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Yeah - China has laws that say certain trades can only be paid for in gold - or must have collateral in gold - or some such - but that much gold does not exist in the world - so they invented paper gold.
It's basically another fiat currency that trades at the price of gold - (and thus allows everyone to pretend Chinese law is being followed,) but when it is bought and sold, it has an effect on the retail price of real gold, for now. Until someone defaults on a paper gold contract, which may be mere moments away. Sooner or later the market will realize it is not real gold, and that game will be over, hopefully for good.
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[–] CrustyBeaver52 0 points 4 points 4 points (+4|-0) ago
Market players are leveraged to the 9's, and now they are caught big time.
Margin call gentlemen.
Panic sales across the board.
Yesterday morning somebody dumped $24 billion in paper gold.
[–] fightknightHERO 0 points 2 points 2 points (+2|-0) ago
paper gold?
[–] CrustyBeaver52 0 points 1 point 1 point (+1|-0) ago
Yeah - China has laws that say certain trades can only be paid for in gold - or must have collateral in gold - or some such - but that much gold does not exist in the world - so they invented paper gold.
It's basically another fiat currency that trades at the price of gold - (and thus allows everyone to pretend Chinese law is being followed,) but when it is bought and sold, it has an effect on the retail price of real gold, for now. Until someone defaults on a paper gold contract, which may be mere moments away. Sooner or later the market will realize it is not real gold, and that game will be over, hopefully for good.