Silver Trending Towards Backwardation

http://www.runtogold.com

The silver backwardation has been on-again off-again throughout 2009 and this portends gigantic problems for the worldwide monetary system. Backwardation is a situation where the fiat currency price of a commodity is pregnant with a premium the buyer is willing to pay for immediate delivery. The price of a commodity for future deliver is lower than the spot price. This is contrasted with contango where the spot price is lower than the futures price. Backwardation seldom arises in the monetary commodity gold or the quasi-monetary commodity silver.

http://www.runtogold.com/2009/09/silver-trending-towards-backwardation-again/

HOW TO BUY GOLD OR SILVER
http://www.runtogold.com/how-to-buy-gold-or-silver/

GET THE SKINNY ON SILVER INVESTING
http://www.runtogold.com/2009/06/get-the-skinny-on-silver-investing/

Category:

Education

Tags:

• silver
• gold
• backwardation
• silver future
• silver futures
• silver fowards
• silver dollar
• ron paul
• peter schiff
• lbma
• comex
• comex failure
• failure to deliver
• dollar
• dollar collapse

[herbs814]

silver bulls wanting physical silver despite immediately despite the loss of interest and opportunity cost is analagous to buying silver on margin. Buying into a bubble on margin is the classic sign of Kondratieff autumn (the climax of the bubble) when the rise in the price of the commodity will begin to exceed the rise in the income (or credit) with which to continue buying. As income falls and credit tightens, the bubble mania progresses until buyers cannot continue to buy (deflationary bust)

[RunToGoldDotCom]

"silver bulls wanting physical silver despite immediately despite the loss of interest and opportunity cost is analagous to buying silver on margin. Buying into a bubble on margin"

No. Fail. They are nothing alike. Bubbles are unsustainable. Buying on margin requires other's capital and the speculator *can* be 'margin called' and therefore unsustainable. When physical silver is bought and paid for the owner *cannot* be margin called. Therefore the high price is sustainable, although not likely

[medulalumosa9]

I'm doing my part to add pressure. I just bought another 60 oz yesterday. Boo-ya!! lol

Thanks!

[JRCrowley]

"silver bulls wanting physical silver immediately" Yes, that's exactly right. Because those who took delivery are now in the win column. That's the point.

[MorpheusWasRight]

@herbs814 holding $35!!

[optionsupdate]

Mr runtogold, why not look at bid to offer? on diffferent month contracts

[SilverRose09]

backwardation. If silver is in backwardation because is becoming a fiat corrency, it is important to explain that the real value of silver then as a money is around 80 to 100 dollars. How can you said that silver will worth less in the future? Please I need to understand what are you saying

[stalepie13]

Trace Mayer invented this term backwardation.

[herbs814]

Is the current price of silver sustainable? Or is it overbought, in a terminal 5th wave up (with a lower macd) in a broad deflationary environment?

Have your 6 months of living expenses and 3 months of food and water stored before you buy more silver.

And don't get too excited until silver holds 21, not 16.

[herbs814]

that is, assuming silver bulls haven't bought into a bubble. a bubble climaxes and pops when bulls are so driven to buy that they buy on margin at rates that outpace their incomes.

Don't buy silver on margin. Maintain an emergency fund of 6 months living expenses in cash or cash-and-silver. Store 3 months of food and water before you buy silver. And if you buy silver, prepare to hold for years while deleveraging continues to unravel the US and Western economies. Deflation before inflation.

[truthsabre7]

China is looking more free market than the US.