Subject: File No. SR-Amex-2005-072
From: Doug J McEwen
Affiliation: Professional Engineer

February 6, 2006

As a Canadian, I am proud that an investment vehicle has been available for silver and gold bullion for many years, in the form of shares of the Central Fund of Canada (CEF on AMEX). This vehicle has the important advantage for residents of Canada that it is eligible for RRSPs. However, it has two important disadvantages. The first is that it behaves like a closed-end fund, trading at times at a premium or discount to the spot price. At present, it is about 7 percent over-valued, making it inefficient for Canadians or Americans to purchase bullion through it. The second disadvantage is that the ratio of gold to silver is fixed, making it impossible to overweight silver relative to gold.

American markets are supposed to be about innovation and efficiency. It is ironic that the Silver User's Association has so much lobbying power in the US markets, when it stands against allowing the free markets to determine price. It is also ironic that the CFTC has allowed the powerful commercial traders to determine the price of silver for so many years through massive naked short positions in the COMEX futures markets. If the SEC believes in free markets, then you must allow the silver ETF to be formed, because the price of silver will finally be determined by the scarcity or abundance of the metal, not by the leveraging power or insider trading knowledge of a few commercial shorts trading in paper.

Increasingly, the common investor recognizes that paper fiat currency is being inflated away through the unlimited creation of new money. The new Fed chairman has made public policy statements that the Federal Reserve stands ready to print even more massive quantities of fresh cash. The SEC cannot stop Americans from protecting their savings from Fed-induced inflation by purchasing bullion. But the SEC can determine whether this will be through the purchase of physical bullion, which is subject to confiscation by the US government as happened in 1933, or through investment vehicles from other countries which are safe from this danger, such as CEF. The question is whether the SEC stands for free markets, or for limiting the investment choices of American citizens.

Please approve the silver ETF. I, for one, would immediately move my US dollar-based silver bullion investment from silver certificates offered by my Canadian broker, which are unbacked by physical metal, to the silver ETF. The choice is whether you want to encourage the financial markets of the United States to retain a leadership role in the world, or whether you wish other countries to take this role over for you.

As a Canadian living in the same city as the corporate office of CEF, the latter choice is OK with me too.