The Moneychanger
Daily Commentary
Thursday, 18 December a.d. 2014 Browse the commentary archive

Sorry I sent no commentary yesterday because I was finishing up my monthly paid Moneychanger newsletter for paid subscribers.

On Tuesday I mentioned that Gunnar Haid had posted an interview with me on That's the right URL; the one I gave on Tuesday was wrong. While you're there you might sign up for Gunnar's blog. I really enjoyed our interview. You can download it as a podcast.

Over the last four days the server for our website has been balking at sending/receiving email. I believe it's fixed now, but If you emailed me in the last 4 days and are incensed because I answered not, I probably didn't get the email, so take a deep breath and re-send it.

Mercy! I can almost hear "Happy Days Are Here Again" playing in the background as the stock market soars. Dow rose 421.28 (2.43%), its "best day since November 2011." S&P clumb 48.34 (2.4%) to 2,061.23.

Daddurn. Don't know what I'll do to keep from bustin', I'm so tickled.

Both indices closed above their 20 day moving averages. Everybody was climbing on the free money bandwagon which the Fed filled up with GAS (hot air) yesterday. Tank holds a thousand pounds of moonbeams. Setting aside the sarcasm, this is quite a rally but I still fancy that the Bird Hath Flown The Cage, or Bull, as the case may be. This decline hath only just begun.

Stock rally has wreaked pure-dee ol' havoc on the Dow in metals, but not total havoc. Dow in gold rose 1.95% today to G$307.60 gold dollars (14.88 oz). That takes it above the 20 DMA and back inside the Broadening Top formation. Thus typically behave Broadening Tops (megaphones), rallying back up into the formation when you think they've already broken down. It will resume falling.

Dow in silver gained 1.24% to S$1,442.57 silver dollars (1,115.74oz) and is above its 20 DMA and back inside the megaphone. Can go higher still without invalidating the megaphone.

As stocks go, so goes the US dollar index. Yesterday and today it floated up to the top of the range, and back within the rising wedge it has been drawing. Ought to stop about 89.60. Rising wedge still calls for a tumble down.

In the last two days the euro has lost all the distance it spent two weeks gaining and stands back at the bottom of the range, having blown its chance for escape. Today fell 0.46% to $1.2286. Yen has lost, too, but only about half the gain of its little rally. Flat today, waiting on results of Japanese election, I reckon.

Like a gigantic Hoover Vacuum, stocks are sucking all the money in the world into themselves. Gold closed up -- get ready! -- forty cents today to $1,194.70. Silver jumped, or should I say "twitched" three-tenths of a cent to 1589.4. Ratio stands at 75.167.

To be knocked down as it was earlier this week and yet not break down says a lot for gold's strength. From here it needs again to conquer $1,205, then $1,218-1225.

Silver is dead in the water, but yesterday and today recovered much of Tuesday's fall. This ain't gigantic, but it's not fatal, either. Gives y'all a chance to buy silver cheaper.

On 18 December 218 BC in the Second Punic War at the Battle of Trebia the Carthaginian Hannibal once again defeated the Romans. The Second Punic War was only one of three, and lasted from 218 to 201 BC. Hannibal crossed the Alps from Spain and whipped the Romans every time he met them. At the Battle of Cannae he killed so many Roman citizens that he sent back baskets full of their thumb rings to the Carthaginian senate. What was most amazing was that as many Roman armies as Hannibal ate up, some new Roman would raise his hand and say, "I'll go next," raise another army, and go after him again. Hannibal eventually lost, but the key to a great people is what the Romans showed: heroes & defenders arise out of the people.

On 18 December 1862 in his second raid into West Tennessee Confederate General Nathan Bedford Forrest defeated Federal cavalry near Lexington and generally rubbed yankee nerves raw. One of those heroes.

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
18-Dec-14 Price Change % Change
Gold, $/oz 1,194.70 0.40 0.03%
Silver, $/oz 15.89 0.00 0.02%
Gold/Silver Ratio 75.167 0.011 0.01%
Silver/Gold Ratio 0.0133 -0.0000 -0.01%
Platinum 1,198.30 -2.40 -0.20%
Palladium 794.45 12.90 1.65%
S&P 500 2,061.23 48.34 2.40%
Dow 17,778.15 421.28 2.43%
Dow in GOLD $s 307.61 7.19 2.39%
Dow in GOLD oz 14.88 0.35 2.39%
Dow in SILVER oz 1,118.54 26.30 2.41%
US Dollar Index 89.46 0.22 0.25%
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: 1,198.30      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,231.85 1,240.24 1,240.24
1/2 AE 0.50 616.61 632.10 1,264.21
1/4 AE 0.25 308.30 322.04 1,288.17
1/10 AE 0.10 125.72 131.21 1,312.14
Aust. 100 corona 0.98 1,164.00 1,176.00 1,199.76
British sovereign 0.24 283.77 295.77 1,256.47
French 20 franc 0.19 225.40 228.52 1,224.01
Krugerrand 1.00 1,213.88 1,223.88 1,223.88
Maple Leaf 1.00 1,213.30 1,228.30 1,228.30
1/2 Maple Leaf 0.50 689.02 629.11 1,258.22
1/4 Maple Leaf 0.25 305.57 320.55 1,282.18
1/10 Maple Leaf 0.10 127.02 130.61 1,306.15
Mexican 50 peso 1.21 1,437.45 1,461.45 1,212.12
.9999 bar 1.00 1,202.49 1,214.30 1,214.30
SPOT SILVER: 15.90      
SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 22.75 26.50 34.64
VG+ Peace dollar 0.77 19.00 22.00 28.76
90% silver coin bags 0.72 12,155.00 12,512.50 17.50
US 40% silver 1/2s 0.30 4,498.75 4,648.75 15.76
100 oz .999 bar 100.00 1,580.00 1,640.00 16.40
10 oz .999 bar 10.00 164.00 165.00 16.50
1 oz .999 round 1.00 16.00 16.55 16.55
Am Eagle, 200 oz Min 1.00 17.65 18.30 18.30
SPOT PLATINUM: 1,198.30      
Plat. Platypus 1.00 1,223.30 1,263.30 1,263.30
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© 2015 Little Mountain Corporation, d.b.a. The Moneychanger. All rights reserved. May not be republished in any form, including electronically, without our express permission.

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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