The Moneychanger
Daily Commentary
Wednesday, 20 March a.d. 2013 Browse the commentary archive

The "solution" to the Cyprus crisis, like all the rest of the "solutions," is wet cardboard screen. Poke your finger at it and it goes right through.

Under the plan the banks/government would steal only the "rich" people's money. The two biggest banks will be closed, one temporarily, one permanently. Depositors with more than E130,000 ($130,000) will "face significant losses." Since the plan must raise E4.2 billion, I reckon they'll lose all of it. Meantime, their accounts are frozen until it can be sorted out. Central bank has limited cash withdrawals even from ATMs, to E100 (US$130)

As I have already noted, this may be the shot at the Archduke in Sarajevo. Certainly, it changes everything, because to bail out the banks, instead of bailing them out indirectly by stealing the money from taxpayers, now they will bail them out directly, by stealing from the depositors.

If you think your own government & the banks won't do the same to you in America, you haven't got the brains God gave a screwdriver.

If you want to find out roughly how insolvent your own bank is, go to and find your bank. Eventually you'll get a graph that compares your bank's Troubled Asset Ratio with the national median Whoa, there! "Median," not "average." Median is the dead middle when you line up every bank. If your bank's Troubled Asset Ratio (loans that aren't paying) is lots higher than the national median, or higher than other banks in your area, you might want to think about changing banks, whether they'll give you a new toaster or not.

Stock markets didn't buy into the latest Cyprus bailout. Dow lost 64,28 (0.44%) to 14,447.75 while the S&P500 lost 5.2 (0.33%) to 1,551.65.

This leaves stocks trapped in sideways range the last seven trading days while gravity remains merciless. Stocks may rise higher, but this will end badly, probably before year-end at latest.

The Dow in Gold fell today, although it popped up early in the day. Closed at 9.00 oz (G$186.05), barely below the 20 DMA at 9.01 oz.

Dow in Silver has not rolled over as dramatically, but is stalled. Closed today at 502.71 oz, down 0.49%. It's fixing to fall.

Cyprus bailout didn't help the euro any more than it helped Cypriot banks. Euro fell 1.08%, and lodged beneath its 200 Day Moving Average ($1.2861) at $1.2853. The plunge hasn't ended yet & won't before $1.2625, most likely.

Yen benefited, rose 0.34% to 106.20 cents/Y100. That is above the 20 DMA (105.74) & right at resistance. But who would buy a currency that has announced a deliberate depreciation?

Uptrend in the US dollar index is being kept alive only by the Cyprus crisis. It's only distinction lies in being the prettiest corpse in the morgue.

When silver popped up above resistance last Thursday, I thought we had a winner. Next day, though, somebody sat on it hard, driving it to the bottom of its 2950c - 2850c range. When a market is range trading, you can only watch and either buy the upside breakout or watch a downside breakout for a place to buy. Inside the range there's nothing to do but sit.

Today silver rose 11.9 cents to 2878.5c. Gold lost $1.60 to $1,604.50. What's interesting is that gold was driven down to a $1,591.38 low today about the time Comex opened (surprise!) but refused to remain below $1,600.

Gold broke out of its pennant 10 days ago. Today it traded as low as its 20 DMA, but bounced smartly off that. Somebody remains ready to buy below $1,600, anywhere.

Since late February gold has traded from $1,619.70 to $1,560.40. Until it punches through $1,620 above or through $1,560 below, the trading is mostly noise.

But how long can you wait? Risk from here for gold reaches to $1,530 at most, about 4.6% below here. But Cyprus has me thinking how much I prefer gold or silver in hand, even if I paid too much for it too soon, to electrons in a bank. But then, I am only a suspicious natural born fool from Tennessee.

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
25-Mar-13 Price Change % Change
Gold, $/oz 1,604.50 -1.60 -0.10%
Silver, $/oz 28.79 0.12 0.42%
Gold/Silver Ratio 55.741 -0.287 -0.51%
Silver/Gold Ratio 0.0179 0.0001 0.52%
Platinum 1,582.90 1.30 0.08%
Palladium 755.55 -4.20 -0.55%
S&P 500 1,551.69 -5.20 -0.33%
Dow 14,447.75 -64.28 -0.44%
Dow in GOLD $s 186.14 7.50 4.20%
Dow in GOLD oz 9.00 0.36 4.20%
Dow in SILVER oz 501.92 -4.33 -0.85%
US Dollar Index 82.89 0.66 0.80%
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: 1,604.10      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,647.41 1,657.84 1,657.84
1/2 AE 0.50 821.59 848.17 1,696.34
1/4 AE 0.25 414.80 432.10 1,728.42
1/10 AE 0.10 168.33 176.05 1,760.50
Aust. 100 corona 0.98 1,559.76 1,573.76 1,605.55
British sovereign 0.24 379.87 389.87 1,656.21
French 20 franc 0.19 299.49 302.49 1,620.17
Krugerrand 1.00 1,624.95 1,639.95 1,639.95
Maple Leaf 1.00 1,614.10 1,629.10 1,629.10
1/2 Maple Leaf 0.50 922.36 842.15 1,684.31
1/4 Maple Leaf 0.25 409.05 429.10 1,716.39
1/10 Maple Leaf 0.10 170.03 174.85 1,748.47
Mexican 50 peso 1.21 1,924.23 1,940.06 1,609.08
.9999 bar 1.00 1,609.71 1,620.71 1,620.71
SPOT SILVER: 28.78      
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 21,867.95 30.58
US 40% silver 1/2s 0.30 8,121.35 8,491.35 28.78
100 oz .999 bar 100.00 2,878.00 2,918.00 29.18
10 oz .999 bar 10.00 292.80 293.80 29.38
1 oz .999 round 1.00 28.88 29.33 29.33
Am Eagle, 200 oz Min 1.00 30.03 31.13 31.13
SPOT PLATINUM: 1,582.90      
Plat. Platypus 1.00 1,607.90 1,647.90 1,647.90
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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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