The Moneychanger
Daily Commentary
Wednesday, 23 July a.d. 2014 Browse the commentary archive

If you saw a fellow installing a lighting rod on his house, you'd say "I reckon he expects lightening."

If you saw a fellow installing a bomb shelter, you'd say, "I reckon he expects a nuclear war."

And if you saw the SEC adopt "reforms" that relieve money market funds of maintaining a $1.00 per share price and call this a "reform" and say they aim to "mitigate the risks of a run in money market funds & limit further contagion should a run occur," you would say, "I reckon they expect another Panic like 2008, and another run on money market funds."

SEC made that "reform" today. Draw your own conclusion. Why would they be closing the gates against a bank run -- IN ADVANCE? Simple: so that when the runs come, they can deny you your money.

While I've got y'all thinking for yourselves, y'all might like to ask yourself the all-important "Cui bono?" question about the downing of that Malaysian airliner over Ukraine: Who benefits? Would Putin or Russia benefit? Just the opposite. Is Putin stupid? Just the opposite. Who has the most to lose? Putin.

Here's another question: Why was that airliner 300 miles away from the typical flight path? See

Finally, who benefits by fomenting war between Russia and the rest of the world?

Now let your mind wander back over some of the "false flag" operations of the last 150 years, and about this latest incident, ask yourselves, "Is it real, or Memorex?"

A sort of spooky calm hovers over markets. Stocks had an up and down day. The Dow & S&P500 gainsaid each other. S&P500 closed up 3.48 (0.2%) to 1,987.01,a new high, while the Dow fell 0.16% (26.91 to 17,086.63. Today's results bring no resolution: the S&P500 merely moved a step closer to its upper trading range boundary line, the Dow backed away from the top boundary of its bearish rising wedge. Only testimony from today's trading is "confusion." Investors are confused, causing indices to disagree.

Dow in Metals hardly changed enough to talk about. Dow in gold rose 0.15, Dow in silver rose 0.13%. Expect higher prices here.

US dollar index rose to an 8 month high against the puking sick euro today. Dollar index rose 4 basis points (0.06%) to 80.89. It needs to close above 81.10 to pierce that neckline I wrote about yesterday. Dollar is steadily rising.

Euro backed down 0.04% to $1.3461. Apparently it lacks the courage of convictions already expressed, namely, a journey to the earth's core.

Yen has twice, nay, thrice failed to break through the top boundary of a long narrow triangle. Today it lost 0.04% to 98.53. No strength showing in the currency of the Rising Sun.

Gold and silver went sideways with no excitement or flurry. Silver mislaid 1.3 cents to 2905.2c after a narrow range of 2110c to 2094c. Dullsville. Gold traded from $1,303.50 to $1,311.80 and gave up $1.60. Wake me up when something happens.

Both metals closed right at their uptrend lines, without much change from yesterday. If they break that line, which I expect, they'll spike down and give y'all a chance to BACK UP THE TRUCK, MORTGAGE YOUR KIDS, & BUY A TRUCKLOAD.

Till then, I am patiently watching.

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
23-Jul-14 Price Change % Change
Gold, $/oz 1,304.50 -1.60 -0.12%
Silver, $/oz 20.95 -0.01 -0.06%
Gold/Silver Ratio 62.261 -0.038 -0.06%
Silver/Gold Ratio 0.0161 0.0000 0.06%
Platinum 1,485.00 -2.60 -0.17%
Palladium 873.30 -0.55 -0.06%
S&P 500 1,987.01 3.48 0.18%
Dow 17,086.63 -26.91 -0.16%
Dow in GOLD $s 270.76 -0.09 -0.03%
Dow in GOLD oz 13.10 -0.00 -0.03%
Dow in SILVER oz 815.51 -0.78 -0.10%
US Dollar Index 80.89 0.04 0.05%
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: 1,305.80      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,333.22 1,351.50 1,351.50
1/2 AE 0.50 665.45 688.81 1,377.62
1/4 AE 0.25 347.40 350.93 1,403.74
1/10 AE 0.10 138.31 143.64 1,436.38
Aust. 100 corona 0.98 1,270.99 1,279.99 1,305.84
British sovereign 0.24 309.23 321.23 1,364.61
French 20 franc 0.19 245.62 248.59 1,331.51
Krugerrand 1.00 1,316.25 1,326.25 1,326.25
Maple Leaf 1.00 1,320.80 1,335.80 1,335.80
1/2 Maple Leaf 0.50 750.84 685.55 1,371.09
1/4 Maple Leaf 0.25 332.98 349.30 1,397.21
1/10 Maple Leaf 0.10 138.41 142.33 1,423.32
Mexican 50 peso 1.21 1,564.83 1,575.83 1,306.98
.9999 bar 1.00 1,310.37 1,321.80 1,321.80
SPOT SILVER: 20.94      
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 15,111.53 15,361.53 21.48
US 40% silver 1/2s 0.30 5,984.08 6,134.08 20.79
100 oz .999 bar 100.00 2,083.50 2,143.50 21.44
10 oz .999 bar 10.00 214.35 215.35 21.54
1 oz .999 round 1.00 21.04 21.54 21.54
Am Eagle, 200 oz Min 1.00 22.69 23.94 23.94
SPOT PLATINUM: 1,485.00      
Plat. Platypus 1.00 1,510.00 1,550.00 1,550.00
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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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