I have written about “the last contango in Washington ” before. The phrase covers the gold crisis that has been brewing under the surface in the world for the past sixty years due to the insane gold policies of the United States Treasury. As a result all newly mined gold, surpassing the quantity of all gold ever mined in the world prior to 1947, has gone into private hoards, from which it will be next to impossible to coax it out. The measure of this act of disappearance of gold is the vanishing of the basis, or the last contango. In the technical jargon of the futures markets the basis is the spread between the nearest futures price and the cash price in the same location. The gold market has always been a carrying-charge market, a.k.a. contango market, due to the monetary metal status of gold. This means that the gold spread has always reflected the carrying charge, or the opportunity cost of carrying gold, the lion’s share of which is foregone interest. But a very strange phenomenon has been manifesting itself during the past thirty-five years, since the inception of gold futures trading. The basis as a percentage of the rate of interest, rathe
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