The Moneychanger
Daily Commentary
Wednesday, 7 November a.d. 2012 Browse the commentary archive

An email arrived in my box early today with the single word "Election" in the subject line. I opened it to read, "Hold on to your seat, Dorothy, because Kansas is going by-by."

To such prophetic genius, what could I possibly add?

Markets are not, contrary to what some economists contend, rational, any more than the people who make them up are rational. Today, for instance, the US dollar index rose and stocks fell on the news that Bernard O'Bama had been re-elected. If people had any foresight, they'd see that O'Bama's policies will gut the dollar, & they'd sell that dog. On the other hand, to the extent that stocks represent underlying real assets, the dollar depreciation will send their price up. Those gains will be illusory, due only to inflation, but they'll probably gain, unless, of course the prospect of another four years of government regulation, ethanol schemes, green pipe dreams, & stimulus packages to nowhere drives stocks down to the earth's core.

I look at the Dow chart & am impelled to burst out the same thing my mother blurted out the first time she visited our log house here, before we renovated it & doubled the size: "I don't think this can be fixed!" Turned out she was wrong, but I believe I am right.

Dow chart is green & puking sick. Dow today dropped 312.95 (2.38%, huge!) to 12,932.73. It sliced through the 200 DMA (12,991.63) like the guillotine through Marie Antoinette's ivory neck. Its jaws of death are eating jaws of death: it has formed a broadening top formation within a broadening top, offering a two-fold witness of its intent.

S&P500 sank 33.85 (2.37%) to 1,394.53. It looks no better than the Dow.

And measured in Gold, stocks broke down emphatically. Look at the chart here: The Dow in gold formed a long-lived diamond, broke down out of it in August, fell like your glasses out of your shirt pocket down a well, caught, rallied a little, then today collapsed through the uptrend line of that little rally, AND traded below the last low. I don't think this can be fixed.

US dollar index jumped up again today, as high as 80.924, nearly that 81 I've been looking for, & is trading now at 80.742, up 11.6 basis points (0.15%). That boosts the buck slightly above its 200 DMA (80.64). Either it will stall here, or clear 81 and head for 82, maybe 81.50. Momentum indicators are headed up, but technical indicators are chancy, chancy when a market is manipulated by central banks.

The euro saw no joy in Comrade Obama's election, socialist as it is. Euro sank through the crucial 62 DMA (127.87) and ended at 127.79, down 0.27%. I don't think this can be fixed, either.

Yen gained 0.53% to 125.09 cents per 100 yen, and appears to have turned up. Oh, not for any big rally, just turned up instead of sinking like an anvil in quicksand. I don't think the yen can be fixed, either.

Watching markets, sometimes things are really hazy. You can peer & peer & simply can't make out any form. The last year or so has been that way. Other times, all the klaxons blow & the bells ring & you'd have to be blind & deaf to miss what's going on. Today was one of those latter days.

Silver & gold danced the same steps today. Both kissed their old support good-bye, both reached new highs. Yes, both closed lower, too, but all lower closes are not equal.

Silver lost 36.8 cents to end at 3165.1. Low came at 3135, which, not coincidentally was it had been stymied climbing up from below, & where it broke out & gapped up on Tuesday. Same holdeth true for gold, but the bottom was our well-known old friend, $1,706.60.

Likely silver & gold have one more leg down in this correction, but that may be truncated. They cannot close below $1,700 & 3135, without demolishing my interpretation.

Both silver & gold pierced their 20 day moving averages (3229c & $1,722.24), so they are trying to break that tripwire for a higher move. Both have successfully pierced & remained above their downtrend lines.

Unless silver & gold gainsay all these up-pointing signs by closing lower, we have a sinewy, scrappy, leather-tough rally in our future.

Stop mooning about not buying Tuesday or Monday at the lows and BUY. Sooner or later you have to take a risk, and the odds just don't get no better than this.

Colorado & Washington voted to legalize marijuana. I find that enlightening. Neither these states nor any others will challenge the federal tyranny on the police state or unconstitutional money or foreign wars or interference in the economy or the liberties of the citizen, or assassinations or torturing prisoners, but that smoking dope, now that's another matter. We'll fight the feds down to our last roach, Buddy! We believe in freedom, after all. Got to get that head right! Wonder what they do when the feds flex their muscles & withhold their highway funds & other subsidies? That'll be fascinating.

I don't think this can be fixed.

Here's a little lagniappe for y'all: Grace Harbor Farms MSM Cream from Grace Harbor International, Custer Washington. (360) 366-4151, Contains goat milk, MSM (methyl sulfonyl methane, a natural source of sulfur), avocado oil, jojoba oil, peppermint oil, rosemary oil, eucalyptus oil, lavender oil, tea tree oil, vitamin E, and Grapefruit Seed Extract. Not only does it have powerful antibiotic & antiseptic properties that will kill dandruff, skin funguses & infections, but it also relieves aching joints. This stuff will make you leap tall buildings at a single bound and not come down till July. Try it. Mark that I have no financial interest in this recommendation. I mention it only because my wife & I are addicted to it, and we do NOT smoke it.

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
7-Nov-12 Price Change % Change
Gold, $/oz 1,713.20 -0.90 -0.05%
Silver, $/oz 31.65 -0.37 -1.15%
Gold/Silver Ratio 54.128 0.594 1.11%
Silver/Gold Ratio 0.0185 -0.0002 -1.10%
Platinum 1,535.50 -18.80 -1.21%
Palladium 509.55 -9.80 -1.89%
S&P 500 1,394.53 -33.86 -2.37%
Dow 12,932.73 -312.95 -2.36%
Dow in GOLD $s 156.05 -3.68 -2.30%
Dow in GOLD oz 7.55 -0.18 -2.30%
Dow in SILVER oz 408.60 -5.08 -1.23%
US Dollar Index 80.74 0.12 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: 1,715.50      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,765.25 1,775.54 1,775.54
1/2 AE 0.50 874.40 903.64 1,807.28
1/4 AE 0.25 437.20 460.40 1,841.59
1/10 AE 0.10 180.02 187.85 1,878.47
Aust. 100 corona 0.98 1,673.13 1,683.53 1,717.54
British sovereign 0.24 403.83 407.83 1,732.49
French 20 franc 0.19 320.28 324.28 1,736.92
Krugerrand 1.00 1,741.23 1,758.23 1,758.23
Maple Leaf 1.00 1,725.50 1,740.50 1,740.50
1/2 Maple Leaf 0.50 849.17 892.06 1,784.12
1/4 Maple Leaf 0.25 424.59 454.61 1,818.43
1/10 Maple Leaf 0.10 169.83 185.27 1,852.74
Mexican 50 peso 1.21 2,051.66 2,068.66 1,715.73
.9999 bar 1.00 1,721.50 1,732.50 1,732.50
SPOT SILVER: 31.77      
SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 30,500.00 32,500.00 42.48
VG+ Peace dollar 0.77 30,000.00 32,000.00 41.83
90% silver coin bags 0.72 22,715.55 22,965.55 32.12
US 40% silver 1/2s 0.30 9,180.40 9,380.40 31.80
100 oz .999 bar 100.00 3,169.00 3,217.00 32.17
10 oz .999 bar 10.00 322.70 325.20 32.52
1 oz .999 round 1.00 31.62 32.32 32.32
Am Eagle, 200 oz Min 1.00 33.27 33.97 33.97
SPOT PLATINUM: 1,535.50      
Plat. Platypus 1.00 1,545.50 1,585.50 1,585.50
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.