Well, a Greek Debt Deal is still Near, but drawing nearer only glacially. For some reason, the Greeks refuse to co-operate with their own economic rape. Hard to know who to back in this one, the Greeks who brought this on themselves by following the "government can support everybody" theory, or the purveyors of phony money -- IMF, ECB, & European Commission -- who make the theory plausible, at least until it metastasizes beyond the economy's ability to support the blood loss.

Then there's that bailout. Amazing how investors will lose half of their claim in Greek bonds, but it will be called a "swap" or some such euphemism so that the banks that sold the insurance against a Greek bond default (derivatives) won't have to pay the investors' losses. As George Orwell's pigs remarked in Animal Farm when the other animals noticed them acting just as the farmer had before the Revolution, "All animals are equal, but some are more equal than others."

How do y'all like "Government of the banks, by the banks, and for the banks"?

Not surprising anyone, the euro had a tough day today. Closed down 0.17% at 1.3133, but dipped as low as 1.3028. Lurching through 1.3000 would demolish enthusiasm for the euro.

Japanese yen bounced like a dead cat, rising 0.08% to 130.66c/Y100 (Y76.53/US$1). This leaves the yen below support & it could well plunge to 128.25c. But who can ken the ways of fiat money? Might put on any sort of technical pattern, then for hidden policy reasons the Nice Government Men smash the pattern.

Stocks couldn't penetrate last resistance at last May's high (call it 12,850 - 12,875). Oh, 'twasn't a large drop, just 17.1 points (0.13%) for the Dow, which ended at 12,845.13. S&P500 gave up even less, 0.57 point (0.04%) to 1,344.33.

HOWEVER, if you will picture the ballistics curve for any flying object, you will notice a portion when the ascent rate slows, the curve rolls over as the object loses momentum, then begins to descend. Loses momentum -- how stocks felt today.

Silver & gold have just about locked up my mind today. Nothing about this jells.

Gold fell $15.10 to $1,722.80, which after Friday was to be expected. Silver, on the other hand, after making a low at 3305c when New York was just opening, traded up like a basketball released underwater, hit a high of 3378.2c, then closed -- get this -- three-tenths (3/10) of a cent lower than Friday.

That's a thorny non-confirmation. Overnight silver did the expected, fell down to its next support at 3300c, as gold did. But whence arose all that enthusiasm that floated it back to practically unchanged?

Could mean several different things. First, NGM might have been busy pushing gold down so that the euro wouldn't tank, & got too busy to push down silver, too. But let's deal with the non-confirmation, which whispers that either gold's fall or silver's rise was false. And since silver is the little brother here, which under such circumstances should be weaker, I'm tempted to guess that gold doesn't intend to go much lower. After all, low today was $1,713.12, fairly strong given Friday's stumble.

Metals are blowing hot & cold out of both sides of their mouth. Five-day gold chart must not breach support around $1,715. If it does, $1,675 will be the next stop, and despite today's puzzling non-confirmation, we ought to expect that because that's where the short term trend is headed: down.

If silver steps through 3300c, 3100c is a likely target. 50 DMA stands at 3099c.

On 6 February 1911 was born Ronald Reagan, king of actors, even as a politician. Here's what I don't get: why don't Americans hold their politicians responsible to keep their word? How do they -- especially "conservatives" -- swallow any performance & insult & betrayal, as long as occasionally the politician tosses 'em some trifle. Everybody praises "Red Ronnie" as a great conservative, but he sure didn't conserve any money. Budget shot to new highs under him as California's government, and he handily repeated that act as president. And don't get me started on George "the conservative" Bush.

On a happier note, today is celebrated as Waitangi Day in New Zealand, memorializing the treaty signed 6 February 1840 between the British and the native Maoris of New Zealand. I've been to New Zealand, and those few folks living there better HOPE nobody else in the world finds out about the place. It's the size of California with a population smaller than Tennessee's (4.4 million versus 6 million) and climate from tropical to Alpine. And the land is richer than red velvet cake. If American real estate developers ever find NZ, they'll ruin it in three weeks.

On 6 February 1952 Queen Elizabeth II acceded to the throne when her father, George VI, died. I was 4 at the time & did not attend the June coronation.

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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