Gold finally posted its biggest gain in three months last week. On December 2nd, goldbugs said gold futures went into backwardation, which suggests supplies are drying up. What does this mean? I can't possibly claim to get this stuff; however, there are crazy bastards trying to spark a COMEX futures gold 'bank run' of sorts.

The artificially tilted gold market could likely get a huge thrashing at the end of the month. The idea: everyone trades on gold and silver futures - bets of delivery at a certain price and time. Normally all these bets get rolled over to cash and extended into the next cycle -- so the gold that's being bet on never has to leave the reserves.

To crash this parlor game, the goldbugs are going to try to buy out all the COMEX gold warehouses. They are now 43% emptied of real gold. COMEX is putting the word out warning of a potential disruption.

Without all of that 'paper gold' to bend the situation, the gold bugs think that gold might finally take off, in this stolen trillion-dollar fiat currency environment - but what will happen?

Meltdown 2011 seems to have the plan. Here's the log of progress in crashing COMEX precious metals buffer. Comex Gold Deliveries/Warehouse Supplies Consider:

COMEX trades hundreds of times more gold & silver than they actually possess. If enough investors demand delivery of PHYSICAL gold & silver COMEX stockpiles will be depleted. If COMEX runs out, the ensuing rush to grab physical metal to settle contract obligations *could* be the spark that ignites the long-awaited precious metals wildfire.

Explanation:
COMEX warehouses contain both “registered” and “eligible” metals. The “registered” metals are available for physical delivery. The “eligible” metals are not ready for delivery until they become “registered.” Although this pool of “eligible” metals is stored at COMEX warehouses there is no obligation to “register” these metals for subsequent physical deliveries.[......]

Sources:
[1] COMEX precious metals warehouse stocks:http://www.nymex.com/warehouse.aspx
[2] COMEX precious metals daily deliveries: http://www.nymex.com/media/delivery.pdf

Meanwhile at the Gold Anti-Trust Action Committee (which sounds like an awesome place to work) WE find out that COMEX sez its time for the big squeeze?!

Comex said warning brokers about December gold squeeze
Submitted by cpowell on Sat, 2008-12-13 04:11. Section: Daily Dispatches
From "Midas" Commentary
by Bill Murphy
LeMetropoleCafe.com
Friday, December 12, 2008
I received a call this morning from a commodities broker who told me that the Comex is alerting various futures firms about the potential of a squeeze on the December contract and is advising the $840 December shorts to exit their positions. That is the remaining open position.
There have been 12,636 notices of delivery. The shorts have until December 31 to make delivery. Normally they deliver early to take in cash and earn the interest. They must be delaying. As I understand the situation, that represents about 40 percent of the gold available at the Comex, and of course someone could enter the scene late, buy February gold, and then spread into December, which would stun the shorts.
My broker friend said his back office said this sort of alert is highly unusual and that the concern is real, not only for gold, but for other commodities too, like copper and palladium, as there is a good deal of talk of taking deliveries there too. But gold is the one for which the advice to cover went out.
This is an extremely productive development and could spur the price of gold up quickly as word spreads. As we all know, buying Comex gold and silver (the cheapest way to buy precious metals) makes all the sense in the world in this financial environment.

How much farther can things go? From that first link, the widely circulated essay by Antal E. Fekete: Gold Red Alert- Gold Price Backwardation first time in History!

Once entrenched, backwardation in gold means that the cancer of the dollar has reached its terminal stages. The progressively evaporating trust in the value of the irredeemable dollar can no longer be stopped.

Negative basis (backwardation) means that people controlling the supply of monetary gold cannot be persuaded to part with it, regardless of the bait. These people are no speculators. They are neither Scrooges nor Shylocks. They are highly capable businessmen with a conservative frame of mind. They are determined to preserve their capital come hell or high water, for saner times, so they can re-deploy it under a saner government and a saner monetary system. Their instrument is the ownership of monetary gold. They blithely ignore the siren song promising risk-free profits. Indeed, they could sell their physical gold in the spot market and buy it back at a discount in the futures market for delivery in 30 days. In any other commodity, traders controlling supply would jump at the opportunity. The lure of risk-free profits would be irresistible. Not so in the case of gold. Owners refuse to be coaxed out of their gold holdings, however large the bait may be. Why? [.....]

I have often been told that the U.S. Mint is already open to gold, witness the Eagle and Buffalo gold coins. But these issues were neither unlimited, nor were they coined free of seigniorage. They were sold at a premium over bullion content. They were a red herring, dropped to make people believe that gold coins can always be obtained from the U.S. Mint, and from other government mints of the world. However, as the experience of the past two or three months shows, one mint after another stopped taking orders for gold coins and suspended their gold operations. The reason is that the flow of gold to the mints has become erratic. It may dry up altogether. This shows that the foreboding has been evoked by the looming gold backwardation, way ahead of the event. Now the truth is out: you can no longer coax gold out of hiding with paper profits.

If the governments of the great trading nations had really wanted to save the world from a catastrophic collapse of world trade, then they should have opened their mints to gold. Now gold backwardation has caught up with us and shut down the free flow of gold in the system. This will have catastrophic consequences. Few people realize that the shutting down of the gold trade, which is what is happening, means the shutting down of world trade. This is a financial earthquake measuring ten on the Greenspan scale, with epicenter at the Comex in New York, where the Twin Towers of the World Trade Center once stood. It is no exaggeration to say that this event will trigger a tsunami wiping out the prosperity of the world.

So what's the plan?! See also Cryptogon: Comex Said Warning Brokers About December Gold Squeeze, Gold In Backwardation? Not So Fast .. - Seeking Alpha, for the 'reconstructed' real economic numbers, Shadow Government Statistics, Credit crunch? What credit crunch? report says - Forbes.com, Will We See a Big Upward Move in Gold? - Seeking Alpha. Meanwhile, the shock absorbers get thousands more strings attached... JPMorgan Chase: Poisoned by Bear's 5,000 Counterparties....