The Moneychanger
Daily Commentary
Tuesday, 13 May a.d. 2014 Browse the commentary archive

Today was about like yesterday, only more so, & my concentration is waning because of the rambling roses and my dear wife.

Stocks continued to levitate today. Dow and S&P500 both made new highs. Dow rose a tee-tiny 19.97 (0.12%) to 16,715.44 while the S&P500 added an infinitesimal 0.8 (0.04%) to 1,897.45. Meanwhile the Nasdaq Comp, Russell 2000, & Wilshire 5000, nowhere close to all time highs, all fell. Participation is not, as they say, "across the board."

This breakout so far does not prove itself as a breakout, and could easily stop here -- or the Dow might add another 100 points. Ultimate high will likely be seen this week or next. I make no prediction, I only watch.

Dow in gold rose marginally, up 0.17% to 12.91 oz (G$266.87 gold dollars). This changeth not the chart. Dow in silver rose 0.03% to 855.14 oz (S$1,105.64 silver dollars), but changed nothing there, either.

Jumping my bar for confirmation, the US dollar index today leapt 24 basis points (0.30%) to close at 80.19, well above the last high and internal support/resistance. Next barrier is 80.40.

Weak economic news from Germany and rumors the German Bundesbank (the former German central bank) would support the ECB in easing sent the euro tanking 0.4% to $1.3689, gapping down again. Methods mentioned to further inflate the euro were paying banks negative interest rates on reserves (in other words, the ECB charging banks to hold reserves) & massively buying packages of bank loans. We suspicious, non-bank yokels recognize this as a method to move rotten loans off the banks' books & onto the ECB's books.

I want y'all to push back a minute, take a deep breath, roll your eyes at the ceiling, and think about these ECB easing measures. These are actually adults (chronologically, at least), talking seriously about performing these loony acts with the money supply of a continent. Nothing but goofs & adolescents in charge. Teenagers with nuclear weapons & car keys.

Speaking of goofs & adolescents, Little Timmy Geithner has published a book explaining how the 2008 crash was everybody else's fault & his part as O'Bama's pretend Treasury Secretary was perfectly executed. Now little Timmy never worked a day in his life (unless you count a high-level government job working), never met a payroll, never ran a bank, but because he had worked for Henry Kissinger & then Bob Rubin & Larry Summers as a Step-and-Fetch-It in the Treasury Department, was appointed head of the NY Fed just in time to ignore the Big Banks' shenanigans that spawned the 2008 global financial crisis. Little Timmy never noticed anything wrong on Wall Street, imagine that! And Little Timmy was responsible for the "Too-Big-To-Jail" policy that ensured none of his cronies got prosecuted for their roles in the frauds that brought on the 2008 crisis.

To such doafs is entrusted the financial well-being of your family. Ain't central banks and government economic control jus' grand?

But on to silver & gold. Gold eased off one thin paper dollar to $1,294.60 on Comex. Silver emerged victorious with one-quarter cent between its teeth to close at 1950.4c. Silver's range was a colossal 26 cents.

Gold ran into selling at its 200 DMA ($1,299.86) but refused to fall lower than $1,289.10. Gold will explode one way or the other soon. What appears to be no interest is more likely balanced force on either side. When one or the other gives way, 'twill move far.

Silver spent a day inchworming sideways in a tiny range. It remained today above its 20 DMA (1946c), and continues to trade in a narrow range of 1990c to 1900c. Here, too, silver is coiling for a big move one direction or another.

Because both silver and gold keep edging up and pop back every time they are slammed down, my money says they will break out to the upside, and soon. Complacent investors are missing one of this century's magnificent buying opportunities.

I took my wife Susan to her cardiologist at Vanderbilt in Nashville yesterday because after two heart surgeries (2008 & 2012) she still is plagued with atrial fibrillation, a very fast heartbeat in her heart's upper chambers. Drugs have not solved the problem, so we left yesterday with the verdict that she must either go to the Big Bertha of drugs, amiodarone, or have an ablation. In an ablation they cut the firing fibers in the heart which solves the atrial fibrillation but leaves her dependent on her pacemaker. Better make sure that battery's good. This morning her cardiologist called to tell her that she had called a pacemaker expert who allowed that reprogramming her present pacemaker might give Susan some relief. That she has performed tomorrow.

I deeply appreciate your prayers for Susan -- please don't stop yet!

May in Tennessee is magic. Tulip poplars are blooming above, then the rambling roses fill up the fence rows, sending out sprays of blossoms to perfume the air. The blackberries are blooming and clover and so many others whose names I know not. That rambling rose makes me want to, well, ramble through the woods and follow my nose.

I need y'all's help identifying one tree. It's a small understory tree with soft leaves something like ash or dogwood. On long racemes it has white, almost bell shaped flowers with startling yellow stamens hanging down. It has a sweet almost dusty smell that fills the woods wherever it grows. Anybody recognize this one?

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
13-May-14 Price Change % Change
Gold, $/oz 1,294.60 -1.00 -0.08%
Silver, $/oz 19.50 0.00 0.02%
Gold/Silver Ratio 66.376 -0.065 -0.10%
Silver/Gold Ratio 0.0151 0.0000 0.10%
Platinum 1,454.70 13.80 0.96%
Palladium 817.45 8.55 1.06%
S&P 500 1,897.45 0.80 0.04%
Dow 16,715.44 19.97 0.12%
Dow in GOLD $s 266.91 0.52 0.20%
Dow in GOLD oz 12.91 0.03 0.20%
Dow in SILVER oz 857.03 0.85 0.10%
US Dollar Index 80.19 0.24 0.30%
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: 1,293.90      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,330.13 1,339.19 1,339.19
1/2 AE 0.50 659.38 681.56 1,363.12
1/4 AE 0.25 329.69 347.25 1,389.00
1/10 AE 0.10 135.75 141.68 1,416.82
Aust. 100 corona 0.98 1,261.94 1,270.94 1,296.61
British sovereign 0.24 306.87 311.62 1,323.78
French 20 franc 0.19 243.38 246.42 1,319.88
Krugerrand 1.00 1,308.13 1,318.13 1,318.13
Maple Leaf 1.00 1,308.90 1,323.90 1,323.90
1/2 Maple Leaf 0.50 743.99 679.30 1,358.60
1/4 Maple Leaf 0.25 329.94 346.12 1,384.47
1/10 Maple Leaf 0.10 137.15 141.04 1,410.35
Mexican 50 peso 1.21 1,552.13 1,563.13 1,296.45
.9999 bar 1.00 1,298.43 1,312.90 1,312.90
SPOT SILVER: 19.50      
SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 26.50 28.50 37.25
VG+ Peace dollar 0.77 22.50 23.75 31.05
90% silver coin bags 0.72 14,868.43 15,118.43 21.14
US 40% silver 1/2s 0.30 5,559.28 5,709.28 19.35
100 oz .999 bar 100.00 1,954.50 2,004.50 20.05
10 oz .999 bar 10.00 195.45 200.45 20.05
1 oz .999 round 1.00 19.60 20.10 20.10
Am Eagle, 200 oz Min 1.00 21.35 21.75 21.75
SPOT PLATINUM: 1,454.70      
Plat. Platypus 1.00 1,469.70 1,486.70 1,486.70
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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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