The Moneychanger
Daily Commentary
Monday, 31 October a.d. 2011 Browse the commentary archive

Stocks stir my soul to poetry:

Under water everywhere,

& all th'indices did shrink!

Underwater everywhere,

& every stock did stink!

Last Thursday I wrote that you should look around and fix the sight in you mind, because for stocks that was as good as it gets. Now y'all see why I said that. Today the Dow closed at 11,955.01 and lost 2.26% or 276.1 points, all but 85.97 points of what it gained in the last two days. It lost 76.25% of the last two days gains.

S&P500 lost 31.78 or 2.47% today.

Now all those who bought the euro "fix" are beginning to sober up, rub their eyes, & wonder what in the WORLD they were thinking to buy stocks like that?

Now I bet y'all understand why they serve free drinks in casinos.

I was wondering when the Nice Government Men in Japan were going to act to save their export addicted economy, & they did this morning. I will forbear the obvious martial arts & samurai & ninja references, and observe merely that they slapped the yen winded. It dropped to 127.92 c/Y100 (Y78.17/$1, down 3.02% from Friday. Since it was a government surprise party, they threw it over the weekend for the rest of us) so that it all happened at once & beat the longs senseless. 'Twill be a while before they go long yen again. Chart damage will last a while, too.

Yet the Japanese only set the stage for more trouble down the road, since they did not announce, like the pragmatic Swiss, that they would not tolerate the yen over such and such a rate. Thus they again have to make another surprise raid on their own currency.

Central banking is NOT the road to currency stability.

Euro's day in the sun is over, too. Japanese move today sent money screaming into dollars for safety, so the Euro gapped down -- largely -- below its 200 DMA (1.40.86) then fell to the 50 DMA (1.3842) for good measure, wiping out all the last week's gains. Closed at 1.3852, down 2.1%.

And who was the gainer in all this, save the US dollar, the currency everyone loves to hate but buys anyway. Dollar bounded up off 75 to end the day up 145.4 basis points (1.87%) at 76.551, leaving the last two days behind as a spike bottom & suspected turnaround -- as suspect as a cat with yellow feathers on his chin when your canary goes missing.

For a while at least, the dollar will rally. Until the next crisis, which might be two days or two weeks or two months or two minutes, but surely will come.

Silver & gold are the currency alternatives -- competitors, if you will -- to the euro, yen, & dollar. Thus when the dollar rallies, you can expect silver & gold to take body blows.

Today they did. Gold dropped $22 (1.3%) to turn off the Comex lights at $1,724.20. Big drop had already happened on the other side of the world time the globe's turning brought midnight Sunday/Monday to the Eastern Time zone. That's the great thing about government surprise parties, no way to decline the invitation.

Most of the day gold traded from $1,725 to $1,712, although the low came before New York opened at $1,704.60. Closing under that $1,725 support offered no encouragement to gold bugs, and will likely knock prices again tomorrow. $1,705 is the support to watch.

That marks the upper boundary line of gold's trading from the end-September collapse until last week's upside breakdown. Falling thru that mark opens a trapdoor under gold with a $1,650 basement. $1,605 is possible, & home to the 150 day moving average.

Silver, more manic as usual, lost 2.6% today, 93.3c, to close Comex at 3433.70, beneath 3450c support. Likely target is 3200-ish, about where 'twill meet the rising trend line. If it falls thru that, silver holders will be writhing in pain.

BOTTOM LINE: Bull market is alive & well, just undergoing a correction. Y'all hang on -- don't let that bull shake you off!

I'm going to share a little secret with y'all. I've been working on a book. For 15 years. No, not about silver & gold, hardly mentions them. Rather, it's the tale of moving with my family to a farm waaayout in the country, so far out you have to order sunlight from Sears and Roebuck. It exposes all, from colossal mistakes to miniscule successes. I'll tell you where the dead animals are buried, & who (probably) killed them. You'll learn how we got to 27 dogs at one point, how we fell into the pig business, & how not to herd sheep (Hint: gotta have a Border Collie). You'll hear about the joys -- Bodacious Hoedowns & Agrarian Challenges -- and the sorrows -- how many chickens can a skunk kill? You will also no doubt find it even easier to laugh at me than I do to laugh at myself, & you will meet my whole family and others for miles around.

God willing, it will be finished in time for Christmas, but it's going to be a close race. As soon as I know, I will get an order page put up on our website so y'all can pre-order. I just want y'all to be on the look-out for the announcement. Working title -- I'm not making this up -- is "At Home In Dogwood Mudhole."

I'm not going to say a word about today being Halloween. If y'all don't know that already, you're too thick to read a calendar or turn on a TV, & you'd better start looking for a job with the Obama administration or the Federal Reserve.

On Halloween 1517 Martin Luther posted his 95 Theses on the door of the Wittenberg Palace Church. Nobody noticed it then, but it was the beginning of the Protestant Reformation.

On 31 October 1668 US Postmaster General Alexander W. Randall approved a standard uniform for postal carriers. Until then they had been undercover, blending in with the general populace. Mercy, my mailman hasn't gotten the word yet. He wears whatever he wants to, & drives from the wrong side of the car, to boot. I reckon we're all just more independent in Tennessee.

Today will be the last day I will send a commentary until 8 November. I'll miss y'all, but I have to attend a timber framing class.

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

— Franklin Sanders, The Moneychanger

Your source for gold and silver. Read our latest reviews and testimonials.
Market Snapshot See more charts and market data
31-Oct-11 Price Change % Change
Gold, $/oz 1,724.20 -22.00 -1.3
Silver, $/oz 34.34 -0.93 -2.6
Gold/Silver Ratio 50.210 0.705 1.4
Silver/Gold Ratio 0.0199 -0.0003 -1.4
Platinum 1,606.10 -39.40 -2.4
Palladium 649.00 -14.85 -2.2
S&P 500 1,253.31 -31.78 -2.5
Dow 11,955.01 -276.10 -2.3
Dow in GOLD $s 143.33 -1.45 -1.0
Dow in GOLD oz 6.93 -0.07 -1.0
Dow in SILVER oz 348.17 1.38 0.4
US Dollar Index 76.55 1.45 1.9
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: 1,723.60      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,764.97 1,780.97 1,780.97
1/2 AE 0.50 884.21 904.89 1,809.78
1/4 AE 0.25 444.90 456.75 1,827.02
1/10 AE 0.10 184.43 191.32 1,913.20
Aust. 100 corona 0.98 1,677.65 1,692.65 1,726.84
British sovereign 0.24 405.74 412.74 1,753.34
French 20 franc 0.19 321.80 328.80 1,761.09
Krugerrand 1.00 1,739.11 1,755.11 1,755.11
Maple Leaf 1.00 1,735.60 1,756.60 1,756.60
1/2 Maple Leaf 0.50 902.74 913.51 1,827.02
1/4 Maple Leaf 0.25 452.45 456.75 1,827.02
1/10 Maple Leaf 0.10 175.81 198.21 1,982.14
Mexican 50 peso 1.21 2,063.43 2,080.43 1,725.49
.9999 bar 1.00 1,729.63 1,740.63 1,740.63
SPOT SILVER: 34.43      
SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 25,500.00 28,000.00 36.60
VG+ Peace dollar 0.77 25,000.00 27,000.00 35.29
90% silver coin bags 0.72 24,152.70 24,552.70 34.34
US 40% silver 1/2s 0.30 9,566.85 9,866.85 33.45
100 oz .999 bar 100.00 3,468.00 3,528.00 35.28
10 oz .999 bar 10.00 344.30 350.30 35.03
1 oz .999 round 1.00 34.53 35.28 35.28
Am Eagle, 200 oz Min 1.00 36.18 37.18 37.18
SPOT PLATINUM: 1,606.10      
Plat. Am Eagle 1.00 1,606.10 1,706.10 1,706.10
Home Questions & Answers Articles & Resources
The Moneychanger, P.O. Box 178, Westpoint, TN 38486

Copyright Notice

© 2015 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.

For complete details on how to buy from us or sell to us, please click here.