CUSTER, SOUTH DAKOTA – Money supply is growing at the fastest pace since the Civil War… according to one of my favorite stock market historians.

Meanwhile, there are supply shortages in many industries (of both goods and workers).

When soaring money supplies meet shortages, the prices of goods and wages must rise…

More below…

Life on the Road

Greetings from the Black Hills of South Dakota…

My family and I are on an epic road trip around America. We started in Florida.

First, we crossed the South. Then, we crossed the Midwest. Then, we rounded the Great Lakes. Now we’re in the Northwest.

This weekend, we hit mountains for the first time since Tennessee (the Black Hills of South Dakota). We enter our eleventh week of life on the road.

We’re pulling a little pop-up camper with us. We’ve been sleeping in campgrounds, driveways, backyards, parking lots, horse pastures, and even, once, a barn.

We’re having an unbelievable time… this is truly the happiest and most free I’ve ever felt in my life.

I’m writing to you from tonight’s campground – the Roost Resort – just outside Custer State Park.

(A reader of these Postcards stayed here recently and recommended it to us through the mailbag section. We weren’t able to get site #11 unfortunately, but still, we love it.)

Here we are eating dinner…


Dusty, Miles, and Penny at our Black Hills campsite

As I’ve written many times in these Postcards, the U.S. government NEEDS inflation to reduce the pile of money it owes. It’s the only way it can continue without slashing its budget.

First, it will stimulate inflation to 4% or 5%. Then, it will hold interest rates on its debt at 2% or 3% for a couple of decades, effectively taking a couple of percent a year from its creditors (instead of paying its creditors interest) and gradually reducing the total debt load.

This is the plan, at least. (They used this exact same plan after WW2.)

Economists call this “financial repression,” and it’ll turn government bonds into “certificates of confiscation.”

I have my doubts things will turn out the way they hope, but that’s another conversation.

Anyway… one of my favorite financial thinkers I follow – stock market historian Russell Napier – said this in an interview last week…

We are currently in the worst recession since World War II, and yet we observe the fastest growth in broad money in at least three decades. In the U.S., M2, the broadest aggregate available, is growing at more than 23%. You’d have to go back to at least the Civil War to find levels like that. In the Eurozone, M3 is currently growing at 8,9%. It will only be a matter of months before the previous peak of 11.5% which was reached in 2007 will be reached. So I’m not making a forecast, I just observe the data.

Here’s the link to Napier’s full interview.

Rationing in America

Meanwhile, there are acute shortages throughout the U.S. economy.

I’ve already reported on the difficulty fast-food restaurants, convenience stores, and meat packing plants are having recruiting employees.

This week The Wall Street Journal reports 10% of packaged goods, beverages, and household goods were out of stock. Some parts of America are using rationing.

“Popular items such as flour, canned soup, pasta, and rice remain in short supply,” it reports.

Russell Napier – who I quoted above and who has been predicting disinflation for the past two decades – says he now expects 4% headline inflation in the U.S. and most of the developed world by 2021.

If he’s right, and assuming central banks cap interest rates on government debt (financial repression) once it shows up, there’s going to be an epic investor stampede out of the bond market and into commodities and stocks…

We’ll see.

– Tom Dyson

P.S. Today we visited Mount Rushmore. I found the experience underwhelming. While I appreciate the artistic endeavor, I found it a little “cheesy” as a tourist attraction. And I found it very offensive given the history of the Black Hills, which Dan Denning explains, in the mailbag, below.


Mount Rushmore

P.P.S. Thank you to everyone who writes in and invites us to camp on your property. We will shamelessly accept all invitations, wherever possible. Please keep ‘em coming at [email protected]. Also, I will never reveal your identity or your personal information when I republish your messages…

Like what you’re reading? Send your thoughts to [email protected].


A word from Dan Denning on The Black Hills… feedback on the Dysons’ stop in Valentine, Nebraska… And more trip suggestions for Tom…

Dan Denning’s comment: The Black Hills are a great place for a little lesson in monetary history. Short version:

  1. The Prussian-led German coalition defeats France in the Franco-Prussian War, 1871-1873.

  2. The German coalition turns French reparations into the basis of a new country (unification) with new money (implementation of the gold standard, demonetization of Silver Thaler coins).

  3. German demonetization causes American demonetization (end of bi-metalism) and both Long Depression in the UK and the Panic of 1873.

  4. Gold is discovered in the Black Hills. America now needs gold.

  5. General George Armstrong Custer is sent to South Dakota to verify gold discovery.

  6. In 1851, the Treaty of Fort Laramie, giving the Sioux, Arapahoe, and Cheyenne autonomy (settler-free) in their lands, is thrown into the trash by Ulysses S. Grant because of gold discovery.
  7. Custer is sent back out to the Sioux territory to pacify the rebellion after treaty abrogation. The 7th Cavalry is largely destroyed by Crazy Horse and his coalition.

  8. Native people are largely subjugated and herded onto reservations.

  9. The Homestake Mine in Black Hills produces 10% of the world’s gold for the next 125 years.

  10. The son of a Danish immigrant carves a monument to the American government into the sacred lands of the Sioux to rub their face in the fact that money and power always go hand-in-hand, and that gold is money.

P.S. My prediction is that tearing down monuments moves into tearing down the Constitutions. Washington and Jefferson’s greatest monuments aren’t statues or buildings. It’s in the separation of powers and limited government in the Constitution.

Enjoy Mount Rushmore before someone tries to blow it up or drench it with blood. But it’s really the ideas (not the stone) that are under attack. They’re worth more than the paper they’re printed on. They may not last much longer at this rate.

Reader comment: Valentine is growing fast, but as a city, it’s a good cross-section of America. Many, if not most, of the dwellers have come from farms and are country folk, living a slower-paced city life than many other cities. They are dear, good-hearted folk. Best of the best to you. P.S. In this health crisis, it might be good to eat some good organic, nutritious food to build your immune systems. Perhaps it’s available in farm country, from some small farms.

Reader comment: I was surprised at your impressions of Valentine. Have you read the ratio of acres to people to cows in Cherry County? People aren’t in town because it’s haying season. Lots of times, you can’t find a parking place. Those bruised cars out cruising (social mainstay) very well might be carrying fifth- and sixth-generation ranchers with 20-40k-acre ranches, paid for and grooming the next generation.

Don’t worry about crime while going to Main Street. Most of the houses in town aren’t even locked! Sorry you aren’t able to explore the real natural beauty of the area. Safe travels.

Tom’s response: Thanks for the clarification. I guess we were feeling a little vulnerable on our own in that park and we found the all-day-long “cruising” past our camp a little disconcerting.

Reader comment: Hi Tom and family, love reading about your travels and adventures. I would like to invite you to enjoy some of my hometown hospitality. Scottsbluff is the western gateway for the pioneer settlers along the Oregon Trail. Tons of history and a place set up camp at our house.

Tom’s response: Thank you! We’d love to accept. Currently not planning on going as far west as Oregon, but our plans are constantly evolving. I’ve made a note of your email address should we make it to Oregon. Thanks again!

Reader comment: I suggested you stop in Omaha on your way to SD, but you didn’t. Lots of history here for the kids to learn about. Besides, I wanted to pick your brain for 10-12 hours over hamburgers on our deck. Now you are in Valentine. Been through there many times on Highway 20, headed to Sheridan, WY to our summer cabin in the Big Horns. Used to stop and fish for trout at Long Pine, just west of Valentine. Thanks for all your daily updates. What a great experience for the kids.

Tom’s response: Sorry we missed you. Omaha would have been fun, too, but we just can’t see everything, and we wanted to get to the Badlands. Hamburgers on the deck sound great. Next time?

While paid-up subscribers thank Tom for his investment recommendations in Tom’s Portfolio

Reader comment: I have an IRA and have now put plenty into gold investments. I have seen many model newsletter portfolios since the beginning of the year, and really yours is great. Thank you.

Definitely try to get to SW Montana in your travels. There is a ton of history here as it was not named the Treasure State for nothing. Would love to hook up with you and your family sometime if you are in the Butte area. Given your interest in metals, there are many places around here that your family would definitely enjoy. Thanks for the inspiration.

Tom’s response: Thanks for writing in. We’ll definitely be coming through Western Montana. I’ll look you up in about a month…

Reader comment: Tom, I want to thank you for your advice. I am pleased so far, with my investments in gold and tankers. Prior to my encounter with you, I had an aversion to investing in gold, which I considered a wild thing to do. But thanks to your advice, I invested in physical gold and silver, the “kickers,” royalty and streaming companies, and shares of major and junior miners. That is diversification within diversification!

Your road stories are great. It is almost like being with you and your family, wherever you are! Congratulations for taking steps “outside the box” in both professional and family life. You remind me of a centuries-old Spanish poem, “Narrow is the road taken by wise men, so few will listen, so few will follow!” Life is a long trip, and the fun is on the road itself, not on arriving at the destination! I look forward to receiving your continuous advice. Bon voyage!!!

Tom’s response: Thank you for these kind and encouraging words… and for the lines from the old Spanish poem. As always, please keep writing us at [email protected].