The Moneychanger
Daily Commentary
Tuesday, 16 July a.d. 2013 Browse the commentary archive

"Trifling." If you don't speak Southern, you don't know that word describes someone who is just of no account, worthless, always fiddling with something that doesn't amount to a hill of beans & spending his time on things no adult would mess with for long. He can never bring any plan to fruition, and in the end just wastes your time.

This morning I couldn't find a pair of wire pliers to pull out my own teeth so I was torturing myself by listening to National Proletarian Radio instead. Thereupon was interviewed a man who had -- I am NOT making this up -- written a book about "Fantasy Sports." Seems that 30 million Americans play these virtual fantasy sports, although how I'm not really sure & don't intend to investigate.

The word that leapt to my mind was "trifling." I'm sure people have every right to spend their time as they please, but if you're 40 or 50 and spend your leisure time playing video games, well, that's just trifling. Worse yet, I got to thinking about all the real sports, & the zillions of dollars & hours & energy Americans spend on such things, and, well, I confess the "T" word did cross my mind again.

But what do I know? I'm so sports ignorant my wife has to watch football for me.

Seems stocks are fidgeting before what Bernanke might say in front of congress tomorrow. Reckon they're afraid he might say something wrong. Y'all think about how loony this is. An academic who has never built a business or made a payroll in his life, far as I know, has US & world markets trembling over what he might say. Now there's a victory for reason and common sense.

That misapprehension about Ben the Beneficent sent the dollar shamefully tumbling down the cellar stairs. Lost 57.4 basis points (0.74%) to 82.468.

That left the dollar at its low for nearly a month. Eight month daily chart left an island top isolated by gaps up and down, made a flag of sorts just above the moving averages (20 at 83 and 50 at 82.89). Now it has plunged again, leaving me with impressed that if it breaks 82.00, it won't stop before 81.50. However, I don't expect it to break 81.00.

Euro enthusiastically gapped up today, above the 20 DMA ($1.3080) & closed up 0.79% at $1.3162. Top of the channel for the euro is $1.345, & it would take earthquakes, fire, flood, and approaching comets for it to breach that mark. Fact is, the euro is the chief candidate for the next financial crisis. Hard choice between the euro and the yen, but I believe the euro wins the booby prize.

Yen rose 0.79% today to close at 100.92 cents/Y100. Still trending up, however lamely.

Dow fell 32.41 (0.21% to 15,451.85 while the S&P500 gave back 6.26 (0.37%) to 1,676.26. Today's little break didn't come close to breaking the uptrend.

It's interesting that the Dow in Silver has traded out into a triangle that seems to hint it may break out toward the earth's core. Dow in silver fell today, down 0.75 or 5.43 oz to 775.58 oz. Dow in gold has done something similar, with a slightly more pronounced downward bias. Still rolling over to the downside.

Gold rose $7.00 today to $1,290.80. Silver gained 9.7 cents to 1992.3c.

Both are range-bound. Gold has traded between $1,296 and $1,271 the last five days, silver between 2022c and 1970c. I repeat yesterday's admonition: stases don't stay. Both silver & gold have established uptrends off their late June lows and both have stalled at first resistance, $1,300 and 2000c. They must break through or fall back.

For silver & gold investors, it's spider time, time to take a lesson from Robert the Bruce who spent so many years trying to free Scotland from the English. In the winter of 1306-07 Bruce was running from his sixth or seventh defeat at English hands. In a cave he watched a spider spinning a web from one part of the roof to another. Over and over the spider tried to anchor her web, and over and over failed. But every time she began again until she had finished the web.

I don't need to explain my point to y'all, do I?

On 15 July 1791 King Louis XVI was suspended from office until he agreed to ratify the new French constitution. Whoops -- on 15 July 1875 ANOTHER French constitution was finalized. Of the making of many constitutions there is no end -- of the minding them, little beginning.

On 15 July 1935, a black day in history, Oklahoma City became the first US city to use parking meters.

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
16-Jul-13 Price Change % Change
Gold, $/oz 1,290.80 7.00 0.55%
Silver, $/oz 19.92 0.10 0.49%
Gold/Silver Ratio 64.789 0.036 0.06%
Silver/Gold Ratio 0.0154 -0.0000 -0.06%
Platinum 1,426.10 3.60 0.25%
Palladium 734.50 3.45 0.47%
S&P 500 1,676.26 -6.24 -0.37%
Dow 15,451.85 -32.41 -0.21%
Dow in GOLD $s 247.46 -1.87 -0.75%
Dow in GOLD oz 11.97 -0.09 -0.75%
Dow in SILVER oz 775.58 -5.43 -0.70%
US Dollar Index 82.47 -0.57 -0.69%
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: 1,290.50      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,325.34 1,332.44 1,332.44
1/2 AE 0.50 657.65 679.77 1,359.54
1/4 AE 0.25 328.82 346.34 1,385.35
1/10 AE 0.10 135.40 141.31 1,413.10
Aust. 100 corona 0.98 1,256.09 1,267.09 1,292.69
British sovereign 0.24 305.61 317.61 1,349.22
French 20 franc 0.19 240.94 247.94 1,327.99
Krugerrand 1.00 1,308.57 1,320.57 1,320.57
Maple Leaf 1.00 1,305.50 1,320.50 1,320.50
1/2 Maple Leaf 0.50 742.04 677.51 1,355.03
1/4 Maple Leaf 0.25 329.08 345.21 1,380.84
1/10 Maple Leaf 0.10 136.79 140.66 1,406.65
Mexican 50 peso 1.21 1,548.05 1,558.96 1,292.99
.9999 bar 1.00 1,295.02 1,306.02 1,306.02
SPOT SILVER: 19.92      
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 16,205.48 16,705.48 23.36
US 40% silver 1/2s 0.30 5,683.18 5,833.18 19.77
100 oz .999 bar 100.00 1,981.50 2,061.50 20.62
10 oz .999 bar 10.00 204.15 205.15 20.52
1 oz .999 round 1.00 20.02 20.82 20.82
Am Eagle, 200 oz Min 1.00 21.17 22.72 22.72
SPOT PLATINUM: 1,426.10      
Plat. Platypus 1.00 1,451.10 1,491.10 1,491.10
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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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