Good News about Economy

[dashendeavors]

Your patience is infinite. Wow. I've come up against the same incredulity and it takes my breath away. The facts are the facts, but they don't teach economic truth in the US school system for very good reasons.... good, if you're a central banker profiting from the immorality of Keyensian economics.

I wish you luck trying to reason with people like those who've skewared you on this thread. As for me, I'm in BA to escape the utter futility I've felt trying to enlighten people to what's going on. Reality will bite. It's sad, but what can you do. Protect yourself with gold. If you can find any.

You know what's going on with gold? You know about the backwardation?

 

[RWS]

. . . . You know about the backwardation?

Not by that name, at least.

 

[dashendeavors]

Not by that name, at least.

http://www.financialsense.com/editorials/fekete/2008/1205.html

You may be interested in this. It explains backwardation far better than I could and it's a little complicated so you might want to read it more than once. Still, it's fascinating and historic.

 

[mini]

One thing that Argentina is doing is they are bailing out the citizens instead of the all the bankers. How many people will "take" advantage of this stimulus package?
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aNtgy0br55Ag

I'm all for helping the consumer, but trying to get people to buy more fridges & new cars??? Is that really going to help the people or the economy in the long term? I doubt it.

http://www.financialsense.com/editorials/fekete/2008/1205.html

You may be interested in this. It explains backwardation far better than I could and it's a little complicated so you might want to read it more than once. Still, it's fascinating and historic.

Maybe you can summarize?

 

[criswkh]

I don't think it will help in the long term. At least Argentina is trying to work with consumers instead of the bankers. People are reluctant to spend money. The new car low I think is a scam. I friend of mine called about it. It seems you pay 1000/month and at the end of the month they, car dealers or someone, has a drawing for the car. It is like a lottery, but you continue to pay to play. (Wait sounds like Chicago).

 

[dashendeavors]

I'm all for helping the consumer, but trying to get people to buy more fridges & new cars??? Is that really going to help the people or the economy in the long term? I doubt it.



Maybe you can summarize?

Since at least 1972 the price of gold futures, (previously the price was fixed by governments) has been higher than the spot price. But on December 2nd, the futures price went below the spot price and stayed there for several days. This means that gold owners are hoarding their gold because 1, they're not confident that they'll be able to buy it back in the future and 2, they have lost all faith in paper currency. Once entrenched, backwardation in gold means that the cancer of the dollar has reached it's terminal stages. Progressively evaporating trust in the value of the irredeemable dollar can no longer be stopped.

Negative basis, (backwardation) means that people controlling the supply of monitary gold cannot be pursuaded to part with it, regardless of the bait.

These people are not speculators. They are highly capable businessmen with a conservative frame of mind. They are determined to preserve their capitol come hell or high water, for saner times, so they can redeploy under saner government and a saner monetary system. Their instrument is the ownership of monetary gold. They ignore the siren song promising 'risk free' profits. Indeed, they could sell their physical gold in the spot market and buy it back at a discount in the futures market for delivery in 30 days. In any other commodity, traders controlling supply would jump at the opportunity. The lure of risk free profits would be irresistable. Not so in the case of gold. Owners refuse to be coaxed out of their gold holdings, however large the bait may be. Why? Well, they don't beleive that the physical gold will be there and available for delivery in 30 days time. They don't want to be stuck with paper gold, which is useless for their purposes of capitol preservation.

This is NOT "good news about the economy".

Check out spot gold prices in currencies other than the dollar. http://www.jsmineset.com/wp-content/uploads/2008/12/charts-for-12-11-2008.pdf

 

[RWS]

. . . . on December 2nd, the futures price went below the spot price and stayed there for several days. This means that gold owners are hoarding their gold . . . .

Or simply that sellers and buyers believe that the future will be more stable than the present. I'll not comment further 'til I've read the article that you kindly linked to, "dashendeavors".

 

[igor]

Or simply that sellers and buyers believe that the future will be more stable than the present.

Keeping lyrics aside, that means people who do arbitration could not get physical metal and keep it until expiration date of the gold futures to get their risk-free 3%.

 

[bigbadwolf]

But on December 2nd, the futures price went below the spot price and stayed there for several days. This means that gold owners are hoarding their gold because 1, they're not confident that they'll be able to buy it back in the future...

Do you mean they think the futures contract will not be honored? Because otherwise they have a risk-free arbitrage opportunity.

 

[mini]

Or simply that sellers and buyers believe that the future will be more stable than the present. I'll not comment further 'til I've read the article that you kindly linked to, "dashendeavors".

That's what I was going to say. People are buying now* driving up the prices. But in the future the price will go down because more stable situation means less buyers. I don't know, but that's how I interpret it.

(or then in the case of 2 Dec).