The Moneychanger
Weekly Commentary
Friday, 9 September a.d. 2016 Browse the commentary archive
Here's the weekly scorecard:
  2-Sep-16 8-Sep-16 Change % Change
Silver, cents/oz. 1,927.60 1,959.10 31.50 1.6
Gold, dollars/oz. 1,322.10 1,336.80 14.70 1.1
Gold/silver ratio 68.588 68.235 -0.352 -0.5
Silver/gold ratio 0.0146 0.0147 0.0001 0.5
Dow in Gold Dollars (DIG$) 289.13 285.77 -3.37 -1.2
Dow in gold ounces 13.99 13.82 -0.16 -1.2
Dow in Silver ounces 959.33 943.29 -16.04 -1.7
Dow Industrials 18,491.96 18,479.91 -12.05 -0.1
S&P500 2,179.98 2,181.30 1.32 0.1
US dollar index 95.84 95.03 -0.81 -0.8
Platinum 1,059.50 1,083.10 23.60 2.2
Palladium 674.20 687.80 13.60 2.0

I am leaving tomorrow for a week's vacation on the beach in South Carolina, with Susan & five of my 14 grandsons. I may be insane. Think about 10 hours in a car with five boys. Next week I won't be sending out any commentaries unless I just take a notion, but I will return, God willing, on 19 September. Our office will remain open and ready to help you.

Kirkpatrick Sale of the Middlebury Institute noted that an August 16th found that 61% of Texans who support Trump have vowed that Hillary is elected they will push for Texas to secede. A 2014 Reuters poll found 36% of Texans for secession and another 18% not sure, i.e., anti-secession crowd is only 46%. Go, Texas!

In August a California appellate court ruled it is permissible for municipalities to cut pension benefits, if the pensions remain "reasonable." There's yourwrning of their solution to the the insoluble pensions shortfall: cut the benefits. (Bloomberg).

MORE BUZZARDS looking for a place to roost. South Korean Hanjin shipping's bankruptcy, has left 85 - 90 vessels stranded on the world's oceans. No port will take them because they don't know if they'll ever be paid. Bankruptcy of the world's 7th largest shipping line echoes the bubble in ship construction. European Central Bank criminals today announced they would not lower interest rates further, but made astonishing noises about extending their present quantitative easing programs to include buying even non-performing bank loans. Central bankers have taken the world so far out in Lululand there's no cure but to abolish them.

ECB's action sent interest rates up around the world, threatening the bubble in bonds which central banks' Zero Interest Rate Policy and Negative Interest Rate Policy have blown up. When this one blows up, it will cover the whole world with goo.


On the ECB's lying announcement (I don't yet know exactly where & how they lied, but if their lips were moving, they were lying) the Euro rose 0.19% to $1.1260. Euro has basically been range bound since January, probably a reflection of careful manipulation by the Nice Government Men on both sides of the Atlantic. Euro is going nowhere as long as it remains below $1.1400. Tis all feckless churning. Yen lost 079% to 97.57.

US dollar index rose seven huge basis points (0.08%) to end above 95 at 95.03. Chart:

Mercy! Don't touch that thang, it might be contagious! Just look at it. False breakout of a downtrend, lost a month's gains in four days, below its 200, 50, and 20 day moving averages. Nasty. Little future.

Stocks fell off, too. S&P500 lost 4.86 (0.22%) to 2,181.30 and the Dow gave up 46.23 (0.25%) to 18,479.91. Regard the table above and note they have gone nowhere the last week. A Dow close below 18,350 and S&P500 close below 2,160 will take them to the edge of a cliff & push them over.

Silver & gold fell a little again today, after Tuesday's Alpine rise. Comex gold lost $7.50 (0.6%) to $1,336.80 and silver backed off 16.8¢ (0.9%) to 1959.1¢. I have not changed my mind: Silver & gold have begun a massive rally. How massive will appear when gold bursts through $1,365 and silver through 2000¢. Hide and watch.

Someone pointed my attention to similarities between 2009 and now in the metals. Both bottomed in November 2008, then climbed against all expectation with a big spurt in January - February. Traded up into June, then backed off for a July low, inched up in August, and toward August's end took off flying. Made one last low in September offering one last delicious opportunity to buy before they rose through the rest of 2009, 2010, and into 2011.

Gold's 2008 - 2009 chart is here,

See silver's 2008-2009 chart right here,

Y'all compare those charts to December 2015 through now. You'll see the family resemblance. My point is that the September low was THE momentous place to buy.

On 8 September 1892 an early version of the Pledge of Allegiance appeared in the magazine, The Youth's Companion. That was socialist Francis Bellamy's version. Francis was cousin to socialist Edward Bellamy who wrote the utopian socialist novels Looking Backward and Equality.

Nobody talks about it much today, but the pledge was originally supposed to be said giving a raised right hand Roman salute called the "Bellamy Salute," later made famous by the Nazis and Mussolini's Fascists. That salute was dropped in favor of the hand over heart in the 1942 when it became too obvious an embarrassment. You can see a picture here, Search "pledge of allegiance roman salute" and you'll find loads of pictures.

Y'all enjoy your weekend.

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
8-Sep-16 Price Change % Change
Gold, $/oz 1,336.80 -7.50 -0.6
Silver, $/oz 19.59 -0.17 -0.9
Gold/Silver Ratio 68.235 -0.377 -0.5
Silver/Gold Ratio 0.0147 -0.0001 -0.8
Platinum 1,083.10 -8.10 -0.7
Palladium 687.80 -0.30 -0.0
S&P 500 2,181.30 -4.86 -0.2
Dow 18,479.91 -46.23 -0.2
Dow in GOLD $s 285.77 0.91 0.3
Dow in GOLD oz 13.82 0.04 0.3
Dow in SILVER oz 943.29 5.68 0.6
US Dollar Index 95.03 0.07 0.1
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: 1,337.40      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,370.84 1,382.20 1,382.20
1/2 AE 0.50 681.56 705.48 1,410.96
1/4 AE 0.25 344.12 359.43 1,437.71
1/10 AE 0.10 140.32 146.45 1,464.45
Aust. 100 corona 0.98 1,300.43 1,309.43 1,335.88
British sovereign 0.24 317.19 330.19 1,402.66
French 20 franc 0.19 247.20 251.20 1,345.45
Krugerrand 1.00 1,342.75 1,352.75 1,352.75
Maple Leaf 1.00 1,347.40 1,361.40 1,361.40
1/2 Maple Leaf 0.50 769.01 702.14 1,404.27
1/4 Maple Leaf 0.25 341.04 357.75 1,431.02
1/10 Maple Leaf 0.10 141.76 145.78 1,457.77
Mexican 50 peso 1.21 1,602.70 1,613.70 1,338.39
.9999 bar 1.00 1,342.08 1,349.40 1,349.40
SPOT SILVER: 19.61      
SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 25.00 27.00 35.29
VG+ Peace dollar 0.77 20.00 22.00 28.76
90% silver coin bags 0.72 13,946.08 14,232.08 19.91
US 40% silver 1/2s 0.30 5,591.73 5,741.73 19.46
100 oz .999 bar 100.00 1,940.50 1,975.50 19.76
10 oz .999 bar 10.00 197.55 202.55 20.26
1 oz .999 round 1.00 19.41 19.91 19.91
Am Eagle, 200 oz Min 1.00 21.11 22.61 22.61
SPOT PLATINUM: 1,083.10      
Platinum Platypus 1.00 1,098.10 1,128.10 1,128.10
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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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