The Moneychanger
Daily Commentary
Tuesday, 16 June a.d. 2015 Browse the commentary archive

My hogwash meter's needle has pegged over into the red -- so great is the radiation from the massive hogwash bomb headed our way tomorrow in the Federal Open Market Committee meeting announcement. I'd just about rather eat a bug than have to put up with it. Everything about it offends the fastidious sensibilities of a rational man, not to mention morality, logic, & good grammar.

Expecting (I suppose) good things from the FOMC tomorrow, that is, no interest rate hike, US stocks rose today after losing 248 points in the last two sessions. The Dow gained 113.31 (0.64%) today & ended at 17,904.48. S&P500 also rose, adding 11.86 (0.57%) to close 2,096.29. The volatility has to be killing somebody.

The peak in New York Stock Exchange Margin debt tends to lead stock price peaks, but the data runs a month late. In 2000 margin debt peaked in March and the stock market peaked in March; in 2007, margin debt topped in July but stocks in October.

March & April 2015 margin debt posted two new highs, but May hasn't been published yet. Higher margin debt in May would argue stocks have more rise before them.

US dollar index rose 17 basis points (0.17%) to 95.28, while US treasury security prices rose slightly. Thos events point to an uneasy edging to quality in light of the breakdown of talks to resolve the Greek sovereign debt crisis. Friend in Greece reports that Greeks keep the least minimums possible in bank accounts. Wonder why? Too, I wonder why y'all leave big balances in banks. Just as soon take a big old rattler into my bosom to warm up as trust banks & governments.

Euro lost 0.31% to $1.1245. Moving no more than that whispers that the market does not expect Greece to default or exit the euro. German & French stocks (DAX & CAC) made the first half of a key reversal upward today, that is, they broke to a new low for the move, but closed the day higher. London's FTSE just made a new low for the move.

Yen inched up 0.05% to 81.05. It will probably move higher before it moves lower.

Today gold gave back $4.80 and settled Comex at $1,180.50. Silver lost 11.8 cents for a 1595.8c close.

Both silver & gold were lethargic today, as if they'd been drugged. Somebody slipped 'em some thorazine. Gold has a little uptrend running the last eight days, but what can you say when it gets near its 20 day moving average ($1,188.05) and faints?

Yet daily falling toward gold from above is its 200 day moving average, now at $1,208.77. Either gold must show life, strength, & heart by kicking through that barrier, or it will fall away like Superman shunning kryptonite. MACD has nearly turned up, and rate of change has pointed up and is now almost positive. Tain't much recommendation, except the very disfavor of it and the low volatility. Like the girl at the dance who sits by the wall, when she finally gets a chance she's gonna hit that dance floor and cut some kind of rug.

After that little pop yesterday, silver wilted today. It has established new support at 1577c, so mustn't breaks that or it runs the danger of a much larger drop. Premium on US 90% remains at $1.75 over melt at wholesale, smokin' hot, but silver price hasn't shown it yet.

Silver & gold need to show some signs of life, at least fog up a mirror under the nose. Gold needs to hop over its 50 DMA ($1,194.08) & $1,200 while silver needs to o'erleap 1650c.

Don't shoot the messenger, folks. I'm just reporting what the charts say.

On 16 June 1935 your chains were forged when the US House of Representatives passed Franklin Roosevelt's New Deal Legislation. Turns out we got the same Old Deal the peasants got in the 1381 Peasants' Revolt in England.

My father and I used to have hot words about Franklin Roosevelt. My father thought his fascist program had saved the country. I, on the other hand, placed FDR in the same company as Caligula. My daddy was a "yellow dog Democrat." He would have voted for the Democrat if it had been a yellow dog running. That species is pretty well extinct now. We've replaced them in the South with "yellow dog Republicans." Personally, I never could tell 'em apart

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
16-Jun-15 Price Change % Change
Gold, $/oz 1,180.50 -4.80 -0.40%
Silver, $/oz 15.96 -0.12 -0.73%
Gold/Silver Ratio 73.975 0.244 0.33%
Silver/Gold Ratio 0.0135 -0.0000 -0.33%
Platinum 1,079.50 -8.80 -0.81%
Palladium 732.75 -1.35 -0.18%
S&P 500 2,096.29 11.86 0.57%
Dow 17,904.48 113.31 0.64%
Dow in GOLD $s 313.53 3.25 1.05%
Dow in GOLD oz 15.17 0.16 1.05%
Dow in SILVER oz 1,121.98 15.28 1.38%
US Dollar Index 95.28 0.17 0.18%
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: 1,181.40      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,210.94 1,222.75 1,222.75
1/2 AE 0.50 602.00 623.19 1,246.38
1/4 AE 0.25 303.95 317.50 1,270.01
1/10 AE 0.10 123.94 129.36 1,293.63
Aust. 100 corona 0.98 1,151.06 1,160.06 1,183.49
British sovereign 0.24 280.19 293.19 1,245.49
French 20 franc 0.19 222.22 226.22 1,211.69
Krugerrand 1.00 1,196.76 1,206.76 1,206.76
Maple Leaf 1.00 1,189.40 1,205.40 1,205.40
1/2 Maple Leaf 0.50 679.31 620.24 1,240.47
1/4 Maple Leaf 0.25 301.26 316.02 1,264.10
1/10 Maple Leaf 0.10 125.23 128.77 1,287.73
Mexican 50 peso 1.21 1,412.90 1,423.90 1,180.97
.9999 bar 1.00 1,185.53 1,193.40 1,193.40
SPOT SILVER: 15.98      
SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 23.00 26.00 33.99
VG+ Peace dollar 0.77 18.50 21.00 27.45
90% silver coin bags 0.72 12,315.88 12,673.38 17.73
US 40% silver 1/2s 0.30 4,520.88 4,670.88 15.83
100 oz .999 bar 100.00 1,587.50 1,637.50 16.38
10 oz .999 bar 10.00 158.75 164.25 16.43
1 oz .999 round 1.00 16.08 16.58 16.58
Am Eagle, 200 oz Min 1.00 17.48 18.33 18.33
SPOT PLATINUM: 1,079.50      
Plat. Platypus 1.00 1,094.50 1,124.50 1,124.50
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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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