The Moneychanger
Daily Commentary
Tuesday, 21 February a.d. 2017 Browse the commentary archive

One more reminder, coming a week from yesterday:

On Monday, 27 February 2017 I'll be speaking for the Campaign for Liberty in Memphis. Time is 6:30, place is Jason's Deli on Poplar. Not exactly sure what I'll say yet, but I want to talk about indicators of liberty, the signs liberty is making progress, & restoring freedom in Tennessee. Of course, I'll also talk about silver & gold. If you join us, come up and introduce yourself. I am always delighted to meet my readers.


Chart for the US dollar index is here,

US dollar index gapped up today and closed up 43 basis points (0.42%) at 101.38. No doubt riots in France & Sweden help to boost the dollar as scared money flees the euro for safety in the dollar. Riots are also helping the National Front candidate for president, Marine le Pen, but there are abundant other reasons to flee the euro including worsening situations in Greece and Spanish & Italian banks. But then their situation has been horrifyingly insolvent for a long time.

A head and shoulders topping pattern appears to be forming on the dollar index chat. If the now-forming right shoulder rises much higher than 102, that would invalidate the pattern. If it is a H&S, it has a couple more weeks to form. Breaking the neckline would target 95.50.

We'd have riots here where I live in Tennessee, but there's nothing to throw rocks at but trees and nothing to loot but forests. It's tough staging a meaningful riot.

Look at the Euro: Fell 0.76% today to $1.0535.

It gapped down today through its 50 DMA and is trying to fall through support. That dotted line support, by the way, marks the bottoms of shoulders in an UPSIDE-DOWN H&S which would signal a reversal upwards when completed. Mirrors the Dollar index. Well, turns it upside-down.

Here's the yen, Lost 0.75% today but remains in an uptrend.

Stocks continue on a tear that looks like a blow off top (if you don't sell stocks for a living). Dow jumped 0.58% or 118.95 to 20,743. S&P leapt 0.6% or 14.22 to 2,365.38. Goes without saying those are new all time highs, but I will say it anyway. Dow in gold & Dow in silver both hooked up a little today, enough to make me fret but not enough to make me bite my nails yet.

I reckon some cosmic event might change my mind, but for now I believe the dollar & stocks are merely floating on hot enthusiasm for what Trump will do in the future. When the future arrives here in a few weeks, the enthusiasts will discover their error & make a mad dash to resume mourning in sackcloth and ashes -- and to sell. But I'm jes' a nat'ral born durn fool from Tennessee.

Silver & gold were mired down today. On Comex gold slipped one thin dime to $1,237.50. Silver backed up 2.9¢ to 1799¢.

Gold's low came at $1,227.50, the high at $1,238.60, an skinny $11 range. Best thing that can be said about it is it recovered itself from two passes at that low & rallied.

Gaze upon the gold chart,

Despite today's let down, gold barely budged in the face of the strong dollar's garlic breath. And if my life depended on interpreting this chart, I'd say it began an up leg off that December bottom, corrected to the bottom of leg 2 near January's end, and then began leg 3 up & corrected once to $1,217.50. If so, what gold turns loose next will be a humdinger, but not lower.

Here's the daily silver chart,

During today's trading silver fell as low at 1785¢ but double bottomed and climbed fiercely to 1808¢, where it decided to stop. Fending off that attack, in the face of a rising dollar, ain't bad.

Silver's daily chart looks like gold's, namely, headed higher. However, it is now mired in that 200 DMA and resistance around 1800¢. First it has to peck through that wall, but with stocks sucking in all the money & headlines in the world, traction is hard for silver to grab. Be patient, be patient. Both metals are headed higher.

On 21 February 1848 Karl Marx & Friedrich Engels first published the Communist Manifesto. It would be taxing to estimate what rivers and oceans of blood have been shed over that pamphlet. The Manifesto contained ten "planks": 1. Abolition of private property in land & application of all rents to public purpose; 2. heavy progressive income tax; 3. abolition of all rights of inheritance; 4. confiscation of the property of all emigrants & rebels; 5. centralization of credit in the hands of the state, by means of a national bank with state capital and an exclusive monopoly (in other words, a central bank like the Fed); 6. centralization of the means of communication & transportation in the hands of the state; 7. Extension of factories & instruments of production owned by the state; bringing waste lands into cultivation and improving the soil generally in accordance with a common plan; 8. equal obligation of all to work & establishment of industrial armies, especially for agriculture; 9. Combination of agriculture with manufacturing & gradual abolition of the distinction between town and country by more equably distributing population, and 10. free education for all children in government schools, abolition of children's factory labor, combining education with industrial production.

Don't want to depress y'all, but all of these planks are the ruling reality in the United States today. Think about that & you'll understand why I used to say I was the only person in Tennessee who WASN'T a communist.

If you want to give yourself a headache, ask yourself why the supposedly most capitalist country in the world has a government outlined by the communist manifesto. It'll make your head throb.

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
21-Feb-17 Price Change % Change
Gold, $/oz 1,237.50 -0.10 -0.01%
Silver, $/oz 17.99 -0.03 -0.16%
Gold/Silver Ratio 68.788 0.105 0.15%
Silver/Gold Ratio 0.0145 -0.0000 -0.15%
Platinum 1,003.50 0.00 0.00%
Palladium 778.85 -0.40 -0.05%
S&P 500 2,365.38 14.22 0.60%
Dow 20,743.00 118.95 0.58%
Dow in GOLD $s 346.50 2.01 0.58%
Dow in GOLD oz 16.76 0.10 0.58%
Dow in SILVER oz 1,153.03 8.46 0.74%
US Dollar Index 101.38 0.43 0.43%
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SPOT GOLD: 1,236.50      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,264.94 1,276.69 1,276.69
1/2 AE 0.50 636.28 651.02 1,302.03
1/4 AE 0.25 324.32 332.31 1,329.24
1/10 AE 0.10 129.73 135.40 1,353.97
Aust. 100 corona 0.98 1,202.93 1,211.93 1,236.41
British sovereign 0.24 293.26 306.26 1,301.00
French 20 franc 0.19 230.85 236.85 1,268.64
Krugerrand 1.00 1,250.10 1,260.10 1,260.10
Maple Leaf 1.00 1,246.50 1,259.50 1,259.50
1/2 Maple Leaf 0.50 710.99 649.16 1,298.33
1/4 Maple Leaf 0.25 315.31 330.76 1,323.06
1/10 Maple Leaf 0.10 131.07 134.78 1,347.79
Mexican 50 peso 1.21 1,479.54 1,490.54 1,236.25
.9999 bar 1.00 1,236.50 1,248.50 1,248.50
SPOT SILVER: 17.97      
SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 22.50 26.00 33.99
VG+ Peace dollar 0.77 16.00 18.00 23.53
90% silver coin bags 0.72 12,526.80 12,884.30 18.02
US 40% silver 1/2s 0.30 5,109.40 5,259.40 17.83
100 oz .999 bar 100.00 1,787.00 1,812.00 18.12
10 oz .999 bar 10.00 181.20 186.20 18.62
1 oz .999 round 1.00 18.22 18.52 18.52
Am Eagle, 200 oz Min 1.00 18.97 20.22 20.22
SPOT PLATINUM: 1,003.50      
Plat. Platypus 1.00 998.50 1,043.50 1,043.50
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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.
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  • 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.
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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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