The Moneychanger
Daily Commentary
Wednesday, 24 July a.d. 2013 Browse the commentary archive

In congress today the house narrowly defeated a bill to rein in the National Security Agency, 207-215. Politics makes strange bedfellows, with some Republicans & Democrats voting together against the NSA. The fascist Republicans & Democrats banded together, though, to defeat the bill, after waving the bloody shirt of national security all over the house. Folks, in case y'all aren't thinking, this surveillance has nothing to do with national security & everything to do with perfecting a totalitarian police state.

The US dollar index rose today 24.4 basis points (0.31%) to 82.277. That might be the game changer, sending the dollar back up, since it hit that 82 support today & bounced up. Yes, it might yet sink to 81, but ought to get a good bounce from here anyway, maybe to the 50 DMA (8288) or the 20 DMA (83.24). Yen remains trapped. Lost 0.85 today to 99.79 cents/Y100. Euro still hasn't broken its uptrend line. Closed $1.3200, down 0.18%.

In the teeth of a rising dollar today the 10 year Treasury Note yield rose 2.86% to 2.588%. Can you hear those tom-toms beating in the jungle, Bwana Ben? Bad juju, Bwana Ben, bad juju. And Tarzan ain't coming.

Rising dollar didn't aid stocks any, either. Dow today lost 25.5 (0.16%) to 15,542.24. S&P500 lost 0.38% or 6.45 to 1,685.94. Today's break took both indices to their downtrend lines, & took the S&P500 through it. Even though I still expect higher prices before the top, this looks like a break for a correction.

Both the Dow in Gold & Dow in silver rose again today, reaching for a touchback to the breakdown point. Both rose 1%, the DiG ending at 11.775 oz (G$243.42 gold dollars) & 776.57 oz.

Clearly my optimism had hold of me yesterday shaking me like a terrier shaking a rat. Alas, 'twas not to be, but even in defeat there was chocolate icing (I'm not sure those two metaphors mix).

Silver lost 23.2 cents (1.15%) today to 2001.4c while gold lost $15.20 (1.14%) to $1,319.90. So where's the chocolate icing? Silver's low came at 2001.4. It held on above 2000c. Gold's low was $1,313.73. If another plunge is building, then gold will close below $1,295. I don't believe there will be any dallying -- either gold & silver will turn & keep advancing or they will fail quickly.

Stop whining and grumbling. We've seen the worst of it. Bwana Ben has had his day, but his voodoo won't work much longer. Meanwhile he has dug an elephant trap for himself. Candidly, I wish I didn't have to see the catastrophe of that bond bubble bursting.

I've been reading "Resistance, Revolution, Liberation, A Model for Positive Change" by Charles Hugh Smith. While I cannot second everything he says, he hits the nail so many times I've about worn the book out underlining. I have to share this with y'all:

"Let us ask this key question: what is the ideal social control worldview for an expansive Central State ruled by financial elites that hold extreme dominance over the State & economy? The answer is a society of atomized, socially isolated individuals who are largely dependent on the State, individuals who define their identity, status, & self- worth in terms of the State and consumerist signifiers that may be purchased in the market economy."

You can buy the book at

On 24 July 1701 Antoine de la Mothe Cadillac founded the trading post at Fort Ponchartrain, which later became the city of Detroit. That was before it went bankrupt.

On 24 July 1850 Gold was discovered in the Rogue River in Oregon. That gold was the least of the Rogue River's charms.

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-Jul-13 Price Change % Change
Gold, $/oz 1,319.90 -15.20 -1.14%
Silver, $/oz 20.01 -0.23 -1.15%
Gold/Silver Ratio 65.949 0.005 0.01%
Silver/Gold Ratio 0.0152 -0.0000 -0.01%
Platinum 1,455.20 13.10 0.91%
Palladium 744.40 5.85 0.79%
S&P 500 1,675.02 -6.45 -0.38%
Dow 15,542.24 -25.50 -0.16%
Dow in GOLD $s 243.42 2.38 0.99%
Dow in GOLD oz 11.78 0.11 0.99%
Dow in SILVER oz 776.57 7.64 0.99%
US Dollar Index 82.28 0.24 0.30%
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: 1,320.05      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,354.37 1,362.95 1,362.95
1/2 AE 0.50 672.72 695.34 1,390.67
1/4 AE 0.25 336.36 354.27 1,417.07
1/10 AE 0.10 138.50 144.55 1,445.45
Aust. 100 corona 0.98 1,287.44 1,298.44 1,324.67
British sovereign 0.24 312.60 324.60 1,378.95
French 20 franc 0.19 246.45 253.45 1,357.54
Krugerrand 1.00 1,338.53 1,350.53 1,350.53
Maple Leaf 1.00 1,335.05 1,350.05 1,350.05
1/2 Maple Leaf 0.50 759.03 693.03 1,386.05
1/4 Maple Leaf 0.25 336.61 353.11 1,412.45
1/10 Maple Leaf 0.10 139.93 143.89 1,438.85
Mexican 50 peso 1.21 1,583.50 1,594.58 1,322.54
.9999 bar 1.00 1,324.67 1,335.67 1,335.67
SPOT SILVER: 20.08      
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 16,073.20 16,573.20 23.18
US 40% silver 1/2s 0.30 5,731.85 5,881.85 19.94
100 oz .999 bar 100.00 1,998.00 2,078.00 20.78
10 oz .999 bar 10.00 205.80 206.80 20.68
1 oz .999 round 1.00 20.18 20.98 20.98
Am Eagle, 200 oz Min 1.00 21.33 22.88 22.88
SPOT PLATINUM: 1,455.20      
Plat. Platypus 1.00 1,480.20 1,520.20 1,520.20
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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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