Ron Paul writes about a Swiss referendum on repatriating their national gold reserves. Some conspiracy theorists will have you believe that this is a major problem because the gold no longer exists. It has been lent out so many times that physical delivery may be very difficult or even impossible without causing havoc with gold prices.
This is not entirely crazy. Like inventories of securities, inventories of gold are traded (or lent). And like securities, sometimes there's going to be a squeeze.
In light of this, and leaving aside the extreme basis that some may hold for the trade, gold as an investment raises practical questions. The costs of acquiring, transporting, storing, and insuring physical gold seem far out of reach for any normal person. But when you buy an ETF, how can you be sure that there's anything in the vault backing it? What other forms of gold can an ordinary investor use?