The Moneychanger
Daily Commentary
Thursday, 19 September a.d. 2013 Browse the commentary archive

I'm sorry I missed sending y'all a commentary yesterday, but I was tied up with a crew filming a documentary about people who leave the city for an agrarian life in the country, "Beyond Off the Grid." Y'all go check it out at, and if you like the idea, you can help them out. I have already.

Y'all already know what my commentary for yesterday would have sounded like, pennants of sarcasm floating with streamers of cynicism and "I-told-y'all-sos." Alas, I didn't get to send forth those streamers & pennants yesterday, so will compensate today. I will drink in great draughts of daily news & government lies & Fed propaganda to stimulate my sarcasm gland. I really want to say, "I told y'all they wouldn't taper,' but I will forego that pleasure for the sake of humility.

Bernanke & the other criminals at the Fed sucked in the world's wise ones (and economists) on Wall Street and the media with tales of tapering. Alas, the victims learned yesterday 'twas only 'twaddle, idle jawboning to deceive the gullible. 'Tis easy to lie. Lenin gave Felix Dzherzhinsky, his secret police chief, the key to getting lies believed: "Tell them what they want to hear." Seems Bernanke & the FOMC read Lenin's book.

Yea, the almighty Fed even backed off its claims of prescience (claims upon which its raison d'ĂȘtre is pyramided) & lowered its economic growth forecasts for 2013 & 2014. Wait, wait -- you mean we're NOT better off having "experts" running things? You mean "Ph.D" actually does stand for "Piled Higher & Deeper"? You mean academics who have never run a business or met a payroll in their lives don't really know how to run the world's biggest economy?

Well, shucks. I am well & truly disillusioned.

Now, on to markets.

Remember that Comex closes at 1:30 Eastern, BEFORE the FOMC bloviation takes place. So yesterday silver closed at 2151.4c, down 22.1 cents and gold at $1,307.80, down $1.70 (yet above that critical $1,300). Lo, & Behold! Ben mumbled, and the net was "We ain't gonna taper until 2014, if ever."

Markets went wild. Stocks soared and in fifteen minutes gold gained $50 (3.8%) and silver 100 cents (4.6%). Blew right thru resistance levels. And closed higher today, along with breaking into new low territory yesterday and closing higher today. Bingo! Complete key reversal, confirmed.

Today gold rose $61.60 (4.7%) to $1,369.40 and silver gained an eye-popping 172.8 cents (8%) to 2324.2c. Remember, those are the gains from yesterday's low Comex closes, not the gains from the end-of-day prices. Clearly, this demands we act, and I'll tell you how below.

Stocks jubilated yesterday. Dow hit a new all time high at 15676.94, and a new intraday high at 15,709.58. S&P500 also struck a new high at 1,725.52.

Today stocks sang not quite so sweetly. Dow gave back 40.39 (0.26%) to 15,636.55 while the S&P500 lost 3.18 (0.18%) at 1,722.34. We have no way of knowing yet, but this third peak in a series of slightly higher peaks would paint a perfect top on this counter-cyclical rally in the on-going stock bear market.

Ahh, but the self-satisfied chortling really becomes shameless when I cast my eye on the Dow in Gold & Dow in Silver. Yea, Validation, thou art sweet!

Dow in gold closed sharply down today, 4.74% at 11.419 oz (G$236.04 gold dollars), confirming yet again that the June high was THE high. Dow in silver was turned back by its 50 DMA (711.87) and lost 7.67% or 55.91 oz today, ending at 672.77 oz. They won't pass these heights again.

Yesterday the US dollar index lost 106 basis points or 1.30% and ended at 80.23. Think about what happens when you are leaning over the rail of the ferry looking at the water, lean too far and your glasses fall out of your pocket. That's what the dollar index chart looks like. Fell plumb through support at 81, past the August low at 80.77 & the June low at 80.50. It will not pass this way again. All that remains for the dollar to turn down without recall is a close below 79.50.

The Nice Japanese Government Men must have stayed up all night selling yen against that falling dollar tide cause today the yen closed 100.57, down 1.43%. That strikes me as against nature, if not a crime against nature.

Scrofulous, nasty euro was the big gainer from the dollar's plunge. Shot up yesterday and rose another 0.13% today to end at $1,3531, above $1.3500 resistance & apparently headed much higher. In the country of the blind, the one-eyed currency is king.

Bond yields fell yesterday (bond prices rose), but that won't last. Interest rates will have to rise to compensate bond holders for the certainty of dollar depreciation. Bernanke's zero interest rate policy is doomed, and so is the bubble in bonds it blew up. FOMC's announcement might have bought it a little time, but its doom is sealed.

Final proof of the gold & silver reversal will come tomorrow or next day when gold closes above $1,385 & silver above 2400c. Still needed after that is silver above 2500c and gold above $1,434.

Should you wait for the confirmations to buy? I don't think so, after a powerful reversal like we saw yesterday and today. I think it's time to load up the wagon, but then I am a plunger & a risk taker, as well y'all know. Past that, Bernanke has proven once again -- did y'all really NEED for it to be proven again? -- that the only answer Our Masters have to economic crisis & depression is "print more money." That makes silver & gold as near a sure thing as y'all are ever likely to see.

I don't ask y'all for much or ask often, but I would like to ask a favor. I have a beloved friend, Fiona, who has been diagnosed with several tumors, including one in her brain. She has a husband and a little boy six. I would deeply appreciate your prayers on her behalf. For this I need y'all's help.

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
19-Sep-13 Price Change % Change
Gold, $/oz 1,369.40 61.60 4.71%
Silver, $/oz 23.24 1.73 8.03%
Gold/Silver Ratio 58.919 -1.869 -3.07%
Silver/Gold Ratio 0.0170 0.0005 3.17%
Platinum 1,472.40 47.80 3.36%
Palladium 736.55 35.10 5.00%
S&P 500 1,722.34 -3.18 -0.18%
Dow 15,636.55 -40.39 -0.26%
Dow in GOLD $s 236.04 -11.76 -4.74%
Dow in GOLD oz 11.42 -0.57 -4.74%
Dow in SILVER oz 672.77 -55.91 -7.67%
US Dollar Index 80.35 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: 1,367.60      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,403.16 1,412.05 1,412.05
1/2 AE 0.50 696.97 720.38 1,440.77
1/4 AE 0.25 348.48 367.03 1,468.12
1/10 AE 0.10 143.49 149.75 1,497.52
Aust. 100 corona 0.98 1,333.82 1,343.82 1,370.96
British sovereign 0.24 323.86 335.86 1,426.78
French 20 franc 0.19 255.33 262.33 1,405.09
Krugerrand 1.00 1,384.01 1,395.01 1,395.01
Maple Leaf 1.00 1,382.60 1,397.60 1,397.60
1/2 Maple Leaf 0.50 786.37 717.99 1,435.98
1/4 Maple Leaf 0.25 348.74 365.83 1,463.33
1/10 Maple Leaf 0.10 144.97 149.07 1,490.68
Mexican 50 peso 1.21 1,637.24 1,651.92 1,370.09
.9999 bar 1.00 1,372.39 1,383.39 1,383.39
SPOT SILVER: 23.19      
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 17,220.78 17,645.78 24.68
US 40% silver 1/2s 0.30 6,647.83 6,797.83 23.04
100 oz .999 bar 100.00 2,308.50 2,388.50 23.89
10 oz .999 bar 10.00 236.85 237.85 23.79
1 oz .999 round 1.00 23.29 24.09 24.09
Am Eagle, 200 oz Min 1.00 24.44 25.99 25.99
SPOT PLATINUM: 1,472.40      
Plat. Platypus 1.00 1,497.40 1,537.40 1,537.40
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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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