The Moneychanger
Daily Commentary
Thursday, 26 February a.d. 2015 Browse the commentary archive

Y'all don't miss my special offer, below.

Add St. Louis Fed Chief James Bullard to the list of Fed apparatchiki capable of goofy statements. He said the strong dollar was having only a marginal impact on US monetary policy & the economy. Ask other countries if they believe that, since they are depreciating their countries faster than a greased rat can run through a baseboard in a Currency War of competitive devaluations. This is a statement so goofy that you don't want to take either side. No country ever prospered by depreciating its currency, but when others depreciate their currencies it certainly will hurt US exports, or maybe Mr. Bullard doesn't know that US exporters have competitors in Europe and Japan?

What ticks me off most is that ALL central banks manipulate their exchange rates, and they manipulate them together. I wouldn't put it past the Fed to let the dollar rise on purpose, in coordination with the Japanese & Europeans, supposedly to warm up their leftover economies. Yes, it sounds nuts, but Our Rulers are nuts. They have been de-industrializing the US, for heaven's sake, by monetary policy since Bretton Woods!

Stocks trod water all day, trying to peek a nose above the unchanged level. Dow sank 10.15 (0.06%) to 18,214.42. S&P500 went underwater 3.12 (0.15%) to bob slightly underwater at 2,110.74. Today's charts look sick & weak, up and down, unable to rise through unchanged. Something's gone out of them.

Remember the picture from yesterday? I'm wondering whether new highs in stock indices world wide are genuine upside breakouts that will lead to bull market extensions, or merely fakeouts. Add to that the Dow in Gold & Dow in Silver which are approaching the top jaw of a Gator Jaws (broadening top). Tis the nature of broadening tops to wear you out with back & forth, but the Dow in Silver & Dow in gold have been reaching for the top jaws, which suggests they will reverse soon. If so, that would brand the stock breakouts fakeouts.

Another complication: today silver & gold both rose in the teeth of a strong dollar (up 1.2%!). Silver's up 2.4% & gold 1.06% in the last two days. Makes yesterday's musing about a gold & silver rally look a bit more sensible.

Dollar index soared a monstrous 1.2% today, 112 basis points, to 95.35. Catalytic news the media gave was that a "flurry of economic data" was released that sent the dollar up. I don't know Sic 'em from Come here about that, but technically the scrofulous, scabby, unbacked & wholly imaginary US dollar index broke out of a long even-sided triangle, above it's last two highs (95.23) so enough to qualify as an upside breakout.

Oh, and did the euro swoon, like Count Dracula contemplating a wooden stake or the German finance minister facing Yanis Varoufakis across the table! Euro today plunged 1.45% to $1.1199 on its long slide to its intrinsic value, zero. Yen lost 0.46% to 83.67, but remains in its tight range. Euro shot out of a triangle like puncturing an artery. Maybe the European Central Bank ought to hold a garage sale, pump up that euro.

Ten year treasury note yield rose 2.39% to close today at 2.016% (bonds fall when yields rise). Although that places the yield above the 20 & 50 DMAs, the rush out of bonds seems to have ended with a yield peak nearly two weeks ago. For the moment bond prices are not threatened, but worth watching because panic usually shows there first.

West Texas Intermediate Crude fell again today, 4.13% to $48.92/barrel. Looking like it will break down again. Fed-heads are talking about how much falling oil prices will help the economy, but I talked to a friend in an oil boom town where the population had risen from 100,000 to 140,000 in four years. In the last month they lost 17,000 jobs. How will that help the economy?

Gold rose 0.72% or $8.60 to $1,209.60, throwing a leg over that $1,205 resistance. Silver lifted 0.93% or 15.3 cents to 1658.3c.

Okay, now, I am just reporting what the chart shows, not my bias (that comes later). After skidding to a halt at the post-November uptrend line, gold gained yesterday then built on that gain today. A whisker, a mere whisker, stands between gold and that neckline, & not much more between it & the downtrend line from the January high -- tomorrow that's at $1,221. Should gold break through that fence, why, it'll run like a starved hog turned loose in a cornfield. (That's my bias.) Chart's at http://scharts.co/1yVVNjn

Why, silver did the same, only better. Punched into its 20 & 50 DMAs, but strange to relate, closed about where it closed yesterday. Do I see fingerprints on that, Nice Government Men? Y'all know y'all are going to lose in the end, don't you? Silver's gonna run away from y'all & not only will you lose that battle, you'll have to take your pension in depreciating scabby US dollars. (That's bias, too.) Chart's at http://scharts.co/1zMgdZ9

Silver rose intraday to hit its downtrend line from the January peak at 18.50. Barrier here is 1670-1680c. If silver can close above 1700 tomorrow, it will climb back above that neckline where it can run like a scalded dog.

To hold, any rally has to exceed the January highs to continue the rally begun from the November lows, but both silver & gold have a shot at it now.

Note: There's a fairly large piece of land that's come up for sale right near us. People mention to me to keep an eye open for something, but I never know whether they are serious or not. Send me an email at franklin@the-moneychanger with the word "Tennessee" in the subject line & I'll send you details. It's 250 acres.

SPECIAL OFFER: Pre-1935 US GOLD COINS

When the wise Founders of the United States devised a Coinage system under authority of the 1789 constitution, they made a system with a standard silver coin ("dollar or Unit") and roughly half, quarter, and eighth ounce gold coins. The gold coins were not even denominated in "dollars" but in "Eagles" valued in silver dollars, because the system allowed for reducing the gold coins' size whenever the world market silver gold ratio changed.

In 1838 congress reduced the weight of the gold coins to allow for the rise in gold's price, but no one was cheated because there weren't any of the old gold coins in circulation, and the ones that were re-rated more than 100 cents on the dollar.

After 1838 the gold coins' weight was never changed. A double eagle or $20 gold piece contains 0.9875 troy ounce of fine gold; an eagle or $10 gold piece, 0.48375 troy ounce; a half eagle of $5 gold piece 0.2419 troy ounce, and a quarter eagle or $2.50 gold piece 0.1234 troy ounce.

Many of these coins have a high numismatic or collector's value above their gold value. That's why I don't usually trade in them because I prefer bullion coins because they are simpler, require no grading, & are tied directly to the gold price. Also in the last few years their premiums have slipped badly.

But inevitably over time I buy a few, and now I want to sell these thirteen coins listed below, AS A SINGLE LOT. I am selling them as is, and I know they are correctly graded because I asked a friend of mine who is the best numismatic dealer on the West Coast to grade them. None of these coins are "slabbed" or certified. Here's the list & the prices based on $1,210 spot gold. All coins are the Liberty type, except the last listed $20 gold, which is the St. Gaudens type.

"Cull" means that the coin grades less than Very Fine, so is basically just a bullion gold coin without any collector's premium. It still retains the full gold content. THE OFFER, ONE OF EACH LISTED

1906-S $5.00, cull, $307.00 (4.9% premium)

1900 $5.00, polished, $307.00 (4.9% premium)

1907 $5.00, Mint State 60+, $382 (30.5%)

1894 $10.00, cull, $613.00 (4.7%)

1883-S $20, Very Fine, $1,222.00 (4.4% premium)

1896-S $20, Extremely Fine but scuffed, $1,222.00 (4.4% premium)

1896-S $20, About Uncirculated, $1,242.00 (6.1% premium)

1899 $20, About Uncirculated with scratches, $1,222.00 (4.4% premium)

1902-S $20, About Uncirculated 58, $1,268.00 (8.3% premium)

1902-S $20, Extremely Fine scratched, $1,222.00 (4.4% premium)

1904 $20, Uncirculated MS-61, $1,280.00 (9.3% premium)

1907-D $20, cull, $1,201.00 (2.6% premium)

1908 St. Gaudens type $20, Uncirculated MS63, $1,340.00 (14.5%)

That's a total 9.9170 troy ounces of fine gold for $12,828.00 or $1,293.54 per ounce. That's a 6.9% premium overall, about what you'd pay for gold American Eagles. Sorry, I have the one lot only. A CONSOLATION OFFER

If I had to go out and buy Extremely Fine US $20 Liberties, I'd have to charge $1,293.50 apiece, a 10.5% premium. If you just want some of those (in minimum lots of five coins plus $35 shipping or $6,502.50 per lot), put that in your email and I will get them for you IF POSSIBLE AT THAT PRICE, that is, as long as gold doesn't rise more than ten dollars overnight. ORDERING INSTRUCTIONS:

1. You may order by e-mail only to offers@the-moneychanger.com. No phone orders, please. Please do NOT order by replying to THIS email, because it will delay your email.

Your email must include your complete name, address, & phone number. We cannot ship to you without your address. Sorry, we cannot ship outside the United States or to Tennessee.

Repeat, you must include your complete name, address, and phone number. Our clairvoyant quit without warning last week, then I tripped, dropped, & smashed my crystal ball, & our fortune-teller is on strike, so I can no longer read your mind.

2. When you buy from us, we cannot later change or cancel the trade. We are giving you our word that we will sell at that price, & you are giving us your word that you will buy at that price, regardless what later happens in the market, up or down.

If you break your word to us, we will never again do business with you.

3. Orders are on a first-come, first-served basis until supply is exhausted.

4. "First come, first-served" means that we will enter the orders in the order that we receive them by e-mail.

5. If your order is filled, we will e-mail you a confirmation. If you do not receive a confirmation, your order was not filled.

6. You will need to send payment by personal check or bank wire (either one is fine) within 48 hours. It just needs to be in the mail, not in our hands, in 48 hours.

7. "No Nag Basis" means that we allow fourteen (14) days for personal checks to clear before we ship.

Want your order faster? Send a bank wire, but that's not required. Once we ship, the post office takes four to fourteen days to get the registered mail package to you. All in all, you'll see your order in about one month if you send a check.

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
26-Feb-15 Price Change % Change
Gold, $/oz 1,209.60 8.60 0.72%
Silver, $/oz 16.58 0.15 0.93%
Gold/Silver Ratio 72.942 -0.156 -0.21%
Silver/Gold Ratio 0.0137 0.0000 0.21%
Platinum 1,174.70 4.80 0.41%
Palladium 810.25 2.20 0.27%
S&P 500 2,110.74 -3.12 -0.15%
Dow 18,214.42 -10.15 -0.06%
Dow in GOLD $s 311.28 -2.40 -0.77%
Dow in GOLD oz 15.06 -0.12 -0.77%
Dow in SILVER oz 1,098.38 -10.85 -0.98%
US Dollar Index 95.35 1.12 1.19%
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: 1,208.60      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,238.82 1,250.90 1,250.90
1/2 AE 0.50 621.91 637.54 1,275.07
1/4 AE 0.25 310.96 324.81 1,299.25
1/10 AE 0.10 126.80 132.34 1,323.42
Aust. 100 corona 0.98 1,175.19 1,184.19 1,208.11
British sovereign 0.24 286.64 291.64 1,238.90
French 20 franc 0.19 227.34 231.34 1,239.09
Krugerrand 1.00 1,223.10 1,233.10 1,233.10
Maple Leaf 1.00 1,216.60 1,233.60 1,233.60
1/2 Maple Leaf 0.50 694.95 634.52 1,269.03
1/4 Maple Leaf 0.25 308.19 323.30 1,293.20
1/10 Maple Leaf 0.10 128.11 131.74 1,317.37
Mexican 50 peso 1.21 1,446.89 1,457.89 1,209.16
.9999 bar 1.00 1,212.83 1,224.60 1,224.60
SPOT SILVER: 16.51      
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 12,555.40 12,912.90 18.06
US 40% silver 1/2s 0.30 4,678.70 4,828.70 16.37
100 oz .999 bar 100.00 1,641.00 1,701.00 17.01
10 oz .999 bar 10.00 170.10 171.10 17.11
1 oz .999 round 1.00 16.61 17.11 17.11
Am Eagle, 200 oz Min 1.00 18.01 18.81 18.81
SPOT PLATINUM: 1,174.70      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Plat. Platypus 1.00 1,189.70 1,219.70 1,219.70
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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

This is not an offer to buy or sell. Prices subject to change without notice. To enter an order, call us at (888) 218-9226 or (931) 766-6066. Sorry, no sales to Tennessee.

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