The Moneychanger
Daily Commentary
Tuesday, 30 April a.d. 2013 Browse the commentary archive

Why can't I believe the Masters of the Universe & Nice Government Men when they keep repeating that "every day in every way the economy is getting better & better"? I might jes' be a natural born fool who don't know no better than to doubt his betters, but then again, maybe their horns don't toot in tune.

Take today, bless their tiny bureaucratic hearts! The media is just a bustin' their propaganda buttons over the Case-Shiller Price Index jumping 9.3% year over year. Now I just worked up that graph (I'm a fool, but I can work Excel) and that index looks none too healthy, although the 12 month rate of change is rising. However, the very same day my Masters tell me how good the housing industry is, a local builder tells me (1) home building is as bad as he's ever seen it, (2) it's not getting better, (3) no such thing as building houses on speculation any more, and (4) only the most financially secure people can get mortgages to build now.

Who's a natural born fool to believe? Them known liars on Wall Street & in Washington? Why, they while away their time pulling the wings off flies! Or should I believe a man of proven integrity & truthfulness? Y'all tell me, 'cause I jes' can't figure it out.

Stocks enjoyed a bold day, both closing on their highs. This would be a good place for them to press higher, but a more likely place for them to fail.

S&P500 rose 5.03 (0.25%) to 1,597.57, a new all-time high. Gainsaying its little brother, the Dow didn't reach a new high, but closed at 14,839.80, up 21.05 (0.14%). (Dow's all-time intraday high came 11 April at 14,887.51, high close same day at 14,864.14.). I told y'all a while ago it's too hard for me to parse mania markets, so I will just say, Don't expect this to end well, but in weeping, wailing, & gnashing of teeth.

I don't know. Maybe I misjudged the euro. Maybe it ain't sorry as gully dirt after all -- but don't y'all bet on that. It did break out over its downtrend line today, which I should have foreseen yesterday when it hit that 62 DMA. Truth to tell, I just don't care that much what one scurvy, scrofulous fiat currency or the other does. It's like watching dinosaurs die and betting which one will go extinct first.

Euro rose 0.54% today, a sizeable jump, to close near its $1.3086 high at $1.3170. If the scurvo -- make that euro -- can get past $1.3200, it can run, but that level might stop it cold.

Japanese yen rose 0.34% today to close at 102.65 cents/Y100. It, too, today closed above its downtrend line. I would no more bet on that than I would be fitted for a wooden leg. No telling what those NGM will do. Don't trust 'em.

US DOLLAR INDEX was today's sickest sufferer. Dropped 44.5 basis points (0.57%) to 81.693, below support it had to hold if it intended to rally. Hate to call anything the NGM are steadily manipulating, but if this were a real market, today's weakness and close way below the 50 DMA yesterday would send it dropping like a hand axe off a tree-climbing West Coast lumberjack.

Whoops! Looky there! The Dow & S&P500 are a-making new highs, but the Dow in Silver (613.6 oz today, up 1.38%) & the Dow in gold (10.08 oz today, up 0.37%) ain't. In fact, they are still a-downtrending. Stocks have turned down against gold & silver, a very good, a splendid sign.

Silver & gold are blowing hot and cold out of both sides of their mouth. Gold rose $4.80 today to $1,472.20 while silver rose a measly 2.2 cents to 2414.4c. Gold looks to be knocking on a $1,476 ceiling, while silver appears to have peaked yesterday.

Silver must not sink below 2400c, lest it suffer another cascade. Gold needs to hang on above $1,450. I'm sure gold's problem (& gold is leading right now) is that the approaching $1,500 mark is wearing at gold like Kryptonite wears on Superman. I still incline to one more plunge, whether to a slightly lower or slightly higher low I don't know, just to prove the bottom has feet. THEN, oh, THEN y'all will see silver & gold begin to rise once more.

On 30 April 1900 Hawaii was organized as a US territory, and well it ought to have been. After all, we stole it fair and square.

MILESTONES OF AMERICAN CULTURE: On 30 April 1938 appeared for the first time the cartoon character who would become Bugs Bunny. The rabbit's noisy munching was based on Clark Gable's carrot chewing in the 1934 movie, It Happened One Night. Actually, I consider Bugs Bunny to be one of America's foremost contributions to world culture. No, I mean it.

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
30-Apr-13 Price Change % Change
Gold, $/oz 1,472.20 4.80 0.33%
Silver, $/oz 24.14 0.02 0.09%
Gold/Silver Ratio 60.976 0.143 0.24%
Silver/Gold Ratio 0.0164 -0.0000 -0.24%
Platinum 1,505.40 -0.20 -0.01%
Palladium 696.70 -1.40 -0.20%
S&P 500 1,597.57 3.96 0.25%
Dow 14,839.80 21.05 0.14%
Dow in GOLD $s 208.37 7.50 3.73%
Dow in GOLD oz 10.08 0.36 3.73%
Dow in SILVER oz 614.64 0.31 0.05%
US Dollar Index 81.69 -0.45 -0.54%
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: 1,473.70      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,520.86 1,526.75 1,526.75
1/2 AE 0.50 754.76 779.22 1,558.44
1/4 AE 0.25 381.06 396.98 1,587.91
1/10 AE 0.10 161.26 169.48 1,694.76
Aust. 100 corona 0.98 1,435.85 1,449.85 1,479.14
British sovereign 0.24 348.99 358.99 1,525.02
French 20 franc 0.19 275.14 278.14 1,489.77
Krugerrand 1.00 1,506.12 1,521.12 1,521.12
Maple Leaf 1.00 1,483.70 1,498.70 1,498.70
1/2 Maple Leaf 0.50 847.38 773.69 1,547.39
1/4 Maple Leaf 0.25 375.79 394.21 1,576.86
1/10 Maple Leaf 0.10 156.21 160.63 1,606.33
Mexican 50 peso 1.21 1,766.03 1,782.03 1,478.01
.9999 bar 1.00 1,478.86 1,489.86 1,489.86
SPOT SILVER: 24.16      
SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 28.50 32.00 41.83
VG+ Peace dollar 0.77 25.50 29.00 37.91
90% silver coin bags 0.72 19,526.65 20,026.65 28.01
US 40% silver 1/2s 0.30 6,758.45 7,128.45 24.16
100 oz .999 bar 100.00 2,416.00 2,491.00 24.91
10 oz .999 bar 10.00 246.60 251.60 25.16
1 oz .999 round 1.00 24.26 25.16 25.16
Am Eagle, 200 oz Min 1.00 25.41 28.66 28.66
SPOT PLATINUM: 1,505.40      
Plat. Platypus 1.00 1,530.40 1,570.40 1,570.40
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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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