The Moneychanger
Daily Commentary
Tuesday, 5 July a.d. 2016 Browse the commentary archive

Man, man, don't y'all love that US justice system, with equal justice & prizes for all? Lookit that: Hillary really was innocent after all, according to the FBI director. Mmmm, mmm. Yassir. Okay.

By the way, who WAS that Bill Clinton met with at the Phoenix Airport a few days ago? General something or other.

While that was making news, almost totally blanked out of any US media is the imminent bankruptcy of Italy's biggest banks, whose non-performing loans (bad debt) amounts to 17% of their portfolio. I don't know what else is driving silver & gold, but most definitely the Italian -- & European -- bank crisis is most of the motive power. Air reeks with the sharp smell of panic.

US dollar index rose 54 bps or 0.56% today to 96.26. Big jump. The yield on the US 10 Treasury note fell 6.115 to 1.367%, which means the 10 year note made a new high today, no doubt thanks to folks who DO know about the Eye-talyun banking crisis.

Some of those folks are also running into yen, which rose 0.74% to 98.26. The euro -- y'all want to guess? -- SANK 0.6% to $1.1071. If y'all are evolutionists, the euro ought to fascinate you because you are watching it go extinct.

Stocks gave up their Potemkin rally, and why keep up pretenses anyway? The rose for the end of the quarter, dressed up balance sheets, now who cares? No need to coddle the mushrooms any longer.

Dow lost 108.75 (0.61%) to 17,840.62 while the S&P500 wiped out 14.40 (0.68%) for a close at 2,088.55.

Whenever you have to deepen the scale on a chart, you know something's afoot. Today I had to deepen the scale on the Dow in Silver. Has broken through support at February - May double bottom about 992 oz & sunk to 891.59 oz today. I just can't stand it when people say, "I to'ja so," so I will forebear, bite my tongue, & march on.

Silver today gained 32.2¢ or 1.6% to close Comex at 1986.6¢. Gold gained $19.60 (1.5% to $1,356.40.

One of these days y'all are goin' to turn to each other and say, "You know that nat'ral born durned fool from Tennessee? Well, even a blind hog finds an acorn now & then, & I believe he found one in gold & silver." That's as close as I can get to "I to'ja so" without actually saying it.

Today's Comex closes don't near about half tell the story. Over Sunday night silver hit 2105¢ someplace (I am NOT making this up) & the high yesterday was 2075¢. Here in the aftermarket it trading just above 2000¢.

Slap me for a durned fool, but I think it's going higher, maybe even to 2300¢. However, I want to warn y'all that this is a parabolic or straight up move, & it's awfully hard to predict when that will stop, or how far it will run. It's loads of fun, but you're liable to wind up naked and bleeding on the side of the road if you're not careful, because it will blow up.

Yes, I do think the financial panic in Europe is driving this. Gold/Silver ratio has fallen to 68.277, down 7% in the last two weeks. Folks running into gold must be realizing that ratio was simply too high & silver must catch up, therefore it's time to buy silver.

I could bogus things up with gigantic targets for silver & gold, but true is a financial panic could take them to the moon, so I don't need to. Looking PAST that present crisis, silver & gold were already rising, and will for the next FIVE years. THAT is why you ought to buy now, rather than betting on one crisis or another. Ride the primary trend, and when the crisis comes, you'll be ready.

Or buy because moronic criminals are running the world's central banks, and the more their destructive ZIRP, NIRP, and TWERP policies wound & bleed economies, the tighter they tighten them. Yes, you can RELY on central bankers to continue doing the wrong thing, which is why gold and silver are in a primary uptrend. Central bankers are their friend.

Remember: a country without a central bank is like an omelet without toadstools.

On 5 July 1863 the Confederate garrison at Vicksburg surrendered. The Yankees entered the city and distributed supplies to the citizens, whom they had been killing by bombardment for forty days.

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
5-Jul-16 Price Change % Change
Gold, $/oz 1,356.40 19.70 1.47%
Silver, $/oz 19.87 0.32 1.65%
Gold/Silver Ratio 68.277 -0.117 -0.17%
Silver/Gold Ratio 0.0146 0.0000 0.17%
Platinum 1,072.40 18.20 1.73%
Palladium 603.15 -3.00 -0.49%
S&P 500 2,088.55 -14.40 -0.68%
Dow 17,840.62 -108.75 -0.61%
Dow in GOLD $s 271.89 -5.69 -2.05%
Dow in GOLD oz 13.15 -0.28 -2.05%
Dow in SILVER oz 898.05 -20.36 -2.22%
US Dollar Index 96.26 0.54 0.56%
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: 1,355.10      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,390.33 1,400.50 1,400.50
1/2 AE 0.50 690.59 714.82 1,429.63
1/4 AE 0.25 348.68 364.18 1,456.73
1/10 AE 0.10 140.83 148.38 1,483.83
Aust. 100 corona 0.98 1,318.97 1,327.97 1,354.80
British sovereign 0.24 321.38 334.38 1,420.49
French 20 franc 0.19 254.89 258.89 1,386.69
Krugerrand 1.00 1,365.94 1,375.94 1,375.94
Maple Leaf 1.00 1,365.10 1,379.10 1,379.10
1/2 Maple Leaf 0.50 779.18 711.43 1,422.86
1/4 Maple Leaf 0.25 345.55 362.49 1,449.96
1/10 Maple Leaf 0.10 143.64 147.71 1,477.06
Mexican 50 peso 1.21 1,625.54 1,636.54 1,357.34
.9999 bar 1.00 1,359.84 1,367.10 1,367.10
SPOT SILVER: 19.93      
SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 23.00 27.00 35.29
VG+ Peace dollar 0.77 18.00 20.00 26.14
90% silver coin bags 0.72 14,392.95 14,677.95 20.53
US 40% silver 1/2s 0.30 5,761.35 5,923.35 20.08
100 oz .999 bar 100.00 2,018.00 2,043.00 20.43
10 oz .999 bar 10.00 200.80 205.80 20.58
1 oz .999 round 1.00 20.03 20.49 20.49
Am Eagle, 200 oz Min 1.00 21.68 22.68 22.68
SPOT PLATINUM: 1,072.40      
Plat. Platypus 1.00 1,087.40 1,117.40 1,117.40
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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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