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research24
10th December 2008, 21:25
"Here is an update on the backwardation in gold that started on December 2 at an annualized discount rate of 1.98% and 0.14% to spot in the December and February contracts. It continued and worsened on December 8, 9, and 10 as shown by the corresponding rates widening to 3.5% and 0.65%. It is nothing short of awesome. This is a premonition of a coming gold fever of unprecedented dimensions that will overwhelm the world as soon as its significance is fully digested by the doubting Thomases."

I've been reading Dr. Fekete for years and regard him as a top expert on the monetary metals. I like him because he's not a cheerleader for gold speculation, not a gold bug, but rather is an advocate for gold standard. I don't think anybody knows the futures markets better than he.

I urge all serious speculators to read Fekete's entire article at Savehaven.com as he ties into our discussion of James Conrad's article last week concerning devaluation against gold.

SkinnerVic
10th December 2008, 23:08
R24 - you have a link to that? Savehaven.com is a parked domain.

chux03
10th December 2008, 23:39
Is this it?

http://news.goldseek.com/GoldSeek/1228935840.php

from the article:

Be that as it may, the Brave New World of irredeemable currency sans the paper gold factory at Comex will be an entirely different world from what we have been used to for the past thirty-six years. I highlight the differences as I see them. This should be helpful in the long run, even if this backwardation is temporary and gold futures trading will return to normal, since permanent backwardation is ultimately unavoidable.



Item 1: Barrick and other gold producers that still have an open hedge book will go bankrupt.

Item 2: Other gold miners will, one after another, stop selling gold altogether, and go into hibernation.

Item 3: Junior gold mines will put off starting production indefinitely. They will consider their gold ore reserves in the ground a safer store of value than paper money in an insolvent bank.

Item 4: The closing of the gold window at the Comex will furnish an excuse for other issuers of paper gold including the bullion banks to declare bankruptcy fraudulently.

Item 5: GLD and other joint depositories of gold will be under enormous pressure to default and let the owners of the ETF shares hold the bag. Let them sue for the gold. They won’t get it: their contracts give them no right to physical gold. They will get small change, in paper. The principals will cut up the gold pie among themselves. No crumbs will trickle down to shareholders.

Item 6: Even allocated and segregated metal account gold is not safe. The temptation on the account providers to default will be irresistible. They are not going to release the gold until expressly ordered by the courts, and will make sure that no gold will be left by then.

Item 7: Central banks forfeit their gold under leases due to backwardation, causing an uproar of citizens whose patrimony was sequestered and dissipated in such an ignominious manner.

Item 8: The only market for gold will be the fragmented black markets in various countries each charging a price whatever the traffic can bear. All legal protection of the ownership of and trade in gold will be suspended. The Dark Age will descend on the trading world, just as it did when the Roman Empire collapsed.

research24
11th December 2008, 07:20
The salient point is that both Fekete and Conrad believe that the Bernanke Fed will STOP suppressing gold and let it rise in order to devalue the dollar.

This would be HUGE for PMs!!!

http://www.safehaven.com/article-12055.htm

prahudka
11th December 2008, 13:26
The salient point is that both Fekete and Conrad believe that the Bernanke Fed will STOP suppressing gold and let it rise in order to devalue the dollar.

This would be HUGE for PMs!!!



Do the elites ever suppress anything of monetary value, except in anticipation of owning it?

research24
11th December 2008, 15:43
The gold movement is probably pegged to the dollar dropping but I don't know yet why it is going down, particularly with all the reports of Russians buying up dollars like mad. Perhaps the Fed decided to end the support. If the gold shorts continue to flee, we'll know that the Fed has abandoned its anti-gold proxies.

ascentient
11th December 2008, 15:52
I think the dollar is declining as part of a forced government move to start devaluing it to stop the trade deficit getting much worse. I actually think this is the piece of news that has governed most of todays action on the Dow and the dollar, and that gold was just left alone to increase naturally for once.

http://www.bloomberg.com/apps/news?pid=20601087&sid=a9UY0zatFlPs&refer=home

Frelodr
11th December 2008, 16:34
The gold movement is probably pegged to the dollar dropping but I don't know yet why it is going down, particularly with all the reports of Russians buying up dollars like mad. Perhaps the Fed decided to end the support. If the gold shorts continue to flee, we'll know that the Fed has abandoned its anti-gold proxies.

Is there anything that shows the SHORTS are fleeing. Something like graph or chart or something we can physically see? Is there anything that I can watch, other than price of PM going up, that would show this?
Thank you so much, Lodr

Gino
11th December 2008, 18:56
All of Fekete's articles can be found on his website here:
http://www.professorfekete.com/

The funny thing is, I always thought he was quite conservative and dismissive of the hype and exaggeration around PMs. But backwardation in gold is THE indicative event that he has been waiting for. So now it is here, he seems to be saying that "This is it. The time for waiting is over."

Who can not agree. Gold is the only thing that I am ahead on this year and it just seems to be getting stronger. Lets hope that elastic Gold-Silver ratio springs back to something reasonable and doesn't just breakdown completely.

research24
11th December 2008, 20:39
I have to be skeptical until I see a sustained trend reversal. yet when a number of experts I respect are saying the same thing, it gets my attention.

As for the shorts fleeing, you'll find reports of COTs right here on this web site.