Everything but the dollar took a beating this week when Moody's announced it was downgrading the credit of 15 megabanks. No, it makes no sense since every fractional reserve bank is always insolvent and these have been rotten since at least 2006 and everybody knows it and government has bailed them out time and again, but WHAT HO! Trouble with the banks! Markets slap themselves on the forehead as if they'd never imagined such a threat to financial stability.

Meanwhile in Europe, where widespread bank insolvency and national government bankruptcies loom, the eurocrats are cooking up yet another "solution" which bandaids about $700 bn onto a, say, $20 trillion problem. Right, that'll work like square wheels on a wagon.

Yet we live in a world where even lemmings, in sufficient numbers, can suffocate you, and we have to deal with it. So let's look at 'em one at a time.

STOCKS broke this week. A slim chance exists they might make one more rise, but that's like drawing to a royal flush when holding the Ace, Queen, Jack, and 10 of spades. Much more pain will follow in stocks. Today's bounce meant nothing.

US DOLLAR flattened today, losing a token 14 basis points to close at 82.256. Dollar has turned up again, which is wreaking havoc elsewhere. Nice Government Men can't want that dollar to appreciate so strongly against the Euro & yen, but what can they do? Well, following the usual pattern, something stupid. Very stupid. Count on that.

Euro lost 0.23% today to $1.2572. Headed to $1.2000 and lower. Yen suffered also, closed 124.35c/Y100, down 0.20%. No strength there.

Gold bounced today after plunging a horrifying 3.4% this week. Closed $1,571.20 today, up $6.70, but that sayeth little. Silver lost 1.3C to end at 2682c.

Long & short is this: If gold doesn't hold $1,525 and silver 2615c, they will drop much further, as low as $1,450 and 2250c. You will know as they unfold next week, because if they intend to continue falling, Monday & Tuesday will be painful days. On the other hand, physical demand at these prices is huge. I nearly didn't write a commentary this evening because I am so washed out from trying to help all the callers. For silver & gold to fall much further, those buyers would have to disappear. However, if metals do fall, expect even more buyers to crawl out of their hiding places.

Nothing significant has changed for those who follow the primary trend. Silver & gold are correcting. So what? They've been correcting since April 2011 & August 2011. Corrections can last up to 18 months. Stop panicking. Has the Federal Reserve stopped inflating? The rest of the world's central banks? Has common sense, honesty, & financial probity suddenly seized the world's leaders and shaken some backbone into them, like a terrier shaking a rat? Sorry, no. And as long as their idiocy, treason, and parasitism continues, silver & gold will remain in a primary trend, and we are following NOT the daily or weekly fluctuations, but the LONG TERM PRIMARY TREND which hath yet years to run

So calm down, throw a steak on the grill, pour yourself something soothing to drink, and enjoy supper with your spouse and family. A hundred years from now you won't remember a bit of this anxiety.

On 22 June 1933 Germany became a one-party country when Hitler banned all parties other than the Nazis. Not very clever, that. Would have been better to call them the Nazi-1 party and the Nazi-2 party, & let them slug it out, call each other names and accuse each other of playing politics, while both supporting the same program. Oh. Wait. That sounds familiar.

Y'all enjoy your weekend!

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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