The Moneychanger
Weekly Commentary
Friday, 2 October a.d. 2015 Browse the commentary archive
Here's the weekly scorecard:
  25-Sep-15 2-Oct-15 Change % Change
Silver, cents/oz. 1,510.60 1,525.70 15.10 1.0
Gold, dollars/oz. 1,146.00 1,137.10 -8.90 -0.8
Gold/silver ratio 75.864 74.530 -1.334 -1.8
Silver/gold ratio 0.0132 0.0134 0.0002 1.8
Dow in Gold Dollars (DIG$) 294.29 299.46 5.17 1.8
Dow in gold ounces 14.24 14.49 0.25 1.8
Dow in Silver ounces 1,080.01 1,079.66 -0.35 -0.0
Dow Industrials 16,314.67 16,472.37 157.70 1.0
S&P500 1,931.34 1,951.36 20.02 1.0
US dollar index 96.43 96.33 -0.10 -0.1
Platinum 951.20 907.30 -43.90 -4.6
Palladium 667.55 697.60 30.05 4.5

First, think about this: Like cheap magicians, the media pander to our native distraction by details, bogging us down in the day to day fidgety minutiae, keeping our eyes off the horizon so that we are easily misled. No matter what the details & how compelling & significant they seem for the moment, NEVER take your eyes off the Big Picture, the Horizon, The Explanation For It All (well, with limited application of that last one).

Behold, the picture before your eyes: the government/central bank partnership capstoned by the US Federal Reserve system in 1913 breaking down. Dying of its own excess, like an old drunk. With it is dying government control of the economy, and while its demise may not at first issue in real freedom but in dictatorship, that paroxysm, too, will quickly pass. The simple truth is that socialism, whether it favors the Party apparatchiki or the banks & corporations, simply doesn't produce the goods. In quantity it can only produce misery & death.

In the shorter term, confidence in the Fed (and other central banks) and especially the US dollar continues to erode. Considering the 70-year old iron hegemony the dollar has wielded over the global economy, its replacement, however slow or fast, will ground colossal changes. Gold & silver & those who own them will benefit.

Now, this week's markets:

The week's scorecard doesn't show the tremendous moves today. Looks like silver & gold flatlined or fell, while in truth they staved off another attack & recovered stoutly. Stocks staged a fishy recovery today, and the US dollar is badly wounded & bleeding.

The lying government employment report was published at 8:30, & it torpedoed both stocks and the dollar. The consensus expected 200,000 new jobs, but only 142,000 were reported. As usual, last month's report was also adjusted way down. Labor Force Participation rate stands at 62.4%, its lowest since 1977. That means that of all the adults of an age to work, only 62.4% are working. Whether the rest are gone fishing, on disability, tired of working, or what, we don't know.

The markets' logic went like this. Mother Janet has been promising to raise the interest rate if employment picked up, so when employment tanked, markets sold stocks & the dollar.

Dollar tanked because interest rates are the prime determinant of exchange rates, AND the dollar began rising July a year ago on all Mother Janet's promises to raise interest rates. Speculators piled on, and piled on, raising the Dollar to lofty heights, but when the Big Day came in September, Mother Janet & the rest of the professors blinked. Dodged. Blew all their credibility. Dollar index fell in one straight line from 96.30 to 95.22. Oddly, oddly -- Do I smell government fish? -- it recovered during the day to close at 95.97, down only 36 basis points instead of 108. Makes no never-mind, still closed below 96. Broken. View for yourself at http://schrts.co/OkJ5UT

Euro gained 02% to $1.1214 & Yen lost 0.7% to 83.33. Both tried to break out of triangles, but failed, no doubt pushed over by their respective Nice Government Men. In the Currency Race To The Bottom, nobody wants a strong currency. Goofs.

After plunging 200 points on the employment report, stocks astonishingly found friends about 10:15, friends with DEEEEEP pockets wanting to spend big bucks, and that buying drove the Dow up 200.36 (1.23%) to 16,472.37. S&P500 jumpt 27.54 (1.43%) to 1,951.36.

Where does that leave 'em? Still in a corrective reaction in a MASSIVE downtrend. Yes, both closed above their 20 day moving averages, both closed near the top of their range. Both are still dead men walking, not even within walky-talky range of the 200 day moving average above their heads. Take a peek, http://schrts.co/sny8nU

Underscoring stocks' sorry plight are the Dow in Gold & Dow in Silver. Even with stocks up strongly today, both indicators hooked down, and the Dow in Silver sank far beyond its 200 DMA. It closed 1,081.22 troy oz. against a 200 DMA at 1,106.52. Dropped 41.38 oz today, 3.69%. Go look, http://schrts.co/8T9Csu

Dow in gold was already far below its 200 dma (14.98) and closed today at 14.48 oz. Next down leg, which has probably started, is REALLY going to hurt. http://schrts.co/EtrXmy

10 year treasury note yield sank 2.6% today to close at 1.989%. Owch. Remember that bond prices move opposite to yields, so bonds soared today. http://schrts.co/vUJO4G

The past week's flat and listless silver & gold markets woke up today, like a giant refreshed with wine. Gold leapt $22.90 (2%) to $1,137.00 while silver gained 75.1 cents (FIVE POINT TWO PERCENT) to 1525.7.

Clearly, the shorts panicked. They'll think twice before they short gold & silver again.

On the longer term chart what happened? Silver dropped today to the bottom of its 2-1/2 month range at 1436, then when that employment report came out exploded upward through the top of that range, through the downtrend line from the April 2013 high, through 1500c, and all the way to 1525, not too far from the 1544c September high.

This is a superb showing, vindicating silver's uptrend from the August low, and breaking out of an even-sided triangle. 1550c is now the target. Silver's pulled on her seven league walking boots, & can leap that little step in a single bound. http://schrts.co/EPCPau

Gold today before the labor report sank through that even-sided triangle's boundary, but whoa! What a turnaround. Shot straight up, sliced through the 50 DMA & 20 DMA and kept sprinting for the upper triangle boundary. Didn't quite make it, but closed at the doorstep of that $1140 resistance & just under the downtrend line from the January high. It's crouching on the doorstep, waiting to batter down that door next week.

Behold, friends, a big move cometh! Better climb on.

A PERSONAL REQUEST: I am not ashamed to admit that I depend utterly on the Triune God of all heaven & earth for everything. But sometimes our lives come to a crossroads so momentous that we want to reach out to other saints and ask them to pray for us. Susan & I face just that decision, now, and as a gracious favor to me I ask you to pray for us that God would pour out on us the graces of wisdom to know what to do, trust to rely on his goodness, and hope for a perfect outcome that glorifies our Lord Jesus Christ. Thank you in advance.

REVISITING AUDREY ASSAD: Y'all may have mistakenly concluded from my commentary a few days ago that I was damning Audrey Assad's work with faint praise. Let me correct that misapprehension.

I have no time for so-called Christian music because generally it is thinly baptized rock music, and rock music, rootless and contrived, can seldom move or convince. Audrey Assad's work is different.

Meditative best describes it, & musical. She has understood that meditation means focusing on one or two things only, and her lyrics seize on an idea and turn it around and round & round until it becomes a diamond dazzling from every direction, bathed in music. "Fortunate Fall" takes Augustine's utterly profound "felix culpa," the idea that the Fall became happy or blessed because it brought forth such a Redeemer, & leads us by simple repetition deeper into this unfathomable truth. She uses spare Scriptures that evoke a thousand other thoughts. In "Help My Unbelief" she opposes the suffering father's "Help my unbelief" to Thomas' cry, "My Lord & my God" so that we are drawn into that tension between doubt and faith that every believer experiences, and are comforted. In "Humble" she dwells on the unspeakable mystery of the Incarnation so that we cannot avoid thanksgiving. "Lead Me On," "I Shall Not Want," & "Good to Me" form a trinity of meditations on Psalm 23. She rewrites the lyrics of that wonderful hymn, "Lead, Kindly Light" and delivers it from that constipated 19th century style into an elegant simplicity that moves to tears.

Do I still want to grab that drummer & tie his wrists behind his back & ban him to the other room? Yes, but set all imperfections aside & enter into Assad's music & meditation, and simply join her in pondering the mystery of God. This link takes you to the store where you can buy the album, "Fortunate Fall": http://bit.ly/1RkyTJs

Y'all enjoy your weekend.

Argentum et aurum comparanda sunt —
Silver and gold must be bought.

— Franklin Sanders, The Moneychanger

Your source for gold and silver. Read our latest reviews and testimonials.
Market Snapshot See more charts and market data
2-Oct-15 Price Change % Change
Gold, $/oz 1,137.10 22.90 2.1
Silver, $/oz 15.26 0.75 5.2
Gold/Silver Ratio 74.530 1.465 2.0
Silver/Gold Ratio 0.0134 0.0007 5.2
Platinum 907.30 4.10 0.5
Palladium 697.00 18.20 2.7
S&P 500 1,951.36 27.54 1.4
Dow 16,472.37 200.36 1.2
Dow in GOLD $s 299.46 -2.41 -0.8
Dow in GOLD oz 14.49 -0.12 -0.8
Dow in SILVER oz 1,079.66 -42.08 -3.8
US Dollar Index 95.97 -0.36 -0.4
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: 1,138.30      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,170.17 1,178.14 1,178.14
1/2 AE 0.50 580.02 600.45 1,200.91
1/4 AE 0.25 292.85 305.92 1,223.67
1/10 AE 0.10 119.42 124.64 1,246.44
Aust. 100 corona 0.98 1,110.18 1,119.18 1,141.79
British sovereign 0.24 269.97 282.97 1,202.06
French 20 franc 0.19 214.11 218.11 1,168.26
Krugerrand 1.00 1,158.79 1,168.79 1,168.79
Maple Leaf 1.00 1,148.30 1,162.30 1,162.30
1/2 Maple Leaf 0.50 654.52 597.61 1,195.22
1/4 Maple Leaf 0.25 290.27 304.50 1,217.98
1/10 Maple Leaf 0.10 120.66 124.07 1,240.75
Mexican 50 peso 1.21 1,362.73 1,373.73 1,139.36
.9999 bar 1.00 1,142.28 1,150.30 1,150.30
SPOT SILVER: 15.26      
SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 25.00 27.00 35.29
VG+ Peace dollar 0.77 20.00 22.00 28.76
90% silver coin bags 0.72 13,627.90 13,985.40 19.56
US 40% silver 1/2s 0.30 4,309.95 4,559.95 15.46
100 oz .999 bar 100.00 1,551.00 1,576.00 15.76
10 oz .999 bar 10.00 154.10 159.10 15.91
1 oz .999 round 1.00 15.36 15.82 15.82
Am Eagle, 200 oz Min 1.00 16.76 18.26 18.26
SPOT PLATINUM: 907.30      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Platinum Platypus 1.00 922.30 952.30 952.30
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© 2015 Little Mountain Corporation, d.b.a. The Moneychanger. All rights reserved. May not be republished in any form, including electronically, without our express permission.

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.

Other Important Information

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