The Moneychanger
Daily Commentary
Tuesday, 2 July a.d. 2013 Browse the commentary archive

Unless somebody somewhere is behaving like a serious adult, the satirist is left staring at a blank wall. After all, in a world with Bernankes, Obamas, Bidens, Pelosis, Clintons Boehners, Draghis, LaGardes and the whole host of gnomes, trolls, & goblins running things, there isn't a serious adult in the crowd anywhere. How do you make fun of the already ridiculous? Tough, but laughter is all they deserve.

At http://www.oftwominds.com/blogjuly13/legacy7-13.html Charles Hugh Smith has written a short, incisive essay that drives right to the heart of our situation: the systems and institutions we have inherited are dysfunctional and unreformable because each is fiercely defended by its army of constituents. Go, read!

I add to that: over 50% of income in the United States comes from government spending, about 20% from state and local government spending and about 30% from federal spending. In other words, less than half the people are producing anything. This can't be fixed, reformed, or solved, & all those people will fight like screaming, clawed banshees to protect their place at the nipple. Can't be fixed, & can't stop. Another reason I maintain inflation WILL continue.

'Twas not a bright day for stocks, which failed to break the shackles of gravity. Dow fell back 42.55 (0.28%) to 14,932.41. S&P500 tripped 0.88 (-0.05%) to 1,614.08. Under the 20 DMA, & the 50 DMA. Feels awfully heavy.

Dow in gold & Dow in silver moved sideways. Dow in gold gained 0.7% or 0.84 oz to 12.077 oz (G$248.22 gold dollars). Dow in silver added 1.07% (8.19 oz) to 778.78 oz. Forming a broadening top still.

US dollar index flexed its new muscles today & kicked sand into the faces of the euro & yen and called them "Skinny!" Dollar index jumped up 52.7 basis points (0.68%) to 83.55. The near vertical rally continues. Yen lost 0.97% to 99.42 cents/Y100 and the euro broke support at $1.3000, closing down 0.675 at $1.2979. All three of them are ready for the Old Currencies Home.

Eye-catching day in silver & gold, because they didn't break and tuck-tail, although they did drop. Silver lost 1.34% or 26.2 cents to 1929.8c, according to Comex, but in fact never traded there. I know, because I watched it for two hours, waiting for it to drop below 1940c to buy some, and it never did until after the market closed. Quis custodiet custodes ipsos? And when the guards go bad, what cure remains?

Gold lost $12.30 (0.98%) to $1,243.60. Low came at $1,242.13, and it, too, very tenaciously held on. Somebody was buying whenever gold approached $1,240.

As long as gold holds on above $1,240 tomorrow & silver above 1930c, this little rally will continue. Both silver & gold ended the day setting on an internal resistance line. If they break through that tomorrow, they will jump. I bought a little today.

I no longer follow the gold & silver stocks, because that would be like a Chinese restaurant selling tacos -- not in my line of business. But nearly 30 years ago when I was learning how to evaluate gold stocks & writing about them, I made friends with Sam Parks out in Seattle, and reliable & honest man in a questionable field. Mark Twain defined a gold mine as "a hole in the ground with a liar at the mouth." While that may be true, it's also true that gold stocks can offer HUGE leverage to the gold price, IF you can pick the right ones. Sam was very knowledgeable and did all his own homework.

Sam Parks retired a number of years ago, and the two brokers, Jane Baerney & Val Fitzsimmonds, who had worked with him took over his book. For more than a decade I have recommended the two of them to my customers interested in mining stocks, & Sam still does a lot of their research. You can call them at (866) 972-9948 for Jane Baerny (ask for Samantha Parks, Sam's daughter, who works with Jane) or (800) 465-4402 for Val Fitzsimmonds. Their minimum account is $25,000.

While they have done an amazingly profitable service for my customers in the past, remember that's no guarantee of future performance, & nobody can promise that any investment will be profitable. I get no kickback and have no financial interest whatever in making this recommendation, I simply know these ladies do a fine, diligent, and honorable job. I also believe that if ever there has been a time to invest in mining stocks at low prices, that time must be near.

On 2 July 1489 was born Thomas Cranmer, first protestant Archbishop of Canterbury, was born. His was the liturgical and artistic genius behind the Book of Common Prayer. He was burned at the stake in 1556 under Bloody Mary.

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
2-Jan-13 Price Change % Change
Gold, $/oz 1,243.60 -12.30 -0.98%
Silver, $/oz 19.30 -0.26 -1.34%
Gold/Silver Ratio 64.442 0.234 0.36%
Silver/Gold Ratio 0.0155 -0.0001 -0.36%
Platinum 1,379.20 -12.90 -0.93%
Palladium 684.90 2.20 0.32%
S&P 500 1,614.08 -0.88 -0.05%
Dow 14,932.41 -42.55 -0.28%
Dow in GOLD $s 248.22 1.73 0.70%
Dow in GOLD oz 12.01 0.08 0.70%
Dow in SILVER oz 773.78 8.19 1.07%
US Dollar Index 83.55 0.53 0.63%
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: 1,243.60      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,278.42 1,284.02 1,284.02
1/2 AE 0.50 633.73 655.07 1,310.13
1/4 AE 0.25 316.86 333.75 1,335.00
1/10 AE 0.10 130.47 136.17 1,361.74
Aust. 100 corona 0.98 1,210.44 1,221.44 1,246.12
British sovereign 0.24 294.50 306.50 1,302.04
French 20 franc 0.19 232.18 239.18 1,281.09
Krugerrand 1.00 1,256.04 1,268.04 1,268.04
Maple Leaf 1.00 1,258.60 1,273.60 1,273.60
1/2 Maple Leaf 0.50 715.07 652.89 1,305.78
1/4 Maple Leaf 0.25 317.12 332.66 1,330.65
1/10 Maple Leaf 0.10 131.82 135.55 1,355.52
Mexican 50 peso 1.21 1,491.79 1,502.41 1,246.09
.9999 bar 1.00 1,247.95 1,258.95 1,258.95
SPOT SILVER: 19.34      
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 15,254.53 15,754.53 22.03
US 40% silver 1/2s 0.30 5,512.08 5,662.08 19.19
100 oz .999 bar 100.00 1,923.50 2,003.50 20.04
10 oz .999 bar 10.00 198.35 199.35 19.94
1 oz .999 round 1.00 19.44 20.24 20.24
Am Eagle, 200 oz Min 1.00 20.59 22.14 22.14
SPOT PLATINUM: 1,379.20      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Plat. Platypus 1.00 1,404.20 1,444.20 1,444.20
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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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