The Moneychanger
Daily Commentary
Tuesday, 25 June a.d. 2013 Browse the commentary archive

Somebody pointed out to me yesterday that Ben Bernanke is from Augusta, Georgia -- the South. I am so ashamed.

But then the Federal Reserve scheme was hatched in Georgia, too. On Jekyll Island. What's the matter down there? Somebody from North Carolina -- I mention no names -- once said, if you want to know what 250,000 Confederate soldiers died to prevent, look at Atlanta.

Stocks bounced a little today. It's remotely possible that yesterday marked the bottom of the correction, but I doubt it. It was nothing in today's bounce -- Dow up 100.75 or 0.69% and S&P500 up 14.94 or 0.95% to 1,588.03 -- that suggested that, only that yesterday both indices touched or nearly touched the bottom trend channel line. Good place for a bounce, but no warrant the decline has ended.

Dow in Gold & Dow in silver keep tying my head in knots, refusing to break away and run up or break down and fall. Gold & silver contradicted each other today (I'll get to that later) so the Dow in Gold rose 0.097 oz to 11.579 oz or 0.85% (G$239.35 gold dollars) while the Dow in silver rose only 3.89 oz (0.52%) to 755.93.

I check the US dollar index late in the day and the price I report is compared to the one I published yesterday. Today it's trading at 82.541, down 0.77 or 0.09% from yesterday. Gained nothing, really, but remains in a sharp uptrend.

Ten year US treasury note yield rose again today, 1.61% to 25.89 (2.589%). Although the close was higher, the intraday high was lower. Indicators show it way overbought, which means, ripe for a correction. However, it broke away with a gap, and the move probably won't end without an exhaustion gap.

Although the dollar index was roughly flat today, the Euro dropped 029% to $1.3082 and the yen lost 0.08% to 102.22. Both are merely pausing in sharp downtrends.

Silver actually rose 3.3 cents today to 1952.6c while gold fell $2.00 to $1.274.80.

Both silver & gold have gone flat. Gold's trading range today was only $10.70 and silver's only 31.4 cents. Dead. Flatlining. No life.

Both are strongly oversold, way below 30 on the RSI, but no sign of life appeareth.

Might as well enjoy your summer while you're waiting for silver & gold to come back, because right now they're not in a hurry. Come back they will, but I'm going to stop plaguing myself about it and take a long view.

On 25 June 1876 in the Battle of Little Bighorn the Sioux and Cheyenne wiped out the 7th Calvary, who had been led into a trap by their Commander, Lt.Col. George Custer. Frankly, considering Custer, & considering he was invading the Indians' lands, you just have to root for the Indians.

On 25 June 1938 a portentous and deadly federal minimum wage law was passed guaranteeing workers 25 cents an our (rising to 40 cents by 1945) and a maximum 44 hour working week. Did it really raise wages? No, it priced low-value labor out of the market, which it was intended to do. Since the New Deal all the favors done for labor -- Social Security, mandatory retirement, etc. -- are aimed at shrinking the number of available workers.

Y'all listen now, and don't forget this: ALL government help, like all government money, comes with a sock in the jaw.

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
25-Jun-13 Price Change % Change
Gold, $/oz 1,274.80 -2.00 -0.16%
Silver, $/oz 19.53 0.03 0.17%
Gold/Silver Ratio 65.287 -0.213 -0.33%
Silver/Gold Ratio 0.0153 0.0000 0.33%
Platinum 1,350.50 21.40 1.61%
Palladium 667.15 11.05 1.68%
S&P 500 1,588.03 14.94 0.95%
Dow 14,760.31 100.75 0.69%
Dow in GOLD $s 239.35 2.01 0.85%
Dow in GOLD oz 11.58 0.10 0.85%
Dow in SILVER oz 755.93 3.89 0.52%
US Dollar Index 82.54 -0.08 -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: 1,276.10      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,316.94 1,317.57 1,317.57
1/2 AE 0.50 650.30 672.19 1,344.37
1/4 AE 0.25 325.15 342.47 1,369.89
1/10 AE 0.10 133.89 139.73 1,397.33
Aust. 100 corona 0.98 1,242.08 1,253.08 1,278.39
British sovereign 0.24 302.20 312.20 1,326.24
French 20 franc 0.19 238.25 245.25 1,313.59
Krugerrand 1.00 1,291.41 1,303.41 1,303.41
Maple Leaf 1.00 1,291.10 1,306.10 1,306.10
1/2 Maple Leaf 0.50 733.76 669.95 1,339.91
1/4 Maple Leaf 0.25 325.41 341.36 1,365.43
1/10 Maple Leaf 0.10 135.27 139.09 1,390.95
Mexican 50 peso 1.21 1,530.77 1,541.59 1,278.59
.9999 bar 1.00 1,280.57 1,291.57 1,291.57
SPOT SILVER: 19.58      
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 15,822.95 16,322.95 22.83
US 40% silver 1/2s 0.30 5,407.35 5,777.35 19.58
100 oz .999 bar 100.00 1,948.00 2,028.00 20.28
10 oz .999 bar 10.00 200.80 201.80 20.18
1 oz .999 round 1.00 19.68 20.33 20.33
Am Eagle, 200 oz Min 1.00 20.83 22.38 22.38
SPOT PLATINUM: 1,350.50      
Plat. Platypus 1.00 1,375.50 1,415.50 1,415.50
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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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