The Moneychanger
Daily Commentary
Tuesday, 24 November a.d. 2015 Browse the commentary archive

Years and years ago I used to work in the temporary help business, like Manpower. Of all the no-shows, greatest excuse I ever heard was from a sleepy woman over the phone. When I asked her why she didn't show up for her assignment, she said, "Uhh, I got up and got into the car and when I tried to start it the accelerator cable was broke!"

So when asked why I didn't send y'all a commentary yesterday, I answer, "My accelerator cable was broke."

On Friday, Mario Draghi, head criminal for the European Criminal Bank, hinted as heavily as a Mafia don that the ECB would begin more Quantitative Easing come their December meeting. This came late in the day, & of course pushed the euro's head under water and held it there blowing bubbles, while it pushed the US dollar up.

The prospect of more easy money, oddly, didn't help stock markets in Europe or the US, as they fell on Monday. Today after a rutty start stocks rose listlessly in the US. Dow found 19.51 (0.11%) somewhere to close at 17,812.19. S&P500 millimetered up 2.55 (0.12%) to 2,089.14.

By a small margin the Dow in Gold yesterday posted a new high for the move at 16.66 oz. against July's 16.500 oz. Dow in silver likewise made a new high at $1,261.89 oz. Indicators have all turned down or are turning down. Those new highs still qualify for double tops with the summer highs. Charts are at http://schrts.co/CJE3oi and http://schrts.co/TWdhWs

US Dollar Index rose yesterday 25 basis points and fell today 21 basis points. However, yesterday it did make a new intraday high at 100.07 and a new high close at 99.87. It has walked through its uptrend line but obviously not fallen off. Only question here is whether the dollar index can make it through the double-top March highs, where resistance is liable to be feisty. Heaven have mercy on the dollar if the Fed raiseth not interest rates in December, for all this rise since October has been flying on a cloud of hot Fed blarney gas about raising rates. That hot money hath no loyalty, & disappointed in the dollar it will run like scalded dog.

Yield on the 10 year treasury note fell below its 20 DMA today, latest in a string of lower yields. Maybe some speculators are getting worried the Fed won't make good its interest rate threat.

West Texas Intermediate Crude has risen back within its September - November trading range & is edging toward its 20 DMA.

Yesterday gold and silver fell, & silver even painted its lowest close for the move, 1404.2c. Today silver rose 11.7 cents (0.8%) to 1415.9c. After losing $8.40 yesterday, gold regained $7.00 today to close Comex at $1,073.80.

Both five day/15 minute charts show a sort of rounding bottom Monday, but for interpretation to be accurate, they must not fall below $1,073 and 1410c -- cutting it close.

Gold and silver markets are as stagnant and moribund as other markets, only more so. Nothing will happen there -- including, I wager, a sharp decline -- until silver rises above 1440c and gold over $1,090. Both are extremely oversold & both show bullish Commitments of Traders numbers, so both are set up for a rally, but both are keeping us waiting. Watch for it still. Personally, I am buying.

Ralph Nader wrote Janet Yellen a hot letter dragging the Fed over the coals for keeping interest rates at zero and ruining US savers. Some report I read said Yellen answered with a really acid letter. I went and read it. Yeah, buddy, it was like being savaged by a dead sheep.

First place, it was written in that constipated bureaucratese politicians, academicians, and others use to obfuscate rather than clarify their meaning. Americans can't write simple, plain English any more, probably because they can't think. The loathsome style is filled with clich├ęs that lost their meaning before the last Ice Age -- well aware, continuing aftermath, has been & continues to be, underscores progress, critically important, and others begging for pruning like a four year apple tree. Oh, and don't forget shunning the simple possessive case: "lives of all Americans" rather than "all Americans' lives." You ain't French, Janet, you can use an S and an apostrophe. It's okay.

These are all simple fixes that even the least gifted can do at home, unaided by a dictionary or thesaurus. So why can't the mighty Fed Hed speak plain English, get it down where the goats can grab it? Maybe the point always is to obscure, dodge, and hide. Worse, maybe she just can't. Maybe she don't know no bettah?

On 24 November 1832 South Carolina passed an ordinance of Nullification declaring the tariffs of 1828 & 1832 unconstitutional & unenforceable in South Carolina after 1 February 1833. President Andrew Jackson threatened to invade South Carolina, which prepared to resist militarily.

On 1 March 1833 Congress passed the Force Bill authorizing the president to use military force against South Carolina, PLUS a new negotiated tariff that satisfied South Carolina. The South Carolina convention re-convened & repealed the Nullification Ordinance on 15 March 1833, but three days later nullified the Force Bill. In other words, after all the whoop-la, South Carolina got what she wanted and backed off the Federal government . That's how nullification is designed to keep Washington in line, but state officials nowadays don't have the backbone of an earthworm.

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
24-Nov-15 Price Change % Change
Gold, $/oz 1,073.80 7.00 0.66%
Silver, $/oz 14.16 0.12 0.83%
Gold/Silver Ratio 75.839 -0.133 -0.18%
Silver/Gold Ratio 0.0132 0.0000 0.18%
Platinum 840.50 -6.30 -0.74%
Palladium 541.50 0.35 0.06%
S&P 500 2,089.14 2.55 0.12%
Dow 17,812.19 19.51 0.11%
Dow in GOLD $s 342.90 -1.87 -0.54%
Dow in GOLD oz 16.59 -0.09 -0.54%
Dow in SILVER oz 1,258.01 -9.09 -0.72%
US Dollar Index 99.65 -0.21 -0.21%
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SPOT GOLD: 1,074.90      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,102.85 1,112.52 1,112.52
1/2 AE 0.50 547.69 567.01 1,134.02
1/4 AE 0.25 276.53 288.88 1,155.52
1/10 AE 0.10 112.76 117.70 1,177.02
Aust. 100 corona 0.98 1,046.24 1,055.24 1,076.56
British sovereign 0.24 254.93 267.93 1,138.19
French 20 franc 0.19 202.19 206.19 1,104.39
Krugerrand 1.00 1,088.87 1,098.87 1,098.87
Maple Leaf 1.00 1,084.90 1,098.90 1,098.90
1/2 Maple Leaf 0.50 618.07 564.32 1,128.65
1/4 Maple Leaf 0.25 274.10 287.54 1,150.14
1/10 Maple Leaf 0.10 113.94 117.16 1,171.64
Mexican 50 peso 1.21 1,288.12 1,299.12 1,077.49
.9999 bar 1.00 1,078.66 1,086.90 1,086.90
SPOT SILVER: 14.16      
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 11,661.65 12,091.65 16.91
US 40% silver 1/2s 0.30 3,985.45 4,135.45 14.02
100 oz .999 bar 100.00 1,441.00 1,466.00 14.66
10 oz .999 bar 10.00 143.10 148.10 14.81
1 oz .999 round 1.00 14.26 14.72 14.72
Am Eagle, 200 oz Min 1.00 15.66 16.91 16.91
SPOT PLATINUM: 840.50      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Plat. Platypus 1.00 855.50 885.50 885.50
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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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