The Moneychanger
Daily Commentary
Thursday, 21 December a.d. 2017 Browse the commentary archive

One can hardly conceive any limit to the perverse outcomes of central bank & government meddling in the economy. Every tiny interference spawns a fairy ring of poison toadstools, popping up in all directions.

Think only of the Fed created bond bubble. Trying to do a little good, they did lot of evil. By announcing they were going to suppress interest rates indefinitely, they attracted speculators who were virtually guaranteed a profit by merely buying and holding bonds. If a little is good, a lot is better: success begets excess. The Fed literally TRAINED the market to expect lower interest rates and higher bond prices forever -- a plateau of permanently high bond prices.

Now into the bond bubble they raise their discount rate, with heavily-breathed promises of more rises in 2018, while congress passes a tax "reform" bill that will add umpteen point umpty trillion to the US government deficit -- terrorizing the market & sending interest rates on a moon shot. I have not mentioned what the Fed's balance sheet reduction by selling bonds will accomplish in the way of deflation. When they sell bonds, they reduce the money supply.

What a wreck! Like turning a chimpanzee loose to fix a grandfather clock.

Bitcoin continued to sank today. CBOE futures closed $15,325, down $1,125 or 6.8%. currently shows $15,294.76, down $1,159.96 or 7.1%. Since the 17 December high at 19,694.68 Bitcoin has dropped 17.7%. Yassuh! THAT is volatility. Whether we've seen the peak yet, who knows? Certainly not this nat'ral born durn fool.

Stocks rose today, roughly regaining their last two day's losses. Dow rose 55.64 (0.23%) to 24,782.29. SP500 clumb 5.32 (0.2%) to 2,684.51. Folks, the optimism waxeth not hotter than it is now. Somewhere out in the near future is a man in a camel hair robe warning that the end is nigh.

Today the US dollar index continued its bold march downward by dropping another 11 basis points (0.12%) to 92.85. The first test comes about 92.50 where support comes from the shoulders of the upside down head & shoulders. Should the dollar index step through that floor, the really important support lies below at 91. Any close below that bring free fall.

Comex gold rose $1.20 to $12,67.30. Silver lost 3.6¢ to 1615.2¢.

Two days before the holidays markets are going dead because traders are emptying out their positions. Nobody wants to go home with a big position over a three day holiday. Next week may be quiet as well, but that could go either way. Just keep remembering that silver & gold have turned a corner with those improved Commitments of Traders reports.

Today's trading on gold's EOD chart here, took gold barely above the 200 day moving average. Positive, but mighty lazy. Indicators call for higher prices.

Silver is treading on its 20 day moving average and has made a fine advance since the low on December 12. Look, Up-pointing indicators promise higher prices.

Just to make dead certain sure y'all understand where I stand, because I am often so mealy-mouthed and ambiguous, gold and especially silver are preparing a spectacular rally. As the bubbles pop, scared money will run into metals and drive them even faster.

This is my last commentary before Christmas. My son Worth lost his wife to an auto accident in 2012, and he is getting married tomorrow. I love y'all, but that demands my attention and attendance, with rejoicing.

May God bless each of you as you celebrate the most merciful and unspeakably precious Incarnation of Our Lord Jesus Christ. Hug your spouse and your children, laugh & rejoice. God has solved The Big Problem -- with a baby.

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-Dec-17 Price Change % Change
Gold, $/oz 1,267.30 1.20 0.09%
Silver, $/oz 16.15 -0.04 -0.22%
Gold/Silver Ratio 78.461 0.249 0.32%
Silver/Gold Ratio 0.0127 -0.0000 -0.32%
Platinum 918.80 -18.00 -1.92%
Palladium 1,043.00 6.00 0.58%
S&P 500 2,684.51 5.32 0.20%
Dow 24,782.29 55.64 0.23%
Dow in GOLD $s 404.24 0.53 0.13%
Dow in GOLD oz 19.56 0.03 0.13%
Dow in SILVER oz 1,534.32 6.85 0.45%
US Dollar Index 92.85 -0.11 -0.12%
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: 1,267.10      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,286.11 1,309.55 1,309.55
1/2 AE 0.50 645.71 668.40 1,336.79
1/4 AE 0.25 326.02 340.53 1,362.13
1/10 AE 0.10 132.94 138.75 1,387.47
Aust. 100 corona 0.98 1,232.70 1,242.01 1,267.10
British sovereign 0.24 300.51 313.51 1,331.83
French 20 franc 0.19 234.20 238.20 1,275.85
Krugerrand 1.00 1,273.44 1,283.44 1,283.44
Maple Leaf 1.00 1,275.10 1,291.10 1,291.10
1/2 Maple Leaf 0.50 728.58 665.23 1,330.46
1/4 Maple Leaf 0.25 323.11 338.95 1,355.80
1/10 Maple Leaf 0.10 134.31 138.11 1,381.14
Mexican 50 peso 1.21 1,516.16 1,527.16 1,266.62
.9999 bar 1.00 1,262.10 1,280.10 1,280.10
SPOT SILVER: 16.11      
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 11,121.83 11,407.83 15.96
US 40% silver 1/2s 0.30 4,559.23 4,706.23 15.95
100 oz .999 bar 100.00 1,590.50 1,625.50 16.26
10 oz .999 bar 10.00 162.55 167.55 16.76
1 oz .999 round 1.00 15.91 16.51 16.51
Am Eagle, 200 oz Min 1.00 17.36 18.11 18.11
SPOT PLATINUM: 918.80      
Plat. Platypus 1.00 933.80 963.80 963.80
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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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