The following is from http://www.barnhardt.biz
On Sychophants, Process Servers & Decoupling
Posted by Ann Barnhardt - December 15, AD 2011 9:38 PM MST
[The BASIS is the relationship between the cash market and the futures market and is very simply defined as (CASH minus FUTURES)].
“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.”
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This crashes the system, doesn’t it?
Pretty much, yup.
At least it destroys any idea of the futures market being a reliable “price discovery mechanism” that it is often touted as.