The Moneychanger
Daily Commentary
Wednesday, 24 February a.d. 2016 Browse the commentary archive

A MARK OF THEIR DESPERATION: Illinois' state budget and pension fund crisis is the worst in the US, save for California. From a friend who lives across the border in Indiana comes this mark of their desperation. The utility company cut off electricity to the Illinois State Police outposts for failure to pay the bill. My friend also drives an agricultural truck through Illinois & says they are setting up roadside scales, stopping every truck, and ticketing and fining if loads are even 100 lb. over limit. Clearly they are desperate for revenue.

But hark! This is only the first buzzard of spring. Most states have budget shortfalls, and many have pension schemes waiting for bankruptcy, they just haven't declared it yet. Hide & watch. Big POP a-comin'.

Behold! The US dollar index reached 97.5 resistance, twice poked its head above, then wilted like Swiss chard in hot olive oil. Today it fell back 13 basis points (0.13%) to 97.39. Maybe the 20 DMA at 97.22 can catch it. It's pounding into the uptrend line, trying to fall through.

Euro remains a mere reactionary shadow of the US dollar. Rose 0.1% to $1.1025. Yen's rally broke today with a gap that left behind what resembles an island reversal. Dropped 0.63% to 88.58¢/Y100 (Y112.89/US$).

Stocks peeked over resistance at 16,600 & 1950 plus their 50 day moving averages.

Dow languished most of the day little above unchanged, but at that regular 1:00 hour "friends" began buying and raised the Dow from 16,516 to 16,697.29, up 212.3 (1.29%) at close. S&P500 differed not much, rising 1.13% (21.9 points) to 1,951.70. These closes rose a gnat's eyebrow about the 50 DMAs (16,600 & 1,945.50). Now let's see how far stocks can rise against that headwind of resistance. I have no opinion because I wouldn't buy stocks if I had gummint money to do it, so I have no dog in this fight. Know, however, sure as cats have kittens that stocks will shed value this year like a dog with dermodectic mange sheds fur. Consider the Shanghai stock exchange with an already advanced case of mange. Lost 6.4% today.

Comex raised gold futures margins today from $4,675 initial & $4,250 maintenance to $4,950 and $4,500. This is usual as the price rises.

Silver ebbed 12.7¢ to 1516.5¢ on Comex. Gold lost -- wait for it! -- fifty cents to end at $1,238.20.

This picture is all fuzzy. Wind must have blown down my antenna. Can't quite get silver & gold to focus in sharply.

After its $9 collapse in yesterday's aftermarket, gold rose to $1,244.40 at today's high, made a slightly lower low ($1221.80 against $1,222.40), then ended the day virtually unchanged. It altered the appearance of that pennant into a possible Bearish Flag instead. Behold the chart, All this whispers darkly of lower prices. More, the Comex closing gold/silver ratio rose today to 81.649, bumping the trading channel's top boundary. That strongly implies that gold will drop relative to silver.

But Thunderation! Look at Silver, It bumped its 200 DMA today, exactly at the same location as the 20 DMA (1506¢ & 1507¢) and has formed an even-sided triangle which could just as easily resolve skyward as earthward. I am torn because I wanted to buy more silver somewhere under 1510¢ & missed it today when it hit 1503¢. I'm not acting coy, the pros & cons are just too evenly balanced.

Commitments of Traders for silver are lousy, so that's against it.

Here's where I hang. Gold closing above $1,264 would drag gold substantially higher, say, to $1,300 - $1,395. Otherwise look for one more scary leg down that cracks $1,200 & plunges swiftly to $1,180/$1,170 then snaps right back. For now that's the clearest picture I can get., although I've 'bout twisted the knobs off.

Susan's eye has it's little problems, but is getting better. We're thankful for every little betterment.

FOR TENNESSEE DWELLERS ONLY. HB1627 in our legislature would remove the sales tax from gold and silver. (IMHO it's illegal & unconstitutional to levy it, but never mind, we have to take what we can get.) IF and only IF your legislator is on the House Finance, Ways, & Means Committee, you need to contact them now. Here's a list of that committee,

No clue who your legislator is? Go to Click on "House Members" on the right, then type in your address & town and your representative & senator will come up. If he's on that Finance Committee, Call him at best, email him at least. Identify yourself with your address & contact information. (There's an email button on your legislator's page.)

Tell him you want him to support House Bill 1627 (sponsored by Rep. Hulsey), a sales tax exemption for precious metals. Tell him it will encourage local Tennessee business and capture business now flowing to the 32 states that do NOT charge sales tax. Sample letter is here, but keep it brief.

I estimate it will take you ten to fifteen minutes to accomplish this. Too busy? How much time is restoring your stolen monetary freedom worth? I'm not ashamed to wave my bloody shirt here: I went to jail over this illegal sales tax. Surely you can make a phone call or send an email.

Argentum et aurum comparanda sunt —
Silver and gold must be bought.

— Franklin Sanders, The Moneychanger

Your source for gold and silver. Read our latest reviews and testimonials.
Market Snapshot See more charts and market data
25-Feb-16 Price Change % Change
Gold, $/oz 1,238.20 -0.50 -0.04%
Silver, $/oz 15.17 -0.13 -0.83%
Gold/Silver Ratio 81.649 0.645 0.80%
Silver/Gold Ratio 0.0122 -0.0001 -0.79%
Platinum 926.10 -17.30 -1.83%
Palladium 483.60 -3.90 -0.80%
S&P 500 1,951.70 21.90 1.13%
Dow 16,697.29 42.30 0.25%
Dow in GOLD $s 278.76 0.82 0.29%
Dow in GOLD oz 13.49 0.04 0.29%
Dow in SILVER oz 1,101.04 11.91 1.09%
US Dollar Index 97.39 -0.13 -0.13%
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: 1,232.90      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,263.72 1,283.45 1,283.45
1/2 AE 0.50 628.27 650.35 1,300.71
1/4 AE 0.25 317.21 331.34 1,325.37
1/10 AE 0.10 129.35 135.00 1,350.03
Aust. 100 corona 0.98 1,202.45 1,211.45 1,235.92
British sovereign 0.24 292.40 305.40 1,297.37
French 20 franc 0.19 231.91 235.91 1,263.57
Krugerrand 1.00 1,246.46 1,256.46 1,256.46
Maple Leaf 1.00 1,242.90 1,256.90 1,256.90
1/2 Maple Leaf 0.50 708.92 647.27 1,294.55
1/4 Maple Leaf 0.25 314.39 329.80 1,319.20
1/10 Maple Leaf 0.10 130.69 134.39 1,343.86
Mexican 50 peso 1.21 1,478.95 1,489.95 1,235.76
.9999 bar 1.00 1,237.22 1,244.90 1,244.90
SPOT SILVER: 15.16      
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 12,591.15 12,948.65 18.11
US 40% silver 1/2s 0.30 4,354.20 4,516.20 15.31
100 oz .999 bar 100.00 1,541.00 1,566.00 15.66
10 oz .999 bar 10.00 153.10 158.10 15.81
1 oz .999 round 1.00 15.26 15.72 15.72
Am Eagle, 200 oz Min 1.00 16.66 17.91 17.91
SPOT PLATINUM: 926.10      
Plat. Platypus 1.00 941.10 971.10 971.10
Home Questions & Answers Articles & Resources
The Moneychanger, P.O. Box 178, Westpoint, TN 38486

Copyright Notice

© 2015 Little Mountain Corporation, d.b.a. The Moneychanger. All rights reserved. May not be republished in any form, including electronically, without our express permission.

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.

Other Important Information

This is not an offer to buy or sell. Prices subject to change without notice. To enter an order, call us at (888) 218-9226 or (931) 766-6066. Sorry, no sales to Tennessee.

For complete details on how to buy from us or sell to us, please click here.