They Cannot, Dare Not Stop Inflating, and that Will Keep Driving Silver and Gold Prices to the Stars

Gold Price Close Today : 1,602.10 Gold Price Close 8-Jul : 1,541.20 Change :
60.90 or 4.0% Silver Price Close Today : 4033.3 Silver Price Close 8-Jul :
3653.6 Change : 379.70 or 10.4% Gold Silver Ratio Today : 39.722 Gold Silver
Ratio 8-Jul : 42.183 Change : -2.46 or -5.8% Silver Gold Ratio : 0.02518 Silver
Gold Ratio 8-Jul : 0.02371 Change : 0.00147 or 6.2% Dow in Gold Dollars : $
159.81 Dow in Gold Dollars 8-Jul : $ 169.77 Change : $ (9.96) or -5.9% Dow in
Gold Ounces : 7.731 Dow in Gold Ounces 8-Jul : 8.213 Change : -0.48 or -5.9% Dow
in Silver Ounces : 307.07 Dow in Silver Ounces 8-Jul : 346.43 Change : -39.36 or
-11.4% Dow Industrial : 12,385.16 Dow Industrial 8-Jul : 12,657.20 Change :
-272.04 or -2.1% S&P 500 : 1,305.44 S&P 500 8-Jul : 1,343.80 Change : -38.36 or
-2.9% US Dollar Index : 75.378 US Dollar Index 8-Jul : 75.082 Change : 0.296 or
0.4% Platinum Price Close Today : 1,775.20 Platinum Price Close 8-Jul : 1,730.50
Change : 44.70 or 2.6% Palladium Price Close Today : 795.75 Palladium Price
Close 8-Jul : 775.05 Change : 20.70 or 2.7% Every morning I drive down Suck Stem
Branch Road and just before I drive into the Green Cathedral there lives a
groundhog. I bear no animus to any groundhog, but for some crazed reason, the
groundhog sits in the ditch and waits until my car gets within about 35 feet and
at that precise moment races across the road in a suicidal game of chicken with
my 3,500 lb. Isuzu Trooper. I have observed that rabbits and squirrels, too,
will abandon a perfectly secure refuge to rush to their own destruction awaiting
in midroad. Yet this suicidal behavior can't hold a candle to human beings. We
have central banks. I missed sending a commentary last Friday, so will sum up
last week from Friday a week ago to today, Monday. Certain numbers will leap out
at you from the scoreboard: the Silver Price up 10,.4% the Gold Price up 4%, Dow
in Silver ounces down 11.4%, Dow in Gold Dollars down 5.9%. Not a good week for
stocks or dollar denominated assets. The Gold Price today reached 103% of its
last high. It's over $1,600, with Comex closing today at $1,602.10, up $12.30.
On the weekly chart 'twill hit the upper trading channel boundary about $1,650,
but $1,625 remains another ancient target. I noticed Steve Saville commented
yesterday that GOLD had been moving up 9 days straight, an awfully long unbroken
stretch. Well, today it made that ten days, yet surely some pause, some
correction must strike soon. The Silver Price returned to center stage today,
gaining 127c to shutter down Comex at 4033.3c, after a high of 4071c. That took
the gold/silver ratio down to 39.722. Silver above 4100c means the Dogs of Rally
are racing again. Stand not in the path of this juggernaut, but bear always in
your mind that it might turn at any time. Clearly silver is following gold,
actually, outrunning it, but both are being driven by institutional stupidity,
government misfeasance, central bank malfeasance, and the need to feed the
banks. Can that last forever? Ooooo. I should have said that some other way.
Every time the Silver Price approaches its last high, the shorts flee and the
bulls take the field, pushing to the next level: 3940c yields, then shoots to
4050c. I'm not opposed to buying here if you have a calm and equitable mind that
recognizes the risk of all those institutional players suddenly coming to their
senses -- or, more precisely, APPEARING to come to their senses. In the long run
it makes no difference what they do, they cannot, dare not stop inflating, and
that will keep driving SILVER and Gold PriceS to the stars. I fear, I truly
fear, that silver and gold are accelerating into that state that panicked buyers
will not look at charts or even ask prices, they will simply buy, buy, buy in
their desperate need to flee fiat currencies. Stocks today reached G$159.81
(7.731 ounces), a new low for this move and a tiny breakdown thru the bottom
support line. The DiG$ frequently makes that breakdown without following
through, but if it does then look for a speedy plunge to G$145 (7.014 oz). Dow
in Silver Ounces is verging on a breakdown through 300 oz. of silver buying the
whole Dow. Stocks spent the last four trading days steadily digging lower and
lower. Now that they have reached 12,300, they might catch on that stouter
support. On the other hand, they tried to pierce their 20 and 50 day moving
averages today (12,346 and 12,359) but didn't close beneath them. Stocks remain
the Typhoid Mary of Investment Healthcare Professionals. By the way, the new low
for the Dow in Gold Dollars whispers that either stocks are about to plunge or
gold is about to skyrocket. The US DOLLAR INDEX rose 14.8 basis points today
(0.19%) to its present 75.378. Mark, simply, that the dollar remains in an
uptrend from last Wednesday's 74.65 low and from its May 72.70 low: higher
highs, lower lows makes an uptrend. As long as the Dollar Index remains above
74.75, the trend remains in force, targetting 78. Euro struggleth still. Today
closed at 1.4110, down 0.34%. Hard to look at this chart, a jagged descent as
bad as the face of Mt. Everest, and imagine that it will turn and climb. Close
below 1.395 and 1.3913 (200 DMA) kicks the euro into the abyss. Yen has made a
classic pennant which in a sane world where central banks and governments don't
manipulate markets, points to Y76.27/$ (131.12c/Y100). Don't look for that,
however, because the Japanese Nice Government Men will be zeroing in on that
rate to make it sink. Footnote from last week's trip: if y'all are ever in
Chattanooga, do not miss eating at the Boathouse restaurant on the Tennessee
River. It is superb. The grilled squid with arugula and garlic will make you
tongue slap your jaws. Argentum et aurum comparenda sunt -- -- Gold and silver
must be bought. - Franklin Sanders, The Moneychanger The-MoneyChanger.com ©
2011, The Moneychanger. May not be republished in any form, including
electronically, without our express permission. 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 is up targeting 16:1 gold/silver ratio or $195.66;
stocks' primary trend is down, targeting Dow under 2,900 and worth only one
ounce of gold; US$ or US$-denominated assets, primary trend down; real estate in
a bubble, primary trend way down. Whenever I write "Stay out of stocks" readers
inevitably ask, "Do you mean precious metals mining stocks, too?" No, I don't.
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 outlook. I write them for
long-term investors in physical metals. Take them as entertainment, but not as a
timing service for futures.