The Moneychanger
Weekly Commentary
Friday, 10 May a.d. 2013 Browse the commentary archive
Here's the weekly scorecard:
  3-May-13 10-May-13 Change % Change
Silver, cents/oz. 2,397.50 2,363.20 -34.30 -1.4
Gold, dollars/oz. 1,464.30 1,436.80 -27.50 -1.9
Gold/silver ratio 61.076 60.799 -0.280 -0.5
Silver/gold ratio 0.0164 0.0164 0.0001 0.5
Dow in Gold Dollars (DIG$) 211.39 217.52 6.13 2.9
Dow in gold ounces 10.23 10.52 0.30 2.9
Dow in Silver ounces 624.57 639.75 15.18 2.4
Dow Industrials 14,973.96 15,118.49 144.53 1.0
S&P500 1,614.38 1,633.70 19.32 1.2
US dollar index 82.11 83.17 1.06 1.3
Platinum 1,501.70 1,486.00 -15.70 -1.0
Palladium 692.20 704.60 12.40 1.8

Let's get one thing straight: gold & silver will win in the end. Set aside all the Central Bank gold smash-downs, all the bear raids, all the manipulation, all the central bank & government & prostitute media, in the end gold and silver will win.

Get this clearly fixed in your mind, as certain as gravity will grab hold of any hammer you drop out a second story window and pull it all the way to the ground. The financial elite that hijacked your government has set up a banking & financial system that must inflate or die. Die they will not voluntarily, so inflate they must. Inflation creates periodic crises, & over the last 50 years these have grown more frequent and more severe. Since 2008 the crisis has engulfed the globe and not even massive liquidity (money creation) & tsunamis of government blarney can fix it.

The central banks will raid the gold market, will talk of slowing quantitative easing & exit strategies, but it's all blarney -- pure hogwash. They can't stop creating money, but they can try to stop you fleeing into gold & silver.

The more they inflate, they more demand for silver & gold they create. And their countermeasures backfire on them. This latest raid on gold has gratified millions of eager, waiting buyers.

Forget all the talk, even my talk, about day to day moves & even primary trends, because the one primary trend that eventually will enforce itself is this: they will keep on creating money until the money fails, and in the end, silver & gold will win.

Tough holding on in the meantime? Maybe so, but in the end, everything but silver & gold is a sucker bet.

And as a friend reminded me today, "If you don't hold it, you don't own it."

Any of y'all still in doubt where I stand?


It was another gassy week of "new all-time highs" in stocks, & agony without much ecstasy for silver & gold. Platinum stayed roughly even, palladium advanced, and the dollar broke out into a new uptrend.

Much as it may shock stock investors (& others) a "rationalization" is not "reasoning." Most of what passes for "proof" that stocks must go higher is merely the typical rationalization of those gripped by a mania.

Rationally, you buy stock as a source of future income. Right now the S&P500 has a dividend yield of 1.97%, the Dow (average) 2.47. Even a natural born fool from Tennessee knows that you'd have to hold the S&P500 36-1/2 years to get your money back and the Dow 29.1 years. Rip-roaring return, huh? And nowhere near the yields seen in markets with years of upward run awaiting them.

Rationalistically, you say, "Look at them stocks a-blowin' & a-goin'! My hairdresser told me today, and she knows a man who knows a man who trims Bernanke's hedges, that the Fed will keep on easing until 2021." That's about the level of most financial reporting. Doesn't matter: if unemployment or dollar or dog-food rises, that'll be good for stocks. If they fall, that'll be good, too.

Today stocks waited till the end of the day, about 3:40, before they rose, then gained from 15,080 to 15,118 in 20 minutes. Dow ended at 15,118.49, 35.87 (0.24%) fatter than yesterday. S&P500 gobbled 7.03 (0.43%) to lean back from the table at 1,633.70.

Stock's rise today teamed up with metals' fall to tug down the Dow in Gold and Dow in Silver. Dow in gold lost 2.5% or 0.255 oz (G$5.27 gold dollars) & ended at 10.522 oz ($217.52 gold dollars). Almost all the week's loss came today. First downtrend line I drew has been violated to the upside, & the Dow/Gold stands above its 20 DMA (10.31 oz). May be targeting a double top with the 11 oz (G$227.39) top on 15 April. At that high the Dow/Gold hit the long term downtrend line from 1999. Behavior here is critical to the primary trend.

Dow in Silver simply isn't behaving as the Dow in Gold. Believe it or not, stocks are having to work harder to gain against silver, with less result. Today Dow/Silver closed 639.75, up 8.12 oz. Still in a downtrend, but old high is 656.15. Here, too, Dow/Silver is tapping against its long term (since June 2001) downtrend line.

US Dollar index made good its escape from the shell yesterday (up 82.5 basis points) by jumping another 47.1 basis points (0.61%) to 83.165. Dollar index is targeting at least 83.50, maybe lots higher.

Poor old folks who were long euros or short dollars got caught today. Euro sank beneath its 20 dma yesterday, through its 50 dma today, & pierced but closed not below its 200 DMA. Lost 0.42% to $1.2984. Busted.

Japanese yen today did what few believed possible, it gapped down & sank to a lower low, 98.41 cents/y100, down 1%. Wonder what it will take to make capital flee the yen? Wonder what kind of havoc this is wreaking with the export plans of other Asian & European nations?

US$1=Y101.6=E0.7724=0.042 316 oz Ag=0.000 696 oz Au.

Somebody slammed gold HARD about 5:00 a.m. sending it gap-down from $1,445 to $1,435. Fell lower still by the New York opening, to a $1,421 low about noon. About 12:45 it gapped up to $1,435, then closed Comex down $32 for the day. It's pretty sorry when the best thing you can say about a market is, "Well, at least it closed $15 above the low."

But that does say a little something, namely, hungry buyers are ganged up around $1,425. After Comex closed gold rose another $7.

Today's drop merely continued the fall out of the channel that began Tuesday. Gold close plumb on its 20 day moving average, so Monday may be a mess. Short term gold must climb above $1,475 to reverse this downtrend.

Silver remained more phlegmatic than gold again today, but suffered damage all the same. Silver lost only 24.7 cents by the time it closed Comex at 2363.2c.

At 5:00 a.m. (I'm always talking about New York Time, 5 hours ahead of London) silver fell sharply from 2370c to 2360c in a few minutes, traded sideways an hour, then gapped down to 2335c. By 9:45 silver had reached its low at 2319c, traded a long time sideways, then gapped up from 2335c to 2360, boom. Formation it left behind is a classic island reversal. Only trading into that gap left behind would gainsay that.

Silver's 2319c low today considerably exceeded yesterday's 2373.6.

Signals here are arguing with each other. Silver today fell out of its established upward channel, and within that upward channel it had formed an even-sided triangle. Breaking down from a channel and a triangle points to lower prices -- but where do you put that island reversal? Or prices 20 cents higher after Comex?

All in all, we have not yet reliable signs that silver & gold have made a lasting bottom & turned up. Calmly, patiently, we have to wait for that proof.

On 10 May 1775 the Second Continental Congress convened in Pennsylvania and votes to issue paper money for the first time. It was not the last time, & in fact Congress issued paper money so many times that by the Revolution's end it was all practically worthless. The memory of that catastrophe was largely responsible for including Article I, section 10 in the US Constitution, "No State shall make any Thing except gold and silver coin a tender in payment of debt." That's still in the constitution, but for some reason instead of following that, the congress has given a monopoly to create money to a private banking cartel, the federal reserve system.

Why do y'all take it? Why don't you rise up & demand your rights & your inheritance? You have nothing to lose but your debt-slavery chains.

Y'all enjoy your weekend!

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
10-May-13 Price Change % Change
Gold, $/oz 1,436.80 -32.00 -2.2
Silver, $/oz 23.63 -0.25 -1.0
Gold/Silver Ratio 60.799 -1.348 -2.2
Silver/Gold Ratio 0.0164 -0.0002 -1.0
Platinum 1,486.00 -30.50 -2.0
Palladium 704.60 -9.05 -1.3
S&P 500 1,638.70 7.03 0.4
Dow 15,118.49 35.87 0.2
Dow in GOLD $s 217.52 5.27 2.5
Dow in GOLD oz 10.52 0.25 2.5
Dow in SILVER oz 639.75 8.12 1.3
US Dollar Index 83.17 0.47 0.6
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: 1,443.70      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,485.57 1,495.67 1,495.67
1/2 AE 0.50 739.38 763.36 1,526.71
1/4 AE 0.25 373.30 388.90 1,555.59
1/10 AE 0.10 157.98 166.03 1,660.26
Aust. 100 corona 0.98 1,408.04 1,422.04 1,450.76
British sovereign 0.24 341.89 351.89 1,494.84
French 20 franc 0.19 269.54 272.54 1,459.77
Krugerrand 1.00 1,474.02 1,489.02 1,489.02
Maple Leaf 1.00 1,453.70 1,468.70 1,468.70
1/2 Maple Leaf 0.50 830.13 757.94 1,515.89
1/4 Maple Leaf 0.25 368.14 386.19 1,544.76
1/10 Maple Leaf 0.10 153.03 157.36 1,573.63
Mexican 50 peso 1.21 1,731.82 1,747.82 1,449.63
.9999 bar 1.00 1,448.75 1,459.75 1,459.75
SPOT SILVER: 23.84      
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 18,690.10 19,190.10 26.84
US 40% silver 1/2s 0.30 6,664.05 7,034.05 23.84
100 oz .999 bar 100.00 2,384.00 2,469.00 24.69
10 oz .999 bar 10.00 243.40 248.40 24.84
1 oz .999 round 1.00 23.94 24.84 24.84
Am Eagle, 200 oz Min 1.00 25.09 27.84 27.84
SPOT PLATINUM: 1,486.00      
Platinum Platypus 1.00 1,511.00 1,551.00 1,551.00
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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.
  • 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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