I've been struggling to describe in a single sentence the global financial crisis unravelling around us. Talking to a friend today, I came close.

We are watching the death of a system that bases national income on government money (borrowed from fractional reserve banks that create it out of thin air) rather than production and of the dogma that prosperity arises from debt and speculation rather than production and of the silly delusion that an economy can infinitely support usury & usurers.

All of which is merely a long way of saying, "The free ride is over for everybody."

Of course, I'm just a natural born fool from Tennessee, & all them pointy-toed shoe wearing Wall Streeters & chrome-domed central bankers & their blinking economists must surely know more than I do, because SHOOT! If I'm right, then their whole system is wrong!

The tale of today's markets is quickly told. US dollar index continued its slide, gold & silver gave back some of Friday's massive gains, & stocks broke their plunge in the same way somebody jumping off the Empire State Building might be buoyed up by a breeze: it slows briefly, but does not stop the descent.

In more detail:

US dollar index lost 33.8 basis points (0.43%) to end at 82.552. It reached the September 2010 high, but it's a leetle too soon to guess whether the dollar's rally has been broken. All the signs point that direction, but we need more confirmation. Dollar below 81.75 (the January 2011 high) would confirm that the rally has ended.

Euro gained 0.54% today to $1.2497, but it's all so pitiful I don't even feel like making a joke out of it -- so many people are being wounded so badly for the benefit of a few. It is inexpressibly cruel.

Japanese yen today lost 0.48% to 127.64 cents (Y78.35/US$1). Still rallying, though.

Stocks were mixed. S&P500 rose a bare 0.14 points, NASDAQ rose half a percent, but the Potemkin Dow Industrials lost 17.11 (0.14%) to 12,101.46. Maybe stocks can stage a dead cat bounce from her, but having broken that 12,250 support, the Dow is doomed.

SILVER & GOLD gave back something today. Big deal. Look closer and it doesn't look bad.

Gold lost $8.30 to end at $1,612.20. Low came at $1,608.82, so gold handily defended all that support from $1,600 to $1,605. However, it stumbled at $1,633.66, unable to break through $1,625 - $1,630 resistance. No matter, tomorrow gold will return to batter on that gate once more. Count on it.

Whoops. Did I forget to tell y'all that my friend Bob the Technical Genius reminded me today that gold in Euros has climbed above its 200 day moving average?

SILVER closed a symbolic 0.8c below the 2800c round number: 2799.2 cents, down 50.5 cents. Again, no matter. Silver has climbed above the downtrend line stretching back to the August high. It has left behind a thrice tested slow uptrend line. Looks like a rock-solid bottom.

Silver must meet resistance at 2900c, then 3000c, but the big goal is a higher fan line that crosses today about 3080. Silver Friday closed above its 20 DMA (2839c), today fell a bit below, but rally it will.

You've been given a dramatic and unusually unambiguous signal that silver & gold have posted their lows. Don't waste your opportunity: Buy!

On 4 June 1919 US Marines invaded Costa Rica. One wonders why even an empire as far reaching as the United States would bother poor little Costa Rica. Were they making nuclear bananas? Is it any wonder that nobody south of the Mason-Dixon line trusts Washington, DC?

On 4 June 1943 Juan Peron took part in the military coup that overthrew Ramon Castillo. However, Argentina was to discover that there was something worse than Castillo. On 4 June 1946 Juan Peron was installed as Argentina's president.

On 4 June 1985 the US Supremes upheld a lower court ruling that struck down an Alabama law providing for a daily minute of silence in public schools. I guess the opponents of the silent minute were afraid the students might be engaging in behaviour TOTALLY inappropriate to a public school: thinking.

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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