The Moneychanger
Daily Commentary
Tuesday, 12 December a.d. 2017 Browse the commentary archive

YIPPEE! I found the recipe for Susan's "flourless" Christmas nut cake. She made them every Christmas to give to the folks who through the year help us at the bank and post office, and she used to delight in telling them that she didn't use any flour to make the cake. It's filled with nuts and coconut and butter and eggs and one secret ingredient. If y'all would like the recipe, send an email with "Susan's recipe" in the subject to franklin@the-moneychanger.com.

Little change in today's markets.

US dollar index was maybe the exception. It rose 22 points through 94 resistance and ended 0.2% higher at 94.06. Whether it can build on this breakout-let we'll see.

Nasdaq, Nasdaq 100, and Russell 2000 all fell while the S&P rose slightly (4.12 or 0.15% to 2,664.11) and the Dow rose robustly (118.77 or 0.5% to 24,504.80).

This is an avalanche waiting to happen. Widespread belief is that the Fed will raise rates Thursday, which can't really be good for an ageing stock bull -- not to mention the possibly deflationary effects of reducing their balance sheet. Nuts. Just all nuts, & I don't mean "mixed, salted."

CBOE spot month Bitcoin contract rose 550.26, a modest 3.3% to 17,350.26. Coindesk.com shows at this writing 17,404.60, up $704.92 or 4.22%. Further sayeth the commentator naught.

Whoa! I just found something. CBOE announced Initial speculator margin rate for Bitcoin futures is a gargantuan 47%, with a 43% maintenance margin (you put down 47% and must maintain 43%). Hedger/Member rates are 43% and 43%. Those are some kind of STIFF margins.

Selling pressure on gold and silver is climbing as the Fed's expected discount rate draweth nigh on 14 December. Comex gold tripped $5.20 (0.42%) to end at a new low close for the move, $1,238.50. Silver dropped $11.5¢ (0.73%) to 1558.24¢.

My mind is divided. Can't figure out whether all the speculators have already sold silver & gold working up to the FOMC announcement, or whether the announcement may draw in yet more selling. Ultimate outcome, after a few days to settle down, will be better for metals as it will remove that overhanging cloud.

On 12 December 1791 the Bank of the United States opened. This was a project of the banking sharks like Hamilton who wanted a national bank so they could feed off the nation. This one was so ridiculously undercapitalized that they hired a couple of men with a dolly to raise silver bags up on a dumb waiter, roll them showily across the lobby, then carry them downstairs to complete the propaganda circle again. The heart of larceny has not changed over the years, computers notwithstanding. However, banks and bankers in those days were suspect to decent people, whereas today they are lauded & fawned over as if they really contributed some value to society, like playing basketball. As John D Rockefeller learned, money not only buys publicity, it buys politicians, too.

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
12-Dec-17 Price Change % Change
Gold, $/oz 1,238.50 -5.20 -0.42%
Silver, $/oz 15.58 -0.12 -0.73%
Gold/Silver Ratio 79.483 0.251 0.32%
Silver/Gold Ratio 0.0126 -0.0000 -0.32%
Platinum 874.80 -17.10 -1.92%
Palladium 1,015.70 3.60 0.36%
S&P 500 2,664.11 4.12 0.15%
Dow 24,504.80 118.77 0.49%
Dow in GOLD $s 409.01 3.68 0.91%
Dow in GOLD oz 19.79 0.18 0.91%
Dow in SILVER oz 1,572.64 19.09 1.23%
US Dollar Index 94.06 0.22 0.23%
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: 1,243.30      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,268.17 1,284.95 1,284.95
1/2 AE 0.50 633.57 655.84 1,311.68
1/4 AE 0.25 319.89 334.14 1,336.55
1/10 AE 0.10 130.44 136.14 1,361.41
Aust. 100 corona 0.98 1,206.50 1,218.68 1,243.30
British sovereign 0.24 294.87 307.87 1,307.85
French 20 franc 0.19 229.80 233.80 1,252.29
Krugerrand 1.00 1,247.03 1,257.03 1,257.03
Maple Leaf 1.00 1,251.30 1,267.30 1,267.30
1/2 Maple Leaf 0.50 714.90 652.73 1,305.47
1/4 Maple Leaf 0.25 317.04 332.58 1,330.33
1/10 Maple Leaf 0.10 131.79 135.52 1,355.20
Mexican 50 peso 1.21 1,483.93 1,494.93 1,239.89
.9999 bar 1.00 1,247.65 1,255.30 1,255.30
SPOT SILVER: 15.66      
SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 22.50 25.50 33.33
VG+ Peace dollar 0.77 15.00 18.00 23.53
90% silver coin bags 0.72 10,907.33 11,193.33 15.66
US 40% silver 1/2s 0.30 4,426.48 4,573.48 15.50
100 oz .999 bar 100.00 1,545.50 1,580.50 15.81
10 oz .999 bar 10.00 158.05 163.05 16.31
1 oz .999 round 1.00 15.46 16.06 16.06
Am Eagle, 200 oz Min 1.00 17.16 18.66 18.66
SPOT PLATINUM: 874.80      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Plat. Platypus 1.00 889.80 919.80 919.80
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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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