A Warm “Thank You”

DRIGGS, IDAHO – Greetings from our mountain bolthole…

It’s time for another Friday mailbag edition, where I answer your questions and comments each week.

But before we get to that… Thank you for all your lovely messages offering condolences, prayers, and well wishes after Mum died.

It’s been hard. I feel especially guilty that I didn’t see her in her last year alive.

I could tell you Covid prevented me from traveling to England, but that wouldn’t be true. The real reason I didn’t see Mum was because I was complacent about her health. I thought she had 10 more years – five at least.

“We’ll have much more time together in the future,” I told myself, as I cruised around America with Kate and the kids in our camper…

(We were planning to go live with her in London after the ski season.)

I badly miscalculated.

Anyway, while I sometimes find comfort in “going down the hole” and wallowing in guilt and grief, it also feels a bit self-indulgent. Mum wouldn’t have approved. “Button up and get on with it,” she would have said.

And so I will.

Thank you again for all your messages. They’ve really cheered me up.

Now, let’s button up and get on with this week’s mailbag – where we talk about China’s new role as a global superpower… the benefits of owning gold in your portfolio… and more…

Reader comment: She sounds like such a lovely lady! Time heals but memories never escape us. I am so sorry for your loss of your mom. My mom still guides me. I miss her after 35 years.

I just lost my husband to the Covid virus the day after Christmas and I know your grief. Sixty-five years of marriage does not make the loss any less sad.

I’m so sorry to hear about the loss of your husband. You have my condolences. Thanks for your message.

Reader comment: Belated condolences on your Mum’s passing, which must have been very hard for you and your brother. Despite that, you have continued with your Postcards. Many thanks – they are appreciated.

The reader who comments so favorably on China and its accomplishments could have similarly eulogized about Nazi Germany in early 1939. I suspect that, thanks to government action, much of China’s population is similarly ignorant of what is going on in their country or, if better informed, dare not speak out, as they know that criticism is not likely to end well for them.

Kate and I spent two months in China in 2019. My impression was that most Chinese hold their government in high regard. There’s a national sense of “stick together” which allows China to be so competitive on the world stage, in my opinion.

Reader question: Can you explain to me the rationale for gold being a store of value and ALSO an asset that can grow your wealth? I am far from being anti-gold, but I try to be a rational thinker.

In the 1920s you could take your 20 ounces of gold and buy a new car ($800). I’m just using crude approximate figures to make a point. When I was a young boy in the 1950s, my father could have bought a new car with 20 ounces of gold ($1500). After I graduated from college in the early 1970s, I could buy a new car for 20 ounces of gold ($4000). Today, I can buy a new car for 20 ounces of gold ($40,000).

For sure, gold has been a spectacular store of value! However, it could be argued that it has not built any wealth along the way. My point is that if at some time in the future, gold is $10,000 per ounce, a new car would then cost approximately $200,000. This MIGHT seem absurd, but maybe not, since a new car has inflated in price ten times since 1970.

With all of the craziness of Modern Monetary Theory, government currency manipulation, and the desire of central banks to stimulate inflation… I’m not sure my gold will ever do anything but maintain my status quo.

Great question. I would respond by saying that maintaining “status quo” is absolutely fine by me considering we’re in the final innings of the greatest financial experiment in history.

I’m advocating a position of “maximum defense” – both in these Postcards and in my Tom’s Portfolio advisory – and I’ll be very satisfied to get through the crisis with my purchasing power intact.

That said, I also believe I have the knowledge and experience to “trade” my precious metals for great stocks at the tops and bottoms of the credit cycle using the Dow-to-Gold ratio… and do far better than “maintain the status quo” over the long run.

Reader question: I’m anxious to start traveling the way in which you and your family have done, driving from one spot to the next and staying in campgrounds. So far, I’ve used an app, but it doesn’t seem to be as informative as the ones you’ve mentioned using.

Since I didn’t make a note of them when you named them in your Postcards, I’m wondering if you can tell your readers once again which ones you consider worth having on our phones. Thank you!

Google Maps is, by far, the most important app. We also used Campendium, Allstays, and Hipcamp.

Reader comment: Tom, I am not accustomed to responding to authors, primarily because I have spent the better part of my life reading and thus have habitually encountered bright and creative people like you in the materials I peruse. However, I make an exception because your extraordinary parenting (kudos to your understanding, “soon to be renewed” wife) touches a chord with me.

I raised a son and daughter. As they were growing up, I thought about the things I would have wanted to have done with my beloved parents but did not get the chance to do. High on my list was to travel one-on-one with them.

When my kids were young, I convinced their doubtful mother that yearly daddy-son and daddy-daughter trips of two weeks or thereabout every summer would expand them and promote greater understanding and empathy.

Each received five yearly trips, and those trips have generated some of the happiest and most touching memories we share into their adulthood. I commend you for your wise parenting.

When Kate and I were divorced and living separate lives, I would travel to London to visit my mother twice a year. I’d take one child with me each time in a rotation. These were very special trips, so I really appreciate your one-on-one parenting idea.

Reader question: Tom, I noticed a name change to the Perth Physical Gold ETF. Goldman Sachs bought it and has taken it over. Do you still recommend using this vehicle as a part of 65% allocation to physical gold?

I have been reading your work since The 12% Letter, became a lifetime member of Palm Beach Research Group as soon as you offered that option, and have really enjoyed reading your postcards.

Your guidance on the current precious metals market helps make sense in this very confusing period regarding world finance issues. God bless you and your family and thank you for all you do!

No, I will not continue to recommend this. It now lacks the one quality I look for in a gold exchange-traded fund (ETF) – full redeemability in physical gold.

I will recommend a replacement ETF in my paid service, Tom’s Portfolio. If you’re a paid-up subscriber, please look out for my update next week. If you’re not paid-up yet, you can find out more about a subscription… including access to the precious metals model portfolio I put together for my subscribers… right here.

– Tom Dyson

P.S. I’m sorry if I didn’t answer your mail today. I usually try to publish (and answer) as many of your messages as I can, but this week there were too many. I do read every one, so please keep writing us at [email protected].

P.P.S. Here’s a picture of our three kids at the top of the mountain yesterday. That’s Driggs below us. The little girl in the red helmet is a neighbor…