by Addison Wiggin & Ian Mathias

• Gold demand up... but for now, gold price is down
• A legitimate sign the recessions’s over? The 5 unpacks unemployment stats
• Not everything is looking up… Ugly retail results
• Fedheads talk out both sides of their mouths, and a bump in the road for Bernanke
• Burning through $700 million in a week… The state that could be the “next California”
• Readers write: Alternative energy, biotech and more…

More evidence of growing gold demand: October sales of gold bullion coins at the New York auction house Stack’s rose 142% from a year earlier.

This just reinforces the news we related yesterday about the U.S. Mint suspending sales of 1-ounce Gold Eagles. But now comes the curious news that the Mint is resuming sales of the fractional 1/10th-ounce Gold Eagles for the first time in a year -- 345,000 of them, to “authorized purchasers” who then resell to dealers and directly to the public.

As you’ll recall, last week, we invited you to send in your questions about buying gold coins and we’d put those questions to Nick Bruyer, one of the finest coin experts we’ve had the privilege of knowing. We’ve now tentatively planned to air that interview the week of Dec. 14.

We haven’t pegged an exact date, because we want to make sure we don’t crash our servers (again). At last check, 9,313 people have already signed up. We’re pushing our IT people to perform tweaks that’ll allow as many people to take part as possible, but at some point they’re going to go all Scotty on us (“I’m givin’ it all she’s got, captain!”) and say they just can’t take anymore. Please, if you’re interested, sign up now here before we cut off access.

In the meantime, today’s unemployment report was enough to send gold back below for $1,200 for the first time since Tuesday.

(Our resource trader Alan Knuckman’s timing couldn’t have been better; he told his readers yesterday to close out part of a gold call position for 107% gains yesterday. For access to his next recommendation at a special discount, check this out.)

Indeed, the unemployment numbers are causing early holiday rejoicing across the land.

Nonfarm jobs fell by just 11,000 in November, and the unemployment rate fell slightly, to a yummy round 10.0%. The “expert” consensus had been calling for a loss of 100,000 jobs and the unemployment rate to remain steady at 10.2%.

The broader “U6” measure of unemployment -- including people who’ve given up looking for work recently and those working part time but wanting to work full time -- fell from 17.5% in October to 17.2%.

The 11,000 drop is the best showing in nearly two years, but it’s not nearly as important as the trend it might signal. Can payrolls actually rise next month? If so, it would be a first since December 2007. That’s when the recession officially began. If the number prints positive next month, we wouldn’t be surprised to see the National Bureau of Economic Research call an end to the recession. We’ll even venture to say the NBER will declare it ended as of November 2009.

No surprise, U.S. stocks are surging in reaction. The Dow is up nearly 150 points within 20 minutes of the open.

That more than makes up for yesterday’s losses, most of which came during the final hour of trading, after some mixed messages from the Federal Reserve.

Even the dollar got a rush from the goosy jobs stats. The dollar index is back above 75 as we write, in line with the short-term rally Marc Faber described in our interview with him, seen here.

But before we get too far ahead of ourselves… or the Obama jobs summit, for that matter… we also see a host of mainstream analysts have weighed in this week with long-term unemployment forecasts. Goldman Sachs is looking for a peak in mid-2011 at around 10.7%. Mark Zandi, the guy behind Moody’s Economy.com, calls the same number, but sooner -- in the third quarter of next year.

That’s also when Zandi sees housing prices bottom, after a new wave of foreclosures floods the market early next year. So far, housing prices have fallen an average 32% since the top in 2006. Zandi figures on 38% by the time it’s all over.

The early read on retail sales for November: They actually fell from the month before, according to the International Council of Shopping Centers.

The drop of 0.3% is a far cry from the minimum 5% growth the experts expected. Four out of five retailers missed their forecasts, including Macy’s (down 6%), Abercrombie & Fitch (17%) and Saks (26% -- ouch).

These numbers bear a striking parallel to the ISM service sector report we mentioned yesterday: Two months of growth in September and October, only to reverse in November.

For the record, these retail numbers are incomplete; they exclude electronics retailers, and online sales. A fuller picture might emerge when the government’s retail sales numbers for November come out a week from today.

One reason U.S. stocks fell out of bed in the final hour of trading yesterday was a remark by St. Louis Fed president James Bullard that the Fed might raise interest rates even if the job market continues to look sluggish.

"If a tepid recovery in labor markets is just the new reality," Bullard told Dow Jones, “then you shouldn't be saying, 'Oh, we are just going to keep interest rates where they are.'”

In contrast, Fed chairman Ben Bernanke is sticking to the party line -- the zero interest rate policy will remain in effect for, well, a long time. Nor does he feel that policy is forming any new bubbles in the U.S. economy.

"We do not see, at this point,” Bernanke said during testimony yesterday to the Senate committee considering his nomination for a second term, “any extreme misevaluation of assets in the United States.”

Ummmm… wasn’t this the same guy who never saw the housing bubble coming? Or gave us the vaunted “helicopter theory” of consumer stimulation? Alas, they love their money printers in Washington. Bernanke’s confirmation is all but a cinch.

“It looks as though the United Kingdom could be the hardest hit,” concludes Bill Jenkins. Our forex maven has been poring over the numbers in light of the Dubai government’s decision not to guarantee Dubai World’s debt.

“Half of the $60 billion debt is owed to banks based in the U.K. Some $13 billion of that money is on loan from the Royal Bank of Scotland and Standard Chartered; another $17 billion is from HSBC, whose stock fell from $62 down to $58 on the news.

”Since the United Kingdom is still struggling to get any kind of recovery started, the news weighed heavily on its currency -- at least initially. More bad debt on the books is not exactly what it needed at this point. Since the United Kingdom has already been issued a warning by Fitch about its sovereign debt rating, it certainly does not want an increase in borrowing costs for their gilts. This only adds to that burden.”

The pound is likely to take it on the chin… and Bill will be right there trading the event. If you’re inclined to join him, you can do so here.

Et tu, Arizona?

California issued IOUs to state employees twice this year. Now comes word the Grand Canyon State has already blown through a $700 million line of credit it took out just last week from Bank of America.

“The governor and legislature need to [rein] in excessive spending,” complains State Treasurer Dean Martin. “We can no longer afford to continue spending more than we make."

Arizona lawmakers hope to close the state’s $1.6 billion budget gap in a special session the week after next. Why not sooner, given the urgency of the situation? Because some of those lawmakers will be attending a convention next week in San Diego. Heh.

Arizona is of nine states identified last month in a study by the Pew Center on the States as likely candidates to become “the next California.” The others are Florida, Illinois, Michigan, Nevada, New Jersey, Oregon, Rhode Island and Wisconsin.

One of the major trends to watch for in 2010 will be the cratering revenue of local and state governments… and the most likely response, also the most perverse -- to raise taxes.

Got any trends in 2010 you’d like your friends at The 5 to identify and follow? Send us your list here.

We close our dispatch today with something from the Let-Them-Eat-Cake Department…

An investment banker’s idea of humor?

New York Times columnist Andrew Ross Sorkin spotted this license plate in Greenwich, Conn. It traces to a vice chairman at TARP beneficiary Morgan Stanley. Clearly, he doesn’t feel the sort of jitters that have reportedly prompted some executives at Goldman Sachs to buy handguns for self-defense.

“I do not understand all this talk about alternate energy sources,” writes a reader in response to our discussion yesterday and the day before about solar, wind, geothermal, etc. “It seems to me that the public is being led to believe that we must pursue alternate energy because the Earth is running out of oil; we aren’t.”

“What about the gigantic discovery known as the Bakken oil field, which stretches from northern Montana through North Dakota and into Canada and contains enough light, sweet oil estimated to only cost Americans just $16 per barrel? I have read that this field is estimated to contain enough oil to fuel the American economy for 2,014 years but the environmentalists have been holding up exploitation of this field. Do you suppose that just maybe OPEC could be funding these environmentalists to prevent this oil from being extracted?”

The 5: We clearly have yet to drive a stake through the heart of the Bakken oil shelf myth. The issue is “cheap” oil. We refer you to previous remarks on this subject by our resident oil field geologist Byron King, who’s seen the Bakken up close and personal.

“I have invested off and on in biotech companies, but not for a long time,” says a reader responding to Patrick Cox’s remarks yesterday. “The reason is that for every winner, there are many losers. There is this breakthrough or that discovery that's going to make us all rich, but it never happens.”

“RNAi has been around for a while. It’s like taking the kids to grandmother’s house in another state. Are we there yet? Huh? No, no we still have a way to go, you'll know when we get there.”

”I would rather run my money through a slot machine than invest in biotech. Biotech is a sure loser -- if you buy them all, the one winner will never make up for the losers.”

The 5: If you “buy them all,” as you say, yes -- even the strategy of spreading your risk won’t pay off in the end. But with good information, you can target a handful that’ll make the strategy pay off huge. That’s the whole reason we brought Patrick Cox on board nearly two years ago -- because he’s as connected as anyone can possibly be to the few dozen scientists, executives and venture capitalists who intend to change the world with their work. See here.

Regards,

Addison Wiggin
The 5 Min. Forecast

P.S. ”After reading many of your publications for two years and continually being entertained, challenged and stimulated,” says a final message that just hit our inbox, “I am a faithful subscriber.”

“However, [yep, here we go] there certainly is a disconnect from the quality articles and investing advice you give and your means for advertising them.

“I refrain from passing Agora's publications onto my friends and family because your sales methods give the appearance of ‘too good to be true,’ and, therefore, are.

“Intelligent people generally don’t trust these tactics and will assume that the product you are offering, and even your articles, are not legit. When I get something in my inbox that states that I can walk away with $6,000 if I cancel my subscription, I immediately think, ‘Oh, they want me to buy something and are trying to trick me into it.’”

The 5: You’re right…. we ARE trying to trick you.

Over a decade ago, Target Marketing magazine named our founder Bill Bonner Entrepreneur of the Year for recognizing, among other things, that in the “zany, crowded world of newsletter marketing you have to shout to be heard.”

We don’t like it any more than you do.

But if you’ve had any experience with direct marketing, you know that to communicate your offer, you write a headline and test it. If it works, you “roll it out.” Then you write more headlines and try to beat the “control.”

Try as we might, we can’t beat this headline. It’s the one that “shouts” for us most effectively: “TAKE ADVANTAGE OF OUR BEST OFFER!”

The Reserve is open only once a year. If you are, as you have stated, happy with our work, you’ll love the discount we give on the whole caboodle. You get all of Agora Financial’s services, plus a host of exclusive Reserve Only benefits, for one flat rate and a yearly maintenance fee.

No more ads. No more tricks. Just one fee and you’re free!

On top of that, we’ll even credit the price you’ve paid for any of the services you’re already a subscriber to. It’s gimmicky, sure. But it works, and I defy you to find a Reserve member who doesn’t love it.

I couldn’t recommend any more forcefully that you call our friend John Wilkinson at 1-866-361-7662 and find out what credits and rebates you already qualify for. It’s a great deal. And if we offered it for too long each year, we’d break the bank. So it’s open only for the holiday season, and then we’re back to our same old tricks.

To view the gaudy promotion in question, see here.