The Moneychanger
Daily Commentary
Wednesday, 10 February a.d. 2016 Browse the commentary archive

Where in the WORLD do they get these central banking people? Former head Fed criminal Ben "Helicopter" Bernanke said today the Fed should add negative rates to its toolkit. Oh, like Jack the Ripper should add a longer, sharper scalpel to his "toolkit"?

Where'd they get this moniker "toolkit" anyway? Makes 'em sound like somebody doing honest work, a plumber or trim carpenter, not a criminal central banker raping the public and their economic future.

Mother Yellen, not to be confused with Mother Jones or Mother Earth, mumbled before congress that the Fed still will raise interest rates, SOMETIME, but mostly talked about instituting negative interest rates, which she reckons they can legally do. Ominous, I'd say, but then I don't trust 'em to tell the truth to their mothers.

Yellen's comments goosed stocks up, but they couldn't hold the gains. Nasdaq ended up a little, but the blue chip Dow dropped 99.64 (0.62%) to 15,914.74 and the S&P500 dropped 0.35 (0.02%) to 1,851.86. Looking mighty sorry, like stocks are ready to jump over the cliff.

Yeah, Buddy, that central banking is GREAT for stabilizing markets, handy as an atom bomb for mashing potatoes.

US dollar took no heart from Mother Yellen's nasal remarks, either. Dropped 16 basis points (0.16%) to 95.78. Having smashed support at 97.20, & 97.50, and the 200 day moving average and 96.50, dollar index has now moved on to smash 96. Dad-durn, that's what I want, one of them FLEXIBLE currencies.

Euro took sick today and puked back 0.3% to end at $1.1284. Yen took all the gain and glory, up 1.51% to 88.17. Way out of control for the NGM. Meanwhile the 10 year treasury note yield took its own step toward negative rates by falling 1.39% to close at 1.705%. Yield is way oversold (note is way overbought).

Gold finally dropped a little, down $4.00 (0.33%) to $1,194.70. Silver backed up 16.7¢ to 1527.7¢.

Both silver & gold remain above their 200 day moving averages, but silver is beating its head against that downtrend line from the October 2013 high. Makes this a likely place to stage a short correction & rebuild momentum.

Gold is wavering, too, after a splendid run. Unless gold can pierce the three-day old high at $1,201.40, expect a little correction. Don't let it scare you. Patiently watch for your chance. I would buy a breakout close over $1,205, should that come first. Quite literally, gold could go either way, higher or lower, and higher means very much higher. Main chance still favors a correction.

MILESTONES OF AMERICAN CULTURE: On 10 February 1933 the Postal Telegraph Company of New York City introduced the singing telegram.

On 10 February 1840 Britain's Queen Victoria married the German Prince Albert of Saxe Coburg-Gotha. During World War I that German last name became an embarrassment, so they changed the family name to Windsor. And, no, this Prince Albert was NOT in the tobacco business.

Today is Ash Wednesday, the beginning of the Lenten season.

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
10-Feb-16 Price Change % Change
Gold, $/oz 1,194.70 -4.00 -0.33%
Silver, $/oz 15.28 -0.17 -1.08%
Gold/Silver Ratio 78.203 0.587 0.76%
Silver/Gold Ratio 0.0128 -0.0001 -0.75%
Platinum 933.30 -4.40 -0.47%
Palladium 517.80 7.20 1.41%
S&P 500 1,851.86 -0.35 -0.02%
Dow 15,914.74 -99.64 -0.62%
Dow in GOLD $s 275.37 -0.80 -0.29%
Dow in GOLD oz 13.32 -0.04 -0.29%
Dow in SILVER oz 1,041.75 4.81 0.46%
US Dollar Index 96.07 -0.67 -0.69%
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: 1,193.10      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,224.12 1,242.02 1,242.02
1/2 AE 0.50 607.97 629.36 1,258.72
1/4 AE 0.25 306.97 320.65 1,282.58
1/10 AE 0.10 125.17 130.64 1,306.44
Aust. 100 corona 0.98 1,163.63 1,172.63 1,196.32
British sovereign 0.24 282.96 295.96 1,257.27
French 20 franc 0.19 224.42 228.42 1,223.47
Krugerrand 1.00 1,205.03 1,215.03 1,215.03
Maple Leaf 1.00 1,203.10 1,217.10 1,217.10
1/2 Maple Leaf 0.50 686.03 626.38 1,252.76
1/4 Maple Leaf 0.25 304.24 319.15 1,276.62
1/10 Maple Leaf 0.10 126.47 130.05 1,300.48
Mexican 50 peso 1.21 1,431.21 1,442.21 1,196.16
.9999 bar 1.00 1,197.28 1,205.10 1,205.10
SPOT SILVER: 15.25      
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 12,405.25 12,762.75 17.85
US 40% silver 1/2s 0.30 4,380.75 4,542.75 15.40
100 oz .999 bar 100.00 1,550.00 1,575.00 15.75
10 oz .999 bar 10.00 154.00 159.00 15.90
1 oz .999 round 1.00 15.35 15.81 15.81
Am Eagle, 200 oz Min 1.00 16.75 18.00 18.00
SPOT PLATINUM: 933.30      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Plat. Platypus 1.00 948.30 978.30 978.30
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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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