Question for Mohammed - What Kind of Leverage ?

Started by abduLMaria, August 10, 2010, 12:49:04 PM

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abduLMaria

In the now infamous March 25 CFTC hearings, Jeffrey Christian admitted to a 100:1 ratio of paper gold to physical gold, and also admitted that, by his definition, physical gold is still paper gold.

Now people are using the term "leverage" to describe the situation.

However, usually when the term leverage is used in a financial context, it means that the investors have borrowed money.

My gut feeling is that both kinds of leverage apply on the LBMA - there's the paper gold scam, and investors are using borrowed money.

It would be great to obtain clarification from Mohammed about this.
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