The Moneychanger
Daily Commentary
Tuesday, 29 October a.d. 2013 Browse the commentary archive

Tonight I'll appear on a webinar with Jason Matyas, who is working on the documentary, "Beyond Off the Grid." At you can sign up for the webinar. Starts at 8:00 Central time. We'll be talking about why a US government default is inevitable, and how to rebuild your local economy.

Or, y'all could wax cultural & watch rasslin' instead.

Those blasted Federal Open Market Committee meetings cast a pall over everything. Today stocks shot up on the theory that the FOMC tomorrow will announce that it's buying more monetary liquor for the party, i.e., not slowing down Quantitative Easing. This, they believe, will work wonders for the stock market.

Silver & gold, on the other hand, are languishing. Well, maybe the NGM have them languishing, since the Nice Government Men could hardly want silver & gold busting the roof when they announce they mean to keep on depreciating the dollar.

Anyhow, we are back to the proverb, "Buy the rumor, sell the news." Tomorrow comes the "news" & that may crack the stock market's back for this short term move.

Dow Jones Industrial Average made a new high today at 15,680.35 vs. the 18 September high at 15,676.94. Hubba-hubba. Dow rose 111.42 or 0.72%. S&P500 rose 9.84 (0.5%) to 1,771.95. It has risen 9 of the last 10 days.

Folks, I'm nothing but a natural born fool from Tennessee who only wears shoes half the year, but even I know that this is NOT normal and will not go on forever. This doesn't even take into consideration that the whole stock market is floating on a massive wave of newly created money. But shucks! Who am I, hick & ridge-runner, to put my conclusions up against the opinion of hundreds of shark-skin suit & pointy-toe shoe wearing Wall Streeters who hawk stocks for a living? Why, they're bound to be objective, right? After all, they're government regulated!

Dow in gold & Dow in silver rose a little today. DiG rose 1.22% to 11.656 oz (G$240.91 gold dollars). DiS added 6.38 oz (0.92%) to 698.39. Both remain comfortably within their downtrends, although both rose slightly above their 20 day moving averages today.

Do y'all ever think about what a sham, Potemkin world y'all live in? Everything is manipulated -- markets, media, politics -- to create an illusion of stability, prosperity, and participatory democracy. Do any of y'all really believe that hogwash? Talk is getting around on the Internet about the "Mystery Seller" coming in to the light trading hours of silver & gold futures selling two thousand or more contracts at a lick. No profit- maximizing seller in his right mind would do that. Therefore, the finger points to? Well, who has a motive to deceive?

US dollar index has been gaining this week. This is the sort of move that drives the rational mind to gibber and drool. All the news expected from the FOMC is that they will continue to create $85 billion of new money a month, which can only sepreciate the dollar, & in the teeth of that the dollar RISES? Well, it did. 28.7 basis points (0.37%) today to 79.631. Y'all can buy them nasty dollars if you want, but you're just picking your own pocket. Dollar strength is almost as enduring as Hollywood chastity.

Continuing the offense against reason, the Euro fell 0.31% today to $1.3744, obviously expecting dollar strength -- from alien tourists, I suppose. Yen dropped 0.56% to 101.85 cents/Y100, for what reason I haven't a clue. I've stopped trying to parse why the Japanese do anything. At the rate their population is declining, who knows how long the yen will continue to be traded. Various reports say more adult diapers are being sold than children's in Japan. What does that mean?

I've already voiced my suspicions as to why silver & gold have slacked off this week. Today silver pared off 4.6 cents to 2245.2 while gold lost $6.80 to $1,345.20.

That takes silver barely below its 2252c 50 DMA. I don't like that, but it's a near thing. MACD, RSI, & Rate of Change are all positive for silver. Ditto for gold, but its 50 DMA stands at $1,342.30.

I reckon we simply have to endure this until the silly FOMC cloud passes. Meanwhile, the uptrend in silver & gold that began 16 October remains in force.

On 29 October 1682 Quaker William Penn landed in Chester, Pennsylvania in the colony he helped to found. The Quakers really were the first people to think like moderns. They rejected the objective authority of the Scripture and raised above that authority their subjective feelings, a.k.a., "inner light." Thus today, people do what "feels" right, and you just hope that riddling you with an AK-47 doesn't "feel" right to them. There is, after all, something to be said for objective morality. At least you know what's coming.

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
29-Oct-13 Price Change % Change
Gold, $/oz 1,345.20 -6.80 -0.50%
Silver, $/oz 22.45 -0.05 -0.20%
Gold/Silver Ratio 59.914 -0.180 -0.30%
Silver/Gold Ratio 0.0167 0.0000 0.30%
Platinum 1,459.10 -11.00 -0.75%
Palladium 746.05 -3.40 -0.45%
S&P 500 1,771.95 984.00 124.88%
Dow 15,680.35 111.42 0.72%
Dow in GOLD $s 240.96 2.92 1.22%
Dow in GOLD oz 11.66 0.14 1.22%
Dow in SILVER oz 698.39 6.38 0.92%
US Dollar Index 79.63 0.29 0.36%
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: 1,344.20      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,381.84 1,391.25 1,391.25
1/2 AE 0.50 685.03 709.07 1,418.13
1/4 AE 0.25 357.63 361.25 1,445.02
1/10 AE 0.10 142.38 147.86 1,478.62
Aust. 100 corona 0.98 1,311.00 1,321.00 1,347.68
British sovereign 0.24 318.32 330.32 1,403.24
French 20 franc 0.19 252.84 255.76 1,369.91
Krugerrand 1.00 1,368.40 1,379.40 1,379.40
Maple Leaf 1.00 1,359.20 1,374.20 1,374.20
1/2 Maple Leaf 0.50 772.92 705.71 1,411.41
1/4 Maple Leaf 0.25 342.77 359.57 1,438.29
1/10 Maple Leaf 0.10 142.49 146.52 1,465.18
Mexican 50 peso 1.21 1,612.46 1,623.70 1,346.69
.9999 bar 1.00 1,348.90 1,360.20 1,360.20
SPOT SILVER: 22.47      
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 16,598.73 16,848.73 23.56
US 40% silver 1/2s 0.30 6,435.43 6,585.43 22.32
100 oz .999 bar 100.00 2,236.50 2,306.50 23.07
10 oz .999 bar 10.00 229.65 230.65 23.07
1 oz .999 round 1.00 22.57 23.12 23.12
Am Eagle, 200 oz Min 1.00 24.22 24.97 24.97
SPOT PLATINUM: 1,459.10      
Plat. Platypus 1.00 1,484.10 1,524.10 1,524.10
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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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