I have received a deluge of mail from readers of my latest article on the gold basis and the threat of the coming permanent backwardation in gold. I truly appreciate the interest of my readers in learning my thoughts on the subject. I regret that it is not possible for me to answer these letters individually; I make an attempt here to answer one or two, where the questions are general enough so that my answers may benefit all readers. Hello Antal! I have questions about your “Dress Rehearsal for the Last Contango”. (1) Will not gold at $1,000+ per ounce restore gold holdings registered at Comex warehouses? If not, why not? (2) When the gold basis goes negative, could it not subsequently go back to positive, assuming the price rises to over $1,000? If not, why not? (3) Why must gold backwardation, once established, become permanent? I should like to hear your reply to these questions. I am really very interested in understanding fully the implications of the vanishing basis for gold, and I hop
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