The Moneychanger
Daily Commentary
Monday, 9 March a.d. 2015 Browse the commentary archive

I sort of miss the 18th century. Oh, not the Revolution part at the century's end, but the earlier part. Governments didn't meddle in all your least affairs & tell you how much water you could use to flush your toilet & what lightbulbs to use & try to steal everything from you. Government was usually a carousing, womanizing king who pretty much stuck to his business & left everybody else alone, unless he was French and stealing from the public at a pretty heady tax rate. You could give you allegiance to a country like that where government minded its own business & let you mind yours, taxed just enough, hung highwaymen & malefactors at the city gates, and when they waged war never had armies larger than 7,000 or 8,000, didn't tear up the turf, and strictly left non- combatants alone.

Take George III for example, probably the most upright king England ever had. Never took a mistress, stayed to same wife all his wife and had 15 children by her. He stuck to his science and his farming, left government to his ministers.

Makes you sort or teary-eyed for the good old days, don't it.

Today marks the sixth anniversary of the stock market's advance. That makes it one of the longest-lived in history. Dow bottomed 9 March 2009 at 6,547.05 and &S&P same day at 676.53. It will stand as a historical monument to what central bank money creation can do all by itself, without a single shred or particle of economic backing. S&P500 just a tad overvalued at 27 times earnings. Mercy. Gonna hurt when the bubble pops.

US dollar index backed off 4 basis points to 97.63. All else quiet.

Gold rose $2.30 to $1,166.40, on a scintillating range of $6.40 from high to low. Silver fell 2.9 cents to 1575.5c out of a 20 cent range, 1596 - 1570c.

Might as well not have come to work today. No change, silver & gold still bumping bottom. If they don't catch her and turn up, then we have to reckon with further downside.

But give 'em a couple of days. What I wrote Friday stands: looks like a buying climax on the US dollar was driving things, and that ought to turn around.

But I reckon I oughtn't overlook the black magic power of Money Creation.

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
9-Mar-15 Price Change % Change
Gold, $/oz 1,166.40 2.30 0.20%
Silver, $/oz 15.76 -0.03 -0.18%
Gold/Silver Ratio 74.034 0.282 0.38%
Silver/Gold Ratio 0.0135 -0.0001 -0.38%
Platinum 1,149.70 -10.20 -0.88%
Palladium 822.60 -4.55 -0.55%
S&P 500 2,079.43 8.17 0.39%
Dow 17,995.72 138.94 0.78%
Dow in GOLD $s 318.93 1.84 0.58%
Dow in GOLD oz 15.43 0.09 0.58%
Dow in SILVER oz 1,142.22 10.90 0.96%
US Dollar Index 97.63 -0.04 -0.04%
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: 1,167.80      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,194.66 1,208.67 1,208.67
1/2 AE 0.50 600.90 616.01 1,232.03
1/4 AE 0.25 300.45 313.85 1,255.39
1/10 AE 0.10 122.51 127.87 1,278.74
Aust. 100 corona 0.98 1,135.52 1,144.52 1,167.64
British sovereign 0.24 276.96 281.96 1,197.80
French 20 franc 0.19 219.66 223.66 1,197.98
Krugerrand 1.00 1,181.81 1,191.81 1,191.81
Maple Leaf 1.00 1,175.80 1,192.80 1,192.80
1/2 Maple Leaf 0.50 671.49 613.10 1,226.19
1/4 Maple Leaf 0.25 297.79 312.39 1,249.55
1/10 Maple Leaf 0.10 123.79 127.29 1,272.90
Mexican 50 peso 1.21 1,398.04 1,409.04 1,168.65
.9999 bar 1.00 1,171.89 1,183.80 1,183.80
SPOT SILVER: 15.71      
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 11,979.83 12,337.33 17.26
US 40% silver 1/2s 0.30 4,441.23 4,591.23 15.56
100 oz .999 bar 100.00 1,560.50 1,620.50 16.21
10 oz .999 bar 10.00 162.05 163.05 16.31
1 oz .999 round 1.00 15.81 16.31 16.31
Am Eagle, 200 oz Min 1.00 17.21 18.01 18.01
SPOT PLATINUM: 1,149.70      
Plat. Platypus 1.00 1,164.70 1,194.70 1,194.70
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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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