Euro Central bank did something, but not what anybody wanted. Instead of announcing it would start buying all those sovereign bonds nobody else wants, it announces it was reducing bank reserve requirements 50%, from 2% to 1%, and loosening collateral requirements for loans from the ECB. Also, the bank cut its benchmark interest rate by 1/4%, back to its all-time low of 1%.

Well, great. This does nothing to solve the long term government and bank solvency riddles. Stock markets greeted this good news by dropping thru the trap door in the floor. Euro fell, dollar rose, silver & gold dropped, too.

Confirming for the nonce my interpretation that 12,200 caps the Dow, it fell 198.67 (1.63%) to close at 11,997.70. Owch, bad juju for investor morale to close below 12,000. S&P500 dropped a massive 2.11% (26.66 points) to 1,234.35.

Looks to me like it completed a topping formation from Friday through Thursday, and broke down today. Expect lower prices.

US DOLLAR INDEX rose 34.1 basis points (0.44%) leaving behind a five day chart that bottomed at 78.2 and 78.1. Hit 79. Will go higher. Euro fell off 0.5% to 1.3349, so the ECB's inflationary program helped not at all. Yen flattened at 128.74c /Y100 (Y77.68/$1), down 0.02%.

We see again that markets are not always logical. The ECB announces it will inflate beaucoup more, & silver & gold drop. Right. Maybe on the scale was tipping away a finger of the Nice Government Men? Not question that this brings good news to gold and silver for the long term. Bad news for the rest of the world, but good for metals.

GOLD dropped $31.10 (1.8%), all the way down to the 50 dma ($1,708) but HARK! BEHOLD! It broke not support at $1,700-$1,705. Yes, that means something. It means that it fell from one side of the narrow nose-cone it has traded into, to the other side. Triangle has NOT YET resolved with either an upside or a downside breakout. Stepping away from the chart a little more, that means that the uptrend line in force since the end-September low at $1,535 remains in force.

Here I am out on that limb, once again. I bought gold today.

Silver fell 108.8c, to 3146.7c, down a meaty 3.3%. It pierced the uptrend line by a little, fell as low as 31.42c. This is not yet a downside breakout. It stands on the line, but not yet. I may get my head handed to me on a platter, but I bought more today.

Think: silver has been bumping up against its 300 day moving average (3377c). Maybe this is just the back up for a running start at that line.

If is am wrong, the market tomorrow will gainsay me loudly & finally, fall maybe to 2950c. If I am right, this point offers a spectacular buy.

SORRY, MY WIFE IS KIDNAPPING ME TOMORROW TO CHRISTMAS-SHOP, SO I WON'T BE PUBLISHING A COMMENTARY. SEE Y'ALL MONDAY.

Yesterday Jamie Dimon, CEO of JP Morgan Chase, at a conference sponsored by public-spirited Goldman Sachs, said, "Acting like everyone who's successful is bad and that everyone who is rich is bad -- I just don't get it."

Well, Jamie, mayhap I can 'splain it to you. You complained as if you EARNED your wealth by your extraordinary genius & hard work, and thus stacked penny by penny your estimated $231 mn to $3 bn fortune, along with that $17 mn stock & option bonus you were paid in 2009.

But Jamie, Jamie, some of us slackers remember where you came from. No, you weren't born in Hell's Kitchen, but you did graduate from Harvard Business School. And boy! Did your hard studying pay off. You were so valuable at that point, just getting out of school with no experience, that your father, executive VP at American Express, put in a good word for you with Sandy Weill, then CEO of Amex. And he hired you upon graduation to start at the bottom? Scouring toilets in the Amex headquarters? Sorting packages in the mail room? Licking envelopes with the little people? Well, not exactly, Jamie. Maybe, just maybe, it's been possible for you to jump higher than all those envious slackers because you started higher than them, by 40 or 50 floors. And maybe, just maybe, you have waxed so rich not from genius & hard work, but because your cronies have boosted you along the way.

And while I would be the very last person in the entire universe, known or unknown, ever to say that "rich is bad", I wonder who in God's creation really NEEDS $231 mn to $3 bn, or who really is WORTH $17 mn in bonuses to any company anywhere anytime.

Jamie, I have to say that the slackers look at you & they don't say, "Rich is bad," they say, "Look at the arrogant crony capitalist, who has gotten fat on his connections, family, business & government. How, exactly, does he differ from a tape or pinworm?"

But don't pay 'em no mind, Jamie. We all know how envious those slackers are. Let them eat cake.

On 8 December 1776 George Washington's retreating Army crossed the Delaware River, fleeing from New Jersey into Pennsylvania. They were fighting a war to make the world safe for the Jamie Dimons of the future.

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

— Franklin Sanders, The Moneychanger

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

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