The Moneychanger
Daily Commentary
Tuesday, 20 November a.d. 2012 Browse the commentary archive

Here's what I like about doing business with the yankee government: they change the rules on you whenever they like, and are always happy to stab you in the back without shame or apology.

We send out lots of insured packages through the postal monopoly, USPS, nor is this an inexpensive service. They lost a package valued at $1,000, but before our claim was processed, they sua sponte changed the rules: we will no longer pay insured mail claims against silver, gold, or currency. We found out when we got a check for $16.95, which was, you guessed it, the postage on the package. They kept our thousand bucks.

That's another reason I keep on telling y'all that it makes no sense to belong to any partnership with the yankee government, like an IRA. Give ear: Ownership has two parts, Title & Control. In your IRA-government partnership, you have Title (a legal claim) while the yankee government has Control (possession). It's like lunchtime in California when you own Title to a Big Mac, but it's stored in New Jersey.

What will you do when the yankee government changes the rules & says the only thing your IRA can buy is US gummit bonds? They got you, and your money.

Me, if I own a Big Mac, I'm sure gonna take delivery, at the window, soon as I put my money down.

But mercy! What do I know? I'm just a natural born fool from Tennessee where people are so ignerunt & ole-fashioned they still keep their word & even expect other folks to as well. Most of us have a hand-shake stronger & surer than any contract any lawyer living or dead ever devised.

Currencies: US$1 = Y81.69=E0.7802=0.03037 oz silver= 0.00058 oz. gold.

US dollar index vacillated up & down today, but right now is trading 3.5 basis points higher than yesterday, although it's been lower. Just looks like its stubbornly resisting any further decline. Fell yesterday to near the bottom channel boundary, & near the 200 DMA (80.72), but hasn't penetrated them yet.

Yen took another tumble today, down 0.36% to Y122.42, & looks like the Nice Government Men have pushed it off the cliff again.

Euro rallied 0.26%, second day running, to $1.2817. Sitting plumb on the 200 DMA. Might rally further, though WHY will remain a mystery as deep to me as the purpose of ballet.

You won't catch me bad-mouthing stocks today because they were a bit tired and confused. Some indices rose, some fell. Dow lost 7.45 to 12,788.51, while the S&P500 added 0.92 to 1,387.81. Dow must continue to climb or risk judgment that yesterday's rally was a fluke.

Use any rally as a heaven-sent opportunity to sell stock and put the proceeds into silver & gold.

Awww, silver & gold backed off a little today, probably because all them pointy-toed shoe wearing New York traders flattened their positions before the long weekend. While the cat's away, the rats come out. A thin market tomorrow and Friday gives the few floor traders present -- and the Nice Government Men at a distance -- room to try to frighten the lily-livered by shaking down the silver & gold markets. Don't matter, that old dog won't hunt.

Gold today lost $10.80 to plump back on the $1,725 - 1,720 support. Silver closed down 23.8 cents at 3292.3c.

Plumb suspicious that in the aftermarket gold is trading $4 higher and silver 23.2 cents higher. Makes a wild-eyed paranoid conspiracy theorist like me wonder if they didn't paint the tape on the close. (Whoops! I wasn't supposed to let that slip out, no more'n I'm supposed to tell the truth about the yankee government.)

None of that matters. Support for gold & silver remains intact, indeed, unchallenged. Gold could drop as low as $1,705 & silver to 3180c before any question would poke up its head. Lows today were $1,722.20 and 3266c.

I'm going to be celebrating Thanksgiving by -- oddly enough -- giving hearty thanks & praise to God for blessings greater than I can carry home & more than I can possibly count. Thus I will not be sending y'all a commentary on Wednesday or Friday. God willing, I will return on Monday, 26 November, cantankerous, stubborn, suspicious, narrow-minded, & laughing laughing hard as ever. Y'all enjoy your holiday.

No whit of my outlook changed today. A monstrous, colossal rally in silver & gold hath begun that will endure two years or more. Buy, and use any decline to buy more.

And if that ain't right, complain to Ben Bernanke.

On 20 November 2012 Kentucky's Confederate government filed a secession ordinance. Unfortunately, Kentucky was already occupied by an invading foreign army.

MILESTONES OF AMERICAN CULINARY ACHIEVEMENT: On 20 November 1984 McDonald's made its 50 billionth hamburger. Supersize me! No, no, make mine carrot juice!

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

— Franklin Sanders, The Moneychanger

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Market Snapshot See more charts and market data
20-Nov-12 Price Change % Change
Gold, $/oz 1,723.20 -10.80 -0.62%
Silver, $/oz 32.92 -0.26 -0.78%
Gold/Silver Ratio 52.340 0.081 0.16%
Silver/Gold Ratio 0.0191 -0.0000 -0.16%
Platinum 1,570.50 -10.50 -0.66%
Palladium 637.75 -6.85 -1.06%
S&P 500 1,387.81 0.92 0.07%
Dow 12,788.51 -7.45 -0.06%
Dow in GOLD $s 153.41 0.88 0.58%
Dow in GOLD oz 7.42 0.04 0.58%
Dow in SILVER oz 388.44 2.80 0.72%
US Dollar Index 80.89 0.04 0.05%
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SPOT GOLD: 1,727.10      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,777.19 1,787.55 1,787.55
1/2 AE 0.50 880.31 909.75 1,819.50
1/4 AE 0.25 440.16 463.51 1,854.04
1/10 AE 0.10 181.24 189.12 1,891.17
Aust. 100 corona 0.98 1,684.44 1,694.90 1,729.14
British sovereign 0.24 406.56 410.56 1,744.09
French 20 franc 0.19 322.45 326.45 1,748.52
Krugerrand 1.00 1,753.01 1,768.01 1,768.01
Maple Leaf 1.00 1,737.10 1,752.10 1,752.10
1/2 Maple Leaf 0.50 854.91 898.09 1,796.18
1/4 Maple Leaf 0.25 427.46 457.68 1,830.73
1/10 Maple Leaf 0.10 170.98 186.53 1,865.27
Mexican 50 peso 1.21 2,065.53 2,082.53 1,727.24
.9999 bar 1.00 1,733.14 1,744.14 1,744.14
SPOT SILVER: 33.16      
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 23,705.83 23,955.83 33.50
US 40% silver 1/2s 0.30 9,588.98 9,788.98 33.18
100 oz .999 bar 100.00 3,307.50 3,355.50 33.56
10 oz .999 bar 10.00 336.55 339.05 33.91
1 oz .999 round 1.00 33.01 33.71 33.71
Am Eagle, 200 oz Min 1.00 34.66 35.36 35.36
SPOT PLATINUM: 1,570.50      
Plat. Platypus 1.00 1,580.50 1,620.50 1,620.50
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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.

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