The Moneychanger
Daily Commentary
Wednesday, 10 December a.d. 2014 Browse the commentary archive

Yesterday I failed to mention that one cause of the turmoil & slide in stocks worldwide was the Greek prime minister announced snap presidential elections, and the socialist party most likely to win might wreak havoc with the status quo, even withdraw from the Euro. As throughout the global financial system, no problems have been corrected in Greece, they've just papered over debt with more debt. If Greece comes unglued, the whole EU might split at the seams. Greek stock market lost 13 percent in one day. Chinese and other stock markets also fell.


The US Treasury is quietly ordering "survival Kits" for employees of the Office of the Comptroller of the Currency that examines banks all over the country. Dept. of Treasury sent out a solicitation for bids for the survival kits. Wow. What are they expecting? See article at Zero Hedge,

Same day THIS comes in. A friend informs me that at least one commodity brokerage in Chicago is having mandatory "Security awareness training." Reckon they're afraid the mob will drag the brokers out into the streets and hang them from the same lamp posts as the bankers?

Is this mere coincidence, or is fear bubbling up out of the Establishment like hot gas out of the LaBrea tar pits?

Nat'ral born durn fool from Tennessee that I am, I warned y'all yesterday to watch out for them stocks. I ain't gonna remind y'all no more, 'cause they's nothing I hate like people who say, "I told ya so."

Dow shed 268.05 points (1.51% -- whew!) to 17,533.15, below the 20 DMA (17,767.68) & acting just as it did in early October on the way to fainting. S&P500 scraped off 33.68 (1.64%) to 2,026.14. Broken. Investors are looking at AVERAGES that say December is always a great month. Yeah, but remember that the AVERAGE height of a seven foot girl and a 4'6" foot girl is 5'9", but when you take 'em to supper, one is still going to be awful tall and the other awful short. Average don't promise nothing about "next".

Dow in Gold fell 0.98% to G$295.81 gold dollars (14.31 troy oz), & landed below its 50 DMA (G$296.64). Hath already fallen through the bottom boundary of the Broadening Top (Megaphone) formation. The Jaws of Death have snapped shut.

Dow in silver likewise sliced through its 50 DMA (S$1,344.04 or 1,039.53 oz) and fell 1.33% to close at S$1,327.62 (1,026.83). Hath also fallen thru the bottom limit of the megaphone.

Both the DiG & DiS will fall lower, UNLESS the DiS cannot fall through the larger trading channel bottom boundary (tomorrow about S$1,309.74 or 1,013 oz). Both will give final confirmation ONLY when they dive beneath their 200 DMAs, now G$274.73 or 13.29 oz and S$1,154.95 (893.28 oz).

US dollar index today lost another 50 basis points (0.56%) & closed near the bottom of the day's range AND beneath its 20 DMA (88.24). It has now fallen out of the rising wedge formation we've been watching but I will not stop worrying until it closes below 87.60.

Euro is trying to break out upside through the top of its falling wedge, but has run into knee-deep molasses. Rose 0.55% today to $1.2442, barely above its 20 DMA. Higher price tomorrow would prove a breakout.

Yen is on a rip-roarin' tear, up 1.4% today to 84.73 cents/Y100. Above the 20 DMA. Above its short term downtrend line. Looking buffed.

Oil's fall has not stopped yet. West Texas Intermediate Crude dropped another 3.24% today to end at $61.22/barrel. RSI says "Way oversold" but no sign of a turnaround yet.

Comex gold lost $2.60 (0.2%) to close $1,228.90. Comex silver climbed 5.2 cents to 1713.3 cents.

Silver has left its 20 DMA and downtrend line from the July high way behind, & has set its eyes on the downtrend form the August 2013 high (1764c). But all is Chin-boogey until it climbs above the 1860c line that for so long served as support & now offers resistance coming from the underside.

Potentially pivotal is gold's bursting through the downtrend line from the October 2012 high. Yes, gold closed above that yesterday and closed on that line today. Given the stage of this advance, gold ought to shock its nay-sayers in the next two weeks.

Silver & gold will likely rise tomorrow while stocks & the dollar fall. Time to start buying silver & gold.

On 10 December 1690 Massachusetts Bay Colony became the first American colonial government to borrow money. They had already become the first to utter paper money a few years previous.

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
10-Dec-14 Price Change % Change
Gold, $/oz 1,228.90 -2.60 -0.21%
Silver, $/oz 17.13 0.05 0.30%
Gold/Silver Ratio 71.727 -0.371 -0.51%
Silver/Gold Ratio 0.0139 0.0001 0.52%
Platinum 1,242.10 -4.20 -0.34%
Palladium 821.80 9.70 1.19%
S&P 500 2,026.14 33.68 1.69%
Dow 17,533.15 -268.05 -1.51%
Dow in GOLD $s 294.93 -3.88 -1.30%
Dow in GOLD oz 14.27 -0.19 -1.30%
Dow in SILVER oz 1,023.36 -18.81 -1.80%
US Dollar Index 88.22 -0.50 -0.56%
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: 1,228.30      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,261.46 1,271.29 1,271.29
1/2 AE 0.50 632.06 647.93 1,295.86
1/4 AE 0.25 316.03 330.11 1,320.42
1/10 AE 0.10 128.87 134.50 1,344.99
Aust. 100 corona 0.98 1,193.14 1,205.14 1,229.49
British sovereign 0.24 290.88 302.88 1,286.65
French 20 franc 0.19 231.04 234.12 1,254.01
Krugerrand 1.00 1,245.50 1,255.50 1,255.50
Maple Leaf 1.00 1,243.30 1,258.30 1,258.30
1/2 Maple Leaf 0.50 706.27 644.86 1,289.72
1/4 Maple Leaf 0.25 313.22 328.57 1,314.28
1/10 Maple Leaf 0.10 130.20 133.88 1,338.85
Mexican 50 peso 1.21 1,473.43 1,497.43 1,241.96
.9999 bar 1.00 1,232.60 1,244.30 1,244.30
SPOT SILVER: 17.10      
SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 22.75 26.50 34.64
VG+ Peace dollar 0.77 18.50 22.00 28.76
90% silver coin bags 0.72 13,259.68 13,617.18 19.05
US 40% silver 1/2s 0.30 4,851.28 5,001.28 16.95
100 oz .999 bar 100.00 1,699.50 1,759.50 17.60
10 oz .999 bar 10.00 175.95 176.95 17.70
1 oz .999 round 1.00 17.20 17.75 17.75
Am Eagle, 200 oz Min 1.00 18.85 19.85 19.85
SPOT PLATINUM: 1,242.10      
Plat. Platypus 1.00 1,267.10 1,307.10 1,307.10
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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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