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

This morning the Natterers on Nat. Proletarian Radio were a-buzzin' about some judge turning over the Communist New York Mayor Bloomberg's law forbidding sales of big jugs of soft drinks.

Ahh, it just warms your heart to see those freedom- loving soft-drink corporations stand up for the right of folks to choose what they want to put into their own bodies. Right, well, I'm all for that, but you wonder why none of the corporations ever complain about all the other regulations that put small farmers and food processers out of business, or keep them out? There, freedom just ain't so important, I reckon.

Y'all write this down in your little books: the purpose of ALL regulation (all of it) is to stifle competition.

Here was an interesting day. Dow & S&P500 got into an argument & couldn't agree whether to rise or fall. And thanks to Bundesbank president Jens Weidmann, gold & silver gapped up like they had dynamite under them.

Dow hit another new high today, but managed to add only 2.77 (0.02%) to close at 14,450.06. S&P500 hit a new intraday high at 1,556.77 but lost 3.74 from yesterday to close at 1,55248 (down 0.24%). Dow was the only index that ended the day higher. Mmmm.

More fascinating yet are the Dow in Gold & Dow in Silver. After hitting a high day before yesterday at 9.14 oz (G$188.94 gold dollars) it gapped down today to close at 9.08 oz (G$187.70). Gapped down out of a rising wedge. Needs to confirm, of course, but that's the first sign of a top. Dow in silver performed the same way, tripping down out of a wedge after a high yesterday at 498.98 oz. Closed today at 496.57 oz.

What meaneth all this? It's the first hint that silver & gold have turned up against stocks. Whether that means stocks drop or not (it might), I don't care, but it points to the end of the long silver & gold correction.

In the rotten world of fiat currencies & corrupt central banks that feed off the public like tapeworms. the head of the German central bank today announced the Bundesbank had raised its risk loss provision to 14.4 billion euros ($18.7 bn) from 7.7 billion euros a year ago. He also said, "The crisis is not yet over despite the interim calm on financial markets."

I reckon it was bound to happen sooner or later, a central banker accidentally telling the truth. As Lord Acton (1834-1902) said, "The issue which has swept down the centuries . . . And which will have to be fought sooner or later . . . is the people versus the banks." (quoted by Charles Demastus in Freedom Watch)

Silver & gold responded by gapping up. The US dollar index went nowhere, closing today 82.607, down 1.6 basis points. Euro dropped only 0.9% to $1.3033, while the yen rose 0.24% to 104.11 cents per 100 yen.

Dollar is fixing to break its steep uptrend. Bond market waxes more & more suspicious. Ten year treasury yield rose sharply yesterday, backed off a little today. Ended at 2.023% yield. If it clears 2.4%, Ben will start sweating bullets like he's been napping in nettles.

About 8:00 a.m. New York time gold bounded from $1,584 to $1,592. One leap, one minute. It didn't really gain after that, but closed at $1,591.5 (up $13.70 or 0.87%) after at $1,594.67 high. Literally traded in a $2.70 range all day. Flat.

Silver followed the same path, gapping up from 2892 cents to 2928.5 in one minute, then trading the rest of the day between 2915c and 2925c. Closed at 2913.1c, up 31.9 cents (1.1%).

Granted we need to see confirmation, but here's what gives hope to the chart. Gold had been forming a pennant (little even-sided triangle) and today broke out upside and punched into its 20 DMA ($1,593.99). One more day outside that pennant, & gold will have reversed directions.

Ditto silver. Broke out upside from a pennant, cut into the 20 DMA (2930), but closed slightly below it.

Add to this the MACD, which has turned up for both metals. This is the best we've seen them look since mid-February.

Yet, hold! Gold still must climb over $1,600 & silver over 2950 to confirm a reversal beginning.

I nibbled at buying some silver today, just in case it really is a reversal upwards.

On 12 March 1884 the Mississippi legislature established the first state college for women, known then as the Industrial Institute & College, it's name was changed in 1920 to Mississippi State College for Women, known affectionately as "The W."

On 12 march 1894 in Vicksburg, Mississippi (things were popping back in Mississippi then) Coca-Cola was sold in bottles for the first time. . . SMALL bottles, so as not to offend the distinguished communist mayor of New York.

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-Mar-13 Price Change % Change
Gold, $/oz 1,591.50 13.70 0.87%
Silver, $/oz 29.13 0.32 1.11%
Gold/Silver Ratio 54.633 -0.129 -0.24%
Silver/Gold Ratio 0.0183 0.0000 0.24%
Platinum 1,593.00 -6.20 -0.39%
Palladium 773.40 -3.70 -0.48%
S&P 500 1,552.48 -3.74 -0.24%
Dow 14,450.06 2.77 0.02%
Dow in GOLD $s 187.69 7.50 4.16%
Dow in GOLD oz 9.08 0.36 4.16%
Dow in SILVER oz 496.04 -5.40 -1.08%
US Dollar Index 82.61 -0.02 -0.02%
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: 1,593.55      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,636.58 1,646.93 1,646.93
1/2 AE 0.50 816.18 842.59 1,685.18
1/4 AE 0.25 412.07 429.26 1,717.05
1/10 AE 0.10 167.22 174.89 1,748.92
Aust. 100 corona 0.98 1,559.00 1,565.00 1,596.61
British sovereign 0.24 377.37 387.37 1,645.59
French 20 franc 0.19 297.52 300.52 1,609.62
Krugerrand 1.00 1,616.55 1,626.55 1,626.55
Maple Leaf 1.00 1,603.55 1,618.55 1,618.55
1/2 Maple Leaf 0.50 916.29 836.61 1,673.23
1/4 Maple Leaf 0.25 406.36 426.27 1,705.10
1/10 Maple Leaf 0.10 168.92 173.70 1,736.97
Mexican 50 peso 1.21 1,911.58 1,927.34 1,598.53
.9999 bar 1.00 1,599.13 1,610.13 1,610.13
SPOT SILVER: 29.18      
SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 30.50 34.00 44.44
VG+ Peace dollar 0.77 28.00 31.00 40.52
90% silver coin bags 0.72 21,542.95 21,942.95 30.69
US 40% silver 1/2s 0.30 8,239.35 8,609.35 29.18
100 oz .999 bar 100.00 2,918.00 2,958.00 29.58
10 oz .999 bar 10.00 296.80 297.80 29.78
1 oz .999 round 1.00 29.28 29.73 29.73
Am Eagle, 200 oz Min 1.00 30.43 31.53 31.53
SPOT PLATINUM: 1,593.00      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Plat. Platypus 1.00 1,618.00 1,658.00 1,658.00
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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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  • 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.
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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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