The Moneychanger
Daily Commentary
Tuesday, 24 December a.d. 2013 Browse the commentary archive

There's hardly any meaning in a pre-holiday market, but I'm sending y'all prices for what they're worth, new highs in the stock market and all.

Silver & gold took back today everything they lost yesterday, which reminds me of a pointless battle in World War I. We've fought this ground before. However, keep your eyes open. I still expect a bottom soon, maybe with another waterfall, or maybe proved by a reversal.

Yesterday I mentioned swapping gold for silver, to take advantage of a drop in the gold/silver ratio from 62:1 to 30:1, which is the next move I expect. If you bought gold at higher prices, this swap would have you "selling" gold at a loss, which you may be able to write off your taxes. Warning: Take not my tax advice, as I am clearly no tax adviser. Check with your own tax daddy about that. Anyway, swapping silver for gold and vice versa does not constitute a "like-kind exchange" for tax purposes. But besides any tax considerations, swapping gold for silver now would set you up to profit from that drop I expect in the ratio, probably a couple of years out.

In my comments yesterday I said that "without central banks, world wars and socialism would be impossible: taxpayers & bond markets would rebel before they got too far." By no means does my denunciation of Big Government socialism constitute an endorsement of Big Government industrial capitalism or fascism (the correct name for the business/government partnership that rules us). None of these resemble in the least the only political & economic state I value: ordered liberty.

Tomorrow, Christmas Day, and Thursday, St. Stephen's Day, our office will be closed and I won't be sending a commentary. Tonight & tomorrow we will be celebrating the Incarnation of Jesus Christ, wherein all our happiness is embodied. In the Incarnation, the incomprehensible God is made comprehensible, our sins are forgiven and we have peace with God, and we have a faithful High Priest who, because he has suffered all we suffer, can have compassion on us. Glory be to God on high, and on earth, peace, good will to men. Alleluia!

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
24-Dec-13 Price Change % Change
Gold, $/oz 1,205.10 6.70 0.56%
Silver, $/oz 19.45 0.08 0.39%
Gold/Silver Ratio 61.949 0.106 0.17%
Silver/Gold Ratio 0.0161 -0.0000 -0.17%
Platinum 1,336.50 -4.80 -0.36%
Palladium 694.55 -3.10 -0.44%
S&P 500 1,827.99 5.33 0.29%
Dow 16,357.55 62.94 0.39%
Dow in GOLD $s 280.59 -0.48 -0.17%
Dow in GOLD oz 13.57 -0.02 -0.17%
Dow in SILVER oz 840.88 -0.01 -0.00%
US Dollar Index 80.68 0.11 0.14%
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: 1,206.20      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,239.97 1,248.42 1,248.42
1/2 AE 0.50 614.65 636.27 1,272.54
1/4 AE 0.25 320.88 324.17 1,296.67
1/10 AE 0.10 127.75 132.68 1,326.82
Aust. 100 corona 0.98 1,176.41 1,186.41 1,210.37
British sovereign 0.24 285.64 297.64 1,264.41
French 20 franc 0.19 226.89 230.00 1,231.91
Krugerrand 1.00 1,227.91 1,238.91 1,238.91
Maple Leaf 1.00 1,221.20 1,236.20 1,236.20
1/2 Maple Leaf 0.50 693.57 633.26 1,266.51
1/4 Maple Leaf 0.25 307.58 322.66 1,290.63
1/10 Maple Leaf 0.10 127.86 131.48 1,314.76
Mexican 50 peso 1.21 1,444.02 1,457.32 1,208.69
.9999 bar 1.00 1,210.42 1,222.20 1,222.20
SPOT SILVER: 19.42      
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 78,235.30 78,485.30 109.77
US 40% silver 1/2s 0.30 5,537.15 5,687.15 19.28
100 oz .999 bar 100.00 1,932.00 1,992.00 19.92
10 oz .999 bar 10.00 199.20 200.20 20.02
1 oz .999 round 1.00 19.52 20.02 20.02
Am Eagle, 200 oz Min 1.00 21.17 22.42 22.42
SPOT PLATINUM: 1,336.50      
Plat. Platypus 1.00 1,361.50 1,401.50 1,401.50
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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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