abc bullion, page-19

Hi Bron,

My statement that certain schemes are a swindle was not intended to apply to The Perth Mint or any of its programs, rather than the two court cases referred to earlier involving allegations over charging fees for metal that did not exist. On this account I apologize for any harm possibly experienced by The Perth Mint over the association of that statement and questions I asked in the forum about The Perth Mint's Unallocated Precious Metals Scheme, and withdraw the comment.

The offer to re-iterate the disadvantages as I see it of Unallocated Precious Metals Schemes over personal precious metals ownership is far too tempting however. Please feel free to take me to task should I err and point out where they dont apply to the Perth Mint Unallocated Precious Metals Scheme TM.

Levels of accountability, security and integrity of Unallocated schemes are on the most less than what some precious metals investors might hope from such a prestigious asset.

Many assume that precious metals investing and precious metals ownership are one and the same thing. The whole idea of precious metals ownership is possession of a tangible, fungible asset that in times of instability is available to the owner. My fear is that many investors are buying into Unallocated schemes thinking that if a crisis hits they will have access to that precious metal as if they owned it. This is clearly not so as the following points demonstrate;

1. If you give notice to the scheme to take delivery you normally have to wait longer than 7 days to get your metal. Does this sound like security for the investor?

2. If the government decides to change the laws of precious metal ownership, the scheme is obliged to comply with a government instruction over yours. Does it seem like accountability to a third party/s is greater than that to the purchaser?

3. If a local or national crisis occurs the scheme is not obliged to deliver your metal in accordance with the agreement and unspecified delays are entirely possible. Could this be a security issue for the owner?

4. The maximum liability of the Unallocated provider will be limited by clauses in the contract, rather than reflecting the true price of the precious metal when the account is settled should they fail to deliver. Is it possible the client may not necessarily realize the full potential value if delivery fails?

5. The metal may appear as an asset in more than one set of books, for instance the client AND the scheme providers. Could there possibly be more than one owner in this case?

Another issue with unallocated precious metals schemes is that on the whole they are a disconnect between the client and precious metals market discovery mechanism.

6. Unallocated schemes are under no obligation to time their purchase of precious metals in accordance with your purchase. Will metal be withdrawn from the market when a client makes an investment?

7. Unallocated schemes time the purchase of precious metals to their own advantage. Could the provider be generating profit from astute timing of larger purchases?