But how much actual physical gold backs the $50 billion in the GLD? My bet is they could only deliver a fraction if they had to for some reason, like a liquidation.

A read of their prospectus lists way too many potential issues that should not exist for physical gold. Moreover, they don't seem to leave any trail of where they buy such large amounts. Oh, and they are not audited to prove the physical amount -- what are they, another "trust me, it's there" exaggerating government?

Anyway, that is why I would only use GLD as a quick trade or short against my actual physical long term gold.