The Moneychanger
Daily Commentary
Wednesday, 16 March a.d. 2016 Browse the commentary archive

World's largest re-insurer Munich Re announced today in Munich that it is boosting its gold and cash reserves rather than suffer punishing negative interest rates from the European Central bank. It is trying to counteract the near zero or negative interest rates that reduce income needed to pay out claims. Munich Re has already held gold for some time and lately added cash in the "two-digit million euros." Whoa. Think about that, this gigantic organization holding cash currency. And gold.

Harbinger of things to come? Whoops. Central banks' traps aren't working too well, are they?


The Tennessee proverb says, "He who lives by his big mouth, dies by his big mouth." From July 2014 forward the Fed has floated the US dollar on a rising cloud of gassy hot air: bluster, jawboning, threatening, yakking. Then the mountain gave birth to -- a mouse. A 1/4 point interest rate rise last December that nearabout wrecked world stock markets.

That's the thing about threatening: don't work long term. Ever notice that those parents who keep on saying, "Now, Bobby, don't do that or I'm going to have to give you a whippin'" and keep on saying without ever acting have the children from hell? Little Bobby knows they're bluffing. Now the world knows that Janet Yellen & her miscreant academic trolls have been bluffing all the time. Now the dollar will die by their big mouth.

Today the US dollar lost 74 basis points to end at 95.93, down 0.77%. Great job, Janet.

US dollar chart makes me grimace in pain just to look at it. Look at those three huge perpendicular slides (blue arrows). Those depict days where buyers withdraw their bid and sellers panic through the exit. Behold, now the dollar has come to critical 92.50 support, Nice Government Men must be sweating bullets and spitting iron filings. Of course, this doesn't hurt gold and silver at all.

Currency traders must be puking in wastebaskets all over the globe, just before they run out a window or look for a new line of work. Euro rose 1.14% to $1.1235 & Yen jumped 0.6% to 88.90. Central banks sure do stabilize markets, don't they?

The Fed left interest rates untouched and said it should raise rates 0.5% by the end of the year -- in other words, more of the someday, sometime, we threaten.

Who knows what and why stock investors are thinking? Evidently, for the moment, until tomorrow morning's open, they took that as positive. Dow climbed to 17,325.76, up 74.23 (0.43%), its highest close this year. S&P500 rose 11.39 (0.56%) to 2,027.22. This is about as good as it gets, so 'twould be a fine time for a correction to begin.

Dow in Gold rose yesterday nearly to the 50 day moving average, then fell back today. Ended at 13.72 oz (G$283.87 gold dollars). Also looks like a good time to change direction and resume the downtrend.

Relatively weaker than gold, silver let the Dow in Silver nearly reach the 200 DMA on 1 March, but sank and today sank back through the 50 DMA. Stocks would have to stage a manic rally to take the Dow in Silver much higher, or silver would have to sink mightily.

Comex closes before the FOMC announcements, so a deathly hush still reigned when they closed at 1:30 p.m. Gold lost $1.10 to $1,229.30 & silver gave back 4.1¢ to 1521.4¢.

Then Old Yellen spouted off at 2:00 sharp. US dollar began to sink immediately, like a cast iron canoe full of lead washers. Silver & gold both shot straight up. Gold rose to $31.30 (2.5%) above yesterday's close and silver rose to 34¢ (2.6%) over yesterday at 1564.5¢.

In the same way I wasn't too hot to proclaim a gold rally after the ECB slammed the dollar last week, so this week when the Fed slams the dollar I am not burning to announce another rally.

That doesn't make me right, but it does keep me from making too many mistakes on a day when central banks, a force external to markets, stir up turmoil. If gold had closed above the last high, I would think differently, but for now I'll wait and see. Danger of a correction has not vanished, & indicators point down.

Silver could easily visit its 200 DMA, not at 1494¢. Gold might drop as far as its 50 DMA, now $1,177.14.

I would abandon this correction notion and do an about face on a dime if gold closed above $1,287.80 and silver closed higher than 1624¢. If I saw that I'd be buying with both hands and my toes.

I have to drive over to Chattanooga tomorrow, and probably won't get home in time to send y'all a commentary. God willing, I'll send one on Friday.

Tennessee is crazy: it charges sales tax on constitutional gold & silver money. I know, I've been through the wringer fighting it. After four years trying, a bill to remove the tax has finally gotten out of subcommittee to the Senate Finance, Ways & Means Committee. If you live in Tennessee, do yourself a favor and contact the members of the Senate Finance Committee, listed here

Time's a-wastin'! Bill will be heard next week. Email ONLY ONE MEMBER AT A TIME (otherwise emails are automatically deleted as spam), but you can use the same message. You can also call their offices. Here's the bill,

Here are talking points:

1. The bill really won't cost the state anything because investors now just buy out of state and avoid the tax. Removing the tax would steer that business to Tennessee seller.

2. 32 other states have already removed the sales tax on silver & gold. Tennessee needs to stay competitive.

3. (optional) The tax is unconstitutionally applied to silver & gold money in any event.


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
16-Mar-16 Price Change % Change
Gold, $/oz 1,229.30 -1.10 -0.09%
Silver, $/oz 15.21 -0.04 -0.27%
Gold/Silver Ratio 80.801 0.145 0.18%
Silver/Gold Ratio 0.0124 -0.0000 -0.18%
Platinum 958.20 -1.10 -0.11%
Palladium 577.20 6.80 1.19%
S&P 500 2,027.22 11.24 0.56%
Dow 17,325.76 74.23 0.43%
Dow in GOLD $s 291.35 1.51 0.52%
Dow in GOLD oz 14.09 0.07 0.52%
Dow in SILVER oz 1,138.80 7.93 0.70%
US Dollar Index 95.90 -0.74 -0.77%
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: 1,261.70      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,293.24 1,313.43 1,313.43
1/2 AE 0.50 642.96 665.55 1,331.09
1/4 AE 0.25 324.63 339.08 1,356.33
1/10 AE 0.10 132.37 138.16 1,381.56
Aust. 100 corona 0.98 1,229.30 1,238.30 1,263.31
British sovereign 0.24 299.23 312.23 1,326.39
French 20 franc 0.19 237.33 241.33 1,292.59
Krugerrand 1.00 1,274.32 1,284.32 1,284.32
Maple Leaf 1.00 1,271.70 1,285.70 1,285.70
1/2 Maple Leaf 0.50 725.48 662.39 1,324.79
1/4 Maple Leaf 0.25 321.73 337.50 1,350.02
1/10 Maple Leaf 0.10 133.74 137.53 1,375.25
Mexican 50 peso 1.21 1,511.98 1,522.98 1,263.15
.9999 bar 1.00 1,266.12 1,273.70 1,273.70
SPOT SILVER: 15.65      
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 12,508.93 12,793.93 17.89
US 40% silver 1/2s 0.30 4,497.28 4,659.28 15.79
100 oz .999 bar 100.00 1,589.50 1,614.50 16.15
10 oz .999 bar 10.00 157.95 162.95 16.30
1 oz .999 round 1.00 15.75 16.21 16.21
Am Eagle, 200 oz Min 1.00 17.15 18.40 18.40
SPOT PLATINUM: 958.20      
Plat. Platypus 1.00 973.20 1,003.20 1,003.20
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© 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.

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