The Moneychanger
Daily Commentary
Tuesday, 14 October a.d. 2014 Browse the commentary archive

In the face of tyranny in America I am sometimes speechless, not because I have nothing to say, but because I have so much to say I don't know where to start.

Last night I read an article every one of you ought to read: Philip Hamburger's "The History & Danger of Administrative Law." Professor Hamburger notes that although its advocates justify administrative law for its supposed modernity and necessity it actually only revives ancient absolutism. It operates outside the law ("extra-legally"), above the law ("supra-legally") forcing judges to defer to it, and it consolidates rather than separates power, uniting in itself legislative, judicial, and executive powers. Most Americans don't realize what a treasure and shield against tyranny we have in the common law, or how we are hoodwinked into submitting to foreign administrative jurisdiction. Here is a simple, understandable explanation. Read it, please.

Markets today:

Stocks climbed on a ledge and stopped plunging over that waterfall today, but the damage has already been done. Yesterday both the Dow and the S&P500 broke their August lows, further confirming a down trend. S&P500 also broke its uptrend line from March 2009 when the bull phase began. Both also crashed through their bottom channel lines, which might signal a pause or an acceleration of the fall.

Dow lost 5.88 (0.04%) to 16,315.19. S&P added 2.96 (0.16% to 1,877.70. Break yesterday below 1,900 is liable to demoralize stock investors pretty badly.

Dow in silver bounced up at day's end, up 0.6% to $1,213.71 silver dollars (938.73 oz). It spent 16 months forming a big wedge, broke above the top limit in September, and today plunked down against it. Dow in Silver ought to fly like a man jumping off the Yazoo River bridge with an anvil tied to each ankle.

Dow in gold hooked up today, 0.33% to G$273.69 gold dollars (13.24 oz). Still in freefall below the 20 & 50 DMA with all indicators pointing down.

US dollar index rose 0.45% (39 basis points) to 85.92. Question is not whether it is correcting, but how far it will fall. Investors must be POURING out of stocks into bonds. Ten year bond yield today gapped down mightily to 2.206%. Clearly the flight into treasury bonds is on.

Yet it didn't depress the yen too much. It lost 0.17% to close at 93.42 cents/Y100, but is steady rallying. Euro fell back 0.75% to $1.2660. Having a hard time getting off the ground.

Silver rose 5.9 cents today (0.34%) while gold rose 0.35% ($4.30). Funny how close those changes are. Silver closed Comex at 1735.3 cents and gold at $1,233.60.

Gold is knocking at the ceiling of $1,237, knocking, knocking, but hasn't yet broken through. Silver is knocking at the 1760c ceiling, but so far has only bloodied its knuckles.

Slowing down here is poor form. Silver has yet to climb above its 20 DMA (17.51). Action of the last four weeks still looks like a bottom, but silver needs to prove itself soon. Advance is getting bogged down. Silver is liable to break through 1800c suddenly and not look back.

Y'all will be consoled that while the US economy has been drugged with Thorazine for five years, the US today won a significant battle in the Chicken Wars. The Obama Administration took India to the World Trade Organization of banning US poultry and eggs back in 2007. Bird flu was the reason given, but now they must take US chickens. Yes, the Obama Administration is making the world safe for Chickenocracy.

Durn. Makes me proud to be an Amurrikan.

On 14 October 1066 Duke William of Normandy defeated the Saxon king of England, Edward II who had already been fighting a war on two fronts. As a result of William's victory, the hybridized English language was born because the conquered Saxons had their own language and the Normans brought French with them. Gradually the two mixed, and that's why in English we have a "porkchop" instead of a "swinechop." The French word for the same meat is applied (for class) when it gets to the table: veal for calf, beef for cow, mutton for sheep, escargot for snails, etc. So most of the language we use everyday is still Saxon, but a huge number of Frenchified words have also entered our vocabulary. The Norman conquest, by the way, is the reason the bailiff in your local court opens court saying, "Oyes, Oyes!" He's actually saying, "Oyez, Oyez!" the Norman French plural imperative meaning, "Hear ye!"

I believe, by the way, that my wife has prepared a pullet pot pie for supper tonight.

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
14-Oct-14 Price Change % Change
Gold, $/oz 1,233.60 4.30 0.35%
Silver, $/oz 17.35 0.06 0.34%
Gold/Silver Ratio 71.089 0.006 0.01%
Silver/Gold Ratio 0.0141 -0.0000 -0.01%
Platinum 1,272.50 11.80 0.94%
Palladium 794.25 9.15 1.17%
S&P 500 1,877.70 2.96 0.16%
Dow 16,315.19 -5.88 -0.04%
Dow in GOLD $s 273.40 -1.06 -0.38%
Dow in GOLD oz 13.23 -0.05 -0.38%
Dow in SILVER oz 940.19 -3.55 -0.38%
US Dollar Index 85.92 0.39 0.46%
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: 1,231.70      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,262.49 1,274.81 1,274.81
1/2 AE 0.50 633.81 649.72 1,299.44
1/4 AE 0.25 316.91 331.02 1,324.08
1/10 AE 0.10 129.22 134.87 1,348.71
Aust. 100 corona 0.98 1,196.45 1,208.45 1,232.86
British sovereign 0.24 291.68 303.68 1,290.07
French 20 franc 0.19 231.68 234.76 1,257.41
Krugerrand 1.00 1,245.25 1,255.25 1,255.25
Maple Leaf 1.00 1,246.70 1,261.70 1,261.70
1/2 Maple Leaf 0.50 708.23 646.64 1,293.29
1/4 Maple Leaf 0.25 314.08 329.48 1,317.92
1/10 Maple Leaf 0.10 130.56 134.26 1,342.55
Mexican 50 peso 1.21 1,474.54 1,498.54 1,242.88
.9999 bar 1.00 1,236.01 1,247.70 1,247.70
SPOT SILVER: 17.33      
SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 24.00 27.00 35.29
VG+ Peace dollar 0.77 19.00 22.50 29.41
90% silver coin bags 0.72 12,784.20 13,070.20 18.28
US 40% silver 1/2s 0.30 4,920.60 5,070.60 17.19
100 oz .999 bar 100.00 1,723.00 1,783.00 17.83
10 oz .999 bar 10.00 178.30 179.30 17.93
1 oz .999 round 1.00 17.43 17.93 17.93
Am Eagle, 200 oz Min 1.00 19.08 20.33 20.33
SPOT PLATINUM: 1,272.50      
Plat. Platypus 1.00 1,297.50 1,337.50 1,337.50
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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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