The Moneychanger
Daily Commentary
Monday, 24 June a.d. 2013 Browse the commentary archive

There are two mutually exclusive ways of viewing markets. In the first, markets are fairly free, but subject to manipulation at the margin by the Elite through government or large operators, though not permanently against the primary trend. In the second the Elite, which I feel more comfortable calling the "Money Power," can control every price, and uses manipulation to herd the public in any direction they want.

If the second is true, then their power is perfect & we might as well quit, because they are stronger than God. For some reason, I just can't swallow that. I keep thinking that most of their "power" is a bluff.

But what do I know? I'm just a natural born fool from Tennessee, where people mind their own business & a man's handshake is more binding than a contract concocted by twenty-five snake-bellied New York lawyers.

Stocks around the world -- especially in developing countries, continued to reel in Bernanke-itis. Dow today hit a low at 14,551, and settled down 139.84 (0.94%) at 14,659.56. It has lost 4.3% since 18 June. S&P500 lost 19.34 (1.21%) to close at 1,573.09, down 4.76% since 18 June.

Ultimate target here for the Dow may be as low as 14,000 and for the S&P500 1,540.

Dow in Gold barely rose today, 0.11%, to 11.43 oz (G$236.28 gold dollars), while the Dow in silver added 9.04 oz (1.23%) to 746.98 oz. No secret why. While the Dow fell 4.3%, gold fell 6.6% and silver 10.1%.

Turmoil reigns in the bond market, where the yield on the 10 year treasury note has risen from 20.99 (2.099%) on 14 June to 25.48 (2.548%) today, up 17.9%. In the same period the 30 year US bond has lost 2.9% & the 10 yr note 3%. HUGE moves for the bond market. Great bubble, Ben! How's that ZIRP (Zero Interest Rate Policy) doing?

Currencies were flat today, having exhausted the Nice Government Men in the past few days. US dollar lost 1.1 basis points to 82.618.

Having lost 2.93% since the 18th, the Euro ended unchanged today at $1.3123. Yen climbed 0.2% to 101.73, not much change either. Euro had been in an uptrend but now has fallen through all its moving averages and touched but didn't penetrate the 200 DMA today. Dollar has all the other currencies on the run.

Let's see. In one day Ben cracked stock markets around the globe, the bond market & interest rates, & silver & gold. The man's a genius. That's what I like about central banking -- its stabilizing influence.

US$1=Y98.3=E0.7620=0.051300 oz Ag = 0.000783 oz au.

Today gold fell $14.80 to $1,376.80. Silver lost 46.5 cents and closed at 1949.3c.

Gold's low so far in this move has been about $1,268.70 last Thursday (20 June). Today's low came at $1,278.84, high reached only $1,291.22. Silver's low came Friday (21 June) at 1931c.

Today's trading for both metals was flat, not as low as Thursday or Friday, but no higher. No strength in these little narrow ranges.

Gold touched its bottom trading channel line on Friday. Silver may have fond its feet, but could drop another 75 cents. Other than an extremely overbought condition, neither one is flashing signs of a reversal.

Hate to tell y'all, but this feels a lot like fall of 2008.

As always, I've been thinking on all this, trying to chart a path, when my phone rang. It was fellow in a third generation business, one with a minimum 100 year time horizon. These folks have to be long term thinkers. He already has a lot of gold, bought much lower, and he called today to buy more. What does he know that I don't?

I get so frazzled watching markets from day to day & watching that trained pony Bernanke do his tricks that I take my eyes off the horizon. The end really isn't in doubt, but they throw up all sorts of distractions to make you think so. We live in the age of appearances, where any illusion works.

Until you see thru it, and realize the truth is simple. It always is, once you identify it.

Simple truth is, inflation never works. Never has, never will. Always guts the middle class & savers, always ends in tragedy for the society that tries it. America is no exception to that truth. Wait & see.

That's why I will patiently sit on my gold & silver, & buy more whenever I see this decline turning. But y'all already know I'm nothing but a natural born durn fool from Tennessee, not one of them clever Yankee traders. Reckon I'm just doomed. Wonder why I don't feel no worse for 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
24-Jun-13 Price Change % Change
Gold, $/oz 1,276.80 -14.80 -1.15%
Silver, $/oz 19.49 -0.47 -2.33%
Gold/Silver Ratio 65.500 0.785 1.21%
Silver/Gold Ratio 0.0153 -0.0002 -1.20%
Platinum 1,328.10 -34.40 -2.52%
Palladium 656.11 -17.15 -2.55%
S&P 500 1,573.09 -19.34 -1.21%
Dow 14,659.56 -139.84 -0.94%
Dow in GOLD $s 237.34 0.48 0.20%
Dow in GOLD oz 11.48 0.02 0.20%
Dow in SILVER oz 752.04 10.52 1.42%
US Dollar Index 82.62 0.01 0.01%
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SPOT GOLD: 1,281.50      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,319.95 1,323.15 1,323.15
1/2 AE 0.50 653.06 675.03 1,350.06
1/4 AE 0.25 326.53 343.92 1,375.69
1/10 AE 0.10 134.45 140.32 1,403.24
Aust. 100 corona 0.98 1,248.59 1,259.59 1,285.03
British sovereign 0.24 303.48 313.48 1,331.67
French 20 franc 0.19 239.26 246.26 1,318.99
Krugerrand 1.00 1,299.44 1,311.44 1,311.44
Maple Leaf 1.00 1,296.50 1,311.50 1,311.50
1/2 Maple Leaf 0.50 736.86 672.79 1,345.58
1/4 Maple Leaf 0.25 326.78 342.80 1,371.21
1/10 Maple Leaf 0.10 135.84 139.68 1,396.84
Mexican 50 peso 1.21 1,537.25 1,548.10 1,283.99
.9999 bar 1.00 1,285.99 1,296.99 1,296.99
SPOT SILVER: 19.60      
SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 26.00 29.00 37.91
VG+ Peace dollar 0.77 24.00 27.00 35.29
90% silver coin bags 0.72 15,658.50 16,158.50 22.60
US 40% silver 1/2s 0.30 5,413.25 5,783.25 19.60
100 oz .999 bar 100.00 1,950.00 2,030.00 20.30
10 oz .999 bar 10.00 201.00 202.00 20.20
1 oz .999 round 1.00 19.70 20.35 20.35
Am Eagle, 200 oz Min 1.00 20.85 22.40 22.40
SPOT PLATINUM: 1,328.10      
Plat. Platypus 1.00 1,353.10 1,393.10 1,393.10
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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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