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 | Antal E. Fekete - Gold University |
The Vanishing Of The Gold Basis and...  |
| The gold basis is defined as the difference between the nearby futures price and the cash price of gold in the same location. A positive basis is called contango; a negative one, backwardation. Since there were no organized futures markets in gold prior to 1971, the history of gold basis is confined to the last 35 or so years Gold futures trading started on the Winnipeg Commodity Exchange in Canada in 1971 at a time when ownership and trading of gold was still illegal in the United States. Upon becoming legal the bulk of gold futuresTuesday, January 12, 2021 |
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| Antal E. Fekete - Gold University |
| More dress rehearsal for the last contango |
| You have to remember that the basis is widely used as a guide in the huge arbitrage operations between gold holdings and dollar balances and in the gold carry trade. To participate in this arbitrage you must have gold on deposit in Comex warehouses. But with the vanishing of the gold basis the profitability of this arbitrage as well as that of the gold carry trade has been drying up, which explains the dwindling of warehouse stocks.Saturday, January 9, 2021 |
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| Antal E. Fekete - Gold University |
 “Gold Is Pale Because It Has So Many Thieves Plotting Against It” |
| * The title is a quotation from Diogenes Laertius (fl. 2nd century A.D.)
This was the favorite quotation of the late Chicago economist and gold expert Melchior Palyi.Tuesday, December 22, 2020 |
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| Antal E. Fekete - Gold University |
| Forward Thinking On Backwardation |
| .Thursday, October 8, 2020 |
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| Antal E. Fekete - Gold University |
| The Supply of Oxen at the IMF |
| .Wednesday, October 7, 2020 |
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| Antal E. Fekete - Gold University |
| Recapitalize The Banks With Gold |
| .Tuesday, September 22, 2020 |
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| Antal E. Fekete - Gold University |
| Gibson’s Paradox The Gold Price |
| .Sunday, September 6, 2020 |
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| Antal E. Fekete - Gold University |
| The Gold basis is Dead - Long Live the Gold Basis! |
| To the government, the gold basis is like the naughty child who blurts out unpleasant truths. He must be gagged and silenced at all hazards. Fool's gold basis is even more important than fool's gold in terms of the number of people victimized.Saturday, August 29, 2020 |
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| Antal E. Fekete - Gold University |
| Keeping our Eyes Peeled for the Silver and Gold Basis |
| Here is a question for the discriminating observer. How is it that interest-rate derivatives do not obey the Law of Supply and Demand? The more there are of them, the more they are in demandMonday, August 10, 2020 |
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| Antal E. Fekete - Gold University |
| Has Hedging Killed The Goose - (Final Part) |
| .Saturday, July 18, 2020 |
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| Antal E. Fekete - Gold University |
| Remobilize Gold To Save The World Economy! |
| Let me explain. Gold is the only ultimate extinguisher of debt. Other extinguishers do, of
course, exist but they are not ultimate in that they have a counterpart in the liability column of
the balance sheet of someone else. Gold has no such liability attached to it. Gold is where the
buck stops. It is this propertyTuesday, May 5, 2020 |
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 | Keith Weiner - Monetary Metals |
| Standing Ready to Lease Gold |
| We will take another break from capital destruction, to treat a topic which has come up this week. On March 11, we said:
“…central bankers do not think about gold.
Granted, they once did. In the 1960’s, there was the now-infamous London Gold Pool to keep the price of gold at $35. This is endlessly cited as evidence of current central bank price suppression, without bothering to mention that until 1971 the official US policy was to maintain the dollar to gold exchange rate of $35 to the ounce. …
Tuesday, March 20, 2018 |
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| Keith Weiner - Monetary Metals |
| Open Letter to GATA |
| Dear GATA and Mr. Chris Powell:
I am writing this in response to your article Monetary Metals’ Weiner refuses to see anything wrong in the gold market.
There is a certain irony for me to read that I refuse to see. I have spent eight years studying the mechanics of the market, building a model, developing software to run the model through several generations, and licensing nearly three terabytes of data giving ever bid and offer in both the spot and futures markets with sub-millisecond resolutionThursday, March 15, 2018 |
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| Keith Weiner - Monetary Metals |
| Super-Duper-Irrational Exuberance |
| Think back to the halcyon days of the dot com boom. This was a time after Greenspan declared “irrational exuberance”. Long Term Capital Management collapsed in 1998, and Greenspan decided to risk propelling exuberance to a level beyond irrational. Super-duper-irrational exuberance?
Anyway, Greenspan cut interest rates a few times in late 1998. Technology companies were able to raise $5 million or more with just a sketch on a napkin (“serviette” for those outside the US). Companies at a “later stTuesday, March 13, 2018 |
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| Keith Weiner - Monetary Metals |
| Inflation Is Not Under Control |
| Let’s continue on our topic of capital consumption. It’s an important area of study, as our system of central bank socialism imposes many incentives to consume and destroy capital. As capital is the leverage that increases the productivity of human effort, it is vital that we understand what’s happening. We do not work harder today, than they worked 200 years ago, or in the ancient world. Yet we produce so much more, that obesity is a disease more of the poor than the rich. Destruction of capitaMonday, March 5, 2018 |
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| Keith Weiner - Monetary Metals |
| Gold is a Giant Ouija Board |
| We have been promising to get back to the topic of capital destruction, which we put on hiatus for the last several weeks to make our case that the interest rate remains in a falling trend. Today, we have a different way of looking at capital destruction.
Socialism is the system of seeking out and destroying capital. Redistribution means taking someone’s capital and handing it over as income to someone else. The rightful owner would steward and compound it, not consume it. But the recipient of uMonday, February 26, 2018 |
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| Keith Weiner - Monetary Metals |
| Irredeemable Currency De-tooths Savers |
| Arbitrary Interest Rates
In the past few weeks, we have argued that interest rates will not rise. We have made our arguments based on observable cases of soft credit demand that falls with rising rates, and analysis of the incentives on creditors and debtors. Ours is a case that rates can’t go up much, for long, because demand for credit won’t chase rates up. In the postwar period up to 1981, borrowers chased rates all the way up the moon. But not since then.
Now, we want to make a theoretical aMonday, February 19, 2018 |
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| Keith Weiner - Monetary Metals |
| Take It To The Bank: Interest Rates Won’t Rise |
| How Not to Predict Interest Rates
We continue our hiatus from capital destruction to look further at interest rates. Last week, our Report was almost prescient. We said:
The first thing we must say about this is that people should pick one: (A) rising stock market or (B) rising interest rates. They both cannot be true (though we could have falling rates and falling stocks).
We write these Reports over the weekend. At the time of last week’s writing session, Friday’s close on the S&P was 2757 (fuMonday, February 12, 2018 |
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| Keith Weiner - Monetary Metals |
| The Fed’s Passive Aggressive Play |
| Singing the song of rising rates
Last week, we took a break from the theme of the consumption of capital, for our annual Outlook 2018 report. We are going to leave the topic for one more week, while we address a market move which is on everyone’s mind.
Are interest rates now in a rising cycle?
The Fed has been singing the song of rising rates since Yellen hinted at it in September 2014. The Fed’s first hike was December 2015. Here is a graph showing the Fed Funds Rate, which the Fed controls, wiMonday, February 5, 2018 |
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| Keith Weiner - Monetary Metals |
| Shut Down Shoddy Debt |
| We have been discussing the consumption of capital. We again must say:
“We see people eating more of the seed corn.”
Right now as we write this on Saturday afternoon, the US government has “shut down”, due to a political impasse on the legislation to fund its continuing operations. Government funding is a mix of taxing and borrowing. Government borrowing provides a segue into another mechanism of capital consumption.
Legitimate credit requires that the lender both know and approve. Do holders ofMonday, January 22, 2018 |
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