The Moneychanger
Weekly Commentary
Thursday, 5 September a.d. 2013 Browse the commentary archive
Here's the weekly scorecard:
  30-Aug-13 5-Sep-13 Change % Change
Silver, cents/oz. 2,346.30 2,320.60 -25.70 -1.1
Gold, dollars/oz. 1,396.10 1,373.10 -23.00 -1.6
Gold/silver ratio 59.502 59.170 -0.330 -0.6
Silver/gold ratio 0.0168 0.0169 0.0001 0.6
Dow in Gold Dollars (DIG$) 219.29 224.88 5.59 2.5
Dow in gold ounces 10.61 10.88 0.27 2.5
Dow in Silver ounces 631.22 643.69 12.47 2.0
Dow Industrials 14,810.31 14,937.48 127.17 0.9
S&P500 1,632.97 1,655.08 22.11 1.4
US dollar index 82.07 82.64 0.58 0.7
Platinum 1,526.20 1,481.20 -45.00 -2.9
Palladium 722.10 685.80 -36.30 -5.0

It must be rotten being a central banker. Everything threatens always to blow apart.

In the US the student loan bubble is starting to burst. US's largest bank, J.P. Morgan Chase has notified colleges that they will stop making new student loans in October. Sort of like the subprime shutdown in 2007.

As if that weren't bad enough, poor old Super Mario Draghi, ECB head criminal, has found that Samson's weapon no longer works on European banks to suppress interest rates. Mario has threatened & blustered & promised to keep rates low, but banks have the interest rate back where it was when he started. All the jawboning and keeping the interbank rate low, well, tain't working.

Tomorrow I am leaving for a week's vacation with my family so I won't be publishing another commentary until 16 September, unless something really excites me.

Silver & gold are correcting, but looking back a week haven't lost much of their gains. Stocks have turned up -- maybe. Dollar index has gained ground, while platinum & palladium have been whipped with barbed wire.

Stocks today nearly reached the limit of this little rally off the bottom, namely, their short term downtrend line. This hits the Dow about 15,000 & the S&P500 around 1,665. They'll likely hit that line and react back a little, but for right now, and barring closes below 1627 & 14,760, should continue to one last peak before they dive into the abyss later this year.

Dow in metals are both correcting, reaching up after their long plunge toward the 20 or 50 day moving averages, then to dive again.

Dow in gold jumped up 1.3% to 10.879 oz (G$224.88 gold dollars). Long term downtrend today lies beneath about 10.50 oz. Dow in silver rose 0.7% or 4.77 oz to close 643.69 ounces. Long term downtrend line today stands about 610 oz. After throwing over the long term downtrend lines in May, both are now sinking beneath it again. Not surprising they should need two tries to crack that wall.

US dollar index has climbed out of danger of revisiting 79 any time soon. Closed today up 0.62% or 47.9 basis points at 82.643 -- above its 20 & 50 DMAs, so momentum is upward.

Euro & yen both look like they've been sipping strychnine. Yen closed at 99.89 cents/Y100, down 0.36% and falling toward -- well, wherever the Japanese Nice Government Men decide it ought to fall toward. They are so NICE -- not too bright, but nice. All NGM world over SMILE as they hold a gun to your head.

Euro has buckled on its concrete overshoes and jumped off the Brooklyn Bridge. Closed at $1,3118 today, down 0.66% and below its $1.3139 200 DMA. Can anybody say "targeting $1.2800"?

More bad news for Ben the Bloviator & Chief Criminal at the Fed: Ten year treasury note yield today hit a new high for the move, 2.979, up 2.83% today. O Zero Interest Rate Policy, where art thou?

Y'all listen now, this is not a joke. If the bond bubble Ben blew up with his stupid ZIRP bursts, O, mercy! Many will be ruined.

Silver & gold slowed their speed of descent today. Silver dropped 16.3 cents (0.7%) to 2320.6c. Gold lost another 1.2% or $16.80 to $1,373.10.

For now I'm assuming silver and gold are correcting only their strong rally from early August, and once this is finished, will continue rallying toward $1,550 and 2700c before a larger degree rally sets in.

Gold's rise from $1,271.80 to $1,434 equals $162.20. Today's gold low at $1,366.73 corrects 41.5% of that rise. Yep, enough to satisfy but a 50% correction would take it to $1,352.90.

Silver rose from 1910c to 2512c or 602c (whoa! 31.5% off that low). Today's 2316c low corrects 32.6% of that rise, which might satisfy a correction. However, a 50% correction would reach 2211c. More likely in my eyes would be 2255c.

If silver or gold close below $1,340 and 2200c, I'd have to re-think it all. Otherwise, I'll stick with that outlook.

Right -- this correction offers you yet another chance to buy silver & gold on the cheap. Better grab it. I believe that the last low of the 2011 - 2013 correction fell on 27 June, & that the 2011-2013 correction was analogous to the 1974-1976 correction. From those lows gold gained 850% and silver 1,250%.

Right nearly takes your breath away, don't it?

On 5 September 1698 Russia's Peter the Great imposed a tax on beards. It was part of his attempt to break Russian tradition & the strength of the Boyars or nobles and westernize Russia. Unhappily, we don't know how Russia might have developed if Peter had just left their beards alone. Hairy, but happy, maybe.

On 5 September 1793 during the French revolution the Reign of Terror began when the National Convention enacted measures to repress counterrevolutionaries. The revolution always devours her own children.

On 5 September 1836 Sam Houston was elected the first president of the Republic of Texas. Y'all do remember that Sam Houston was from Tennessee, right?

On 5 September 1877 Sioux Chief Crazy Horse who a year earlier had defeated yankee General George Customer and 24 others at Little Bighorn, was bayoneted in a jail cell by a US soldier.

Yes, you can put precious metals into an IRA, & this IS the time to swap stocks for silver and gold. For more information, contact New Direction IRA at www.newdirectionira.com. We don't get a commission or kickback for recommending New Direction, but if you put us down as your dealer, we will earn a commission when you buy gold or silver. For precious metals IRA holders, I highly recommend our gold/silver swapping strategy. Read http://the-moneychanger.com/articles/why_silver_will_outperform_gold_400

If you already have a precious metals IRA and aren't satisfied with your present custodian, transfer it to New Direction. Tell them The Moneychanger sent you.

Y'all enjoy your weekend!

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
5-Sep-13 Price Change % Change
Gold, $/oz 1,373.10 -16.80 -1.2
Silver, $/oz 23.21 -0.16 -0.7
Gold/Silver Ratio 59.170 -0.720 -1.2
Silver/Gold Ratio 0.0169 -0.0001 -0.7
Platinum 1,481.20 -12.60 -0.8
Palladium 685.80 -10.80 -1.6
S&P 500 1,655.08 2.00 0.1
Dow 14,937.48 6.61 0.0
Dow in GOLD $s 224.88 2.84 1.3
Dow in GOLD oz 10.88 0.14 1.3
Dow in SILVER oz 643.69 4.77 0.7
US Dollar Index 82.64 0.48 0.6
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: 1,366.20      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,398.99 1,410.60 1,410.60
1/2 AE 0.50 696.25 719.65 1,439.29
1/4 AE 0.25 348.13 366.65 1,466.62
1/10 AE 0.10 143.35 149.60 1,495.99
Aust. 100 corona 0.98 1,332.45 1,343.45 1,370.59
British sovereign 0.24 323.53 335.53 1,425.37
French 20 franc 0.19 255.07 262.07 1,403.69
Krugerrand 1.00 1,379.86 1,391.86 1,391.86
Maple Leaf 1.00 1,381.20 1,396.20 1,396.20
1/2 Maple Leaf 0.50 785.57 717.26 1,434.51
1/4 Maple Leaf 0.25 348.38 365.46 1,461.83
1/10 Maple Leaf 0.10 144.82 148.92 1,489.16
Mexican 50 peso 1.21 1,635.56 1,648.56 1,367.31
.9999 bar 1.00 1,370.98 1,381.98 1,381.98
SPOT SILVER: 23.17      
SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 25.50 28.00 36.60
VG+ Peace dollar 0.77 21.50 25.00 32.68
90% silver coin bags 0.72 17,353.05 17,853.05 24.97
US 40% silver 1/2s 0.30 6,643.40 6,793.40 23.03
100 oz .999 bar 100.00 2,327.00 2,392.00 23.92
10 oz .999 bar 10.00 232.70 239.20 23.92
1 oz .999 round 1.00 23.27 24.02 24.02
Am Eagle, 200 oz Min 1.00 24.42 26.17 26.17
SPOT PLATINUM: 1,481.20      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Platinum Platypus 1.00 1,491.20 1,521.20 1,521.20
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© 2015 Little Mountain Corporation, d.b.a. The Moneychanger. All rights reserved. May not be republished in any form, including electronically, without our express permission.

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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