The Moneychanger
Daily Commentary
Monday, 9 June a.d. 2014 Browse the commentary archive

I've been thinking about Germany in the 1930s as the Nazis built their police and surveillance state. Most Americans aren't familiar with that history, so they don't know that many people opposed the Nazis, especially from the Church. Nor do folks realize how careful the Nazis were to push only hard enough to make progress, but not to provoke any pushing back. Then one day, it was too late to try to oppose them. They had built the police state brick by brick, & the trap was shut. Then the war made it easy to brand anyone who opposed the regime a traitor. War offers that cover for totalitarian states.

An even more thorough police state is being built in the US today, with capabilities the Gestapo could only dream of. Many complain, but few oppose at any risk to themselves -- I mean principled opposition that is willing to stand lawfully on the constitution and the law in court and even risk jail. I don't mean morons who think that shooting up a post office will change anything.

Until somebody says, "No, that's illegal and I won't go along," nothing will change. Self-government cannot be preserved by cautious people watching heroes from the sidelines, or blogging or surfing the internet. Only a "belligerent claimant in person" can enforce his rights.

More than 125 years ago Swiss philosopher Henri Amiel said, "If liberty is to be saved, it will not be by doubters, men or science, or materialists; it will be by religious convictions; by the faith of the individuals who believe that God wills men to be free."

Now to markets:

Ho-hum, stocks today made new all-time highs. Dow added 18.82 (0.11%) to 16,943.10 and the S&P500 added 1.83 (0.09%) to 1,951.27. This only drives both indices further into overbought territory. But overbought can get overboughter. Some correction, sharp, ought to come shortly. Top might be put in then, or later in the fall.

Dow in Gold rose 0.14% to 13.53 oz (G$279.69 gold dollars), barely inching up. Dow in Silver fell 0.13% to 889.64 oz (S$1,150.24 silver dollars). Odd, the one forecast I feel trust most is the Dow in Silver topping not higher than 912 oz. (S$1,179.15). Bumping along the top line of a rising wedge, the Dow in Silver could plunge any time.

Problem is before that plunge takes place, silver has to show more life. Today it rose 8.2 cents but stopped at the same old bus stop, 1904.5c. We've been here so many times I've got my name carved in the sidewalk. Gold rose $1.40 to $1,253.50.

Gold's range today was $1,257.30 - $1,251.60 or 0.46%. Put a mirror under gold's nose to check if it's still breathing! Silver's range, 1919c - 1899c, at least amounted to 1%.

Stocks are sucking attention and investors away from silver and gold. Now here's the set-up. Everybody in the mainstream investing world except the precious metals diehards believe the silver & gold bull market has ended and metals will drop lower this year. Likewise the other article of their creed is that central banks, especially the Fed, has fixed the economy and the magic money machine will keep stocks rising forever.

These things are demonstrably false, but that's not the point: for a while, when EVERYbody believes something, that belief can drive markets. Once the belief is shown to rank for truthfulness right up with the Yeti and Probity in Politicians and the Sincerity of Cats, it collapses as reality takes charge.

But markets -- not always! -- often do the opposite of what everyone expects. Right now that would be accomplished either by a sharp fall in stocks or fast rally in metals.

I can be patient. I know that when the cause doesn't change, the outcome won't change. Those central banks haven't stopped printing money yet, have they?

Sorry, I will be travelling this week and will not be publishing any commentaries until next Monday, 6 June, unless something huge happens or I just take a notion.

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
9-Jun-14 Price Change % Change
Gold, $/oz 1,253.50 1.40 0.11%
Silver, $/oz 19.05 0.08 0.43%
Gold/Silver Ratio 65.818 -0.211 -0.32%
Silver/Gold Ratio 0.0152 0.0000 0.32%
Platinum 1,456.30 1.30 0.09%
Palladium 841.95 -2.00 -0.24%
S&P 500 1,951.27 1.83 0.09%
Dow 16,943.10 18.82 0.11%
Dow in GOLD $s 279.41 -0.00 -0.00%
Dow in GOLD oz 13.52 -0.00 -0.00%
Dow in SILVER oz 889.64 -2.85 -0.32%
US Dollar Index 80.67 0.23 0.29%
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: 1,251.70      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,286.75 1,295.51 1,295.51
1/2 AE 0.50 637.86 659.33 1,318.67
1/4 AE 0.25 318.93 335.92 1,343.70
1/10 AE 0.10 131.32 137.06 1,370.61
Aust. 100 corona 0.98 1,220.78 1,229.78 1,254.62
British sovereign 0.24 296.86 301.61 1,281.27
French 20 franc 0.19 235.45 238.54 1,277.68
Krugerrand 1.00 1,264.22 1,274.22 1,274.22
Maple Leaf 1.00 1,266.70 1,281.70 1,281.70
1/2 Maple Leaf 0.50 719.73 657.14 1,314.29
1/4 Maple Leaf 0.25 319.18 334.83 1,339.32
1/10 Maple Leaf 0.10 132.68 136.44 1,364.35
Mexican 50 peso 1.21 1,501.50 1,512.50 1,254.46
.9999 bar 1.00 1,256.08 1,270.70 1,270.70
SPOT SILVER: 19.02      
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 14,493.05 14,743.05 20.62
US 40% silver 1/2s 0.30 5,419.15 5,569.15 18.88
100 oz .999 bar 100.00 1,907.00 1,957.00 19.57
10 oz .999 bar 10.00 190.70 195.70 19.57
1 oz .999 round 1.00 19.12 19.62 19.62
Am Eagle, 200 oz Min 1.00 20.87 21.27 21.27
SPOT PLATINUM: 1,456.30      
Plat. Platypus 1.00 1,471.30 1,488.30 1,488.30
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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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