The Moneychanger
Daily Commentary
Tuesday, 11 December a.d. 2012 Browse the commentary archive

A late friend of mine, God rest his soul, used to look at the news and ask, "Is it real, or Memorex?" Are you seeing what you seem to see, or is it all a set-up painted & played by government agencies & "intelligence" services. Just so I notice that the US Department of [In]justice is presently squeezing HSBC Bank. Now most likely neither of these parties are the sort you'd want living next to you, but one wonders how HSBC could have been laundering the accused zillions all these years without DoJ ever sniffing a clue.

Is it real, or Memorex? Is it the money-laundering, or did HSBC merely cross somebody powerful & need to be taught a lesson? Did somebody miss his cut?

Same question arises about Generals Petraeus & Allen. How come when Teddy Kennedy womanizes it's no big deal, but the whole green Army & government & even the FBI (does not stand for Female Bureau of Investigation) suddenly goes all foamy-mouth about what couldn't have been much secret. Maybe there's another reason to get rid of them?

Think about it: easiest way to ruin somebody would be to plant child porn in his trunk, then call the cops on him. Never mind that they man has the integrity of an oak tree, once that hits the headlines every friend he ever had & most of his kin will smell the "smoke" and run away like scalded dogs, leaving him to hang unassisted, easy prey for the government.

But is it real, or Memorex?

Nasty US dollar index today lost a weighty 26.1 basis points (0.34%) to end at 80.067, barely hanging on above the morale bruising 80 level. Scabby dollar has spent its fuel, but is hovering today, awaiting news from tomorrow's meeting of the FOMC (Fiends Opposed to Monetary Character). I've given up on trying to figure out how markets will react to anything the Fed or its cancerous committees do. Whatever they do, other than shut and bolt the doors & go out of business, will HURT the dollar long term.

Tomorrow's question hinges on whether the Fed will continue "Operation Twist" whereby the Fed obstructs, hamstrings, hampers, hinders, hobble, and handcuffs the real economy by suppressing long term interest rates AND continuing to misdirect capital away from truly profitable & useful undertakings. Let me predict that in some transmogrification or other, they will, because the only other answer -- stop digging the hole deeper -- will never occur to their control-starved brains & Size 1 consciences. (Sizes 1 through 18 consciences fit ringworm fungus, the larger single-celled animalcules, some bacteria, cockroaches, mealy bugs, most worms, planaria, tapeworms & other internal parasites, all the way up to earwigs, ticks, chiggers, leeches, & lamprey eels. Most mammalian consciences are Size 80 or larger.)

Euro rose 0.5% today to $1.3005, Yen fell 0.2% to 121.20c/Y100.

US4=Y82.51=E0.7689=0.030 357 oz Ag= 0.000 585 oz Au.

Stocks bumped up today, apparently expecting good news from the Friends Of Monetary Corruption. Dow gained 78.56 (0.6%) to 13,248.44 (I told y'all, 13,300 is coming). S&P500 added 9.29 (0.65%) to 1,427.84.

Only question left in what passes for my brain is whether the Dow will drop like a poleaxed steer from 13,300 or race on up to pull in as many poor victims as possible. I hope y'all tie yourselves to the mast & refuse to harken to the Sirens' song.

Silver & gold had a punk day. Silver forked over 35.9 cents to close at 3294.1c while gold gave back $4.80 to $1,708.20.

Here, too, markets are holding their breath waiting for tomorrow. After rising from last Thursday, gold peaked yesterday at $1,716.74 & traded sideways today between $1,714.30 & $1,705.45. That $1,705 support is still gold's line in the sand. Cross that & drop a long ways. Up above the barrier is $1,725. Cross that & rise a long piece.

Silver's low today at 3275c looks feisty, but it's still holding breath. Silver is caught in a range like gold: must hold 3250c, must better 3340c. Meanwhile we wait.

Don't misread all this. You are watching the tail-end of a silver & gold correction. Whether by month end or next month, both will come roaring up out of this hole, launching skyward like an Intercontinental Ballistic Missile out of a Nebraska silo. If you have none, you'd better be buying some. If you have some, you'd better be planning to buy more.

Fomenting the greatest hoax in history since the income tax, on 11 December 1997 more than 150 countries agreed to control the Earth's greenhouse gasses in the Kyoto conference on global warming. At the same time they voted to provide $42 billion to feed homeless leprechauns. (Just joking. It was only $32 billion.)


My friend Nick Laird of has a genius for creating charts. Go to and check out the "Free Charts" for a mere taste of Nick's expertise. While you're there look at the chart he calls "GoldeWave," which shows his Elliott Wave count for gold's future. You'll gasp. And while you're there looking around with amazement, ponder not only the free charts but consider subscribing, too.

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
11-Dec-12 Price Change % Change
Gold, $/oz 1,709.80 -4.80 -0.28%
Silver, $/oz 32.94 -0.36 -1.08%
Gold/Silver Ratio 51.905 0.415 0.81%
Silver/Gold Ratio 0.0193 -0.0002 -0.80%
Platinum 1,638.50 16.70 1.03%
Palladium 695.30 -7.95 -1.13%
S&P 500 1,427.84 9.29 0.65%
Dow 13,248.44 78.56 0.60%
Dow in GOLD $s 160.33 1.41 0.89%
Dow in GOLD oz 7.76 0.07 0.89%
Dow in SILVER oz 402.19 6.70 1.69%
US Dollar Index 80.07 -0.26 -0.32%
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SPOT GOLD: 1,709.80      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,761.09 1,769.64 1,769.64
1/2 AE 0.50 871.49 897.65 1,795.29
1/4 AE 0.25 440.02 453.10 1,812.39
1/10 AE 0.10 181.13 185.51 1,855.13
Aust. 100 corona 0.98 1,667.57 1,677.95 1,711.84
British sovereign 0.24 402.49 406.49 1,726.79
French 20 franc 0.19 319.22 323.22 1,731.22
Krugerrand 1.00 1,733.74 1,748.74 1,748.74
Maple Leaf 1.00 1,719.80 1,739.80 1,739.80
1/2 Maple Leaf 0.50 846.35 889.10 1,778.19
1/4 Maple Leaf 0.25 423.18 453.10 1,812.39
1/10 Maple Leaf 0.10 169.27 184.66 1,846.58
Mexican 50 peso 1.21 2,044.84 2,061.84 1,710.08
.9999 bar 1.00 1,715.78 1,726.78 1,726.78
SPOT SILVER: 32.95      
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 23,416.25 23,666.25 33.10
US 40% silver 1/2s 0.30 9,528.50 9,703.50 32.89
100 oz .999 bar 100.00 3,295.00 3,345.00 33.45
10 oz .999 bar 10.00 334.50 337.00 33.70
1 oz .999 round 1.00 32.80 33.65 33.65
Am Eagle, 200 oz Min 1.00 34.55 35.20 35.20
SPOT PLATINUM: 1,638.50      
Plat. Platypus 1.00 1,663.50 1,703.50 1,703.50
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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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