The Moneychanger
Daily Commentary
Thursday, 29 September a.d. 2016 Browse the commentary archive

It appears that people prevaricate -- perish the thought -- when they think their name might be recorded on a poll. It follows that if they take the same poll anonymously, they can answer what they truly think, instead of what they think you think they ought to think. A fellow has worked out an app to take an anonymous election poll, and has some surprising results. Article is at http://usat.ly/2cZsyVE

I've passed a milestone (not to be confused with a gallstone). Just today finished the last edit for At Home in Dogwood Mudhole, Volume 3. If all goes well and my book designer works his accustomed miracles, we will be selling Volume 3 before Christmas. Stay tuned.

Following the infallible French proverb, "Nothing is confirmed until officially denied," I see loads of German officials from Merkel down swearing the government will not bail out Deutsche Bank. Meanwhile, in what must be some sort of behind-the-scenes struggle between the US government & the German government, the US is insisting -- right now! -- on fining Deutsche Bank $14 billion for fraudulent dealings in mortgage backed securities. US government announced that September 9, in what looks awfully like an attempt to put a bullet in DB's dying head.

DB has fallen 91% from its May 2007 high at 125.50 It's lost 57% in the last 12 months, and 25% since the Department of Justice's announcement. Of course, DB's troubles are spilling over to other insolvent European and American banks, as well as stocks in general. When DB goes down, the carnage will become general and blood will flow up to the central bankers' attaché case handles.

Lo, the panic is propagating overseas, in US stock markets. Dow fainted today, down 195.79 (1.07%) to close at 18,143.45, barely hovering above the critical 18,100 level. S&500 lost 20.24 (0.93%) for a 2,151.13 close. Dow chart is here, http://schrts.co/Q6KUW0

Veritas filia temporis. Truth is the daughter of time. Now we see that stocks' breakdown a few days ago, made to look false by a two day rally back to the breakdown point, has been confirmed by today's cave-in. Killer confirmation comes when the Dow closes lower than 17,992.21, the last low.

Y'all hear my words: something ugly is looming.

US dollar index fiddled again today, adding 13 basis points (0.14%) to 95.47. Remains beneath the 50 DMA (95.59). Got no more spunk than a road killed rooster. Building for a break one way or the other. Chart says "down", but a panic over European banks would send timid money streaming into US dollars and US treasuries, sending the dollar up.

Comex today saw gold gain 2.30 to $1,321.70 and silver add 7.1¢ to 1911.5¢.

It was an up and down day. Gold began the day by falling after 9:00 to a $1,316.60 low, rallied back to $1,321, then fell again to $1,316. That little double bottom gave gold enough purchase to jump to $1,324, but in the after-scrabble it fell and only grabbed hold at $1,321.70. Today's double bottom and advance pictures a market that longs to rise.

Silver see-sawed in similar fashion. It hit a low just before New York opened at 1901¢. That sucked in buyers waiting there, and it bounced back to 1913¢ sharply, then fell just as sharply to 1901¢ again -- double bottom.

Immediately about 10:00 silver launched through 1920¢ to 1921¢. Fell jusst as sharply to 1903¢, then climbed for good. Ended Comex at 1911.5, and in the aftermarket is trading at 1913. Once again, this chart pictures a market determined not to drop through 1900¢.

How a blowup in Deutsche Bank will affect silver & gold is anybody's guess, but I'll merely observe that this is not 2008. Central banks have had 8 long years to wear out their credibility with QE, ZIRP, and NIRP, proving only that they are all TWIRPS, clueless & incompetent. One suspects gold (and to a lesser extent silver) would offer an attractive refuge for that timid money. We'll see.

On 29 September 2008 the Dow Jones Industrial Average fell 777.68 points, its largest single-day point loss, following the bankruptcies of Lehman Brothers & Washington Mutual. Y'all rememer that 777.68.

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
29-Sep-16 Price Change % Change
Gold, $/oz 1,321.70 2.30 0.17%
Silver, $/oz 19.12 0.07 0.37%
Gold/Silver Ratio 69.145 -0.137 -0.20%
Silver/Gold Ratio 0.0145 0.0000 0.20%
Platinum 1,030.80 8.90 0.87%
Palladium 718.50 5.00 0.70%
S&P 500 2,151.13 -20.24 -0.93%
Dow 18,143.45 -195.79 -1.07%
Dow in GOLD $s 283.77 -3.56 -1.24%
Dow in GOLD oz 13.73 -0.17 -1.24%
Dow in SILVER oz 949.17 -13.82 -1.44%
US Dollar Index 95.47 0.13 0.14%
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: 1,320.60      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,356.26 1,364.84 1,364.84
1/2 AE 0.50 673.00 696.62 1,393.23
1/4 AE 0.25 339.80 354.91 1,419.65
1/10 AE 0.10 138.56 144.61 1,446.06
Aust. 100 corona 0.98 1,282.80 1,291.80 1,317.90
British sovereign 0.24 313.20 326.20 1,385.73
French 20 franc 0.19 244.09 248.09 1,328.82
Krugerrand 1.00 1,329.84 1,339.84 1,339.84
Maple Leaf 1.00 1,330.60 1,344.60 1,344.60
1/2 Maple Leaf 0.50 759.35 693.32 1,386.63
1/4 Maple Leaf 0.25 336.75 353.26 1,413.04
1/10 Maple Leaf 0.10 139.98 143.95 1,439.45
Mexican 50 peso 1.21 1,582.56 1,593.56 1,321.69
.9999 bar 1.00 1,325.22 1,332.60 1,332.60
SPOT SILVER: 19.15      
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 13,831.68 14,117.68 19.75
US 40% silver 1/2s 0.30 5,456.03 5,606.03 19.00
100 oz .999 bar 100.00 1,894.50 1,929.50 19.30
10 oz .999 bar 10.00 192.95 197.95 19.80
1 oz .999 round 1.00 18.95 19.45 19.45
Am Eagle, 200 oz Min 1.00 20.65 22.15 22.15
SPOT PLATINUM: 1,030.80      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Plat. Platypus 1.00 1,045.80 1,075.80 1,075.80
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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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