The Moneychanger
Daily Commentary
Wednesday, 22 June a.d. 2016 Browse the commentary archive

Markets were comatose today, paralyzed by Brexit's uncertainty. Gold traded in a $10 range, silver 24¢. Dollar gave back yesterday's gains, as did stocks. All eyes are on Brexit, except the ones like mine which have drifted off into a doze.

Lo, the US dollar index gave back 39 of 42 basis points it gained yesterday, chalking up a 0.41% loss to 93.78. In the last three days the dollar index has, quite literally, plowed back and forth over the very same ground. No gain, no change.

Meanwhile the euro gained 0.47% to $1.1298. No reason to guess whether this is real or Memorex, I'll tell you right out: it's Memorex. Central banks are supporting the euro before Brexit, and should Brexit brex, they will buy more to forestall its humiliating collapse. Yen gained 0.34% to 95.78. Whole world's become one gigantic Potemkin village.

Stocks stalled, giving back yesterday's gains & closing lower, the Dow below its 50 DMA. Dow lost 48.9 or 0.27% to 17,780.93 -- jumped early inn the day, but began fading about 11;00 and never woke up. S&P500 backed off 3.45 90.17%) to 2,085.45.

Dow in gold and Dow in silver haven't changed. Both are headed lower.

Gold shaved off $2.50 (0.2%) on Comex to close at $1,268. Silver -- get out your microscope -- lost 6/10¢ to 1730.5¢.

It does no good a-tall to speculate on the market outcome after Brexit. More important is the primary trend, which is up for silver & gold, topping for stocks, & unproven & neutral for the US dollar index. Whatever blip Brexit causes won't last more than a few weeks. Central banks will do all in their considerable criminal powers to smother and dampen those effects.

On 22 June 1775 the Continental Congress issued its first emission of Continental currency, $3,000.000. By the end of 1778, they had sunk to only 1/5 to 1/7 of face value. By 1780, 1/40. By May 1781, they ceased to circulate. Over the lifetime of the Continental currency congress issued $241,592,780. Is it any secret why it depreciated?

The experience of the Continental's hyperinflation & depreciation, as well as 100 years of Colonial experience with paper money, led to Article I, Section 10 in the 1789 Constitution, providing that no state could issue bills of credit (paper money) or "make any Thing but gold and silver Coin a Tender in Payment of Debts." The same constitution removed from congress the power to emit bills.

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
22-Jun-16 Price Change % Change
Gold, $/oz 1,268.00 -2.50 -0.20%
Silver, $/oz 17.31 -0.01 -0.03%
Gold/Silver Ratio 73.274 -0.119 -0.16%
Silver/Gold Ratio 0.0136 0.0000 0.16%
Platinum 983.10 2.00 0.20%
Palladium 564.85 10.90 1.97%
S&P 500 2,085.45 -3.45 -0.17%
Dow 17,780.93 -48.90 -0.27%
Dow in GOLD $s 289.88 -0.23 -0.08%
Dow in GOLD oz 14.02 -0.01 -0.08%
Dow in SILVER oz 1,027.50 -2.47 -0.24%
US Dollar Index 93.78 -0.39 -0.41%
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: 1,266.80      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,298.47 1,309.24 1,309.24
1/2 AE 0.50 645.56 668.24 1,336.47
1/4 AE 0.25 325.94 340.45 1,361.81
1/10 AE 0.10 132.91 138.71 1,387.15
Aust. 100 corona 0.98 1,235.51 1,244.51 1,269.65
British sovereign 0.24 300.44 313.44 1,331.53
French 20 franc 0.19 238.29 242.29 1,297.73
Krugerrand 1.00 1,276.93 1,286.93 1,286.93
Maple Leaf 1.00 1,276.80 1,290.80 1,290.80
1/2 Maple Leaf 0.50 728.41 665.07 1,330.14
1/4 Maple Leaf 0.25 323.03 338.87 1,355.48
1/10 Maple Leaf 0.10 134.28 138.08 1,380.81
Mexican 50 peso 1.21 1,518.09 1,529.09 1,268.22
.9999 bar 1.00 1,271.23 1,278.80 1,278.80
SPOT SILVER: 17.28      
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 12,569.70 12,854.70 17.98
US 40% silver 1/2s 0.30 4,979.60 5,141.60 17.43
100 oz .999 bar 100.00 1,753.00 1,778.00 17.78
10 oz .999 bar 10.00 174.30 179.30 17.93
1 oz .999 round 1.00 17.38 17.84 17.84
Am Eagle, 200 oz Min 1.00 18.78 20.03 20.03
SPOT PLATINUM: 983.10      
Plat. Platypus 1.00 998.10 1,028.10 1,028.10
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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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