Gold: Is This It, NOW?

From Wikipedia:

Backwardation is a futures market term: the situation in which, and the amount by which, the price of a commodity for future delivery is lower than the spot price, or a far future delivery price lower than a nearer future delivery.

The opposite market condition to backwardation is known as contango, in which the spot price is lower than the futures price. Different from contango, backwardation … is unlimited.

Antal E. Fekete, a professor at Intermountain Institute of Science and Applied Mathematics, and frequent writer on precious metals, answers a timely question:

Q: People from around the world keep asking me what advance warning for the collapse of our international monetary system, based as it is on irredeemable promises to pay, they should be looking for.
A: My answer invariably is: “watch for the last contango in silver”.

It takes a little bit of explaining what this cryptic message means. Contango is that condition whereby more distant futures prices are at a premium over the nearby. The opposite is called backwardation which obtains when the nearby futures sell at a premium and the more distant futures are at a discount.

When contango gives way to backwardation in all contract spreads, never again to return, it is a foolproof indication that no deliverable monetary silver exists.

People with inside information have snapped it up in anticipation of an imminent monetary crisis.

Friday the goldbugs at Lemetropolecafe.com explained gold’s $50 up move:

Gold Officially Goes Into Backwardation

This morning, gold officially went into backwardation for the first time since the announcement of the Washington Agreement in 1999, which sent gold shorts scrambling to find physical metal after the world’s major central banks agreed to limit sales of gold going forward and ended the one-way trade to the downside in gold that had been in place in the late 1990s.

We know gold is now in backwardation because the gold forward offerred rate (GOFO) has now gone negative. The 3M GOFO has fallen 12 bps to -0.07%, and the 1M GOFO has fallen 20 bps to -0.1167%.

Unlike other commodities, gold very rarely goes into backwardation, and only when
1) the market fears a collapse in the currency, and/or
2) the market is worried about counterparties making good on their promise to deliver gold [ed: A.K.A. “COMEX goes bust”] (which was briefly the case in 1999, when the Washington Agreement was announced and shorts were squeezed).

Translation: Gold is about to meltup, and the dollar is about to have an accident.

Buckle up, gold bulls. Gold could be set to blow its top soon.

How close is COMEX to going bust? Answer: Vaporize COMEX CountDOWN

See also:

  • Warning: COMEX May Default on December Gold
  • Attack of COMEX Gold & Silver
  • How 2 Track COMEX Deliveries
  • Sinclair Sez “Help Me Bust Comex”
  • This Guy Plans 2 Kill “Paper” Silver
  • ◊◊◊◊ Now: Gold @ $791.70, Silver @ $9.59, USDX @ 87.36 ◊◊◊◊
    ◊◊◊◊ Now: DJIA 8,046.42

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    16 Responses

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    2. buy miners.they are cheap and have to find the paper gold for the shorts.unhedged miners like Kinross

    3. What’s the safest Gold/Silver way to play this coming meltdown?
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    4. Gold in Backwardation…

      There has been quite a bit of chatter about gold going into backwardation instead of being in its regular state of contango.  These are adjectives for futures contracts on commodities and not types of dances.  Gold has been in backwardation briefly a…

    5. […] info: – Gold: Is This It, NOW? – Attack of COMEX Gold & Silver – How 2 Track COMEX Deliveries – Sinclair Sez “Help Me Bust […]

    6. Scott, wouldn’t it be something if we could establish and promote a legal fund through your site or maybe David Morgan’s that would offer a reward to any individual or individuals that would come forward and expose this obvious Comex crime in progress. We could get this out to all the big PM sites and ask for donations to a registered account. No one to date has offered this idea so far, but I think it could work, as there are many people interested in the outcome. There has to be a few underlings working at the Fed, Comex, etc. that are aware of the crime but have not considered coming forward and testifying with info that could really bust this crime in progress.

    7. […] can check COMEX deliveries online: How 2 Track COMEX Deliveries  Gold: Is This It, NOW? Attack of COMEX Gold & Silver Possibly related posts: (automatically generated)Andrew Wilshire […]

    8. […] info: – Gold: Is This It, NOW? – Attack of COMEX Gold & Silver – How 2 Track COMEX Deliveries – Sinclair Sez “Help Me Bust […]

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    11. […] Gold: Is This It, NOW? … Gold Officially Goes Into Backwardation This morning, gold officially went into backwardation for the first time since the announcement of the Washington Agreement in 1999, which sent gold shorts scrambling to find physical metal after the world’s major central banks agreed to limit sales of gold going … […]

    12. […] Let’s join Jim Sinclair and Bob Coleman and BUST COMEX gold and silver! Sinclair Sez “Help Me Bust Comex” Warning: COMEX May Default on December Gold How 2 Track COMEX Deliveries Gold: Is This It, NOW? […]

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