Looks like the Japanese Nice Government Men got plenty fed up with trying to run an export-led economy with a rising currency. It dropped 0.789% today to 125.12 cents per hundred yen, gapping down.

The euro rose 0.29% today to $1.3060. Odd, since the US dollar index ALSO rose, 0.06% (4.5 basis points) to 79.611. That puts currencies at US$1 = Y79.92=E0.7657.

Critical point to note is that the US Dollar Index stayed above the 79.40 lip of that rounding bottom it left last week, which positions it to rally. Yes, I know I'm anticipating, but nothing else would catch the market with more surprise. Dollar is blocked by 79.68, so watch it to break through that number.

Oh, mercy! There's a Federal Open Market Committee this week. No telling how much damage those goofs will do this time.

For stocks the day just deteriorated as it wore on. sinking deeper and deeper. About 3:30 p.m. "friends" (Wink! Wink! Nice Government Men on the Plunge Protection Team) entered the market to buy enough to bring the Dow & S&P500 up to "higher by a gnat's eyebrow." Dow gained -- hold your breath! -- 2.23 to close 13,345.74. S&P500 won 0.57 to 1,433.76.

Stocks are in a parlous position. Dow today, trading BELOW its 50 DMA (13,355.6) reached down & touched the support line formed by the March thru May head & shoulder's neckline. Below that lies about the same support as what stands under you when your 747 Jumbo Jet is flying at 25,000 feet.

Gold traded in a narrow range today between $1,721.20 & $1,728.80, closing higher $2.30 at $1,725.10. Silver eased 15.4 cents higher to 3222.7c in a narrow range from 3240.8c to 3203c.

On both metals' charts they merely bumped up against the downtrend line today. This changeth naught. To reverse this downtrend gold needs to close above above $1,740. Otherwise we will see lower prices still.

In the thrilling world of bank supervision, not much happens. Last year, however, the exciting fellows charged with structuring the Basel III requirements for banks proposed moving gold from a Tier 3 to a Tier 1 asset on the same footing with cash. US Federal Reserve in June circulated a memo to banks asking what they thought about that. Far as I know, this hasn't been put into effect yet in the US, but clearly it would bring gold back into the monetary system through the back door.

A friend wrote in response to my Friday remarks about the trend of de-centralization taking over the world. He objected to my claim that young people had already adopted a decentralizing mind, pointing to the Occupy people & others. First, there aren't many of them, but second, when the Great Central Power fails to come through with a cushy lifetime sinecure that recognizes their self-assessed worth, they will not be happy. Government failure to deliver on its promises will sour millions of centralization's partisans. When they have to root, hog, or die, they'll change their minds pretty fast.

I have to travel down to Florida this week. It's a rotten assignment, but somebody has to do it. I will try to send daily commentaries most days, but don't be surprised if my sunburn intervenes one of those days. I appreciate y'all's forgiving indulgence.

Y'all test how much hope you still place in politics: don't watch the presidential debate tonight. Do something meaningful instead, like re-arranging your sock drawer.

On 22 October 1836 Sam Houston was inaugurated the first elected president of the Texas Republic.

On 22 October 1844 followers of Judge Miller donned white robes and went out on a New York hillside to await the Second Coming which Miller had predicted. Miller was no better at these predictions than Harold Camping. Since they're specifically forbidden (Acts 1:7), you wonder why these people keep on making these prophecies.

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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