Gold and Silver are in backwardation… exciting, huh!? Well maybe. First, here’s David Mcalvany’s take on it.
“It’s not uncommon to have backwardation in any market, but it usually happens a very MINOR amount, and only for a day or two. We’re now into our 8TH WEEK of backwardation, 2 full months. It’s not the degree to which we are in backwardation, but the duration which I think is very intriguing.”
Backwardation is one of those terms that most of us generally understand, but the minute we try to articulate it to our friends we struggle to find the right words to define it. Backwardation is when a futures contract in the front month is more expensive than in the months further down the road. It’s a fairly rare occurrence. And it almost never happens for weeks on end.
Enter the folks at Mcalvany Financial, who explain the details of backwardation in the following clip. Not only does David Mcalvany do a fine job explaining this confusing concept, he also details how investors in China and India want PHYSICAL gold IN HAND, and how those investors want their physical metals NOW, preferring not to wait 3, 6, 9 months or more to get them.
With backwardation now entering its eighth week, it’s clear that something very unusual and potentially very exciting is going on.
Awakened people all over this planet are seeing the headlines and connecting the dots and are steadily accumulating precious metals. This at a time when mines are shutting down, war drums are ramping up, and governments around the globe continue with their irresponsible monetary policies. As Harvey Organ has been daily chronicling, gold and silver stockpiles are disappearing from warehouses around the world.
I don’t mean to be sensationalist. I honestly hope that I have years, not months, to add to my own PM collection. But like a game of musical chairs, none of us knows exactly when that last measure is going to be played and the music stops. At that moment we will own all we are likely to ever own, with the real-world price of PHYSICAL having completed its moonshot, out of reach.
“This breaking news piece is brought to you as a reminder of how unprecedented Backwardation lasting for over two months, actually is.”