The Moneychanger
Daily Commentary
Tuesday, 5 February a.d. 2013 Browse the commentary archive

Y'all, it's cruel to keep me in here. It's about 65 degrees, sky is clear, sun is bright, and through my window I can hear and see the lambs jumping and playing in my pasture. No day for me to stay inside & stare at a computer screen. What mind I've got left keeps on wandering outside. Makes me want to run wild over the mountaintops.

Been thinking today. Unless y'all have been watching the economy & money supply and Fed for years, y'all cannot appreciate how much money they have created since 2007. Used to talk about billions, now it's trillions. Sure mark of a market blowing off or near the end of a bull move is a straight up or hyperbolic rise. That's what they're working on printing money, & not just the Fed but all the world's central banks. I read today some 40 of 'em have a zero interest rate policy right now. You can call me a natural born fool from Tennessee & brush whatever I say aside, but truth's truth: they're going to blow up the whole system. That's why you need to buy silver & gold. Let 'em go over the cliff by themselves.

Stocks bounced back today,, but couldn't clear 14,000. Dow added 99.22 (0.71%) to 13,979.30. S&P500 gained 15.58 (1.04%) to 1,511.29.

It's a mania. I don't care what all the performers on CNBC & the rest say, it's a mania, & it will end as all manias end, with an explosion followed by sorrow, weeping, & wailing. Y'all watch yourselves.

US dollar index climbed back up off its support, but at day's end had only lost 2 basis points to end at 79.54. What can you say? It's below all its moving averages, pushed up against support, & been declining since November. Don't sound like a winning lottery ticket to me.

Those Japanese are fighting the currency wars in earnest. Yen just keeps on plunging, down another 1.41% today to 106.82 cents/Y100. Will the Japanese finally stop at 100c/Y100? Europeans, Koreans, Americans -- none of 'em will be able to sell exports with the yen that low. Somebody's gonna get mad.

And the Euro keeps rising against the US dollar, up 0.47 today to $1.3711, first close above $1.3700 for this move. Has its eye on $1.425.

US$1=Y93.62=E0.7293=0.031388 oz. Ag=0.000598 oz Au.

Two of the puzzlingest charts I've ever seen are the Dow in Gold and the Dow in Silver. Dow/Gold looks like an island reversal top, but unless gold breaks out upside soon, Dow/Gold could drive for 9.12 oz (G$188.53 gold dollars). Dow in silver is even jumpier, all over the place, gaping up then gapping down, & now just below the downtrend line and almost through the 20 DMA. Can only watch until it reveals its mind, but I know at least that because stocks are locked in a bear market against silver & gold, eventually both these charts will resume falling.

Gold & silver tugged against each other today. Gold fell 2.90 to $1,672.40 but silver rose 15.9 cents to 3185.9c.

Gold pushed higher today, up to $1,683.63, but that's the very area that for nearly a fortnight has blocked it. Lows have been climbing the last four days. Today gold stopped at $1,667.

But back away from that short term chart. On the longer chart God has built a falling wedge, broken out to the upside through the top of that wedge, and traded sideways. Someday soon it will puncture $1,705, & then the fun will begin. Gold must hold $1,655 down below.

Since mid-January silver has been wrestling with 3200c & 3250c. Today it once again reached that area (3203c) but fell back. Lows are rising.

Silver's chart shows more strength than gold's. Like gold, it has broken out of a falling wedge, then traded sideways into an even-sided triangle. Soon it will break out of that triangle, up or down. My money's on up, but I don't buy lottery tickets.

Tyrants don't always win. On 5 February 1937 Franklin Roosevelt announced a plan to pack the Supreme Court with his own appointees, increasing the judges' number to 15. Comrade Roosevelt was ticked because the Supreme Court had refused to rubber stamp his fascist revolution. Clearly, they were a different bunch then than they are now. Roosevelt was beaten miserably in the Senate.

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
5-Feb-13 Price Change % Change
Gold, $/oz 1,672.40 -2.90 -0.17%
Silver, $/oz 31.86 0.16 0.50%
Gold/Silver Ratio 52.494 -0.355 -0.67%
Silver/Gold Ratio 0.0190 0.0001 0.68%
Platinum 1,705.70 9.10 0.54%
Palladium 765.05 7.65 1.01%
S&P 500 1,511.29 1,558.00 -3335.47%
Dow 13,979.30 99.20 0.71%
Dow in GOLD $s 172.79 7.50 4.54%
Dow in GOLD oz 8.36 0.36 4.54%
Dow in SILVER oz 438.79 0.93 0.21%
US Dollar Index 79.54 0.02 0.03%
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: 1,672.10      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,717.25 1,728.12 1,728.12
1/2 AE 0.50 852.26 880.78 1,761.56
1/4 AE 0.25 426.13 448.75 1,795.00
1/10 AE 0.10 175.47 183.09 1,830.95
Aust. 100 corona 0.98 1,630.80 1,644.80 1,678.02
British sovereign 0.24 393.61 397.61 1,689.09
French 20 franc 0.19 312.18 316.18 1,693.52
Krugerrand 1.00 1,698.85 1,713.85 1,713.85
Maple Leaf 1.00 1,682.10 1,697.10 1,697.10
1/2 Maple Leaf 0.50 961.46 877.85 1,755.71
1/4 Maple Leaf 0.25 426.39 447.29 1,789.15
1/10 Maple Leaf 0.10 177.24 182.26 1,822.59
Mexican 50 peso 1.21 2,005.80 2,022.80 1,677.70
.9999 bar 1.00 1,677.95 1,688.95 1,688.95
SPOT SILVER: 31.80      
SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 30.50 34.00 0.04
VG+ Peace dollar 0.77 29.00 33.00 0.04
90% silver coin bags 0.72 23,094.50 23,423.50 32.76
US 40% silver 1/2s 0.30 9,336.75 9,411.75 31.90
100 oz .999 bar 100.00 3,180.00 3,220.00 32.20
10 oz .999 bar 10.00 323.00 325.50 32.55
1 oz .999 round 1.00 31.90 32.35 32.35
Am Eagle, 200 oz Min 1.00 33.05 34.05 34.05
SPOT PLATINUM: 1,705.70      
Plat. Platypus 1.00 1,730.70 1,770.70 1,770.70
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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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