WEST PALM BEACH, FLORIDA – I left my job almost two years ago. As longtime Postcards readers know, Kate and I sold all our things. (We’re divorced.) We hit the road with our three kids. We don’t have anywhere to live.
We left “the matrix” in another important way, too. When we left America, we drained our bank accounts and retirement accounts of cash and converted all our savings into gold and silver.
Why did we do this? We don’t want to be “in the system” anymore.
I’m not going to get into it now, but the system is unbalanced and unstable. That’s why for the past two years, we’ve been sitting on the sidelines in precious metals, until it’s safe to return to the financial system.
When it finally is safe, we’ll sell all our gold and invest in a select group of stocks. Our money will stay there – I hope – generating bigger and bigger dividends for the rest of our lives.
How will we know when it’s safe, though?
If you’ve been reading these Postcards, you know the ultimate barometer of systemic “health” is the Dow-to-Gold ratio.
The Dow is the aggregated stock price of 30 of the largest, most iconic businesses in the world.
Gold is an inert metal. It’s the investment equivalent of hiding your money under the floorboards.
By presenting these two as a ratio, I get a barometer.
I’ve looked through 100 years of stock market history. The last times the system “reset,” depending on how bad things got, the ratio went below 5.
On the flip side, when things were ripping – as they were in the late 1990s, for example – the ratio got as high as 41.
The thing about this barometer is, unlike other price series in financial markets, it doesn’t bounce around much. Once it begins a trend, it tends to stay in that trend for many years.
The charts below tell the whole story.
When we started our travels and arrived in Africa in November 2018, the barometer was above 22. Today, it’s at 13.6.
It’s falling again.
I believe this is the start of a longer trend… a signal that the system is going to break soon. Maybe it’s started to break already?
Either way, while we wait for the Dow-to-Gold ratio’s rendezvous with destiny (as Bill Bonner calls it), we remain in our financial “cabin in the woods.”
For reasons I wrote about on Friday, the system still looks to me like the Titanic speeding through an ice field… except it’s traveling even faster now.
We’re sticking with gold and silver.
– Tom Dyson
P.S. If you missed it, Bill Bonner just wrote an urgent briefing about the crisis we’re in… and what he sees coming. It’s a MUST read. Just go right here.
P.P.S. Here I am answering reader feedback when my cameraman gets an itch…
As always, send us your questions and comments at [email protected]! I’ll keep answering your questions in these little videos.