The Moneychanger
Daily Commentary
Tuesday, 3 December a.d. 2013 Browse the commentary archive

The yankee government has declared war on brown tree snakes in Guam and its main weapon is -- mice. Yes, today US helicopters at a bargain basement cost of $8 million released 2,000 mice on cardboard parachutes to fight the snakes. I am NOT making this up. Besides at $4,000 each, these are clearly GOVERNMENT mice. How can a mouse whup a snake? Easy. They douse the mice down with Tylenol, 80 milligrams of which will kill a snake. (That ain't much of a recommendation for humans taking it, either.) The plan is the gummint drops the mice, the mice parachute to the ground, snakes eat the mice, & bingo! Dead snakes.

Why do they always have to complicate things? In Tennessee we'd just announce that brown tree snakes taste like chicken and that they are strictly out of season except during June. Either that, or they can be used to make meth. Take about 2 weeks to get rid of those two million snakes.

The pain became general today as stocks followed through on yesterday's key reversal confirmation. Dow punched into but closed above its 20 DMA (15,904.29) and lost 94.15 (-0.59%) to close at 15,914.62. S&P500 dittoed that performance, just didn't quite punch into its 20 DMA (1,786.86). Dropped 5.75 (0.32%) to end at 1,795.15. MACD for both indices gave a sell signal today. All other stock indices I watch fell as well.

Surprise, stock investors! Corrections are not a myth!

No telling yet whether the top just seen was THE top in stocks, but probably not. Probably we'll get a correction, then surge into year end and past to a higher high and then collapse. Once again, I will warn all those filling their cups at the foaming punchbowl: stocks are NOT rising on economic outlook, but on a newly created money from the Fed. This is a bubble, another bubble. Watch out.

For record keeping purposes (if y'all still play records) the Dow in Gold yesterday made a new high at 13.138 oz.(G$271.59) But behold! Today it fell 0.78% (basis end of day) to 13.04 oz. (G$269.56). Remains overbought on RSI, but hasn't flashed a sell signal on MACD.

Dow in Silver dropped 0.17% to close at 834.76 oz after yesterday's new high at 836.19 oz.

Just a reminder: I am watching for the DiG & DiS to turn down as a signal of gold & silver bottoms.

US Dollar Index, as kind to its friend as a rattlesnake is to chipmunks, plumb reversed yesterday performance and dropped 28.9 basis points to 80.62 (-0.38%).

News reports say that stocks have dropped on fears the Federal Reserve will announce tapering. But why would that take the dollar down? Gold maybe, but why dollars? Anyway, taper the Fed won't, because it has now, like the pusher-man, addicted markets to its continuing money creation. Tapering would push the whole mess over the cliff.

Euro rose 0.37% to $1.3592. If it can climb above 1.3618, it will race for $1.3800. Yen actually turned & rallied 0.77% to 97.53 cents/Y100. Could be a bounce filling up gaps the waterfall left behind, or might be turning around. I have to expect the Japanese Nice Government men will drive it lower still.

On a $1,225.80 to $1,214.60 range gold today closed Comex 60 cents lower at $1,221.70. Silver backed off 22.5 cents to end Comex at 1900.8c.

Both metals are bouncing along their bottom Bollinger bands, and neither has yet given a sign of turning around. However, this decline, which started in October, is beginning to look ripe. Gold/Silver ratio offers no guidance. It closed higher today at 64.273, but in a lower range than yesterday. No guidance. Premiums on US 90% silver coin are strong, but gold coin premiums are unchanged. Both Platinum & Palladium rose today.

So we wait, although I am convinced a bottom lies in the not too distant future.

On 3 December 1586 Sir Thomas Herriot introduced into England potatoes from Colombia. He had an eye on the future.

MILESTONES OF AMERICAN MEDICINE. Plop, plop, fizz, fizz, Alka Seltzer went on sale on 3 December 1931.

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
3-Dec-13 Price Change % Change
Gold, $/oz 1,221.70 -0.60 -0.05%
Silver, $/oz 19.01 -0.23 -1.17%
Gold/Silver Ratio 64.273 0.721 1.13%
Silver/Gold Ratio 0.0156 -0.0002 -1.12%
Platinum 1,354.90 9.00 0.67%
Palladium 714.05 1.65 0.23%
S&P 500 1,795.15 -5.75 -0.32%
Dow 15,914.62 -94.15 -0.59%
Dow in GOLD $s 269.28 -1.46 -0.54%
Dow in GOLD oz 13.03 -0.07 -0.54%
Dow in SILVER oz 837.26 4.90 0.59%
US Dollar Index 80.61 -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: 1,223.30      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,260.00 1,266.12 1,266.12
1/2 AE 0.50 623.37 645.29 1,290.58
1/4 AE 0.25 325.44 328.76 1,315.05
1/10 AE 0.10 129.56 134.56 1,345.63
Aust. 100 corona 0.98 1,189.49 1,199.49 1,223.72
British sovereign 0.24 289.69 301.69 1,281.62
French 20 franc 0.19 230.10 233.19 1,249.01
Krugerrand 1.00 1,244.10 1,255.10 1,255.10
Maple Leaf 1.00 1,238.30 1,253.30 1,253.30
1/2 Maple Leaf 0.50 703.40 642.23 1,284.47
1/4 Maple Leaf 0.25 311.94 327.23 1,308.93
1/10 Maple Leaf 0.10 129.67 133.34 1,333.40
Mexican 50 peso 1.21 1,463.01 1,477.93 1,225.79
.9999 bar 1.00 1,227.58 1,239.30 1,239.30
SPOT SILVER: 19.06      
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 14,378.65 14,628.65 20.46
US 40% silver 1/2s 0.30 5,430.95 5,580.95 18.92
100 oz .999 bar 100.00 1,896.00 1,956.00 19.56
10 oz .999 bar 10.00 195.60 196.60 19.66
1 oz .999 round 1.00 19.16 19.66 19.66
Am Eagle, 200 oz Min 1.00 20.81 22.06 22.06
SPOT PLATINUM: 1,354.90      
Plat. Platypus 1.00 1,379.90 1,419.90 1,419.90
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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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