The Moneychanger
Daily Commentary
Wednesday, 9 December a.d. 2015 Browse the commentary archive

I came across this gem from Eric Sloane in his 1973 book, The Spirits of '76:

"[The church was once the center of each village. Villages no longer are born around a central church; instead they start around wherever a bank is built. The smallest shopping mart on the outskirts of any small village may install a bank and only then does it become established as a community. Off the highway nowadays, as you speed past roadside communities, you can occasionally see the tall white spires of early churches still standing in what is known as `the older sections of towns.' I called this to the attention of one banker who agreed with me. `Some of the more fervent prayers,' he said, 'are not said in the church at all, but right here in the bank.'" (pp 42 & 43)

Maybe we ought to change the US motto to, "In banks we trust."

TODAY the US dollar index for little apparent cause fell 113 basis points (1.15%) a huge loss. That leaves the Great Drop on 3 December looking more & more like a permanently broken rally. Dollar's plunge today left it below the 50 DMA (97.53) & within easy striking distance of the 200 DMA (96.78). Some ECB apparatchik said something about the dollar's fall on 3 December arising from too high expectations about what the ECB would announce. That must have set speculators to scratching their heads about what the Fed might do, and a flood of 'em decided skedaddling was the better part of valor. This chart shows their tracks,

Santa Claus rally notwithstanding, stocks can't get up and fly. Dow sank 15.67 (0.77%) to 17,492.30. S&P500, however, fell much more, 13.53 or 1.17% to 2,047.62. Dow in Gold & Dow in Silver turned down again, too.

Gold rose 1.30 to $1,077.60 on Comex. Silver, relatively weaker the last few days, rose 7.3 cents to 1416.4, still mired under the 20 DMA (1417c).

Somebody has to explain silver & gold's laziness here. Gold can't get over its 20 DMA ($1,070.52) or its $1,080 resistance. Silver has just gone plumb to sleep.

Odd, this behavior. Odder still with today's big US dollar index tumble. Gold & silver charts still look fine, indicators all point up, both have traced out V-bottoms, both have begun climbing. Only remains to ask, Why are they stalled?

Durn! Y'all didn't expect me to know, did you? I'm no more'n a nat'ral born durn fool from Tennessee. I can ask a milyun questions, but can't answer a danged one. Course, sometimes asking the RIGHT question might be better than spoutin' a bunch of no-good answers.

Bottom line is markets are worried, worried today, but that worry isn't slopping over into demand for silver & gold -- yet.

On 9 December 1958 Robert Welch and eleven others met in Indianapolis to form the anti-Communist John Birch Society, thus giving the Left something to squawk about for the next 60 years. Nevertheless, the JBS has not yet successfully taken over the US.

On 9 December 1848 was born Joel Chandler Harris, writer & creator of the Uncle Remus tales.

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
9-Dec-15 Price Change % Change
Gold, $/oz 1,077.60 1.20 0.11%
Silver, $/oz 14.16 0.07 0.52%
Gold/Silver Ratio 76.080 -0.309 -0.40%
Silver/Gold Ratio 0.0131 0.0001 0.41%
Platinum 856.60 19.20 2.29%
Palladium 552.20 4.95 0.90%
S&P 500 2,047.62 -13.53 -0.66%
Dow 17,492.30 -15.67 -0.09%
Dow in GOLD $s 335.56 -0.68 -0.20%
Dow in GOLD oz 16.23 -0.03 -0.20%
Dow in SILVER oz 1,234.98 -7.51 -0.60%
US Dollar Index 97.33 -1.13 -1.15%
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GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,103.35 1,110.87 1,110.87
1/2 AE 0.50 546.87 566.17 1,132.33
1/4 AE 0.25 276.12 288.45 1,153.80
1/10 AE 0.10 112.59 117.53 1,175.26
Aust. 100 corona 0.98 1,044.68 1,053.68 1,074.97
British sovereign 0.24 254.55 267.55 1,136.57
French 20 franc 0.19 201.89 205.89 1,102.77
Krugerrand 1.00 1,086.72 1,096.72 1,096.72
Maple Leaf 1.00 1,083.30 1,097.30 1,097.30
1/2 Maple Leaf 0.50 617.15 563.48 1,126.97
1/4 Maple Leaf 0.25 273.69 287.11 1,148.43
1/10 Maple Leaf 0.10 113.77 116.99 1,169.90
Mexican 50 peso 1.21 1,286.21 1,297.21 1,075.90
.9999 bar 1.00 1,077.06 1,085.30 1,085.30
SPOT SILVER: 14.13      
SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 22.50 26.00 33.99
VG+ Peace dollar 0.77 17.50 20.00 26.14
90% silver coin bags 0.72 11,314.88 11,672.38 16.33
US 40% silver 1/2s 0.30 3,975.13 4,125.13 13.98
100 oz .999 bar 100.00 1,437.50 1,462.50 14.63
10 oz .999 bar 10.00 142.75 147.75 14.78
1 oz .999 round 1.00 14.23 14.69 14.69
Am Eagle, 200 oz Min 1.00 15.63 16.88 16.88
SPOT PLATINUM: 856.60      
Plat. Platypus 1.00 871.60 901.60 901.60
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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.
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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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