US Mint Gold Eagle Coin Sales Research (1987-2011) Casts Doubt on “Gold Bubble” Assertion

New research from Dr Constantin Gurdgiev, Head of Research with St Columbanus AG, member of the investment committee of GoldCore and the adjunct lecturer in finance in Trinity College, Dublin, questions the widely held belief that retail investors are “piling into” gold in a speculative frenzy. “The U.S. Mint data on sales of gold coins suggests that we are not in the last days of the ‘bubble’,” finds Gurdgiev. Buyers of gold bullion coins such as the US Mint’s gold eagles are store of value buyers and sometimes collectors, Gurdgiev points out. Most buyers of gold coins are motivated not by a return on capital but by a return of capital and by wealth preservation. Gurdgiev points out that “gold coins are traditionally held by retail investors as portable units to store wealth. Due to this, plus demand from collectors, gold coins are less liquid and represent more of a pure ‘store of value’ than a speculative instrument.” The data shows that there has not been a dramatic increase in demand for the US Mint’s Gold Eagles with annual demand in 2011 set to be some 1,275,000 oz which is below the levels since back in 1986-1987, in 1998-1999 and more recently in 2009 when demand was 1,435,000 oz. Gurdgiev excellent article concludes that the data and evidence from the US Mint regarding the “behaviourally anchored, longer-term demand for gold coins as wealth preservation tool for smaller retail investors” does not “appear to support the view of a dramatic over-buying of gold by the fabled speculatively crazed retail investors that some media commentators are seeing nowadays.”

Former Fed Official Poole Sees Risk Of "Astonishing Rise" In Inflation

Speaking at a Bloomberg inflation meeting this morning, former St. Louis Fed official William Poole was quite vociferous in his concerns over current Fed policy noting that Bernanke paid too much attention to equity prices. He also noted that there is a risk of an 'astonishing rise in inflation.

Art Cashin Confirms That Operation Twist Is A Failure Before It Has Even Begun

Yesterday we documented that the by now widely bashed Operation Twist has been a failure before it was even launched as confirmed by recent trends in mortgage refinancing, or more specifically, lack thereof. Today, none other than market (and alleged bar) veteran Art Cashin confirms precisely what we said: that the one goal of the Twist - to get mortgage rates lower and refinancing higher - is and will be a failure. Again, it is very unfortunate that what is by now glaringly obvious to all will never become clear to the Fed until after the economy has finally been pushed over the precipice.




 

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Initial Claims Surge Again, Far Worse Than Consensus As Prior Revised Higher As Usual

The BLS playbook in full force today: miss expectations of 405K - check, by printing at 414K; another weekly print over 400K - check (21 out of 22 weeks over 400K), revise prior week's higher - check (from 409K to 412K). Unfortunately, unlike two weeks ago when another blowout miss was reported, this time there is no striking phone carrier to blame it to. And as usual, those coming off their extended claims cliff keeps increasing, with 78K people dropping off EUCs and Extended claims: nearly 2 million people have been cut off from any extended government benefits in the past year. Overall, another weekly data set that confirms that next month's NFP number will most certainly not be positive... or zero.

Central Banks Buying Gold

Eric De Groot at Eric De Groot - 10 minutes ago

Bolivia is the latest central bank to join the gold buying bandwagon. Falling global supply as local demand increases translates into severe shortages if price is not allowed to equilibrate demand. How many times have the US mint suspended coin sales this year? Headline: Bolivia Central Bank to Buy Local Gold Output to Boost Reserves Bolivia’s central bank will buy gold from local producers... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] 

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Greek backsliding sparks euro exit talk

Eric De Groot at Eric De Groot - 15 minutes ago

The exit stage left of weaker Euro members, driven by market forces, has become a real possibility - dare I say an inevitable outcome. Euro and Swiss gold are sending a clear message for those capable of reading between the lines. Greece’s departure will open the exit door for Portugal, Spain, Ireland, and, yes, even Italy. Bond shorts must remember that Europe must crumble before the wolf... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] 

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Risk On versus Risk Off

Eric De Groot at Eric De Groot - 1 hour ago

Hemorrhage vs liquidity phases influence more than gold and silver market. The trend in stocks, bonds, commodities are all influenced by the direction of global money flows as defined by risk on versus risk off. Source: facebook.com [[ This is a content summary only. Visit my website for full links, other content, and more! ]] 

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The Commodity Bull Has Not Ended

Eric De Groot at Eric De Groot - 1 hour ago

Do not confuse a pause with top in commodities. Spot Commodity Prices: CRB Spot Index (1947 - Present); 16-Raw Industrial Spot Price (1935-1947); Great Britain Wholesale Price of All Commodities (1885-1935) and Trend Z Scores Gold continues to shrine relative to commodities. The CRBSPOT to Gold ratio has broken the 2009 lows. This suggests another down phase in progress. Spot Commodity... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] 

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Embry on JPM Morgan and its trapped silver shorts

silvergoldsilver at silvergoldsilver - 2 hours ago

From KWN: "I’ve been buying gold shares, I mean this is no different than the smash that we had a couple weeks ago when they (the cartel) took it from $1,900 to $1,700. One of the reasons for the takedown is they know what’s coming." Click here to read... 

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If you’re looking for bubbles, don’t look at gold coins

Eric De Groot at Eric De Groot - 2 hours ago

The physical and paper markets do not support the bubble top in gold argument often presented by media. The talking heads will become gold's biggest supports towards the end of the mania stage. Today's skepticism suggests that gold still has a long way to run. US Mint Coin Sales (oz) and Spot Price of Gold (USD) Headline: If you’re looking for bubbles, don’t look at gold coins Once again,... [[ This is a content summary only. Visit my website for full links, other content, and more! ]]

EURO CDS Update

A tale of two Europes:

• PORT 1030/1070 +25
• IRELAND 812/840 +6
• ITALY 420/428 +2
• GREECE (pts) 51/55 +2
• SPAIN 380/390 -2

• BELGIUM 262/272 flat
• FRANCE 164/168 -8
• AUSTRIA 126/131 -5
• ENG 74/76 -1
• DEUTSCHE 76.5/78.5 -1

Frontrunning: September 8

• Yuan Convertible By 2015: China to EU Chamber (Bloomberg)
• European Bailout Tensions Threaten German Coalition (WSJ)
• Greek backsliding sparks euro exit talk (Reuters)
• Perry, Romney Clash at Debate (WSJ)
• Fitch warns of downgrades for China (Reuters)
• Mists Clear on China's Policy Outlook (WSJ)
• Dutch PM calls for Europe budget tsar (FT)
• Libor inquiry looks at criminal angle (FT)
• Business Leaders Call for More Central Bank Stimulus to Aid Economy (WSJ)

Bloomberg Finds Confidence Of Lowest Earners Now At Record Low

While not considered in the same category as the UMichigan or the Conference Board confidence indices, the Bloomberg (formerly ABC) Consumer Comfort index, which is just as familiar with statistical sampling and using phones as the prior two (and does not share their penchant for calling Wall Street execs to break any market downward trend), just found that the week of September 4 saw consumer confidence drop from -49.1 to -49.3, the second lowest in 2011. Worse is that confidence in the state of the economy has now plunged to the lowest since 2009, or basically since the market generational lows, confirming that "confidence" is nothing but a way of saying popular perception of the S&P, pardon Russell 2000. Lastly, and worstly, while the the confidence of of $100K+ earners dropped to -18.2 from -15.1, the confidence, whatever that means, of those earning the least is now at a record low. Luckily, this is certainly not the social group most targeted by Obama in his reelection bid. Oh wait, nevermind.

Watch Jean Claude Trichet's On Air Meltdown

Think the ECB is unable to maintain the illusion that central planning works? Think again. Some unlucky sod dares to ask Trichet how the central bank plans to defend its failure as a monetary authority, to which the French president proceeds to have an unprecedented (for a central head banker) on air meltdown with literal foaming in the mouth. "You want the lies?... You can't handle the lies. It is all about ze price stabeeleetee." Hilarity ensues, especially after JCT proceeds to bash his one and only nemesis: Germany. Prepare to watch many more such episodes over the next 2 years as the world voodoo economist PhDs have so carefully constructed for themselves in their ivory towers comes crashing down.