The Moneychanger
Daily Commentary
Wednesday, 2 April a.d. 2014 Browse the commentary archive

If I wanted to watch a wholly bogus stock, I would watch Facebook (FB), maker of nothing, producer of nothing, founded on nothing, light as air, hitchhiker on the ephemeral & unreal. Like Apple (AAPL) before it Facebook seems to have fallen from grace lately. After reaching 72.59 in early March, it tanked to 57.98 (down 20%) and fell below its 20 DMA, 50 DMA, and uptrend line. It is trying now to climb back through that line. A stock this bogus in a market this bogus is bound to wind up a dead canary on the bird cage floor before the mine fills with poison gas. Mercy, it may have already done that.

But then, how much does a nacheral born durned fool from Tennessee know next to them Wall Street smarties who've been picking y'all's pockets so efficiently for so many years?

By the way, my goofy theory is that Facebook's has succeeded because it is actually a US government front. How else could they get y'all to spill your guts about all your life and secrets AND put it into the public domain? Brilliant move for a police state. WARNING: I'm a durn fool, so don't pay no attention to my goofy theory.

'Twas a lackluster day for stocks with a zootz toward the end that took the S&P500 to a new high. Dow rose 40.39 (0.24%) to 16,573 while the S&P500 climbed/clumb 5.38 (0.29%) to 1,890.90.

I expect stocks will move yet higher, but here's a little warning lecture about such moves anyway. Both indices have timidly broken above three month old resistance, good enough, but sometimes such little pin punctures fade. Look more closely and inwardly. Dow's high today was 16,588.19, versus 16,588.25 on 31 December 13, but it couldn't close quite as high as it did then, by 3 points. S&P500 had made two highs at 1,883.57 and 1,883.97 earlier, and a high today at 1,893.17. As I said, stocks will probably keep rising, but sometimes these moves have a way of slapping you in the back of the head, so you have to watch closely.

Mmmmm. Today might have marked the end of the upward correction in the Dow in Metals. Dow in gold dropped 0.59% to 12.84 oz (G$265.43 gold dollars), just shy of a 61.8% correction. Full stochastics are rolling over earthward. Dow in Silver has made (as of yesterday) an 86.8% correction of the December - February drop. Closed today LOWER BY 1.31% at 826.58 oz (S$1,068.70 silver dollars). BE WARNED: I am anticipating here. No full evidence of a downturn, yet it seizeth my eye that the day stocks hit new highs, the indicators turn down.

Well, well, the US dollar, destroyer of nations & middle class capital, turned around today, rose 15 basis points (0.19%) and closed at 80.39. It really needs to climb above 80.50 to turn up, but this at least lodged it above the 50 DMA (80.32). Might rise after all. Euro passed out again, down 0.2% to $1.3764, dashing whatever fragile hopes it had yesterday raised from the dead. Yen has fled in a full scale rout, down another 0.2% today to 96.28 cents per 100 yen. That closes below the last low at 96.38 cents.

US Ten Year Treasury note yield also jumped a meaty 1.6% today to 2.803%. T-note yield has been congested and skrunched up in a narrow range, but after proving in February that it was indeed headed higher (it bounced off a lower range boundary line), it gapped up today. Must close above 3.036 to attract attention, but it will.

Copper has fought its way back up to $3.05, but requires a close higher than $3.25 to prove it does not intend to visit the earth's core.

I never say "I told y'all so" even when I really want to, so I won't say it now. Silver jumped up 36.2 cents (1.8%) to 2003.1c & gold added $10.90 (0.85%). Ratio dropped from 65.057 yesterday to 64.425.

Look more closely. Silver stayed under 1990c until 9:00, when somebody big said, "Buy!" Vaulted to 2015c, then stayed flat most of the rest of the day, but trailed off at the end.

Gold followed a like pattern, flat around $1,284 until 9:00 when the buying dogs were loosed. Popped up in an hour and a half to $1,294. I'm a little concerned it couldn't make it through $1,295, which is the bottom of the resistance range spreading from $1,295 to $1,300. Yet that's all in order. Hard to punch through resistance at the first try.

Silver is leading this move up, and that's a good sign. Still, silver & gold need to confirm higher goals by other indicators. A close above $1,305 tomorrow wouldn't hurt.

Silver & gold upturn is fragile and tender yet, but there on the chart. Just hide and watch.

On 2 April 1453 Mehmed II besieged Constantinople (now Istanbul) which fell of 29 May 1453, ending the 1000 year reign of the Byzantine Empire. It was founded upon the integrity of its coinage, the gold bezant or solidus. These were minted in the same weight and purity from the time of Constantine I (d. 337) until the mid-11th century. When the coin lost its integrity, so did the nation.

On 2 April 1792 the US Congress passed the Coinage Act which made the dollar of silver (371.25 grains fine silver or 0.7734 troy ounce fine silver) the standard coin, with smaller halves, quarters, dismes [sic] & half-dismes. The act also provided for gold coins or "eagles" not denominated in but valued in dollars. The eagle was "valued at" $10 and contained 247-1/2 or 0.5156 troy ounce fine gold. There were also half and quarter eagles. Dr. Edwin Vieira describes this system as "symmetalism" because the system allowed for using both metals and adjusting only one coin for changes in the world gold/silver ratio. Those changes were made in the 1830s, but without cheating anyone. That was a right different government in those days. When the coin lost its integrity, so did the nation.

On 2 April 1914 the US Federal Reserve Board announced plans to divide the country into 12 districts, symbolic, no doubt, of its conquest. When the coin lost its integrity and independence, so did the nation.

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
2-Apr-14 Price Change % Change
Gold, $/oz 1,290.50 10.90 0.85%
Silver, $/oz 20.03 0.36 1.84%
Gold/Silver Ratio 64.425 -0.632 -0.97%
Silver/Gold Ratio 0.0155 0.0002 0.98%
Platinum 1,437.10 9.10 0.64%
Palladium 788.60 6.25 0.80%
S&P 500 1,890.90 5.38 0.29%
Dow 16,573.00 40.39 0.24%
Dow in GOLD $s 265.47 -1.61 -0.60%
Dow in GOLD oz 12.84 -0.08 -0.60%
Dow in SILVER oz 827.37 -13.17 -1.57%
US Dollar Index 80.39 0.15 0.19%
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: 1,289.70      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,325.81 1,334.84 1,334.84
1/2 AE 0.50 657.24 679.35 1,358.70
1/4 AE 0.25 328.62 346.12 1,384.49
1/10 AE 0.10 135.31 141.22 1,412.22
Aust. 100 corona 0.98 1,257.84 1,266.84 1,292.43
British sovereign 0.24 305.87 310.62 1,319.55
French 20 franc 0.19 242.59 245.64 1,315.68
Krugerrand 1.00 1,307.76 1,317.76 1,317.76
Maple Leaf 1.00 1,304.70 1,319.70 1,319.70
1/2 Maple Leaf 0.50 741.58 677.09 1,354.19
1/4 Maple Leaf 0.25 328.87 344.99 1,379.98
1/10 Maple Leaf 0.10 136.71 140.58 1,405.77
Mexican 50 peso 1.21 1,547.09 1,558.09 1,292.27
.9999 bar 1.00 1,294.21 1,308.70 1,308.70
SPOT SILVER: 19.94      
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 15,075.78 15,325.78 21.43
US 40% silver 1/2s 0.30 5,689.08 5,839.08 19.79
100 oz .999 bar 100.00 1,998.50 2,048.50 20.49
10 oz .999 bar 10.00 199.85 204.85 20.49
1 oz .999 round 1.00 20.04 20.54 20.54
Am Eagle, 200 oz Min 1.00 21.44 22.64 22.64
SPOT PLATINUM: 1,437.10      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Plat. Platypus 1.00 1,452.10 1,469.10 1,469.10
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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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