Shortly after the collapse take-down of MFGlobal in October of 2011, Ann Barnhardt walked away from Barnhardt Capital Mangement, and published a prescient prediction on the coming collapse of the paper futures markets, as the loss of confidence by arbitrageurs in the paper markets would result in a decoupling of the cash markets from the futures markets.  Barnhardt warned readers to:

Watch for the gold and silver futures to sell off as people walk away from paper, while the online cash dealers, seeing that market demand for their physical inventory is robust, begin to ignore the futures prices and hold their prices steady or even raise them. When you see this basis decoupling and absence of arbitrage, lo, the end is nigh. A parabolic spike is coming.

Exactly what we’ve seen in the physical silver market over the past week.  Is the end nigh? [Read more...]