TFMR Podcast #41 - Andrew Maguire Discusses Gold Backwardation and Current Gold Price Trends

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Today, we conclude our analysis of the current backwardation in gold by visiting with legendary trader, Andrew Maguire.

A couple of things before we get started:

  • If you haven't yet, I strongly encourage you to listen to yesterday's podcast with Sandeep Jaitly before you listen to this one with Andy. I posted Sandeep first for a reason...you need as clear an understanding of backwardation as possible so that you can give this your full consideration.
  • There are good people, like Trader Dan, who have looked at this issue and concluded that there is no current backwardation in gold. Perhaps it all depends on what you're measuring. All I know is that Sandeep and Professor Fekete are global authorities on this stuff and I tend to side with them. Reasonable people can disagree, however, and it is disagreement that helps to make a "market", whether it's gold, silver, stocks, whatever.
  • Andy will have more to say in March and he's promised to come back soon for another podcast. This particular podcast primarily deals with the current backwardation and the implications for price in the short, intermediate and longer terms.

And keep in mind as you listen...Andy is "boots on the ground" in London, the center of the gold trading world for the past 200+ years. The Comex in New York controls paper price but, as you know, the underlying fundamental going forward is global, physical demand and this takes place in London. Where Comex may physically settle 1,000,000 troy ounces (30 metric tonnes) once every two months, London allocates and settles that much physical metal nearly every single day. Therefore, spot vs futures backwardation is a big, big deal. It drives allocation and purchase decisions for many of the central banks and other sovereigns currently racing to convert dollars into hard assets. Therefore, you must fully consider the ramifications of what is happening and I'm confident you'll find that this podcast will promote your understanding of the situation.

TF

p.s. Once again, I urge you to consider a subscription to Coghlan Capital, perhaps only for Andy's detailed and extensive, weekly commentary. He provides the reader with background and information you simply cannot and will not find anywhere else. Along with the commentary, you also get real-time access so you can follow along with Andy's daily trading activity as well as unbiased and objective technical analysis from Paul Coghlan. Yes, it's expensive but what service of real value isn't? At this critical time, it might be the smartest investment you could make. https://www.coghlancapital.com/daytrades-application?ak=turd_army

  135 Comments

pbfurn
Feb 28, 2013 - 10:06am

First?!!?

Hard to believe!

foxenburg
Feb 28, 2013 - 10:18am

thurd?

Must be a slow day. We are snowed in here in the Gredos mountains in Extremadura. Just sitting here tippety-tapping, as my wife disapprovingly calls it, on my laptop. She thinks I ought to be out there doing chores.

Patrancus
Feb 28, 2013 - 10:21am

2nd maybe

don't watch or listen to it any longer than I have to, Spring is right around the corner, the earth is calling.

crows - movie sound effects
achmachat
Feb 28, 2013 - 10:28am

huh?

Turd, you're not supposed to put up pictures of AM.

How is Rawdoglet going to continue saying that AM doesn't really exist?!

koan
Feb 28, 2013 - 10:40am

oil, eur, ag, au all around

oil, eur, ag, au all around the bottom of their short term ranges - moment of truth time. I venture they hold (though only putting my non-existent reputation on the line!).

dgstage
Feb 28, 2013 - 10:41am

Bill Murphy

Nice guy, but rattles easily. He is hard for me to listen to.

Kcap
Feb 28, 2013 - 10:50am
billwilson
Feb 28, 2013 - 10:53am

watch

Watch the miners on this next push down in PMs (coming very soon). If they hold and move up we could have a bottom.

The move Tuesday was obviously phony as the miners did not follow. Miners always need to lead higher.

Kcap
Feb 28, 2013 - 10:55am

Ummm...the only problem is...

First Day Notice for March silver is today, not yesterday.

SilverSurfers
Feb 28, 2013 - 10:59am

FED Bank Chair Bernake is a Charlatan

In the Russian language (Parusski) there is a word "Monae", that is Money, and its translate into English (Paengliski) simply as "coinage". The Russians are on to something here, from way back to the days of Ivan the Terrible. USA Founding fathers used the term money, in terms of coinage as well, and that is, particularly gold and silver money, which I suspect dear old Ivan, would have been in complete agreement. Its reflected in our constitution as well. Gold and Silver, the monetary metals are precious, cant be printed as paper that is "not worth a continental", and are divisible in two units, literally, as in the American west, where silver dollars where cut into pie shape wedges, 1-8th, call bits, and the cowboy could get a shot of whisky for two bits, you bet!

Just after the turn of the 20th century, the banksters wanted to control the money the supply, and Woodrow Wilson caved, creating FED BANK, its FEDERAL RESERVE NOTE, the paper dollar, and of course, the IRS thuggery, and hence the starting gun of the great kensysian experiment in paper money. But they could not just start printing gold-unbacked paper, as the Americana mentality back then was that only gold and silver are money, and would not buy into a "naked" fiat dollar. So, first there was the gold/silver certificate, to get the people first using paper money, to get into the peoples hands, and that was trick and easy, for as long as the Federal Reserve Note was 100% backed by monetary mental, it was accepted, and used, while the banksters, in their smoke filled back room started screaming, HOOK UP!! HOOK UP!! HOOK UP!!

The license to steal fatacompli, and out comes the paper, not fully backed, based upon reserves requirements, the printing presses fired up, and off to the races of UNLIMITED MONEY PRINTING. Then come the boom or the roaring 20s, and of course, the bust of the depression. But no crises by the totalitarians should go unexploited, and Raw-Deal FRD took it a bit further, effectively confiscating the people's gold, and the poor saps about the country, not know any better, worship FDR, the court-packer dictator. Co-victors of the great patriotic war, the US was riding high and mighty, with a gold reserve second to none, and a paper dollar, everyone around the world could trust, and thus, the dollar became the world reserve currency. They knew we Americans were on all four, and that our printing money was literal backed by gold to any foreigner (but not US citizens) that COULD REDEEM THE FEDERAL NOTE in gold coinage. The US kept the printing paper money. But the rest of world had no problem with the US printing paper currency, as they were subjected to the US gimmickry, and wanted gold for US paper money, until of course, the drain of the US gold stock was a torrent, and Nixon, in a effort to preserve the last of the US gold hoard, closed the gold window, and thus, the GRAND global experiment in fiat paper money.

Simple truths are at times hard to fine, but not here. A "note" is a promise to pay. Foreigners KNEW WHAT THAT MEANT. A currency note is by definition, a PROMISE TO PAY. The Federal Reserve Note could be REDEEMED in gold specie. A "note" is a promise to PAY. PAY? you ask, what do you mean pay. People still to this day understand what "pay" mean. You work, you get paid. You buy goods, you pay up. YOU PAY MONEY. Now most people are not so sophisticated to distinguish the subtle difference, whether you "Pay" or "GET PAID" in monetized metal (gold and silver) or in monetized debt, the paper FEDERAL RESERVE NOTE.

The federal reserve note is a promise pay. The promise to pay was a promise to pay in real money, gold and silver coinage. The federal reserve note is modernly an irredeemable note, as THEY WONT PAY on their note, they wont redeem in specie. Do to the WW FDR LBJ BHO, mostly, the federal budgets have ballooned to fund their vision of THE GREAT SOCIETY, where all are reduced as humans, and enslaved as tax mules or dependents. In order to fund OUR GREAT SOCIETY, with deficits and effectively no-debt limit, the Federal Reserve must monazite government debt, and thereby print money, in continuing exponentiating amount, to where all should see the Federal Reserve Note, as an irredeemable ponzi coupon. You bet!!

The US purportedly, (but don’t count on it) has 8K tons of gold, which is claimed by many to have been encumbered, leased, swapped, and loaned out, (to maintain an image of a sound dollar), to where we have actually, no real gold left, but perhaps some PROMISE TO "PAY" it back, a paper promise. This makes absolute sense. They refuse to audit the US gold reserves, for if the truth be know that the US government has squandered the people gold, the last treasure of the US, and uprising and chaos would immediately ensure. It should only take 1 month for Germany to get ALL their gold back, not over 20 freaking years, in dribbles. Charles Degaul, of France, merely sent over a couple of battleships, to pick up their gold up, for the US, in one go, way back when. No big deal then, but today, with bullion manipulated to support the fiat money, with depletion of on-time US gold, Germany can only get over decades.

Ben Bernake knows economic history, and is not stupid. He knows what we know. The Federal Reserve Note is now suspect, it must be printed in exponentiating amounts to fund the totalitarians in DC, and that IT WILL COLLAPSE as we have long gone past the point of no return for the fiat paper dollar. The only option left, is exponential printing, until it does. He knows what all the other central bankers know, gold IS THE ultimate extinguisher debt, that is, it can be used to PAY off any obligation, ANY WHERE, ANY TIME, ANY PLACE. Why? Because its real money, accepted by all as PAYment, for 5000 years. Central banks around the world ARE BUYING GOLD, for they see the irredeemable ponzi scheme for what it truly is, the lightening rod of the collapse of the global fiat complex.

Bernake claims gold is not money. What it really means is that he will lie to keep the ponzi scheme going, he only wants monetized notes, that is paper currency, to remain as the medium of exchange. The congressional bafoons should ask been some simple questions, such as, is a note a promise to pay. well well stammer stammer, yes. Is the federal reserve note, a note? well well stammer stammer, yes. Can you pay off a note with money? well well stammer stammer, yes.
Is gold money? NO.

Bernake is a fraud and charlatan, trying to maintain the paper fiat regime, the irredeemable ponzie coupon, and will lie and perjure himself, WITH IMPUNITY, before congress and the people, to maintain that totalitarian socialistic fascist racist cesspool that is DC.

Key Economic Events Week of 10/21

10/22 10:00 ET Existing home sales
10/24 8:30 ET Durable Goods
10/24 9:45 ET Markit flash PMIs
10/24 10:00 ET New home sales
10/25 10:00 ET Consumer Sentiment

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Key Economic Events Week of 10/21

10/22 10:00 ET Existing home sales
10/24 8:30 ET Durable Goods
10/24 9:45 ET Markit flash PMIs
10/24 10:00 ET New home sales
10/25 10:00 ET Consumer Sentiment

Key Economic Events Week of 10/14

10/15 8:30 ET Empire State Fed MI
10/16 8:30 ET Retail Sales
10/16 10:00 ET Business Inventories
10/17 8:30 ET Housing Starts and Bldg Perms
10/17 8:30 ET Philly Fed MI
10/17 9:15 ET Cap Ute and Ind Prod
10/18 10:00 ET LEIII
10/18 Speeches from Goons Kaplan, George and Chlamydia

Key Economic Events Week of 10/7

10/8 8:30 ET Producer Price Index
10/9 10:00 ET Job Openings
10/9 10:00 ET Wholesale Inventories
10/9 2:00 ET September FOMC minutes
10/10 8:30 ET Consumer Price Index
10/11 10:00 ET Consumer Sentiment

Key Economic Events Week of 9/30

9/30 9:45 ET Chicago PMI
10/1 9:45 ET Markit Manu PMI
10/1 10:00 ET ISM Manu PMI
10/1 10:00 ET Construction Spending
10/2 China Golden Week Begins
10/2 8:15 ET ADP jobs report
10/3 9:45 ET Markit Service PMI
10/3 10:00 ET ISM Service PMI
10/3 10:00 ET Factory Orders
10/4 8:30 ET BLSBS
10/4 8:30 ET US Trade Deficit

Key Economic Events Week of 9/23

9/23 9:45 ET Markit flash PMIs
9/24 10:00 ET Consumer Confidence
9/26 8:30 ET Q2 GDP third guess
9/27 8:30 ET Durable Goods
9/27 8:30 ET Pers Inc and Cons Spend
9/27 8:30 ET Core Inflation

Key Economic Events Week of 9/16

9/17 9:15 ET Cap Ute & Ind Prod
9/18 8:30 ET Housing Starts & Bldg Perm.
9/18 2:00 ET Fedlines
9/18 2:30 ET CGP presser
9/19 8:30 ET Philly Fed
9/19 10:00 ET Existing Home Sales

Key Economic Events Week of 9/9

9/10 10:00 ET Job openings
9/11 8:30 ET PPI
9/11 10:00 ET Wholesale Inv.
9/12 8:30 ET CPI
9/13 8:30 ET Retail Sales
9/13 10:00 ET Consumer Sentiment
9/13 10:00 ET Business Inv.

Key Economic Events Week of 9/3

9/3 9:45 ET Markit Manu PMI
9/3 10:00 ET ISM Manu PMI
9/3 10:00 ET Construction Spending
9/4 8:30 ET Foreign Trade Deficit
9/5 9:45 ET Markit Svc PMI
9/5 10:00 ET ISM Svc PMI
9/5 10:00 ET Factory Orders
9/6 8:30 ET BLSBS

Key Economic Events Week of 8/26

8/26 8:30 ET Durable Goods
8/27 9:00 ET Case-Shiller Home Price Idx
8/27 10:00 ET Consumer Confidence
8/29 8:30 ET Q2 GDP 2nd guess
8/29 8:30 ET Advance Trade in Goods
8/30 8:30 ET Pers. Inc. and Cons. Spend.
8/30 8:30 ET Core Inflation
8/30 9:45 ET Chicago PMI

Key Economic Events Week of 8/19

8/21 10:00 ET Existing home sales
8/21 2:00 ET July FOMC minutes
8/22 9:45 ET Markit Manu and Svc PMIs
8/22 Jackson Holedown begins
8/23 10:00 ET Chief Goon Powell speaks

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