The Moneychanger
Daily Commentary
Tuesday, 26 September a.d. 2017 Browse the commentary archive

A few items have piled up in my mind. I want to clear those first. There's not much room up there.

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DECENTRALIZATION. About 1650 a centralizing trend began that consolidated nations into states, centralized most power in governments, and eventually left the world with only two empires, the US & Soviet. With the collapse of the Soviet Union the trend peaked, since you can't get more centralized than one empire. For the next 400 years of so power will flow AWAY from centers and toward the periphery, toward communities, voluntary organizations, and individuals. Yes, freedom IS coming.

The turn is slow, but accelerating, and evidence springs up constantly. Lately it's secession movements across the world, be especially in Catalan and Kurdistan (not to mention Scotland, Hawaii, Cascadia, Quebec, etc.) These were inconceivable 30 years ago. Add to that the decentralizing if confused "populist" trend in politics seen in Brexit, Trump's election, & Merkel's recent betting in German elections. Rough as it may get, for the next 400 years humanity will decentralize power. It will get rough because, as Joe Stalin observed, "Ruling classes never voluntarily leave the stage of history."

MERKEL. She was trounced in the elections. "Right wing" Alternative fuer Deutschland took 13% of the votes & came in 3rd, left SPD had its worst results since WWII. Clearly the centralizing of Europe is beginning to call forth rejection EVEN in Germany. Can the euro and European Union survive all the centrifugal forces, not to mention the puking sick financial system, banks, and huge debt government and private? Probably not, though it won't happen tomorrow. Merkel's defeat likely put a top on the euro for a while.

TODAY'S MARKETS: Yellen blathered & blew in Cincinnati today but her breath wasn't sufficiently strong to raise stocks. Dollar did rise a bit, and silver & gold rolled down.

US dollar index rose 33 basis points (0.4%) to 92.79. Don't y'all get excited, this could keep up several weeks as the dollar stages a business-as-usual counter trend rally. Next big move, however, will point earthward.

Stocks were confused. Dow lost 11.72 (0.5%) to 22,284.32 while the SP500 rose 0.18 to 2,496.84. Although technically they have broken out to the upside, neither index has been able to capitalize on that breakout and continue rising. Doesn't inspire much confidence. King-size tumble coming.

I reckon I spoke too soon & smugly yesterday. Comex silver today lost 25.5¢ (11.5%) to 1680.4¢ & gold peeled off $9.80 (0.8%) to $1,297. Worse than that, the gold/silver ratio broke out upwards. Here's the picture,

The human tendency is to let your emotions slosh up and down with markets, so let me try to shake that off.

Look at silver first, up close

Silver make its lowest close for this move, as well as a new intraday low at 1682¢. This brings silver, beneath its entwined 50 & 200 day moving averages, slap down on the uptrend line from the December 2015 low. Remember, friends, it's silver. It nearly always exceeds what you expect, whether travelling upwards or downwards. If the uptrend line doesn't contain it, it could fall to 1650¢. At least today's low occurred on falling volume, so the move should be running out of steam.

Now check out gold,

Gold's range was a little smaller than yesterday's, but it closed right in that $1,296 - $1,306 support/resistance range. Gold must drive better than this, soon, or it will lurch to $1,280 - $1,272.

Y'all shoot not the messenger! I only report what I see.

On 26 September 1890 the US mint stopped striking $1 and $3 gold coins and the three cent piece. A 3¢ piece an a $3 gold piece make no sense at all unless you know a postage stamp cost 3¢ & a sheet of 100 cost $3.

Argentum et aurum comparanda sunt —
Silver and gold must be bought.

— Franklin Sanders, The Moneychanger

Your source for gold and silver. Read our latest reviews and testimonials.
Market Snapshot See more charts and market data
26-Sep-17 Price Change % Change
Gold, $/oz 1,297.00 -9.80 -0.75%
Silver, $/oz 16.80 -0.26 -1.49%
Gold/Silver Ratio 77.184 0.579 0.76%
Silver/Gold Ratio 0.0130 -0.0001 -0.75%
Platinum 940.20 -15.50 -1.62%
Palladium 910.35 -4.35 -0.48%
S&P 500 2,496.84 0.18 0.01%
Dow 22,284.32 -11.72 -0.05%
Dow in GOLD $s 355.17 2.48 0.70%
Dow in GOLD oz 17.18 0.12 0.70%
Dow in SILVER oz 1,326.13 19.14 1.46%
US Dollar Index 92.46 0.49 0.53%
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: 1,294.30      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,307.24 1,317.24 1,317.24
1/2 AE 0.50 653.12 664.87 1,329.73
1/4 AE 0.25 329.79 336.44 1,345.77
1/10 AE 0.10 133.21 137.21 1,372.10
Aust. 100 corona 0.98 1,259.16 1,268.67 1,294.30
British sovereign 0.24 302.70 308.20 1,309.25
French 20 franc 0.19 239.23 244.23 1,308.14
Krugerrand 1.00 1,304.30 1,312.30 1,312.30
Maple Leaf 1.00 1,294.30 1,304.30 1,304.30
1/2 Maple Leaf 0.50 656.86 669.26 1,338.51
1/4 Maple Leaf 0.25 329.79 336.44 1,345.77
1/10 Maple Leaf 0.10 133.64 137.99 1,379.86
Mexican 50 peso 1.21 1,544.93 1,555.93 1,290.48
.9999 bar 1.00 1,296.30 1,308.30 1,308.30
SPOT SILVER: 16.80      
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 11,758.18 12,044.18 16.85
US 40% silver 1/2s 0.30 4,777.53 4,925.53 16.70
100 oz .999 bar 100.00 1,654.50 1,707.50 17.08
10 oz .999 bar 10.00 166.45 171.45 17.15
1 oz .999 round 1.00 16.75 17.30 17.30
Am Eagle, 200 oz Min 1.00 18.35 18.75 18.75
SPOT PLATINUM: 940.20      
Plat. Platypus 1.00 938.20 985.20 985.20
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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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