Gold Price Close Today : 1806.90 Change : 30.20 or 1.7% Silver Price Close
Today : 40.087 Change : 0.969 or 2.5% Gold Silver Ratio Today : 45.07 Change :
-0.345 or -0.8% Silver Gold Ratio Today : 0.02219 Change : 0.000168 or 0.8%
Platinum Price Close Today : 1782.00 Change : 8.00 or 0.5% Palladium Price Close
Today : 720.00 Change : 6.00 or 0.8% S&P 500 : 1,202.09 Change : -2.00 or -0.2%
Dow In GOLD$ : $130.52 Change : $ (2.12) or -1.6% Dow in GOLD oz : 6.314 Change
: -0.102 or -1.6% Dow in SILVER oz : 284.60 Change : -6.85 or -2.4% Dow
Industrial : 11,408.66 Change : 7.65 or 0.1% US Dollar Index : 76.99 Change :
-0.154 or -0.2% On Thursday and Friday, 22 and 23 September, I will be
travelling and so will not be sending out commentaries. God willing, I will
return on Monday, 26 September. What does IMF-imposed austerity look like?
Here's a hint from an astute friend in Greece. I asked him if the Greek
government would default, since he had several months ago written that default
was a question of when, not if. He wrote: "We have already been under a
'controlled bankruptcy state' for a few months. "We are now watching the
epilogue of the Greek drama, and I think it will not last much longer. Actually,
it can't. Practically. " * The state has imposed ridiculous anti-constitutional
taxes in order to fill fiscal holes, people simply cannot pay any more. " * Real
unemployment (part-time jobs do not count) is 30% already. " * One out of two
Greek families is touching the "being poor" limit. " * The prime minister
declared that the government intends for every family to have at least one
family member with a job. (!) " * Our economy is wrecked, we do not produce,
only import. " * There are cuts everywhere, life is getting more expensive, but
salaries get lower. Imagine life getting about 7-8% more expensive in a year and
salaries/retirements to get cut about 20%. Add to this some outrageous "special"
taxes. People simply cannot take it. "I cannot estimate how far this can go,
soonest is by the end of this year, latest seems sometime within the next year."
Just apply those same "austerity measures" to yourself right here. Is anybody
surprised that Greeks have been pulling their money out of the banks and buying
gold? Another 7-league boot fell late yesterday when Italian government debt was
downgraded from A+ to A rating. Italian government blustered, but nobody was
much surprised. Euro actually rose, a classic case of buy the rumor, sell the
news. What frustrates me so much is that none of these measures make even baby
steps toward reforming these economies. Nobody ever addresses the
presuppositions underlying their failures, namely, that governments OUGHT to run
economies, that prosperity can be accomplished by government spending and
borrowing (government and private), that borrowing, flipping burgers, and
selling each other computer programs can really replace PRODUCTION, real
production, in an economy. Wealth of the world begins with the things men take
out of the ground. As that processes thru the economy, it creates income for all
who handle it. But what happens when production is shipped overseas? How is the
lost income replaced? Our Rulers answer is, borrowing. Ask the Greeks how well
that works. Mercy, ask the Americans! Nice Government Men were busy painting the
tape today. All the stock indices dropped slightly, while the Dow alone gained
an insignificant 7.65 points (0.07%) to close 11,408.66. S&P lost 2 (0.17%) to
close 1,202.09. Dow tried all day to get through the same 11,550 resistance that
stymied it on Friday, but in vain. Wasted a lot of buying power trying, though,
and has traced out on a 5-day chart something that looks remarkably like a
double top. Longer term chart is choppy and indecisive, but looks to be
meditating another, larger drop. US dollar index fell 15.4 basis points today
(0.2%) to 76.992, yet it remains above its 20 day moving average (75.51) and 50
dma (74.9) and 200 dma (76.12). That, and a stirring rise in the last 3 weeks
pretty well defines a rally. The Franken-currency, the euro, rose 0.68% to
1.3699 today. Meaningless. It's falling down the wall like some alien slime
monster in a Grade B movie from the 1950s, with little hope of rallying any time
soon. Yen is giving the Nice Government Men fits, refusing to get with the
program and fall. Closed today at 130.86c/Y100 (Y76.42 = $1). The GOLD PRICE is
playing the same tricks on us it played in mid-August when it posted a downward
key reversal and upside key reversal back to back. Yesterday's break should have
taken it lower, but instead it gained $30.20 today (versus losing $35.80
yesterday) to close Comex at $1,806.90. The breakdown thru the uptrend line
remains, but today the GOLD PRICE closed smack under it. It can clamber above
that line, it will scramble for higher ground. Gold abideth still beneath its 20
dma ($1,823.20), and that wide spread between the 50 dma ($1,737.19) and the 200
dma ($1,517.89) is begging to be narrowed. Momentum, in other words, points down
but gold keeps on refusing to give up and drop. Must-hold support remains
$1,765. Critical resistance above is $1,825. Break either of those lines, and
gold will travel much further in the direction of the break. The SILVER PRICE
built on yesterday's bounce off 3900c support and reached as high as 4026. Like
gold, silver contradicted yesterday's 167.1c loss by regaining 96.9c and closing
Comex at 4008.7c. It weakened off in the aftermarket, however, to 3975c, not an
encouraging move. Even tho the SILVER PRICE rose today, it remains BELOW its
rising trend line, which of course constitutes a breakdown. It also lingers
below its 20 dma (4116c) and even 50 dma (4032c). Absent a rise shooting through
4250 and then 4400c, silver will see lower prices. Having said all that, I still
note that a crisis and panic is slowly sizzling in Europe while the cooks are
out on the porch smoking and piddling. That panic could catch fire and burn out
of control at any time, so don't get too cocksure that silver and gold will fall
sharply. If that crisis fizzles instead of sizzles, they'll drop. Otherwise fear
will keep buoying them up,. Must hold support for silver is 3875c. On 20
September 1873 began the Panic of 1873, which introduced a severe international
economic depression that lasted until 1879. Not much to anybody's surprise, it
was caused by speculation financed by the banks. It began with the
demonetization of silver in the US ("The Crime of '73") and following
demonetization by the new German empire. Wild optimism in Germany and Austria
with the founding of the new Reich provoked more speculation, and it broke in
the US with the failure of the Northern Pacific Railway that declared bankruptcy
on 18 September. On 20 September that took down Jay Cooke and Co., a major New
York banking establishment that today would be classed as "too big to fail."
What lesson can we learn from this? That the so-called business cycle and
depressions are really not anything more than a "banking cycle" where the banks
pump out credit then withdraw it when the bubble bursts. Where have we heard
this story before? 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.
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