The Moneychanger
Daily Commentary
Thursday, 8 December a.d. 2016 Browse the commentary archive

Me, I don't know beans from okra, since I don't claim to be no more'n a nat'ral born durn fool from Tennessee, but fool that I am, I can recognize when a crook has been caught red-handed in the cookie jar, or crumb-handed, as the case may be.

Y'all go to Wall Street on Parade, Pam & Russ Martens' website & read, "Bombshell dropped in Federal Courts: Proof of a Silver Market `Mafia' Among Big Banks."

Lawyers for traders suing Deutsche Bank, HSBC, Bank of Nova Scotia, & UBS filled truckloads of persuasive evidence of conspiracy and market manipulation, consisting of emails and phone conversation among the banks' traders, filled with quotes like, "If we are correct and do it together, we screw other people harder."

The Martens write, "UBS & Deutsche Bank are charged by the plaintiffs with implementing an 11 o'clock rule, "whereby they would short silver at the same time each day" and "use a countdown sequence -- `3 2 1 boom' to ensure their manipulative transactions were entered at the same time."

But where is the yankee Justice Department? Where their self-righteous outrage? Where their smug posturing? Why, o why, are they so unwilling to prosecute the big banks, which have degenerated into criminal organizations all? Whoops, I forgot: Big Banks are Too Big To Jail.

Today stocks rose yet again, to yet new all time highs. Look at the Dow here,

The rule of thumb for pennants or flags is that they fly at half-staff. So if you measure from the start to the peak of the first run, then add that distance to the breakout from the flag, you get a target, in this case, about 19,800. Throw your eye on that RSI at an 83.41 reading, when 70 is considered overbought.

Dow today added another 65.19 (0.33%) to 19,614.81. S&P500 rose 4.85 (0.22%) to 2,246.19.

Did y'all catch what I meant in that "rule of thumb" paragraph?

Look at the US dollar chart,

Dollar index today shot back up to it breakdown point at 101 -- not a rally but frequently seen behavior as a market returns to the line for on final kiss good-buy. Established short term trend points DOWN.

Draghi & the ECB announced they were curtailing their bond buying program (read: inflation -- quantitative easing) a leetle bit, & that was enough to send interest rates up and the Euro skidding. Makes no sense that investors can't grasp that inflation destroys a currency. Euro ended down 1.31% at $1.0614. Japanese yen lost 0.33% to 87.69. This should prove a one-day event for the euro as the dollar is destined for lower things.

Gold gave back $5.20 (0.4%) on Comex to close at $1,169.80. Silver backed up 17.8¢ (1%) to 1702.5¢.

Here's a picture of gold, because I have less than 1,000 words to say:

Gold is scooping along a bottom at about $1,160, millimetering up a few angstrom units a day. All this looks like a bowl or rounding bottom, but a close below $1,160 would blow the bottom out of that bowl. Indicators -- MACD, ROC, RSI -- point up.

Silver's chart, shows a pattern kin to gold's bowl. Sure, today it fell after bumping into 1725¢ resistance yesterday. Nothing untoward there, merely normal action. Unless silver suddenly falls out of bed, the path of least resistance is upward.

When on 8 December 1952 Lucille Ball appeared expecting on the "I Love Lucy" show, it was the first acknowledgement of pregnancy on TV. I guess nobody ever got pregnant before that? Wow. TV really has changed things.

On 8 December 1974 the Greeks rejected monarchy in a referendum. Boy, I bet they regret that now. When you have a king, you only have to chop off one head to fix things and get a new one. When you have a parliament, you have a many headed monster that chops off your standard of living.

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-Dec-16 Price Change % Change
Gold, $/oz 1,169.80 -5.20 -0.44%
Silver, $/oz 17.03 -0.18 -1.03%
Gold/Silver Ratio 68.711 0.409 0.60%
Silver/Gold Ratio 0.0146 -0.0001 -0.59%
Platinum 942.40 0.70 0.07%
Palladium 739.30 6.30 0.86%
S&P 500 2,241.35 29.12 1.32%
Dow 19,614.81 65.19 0.33%
Dow in GOLD $s 346.62 2.68 0.78%
Dow in GOLD oz 16.77 0.13 0.78%
Dow in SILVER oz 1,152.12 15.71 1.38%
US Dollar Index 101.01 65.19 181.99%
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: 1,169.80      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,202.55 1,208.99 1,208.99
1/2 AE 0.50 596.09 617.07 1,234.14
1/4 AE 0.25 300.97 314.38 1,257.54
1/10 AE 0.10 122.72 128.09 1,280.93
Aust. 100 corona 0.98 1,140.90 1,149.90 1,173.13
British sovereign 0.24 277.44 290.44 1,233.80
French 20 franc 0.19 216.22 220.22 1,179.53
Krugerrand 1.00 1,183.84 1,193.84 1,193.84
Maple Leaf 1.00 1,179.80 1,193.80 1,193.80
1/2 Maple Leaf 0.50 672.64 614.15 1,228.29
1/4 Maple Leaf 0.25 298.30 312.92 1,251.69
1/10 Maple Leaf 0.10 124.00 127.51 1,275.08
Mexican 50 peso 1.21 1,400.44 1,411.44 1,170.64
.9999 bar 1.00 1,173.89 1,181.80 1,181.80
SPOT SILVER: 17.02      
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 12,705.55 12,991.55 18.17
US 40% silver 1/2s 0.30 4,829.15 4,979.15 16.88
100 oz .999 bar 100.00 1,682.00 1,717.00 17.17
10 oz .999 bar 10.00 171.70 176.70 17.67
1 oz .999 round 1.00 16.82 17.32 17.32
Am Eagle, 200 oz Min 1.00 18.52 20.02 20.02
SPOT PLATINUM: 942.40      
Plat. Platypus 1.00 957.40 987.40 987.40
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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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