the boyz, including famous gold traders, is feasibility-studying the establishment of a platform comprised of outsourced third party storage / custodial facility, a structure of legal documents, and have the platform act as a party integrated into the global trade system of gold, akin to a bank and gold mine, and offer own paper gold instruments that can only be redeemed by paper gold, and the terms would be perpetual / near-perpetual, with physical gold owners able to short paper gold, and the folks who wish to buy / trade paper gold doing to their heart's content until the cows come home, and of course, ultimately, until doomsday - that fine day when paper gold goes worthless and physicalgold goes worthmore.
i am trying to spot the flaw in the concept.
first thought experiment - what happens as gold exchanges are successively shut down by the authorities in move to outlaw gold holdings, gold trading, and gold storage?
my answer so far is the schema needs to be done 50/50 in switzerland and hong kong, and with the physical gold owners re-insured by the surplus-plenty governmental authorities.
the hong kong gold storage facility at the airport is owned and backstop re-insured by the hk government, and unlikely that the hk authority would see need to outlaw gold trading as way too many residents own physical gold and have paper gold that is organic part of their regular bank wrap account.
conclusion so far, the concept has merit. |
