From time to time I've encountered people who tell me they have been buying gold stocks (paper gold) for a number of years and see no reason to join me in purchasing physical gold since they are the same thing. They couldn't be more wrong.
Paper gold to date has sold 300 ounces for each ounce of physical gold in existence. The derivative bubble created by paper gold is 1.5 quatrillion. So when those people were to decide to cash out their certificates, they will discover they hold a lot of scrap paper.
Paper gold is about as valuable as paper currency. As cycle analyst Bo Polny says, currency requires faith and confidence. Take away the faith and confidence and you're left with so much paper. Physical gold requires no faith and confidence to maintain the value it has had for over 6,000 years.
Funny thing about derivative bubbles, when they burst they leave only paper debris behind.
Think it's time to consider changing you paper for physical gold? It's up to you.
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