“Franklin Sanders” at the Silver and Gold blog, thinks that this gold and silver price plunge is short-term and represents a strong buying opportunity, with gold bottoming in the $925-$890 range.

FWIW, I’d agree. This looks like standard profit-taking and runs strongly counter to the ongoing drumbeat of profligate spending and tax increase news piled atop negative economic reports and continued bailout needs. 

Silver and gold prices continued correcting today. The Gold Price dropped 3.40 to close at US$965.70 at the Comex close 12:30 Central time, but dropped US$15 in the aftermarket, on no news that I saw. Gold must reckon here with a correction to US$925 – US$890. I expect this weakness will pass quickly, say, two or three weeks at most.

The Silver Price dropped only 12 cents today to $13.8750, but shaved off another 23.5 cents in the aftermarket to $13.64. The same normal, natural correction has hit both metals. Silver has strong support at 13.50,13.20,12.80,12.50, 12.00 and 11.00.

via Silver and Gold Prices: Silver and Gold Prices are Presenting Yall With a Rare Buying Opportunity – Watch, and Dont Miss It.

Amazing number: 19.5 square feet of selling space per American consumer!

About 220,000 stores may close this year in America, says our guest, retail consultant Howard Davidowitz of Davidowitz & Associates. As more Americans save and spend less, it’s clear there’s too much retail space. Just visit Web site deadmalls.com and track retail’s growing body count. And luxury retailers? They’re on “life support,” Davidowitz says. 

via Americans’ Standard of Living Permanently Changed: Tech Ticker, Yahoo! Finance.

Franklin Sanders offers one perspective on the whether to spend the premium to buy numismatic gold coins or not. He provides a great counterpoint to all of the industry hype around the subject.

His introduction sums up his view:

Our new customers usually ask,  “Will the government seize gold again like it did in 1933?  Shouldn’t I buy numismatic coins to protect myself from seizure?  Aren’t numismatic coins exempt from reporting to the government?”  The correct answers are (1) No,  (2) No, and (3) No.  But numismatic coins do cost a lot more per  ounce than bullion coins, and they carry a much higher commission.

His big points are:

1. The current law provides no real protection of numismatics
2. There is no legal definition of what constitutes a “numismatic”
3. Very few other forms of gold are reportable by dealers (e.g., 100 oz. gold bars, anyone?)
4. The government’s far more likely to seize pension and retirement funds than gold anyway

via What You Need To Know Before You Buy Numismatics.

Peter Schiff appears on the Laura Ingraham show this morning.

One of the more interesting points he makes is evaluating the value of the Dow in light of ounces of gold. When Bush took office, the Dow was roughly 42 ounces of gold. Now it’s about 9. He expects that by the time Obama leaves office, it’s likely to be around one ounce of gold in value.

He compares the attempts to “fix” the economy to attempting to recreate the debt-based house of cards.

His advice is the same that it’s been for a while, which is refreshing considering that he’s taken some heat for it recently: gold, silver, foreign currency (he calls the dollar’s recent surge a false rally), and foreign stocks and bonds.

Blessed is the one who finds wisdom,
and the one who gets understanding,

for the gain from her is better than gain from silver
and her profit better than gold.

– Proverbs 3:13-14 (ESV)

via Passage: Proverbs 3 (ESV Bible Online).

Alexander Muse is a technology entrepreneur with a brilliant summary of where we’re at (and why I started this blog) — the rules have (apparently) changed (and I’m trying to figure out what they are… or, presuming that there are no rules, then I’m still trying to figure out what the best strategy for operating in the world without rules is).

Here’s the meat of his post: 

The biggest risk we face now is that there are no rules.  The government might force you to make loans that you know are bad.  Then again they might not force you to make loans.  The government might punish you for making loans despite the fact that they forced you to in the first place.  The government might punish for not making loans despite the fact that they didn’t force you to make them.  The government might take over your business.  The government might save your competitor and let your company go out of business.  The government might dictate how much you are allowed to earn.  The government might decide whether or not you deserve cancer treatment or a liver transplant. The government might let you keep your house even though you can’t afford it.  The government might pay you NOT to work.  Rules mean the game can go on – they don’t even need to be fair for everyone to prosper.  Of course, without rules everything stops until we all can agree on a new set of rules.  That is the reality of today.

I have this recurring argument with a good friend of mine when we discuss buying gold as a hedge against economic risk in this climate.

He advocates buying “semi-numismatic” or “numismatic” gold (basically rare coins), because when gold was confiscated by FDR back in the 1930s they were exempt from confiscation. So today you see a pretty healthy premium above traditional “rarity” due to demand being paid for those coins by folks who are concerned about the scenario where gold is once again confiscated to stabilize the currency.

My response is that there’s no guarantee that the same rules and limits will apply today. Just because FDR stopped at rare coins, why does that mean that BHO will? So why pay the inflated premium if there’s no guarantee? And if there’s no guarantee, then why not pay less for more gold and have a larger, less precarious investment in the metal and hope for the best?

In this example,  we’re not even talking about something more difficult to change, like economic instincts or regulations. Instead, we’re talking about federal policies, which can be changed on a whim with enough arm twisting, predicitions of impending catastrophe, or demagoguery.

via Remember: The old rules don’t apply. . . | Texas Startup Blog.

Irresponsible, Foolish, and An Excuse For The Same Old Politics And Pork? Or Bold and Decisive Action? You make the call!

Leaving out the earmarks does mean Congress will have less control over how the money is spent. But, Obey says, “So what? This is an emergency. We’ve got to simply find a way to get this done as fast as possible and as well as possible, and that’s what we’re doing.”

via Earmark-Free Stimulus Bill Lacks Spending Direction : NPR.

WSJ Real Time Economics summarizes reponses to the latest unemployment data.

Here’s a good analysis of what to expect in the near future by Nigel Gault, IHS Global Insight, based on the layoffs already announced and “in the pipeline”:

There is no end in sight to the huge payroll declines, as high-profile lay-off announcements keep coming, and initial unemployment insurance claims have moved above 600,000 for the first time in this cycle. February might be even worse than January. We have now lost 3.6 million jobs since the cycle peak in December 2007, with 1.8 million lost in the last three months alone. We are heading for total job losses in the 6-7 million range and an unemployment rate well above 9%.

In my continuing attempt to look on the bright side, you’ve got to love an environment that drives over-the top quotes like “slow motion train wreck” and “massively intensified”!

Peter Schiff has a great interview with Yahoo’s techticker.

The fiscal stimulus bill being debated in Congress not only won’t help the economy, it will make the recession much worse, says Peter Schiff, president of Euro Pacific Capital.

…the difference is that the economy is in a much worse state going into this depression than it was in the 1930s… and without the discipline of gold, we have a central bank that could create massive inflation. So we could have an inflationary depression.