Odds. Ends. Out.

Just a few items as we wrap up Thursday and prepare for Friday.

First, I must chuckle and fart in the general direction of the Bullion Bank Cartel. As they arrived this morning, they thought they were going to put the hammer down today. The POSX was rallying and it was game on. As documented in the previous thread, from the opening bell The Cartel attacked...and attacked...and attacked. They soon ran into two, fundamental problems.

  1. The Pig suddenly reversed. (Do you see what I mean about Forex ripping you to shreds if you let it?)
  2. Over a thirty minute period, four stabs below 1710 were all met with plentiful buy orders.

Oh how The Forces of Darkness must be angry and confused this evening. This is not supposed to be how it works! Everything was set for a raid today. Gold would finally be taken back under 1705 and silver would be pushed below $33. OOOOoooops. As Coach Corso would say: "Not so fast, my friend". As quick as you can say "Sergey Aleynikov", the WOPRs flipped over to BUY from SELL and the metals charged back higher.


This all sets up a rather interesting day tomorrow. As you know, silver has painted red candles on the last two entries to the weekly charts and gold was red last week. Will they do so again this week? Silver needs to beat $33.58 tomorrow and gold's level is just $1723.

Adding to the intrigue is a big jump in OI yesterday. On a day where gold traded higher by about $10, total OI jumped by 7010 contracts, with 6,000 being added to the front-month April12. At 438,174, that's the highest total OI since 1/20/12, three days before the FOMC minutes that sparked gold over $60. Silver also saw it OI jump by almost 2000 contracts on a day where price rose just 6 cents. At 106,621, the total OI is now the highest it's been all year. Hmmmm. The silver picture is particularly interesting given that 1-month lease rates are again approaching -0.40% tonight. Caution is definitely still warranted.


Just for fun, here's a POSX chart that has lines drawn all over it like I'm some kind of actual, fancy-schmancy technician. It's probably useless but it's worth looking at, anyway.


Here are a few items I've picked up along the way today:

A solid chart summary from Trader Dan.


As if you needed more evidence that infinite QE is necessary and coming:


Gonzalo has written a timely, new piece:


You absolutely MUST READ this:


This is pretty solid from Denver Dave:


And this is certainly interesting, too:


That's it. Have a great overnight!  TF



Single currency's struggle takes its toll on Europe

The diverse nature of the 17 countries brought together in monetary union has never been so apparent.

As Greece stands on the brink of bankruptcy, Germany, its financially disciplined and powerful eurozone peer looks down with disapproval on a country that for years lived beyond its means.

Greece may be in a bad state but it is not alone, and the eurozone's weakest economies have dragged down the strongest with them. As Howard Archer, economist at IHS Global Insight, puts it, the region "stuck one foot back through the recession door" in the fourth quarter of 2011, after the combined economy shrank by 0.3pc. The other foot is expected to join it in the coming months.

"We doubt that the eurozone will be able to avoid further contraction in the first quarter and very possibly the second as well in the face of tighter credit conditions, a further tightening in fiscal policy in many countries, the ongoing pressures facing consumers, and limited global growth," said Mr. Archer.

The Telegraph ...the link is here.

Smiddywesson's picture

What is money

Gold is money

Silver is money

Oil is money.

Victor the Cleaner wrote a great post about why gold always reverts to money and why fiat always fails.  I consider it one of the best posts of the last 12 months.

When it all collapses, there will be a new monetary system.  It won't be based on paper, those with gold, and silver, and oil won't trade their money for paper.  Read this, you will be well rewarded.



Nigel Farage - Greece Descending into Total Chaos & Violence

His interview with Eric King is no exception to that rule...and the blog is posted over at the King World Newswebsite...and the link is here.


Iran Warns 6 Countries in Europe It Will Cut Off Oil

Besieged by international sanctions over the Iranian nuclear program including a planned oil embargo by Europe, Iran warned six European buyers on Wednesday that it might strike first by immediately cutting them off from Iranian oil.

Iran’s official Islamic Republic News Agency said the threat was conveyed to the ambassadors of Italy, Spain, France, the Netherlands, Greece and Portugal in separate meetings at the Foreign Ministry in Tehran. Officials said in an earlier report by Press TV, Iran’s state-financed satellite broadcaster, that Iran had already cut supplies to the six countries was inaccurate — but not before word of the Press TV report sent a brief shudder through the global oil market, sending prices up slightly.

“Iran warns Europe it will find other customers for its oil,” the Islamic Republic News Agency said. “European people should know that if Iran changes destinations of the oil it gives to them, the responsibility will rest with the European governments themselves.”

Posted in The New York Times yesterday....and the link is here.


India's support for Iran threatens its US relationship and globa

The Indian government’s ill-advised statement last week that it will continue to purchase oil from Iran is a major setback for the US attempt to isolate the Iranian government over the nuclear issue. The New York Times reported Sunday that Indian authorities are actively aiding Indian firms to avoid current sanctions by advising them to pay for Iranian oil in Indian rupees. It may go even further by agreeing to barter deals with Iran – all to circumvent the sanctions regime carefully constructed by the United States and its friends and allies. According to the Times, India now has the dubious distinction of being the leading importer of Iranian oil.

This is bitterly disappointing news for those of us who have championed a close relationship with India. And it represents a real setback in the attempt by the last three American presidents to establish a close and strategic partnership with successive Indian governments.

Posted on The Christian Science Monitor website... link is here.

Exbroker's picture

This pretty much sums up The Morge

Two great white sharks swimming in the ocean spied survivors of a sunken ship.  "Follow me son" the father shark said to the son shark and they swam to the mass of people.
"First we swim around them a few times with just the tip of our fins showing."
And they did.
"Well done son, now we swim around them a few times with all our fins showing."
And they did.
"Now we eat everybody" and they did.
When they were both gorged, the son asked, "Dad, why didnt we just eat them all at first?"
"Why did we swim around and around them?"
His wise father replied, "Because they taste better without the shit inside

Soros Raises Gold Fund Stake as Paulson Joins Tudor in Selloff

Paulson & Co., the hedge fund founded by billionaire John Paulson, cut its stake in the SPDR Gold Trust for the second straight quarter, while billionaire investor George Soros increased his holdings.

Paulson held 17.3 million shares in the exchange-traded fund backed by bullion as of Dec. 31, 15 percent less than the 20.3 million on Sept. 30, Securities and Exchange Commission filings showed. His holdings fell 45 percent from end-June, the first reduction in more than two years. He is still the biggest stakeholder. Vinik Asset Management LP, Tudor Investment Corp. and SAC Capital Advisors LP also sold shares. Lone Pine Capital LLC added holdings.

This story was posted at the moneynews.com website and the link is here.


"John Embry: Is Greece's Situation Bad for Gold?"

This interview, headlined "John Embry: Is Greece's Situation Bad for Gold?", is posted at the KWN website...and the link is here.

achmachat's picture

Chinese Character...

I really liked the presentation... but he should have double-checked his sources.

The Chinese character for money actually is made up of GOLD and two spears.

He might have been thinking about the character for "treasure". Because that's the one that would come closest to something housing something valuable.... the problem is that the valuable thing being housed is jade.


doesn't make the presentation less interesting though.

Sunnyboy's picture

Yentervention Pn

n'th :-)

Was recently postulating on the effects of the Yentervention on the USD and on our most precious, what is obvious is that, ongoing, it is $ +ve but what I am wondering is what they buy at the end of the day/yentervention...price action is (very suruptitiously) saying pm's...the plot thickens.

PS China is buying yen and selling $'s, many CN companies are majority JP owned, that is for now a reversing trend. Yentervention is a Chinese invention surely?

Dr G's picture

I LOVED the Nigel Farage

I LOVED the Nigel Farage interview on KWN. What a stud. Great guy, straight shooter, explains things simply.

How about that ancedote where the rich former politicans are buying AK-47s to protect their property in Greece? Good stuff.

NW VIEW's picture


Yes the posx was at 80.12 a while back and now is at 79.36.  I was pondering the index tonight and thinking about the percentages of the six currencies that control the dollar value.  If one sat down with an educated person and told them that we take 57.6% of EUR, 13.6 of JPY, 11.9% of GBP, 9.1% of CAD, 4.2% of SEK and 3.6% of CHF to determine the value of the dollar, they would have some real questions.  If we also told them that this represents a total of 21 nations, they would have some new questions.

The last time I visited RSA, the exchange rate was 11 rand for one dollar.  That was great for me and not so good for the businesses in RSA.

All of these 21 countries have fiat paper, think about that. There is not a standard to really finding  the true value of any of these fiat  currencies anywhere.   The values are what the EE and the nations say that the values are.  This house of fiat card will come crashing down some day and the only true assets with be what we have stored at home and within.

I may be that we could fix the fiat money by changing the percentages every month, why not, it is just an illusion of the value as calculated today.


Singapore =Success VS Greece= Failure

Brother John F is taking a close look at small place called Singapore and compares  it with Greece.

Today, Singapore has a highly developed market-based economy, based historically on extended entrepôt trade.s( a trading post where merchandise can be imported and exported without paying import duties, often at a profit.)The Singaporean economy is known as one of the freest,most innovative, most competitive,and most business-friendly. The 2011 Index of Economic Freedom ranks Singapore as the second freest economy in the world, behind Hong Kong. According to the Corruption Perceptions Index, Singapore is consistently ranked as one of the least corrupt countries in the world, along with New Zealand and the Scandinavian countries.

Singapore is the 14th largest exporter and the 15th largest importer in the world. The country has the highest trade-to-GDP ratio in the world at 407.9 percent, signifying the importance of trade to its economy. The country is currently the only Asian country to have AAA credit ratings from all three major credit rating agencies – Standard & Poor's, Moody's, and Fitch. Singapore attracts a lot of foreign direct investment because of its location, corruption-free environment, skilled workforce, low tax rates and advanced infrastructure. 

Singapore= 274 sg miles                          Greece 50.00.00 sg miles 11 min

Singapore= 5 mill population                  Greece 11 mil. population

GDP=291 bill$                                           GDP 318 bill

Singapore is a world leader in several economic areas: The country is the world's fourth leading financial centre, the world's second-biggest casino gambling market, one of the world's top three oil refining centres, the world's largest oil-rig producer, and a major ship-repairer. The port is one of the five busiest ports in the world. The World Bank has named Singapore as the easiest place in the world to do business and ranks Singapore the world's top logistics hub. It is also the world's fourth largest foreign-exchange trading centre after London, New York and Tokyo.

The percentage of unemployed economically active people above age 15 is about 2%

Greece with 20 % unemployment is drowning in debt, collapsing

Singapore has the world's highest percentage of millionaire households, with 15.5 percent of all households owning at least one million US dollars.

Despite its relative economic success, Singapore does not have a minimum wage, believing that it would lower its competitiveness. It also has one of the highest income inequality levels among developed countries, coming in just behind Hong Kong and in front of the United States.

Acute poverty is rare in Singapore, but the government has been criticised for not providing a comprehensive social-welfare safety net and for allowing some Singaporeans to fall through the cracks. The government has rejected the idea of a generous welfare system, stating that each generation must earn and save enough for its entire life cycle.  

Any wonder, Jim Rogers, on of the greatest traders in the world, self made man has made Singapore his home???

Conclusion. Socialism and large government brings powerty.

By the way, anybody on this site from Singapore????

Be Prepared's picture

TheGoodDoctor - You have my thoughts...

with you... Our journeys are woven together and I, like Pining, send you the best wishes for clarity of mind and strength of soul.... may all that you know and experiences you've had stand out to all those you meet tomorrow.

DonShimoda's picture


No but have been there... I could make it home....sunny everyday!

BTW  no more a lurker .... now a new Turdite!

Be Prepared's picture

Ranting Andy - GLD/SLV Theory

GLD/SLV Theory, From the Desk of the President

February 16, 2012

During Miles Franklin’s first educational Webinar last week (replay link HERE), our Q&A queue was so long, we had to answer most of the questions in follow-up reports (readHERE and HERE).  By far, the most oft-asked question related to the potential for gold confiscation by the U.S. government, a topic I have discussed ad nauseum for several years.

Moreover, very little gold is actually owned by U.S. citizens – certainly not enough to make a dent in America’s gargantuan debt load, and the simple act of decreeingconfiscation would be seen worldwide as a denouncement of the dollar, and validation of gold, as MONEY.  Moreover, barely any gold was actually confiscated in 1933, with not a single prosecution for violating the confiscation law, Executive Order 6102.  In today’s world of high-tech home security, armaments, and global depositories, it is difficult to envision a scenario of home invasion, international investigation, and enforcement of such a draconian action, particularly if catalyzed by plunging fiat currency values.  Not to mention, how would the government know who actually owns gold, as nearly all transactions are non-reportable?

I have long believed these criminal securities were created by the government specifically to divert bullion investment into a PAPER security with “rules” so vague, it would be impossible to prosecute its custodians in the event of a default of the underlying PHYSICAL gold and silver.  These funds are never audited, and the fund custodians (HSBC for GLD and JP Morgan for SLV, two of the world’s shadiest banks) have discretion to lease out said metal, making it impossible to know the funds’ true, unencumbered holdings.  That said, GLD and SLV clearly hold material inventories of PHYSICAL gold and silver, although impossible to know how much.

In the case of silver, ZERO government inventory exists, as nearly all the world’s silver has been consumed by industry.  It is widely estimated that no more than one billion ounces of investable silver is available worldwide, and if that is the case, the 310 million ounces purported to be held by SLV represents roughly one-third of the global supply, by far the largest stash anywhere.  That said, even 310 million ounces is worth just $10 billion at today’s prices, the same amount the government prints each hour, and thus, hardly a candidate for confiscation, particularly as silver is required for numerous, critical industrial applications.

As for gold, approximately 30,000 of the estimated 180,000 tonnes of gold mined throughout history is purported to be held by Central Banks, the largest of which is the U.S.’s so-called 8,134 tonnes.  I maintain my belief that most American gold has been leased, swapped, or surreptitiously sold over the past 15 years to support the dollar’s value, and frankly, distrust many of the figures in this table, particularly the IMF’s 3,101 tonnes, in my view nothing more than double-counted “pledges” from member-nations such as the United States.  However, suffice to say that even if the U.S. did own every ounce of that 8,134 tonnes, it would only be worth $450 billion at today’s prices, just one-third of the $1.3 trillion 2011 fiscal deficit.  <Rest of the Rant>

GoldenTurds's picture

Underwear Bomber -- Statement from Kurt Haskell, Delta 253

BREAKING: Kurt Haskell Exposes Government False Flag Operation During Underwear Bomber Sentencing

Exclusive: Personal Statement from Kurt Haskell, Delta 253 Passenger

Kurt Haskell
Thursday, February 16, 2012

Every victim of a crime in Michigan is entitled to make a statement in open court regarding the impact of the crime on their life. The statement is limited to the victim’s physical, emotional and financial well being as it relates to the crime. Keep that in mind as you read my statement. Below is a copy of the victim impact statement I gave today at the Underwear Bomber sentencing hearing. When reading my statement, keep in mind that I am a practicing attorney in the State of Michigan. In addition, I regularly practice in the Court the hearings are taking place at and therefore, I am somewhat limited as to what I can say. We were limited to 5 minutes each.

I wish to thank the Court for allowing me these 5 minutes to make my statement. My references to the government in this statement refer to the Federal Government excluding this Court and the prosecution. On Christmas Day 2009, my wife and I were returning from an African safari and had a connecting flight through Amsterdam. As we waited for our flight, we sat on the floor next to the boarding gate. What I witnessed while sitting there and subsequent events have changed my life forever. While I sat there, I witnessed Umar dressed in jeans and a white t-shirt, being escorted around security by a man in a tan suit who spoke perfect American English and who aided Umar in boarding without a passport. The airline gate worker initially refused Umar boarding until the man in the tan suit intervened. The event meant nothing to me at the time. Little did I know that Umar would try to kill me a few hours later as our flight approached Detroit. The final 10 minutes of our flight after the attack were the worst minutes of my life. During those 10 minutes I sat paralyzed in fear. Unfortunately, what happened next has had an even greater impact on my life and has saddened me further.

When we landed, I was shocked that our plane taxied up to the gate. I was further shocked that we were forced to sit on the plane for 20 minutes with powder from the so called bomb all over the cabin. The officers that boarded the plane did nothing to ensure our safety and did not check for accomplices or other explosive devices. Several passengers trampled through parts of the bomb as they exited the plane. We were then taken into the terminal with our unchecked carry on bags. Again, there was no concern for our safety even though Umar told the officers that there was another bomb on board as he exited the plane. I wondered why nobody was concerned about our safety, accomplices or other bombs and the lack of concern worried me greatly. I immediately told the FBI my story in order to help catch the accomplice I had seen in Amsterdam. It soon became obvious that the FBI wasn’t interested in what I had to say, which upset me further. For one month the government refused to admit the existence of the man in the tan suit before changing course and admitting his existence in an ABC News article on January 22, 2010. That was the last time the government talked about this man. The video that would prove the truth of my account has never been released. I continue to be emotionally upset that the video has not been released. The Dutch police, meanwhile, in this article (show article), also confirmed that Umar did not show his passport in Amsterdam which also meant that he didn’t go through security as both are in the same line in Amsterdam. It upsets me that the government refuses to admit this fact.

I became further saddened from this case, when Patrick Kennedy of the State Department during Congressional hearings, admitted that Umar was a known terrorist, was being followed, and the U.S. allowed him into the U.S. so that it could catch Umar’s accomplices. I was once again shocked and saddened when Michael Leiter of the National Counter terrorism Center admitted during these same hearings that intentionally letting terrorists into the U.S. was a frequent practice of the U.S. Government. I cannot fully explain my sadness, disappointment and fear when I realized that my government allowed an attack on me intentionally.

During this time, I questioned if my country intentionally put a known terrorist onto my flight with a live bomb. I had many sleepless nights over this issue. My answer came shortly thereafter. In late 2010, the FBI admitted to giving out intentionally defective bombs to the Portland Christmas Tree Bomber,the Wrigley Field Bomber and several others. Further, Mr. Chambers was quoted in the Free Press on January 11, 2011 when he indicated that the government’s own explosives experts had indicated that Umar’s bomb was impossibly defective. I wondered how that could be. Certainly, I thought, Al Qaeda wouldn’t go through all of the trouble to plan such an attack only to provide the terrorist with an impossibly defective bomb.

I attended nearly all of the pretrial hearings. At the hearing on January 28, 2011, I was greatly disappointed by the prosecution’s request to block evidence from Mr. Chambers “as it could then be able to be obtained by third parties, who could use it in a civil suit against the government”. It really bothered me that the government apparently was admitting to wrongdoing of some kind as it admitted that it was concerned it would be sued. It further upset me to know that the government was putting its own interests ahead of those of the passengers.

  • A d v e r t i s e m e n t
  • Infowars.com335x205.jpg

When I attended the jury selection hearings, I questioned why versions of the same two questions kept coming up, those being:

1. Do you think you’ll be able to tell whether something is actually a bomb? and
 2. Do you realize that sometimes the media doesn’t always tell the truth?

I continued to be greatly saddened at this point as I felt the truth continued to be hidden.

When Umar listed me as his only witness, I was happy to testify, not on his behalf, but on behalf of the truth. I never expected to testify, as my eyewitness account would have been too damaging to the myth that the government and media are putting forward. A mere 5 days after I was announced as a witness, there was an inexplicable guilty plea which exasperated me as I no longer would be testifying.

In closing I will just say that regardless of how the media and government try to shape the public perception of this case, I am convinced that Umar was given an intentionally defective bomb by a U.S. Government agent and placed on our flight without showing a passport or going through security, to stage a false terrorist attack to be used to implement various government policies.

The effect this matter has had on my life has been astounding and due to this case, I will never trust the government in any matter, ever.

In regards to sentencing, nothing I’ve said excuses the fact that Umar tried to kill me. He has waived his valid claim to the entrapment defense. Umar, you are not a great Muslim martyr, you are merely a “Patsy”. I ask the court to impose the mandatory sentence.

treefrog's picture


there's that number again  (about an hour ago).

s1lverbullet's picture

Lol I about crapped myself

Lol I about crapped myself when I read the Monty Python reference.  I had a huge old grin on my face! Silver has been such a stud muffin lately.  So is this TF guy!

LOUP-GAROU's picture

@ The Good Doctor

May the good Lord bless you and everyone that is looking for work!

vamoose1's picture


Well,  I am  a little light on  my 100 dollar target,  95 bucks or so and munching those feathers pretty good.  But its early days. Startling release from the company just now though. Munch mensh. 

Jasound's picture

Put this in your pipe and smoke it.

Don't Know if anyone posted this already, but here goes anyway.................

DO NOT CLICK ON "Trailer updated click here". The new trailer has been censored.

Turd Ferguson's picture



That is an incredible story. Everyone please read!!

¤'s picture

"On we sweep with thrashing oars..." ~ Zep

codematrix's picture

My email thread with Bart Chilton

Here's my email thread with Bart Chilton.  I know many of you think he's one of the bad guys but I don't and never have.  I masked my real name and replaced it with code.


Hey Code,

Every other week the definition rule (which needs to be approved by the SEC also) gets pushed back. I'm complained (did so today). Now they are saying early April! I'm in the process of trying to get support to implement limits on COMEX absent the swaps definition, but this is a work in progress.
There is a law suit trying to take down the position limits rule. There is all sorts of court action on this. The lawyers are having a field day. I think we will prevail.

NOTE: To get more information or to order Ponzimonium--How Scam Artists Are Ripping Off America, go to this link:

Neither the CFTC nor Commissioner Chilton receive any proceeds from the sale of Ponzimonium.
From: Code Matrix [mailto:Code_Matrix@hotmail.com]
Sent: Thursday, February 16, 2012 02:27 PM
 To: Chilton, Bart
Subject: RE: Investigations and Breaking The Law

Hi Bart,
Thanks for getting back to me.  I know and the community as a whole, that you are our biggest advocate and I among others, truly appreciate you efforts.  It must be tough being the only voice in this battle in doing what is right.
The COMEX as a whole is nothing but a big criminal organization, hence, the well deserved named the 'CRIMEX'.
I do have a couple questions if you don't mind answering:
1.When is the definition of the term/word 'SWAP' going to be defined?
2.I heard that the big banks with the highest short concentration, have proceeded with legal actions against the CFTC for trying to impose position limits.  Is this one of the reasons whey position limits are being delayed, or is there more to this?


Code Matrix

From: BChilton@CFTC.gov
 To: Code_Matrix@hotmail.com
 Subject: Re: Investigations and Breaking The Law
 Date: Thu, 16 Feb 2012 18:46:55 +0000
I've spoken about these issues often (silver and the investigation and position limits). I called for the investigation and have been the strongest advocate for limiting the positions of large traders to avoid too much concentration. It takes 3 of the 5 Commissioners to take an action. That's not an excuse, just a fact. If you have not, and would like to, listen to what I have said in the last few months, simply Google my name and combine it with silver and one of the following: King World, Jim Paplava, or Tom O'Brien.
I'll continue to do all I can.

NOTE: To get more information or to order Ponzimonium--How Scam Artists Are Ripping Off America, go to this link:

Neither the CFTC nor Commissioner Chilton receive any proceeds from the sale of Ponzimonium.
From: Code Matrix [mailto:Code_Matrix@hotmail.com]
Sent: Thursday, February 16, 2012 01:33 PM
 To: Gensler, Gary; Chilton, Bart; Wetjen, Mark; O'Malia, Scott; Sommers, Jill; Riley, John; Berkovitz, Dan M; Hardman, Harold; Shilts, Richard A.; McGonagle, Vincent A.; Cela, Phyllis J.; Sherrod, Stephen
 Subject: Investigations and Breaking The Law
. . .

¤'s picture

Permanent Gold Backwardation

Permanent Gold Backwardation
Published : February 13th, 2012

By Keith Weiner

The Root of the Problem Is Debt

Worldwide, an incredible tower of debt has been under construction since President Nixon's 1971 default on the gold obligations of the US government. His decree severed the redeemability of the dollar for gold and thus eliminated the extinguisher of debt. Debt has been growing exponentially everywhere since then. Debt is backed with debt, based on debt, dependent on debt and leveraged with yet more debt. For example, today it is possible to buy a bond (i.e., lend money) on margin (i.e., with borrowed money).

The time is now fast approaching when all debt will be defaulted on. In our perverse monetary system, one party's debt is another's "money." A debtor's default will impact the creditor (who is usually also a debtor to yet other creditors), causing him to default, and so on. When this begins in earnest, it will wipe out the banking system and thus everyone's "money." The paper currencies will not survive this. We are seeing the early edges of it now in the euro, and it's anyone's guess when it will happen in Japan, though it seems long overdue already. Last of all, it will come to the USA.

The purpose of this article is to present the early-warning signal and explain the actual mechanism to these events. Contrary to popular belief, it will not happen because the central banks increase the quantity of money to infinity. The money supply may even be contracting (which is what I expect).

To understand the terminal stages of the monetary system's fatal disease, we must understand gold.

Defining Backwardation

First, let me introduce a key concept. Most traders define "backwardation" for a commodity as when the price of a futures contract is lower than the price of the same good in the spot market.

In every market, there are always two prices for a good: the bid and the ask. To sell a good, one must take the bid. And likewise, to buy the good, one must pay the ask. In backwardation, one can sell a physical good for cash and simultaneously buy a futures contract, and make a profit on the arbitrage. Note that in doing this trade, one's position does not change in the end. One begins with a certain amount of the good and ends (upon maturity of the contract) with that same amount of the good.

Backwardation is when the bid in the spot market is greater than the ask in the futures market.

Many commodities, like wheat, are produced seasonally. But consumption is much more evenly spread around the year. Immediately prior to the harvest, the spot price of wheat is normally at its highest in relation to wheat futures. This is because wheat inventories in the warehouses are very low. People will have to pay a higher price for immediate delivery. At the same time, everyone in the market knows that the harvest is coming in one month. So the price, if a buyer can wait one month for delivery, is lower. This is a case of backwardation....


Jasound's picture

Anybody who follows INFOWARS........

Anybody who follows INFOWARS knows who Kurt Haskell is. I'm just glad he took advantage of his right to speek in open court.

R man J's picture

Reaching my Personal Stacking Goal

...It took 5 years, but next week, I will head to the local coin shop to purchase the final 55 oz. to reach a personal Ag stacking goal of 1000 ozcool

Thanks to the Cartel for keeping the price low.

Now if there were just 1 million middle class schmucks like me that did THEIR part (0.3% of US pop.; not to mention the world pop.), that would be 1 billion ozs stacked. What is 1 billion ozs ? 35,000 TONS! That is more than a whole years' worldwide production! 

keep stacking. We are a vast MINORITY!



Welcome to the site Don, you will learn much here. We all do

Each one, teach one 

agNau's picture

Sorry if this is a repost, I just came across it.


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