Fraser Murrell: Permanent gold backwardation means a worldwide financial meltdown

Australian scholar Fraser Murrell, a mathmetician and former stockbroker, argues today in commentary posted at MineWeb that, as the economist Antal Fekete has written, permanent backwardation in gold is the great threat to the world financial system, at least as it is now constituted as a fiat money system.

"Sooner or later," Murrell writes, "the bullion banks and governments will run out of ammunition and they will be forced to step back and allow the market to do its thing. Which is to repeat the 1970s -- the worst of all economic outcomes -- stagflation. Unfortunately, this is the consequence of all the money printing, and while it can be delayed it cannot be stopped. The gold price will eventually peak in the tens of thousands of dollars and unless the bullion banks unwind their short positions, they will either default or go bankrupt."

Murrell's commentary is headlined "Permanent Gold Backwardation = Global Meltdown Ahead" and it's posted at MineWeb here:

http://www.mineweb.com/mineweb/content/en/min...259165&s...