The Moneychanger
Daily Commentary
Monday, 3 August a.d. 2015 Browse the commentary archive

Just a leetle whisper in y'all's ear. According to Fred, the St. Louis Fed's database, as of 29 July 2015 the federal reserve system has issued $1,370.77 billion in Federal Reserve notes, i.e., currency. Now according to a conversation I had years ago with a Treasury official, about 75% of that circulates OVERSEAS, so only 25% remains in the US. Further, 318,892,103 folks live in the US, give or take a million. A quick division tells me that for every US man, woman, & child only $1,074.64 circulates in the US . Most all daily business payments are made with bank credit, i.e., bank account electrons or credit cards. Most people have little cash, & customarily beg a pittance of cash from their bank at ATMs.

When the Greek Crisis blew up last month & they closed the banks, they limited ATM withdrawals to 60 euros a day or 1600 a month. Lots of folks had been withdrawing cash because they saw what was coming, but when the Greek government locked down the banks, they locked down safe deposit boxes, too. How would your family do without any cash?

Here's an idea for you that expires with August: get two or three months living expenses out of the bank in cash. Not all $100s, small bills. Put that cash someplace safe where you have 24 hour access. "Expires with August" means "do it very, very soon." You're not making any interest leaving it in the bank anyway.

But what do I know? I'm just a nat'ral born durned fool from Tennessee. You say "bank" around here, folks think you're talking about a creek.

TODAY'S MARKETS

Silver & gold disappointed me today Comex silver lost 23 cents to 1451.6c while gold backed down $5.50 to $1,089.40. Silver's low came at 1444c & gold's at $1,085.10.

This action is by no means fatal, simply disappointing. Gold's low came 23 July at 1,072.30 & silver's 24 July at 1433c. Any move that doesn't seriously penetrate those levels would constitute a double bottom.

Silver's MACD indicator has turned up, but its RSI has turned down. Tiny changes. Gold's RSI is growing less oversold and the RSI is curling up. No bad news here, but no good news.

Gold/Silver Ratio rose 1% to 75.048. Closed almost but not quite above the 20 DMA tripwire.

Dow in gold fell barely to 16.15 oz, Dow in silver rose 1.16 to 1,212.41 oz.

Stocks themselves tak'n a faintin' spell. Dow lost 91.66 (0.52%) to 17,598.20. Any close below 17,400 could panic the herd. S&P500 lost 5.8 (0.28%) to 2,098.04 -- whoops, below the 50 DMA and almost below the 20.

US dollar index, scrofulous troubler of the world, rose 14 basis points to 97.57. Euro fell 0.3% to $1.0950, Yen fell 0.08% to 80.63. In other words, nothing happened much in the scabby world of fiat currencies.

On 3 August a.d. 8 the Roman general Tiberius defeated the Dalmatians on the River Bathinus, destroying their civilization. As the Briton Cataractus said of another Roman general, "He left a desert and called it peace." Reminds you of somebody else, so other nation, but I can't now think who. Funny the Romans called everybody else barbarians, but they were the destroyers of civilizations.

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
3-Aug-15 Price Change % Change
Gold, $/oz 1,089.40 -5.50 -0.50%
Silver, $/oz 14.52 -0.23 -1.56%
Gold/Silver Ratio 75.048 0.798 1.07%
Silver/Gold Ratio 0.0133 -0.0001 -1.06%
Platinum 966.60 -17.80 -1.81%
Palladium 602.70 -7.65 -1.25%
S&P 500 2,098.40 -5.80 -0.28%
Dow 17,598.20 -91.66 -0.52%
Dow in GOLD $s 333.93 -0.05 -0.02%
Dow in GOLD oz 16.15 -0.00 -0.02%
Dow in SILVER oz 1,212.33 12.69 1.06%
US Dollar Index 97.57 0.14 0.14%
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: 1,085.60      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,119.25 1,123.60 1,123.60
1/2 AE 0.50 553.15 572.65 1,145.31
1/4 AE 0.25 279.28 291.76 1,167.02
1/10 AE 0.10 113.88 118.87 1,188.73
Aust. 100 corona 0.98 1,056.66 1,065.66 1,087.18
British sovereign 0.24 257.47 270.47 1,148.97
French 20 franc 0.19 204.20 208.20 1,115.17
Krugerrand 1.00 1,106.23 1,116.23 1,116.23
Maple Leaf 1.00 1,093.60 1,109.60 1,109.60
1/2 Maple Leaf 0.50 624.22 569.94 1,139.88
1/4 Maple Leaf 0.25 276.83 290.40 1,161.59
1/10 Maple Leaf 0.10 115.07 118.33 1,183.30
Mexican 50 peso 1.21 1,302.26 1,313.26 1,089.21
.9999 bar 1.00 1,089.40 1,097.60 1,097.60
SPOT SILVER: 14.46      
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 12,376.65 12,734.15 17.81
US 40% silver 1/2s 0.30 4,073.95 4,223.95 14.32
100 oz .999 bar 100.00 1,436.00 1,486.00 14.86
10 oz .999 bar 10.00 143.60 149.10 14.91
1 oz .999 round 1.00 14.56 15.06 15.06
Am Eagle, 200 oz Min 1.00 15.96 16.81 16.81
SPOT PLATINUM: 966.60      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Plat. Platypus 1.00 981.60 1,011.60 1,011.60
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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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