The Moneychanger
Daily Commentary
Thursday, 15 January a.d. 2015 Browse the commentary archive

Today was the day, the ides of January.

Swiss Nice Government Men, (well, central bank criminals, but it's hard to distinguish) tired of sweating bullets last night and stunned markets by abandoning the link to the euro (SF1.20 = 1 euro). No surprise, the scabby Euro sank immediately 15% against the franc and rose nearly 16% against the scrofulous, fungus-riddled US dollar.

Since much of Switzerland's economy exports, Swiss stocks tanked as investors sold exporters, anticipating their sales shrinking thanks to a higher franc.

The Swiss National Bank criminals had promised in 2011 to keep a floor under the euro at $1.20. Only last month, (according to the New York Times, that prints all the news that fits) the SNB had reiterated its pledge to keep on supporting that floor by buying the euro in "unlimited quantities" if need be.

Well, I reckon that's about how long a central bank's word is good for, thirty days -- shucks, maybe longer than usual But you can sure put down as Gospel what the French say about lying government spokesmen, "Nothing is confirmed until officially denied." The euro might not survive this move.

Lo, yet another loud example of how well central banks stabilize markets.

It gets worse, & spreadeth wider. It appears that loads of Poles, Rumanians, & Bulgarians have granted mortgages in Swiss francs. Now they are obliged to repay in francs worth about 15% more. There's an object lesson in the Moneychanger Rule, NEVER borrow a currency that is likely to appreciate.

They were also violating another Moneychanger rule, NEVER trust a central bank. Today's announcement wasn't even guessed at. Want to see what a central bank surprise party looks like? Go view this chart of the Swiss Franc in Euros, If you went home short Swiss Francs last night, you are bankrupt this morning.

Y'all think about that.

Rest of the day wasn't just peachy for the World That Worships Central Banking, either. Central Banking, either. Today their god failed them.

Stocks continue to sink over the horizon, but 'tain't no rosy sunset here. Dow coughed up another 106.38 (0.61%) to 17,320.71; S&p500 shaved off 18.6 (0.92%) for a close at 1,992.67. Stocks sought to rally, but only early in the day. Rest of the day they looked like a skydiver with a faulty parachute. Believe it or not, yet more downside cometh.

Big gold jump today combined with Dow weakness pushed the Dow in Gold off the wall. Closed down G$9.51 gold dollars (3.25%) to G$283.62 (13.72 oz)! Not far from the 200 DMA at G$280.52 (13.57 oz). Today was the day the DiG fell out of the lower Gator Jaw, and hovers above punching through the uptrend line from August 2013. Once it breaches those supports, the pain will become gin'ral.

Although it fell 1.28% to S$1,320.82 silver dollars (1,021.57 oz), Dow in Silver hath not yet fallen out of the Gator Jaws. Close, but not there yet. Bottom Jaw stands about S$1,292.29 (1,000 oz).

Dow in Gold & Dow in Silver are SCREAMING that stocks have topped against metals: trend change. Yes, yes, a bit more confirmation is needed.

I'd be surprised anybody is left in the currency trading business after today. Here's an intraday chart, In Europe the dollar index gapped down from 92.60 at 4:45 a.m. to below 91.60 IN ONE GAP. Tried to rally without much success, then for 8:00 a.m., rose to 92.65 by 11::30, then trailed off the rest of the day to close up only 29 basis points (0.31%).

Euro, in dollar terms, lost 1.31% for a $1.1633 close. Y'all just wait a week, your European vacation will get even cheaper. Since the year rolled over gold in Euros has gone from below €1,000 to €1,086 today. Chart:

Japanese yen, safe on the other side of the earthball from Europe, keeps rallying, up another 0.97% today to 86.09, well above its 50 DMA. Blue sky above.

WTIC cast doubt on a two day completed key reversal by closing lower today, down 4.87% at $46.25/barrel. Three day uptrend still intact, though.

Yea, yea, this was the day. Gold worked its way through that neckline about 6:30 a.m. then shot higher, paused, and shot higher again, up to $1,267.20. Closed up $30.30 (2.45%) at $1,264.70, right near the top.

Silver broke through 1680c about 5:30 & levitated strait sunward. Hit 1720c dropped sharply but to a higher low, then bounced back to 1720 -- all this by 8:00 a.m. Then it vibrated sideways, but couldn't overcome 1720c. Finally it fell back to 1707.3c on Comex, up only 11.7 cents (0.7%).

What is that 1720c line? The downtrend line from the August 2013 high. Remember the Dow in Gold is balking coming down at the uptrend line from August 2013. Silver should play catch up with gold once it bursts through 1720c, running first & fast for 1860c.

I remind y'all that the upside-down head & shoulders y'all have been watching in gold has a measured target (height of the head added to the neckline at breakout) of US$1,350 (Thirteen hundred Fifty dollars). Today that breakout happened. Silver will follow. Panic fills the air : sudden Swiss franc abandonment of the euro, copper & other commodities falling after oil has already collapsed, stock markets tanking -- there's a smell of blood.

Buy the breakout! Buy the breakout! Buy the breakout!

Gold/Silver ratio rose to 74.076, giving gold holders one last chance to swap gold for silver.

ON 15 January 1920 the Dry Law took effect in the United States, making selling liquor and beer illegal (I don't think this was constitutionally possible, but let's suspend disbelief a moment, as the courts did). Thus was a nation of pretty mild beer drinkers transformed into bathtub gin-guzzling hard liquor drinkers, & along the way planted and fertilized nation-wide crime syndicates. Hell hath no fury like a do-gooder with influence in congress. God preserve us from Goodness crusades!

ON 15 January 1922 the Irish Free State formed with Michael Collins as first premier. Ireland had not had independence for hundreds of years. Y'all see, secession is not impossible.

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
15-Jan-15 Price Change % Change
Gold, $/oz 1,264.70 30.30 2.45%
Silver, $/oz 17.07 0.12 0.69%
Gold/Silver Ratio 74.076 1.276 1.75%
Silver/Gold Ratio 0.0135 -0.0002 -1.72%
Platinum 1,262.10 23.70 1.91%
Palladium 766.35 14.30 1.90%
S&P 500 1,992.67 -18.60 -0.92%
Dow 17,320.71 -106.38 -0.61%
Dow in GOLD $s 283.11 -8.73 -2.99%
Dow in GOLD oz 13.70 -0.42 -2.99%
Dow in SILVER oz 1,014.51 -13.27 -1.29%
US Dollar Index 92.57 0.29 0.31%
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: 1,263.60      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,292.66 1,307.83 1,307.83
1/2 AE 0.50 650.24 666.55 1,333.10
1/4 AE 0.25 325.12 339.59 1,358.37
1/10 AE 0.10 132.57 138.36 1,383.64
Aust. 100 corona 0.98 1,231.15 1,240.15 1,265.20
British sovereign 0.24 299.68 304.68 1,294.32
French 20 franc 0.19 237.68 241.68 1,294.50
Krugerrand 1.00 1,277.50 1,287.50 1,287.50
Maple Leaf 1.00 1,278.60 1,293.60 1,293.60
1/2 Maple Leaf 0.50 726.57 663.39 1,326.78
1/4 Maple Leaf 0.25 322.22 338.01 1,352.05
1/10 Maple Leaf 0.10 133.94 137.73 1,377.32
Mexican 50 peso 1.21 1,422.85 1,433.85 1,189.23
.9999 bar 1.00 1,268.02 1,279.60 1,279.60
SPOT SILVER: 17.04      
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 21.00 27.45
90% silver coin bags 0.72 90,833.60 91,191.10 127.54
US 40% silver 1/2s 0.30 4,835.05 4,985.05 16.90
100 oz .999 bar 100.00 1,694.00 1,754.00 17.54
10 oz .999 bar 10.00 175.40 176.40 17.64
1 oz .999 round 1.00 17.14 17.69 17.69
Am Eagle, 200 oz Min 1.00 18.79 19.44 19.44
SPOT PLATINUM: 1,262.10      
Plat. Platypus 1.00 1,287.10 1,327.10 1,327.10
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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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