The Moneychanger
Daily Commentary
Monday, 7 November a.d. 2016 Browse the commentary archive

A reader from Wales castigated me -- justly -- for omitting the Welsh from the list of fractious folks in the UK. Worse yet, they all voted to leave the EU, while the Scots voted to stay. I repent in dust and ashes and as penance will sing "Men of Harlech" six times. "Cambria will not yield!"

Markets were roiled by the FBI commissar Comey's announcement that 11 days after he had put Hellery under suspicion of high crimes & misdemeanors again, she hadn't done anything wrong after all. FBI must have cannibalized every temp employment agency on the east coast to hire enough people to read all those emails in 8 days. Amazing.

Clearly beneath the clalm surface of these muddy waters the barracudas are tearing & eating each other, the pro-Hellery faction against the anti-Hellery faction. Kid yourself not, her legal troubles have not ended. And in spite of all the news & rumors of election fraud, I still expect Trump to win.

I curled my lips in ironic & scornful (yes, I succumb to scorn when provoked) laughter when the stock market and dollar rose on the news that Hellery would not be arrested & jailed this week. What are these frantic buyers missing? The economic cake is already baked. Central banks have suppressed interest rates for 36 years, and for the last 8 years jettisoned every trace of common sense with QE, ZIRP, & NIRP (burp!). Central banks have reached the limits of their existence and the world's economy is choking on them. Whether Hellery or Trump wins, these problems will remain. That means stocks will decline for a long time while silver & gold will keep on rising.

Course I don't know bacon from fat meat. I'm jes' a natural durn fool from Tennessee. I don't know a security clearance from a valve clearance, & ain't NOBODY lining up to pay me millions of bucks for influence. Closest I ever got to influence was one time I got the influenza.

Stock indices gainsayed each other today. S&P500 rose to pierce -- barely -- its 20 day moving average. Chart's here,

On the other hand the Dow rose through its 20 & 50 DMA, and the downtrend line running hand in hand with the 50 DMA. Chart: That might mark the limit of the move. Whoops, almost forgot: Dow rose 371.32 (2.08%) to 18,259.60 while the S&P500 rose 46.34 or 2.22% to 2,131.52.

Bottom line: countertrend rally. These same gnat brains will sell just as hard tomorrow if Trump wins. Either way, stocks are locked in an intermediate downtrend.

US dollar index also staged a countertrend rally on the cockamamie notion that Hellery the big-spending socialist would be better for the dollar than Trump, the small-spending socialist. Chart's here

As with stocks, there's no sign yet that the dollar has changed its trend to skyward.

Gold took it on the chin, losing $25 (1.9%) to close at $1,278.30 on Comex. Silver fell not as much, only 21.8¢ or 1.2% to 1812.4¢.

How badly was gold wounded? Nothing a band aid couldn't fix. Gold fell nearly to its 200 DMA (1,276.70) but remained above the trend line climbing out of October's lows. See for yourself,

Silver's fall stopped cold at 1800¢, suggesting loads of buyers are happy to acquire silver there. Chart's right here,

Silver didn't break its uptrend line, either.. Didn't get near the 200 DMA (1749¢).

All this was expected since a cyclical low was due this week. Now you have seen it. Tomorrow will be quiet, until it becomes apparent which juvenile delinquent will win. Don't miss this: whatever the election's immediate effect, long term it won't change much, except the interior decorator at the White House.

One more Susan story, about how we met:

I had an apartment with two college buddies & had heard about Susan, who was running with the same crowd of folks I ran with. I had broken up with a girl I had dated for three or four years, and was finished with her forever.

We had a party at our apartment, and the first time I ever saw Susan, she was highstepping with those long legs across people sitting on the floor. She was wearing white pants and a white sweater with navy blue zig-zag stripes about 2 inches wide. First time I saw her I thought, "THAT is what I have been looking for! THAT is what I have to have."

That was late in April. At first she refused to go out with me because she thought I was engaged. I squelched that misconception speedily and we had our first date May 5 or May 6, 1967. At 20 years old, we decided to get married that night, which I'm sure horrified & terrified Susan's wonderful mother. For reasons still not clear to me, her father and mother agreed. We got married 16 December 1967 & I never looked back. I know when I've hit the jackpot.

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
7-Nov-16 Price Change % Change
Gold, $/oz 1,278.30 -25.00 -1.92%
Silver, $/oz 18.12 -0.22 -1.19%
Gold/Silver Ratio 70.531 -0.525 -0.74%
Silver/Gold Ratio 0.0142 0.0001 0.74%
Platinum 998.60 -3.10 -0.31%
Palladium 655.85 28.50 4.54%
S&P 500 2,131.52 46.34 2.22%
Dow 18,259.60 371.32 2.08%
Dow in GOLD $s 295.28 11.55 4.07%
Dow in GOLD oz 14.28 0.56 4.07%
Dow in SILVER oz 1,007.48 32.22 3.30%
US Dollar Index 97.79 0.71 0.73%
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SPOT GOLD: 1,280.80      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,317.94 1,323.71 1,323.71
1/2 AE 0.50 652.70 675.62 1,351.24
1/4 AE 0.25 329.55 344.22 1,376.86
1/10 AE 0.10 134.38 140.25 1,402.48
Aust. 100 corona 0.98 1,249.16 1,258.16 1,283.58
British sovereign 0.24 303.76 316.76 1,345.63
French 20 franc 0.19 236.73 240.73 1,289.42
Krugerrand 1.00 1,297.45 1,307.45 1,307.45
Maple Leaf 1.00 1,290.80 1,304.80 1,304.80
1/2 Maple Leaf 0.50 736.46 672.42 1,344.84
1/4 Maple Leaf 0.25 326.60 342.61 1,370.46
1/10 Maple Leaf 0.10 135.76 139.61 1,396.07
Mexican 50 peso 1.21 1,536.41 1,547.41 1,283.41
.9999 bar 1.00 1,285.28 1,292.80 1,292.80
SPOT SILVER: 18.18      
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 13,495.63 13,781.63 19.28
US 40% silver 1/2s 0.30 5,169.88 5,319.88 18.03
100 oz .999 bar 100.00 1,797.50 1,832.50 18.33
10 oz .999 bar 10.00 183.25 188.25 18.83
1 oz .999 round 1.00 17.98 18.48 18.48
Am Eagle, 200 oz Min 1.00 19.68 21.18 21.18
SPOT PLATINUM: 998.60      
Plat. Platypus 1.00 1,013.60 1,043.60 1,043.60
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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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