The history of 'paper gold', in all its forms, including many national currencies until they floated in the 70s, is one of 'detachment' from the actual gold by

The history of 'paper gold', in all its forms, including many national currencies until they floated in the 70s, is one of 'detachment' from the actual gold by the issue of more paper than what was backed by actual goods (fraud in other words). There are some interesting arguments by people in the industry that the gold certificates in use today, supposedly backed by gold in mostly London, have only a small fraction of the physical gold behind them from what their denomination proclaims. Indeed, the more you look into the terms and details of the big gold funds, the fishier they look (as an example, their terms explicitly exclude the fund from any custodian risk, meaning they have no responsibility for the gold actually existing). A thesis is that the paper gold is now being used as an instrument to regulate the demand for actual gold - whenever demand gets too high, more paper gold can be issued to counter the trend. This is managed by creative bookkeeping, where gold bars are leased to other entities (a practice that central banks openly use), who then lease them somewhere else, etc., until the ownership of any one given bar is no longer particularly clear, and may well be 'owned' by a number of entities at the same time. Thinking back to the previous financial crisis, it is not hard to believe a scenario where the financial industry invents creative tricks to make value out of thin air.