Back in 1993 when James Blanchard of New Orleans asked me to write and edit the book SILVER BONANZA, I'd had a gutful of silver. After a 13 year bear market, I didn't even want to hear the word "silver." Researching that book, however, permanently changed my mind and taught me why silver will outperform gold.
Yet precisely the history that enables you to understand why silver behaves as it does was killed by the New York publisher when they picked up the book. Thankfully, Blanchard had already published SILVER BONANZA privately in the whole, unexpurgated form.
THAT is the edition I have permission to reprint in PDF format. Originally published at $75, I sell it on my website for $39. But at http://store.the-moneychanger.com/products/silver-bonanza you can buy the PDF version at a $20 discount, for only $19 if when you check out you enter the special offer code "MC0903".
And you'll find that our forecast for silver has come true, in greater terms that we could imagine. Only thing we missed was silver in photography. We underestimated how rapidly digital would improve, but our conclusion was correct: it didn't make a bit of difference to the silver bull market, which roared ahead anyway. But y'all go check it out for yourselves.
Now to markets.
'Twas not a kind week for silver or gold, which both lost 1.6%. Nor did platinum or palladium fare better. The scrofulous US dollar index rampaged after the European Central Bank's surprise party. Stocks, in spite of the S&P500's new highs, barely held their own.
The week's big news was the European Central Bank's announcement they will further obliterate their currency with inflation. ECB lowered its rediscount interest rate from 0.15% to 0.05%, began charging banks 0.2% to hold reserves, and announced a quantitative easing program of US$691 billion over three years (US$230 bn/year or US$20 bn a month).
That announcement threw the euro over the cliff and sent people jumping onto the US dollar, the only horse in the corral not lame in two feet. Dollar index gained 1.12% while the euro lost 1.59%. Today the Dollar index closed off one basis point at 83.79, and that probably marks the move's limit. Euro rose slightly, 0.9%, to $1.2951. Yen rose 0.21% to 95.17. The dollar is so overbought, and the yen and euro so oversold, that they need at least a relief correction to work that off.
S&P500 today made a new high at 2006.68, up 9.16 or 0.46%. Dow added 67.75 (0.4%) to close at 17,137.36, not quite equal to 16 July's high at 17,138.20.
The S&P500 had posted a key reversal on Wednesday & Thursday, but cancelled that today with a higher close. It still appears to be rolling over. Dow, also, looks gravity bound. A close below 17,000 or 1990 would drag down stocks like wearing concrete overshoes swimming off Long Island.
Throw your eye on the Dow in Gold chart here, http://scharts.co/1tzI0Nu
The Dow in Gold made a high at December's end at 13.80 oz (G$285.27 gold dollars). It dropped into March to 11.62 ox ($240.21) , then climbed to an early June high at 13.53 oz (G$279.69). From that June high it fell into early August to 12.45 oz (G$257.36). From there it climbed again to 13.53 oz today. Question here is, Can it climb higher or will resistance here stop the DiGs? Indicators whisper that it is topping.
Now go look at the chart for the Dow in Silver, http://scharts.co/1pyWo0N
Dow in silver painted a rising wedge from June 2013 through June 2014 when it topped at 892.99 oz (S$1,154.57 silver dollars). In June the DiS dropped out of that rising wedge, then predictably dropped to 787.85 oz (S$1,108.63), below the 200 DMA. It rallied from mid-July to 894.40 oz (S$1,156.40) yesterday, a new high.
Both these charts appear to be forming double tops. Dow in silver could climb as high as 912 oz (S$1,179.15). Gold must not rise higher than 2% above the 13.80 top or 14.08.
Why am I wasting your time with this? Because these indicators must turn down before silver & gold can turn up. Until they turn down, the Federal Reserve's paper money scam is working.
Gold grew today by -- are y'all ready for this? -- seventy cents to $1,265.80. Silver took out her tweezers and plucked 1.8 cents from somewhere, rising to 1908.2c.
A five day chart shows that gold yesterday made a V-bottom overnight at $1,258. Good, but gold must hold above $1,262 to verify that.
Silver's five day chart resembles gold's, with a V-bottom yesterday. Must hold above 1900c.
Considering the ECB's surprise party this week and the dollar's rise, silver & gold held up pretty well. In spite of dollar strength, they held on. That's the best thing I can say for them right now.
Wait, Moneychanger! Are you giving up on metals? Not on your life, but this will play out until a docile, gullible, a and public-school-educated public catches on to the Federal Reserve's printing scam. Or until yet another financial crisis blows up.
Nothing has changed. Nothing has been reformed. No heads have rolled. If the cause (inflation) hasn't changed, then the result (the gold & silver bull market) won't change, either. Be patient, be patient. Now is the time to buy, not jump overboard.
I remind y'all that I will be vacationing 8-12 September, and so won't be publishing daily commentaries. Our office will be open to help you buy silver or gold, however.
On 5 September 1836 Sam Houston was elected president of the Republic of Texas. Y'all know he was from Tennessee, right? Wasn't for Tennesseans, Texans would probably still be paying taxes to Santa Anna.
Y'all enjoy your weekend!
Argentum et aurum comparanda sunt —
Silver and gold must be bought.
— Franklin Sanders, The Moneychanger