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Daily Commentary
Monday, 16 November a.d. 2015 Browse the commentary archive

One single question about the terrible carnage in Paris: Is it real, or Memorex?

TO MARKETS: I'm not saying this happened, I'm only saying that were I the Nice Government Men charged with (what they call) " maintaining order in markets" I would have bought the French & German stock markets hard, bought US stocks, and bought euros to keep the dollar from blowing out the top.

In the event, the French CAC fell 1%, the German DAX dropped 0.69%, & the London FTSE rose 0.46%. US dollar index rose 0.37% to 99.46 while the Euro fell 0.78% to $1.0687. US 10 year treasury note yield fell, so the 10 year note rose, which might indicate a flight to safety from Europe to the US, slightly.

The US dollar index' correction since the March high traced out a long flat- bottomed triangle or pennant, but now has broken out of that pennant. All that blocks its way to another huge advance is the double top just above 100. On this chart it's a broad red line,

The Dollar Index' rally began in July 2014, traded up to March, then began correcting. If that pennant marks the half way point of the rally, a possibility, the dollar could rally to 120. Don't start gasping and grabbing for the defibrillator. It's only a possibility.

One can only picture with sweaty trembling & nausea what sort of world the dollar index at 120 implies. That suggests that even the crippled intellectual Marxists at the Fed would reverse course before that happens. "I hope," he said in a tiny, squeaky voice.

After plunging at first, US stocks reversed & rose bravely. Dow climbed 273.77 (1.38%) to 17,483.01 and the S&P500 bloated 30.15 (1.49%) at 2,053.19. Stock touts & pimps will cheer this as a reversal, but think about it technically. On Thursday stocks crashed through their 200 day moving averages, today in typical fashion they rallied to touch back. No change of direction.

In like fashion West Texas Intermediate Crude rallied today back up to the bottom boundary of the range it fell out of on Wednesday. So far, that changes nothing and oil will surely drop further.

On Comex close gold had gained a measly $2.90 (0.3%) to 1,083.70 while silver gobbled up 1.8 cents (0.13) to 1422.1c.

Over the weekend the Paris attacks drove gold out of its flatlining up to $1,098 about 3:00 a.m. Monday Eastern time. Selling began there and gold eroded and dwindled town to $1,093 about 9:30, then fell off & fell off to reach that $1,083.70 close. If there was any safe haven buying present, it was weak and easily overcome by the sellers. Reckon the world trusts dollars, at least until that rattlesnake in the bosom bites 'em on the neck.

Silver rose as high at 1442c, made a double top, then began falling sharply at 9:30.

Frankly there's nothing to be made out of today's trading, except to conclude that interest in silver & gold is so low, & opinion so universally negative, that we must be somewhere close to a bottom.

Reminds me of the little optimist and the little pessimist. Psychologists wanted to see how they reacted, so they took these two little 8 year olds, one a hardened pessimist and the other an unshaken optimist, to test them. They locked the little pessimist alone in a room full of toys and the little optimist in a room three feet deep in horse manure.

An hour later they unlocked the first door, and there sat the little pessimist in the midst of the untouched toys. "What's wrong," they asked." "Oh, you

"Oh, you can't trust those toys. They're dangerous. You might start playing with one of those metal trucks and break it and cut an artery and bleed to death. Or you might trip & fall on it and put your eye out."

Duly noting his responses, the psychologists moved on to the room with the little optimist. They unlocked the door and a blizzard of horse manure came shooting out the door. They peeked around the corner and saw the little boy was throwing the manure up in the air, digging as fast as he could.

"Little boy, what's going on?"

"Listen, mister, I ain't got time to talk to you. With all this manure in here, there's GOT to be a pony under here somewhere!"

Bad as things may be, y'all keep digging for that pony.

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-Nov-15 Price Change % Change
Gold, $/oz 1,083.70 2.90 0.27%
Silver, $/oz 14.22 0.02 0.13%
Gold/Silver Ratio 76.204 0.108 0.14%
Silver/Gold Ratio 0.0131 -0.0000 -0.14%
Platinum 865.30 1.80 0.21%
Palladium 551.35 12.30 2.28%
S&P 500 2,053.19 30.15 1.49%
Dow 17,483.01 237.77 1.38%
Dow in GOLD $s 333.49 3.65 1.11%
Dow in GOLD oz 16.13 0.18 1.11%
Dow in SILVER oz 1,229.38 15.18 1.25%
US Dollar Index 99.46 0.37 0.37%
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: 1,082.20      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,111.42 1,120.08 1,120.08
1/2 AE 0.50 551.41 570.86 1,141.72
1/4 AE 0.25 278.41 290.84 1,163.37
1/10 AE 0.10 113.53 118.50 1,185.01
Aust. 100 corona 0.98 1,053.35 1,062.35 1,083.81
British sovereign 0.24 256.66 269.66 1,145.54
French 20 franc 0.19 203.56 207.56 1,111.74
Krugerrand 1.00 1,096.27 1,106.27 1,106.27
Maple Leaf 1.00 1,092.20 1,106.20 1,106.20
1/2 Maple Leaf 0.50 622.27 568.16 1,136.31
1/4 Maple Leaf 0.25 275.96 289.49 1,157.95
1/10 Maple Leaf 0.10 114.71 117.96 1,179.60
Mexican 50 peso 1.21 1,296.87 1,307.87 1,084.74
.9999 bar 1.00 1,085.99 1,094.20 1,094.20
SPOT SILVER: 14.23      
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 11,743.88 12,173.88 17.03
US 40% silver 1/2s 0.30 4,004.63 4,154.63 14.08
100 oz .999 bar 100.00 1,447.50 1,472.50 14.73
10 oz .999 bar 10.00 143.75 148.75 14.88
1 oz .999 round 1.00 14.33 14.79 14.79
Am Eagle, 200 oz Min 1.00 15.73 16.98 16.98
SPOT PLATINUM: 865.30      
Plat. Platypus 1.00 880.30 910.30 910.30
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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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