The Moneychanger
Daily Commentary
Tuesday, 20 March a.d. 2012 Browse the commentary archive

That rotten dollar index bounced back up 15.1 basis points (0.19%) to trade right now at 79.611. It traded today up to 79.843, the 79.80 area where it broke down on Monday, but fell back. Insofar as a man even can say anything at all about such a manipulated market, it appears to be headed lower, but needs to confirm that with a close lower than 79.35. If I said that the dollar & all the other scabby fiat currencies were a joke, I'd be slandering jokes.

Yen dropped 0.45% today to 119.44c/Y100 (Y83.82/US$1), but didn't drop lower than Friday's close, so that bottom at 119.14 remains valid. As valid as anything might be when talking about unbacked currencies run by political whim for fundamental corruption.

The Euro closed $1.3223, down 0.14% from Monday. 'Tain't able to break through the 20 DMA at 1.3232 so far. I can say this, I'd rather own euros than have cholera.

The enemies of gold are the enemies of justice & mankind. Here's a little proof (thanks to VP for sending it) from that well know philanthropist Adolf Hitler: "Gold is not necessary. I have no interest in gold. We'll build a solid state, without an ounce of gold behind it. Anyone who sells above the set prices, let him be marched off to a concentration camp. That's the bastion of money."

See, it's easy: the concentration camp is what all fiat money advocates answer to gold. They may be a little more subtle, like Alan Greenspan & Ben Bernanke & all the other heads of central banks, but the concentration camp remains their ultimate answer.

I keep on trying to say things in new & different ways so my constant dinning doesn't deafen y'all. Here's a new way: if you want to end up living in a cardboard house under a bridge, keep on counting on stocks. Otherwise, sell them now & put the proceeds into silver & gold.

Stocks today fell. Dow fell 68.94 (0.52%) to 13,170.19. S&P dropped 4.23 (0.30%) to 1,405.52. This is a harbinger only, and needs further confirmation to call it a break. Next would come a close below the 20 DMA, now 13,021.

Silver & gold both wore themselves out yesterday, and both wilted today. Gold closed Comex $20.20 lighter at $1,646.70 & silver lost 112.1c to 3180.5c.

Gold nearly ruined that nascent uptrend, and fell as low as $1,641.90. So far the $1,640 support holds, but should gold punch through that, then we are dealing with $1,625 - $1,605.

Silver broke down through 3200c support when it fell to 3179c. Last week's low came at 3145c and today silver posted a low price at 3179c, then closed at 3180.5c, practically on the day's low.

In the aftermarket silver has risen above 3200c, but this is like an alcoholic walking back & forth, up & down in front of a liquor store. If he doesn't intend to go inside, he shouldn't keep wearing out the sidewalk there. However, right now all hangs on that 3150c level. Should silver break that, then 3100c, even 3000c becomes the next target.

Be patient, lift up your eyes to the horizon, & gaze there upon the PRIMARY UPTREND in silver & gold, & know that this, too, will resolve to the upside eventually -- and probably within the next two weeks, maybe this week.

On 20 March 1413 in England Henry V took the throne upon the death of his father, Henry IV. At the time a desperate name shortage ravaged in England, so much so that name-rationing had even reached the royal family. Only after 1448 with the importation of Ralph from Sweden, Geert from Holland, Hans from Germany, & Guido from Italy was the name-drought relieved.

On 20 March 1815 Napoleon Bonaparte entered Paris after escaping from Elba to begin his Hundred Days rule. Before he was finally exiled to St. Helena he needed to shed the blood of a few more thousand Frenchmen and assorted foreigners, of course.

On 20 March 1886 the first Alternating Current (AC) power plant in the US began operating. It was competing with Direct Current (DC) power which was in many ways much safer, but also much harder to transmit. To prove his point, Thomas Edison, who backed DC power, took a show around the country electrocuting cats on stage to demonstrate how dangerous AC was. Eventually he ran out of cats & AC took over.

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

— Franklin Sanders, The Moneychanger

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Market Snapshot See more charts and market data
20-Mar-12 Price Change % Change
Gold, $/oz 1,646.70 -20.20 -1.21%
Silver, $/oz 31.81 -1.12 -3.40%
Gold/Silver Ratio 51.775 1.149 2.27%
Silver/Gold Ratio 0.0193 -0.0004 -2.22%
Platinum 1,653.00 -24.90 -1.48%
Palladium 693.05 -13.00 -1.84%
S&P 500 1,405.52 4.23 0.30%
Dow 13,170.19 68.94 0.53%
Dow in GOLD $s 165.33 2.88 1.77%
Dow in GOLD oz 8.00 0.14 1.77%
Dow in SILVER oz 414.09 16.19 4.07%
US Dollar Index 79.61 0.15 0.19%
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: 1,649.80      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,694.34 1,710.34 1,710.34
1/2 AE 0.50 833.15 866.15 1,732.29
1/4 AE 0.25 420.70 437.20 1,748.79
1/10 AE 0.10 174.88 183.13 1,831.28
Aust. 100 corona 0.98 1,605.81 1,620.81 1,653.55
British sovereign 0.24 388.36 395.36 1,679.54
French 20 franc 0.19 308.02 315.02 1,687.29
Krugerrand 1.00 1,661.35 1,677.35 1,677.35
Maple Leaf 1.00 1,661.80 1,682.80 1,682.80
1/2 Maple Leaf 0.50 816.65 857.90 1,715.79
1/4 Maple Leaf 0.25 408.33 437.20 1,748.79
1/10 Maple Leaf 0.10 163.33 178.18 1,781.78
Mexican 50 peso 1.21 1,973.09 1,990.09 1,650.57
.9999 bar 1.00 1,655.57 1,666.57 1,666.57
SPOT SILVER: 32.11      
SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 25,833.87 29,000.00 37.91
VG+ Peace dollar 0.77 25,333.87 28,000.00 36.60
90% silver coin bags 0.72 22,493.90 22,843.90 31.95
US 40% silver 1/2s 0.30 9,000.45 9,175.45 31.10
100 oz .999 bar 100.00 3,236.00 3,276.00 32.76
10 oz .999 bar 10.00 323.60 327.60 32.76
1 oz .999 round 1.00 32.36 32.96 32.96
Am Eagle, 200 oz Min 1.00 33.71 34.41 34.41
SPOT PLATINUM: 1,653.00      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Plat. Platypus 1.00 1,678.00 1,721.00 1,721.00
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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.

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