| This article discusses the meaning of gold backwardation and its relationship with the global economy. Antal Fekete warned many years ago that a “permanent gold backwardation” would act as a financial black hole that would consume the entire global financial system. Subsequent “scholars” found (minor) flaws in his argument. However (I believe) Fekete was right and that his warning is particularly pertinent today - as gold now enters its fourth year in (or near) backwardation.
First - some definitions. The GOFO (gold forward rate) measures the difference between the spot gold price and the forward (futures) price, measured as a percentage, quoted individually over 1, 2, 3, 6 and 12 months. GOFO is (a swap rate) paid by the gold owner, who puts up his gold as collateral to borrow dollars...............................................Full Article: Source
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