The Moneychanger
Daily Commentary
Wednesday, 18 January a.d. 2017 Browse the commentary archive

Y'all ever notice how some people seem to jam your brain waves, while other people make you sharper? It's really easy to think around them, but around the jammers a fog descends on your head.

Janet Yellen spoke today, jamming brainwaves all over the world. I have to squelch my revulsion at the ridiculous wrongness of the world hanging on the words of an academic bureaucrat who never has made a living at a real job & probably can't even sweep properly. If I don't squelch that disgust, I won't be able to write.

Anyhow, Janet the Jammer, speaking in San Francisco this afternoon, reminded markets that she and her colleagues (grotesquely mis-grammarized as "I and my colleagues") expect to raise rates a few time a year until they push the Fed discount rate to 3% by end-2019. I leave out the rest of her remarks, seeing as they might repel and disgust fastidious thinkers. However, it didn't matter what else she said, markets only heard "more interest rate hikes" and that sent 'em spurting out of bonds and into dollars, as if the Fed were going to hike rates this very afternoon before 4:00.

Once again we see how socialist central bankers, pernicious, poisonous leftovers from the tail end of the Gilded Age, only send turmoil into the very markets they are supposed to stabilize. US dollar index spiked up 91 basis points (0.91%) to 101.23. Looking at the chart, one might almost think Jammin' Janet timed the statement to rescue the fainting dollar. Naw, naw, but y'all look at the chart for yourselves,

Jammy Janet's announcement came almost too late for stocks. Dow still closed 22.12 (0.11%) lower but the S&P500 caught a bid and rose 4 points (0.18%) to 2,271.89. None of that alters the charts, which continue to show broadening tops in the latter stages of breaking down.

Jammy Janet hit silver & gold a lick. Gold closed Comex at $1,211.30, down 70¢ and silver rose 13.2¢ (0.8%) for a 1723.5¢ ending. Great, but Janet pronunciated later & gold fell to $1,202.90 and silver to 1703.5¢.

'Tain't so bad after all. Gold's support at $1,200 caught and held it. Silver reached for 1725¢ resistance, and never mind the catalyst, Janet or a full moon, fell back. Not ready yet to push its way through that thicket. Silver at least avoided the demoralization of ending below 1700¢ in the aftermarket. So nothing really changed on the charts, at least, not yet.

Markets are strangely quiescent. Are they holding their breath waiting to see if Trump will REALLY be inaugurated? Certainly the political class and media & actors have kicked their Trumpophobia into high gear, refusing to take part in the inauguration. It's always amusing to see Hollywood's finest (if not the brightest) and politicians striking some utterly riskless popular stance, intoning the obvious, then patting themselves on the back for doing a brave thing standing against the mainstream. Do these folks realize they are a parody of themselves?

On this day in 1701 Frederick I and Sophie Charlette von Hanover (1668-1705) were crowned the first king and queen of Prussia. In 1695 she inherited land west of Berlin and built the enormous Charlottenburg Palace. It still stands, so if you ever get to Berlin, go visit it. The entire district around the palace is now called Charlottenburg. On the wide boulevard leading to the palace there used to be a small museum where they kept the bust of Egyptian queen Nefertiti. It is astonishingly lifelike. Standing in the room gazing on it with Susan, I kept thinking I could see a pulse beat in her neck. It's about 3,350 years old.

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
18-Jan-17 Price Change % Change
Gold, $/oz 1,211.30 -0.70 -0.06%
Silver, $/oz 17.24 0.13 0.77%
Gold/Silver Ratio 70.281 -0.583 -0.82%
Silver/Gold Ratio 0.0142 0.0001 0.83%
Platinum 968.00 -11.10 -1.13%
Palladium 750.40 -2.00 -0.27%
S&P 500 2,271.89 4.00 0.18%
Dow 19,804.65 -22.12 -0.11%
Dow in GOLD $s 337.98 -0.18 -0.05%
Dow in GOLD oz 16.35 -0.01 -0.05%
Dow in SILVER oz 1,149.09 -10.16 -0.88%
US Dollar Index 101.23 0.91 0.91%
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: 1,202.90      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,237.78 1,243.20 1,243.20
1/2 AE 0.50 623.49 634.53 1,269.06
1/4 AE 0.25 317.75 323.28 1,293.12
1/10 AE 0.10 130.71 131.72 1,317.18
Aust. 100 corona 0.98 1,173.19 1,182.19 1,206.07
British sovereign 0.24 285.29 298.29 1,267.15
French 20 franc 0.19 224.58 230.58 1,235.04
Krugerrand 1.00 1,214.93 1,224.93 1,224.93
Maple Leaf 1.00 1,212.90 1,226.90 1,226.90
1/2 Maple Leaf 0.50 691.67 631.52 1,263.05
1/4 Maple Leaf 0.25 306.74 321.78 1,287.10
1/10 Maple Leaf 0.10 127.51 131.12 1,311.16
Mexican 50 peso 1.21 1,442.97 1,453.97 1,205.91
.9999 bar 1.00 1,207.71 1,212.90 1,212.90
SPOT SILVER: 17.04      
SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 23.00 27.00 35.29
VG+ Peace dollar 0.77 17.00 20.00 26.14
90% silver coin bags 0.72 12,251.53 12,537.53 17.54
US 40% silver 1/2s 0.30 4,833.58 4,983.58 16.89
100 oz .999 bar 100.00 1,693.50 1,718.50 17.19
10 oz .999 bar 10.00 171.85 176.85 17.69
1 oz .999 round 1.00 17.29 17.59 17.59
Am Eagle, 200 oz Min 1.00 18.54 20.04 20.04
SPOT PLATINUM: 968.00      
Plat. Platypus 1.00 983.00 1,013.00 1,013.00
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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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