“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.

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.

The WSJ hits the Bush/Obama bailout mentality hard in their editorial “Barack Obama-san.” Politics aside, it’s a sobering review of what has happened to the Japansese economy after real estate and stock market bubbles burst and the government responded with multiple bailouts.

Here’s the chart that compares Japansese and US government debt as percentages of their respective GDPs:

This is a troubling reminder. Not a road to go down, right?

But we’ve already gone down that road. And I’m not talking about AIG or TARP.

You see, this editorial focuses on government debt. But the total national debt that includes individuals and businesses has already bloated!

A recent Morgan Stanley presentation highlights the spike of total debt in the US (on slide 6). Since the turn of the century alone, it has spiked from roughly 250% to 300% of GDP!

The lesson to be learned is more than the ineffectivity of public stimulus, which the WSJ rightly highlights. It is that, regardless of the source or destination of largess, its tantilizing short term benefits are dwarfed by its subtle, long term poison.

Just like binge eating, the pounds remain after the pleasure, and make it that much harder to cut back in the future.