The Moneychanger
Weekly Commentary
Friday, 16 May a.d. 2014 Browse the commentary archive
Here's the weekly scorecard:
  9-May-14 16-Jun-14 Change % Change
Silver, cents/oz. 1,907.70 1,929.20 21.50 1.1
Gold, dollars/oz. 1,287.30 1,293.30 6.00 0.5
Gold/silver ratio 67.479 67.038 -0.441 -0.7
Silver/gold ratio 0.0148 0.0149 0.0001 0.7
Dow in Gold Dollars (DIG$) 266.30 263.59 -2.71 -1.0
Dow in gold ounces 12.88 12.75 -0.13 -1.0
Dow in Silver ounces 869.28 854.83 -14.46 -1.7
Dow Industrials 16,583.34 16,491.31 -92.03 -0.6
S&P500 1,878.48 1,877.86 -0.62 -0.0
US dollar index 79.93 80.11 0.18 0.2
Platinum 1,428.90 1,465.30 36.40 2.5
Palladium 799.80 814.80 15.00 1.9

The week's scoreboard says it all. New all time highs in the Dow & S&P500? Yes, but they ended the week lower. Gold & silver slapped in mid-week? Yes, but closed the week higher. White metals higher, and all this in the teeth of a higher dollar that clearly reversed upward.

Mathematically the stock market does not have to tank for the Dow in Gold (or Silver) to fall. Gold only needs to outperform stocks, so both might be rising, but gold rising faster. During the 1920-1923 German hyperinflation, stocks soared, but in the end they fell far behind the hyperinflation, which brings me to my point. In an age of inflation when evaluating any asset becomes like trying to shoot skeet off the back of a bass boat in a thunderstorm: the only thing that counts is purchasing power. Nominal gains mean nothing, only purchasing power gains.

Stocks today tried without success to climb to positive territory until about 3:00 as closing time drew near and suddenly buyers appeared out of nowhere. Yeah, sure. Dow rose 44.5 (0.27%) to 16,491.31, no more than a dead cat bounce after losing 268.63 the previous two days. S&P500 clawed back 7.03 (0.38%) to 1,877.86. Since end-December stocks have tried and failed three times to break through 16,500-16,600. This week they collapsed and fell back to the 50 DMA. Can they rally from here? I tend to picture the top as behind us, but that's possible.

Dow & S&P500 weekly charts show markets that have traded up to overhead trend line and bounced back, too.

Dow in gold and Dow in silver are a little confused. At its 12.75 oz close today (G$263.57 gold dollars) the Dow in gold remains below its 12.77 oz 20 DMA, and right atop its rising uptrend line. Dow in silver rose 1.13% to 853.19 oz (S$1,103.11 silver dollars), above its 20 DMA (849.67 oz or S$1,098.56). Both are trying to break down but haven't yet.

Mercy, the 10 year treasury note yield took a beating this week, from 2.656% on 12 May to 2.518% today. Sounds insignificant, but smashed the support line and gapped down. This and the likewise tumbling yield on 30 year bonds imply investors are crowding into bonds as they flee from stocks. (Bond prices rise when bond yields fall.) Doesn't bode bouquets for stocks.

US dollar index showed unaccustomed gumption since its turn upwards a week ago Thursday. Shot straight up of 78.93 low but could not pierce its overhead downtrend line and stopped cold at 80.40 and fell back. Today rose two (minute) basis points to 80.11. Must yet validate last week's upward reversal by closing over 80.40, really, over the 200 DMA at 80.53. Likely will.

Euro is a wreck. Closed today down 0.11% at $1.3695, and soon will fall below its 200 DMA ($1.3617). Yen is seeking to break out, and has broken out above its downtrending range upper boundary, but above stands the 200 DMA at 99.04. Can it punch through that? Good chance, but the yen must prove it next week. Yen closed today up 0.04% at 98.50.

Today gold closed down 20 cents at $1,293.30. Silver backed up 15.5 cents to 1929.2c. For the week both metals rose, silver 1.1%, gold 0.5%.

Something stinks in all markets. They simply aren't behaving as markets do. They show hardly any trading range. They jump on the open, then do nothing. In the last 30 days silver & gold have both madethree dramatic key reversals, confirmed with higher closes the next day, but then fallen back. 'Tain't natural. Markets just don't keep acting that way. They break out or they break down. This points to "management" by the Nice Government Men, but I hate to be forever pulling that out as the explanation for everything.

Behold, this much is sure! No matter how much the NGM manipulate, they can only do it at the margin, and not for long. As proof I point to gold's rise from $252 & silver's from $4.01 since 2001. Soon, probably this month, silver and gold will stage a big rally that soars past the straggling highs of the last two years. And they are both out of their usual seasonal synch, so they should rise into June and July. Morale in the silver & gold markets has been so beaten down and bloodied that it's hard for most folks to see that THE LOWS ARE BEHIND US.

Then I look at the lunatic asylum that is the monetary & financial system. Give a roomful of teenage boys cases of gin, car keys, and free passes to a stripper club. That's about what central banking and finance looks like today: the adults have disappeared. The Fed has had a long string of good luck and breaks that have made its money creation and lies look valid. "Luck" is not a firm foundation for an economy or a currency.

Technically both silver and gold are barely above the downtrend lines on their weekly charts. On daily charts they are in three week uptrends, and pushing the upper boundaries. Momentum indicators are generally positive.

Look for gold to clear $1,315 next week, which will be the bell starting the race. Silver still needs to clear 2000c, then 2060c.

I know y'all probably think I'm Johnny One Note, but I can't sing any note but the one I see in front of me. Now is the time to buy while prices are low and before silver & gold begin rallying.

But what do I know? I'm just a nacheral born durn fool from Tennessee who only wears shoes when he has to show up in church. I ain't got no more sense than to believe that gravity always works.

On 16 May 1886 was born Douglas Southall Freeman, Virginia journalist, historian, and author of the most elegant and best biography of Robert E. Lee.

I have been nudging everyone here at the Top of the World Farm toward Holistic Management for a number of years. Usually you have to travel to New Mexico or Canada to attend the training sessions, but one was offered a couple of years ago at Summertown, about half an hour from us. I sent my sons Justin and Wright & it changed the way they thought and farmed. Holistic Management (see the book by Alan Savory) is a management technique that takes the whole-under-management into account for every decision. The results have astounded even me, in animals, costs, and quality of life. In 25 years, all agriculture will be conducted this way, and nobody will be able to believe that anybody in America ever used pesticides, herbicides, and high cost inputs and debt.

On 17-19 June 2014 they're offering another Introduction to Holistic Management Whole Farm/Ranch Planning & Holistic Planned Grazing. Owen Hablutzel is the teacher. You'll find full description & registration at Spiral Ridge Permaculture,

On 20-22 June they're offering Keyline Design: Whole Farm/Ranch Planning for Water Abundance & Soil Fertility all about Keyline Plowing. Keylining slices deep into the earth to capture water flowing off the contour and creates drought resilience and maximum water harvest. Read about it and register here,

Yes, I eat my own cooking. We use Holistic Management on our own Farm and have extensively used Keyline Plowing. If you apply these techniques you will recoup the cost of the courses many times over & bring more order & peace into your life and operation.

Y'all enjoy your weekend!

Argentum et aurum comparanda sunt —
Silver and gold must be bought.

— Franklin Sanders, The Moneychanger

Your source for gold and silver. Read our latest reviews and testimonials.
Market Snapshot See more charts and market data
16-May-14 Price Change % Change
Gold, $/oz 1,293.30 -0.20 -0.0
Silver, $/oz 19.29 -0.16 -0.8
Gold/Silver Ratio 67.038 -0.005 -0.0
Silver/Gold Ratio 0.0149 -0.0001 -0.8
Platinum 1,465.30 -3.80 -0.3
Palladium 814.80 2.90 0.4
S&P 500 1,877.86 7.03 0.4
Dow 16,491.31 44.50 0.3
Dow in GOLD $s 263.59 0.78 0.3
Dow in GOLD oz 12.75 0.04 0.3
Dow in SILVER oz 854.83 9.10 1.1
US Dollar Index 80.11 0.02 0.0
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: 1,292.30      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,327.19 1,337.53 1,337.53
1/2 AE 0.50 658.56 680.72 1,361.44
1/4 AE 0.25 329.28 346.82 1,387.28
1/10 AE 0.10 135.59 141.51 1,415.07
Aust. 100 corona 0.98 1,260.38 1,269.38 1,295.02
British sovereign 0.24 306.49 311.24 1,322.17
French 20 franc 0.19 243.08 246.12 1,318.28
Krugerrand 1.00 1,306.52 1,316.52 1,316.52
Maple Leaf 1.00 1,307.30 1,322.30 1,322.30
1/2 Maple Leaf 0.50 743.07 678.46 1,356.92
1/4 Maple Leaf 0.25 329.54 345.69 1,382.76
1/10 Maple Leaf 0.10 136.98 140.86 1,408.61
Mexican 50 peso 1.21 1,550.21 1,561.21 1,294.86
.9999 bar 1.00 1,296.82 1,311.30 1,311.30
SPOT SILVER: 19.28      
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 14,786.20 15,036.20 21.03
US 40% silver 1/2s 0.30 5,495.85 5,645.85 19.14
100 oz .999 bar 100.00 1,933.00 1,983.00 19.83
10 oz .999 bar 10.00 193.30 198.30 19.83
1 oz .999 round 1.00 19.38 19.88 19.88
Am Eagle, 200 oz Min 1.00 21.13 21.53 21.53
SPOT PLATINUM: 1,465.30      
Platinum Platypus 1.00 1,480.30 1,497.30 1,497.30
Home Questions & Answers Articles & Resources
The Moneychanger, P.O. Box 178, Westpoint, TN 38486

Copyright Notice

© 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.

Other Important Information

This is not an offer to buy or sell. Prices subject to change without notice. To enter an order, call us at (888) 218-9226 or (931) 766-6066. Sorry, no sales to Tennessee.

For complete details on how to buy from us or sell to us, please click here.