Why Physical Gold Trumps Paper
August 17, 2012
By James O'Dell
Los Angeles, CA. – Morgan Gold - Gold bullion prices extended gains on Friday, as the price to buy Gold advanced to $1,616.50 an ounce, while the price to buy Silver eased to $28.11 an ounce, after rallying earlier in the day when Germany's Chancellor Merkel softened her position against bond buying by the European Central Bank after ECB President Draghi, made it abundantly clear the bank would only purchase bonds when political leaders did their part as well. "The market is still moving on changing expectations of central bank actions, and is so far unwilling to push prices out of the $1,590 to $1,630 range," said Nick Trevethan, of ANZ.
Meanwhile, the collapse of a Gold-derivatives business (paper Gold), that Polish regulators are calling a typical Ponzi scheme, has stunned tens of thousands of investors, and has sent shock waves through one of the largest emerging economies in the European Union. The company, Amber Gold, that sold Gold-indexed investments offering higher than bank interest rates, announced on Monday, that it was closing its doors. The company vowed to repay its estimated 50,000 investors the approximately $24 million that was mishandled.
None of Amber Gold's representatives could be reached for comment after its collapse, including founder, Marcin Plichta, who has admitted to prior convictions for misappropriating investor funds. Despite warnings by financial authorities for over three years, the company continued to operate without a license. In fact, not only did the company refuse to halt its operations, it expanded its business, even going so far as to launch a budget airline that actually competed for customers with state-owned LOT Polish Airlines SA, on both domestic and European routes.
At a news conference in early August, Plichta said that actions against the company were the "result of a [witch] hunt." Andrzej Jakubiak, of the Financial Supervision Authority said, "It's like a typical pyramid scheme, people stopped bringing in money and hence the end." This is a glaring example of why physical Gold will always trump paper Gold, it's tangible, so take delivery, and it's accepted worldwide. Protect your wealth and your retirement, during these times of economic and geopolitical uncertainty, by investing in physical Gold and Silver bullion.
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