Gold Will Outperform the Stock Market

IDAHO FALLS, IDAHO – Greetings from Idaho!

My family and I are wandering around America with a tent and a propane stove, showing our children the most beautiful country in the world and homeschooling them along the way.

We started our American road trip in Florida three months ago. We’re now making our way through Idaho, driving by endless fields of golden wheat.

But if you’ve been reading these Postcards, you know our nomadic lifestyle goes back way further than that…

Trade of the Generation

As regular readers know, in the fall of 2018, Kate and I drained our bank and retirement accounts and put everything into gold and silver.

We sold all our things and handed back the keys to our apartments. Since then, we’ve traveled all around the world, living out of a suitcase.

Why did we do this? The Dow-to-Gold ratio had started falling again… for the first time in seven years.

Once the Dow-to-Gold ratio gets in motion, it tends to stay in motion. Its drop in 2018 implied to me that gold would start outperforming the stock market… possibly for as much as the next five or 10 years.

The chart below tells the whole story. It shows the Dow-to-Gold ratio going back 120 years.

Notice how it trends, moving in big, clear, predictable waves. Notice how it peaked in 1999, and how it’s been falling ever since.

Notice how the primary trend got interrupted in 2011, and the Dow-to-Gold ratio rebounded. And finally, notice how the ratio peaked in the fall of 2018 and started falling again.

My hypothesis is that the Dow-to-Gold ratio is now back on its way down… to a level somewhere below 5. (Yesterday, I called this the “Trade of the Generation.”)

I will hold my gold until then, at which point I’ll sell it all and invest the proceeds into the stock market. But that’s all in the future. The Dow-to-Gold ratio is at 14.7 today…

New Scenery: Fertile Plains of Eastern Idaho

Last night, we camped on the banks of the Snake River in Wyoming, near the famous ski resort of Jackson Hole.

Today, we packed up camp and drove west, following the river, coming down from the mountains and into the plains of eastern Idaho.

The scenery has changed again from mountains and high altitude desert into fertile farmland. We saw fields of golden wheat and giant tractors bringing in the harvest.

Idaho is state number 20 on our trip so far.

I’m writing to you now from the kitchen table of Scott and Tiffany, our new hosts. (They’ve invited us to sleep in their driveway for a night.)

Scott and Tiffany welcomed us into their beautiful home, fed us, showed us a hot shower and machines to do our laundry, and basically made us part of their family for a day.

Tomorrow, we’ll bid farewell to them and continue on our way (to Yellowstone National Park).

– Tom Dyson

P.S. Scott builds custom homes. He says property prices in these parts are booming. They didn’t even slow down when COVID arrived earlier this year. They’ve just been going straight up.

He also mentioned the price of lumber has been soaring. It’s gotten very expensive. I looked up a chart of lumber futures to see what Scott was saying. The price of lumber futures is at all-time highs!

P.P.S. Idaho has become a popular destination for Californians fleeing from the high taxes in California. But not all Idahoans are happy about this… I found this picture online…

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

Canadian readers are disappointed to hear some British Columbia and Alberta residents expressing hostility towards outsiders…

Reader comment: I hear the same story about British Columbia people being hostile to Alberta people. However, a month ago we went fishing on the coast, and did not feel that at all. I think it is just the media saying things so we all hate the people on the other side of the hill. I believe that is the agenda of the ruling elite, so we all fight with each other.

Reader comment: As a Canadian, I would say I’m embarrassed how folks in British Columbia (B.C.) are treating people from outside of that province. The premier of the province, John Horgan (a socialist, go figure), was quoted as saying that people from outside B.C. should change their license plates, take public transit, or ride a bike. How ridiculous!

It’s not just Americans that are getting harassed in B.C. One of our local radio hosts here in Edmonton was one of them. I haven’t heard of too many out-of-province people getting harassed in Alberta (that doesn’t mean it doesn’t happen, I just haven’t heard). In fact, we would be happy to host you in Edmonton, if you ever make it this way. Unfortunately, with the current border restrictions, that might be a ways off. Happy travels to you and your family! Thanks for your Postcards!

Reader comment: Hi Tom and family! I’m from the Calgary area, currently living in Houston. Just got back to Texas after a few weeks up north. As you’ve noticed, Canada is still closed to non-business travel. They update the closure mid-month and extend it a month each time, so the country is guaranteed closed until September 21. It’s getting really weird. People in B.C. are vandalizing Albertans’ cars, never mind Americans’. Not a good time to visit. The inner fascist is starting to show in too many Canadians. Maybe it’s cabin fever. Too bad; it’s some of the most beautiful country you’ll see, and the weather is great in late August.

Reader comment: Hello. I, for one, hope you keep coming when you get to the Canadian border. I like to think what you were describing were isolated incidents. I am not sure though. It seems the majority of people actually believe in the “scamdemic.” Bodes poorly for the rest of us. I am certain that wouldn’t happen here where I live, but I rarely see anything but Alberta plates now.

I hope you can make it in, if you want to come. I suspect they will refuse entry to you for any other reason than transit to Alaska or maybe compassionate grounds. Good luck in whatever you choose. Thank you for sharing your adventures. I was thinking the last little while that we can actually see your children growing in front of our eyes. Very nice.

Meanwhile, one reader shares his own camper struggles… and another offers kind words for Tom and his family…

Reader comment: On your notes from the fringe about the nomadic lifestyle… I have always wanted to do this and I do think that owning a house is just a big, expensive hassle. The things that stop me from actually doing it are 1) I really NEED my internet to keep my businesses going and that can be a real problem with the current coverage across the nation. How do you deal with that in remote locations? 2) Even more importantly, I have never been able to figure out how to fit a drum set in a camper of any size. I have been a musician for over 50 years and my first instrument is drums… Sigh.

Recently, I have started looking into house boats because they are the ONLY thing I have been able to find that will fit a decent-sized drum kit into. This would limit my options to coastlines and major rivers, but it IS an option. I am hoping the internet will be better as well, but that remains to be seen. What do you think about my idea? Really the only thing I would need to worry about are high seas and pirates if I wander too far out into the ocean. Keep up the good work. I love reading about your adventures!

Reader comment: I hope this finds your family and you well. I’m enjoying your Postcards enormously for both the financial advice and the travelogue. I look forward to hitting the road to travel America one day. Thank you.

Tom’s note: As always, thank you for your messages! Please keep writing us at [email protected].