DRIGGS, IDAHO – Greetings from our winter mountain bolthole…

Starting this week, we’re trying something new. Every Friday, instead of our usual postcards, I’ll compile your top questions and answer them in one easy-to-find spot…

Today we talk about the future of money – including gold, bitcoin, and cash – after I called bitcoin an “elegant score-keeping system that runs on autopilot” with no intrinsic value.

But first, one reader took issue with our snow driving… and another disagrees with this chart we showed of deaths in America…

Reader comment: I hope you are aware that criteria for a death is a person can die “with” the virus, but not “from” it. The CDC released data over a month ago that 6% of the reported deaths were people who ONLY had the SARS-CoV-2 virus. The other 94% of the death totals were people with at least one or more other ailments.

A simplistic chart, as you put it, doesn’t mean it is an accurate one. We need to do a deep dive into all of the relevant data before we can make any proper conclusions. I would also include the average age of death from the CDC. It was about 77.6 years of age about a month ago. The average life expectancy is about 78. This virus predominately has only speeded up the inevitable by less than 6 months.

Dying is a part of life; it just happens to be the last part. If I were in my late 70s or older, with other physical ailments, I believe I would be looking forward to moving on, not trying to delay the inevitable.

That chart showed deaths from all causes. It doesn’t try to discern between people who died from COVID-19 and people who died with COVID or anything like that. Deaths from all causes leaves no room for interpretation or classification.

Reader comment: I used to winter in Pagosa Springs, Colorado. If only a measly six inches of fairly wet snow caused your immobility, you need to seriously upgrade your wheels for the safety of your family. Four-wheel drive, snow tires, chains, emergency survival kit, shovel, kitty litter or sand, and towing rig. Cars can fall off the road, get buried and folks really die… slowly frozen. We find them in the Spring melt… when it’s too late.

You are about to experience Mother Nature. She is much stronger than you can imagine. Think strong hurricane! No visibility. Where is the road? Snow drifted over it. Cell phones are wonderful ways to signal for help… if there is coverage and if you have battery. And if emergency forces can reach you in time.

Please love your family and stop being a pompous Floridian. And know it takes a fair amount of experience to drive winter mountains to ski slopes

I may be pompous, but I’m not a Floridian. Regardless, our car did not handle the snow in Yellowstone and we will be getting snow tires and chains soon.

Reader comment: I love reading about your family travels. I have been following you for several years and am envious. You have given me a goal of a sabbatical of towing a camper around the U.S. for a year, taking the kids to see national parks and other wonders our great nation has to offer.

One question: With the debasing of the reigning dollar, won’t real estate prices climb as much as gold? One part of my goal to enable a year-long (or longer) vacation is having some rental income to help pay for expenses, but home prices have been increasing. Do you see real estate prices keeping up with gold as the dollar drops?

No, I would expect gold to outperform real estate, only because gold is more liquid and more of a safe haven.

Reader comment: It seems to me the utility of bitcoin is its portability and the ability to exchange it across borders. You travel a lot and, no doubt, have had to deal with the difficulties of moving money outside of your home country, having to involve banks that can tell you whether or not you are allowed to move your money, essentially having no choice but to pay whatever fees the bank charges, and often having to wait for sometimes quite a while to receive your funds, etc.

Bitcoin (and some other cryptocurrencies) largely avoid all of this, or at least have the potential to do so. I imagine you might have had similar difficulties with gold. If not, try taking some with you on a plane these days or shipping it overseas.

Traveling overseas with gold or shipping gold overseas is easy and perfectly legal to most countries. I see the benefits of bitcoin as an international payment network like Western Union, but couldn’t almost any cryptocurrency be used for that, too?

Reader comment: Bitcoin/crypto is not a valuable material in its own right… very true. But can’t the same be said about U.S. (or any country’s) currency, whether it’s metal coins or paper with stuff printed on it? Why has it flourished for hundreds of years? Gold has other uses but, come on, who wants to lug around a pile of gold, especially if you have a lot of it?

I’m not sure your argument holds water when compared with the alternatives. A better argument against bitcoin/cryptos may be that it’s more easily tracked by Big Brother and we won’t be able to make personal/anonymous transactions any longer.

Paper currencies have endured because government issuers say they have value and pay interest on deposits.

Bitcoin doesn’t have any issuer standing behind it, like sovereign currency does… or the intrinsic value of gold or silver. I don’t imagine anyone will remember bitcoin in 50 years, except as an example of absurd speculation, much like we see the tulip bubble today…

Reader comment: You say that bitcoin is “not a useful material in its own right. And in a pure barter economy, it wouldn’t have a role. It’s just a money substitute.” Are you suggesting that in the future the only exchangeable currency must have an alternative, tangible use in a pure barter system?

I agree that a physical dollar bill can be burned for heat and therefore has a tangible material use in a pure barter system, whereas bitcoin cannot. This weekend I was already denied the ability to pay for a purchase with physical cash. The War on Cash is starting, and COVID-19 is the mechanism used to classify physical cash as “dirty.”

I do believe that each successive day we are getting closer and closer to government-issued digital currency replacing physical currency. When that day comes, bitcoin’s “useful and material role” will be the ability to hold a digital value outside of prying government eyes. That in and of itself will be of extreme value to many and will have a role to play in the overall economy of the world.

I’m saying real money is discovered, not invented. The qualities money must have that enable it to be discovered are a) convenience in the marketplace and b) trust that it’ll be worth something in trade later.

Bitcoin has plenty of a) but no b). To hold bitcoin today requires faith, not trust. And that makes it a pyramid scheme, in my mind.

Reader comment: Someone mentioned that cash is almost dead. I really hope cash hangs on for several more years yet. The area where I live in Pennsylvania still has restaurants and businesses that are cash-only. Yard sales are a big deal here at certain times of the year as are a lot of the auctions.

I can’t imagine the old Pennsylvania Dutch folks and Mennonites around here somehow concluding private business transactions with credit cards.

I use cash, too. But our overlords see cash as a) an expensive inconvenience and b) a huge source of missing tax revenue. They’ll probably try to convince us to go “digital” by touting decreased transaction costs and better access to consumer loans.

And that’s all the questions we have time for today. But I want to hear from you…

What do you think about our new mailbag editions? As always, keep your questions and comments coming at [email protected], and I’ll do my best to address them in a future postcard.

– Tom Dyson

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