The Moneychanger
Daily Commentary
Monday, 17 November a.d. 2014 Browse the commentary archive

So Japan went into recession today. Right, just like that. Last night everybody went to bed in Tokyo & things were just a blowin' & a goin', but this morning they woke up to recession.

I am just ill-mannered enough to bring up the past. I remember when Shinzo Abe took office in December 2012 with Abenomics, a new dog that was only the old dog with a haircut: Inflation will fix us. Daddurn! Abe must not have done enough inflatin', cause it ain't worked here two years down the road.

Y'all don't reckon anybody in the US Fed will notice that, do you?

On top of that, ECB head Criminal Mario Draghi revved up his lips again today to threaten to threaten to threaten to do something if the Euro economy doesn't straighten up & fly right. If he were a parent, he'd be raising a serial killer.

That scabrous old opportunist, the US dollar index, took its chance to rise 43 basis points or 0.49%. That nixed Friday's first half of a key reversal by posting a higher close today, but remained far enough from its Friday intraday high that it still looks as if it has turned down. Path of least resistance is d-o-w-n.

If Abe has accomplished nothing else, he has managed to gut the yen's value, taking it from about 120 cents/Y100 to 85.77 today, a 28.5% loss in 2 years. But that's what he aimed to do, depreciate the yen, since he is engaged in a currency war. But then, most of the world is, smiling and acting as if everything is okay while trying as hard as they can to depreciate their own currencies which they believe makes them more competitive. It's a replay of the 1930s.

Euro lost almost all the ground it made Thursday & Friday, which is probably why Draghi unlimbered his tongue. Lost 0.62% to $1.2450, Durn! He's almost as effective as one of them Komodo lizards!

Stocks are still bumping up along resistance, eking out a new high by Angstrom units. It was the S&P500's turn for a new high today, up -- get ready, its AHH-mazing -- 1.5 or 0.07% to 2,041.32. In a like tiny range, the down also added 0.07% (lucky 7, or 13.01 points) to end at 17,647.75.

Y'all think this is pure-dee old braggadocio, don't you? 'Tain't. It's experience. Y'all go look at that August 2011 gold chart; you'll see the same sort of action. But shucks! Don't y'all believe me. I ain't nothin' mor'n no nat'ral born durn fool from Tennessee, and don't none of us here in Tennessee know an eighth what them smart fellers in Warshington & New Yark know.

Both the Dow in Gold & Dow in silver have broken their uptrends like Humpty-Dumpty, beyond repair. Dow in Silver closed $1,421.02 silver dollars (1.099.07 troy ounces), up 1.62% at the day's end. Shall I inventory the downward pointing indicators? Sure -- all of 'em. All. That was quick.

I'll tell y'all, eating crow for months on endf leaves an mean edge on ya -- not to mention pinfeathers betwixt your teeth.

Dow in gold rose 0.18 to G$307.39 gold dollars (14.87 troy ounces). Y'all can just ditto that indicator inventory for the Dow in silver.

Y'all just remember that old pendulum principle: when a market swings too far one way, it's bound to swing back th'other way too far.

Time Comex closed silver had given back 25.7 cents (1.58%) to roost at 1605.3 cents. Gold held on to all but $2.00 (0.17%) for a $1,183.00 close.

Not a thing in the world's hurt. After that big leap Friday both were entitled & likely to rest and back up a little today. Gold bumped up into and past its 20 DMA (1189.75) but didn't stay there. Gold is headed much higher -- much. Still, we have to see how it behaves at $1,255, the last high. All indicators also point to higher prices.

Silver behaved like gold, briefly piercing the 20 DMA at 1633c.

So far, so good. Silver must not drop below 1570c, & gold must hold $1,180. Long as they stay above that, should be fine. Should also advance tomorrow.

On 17 November a.d. 1558 Elizabeth I at age 25 ascended the English throne after her half sister Bloody Mary died. Nobody knew what to expect of her, as she had looked around & observed that keeping her head required keeping quiet. She was less a tyrant than her father and half-sister, a marked improvement, and cautiously kept the country out of wars. Whatever she did, under her reign English drama and Literature flourished, as well as English privateers. She reigned 44 years and died in peace, still single.

On 17 November 1734 John Peter Zenger was arrested for seditious libel against the governor of colonial New York. His eventual acquittal by a jury would become a landmark case for jury rights and powers & freedom of the press. Don't you all EVER dodge jury duty, and remember that as a juror you are the judge of both law and facts, regardless what the judge tells you. As an honest juror, you stand the opportunity to help someone not by pandering or catering, but by doing strict justice.

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
17-Nov-14 Price Change % Change
Gold, $/oz 1,183.00 -2.00 -0.17%
Silver, $/oz 16.05 -0.26 -1.58%
Gold/Silver Ratio 73.693 1.039 1.43%
Silver/Gold Ratio 0.0136 -0.0002 -1.41%
Platinum 1,201.80 -11.80 -0.97%
Palladium 768.35 -2.65 -0.34%
S&P 500 2,041.32 1.50 0.07%
Dow 17,647.75 13.00 0.07%
Dow in GOLD $s 308.38 0.75 0.24%
Dow in GOLD oz 14.92 0.04 0.24%
Dow in SILVER oz 1,099.34 18.12 1.68%
US Dollar Index 88.01 0.43 0.49%
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: 1,185.00      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,217.00 1,226.48 1,226.48
1/2 AE 0.50 609.76 625.09 1,250.18
1/4 AE 0.25 304.88 318.47 1,273.88
1/10 AE 0.10 124.32 129.76 1,297.58
Aust. 100 corona 0.98 1,153.41 1,165.41 1,188.95
British sovereign 0.24 280.62 292.62 1,243.09
French 20 franc 0.19 222.90 226.04 1,210.71
Krugerrand 1.00 1,200.41 1,210.41 1,210.41
Maple Leaf 1.00 1,200.00 1,215.00 1,215.00
1/2 Maple Leaf 0.50 681.38 622.13 1,244.25
1/4 Maple Leaf 0.25 302.18 316.99 1,267.95
1/10 Maple Leaf 0.10 125.61 129.17 1,291.65
Mexican 50 peso 1.21 1,417.21 1,441.21 1,195.33
.9999 bar 1.00 1,189.15 1,201.00 1,201.00
SPOT SILVER: 16.18      
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 12,855.70 13,213.20 18.48
US 40% silver 1/2s 0.30 4,581.35 4,731.35 16.04
100 oz .999 bar 100.00 1,608.00 1,668.00 16.68
10 oz .999 bar 10.00 166.80 167.80 16.78
1 oz .999 round 1.00 16.28 16.83 16.83
Am Eagle, 200 oz Min 1.00 17.93 18.93 18.93
SPOT PLATINUM: 1,201.80      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Plat. Platypus 1.00 1,226.80 1,266.80 1,266.80
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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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