The Moneychanger
Daily Commentary
Monday, 14 March a.d. 2016 Browse the commentary archive

Well, this week the whole world will be in suspense under the evil Eye of Sauron hovering above Mordor on the Potomac, waiting for the Fed orcs to announce how they will next torture the economy & common sense. That happens Wednesday, so until then markets will be holding their breath. After all, Sauron (an acrostic for c-e-n-t-r-a-l-b-a-n-k) sees all & knows all & fixes all, doesn't he?

Wildest surprise (and most suicidal) that might come from the Fed is a rise in interest rates. Otherwise 'twill be all puff & blow, threatening big stuff for later. Some time.

Meanwhile silver & gold began that correction I have been looking for. Gold closed at $1,244.4, down $14.30 or 1.14%. In the aftermarket it dipped to $1,229.90, but later recovered to $1,234-ish. On Comex silver lost 8.9¢ to 1551.8¢, a mere 0.6%.

Gold closed below the lower boundary of that bearish flag we've been watching, & projects a drop to $1,195.5 to $1,167. If it remains as peppery as it has been, look for that upper target. Volume did NOT rise on this fall, which suggests gravity has not much force behind it. http://schrts.co/pI1ZgR

Silver ought to make a lower low that the 1461¢ on 29 February. Most logical to me seems 1440¢ area, where silver broke out of that bowl. However, interpreting the pattern as a cup & handle says that silver shouldn't drop below 1485¢. http://schrts.co/zsmR7J

Don't bother throwing crockery at my head. I just report what I see, I don't fabricate, pervaricate, or masticate. Res ipsa loquitur.

US dollar index rose 44 basis points (0.45%) to 96.67. This is no stupor mundi. High today came same place as Friday's, 96.74, and stopped, although it closed higher. After the ECB debacle last week, traders will be right shy of loading up on dollars or any other currency, so little should happen before that Fed bloviation on Wednesday.

Stocks are flat. Dow rose 15.82 (0.09%) to 17,229.13 while the S&P500 backed off 2.55 (0.13%) to 2,019.64. Waiting for Sauron to speak.

ON 14 March 1900 the so-called Gold Standard Act took effect in the United States. It was yet another lunatic piece in the puzzle of US Monetary law. Lunatic because it professed to put the US on a "gold standard" but the US was already on a "silver standard" with the standard coin of the realm and standard unit of account enshrined in the constitution and statutory law as the silver dollar containing 371-1/4 grains of fine silver (0.7734 oz). Actually, the system established by the Coinage Act of 1792 was symmetallism, where both metals are used, but silver and not gold was the standard. That is, the gold coins were not even named in dollars. They were eagles, half, and quarter eagles VALUED at $10, $5, & $2-1/2.

Before the constitution had even been signed, banksters had been trying to get their teeth into the new republic's carotid artery with a central bank, but they were foiled. The next 50 years witnessed a battle between the banks and the government for supremacy, but under Andrew Jackson the people finally won over the banks. Lincoln overthrew that in 1863 with the passage of the National Banking Act, the embryo of a central banking cartel. The Gold Standard Act was simply another manipulation by the banks to make sure their notes replaced silver & gold. First they got rid of silver (Crime of 1873), then gold (1934), and at last silver in the subsidiary coin (1965). Now they are even trying to get rid of paper currency.

No vampire is ever satisfied.

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
14-Mar-16 Price Change % Change
Gold, $/oz 1,244.40 14.30 1.16%
Silver, $/oz 15.52 -0.09 -0.57%
Gold/Silver Ratio 80.191 1.374 1.74%
Silver/Gold Ratio 0.0125 -0.0002 -1.71%
Platinum 964.90 -4.30 -0.44%
Palladium 573.25 -7.20 -1.24%
S&P 500 2,019.64 -2.55 -0.13%
Dow 17,229.13 15.82 0.09%
Dow in GOLD $s 286.21 -3.06 -1.06%
Dow in GOLD oz 13.85 -0.15 -1.06%
Dow in SILVER oz 1,110.27 7.35 0.67%
US Dollar Index 96.67 0.44 0.46%
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: 1,234.10      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,264.95 1,284.70 1,284.70
1/2 AE 0.50 628.88 650.99 1,301.98
1/4 AE 0.25 317.52 331.66 1,326.66
1/10 AE 0.10 129.48 135.13 1,351.34
Aust. 100 corona 0.98 1,202.41 1,211.41 1,235.88
British sovereign 0.24 292.69 305.69 1,298.58
French 20 franc 0.19 232.13 236.13 1,264.78
Krugerrand 1.00 1,246.44 1,256.44 1,256.44
Maple Leaf 1.00 1,244.10 1,258.10 1,258.10
1/2 Maple Leaf 0.50 709.61 647.90 1,295.81
1/4 Maple Leaf 0.25 314.70 330.12 1,320.49
1/10 Maple Leaf 0.10 130.81 134.52 1,345.17
Mexican 50 peso 1.21 1,478.90 1,489.90 1,235.72
.9999 bar 1.00 1,238.42 1,246.10 1,246.10
SPOT SILVER: 15.37      
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 12,523.23 12,773.23 17.86
US 40% silver 1/2s 0.30 4,414.68 4,576.68 15.51
100 oz .999 bar 100.00 1,561.50 1,586.50 15.87
10 oz .999 bar 10.00 155.15 160.15 16.02
1 oz .999 round 1.00 15.47 15.93 15.93
Am Eagle, 200 oz Min 1.00 16.87 18.12 18.12
SPOT PLATINUM: 964.90      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Plat. Platypus 1.00 979.90 1,009.90 1,009.90
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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.
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  • 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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