Backwardation Exposes The Truth

Backwardation in the silver market is growing and will soon begin in the gold market. The money printers are becoming nervous as precious metals speak the truth powerfully of their hidden, dark activities.

Consider this quote from James Turk, CEO of GoldMoney:

"What drives the gold price at the end of the day is the demand for physical gold. We're seeing that clearly now in silver which is in backwardation going out to 2015. Money never goes into backwardation unless you reach a position where you have extreme conditions - and that's what we see in silver now - the demand for physical metal is so much higher that people don't want paper any more, they want the real thing."

Turk believes this backwardation, the situation where the price of a commodity for future delivery is lower than the price for immediate delivery, could happen to the gold market.

"We could see gold in backwardation too as people become more and more worried about the inflationary consequences of the money printing that's going on around the world. Silver always leads - in bull markets it leads on the upside and in bear markets it leads on the downside. Maybe as precious metals move into backwardation, silver is again giving us an important message that it is leading and gold will eventually follow."

Asked his view of what is likely to happen over the course of 2011, he says, "We're probably going to see $1,800 - $2,000 this year on the gold price and silver looks like it's going to go to at least $50, given the way the backwardation is forming right now...

"The modern mind dislikes gold because is blurts out unpleasant truths." Joseph Schumpeter

An almost hysterical antagonism toward the gold standard is one issue which unites statists of all persuasions. They seem to sense... that gold and economic freedom are inseparable.
Alan Greenspan

Common experience is the gold reserve which confers an exchange value on the currency which words are; without this reserve of shared experiences, all our pronouncements are checks drawn on insufficient funds.
Rene Daumal