DRIGGS, IDAHO – Greetings from our Teton Mountains bolthole…
In this week’s Friday mailbag edition, we discuss the restructuring of the U.S. dollar system… fair premiums to pay for gold and silver… and a controversial theory about China’s role in the COVID-19 pandemic…
Reader comment: Hi Tom, just want to point out something that many people do not know (they don’t teach it in our public schools). Whenever I talk about the debasement and eventual crash/destruction of the U.S. dollar, the average person says, “That can’t happen here, this is America.”
Call it a collapse, or call it a “reorganization,” but it’s happened twice in our nation’s history (and we are on our fourth version of the dollar today). Rest assured, like the Continental and Greenback before it, the current version of the dollar WILL collapse. The dollar’s days are numbered. And like you, I’m in gold (have been on the buy side since 2000).
My one concern is what they will replace the dollar with. I fear that it will be “cashless” and then we are all doomed slaves.
I don’t think they’ll replace the dollar. More likely, they’ll restructure the system away from using Treasury bonds as the world’s reserve asset and to some sort of neutral settlement asset, like a basket of currencies and gold.
Reader question: Tom, I want to add to my physical silver position, but the premiums are over 20% to spot. If I recall, you have said you wouldn’t pay more than 4% or 5% over spot. It appears the market isn’t offering that.
Would you sit on the sidelines in this scenario, while silver continues to go up? Or would you determine that this is indeed current “fair” pricing and buy in anticipation of even higher prices ahead?
I suggested not paying over 4% for gold and 10% for silver. I just did a quick check of pricing and you should have no problem finding metal below these premiums.
Reader question: Eric Wade [at Stansberry Research] made a point for bitcoin being rarer than gold, but I think he’s ignoring the fact that bitcoin is just one of a multitude of cryptocurrencies, making their supply effectively unlimited, akin to fiat money. So it seems to be purely a speculation rather than an investment or store of value?
Electrons are unlimited in supply.
Reader comment: Love reading about your adventures and time with the family exploring the world and now the U.S. My thinking, maybe crazy and a conspiracy theory, is that China developed the virus as its economy was sinking, released it on the world to tank its economies, locked down the affected area, and contained the virus.
China has effectively cured it. Now, while the other economies are attempting to survive, they take over and are now thriving. Amazing!!
If this was true, it’d be the greatest military campaign ever conducted. Was the virus engineered in a lab? I guess we’ll never know…
Reader question: How surprised I was to see you going to Florida for the holidays. Initially, I thought you were fed up with the cold weather of Idaho. But I couldn’t figure out doing the return trip of 5,200 miles just for the weekend.
It isn’t worth the trouble and risks of driving this cross-country round trip in one week. Could you have used some of your fortunes to get plane tickets for the whole family? What use is a gold coin?
We figured driving would be cheaper and safer. It was a long drive though…
Reader comment: I’m sorry that I didn’t write sooner. I’ve followed your work, Tom, for many years – since The 12% Letter and then followed you to your work at Palm Beach Research Group with Mark Ford. Some of my best investments in my portfolio today are because of your recommendations.
I’m always intrigued with your thoughts and writing. With so much respect for you and your family, I would have made an effort to host you, or at least dine with you, as you traveled through Oklahoma on your way back to Idaho.
I have worked in oil and gas for 20 years and my family and I currently live in Tulsa. Sorry I missed you this time around, but should you venture this way again, it would be an honor to meet you. Safe travels the rest of the way back to Driggs.
Thank you for this very kind invitation and for your encouraging words. We would definitely have taken you up on your offer (we stayed the night in Tulsa at a Super 8 motel by the highway), but we were in a rush to get back to our cabin in the mountains and we crossed America like we were competing in the Cannonball Run…
Reader comment: Hopefully this email catches you in time! I live in Stillwater, Oklahoma, just 30 minutes from Cushing. I would like to meet you and your family, if possible. Thanks. Hope to hear from you.
Aww shucks. Thanks for the invitation. Sorry we missed you this time. We’ll be driving east again in the spring… Maybe we can meet up then?
As always, please keep sending us your comments and questions at [email protected]! I’ll answer as many as possible in future Friday mailbag editions.
– Tom Dyson