The Moneychanger
Daily Commentary
Tuesday, 4 June a.d. 2013 Browse the commentary archive

The day rapidly draweth nigh in which you will be officially declared "crazy" if you disagree with your U.S. government. Likewise the old Soviet Union declared anyone must be crazy who denied that the socialist paradise really was a paradise, so they shoved them into insane asylums. See "A Question of Madness" by Zhores Medvedev, who suffered that treatment.

Prepared for all dissidents are several myth models into which the government can pour your case. For instance, there is the myth of the Rightwingextremist. If you share any of the likes or dislikes of the Rightwingextremist, like abhorring abortion, you must be one, too, & therefore should be at the very least institutionalized until your brain can be fixed. Same goes for the Leftwingextremist myth, or the Religiousfundamentalist, or the Antigovernmentype or Illegaltaxprotestor myth. All they need do is ring the myth bell, & the salivating public immeditely identifies YOU as the myth. And of course, you must be crazy, or sick, so you must be "fixed."

Great example of this came through Catherine Austen Fitts' blog yesterday, see "New York Times Warning: Trust Authorities on Boston Bombing, or You're Nuts" by Russ Baker. If you don't believe the moth-eaten official explanations with all their contradictions, you must be nuts. You are sick, & must be healed by Official Shrinks.

By the way, the Nazis used this same process to dehumanize the Jews, as did the Soviets to dehumanize the bourgeoisie or any other "enemy of the people." It is morally acceptable to do anything to these enemies, even kill them, because, after all, they are not really human like us.

Are y'all beginning to catch on that we are not dealing with politics of "right" or "left," but the deepest questions of humanity and and human freedom?


Daily I search the news for pleasant or encouraging reports to share with y'all, but daily I only come away with acute hogwash poisoning. I notice that IMF apparatchik Christine Lagarde is warning of "somber trends" developing the world economy. I reckon Christine wants the world's central banks to print up more money, on the theory that although it hasn't worked already, it might work if they do a lot more of it. Akkk! Akkk! I can feel the hogwash poisoning climbing up my gullet!

Stocks were not pleased with anything today. Dow backed off 76.87 (0.5%) to 15,177.16. S&P500, resplendent with GM, which, coming out of bankruptcy or tankruptcy or the government's financial hospital has been re-admitted in the place of ketchup cook Heinz, cheapened by 9.04 or 0.55%.

Grief for stocks will begin when they break their 50 day moving averages (14,904 & 1,603), which roughly coincide with their trading channel bottom lines. Just to give y'all a notion how far away that lies, that's about 273 points for the Dow and about 28 points for the S&P500. Both fell almost that many points on 31 May. And downside points come easier than upside points.

Dow in Gold and Dow in Silver both rose a leetle today, but continue to roll over toward the center of the earth. Dow in gold rose 0.54% to 10.863 oz (G$224.56 gold dollars), not quite breaching the 20 DMA in its close but still in a steady downtrend.

Dow in silver closed 677.55, 6.01 oz or 0.9% higher than yesterday. It also rolleth over. 20 DMA at 667.38.

That US dollar index really smashed its chart yesterday. Closed through the uptrend line AND the 50 DMA, and looks sick as a yellow cat eating bad meat. Oh, today it scrabbled around and climbed 7.2 basis points, which you could almost see with a 10 power microscope. Ended at 82.751. A close below 82.50 will accelerate its weight-loss program.

I ought to be ashamed of myself. Making fun of the scrofulous, no-good, unbacked and spineless fiat currencies. Smacks too much of shooting fish in a rain barrel -- with a 12 gauge shotgun. 'Tain't no hard target to hit.

Anyhow, yesterday's touch on the 50 DMA scairt that yen plumb to death. Today it shrank 0.55% to 99.98 cents/Y100. Euro edged up a microscopic 0.7% to $1.3085. Important to note there is that close lies above and outside the downtrend line, so promises more upside.

By the way, don't forget that the US bond market has broken down, forecasting a lower dollar and higher interest rates. I'm so sorry, Ben.

I was having so much fun I almost forgot about silver & gold!

In a trading day as strange as 'tis bogus, silver lost 31.5 cents to end at 2240c while gold scraped off $14.60 to close comex at $1,397.10. In the late aftermarket gold has traded up to $1,400.15 and silver to 2258c.

I say "bogus" because this is very odd trading. Usually markets either make it or break it. If they fail, they follow through downward; if they make a new high, they climb. What do you say about gold? Thursday it had a great up day, bursting through $1,395 resistanct to end around $1,415 -- then Friday giving nearly all back? And Monday bouncing right back, but Tuesday having its pockets picket again?

Here's a guess about these last four days. That $1,491-$1,495 level was resistance, but gold shot through it. When it cam back Friday, it fell not through, but stopped at that resistance-now-become-support, $1,392.50. Yesterday it shot back to the top of the range, $1,415, then today fell back, but ratcheted higher with a $1,393.10 close.

Clearly, many happy souls are delighted to buy gold at $1,392, while many unhappy souls are delighted to sell $1,415. A tense disagreement exists, & somebody's gonna lose & get a black eye.

Battleground leans back & forth across the 20 DMA ($1,405.55). If gold can cross that, it shold shoot up to the 50 DMA ($1,461). However, it the Unhappy Ones can drive gold below $1,390, it might break.

No point in pretending to clarity where none is. Momentum indicators are pointing up, gold resiliently keeps popping back, but gold must first prove itself with a jump over $1,425. I am buying modestly but gladly, but can't quite bring myself yet to make a big commitment. I feel the same way a pig, a chicken, and a cow feel about breakfast. The chicken & the cow are involved, but the pig is committed.

In a burst of good cheer on 4 June 1674 the Massachusetts legislature prohibited horse racing. Spitting on the sidewalk was already illegal.

On 4 June 1792 Captain George Vancouver claimed Puget Sound for Great Britain. Can you imagine how he felt when his eyes first fell on that unspeakable beauty? Of course, it was raining at the time. It rains all the time on Puget Sound, well, except for three days a year and in the rain shadow around Port Angeles. However, it is ALMOST worth it to wait through all that rain just to see one sunny spring day there.

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
4-Jun-13 Price Change % Change
Gold, $/oz 1,397.10 -14.60 -1.03%
Silver, $/oz 22.40 -0.32 -1.39%
Gold/Silver Ratio 62.371 0.222 0.36%
Silver/Gold Ratio 0.0160 -0.0001 -0.36%
Platinum 1,489.90 -6.30 -0.42%
Palladium 748.85 -7.95 -1.05%
S&P 500 1,631.38 -9.04 -0.55%
Dow 15,177.16 -76.87 -0.50%
Dow in GOLD $s 224.56 1.20 0.54%
Dow in GOLD oz 10.86 0.06 0.54%
Dow in SILVER oz 677.55 6.01 0.90%
US Dollar Index 82.75 0.07 0.09%
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: 1,400.15      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,439.35 1,447.06 1,447.06
1/2 AE 0.50 717.06 740.33 1,480.66
1/4 AE 0.25 362.03 377.17 1,508.66
1/10 AE 0.10 146.91 153.67 1,536.66
Aust. 100 corona 0.98 1,364.19 1,378.19 1,406.03
British sovereign 0.24 331.57 341.57 1,451.03
French 20 franc 0.19 261.41 264.41 1,416.22
Krugerrand 1.00 1,419.75 1,432.75 1,432.75
Maple Leaf 1.00 1,415.15 1,430.15 1,430.15
1/2 Maple Leaf 0.50 805.09 735.08 1,470.16
1/4 Maple Leaf 0.25 357.04 374.54 1,498.16
1/10 Maple Leaf 0.10 148.42 152.62 1,526.16
Mexican 50 peso 1.21 1,679.58 1,694.16 1,405.13
.9999 bar 1.00 1,405.05 1,416.05 1,416.05
SPOT SILVER: 22.58      
SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 29.00 32.00 41.83
VG+ Peace dollar 0.77 26.00 29.00 37.91
90% silver coin bags 0.72 17,395.95 17,895.95 25.03
US 40% silver 1/2s 0.30 6,292.35 6,662.35 22.58
100 oz .999 bar 100.00 2,258.00 2,333.00 23.33
10 oz .999 bar 10.00 230.80 231.80 23.18
1 oz .999 round 1.00 22.68 23.58 23.58
Am Eagle, 200 oz Min 1.00 23.83 25.58 25.58
SPOT PLATINUM: 1,489.90      
Plat. Platypus 1.00 1,514.90 1,554.90 1,554.90
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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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