"Boom! Boom" went Bandit Ben's blarney cannon.

"Buy! Buy!" Sang every stock broker & yes-man.

Why should a central banker ever act

When blarney does all, with much more tact?

Clearly, the markets suffer from a massive overpopulation of bean-brains who believe that inflation helps economies. These people are so bedumbed that they would vote for Obama or Romney. Well, it's an ill bean-brain that bestows no good, and this one does, on silver & gold. In fact, exactly the persistence of this stupidity makes them profitable for us.

Ben's bloviation was, as expected, a collection of self-evident bromides. Apparently what got everybody's juices a-flow was this jawbreaker,

"Taking due account of the uncertainties and limits of its policy tools, the Federal Reserve will provide additional policy accommodation as needed to promote a stronger economic recovery and sustained improvement in labor market conditions in a context of price stability."

It jes' sings, don't it?

For you engineers, you'll note that he doesn't say a blessed word about what he actually intends to do. OF COURSE the Fed will "provide additional policy accommodation" [translation: "inflate more"] because that's what the Fed was created to do, inflate. Don't hydrophobic skunks bite?

But Bernanke's rule, like Lenin's, is "Tell 'em what they want to hear." Talk, and you don't have to act.

'Twas enough to suck the life out of the US dollar index. It lost 50.1 basis points or 0.64% to 81.217, back down to that last big low at 81.16 (June). One would expect -- we will see next week -- big follow-through to lower prices. 200 DMA stands near, at 80.60.

My suspicion is that Bernanke & his accomplice malefactors have decided to take the dollar lower to take heat off Europe. A lot lower. But even if they haven't, they certainly will take it lower by more inflating. You can bet BIG money on that outcome.

Euro poked its scabby head through $1.2600 resistance but couldn't clear the mark. Rose 0.60% to $1.2583. If that really is an upside down head & shoulders on the chart, it could rise to $1.3200.

Yen in fact did close above its downtrend resistance, up 0.47% at 127.77c (y76.27). Both the yen & euro show signs of climbing much higher.

Ben's blarney cannon saved stocks from the deep abyss they were leaning over. Dow shot up 90.13 (0.95%) to 13,090.84. S&P500 gained 0.51% (7.1) to close at 1,406.58. As Steve Saville of The Speculative Investor noted recently, stocks have nothing to do with economic performance anymore, they become a casino where you can bet on what policy makers might do.

Today was one of the most exciting days I've ever experienced in gold and silver, & one of the plainest.

I glanced at the screen early and gold had dropped to $1,644. Uh, oh! I thought, that's the very bottom of that flag -- better catch soon or the fall will be shattering. Next I looked, after Bandit Ben fired the Blarney blast at 10:00, gold had shot up to $1,674. I looked at a five minute chart, & have never seen a chart that plain. Breakaway gap at $1,658, then another above at $1,674, then another later at $1,677. It closed at $1,684.60, up $31.10, & in the aftermarket has traded up to $1,692.50.

Y'all believe me now about that flag formation? Expect this rascal to run to $1,740 before it ever pauses to breathe.

If you can put up with the awful lows from manic-depressive silver, you sure can have some fun when it gets high. Today silver acted just like gold, only more so. Didn't gap as much, but OH! It climbed straight up, 100.3c to end at 3137c and a new high for the move.

Did I mention that flag on the silver chart? Friends, silver plumb validated that today. Silver is targeting 3445c [sic] before this move ends.

Remember that silver's Great Hurdle in escaping a correction is to rise above the 300 DMA, now at 3253c.

I do not discount as impossible a rise clean to $1,740 & 3445c followed by a severe retracement, but seems far less likely now. Why? Because BOTH have cleared their downtrend lines from the 2011 highs. Look for more expensive silver & gold next week.

Folks, the next big move has begun. Buy, just buy.

On 31 August 1521 the Spanish conquistador Hernan Cortes captured the Aztec capital of Tenochtitlan, Mexico and set it afire. Before you moan too much about that, you might remember that Cortes' staunch allies were the Indian nations the Aztecs had conquered, levying (among other tribute) thousands of captives yearly as human sacrifices. For some odd reason, people who pour out waves of blood in human sacrifice don't earn much of my sympathy. I'm weird that way. Most of us in Tennessee are.

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

This is not an offer to buy or sell. Prices subject to change without notice. To enter an order, call us at (888) 218-9226 or (931) 766-6066. Sorry, no sales to Tennessee.

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