The Moneychanger
Daily Commentary
Monday, 17 March a.d. 2014 Browse the commentary archive

I won't be sending y'all a commentary on this Friday because I am going to the Upcountry Literary Festival at the University of South Carolina at Union in Union, South Carolina. They have invited me to read from At Home in Dogwood Mudhole, on Saturday, 22 March 2014. My 25 minutes in the sun runs from 9:20 a.m. to 9:45 a.m. Last year Susan & I enjoyed a delightful time there from a wide variety of writers. If you make it, be sure to say hello to us. I won't be saying ne'er a word about silver & gold on stage.

I reckon you buy the rumor & sell the news. Putin's coup in Crimea was might near accomplished with the secession referendum over the weekend. The Crimeans who voted chose to secede from Ukraine & go with Russia. That appears to be a done deal, so perhaps now the entire issue will evaporate, boiling off in steam from hot politicians.

That attitude seems to have sucked the safe-haven money out of the yen today, perhaps out of gold, and blown it back into stocks. I'm not so sure. Contemporary politicians are just as moronic as those of 1914, so plenty capable of starting a devastating war. I can only pray they don't succeed.

Speaking of secession, how come they can do that in Crimea but we can't do that in Tennessee? After all, the US has been the promoter of "national self-determination" since Woodrow Wilson. I reckon that US enthusiasm depends on who's seceding from whom. Once the US seizes a country fair and square, they ain't forward to give it back. Ask the Hawai'ians.

Yen fell most on losing that safe-haven money, down 0.375 to 98.29 cents/Y100. Left behind a nasty exhaustion gap, which likely puts the cap on the Yen for some time.

Like Freddy Kruger, the euro has come back, even if its chainsaw is a mite dull. Technically it's headed for $1.4500, but what's "technical" to a central-bank-manipulated scrofulous fiat currency? Higher the euro climbs, more heat it puts on European manufacturers, mostly German.

US dollar is poised on a precipice, but rose 7 basis points today (0.09%) to 79.51. Should the dollar not reverse, it could suffer a blood-curdling fall from here.

The casino was re-opened and blowin' & goin' on Wall Street today. Dow shot up 181.55 (1.13%) to 14,247.22, a tinch over the 20 Day Moving Average (16,245.88). Dow remains in a downtrend until it crosses above 16,588.25, the December high. MACD flashed a sell signal last week, which flasheth still.

S&P500 leapt 0.965 (17.7) to 1,858.83, also above the 20 DMA (1,855.25). Needs to jump over $1,875 to beat the present downtrend.

After last week's big drops the Dow in Metals rose today on metal's weakness & stock strength. Neither stands in any near peril of reversing trend upward. Dow in Gold ended the day up 2.25% to 11.88 oz (G$245.58). Dow in Silver hit its 200 DMA Friday but bounced up today & even ran above its 20 DMA (759.45 oz). Went home today 2.42% higher at 766.74 oz (S$991.34 silver dollars).

Why do I report these prices in gold dollars & silver dollars? Either because I'm crazy, or because I'm trying to wean y'all off thinking in filthy fiat money and into real money. Also, measuring the Dow in gold gives us one unchanging measure of the Dow since it began in 1885.

Silver & gold both backed down today, gold $6.10 (0.44%) to $1,372.9 and silver 13.5 cents (0.063%) to 2124.9c.

These are not gigantic changes, although gold's rush into new high for the move with a lower close might possibly become a key reversal if it closes lower tomorrow. Silver did close below its 20 DMA at 2140c, but that's subject to oft whipsawing. Maybe both metals are merely wringing out the safe-haven enthusiasm. Gold would have to fall to its 20 DMA at $1,342 to signal anything more than usual fluctuations.

Bigger question is whether silver is contradicting gold's rally, or merely lagging as it often does. If silver is non-confirming, then gold could find trouble ahead.

I am still buying the price dips, although I'll give this one a day or so to sort itself out. That bull market may be dissembling, trying to shake off the most riders possible.

Today is St. Patrick's Day. Patrick became the patron saint of Ireland the long way round. He was born in Britain, but kidnapped as a young man to be made a slave in Ireland. He escaped when he was 20 but had a dream or vision that sent him back to evangelize the Irish. He died 17 March 461, having changed the nation.

Nowadays St. Patrick's day brings all the celebs out of the woodwork claiming to be Irish. A few years ago even our famous president visited Ireland and claimed Irish descent. That's why I spell his name O'Bama. If he said it, it must be true. Our politicians would never tell a lie. (I bet that remark will clean blow the scalp off mor'n 500 heads.)

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
17-Mar-14 Price Change % Change
Gold, $/oz 1,372.90 -6.10 -0.44%
Silver, $/oz 21.25 -0.14 -0.63%
Gold/Silver Ratio 64.610 0.123 0.19%
Silver/Gold Ratio 0.0155 -0.0000 -0.19%
Platinum 1,467.80 -1.20 -0.08%
Palladium 776.20 3.15 0.41%
S&P 500 1,858.83 17.70 0.96%
Dow 16,247.22 181.55 1.13%
Dow in GOLD $s 244.63 3.80 1.58%
Dow in GOLD oz 11.83 0.18 1.58%
Dow in SILVER oz 764.61 13.32 1.77%
US Dollar Index 79.51 0.01 0.01%
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SPOT GOLD: 1,367.30      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,406.95 1,415.16 1,415.16
1/2 AE 0.50 696.81 720.23 1,440.45
1/4 AE 0.25 348.41 366.95 1,467.80
1/10 AE 0.10 143.46 149.72 1,497.19
Aust. 100 corona 0.98 1,333.53 1,342.53 1,369.65
British sovereign 0.24 324.28 329.03 1,397.73
French 20 franc 0.19 257.19 260.12 1,393.28
Krugerrand 1.00 1,383.71 1,393.71 1,393.71
Maple Leaf 1.00 1,382.30 1,397.30 1,397.30
1/2 Maple Leaf 0.50 786.20 717.83 1,435.67
1/4 Maple Leaf 0.25 348.66 365.75 1,463.01
1/10 Maple Leaf 0.10 144.93 149.04 1,490.36
Mexican 50 peso 1.21 1,640.17 1,651.17 1,369.47
.9999 bar 1.00 1,372.09 1,386.30 1,386.30
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SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 26.25 28.25 36.93
VG+ Peace dollar 0.77 22.25 23.75 31.05
90% silver coin bags 0.72 15,665.65 15,915.65 22.26
US 40% silver 1/2s 0.30 6,050.45 6,200.45 21.02
100 oz .999 bar 100.00 2,121.00 2,171.00 21.71
10 oz .999 bar 10.00 212.10 217.10 21.71
1 oz .999 round 1.00 21.26 21.76 21.76
Am Eagle, 200 oz Min 1.00 22.66 23.86 23.86
SPOT PLATINUM: 1,467.80      
Plat. Platypus 1.00 1,482.80 1,499.80 1,499.80
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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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