The Moneychanger
Daily Commentary
Tuesday, 7 January a.d. 2014 Browse the commentary archive

Two centuries ago an English chief justice lamented that a corporation had "no body to kick and no soul to damn," which pretty well puts them beyond the reach of justice. Good thing he's dead -- he'd choke sure enough if he saw what these "juridical persons" do today.

Miss not my point. A "corporation" is a legal fiction, a mythical entity created to dodge liability. A corporation is people. It can't lift its fictional hand unless some real, live human lifts the hand for it. And today corporations are employed to dodge liabilities civil & criminal, especially for big banks & Wall Street felons-on-the-loose. Think: How can a mythical being commit a crime? Not possible. Some PERSON did it & hides behind the guilty corporation.

Thus today JPMorgan Chase agreed to cough up $2.6 billion dollars in penalties criminal & civil for its part in the Bernie Madoff Ponzi scheme.

But who cares? None of the human beings who were acting as JP Morgan Chase paid anything -- JPMC's stockholders paid it. Nor did anyone in management with oversight responsibility go to jail. Ne'er a one.

When they make me dictator, first thing I'll do is not kill all the lawyers but kill all the corporations. At least it will be a bloodless revolution, since corporations can't bleed.

Gold lost $8.40 to $1,229.40 and silver lost 31.2 cents to close Comex at 1976.5c. All's lost? Not quite. Both managed to close above their 20 day moving averages. Both silver & gold are knocking on resistance at their 50 DMAs, so this back-&-fill is to be expected. Once again, as long as silver doesn't close below 1940c and gold doesn't close below $1,195, uptrend remains intact.

Stocks had their first up day this year. Dow gained 105.84 (0.64%) & S&P500 climbed 11.11 (0.66%) to 1,837.88. Hard to tell yet, but chart still appears headed down. Today's highs were only lower highs.

Metal's drop took the Dow in Gold & Dow in Silver up a tad. Dow in Gold rose 1.13% to 13.43 oz against a 20 DMA at 13.27 oz. Dow in silver ended at 833.42 oz above a 20 DMA at 819.43. Whew. This is enough to wear anybody out.

As I suspected, the US dollar index came back today, gaining 23 basis points (0.28%) to clsoe above 81 at a finger-nail hanging 81.01. Clearly it has broken out, with four days above the downtrend line and 50 & 20 DMAs to prove it. Obvious target is 83.

Euro sank at the dollar's good fortune. Lost 0.15% to $1.3615. 'Tis literally hanging over the edge of a cliff. Close below $1.3580 cuts its rope.

Yen backed off 0.41% to close 95.49 cents/Y100. Broke through the downtrend line yesterday, so intends to rise further, I'd say.

Clearly it's crucial for silver & gold to hold on above those 20 DMAs & preserve gains made so far this year -- and to improve them.

I always want to point y'all to the most important things happening in the world, but tonight I face a terrible dilemma. Should I mention Janet Yellen's confirmation by the Senate to succeed Burglar Ben Bernanke as head criminal at the Fed, or the looming Velveeta shortage? First things first. Right here at the year's most important Velveeta season, with a string of college bowl games, NFL playoff games, and the Superbowl coming, the nation is running short of Velveeta, the sine que non of dips without number! Somebody should tell Bernard O'Bama to release all that stockpiled Government Cheese or we'll have the worst Dip Crisis in American history! Where will all the dips do without their cheese?

Whole country's falling apart.

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
7-Jan-14 Price Change % Change
Gold, $/oz 1,229.40 -8.40 -0.68%
Silver, $/oz 19.77 -0.31 -1.55%
Gold/Silver Ratio 62.201 0.548 0.89%
Silver/Gold Ratio 0.0161 -0.0001 -0.88%
Platinum 1,412.70 2.20 0.16%
Palladium 740.80 7.30 1.00%
S&P 500 1,837.88 11.11 0.61%
Dow 16,530.94 105.84 0.64%
Dow in GOLD $s 277.96 3.65 1.33%
Dow in GOLD oz 13.45 0.18 1.33%
Dow in SILVER oz 836.37 18.27 2.23%
US Dollar Index 81.01 0.23 0.28%
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: 1,231.00      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,267.31 1,274.09 1,274.09
1/2 AE 0.50 627.30 649.35 1,298.71
1/4 AE 0.25 327.49 330.83 1,323.33
1/10 AE 0.10 130.38 135.41 1,354.10
Aust. 100 corona 0.98 1,200.59 1,210.59 1,235.05
British sovereign 0.24 291.52 303.52 1,289.36
French 20 franc 0.19 231.55 234.63 1,256.71
Krugerrand 1.00 1,253.77 1,264.77 1,264.77
Maple Leaf 1.00 1,246.00 1,261.00 1,261.00
1/2 Maple Leaf 0.50 707.83 646.28 1,292.55
1/4 Maple Leaf 0.25 313.91 329.29 1,317.17
1/10 Maple Leaf 0.10 130.49 134.18 1,341.79
Mexican 50 peso 1.21 1,472.22 1,487.22 1,233.49
.9999 bar 1.00 1,235.31 1,247.00 1,247.00
SPOT SILVER: 19.82      
SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 22.50 25.00 32.68
VG+ Peace dollar 0.77 19.50 22.00 28.76
90% silver coin bags 0.72 14,882.73 15,132.73 21.16
US 40% silver 1/2s 0.30 5,653.68 5,803.68 19.67
100 oz .999 bar 100.00 1,971.50 2,066.50 20.67
10 oz .999 bar 10.00 203.15 204.15 20.42
1 oz .999 round 1.00 19.92 20.42 20.42
Am Eagle, 200 oz Min 1.00 21.57 22.82 22.82
SPOT PLATINUM: 1,412.70      
Plat. Platypus 1.00 1,437.70 1,477.70 1,477.70
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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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