Something is not right in the Silver and Gold market....

Gold and Silver are currently operating off of the August contract, but it appears the September futures contract has slipped into backwardation. This happens when a futures price is lower in the distant delivery months (September) than in the near delivery months (August). Combine that with negative Silver Forward rates and it leads me to question supply and demand economics or is it just flat out manipulation. Negative Forward rates combined with backwardation represents a supply issue not a demand issue. It would appear the bullion banks don't want to lease their Silver or Gold because the risk is to great that they wouldn't get it back.

Also, the banks would receive an unstable medium for the transaction ala the dollar. It appears everyone is waiting for the dollar to escape it's trapped trading range between 79 to 82 before the metals decide which way they want to go. I have a sneaking suspicion that once the dollar heads to 82 the Pro Forex traders will short it to death and hammer it back down below 79. The strong dollar mantra is over rated. The dollar is being debased via the printing press and now it must be devalued to remain competitive. Contrary to popular belief the only game in town that matters is the bond market. They could care less if you lose all of your 401K in the stock market, because government debt is backed by the bond market. The key indicator to watch is the dollar index. A strong dollar represents lower bond rates, weak stock market, and lower precious metal prices. A weak dollar represent just the opposite. Don't be surprised if the dollar suddenly strengthens. This would flush money from the stock market back into the bond market. It's just a shell game. Also, the US debt is around 12 trillion. A strong dollar would push the interest rate down on bonds. Government debt is backed by bonds and is an adjustable rate depending on interest rates. Would you rather pay 5% or 2.5% interest on 12 trillion? I'm sure you got the point. Watch the dollar....It's the key! Long term I have the dollar heading below 70. If you knew this is coming, where would you put your money? Also, here's a little tidbit. The money supply has grown by 70% since last year. In 1986, the money supply grew 16% yoy. What was the consumer price inflation resulting from that? 8-9% How much is half of 70%?