The Moneychanger
Daily Commentary
Tuesday, 12 August a.d. 2014 Browse the commentary archive

I ain't nothing more'n a natural born durn fool from Tennessee, but I'll be SWITCHED if I ain't smarter than a bunch of fools in government & them talkin' mouths on National Proletarian Radio.

I was mindin' my own bidness this morning, fixin' a cup of coffee, when the NPR-ite talking about Ebola said, "The reason private companies haven't developed a vaccine is that Ebola has only killed 3,000 people since 1976 so there's no demand for it, and it's very expensive to develop a vaccine." T'other NPR-ite picked up on that & said, "Since the free market won't do it, the US government has seen what it could do about developing a vaccine." Turns out the yankee government spent one hundred million bucks yet still has no effective vaccine. Some improvement.

Y'all, they say this stuff -- "free market won't develop a vaccine so US government is seeing what it can do" -- without ever thinking that it evidences an economic IQ the same as the North Pole temperature during a winter storm. Mercy, it evidences a REGULAR IQ that low.

But I ain't only a fool, I am suspicious, too. The media are a-beating this ol' Ebola drum for a reason, & Our Masters are going fidget around & use it some way to lock another set of cuffs around our ankles, even if it's no more'n keeping y'all all terrified all the time about somethin' ain't no threat to you no how & you couldn't do nothin' about it if it was.

It's enough to drive a fool to drink, even if you don't have to drive too hard to do that.

This was not a good day for silver & gold, but let me get these other markets out of the way first.

Stocks had a hard time holding on to yesterday's gains, & didn't. Dow coughed up 9.44 (0.06%) to 16,560.54, and volume is drying up like barn paint in the sun. S&P500 lost 3.17 (0.16%) to 1,933.75, weaker than the Dow. Mercy, there's more plungin', plummetin', & pukin' to come.

Dow in Gold hooked down a fraction, 0.13%, while the Dow in silver rose 0.39% and crossed above its 50 DMA at 827. It closed 831.35 oz.

US dollar index closed at 81.57, up a measly 5 basis points, but closed near the day's low. Euro gapped down today, lost 0.14% to $1.3367 & ain't going nowhere but down. Yen looks as sorry as electronics made in China and sold at WalMart, down 0.07% to 97.79.

Gold closed up 30% at 1,308.80 while silver lost 19 cents to 1987c.

Gold was trading along fine, reaching a high of $1,319.30, until about 2:30 Eastern time when sellers took over & slapped gold winded, down from $1,314 to $1,308.20. Silver traded up until nearly 10:00 a.m., reaching 2016c, but then steadily stepped downstairs the rest of the day.

Whenever a market climbs higher during a day, then falls back to close unchanged or lower -- and a 30 cent rise in gold is "unchanged" -- it's bad news. Now it might be on the first day of a rise somehow it got confused, but most of the time that signals that sellers up there at higher prices are more determined than buyers. Wherefore y'all brace yourselves for lower prices tomorrow.

The 2000c mark has been the divider for silver. It wasn't able to pierce that for a while, now when it does, it falls back below it. 'Tain't stout.

All this runs contrary to what I have been expecting, namely, that both metals begin a rally around mid-month, but today raises the suspicion they have not found a solid bottom yet.

Silver & gold might give us a chance to buy at lower prices.

On 12 August 1806 David Crockett took out a marriage license to be wed to Polly Finley. For some reason he waited 4 days to ride to Polly's house -- maybe it took that long to get up a wedding party -- expecting trouble because Polly's mother didn't think he was the man for her daughter. Her father pleaded with him to have the wedding there, her mama apologized, and everybody had a high old time. In 1813 they moved to a home on Bean's Creek in Franklin County, which you will drive over on Highway 64 every time you drive from here to Chattanooga, as I did last Tuesday. Polly Crockett died in 1815.

On 12 August 1863 Confederate guerilla William Quantrill lead a raid on Lawrence, Kansas, which had for years supplied brutal terrorists who raided into Western Missouri.

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
12-Aug-14 Price Change % Change
Gold, $/oz 1,308.80 0.30 0.02%
Silver, $/oz 19.87 -0.00 -0.01%
Gold/Silver Ratio 65.868 0.021 0.03%
Silver/Gold Ratio 0.0152 -0.0000 -0.03%
Platinum 1,471.90 0.60 0.04%
Palladium 878.60 3.30 0.38%
S&P 500 1,933.75 -3.17 -0.16%
Dow 16,560.54 -9.44 -0.06%
Dow in GOLD $s 261.56 -0.21 -0.08%
Dow in GOLD oz 12.65 -0.01 -0.08%
Dow in SILVER oz 833.44 -0.40 -0.05%
US Dollar Index 81.57 0.05 0.06%
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: 1,309.00      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,336.49 1,354.82 1,354.82
1/2 AE 0.50 673.62 690.50 1,381.00
1/4 AE 0.25 336.81 351.79 1,407.18
1/10 AE 0.10 137.34 143.34 1,433.36
Aust. 100 corona 0.98 1,276.67 1,285.67 1,311.64
British sovereign 0.24 309.99 321.99 1,367.83
French 20 franc 0.19 246.22 249.19 1,334.71
Krugerrand 1.00 1,322.09 1,332.09 1,332.09
Maple Leaf 1.00 1,324.00 1,339.00 1,339.00
1/2 Maple Leaf 0.50 752.68 687.23 1,374.45
1/4 Maple Leaf 0.25 333.80 350.16 1,400.63
1/10 Maple Leaf 0.10 138.75 142.68 1,426.81
Mexican 50 peso 1.21 1,570.24 1,581.24 1,311.47
.9999 bar 1.00 1,313.58 1,325.00 1,325.00
SPOT SILVER: 19.92      
SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 26.00 28.50 37.25
VG+ Peace dollar 0.77 22.00 24.00 31.37
90% silver coin bags 0.72 14,028.30 14,278.30 19.97
US 40% silver 1/2s 0.30 5,684.65 5,834.65 19.78
100 oz .999 bar 100.00 1,982.00 2,042.00 20.42
10 oz .999 bar 10.00 204.20 205.20 20.52
1 oz .999 round 1.00 20.02 20.52 20.52
Am Eagle, 200 oz Min 1.00 21.67 22.92 22.92
SPOT PLATINUM: 1,471.90      
Plat. Platypus 1.00 1,496.90 1,536.90 1,536.90
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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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