The Moneychanger
Daily Commentary
Tuesday, 15 July a.d. 2014 Browse the commentary archive

Mother Janet Yellum crawled out of her den today, saw her shadow, and it scared her so bad she ran back into the hole, predicting we will have three more months of Quantitative Easing & another half decade of ZIRP.

Mother Janet also scared many of the Wall Street groundhogs (earthswine?) when she squeaked something about overstretched stock valuations . Stocks closed mixed with the Dow up barely, the S&P500 down, and other indices lower.

Mother Yellum was heard to peep & cheep that the US economic recovery was still incomplete, and so needs still the Fed's "help." (Y'all stop laughing that loud. It's bad manners to guffaw at quasi-government officials. Show some respect.)

I don't have a clue why but currencies took this jammer-jabber to means something "good" for the US dollar and "bad" for the Franken-currency & the Yen. Some reports commentated that because Mother Yellum praised the growth in employment, it signaled that the Fed groweth confident the US economy is improving. Yet why, one wondereth, would a better US economy be good for the US dollar? Might it mean more inflation, too, & therefore a cheaper dollar? Never mind. You will never unravel your way through this to anything rational, not with fiat money. Nothing rational can come from the irrational, any more that good fruit can come from a bad tree.

Well, let's see how much damage the Fed's "help" did to markets today.

Stock markets quivered with confusion. Russell 2000, Nasdaq, & Nasdaq-100 all dropped, as did the Amex Composite. S&P500 lost 3.82 (0.19%) to 1,973.28 but the Dow added a skinny 5.26 (0.03%) to 17,060.68.

Here we go again. Dow made a marginal new intraday high, but without a new high close, and closed about where it was yesterday. Feels like it is stuck in the mud. S&P500 reached new high for the move at today's high, but it closed lower. Yes, that's the first part of a key reversal. Also, today's peak was lower than that on 3 July -- double-toppy appearance.

Meanwhile the correction continues in the Dow in Metals. Dow in gold climbed 0.86% to 13.15 oz (G$271.83 gold dollars), well above its 20 & 50 DMAs (12.86 oz & 12.98 oz). Momentum weathervanes now point up.

Dow in Silver rose 0.37% to 816.73 oz ($1,055.97 silver dollars). That punched through its 20 DMA (808.49 oz or S$1,045.32). Simply watch & exercise patience and calm. It's a correction y'all knew was coming.

US Dollar Index rose today to its current (since early June's high) downtrend line, but not through it. Closed right on the line at 80.43, up 21 basis points or 0.26%. Dollar index has formed an even-sided triangle, which tells us not a word about which way 'twill break out. However, it hints it might break out upside, but I wouldn't use that guess as a rope to swing over hell on.

Euro took the hit today, closing down 0.37% to $1.3570, below critical support at $1.3600. That drags the euro through the 20 DMA ($1.3617) & points it toward the earth's core.

Yen abideth yet in shivering irresolution. I wax ashamed to keep reporting the yen remains in the same long, narrow triangle, but what can I do? Stay away.

Silver inched down 2.2 cents to 2084.2c. Gold lost $9.40 (0.72%) to $1,296.90.

Gold has reached that $1,295 area where its 50 & 200 day moving averages are clustered along with lateral support. If gold closes much below $1,290 or stays below that point for long, correction could get bloody.

Silver merely cut through its 20 DMA today, but remains above its 200 (2037c) and 50 DMA (1994c). Strong support around 2050c might catch silver, but its too early to tell. More likely is a dip toward 2000c.

Stay sharp! We're going to get a chance to buy here shortly.

Modern times are catching up with comic books. Marvel Comics today announced that Thor the God of Thunder will be transgendered into Thor-ess, the Goddess of Thunder.

On 15 July 1381 John Ball, an English Lollard (Wycliffite) priest was hanged, drawn, and quartered in front of King Richard II for his role in the Peasants Revolt or Wat Tyler's Rebellion. That means he was hanged by the neck until he was almost dead, let down and eviscerated, then cut into four pieces. He earned this honor because he had preached to the peasants Wycliffe's doctrines, especially those on social equality. In one sermon he asked,

When Adam delved and Eve span,

Who was then the gentleman?

When the rebels were scattered, Ball was captured and taken for execution. They stuck Ball's head on a pike on London Bridge, but failed to kill his ideas.

I read Fred Read's "Fred On Everything" because he's one of the few writers who can describe America's degeneracy truthfully and with wry humor and without self- righteousness. Here's an excerpt from his 11 July article, "Oh Help. Oh Help. Oh Help. Getting what we seem to want" at

"The rot [in America] goes beyond the academic. The whole epicene circus smells of weakness of character. Watching our prancing half-men and furry co-eds, I wonder what would happen to them if it rained hard. America today lives in an unconsciously precarious equilibrium. Some two or three percent of the population grow food for an urbanized country that has never shot a rabbit, baited a hook, or existed other than in the world of McDonald's, dope, and latchkey afternoons. They seem never to have been in a schoolyard fight, never had to take care of themselves, defend themselves, or to understand that one day they might have to do it.

"What if one day Mommy, or Mommy Washington, isn't around to take care of them? Any disruptionâ€"riots, for example, that stopped the flow of food trucks into the citiesâ€"would cause devastation. We have become soft, mentally vacuous, helpless, a civilization on the brink."

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
15-Jul-14 Price Change % Change
Gold, $/oz 1,296.90 -9.40 -0.72%
Silver, $/oz 20.84 -0.02 -0.11%
Gold/Silver Ratio 62.225 -0.385 -0.61%
Silver/Gold Ratio 0.0161 0.0001 0.62%
Platinum 1,484.30 -8.00 -0.54%
Palladium 866.30 -5.15 -0.59%
S&P 500 1,973.28 -3.82 -0.19%
Dow 17,060.68 5.26 0.03%
Dow in GOLD $s 271.94 2.04 0.76%
Dow in GOLD oz 13.15 0.10 0.76%
Dow in SILVER oz 818.57 1.12 0.14%
US Dollar Index 80.43 0.00 0.00%
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: 1,295.20      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,324.99 1,340.53 1,340.53
1/2 AE 0.50 660.04 683.22 1,366.44
1/4 AE 0.25 344.58 348.09 1,392.34
1/10 AE 0.10 137.19 142.47 1,424.72
Aust. 100 corona 0.98 1,259.40 1,268.40 1,294.02
British sovereign 0.24 306.72 318.72 1,353.95
French 20 franc 0.19 243.63 246.61 1,320.91
Krugerrand 1.00 1,312.04 1,322.04 1,322.04
Maple Leaf 1.00 1,310.20 1,325.20 1,325.20
1/2 Maple Leaf 0.50 744.74 679.98 1,359.96
1/4 Maple Leaf 0.25 330.28 346.47 1,385.86
1/10 Maple Leaf 0.10 137.29 141.18 1,411.77
Mexican 50 peso 1.21 1,552.12 1,563.12 1,296.45
.9999 bar 1.00 1,299.73 1,311.20 1,311.20
SPOT SILVER: 20.72      
SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 25.00 26.50 34.64
VG+ Peace dollar 0.77 22.00 24.25 31.70
90% silver coin bags 0.72 14,993.55 15,243.55 21.32
US 40% silver 1/2s 0.30 5,920.65 6,070.65 20.58
100 oz .999 bar 100.00 2,062.00 2,122.00 21.22
10 oz .999 bar 10.00 212.20 213.20 21.32
1 oz .999 round 1.00 20.82 21.32 21.32
Am Eagle, 200 oz Min 1.00 22.47 23.72 23.72
SPOT PLATINUM: 1,484.30      
Plat. Platypus 1.00 1,509.30 1,549.30 1,549.30
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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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