The Moneychanger
Daily Commentary
Thursday, 9 January a.d. 2014 Browse the commentary archive

All the markets I watch are lethargic and as indecisive as a pretty girl at a ball being asked to dance by two ugly boys. Better to dance than not to dance, but with which ugly boy?

Some stock indices rose, some fell, all arguing about which way they would go. Dow fell 17.98 (0.11%) while the S&P500 rose 0.64 or 0.3% (I reckon you can call that "rising") to 1,838.13. The chart, as I said yesterday, isn't hard to parse: it's a downtrend. But is it the beginning of a big move, or merely a small breath-catcher? Maybe a bigger move, since the MACD for both indices flashed a sell signal today. Closes below the 20 DMA at 16,257 & 1,819 are needed to confirm that downtrend.

It catches my eye that the Dow in Silver & Dow in Gold dipped down slightly today. Dig dropped 0.25% to 13.40 oz (G$277.00 gold dollars) while the DiS ended at 841.81 oz, down 0.24%. Not much meaning there, but right direction.

The US dollar Index, the female black widow spider of currencies, disappointed its lovers today by dropping 11 basis points (0.14%). It remains in an uptrend, but seems in no hurry, rising one day then giving most of it back the next. Euro rose 0.21% back to the support line it fell through yesterday, but still beneath its moving averages. Amazing it could do that with that anchor tied to its feet and hanging over that cliff. Yen rose 0.1% to 95.44 cents/Y100. It's playing with the downtrend line, trying to make a decisive break when its guards aren't watching.

Silver gained 14.5 cents to 1966.3 & gold augmented $4.00 to $1,229.30, but this provides no life altering information.

Both have measly uptrends working, bottom line of which silver bounced off today, but without reaching above its 20 DMA. Gold remains above its 20 DMA, but stuck between $1,222 and $1,232. So in the end we have two little uptrends working against a major downtrend, & gold & silver ain't talking.

When they don't talk, there's nothing I can say. But of course, being a natural born fool from Tennessee, I just have to open my mouth & prove it. Been thinking today about the Fed's "good luck" with its massive money creation. On a smaller scale US Fed governor Benjamin Strong did the same in the 1920s, fighting the post World War I repression. Oh, it worked for a while, & GM added steam by creating widespread consumer credit with GMAC. Although the agricultural depression continued through the 1920s, industry kept bubbling on more and more new money. Then one day in October 1929, it stopped working. Report card? Pushing off the recession with inflation managed to push off the recession a little BUT also turn it into the bloodiest depression in US history that only ended thanks to the artificial demand of World War II.

Yeah, buddy! That inflation works like a cham-peen! But what do I know? I ain't even no ekernomicks perfesser.

Before I forget, I want to tell y'all about Ron Griess & Ron Griess is to chartmakers as Michelangelo is to painters: a master. But he doesn't just make charts, he makes intelligent, long term charts that take mountains of data and enable the viewer to draw rational conclusions. He offers over 5,000 charts and a Weekly Chart Blog where he pinpoints changes in crucial charts & interprets them. Go to & check out his work. I strongly recommend subscribing.

I have no financial interest in this recommendation

Pondering bubbles today, I remember this one from 1929:

"Stock prices have reached what looks like a permanently high plateau. I do not feel there will be soon if ever a 50 or 60 point break from present levels, such as (bears) have predicted. I expect to see the stock market a good deal higher within a few months." --Irving Fisher, Ph.D. in economics, Yale Professor, 17 Oct 1929

On 24 October ("Black Thursday") seven days later the market lost 11% at the opening bell. On 28 October "Black Monday" the Dow lost a record 13%. On 29 October "Black Tuesday, the Dow lost another 12%. After recoveries and more slides, the Dow finally bottomed 8 July 1932 at 41.22, down 89%.

If a man as great an intellect as Irving Fisher could make that mistake, what chance do the mental midgets have who are running things today? "O Fed, save us!" will sink down into the same class of worship as "O Ba'al, save us!"

On 9 January 1990 my wife and I were arrested by the yankee government in a SWAT team raid. What was our alleged crime? Not filing income tax returns & conspiring to delay & defeat the IRS. According to most folks I was just a monetary nut & crank who believed gold and silver are money and paper is not, but according to one US attorneyess, I was the Most Dangerous Man in the Mid-South. And maybe she was right, given that telling the truth is always dangerous, both to those in & out of power. But those out of power have no SWAT teams with which to arrest their gainsayers.

Exactly one and one half years later, on 9 July 1991 of the 18 defendants who refused to plead guilty, all 18 of us were declared Not Guilty by a jury. To God alone be the glory!

You can read about this adventure at

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
9-Jan-14 Price Change % Change
Gold, $/oz 1,229.30 4.00 0.33%
Silver, $/oz 19.66 0.15 0.74%
Gold/Silver Ratio 62.518 -0.260 -0.41%
Silver/Gold Ratio 0.0160 0.0001 0.42%
Platinum 1,417.70 5.50 0.39%
Palladium 735.60 -1.80 -0.24%
S&P 500 1,838.13 0.64 0.03%
Dow 16,444.76 -68.20 -0.41%
Dow in GOLD $s 276.53 -2.05 -0.74%
Dow in GOLD oz 13.38 -0.10 -0.74%
Dow in SILVER oz 836.33 -9.71 -1.15%
US Dollar Index 81.07 -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: 1,227.60      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,263.81 1,270.57 1,270.57
1/2 AE 0.50 625.57 647.56 1,295.12
1/4 AE 0.25 326.58 329.92 1,319.67
1/10 AE 0.10 130.02 135.04 1,350.36
Aust. 100 corona 0.98 1,197.28 1,207.28 1,231.66
British sovereign 0.24 290.71 302.71 1,285.94
French 20 franc 0.19 230.91 233.99 1,253.31
Krugerrand 1.00 1,250.31 1,261.31 1,261.31
Maple Leaf 1.00 1,242.60 1,257.60 1,257.60
1/2 Maple Leaf 0.50 705.87 644.49 1,288.98
1/4 Maple Leaf 0.25 313.04 328.38 1,313.53
1/10 Maple Leaf 0.10 130.13 133.81 1,338.08
Mexican 50 peso 1.21 1,468.15 1,483.12 1,230.09
.9999 bar 1.00 1,231.90 1,243.60 1,243.60
SPOT SILVER: 19.55      
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 14,689.68 14,939.68 20.89
US 40% silver 1/2s 0.30 5,574.03 5,724.03 19.40
100 oz .999 bar 100.00 1,944.50 2,039.50 20.40
10 oz .999 bar 10.00 200.45 201.45 20.15
1 oz .999 round 1.00 19.65 20.15 20.15
Am Eagle, 200 oz Min 1.00 21.30 22.55 22.55
SPOT PLATINUM: 1,417.70      
Plat. Platypus 1.00 1,442.70 1,482.70 1,482.70
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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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