I reckon there are worse things than being a natural born fool from Tennessee, and surely one of 'em is being that sort of fool who believes government promises. I'm foolish, but I ain't THAT foolish.

MF Global turned keel up and took a billion dollars in client money down with it, & the CEO (Criminal Entwined with Obama) Jon Corzine walked off scot-free. That ought to have told even the hard-boiledest fool that all the government promises of regulating & overseeing markets and -- har-de-har-har! -- justice and even trustworthy markets had all been shattered forever & ever. Well, not many months later and a few days ago Peregrine Financial Group turned keel up, and the same tricks are suspected.

Where were the regulators? Where the CFTC overseers? The SEC? Quis custodiet custodes ipsos? All the custodes had gone for a nap, it seems.

Y'all, this fundamentally alters the entire map. If markets & brokerages themselves cannot be trusted, the North Pole has shifted & y'all had better shift for yourselves, & stop falling for those government promises like a bunch of gullible tourists from up North.

The FOMC released minutes of its June meeting & those showed growing sentiment for printing more money to "stimulate" (read: "ruin") the economy. That ought to have sent the dollar down & stocks up, one might surmise, but not so. The 83.50 mark once again contained the US dollar index, which rose today only 9.3 basis points to 83.494.

Ahh, a pretty picture, the 24 hour chart! Dollar breaks out upside about 10:00 a.m., gets slammed about 11:15, bounces up again as high as 83.61, but does a breakout through support attract any buyers? Not by the hair on the Nice Government Men's chinny-chin-chin! Nay, it closed down below the symbolic 83.50.

The suspicious observer can only surmise that the dollar must be contained lest the euro fall utterly & suddenly to complete worthlessness. Once again today the euro made a new low, $1.2213 and closed down 0.13% at $1.2237. All this has the feel of last summer when the euro crisis smoldered steadily on but never quite burst into flame.

Yen waxed impertinent today and rose above 126 cent resistance, only to have its jaws slapped. Ended down 0.41% at 125.49c/Y100 (Y79.69/US$1).

Stocks found no comfort in the widely bruited suspicion the Fed draweth nigher to speedier inflation. Dow lost 48.59 (0.38%) and closed at 12,604.53. That's below the neckline of the Head & Shoulders Top formed March - May, below the 20 day moving average (12,708) & the 50 DMA (12,655.70). All this signals lower prices. A close below 12,450 puts the petal to the metal downside.

The S&P500 has never rallied over the neckline of its H&S, only up to it. It closed today nearly unchanged, down 0.02 at 1,341.45, barely below the 20 DMA (1,343) and barely above the 50 DMA (1,336). Hark! The winds from the future blow the sounds of weeping, wailing, & gnashing teeth.

For gold 'twas another day of the Mysterious Big Jiggle, where a climbing gold market is suddenly smacked with huge selling. No matter, gold's low came at $1,567.30 and it closed the day on Comex down $4.10 at $1,575.20. No matter, it remains within the confines of that even-sided triangle. Frustration, thy name is triangle.

Silver gainsaid gold's drop by rising 14.4 cents to 2699.5, a number one-half a symbolic cent below 2700c. Generally silver trend up from yesterday, with a low at 2684.1c but a high at 2725c. It's on the low side of the Bollinger Bands, but other than today's little rise, gives little sign of chafing at its low estate or planning a sudden rally. About the time I become complacent is when something big happens, I remind myself.

Today's action changes nothing. Silver & gold are still working through a correction off last year's highs, and stand smack in the midst of usual seasonal lows and weakness. I do not expect we will see prices lower than already witnessed. Premiums on physical silver point to very strong demand, whether that is showing up in the paper price or not.

On 11 July 1754 was born one of history's most famous prudes, Thomas Bowdler. To make Shakespeare cleaner, in 1807 he published The Family Shakespeare, which censored all Shakespeare's "bad" spots. In Hamlet, Ophelia's suicide becomes an accidental drowning, and Lady Macbeth cries not to her murder-reddened hand, "Out, damned spot!" but "Out, crimson spot!" (I feel edified & purified just reading that.) Bowdler's name has passed into the English language in the verb "bowdlerize," meaning to censor in a philistine, prudish, and self-righteous manner.

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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