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Backwardation

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  • jmski52jmski52 Posts: 22,822 ✭✭✭✭✭
    He says if Chavez takes delivery of what is supposed to be 10 metric tons of the metal, “gold will backwardate, wreaking havoc along the way.” If that happens, Gartman says, it may be prudent to buy nearer gold and to sell deferred gold futures.

    Or, you could just keep on stackin'.image
    Q: Are You Printing Money? Bernanke: Not Literally

    I knew it would happen.
  • percybpercyb Posts: 3,324 ✭✭✭✭
    Your advice sounds "sounder" than Gartman's.
    "Poets are the unacknowledged legislators of the world." PBShelley
  • gecko109gecko109 Posts: 8,231 ✭
    Annual world production of gold is about 2300 tons. Chavez' 10 ton "aquisition" represents a meager 1/2 of 1% of just the world's yearly output. Which says nothing about already above ground gold stockpiles. I may be naive, but I fail to see how such a tiny amount of gold transferred from one vault to another could possibly affect worldwide prices. Even if Chavez immediately liquidated all 10 tons into the world market upon delivery, it represents just 1.5 days worth of annual production. Not even a blip on the radar in the big picture.


    Please explain to me what im missing that makes this story a big deal.
  • mixmanmixman Posts: 111


    << <i>Annual world production of gold is about 2300 tons. Chavez' 10 ton "aquisition" represents a meager 1/2 of 1% of just the world's yearly output. Which says nothing about already above ground gold stockpiles. I may be naive, but I fail to see how such a tiny amount of gold transferred from one vault to another could possibly affect worldwide prices. Even if Chavez immediately liquidated all 10 tons into the world market upon delivery, it represents just 1.5 days worth of annual production. Not even a blip on the radar in the big picture.


    Please explain to me what im missing that makes this story a big deal. >>



    Chavez's 10 Tonnes are in London and part of the COMEX pool. If COMEX really is playing a huge shell game with it's physical then removing 10 Tonnes might collapse the Ponzi Scheme.
  • MsMorrisineMsMorrisine Posts: 33,019 ✭✭✭✭✭
    if he is intent on moving it, the COMEX / London / HK / Sydney holding banks (wherever Venezuela has the stash) would need to start taking increased deposits, right?


    if Chavez takes it, someone has to either buy new or deposit it, right? and wouldn't the move potentially incease prices as any new is bought???

    Current maintainer of Stone's Master List of Favorite Websites // My BST transactions
  • gecko109gecko109 Posts: 8,231 ✭


    << <i>if he is intent on moving it, the COMEX / London / HK / Sydney holding banks (wherever Venezuela has the stash) would need to start taking increased deposits, right?


    if Chavez takes it, someone has to either buy new or deposit it, right? and wouldn't the move potentially incease prices as any new is bought??? >>





    But isnt it already accounted for? Doesnt Venezuela already own it? Isnt that already factored into the price?
  • percybpercyb Posts: 3,324 ✭✭✭✭


    << <i>Annual world production of gold is about 2300 tons. Chavez' 10 ton "aquisition" represents a meager 1/2 of 1% of just the world's yearly output. Which says nothing about already above ground gold stockpiles. I may be naive, but I fail to see how such a tiny amount of gold transferred from one vault to another could possibly affect worldwide prices. Even if Chavez immediately liquidated all 10 tons into the world market upon delivery, it represents just 1.5 days worth of annual production. Not even a blip on the radar in the big picture.


    Please explain to me what im missing that makes this story a big deal. >>



    His move alarms others and underscores the importance of holding one's own gold.
    There may be a time in the near future, Chavez is thinking, when he might
    not be able to get his hands on his London stash.

    Are you selling into this rally?
    "Poets are the unacknowledged legislators of the world." PBShelley
  • BearBear Posts: 18,953 ✭✭✭
    Backwardation , does not hold a candle, to the Congressional

    retardations, bloviations , insinuations, fabrications, innanities,

    insanities and outright criminalities and perversions of this most

    imperious branch of Government.
    There once was a place called
    Camelotimage
  • MsMorrisineMsMorrisine Posts: 33,019 ✭✭✭✭✭


    << <i>

    << <i>if he is intent on moving it, the COMEX / London / HK / Sydney holding banks (wherever Venezuela has the stash) would need to start taking increased deposits, right?


    if Chavez takes it, someone has to either buy new or deposit it, right? and wouldn't the move potentially incease prices as any new is bought??? >>





    But isnt it already accounted for? Doesnt Venezuela already own it? Isnt that already factored into the price? >>





    Venezuela owns it, but they can lease it out.
    Current maintainer of Stone's Master List of Favorite Websites // My BST transactions
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