Natalia wrote:
> http://truthingold.blogspot.ca/
>From the most recent blog post there:
When it becomes widely known that all of the people who think they
own gold in fact don't own gold, that it's been hypothecated and
re-hypothecated so many times that there are 100 claims for every
single ounce of physical gold, that is when the prices of gold and
silver will really go berserk to the upside, and at that point the
shorts will have serious problems. -- John Embry on King World News
I didn't know about rehypothecation until recently when it came up,
not on FW but TheForge blacksmithing list. At that time, I mentioned
that I'd ask my college room mate who's recently retired from banking
about it. The last half of his career was devoted to trying to reclaim
assets that collapsed businesses had provided as collateral.
And he said he'd never run into assets that no longer existed because
they'd been rehypothecated several times and eventually vanished away.
But that does seem to be what the gold-blogger is pointing at (albeit
futures, not debt collateral).
The blacksmithing connection, just for reference, was:
http://www.zerohedge.com/news/how-chinas-rehypothecated-ghost-steel-just-vaporized-and-what-means-world-economy
Personally, I could never see the security in owning gold unless you
had assayed bars (or at least lumps of some kind) physically in hand,
in a safe deposit box or in a coffee can buried in the back forty.
- Mike
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