The Moneychanger
Daily Commentary
Wednesday, 13 January a.d. 2016 Browse the commentary archive

Here's a report that appeared on Zero Hedge from Jeff Berwick, Apparently not only has the Baltic Dry Index (a measure of international shipping activity) collapsed, but it appears that the North Atlantic has no cargo ships. They're anchored, without anything to carry. "Commerce between Europe & North America has literally come to a halt." If this is accurate, what do y'all reckon it portends for the US & world economies? Ask Miss Janet, see if she can say.

Stocks are being hammered. Since 31 December 2015 the Dow has fallen 7.3%, the S&P500 7.5%. Russell 2000 has plunged 22% from its June 2015 high. Since their May & summer highs, the Dow has plummeted 11.8%, the S&P500 11.2%, the Wilshire 5000 13.6% (and it closed lower today than in August & September). Dow Jones World index has tumbled 16.3% from last May's high. And Netflix, darling of Wall Street, fell 8.6% today alone. After all, Netflix doesn't actually MAKE anything -- they rent movies. Ahhh, the modern economy! The new age! We are all going to get rich renting each other movies and washing each other's laundry.

Today the Dow puked up 364.81 points (2.21%) for a 16,151.41 close, scaring the snot out of 16,000. S&P500 sank 48.4 to 1,890.2 (2.5%). Stocks declined steadily all day long. Promise even of a relief rally vanished early on. More downside coming, and hard.

Dow in Gold dropped 2.9% to 14.77 troy ounces, far below its 200 day moving average (15.38 oz) and cascading. Breaking 14 oz will confirm the double tops of July and November as tops. Not far beneath that, about 13.50 oz, the Dow in Gold will punch through the uptrend line from 2011. Chart's at

Dow in Silver fell 4.95 to 1,140.96 and closed below the 200 dma (1,146.7 oz). Chart breaks down about 1,190 oz. See it at

For all the fear rampaging across the world, the US dollar index still fell 4 basis points today to 98.95. The yield on the 10 year treasury is plunging, so folks are buying bond with both hands -- that's not the dollar's problem. No answer yet on which way the dollar will jump.

Euro rose 0.21% to $1.0879, but without changing the chart. Yen lost 0.1% to 84.95.

Oil stopped falling today, so I wonder what the pundits will blame falling stocks on tomorrow. WTIC rose 2.65% to $31.39 a barrel. Yesterdays interday low as $29.93, lowest since oil began sliding.

I'm sorry about my attitude yesterday: I was growling & grumbling. I have a great excuse - I'm tired of silver & gold beating me up with rallies that begin then fail -- but that shouldn't notch my objectivity.

I should not have been so negative yesterday because silver & gold held on at support, if not at my specific numbers. Both charts show upside-down head and shoulders patterns, which take their frustrating time to unroll.

Silver today leapt 40.5¢(2.9%) to 1414.5¢ while gold gained only $1.90 to $1,087.50 -- on Comex. Then after Comex closed gold jumped up six bucks, an unusual move lately. Silver's greater rise sucked the gold/silver ratio down from 79.010 yesterday to 76.882 today, a 2.7% drop.

Before I forget it, I want y'all to go, look, and ponder the Gold/Bank Index spread, Next to the Dow in Gold and Dow in Silver this indicator probably most sensitively shows the changes in sentiment that drives silver & gold. By that I mean monetary demand, which arises out of falling faith in the financial system. When people trust the financial system, they buy those [rotten] big bank stocks & sell gold. When they don't trust the system, they sell big bank stocks & buy gold.

Y'all look at that chart. Yes, its RSI is overbought, so we might get a reaction soon, but look how it has gapped up since 2016 began. Needs to get through August & September highs above 17, but given that the July and December lows form a double bottom, that should happen soon. This is magnificently bullish for gold.

So is gold's leap in the aftermarket today. Not much more than a footnote, but a welcome & encouraging one. Gold climbed back above the $1,088 neckline and above its 20 & 50 DMAs, so can still finish out the week wreaking vengeance on its croaking detractors.

I'd like to make some wise statement about silver's performance today, but I haven't a clue what caused it. About 10:00 a.m.. silver jumped straight, staring up to 1410¢. Most likely it was arrogant shorts caught in the stops. Hope it burned 'em good, because that will keep them chary of shorting more.

The move took silver above its 20 DMA and to the 50 DMA, but, bless its heart, 'tain't enough. Silver MUST close above 1440¢.

Gold is moving higher tomorrow, looking at the one day chart. When I saw that leap in the aftermarket, my resistance broke and I bought some.

Donald Trump must be making the Republican inner circle squirm nearly out of their skins. They sent that simpering apparatchik Nikki Haley to jab at Trump in their answer to O'Bama's state of the onion -- wait, wait, make that Union -- message. Whether you like Trump or not, you ought to thank him for the amusement of watching these pencil necks writhe.

Why "pencil necks"? That's my name for 'em because so many Republicans get fat on government franchises -- like banking -- without ever having to work for a living. Got lily-white hands that ain't never even thought about a callus. Not that they got calluses on their brains from working them, either, they just get calluses on their index finger and thumb. Those are the digits they use to pull strings with.

Just so y'all don't get the wrong impression, I rank Democrats right there with Republicans as slimy members of the Reptile Kingdom. Somebody asked me today what I thought about what's happening to our country, I said, "Our country? My country's been occupied since 1865."

Of course, most everybody could say that now, even Northerners, with those aliens in Washington ruling us. I don't know whether they're from overseas or outer space, but they ain't from around here.

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
13-Jan-16 Price Change % Change
Gold, $/oz 1,087.50 1.90 0.18%
Silver, $/oz 14.15 0.41 2.95%
Gold/Silver Ratio 76.882 -2.128 -2.69%
Silver/Gold Ratio 0.0130 0.0004 2.77%
Platinum 850.20 12.70 1.52%
Palladium 486.55 14.15 3.00%
S&P 500 1,890.28 -48.40 -2.50%
Dow 16,151.41 -364.81 -2.21%
Dow in GOLD $s 307.01 -7.48 -2.38%
Dow in GOLD oz 14.85 -0.36 -2.38%
Dow in SILVER oz 1,141.85 -60.21 -5.01%
US Dollar Index 98.95 -0.04 -0.04%
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SPOT GOLD: 1,093.40      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,124.02 1,138.23 1,138.23
1/2 AE 0.50 557.12 576.77 1,153.54
1/4 AE 0.25 281.29 293.85 1,175.41
1/10 AE 0.10 114.70 119.73 1,197.27
Aust. 100 corona 0.98 1,065.32 1,074.32 1,096.02
British sovereign 0.24 259.32 272.32 1,156.83
French 20 franc 0.19 205.67 209.67 1,123.03
Krugerrand 1.00 1,108.71 1,118.71 1,118.71
Maple Leaf 1.00 1,103.40 1,117.40 1,117.40
1/2 Maple Leaf 0.50 628.71 574.04 1,148.07
1/4 Maple Leaf 0.25 278.82 292.48 1,169.94
1/10 Maple Leaf 0.10 115.90 119.18 1,191.81
Mexican 50 peso 1.21 1,307.66 1,318.66 1,093.69
.9999 bar 1.00 1,097.23 1,105.40 1,105.40
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 11,568.70 11,926.20 16.68
US 40% silver 1/2s 0.30 4,050.35 4,212.35 14.28
100 oz .999 bar 100.00 1,438.00 1,463.00 14.63
10 oz .999 bar 10.00 142.80 147.80 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: 850.20      
Plat. Platypus 1.00 865.20 895.20 895.20
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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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