The Moneychanger
Daily Commentary
Thursday, 6 September a.d. 2012 Browse the commentary archive

What would y'all think of a doctor who visited your house (y'all can tell this is a fairy tale already, can't you?) when your child had a temperature of 101º F. and recommended you pack the child in ice to lower that temp down to 89º F. ? That way, he says, "he won't be sick any longer."

Y'all all know that lowering a sick person's temperature way below what's normal does NOT constitute a cure. Yet Central Banking Criminal Dr. Draghi announces that he, like Dr. Ben Bernanke, will cure the sick patient by holding down his temperature. This is what it means to suppress interest rates in a sick economy: it only makes the patient sicker, & might even kill him.

It's worse than that. The European Stability Mechanism, the garbage can into which all the rotten bonds will be cast, will directly buy the bonds from countries in trouble, like Spain, Italy, & Greece. Now I'm just a natural born fool from Tennessee so subtleties are lost on me. Maybe y'all can explain to me exactly how this differs from outright monetizing government debt? This is what the German constitution forbids, remembering the Weimar hyperinflation when the Central Bank directly monetized government debt. This is the issue the German Constitutional court addresses on 12 September, but shucks! Constitutions don't mean nothing nowadays. When politics demand, judges yield, and so does law.

And remember, when Draghi says, "The euro is irreversible," you are hearing the feckless Pop-Pop! of the Blarney Cannon. Nothing in this sublunary world of mutability is irreversible. Nothing. Only rule here is, "Everything changes, all the time."

Once again today we saw the wisdom of the proverb, "Buy the rumor, sell the news." Draghi's Big announcement caused nothing more than a little mouse burp in the market. US dollar index fell 19.1 basis points (0.25%), but fell not through rugged resistance at 81.00. Japanese Nice Government Men took this opportunity to trash the Yen. It fell 0.62%, through its 20 & 50 day moving averages to 126.77c (y78.88). Euro rose only 0.25%, not much of a move & pretty wobbly on the chart. Barely poked its head through $1.2600 resistance to close at $1.2635.

My, O, My! Lots o' joy in Stockville today! After all, lots more inflation will help the economy -- won't it? Yes, sweetheart, just shortly after hell freezes over solid.

Dow gained 244.52 (1.87%) to close at 13,292, just below the August intraday high at 13,330.76 and the May high at 13,338.66. S&P500 actually exceeded its August & may high. It gained 15.51 (2.04%) to 1,432.12.

Don't sell the farm to buy stocks just yet. When measured in gold, today's stocks closes are 7.5% below this years highs. Stocks will NOT outperform gold any time soon.

Gold crossed above $1,700 today, rising $11.80 to $1,702.60. I remind y'all, for an object lesson in the potential speed of gold moves, that 14 days ago only gold crossed above $1,600.

Gold standeth now above its 20, 50, 150 (key long term moving average), and 200 DMAs. Gold left the 200 way back there at $1,645.79.

Gold is still targeting $1,740 for this move. Watch for a reaction after that when you can buy, buy, buy. Bottom of that first correction after a market begins moving up is the safest place to buy always. Not always the most profitable, but the safest.

Silver skipped 34.7 cents to end at 3261.9c. High came at 3298c as silver challenged the next milestone, 3300c.

Day by day the gold/silver ratio keeps on dropping. as silver outperforms gold. It has dropped from the summer highs (and highs for the move) at 59+ to 52.197 today, and left two gaps down along the way. 200 DMA now stands at 54.34. Doesn't have much more downside in it before a reaction will start that will take it at least to 54. If you have not yet swapped gold for silver, that will be your last change. This move will target something below 30:1.

My thanks to all you readers from Canada, Australia, New Zealand, Saudi Arabia, Thailand, and the US who have ordered my new book, At Home in Dogwood Mudhole. I deeply appreciate your confidence.

Now some of y'all are still sitting on the fence. I'll tell you what. If the chapters "Pig Persuader" & "No Green Acres" don't make you laugh out loud at least once, or gasp in frightened horror when the horses run away with Justin and Zach, stowed away on the back of the wagon, learns to pray, I will refund your purchase price. I have not made up one single incident in Volume I (or II or II, for that matter). It's all true, it all happened right here in Tennessee on the Top of the World Farm.

Here's the deal: you can make a pre-publication order at and save the $5 shipping AND get an autographed copy. At Home in Dogwood Mudhole is 400 pages with maps and pictures, and it's more fun that you've had in a long, long time.

On this day in 1757 was born Marie Joseph Paul Yves Roche Gilbert du Motier, Marquis de LaFayette was born. He was sent with the French royalist forces to aid the American Revolution, then was later nearly killed by the French Revolution. He returned to this country in the 1820s to a hero's welcome.

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

— Franklin Sanders, The Moneychanger

Your source for gold and silver. Read our latest reviews and testimonials.
Market Snapshot See more charts and market data
6-Sep-12 Price Change % Change
Gold, $/oz 1,702.60 11.80 0.70%
Silver, $/oz 32.62 0.35 1.08%
Gold/Silver Ratio 52.197 -0.196 -0.37%
Silver/Gold Ratio 0.0192 0.0001 0.37%
Platinum 1,585.40 10.80 0.69%
Palladium 647.00 0.85 0.13%
S&P 500 1,432.12 1,551.00 -1304.68%
Dow 13,929.00 244.52 1.79%
Dow in GOLD $s 169.12 1.83 1.09%
Dow in GOLD oz 8.18 0.09 1.09%
Dow in SILVER oz 427.02 2.99 0.70%
US Dollar Index 81.23 -0.11 -0.14%
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: 1,701.60      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,745.84 1,760.84 1,760.84
1/2 AE 0.50 867.31 893.34 1,786.68
1/4 AE 0.25 437.90 450.92 1,803.70
1/10 AE 0.10 180.26 184.62 1,846.24
Aust. 100 corona 0.98 1,659.57 1,669.91 1,703.64
British sovereign 0.24 400.56 407.56 1,731.34
French 20 franc 0.19 317.69 324.69 1,739.09
Krugerrand 1.00 1,715.21 1,730.21 1,730.21
Maple Leaf 1.00 1,711.60 1,731.60 1,731.60
1/2 Maple Leaf 0.50 842.29 884.83 1,769.66
1/4 Maple Leaf 0.25 421.15 450.92 1,803.70
1/10 Maple Leaf 0.10 168.46 183.77 1,837.73
Mexican 50 peso 1.21 2,035.04 2,052.04 1,701.95
.9999 bar 1.00 1,707.56 1,718.56 1,718.56
SPOT SILVER: 32.63      
SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 26,000.00 27,750.00 36.27
VG+ Peace dollar 0.77 25,000.00 27,500.00 35.95
90% silver coin bags 0.72 23,040.88 23,290.88 32.57
US 40% silver 1/2s 0.30 9,152.38 9,327.38 31.62
100 oz .999 bar 100.00 3,262.50 3,312.50 33.13
10 oz .999 bar 10.00 331.25 333.75 33.38
1 oz .999 round 1.00 32.48 33.33 33.33
Am Eagle, 200 oz Min 1.00 34.23 34.88 34.88
SPOT PLATINUM: 1,585.40      
Plat. Platypus 1.00 1,610.40 1,650.40 1,650.40
Home Questions & Answers Articles & Resources
The Moneychanger, P.O. Box 178, Westpoint, TN 38486

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.

For complete details on how to buy from us or sell to us, please click here.