London markets work on the physical (as I understand it).
New York works on the paper.
Now there's something real in between/overiding those 2 markets ... and the Middle East likes gold.
The ME states already have too many Federal Reserve Notes.
Federal Reserve Notes are NOT USA$'s.
The US$ is succinctly and legally defined by the Coinage Act, 1792 (The Mint Act), viz.
“DOLLARS OR UNITS —each to be of the value of a Spanish milled dollar as the same is now current, and to contain three hundred and seventy-one grains and four sixteenth parts of a grain of pure silver, or four hundred and sixteen grains of standard silver.”
Unfortunately, the Constitution, via the same Coinage Act, tied gold into the currency at the ratio of 15 silver = 1 gold.
It seems hard to understand how such a bimettalic standard could work - given the likelihood of a sudden input or output of 1 of the 2 metals (ie huge gold strike = input or new and wide ranging technology, such as antibiotic, requiring silver = output).
So when one reads of 'the gold standard', one shouldn't consider past the legalities of the Bretton Woods Agreement of '43. (Bretton Woods was the name of the hotel in New Hampshire where the Agreement was concieved/formalised.)
I've rabbited on with this because I'm 'in my cups'.
Notwithstanding the drink, the 'US$' is not a 'US Dollar' and perhaps the holders of many of those 'Federal Reserve Notes' - billions of them actually resulting from the sale of oil (to the USA) - might wish to turn them into something more substantial ( a.k.a. "something of more value").
The Dubai exchange is in their backyard and operates on principals they believe trustworthy - viz. "no usury". Religious overtones here to which I allude but do not name.
The DGXC will shine like the beacon of honesty it will be. The question I see is how will it affect the NY Comex?
dub
ps. silver will be better in the long run, for mine.
