Recently I found this website that has a lot of interesting statistics and among them I noticed something that astonished me : the paper to gold ratio. I am really surprised that there is such a huge ratio between traded gold and physical gold. Here is the value and the definition they give for the paper to gold ratio :
From what I understand that means that if 86 people hold each one 1 ounce of paper gold ETF, only one of them can have access to the physical ounce and the 85 others are left with nothing ? It looks like this system is possible as long as not all paper gold ETFs holder try to access physical gold at the same time. I am not a finance guru so probably I am not getting the whole picture regarding paper gold ETFs but from what I see it is not really reassuring. So here is my question :
Are paper gold ETFs a scam ?
The same question can be extended to paper silver ETFs, that has an even higher paper ratio of 171.
