Maria’s Note: This weekend’s guest edition comes from Postcards From the Fringe editor Tom Dyson. For longtime Diary readers, Tom needs no introduction. In 2018, Bill shared his Dow-to-Gold trading model with him. Tom was so convinced by the model, he went all in on it. He tells the story below… including what it means today in the face of the “coronacrisis”…
WEST PALM BEACH, FLORIDA – In the fall of 2018, Kate and I put our life savings into gold.
I didn’t encase our gold in concrete and send it to the bottom of the sea, but I might as well have. Why do I say that?
Because the only outcome that’ll make us sell our gold is if the Dow-to-Gold ratio goes below 5. In other words, when the ratio has its “rendezvous with destiny,” as Bill puts it.
At that point, we’ll buy stocks again. But until then, we’re not budging.
We call this the Henry David Thoreau of investment strategies. More on why below. But first…
Isolated From the Outside World
Greetings from South Florida!
Over the past two years, we’ve visited 29 countries on four continents and stayed in over 150 different hotels and Airbnbs. We travel with just a suitcase and our three kids in tow.
We’re currently in West Palm Beach, Florida, staying with Kate’s parents.
We’ve isolated ourselves from the outside world as the COVID-19 pandemic rages on… not because we’re scared of catching the virus, but because we want to do our part “flattening the curve.”
When the lockdown lifts, we’ll get back on the road.
We love this lifestyle. We feel like a little wolfpack, fending for ourselves and having a great adventure together.
It’s also been an incredibly powerful tonic for healing our family. It brought us back together, after Kate and I got divorced in 2014. And it’s showed us how to re-order our priorities for the future.
With Kate and the kids last year, somewhere near the Egypt-Israel border
Even in quarantine, we still do everything together. We go to bed together. We wake up together. We eat together. We relax together. We experience the loveliness and beauty of life together, wherever we are.
(It sounds cheesy, but for several years, I had a mental illness. I lost my fascination for life. This lifestyle changed that.)
I can’t speak for Kate and the kids. But for me, I’ve never felt happier and more engaged with life, even in the midst of this coronacrisis.
As for the investment side of our story…
Our Financial Sabbatical
In 2018, we sold all our liquid assets, drained our bank accounts, and handed back the keys to our apartments. I sold my car, all my furniture, and converted everything to physical gold and silver.
In my Postcards From the Fringe e-letter, I’ve described our approach as the Henry David Thoreau of investment strategies.
In the 1840s, Thoreau lived in a cabin in the woods for two years. He wrote a famous book about his experience called Walden.
When we made our move in 2018, it wasn’t an investment or a specific speculation to make money.
We simply decided we didn’t want to live in the financial system anymore. And so we decided to leave… to take a financial sabbatical… and go live in the “woods” for a while.
In my eyes, the whole system had started to resemble a giant and completely inappropriate experiment. I was seeing cracks everywhere – sudden air pockets in the stock market… irrational pricing… fragility.
I saw a total rejection of saving in favor of debt. I saw efforts to prop up the markets using unsound money and financial engineering.
Things like quantitative easing (QE). And artificially lowered interest rates. And huge government deficits.
The economy seemed almost like it was begging to liquidate itself. And yet the feds kept pushing it up and talking it up.
The most disconcerting part of it all is that no one seemed to care! It felt like we were riding on the Titanic, speeding through an ice field…
Nothing Has Changed
When we left the financial system, the only thing we didn’t liquidate was our 401(k). I put it in a gold ETF. And we also kept our whole life insurance policies.
Then we went traveling around the world, doing our best to ignore the news headlines and movements in the stock market. (I struggled with this. My curiosity would always get the better of me.)
Today, as I write to you, we remain in our financial “cabin in the woods.” And as I study economics and watch the financial news, NOTHING HAS CHANGED.
The government is still “managing” the economy… with more financial engineering, more unsound money, bigger deficits, and more soothing words.
The system still looks to me like the Titanic speeding through an ice field… except it’s traveling even faster now.
So we’re sticking with gold and silver until the Dow-to-Gold ratio falls below 5 again. It’s at 14.1 today.
Editor, Postcards From the Fringe
P.S. What’s next for our government, our society, and our economy? Bill just put out an urgent briefing about the crisis we’re in… and what he sees coming. It’s a MUST read. Just go right here.
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