How to Protect Yourself From a Fragile Economy

LONDON, ENGLAND – Here’s an easy way to think about the big trends of the next decade or two…

We’re now at an inflection point in the markets that’s the inverse of the great inflection point of the early 1980s.

Back then, there was only one trade you needed to make – sell your gold and silver and buy stocks and bonds with the proceeds.

Today, it’s the inverse. The trade we need to make is sell our stocks and bonds and buy gold and silver.

The reason is simple. In the early ’80s, they had inflation. They didn’t want it. So the feds worked hard to snuff it out.

Today, the feds say inflation is too low. They want more of it. So they’re working hard to summon it.

Treasury Secretary Janet Yellen says they must “go big” with stimulus.

Federal Reserve Chairman Jerome Powell says he’s going to let inflation “run hot” but keep interest rates at zero for the foreseeable future.

Listen to what the feds say and take them at their word when they say they’re going to summon inflation. Then, do the opposite of what worked in the 1980s.

Sometimes, things are just that simple. More below…

Homeschool Unit Studies

Greetings from London…

Three years ago, my family and I set off on the ultimate homeschool field trip.

We’ve seen the Taj Mahal, the Great Pyramids, the Great Wall of China, the Grand Canyon, Mount Rushmore, and hundreds of other educational sites…

We’re now doing something Kate calls “unit studies.” We pick something we want to learn, and then we immerse ourselves in that thing for several months.

Here in London, we’re exploring some of the world’s greatest museums (like the British Museum and the Tate). When we lived in Driggs, Idaho in the winter, our unit study was skiing and snowboarding.

Krav Maga is another example of a unit study. We want to travel to Israel and learn self-defense for a few months.

We also want to go to Mexico and learn Spanish. We want to learn how to cook. And how to paint. And how to build a house. And how to play musical instruments. And maybe work with horses.

Studying in units like this allows us to see the world. But it’s in a way that’s deeper and more comfortable than the fast-moving travel style we used before we settled down in Driggs.

I imagine we’ll do two or three of these unit studies a year.

Anyway, this is our homeschooling dream right now. Will things actually work out like this? We’ll see…

Things of Importance

Why did I move so far away from my parents 20 years ago? Why have so many of my peers done the same? Why do many of you live so far away from your children?

Don’t we want to be in each other’s everyday lives? Or are other things in life – like work – more important?

Now Mum’s gone, I regret living so far away from my parents for all these years.

Kate and I would like our children to live nearby us when the time comes for them to leave home. But how do we make that happen?

We’re not sure, but it’s something we ask ourselves often. We cherish the time we have with our family now more than ever. And we want to soak up every second we have with our kids before they grow up and start their own lives.

Protect Yourself Against a Fragile Economy

Now, back to the economy…

I recently watched this interview with the late industrial titan and corporate predator, Sir Jimmy Goldsmith. He was on the Charlie Rose Show. It was filmed in 1994.

Goldsmith warned that outsourcing production to low-wage nations like China was putting the interests of Big Business and Wall Street above the interests of the people.

It would destabilize American society, he said.

I loved his quote about offshoring and globalization: “The poor people in rich countries end up subsidizing the rich people in poor countries.”

Twenty-five years later, real wages in the U.S. have stagnated for all but the top 10%… America’s industrial heartland has collapsed… and a massive bubble in debt, equity, and real estate has formed, leaving our economy fragile and prone to crashes.

The good news is, because of COVID-19 and a brewing Cold War with China, these trends have probably reached their apogee.

The bad news is, it’s going to be a painful adjustment for both sides.

My analysis points to inflation in the U.S… big losses for sovereign bond investors… and a rewiring of the world’s banking and payments system around something other than the dollar and paper currencies…

In other words, sell stocks and bonds, buy gold…

– Tom Dyson

A book suggestion as the Dysons explore the meaning of “home” and “community”… while other readers give their take on the Dyson family’s homeschooling adventures…

Reader comment: Of the dozens of books I have read on the home and family, the best by far is What is a Family? by Edith Schaeffer. It’s worth prioritizing! It had a huge impact on how we raised our kids and on how they turned out in life.

Eight of the nine are now happily married, with no hint of divorce. I also have 21 grandkids who are being raised by many of the same principles. Although we homeschooled all of them until they went to college, we are sad that the eighth one is about to get his bachelor’s degree (I have a degree, but we stopped believing in college many years ago), and the fourth and fifth postgrad degrees will soon be earned.

We would prefer that they had been entrepreneurs, instead. But they do prioritize family, which is the main thing!

Reader comment: I’m happy that your kids will have a chance to have their own rooms, a sense of place/neighborhood, join a team or club, a chance to again experience a place over a longer period of time. Home, and in your case, home base.

And while homeschooling has been a good experience for your family, it may also be of value to enroll the kids in a more traditional educational environment. Just as not every teacher is a good fit as one goes through school, the experience of having to work with those who aren’t a good fit is every bit as helpful in the long run. Frustration and hardship and needing to get along are learning tools – though never anyone’s favorite!

If nothing else, exposure to a wider variety of kids and teachers will help your own children value and appreciate the wonderful ones they’ll meet. All this background is of value when they enter the working world to support themselves.

Reader comment: I enjoy reading your newsletter and the adventures of your family. Those years when the children are young fly by so fast. Because you’re not consumed with full-time work, you have more time to enjoy and appreciate your family. I’m happy for you!

Tom’s note: As always, we appreciate your kind words. Please keep writing us at [email protected], and I’ll try to answer as many questions as I can in future Friday mailbag editions.

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