Yet another report declaring that gold bullion is in short supply. Many 'paper gold' ETF's are fooling people into believing that they hold real bullion safely. Boy, are they going to be surprised if/when we get to the kind of crunch that sees real bullion in severe demand. As author Patrick Heller points out in the article below, Credit Suisse is defending two law suits now over the issue of the bank selling depositors gold.Dont' get caught in a similar situation. Contact me for real bullion, safely stored in Canada now.

In the meantime, here is an excerpt from the article: "In the London Bullion Market there were even more reports that it is becoming almost impossible to obtain delivery of physical gold. In theory, the London market contracts are to be settled by delivery of physical gold, but many would-be buyers who ask to buy a contract to take delivery are having their bids rejected. Others who have purchased contracts are having to hire attorneys to force the sellers to comply with the terms of the contract. The stories continue to mount about buyers being offered substantial bonuses in return for not taking delivery on these contracts.

As the number of stories grows about non-existent physical gold theoretically being held to cover shares of exchange traded funds, certificate programs, commodity contracts, and non-allocated storage accounts, I think it is long past time to get out of such forms of “paper gold.” In the past six months, a significant number of owners of such assets have liquidated them to replace them with physical gold in their immediate custody or allocated storage. I expect huge shortages of physical gold to develop in the next one to two years, with the result that many owners of “paper gold” will learn to their dismay that they don’t really own gold. Any reader who owns gold in paper form may soon find themselves in much better financial circumstances by promptly turning that asset into the real thing under their own control." Read more here: Numismaster.com

This article from iAfrica.com voices some predictions re precious metals and recommends a core holding of bullion. Here is an excerpt: "You should hold some bullion when it comes to precious metals. Unlike shares they are not influenced by poor management decisions, strikes, high costs, and bad hedging policies. However, due to South Africa's unique position when it comes to platinum, shares in this sector could do very well indeed."  Read more here: iAfrica

Interview with GATA representative re ad the Chinese put out telling citizens to 'buy silver'. Where will they get it? Who knows. There isn't much of it around. Watch the video now:

In this article in the Financial Post, Nick Berisheff of BMG BullionBars is quoted as favouring platinum over gold at this point. Here is an excerpt from the article: "

After a year in which everyone seemed to be backing the truck up for gold, investors are turning their attention to platinum, an outperformer versus gold in 2009 that continues to offer better prospects for price appreciation.

In the past month alone, platinum and its near cousin palladium have climbed as much as 12% and 15%, reaching a peak last week after getting a huge boost from the launch of two exchange-traded funds in the United States."

Writing in Gold Speculator, the author points to more evidence of manipulation in the precious metals market – this time with silver being taken down. Here is an excerpt: "As per usual, JPMorgan absolutely bushwhacked silver. Silver followed gold down, but at an accelerated rate. From it's approximate high of $17.24 spot early in Hong Kong trading Tuesday morning, it was down exactly 40 cents by the time that trading began on the Comex. JPMorgan et al pulled their bids at that instant… and the technical funds found themselves dumping their long contracts into a black hole… and the price cratered. By the time the bloodbath was over at 9:15 a.m… silver had shed another 50 cents to its low of the day… which was $16.32 spot." Read more here: Gold Speculator

The latest BullionBuzz magazine is out. You can find it here: BullionBuzz. A number of topics are covered including gold and what's driving it now, hyperinflation, Ron Paul on the economy and a piece on a meeting coming up with the various Latin American presidents on the issue of breaking their dependence on the US dollar. Here is an excerpt: "“Latin American presidents have organized a meeting to take a step to 'break' their dependence on US dollar in regional financial transactions. Venezuelan President Hugo Chavez said on Saturday that the leaders would meet Monday in Caracas. "We'll have a very important meeting of economy ministers from ALBA (Bolivian Alliance for the peoples of Americas) to further shape an extraordinary project" on a new currency, Chavez said. The currency, the Sucre, will "break the dependency on the dollar, its economic and financial colonialism," he added. The Sucre was named after Jose Antonio de Sucre who fought for independence from Spain alongside Venezuelan hero Simon Bolivar in the early 19th century.
Leftist Latin American leaders agreed on using the new intra-regional trading currency in an October meeting of ALBA. The currency is expected to be rolled out early this year in a non-paper form. Formed in 2004, ALBA is an alliance for regional integration between the countries of Latin America and Caribbean. ALBA's nine members include Venezuela, Bolivia, Cuba, Ecuador, Nicaragua, Honduras, Dominica, Saint Vincent and the Grenadines, and Antigua and Barbuda.”"

I keep hammering away at this theme – that ETF's are risky. Many people are investing in them whithout due diligence. If you are one of them, read your official documentation and especially the section dedicated to 'Risks'. Paul  Mladjenovic points out the risks clearly in this article. Here is an excerpt: "Diversify away from paper assets. As I have written before, paper assets have “counter-party risk”. Any “paper”investment that you have (such as stocks, bonds, ETFs, mutual funds, cash accounts, etc.) have counter-party risk. In other words, that investment’s value is tied to someone else’s promise or performance. A stock can go worthless if that company ceases to perform well (or just ceases to perform!). Bonds can become worthless if the borrower can’t or won’t pay. What should you consider? Add some gold or silver physical bullion to your asset portfolio. Gold and silver bullion are among the very few investments that do not have counter-party risk. They have their own, unique intrinsic value and that has been true for thousands of years. It will continue to be true for years to come." Read more here: Commodity Online

If you're interested in buying and selling gold coins you might want to read this interview of Nick Bruyer by Addison Higgins. Here is an except: "It was clear that because of the skyrocketing gold price, and the growing interest in the silver market, coupled with the shenanigans that are occurring in the financial markets many of you want to know more about how to invest in gold and silver coins. So to help answer your questions, today we are joined by Nick Bruyer, CEO of First Federal Coin Corp., and an award winning professional rare coin expert with 34 years of experience in the field. His company placed over four hundred million in coins with tens of thousands of collector's investors. In 1976, he worked on the sale of the LaVere Redfield Collection, the largest private holding of 19th century silver dollars outside of the US treasury. He's handled dozens of shipwreck treasures and advised Odyssey marine exploration on their SS Republic and 2007 Black Swan treasure finds.

Mr. Bruyer works with governments worldwide negotiating exclusive distribution agreements with dozens of countries including Great Britain, France, South Africa, Australia, Russia and China. His firm was selected as lead U.S. distributor of the Sydney 2000 Olympic Coin Program. First Federal currently distributes Beijing 2008 Olympics and Vancouver 2010 Olympic Coin Programs. We've asked Nick to join us today to help us answer a number of questions from readers of the Whiskey & Gunpowder and 5 Minute Forecast e-letters."  Read the interview here: HowStreet

Jeff Nielson writes in Seeking Alpha about deflation. Deflation is not nearly as well understood as inflation – at least when it comes to the roll of precious metals and commodities. Many believe that the value of gold will drop in a deflationary scenario. Jeff sees the opposite and makes the case for gold rising. Here is an excerpt: "As the U.S. economy begins its next leg down (and a “leg” certain to be even more painful than the initial collapse), and as the U.S.'s previously-deluded creditors begin to comprehend the magnitude of U.S. insolvency, no one will want to hold U.S. dollars – and everyone will want to hold gold and silver.

In a high-inflation environment, a currency moves relentlessly but gradually toward a value of zero. Conversely, in a solvency crisis, a currency can go to zero overnight. Thus, instead of a deflationary environment being “bearish” for gold, it is arguably even more bullish than a high-inflation scenario." Read more here: Seeking Alpha

U.S. Global Investors has unveiled their update to their Periodic Table of Periodic Returns. Gold has done well. According to the article, "Gold had the most positive years – its streak now stands at nine straight years after a 5.5 percent loss in 2000, when the bullion price dipped below $265, roughly a quarter of the current price. Oil, platinum and silver all had eight positive years during the decade, while nickel had six down years."

Further, "We believe that the secular bull market for commodities and natural resources stocks that began in 2000 is far from over. The International Monetary Fund believes that commodity prices will rise further in 2010 as a result of global economic recovery and escalating demand from fast-growing emerging markets." So, general support for gold and other precious metals is in the cards as they fill other rolls than that of currency. Read more in 'Seeking Alpha'