have had a lot of time to THINK because my wife has been out of town for over a week.


oops! She's home.

Never mind.


donpaulo's picture

Physical metals are the proper place to store value over time.

I bought some more today on spotmex


Chicken_Little's picture

#nope 1004, you're headed for yep-2012.

Hremas's picture

Very good this post,clear and helpful.Forex Trading online.

MikeNYC's picture

Totally off-topic, but...

Did AL Queda just take a Pakistani naval base?


mrgneiss's picture

Hey..........only the moron with the green hair is allowed to hijack threads...........get with the program........

john39's picture

just our CIA and al-cia-du independent contractors hard at work trying to start wwIII

SoCalBusted's picture

These people can go fuck themselves.  So worried about silver, but what about HFT?

Tail Dogging The Wag's picture

... while the CFTC continues to "investigate" you can diversify your portfolio.

In times of change you need new alternatives and new ideas.

Land in Panama is one of the most undervalued assets in 2011.


In the event of a sale of land from any of the Thorsson Capital properties to any Zero Hedge reader, the vendor (Thorsson Capital) hereby pledges a donation of 1% of the total sale to Zero Hedge, said donation is to be made within 30 working days of settlement.


macholatte's picture

go peddle your dirt somewhere else.

GetZeeGold's picture


Position's not only a good's the law. It's just that we're not going to enforce them right now.

Maybe later....yes....later sounds good.

Screw that whole 3 part government system.....we're the law, the kings, and the sheriff.....all in one.

....and we don't have to show you no stinking badges.



lunaticfringe's picture

The eternal investigation continues simply because the CFTC is nothing other than a bag man for big bank manipulators- the issuers of worthless fiat. At this point, I could give a shit less about any regulating body...they have proven time and time again they are not interested in a level playing field...just tilting for their elite cronies. We get it assholes.

Hugh G Rection's picture

Hey CFTC, Your mother's ass is so big when she sits down she's 3 feet taller.


Silver bitchez

DoChenRollingBearing's picture

I am afraid the Lunatic Fringe has it correct.

Hey!  As the Bearing has just finished basic training in the Tinfoil Hat Brigade, I URGENTLY need advice from any of my Superiors here at ZH!

Should I join the Space Batallion?  Looks fun...

Or the Lunatic Fringe Batallion?  Looks good too.

Or other suggestions?  Inquiring Bearings and THB members want to know!

slewie the pi-rat's picture

maybe stay autonomous, DC;  don't lose your bearings.

keep your hat on!


goldsaver's picture

DCRB, is there any method that I can contact you? Need info on your neck of the woods in SA.

Mariposa de Oro's picture

My Dearest DoChen, How many times need I remind you NOT to wear the hat out in public?  If you do, you won't be invited to the good parties.  Thus, you must LOOK like a sheeple (take off the damn hat) and SPEAK like a sheeple (stop talking about the damn hat).  If you fail to do the above, it's re-education for you, my little catapillar....


Jreb's picture

Holy hell - no silver bitchez??? Did everyone take the day off here?? WTF? Maybe the rapture only hit ZH posters...

topcallingtroll's picture

Yeah the zeal for silver is waning. Is this a bottom?

I am looking for signs of.distribution versus consolidation, but i suspect at this point its moves will be based on macro economic trends which are hard to predict.

Everyone should have some gold and silver. Just dont bet the ranch bitchez.

DoChenRollingBearing's picture

+ $1500, both points.

5% - 20% in gold / silver seems about right to the Bearing, who is at 12% PMs.

Diatribe's picture

I'm guessing you don't care about 88% of your money...

DoChenRollingBearing's picture

I am VERY diversified.  If I could put a small percentage of my assets in another UNIVERSE, I would.



If we get to FOFOA's $55k, then my 12% jumps a LOT.

Hulk's picture

Yes, but the hangover is going to be a real bitch!

topcallingtroll's picture

I believe it will be a kinder, gentler change of status.quo as we slowly lose our standard of living.

But by we I really mean all of you!

( sorry..I am a troll!)

DoChenRollingBearing's picture

Hulk, re the hangover at our Really Big Party, well that's just too damn bad!  If by hangover you mean from our current predicament, I agree, the hangover will be REALLY BAD.

top, what a terrible troll you are!  Yeah, all of you who do not have the best diversification (and wealth preservation mechanism) in town: physical gold!

Oro putaz!

Kevin... Who suffers from Cassandras curse's picture

O.K.  I tried to google "Oro putaz" and came back with"bullshit"


What dose it mean?

tmosley's picture

Yup.  Even my five percent would go above half, if such a move was not accompanied by ANY rise in silver.  Which is unlikely to say the least.

au_bayitch's picture

I had something to reply but after looking staring at your avatar I've forgot.

Rynak's picture

Don't know about others, but my impression is that most people who are interested in physical silver, are currently waiting... either because they did already buy at the current levels, or because they think it will go lower. Not much to talk about, when one is waiting and the price doesn't do much besides of moving up and down between 33-36$.

XenoFrog's picture

Too busy stacking up my supply into a little play fort.

Pullmyfinger's picture

I'm stacking mine into a Large play fort.

Imminent Crucible's picture

I'm waiting for someone to add "I'm stacking mine into Fort Knox."

topcallingtroll's picture

The COMEX will eventually have some competition. Free competition solves virtually all human maladies.

pupton's picture

I just read that the shanghai exchange will start trading silver by the end of the year. COMEX will have some competition if that happens, right.

Nate H's picture

" Free competition solves virtually all human maladies."


That was true on an empty planet.  Now we're gliding on a different part of the polynomial.