Gold Is Immune to Asset Volatility

DRIGGS, IDAHO – Gold is down about 15% from its high last August.

Meanwhile, almost everything else has gone up. Stocks, bonds, cryptos, real estate, foreign currencies, oil, industrial metals, agriculture – all have made big gains.

I find comfort in this…

(More below.)

Proud Dad Moments

Greetings from our little libertarian homeschool in the mountains…

Our eldest child, Dusty (13), takes after me in a lot of ways.

He’s started reading investment newsletters. He’s investing his pocket money in gold, silver, and shipping stocks. He’s hooked on the High Ground series of books by Doug Casey and John Hunt.

We’ve started having wonderful conversations about economics and markets. Last night, he asked me who Gordon Gekko is. (Gekko is the titan in the 1987 movie Wall Street.)

But there’s one thing Dusty does that makes me prouder than any of the things above…

He pays attention to other people.

For example, we go skiing at the Grand Targhee Resort every day. We see the same men and women operating the chair lifts each time.

Dusty has become so friendly with them that we overheard one of them talking to his colleague about Dusty, unaware we were nearby.

“He’s the nicest kid,” he said. “He always thanks us and makes conversation with us.”

We asked Dusty what he talked to them about. He just shrugged and said, “I don’t know. I ask them for snowboarding tips… and what kind of music they like… and how much money they get paid.”

We’re also trying to cultivate a love of reading in our children. Driggs has a lovely little library for children. Kate checks out dozens of books from it each week.

The boys take turns to read Penny a story each night. Here’s Dusty reading her a Peppa Pig book last night (with full sound effects)…

And in another proud Dad moment…

An online ski magazine called Snow Brains recently featured the photograph below of Dusty snowboarding on Blackfoot, a trail at Grand Targhee.

They used the caption: “Dusty Dyson, age 13, practicing ‘remote learning’ in the Blackfoot classroom.”

(It was a school day.)

The “Everything” Rally

Turning back to the markets…

The last year has been a story of the greatest financial stimulus in history. This, of course, has stimulated the investment markets and caused an “everything” rally.

“The greatest financial experiment in history,” we’ve been calling it in these Postcards.

If gold had responded to this stimulus like all the other assets, I would have found this a little disconcerting. I don’t want my money exposed to this artificial stimulus.

I want it immunized from it. So really, I’m relieved that gold has not participated in the everything rally.

It’s just doing what it’s supposed to be doing… protecting the long-term purchasing power of our savings. And when the everything rally falters, we’ll be grateful we own gold.

Still Below the 1980s Peak

Gold has clearly been in a bull market since 2018. And as the Great Financial Experiment runs its course, it’s only going to keep rising.

I’ve been studying bull markets for most of my life. The action in gold last year didn’t have any hallmarks of a major top.

We barely set a new all-time high. And adjusting for inflation, we’re still below the 1980s peak in the gold price.

By the time this is all over, I expect gold will be far above $10,000 an ounce.

I don’t trade gold. (I got an expensive lesson trading gold in 2005, when I should have just been holding.) And I haven’t sold an ounce of our gold over the last year.

I bought more physical gold last week. And I’m poised to buy more if its price falls any further.

If you haven’t bought gold yet… or if you own a big basket of bonds or stocks… now would be a great time to trade them in for gold and silver…

– Tom Dyson

P.S. As longtime readers know, I advocate for a precious metals portfolio of about 65% physical gold, 20% physical silver, and 15% gold and silver stocks. In fact, I put together a detailed report about how to build the ideal portfolio – including the 11 gold stocks I recommend today. Watch this to learn more.

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

Readers offer the Dyson family suggestions on where to settle next (and a possible glimpse into their future)… congratulate Tom and Kate on their remarriage… and appreciate Tom’s analysis on Venezuela…

Reader comment: Tom: My brother and his family live in Chapala, near Guadalajara. They are U.S. citizens and there are expats there. Might be worth checking out.

Reader comment: Hi Tom. Wish I was getting in on some of that great skiing! I have been there, and down the road at Jackson Hole, and they are both amazing!

In one of your latest postcards, you said you are thinking about Mexico. I have been living in San Miguel for the past couple months and am really enjoying it. Great weather, and just enough expats so you can get by with limited Spanish.

I recently retired and was living in Alaska. Bought a motorcycle and rode to San Miguel, via a month in nearby Queretaro. I just wanted to say, San Miguel is probably considered a more expensive area because of the expats, but I still find it quite reasonable. Of course, I’m single, but have been living here for about $1,000 a month. I would recommend coming for at least a visit.

Reader comment: Tom: In a recent postcard, you mention one reason for settling (however temporarily) in Driggs was to allow your kids to make some friends. When I retired from the Navy after moving my family four times in the previous four years, we settled in the center of Arizona. Our thought was to use the first location as a base to explore the state, looking for a best/final location to retire. But my daughter entered school there, made friends, and 29 years later, we’re still in the first location.

It’s great to help your kids make friends, but as the song goes, “breaking up is hard to do” (especially for kids).

Reader comment: Congratulations, Kate and Tom! Kate, thanks for giving Tom another chance… the road trip was a good test. You are giving the kids a great experience that may never come again.

Tom, thanks for the mention of Venezuela as well. We may have the same thought. I would like to see it currently in order to get an idea of what the U.S. has a very good chance of becoming in the near future. I believe there will be an opportunity; it will take time, though. Do keep us updated as you hear more on that too, please! Thanks, and again, Congratulations!

Tom’s note: As always, thanks for writing in! Please keep sending your comments and questions to [email protected]. We love hearing from you.