The Moneychanger
Daily Commentary
Monday, 28 December a.d. 2015 Browse the commentary archive

An article on David Stockman's website today noted that 405 days ago, on 18 November 2015, the S&P500 closed at 2,052 against today's 2,056.50. 417 days ago, on 6 November 2014 the Dow closed at 17,554, against today's 17,528.27. In other words, in the teeth of all they hype that screams you must be in the market and can't stay on the sidelines, you would have made nothing -- and taken on a bucketload of risk -- to own stocks for the last 400+ days.

Think about that. Stocks have churned sideways, striving all year to break out in a new rally, without even a glint of success.

THIS is what a topping market looks like. This perfectly describes the upside-down bowl or rising top that has capped stocks. All the same, the propaganda spewed from the Fed & Wall Street implies that next year will bring another bumper crop of stock profits. Well, y'all believe that if you want, & don't listen to a nat'ral born durn fool from Tennessee, but rather than catching bumper profits, stocks are liable to catch you between two bumpers next year.

In spite of stocks' relative strength, no new highs have appeared in the Dow in Gold or Dow in silver. Dow in gold remains below its 20 DMA. See and

US dollar index fell again today, 5 basis points to 97.96, but it's not the drop's amount that hurts, it's the position. Below the 20 & 50 day moving averages. Part of a series of lower highs and lower lows. Smelling like 8 day old mackerel, and pointing further down. Even that can't pull any action out of the euro, which rose a token 0.05% to $1.0970. Yen dropped 0.07% to 83.07. Yen might be headed higher, but it's dangerous to judge such matters based on quirky holiday trading.

Silver & gold gave back all the tiny gains they had struggled to gain in Christmas week. Silver lost 49.7¢ (3.5%) to 1387.3¢ on Comex. Gold lost $6.70 or 6.2% to $1,070.50. They are replaying their disappointing performance of December 2014, but remember that both metals came blasting up out of that hole in January 2015.

Gold fell back to its 20 DMA but silver really slipped, way below its 20 DMA & clean back to November & December lows. 'Tain't really so rotten. Last 2 month's trading looks like an upside-down head & shoulders, making the right & last shoulder.

So although I am phlegmatic as a toad about the price movement today, I heartily disliked the jump in the Gold/Silver ratio to 77.164 (Comex closing basis). That needs to turn around tomorrow or it becomes a croaking raven sent by the undertaker.

Have I lost my mind? I just can't get rattled about the prospect of silver or gold dropping further. I don't see it. Of course, I'm just a nat'ral born durned fool, & I've been fooled lots of times before.

On 28 December 1832 Vice President John C. Calhoun resigned from office under President Andrew Jackson. One of America's few original political thinkers, Calhoun supported the doctrine of rule by a concurrent majority and nullification to protect states from the centralizing encroachment of the federal government and majority tyranny. In November 1832 after Jackson signed the Tariff of 1832, South Carolina passed the Ordinance of Nullification declaring the Tariffs of 1828 & 1832 unconstitutional and unenforceable in South Carolina after 1 February 1833. Calhoun split with Jackson, of course, and resigned on 28 December 1832. South Carolinians began preparing to defend their rights by force, if necessary.

On 1 March 1833 congress passed the Force Bill authorizing military force against South Carolina, but at the same time passed the Compromise tariff of 1833, which South Carolina could accept. South Carolina re-convened its convention and repealed the Nullification Ordinance on 15 March 1833. However, three days later they passed another ordinance nullifying the Force Bill. What men!

Calhoun was right, plainly. Today states are little more than subdivisions of the central tyranny from Washington, and I don't think you could find enough courageous nullifying state legislatures to hold a convention in a broom closet.

I hope I'm wrong about those legislators, but nothing changes until somebody says NO.

I won't be sending a commentary tomorrow since I will be finishing up my monthly Moneychanger newsletter. See y'all again on Wednesday, God willing.

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
28-Dec-15 Price Change % Change
Gold, $/oz 1,070.50 -6.70 -0.62%
Silver, $/oz 13.87 -0.50 -3.46%
Gold/Silver Ratio 77.164 2.203 2.94%
Silver/Gold Ratio 0.0130 -0.0004 -2.85%
Platinum 880.80 -2.60 -0.29%
Palladium 552.00 -7.50 -1.34%
S&P 500 2,056.50 -4.49 -0.22%
Dow 17,528.27 -23.90 -0.14%
Dow in GOLD $s 338.48 1.65 0.49%
Dow in GOLD oz 16.37 0.08 0.49%
Dow in SILVER oz 1,263.48 42.04 3.44%
US Dollar Index 97.96 -0.05 -0.05%
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: 1,069.70      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,102.86 1,113.56 1,113.56
1/2 AE 0.50 545.04 564.27 1,128.53
1/4 AE 0.25 275.19 287.48 1,149.93
1/10 AE 0.10 112.21 117.13 1,171.32
Aust. 100 corona 0.98 1,039.08 1,048.08 1,069.25
British sovereign 0.24 253.70 266.70 1,132.95
French 20 franc 0.19 201.21 205.21 1,099.15
Krugerrand 1.00 1,081.47 1,091.47 1,091.47
Maple Leaf 1.00 1,079.70 1,093.70 1,093.70
1/2 Maple Leaf 0.50 615.08 561.59 1,123.19
1/4 Maple Leaf 0.25 272.77 286.14 1,144.58
1/10 Maple Leaf 0.10 113.39 116.60 1,165.97
Mexican 50 peso 1.21 1,280.60 1,291.60 1,071.25
.9999 bar 1.00 1,073.44 1,081.70 1,081.70
SPOT SILVER: 13.86      
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 11,193.33 11,550.83 16.16
US 40% silver 1/2s 0.30 3,895.48 4,045.48 13.71
100 oz .999 bar 100.00 1,410.50 1,435.50 14.36
10 oz .999 bar 10.00 140.05 145.05 14.51
1 oz .999 round 1.00 13.96 14.42 14.42
Am Eagle, 200 oz Min 1.00 15.36 16.61 16.61
SPOT PLATINUM: 880.80      
Plat. Platypus 1.00 895.80 925.80 925.80
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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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