Monthly Archives: August 2015

When Markets Disintegrate: Cash-Futures Delinkage

I wrote this on December 15, ARSH 2011, and, sure enough, as the markets descend into undeniable farce and total government/bankster manipulation that not even the most ignorant “civilian” can fail to recognize, I saw THIS STORY on ZeroHedge today about how the premium for physical bullion is exploding, which is precisely what my article describes.


Finally, a very simplistic explanation of how the cash commodity markets are soon going to decouple from the futures markets. This is a little complex, but stay with me. I think this is important to understand because none of us who have lived our whole lives in the U.S. have ever seen a market disintegrate.

The threat (or promise) of delivery upon expiration is what keeps the futures markets tethered to the cash markets. Up until now, if an unreasonably wide spread between the futures price and the underlying physical commodity market got too out of whack, a process called “arbitrage” would kick in. Arbitrage is when a party simultaneously buys and sells on two separate but related markets in order to capture an inefficient spread between those two markets.

I’m going to use precious metals as my example commodity because there are a lot of metals guys reading this, and because the metals markets will be the big tell in term of when decoupling and thus total futures market disintegration is upon us. But these examples apply to all of the physical commodities.

Let’s say that the physical silver market is trading far lower than the silver futures price. This is what is called a WEAK BASIS. The BASIS is the relationship between the cash market and the futures market and is very simply defined as (CASH minus FUTURES). If cash silver can be bought at $25.00 per ounce and the futures are at $30.00 per ounce, the cash is $5.00 under the futures. When cash is under the futures, this is called a WEAK basis.

Up until now, what would a metals trader do? In very simple terms, he would buy the cash silver at $25.00 per ounce and then simultaneously sell the futures at $30.00. Because he has short-sold the futures, he could hold the contract to expiry and then deliver the $25.00 cash silver he bought to make good on the contract and receive his $30.00 price. So his simple net profit would be $5.00 per ounce. As many traders saw this spread and simultaneously executed this same strategy of buying the cash and selling the futures, what effect would this have? Right. It would cause the cash-futures spread to move back in toward convergence by pushing the futures price down (lots of sellers) and propping the cash market up (lots of buyers).

Now the opposite scenario: a STRONG basis. Let’s say cash silver is trading at $32.00 and the futures are trading at $28.00. A trader might take physical silver that he has in inventory and sell it in the cash market, and then immediately take those proceeds and buy back and equal number of ounces in the futures market and take delivery. Since the same number of ounces in the futures market cost $4.00 per ounce LESS, he would end up with the same number of ounces in his inventory PLUS $4.00 per ounce in CASH in his pocket. If he and many other traders saw this condition and they all sold cash silver and bought the futures, this would, again, converge the spread between the cash market and the futures market.

The lynchpin that is holding this dynamic together and keeping the futures markets tied to the underlying cash market is the fact that the futures contracts are deliverable, and a trader can either deliver or take delivery of actual physical silver via his futures position.

Are we seeing a problem yet? The futures markets have lost their viability and trustworthiness because of the MF collapse and theft. At some point in the not-too-distant future, people everywhere are going to realize that the delivery mechanism is not reliable. Heck, just holding cash and/or positions in a futures account is no longer reliable. If the futures market itself is not reliable, traders will no longer attempt to arbitrage these basis spreads because the risk to the trader that the rug will be pulled out from underneath them is simply too great.

And in the metals markets, the delivery process itself is . . . um . . . shall we say, easily corrupted? When you ”take delivery” of physical metals, it doesn’t get sent to your house. All you get is a certificate saying that X number of ounces are being held in a certified vault somewhere with your name on them. After the MF collapse, that sounds like a joke, right? A CERTIFICATE with my NAME ON IT? Yeah. That really is how it works.

When the arbitrageurs finally lose all confidence in the markets, the cash market will decouple from the futures because no one will be willing to take the risk of having their money, positions and/or physical metals stolen/confiscated. If no arbitrageurs are willing to trade these spreads – no matter how wide they may become – and thus there is no force causing the cash and futures to converge, we will see the basis spreads become extremely wide. As people flee the futures markets, the futures prices will drop, while the cash markets hold steady or even diverge and actually rise as all of the former paper players realize that physicals are the only remaining game to be played.

Watch for this. Watch for the gold and silver futures to sell off as people walk away from paper while the online cash dealers, seeing that market demand for their physical inventory is robust, begin to ignore the futures prices and hold their prices steady or even raise them. When you see this basis decoupling and absence of arbitrage, lo, the end is nigh.

How much lead warning would have been "right"?

I recorded and released my Economics Presentation, titled, “The Economy Is Going to Implode… And You Deserve to Understand Why” thirty-three months ago.

Thirty-three months.

I have given countless interviews repeating the cry, “Get out, get out, get out.”

My conscience is clear on this point, both with regards to content and timing, which I view in retrospect as having been just about optimal. It was enough time for all those willing to engage the dataset to do their own thoughtful due diligence, plan, and execute their asset reallocation in an orderly way.

And remember, this is all about simple arithmetic.  Not psychology, not feelings.  It’s math.  To not see this coming is to deny, or to cast as unimportant the foundations of the physical universe. Exponential functions are parabolic. Two exponential functions will always diverge, and the larger will always consume the smaller.  If debt increases 7% per year, and GDP increases 5% per year, the debt will, as a metaphysical certitude, utterly consume the whole as the steeper parabola zooms away from the shallower parabola.




“There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.”
– Ludwig von Mises

Prayer Request, Object Lesson and Wake-Up Call

Miss Barnhardt,

One of the neat extras of living around so many illegals: I was diagnosed today with an active case of TB. The local school system stopped testing kids two years ago – they thought it would single them out for attention, hurt their self-esteem.

Please remember me in your prayers.


Saint Therese of Lisieux (died of TB), pray for us.

Saint Rita of Cascia (died of TB), pray for us.


So you think a man who builds mirror-penis skyscrapers and names them all after himself is cause for hope? Rilly?

To say that watching people fawn over the psycho carnival barker Trump makes me nauseous with despair is putting it mildly.

The Barnhardt Axiom:

The fact that a given person is holding or even seeking high-level public office is, in and of itself, proof that said person is morally and/or psychologically UNFIT to hold public office.

So, who said the following? I’ll give you forty-seven guesses:

1) “I probably identify more as Democrat.”

2) “I’ve been around for a long time. And it just seems that the economy does better under the Democrats than the Republicans.”

3) “Nancy — you’re the best. Congrats. [signature]”
—Handwritten note to Speaker Nancy Pelosi

4) “Bush is probably the worst president in the history of the United States.”

5) “I’m totally pro-choice.”

6) “I want to see the abortion issue removed from politics. I believe it is a personal decision that should be left to the women and their doctors.”

7) “I’m very liberal when it comes to health care. I believe in universal health care.”

8) “The Canadian plan also helps Canadians live longer and healthier than Americans… We need, as a nation, to reexamine the single-payer plan.”

9) “By imposing a one-time 14.25 percent net-worth tax on the richest individuals and trusts, we can put America on sound financial footing for the next century.”

10) “I think he [Obama] has a chance to go down as a great president.”

Stumped?  I’ll give you a hint.  This person has donated over $100,000 to the Clinton Foundation, and Hillary Clinton sat in the FRONT ROW of this person’s most recent wedding.

I’d just like to also mention for the record the fact that we are all up-in-arms about Pope Francid and his Franboys getting ready to eviscerate the sacrament of marriage later this fall, but don’t even bat an eyelash when public figures have a string of ex-spouses.  I guess I’m just being completely unreasonable, unrealistic and… wait for it… IMMODERATE to expect any degree of intellectual consistency from anyone, ever.  After all, it’s a post-modern world, and the essence and battlecry of modernism is, “WE DON’T ACTUALLY BELIEVE WHAT WE BELIEVE!”

So here’s the answer.  All of the quotes above are from the second coming of George Washington, or Constantine – oh, no wait.  The second coming of Constantine is Putin…

…That developer of mirror-penis skyscrapers which he then names after himself, because that is so totally NOT indicative of anything even remotely problematic:


The only function I would attend with Bill and/or Hillary Clinton, people who are rapists, murderers and guilty of capital crimes against humanity, would be their public executions.

Where This WILL Eventually End Up: Fetal Cannibalism

With regards to my Tax Strike, and how I have been begging, pleading, admonishing all of you to STOP PAYING TAXES TO THIS ILLEGITIMATE AND SATANIC REGIME, not only as the last non-violent means of resistance, but also for the good of your immortal souls, I would often use rhetoric such as, “What is it going to take for you to draw the line and say ‘this far and no farther?’  What crime will these people have to commit, what atrocity will be needed in order to rouse you from your acedia, indifference and decadence?


That question is no longer a hyperbolic rhetorical device.

After the second Planned Barrenhood video was released, it occurred to me that the inevitable terminus of this LITERAL MEAT MARKET was the selling of late-term, intact (whole) fetuses into the Asian black market for food.  The Chinese, in particular, have been well-known to consume what is codenamed “spare rib soup”.  This is nothing less than soup made of whole human fetus and placenta.  The Chinese tout this as having “medicinal” benefits – like eating “human life force”.  Fricking pagans.

And it sells for THOUSANDS of dollars per serving.


Anyway, as we all know, the Asian cultures, and in particular the Chinese, value SONS massively over daughters.  And as we also know, the Chinese have had a “one child” policy for decades now.  So, the fetal meat market in China is mostly healthy baby girls who have been gestated to the fifth month or longer, who were identified as female by ultrasound, and then aborted.  In fact, there is a severe price discount for the meat of non-healthy or abnormal children who are either aborted or miscarried.  Because think about it, the whole point of this evil pagan practice is to consume the “life force” of the child.  Thus, weak or abnormal babies are considered less potent.

Now, given this, what do you imagine is the most prized type of baby for its meat?  What is the premium commodity in the baby meat market?

Healthy, intact (whole) BOYS.

But how many late abortions of healthy boys are there?

Darn few.

Or should I say, darn few… IN CHINA.

What is the great untapped source of healthy baby boys for slaughter?

What would be the fantasy meal, the ultimate vector of life force and sexual potency and virility in the mind of a satanic Chinese pagan man who eats human babies believing that it will give him greater sexual prowess and endurance, as well as general overall physical strength and vigor?


You know I’m right.  And you know they’d all be on board with it – both the Planned Barrenhood Nazis, and the people who procure abortions from them.

Christ have mercy.

Pope Francis: Not the Antichrist, but the Anti-John the Baptist – the False Prophet Forerunner

I posted a few weeks ago that it is now appropriate for serious-minded people to start considering the possibility that Pope Francis is, in fact, the Antichrist.  Well, I heard from many serious people, and I will share the consensus, which I believe is almost certainly correct.

First, the serious consensus is that Pope Francis is NOT the Antichrist.  He is, without question, the Spirit of Antichrist, but not the individual Antichrist himself.  Why?  The Antichrist will be A.) extremely intelligent, which Bergoglio is not, and B.) teaching and tradition with regards to the Antichrist holds that he will be a layman.

What the serious consensus today is, however, is that there is a very, very high probability that Francis is the False Prophet forerunner of the Antichrist, who is paving the way and laying the groundwork for the Antichrist.

John the Baptist was executed for defending the sanctity of Marriage vis-a-vis the state, namely King Herod.  Bergoglio is himself attacking Marriage, and not only fails to speak out against the state, but is openly cooperating with it as an ally.

John the Baptist was genuinely unconcerned with the material and everything he said and did was in regards to the human soul and its eternal fate.  Francis is an utter materialist who frames everything up to and including the slaughter of preborn children in material terms, and says hardly anything about the eternal fate of the soul – and was reported to have confessed in an interview his belief in the heresy of Soul Annihilation, which has gone uncorrected in any way to this day.

John the Baptist proselytized the One True Faith, and the essentiality of baptism.  Francis condemns proselytization, tells people he has no interest or desire to convert them to Christianity, and openly embraces false religions.

John the Baptist preached repentance.  Bergoglio denies the need for repentance and casts this as “mercy”.

John the Baptist’s charge was to “Prepare ye the way of the Lord, make straight His paths.” Francis has stated and has as his motto “hagan lio”, which means in Spanish, “make a mess” or more colloquially, “raise hell”. Francis proudly sows utter chaos.

John the Baptist diminished himself so that Christ might shine.  Bergoglio diminishes Christ so that Francis might enjoy more worldly popularity and “power”.

Now, read the following quote from this glowing article from a New Jersey newspaper about a sodomite priest at a local parish and then sit in stillness with the full horror of what damage Francis has done in just over two years.  He now has people denying that GOD HIMSELF will judge us for our sins.  Stop and think about that.  Use logic and progress your way through that.  If “p”, then “q”.  If “q” then “r”.  If “r” then “s”.

Where it leads, and leads quickly, is to nihilism (the utter rejection of all moral principles, and the belief that life is meaningless), utter hedonism and mass murder.

Hoboken resident Caren Rankin, a parishioner of Saints Peter and Paul Church, was similarly unfazed and supportive of the news [that the new parish priest is an open, unrepentant sodomite]. She didn’t think it would bother her friends in the church, either.

“I believe as the pope believes,” she said. “The pope said God doesn’t judge, so I don’t judge.”

Just another judgmental, unmerciful Christian getting his comeuppance.

Just another judgmental, unmerciful Christian getting his comeuppance.



Yes, Dears, Francis is a PERONIST-FASCIST…

The was a full piece in the Washington Post yesterday titled, “You can’t understand Pope Francis without Juan Perón — and Evita”.

Um.  Yeah.  Been SCREECHING the fact that he is a dirty, dirty thug Peronist-Fascist since, um, oh, A FEW HOURS AFTER HE WAS ELECTED.  But I’m not bitter or frustrated or anything.  Nope.  Not me.

… but what does “Peronist” mean?

Well, I can’t take credit for this explanation.  This was a comment on a Fr. Z thread by an Argentinian in September of ARSH 2014, it is was so informative that I saved it for future reference.  Now is the time, because none outside of Argentina really knows what “Peronist” means, other than having to do with Juan and Eva Peron.  Well, wonder no more.  Here it is.  If I may be permitted to put it is a nutshell, Peronism is INSTITUTIONAL NARCISSISTIC PSYCHOPATHY.

martin.c says:
28 September 2014 at 11:19 AM
Argentinian here. Peronismo and Justicialismo are two different names for the same thing: the “Peronista” party had to change its name due to a new law which forbade political parties to include personal references in their names, so they re-branded it “Justicialista” party.

The main idea behind justicialismo/peronismo is not about economy or politics, it is about power. The peronist leader thinks: “The best thing that can happen to the country is not freedom or development or peace or education or whatever… the best thing that can happen to the country is ME. Therefore I have to amass as much power as I can, and for that I have to amass as much wealth as I can. Once I have the power, I will bring peace and prosperity. Somehow.”

That’s why you have liberal peronists, conservative peronists, marxist peronists, keynessian peronists, libertarian peronists, and so ad nausseam, because actual ideas about how to actually govern are secondary, the primary thing for the peronist is for he/she to be the one ruling.

Of course, they say that peronismo is about bringing social development to the poor. That may be true, but they don’t have any clear idea of how to actually achieve that. Some of them think that it is all about giving money and stuff to the people for free, others have some degree of formal socioeconomic thought. But power always comes first. If a peronist government has to choose between the welfare of the nation and power, the answer is always power. And if a peronist leader have to choose between his/her beliefs and power, the answer is, again, power.

So, if you have a vague desire for “social justice” and are willing to support whatever peronist is above you in the ladder in order to eventually take your turn there, that’s enough to be a peronist. Sociopolitical discussions are not to be had within the party. The most famous peronist adaggio is “Que se doble pero que no se rompa”, which roughly means, “let it bend but never break”. A marxist peronist and a capitalist peronist will sing the peronist march together and affirm that “the best thing which can happen to a peronist is another peronist”. Because they will support each other when the time comes. Schisms within the peronist party are always about power, never about doctrines or beliefs.

So, if you think that Pope Francis will bring collegiality to the Church you are dead wrong: it is his time to hold the power and he will use it. He will allow some form of collegiality but only for those thing which he does not care about, and only if he has no choice.

And, btw, doctrine is one of those things.