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Gold/Mining/Energy : Blue Chip Gold Stocks HM, NEM, ASA, ABX, PDG

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From: No Mo Mo	4/19/2013 1:15:16 PM
	1 Recommendation Read Replies (2) of 48092

Antal Fekete on how the attack on paper gold exacerbates gold backwardation and will feed into the move toward physical gold: In fact, however, a lower gold price is making the problem more intractable, not less. The Fed is diving from the frying pan into the fire.This is the point missed by almost all observers and market analysts. They ignore the underlying flight into physical gold that continues unabated, in spite of (or, better still, because of) the panic in the paper gold market. The Fed’s intervention in bankrolling short interest is going to back-fire, for the following simple reason. The Fed’s strategy is inherently contradictory.A lower price for paper gold makes it easier, not harder, to demand delivery on maturing futures contracts. The more paper gold Bernanke sells, the lower the cost of acquiring physical gold in exchange for paper gold becomes. The price of the nearby futures contract will drop to hitherto unimaginable depths, relative to the cash price, making backwardation worse, not better. Ultimately this will make backwardation irreversible. Welcome to the world of permanent gold backwardation. feketeresearch.com

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