The Moneychanger
Daily Commentary
Wednesday, 11 February a.d. 2015 Browse the commentary archive

"I changed my car horn from a honk to gunshot sounds. People move out of the way much faster now."

UNCOMFORTABLE FACTS: In the last six years central banks have created $11 trillion dollars. That is incomprehensible.

The Baltic Dry Index, which measures sea freight activity, has hit an all-time low since it was introduced in 1986. Freight rates to ship dry bulk goods have collapsed, which implies that the economic outlook for the world and especially China is almost as bright as the future of a cricket at a chicken convention.

A hilarious picture from the European finance ministers meeting is found at http://cbsn.ws/1DGGv43 In the pic Greek FM Yanis Varoufakis is shaking hands with IMF Managing Director Christine Lagarde. Into a room of impeccably dressed and cravatted finance ministers walks Varoufakis with no tie, his shirttail out, and a plaid muffler hanging around his neck, grinning like the proverbial donkey eating sawbriers. Funnier than all that is Eurogroup Pres. Jeroen Dijsselbloem on the left who is glancing toward Varoufakis barely able to stifle his laughter. Varoufakis is posing, Lagarde is posing, everybody is posing, phony as a Happy Meal. But most interesting is Varoufakis' Marxist clothing statement, refusing to wear the upper class uniform. That will hardly impress those central bank criminals and apparatchiki. It's Greece versus the banks. Who do y'all reckon will win?

With the Ukraine peace talks beginning & the Greek pot boiling, stocks felt not chipper today. Indices were mixed with the Dow, S&P500, & Russell 2000 down slightly and the Nasdaq and Nasdaq-100 up slightly.

Dow Industrials lost 6.62 (0.04%) to 17,862.14. S&P500 barely moved, losing 0.06 point to 2,068.53. That says almost nothing, given the political threats & distractions. Thanks to lower silver & gold, the Dow in metals rose. Dow in Gold rose 1.09% to G$302.84 gold dollars (14.65 troy ounce). Dow in Silver twitched up 0.82% to S$1,377.87 silver dollars (1,065.7 troy oz.). Both bear watching, as they are above both the 20 & 50 DMA, but the 50 DMA stands higher than the 20.

Somebody made my stomach flip over twice today by noticing that the US dollar index hasn't been this high since the 2008 financial crisis.

There's an uptrend line from mid-December that the US dollar index dropped through on 3 February when it fell out of that little triangle. Stayed dancing on that line for 6 days, not strong or weak. Still traded across it today, but closed above, and poked its poll through the downtrend. What happens if the Europeans strike a deal with the Greeks tomorrow? Euro backed up 0.17% to $1.1297, nothing. Yen has started itself another little old downtrend -- tripped and fell 0.68% to 83.13.

US 10 year treasury not yield hit 2%, then fell back to 1.988%, ending its rally from 3 February from 1.673%. With European government bonds yielding negative interest rates, it makes little sense that US government note prices with a positive yield should be falling (yield rising). Another mystery.

West Texas Intermediate Crude diminished 4.16% to $48.84/barrel. It has a little rally working.

Gold slid $12.60 (1.02%) to a Comex close at $1,219. I'll have something intriguing to say about that in a second. Silver gave up only 11.2 cents (0.66%) to 1674.5c.

First silver. It closed right near its 50 DMA (1676c) & remains in that bullish falling wedge. Looking at the Bollinger Bands two standard deviations on either side of the 20 DMA, silver could fall to 1637c tomorrow before it hit that lower line. What difference does that make? Usually a market stays within those Bollinger bands, and when it punctures the bottom line it's usually a pretty good buy signal (sell signal when it punctures the top). I believe I would buy around there, even if it traded a day or three on the low side of the line. It often does that before it reverses, but without clean falling off the chart -- just a few points below. Remains a little below the neckline, but not enough to give me heartburn.

Gold's fall took it through the neckline, today about $1,226.50. Doesn't amount to much on a chart. However, gold did two things that make this price a buy. First, it poked into its bottom channel line of the downtrend from the 22 January high. Right favorable place to buy some. Second, it punched into the bottom Bollinger Band ($1,218.39) and closed pennies above it.

How trustworthy is that buy signal? Well, looking at a six month chart, http://scharts.co/1DH00te buying at the bottom BB would have killed you in August & September, when gold slid down that line like a waterslide. But it only pierced it on the day before and the day of the ultimate low, then rose to the top line for a $70 climb. In November gold saw three BB punctures. The last marked the early November low at $1130.40 from which it rose to $1,239. At end-November gold again touched its lower BB, and rallied from $1,167.30 to $1,307.80. So I reckon it's either a VERY good buy signal, or VERY bad.

What often happens is that gold punctures the BB the first day, trades lower the second or third day, then closes higher. Buying that reversal day is a more reliable signal.

But what do I know? I'm jes' a nat'ral born durned fool from Tennessee, looking at that breath-stealing orange sunset & heartsick for spring. I won't even mind the flies, I wan to hear those spring peepers so bad.

The deadline for signing up for Obamacare is 15 February 2015. If you like the US Post Office, you'll love Obamacare. When the law was written, Christian medical need sharing fellowships were grandfathered in. They aren't "insurance," but belonging exempts you from Obamacare insurance.

My wife & I belong to Samaritan Ministries, www.samaritanministries.org. While Samaritan doesn't pay for any pre-existing conditions, it covers any illness that might arise. Once a month Samaritan sends us a letter telling us where to send our check, & we send a check for less than $385 directly to the folks who need it. Pretty simple.

How to qualify? You can't smoke and you have to be a regularly attending member of a local church. More info at www.samaritan.org. If you tell them The Moneychanger/Franklin Sanders sent you, we get a little credit toward our annual fee. Whether you tell them that or not, you owe it to yourself to check out Samaritan.

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
11-Feb-15 Price Change % Change
Gold, $/oz 1,219.00 -12.60 -1.02%
Silver, $/oz 16.75 -0.11 -0.66%
Gold/Silver Ratio 72.798 -0.264 -0.36%
Silver/Gold Ratio 0.0137 0.0000 0.36%
Platinum 1,196.90 -11.70 -0.97%
Palladium 766.85 0.85 0.11%
S&P 500 2,068.53 -0.06 -0.00%
Dow 17,862.14 -6.62 -0.04%
Dow in GOLD $s 302.91 2.99 1.00%
Dow in GOLD oz 14.65 0.14 1.00%
Dow in SILVER oz 1,066.71 6.69 0.63%
US Dollar Index 95.18 0.36 0.38%
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: 1,219.40      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,243.79 1,262.08 1,262.08
1/2 AE 0.50 621.38 646.28 1,292.56
1/4 AE 0.25 313.74 327.71 1,310.86
1/10 AE 0.10 127.93 134.13 1,341.34
Aust. 100 corona 0.98 1,186.89 1,195.89 1,220.05
British sovereign 0.24 289.20 294.20 1,249.79
French 20 franc 0.19 229.37 233.37 1,249.97
Krugerrand 1.00 1,234.03 1,244.03 1,244.03
Maple Leaf 1.00 1,234.40 1,249.40 1,249.40
1/2 Maple Leaf 0.50 701.16 640.19 1,280.37
1/4 Maple Leaf 0.25 310.95 326.19 1,304.76
1/10 Maple Leaf 0.10 129.26 132.91 1,329.15
Mexican 50 peso 1.21 1,459.82 1,470.82 1,219.89
.9999 bar 1.00 1,223.67 1,235.40 1,235.40
SPOT SILVER: 16.75      
SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 23.00 26.00 33.99
VG+ Peace dollar 0.77 19.00 22.00 28.76
90% silver coin bags 0.72 12,655.50 13,013.00 18.20
US 40% silver 1/2s 0.30 4,749.50 4,899.50 16.61
100 oz .999 bar 100.00 1,665.00 1,725.00 17.25
10 oz .999 bar 10.00 172.50 173.50 17.35
1 oz .999 round 1.00 16.85 17.40 17.40
Am Eagle, 200 oz Min 1.00 18.25 19.10 19.10
SPOT PLATINUM: 1,196.90      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Plat. Platypus 1.00 1,221.90 1,261.90 1,261.90
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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.

Other Important Information

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