RANCHO SANTANA, NICARAGUA – The markets fell 12% last week in one of the fastest, most dramatic moves since Black Monday 1987. (On Black Monday, the Dow fell 22.6% in one day.)
It was quite a sight to behold. But let’s put this in perspective…
Symptoms of a Broken System
The coronavirus story had been in the news for six weeks. The stock market IGNORED it and kept rising. So last week the market was only catching up to where it should have been weeks ago.
It’s just another example of how investors put their heads in the sand sometimes… and how the market doesn’t always anticipate the future efficiently.
(Toys “R” Us was a great example of this in 2017. Its bonds plunged from $97 to $21 in eight trading days… even though it had been obvious to everyone for at least three years that it was going bankrupt.)
The other thing to say about last week’s big drop is it’s symptomatic of the crazy, broken system I’ve been complaining about since the day I started writing these Postcards.
The system is rotten to the core with intervention, manipulation, fake money, fake trades, fake deals, fake news, and robotic trading. The system has become very, very fragile.
Say what you will about my recession predictions, my inflation predictions, and my Dow-to-Gold predictions.
The bottom line is, I don’t want to participate in this toxic mess. I want to sit on the sidelines in physical gold and get on with my life… until the next time I can buy stocks in an environment that’s much more likely for long term returns.
Back on the Road
Greetings from Nicaragua!
My family and I have packed up our stuff again and hit the road. We’re going to spend the next year traveling the world, living out of a suitcase, and homeschooling our kids in hotel rooms.
We’re probably not going to visit as many countries as we did on our last trip. (We visited 29 countries on four continents over two years.) Instead, we’re going to look for places we can live in for a few months and not do so much “hotel hopping.”
But we’ll still only be looking at very cheap countries… places like Turkey, Iran, Argentina, Pakistan, and Vietnam. (This list will likely change from month to month as currencies fluctuate and the geopolitical environment evolves.)
Not All Beaches and Pools
Our next destination is Argentina. But first, we’re staying at a resort called Rancho Santana on Nicaragua’s pacific coast.
During the heat of the day, we stay indoors. I study the financial system while Kate homeschools the kids. In the cool of the day, we do activities like surfing, swimming, horseback riding, volunteering, and exploring the ranch.
It’s paradise here.
Even the food is incredible, and… considering it’s all made from locally-grown ingredients… it’s quite cheap. (We pay $12 for a giant burger and fries, $2 for a plastic container full of fresh pineapple and $7 for a plate of vegetable tacos.)
But our life is not all beaches and pools. Today we visited the farm. We saw sheep, pigs, chickens, cattle, horses, vegetable gardens, and the tropical orchard.
Here’s Miles milking a cow…
Miles at the farm earlier today
– Tom Dyson
P.S. The Fed cut rates by half a percent today. The press is calling it a “surprise” rate cut, but it wasn’t a surprise to us. I wonder what they’re going to do next. As you know if you’ve been reading these Postcards, there’s a lot more intervention to come…
That includes what we’ve been calling “curve control” and at least $5 trillion in freshly printed money (catch up here)… as well as some big bail-outs. I bet they’ll announce a big infrastructure upgrade plan soon, too.
Like what you’re reading? Send your thoughts to [email protected].
FROM THE MAILBAG
A reader wants to hear Kate’s perspective… While others open up about divorce and healing after Tom shared his story (catch up here and here)…
Reader comment: I’d like to hear a few stories from Kate and her views on things! Nothing personal, but I think you are hogging the microphone… as they say! It is lovely to hear all about your adventures. Just make sure you are not riding roughshod over your wife and children’s needs…
Tom’s response: I offered Kate the “microphone” many times. She hasn’t accepted it yet. I’ll keep asking her…
Reader comment: I loved reading about your divorce because of the brutal honesty about yourself and your relationship with your wife. Of course, you probably weren’t present for your children, either.
As you mentioned, it was a good thing Kate kicked you out and kept you away. I understand that from my own experience with a boyfriend. When my husband died, this boyfriend, who was also a widower, didn’t treat me very nicely. He broke up with me and I was crushed. I decided that I needed to date someone who would be kind and treat me well. Consequently, after both of us healing our grief, he came back two and a half years later. The relationship is much better and so am I.
Reader comment: Selfishness has destroyed more unions than any other single personality trait. You now have fodder for the classic dialog about what tears relationships apart. The speed at which personal bonds fray will vary from couple to couple, but an undercurrent of selfishness is so frequently found that successful counselors probe this topic as quickly as practical.
The sharing of your story is so valuable to the community that seeks to resolve and improve interpersonal unions that a simple “THANK YOU” seems woefully inadequate.
Please keep the feedback flowing regarding your progress and please be patient with the process. The human animal is such a complex thing that any story shining a light on the sequential development of a relationship is a story worth analyzing. For example, imagine how same sex chemistry adds even more layers to relationship development.
Reader comment: I am an Episcopal priest and have been a Master of Social Work therapist since 1973. Never trust your marriage to someone you haven’t met. Are they married? What type of a person are they? Do they seem genuine and open, above all caring?
Therapy is a relationship. Great knowledge is less important than a healing personality. They should know what it is like to sit in your seat. Sadly, in your case, you were not at your emotional bottom. The nutty program you attended helped you get there but at a huge risk to everything you hold precious.
Reader comment: I fully understand what you went through because I was there myself. After being separated from my wife and kids for a year and reading a lot of books on how women think and how men are to treat their wives in a Godly way, I changed. I lost 45 pounds, too!
I’m very happy you salvaged your marriage. Your children will reflect upon your behavior later in life when they encounter a similar situation. I know it’s lonely at the top, but wearing the crown as king comes with responsibility and love for everyone around you. P.S. After being back together with my wife, I’ve found the 45 pounds again…
Tom’s note: Thanks to everyone who wrote in. Please keep sending your questions and comments to us at [email protected]! Kate and I read every note you send us.