JIM RICKARDS: Here’s the Difference Between “Paper” Gold and “Physical” Gold

Summary: After crashing over $200 in a matter of just a couple of days, many investors are having second thoughts about gold. However, legendary author Jim Rickards, author of the book “Currency Wars,” explains how there’s a big difference between “paper” gold (gold futures, ETFs,) and “physical” gold (bars and coins). In this interview with Business Insider, Rickards explains just how big the disconnect is between “paper” and “physical” gold is. He uses the classic “weak hand, strong hand” analogy – the “weak” hands were buyers of futures and ETFs who were over-leveraged. Buyers in Russia, China and the U.S. who are purchasing physical bullion for cash were hardly affected by the price crash while the value of their holdings dropped somewhat, they were not forced to liquidate at the first sign of trouble. ETFs, futures and hedge funds do not have this luxury, and sometimes need to sell holdings to cover redemptions or other investments. Read more…