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."