Gold and silver broker GoldSilver.com
publishes a fascinating
review of the prospectuses of some Asian banks that offer "paper"
gold funds and are pretty candid in acknowledging that investors aren't
really buying gold at all. "With paper gold, you don't own gold,"
GoldSilver.com says. "In most cases you don't even own a promise to
receive physical gold."
Indeed, "paper gold" is the mechanism by
which central banks long have suppressed the gold price, as "paper
gold" allows them to increase the purported gold supply to keep up with
the growth in the world money supply without having to go through the trouble
of actually mining any metal. Like central bank money, "paper gold"
is potentially infinite.
The GoldSilver.com commentary is headlined
"Paper Gold and Gold Passbook Scams" and it's posted here: