The Moneychanger
Daily Commentary
Thursday, 7 November a.d. 2013 Browse the commentary archive

Every time I look at the stock market, I feel like a tee-totaling celibate at a Roman orgy: I just don't see nothing that interests me.

Yesterday I mentioned that the stock index choir was singing out of tune, Dow making new highs & other indices down. Well, today they puked all over their choir robes, to wit:

Dow lost 152.90 or 0.97% to 15,593.98

S&P500 lost 23.34 or 1.32% to 1,747.15

Nasdaq lost 74.62 or 1,90% to 3,857.33

Nasdaq 100 lost 63.97 or 1.89% to 3,321.41

Russell 2000 lost 19.54 or 1.78% to 1,079.09.

Wilshire 5000 lost 276.11 or 1.47% to 18,548.79.

You all can brag about your outsized stock gains & all the pointy-shoe types on Wall Street can puff out their chests, but this market is floating on hot money, not economic outlook, and is as nervous as a lame mouse at a cat convention. And it will probably get worse tomorrow.

Andith the twisted logic of a basement full of mouth-foaming, hair-tearing lunatics, reported US GDP rose today & sent the dollar shooting up. Now think about that: back in July the yankee government announced it was "revising" the way it figures GDP, which being translated is, "we're jimmying the numbers so you oafs won't realize how badly we are shafting you." There's only one way you can tell a government spokesman is lying: are his lips moving? GDP numbers have now become as deceptive & meaningless as unemployment numbers or government deficit projections or Viet Nam war casualty reports.

Anyway, the press spun it this way: if GDP improves, the Fed can "taper" sooner & stop injecting so much hot new money. Tennessee hogwash. They've got the stock market & economy so addicted to Quantitative Easing right now there's no way they can stop. No way. Remember, I said it, and you can quote me. Write it on the wall, hoping you can get to rub my nose in it later. You won't.

The very thought of Fed tapering today gave the entire stock market world the wastebasket heaves.

Add to this panic the ECB which lowered its interest rate today to a number nearer zero than it already was: 0.25%. Dollar index jumped to 80.85, up 36 basis points or 0.45%, and it pushed the euro off a cliff. Literally. Euro dropped 0.73% to $1.3416, headed for its 200 Dma ($1.3231) & further infamy & humiliation. After all, the Europeans have the world's second most over-indebted & putrescent economy and most rotten banks (after Japan), & their currency now pays no more interest than the US dollar. What I can't parse because there's something I'm not seeing is that the yen reversed mightily upward, gaining 0.61% to 101.96 cents/Y100, with a high not far from the 102.60 200 DMA. I don't know what drove the yen higher & I don't care, since I wouldn't buy yen with YOUR money.

What about silver & gold? Well, for all the bubbling & bloviating about the higher dollar, they did no more than fall back to the bottom of the same range they've been trading in for more than a week.

Think about those stock index losses today when you consider that silver fell only 0.5% or 10.7 cents to 2163.9 while gold fell 0.7% or $9.30 to $1,308.40.

Do those numbers sound familiar? Well, I'll be durned. Gold gained $9.70 yesterday, and lost $9,30 today, & closed near $1,308 again. Silver lost 10.7c today & gained 13.2c yesterday, and is right hear around 2160c again.

But take this home: they did not break that support today. They held. Both did sort of puncture my uptrend line, but closed right at it. Pretty good, all things considered.

All this monetary folly, this criminal lunacy, will not end well. It's liable to break out in a hyperinflation, & whatever happens the US government will default & after the dust settles, the dollar won't be the reserve of anything anymore.

Only protection I know is to convert US dollars to silver & gold. But what do I know? I'm only a natural born durn'd fool from Tennessee. What am I compared to all them Harvard & New York smarties that have never turned a peg or earned a paycheck a day in their lives? Why, I'm so durned ignerunt I can't even understand how they make anvils fly.

On 7 November 1917 Vladimir Lenin & Leon Trotsky led the Bolshevik Revolution in Russia, pushing out the provisional government. Lenin had been in exile in Switzerland, but under most mysterious circumstances the German General Staff sent him back to Russia in a sealed train. The revolution took Russia out of the war, but was a disaster for both Germany & Russia -- a disaster lasting generations that hasn't ended yet.

Argentum et aurum comparanda sunt —
Silver and gold must be bought.

— Franklin Sanders, The Moneychanger

Your source for gold and silver. Read our latest reviews and testimonials.
Market Snapshot See more charts and market data
7-Nov-13 Price Change % Change
Gold, $/oz 1,308.40 -9.30 -0.71%
Silver, $/oz 21.64 -0.11 -0.49%
Gold/Silver Ratio 60.465 -0.130 -0.21%
Silver/Gold Ratio 0.0165 0.0000 0.22%
Platinum 1,455.00 -10.60 -0.72%
Palladium 758.60 -5.70 -0.75%
S&P 500 1,747.15 -23.34 -1.32%
Dow 15,593.98 -152.90 -0.97%
Dow in GOLD $s 246.37 -0.66 -0.27%
Dow in GOLD oz 11.92 -0.03 -0.27%
Dow in SILVER oz 720.64 -3.49 -0.48%
US Dollar Index 80.85 0.36 0.45%
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: 1,307.00      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,342.29 1,352.75 1,352.75
1/2 AE 0.50 666.06 689.44 1,378.89
1/4 AE 0.25 347.72 351.26 1,405.03
1/10 AE 0.10 138.44 143.77 1,437.70
Aust. 100 corona 0.98 1,272.15 1,282.15 1,308.05
British sovereign 0.24 309.51 321.51 1,365.82
French 20 franc 0.19 245.85 248.82 1,332.71
Krugerrand 1.00 1,329.22 1,340.22 1,340.22
Maple Leaf 1.00 1,322.00 1,337.00 1,337.00
1/2 Maple Leaf 0.50 751.53 686.18 1,372.35
1/4 Maple Leaf 0.25 333.29 349.62 1,398.49
1/10 Maple Leaf 0.10 138.54 142.46 1,424.63
Mexican 50 peso 1.21 1,567.84 1,578.85 1,309.49
.9999 bar 1.00 1,311.57 1,323.00 1,323.00
SPOT SILVER: 21.63      
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 16,001.70 16,251.70 22.73
US 40% silver 1/2s 0.30 6,189.10 6,339.10 21.49
100 oz .999 bar 100.00 2,153.00 2,223.00 22.23
10 oz .999 bar 10.00 221.30 222.30 22.23
1 oz .999 round 1.00 21.73 22.28 22.28
Am Eagle, 200 oz Min 1.00 23.38 24.13 24.13
SPOT PLATINUM: 1,455.00      
Plat. Platypus 1.00 1,480.00 1,520.00 1,520.00
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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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