The Moneychanger
Daily Commentary
Monday, 6 July a.d. 2015 Browse the commentary archive

The Greeks voted NO! on something, be exactly what isn't clear. Certainly in their minds 61% were voting against "austerity" imposed by the Troika. Yet the hopelessly unpayable debt remains, mostly transferred by now from the banks who helped spawn it to the ECB and national central banks, which means, "to the European taxpayers."

It remains in the interests of the Eurocrats not to suffer a breach with Greece, lest others get the idea they might wriggle out of their impossible debts. Therefore they will continue to keep talking the problem to death until the public experiences utter "crisis-exhaustion" and will accept any solution at the price of not having to listen to any more about it.

Big sticker in Greece is that the Greek banks run out of cash in 48 hours -- whoops, make that about 36 now. What's interesting is that the Greek people have seen this coming for months, and have taken as much of their money as they could get out of the banking system. Now we have the interesting question,

What if somebody gave an economy, and no banks came? Could the economy run with people paying each other in cash? Inconvenient for a while, but possible. Shucks, to be rid of the banks is worth a three or four year financial crisis.

US Dollar Index's reaction to the aftermath of Greece's referendum was muted. It rose 19 basis points (0.2%) to 96.49, technically not a breakout over 96.50 support, but not far and pushing. Since mid-June the Dollar index has been in an uptrend, and remains in that uptrend. Greece will eventually drive it higher.

Hot money looking for a safe perch sent investors into US treasury securities. That showed in the dropping yields (as bond prices rise, yields fall) in the 10 year treasury note 9down 4.81% to 2.278%) & the 30 year Treasury bond (down 3.79% to 3.071%). Not a stampede, but enough for yields to gap down.

Euro fell 0.26% to $1.1056, not as far as reason expects, but given that ALL central banks manipulate exchange rates, especially during crises, that's about right. As the dollar index is about to break out upside from an even-sided triangle, so the euro is fixing to break out downside. Once dams burst, it's tough to rebuild them during the following flood.

Japanese yen caught some safe have bid from Europe, rising 0.44% to 81.62. Still needs to cross 82.25 before it proves much.

STOCKS have closed lower two weeks running. Today they melted again, just enough to demoralize. Dow lost 46.53 (0.26%) to 17,683.58. S&P500 peeled off 8.02 (0.39%) to 2,068.76. Stock drops combined with metals' strength sent the Dow in gold below its 20 & 50 DMAs and the Dow in silver below its 20 DMA. There's a Big Drop a-comin'.

West Texas Intermediate Crude today fell badly out of the range that has contained it since May began. That's only the beginning. See Copper also fell hard, 3.75% to $2.54. Chart argues it will fall as far as $2.42.

Although those inflation markets fell, silver & gold rose. Silver gained 18.9 cents (1.2%) to 1572.6 cents while Gold jumped $9.90 (0.85%) to $1,172.90. All the same, the silver & gold charts show nothing but suspicion they MIGHT turn up, but also suspicion they might break down.

Here's the range that doesn't tell us anything new: for gold, $1,155 to $1,190; for silver, 1544c to 1640c.

I remind y'all that we are now in the window for silver & gold to make their seasonal lows, and we will probably see those by this week's end.

I have a foreboding -- can you say, "I forebode"? -- that this eerie peace in markets is the calm BEFORE a storm. I hope I'm wrong.

On 6 July 1967 the Biafran War erupted as Nigerian state forces invaded seceding Biafra, home of the Ibo (sometimes spelled Igbo) people. In 3-1/2 years 725,000 military casualties were inflicted and about 3 million civilian. As usual, the US backed the wrong side.

On 6 July 1415 the Czech religious leader Jan Hus was burned at the stake, despite the safe passage the emperor had guaranteed him. How can you tell an emperor is lying? His lips are moving.

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
6-Jul-15 Price Change % Change
Gold, $/oz 1,172.90 9.90 0.85%
Silver, $/oz 15.73 0.19 1.22%
Gold/Silver Ratio 74.583 -0.270 -0.36%
Silver/Gold Ratio 0.0134 0.0000 0.36%
Platinum 1,065.90 -17.70 -1.63%
Palladium 675.15 -18.00 -2.60%
S&P 500 2,068.76 -8.08 -0.39%
Dow 17,683.58 -46.53 -0.26%
Dow in GOLD $s 311.66 -3.48 -1.10%
Dow in GOLD oz 15.08 -0.17 -1.10%
Dow in SILVER oz 1,124.48 -16.67 -1.46%
US Dollar Index 96.49 0.19 0.20%
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: 1,168.70      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,202.59 1,209.60 1,209.60
1/2 AE 0.50 595.53 616.49 1,232.98
1/4 AE 0.25 300.68 314.09 1,256.35
1/10 AE 0.10 122.61 127.97 1,279.73
Aust. 100 corona 0.98 1,139.83 1,148.83 1,172.04
British sovereign 0.24 277.18 290.18 1,232.69
French 20 franc 0.19 219.83 223.83 1,198.89
Krugerrand 1.00 1,183.89 1,193.89 1,193.89
Maple Leaf 1.00 1,176.70 1,192.70 1,192.70
1/2 Maple Leaf 0.50 672.00 613.57 1,227.14
1/4 Maple Leaf 0.25 298.02 312.63 1,250.51
1/10 Maple Leaf 0.10 123.88 127.39 1,273.88
Mexican 50 peso 1.21 1,401.94 1,412.94 1,171.88
.9999 bar 1.00 1,172.79 1,180.70 1,180.70
SPOT SILVER: 15.66      
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 12,448.15 12,805.65 17.91
US 40% silver 1/2s 0.30 4,427.95 4,577.95 15.52
100 oz .999 bar 100.00 1,556.00 1,606.00 16.06
10 oz .999 bar 10.00 155.60 161.10 16.11
1 oz .999 round 1.00 15.76 16.26 16.26
Am Eagle, 200 oz Min 1.00 17.16 18.01 18.01
SPOT PLATINUM: 1,065.90      
Plat. Platypus 1.00 1,080.90 1,110.90 1,110.90
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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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