England has no kidney bank, but it does have a Liverpool. I'm sending you this weekly summary early this week, because tomorrow I will be busy with the Transformations & Renewals Conference. God willing, I will return Monday, having enjoyed an enlightening & uplifting weekend. The weekly scoreboard always tells the tale. First, confusion abounds. Markets that should move together show mixed & contradictory closes, e.g., Dow down and S&P500 up, gold up, silver down. However, all these closed lower this week: gold, silver, platinum, palladium, the Dow, and the S&P500. On that board, only the dollar rose this week, & that grudgingly. Seems obvious that investors are wary of committing themselves before the election, although whether Peter Pan or Tinkerbelle is elected, it won't make any difference in anything, except the rate at which we are fleeced & enslaved. Yesterday morning on National Proletarian Radio, the Voice of International Socialism & Stupidity, I heard some college students interviewed about the election. I pass over in silence exactly how much deep judgment a 21 year old can have, and get to the point. One girl said she was voting for Romney because he could create jobs. Could y'all hear me groan? You cannot have an intelligent conversation with a person who believes that politicians create jobs. They simply don't know enough to form the words. PRODUCERS create jobs, governments consume resources. Any money government spends must by inflating or taxing come first from producers, curtailing their resources, causing them to consume less, and, obviously, employ fewer workers. Maybe the government is putting something in the water that makes people believe stupid ideas really will work: stupidium, the last and dumbest element. At the moment the big question overhanging the market is whether the US dollar index is down for the count or intending to rally. It has twice sought to break through 80, with wretched impotence. Today it held on above its 20 DMA, so technically remains pointed up. Dollar is battling its downtrend line from July, & should it conquer, will run to the 200 DMA at 80.70, or even to 81. This will spook stock & metals investors the way a green dog spooks quail in an open field. (He doesn't know to stop and point at 'em.) To maintain upward momentum the US dollar index must remain above 79.50. US1.00 = E0.7737 = Y78.33. Euro closed up 0.46% at $1.2925 but beneath its $1.2958 20 DMA. Has failed to breach that downtrend line & advance. Looks mighty poorly, kinda green around the gills. Yen closed 127.67 cents, down 0.18%. Every bit as flakey as the euro. Stocks have reached the Fish or Cut Bait crossroads. If the Dow closes below 13,300 (50 DMA is 13,326) it will fly like your seven-year old trying his batman cape off the garage roof. Dow today dropped 18.58 (0.14%) to 13,326.39 while the gainsaying S&P500 rose 0.28 to 1,432.84. Both the Dow & S&P500 have fallen down from their rising wedges & unless they can catch their balance & rise, a fall yet huger awaits. Let's think first about the Gold/Silver Ratio before we talk silver & gold. Today's ratio closed at 51.953, near the top of the last month and a half's range. Above, between 53.5 and 54 is a gap the ratio left on the way down. More, the 50 DMA stands at 53.74 and the 200 DMA at 54.05, & both are likely targets for an upside correction. Odds here favor a rise to 54. Remember that a rising ratio means falling gold & silver, & vice versa. Gold closed up $5.60 to $1,768.80 while silver gainsaid with a lower close, down 2.7 cents to 3404.6. Both silver & gold have traced out broadening tops formations punctuated by a double top. This might instead prove to be a consolidation formation, it's true, but until gainsaid, gravity has control. Gold must sling its leg over $1,800 & step out smartly to contradict this broadening top view. Down below, if it breaks the last low ($1,738) it will probe beneath down to $1,700 or $1,650. Silver has double tops about 3544c, and a hammock beneath at about 3350c. Targets if it falls out of that hammock are 3100c and 3200c. Instead of whining & griping, let loose that smile & thank Heaven for the opportunity to buy silver & gold at reduced prices before they launch moonward. Here's an example why I don't worry too much about short term timing. Customer reminded me today he had bought in August 2008 at $805 gold and $14.15 silver. After August 2008 both nosedived, silver down to $8.80 and gold to $705. Owch! We're ruined! Not quite. As of today, that silver had gained 123% (was 2.23 times what he paid for it) and the gold had gained 108% (was 2.08 times cost). Looking from here, that temporary spasm of bad timing doesn't look so bad after all. On this day in 1884 was born Eleanor Roosevelt, wife of President Franklin D Roosevelt. Not everybody loved her. When she died, Westbrook Pegler wrote that "Thousands came. Some to mourn, but most to make sure." Whoopie! The digital versions of At Home In Dogwood Mudhole are ready. Hard copies won't be here until 26 October, but if you want to purchase AHIDM in PDF, Kindle, or e-Book format for $16.95, you can order at http://store.the-moneychanger.com/products/at-home-in-dogwood-mudhole-vol1 Sorry, I've worn out two pencils and a fountain pen trying to figure out how to autograph those digital versions, but it's licked me. I can't do it. And once y'all order & have a chance to read a little, let me know what you think. If it doesn't make you gasp, laugh, cry, or jump up and down (or all at once), I'll refund your electrons. Y'all enjoy your weekend.
Argentum et aurum comparanda sunt —
Silver and gold must be bought.
— Franklin Sanders, The Moneychanger
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