Stock Market Crash: Still a Long Way to Go

WEST PALM BEACH, FLORIDA – The stock market is in a BEAR market… and it still has a long way to CRASH. 

Crash in terms of what… The cash in my bank account? Foreign currencies? Property? 

No. The stock market must crash in terms of gold, over the next five to 10 years… by at least another 50%. 

Nothing I’ve seen suggests I’ve misunderstood the situation or misread the data.

And so we wait, in physical gold and silver, watching the Dow-to-Gold ratio and waiting for stocks to complete their crash in terms of gold. 

When we get to the bottom of the crash, Kate and I will convert all our gold into the stocks of Disney, Coca-Cola, Hershey, Starbucks and other corporate aristocrats.

Then we’ll never have to “work” again. We’ll be able to live off the dividends into perpetuity.

That’s our bet. We’ve placed it. Now it’s just a waiting game. 

Clipped Wings, Still a Happy Family

Greetings from West Palm Beach, Florida…

My family and I are a gypsy family. We don’t have a home or any possessions. But our wings got clipped by this virus and now we are sheltering with Kate’s parents in South Florida.

Their house has three bedrooms so there’s plenty of room for us. And they’ve told us we can stay as long as we like. 

It’s nice here. The weather’s mild and they live in a quiet, gated community with a swimming pool and a long sidewalk.

We ride our bikes and skateboards around the neighborhood occasionally. And I go to my writing bench every day. Otherwise we don’t leave the house much.

But that’s okay. We’re doing fine. We’re comfortable. We’re safe. The internet is fast. And we’re together. I hope you’re well, too. 

I write this message to you from the bench that has become my writing space. It sits beneath two palm trees and looks over a lake.

Here I am, with my 35-year-old five-speed bicycle (made by J.C. Penney)…

On my writing bench with my 35-year-old bike

Living With Kate’s Parents

How is it living with my future in-laws? 

Kate’s parents are kind-hearted, generous people.

They’ve been very open about their feelings and yes, they were upset we got divorced. Especially Kate’s dad, who I suspect only reluctantly accepted me back in his life.

But they love their daughter. They love their grandkids, and they’ve gone out of their way to make me feel like part of the family. 

If anyone has baggage about the past, it’s probably me. 

Income for Life, Great Comfort

Yesterday I received an email from MassMutual – one of the companies that sold us our Income for Life policies:

While the impact of these conditions may seem unprecedented in the moment, in many ways, MassMutual has been here before, as we have delivered financial security for our customers for nearly 170 years.

The Civil War. Two World Wars. The Spanish Flu pandemic. The Great Depression. The financial crisis of 2008.

Throughout these disruptive moments in history, we’ve been there to provide stability and security to our customers, time and again.

Income for Life was an investment strategy I created several years ago before I got depression and took a sabbatical. The entire strategy is built around whole life insurance issued by a mutual life insurance company.

A mutual life insurance company is owned by its policyholders and uses no debt, no leverage, no margin, and no stock buybacks.

Each year we receive tax-free dividends and our cash value compounds because we get a year older and a year closer to death.

And best of all? There’s no way to sell it.

We’re stuck compounding our money year after year for the rest of our lives. And if something should happen to me, my family will be well provided for.

These policies are a source of great comfort for us.

– Tom Dyson

P.S. Every day I receive questions from you asking me about gold royalty companies, gold coins, gold options, how to buy physical metal, etc. This raises a question for me…

Should I be writing a paid newsletter about this idea… and charging money for it? I’ve been resisting this idea for months even though various people have pushed for it. 

First, I don’t want to turn my writing into work. I love writing these Postcards. It’s been one of the greatest joys of my WHOLE life.

Your letters of encouragement and gratitude have, quite literally, changed my life and I don’t want to do anything that could threaten that relationship. 

Second, I don’t like the pressure of knowing that thousands of people have high expectations for my ideas and if my recommendations don’t work, they’re going to call me a “sell out” and think badly of me.

I’m far more comfortable telling personal stories, giving people my ideas for free, and not giving any specific investment advice. 

And finally, I don’t like the way the newsletter business sells subscriptions. It’s embarrassing having to toot my own horn so publicly. That’s not my style at all… 

On the other hand, I’m utterly convinced by this idea. And it’s important. Critical even.

I’ve nagged everyone in my family to buy gold (limited success) and helped the receptive ones to build portfolios.

This stuff isn’t simple. I know that. It’s not enough to just say “buy gold” and “sell your stocks.” That’s dangerous information and fraught with potential accidents and screw-ups. It’s not easy to be a contrarian.

One of my biggest regrets as a writer was not yelling louder about bitcoin when I found that. It was $4. But at the time, I was developing a very safe, conservative investment strategy at The Palm Beach Letter, and it just didn’t fit within the content we were producing. So I kept it to myself. 

Anyway, I’ve made up my mind. I’m going to build something around this idea.

I’m not sure exactly what it’ll look like yet, but it’ll show you how to play my Dow-to-Gold ratio idea – including specific stocks, percentage allocations, how to buy physical gold, how to buy digital gold, how to buy silver, how to hide gold, etc. 

This will be a PAID newsletter product. And it won’t be cheap. (I’ll continue writing these Postcards regardless.)

Please send me an email at [email protected] with your opinions on this and, as always, any other feedback you feel like sending. 

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

Today, one reader asks Tom about the safety of retirement accounts… in the event of a government default. Here, Tom offers his thoughts…

Reader question: I have also read about another option: Instead of revaluing the price of gold, where the government will pass an extreme act, they grab part of everyone’s 401(k) instead. As you state, the money has to come from somewhere. And if not from the foreign markets and the Chinese anymore, then Americans… and the only place there is this kind of money is in a 401(k). Your thoughts?

Tom’s response: Have heard this theory before. Find it very hard to believe. As long as they have a printing press and they aren’t scared to use it, this sort of desperate measure shouldn’t be on the table. What happens after the Fed has lost credibility and printing money isn’t an option? Maybe then. But that’s a long way off still…

Meanwhile, another reader praises Tom for sharing homeschool resources… and others continue the discussion on government debt, owning precious metals, and the coronavirus crisis…

Reader comment: Thanks for continuing to send out the homeschooling resources! We are always looking for good suggestions, especially now that our hand has been forced. This coronavirus has been one of the best things to happen to our family. Our children’s school is closed for four weeks and my wife and I have wanted to "unschool" our children for some time now.

My wife has always been concerned about money, though, as she’d lose her income if our children stayed home to learn. But now that the central authorities have shut everything down, my wife must work from home AND homeschool the children. So we’re actually thrilled as a family, praise the Lord.

Reader comment: You just continue to be you. Don’t worry what a few readers say. 99.1% of the people are thankful that you lay out your mind, body, and soul. More than most people will.

We enjoy reading the good, the bad, and the ugly. True life… with no sugar coating. Don’t change a thing. People are reading because of your truth. You can’t please everyone. Don’t let them change what you write. Next time you talk to Bill Bonner, he will tell you he gets more hate mail than you. But he won’t change one bit… and neither should you.

Reader question: Isn’t silver an even better bet than gold right now, given the record gold/silver ratio and the (in my mind) inevitable inflation? 

Reader comment: Thanks for continuing to write your Postcards in the middle of this crisis. They’re always very interesting. I don’t have anything brilliant to say, except, “Thank you.” And I hope you, Kate, and your family are all well and happy.

I’m fine. Here in the small town near Kyoto, where I live, the situation is less dire than in Europe, etc. But still, most people are being very careful. 

Reader comment: Enjoying your Postcards from way over here in Vietnam. Keep ’em coming. People keep worrying about deflation and inflation, and rightly so because that spells Stagflation… with a capital “S.”

Reader comment: I like your focus. For most of us, there seems to be too much data. Stocks are falling! Unemployment is skyrocketing! The Federal Reserve is PRINTING! Investors/hedge funds are selling!

What really matters? Conservation of assets! Gold seems less likely to implode than almost anything else. Thank you, Tom. You seem to be a voice of reason in a sea of chaos. Keep it up.

Reader comment: I thought your summary of the world’s current financial crisis, vis a vis the U.S. government debt problem, is accurate and succinct. The numbers are alarming and do not lie. There is another option they have to solving their potential insolvency though, apart from the Federal Reserve monetizing their debt: WAR.

Nothing better than a good, old-fashioned, overseas conflict to galvanise the public and crank up the heavy-cogged wheels of American industry. If you believe in the Deep State and the American Industrial Military Complex running the nation, through their preferred president, then this surely must be under consideration. It’s happened in the past. Extreme problems call for extreme measures. We shall see!

Reader comment: Love your newsletters! My daughter-in-law is an ER nurse and she certainly works hard. She works at Kaiser in California and they have really good protocols for screening patients before they even come into the hospital. But it’s super stressful for her. Thank you for highlighting our heroes!

Reader comment: I enjoy reading your newsletters. You write in a genuine way, which is rare in your field. Your struggles with mental health touched me, since as a business coach, I’ve supported a lot of driven, high-achieving executives who exhibit a mix of the anxieties you describe.

Tom’s note: Please keep writing us at [email protected]! Kate and I read every message you send us.