The Moneychanger
Daily Commentary
Tuesday, 26 November a.d. 2013 Browse the commentary archive

Sorry I missed y'all yesterday, but I was finishing my monthly Moneychanger newsletter for paid subscribers.

Y'all, the world's getting crazier than an outhouse rat. As a general run of things, the food in France is just about the best you'll find anywhere in the world outside Tennessee, but even here there are a bunch of places here I wouldn't take you to eat. Just about any old place in France is good to eat, & they like eating so much they're studying on dinner soon as they stand up from breakfast. It's that good and no lie. I've been there.

Here's the crazy part. Why would anybody who had life that good eat at McDonalds? Not only does it make no sense, but there are 1,200 Mickey D outlets in France, and they're making so much money selling poison burgers & fries that Burger King is now invading.

Whole world's gone crazy, even the French. Zut alors!

There's more. Next year in Scotland they're holding a referendum on Scotland declaring independence from the United Kingdom. If the Scots can do it, why can't we? They don't have but 5.3 million people, and we have 6.5 million, and we're probably better looking. They're all crammed into 30,414 square miles and we're spread out over 42,143 square miles. The little old Scottish GDP is only $235 billion versus $290.3 billion for Tennessee. Ain't no justice in the world.

Then you come to markets today, & they're crazier still. By not enough to mention today -- 0.26 point -- the Dow Jones Industrial Average made a new high at 16,072.80. S&P500 rose 0.27 to 1,802.75.

I know the cheerleaders all filled the streets for this occasion, but double tops make me nervous for any market, let alone as overdue for a correction as stocks are. And today the Nasdaq Comp finally climbed above 4000 to 4,017.75. High in 2000 was 5,048.62, so some folks are still waiting to get even.

Both the Dow in Gold and Dow in Silver rose today, and both of 'em are more overbought than orange glitter lipstick at a teenie-bopper convention. DiG closed 12.95 oz (G$267.70 gold dollars), up 0.76% (against the June high at 12.514 oz). DiS added 1.92% to end the day at 811.55. June high was 816.77 oz.

Until these two indicators turn down again, silver & gold will not get any relief. Probably they will reverse about the same day stocks reverse downward and silver & gold turn around upward. Meanwhile we just sit and stew -- with a smile, cause we know how it will turn out.

Like the 3 Stooges, the US DOLLAR INDEX loves to poke its friends in the eye. After that sharp ally from 79.06 in late October to 81.58 in early November, it looked ready to rally. Whoops, it's back down at 80.63 & looking sick as a dog puking peach pits. MACD gave a sell signal today. On a 5 day chart 80.60 looks like a cliff edge the dollar just hadn't ought to fall over.

Meanwhile the suave Euro, which like a bankrupt and shabby Count manages to put up a good outward show in spite of inward emptiness, rose 0.41% to $1.3575. Closed over the 50 day moving average today ($1.3560). Maybe the euro will run for the sky. All this leaves me asking myself what the market knows about the dollar that makes it so nervous.

Yen also rose 0.37% to 97.76 cents per 100 yen. Given its fall of the last five days, no, make that the last month, nothing there suggests a turnaround yet.

Nor does anything in today's action foretell any turnaround yet in silver or gold. I think the Nice Government Men must have stayed up late last night, just to whack the metals. Gold gapped up above $1,250 late yesterday & silver followed suit with a run to 2025c. Well, my, that attracted big time sellers, so about the time markets opened in the US they started piling on. I reckon they saw that both silver & gold had yesterday posted the first half of a key reversal, so they had to make sure neither one closed higher today. Silver ranged from 2029c to 1981c, but closed down 3.4 cents at 1984.8 cents. Gold rose -- get this -- twenty cents to $1,241.40, after a high at $1,257.80 and a low of $1,239.20.

MACD is negative, RSI is oversold, rate of change is negative. Mercy, we'd have to order sunshine from Sears & Roebuck just to get a ray of light in here. We are sailing between Scylla & Carybdis from now to the end of December's first week -- a dangerous passage that could bring new lows. Frankly, that would be a relief.

So y'all have to decide what to believe in: Fiat money and its snake oil promoters like Greenspan (remember him? Never could parse a single sentence he mumbled), Bernanke, & now Big Janet who'll all lie quicker than a minnow can swim across a dipper, or gold and silver, still valuable after, oh, six millennia?

Shucks, don't ask me! I'm just a natural born durned fool from Tennessee, dumber than a central banker.

If you have some sad friend or relative you want to cheer up at Christmastime, get yourself right now to and order a copy of my new book, At Home In Dogwood Mudhole Volume 2. You'll laugh, you'll cry, you'll wonder how people who could do such crazy & insanely dangerous things aren't ten feet underground yet. Not convinced? Go read the sample chapter, "Home Alone Milking." If it doesn't make you laugh, don't tell anybody, cause it means your sense of humor has been surgically removed.

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
26-Nov-13 Price Change % Change
Gold, $/oz 1,241.40 0.20 0.02%
Silver, $/oz 19.85 -0.03 -0.17%
Gold/Silver Ratio 62.545 0.117 0.19%
Silver/Gold Ratio 0.0160 -0.0000 -0.19%
Platinum 1,370.40 -5.60 -0.41%
Palladium 716.20 -3.70 -0.51%
S&P 500 1,802.75 0.27 0.01%
Dow 16,072.80 0.26 0.00%
Dow in GOLD $s 267.64 -0.04 -0.01%
Dow in GOLD oz 12.95 -0.00 -0.01%
Dow in SILVER oz 809.79 1.40 0.17%
US Dollar Index 80.63 -0.21 -0.26%
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: 1,241.60      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,277.61 1,285.06 1,285.06
1/2 AE 0.50 632.71 654.94 1,309.89
1/4 AE 0.25 330.31 333.68 1,334.72
1/10 AE 0.10 131.50 136.58 1,365.76
Aust. 100 corona 0.98 1,207.28 1,217.28 1,241.87
British sovereign 0.24 294.03 306.03 1,300.03
French 20 franc 0.19 233.55 236.61 1,267.31
Krugerrand 1.00 1,263.95 1,274.95 1,274.95
Maple Leaf 1.00 1,256.60 1,271.60 1,271.60
1/2 Maple Leaf 0.50 713.92 651.84 1,303.68
1/4 Maple Leaf 0.25 316.61 332.13 1,328.51
1/10 Maple Leaf 0.10 131.61 135.33 1,353.34
Mexican 50 peso 1.21 1,484.90 1,500.00 1,244.09
.9999 bar 1.00 1,245.95 1,257.60 1,257.60
SPOT SILVER: 19.79      
SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 25.00 26.50 34.64
VG+ Peace dollar 0.77 22.00 24.25 31.70
90% silver coin bags 0.72 15,007.85 15,257.85 21.34
US 40% silver 1/2s 0.30 5,646.30 5,796.30 19.65
100 oz .999 bar 100.00 1,969.00 2,029.00 20.29
10 oz .999 bar 10.00 202.90 203.90 20.39
1 oz .999 round 1.00 19.89 20.39 20.39
Am Eagle, 200 oz Min 1.00 21.54 22.79 22.79
SPOT PLATINUM: 1,370.40      
Plat. Platypus 1.00 1,395.40 1,435.40 1,435.40
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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.

Other Important Information

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