The New CS Board

[jumanji0881]

Could market forces end the paper gold market ? -
My comment : Market forces may be in the process of making Basel 3 irrevalent for the paper gold market. Basel 3 can be delayed and avoided indefinitely, but market forces can do the job Basel 3 was intended to do. In the following article, Pozsar argues that it is the underlying commodity that has value, not the rehypothecated derivatives on that commodity. I've seen numbers as high as 1000:1 for paper gold vs the actual gold being used as collateral.

Gold: "A crisis is unfolding. A crisis of commodities"- Zoltan Pozsar | ZeroHedge : https://www.zerohedge.com/news/2022-03-10/gold-crisis-unfolding-crisis-commodities-zoltan-pozsar

Excerpts:
Collateral is the foundation on which the financial system is based. Collateral equals money in the realest sense.

That collateral is a large and grossly undervalued part of the current core’s valuations. Put another way, the derivative-tail has been wagging the spot-dog too hard and too long.

The collateral underpinning the system is not financial this time. It is real. War, sanctions, and the ensuing chaos has split markets along spot versus derivative lines. Geographically: East vs West. Collateral: Real vs rehypothecated.