The Moneychanger
Daily Commentary
Tuesday, 19 September a.d. 2017 Browse the commentary archive

Yesterday I wrote, "On 18 September 1882 the Pacific Stock Exchange opened, and it suddenly became possible to cheat investors on either US coast."

Lo, a smoking email awaited me this morning: "Hey, worked there for 33 years and always bent over to help create and honest and upright record. You're throwing stones like a blind man, so have some respect or button that lip."

Ahh, forgive me. I have been reading Flash Boys & think constantly about the corruption of today's rigged markets. I overlooked, of course, the many people who faithfully do an honest job in their place and station, even on Wall Street. Their faithfulness keeps the world running. May they prosper and increase, and may the crooked be cast down and brought low. Soon.

More ambiguity appears in today's numbers: dollar down again, stocks edging up, metals gainsaying each other. No resolution yet.

US dollar index rose 18 basis points yesterday, and fell 19 basis points today. Here's a chart, but it lacks today's posting. In your mind's eye just paint in a little red bar the same length as yesterday's black bar.

Reason I have concluded the dollar's primary trend has turned down, other than the completed Head & Shoulders patterr it fell out of and subsequent avalanche, is that it has closed lower than the May 2016 intraday low at 91.88, and not just a little bit. Dollar index' avalanche will speed up once it falls through 90. Trump & Mnuchin bay just stumble into doing what their predecessors for the last century have not done, i.e., knocking the dollar in the head.

Here's a weekly dollar chart since 2011, the span of its primary uptrend, so you can see what I mean, Whoops. Has also sunk beneath the 200 week moving average. Wow -- even worse than I thought.

Dow added 39.45 (0.18%) to 22,370.80 and the S&P500 tagged along with a 2.78 gain (0.11%) to 2,506.65. Just for laughs, here's the Dow chart. Notice the sharply attenuating rising wedge, which does NOT foretell any great continuation. Rather, it screams a breakdown is coming.

Silver & gold quarreled today, couldn't decide whether to rise or fall. Silver on Comex added 12.4¢ (0.73%) while gold moved -- ready for this? -- ten whole cents, one thin dime -- down to $1,306.20.

It seems this is, for the moment, all the damage the specter of the FOMC meeting tomorrow can do. Assuming they don't announce something totally goofy, like Janet Yellen taking up a new career as a burlesque dancer, the low came today or will come tomorrow. As I've been telling y'all, after FOMC meetings gold tends to rise.

Odd thing happened in Nashville at Lipscomb University. Read about it here,

Seems Lipscomb gave a supper and decorated tables with a fall spray that included cotton plants. Just one glance at the evil cousin of okra melted snowflakes all over campus, including the invertebrate president. Adding insult to injury, at supper they served collards and -- perish the thought -- cornbread. Seems this was construed as an insult to African Americans.

Boy, have I got news for y'all. I will bet that more whites grew & picked cotton than African Americans. I know my dad did, and my grandparents on both sides till memory runneth not to the contrary. When I was a kid and into the early 1960s schools all over the south let out for two weeks in October for cotton picking, and white children were right there picking beside parents. Oddly enough, no chills go down my spine when I see a cotton stalk, other than the memory of my father's story about his daddy wearing him out with a cotton stalk during cotton picking time for clowning around when he should have been picking cotton.

More news: almost all white people in the South grew up eating collards & cornbread and, incredible as it sounds, millions of them still do every day -- with gusto. In fact, before she died Susan cooked a skillet full of crusty cornbread nearly every evening. She was famous for it, and nothing will ever make me apologize for cooking or relishing it.

We are all being played, black & white. All this snowflake & social justice warrior stuff aims only at setting us at each other's throats: Divide & conquer. I ain't buying it. And I'll be happily eating cornbread till the day I die, without the first twinge of guilt.

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
19-Sep-17 Price Change % Change
Gold, $/oz 1,306.20 -0.10 -0.01%
Silver, $/oz 17.20 0.12 0.73%
Gold/Silver Ratio 75.964 -0.558 -0.73%
Silver/Gold Ratio 0.0132 0.0001 0.73%
Platinum 950.40 -9.90 -1.03%
Palladium 905.70 0.80 0.09%
S&P 500 2,506.65 2.70 0.11%
Dow 22,370.80 39.45 0.18%
Dow in GOLD $s 354.04 0.65 0.18%
Dow in GOLD oz 17.13 0.03 0.18%
Dow in SILVER oz 1,301.01 -7.14 -0.55%
US Dollar Index 91.64 -0.19 -0.21%
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: 1,310.20      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,318.06 1,328.06 1,328.06
1/2 AE 0.50 661.15 672.90 1,345.79
1/4 AE 0.25 333.85 340.50 1,361.98
1/10 AE 0.10 134.85 138.85 1,388.48
Aust. 100 corona 0.98 1,274.63 1,284.26 1,310.20
British sovereign 0.24 306.42 311.92 1,325.05
French 20 franc 0.19 242.17 247.17 1,323.88
Krugerrand 1.00 1,320.20 1,328.20 1,328.20
Maple Leaf 1.00 1,310.20 1,320.20 1,320.20
1/2 Maple Leaf 0.50 664.93 677.33 1,354.65
1/4 Maple Leaf 0.25 333.85 340.50 1,361.98
1/10 Maple Leaf 0.10 135.28 139.63 1,396.28
Mexican 50 peso 1.21 1,563.91 1,574.91 1,306.22
.9999 bar 1.00 1,312.20 1,324.20 1,324.20
SPOT SILVER: 17.75      
SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 21.00 24.00 31.37
VG+ Peace dollar 0.77 14.50 17.50 22.88
90% silver coin bags 0.72 12,441.00 12,727.00 17.80
US 40% silver 1/2s 0.30 5,059.25 5,207.25 17.65
100 oz .999 bar 100.00 1,750.00 1,803.00 18.03
10 oz .999 bar 10.00 176.00 181.00 18.10
1 oz .999 round 1.00 17.70 18.25 18.25
Am Eagle, 200 oz Min 1.00 19.30 19.70 19.70
SPOT PLATINUM: 950.40      
Plat. Platypus 1.00 948.40 995.40 995.40
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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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