Four Reasons You Should Consider “Fringe” Investing

REXBURG, IDAHO – Is inflation coming? It’s one of the greatest questions of our time. The answer will shape economics – and history – for decades to come.

(More below.)

Epic American Camping Trip

Greetings from Beaver Dick Park…

My family and I are on an epic camping trip around America. We’ve been to 20 states so far… traveled 10,000 miles, and camped under the stars over 100 nights.

We’re currently in Idaho… on our way to Yellowstone National Park.

Over the last three months, we’ve learned that our favorite places to camp are municipal campgrounds in small towns.

They’re cheap, they’re laid back (state parks – and especially national parks – are far more officious), they’re mostly empty, and there’s always a little Main Street nearby where we can get coffee, food, ice, gas, cell phone signal, and running water.

Sometimes, they’re fairgrounds… sometimes, they’re town parks… and they often have a run-down little playground the kids can play in, or boat ramps by a lake.

We’ve now camped in dozens of these little municipal campgrounds – from Sopchoppy, Florida… to Washburn, Minnesota… to Valentine, Nebraska… and many towns in between.

(We use the Allstays app to find them. They show up as little brown and white markers with a “CP” for City Park.)

Today, we’re in Rexburg, Idaho camping in a municipal park called Beaver Dick Park. We’re paying $10 a night.

Along with a nice shady spot for a camper, this park has a frisbee golf course, a volleyball court (with a free volleyball included), and a horseshoe court.

Unfortunately, there’s no running water or electricity. And the bathrooms are stinky latrines. We are able to use the lawn sprinkler system to wash our dishes though…

Four Important Signposts for Our Investment Strategy

Tomorrow, Jay Powell – chairman of America’s central bank and one of the most powerful people in the world – will give his speech at the annual Jackson Hole monetary policy meeting. (It’s a virtual meeting this year.)

He’s expected to announce a big change in central bank monetary policy. I’ll paraphrase it as: “If inflation comes, we won’t do anything to suppress it. We’ll let inflation run hot for a while.”

If you’re trying to build an investment strategy, this is a very important signpost, in my opinion. Because if inflation does come, there will be a long upside to our gold, silver, and stock investments. Or, as a statistician would call it, “an asymmetric return profile.”

Let’s see what Powell says… and how the markets react tomorrow.

Here’s another signpost…

As I reported yesterday, lumber – one of the world’s largest-traded commodities by usage and production – recently soared in price to levels never before seen in history.

Iron ore – the raw material of steel – another of the world’s most important commodities has also soared in price recently. It’s now trading at the highest price in six years…

Meanwhile, as I’ve explained many times in these Postcards, the federal government must try to reduce the burden of its debts by debasing the currency. That’s another important signpost…

And finally, news came this month that Warren Buffett, the ultimate “inside investor,” has purchased gold.

I can’t say for sure if inflation is coming. It’s been over 40 years since anyone’s seen it. And I must admit, it feels like a bit of a “fringe” prediction. And yet, the signposts keep coming…

We’ll see.

– Tom Dyson

P.S. Rising iron ore prices are great for shipping investments – like the oil tankers I’ve been writing about in these pages. Why? Because a rising iron ore price increases the price of scrap steel.

When scrap steel prices increase, shippers have a greater propensity to scrap their old ships instead of sailing them. A reduction in the fleet size results. This supports shipping rates and makes shipping investments more profitable…

P.P.S. In late May, I got in front of the cameras for the first time in years. I laid out how I expect this “fringe” inflation idea to play out… what to do about it today… as well as my case for oil tanker stocks and how to play it. If you haven’t yet, there’s still time to get on board these ideas before it’s too late. Find out more here…

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

One reader wants to know if a drop in the U.S. dollar’s value would impact the Dow-to-Gold ratio. And one is interested in Tom’s approach to investing in gold…

Reader comment: Hi Tom and family: I have been a fan of precious metals for many years and while I am not “all in,” I have always kept a significant portion of my assets in gold and silver, through the downs as well as the ups. However, your Dow-to-Gold ratio seems to assume that the dollar will retain some value.

What if all the money-printing and debt implodes into hyperinflation and precipitates a crash, wherein the dollar becomes worthless? The Dow-to-Gold ratio would fall to 5 and just keep going down to 0. And, if a new fiat currency was issued, unless it was backed by gold and silver, there would be no history for the correct ratio and the whole cycle could repeat.

Your thoughts? I have been enviously following you from the beginning of your Postcards and wish you well on your journeys!!! Best regards and safe travels!!!

Tom’s response: The Dow-to-Gold ratio pits one non-dollar asset (stocks) against another non-dollar asset (gold). The value of the dollar is mathematically irrelevant to the Dow-to-Gold ratio.

Reader comment: In June, we traveled by motorhomes with another couple to many of the same places you went in July and August. While little of it was new territory for us, we loved being out west again even if much of it was “cancelled.”

While in Moab, we rented a four-place ATV and rode over the mountain along the Colorado border, west of town. Getting into the wilderness during the pandemic was the high point of our trip. The low point was Yellowstone. All the national parks are crowded this year as people flee the cities to escape disease and unrest. Unfortunately, many of them brought their bad manners with them.

I was quietly having an affable political discussion with another Arches visitor when a BLM supporter stepped up and berated us for our views. I guess social justice warriors never go on vacation.

I am intrigued by your gold approach, but since most of our retirement funds are in regular and Roth IRAs, we have little in gold and silver coins or bullion. The IRAs are in gold, silver, and other precious metal miners, mining royalties and tech stocks. All the stocks have upward momentum and tight stops. I admit I cannot “go fishing,” but mobile computing and a comfortable retirement allow us to travel as we wish. I write this from the car on a week’s trip to Cape Cod. You seem to be one of the freest financial writers since Jim Rogers’ Investment Biker a generation ago. Keep it up.

Another reader wants to catch up on the Postcards archives… while others share travel suggestions… and their own memories…

Reader comment: I just LOVE reading about all your adventures but have missed many due to illness. Is there a way I can go back and read all your postcards from the beginning, including your world travels, via a website?

Tom’s response: You can read the archives here.

Reader comment: You are now in a country I know very well. The scenery gets quite enjoyable by the time you get to Pinedale (on your way to Jackson Hole). If you go to central Idaho on your travels, go to the small town of Stanley. The backdrop there is the Sawtooth Mountains. It’s drop-dead gorgeous there. It’s the Switzerland of America.

I worked for the U.S. Forest Service there for four summers while I was attending college. It has a very western feel, and there are plenty of campgrounds in the area.

Reader comment: Dear Tom and Family: I enjoy traveling with you each day, seeing America as rural Midwesterners and Westerners see it. It is much different than the impression given by the bright lights and rush of the big cities.

One of the most important lessons we can learn is living one day at a time, in intimate connection to our God! Tomorrow has enough troubles of its own for us to drag them into today and worry about them.

I like what the ancient prophet Micah said in chapter 6, verse 6 of his book: “And what does the Lord require of you? To act justly, and to love mercy, and to walk humbly with your God.” Walking humbly is taking a day-by-day approach.

Reader comment: Love your adventure. It brings back many memories of my own travels, and you’re in one of my favorite parts of the country now. Big Piney calls itself the “Icebox of the Nation.” They say in the spring it can snow anytime up until the 4th of July, and in the fall, it can snow any time after the fourth of July. I was there one year on the 4th of July – and it snowed. Be prepared, and endeavor to persevere. Looking forward to hearing more of your adventure.

Reader comment: Since you’re headed up to the Tetons and Yellowstone, and my wife and I just got back from there, I thought I’d give you a few suggestions. In the Tetons, I’d definitely stop by Jenny Lake and hike clockwise (Don’t go counter clockwise as the hike would go from 2.5 miles to about 8 miles) to Moose Ponds (easy hike with frequent Moose sightings, Hidden Falls, and if you feel ambitious, Inspiration Point). There is a water taxi that will take you to the Inspiration Point/Hidden Falls area as well. Also, depending on time constraints, stop by the National Wildlife Museum just outside of Jackson. If looking for a meal suggestion, Annie’s Thai Kitchen is actually really good. It’s take-out only, so just make sure to call ahead.

Yellowstone: Try to squeeze in much of what you want to do in the mornings. Much of the park becomes a mad house after 12 noon, but luckily the park never closes. If you can shake the kids awake, you can get a lot done in the morning hours. Can’t-miss parts of the park: Grand Prismatic Springs – absolutely gorgeous (you have the option to do the overlook trail at the Fairy Falls trailhead, which is worth it on a clear, sunny day); Mammoth Hot Springs/Terraces – very unique formations with maybe 1.3 miles of total walking; Lamar Valley – Serengeti of the Americas. Lamar Valley is where you’ll run across lots of bison and antelope.

If in the area, turn onto the Slough Creek dirt road and stop at either of the first two pull-outs just past the latrine area. You’ll see several people with scopes watching the local wolf pack. If you don’t have a good set of binoculars, most people there will let you look in their scope if you ask them, or help you pinpoint the wolves in your own binoculars. The people there are very passionate about wolf biology and are more than happy to discuss the topic. Early morning is best for the area, but if you can get to Slough Creek dirt road by 7 a.m., you’re doing well.

As far as food in the park, it’s best to bring your own. There are areas you can buy your food, but they are further apart than most realize, it’s expensive, and you will likely have to go out of your way to get to one. By the way, most visitor centers are closed in the park and restrooms are much further apart in areas than you may realize, so take advantage of both when you can.

As far as Old Faithful is concerned, I personally think it’s way more hype than it’s worth. But it is one of the few areas that has good access to both food and restrooms. I hope you guys continue to enjoy your gypsy lifestyle. Personally, I think you are giving your kids the best education in life.

Meanwhile, other readers give their take on the current situation in Canada, since the Dysons had to postpone that part of their trip due to the coronavirus…

Reader comment: Since you cannot go to Canada, I suggest you pick up the trail of Lewis and Clark and read one of books that decries their trip, and end up at Fort Clatsop on the west coast. It will be a great education for the children and you. Later, you can do the part of their trip back to St. Louis. At the Arch is a great museum about the trip. Good luck. I am enjoying your writing and investing in silver and gold.

Reader comment: Dear Tom and family, we immigrated to Canada from Switzerland 30 years ago. From the Canada we fell in love with back then, there is not much left. Today, Canada is full of zombies and Trump-haters, and they have no idea what happens around the world. Unless you want to adapt to those zombies, you better do your Canada trip another time. Enjoy your trip in the USA. I wish we were there!

Tom’s response: We’re giving up on our trip to Canada. They don’t want American tourists there, even though we’re perfectly healthy and willing to drop more than $30k into the Canadian economy over the next six months. I guess we’ll spend our money in America instead.

And finally, a reader chimes in on Tom’s tire situation, after one of his trailer tires suddenly wore out last week…

Reader comment: Tom, I spent over 50 years in the tire business selling tires. What you describe can be from one of several things. It is definitely not a wheel bearing as that would have fallen apart by now. Those on trailers typically don’t last a full day’s travel when they go bad. Jack the trailer up and spin the tire. You can hear a bad wheel bearing from 10 feet away; it will make lots of noise. A bent axle will wear the tire on the inside or outside.

Trailer tires are all made in the Far East. Typically they are not made with the best of materials. I see lots of out of round tires, especially when you take them on long trips like you are. They heat up because they are small, and all kinds of uneven wear can result. If you see them when they come out of the container, the ones on your trailer will have 10 in a stack, completely squashed flat.

We had to lay them in the sun for a day with an inner tube in them to expand them enough so we could mount and inflate them. Sounds like a quality product, doesn’t it? Unless you put a tube in them, they are impossible to inflate without a special bead blaster that shoots a big blast of air in them to expand them.

That being said, you probably had a bad tire and you will most likely have another on the other side soon. Look real close in between the tread and see if there are cracks in the rubber. This is another sign that it will fail soon. The whole tread comes right off the tire, all at once. Happy trails.

Tom’s response: Thanks for your expertise. We changed the tire and everything seems to be working fine now. I’ll keep an eye on the other tire though. I expect it’ll fail soon, too…

And as always, thanks to everyone who wrote in! Please keep writing us at [email protected].