Monday, November 24, 2008

Moving Backward?

If anyone understands this well, help me out here. But isn't this backwardation right now? Look, Dec. '08-June '09 gold costs less than cash-now gold. It wasn't even like this on Friday when Lance Lewis made his post. Compare the "Last" price column with the "Previous Settlement" column, which should be from Friday. Am I wrong? Or do we have more backwardation today? Is this normal for this chart?

Click image to enlarge!

Here's the live link.


FOFOA said...

Citigroup collapses! Banking Shutdown Possible
by Martin D. Weiss, Ph.D. 11-24-08

FOFOA said...

From LeMetropole Cafe:

*Yet, with all of that, the most exciting development is one that few outside of the GATA camp will deal with or comprehend. This gives us an ACE up our sleeves and a substantial advantage over others analyzing this market. That’s because the mainstream gold world and Planet Wall Street have no idea what The Gold Cartel has done, and how much gold has already been depleted from the coffers of the central banks of the world … gone, lent out as part of the gold price suppression scheme … gold they CANNOT retrieve, not with a supply/demand deficit which will exceed 1500 tonnes in 2009, perhaps by a wide margin.

In doing what they did, The Gold Cartel is running into a wall as far as available central bank gold to meet the growing supply/demand deficit. We have covered this for weeks so no need to repeat here, except to say that continued observance of US melt gold may suggest how dire their situation is becoming.

In that regard one of the next financial market crises may be a GOLD ONE that has to do with derivatives and the lent gold. The central banks have stopped selling gold recently. What if they not only continue on that path, but try to get some of their lent gold back from their Gold Cartel, and other, borrowers? In light of the recent profligate actions of the US Government with the resulting realization of just how much trouble the US is in, that potential has been greatly enhanced. Some sheepish central bankers are likely to be very concerned about having squandered this coming valuable official reserve treasure in the years ahead. Should one make that decision, how long before others might follow suit?…

Central Banks cling to their gold
Allan Seccombe
Posted: Mon, 24 Nov 2008

GOLD sales under the Central Bank Gold Agreement (CBGA) were the lowest on record in the year to September 26, according to the Société Générale Quarterly Hedge Book Analysis, which showed gold companies’ de-hedging slowing to two million ounces.

"Official sector sales are thought to have dropped substantially during Q3 (third quarter of 2008), as falling sales were encountered from the CBGA signatories," the analysis compiled by metal consultancy GFMS said…

As we know the gold market cannot handle this kind of NEW DEMAND. The price would go bonkers in much faster fashion than it has done, even as over Friday and today. Should the price of gold explode quickly, it could easily set off another derivatives crisis, as we saw after the Washington Agreement in September of 1999. Back then the resulting gold derivative crisis was linking more to the offside hedging firms, which were dealt of a number of "exotic" option programs by the cabal bullion dealers. This time it could come for some of the dealers themselves, the Gold Cartel banks, banks like Citi, Goldman and Morgan, which are already in the deepest of financial market difficulty.

We shall see.

FOFOA said...

New from Lance Lewis

Anonymous said...

It's kind of off topic, but I'm watching NBC News right now and they just made a point of stating that the Federal Reserve is printing money to finance all these bailouts.

Specifically, the suggested investing in ink manufacturers, stating that the Fed was doing "whatever it takes" to revive the economy.

I never thought I'd hear the MSM admit that the Fed was printing money.


FOFOA said...

Thanks Dave,

Very interesting. I guess the fear of inflation is officially on the backburner.

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