TFMR Podcast #40 - Sandeep Jaitly Discusses Gold Backwardation

Close enough , wow!

high 5 all

So much knowledge, such a nice crew and nearly all on the same page.

and  a newb can make top ten too. :)

Last Saturday morning one of my cats died.  Ink – the big, gray & black-striped tabby who I picked up at the animal shelter back in 1998, liked to sit on my lap whenever I sat in front of the computer.  He seemed fine earlier, but after leaving the room for a half-hour I returned to find him just lying on the floor with his eyes & mouth open, not breathing.  It must've been sudden, so I do not think that he suffered since he had showed no signs of any illness.

The past few days have been difficult, and as any of you who have lost a pet knows, there is a big empty hole in our hearts now.  I decided not to 'sugar-coat' things, and my daughter is better off because of her father's adhering to reality. But she talked about Ink nonstop on Saturday, and asked many questions which I tried my best to answer.

I dug the grave in a spot next to the pond, but waited until late afternoon - just before dark - before burying Ink.  I must admit one reason I left him there in his box all day, wrapped inside my daughter's little toddler-blanket, was because I had this hope that he would awaken. But of course that did not happen.  All the Silver in the world will not bring my cat back!  But that's okay, he had a happy life.

Don't forget to hug your loved ones and let them know how much they mean to you!

While we were working in the garden Sunday morning, dear daughter pointed up at the sky and said that a cloud up there looked just like our dear departed cat.

Nice job TF! The archive of podcasts is getting larger and gains valuable depth with each esteemed guest you roll out for us.

I follow Andy. He didn't make any trades last night. What are you referring to?

Yeah... what acadotte said!

Last night the markets were very flat. What was there to trade that made so much money? The largest move in silver was about 16 cents.

Great explanations, very informative- I am glad that Turd directly addressed some of the recent "critique" (and I use that term loosely) in the PM blogosphere that backwardation "happens all the time in commodities markets".  Sandeep did an excellent job sorting through that one.  Favorite comment of the interview was Sandeep saying that the backwardation structure right now "...seems poised to smack anyone in the face who is short gold or silver in the coming weeks".  Nice!!!

Great content, Turd.  Thank you!

Thanks Turd. This was a very informative conversation.

My dear Mayor Turd:

As a friend mentioned above,  your interviewing skills are top notch. You allow your guest to flesh out an answer, but not to drone off point. You have quite a knack for steering the interview in a very charming and extremely well informed  way.

I often feel as though I'm in a graduate level finance course while hanging out in Turdville. How cool is that...

GC

Turd really knows his shit!

And is a great interviewer. Respect.

I hope its not time for Silver to plummet!

A few more weeks will let us know!

Remember when gold first went into backwardation in 2008? The cries from the rooftops were deafening! There after has been much 'hullabaloo' about this phenomena. So much so, that backwardation discussion has become ho-hum, back page news.

Just as in present market sentiment, the amount of complacency is astounding. Sooner, rather than later, this complacency is going to bite those who are in lah-lah land, in the nether regions! Backwardation in gold and to a lessor extent silver, is an unnatural state.

Sandeep's comparison to interest is remarkable. I like it alot. Attempting to explain backwardation to the uninitiated is difficult and anything to simplify this is very welcomed.

Backwardation is like being paid a higher rate of interest for your gold, rather then your fiat. Which should be the other way around.

TF - Thank you very much for all that you do. The shorts are now facing the 'perfect storm.'     

Some good stuff on steel and Capesize shipping in this, but coal imports is my focus:

China PMI Figures Down; Iron Ore Prices Damp, Coal Imports Up | Steel, Aluminum, Copper, Stainless, Rare Earth, Metal Prices, Forecasting | MetalMiner

Chinese coal imports in January, however, were up 54 percent year-on-year increasing to 25.2 million tons, while metallurgical imports totaled 7.1 million tons, an increase of 3.7 million tons or 107.3 percent year-on-year.

For coal imports to be rising so strongly with iron ore remaining flat seems contrarian until one looks a little deeper.

Domestic coal production has been severely restricted as the government seeks to limit small private mines in preference to large state enterprises. There are good reasons for this: China’s safety record is the worst in the world, and only by applying proper corporate safety procedures is Beijing going to turn the situation around. Meanwhile, Australian and Mongolian coal miners are benefiting with rising demand.

Metallurgical imports totaled 7.1 million tons, an increase of 3.7 million tons or 107.3 percent year-on-year. 

 WOW!

Jim Willie is as bullish as ever in his latest hat trick letter.  lol

WHAT WILL THE FUSE BE THAT TRIGGERS THE FINANCIAL COLLAPSE ??

Some mid-sized seemingly minor bank will fail. It will have linkage to another big bank in a corresponding role. The obligations will not be possible to cover. The contagion will spread to numerous large banks across Europe to London and New York. The derivatives could be involved, very unmanageable. If not a mid-sized bank, then a major bank will fail from the inability to contain the profound insolvency and massive bleeding during capital flight. The Greek zone has been contained, where disaster runs its course. But larger Italy, Spain, and France are rapidly breaking down, each in its own unique important way. A great many fuses lie, each waiting to be lit.

http://www.silverdoctors.com/jim-willie-gritty-questions-on-the-historic...