Indeed. Chanelling you-know-who for a second, TPTB can't afford paper gold to decouple so badly with physical otherwise real gold will 'go in to hiding'. This will drive the stock-to-flow ratio of gold to infinity, create dollar hyperinflation and destroy the USD Reserve system there and then. This is why we get the managed ascent of paper gold. I suspect the central banks are targeting the minimum paper POG possible to ensure the ongoing flow of physical.
I think we're going to smash through the 1980-SGS CPI price in physical gold without breaking sweat. 1980 was just a dress-rehearsal for the end of the USD reserve system, with a superspike that I believe was caused by panic buying in size by the Middle East and some central banks (Iran, ironically enough) bidding for gold in the open market. Where is Volcker this time? Who is willing and able to impose mass poverty on the West with 20% interest rates?
Let me give you some interesting reading Malvern Once you understand that hyperinflation is a demand side phenomenon and printing is the supply side response, it becomes somewhat clearer. The question of "how do you get the money into people's hands" is practically irrelevant and misleading.
http://fofoa.blogspot.com/2010/09/just-another-hyperinflation-post.html
http://fofoa.blogspot.com/2010/09/just-another-hyperinflation-post-part-2.html
http://fofoa.blogspot.com/2010/09/just-another-hyperinflation-post-part-3.html
http://fofoa.blogspot.com/2011/04/big-gap-in-understanding-weakens.html
http://fofoa.blogspot.com/2011/04/deflation-or-hyperinflation.html
And folks, please do drop by the golbu.gs chat room to share your forecasts, charts, pictures of rockets - whatever - as we watch this gold market unfold.