The Moneychanger
Daily Commentary
Thursday, 11 April a.d. 2013 Browse the commentary archive

Mother Market spoke today, right on cue, as Bitcoin crashed, losing nearly half its value in six (6) hours, from $260 to $160. Bear witness & memorize how much faster a panic can propagate electronically than under the old time paper systems. Same applies to ALL markets today -- once they start crashing, electronics enable them to crash at the speed of light.

I take no pleasure in reporting Bitcoin's crash, but it offers a lesson in fighting the chart. A market moving vertically is a market about to crash. It is never "different this time." Not ever.

Likewise, dear friends, the outcome of the present global monetary inflation will NOT be "different this time." Hard as it is for you to cling to reality now under the barrage of Fed & Government propaganda & manipulation tricks, reality is your only ticket out home.

Never draw to an inside straight. For 4500 years of human history, people have learned that you can trust silver & gold but not government. Not different this time. You won't draw the one-eyed Jack.

Ho-hum, stocks made another new all-time high today. Dow closed at 14,865.14, up 62.9 (0.42%). S&P500 climbed 0.36% (5.64) to 1,693.37. It's blowing off, so not predictable as to where it will top, but top it will, & sooner rather than later. Then another raft of victims will learn that it's not "different this time."

Dow in gold closed flat to yesterday, closing 9.50 oz (G$196.38 gold dollars). Maximum target here is 10.10 oz (G$208.79).

Why does that natural born fool keep reporting the Dow's price in gold dollars, a measurement almost as easy to compute as "furlongs per fortnight"?

He hath grounds. By reducing the Dow to its value in gold DOLLARS (G$1.oo = 0.048375 troy ounce or 1 troy ounce = $20.6718 gold dollars) he hath a single unchanging measurement of the Dow all the way back to 1896.

Dow in Silver continues to show some sort of isolated island formation above. Has closed lower since last week, & today closed 536.1 oz, up 0.06%. High so far has been 545.41 oz, with a maximum upside target of about 560 oz. A close below 515 oz breaks it down.

Fiat currencies are so nasty I don't even want to talk about them, like trying to have a nice conversation about intestinal parasites. Got to do it anyway, so here goes:

US dollar index lost 0.3% today or 22.9 basis points to close at 82.273 as it continues rolling over in a rounding top. Two days ago broke its uptrend line. In a sane and honest world, it would keep on going until it reached its nominal value in paper, but it could be manipulated one way or the other. Bias of the market is down for now.

Euro jumped up to touch its 50 DMA ($1.3131) today, but fell back to close up only 0.28% at $1.3105. At $1.3100+ lieth not only the 50 DMA but also resistance from March & earlier. Should it breach that resistance, twill sprint for $1.3350, mayhap loftier. Stay away.

Japanese authorities managed to come one small step closer to destroying their economy today as the yen closed 0.5% lower at 100.19 cents/Y100. Stay away.

Gold bounced back $6.00 today to close $1,564.30. Silver added 4.6 cents to 2768.5c. Gold/silver ratio rose slightly, from 56.380 yesterday to 56.504 today. Still room to swap gold for silver.

Look at silver first. For all the pressure brought to break, silver hasn't broken. It gapped up on Tuesday from 2750c but has traded back only to fill the gap, and not below the breakout. Gold was hammered down past its $1,580 breakout point, & yesterday turned in a low at $,1557.80. Today gold again defended that level successfully with a $1,555.80 low.

Today's gold high would not inspire human wave charges all by itself. It topped at $1,567.93, credible considering the headwind -- above $1,555 support, but not above $1,575 resistance. Once again, on the 4 month chart yesterday's fall broke no barriers, destroyed no hopes, just traded about like markets do, up and down.

Still, gold may not linger here without risking a downward plunge. It needs to step out smartly & jump over $1,591 and $1,605, and, most of all, $1,625. A close below $1,555 would hurt -- how much depends on where it stops.

Silver ranged from 2745 - 2784c today. If the last two days formed a rounding or double bottom, silver ought to exceed 2780 tomorrow. Will continue in the unrespected class with Rodney Dangerfield until it betters 2850c and 2950c. A close below 2740c will drag it lower like the Creature from the Black Lagoon -- Whoops, make that the Creature from Jekyll Island.

I'm nervous. I'm sweating bullets. I'm grinding my teeth but I'm staying with silver & gold. Y'all can cast all your hopes on Ben Bernanke, Bernard O'Bama, and John Maynard Keynes, but this natural born fool will stick with Reality. It just feels safer.

On 11 April 1900 the US navy's first submarine made its debut. The Confederate States navy's first submarine had debuted in 1863, and in 1864 sank the US navy's warship USS Housatonic.

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
11-Apr-13 Price Change % Change
Gold, $/oz 1,564.30 6.00 0.39%
Silver, $/oz 27.69 0.05 0.17%
Gold/Silver Ratio 56.504 0.123 0.22%
Silver/Gold Ratio 0.0177 -0.0000 -0.22%
Platinum 1,535.60 6.00 0.39%
Palladium 732.20 12.50 1.74%
S&P 500 1,593.37 5.64 0.36%
Dow 14,865.14 62.90 0.42%
Dow in GOLD $s 196.44 7.50 3.97%
Dow in GOLD oz 9.50 0.36 3.97%
Dow in SILVER oz 536.94 1.38 0.26%
US Dollar Index 82.27 -0.23 -0.28%
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: 1,560.40      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,602.53 1,612.67 1,612.67
1/2 AE 0.50 799.19 825.06 1,650.12
1/4 AE 0.25 403.49 420.33 1,681.33
1/10 AE 0.10 163.74 171.25 1,712.54
Aust. 100 corona 0.98 1,517.27 1,531.27 1,562.20
British sovereign 0.24 369.52 379.52 1,612.24
French 20 franc 0.19 291.33 294.33 1,576.47
Krugerrand 1.00 1,577.56 1,590.56 1,590.56
Maple Leaf 1.00 1,570.40 1,585.40 1,585.40
1/2 Maple Leaf 0.50 897.23 819.21 1,638.42
1/4 Maple Leaf 0.25 397.90 417.41 1,669.63
1/10 Maple Leaf 0.10 165.40 170.08 1,700.84
Mexican 50 peso 1.21 1,871.81 1,887.37 1,565.38
.9999 bar 1.00 1,565.86 1,576.86 1,576.86
SPOT SILVER: 27.60      
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 21,235.50 21,585.50 30.19
US 40% silver 1/2s 0.30 7,773.25 8,143.25 27.60
100 oz .999 bar 100.00 2,760.00 2,800.00 28.00
10 oz .999 bar 10.00 281.00 282.00 28.20
1 oz .999 round 1.00 27.70 28.20 28.20
Am Eagle, 200 oz Min 1.00 28.85 29.95 29.95
SPOT PLATINUM: 1,535.60      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Plat. Platypus 1.00 1,560.60 1,600.60 1,600.60
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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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