Canadian mutual fund company Mackenzie Financial are bringing out a new fund aim at holding precious metals bullion. However, it will not be exclusively held to bullion but may invest in other 'like' assets. Here is an excerpt from their Simplified Prospectur p. 24: "The Fund pursues long-term growth of capital by investing
primarily, directly or indirectly, in gold. The Fund may also invest from time to time, directly or indirectly, in silver, platinum, palladium and/or equity securities of companies which produce or supply precious metals." Read more here: Mackenzie Financial

Mackenzie has a good name in the industry and this could be a good fund for those wanting an easy cost-effective exposure to bullion. However, remember, you do not hold the actual bullion (allocated to you) in this fund, and it can also hold bullion 'proxies'. A better choice for investors who want to stick to pure bullion in a mutual fund would be the BMG BullionFund in Canada.

The Mackenzie funds may not be available to non-Canadian investors.

The latest edition of the BullionBuzz Newsletter is out! Here are a few of the articles with excerpts. Go to BMG for all the articles.

Risks of Investing in Precious Metals ETFs
David Ranson
"David Ranson of Wainwright Economics recently met with Nick Barisheff. Their discussion turned to methods of investing in physical bullion, and the concerns regarding exchange-traded funds. Wainwright felt the points covered represented important information for their subscribers, and published the discussion in a Q&A format that they have made available to BullionBuzz subscribers also. The questions: Explain the major differences between ETFs and open-end mutual funds; what is the concern about the precious metals ETFs specifically; what specific disclosures should precious metals ETF investors be concerned about; few investors or brokers read the fine print of a prospectus but, legally, are these points included so that the investor is ultimately responsible..."

Learn from the Rich Man
Richard Russell
"History will show that 2009 was the year Wall Street’s “too big to fail” institutions got even bigger as they pocketed billions in taxpayers’ money and issued massive bonuses; it was the year the US public was shafted…"

2010’s Perils & Potential
Deepcaster
"In order to see 2010’s potential, Deepcaster looks at the year’s main perils. These include hyperinflation (the US has no way of avoiding a financial Armageddon; with the creation of massive amounts of new fiat dollars..."

A Hell of a Decade
Peter Schiff

"Time has proclaimed the first ten years of the century to be the decade from hell, citing terrorism, wars and a global financial crisis. They also referred to a pending recovery, however, and named Fed Chairman Ben Bernanke “Man of the Year.” In Schiff’s opinion, the past ten years could be described as a decade of sin that paved the way to hell…"

Watch this video interview on gold and the current market with Bob Chapman. Bob is a gold expert and editor of the International Forecaster newsletter. Bob brings some new information on 'Tungsten Gold' and the Chinese/US Treasury connection and theft.

This article from Silver Trading points to shortages in Silver Eagles due to silver demand. It poses a question: If silver is not abundant, why do the silver ETF's appear to have an inexhaustible supply? Do you own real silver bullion?

Here is a quote from the article: "American Silver Eagles are the official silver bullion coin of the United States. These coins have been issued since 1986 and contain one ounce of silver. Both bullion versions and collectible versions have been offered by the United States Mint." Read more here: Currency Trading

I came across this video on the 'Gold Brick Tungsten' story. As I mention in my video, I don't know if the story about fake gold is true but this video by Mr. Jeff Spyker makes a convincing case that it is. Further, he shares some alarming information on gold and silver ETF's. Interesting that he quotes the same passage from the official GLD ETF report on the risks inherent in holding gold through GLD that I did in my video. Watch it now below:

There is a lot of confusion today about the difference between holding gold ETF’s and gold bullion. Most people believe that by holding gold ETF shares they are holding the equivalent of gold bullion. And we are informed that this is the intention of the originators of these gold ETF trusts. However, as we well know, intentions are not always the same as reality.

It is interesting that in a recent article from the Wall Street Manna the editor is quoted as saying that “Merrill Lynch has revealed that some of its richest clients are so alarmed by the state of the financial system and signs of political instability around the world that they are now insisting on the purchase of gold bars, shunning derivatives or “paper” proxies.”

So what is a ‘paper proxy’? Basically, in terms of gold, proxies are shares that are intended to offer investors an opportunity to participate in the gold market through an investment in securities. That means that the investor does not actually hold allocated gold, but a promise to deliver gold or its equivalent value in the event it is needed.

If you hold a paper proxy, it means that there are certain promises that need to be taken at face value if you are to feel confident in your investment. You need to know that underlying your proxy lies a rock solid commitment on the part of the issuer to come up with the real goods. And therein lies the problem.

If you read carefully the official documents issued by most gold ETF trusts the language surrounding the security of your holding is far from comforting. For example, this sentence is extracted from the 2008 annual report of a very popular gold ETF trust:”If the Trust’s gold is lost, damaged, stolen or destroyed under circumstances rendering a party liable to the Trust, the responsible party may not have the financial resources sufficient to satisfy the Trust’s claim.”: I don’t know about you, but that doesn’t give me a lot of reassurance. No mention of insurance is there?

Here is another statement drawn from the same report:”The ability of the Trustee and the Custodian to take legal action against subcustodians may be limited, which increases the possibility that the Trust may suffer a loss if a subcustodian does not use due care in the safekeeping of the Trust’s gold.” Did you know that most gold ETF’s allow for subcustodians for the gold holdings? And if they ‘lose’ the gold, your trustee may have little recourse for its recovery.

I find the above alarming, and especially so when the current market turmoil can be laid partly at the feet of ‘paper assets’ whose supposed solid backing has proved (in some cases) non-existent. That’s why I recommend holding gold bullion in a form that is as secure as is reasonably possible.

The moral of the story: beware gold ETF’s. Make sure you understand what you hold before you invest. While gold Elf’s are convenient and easy to buy and sell, you many not be getting what you bargained for.

Do you want to protect yourself and your family in today’s uncertain financial climate by holding some gold bullion? Visit me now to learn how to purchase gold, silver and platinum bullion safely.

Legendary gold investor and market expert James Sinclair ponders the question ‘why is HSBC backing out of the gold storage business?’. James’ musings have ring of truth. Here is an excerpt:

‘I still am plagued by the question, WHY? You make more money from investor accounts than you ever will from large commercials in the same amount of space.Storage is space times charges which equals revenue. After that it is all computerized billing and confirmation.

With gold climbing steadily higher while showing signs that presage a ballistic move upwards, I have to conclude that there is a problem in the gold market itself stirring below sight that the community has little or no idea about.’ Read more here: Fake Gold…

Gold nears record high. More at Reuters: Gold Nears Record High

The latest Bullion Buzz newsletterletter is up. Go hear to read: Bullion Buzz Newsletter

According to this article by John Waggoner, U.S. holders of Exchange Traded Funds in precious metals may be seeing a bigger tax bill come tax time. If these new tax rates take effect it will put bullion on the same level as most ETF’s in terms of taxation. (So wouldn’t you rather hold bullion?) Here is the link to the article: Exchange traded fund profits may result in higher taxes