The Moneychanger
Daily Commentary
Tuesday, 12 February a.d. 2013 Browse the commentary archive

Saw today in Peter Grandich's letter,, this quotation from a London metals trader that appeared on

"I'm not that worried about the sell-off today, it's just the logical thing. I was surprised they waited so long [to take it down], because many opportunities to push it to that level existed before...and it finally happened, and that's good for the market. This is actually a blessing. We are still not at the lows of January at $1625...but at the moment this is probably as far as it's going to go [$1642]. There's good support here."

He further added that, "This is actually the typical reaction of the Chinese New Year, because the shorts, they know there will be no physical demand for a couple of days, there won't be support there, and so they are smart. This is smart money just pushing it to the extremes. For me this is an opportunity to get something cheap in for the mid-term. But you can't fight the trend at the moment in terms of what's in the air for the Fed-speak, etc., but the long-term money stays and sits." From

There are lies, then there are diplomatic lies, that is, the lies of lying diplomats. The G7 finance frou-frous (Group of Seven includes US, UK, France, Germany, Italy, Canada, & Japan) meeting before the G20 meeting in Moscow, probably to get their story straight, lied through their teeth today in a statement in which they pledged to let foreign exchange markets determine their currencies' exchange rates. They also alibied for Japan's studied devaluation.

I don't any more believe this than I believe Bernard O'Bama is a world-class intellectual and tatting expert. Statement backed & filled by saying something about it devaluing was only OK for the Japanese to beat deflation, but not to boost their economy. Now, let's see. Exactly how do we tell the first sort from the second, or any of them from outright competitive currency devaluation, or, dare I say it, "Currency war"? I can't tell it, any more than I can tell a rattlesnake from a snake.

In the outcome the Yen rose 0.92% to 106.95 & the Euro rose to $1.3451 while the US dollar index fell to 80.066 from 80.199 this time yesterday. Whoops. That fall plunged from today's high of 80.508. Closes left the euro slightly above its 20 DMA, but still way below its broken uptrend line. Not at all clear to me whether the Euro has topped yet or not, but present facts favor that interpretation. Meanwhile, the Euro & US NGM are standing aside while the Japanese pull the plug on the yen. Makes you wonder what kind of deal they've made, or if they're at war with each other.

This much we know: ALL CURRENCY EXCHANGE RATES ARE MANIPULATED BY CENTRAL BANKS IN CONCERT. "Markets determining rates indeed!" he snorted.

Stocks managed to climb firmly & convincingly above 14,000 today. Dow gained 47.46 (0.34%) to 14,018.70, but the S&P500 gained only 2.42 (0.16%) to 1,519.43. Nasdaq & other indices were not convinced, & fell.

Today's close all but guarantees the Dow will at least reach its 2007 high (14,154.63 on 9 October 07) in this rally.

I will tell y'all, but many will not hear or believe, that stocks remain in a BEAR market (primary downtrend) and that this rally will soon collapse in a most painful way, taking the money of the unwary down with it. Flee while ye yet may.

Dow in Gold & Dow in Silver agree that stocks are going higher. Both rose today about their congestion areas.

Gold & silver are simply dead in the water. Silver today gained 10.9 cents to 3100.4c. Gold gained -- got your magnifying glass ready? -- fifty cents, closing at $1,648.70. Range for gold was $1,639.27 - $1,651.87, and for silver 3057.9c - 3112c.

Gold's five day chart was flat to the lows yesterday, with that spike to a lower low at $1,329.27. If it climbs above $1,652 tomorrow & closes up there, that will mark a bottom for a while.

However, today's gold close didn't help the longer term chart much. Gold remains below the uptrend from the lows last June, & below ALL it's moving averages. That I am so negative & indifferent that is probably a sure sign we saw a major low today, but that hasn't shown up on the chart yet.

The snare in all human minds is that we see a trend & project it out unchanged to infinity. Of course, that ignores the one known rule of this universe: everything changes.

Silver gained 10.9 cents to close right at the morale-boosting 3100 cent level. Much like gold's chart, silver made a spike bottom to 3057.9 cents, a new low for the move, and then rose strongly off that spike. Needs to close above 3110c tomorrow to confirm that as a bottom of some sort.

Silver's longer term chart -- I'm looking at 4 months -- offers hope. Today's trading pierced the rising trendline from the June low and punched through the 200 DMA (30.67), but it wouldn't stay there & finished the day higher. And right at the 300 DMA (3111c). And back inside that even-sided triangle I've been watching.

What speaketh all that hope? Simple: silver had the chance to break down, but was strong enough to snap back.

Silver & gold are simply treading water while stocks blow off. Likelihood of further downside is small, but gold must clear $1,705 & silver 3250c before any rally can be counted authentic. Meantime, we wait, with calm assurance we will have the last laugh.

On 12 February 2012 was founded the city of Savannah, Georgia by English colonist James Oglethorpe. Of all the cities in North America, Savannah is surely one of the most beautiful and gracious, and unique in its Georgian layout. The city is laid out as adjoining squares, & nearly every one is ceiled by huge live oaks. Only New Orleans & Charleston have nearly as much personality. More than that, although much of Savannah is a silly tourist trap (what famous American city is not?), it is not all bogus. If you go, be sure to take both a horse-drawn & night bus tour. That night bus tour waxes right bogus talking about ghosts, but the yankee tourists eat that up. You can always pick 'em out because they wear shorts & sandals with black socks.

On that black day 12 February 1873 President Grant signed into law the Crime of '73, which de facto (but not de jure) demonetized silver in the US by not providing for the minting of silver dollars. Conspiracy theorists report that a lobbyist acting for English banks accomplished all this for the bargain price of $500,000. Politicians came cheaper in those days.

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
12-Feb-13 Price Change % Change
Gold, $/oz 1,648.70 0.50 0.03%
Silver, $/oz 31.00 0.11 0.35%
Gold/Silver Ratio 53.177 -0.171 -0.32%
Silver/Gold Ratio 0.0188 0.0001 0.32%
Platinum 1,716.10 21.10 1.24%
Palladium 771.00 12.80 1.69%
S&P 500 1,519.43 2.42 0.16%
Dow 14,018.70 47.46 0.34%
Dow in GOLD $s 175.77 7.50 4.46%
Dow in GOLD oz 8.50 0.36 4.46%
Dow in SILVER oz 452.16 -0.06 -0.01%
US Dollar Index 80.07 -0.13 -0.17%
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: 1,651.00      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,693.93 1,706.31 1,706.31
1/2 AE 0.50 841.50 869.66 1,739.33
1/4 AE 0.25 420.75 443.09 1,772.35
1/10 AE 0.10 173.25 180.78 1,807.85
Aust. 100 corona 0.98 1,610.22 1,624.22 1,657.03
British sovereign 0.24 388.65 392.65 1,667.99
French 20 franc 0.19 308.24 312.24 1,672.42
Krugerrand 1.00 1,677.42 1,692.42 1,692.42
Maple Leaf 1.00 1,661.00 1,676.00 1,676.00
1/2 Maple Leaf 0.50 949.33 866.78 1,733.55
1/4 Maple Leaf 0.25 421.01 441.64 1,766.57
1/10 Maple Leaf 0.10 175.01 179.96 1,799.59
Mexican 50 peso 1.21 1,980.49 1,997.49 1,656.71
.9999 bar 1.00 1,656.78 1,667.78 1,667.78
SPOT SILVER: 31.09      
SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 30.50 34.00 44.44
VG+ Peace dollar 0.77 29.00 33.00 43.14
90% silver coin bags 0.72 22,622.60 22,951.60 32.10
US 40% silver 1/2s 0.30 9,127.30 9,202.30 31.19
100 oz .999 bar 100.00 3,109.00 3,149.00 31.49
10 oz .999 bar 10.00 315.90 318.40 31.84
1 oz .999 round 1.00 31.19 31.64 31.64
Am Eagle, 200 oz Min 1.00 32.34 33.34 33.34
SPOT PLATINUM: 1,716.10      
Plat. Platypus 1.00 1,741.10 1,781.10 1,781.10
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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.
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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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