Paper Gold

[ant1980]

From various threads and discussions people have mentioned paper gold, what would happen to the price of gold if it turns out most Gold was sold in this way?

[azogar]

From various threads and discussions people have mentioned paper gold, what would happen to the price of gold if it turns out most Gold was sold in this way?

not an easy question to answer, very open to opinion and bias.

simply put - gold is the purest antithesis to paper fiat money, especially since 1971, when Nixon cut any last ties between the USD$ and gold.

the most ardent supporter of hard currency (gold) would contend that putting a 'paper' money price on gold is somewhat arbitrary since, the fiat money can be created by Govts. at will and thus does not represent a store of value (think Weimar)

sorry for the basic analysis, but this is where an answer to your question can be found; FOFOA agrees with Prechter to an extent that we will see $200/oz gold, BUT this will be paper gold whereas the 'price' of physical gold will in effect rocket as no-one will want to swap their physical for paper.

Whereas, someone like Stewart Thomson believes that the $USD is on its way (eventually) to becoming gold backed again, but first of all we get the games:

11. What do you think is going to happen when your accounts, and those of the fundsters, are fully laden with gold and even leveraged beyond fully invested with gold? The answer as to what is going to happen is the banksters, who have a printing machine and unlimited money, are going to place “ask” orders into the gold market (that’s sell orders for those who need a translation), and do so at a size level you probably can’t comprehend right now.

12. They can sell vastly more gold than you can buy, and after all the gold market players are 100% invested, the banksters are going to start dumping a mountain of gold sell orders into the market, as they have dozens of times since the gold bull began. The bottom line: just like has happened millions of times in all markets in the past, all the current price chasers in gold bullion will be destroyed.

and finally, here is JPM apologist Jeff Christian confirming OTC Gold Market sells 100 ozs of claims to each ounce of physical gold

Good Luck in your quest for the truth, if you find it let me know.

Edited October 12, 2010 by p.p.

[goldfever]

Adrian Douglas answers that one here:(out Today)

http://www.youtube.com/watch?v=JauDzIaZBPQ&feature=player_embedded