TFMR Podcast #45 - Sandeep Jaitly Discusses GOFO and Backwardation


Back on Wednesday morning, I spoke with Sandeep Jaitly of Fekete Research and The Gold Basis Service newsletter. Sandeep is widely recognized as a global authority on basis and backwardation in the metals. You need to listen to this podcast so I am making it public today.

In this 25-minute podcast, we discuss:

  • Backwardation in general and how this relates to the current negative GOFO rates.
  • The ongoing breakdown in the price relationship between physical and paper metal.
  • Since the LBMA no longer publishes SIFO, can we draw any conclusions regarding silver?

We are very fortunate to have Sandeep share his perspective with us. I know you'll enjoy this podcast.



DeaconBenjaminTF Metals Admin
Aug 18, 2013 - 9:26am

Thank you

for the update. I really missed this site on Thurs and Fri.

Aug 17, 2013 - 9:26pm

@DeaconBenjamin, we uncovered

@DeaconBenjamin, we uncovered a networking issue that was causing some Internet Service Providers to not recognize our servers all the time. Some users had no problems at all, while others would only be able to access the site intermittently. This should be resolved now, and the changes will require some time to propagate globally.

I expect the majority of users that have had problems are already able to access the site, and even those in the most remote locations should have full access no later than the next 48-72 hours.

Aug 17, 2013 - 8:50pm

Thank you for making this public

I haven't been able to access the site for the past couple days. I'm not sure why.

So, if you think the SIFO numbers are fictional, does that mean they are really Sci-Fi?

Aug 17, 2013 - 3:06pm

@Bugzy: Banking 101

The bank loans $400,000 to the home buyer. The $400,000 goes to the builder who saves it in his bank against allocated gold.

After 1 year the house is worth $300,000, the home owner is bankrupt, the bank has received $40,000 in interest at the usurious 10% and the bank forecloses.

Now the bank has a $300,000 asset has received $40,000 in interest and the builder still has $400,000 in allocated gold. The $400,000 loan has grown to $740,000 in 1 year.

Grade 8 math question: where did the extra $340,000 come from?

Magical money multiplication (expansion) is the basis of our financial problems.

The true answer is the $40,000 in interest had to come from new thin air money, the bank has a $300,000 fixed asset but the poor smuck (bank) who sold the gold is holding $400,000 of thin air money created by the first bank. The banking system as a whole has $700,000 (ignoring the newly created interest) but only a $300,000 asset and so has lost $400,000 which naturally is exactly the newly created money for the home.

Although this example is quite contrived I believe it reasonably represents the destruction of currency that is currently happening as prior monetary expansion unwinds. Note the currency still exists in the banks but their hard assets (collateral) are dwindling.

Aug 16, 2013 - 9:44pm


I dream of the day when I can cross over and see the promised land.

Aug 16, 2013 - 9:27pm


You're already on the inside...go to this link...

The Library Lounge @ The Vault

I just found someone in there hiding behind one of the bookcases.

edit: Oop's...sorry.

I didn't realize right now that TF unvaulted this podcast and we're not on the inside right now.

Aug 16, 2013 - 9:21pm

Vault Library

But you have to be a member to access.

Aug 16, 2013 - 7:54pm


The real problem comes into play when the "note", which is not recorded, is bundled with several other notes and sold into the secondary mortgage market. Then they are resold again and again and etc. . Nothing is recorded correctly and in time even the banks and title companies do not know who owns the note. One can make some fiat dollars in the backroom as a robo-signer . This mess will never be cleaned up and the taxpayers will get stuck with more "assets" (toxic) called "mortgage backed securities". jmo

Visit the FAQ page to learn how to track your last read comment, add images, embed videos, tweets, and animated gifs, and more.

Aug 16, 2013 - 7:38pm
Aug 16, 2013 - 7:34pm

Vault library?…

…where? Link?

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