Gold Backwardation Stories
December 8th, 2008WARNING: This is not a recommendation to buy, sell or hold any financial instrument.
If I buy a wheat contract, I should have to take delivery of the physical wheat on the specified date. If I sell a wheat contract, I should have to deliver the physical wheat on the specified date. I should not be allowed to buy or sell those leveraged contracts without having to take delivery, or deliver, physical goods. I shouldn’t be allowed to close my position without an exchange of goods.
The same should hold true for gold, coffee, palladium or any other commodity.
It is absolute madness that commodities are bought and sold using leveraged vehicles in markets that allow participation by speculators; individuals and organizations who have no interest or connection to the underlying physical commodity.
—CBOT Resembles Carnival Act as Billion Dollar Black Box Operators Move In
Backwardation is yet another artifact of the confetti currency system. Backwardation occurs when the price of a commodity, for delivery in the future, is lower than the price of the same commodity for immediate delivery. This indicates that confetti paper market participants have lost touch with the underlying reality of the supply/demand situation on the physical commodity in question.
For months, I wrote about how speculation in oil futures contracts was one of the factors driving oil prices higher. That is, parties with absolutely no ability to deliver or take delivery of oil were using credit to manipulate oil prices (to some extent). As oil ran up in a ridiculous manner, I maintained that prices were due to a combination of the collapsing dollar, tight supplies and speculation/manipulation. Now, oil prices are being driven lower by a combination of a rising dollar, more plentiful supplies—despite depletion and cutbacks by producers—and shortside speculation/manipulation.
Yes, speculation may also be used to manipulate prices to the downside. On gold, parties with absolutely no ability to deliver physical gold are using credit to manipulate prices (to some extent). They are creating, essentially out of thin air, promises to deliver physical gold in the future.
Most people have no idea how the futures markets work, and I’m trying to make this as simple as possible. While there are many more details: That’s it, in a nutshell. Market participants with credit can promise to deliver or take delivery of a physical commodity at some price WITHOUT ANY ABILITY TO ACTUALLY DELIVER OR TAKE DELIVERY OF THAT PHYSICAL COMMODITY.
So what, that’s the futures market. What’s the problem?
The problem is that, occasionally, reality kicks in.
On gold, for example, an increasing number of market participants who bought gold futures contracts may decide that they want to take delivery of the physical metal. That is, rather than closing out their positions by selling the contracts to someone else (cash settlement), they elect to take delivery of the gold itself.
This backwardation disequilibrium has the potential to throw a blinding light on the fraud based commodity markets in general, while causing the price of gold to literally explode higher as market participants move to execute deals in the spot market. Key word: Potential. It depends on how many people demand physical delivery of metal.
Here’s a site that’s tracking the physical inventory of gold that’s allocated for delivery (resulting from Comex futures contract settlements): Meltdown2011 – Vaporize Comex Countdown.
Here are some gold backwardation stories that are floating around right now:
Red Alert: Gold Backwardation!!!
The Manipulation of Gold Prices
Gold to Break Upside, Dollar to Break Down (First analyst to notice gold’s backwardation, as far as I know.)
Research Credit: IL, bozomind, pookie
Cryptogon Readers Sign Up for Hosting with Blue Host
December 8th, 2008Thanks to the owners of 00v00.org and westforkguns.com for signing up for hosting with BlueHost. Cryptogon received $180.
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December 8th, 2008Thank you.
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Angry Laid-Off Workers Occupy Factory in Chicago
December 7th, 2008Via: AP:
Workers who got three days’ notice their factory was shutting its doors have occupied the building and say they won’t go home without assurances they’ll get severance and vacation pay they say they are owed.
About 200 union workers occupied the Republic Windows and Doors plant in shifts Saturday while union leaders outside criticized a Wall Street bailout they say is leaving laborers behind.
Leah Fried, an organizer with the United Electrical Workers, said the Chicago-based vinyl window manufacturer failed to give 60 days’ notice required by law before shutting down.
During the peaceful takeover, workers have been shoveling snow and cleaning the building, Fried said.
“We’re doing something we haven’t since the 1930s, so we’re trying to make it work,” Fried said.
Protest organizers said the company can’t pay employees because its creditor, Charlotte, N.C.-based Bank of America, won’t let them. Crain’s Chicago Business reported that Republic Windows’ monthly sales had fallen to $2.9 million from $4 million during the past month. In a memo to the union, obtained by the business journal, Republic CEO Rich Gillman said the company had “no choice but to shut our doors.”
Bank of America received $25 billion from the government’s financial bailout package.
“Across cultures, religions, union and nonunion, we all say this bailout was a shame,” said Richard Berg, president of Teamsters Local 743. “If this bailout should go to anything, it should go to the workers of this country.”
Outside the plant, protesters wore stickers and carried signs that said, “You got bailed out, we got sold out.”
Research Credit: ottilie
One of Two Indian Men Arrested in Connection to the Mumbai Attacks, “Was a Counterinsurgency Police Officer”
December 7th, 2008Via: AP:
One of the two Indian men arrested for illegally buying mobile phone cards used by the gunmen in the Mumbai attacks was a counterinsurgency police officer who may have been on an undercover mission, security officials said Saturday, demanding his release.
The arrests, announced in the eastern city of Calcutta, were the first since the bloody siege ended. But what was touted as a rare success for India’s beleaguered law enforcement agencies, quickly turned sour as police in two Indian regions squared off against one another.
Senior police officers in Indian Kashmir, which has been at the heart of tensions between India and Pakistan, demanded the release of the officer, Mukhtar Ahmed, saying he was one of their own and had been involved in infiltrating Kashmiri militant groups.
Indian authorities believe the banned Pakistani-based militant group Lashkar-e-Taiba, which has links to Kashmir, trained the gunmen and plotted the attacks that left 171 people dead after a three-day rampage through Mumbai that began Nov. 26.
The implications of Ahmed’s involvement — that Indian agents may have been in touch with the militants and perhaps supplied the SIM cards used in the attacks — added to the growing list of questions over India’s ill-trained security forces, which are widely blamed for not thwarting the attacks.
Earlier Saturday, Calcutta police announced the arrests of Ahmed and Tauseef Rahman, who allegedly bought SIM cards by using fake documents, including identification cards of dead people. The cards allow users switch their cellular service to phones other than their own.
Rahman, of West Bengal state, later sold them to Ahmed, said Rajeev Kumar a senior Calcutta police officer.
Both men were arrested Friday and charged with fraud and criminal conspiracy, Kumar said, adding that police were still investigating how the 10 gunmen obtained the SIM cards.
But the announcement had police in Srinagar, the main city in Indian-controlled Kashmir, fuming.
We have told Calcutta police that Ahmed is “our man and it’s now up to them how to facilitate his release,” said one senior officer speaking on condition of anonymity due to the sensitivity of the information. Other police officials in Kashmir supported his account.
The officer said Ahmed was a Special Police Officer, part of a semiofficial counterinsurgency network whose members are usually drawn from former militants. The force is run on a special funding from the federal Ministry of Home Affairs.
“Sometimes we use our men engaged in counterinsurgency ops to provide SIM cards to the (militant) outfits so that we track their plans down,” said the officer.
Police said Ahmed was recruited to the force after his brother was killed five years ago, allegedly by Lashkar-e-Taiba militants for being a police informer.
About a dozen Islamic militant groups have been fighting in Kashmir since 1989, seeking independence from mainly Hindu India or a union with Muslim-majority Pakistan.
India and Pakistan have fought two of their three wars over the Himalayan region, which is divided between them and claimed by both in its entirety.
The Calcutta police denied the claims from Srinagar. “This is not true,” said Kumar.
The bungling and miscommunications among India’s many security services comes as police said they were re-examining another suspected Lashkar militant who was arrested nine months before the attacks carrying hand-drawn sketches of Mumbai hotels, the train terminal and other targeted sites.
Rakesh Maria, a senior Mumbai police officer, said the man, Faheem Ansari, was being transported to Mumbai from northern India where he has been in custody for further questioning, hoping he could shed more light on the attacks.
Maria said there was a definite connection between Ansari and the Mumbai attacks. “Ansari was trained by Lashkar and sent to do reconnaissance,” he said.
And a day after India’s top law enforcement official apologized for security “lapses” that allowed the gunmen to rampage through Mumbai, there were new embarrassments — this time with holes in the prime minister’s security.
Police preparing for a visit of Prime Minister Manmohan Singh near Calcutta hired high-school children for the equivalent of $2.50 each to sit in trees for the day and look out for suspicious people.
Local police chief L.N. Meena defended using children in the prime minister’s security detail, saying there were too many trees in the area and not enough policemen.
“The area is full of trees, so to check them to see if there were any anti-social elements or anyone making mischief, we employed the youths,” he said.
Television footage showed dozens of the youngsters perched in trees, with yellow paper badges that read “security pass” pinned on their chests.
Meanwhile police continued the interrogation of the lone surviving gunman from the Mumbai attacks, Mohammed Ajmal Kasab, 21, who revealed that the gunmen had detailed pictures of the locations, Maria said.
“They were pretty elaborate photographs,” he said, adding that they had also used maps from Google to study the targets.
Kasab has told interrogators he had been sent by Lashkar and identified two of the plot’s masterminds as being involved, two Indian government officials familiar with the inquiry said. Police had earlier identified the prisoner as Ajmal Amir Kasab.
Lashkar changed its name to Jamaat-ud-Dawa after it was banned in 2002 amid U.S. pressure, according to the U.S. State Department. The U.S. lists both groups as terrorist organizations.
Kasab told police that a senior Lashkar leader, Zaki-ur-Rehman Lakhvi, the group’s operations chief, recruited him for the attack, and that the assailants called another senior leader, Yusuf Muzammil, on a satellite phone before the attacks.
In Pakistan, the Interior Ministry chief told reporters he had no immediate information on Lakhvi or Muzammil.
According to the U.S., Lakhvi has directed Lashkar operations in Chechnya, Bosnia and Southeast Asia, training members to carry out suicide bombings and attack populated areas. In 2004, he allegedly sent operatives and funds to attack U.S. forces in Iraq.
Research Credit: ltcolonelnemo
The Milwaukee Community Currency Story
December 7th, 2008Sometimes, I read a story, grit my teeth and pray that people don’t submit it to me by the dozens. Oh well.
People are SO HAPPY about this. * Holding my head in my hands *
My problem with this article is this sentence:
And it’s completely legal.
Oh sure. And what currency will the business owners use to settle up with the maniac fascist tax authorities? Not Humboldt Gold or Milwaukee Cheddar Heads or Eugene Tofu Flake Bucks. If they want to avoid having guns pointed at their heads, they will pay the IRS in Federal Reserve Notes.
So yeah, let it rip with your local currency schemes, if it makes you feel good. Let’s just not get confused about the reality of what’s actually happening here, which is, the Matrix doesn’t care what made up script you use as long as Federal Reserve Notes come out the other end. Devise a system where people are actually conducting commerce outside of the tax framework and watch what happens. The second the Feds get wind of it, look out.
Stories like this are meant to make you believe that once you’re thinking outside the box, you’re out of the box. Actually, what you find outside the box is another box.
All the time, dumbshits accuse me of being negative; not seeing the good side of things. (With this Obama pathology, especially.) If pointing out the underlying nature of a thing makes me a negative person, why are you reading this site? Go away. Please, close your browser window and stop reading Cryptogon. Go drive your Prius to the icecream collective and buy a double hemp seed rebellion cone with your Lick Bush Bucks.
Note: I tried to find a link to an Obama-themed iPod case to include in my little rant, but, by some astonishing miracle, I couldn’t find one.
I’m not saying that the government is all powerful, all seeing and all knowing. Not at all. There are all kinds of deals that people can work out with each other that nobody else needs to know about.
I would suggest working within the food complex first of all. In areas where people raise their own animals, grow their own food and save their own seeds, this happens automatically. These people know that governments are simply running protection rackets for crooked corporate middlemen. There is a very healthy skepticism of government in these circles and idiotic laws are often ignored with contempt and prejudice. If you’re ever lucky enough to buy outlaw meat from an unregistered home kill operator, as I have, drop to your knees and kiss the dirt. Know that you’re in a good place.
There’s a saying in rural New Zealand (and probably lots of rural areas) that goes something like this, “If you want to do anything that makes sense, the last thing you should do is ask permission to do it.”
So, food. Focus on food. When you produce your own food, or buy/barter for it with someone who produced it, you kick fascists in the nuts and gouge out their eyes. Vegan pacifists may send warm lovey dovies and good vibrations to the enemy, as long as they’re growing their own and buying/bartering for same. If you’re dealing with the realities of natural food, then the currency doesn’t matter.
Better yet, make food the currency.
Via: Chicago Tribune:
They may be talking funny money, but it’s not funny business.
Residents from the Milwaukee neighborhoods of Riverwest and East Side are scheduled to meet Wednesday to discuss printing their own money. The idea is that the local cash could be used at neighborhood stores and businesses, thus encouraging local spending. The result, supporters hope, would be a bustling local economy, even as the rest of the nation deals with a recession.
“You have all these people who have local currency, and they’re going to spend it at local stores,” said Sura Faraj, a community organizer who is helping spearhead the plan. “They can’t spend it at the Wal-Mart or the Home Depot, but they can spend it at their local hardware store or their local grocery store.”
Incentives could be used to entice consumers into using the new money. For example, perhaps they could trade $100 U.S. for $110 local, essentially netting them a 10 percent discount at participating stores.
It’s not a new concept—experts estimate there are at least 2,000 local currencies all over the world—but it is a practice that tends to burgeon during economic downturns. During the Great Depression, scores of communities relied on their own currencies.
And it’s completely legal.
As long as communities don’t create coins, or print bills that resemble federal dollars, organizations are free to produce their own greenbacks—and they’d don’t even have to be green.
In Wisconsin, could that mean dough that looks like cheese?
November Earnings
December 7th, 2008November earnings for Cryptogon and Farmlet came to a total of $1610.48.
November started out very slow. There were a small number of contributions from core contributors—the readers without whom Cryptogon would not exist—and then one new contributor.
I mentioned that earnings were way down in a post and a wave of contributions came in, with many from outside the U.S. That turned it around.
A total of 28 people sent cash contributions in November, while about 28,300 people in the U.S. and about 40,000 people around the world read the site. HAHA These are breathtaking numbers.
Thanks to the four one hundredths of one percent of you for sending those generous cash contributions. (I think I’ve done the calculation properly.)
A larger number of you made the Amazon total very strong in November. Thank you for remembering to begin your Amazon sessions via Cryptogon. It all adds up.
Thanks to the owners of the following domains for sighing up for hosting with BlueHost:
People tried out new affiliate, Swanson Health Products, and BullionVault continues to show activity. Thanks for that
Finally, thanks to Oracle Broadcasting Network for their generous sponsorship of Cryptogon.
British Government Must Delete the Genetic Profiles of Innocent People from DNA Database
December 6th, 2008Via: Guardian:
The fingerprints and DNA samples of more than 857,000 innocent citizens who have been arrested or charged but never convicted of a criminal offence now face deletion from the national DNA database after a landmark ruling by the European court of human rights in Strasbourg.
In one of their most strongly worded judgments in recent years, the unanimous ruling from the 17 judges, including a British judge, Nicolas Bratza, condemned the “blanket and indiscriminate” nature of the powers given to the police in England, Wales and Northern Ireland to retain the DNA samples and fingerprints of suspects who have been released or cleared.
The judges were highly critical of the fact that the DNA samples could be retained without time limit and regardless of the seriousness of the offence, or the age of the suspect.
The court said there was a particular risk that innocent people would be stigmatised because they were being treated in the same way as convicted criminals. The judges added that the fact DNA profiles could be used to identify family relationships between individuals, meant its indefinite retention also amounted to an interference with their right to respect for their private lives under the human rights convention.
SWAT Team Conducts Food Raid in Rural Ohio
December 6th, 2008Via: Crossroad:
On Monday, December 1, a SWAT team with semi-automatic rifles entered the private home of the Stowers family in LaGrange, Ohio, herded the family onto the couches in the living room, and kept guns trained on parents, children, infants and toddlers, from approximately 11 AM to 8 PM. The team was aggressive and belligerent. The children were quite traumatized. At some point, the “bad cop” SWAT team was relieved by another team, a “good cop” team that tried to befriend the family. The Stowers family has run a very large, well-known food cooperative called Manna Storehouse on the western side of the greater Cleveland area for many years.
…
Presumably Manna Storehouse might eventually be charged with running a retail establishment without a license. Why then the Gestapo-type interrogation for a 3rd degree misdemeanor charge? This incident has raised the ominous specter of a restrictive new era in State regulation and enforcement over the nation’s private food supply.
New Record: 10 Percent of U.S. Home Loans At Least One Month Late in Payments or in Foreclosure
December 5th, 2008Via: AP:
A record one in 10 American homeowners with a mortgage were either at least a month behind on their payments or in foreclosure at the end of September as the source of housing market pressure shifted to the crumbling U.S. economy.
The Mortgage Bankers Association said Friday the percentage of loans at least a month overdue or in foreclosure was up from 9.2 percent in the April-June quarter, and up from 7.3 percent a year earlier.
Distress in the home loan market started about two years ago as increasing numbers of adjustable-rate loans reset to higher interest rates. But the latest wave of delinquencies is coming from the surge in unemployment.
Employers slashed 533,000 jobs in November, the most in 34 years, catapulting the unemployment rate to 6.7 percent, the Labor Department said Friday.
“Now it’s a case of job losses hitting more across the board,” Jay Brinkmann, chief economist of the Mortgage Bankers Association.
The U.S. tipped into recession last December, a panel of experts declared earlier this week. Since the start of the recession, the economy has lost 1.9 million jobs.
Job losses are already having an impact in rising delinquency rates for traditional 30-year fixed rate loans made to borrowers with strong credit. Total delinquencies on those loans rose to 3.35 percent in September from 3.07 percent at the end of June, the Mortgage Bankers Association said.
There were some modest signs of stabilization. The number of loans that entered the foreclosure process totaled 1.07 percent of all loans in the third quarter, flat from the second quarter.
Though that number likely reflects changes in state laws that delay or extend the foreclosure process and efforts to work out or modify loans that could still fall back into foreclosure.
