Red Alert: Gold Backwardation!!!

They are devaluing the gold standard because in late December the calls come in for physical delivery and Russia has a crap load of certificates it has said its going to call. Normally the comex only keeps a max of 1%-2% of physical gold on hand; as in the past very few have turned in to have physical delivery. So basically much like the bankers they over extended themselves and dont have the physical gold for all the certificates that are outstanding, hence the need to devalue the standard. All I have to say is GOOD LUCK getting it if you have the certificates! They dont have it and everyone is now out or on their last leg on supplies, with no further deliveries being anticipated this means big trouble....

I don't understand how this is going to be as bad as what the article mentions. Gold is not the only valuable commodity. Seems to me something else will emerge as numero eine.

Why is everyone surprised at the fall of Gold? It is used as an industrial metal, tooth fillings and jewelry. We are in a recession/depression and there is going to be less and less demand for gold. Somehow people have it locked into their heads that it is going to be used as the basis for some future currency. It isn't going to happen as there is simply not enough to back the amount of currency we need, and if by some far fetched scenario where it is used for that purpose, it will become immediately illegal for anyone to hold it and you will be forced to turn it in to the goverment and the goverment will not pay top price.

Charts withstanding, anyone with half a brain can see that Gold is going to keep dropping over both the near and long term.

Well alot of people started buying into gold futures when the world economy started going south.In other words paper gold. Now with the fact that there is not enough gold to go around and the people that have large sums of gold holding on to what they have means the people that bought the paper gold are left with pretty much a worthless piece of paper that translates into no gold. They had their money basically stolen from them.

The OP and xoxo stacie (-nice ring to that-) are not exaggerating.

International finance has been nothing but a game of call-my-bluff for far too long. Now Russia has the gall to actually do it!

Think of it this way: finding you've invested significant portions of the nation's wealth in un-redeemable IOUs. As long as everyone pretended the slips of paper represented something in the real world everyone had secure investments.

Then one day, late in 2008, the Russians seem to have learned a lesson from poker. When they see drops of perspiration dripping down the other guy's forehead - no matter how hard he tries to stop it - Ivan smiles a wry smile.

He calls the American's bluff.

But then he notices the guy who issued the chips is also sweating...

Originally posted by CaptGizmo
Well alot of people started buying into gold futures when the world economy started going south.In other words paper gold. Now with the fact that there is not enough gold to go around and the people that have large sums of gold holding on to what they have means the people that bought the paper gold are left with pretty much a worthless piece of paper that translates into no gold. They had their money basically stolen from them.

there is to my knowledge, there is at least one article
which suggests that London is shipping a good size tonnage of gold to the COMEX in the USA, (in time for the 31 Dec. settlement date) one reason being the manipulators are not yet ready for the paper gold trading to fold ~ just yet ~

the list of financial focused sites are numberous so i shant list any, but 321gold.com is a good starting point to find the unsubstantiated claim of London gold being destined for gold delivery thru the COMEX gold

reply to post by St Udio


Thanks for the link. Interesting that the Swiss who still have their currency backed by Gold are suggesting Platinum as a good future investment. Can not say i disagree with them as there appears to be a rise in the Platinum backed exchange.

This is a waiting game really.

Have watched the futures and certified (joke) gold for a while with a wry fear to be honest.

More is about and being produced than your source gives claims for, but it still is real and does have to come home to roost.

I also expect by spring of next year something similar though not so widespread, and more nation area specific and less drawn out timewise (as new gold is being mined, and put back into circulation from unregistered and accounted sources every day) with the fiasco that was the Brent Crude trading, after the recent widespread run from stocks in the mainstream.

Much much more futures are held than the wells can provide in their lifetime, and many of them come home to roost in the timeframe I mention above!

It will without want of a better description probably tip the UK. If the mainstream catch on and some REAL and HONEST auditing is done, (that would be a first remember enron lol) before it would be the trigger for the massive rise in Oil again wanted by the TPTB.

Especially if Russia as seems likely will cut of Ukraine from supplying or rather shipping about 60-80% of the European Gas this winter, and people start looking properly to guarantee supplies.

Of course this will practically end the shares in most of the world, 1/4 or so of the FTSE wealth is based on Oil and its derivatives. 1/5th or so of Britains economies income into it is based on the Service and mainly Financial services, industry. If both go, and the latter nearly is totally already, another quarter(Q prof/costs) is all that is needed Really, and the realisation that the other 1/4 of britains income/wealth needs to be written down by about 30-40% by my rough and quick calculations.... well then goodbye the Financial Heart of the worlds trading economies.
And before anyone shouts it's New York, know your subject please and research

They have bought and sold about 50-60 yrs of Oil from Brent (total as is now not field) with about 30-40 yrs total supply left. No regulation, cross continent, and panic buying as the rest of the market fell, the volatility was as sacry as CBOE still is... but you cant do that with a FIXED and DECLINING and LESS PROFITABLE (extraction costs) resource. Much worse and dubious than any Financial problems we have seen already.

Of course this will have massive implications for the Op post, and the REAL price of Gold may become much higher even than the Citigroup estimates of 2k an ounce this week, for 09.

Like I said at 272 in 05 buy gold, but as always like I maintain, get a safety deposit box, or really really good safe and have it hidden, have the actual stuff in your possession.

Again not in a position to make a profit myself, life choices, however This will come to pass too.

Elf

I would put a bet on the oil thing lol, if only could afford it now... but certainly not a timeframe though I am fairly confident about 90% sure by this time next year at the very latest. Doubt if it will need more than one winter, even with gloabl downturn, and the increased accounting and bookeeping. Looks like its going swimmingly to plan for those who are really burning those bright LIGHT gas towers on the oil well's eh?

[edit on 6-12-2008 by MischeviousElf]

reply to post by CaptGizmo


Okay, I read this article earlier today, Now - if there is not enough gold for the futures that Comex sold (which I had been waiting for the date of Nov. 28th - expecting default from Comex) - doesn't that mean gold will go up? Look Saudia Arabia just purchased 3.5 billion of physical gold, Iran is turning their reserves into physical gold. I have been hoping Russia will bust Comex wide open, so Gold could do what it should be doing, instead of being manipulated like it has been. If you have physical gold - then it will go up big time. The other thing, is if this person is saying it will go down, then it is only one person, compared to thousands of others who say - gold is going up up up.

So tell me what I read wrong in this article, because my last thought was - no gold for sale,.......then what gold is out there, will be sought after for high prices.

Please explain to me, what I missed. I am being serious about that, I just don't understand.

Originally posted by CaptGizmo
Well alot of people started buying into gold futures when the world economy started going south.In other words paper gold. Now with the fact that there is not enough gold to go around and the people that have large sums of gold holding on to what they have means the people that bought the paper gold are left with pretty much a worthless piece of paper that translates into no gold. They had their money basically stolen from them.

I get that a little bit now. Sounds like every pinksheet stock I've owned.

reply to post by questioningall


Yeah I must have missed something. The basic law of supply and demand says that if there is a low supply then demand goes up making gold more valuable. I do understand that once the people that have gold paper notes find out there is no physical gold to be rendered that they will all freak and chaos will once again have control of our future instead of the mechanical monetary system that we have created today.

I can't wait for that to happen............. for people to wake up.

Originally posted by Chaos3003
reply to post by questioningall

 

Yeah I must have missed something. The basic law of supply and demand says that if there is a low supply then demand goes up making gold more valuable. I do understand that once the people that have gold paper notes find out there is no physical gold to be rendered that they will all freak and chaos will once again have control of our future instead of the mechanical monetary system that we have created today.

I can't wait for that to happen............. for people to wake up.

First off, the law of supply and demand does not say if there is a low supply there will be be more demand. It says that if there is a low supply and there is high demand=higher prices. If there is a high supply and there is low demand=lower prices. Then the production of such material will then start to move to an "equilibrium" which will maximize the benefit for everyone because the producers of the material will produce more (because the prices are high) and more people will produce (again because the prices are high). And vice versa.

Second off, I do not think there will be chaos on the streets because people find out that their paper is not backed by real good. For one, most people who invest in gold don't want gold bullion sent to their house in a Fed Ex package. They invested in gold because once gold increases, they can then sell the paper for more money than they did when they bought it.

Most people don't think like some ATS'ers where we will be living in the stone age with no fiat currency and only gold and silver to barter (which makes no sense because if we were that economically decimated, gold and silver wouldn't mean crap).

reply to post by Chaos3003


You have no idea - how much I want it to happen!
Gold has been manipulated terribly - in fact other countries are getting angry over it. BTW: one analyst detailed out - with all kinds of numbers - that if we still had the "gold standard" today against our currency - and all the other countries with their dollar reserves.......you know what gold would be today per ounce???
Give up???
Try........$14,500 per ounce

And that is not with all the printing we are doing of the dollars right now either.

We won't go back to gold standard, due to the fact no country can afford to, but gold will have to come in the mix somewhere soon.

Oh, one other thing, a big investment firm, said 2 days ago, they were going to start buying gold for their hedge funds. What is weird after that announcement - gold went down. So gold is not doing what it should be, it should already be well above the thousand market - without manipulation, that is happening.

they will bring gold down, backwardation or not.
reason?
simple - gold is the end of fiat currency.
elite can't really afford this, it's too risky...and stupid.
Saudi Arabia? please - they are US puppets.
Russia? really - they are oil dependant, remove oil
revenue and Russia is in trouble.

i expect gold to fall sharply.

reply to post by RetinoidReceptor


No, I think right now, people need to realize, to get the value out of their dollar - with the value it hold currently, they need to think ahead. Use the value now to buy commodities that will hold and sustain their values in the future. That is what people need to look at, and not be blinded by all the talk on T.V. - hold value and increase it by metals. When we hit a devaluation of the dollar next year, people need to have something in hand that held it's value. The answer is metals: gold, silver, etc.

as the market savvy know, the fed fear deflation big time but the thing IMO they MAY fear even more than good ole deflation, is tangible assets like gold taking over there paper money game

that is why "couragous" volker raised interest rates so high so fast, to kill the flood of money that was going out of paper into gold (i.e real money) sure this caused rampant unemployment but volker was praised for controlling "inflation". besides this is a risk the elites are willing to set aside as collateral damage, especially since it won't effect them.

the comex paper market is likely being exploited (if a fraud like comex can be exploited) by big players demanding delivery of gold in a market where delivery is rare. This could threaten to lead to a comex default and a large run up in the gold price, (combine this with investors world wide looking /some addicted to high returns) this could lead to a large shift in cash positions (even bonds) into gold as well, further threatening paper markets

what can the fed's do to stop this and defend there paper game, besides deliver a bit more gold to comex.

i am going out on a limb with this next paragraph but i have been wondering about something the fed has been doing for the past several weeks and not only what it was accomplishing, but why the fed may be doing this?

the fed began paying banks interest for the excess reserves that they (the banks) held. This amount of interest was increased by the fed until it reached a full 1% on nov 6. This may not sound like much to you , but in this very difficult time where banks are already adverse to taking risks lending out there money to ( borrowers, even corporations who may face economic hardships and thus difficulty paying back) giving banks an INCENTIVE to hoard money (from TARP) or be lent from the GSE's at .035 percent and Encourage banks to hoard money and collect the risk free differential . this may explain why EXCESS reserves have gone from 2 billion to 600 billion in the last couple months and why the fed may engage in such an operation that would cause banks to stop lending EVEN FURTHER to the economy (and instead just make risk free money on the difference from interest rate spreads) . If the fed adds to the deflation forces by (giving banks less incentive to lend) which may also decrease something called velocity of money (delfationary) and in addition bernanke recently telagraphs they will be buying lond bonds (to keep people buying bonds as well) this may keep the paper game in business (in deflation paper gains value) and even the gold price in check even with a default or they may hope this will slow the demand for gold delivery as well.

It may be a stretch that the two are related but the paying a full percent of interest on banks excess reserves is one of the shadiest things the fed is doing IMO (giving the banks incentive to stop lending during a consumer led recession) and why else would they do this except to keep the paper game going (by adding to the deflation forces) while there is a threat to it (paper game) via a comex default, well i concede they may do it to recapitalize the banks ( that capital will be lost as house prices fall further and if that was the real goal then they should address the foreclosure problem very aggressively.

studio do you think this holds water



[edit on 6-12-2008 by cpdaman]

[edit on 6-12-2008 by cpdaman]

Originally posted by eventHorizon
they will bring gold down, backwardation or not.
reason?
simple - gold is the end of fiat currency.
elite can't really afford this, it's too risky...and stupid.
Saudi Arabia? please - they are US puppets.
Russia? really - they are oil dependant, remove oil
revenue and Russia is in trouble.

i expect gold to fall sharply.

i agree..has anyone been to a coin show, jeweler, a pawn shop, a mall? there is gold all over the place. of course not in bulk quantities, but enough for the regular person to purchase in small amounts and have some protection against currency inflation. gold is all around, my friend, and nobody is going to be able to confiscate enough of it to severely impact the world and cause a shortage. if gold goes up to 2000 dollars an once, there are going to be alot of normal people well protected.

[edit on 6-12-2008 by jimmyx]

jimmy russia is oil revenue dependent

and perhaps the russians would try to topple comex and hope that the run up in gold would lead to a broader run up in commodity prices including oil ,either that or they are just looking to take down the vulnerable (usa / western banking paper system) while they are in a position of weakness them selves, as a sort of last ditch effort. this could go for other country's dependent on oil revenue as well. They could be getting quite desperate seeing oil go from 150 to 43$, it could be in the best intersts of these country's to try and topple the paper gold market and hope the physical gold run up gives legs to the oil price as well


also it figures antal fekete wrote this article he covers all sorts of topics untouched by the MSM or even most "independent economists", i have read and learned and questioned many of his ideas, and hopefully for our sake he is wrong since his last sentence states

It is no exaggeration to say that this event will trigger a tsunami wiping out the prosperity of the world.

while i wouldn't put money on it, i would say it is certainly a possibilty

gee makes me wonder if that is why gov't have built all those underground bases (for continuinty of gov't function in case of a economic collapse/disintegration) .

[edit on 6-12-2008 by cpdaman]

reply to post by cpdaman


Hi, everyone.

I 've read about Internetional monetary fund to change his standard about central bank reserves. It was allowed for a central bank to borrow gold from another central bank, and count it as a full asset to boost the balance sheet.

This practice was supposed to be abolish this month.

Any news anyone ?


Could fasten an ongoing crisis.

Thanks