goldswitzerland.com / by Egon von Greyerz / May 18, 2017
The most expensive investment anyone can buy today is paper gold. For $1,260, an investor will get a piece of paper saying he owns 1 ounce of gold. But he is unlikely to ever see that gold. Firstly, most investors who buy paper gold have no understanding of the real reason for holding gold and will therefore never contemplate taking delivery. And even if he did understand the importance of holding real gold, he is quite happy to hold the surrogate alternative which is paper rather than physical. This is of course what the issuer of the paper gold wants. He knows that paper gold buyers have no intention of taking delivery. This is perfect for the seller because he has no intention of making delivery either. And this is how paper markets function. Buyers and sellers are willing to trade pieces of paper that are said to represent an underlying instrument whether it is a stock, bond, currency or commodity.
Paper gold at $1,260 is worth ZERO
But paper markets are illusory. They give the impression that the buyers acquire a real share in the underlying instrument.
Read more ... source: The Bitcoin Channel
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