Who's afraid of the big bad wolf?

7:53 am (Hawaii) Got up a little while ago, found the market flat/mixed. Then I did my usual checking around. FAZ opened at 72+, dipped to 68+ and I missed it because I was asleep. It's now above 70. Volume in FAZ and the bankster stocks is mediocre, which tells me this is probably a dead-cat bounce for the finnies.

Then I checked on paper gold and silver. I'm completely in cash and haven't been willing to touch AGQ or DGP of late. DGP is at 54+, quite a good price to keep an eye on. But AGQ is at 115+. I had to do a double take. It's gone from 200 two days ago to 110 today. This kind of insanity has happened before, like when it fell from 382 to 150 or so earlier this year. That's the true nature of a 3x bull ETF, especially when it's tracking a severely manipulated spot price.

I'm glad I had the sense to stay out of the paper on the long side. However, I'm bummed that I didn't at least have a small position in DZZ (gold short) or ZSL (short silver). DZZ was up 8.6% and ZSL was up 30% at last check. Yup, 30%. I can deal with spot price being, well, spotty. My very modest physical stash is a store of value, not a treasure chest. So I'm looking at the probability of more inflation, more scarcity in basic resources and goods, especially being here in the islands. We're subject to powers of other places, dependent on shippers for most of our goods and food. So in this downturn, I'll continue to be picky about price when I shop and load up on basic necessities. It will not shock me when Matson or other transports here declare delays in delivery of these basics. Then prices will skyrocket from time to time. We're at their mercy.

As I type, AGQ is up to 119 and I've been considering a tiny scale-in position. It's so beaten up, losing almost half its value in two days, far worse than what's happened to the indices this week. But I also remember what I saw on spot silver's chart. The last time it had a serious decline was after the run to 21. From there, it fell below 9. That's serious. We had a price pullback from 49 to 32 recently, but it doesn't compare to 21-to-9.

At that decline rate, current price would fall even more. It would go from 49 to 21. I did that math a few months ago and didn't think it would realistically happen, not with growing interest and demand. However, recessionary pressures are real and the latest declaration from Bernanke, FedEx, etc don't help spot price for silver.

BrotherJohnF makes an argument that spot silver should not be in this major decline. He argues that demand for silver-related products like cellphones and computers remains high globally, citing numbers out of Brazil, China, India. But does that mean spot silver price has bottomed today? Is $30 the new bottom for silver? This is a time when most silver traders are running away and smart traders are stepping in. But silver seemed to be cheap yesterday, too. It's a tough call and the only move I'll make is to scale in with tiny position.

Two days ago, I would've been pleasantly surprised with AGQ at 180 or 160. But at 119, it would've been almost too preposterous to believe. In general, between the banksters and FAZ, spot gold and silver vs bankster shorts and economic puppeteering gone bad across the galaxy, I'm in no rush to dive in head first. But this is a good time to watch closely. Or get out and enjoy life away from this chaos for a day.

Right now, ASEs are going for $35.03. An AGE is $1,741. US Mint started selling its America the Beautiful 5-oz Gettysburg coin at the regular price of $279. That comes out to $56 an oz, or 87% over spot. With all of their price increases in the past few months, I don't see the US Mint lowering its silver and gold prices at all. Ever. I'll take a pass for now. In fact, I'd rather make some fiat profit by trading DGP or AGQ or FAZ, then use that to buy metal at these discounted prices.

US Mint raises ASE proof 14%

10:32 am (Hawaii) I noted last night that the US Mint site had taken its American Eagle 1-oz Silver Proof Coin off the table to adjust the previous price of $59.95. My guess was that they'd move the price up to $64.95 and continue increasing over time at $5 increments, similar to what they did with the First Spouse gold coins.

Well, the new price is up today: $68.45. That's a 14% increase. I'm glad I got a few proofs, my first ever, while it was at the $59.95 price. But now I'm wishing I had more even though this increase is ridiculous. At $59.95, it felt cheap as spot silver rose from 37 to 44. But with spot silver back at 40, $68.45 has gone from a ridiculous premium to an unfathomable one: 70 PERCENT!

That's how it goes when emotion is involved, and emotion is involved because this is one hell of a beautiful coin. But enough is enough. No new ASE proofs for me, not for awhile.

I remember when ...

9:01 pm (Hawaii) I remember when First Spouse 1/2 oz coins from the US Mint were only $929. I waffled and waffled and decided, no. I am not paying $929, or a rate of $1,858 per oz of gold, when spot gold price was actually around $1600 or so.

Eventually, I was shocked to see price rise to $979 for those same First Spouse gold coins. Then $1,029. Now, it's $1,054. Yeah. Holy shit. But that was over the past few weeks.

Tonight, I took a look at the site and notice another shocker: ASE 1-oz proofs, which had sold for $59.95, are off the table. The site now says, "This product is temporarily unavailable for product repricing."

Product repricing? The product was already 50% above spot (silver) price. My guess is that it'll return with a new price of $64.95. It'll make me wish I'd collected far more proofs at $59.95. I know silver is silver and numismatic value is debatable in a hyperinflationary environment. Even the First Spouse coins at these prices are nowhere near a 50% premium. But proofs are pretty, really pretty. I'm probably not done with getting a few more.

Attack of the Euro castle

11:45 am (Hawaii) An astute poster on Turd's magnificent site noted that the CME mafia attack on gold and silver this morning may have had more to do with Spot price in Euros than Dollars. His thesis is compelling, and with gold price at all-time highs in recent weeks in Europe, it also makes sense.

ScottJ: Raid to protect Euro Gold closing? (June 23 2011)

bigdad06 points to the White House's move to kneecap crude oil this morning as an indication that the Fed/CME mafia is running out of methods to control the price of gold and silver.

(video) bigdad06: Emergency update! (June 23 2011)

On Fast Money, Doug Kass stated what a lot of retail traders and investors have noted: the Fed has no clue of what to do.

I'm debating whether to acquire some First Spouse 1/2 oz gold coin today from the US Mint. Today, they began selling Julia Grant gold coinage. I prefer the proof, never owned one before. But at $929 for the half-ouncer, that's roughly $170 over spot. I don't mind paying premium for the 5-oz America The Beautiful silver coinage, but the First Spouse gold? It's a tough call, especially when American Gold Eagles are available much cheaper. There's a side of me that is practical and has remained sealed to lower bullion prices. But a small part of me is digging the numismatic flavor of coins. Tough call. In addition, a new ATB is out next Wednesday, and on Thursday, new American Silver Eagle proofs go on sale.

I like the ATB that came in the mail a couple of weeks ago, even if it doesn't have that shiny, proof look.

12:37 pm (Hawaii) Did some checking on eBay regarding the First Spouse coins. There have been previous series (2007, '08, '09) of First Spouse half-ounce gold coins, and some of them are selling below spot. They include a half-ounce Dolley Madison ('07) currently going for $676 (with 2 days left).

I don't know how limited their mintages were, but I'm not encouraged. 

(Note: This site lists the Dolley Madison mintages at 18,355 for proof, 12,541 for uncirculated. I think that Dolley coin will get much higher before the deadline.)

Paying $170 over spot for a new Julia Dent proof or even a Mary Todd Lincoln proof doesn't make sense, especially with the possibility of Spot Gold prices dropping this summer. 

Leaning toward waiting a day. If spot prices tank again tomorrow, I'll avoid premium prices; US Mint's prices are locked and will not adjust to the spot. In that case, I'm better off waiting and getting American Gold Eagles elsewhere at "only" $100 over spot. If I wait, I may miss out on the First Spouses, but I like my chances by being patient. 

I don't have a lot of trust in eBay, but prices there are definitely superior for shoppers compared to premium at the US Mint.