The Moneychanger
Daily Commentary
Wednesday, 15 May a.d. 2013 Browse the commentary archive

Can't help sounding like a broken record, because although the end is sure, blow-off markets take time to unfold.

Two headlines make my blow-off point. "Dow, S&P500, Google at all time highs intraday. Stocks shrugged off disappointing economic data in the US & Europe & continued to move higher into record territory." Or this: "Wall Street rallies despite downbeat earnings. US stocks soared to new record highs on Wednesday, despite further signs that the country's largest public companies have seen limited sales growth in the first year's quarter."

Good news, bad news, no news -- it's all the same to a blow-off market, it will rise on any news, even news that ought to cast rational doubt on future performance.

Never mind. Dow & S&P500 both made new all-time highs again today. Dow fattened up 60.44 (0.4%) to 15,275.69. S&P500 swelled 8.44 (0.51%) to 1,658.78.

Put that into perspective. To match its inflation-adjusted peak in 2000, the Dow today would need to reach 15,845.33. To match its 2007 inflation adjusted peak, the S&P500 would have to be at 1,772.67. To reach its year 2000 peak, adjusted for inflation, the S&P500 today needs to reach 2,099.43. Those prices would just bring you even with what inflation has cost.

The Dow in Gold & Dow in Silver jumped up today, thanks to rising stocks and falling metals.

Dow in silver jumped to a new high at 674.19 oz, up 3.66%. Dow in gold did not jump quite as much, only to 10.94 oz (G$226.15 gold dollars) where the last high was 11 oz. Both are flirting and trading through and around long term downtrend lines. Nerve-wracking.

The US dollar index continued to rise today, adding another 21.7 basis points (0.285) to 83.822, confirming yet again that it has broken out towards the sky. This will drag on gold and silver and stocks.

Anent this temporarily strong dollar, it's interesting that the yield on the US treasury 10 year note since May 1 has risen right sharply, implying that folks are selling dollars. Why? To invest in stocks, where they might find some return? Falling yields (rising bond prices) would be bad news for stocks right now.

Astonishing everyone, the Japanese yen actually rose 0.04% today to 97.79 cents/Y100. Frankly, it makes little sense looking at the chart any longer, since the Nipponese Nice Government Men are plainly in charge, with the approval of the G7 central banks.

The euro gapped down today on more bad economic news: Euroland has an incredible shrinking economy. That knocked the currency in the head. It closed beneath its 200 DMA yesterday, gapped down today to close at 1.2878, down 0.48%. Should the euro not catch hold around the last low ($1.2750), a large span of air remains to catch it before it hits $1.2600.

Gold & silver took a bad beating with a big stick today. Gold buckled by $28.20 (2%) to $1,396.50, below the morale- busting $1,400 level. Silver belly-flopped by 71.2 cents to 2264.3 cents, 3.1% lower than yesterday.

For gold, $1,375 - $1,350 now becomes the target, & we are fast drawing nigh that juncture where we will discover whether that $1,321.50 low on 15 April marks the limit of gold's correction.

From silver's low today at 2252.3 it's only 52 cents to the 15 April low at 2200c. Tomorrow we'll find out how many buyers are lurking there, and how much they want to buy.

I am of course no more than a natural born fool from Tennessee, but if his highness Ben the Banker were to put me in charge of manipulating silver & gold, even for a day, & I wanted them to drop, I'd hit 'em hard tomorrow, to test whether they have any resilience at those earlier lows or not. If I couldn't break 'em, I'd leave 'em alone for a while. But don't pay no attention to me, I'm just a fool & don't know nothin'.

On 15 May 1213 English King John named Stephen Langton Archbishop of Canterbury. Funny how tyrants shoot themselves themselves in the foot. Two years later Langton helped lead the barons in the uprising that forced John to sign the Magna Carta, the Great Charter of English (and American) liberty. It remains part of the common law, but along with most of the common law has been obscured or cast aside by bureaucratic & statutory encroachments. For instance, the right to travel without let or hindrance has been withdrawn by the supposed requirement to have a driver's license, & the driver's license has become the "papers" you must have to travel anywhere. But there's still hope. Governments may suppress common law rights, but they remain inalienable.

When I wrote about using zinc oxide ointment as a very effective deodorant a few weeks ago, reader WS sent me a sample of a healthy deodorant his wife makes, without petroleum jelly. Sure enough, it doesn't have antifreeze or any other scary ingredients, but does contain zinc oxide. She's been producing it for ten years, and sells it all over the world. I tried it, and it works like a champ. You can order from www.no-bo.com (no, I am not joking). A twist up deodorant bar costs $10.99 & he says lasts 3-4 months, but at the rate I'm going through it, it will last six months. All the ingredients are listed and described on the website. Looks like an effective & healthy alternative to chemical deodorants.

Argentum et aurum comparanda sunt —
Silver and gold must be bought.

— Franklin Sanders, The Moneychanger

Your source for gold and silver. Read our latest reviews and testimonials.
Market Snapshot See more charts and market data
15-May-13 Price Change % Change
Gold, $/oz 1,396.50 -28.20 -1.98%
Silver, $/oz 22.64 -0.71 -3.05%
Gold/Silver Ratio 61.675 0.673 1.10%
Silver/Gold Ratio 0.0162 -0.0002 -1.09%
Platinum 1,490.70 -11.20 -0.75%
Palladium 728.30 1.90 0.26%
S&P 500 1,658.78 8.44 0.51%
Dow 15,275.69 60.44 0.40%
Dow in GOLD $s 226.12 5.35 2.42%
Dow in GOLD oz 10.94 0.26 2.42%
Dow in SILVER oz 674.63 23.15 3.55%
US Dollar Index 83.82 0.22 0.26%
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: 1,394.70      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,435.15 1,444.91 1,444.91
1/2 AE 0.50 714.27 737.45 1,474.90
1/4 AE 0.25 360.62 375.70 1,502.79
1/10 AE 0.10 152.61 160.39 1,603.91
Aust. 100 corona 0.98 1,360.25 1,374.25 1,402.01
British sovereign 0.24 330.28 340.28 1,445.55
French 20 franc 0.19 260.39 263.39 1,410.77
Krugerrand 1.00 1,421.20 1,436.20 1,436.20
Maple Leaf 1.00 1,404.70 1,419.70 1,419.70
1/2 Maple Leaf 0.50 801.95 732.22 1,464.44
1/4 Maple Leaf 0.25 355.65 373.08 1,492.33
1/10 Maple Leaf 0.10 147.84 152.02 1,520.22
Mexican 50 peso 1.21 1,673.04 1,689.04 1,400.88
.9999 bar 1.00 1,399.58 1,410.58 1,410.58
SPOT SILVER: 22.57      
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 17,710.55 18,210.55 25.47
US 40% silver 1/2s 0.30 6,289.40 6,659.40 22.57
100 oz .999 bar 100.00 2,257.00 2,342.00 23.42
10 oz .999 bar 10.00 230.70 235.70 23.57
1 oz .999 round 1.00 22.67 23.57 23.57
Am Eagle, 200 oz Min 1.00 23.82 26.57 26.57
SPOT PLATINUM: 1,490.70      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Plat. Platypus 1.00 1,515.70 1,555.70 1,555.70
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© 2015 Little Mountain Corporation, d.b.a. The Moneychanger. All rights reserved. May not be republished in any form, including electronically, without our express permission.

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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