The Moneychanger
Daily Commentary
Wednesday, 17 June a.d. 2015 Browse the commentary archive

Offering another sterling example how government regulation protects you, over 58 years (Kummerow, 1957) after non-political scientists began pointing out the dangers of trans-fats, the Food and Drug Administration ordered food manufacturers to remove transfats from their products -- within three years.

Although it was first produced in 1911, partially hydrogenated vegetable oils -- Crisco, for example -- only began to replace lard and butter in American usage after World War II. Anyone with taste buds who has ever tasted butter or anything cooked with lard knows that partially hydrogenated vegetable oil can NEVER replace them in fact. It was cheap, so it must be good, right? Nope. Turns out it harms your body in all sorts of ways, causing diabetes, artery hardening, obesity, heart attacks, strokes, dementia, inflammation, & cancer. Yum, yum, must be good for you if the FDA never banned it. Whoops, they never sufficiently tested it either, just like Genetically Modified Organisms.

Whoops, lard and butter, along with eggs, are exactly what the medical establishment has demonized for decades. Lately they backed off, too. Turns out your body needs those fats after all. Sorry you're dead.

Listen, the very best thing you can do for your health is to eat a wholesome, unprocessed diet with plenty of raw milk, cream, cheese, eggs, liver, meat, cod liver oil, seafood and other nutrient dense foods. Best place for you to start is Weston A Price Foundation, Dive into their website and read. Then find you a local farmer where you can buy nutrient-dense foods directly, where you know what goes into your food and the producer's integrity. Go look him in the eye. First step, Know Your Farmer. Next step, Buy Local.

Here's a link to an article about how ordinary Greeks are coping with the threats of their government's insolvency: How do they respond? By pulling money out of the banks. Only one mentions buying gold, none silver, which would be eminently more useful than gold in a financial crisis.

Banks & governments can turn off your access to your own money without any warning. Then you're stuck, and at their mercy. If you can, always try to keep three month's cash needs somewhere you have 24 hour access to it, even if you have to build in a safe at your home. It's the same principle as how to stay out of bar fights: leave the bar before the fight begins. Leave the bank before the crisis begins.

Following precedent, Janet Yellen & her Committee of Monetary Midgets blew hot and cold out of both sides of their mouths. Yes, we are going to raise interest rates buuuuuuuuuut not quite yet. Merciful heavens, how long do we have to put up with this idiocy? Where are lightning bolts when you need them?

Bottom line: no interest rate increase yet, nor is one in sight without a radiotelescope.

Dollar index took that news on the chin and fell down the stairs and out the door, down, down, down 77 basis points (0.81%) to 94.49. Did not, however, make a new low for the move, but got within a single skinny basis point. Bad day, but don't count it out yet. Needs to crash below 94.30 to confirm, and really I'd like to see it below 93.15.

Euro bathed its feet in the dollar's blood. Rose 0.79% to $1.1339. No breakout, just higher than it as yesterday, needs to conquer $1.1500 to strut. Yen lost 0.4% to 81.03. Shorter maturity notes yields fell where longer term (30 year) rose because the Fed allowed it would keep on buying loads of 'em.

The Greeks are playing guts ball with those squishy Eurocrats, going nose to nose without a blink. They may get away with it -- for a while. But whatever happens, the banks will not lose, you can bet your cheap politician on that.

At Comex close gold was lower by $4.10 at $1,176.40 while silver had lost 1.8 cents to 1594c. As I write in the aftermarket silver is trading at 1611c and gold at $1,185.20.

During the day gold and silver were flat and still as a roadkilled cat, hugging $1,180 & 1600c. About 12:30 Eastern gold dropped below $1,175, traded sideways until Yellen's bellin', then about 3:00 everybody changed his mind and started buying. That ran gold up as high as $1,189 & silver to 1627.4c, but they have since calmed down.

It's always a strong sign when a market under pressure by events and price touches a new low for the move or a relative low then bounces back at day's end. That's what silver & gold did today. Also the gold/silver ratio appears to be rolling over downward. The Gold/ US dollar index spread popped up, clean above its 50 AND its 20 day moving averages. Chart's here,

These execrable FOMC days always confuse markets, but silver & gold came out of this one like a Labrador coming up out of a freezing pond, shaking the water off their backs & looking for the next duck to hunt.

On 17 June 1631 Mumtaz Mahal died during childbirth. Her husband, Mughal emperor Shah Jahan I, then spent more than 20 years building her tomb, the Taj Mahal.

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
17-Jun-15 Price Change % Change
Gold, $/oz 1,176.40 -4.10 -0.35%
Silver, $/oz 15.94 -0.02 -0.11%
Gold/Silver Ratio 73.802 -0.174 -0.23%
Silver/Gold Ratio 0.0135 0.0000 0.24%
Platinum 1,072.40 -7.10 -0.66%
Palladium 720.30 -12.45 -1.70%
S&P 500 2,100.44 4.15 0.20%
Dow 17,935.74 31.25 0.17%
Dow in GOLD $s 315.17 1.64 0.52%
Dow in GOLD oz 15.25 0.08 0.52%
Dow in SILVER oz 1,125.20 3.23 0.29%
US Dollar Index 94.49 -0.77 -0.81%
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: 1,184.20      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,217.36 1,225.65 1,225.65
1/2 AE 0.50 603.43 624.67 1,249.33
1/4 AE 0.25 304.67 318.25 1,273.02
1/10 AE 0.10 124.24 129.67 1,296.70
Aust. 100 corona 0.98 1,154.95 1,163.95 1,187.46
British sovereign 0.24 280.85 293.85 1,248.31
French 20 franc 0.19 222.75 226.75 1,214.51
Krugerrand 1.00 1,199.59 1,209.59 1,209.59
Maple Leaf 1.00 1,192.20 1,208.20 1,208.20
1/2 Maple Leaf 0.50 680.92 621.71 1,243.41
1/4 Maple Leaf 0.25 301.97 316.77 1,267.09
1/10 Maple Leaf 0.10 125.53 129.08 1,290.78
Mexican 50 peso 1.21 1,416.25 1,427.25 1,183.75
.9999 bar 1.00 1,188.34 1,196.20 1,196.20
SPOT SILVER: 16.08      
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 12,423.13 12,780.63 17.88
US 40% silver 1/2s 0.30 4,550.38 4,700.38 15.93
100 oz .999 bar 100.00 1,597.50 1,647.50 16.48
10 oz .999 bar 10.00 159.75 165.25 16.53
1 oz .999 round 1.00 16.18 16.68 16.68
Am Eagle, 200 oz Min 1.00 17.58 18.43 18.43
SPOT PLATINUM: 1,072.40      
Plat. Platypus 1.00 1,087.40 1,117.40 1,117.40
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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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