The Moneychanger
Daily Commentary
Monday, 18 March a.d. 2013 Browse the commentary archive

Weekend events in Cyprus shows that the rule of law is stone cold dead. Let the potential victims beware! To bail out the banks, the government is stealing 9.9% of every depositor's account. You go to bed with $10,000 balance, wake up with $9,010. The banks now possess all. What's theirs is theirs, & what's yours is theirs, too. Weekend surprise party, as usual.

As a sop to the victims, they receive worthless shares of stock in their bankrupt bank. Of course, that only adds insult to injury.

Don't be drawn off point by the inevitable bank propaganda claiming much of the money stolen was owned by evil Russians oligarchs. What difference does that make? Because you consider someone "evil" you are empowered to steal from them? Besides, if banks & their running-dog governments can steal from evil Russian oligarchs, they will steal from you, too, as we already see.

That prompts another meditation on why timing this bull market is not as important as climbing onto the bull. Which do you prefer, electrons in a bank, waiting to be stolen, or silver and gold in hand? Go ahead, mock my suspicions. Y'all won't be laughing or mocking when they get around to stealing YOUR money. Mocking won't hurt my feelings. I don't know no better no how. I'm just a natural born fool from Tennessee -- but I ain't waiting around to be robbed.

This officially-sanctioned theft in Cyprus will likely prove to be the catalyst silver & gold were waiting on to begin their rally in earnest.

I pass over as a subject way too hateful & stupid to discuss the possibility that the entire Cyprus caper was engineered by the US behind the scenes to provoke the Russians for backing Assad in Syria. Still, that's possible, too. Whatever the reason, the move in Cyprus annihilates the rule of law & opens depositors around the world to theft-by-bank.

As my old first sergeant used to say, "A word to the wise is suffice."

In few words, the stunt in Cyprus sent scared money looking for a safe hole. Stock markets everywhere fell, dollar rose, euro fell (no surprise to anyone with an IQ greater than the poundage in his tires), yen did nothing, & around the globe Nice Government Men & stinking central bank yellow dog lackies sweat bullets & stayed up all night trying to figure out how to keep their bogus world together so they continue sucking the lifeblood out of the productive.

Dollar rose 50.9 basis points (0.6%) to 82.745 from where it ended Friday. Euro lost 0.93%to $1.2955, but didn't break down on the chart, although it ain't but a gnat's whisker between it & falling off a cliff. Japanese sat this one out. Yen was unchanged at 104.89.

US$1=Y95.34=E0.7719=0.034673 oz Ag=0.000623oz Au.

Stocks hit the skids around the world. Asian markets were hit worse since their NGM didn't have much time to react & manipulate markets. Hong Kong's Hang Seng index lost 2%, Tokyo's Nikkei lost 2.71%. German Dax lost 0.4%, French CAC40 lost 0.71%, Dow Jones World Index sank 0.95%. Lawsie, it was a mess!

Now y'all pay attention here: both the Dow in Gold & Dow in Silver broke today, Dow in Gold the worst. Closed 9.01 oz (186.25 Gold dollars), down 1.26%. Dow in Silver closed 500.52, down 0.75%. Too early to call the game, but that pretty stoutly betokens a reversal downward. Needs confirmation, sure, but gold even gapped down. Dow/Gold is reversing on the weekly chart, too.

I don't give two hoots and a holler what stocks are doing in nominal dollars, because that's a shell game. Purchasing Power is the real game, and what's gaining on what. It appears gold and silver are about to start gaining on stocks again after a long lag.

Y'all listen, and write this down in that little book y'all all carry in your pockets. Stocks since 2000 have lost 85% of their value against silver & gold, & before this is over, they'll lose another 85%. Hide & watch.

Don't governments just LOVE to stage surprise parties over weekends? Ain't that just like 'em, bless their hearts! You gotta love 'em, unless of course you don't, like me.

But thanks to governments over the weekend gold smashed that $1,595 resistance that had so long imprisoned it, then leapt quickly to $1,605, then $1,610.28. Comex gold gained $12.10 to $1,604.60. Silver gained only 2.4 cents [sic], of which more anon.

I bet y'all weren't paying attention last week when I kept writing that gold had broken out of that little pennant and kissed back. Today it shot up, confirming the upside breakout from that pennant. Of course, it must continue rising, & the first big hurdle stands at $1,625, then the higher hurdle at $1,650.

Don't y'all be surprised if the Nice Government Men try to slap gold silly tomorrow, but if gold is to continue rallying it must not drop below $1,595. I bought some with a good will first thing this morning, & I'm proud of it still, even knowing the danger.

The fly in the ointment of today's gold rise is silver's chintzy 2.4 cent rise. Course, silver can be expected to lag gold when a financial crisis fills the air. High today came at 2902c which didn't even beat last week's highs.

It's all right, gold ought to drag silver on up if gold intends to rise in earnest. If both of them don't rise here, then we have an awfully long time to wait. But I think today proved the change of direction promised and whispered by the early March lows.

Expect lots higher prices for gold & silver this week, unless they manage to break them tomorrow, which I have to doubt.

You know, if I was an Italian or Spaniard with any money at all in a bank, I would look at Cyprus and easily picture a target painted on my chest. Hadn't y'all rather hold gold & silver in your hand than electrons in a Spanish or Italian Bank? Mercy, I'd rather hold gold & silver than electrons in a New York bank!

Buy the breakout: time to start buying silver & gold.

On 18 March 1931 the first electric shavers went on sale. No shock, they were by Shick.

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
18-Mar-13 Price Change % Change
Gold, $/oz 1,604.60 12.10 0.76%
Silver, $/oz 28.84 0.02 0.08%
Gold/Silver Ratio 55.636 0.374 0.68%
Silver/Gold Ratio 0.0180 -0.0001 -0.67%
Platinum 1,578.20 -13.20 -0.83%
Palladium 762.85 -10.85 -1.40%
S&P 500 1,552.10 -8.60 -0.55%
Dow 14,452.06 -62.05 -0.43%
Dow in GOLD $s 186.18 7.50 4.20%
Dow in GOLD oz 9.01 0.36 4.20%
Dow in SILVER oz 501.09 -2.57 -0.51%
US Dollar Index 82.75 0.51 0.62%
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: 1,605.50      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,648.85 1,659.28 1,659.28
1/2 AE 0.50 822.31 848.91 1,697.82
1/4 AE 0.25 415.16 432.48 1,729.93
1/10 AE 0.10 168.47 176.20 1,762.04
Aust. 100 corona 0.98 1,570.71 1,576.71 1,608.56
British sovereign 0.24 380.20 390.20 1,657.61
French 20 franc 0.19 299.75 302.75 1,621.57
Krugerrand 1.00 1,628.50 1,638.50 1,638.50
Maple Leaf 1.00 1,615.50 1,630.50 1,630.50
1/2 Maple Leaf 0.50 923.16 842.89 1,685.78
1/4 Maple Leaf 0.25 409.40 429.47 1,717.89
1/10 Maple Leaf 0.10 170.18 175.00 1,750.00
Mexican 50 peso 1.21 1,925.91 1,941.75 1,610.48
.9999 bar 1.00 1,611.12 1,622.12 1,622.12
SPOT SILVER: 28.93      
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 21,578.70 22,114.70 30.93
US 40% silver 1/2s 0.30 8,165.60 8,535.60 28.93
100 oz .999 bar 100.00 2,893.00 2,933.00 29.33
10 oz .999 bar 10.00 294.30 295.30 29.53
1 oz .999 round 1.00 29.03 29.48 29.48
Am Eagle, 200 oz Min 1.00 30.18 31.28 31.28
SPOT PLATINUM: 1,578.20      
Plat. Platypus 1.00 1,603.20 1,643.20 1,643.20
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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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