Paper Gold to Physical Gold ratio: 80 to 1! (3min.)

[LargoWinch]

I don't know the guy much, but I like his candidness.

More importantly, could it be possible that the paper market to physical market is 80 to 1. If so, that is astounding.

[Rajiv]

Re: Paper Gold to Physical Gold ratio: 80 to 1! (3min.)

Why do you think that these people (paper gold market) are any different than the goldsmiths? -- See Money as Debt

[Spartacus]

Re: Paper Gold to Physical Gold ratio: 80 to 1! (3min.)

I will be VERY surprised if it's as low as 80.

When I first tried to buy Silver in 1999 / 2000 (before I talked with Mr. Spicer at CEF and he told me where to get some real Silver) I could not get straght answers out of the 2 banks where I had accounts[1]

When I talked to TD the said they could sell me Silver or Gold certificates. I would never see these, I would never be able to take possession (of the certificates) and TD would charge me a storage fee (for the certificates) based on the ounces of Silver the certificates represented.

I asked over several weeks if there was any way to take possession of the Silver behind the certificates.

After weeks of runaround I started asking if there was any Silver. They said there was. I asked for proof. Audited statements or a visit to the vault. Weeks and weeks of runaround. Never got a straight answer. I guess they have the Silver, but are just not willing to prove it.

This was one of the reasons I believed Butler when I found him later, and he wrote that there is billions of ounces of Silver promised as certificates all over Europe, with zero actual metal behind it.

This was 8 or 9 years before Morgan Stanley was fined for selling non existent Silver.

http://www.lawyersandsettlements.com...us-metals.html

[1] the first 5 or 6 times that I called Scotiabank branches - one was a half kilometer from the precious metals desk, they did not know that they sell Silver.

[cjppjc]

Re: Paper Gold to Physical Gold ratio: 80 to 1! (3min.)

I will be VERY surprised if it's as low as 80.

After weeks of runaround I started asking if there was any Silver. They said there was. I asked for proof. Audited statements or a visit to the vault. Weeks and weeks of runaround. Never got a straight answer. I guess they have the Silver, but are just not willing to prove it.

.

You guess so. I think as Ted Butler has said, It's a naked short.

[D-Mack]

Re: Paper Gold to Physical Gold ratio: 80 to 1! (3min.)

Why do you think that these people (paper gold market) are any different than the goldsmiths? -- See Money as Debt

I've heard this story, do you know where this originated ?

I would like to read up on that and it would be helpful to have a year and a country.

[junkacc]

Re: Paper Gold to Physical Gold ratio: 80 to 1! (3min.)

Who's to say this can't be used to manipulate gold prices. This can go on and on until 1:1000 until the bubble crashes down on everyone. The question is, will a paper gold crash bring down physical as well?

[Rajiv]

Re: Paper Gold to Physical Gold ratio: 80 to 1! (3min.)

It is explained in the linked video above -- however, here a few more links

Chapter 26 — The Goldsmith Who Became a Banker, a True Story

The Goldsmiths--Part I

In March 2008, gold hit a high of around $1030 per ounce. By mid-August, it had collapsed to $772. Similar falls happened to most of the commodities and foreign currencies. Wheat went from a high of $13-15 to $7-8 per bushel; Silver, soybeans and corn all crashed as well. Even the EURO currency went from almost $1.60 to $1.46 and oil fell from $149 to $111.

Here, the question must be asked--how is it possible that these prices can collapse in just a matter of days? For the answer, one must address the subject of the historic goldsmiths and how they are still around today and still making money--like never before. This article and two succeeding ones will broach this theme.

As a backdrop on this topic, here are a couple of quotes. Per Thomas Jefferson, in 1800, “Everything predicted by the enemies of banks...is now coming to pass. We are to be ruined by a deluge of bank paper” (Dec 2002, “Radio Liberty,” p. 1). In 1850, Thomas Webster added: “Of all the contrivances for cheating the laboring classes of mankind, none has been more effective than that which deludes them with paper money” (ibid, p. 1).

Some History

The story of banking and paper money evidently started with ancient goldsmiths. In the early days, it was a known axiom that gold and silver particularly (and other precious metals and stones as well) were recognized as things of value and could be used for exchange purposes. Accordingly, goldsmiths appeared on the scene to provide some services for people with gold.

One of the services provided (for a fee, of course) was that goldsmiths would accept gold for deposit or storage from people possessing it (because gold was bulky and was a problem for storage, safekeeping and exchange). Goldsmiths would give the gold owner a receipt for his gold.

As time passed, people in society with these receipts began exchanging the receipts as money without converting them to gold. Since goldsmiths would pay off gold when the receipts were presented, the receipts were as good as gold (and thus, became a medium of exchange and the real beginnings of paper money).

The goldsmiths quickly learned that most people would never bother to surrender their receipts for actual gold (since it was bulky and problems for storage and safekeeping and since the receipts were as good as gold in making exchanges). Accordingly, many of the early goldsmiths decided to write more receipts than they had gold. The goldsmiths then could issue these receipts for goods, services and investments.

The only problem with this system was that when the goldsmith issued more receipts than there was gold he ran the risk of facing a run on his operation and would not be able to cover all of the receipts he had issued. Of course, people not receiving gold for their receipts would get mad and often hang the goldsmiths. Goldsmithing could be a risky business whenever the goldsmiths tried to cheat the public (which was often).

[LargoWinch]

Re: Paper Gold to Physical Gold ratio: 80 to 1! (3min.)

Who's to say this can't be used to manipulate gold prices. This can go on and on until 1:1000 until the bubble crashes down on everyone. The question is, will a paper gold crash bring down physical as well?

My view is that a crash of paper gold would send the physical price through the moon...