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ryshay
8th December 2009, 00:18
Hi, I sent this email to the CFTC. No response.

I am basically saying that China is going to default on their OTC derivative contracts (like in silver), which will gravely injure or kill certain commodities trading on the COMEX.
At least they can't say, "Nobody could have saw this coming..." when the derivatives SHTF.
Rick Ackerman has a great article today about this subject: http://news.goldseek.com/RickAckerman/1260255720.php


"Dear Chairman Gensler and Commissioners:

Thank you for stated goals to announce further CFTC decisions regarding position limits in commodities in the near future.

I am concerned that this action could not come at a better time:
No doubt, the US Banks enjoy certain exemptions from the CFTC to the usual position limits on some commodities, since the US Banks can say their derivative positions on the COMEX are backed by their side derivatives with China.
China is again positioning themselves to default on their commodity derivative agreements with the US Banks.


This article has some chilling statements from China that seem to posture a possible default on their derivative agreements with the US Banks.
Chinese official slams banks over derivatives

http://www.ft.com/cms/s/0/9d3ce434-e029-11de-8494-00144feab49a.html?nclick_check=1




This reminds me of the time that China said that “state-owned companies will be allowed to walk away from loss-making commodity derivative trades” in late August.
Beijing's derivative default stance rattles banks

http://www.reuters.com/article/idUSSP47327420090831?sp=true


Ted Butler has argued in the past that China may “walk-away” from their derivative contracts with US Banks, so where will that leave the US Banks’ commodity positions on the COMEX?
I am concerned that these two statements from China may indeed herald a time when some of the US Banks derivative positions on the COMEX will have no backing at all, if China does walk away as they are threatening.

Thanks for your time and consideration."

LETMYSILVERGO
8th December 2009, 02:07
WELL, THEY CAN;T say u did not tell them--Good Job.

Mighty Moose
8th December 2009, 02:19
The whole relationship between China & the USA can be summed up this way; "the borrower is servant to the lender". This will play out as it should.

valerb
8th December 2009, 03:02
Hi, I sent this email to the CFTC. No response.

I am basically saying that China is going to default on their OTC derivative contracts (like in silver), which will gravely injure or kill certain commodities trading on the COMEX.
At least they can't say, "Nobody could have saw this coming..." when the derivatives TSHTF.
Rick Ackerman has a great article today about this subject: http://news.goldseek.com/RickAckerman/1260255720.php


"Dear Chairman Gensler and Commissioners:

Thank you for stated goals to announce further CFTC decisions regarding position limits in commodities in the near future.

I am concerned that this action could not come at a better time:
No doubt, the US Banks enjoy certain exemptions from the CFTC to the usual position limits on some commodities, since the US Banks can say their derivative positions on the COMEX are backed by their side derivatives with China.
China is again positioning themselves to default on their commodity derivative agreements with the US Banks.


This article has some chilling statements from China that seem to posture a possible default on their derivative agreements with the US Banks.
Chinese official slams banks over derivatives

http://www.ft.com/cms/s/0/9d3ce434-e029-11de-8494-00144feab49a.html?nclick_check=1




This reminds me of the time that China said that “state-owned companies will be allowed to walk away from loss-making commodity derivative trades” in late August.
Beijing's derivative default stance rattles banks

http://www.reuters.com/article/idUSSP47327420090831?sp=true


Ted Butler has argued in the past that China may “walk-away” from their derivative contracts with US Banks, so where will that leave the US Banks’ commodity positions on the COMEX?
I am concerned that these two statements from China may indeed herald a time when some of the US Banks derivative positions on the COMEX will have no backing at all, if China does walk away as they are threatening.

Thanks for your time and consideration."

Well that was a long but interesting article, kind of makes Bob Chapman look like an optimist.

I don't follow the connection and I may very well be wrong.

If China defaults on derivative contracts, someone on the other end of those contracts gets screwed.

What I don't see is how that would have any impact on the COMEX. These are two different forms of investing in Silver or Gold. It would be like Kitco's Silver pool account defaulting on all the investors. It's completely isolated from COMEX. I'm not saying there would not be a ripple effect on the COMEX spot price, but it would not have anything to do with COMEX contracts. The China derivatives would be a cash settlement, so there is no Silver to back the banks short contracts on the COMEX.

How does Gensler force the banks to lower their short contracts? I can see him capping their contracts at current levels. Is there another way to force them out other than making them buy all long contracts for sale at whatever the going rate is? Wouldn't this create a feeding frenzy on the long side? Which of course we know that will never happen.

My understanding on how the COMEX system works in basically limited to the inventory and how that is controlled and the sales aspect. How they could force the banks out of their positions is beyond my scope.

I'd be interested to here a theory or an actual way it can be done.

main1event
8th December 2009, 06:50
The CFTC doesnt respond to rumors and speculation.