The Moneychanger
Daily Commentary
Tuesday, 19 August a.d. 2014 Browse the commentary archive

Durn! What in the world is wrong with me? Why can't I get with the 21st century? What can't I look at the news of markets hanging on Janet Yellum's next words at the meeting of Our Masters at (the appropriately- named) Jackson Hole & not feel that same warm enthusiasm that Winston Smith felt looking at Big Brother on the Telescreen? Why doesn't my heart melt with gratitude and why don't thankful tears run down my cheeks? Why do I continue in my stubborn, self-willed exile from the love of Big Brother?

I reckon because it's all too durned silly, and I'm too much of a hick to recognize Our Masters, let alone respect them. Besides, if they really were Masters of The Universe, as they were touted, wouldn't they look better & smarter than Janet Yellum & all the rest?

But look here at me! I hardly know how to scrape a hog, & here I am knocking my betters. I ought to be ashamed (but I ain't).

Stock market's on another tear. Dow rose 80.85 (0.48%) to 16,919.59 while the S&P added9.86 (0.5%) to 1,981.60. It's the best of all possible worlds. Apparently these indices aim to put in a double top somewhere near or slightly above where they've been before. Dow today closed barely above that uptrend line from the March 2009 low. Recall it had fallen through that back at July's farewell.

Stock strength and metal weakness today sent the Dow in Gold & Dow in silver soaring. Dow in silver rose 1.36% to 871.92 oz (S$1,127.33 silver dollars) & if it doesn't reverse soon will make a double top with the 1 June high at 892.99 (S$1,154.57). Rapidly approaching overbought on the RSI & full stochastic.

Dow in Gold ended the day higher by 0.65%$ at 13.05 oz (G$269.77 gold dollars). This corrects a little over 50% of the fall from 9 June to 7 August, so this chart looks altogether different to the Dow in Silver. The 61.8% correction level is above at 13.12 oz.

Buy the news, sell the rumor. We'll have to put up with this I reckon until Yellum speaks on Friday and nothing comes out of her mouth but hot air. Till then I just have to grin like a jackass eating sawbriars and bear it.

Another thing not helping gold is the US dollar. It rose 31 basis points (0.38%) today to 81.93, finally breaking free of that consolidation either side of 81.50. Target is 82.75 at least.

Euro today broke down from an even-sided triangle to make a new low for the move at $1.3321 (down 0.32%). Looks like the fun's just beginning for the Euro. Yen lost 0.33% to 97.18 & looks hopeless.

Bond & note prices have been rising, anticipating that Big Mother will be announce low interest rates long into the future. We are now watching interest rates retrace the upward progress they made during 2013. Shoot, maybe the law of gravity is all wrong. Maybe it ain't no law a-tall. Maybe Our Masters really are alchemists who can turn paper into gold.

Silver dropped 21.3 cents (0.56%) to 1938.7 cents today. Comex gold dropped $2.60 (0.52%) to $1,295.10.

Nothing hit gold really hard. About 8:30 the US dollar, wino of fiat currencies, began to rise and about the same time gold began to fall. It began the day poking as high as $1,303.70, but dropped and dropped until 1:00 p.m, down to $1,294.70. Closed a bare 40 cents above the low.

Well, it didn't close below $1,295, but it's only a hair above the uptrend line from the June low. Should gold break that line it would drop toward the uptrend line from the December low, which tomorrow stands at $1,270. Reversing upward requires a gold close above $1,325.

Silver barely crossed under that downtrend from the August 2013 high today, not really enough to call it a breakdown. Just below about 1925c stands lateral support, and beneath that 1860c.

Stepping back from the chart, the last 14 months seem to paint a bottom on both silver & gold, but the next couple of days could be as much fun as a self-directed tooth extraction with wire pliers and a hammer.

On this day in 43 B.C. Octavian (Caesar), later known as Augustus, compelled the Roman Senate to elect him consul. In other words, he offered the Senate the same choice we have between Democrats & Republicans.

On 19 August 1692 five more people were hanged for witchcraft in Salem, Massachusetts. The total reached 20 in all.

On 19 August 1839 the details of Louis Daguerre's first practical photographic process are released in Paris. The fundamentally same silver halide process is used today, and only in the last 10 years has begun to yield to electronic photography.

When my friend Thomas Moore published his book, The Hunt for Confederate Gold, in 2005, I ate it alive. It's a mystery, thriller, and love story rolled into one, but most of all it is intelligent. It dramatizes the crises of runaway government, rogue federal agencies, the cult of political correctness, and the danger of a currency backed by nothing but the empty promises of a state. But don't think "dreary political sermon," because it's nothing like that. Passionate, suspenseful, filled with the pull of human loyalties, Hunt for Confederate Gold will bring tears to you eyes.

I have fussed at Tom for years for letting the $30 hard copy go out of print, and now he is making it available in electronic format for $4.99. You can find the ePub, Mobi, & Pdf versions at Abbott Press, http://bit.ly/1qnk6ym. Kindle is available at Amazon, http://amzn.to/XyzgtM It's one of the best books you'll read this decade.

Argentum et aurum comparanda sunt —
Silver and gold must be bought.

— Franklin Sanders, The Moneychanger

At Home in Dogwood Mudhole
Market Snapshot See more charts and market data
19-Aug-14 Price Change % Change
Gold, $/oz 1,297.70 -6.80 -0.52%
Silver, $/oz 19.60 0.11 0.56%
Gold/Silver Ratio 66.209 -0.723 -1.08%
Silver/Gold Ratio 0.0151 0.0002 1.09%
Platinum 1,437.50 -5.70 -0.39%
Palladium 881.30 -14.10 -1.57%
S&P 500 1,981.60 9.86 0.50%
Dow 16,919.59 80.85 0.48%
Dow in GOLD $s 269.52 2.69 1.01%
Dow in GOLD oz 13.04 0.13 1.01%
Dow in SILVER oz 863.24 -0.72 -0.08%
US Dollar Index 81.93 0.31 0.38%
IMPORTANT NOTE: The following are wholesale, not retail, prices. To figure our retail selling price, multiply the "ask" price by 1.035. To figure our retail buying price, multiple the "bid" price by 0.97. Lower commissions apply to larger orders, higher commissions to very small orders.
SPOT GOLD: 1,294.00      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,323.76 1,339.29 1,339.29
1/2 AE 0.50 665.90 682.59 1,365.17
1/4 AE 0.25 332.95 347.76 1,391.05
1/10 AE 0.10 135.77 141.69 1,416.93
Aust. 100 corona 0.98 1,262.04 1,271.04 1,296.71
British sovereign 0.24 306.44 318.44 1,352.74
French 20 franc 0.19 243.40 246.39 1,319.71
Krugerrand 1.00 1,308.23 1,318.23 1,318.23
Maple Leaf 1.00 1,309.00 1,324.00 1,324.00
1/2 Maple Leaf 0.50 744.05 679.35 1,358.70
1/4 Maple Leaf 0.25 329.97 346.15 1,384.58
1/10 Maple Leaf 0.10 137.16 141.05 1,410.46
Mexican 50 peso 1.21 1,552.25 1,563.25 1,296.55
.9999 bar 1.00 1,298.53 1,310.00 1,310.00
SPOT SILVER: 19.38      
SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 26.00 28.50 37.25
VG+ Peace dollar 0.77 22.00 24.00 31.37
90% silver coin bags 0.72 13,785.20 14,071.20 19.68
US 40% silver 1/2s 0.30 5,525.35 5,675.35 19.24
100 oz .999 bar 100.00 1,928.00 1,988.00 19.88
10 oz .999 bar 10.00 198.80 199.80 19.98
1 oz .999 round 1.00 19.48 19.98 19.98
Am Eagle, 200 oz Min 1.00 21.13 22.38 22.38
SPOT PLATINUM: 1,437.50      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Plat. Platypus 1.00 1,462.50 1,502.50 1,502.50
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© 2013 Little Mountain Corporation, d.b.a. The Moneychanger. All rights reserved. May not be republished in any form, including electronically, without our express permission.

Warnings and Disclaimers

To avoid confusion, please remember that the comments above have a very short time horizon. Always invest with the primary trend. Gold's primary trend is up, targeting at least $3,130.00; silver's primary trend is up, targeting 16:1 gold/silver ratio or $195.66; stock's primary trend is down, targeting Dow under 2,900 and worth only one ounce of gold or 16 ounces of silver. US$ and US$-denominated assets, primary trend down; real estate bubble has burst, primary trend down.

Be advised and warned:

  • Do NOT use these commentaries to trade futures contracts. I don't intend them for that or write them with that short-term trading outlook. I write them for long-term investors in physical metals. Take them as entertainment, but not as a timing service for futures.
  • NOR do I recommend investing in gold or silver Exchange Trade Funds (ETFs). Those are NOT physical metal and I fear one day or another may go up in smoke. Unless you can breathe smoke, stay away. Call me paranoid, but the surviving rabbit is wary of traps.
  • NOR do I recommend trading futures options or other leveraged paper gold and silver products. These are not for the inexperienced.
  • NOR do I recommend buying gold and silver on margin or with debt.
  • What DO I recommend? Physical gold and silver coins and bars in your own hands. For additional information, please see our Ten Commandments for Buying Gold and Silver.
  • One final warning: NEVER insert a 747 Jumbo Jet up your nose.

Explanation of Terms

The US DOLLAR INDEX is the average exchange rate for the US dollar against the Euro, Yen, Pound sterling, Canadian Dollar, Swiss Franc, and Swedish Krona, weighted for each country's trade with the US. It gives a general measure of the US dollar's performance against all other currencies.

The DOW IN GOLD DOLLARS measures the Dow Jones Industrial Average in gold dollars (0.048375 troy oz. by law). The DiG$ depicts the Primary (20 year) Trend of stocks against gold. When the DiG$ is dropping, gold is gaining value against stocks in a trend that should last 15-20 years. The DiG$'s chart is identical to the Dow in ounces of gold, but gives us one unvarying measure all the way back to 1896. Because it shows the primary trend ("tide") of gold against stocks, for investors it is the single most important financial chart in the world today. Since its August 1999 high at G$925.42 (44.8 ounces), the DiG$ has trended down, targeting a G$80-G$20 (4-1 oz. of gold will buy the whole Dow).

The DOW IN SILVER OUNCES shows how many ounces of silver are needed to buy the entire Dow. The DiSoz is trending down with a target of under 36 ounces.

The GOLD/SILVER RATIO is the gold price divided by the silver price, and shows how many ounces of silver it takes to buy one ounce of gold. The Ratio shows us the Primary (20 year) Trend of gold's value against silver. When the Ratio's trend is dropping, silver is gaining value against gold. This trend targets a gold/silver ratio of 16 ounces of silver to one of gold within the next 5-10 years. That implies that silver will massively, vastly outperform gold before this bull market ends. When both metals are rallying, the ratio often (but not always) drops, confirming the rally.

Other Important Information

This is not an offer to buy or sell. Prices subject to change without notice. To enter an order, call us at (888) 218-9226 or (931) 766-6066. Sorry, no sales to Tennessee.

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