The Moneychanger
Daily Commentary
Wednesday, 27 April a.d. 2016 Browse the commentary archive

Forgive me, I left something out of my recommendation of the movie, "The Big Short." Watch out. It's filled with bad language & some nudity. Not for anybody but adults, absolutely no children. I recommend it not for you to adopt the speech or lifestyle depicted. but for the portrayal of pure blinded greed, as well as an unrelenting resolve on the other side to pursue truth, and even integrity. "The Big Short" is a warning picture of where unrestrained greed ends. Also, one reader tells me it is available for free on YouTube.

ON 27 April former US House of Representatives speaker Dennis Hastert, 74, was sentenced to 15 years in prison. To read the news articles you'd have thought he was jailed for sexually abusing boys on the wrestling team that he coached. While the judge & the government made much hay out of that evil conduct, they obscured the actual conviction. Hastert was NOT convicted of sexual abuse -- that's a state matter -- but MONEY LAUNDERING and lying to the FBI about his money laundering. Take note that IF Hastert had simply filled out Currency Transaction Reports when he pulled the cash out of the bank, no federal charges whatever would have been laid against him. So the sanctimonious yankee government isn't quite as righteous as they want to appear.

TODAY'S MARKETS:

Janet the Toad opened her mouth wide today, but nothing came out save flies & lies. More croaking about somewhere, someday raising interest rates, a little piping about the economy "moderating," and wheezing lies about how well the economy is faring. None of this act moved markets. Stock indices barely rose, and several just sank further. US dollar index fell, deprived of any interest rate transfusion. Gold stumbled, picked itself up, and stood back straight. At day's end the FOMC announcement was, "A tale told by an idiot, full of sound and fury, signifying nothing."

Dow Jones Industrial average rose 51.23 (0.28%) to 18,041.55 & the S&P500 gained 3.45 (0.16%) for a close at 2,095.15. Meanwhile the Nasdaq and Nasdaq-100 dropped (0.51% and 0.82%). Stocks are floating on borrowed time. Watch out below!

10 year treasury note yield fell, which makes sense. If the Fed doesn't intend to raise rates, bond prices must rise and the yield, which had floated higher in hope, must now decline.

Fed's refusal to raise rates also made the US dollar less attractive, knocking down the US dollar index. It fell 8 basis points (0.09%) to 94.46 barely below the 94.51 twenty day moving average, but below nonetheless. It is now bouncing in a range bounded by 95.20 and 93.85. It's stuck. Got to beat those numbers up or down to break the paralysis.

Euro rose 0.12% to $1.1312, reacting to the dollar's little loss. Yen has more troubles. Fell 0.15% to 89.67 today, and is about to step through its 50 DMA (88.50) into the wild blue yonder below.

Silver closed Comex 18¢ (1%) higher at 1728.6¢. Gold added $7.00 (0.6%) to $1,249.20.

Gold did close above resistance/support at $1,245, but didn't run away. High came at $1,252.80, low at $1,240.70. Some see-sawing occurred around the time Janet the Toad croaked, but gold quickly recovered. Don't get the wrong idea: "recovered" doesn't imply any particular enthusiasm or strength. MACD & Stochastics are negative, RSI barely breathing. If it plans to move higher immediately, it's keeping it a secret.

Frankly I am at a loss to explain silver's strength. The RSI is extremely overbought and all other indicators are stretched like a rubber band around the Sunday New York Times. It is ripe for a correction, & a substantial one ought to arrive before next week ends.

Add to that the Gold/Silver Ratio, not painfully oversold, with what looks like a breakaway gap beginning the fall and an exhaustion gap more than a week ago.. The ratio, too, looks ready to correct

On 27 April 1897 Grant's Tomb was dedicated in New York. I'm still not sure who's buried there.

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
27-Apr-16 Price Change % Change
Gold, $/oz 1,249.20 7.00 0.56%
Silver, $/oz 17.29 0.18 1.05%
Gold/Silver Ratio 72.267 -0.351 -0.48%
Silver/Gold Ratio 0.0138 0.0001 0.49%
Platinum 1,024.10 5.20 0.51%
Palladium 610.40 5.15 0.85%
S&P 500 2,095.15 3.45 0.16%
Dow 18,041.55 51.23 0.28%
Dow in GOLD $s 298.55 -0.83 -0.28%
Dow in GOLD oz 14.44 -0.04 -0.28%
Dow in SILVER oz 1,043.71 -7.99 -0.76%
US Dollar Index 94.46 -0.08 -0.08%
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: 1,245.20      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,282.56 1,286.91 1,286.91
1/2 AE 0.50 634.54 656.84 1,313.69
1/4 AE 0.25 320.38 334.65 1,338.59
1/10 AE 0.10 130.64 136.35 1,363.49
Aust. 100 corona 0.98 1,214.44 1,223.44 1,248.16
British sovereign 0.24 295.32 308.32 1,309.76
French 20 franc 0.19 234.22 238.22 1,275.96
Krugerrand 1.00 1,255.16 1,265.16 1,265.16
Maple Leaf 1.00 1,255.20 1,269.20 1,269.20
1/2 Maple Leaf 0.50 715.99 653.73 1,307.46
1/4 Maple Leaf 0.25 317.53 333.09 1,332.36
1/10 Maple Leaf 0.10 131.99 135.73 1,357.27
Mexican 50 peso 1.21 1,490.70 1,501.70 1,245.50
.9999 bar 1.00 1,249.56 1,257.20 1,257.20
SPOT SILVER: 17.20      
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 12,977.25 13,262.25 18.55
US 40% silver 1/2s 0.30 4,956.00 5,118.00 17.35
100 oz .999 bar 100.00 1,745.00 1,770.00 17.70
10 oz .999 bar 10.00 173.50 178.50 17.85
1 oz .999 round 1.00 17.30 17.76 17.76
Am Eagle, 200 oz Min 1.00 18.70 19.95 19.95
SPOT PLATINUM: 1,024.10      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Plat. Platypus 1.00 1,039.10 1,069.10 1,069.10
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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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