Production of United States Mint American Eagle Gold Proof and Uncirculated Coins has been temporarily suspended because of unprecedented demand for American Eagle Gold Bullion Coins. [via US Mint]

Just the other week I had a chance to talk with the same coin dealer again and he said that the spreads have come down and people are buying as much gold as they can get their hands on. I wonder what all this means? ;)

Many people I correspond with thought the Gold market was crashing when the price broke through $750 recently.  I seem to remember a lot option acitivity around the $600 level as well.  My old Gold model told me otherwise and I paid a visit to my Gold dealer earlier this month.  I’m curious to see if it will tell me to visit my Gold dealear again in October.

It figures that the Gold and Oil markets start to collapse just as I go on hiatus. My guess is that hedge funds are selling their winners to cover their losers (financials, banks, etc). This has had a nasty consequence in the currency markets with the AUDUSD collapsing from its near parity with the USD to around 0.80. Next stop for Gold could be $600 and Oil maybe $80 (wishful thinking?).

My timing models are going wild and pointing to a lot of market crosscurrents. This shouldn’t surprise me because we are in September after all and I can’t wait for October. We are at a very heavy volatility area in the S&P500 market and we could be making a low or preparing for the next leg down. If we are to go lower from here, it’ll be at least a 100 point drop in the S&P500 down to the 1100 level. How’s that for optimism? The upside potential for the S&P is around 1350 right now.

I’m still on hiatus but had to pop in to make a few comments. I should post my last video tutorial sometime but I don’t know when I’ll get to that.

“I don’t know where these guys get the audacity to take our money, taxpayer money, and buy stock in Fannie Mae,” Rogers, 65, said in an interview from Singapore. “So we’re going to bail out everybody else in the world. And it ruins the Federal Reserve’s balance sheet and it makes the dollar more vulnerable and it increases inflation.” [via Bloomberg]

Commenter and blogger Kevin H posted this reply to my $5 Trillion Dollars of Debt post yesterday, “How in the world is the U.S. going to bail Fannie and Freddie out of 5 trillion? We are already in debt 9.5 trillion dollars.”

Yes, the question is “how” and “can we?” Stay long Euros, Gold, and Oil for now.

Yes, yours truly bought shiny gold and silver coins for the first time in his life (I promptly buried them next to my shotgun and 2 year supply of plastic sealed toilet paper).

All joking aside, I decided to start saving in Gold and Silver. Yes, you read that correctly, I said saving. I’m not playing the Gold and Silver market by buying and selling these coins, I’m just transfering my paper money (USD) into Gold and Silver. Essentially I’m switching one asset for another shiny and hard one.

Yes, I know I won’t be earning any interest on them but I will be maintaining my purchasing power. Right now if I park my savings in a bank account, I’ll make maybe 2% interest. That would put me in a depreciation hole faster that shit sliding down a stick, if you believe that our true inflation rate is really between 10 and 12%.

If you ask me, maintaining purchasing power wins over a 2% interest bank account in a border hyper-inflationary economy any day.

Gold has finally started getting active again, probably because of all this Iran attack talk. I’m guessing we’ll see Gold at $1000/oz by the end of the year and possibly $2000/oz next year.

I’m curious to know if my readers think Gold could hit $2000/oz next year or if it will collapse back down to $500/oz.