The Dow-to-Gold Ratio Is Continuing to Fall

SANDPOINT, IDAHO – I think we’re in the final act of an epic speculative frenzy that stretches across all asset classes… from bitcoin to technology shares to income investments…

Yesterday I read the story of Michael Saylor, the CEO of a billion-dollar, publicly-traded tech company. Saylor has begun to invest his company’s cash balance into bitcoin. So far, he’s bought 38,250 bitcoins, which has cost his company $425 million.

More below…

Settling Down for Winter

Another day… another campsite…

While investors are busy gambling their savings in stocks and cryptocurrencies, my family and I are on an epic road trip around America.

We have no home or any place to be… so we can just drift. And drift, we do. We only use backroads. We avoid cities. And we never stick around for longer than a day or two before we hit the road.

We’ve been drifting like this for four months already. It’s been really fun and we’ve seen so much of America and met so many people.

But winter is coming and, frankly, we’re getting a little fatigued of living in a tent and driving 100 miles a day, so we’re winding down our trip now.

In a couple of weeks, we’re going to ditch our camper and find an Airbnb apartment to rent for the winter in some small western town.

(We’d hoped to spend the winter in Fernie, British Columbia, but I don’t think we’ll be allowed into Canada when we try to cross the border next week.)

Smoke in the Valley

We just spent two nights in Missoula, Montana, sleeping in Pete and Gingy’s basement.

We had a great time with them, playing games, talking politics, and hearing about their kids and grandkids. When it was time to say goodbye, we loaded up our car and hit the road again, heading north.

We drove for about three hours up a deep mountain valley. The road shares the valley with a river and a railroad track.

It’s beautiful, although we couldn’t see much because the air is so thick with smoke from the California wildfires.

I’m writing to you now from a beautiful RV park in the Idaho Panhandle. We’re on the shore of Lake Pend Oreille. We’ll stay here a couple of nights and then hit the road again…

Why I Refuse to Buy Bitcoin

Regular Postcards readers will already know my position on bitcoin.

It’s slow. It wastes unbelievable amounts of electricity. And 10 years later, still no one’s using it for much (except for gambling on).

History will show, I think, bitcoin has no value, except as an artefact in the museum of money and a chapter in the book of speculative manias.

It doesn’t work. And the bubble burst three years ago. I would sooner throw away $10,900 on a new camper or a trip to the poker tables in Las Vegas than incinerate it in bitcoin’s slow decline.

Many of the people we’ve met on our trip around America own bitcoin. Even Pete, at 82 years old, owns some bitcoin. They consider it to be a sort of “digital gold,” except with much more upside potential.

I think Michael Saylor has made the same mistake. Bitcoin is not like gold at all… and it is not a store of value. And his shareholders will be very upset when they realize he’s flushed $425 million of their company’s money down the toilet.

But it’s another sign of the speculative times we live in…

Run, Don’t Walk

Here’s another data point I noticed yesterday, courtesy of one of my favorite analysts, Jim Bianco…

Bianco points out that over the last two months, for the first time in history, options trading has overtaken stock trading by volume.

Furthermore, 60% of this activity is in options contracts that expire in less than two weeks and the vast majority of these bets are in just seven popular companies.

My response remains the same. We’re running – not walking – as far away from the financial system as we can… by holding gold.

This chart shows the Dow Jones Index priced in gold – what we call the Dow-to-Gold ratio…

As you can see, the stock market has bounced over the last six months in terms of gold, but I expect the next leg down is upon us now…

– Tom Dyson

P.S. I just recorded an urgent video about the economic mess America got itself into, what’s next, and the single best thing you can do about it today to preserve and grow your wealth. Don’t wait until it’s too late. Watch it here…

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

Tom hears from a family he met in Wisconsin …

Reader comment: I am in the heavy-highway construction business. I purchased another construction company three years ago. Since my kids are grown and out of the house, I “take care” of this new business, while my very competent management handles operations at our home office. During the summer construction season, I stay at a campground in northern Wisconsin. Early this summer, a friendly family, pulling a small tent camper, moved in next to us. This friendly family was the Tom Dyson family. The next two evenings, we hosted Tom and his family for dinner. I had very revealing conversations with Tom. Since then, I have been reading Tom and Bill’s daily diaries.

My Dad (three years passed now) and myself, always wondered aloud, how our country could afford such a tremendous debt; but our conversations started at least 15 years ago!! There is never a politician that ever makes our spending and national debt an issue. I cannot comprehend this.

This year, my company(s) received a very large amount of Paycheck Protection Program money. Incredible. How the U.S. government could put together this program – so quickly, and with so little oversight – is mind boggling. Tom, I firmly believe you are spot on with your conviction of how and why our government is leading us into fiscal ruin. I have 30% of my savings in gold. I will be buying more. Thank you for your daily diaries. I am fortunate to know where we are headed, and how to best prepare for it.

Tom’s response: David! It’s so good to receive your letter! We had such a great time meeting you and Linda. Those two beautiful summer evenings we spent together eating and drinking around the campfire in northern Wisconsin, with all the kids running around, was an absolute highlight of our trip. I’ve thought about you and Linda many times since, with much warmth and gratitude. I hope business is going well! Please say hi to Linda and give her a big hug from all five of us.

Meanwhile, readers check in on Tom’s winter plans… suggest places to ride out the colder weather… and one shares a destination for future travel…

Reader question: Hello Tom and family: Can’t tell you how much I enjoy reading your daily messages, and what a vicarious thrill it is to travel the roads with you. I know you stay off the freeways, and that’s a great start, but how do you decide where to go and what is the program (you’ve mentioned it once) that you’re using?

Tom’s response: Mostly, we just float around, letting the currents take us day by day. Often we don’t know where we’ll be going or what we’ll be doing tomorrow. Just that we’ll pack up our tent and drive west…

Reader comment: Staying north for winter is a huge mistake. You, your family, your car, your trailer are not equipped for winter! Sure, there will be warm days between now and Christmas. But, there can be some brutally cold days and nights! After Christmas, it can be deadly. Nothing you have now is ready for winter! You have a very clever mind, but it’s extremely limited and narrow when it comes to practical thinking. Everyone needs to realize Earth’s limitations! You need to teach your kids practical limitations, which are vital for survival.

Tom’s response: We’re ditching the tent trailer in about two weeks and then we’re going to rent a house near a ski hill and spend the winter playing in the snow.

Reader comment: If you are turned away at the border, you may want to consider driving about seven hours south to the McCall, Idaho area for the winter. We have three small, family ski hills, three groomed nordic ski areas, and thousands of acres of back country to explore. I work at Brundage Mountain Resort as a snowmobile guide and two of the perks are that I get a family pass for all my family to ski and free rental ski gear. You don’t make much money but the skiing is great.

The Little Ski Hill is where all the kids go after school to ski with their friends. There is even a bus that will take the kids straight from school to the hill and give them ski lessons. Obviously, homeschool kids are welcome, too. My two youngest kids are doing online school this year and are really looking forward to winter. If you guys come here we can trade ski lessons for trading lessons 🙂

Tom’s response: We’ve heard that McCall, Idaho is a wonderful place, but I didn’t know it had three ski hills nearby. Will definitely check it out. Right now, our favorite choice is Driggs, Idaho.

Reader comment: Really enjoyed the conversation you had with Dan Denning in Colorado and sharing of innermost feelings and insights. I have a high regard for both of you gentlemen, and I view you as great assets to this chaotic world we are living in at this time. Thank you for the peaceful enjoyment your letters provide, Tom. I love all your family and pray for all.

Reader comment: In 2016, I sold everything (my medical practice, my home, my car) and moved to Cuenca in Ecuador, high up in the Andes mountains. At 8,600 feet and a short distance from the equator, there is a Spring-like climate year round (without bugs!). The population is 600,000 and there is an old Spanish heritage site. The air is clean, water is drinkable from the faucet, food is foremost non-GMO, tropical fruits are delicious, all is and always will be plentiful here, where farming the rich soil is a way of living.

My cost of living was sliced by 75%. Kids are healthy here, not to compare with what I saw in my own medical practice back in the USA (I am a doctor), and parents have way more liberty in how to raise their children. In this mountainous and most beautiful country, vistas are grandiose, so put it on a future world trip, and keep my email. All the best to your family, and stay safe! Your happy, regular reader of the fringes!

Tom’s note: As always, please keep writing in at [email protected]! We read every note you send us, and I’ll do my best to address your questions or concerns.