…pretty much sums up the Financial situation….

ipso..agreed… they won’t get mine.  And I really do think at least some will soar again, even if others go belly up or get bought out obscenely cheap.  rno.. thanks for additional thoughts..

Backwardization Of Gold And The Upwardization Of Gold And Silver Prices

Commodities / Gold & Silver Dec 08, 2008 - 08:01 AM

By: Darryl_R_Schoon

http://marketoracle.co.uk/Article7659.html

—snip—

THE BACKWARDIZATION OF GOLD AND THE UPWARDIZATION OF GOLD AND SILVER PRICES

Those fortunate enough to attend the final session of Gold Standard University Live in Canberra, Australia (attendees from Europe, North America, South Africa, Asia as well as Australia and New Zealand), heard Professor Antal E. Fekete explain the origin and significance of trading the basis with respect to gold and silver.

Professor Fekete recently posted his article, Red Alert: Gold Backwardization!!!, in which he alerted readers that for the first time in history the cash price of gold is higher than the nearest futures price, indicating that buyers value the present physical possession of gold more highly than future possession.

Professor Fekete stated that when gold recently moved into backwardization on December 2nd, a historical line had been crossed, a line which signified whether or not the present system could be saved. Now, according to Professor Fekete, with gold in backwardization, it cannot.

While the war between paper money and gold and silver is still being waged, according to Professor Fekete the outcome is no longer in doubt as the present system is now beyond redemption. This has profound implications for the future price of gold and silver and for gold mining shares.

( Cannuckgold pinning hopes and dreams on below)|

In the last Great Depression, the shares of Homestake Mining, the world’s largest gold mine, went from $4.19 in 1929 to $495 in 1935, paying a $56 dividend that year. In the coming depression, gold and gold mining shares should do just as well—and, after the onset of the depression, just imagine what they will do during hyperinflation.

THE COMING CAPITULATION OF PAPER

Physical gold and silver, whether in hand or in the ground will be the last refuge for the trillions of dollars still invested in paper assets. With an estimated $27 trillion of wealth already lost this year, the day is coming when the last believers in paper assets will finally look to gold and silver to preserve their dwindling wealth.

But when that day comes, those owning monetary metals will not exchange their gold and silver for paper money at any price, i.e. permanent backwardization; and the last believers in paper assets will be stuck with now worthless government issued coupons which previously had passed for money.

The recent historic backwardization of gold is a clear indication that sometime in the future a state of permanent backwardization will occur—and on that day, the world will finally be free from the tyrannical slavery of central bank induced indebtedness.

—snip—

I’m with you there buddy.  I’ve got lots of juniors that are in that under 10 cents category.   Ugly… but what can we do now.  Doesn’t make much sense to sell a stock that is down 80 or 90%.  I know how fast these juniors can go up as well as down so I guess I’ll just hang on for now.

Cheers, ipso

in most cases, the price of a companies stock has everything to do with staying a going concern. if a company has to float a new issue and the stock is very cheap, the new issue will sell for far less than the existing price because the new issue will dilute the ownership of all stockholders. many times, a bank takes company stock as collateral for the loan. if the stock is cheap and falling, the bank will be very hesitant to make the loan because the perception is the company is in trouble and the loan may default and the collateral will be worthless.

isn’t it simply amazing that a company will have an announcement just before a stock issue that will rally the stock or the sale is in an up market. look for lots of issues to be sold on this dead cat bounce into 2009.

rno

re: your PS… I wholeheartedly agree.  The problem is, I own a lot of them… and am worried about their continued existence!  Crowded boat, I know…

In closing, may I request that those of you who seem to relish sending me emails with links to articles bashing gold and to predictions about IMF gold dumps and $450 gold prices please cease doing so. What do you really expect me to say to such articles anyway? This is a gold-friendly web site because of all the reasons outlined so many times over the last few years. If you really believe those other articles then may I kindly suggest that you simply become a dedicated gold bear and sell all your gold and buy Treasuries. Gold is a time-tested store of value and insurance against the depredations of Central Bankers and spend-thrift politicians. That is why people buy it. If you trust paper securities right now and distrust gold, then that is your prerogative. At this point in time, I do not. At some point in the future I hope to be able to do once again. All the articles that some of you send my way are not going to change my convictions about this so stop wasting your time and mine – please!

Thank you!
Trader Dan Norcini

Yep, if they have “operating capital” then it doesn’t affect much… but the reason that many of these small companies are selling for under a dime in the first place is that they don’t have operating capital and their continued existence is in question.

PS I think the share prices of the juniors is just absolute lunacy!

10%!  Way to go!  I’m gonna hold out for 10% too, only in addition I’m going to ask for a written note from Paulsen begging me to borrow the money! 

PS  Maybe season tickets too. 

…………..Beware ,………..

I understand that point…what I don’t understand is what the stock price has to do with the operation of the company.  Shares are bought and sold on the open market, from one individual to another, right?  Someone wants to sell some shares, I want to buy, money changes hands and so do shares.. what does that have to do with the operation of the company?  If they have operating capital, they keep operating…

They can try all the tricks that they wish; however,  I will not borrow any money until they pay me at least 10% to borrow it!   That’s my story and I am sticking to it! 

Dear Jim,

Can you comment on the rumor published on reliable sites that the IMF is going to pummel the gold market down to the $455 levels tomorrow at 12:22 PM?

CIGA Arlen

Dear Arlen,

That rumor is nothing more than RAVING  BS!

Jim

If a junior is forced by circumstance to sell more shares when the SP is tiny then it dilutes the he## out of the stock and really screws the existing shareholders.  Unfortunately this is the only way to survive for some stocks.  What bank wants to make a loan to a company with a 5 cent stock price, especially one which has been in freefall?

Thank for posting the article End of Wall Street.  It is one of the best short descriptions of CDS and CDO’s that I’ve read.  It also gives the lie to the assertions that this problem is about the greed of the big lenders and the borrowers - it is simply a manifestation of corporate criminal behavior deserving punishment.  By the way, do you suppose a similar activity has gone on with precious metals derivatives  heh heh.