muses of the moment

January 22, 2009

Gold Backwardation

Filed under: The Financial Crisis — totallygroovygirlfriday @ 8:11 pm

In December, the price of gold entered backwardation for 48 hours. This is a big word.

It means several things:

Investors are not willing to part with their physical gold requests for delivery or actual metal in their possession for a gain.

Real long term investors are buying physical gold because they think:

  • The global fiat currencies will not survive or severely hamper their wealth and business in the long term.
  • They don’t believe there is near enough physical gold to cover the paper gold market and don’t want to be unable at a future date to get physical gold, no matter what the price.

This is NOT covered in the media and investing books. The global fiat currency system will implode (and that includes the US Dollar). SOME websites are communicating these unprecedented movements in the markets and what it means.

Smart global investors are quietly buying and holding physical gold.

It is like storing tanks and tanks of gasoline at low prices to run your car, when there is NO gas available at any price.

If gold is too much for your pocketbook, buy silver.

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