I recently released a video about the Internet-based currency, Bitcoin. I asked the question: is Bitcoin money? In brief, I said no it’s an irredeemable currency. This generated some controversy in the Bitcoin community. I took it for granted that everyone would agree that money had to be a tangible good, but it turns out […]
Tag Archive for: backwardation
Gold is in Backwardation!
With all the discussion on the Internet, some of it confusing, we thought a picture would be worth a thousand words. Backwardation is when there is a profit to decarry the metal. This is the simultaneous sale of metal in the spot market and purchase of metal in the futures market. Selling is on the […]
Since late January, the February gold contract has been in backwardation. This means that one could make a profit by simultaneously selling a gold bar and buying a February contract. One would still have one’s gold plus a little extra. I coined the term “temporary backwardation” (http://monetary-metals.com/temporary-backwardation-the-path-forward-from-2008-3/), to describe this curious and very recent phenomenon. […]
Professor Antal Fekete has written several pieces discussing gold backwardation, and arguing that this is the red alert signal for the coming financial Armageddon, when the tower of unpayable debts collapses. In this paper, I delve deeper into this topic. My goal is to make this topic approachable by the layman and describe what I […]
The March silver futures contract first entered backwardation on Mar 9 and with a few zigs and zags has not only remained there but has gone deeper and deeper in. The April gold future just entered backwardation today. See the graph (backwardation is when (Spot(bid) – Future(offer) > 0). We shall see what the coming […]
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. […]
On Friday, I published an article: http://dailycapitalist.com/2012/02/17/the-arbitrageur-silver-backwardation/. I was the only one to cover the news of the end of silver backwardation. And I gave my prediction that the price of silver could correct sharply. This piece presents my analysis and theory of what happened. This will necessarily include some educated guesses, as the big […]
I gave this talk at the Chicago Objectivist Society MiniCon Sep 4, 2011. Here is the full set of 9 videos on youtube for my presentation plus Q&A at the end, posted on this site to archive the links. Irredeemable currency vs gold – 1_9 introduction.wmv Irredeemable currency vs gold – 2_9 the origin of […]
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