TSURUHASHI AIRBNB, OSAKA – Kate and I have been discussing our plans…

“What do you think about Iran?” I asked.

Kate raised an eyebrow.


“Yes,” I said. “Perhaps we go live there next year…”

From a Tatami Mat

Greetings from Osaka. I’m writing you from our little Airbnb. We’ve just eaten a supper of sushi and gyoza at the kitchen table, and now the kids are watching a movie.

This Japanese house has paper-thin walls, and it’s cold. I’m trying to keep warm by writing to you from bed. Actually, it’s not a bed. We’re staying in a traditional Japanese house, and my bed is a tatami mat on the floor with lots of blankets.

Great Wonders

Kate and I have been in “Neverland” now for 18 months, traveling the world, seeing the great wonders, staying in unique hotels and guesthouses, eating incredible food, meeting interesting people, and generally not having a care in the world. The “Endless Vacation,” we call it.

Soon, however, we must return to Earth. Our re-entry point will be in January, in Baltimore, where I’m going to catch up with Dan Denning and Bill Bonner. We’re going to collaborate on something together.

It’s funny we’re landing in Baltimore. Almost poetic. Baltimore is one of the world’s grittiest, most degenerate cities, and we’ll be arriving in the dead of winter there. It’s like the “anti-Neverland.” Expensive, dangerous, cold, and grim…

But actually, I love Baltimore. It’s where Kate and I first met, and we have many dear old friends and memories there. We can’t wait to show the kids all our old hangouts, for example.

We’ll stay in Baltimore for a while — no longer than three months — and then we’ll go somewhere else.

Living Like Millionaires

I want to go to Iran.

Iran is very cheap. They have hyperinflation, and their currency is the world’s third weakest. (Venezuela has the world’s weakest currency. Zimbabwe has the world’s second weakest.) We could probably live like millionaires in Iran for less than $1,000 a month.

But unlike Venezuela and Zimbabwe, Iran is safe. Otherwise, it’d be a deal breaker for us. We will never go somewhere where we could easily get robbed or assaulted. Iran is a strict Islamic country, so crime is extremely rare.

It’s also a beautiful country, and Iranians are said to be the most welcoming and hospitable people. It’s also warm. I imagine we’d have an incredible time living there for a few months…

Then, after Iran, I want to live in Turkey or Pakistan for a few months. For the same reasons.

After Turkey or Pakistan, I want to go to Argentina or Chile for a while. Their currencies have also devalued. We could choose a beautiful small town like Cafayate in Argentina. We’d rent an apartment on the main square and settle down for a few months.

“What do you think?” I said to Kate.

“Hmmm,” replied Kate. “Can I think about it?”

Crazy in Osaka

A man yelled at us yesterday.

We’d just arrived in Osaka, and we were changing trains. We were going down an escalator to a railway platform. We were standing on the left, because that’s the custom in Japan when you stand on an escalator. (The Japanese are fastidious about this.)

A man stepped on behind us. He started yelling and waving us over. “Move over,” he shouted. “Go right!”

We were confused. We hesitated.

“Right!” he screamed again. “Move over!! Over! OVER!!!”

The man was clearly unhinged, shouting at us like this.

We stepped to the right. He walked past. As he passed, he gave us a look that said, “Dumb tourists.”

Some women behind were looking on. I waited for them at the bottom of the escalator.

“Don’t worry,” they laughed. “He’s crazy.”

“But why was he yelling at us? Shouldn’t we stand on the left?”

“They stand on the left in Tokyo,” they said. “In Osaka, we stand on the right.”

– Tom Dyson

P.S. A local reader took us on a tour today. We climbed aboard a little train and rode it to an ancient village in the forest called Kurama. We had a fantastic time. We even persuaded our host to eat sandwiches and bananas on the sidewalk outside 7Eleven with us when we got back to town.

Here’s the view from the train, and there we are in the mountain village…


On our way to the Kurama forest, where a reader took us on a tour


With Kate and the kids (Miles, Dusty, and Penny, from left to right) in the mountain village


Readers turn to the Dow-to-Gold ratioTom’s preference to visit countries in turmoil… and deflation… And one reader even takes issue with Tom’s parenting after he said the kids “deserved” stopping at a toy store

Reader comment: I thoroughly enjoy reading your posts of your travels. I save them up and then read them en masse. Kind of remind me of John Steinbeck’s Travels with Charley. I am very envious. Keep these wonderful postcards coming, and take care!

Reader comment: Although I agree with the basic premise of valuing the market (or most any asset) against gold rather than dollars (or other fiat currency), can this current wave truly be compared to the prior two – when gold was pegged? Enjoying the postcards, but also the little financial tidbits you throw in as well. Thanks!

Tom’s response: The beauty of the Dow-to-Gold ratio is it removes the dollar from the equation because the Dow and gold are both expressed in terms of the dollar. So I’d argue the stock market reflected gold’s peg in its movements, and therefore the prior cycles are valid.

But really, the Dow-to-Gold ratio is not the source of my fundamental insight into the markets. My fundamental insight is in the valuation of the stock market. It moves in big waves from oversold to overbought to oversold, etc. Right now, we’re about halfway down the wave from overbought (1999) to oversold (~2025?). The Dow-to-Gold ratio is the best and truest expression of the big valuation waves in the capital markets.

Reader comment: I was concerned about the Chinese American who suggested listening to the local news. I do believe there are radical students. However, how does he know for sure none of the “students” were part of the Chinese army? How does he know the radio broadcasts are not from pro-Beijing employees?

I think most people realize the USA is not the only country with a CIA. Beijing must control the situation, and it will. I worked in China for 5 1/2 years and Taiwan for one year. Every class I taught had a Party rep monitoring the class. I was never officially informed of this; some of my students told me. I hope you print this side of things too. Yes, some students are becoming more and more radical, it’s just not that simple.

Reader comment: A question concerning the Dow-to-Gold ratio going forward: What about dilution? In recent years, more and more gold surrogates have hit the market: ETFs, paper gold, gold miners (and their ETFs), GC futures, options, even cryptocurrencies. Now, if someone wants exposure to the gold market, they don’t have to go out and buy physical gold as was once the case. Instead, they have any number of more convenient, more easily tradable, “modern” options on hand.

So we’ve switched from a simple market trading in a very limited commodity (rarity being the very thing that makes gold a “precious” metal) to an almost limitless raft of paper options. In other words, the rare commodity is no longer rare. There is also the argument that the gold price is now more manipulable as a result, eg with algos driving gold futures and ETF prices.

We witnessed gold following the Dow down in ’08. Does this not hurt the price of gold overall, thus affecting the Dow-to-Gold ratio theory going forward?

Tom’s response: The ETFs, gold miners, futures, etc. are all derivatives of the metal. They do not represent an increase in the actual supply or a change in the “rarity” of the metal itself. Actually, I’d argue they improve gold’s liquidity and make gold more accessible to the retail investor.

Regardless, when investors get worried that the dollar isn’t a safe store of value, money will pour into gold in such large amounts, it’ll completely overwhelm the gold market and send the price rising like cryptocurrencies did in 2017.

Reader comment: It’s been fun to read about your travels with kids. International travel is truly a broadening experience.

It’s a small thing, but I reacted very negatively to your statement that the kids “deserved” stopping at a toy store. Seems that is part of an entitlement philosophy common in the U.S.

To reset your values, you may wish to participate in volunteer activities with groups like El Porvenir to work with folks who are thrilled to get a new latrine or washing station. You could also read about how the U.S. has interfered in other countries in the book Bananas.

Reader comment: What a wonderful trip you are having, and a life-changing trip for your kids. I agree that countries in turmoil can make the best places to visit and/or live as an expat. We left the USA and split our time between Nicaragua and Argentina. The more trouble the countries have, the better and cheaper our life becomes; not so much for the locals, but for us all, the riffraff disappears, and the locals appreciate our presence even more.

I am writing today without a question but a suggestion. I know you are on the cheap (which is good for the kids), but in Japan you should spend at least one night in a nice ryokan, preferably in an onsen town.

The experience of a single room transformed from futons to sleep and then getting served traditional Japanese meals in your room will leave a lasting impression with your kids. We did just that this summer, and it was a great bonding experience and definitely memorable, not to mention the lovely baths.

One word of caution: If you have tattoos, you will likely not be allowed in the baths, especially in a country onsen.

Reader comment: The trains are the best way to get around Japan. They are clean and timely, with few exceptions when there is a fatality on the line. Take full advantage of those Japan Rail passes.

The economy doesn’t seem to be slowing by the looks of all the construction that is going on in and around Tokyo. Yokohama has changed in the last few years as well as Tokyo.

Be sure to visit the Shibuya Scramble, which is I believe the tallest building in Shibuya now. Also, make a trip down to Kamakura if you can, and take the Enoden line to see the giant Buddha. If you have ever read any of Lafcadio Hearn’s books, you might want to take a trip to Enoshima. If you are in the Yokohama area, please don’t hesitate to give me a holler.

Reader comment: Been following for only a few months. You grabbed my attention with your trekking story and the “drop everything, grab the kids, and go.”

Ya know, Tom, the truth does hurt, but it also does set you free, and it’s sad that more people of the world cannot see these planet-sized writings on the wall. Although it is not for the most part their fault.

They are kept confounded, confused, and placated with their little black boxes (cell phones), which let them have some fun. That in itself is a mass diversion.

I try and do my part as well as I can here on the bottom by planting those seeds of truth. But you took it to another level. Shalom verily, I say!!!

Reader comment: I am enjoying your travelogue, but have to admit it wouldn’t be for me. I am thoroughly convinced that outside of the Pacific Northwest in the states, Ireland, England (but not London), Scotland, and the more temperate parts of Europe, there isn’t much that I would like climate-wise in the rest of the world.

Also, I have got too much American sass for most areas. I would probably get into trouble in China or Hong Kong (unless the freedom fighters prevail somehow).

I am concerned that the present American-Chinese trade war is just the first step toward an eventual military conflict between the two nations (such as the case was with Carthage and Rome, England and Spain, and Japan and the U.S.).

Reader question: Yes, the central banks are printing money like mad (inflationary), but tech has been producing a deflationary counterweight. And with artificial intelligence (AI), robotics, 5G, the Internet of Things, etc., printing a likely even larger dose of deflation over the next decade… do you think these opposing forces will remain in balance, or???

Tom’s response: Thanks to everyone who wrote in. Please keep sending us your comments and questions at [email protected]. Kate and I read every one.

To answer your question about deflation… I’ve thought about this for many years. And I agree the forces of deflation are very strong. Not so much because of the productivity gains you mention, but because of the enormous weight of debt crushing the economy.

I argued for deflation for years while others called me an idiot. But now I believe the deflationary forces have run their course.

Why? Because I see the Federal Reserve ready to do “whatever it takes” to generate inflation. There’s no limit to how much it’ll print, and I think it’s about to prove that to us.

It also feels like we’ve just witnessed a climax in “deflation” sentiment, with $12 trillion in bonds trading at negative yields…