The World Is Turning to Gold, Commodities in Place of Paper Currencies

GRAND TARGHEE, WYOMING – I noticed recently that Kazakhstan added 325 tons of gold to its official gold reserves over the last 20 years. They added most of that (314 tons) in just the last nine years.

What’s interesting about Kazakhstan? More below…

At the Base of the Teton Mountains

Greetings from the Teton Mountains…

My family and I are on an epic summer road trip around America. We drive all day. Then when we’re tired, we pull over, find a campground, and sleep the night. Then in the morning, we pack up and move on again. 

We’ve been traveling like this for over three months now. We’ve seen alligators, snakes, moose, deer, elk, buffalo, and bears. We’ve shot guns, driven tractors, fed hogs, butchered chickens, handled bees, caught fish, ridden horses, and met many, many dogs. 

We don’t have an RV. Just a tent, some sleeping bags, a camp stove, and an ice chest. We eat around the campfire (or sometimes we treat ourselves to fast food.) And we clean ourselves in public restrooms (or sometimes, kindly strangers, including Postcards readers, offer us a hot shower).

We don’t have air conditioning or electricity.

It’s been a wonderful adventure for our family and a very educational adventure for our kids.

We’re currently in Wyoming, at the base of the Teton mountain range near the town of Jackson Hole.

Kazakhstan, China, and Russia Are
Making Big Moves Into Gold

Back to Kazakhstan…

Kazakhstan is the world’s largest supplier of uranium. It supplies 43% of the world’s annual production.

It’s just an observation, but I think Kazakhstan’s actions are saying, “We are lucky to possess a very scarce and desirable energy resource. We are willing to trade it with the rest of the world. We’re not willing to trade it for paper dollars. We’ll trade it for gold.”

The Chinese have also added to their gold reserves over the last five years (and reduced their purchases of Treasury bonds).

No one knows China’s true gold holdings, as today, China is the world’s largest producer of gold. And all the gold it produces stays inside China. But China has also purchased gold on the international market – about 900 tons over the last five years.

China is the world’s largest supplier of manufactured goods. Through their actions, they’re saying, “We’re happy to trade our goods with you. We just won’t accept your paper for our hard work. We’ll accept gold.”

The Russians have also added to their gold reserves over the last 13 years.

Russia is the world’s third biggest producer of oil and gas. I think the Russians are making the same point. “We’re not willing to trade our scarce resources for paper dollars. We want gold.”

How It Will Propel the Dow-to-Gold Ratio Lower

As we’ve covered repeatedly in these Postcards, western governments have bankrupted themselves – especially the U.S. – and will be printing extraordinary amounts of fiat currency, borrowing trillions and running enormous deficits over the next decade.

If I had valuable goods for trade, I wouldn’t trade them for paper currency reserves either… especially not at zero percent interest rates.

I’d want gold. Or silver. Or infrastructure. Or other resources and hard assets.

Maybe it’s just a coincidence, but I think we’re starting to see commodities bidding for gold. And the thing about that is, the current value of the world’s commodity production is many times the value of the world’s gold stock. (The annual production of oil, for example, is worth 8x more than the annual raw physical gold market.)

In other words, gold will have to rise by many times its current value if it’s going to keep being able to accommodate commodity producers wanting to trade their resources and save their earnings in gold.

This is why gold is soaring in terms of oil, uranium, and other commodities. (An ounce of gold gets a lot more of these commodities than it used to.)

I think this will be one of the forces that propels the Dow-to-Gold ratio lower over the next decade…

– Tom Dyson

P.S. Winter comes early in these parts and it’s starting to get cold at night. Last night, I had a blanket over my sleeping bag and I was still cold! It reminds me that we need to make plans for the winter. We’ll either have to rent an apartment or head south where it’s warmer…

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

Readers continue to offer travel suggestions for the Dysons… and are concerned over their trailer tire that suddenly wore out…

Reader comment: I live in Olympia, Washington. You are getting close. You are welcome to park at my house and use the shower, bedroom, and laundry. I will be happy to show you the capitol and some of our socialist leaning progressives. The kids should like the Bavarian-themed town of Leavenworth in central WA, which has the largest apple orchards in the U.S.

And you also might like the wine country along the Columbia. We are No. 2 in wine after CA. You can see a jet built at Boeing in Everett and the dams along the Columbia. Best wishes. Your children are lucky to have this experience so young. I have visited more countries than states, but did not start my travels until age 18, when I accompanied 50 head of cattle on a ship to Hawaii!

Reader comment: Tom – I have been wondering about your situation of a tire on your pop-up camper going bald. My theory is a failed wheel bearing, causing the wheel to lock up periodically and rub the tire bald on the pavement. I have been in suspense, so please tell us that you got the problem resolved and what caused it. Please forgive the engineer here. Love your Postcards and am really keen on your adventure. What a great way to see the USA!

Tom’s response: It wasn’t a bearing issue. I raised the wheel off the ground and it spun without any friction or play. Thanks to emails from readers and a conversation with a tire specialist, if the tires were made in China, they’re cheap, and they can suddenly get fatigued and wear out without any warning. Anyway, we just put the spare tire on and everything seems to be working fine (although I’m keeping a close eye on the tires now.) Thanks for your concern!

Reader comment: Been following your trip for some time, great education for your kids! Keep rolling, writing, and stay safe!

Reader comment: Friends of mine own a ranch in Idaho near the Tetons. According to them, one reason Idahoans are unhappy with Californians is that when they moved in, they built mansions that jacked up property prices and taxes. Another reason is the liberal policies they bring that lead to over-regulation and lots of red tape.

Rafting the Snake River is lots of fun. Always wanted to raft Hells Canyon but will have to pass on it after knee injuries. There’s a wonderful museum on the outskirts of Jackson. Happy trails!

Reader comment: As I will never get there (I’m too old), perhaps there will be some vicarious pleasure for me if you get to the areas teased by the following keywords: Glacial Lake Missoula, Cooper’s Ferry Archaeological site (Nez Perce tribe’ ancient village called Nipehe), the Camas Prairie, the Channeled Scablands, Hell’s Canyon (Snake River), Columbia River Gorge, and Pacific Coast Migration Model (or Kelp Highway Hypothesis). Amazing human and geological events there about 13,000 to 15,000 years ago! Fun study for adults and children of all ages! Safe travels – love your Postcards!

Tom’s response: We’re on the case!

Meanwhile, readers have questions for Tom about investing in gold…

Reader comment: Hello Tom and family. I’ve been following your family’s travels since the time you guys stayed with Mrs. Wong in southern China, around the time of Penny’s 7th birthday. Some experiences you have had so far!

I have a question for Tom: I see on Kitco’s website they offer VaultChain, which is a direct investment in gold, backed by the Royal Canadian Mint. This is obviously a safe place to keep gold, and the blockchain distributed ledger system should be very safe. Would you buy any gold through this method? Do you think there is a downside to this form of investment?

Tom’s response: What are the fees like? And the bid-ask spreads for trading gold? I haven’t looked into it, but it sounds great so far. I’ll look into it when I next have a wifi connection.

Reader question: Hello Tom. Just one question: What do you think about the tokens that try to match the price of gold? I have found they’re the cheapest way to custody “gold,” otherwise it is expensive.

Tom’s response: I’d love to own gold stored on the blockchain. I don’t know enough about it to comment or to recommend any… but it’s something I intend to look into soon.

Another reader says the Postcards remind them of their own childhood…

Reader comment: Hi Tom and family! Your adventures remind me of my younger days growing up in Northern California, near San Francisco. Every summer my parents would take us camping up north for two weeks, mostly in the Redwoods areas. Back then, we slept in tents and station wagons. Your daily photos remind of all the beautiful sights we were exposed to. Great memories. I had to laugh at your Idaho sign. Back in the day, it was Oregon telling Californians to go home! Some things never change.

And finally, others join the homeschool conversation… and praise Tom and Kate for the experiences they’re giving their kids…

Reader comment: Tom, in reference to the concern expressed by one of your readers about how homeschooling your children will affect their higher education, the answer is: not in the least. Colleges and universities are, for the most part, very open to the acceptance of homeschoolers. Our homeschooled daughter completed her undergraduate studies at The University of Texas and is now pursuing her graduate studies at Harvard.

Reader comment: Tom, It was encouraging to see that you are open-minded enough to post the letter from one of us “wacky Christians” of which I consider myself to be one. Also, kudos to you and Kate for the education you are providing to your children. My children went through the public education system here in Canada and I myself have a Master’s degree in Engineering, but I feel like my real education comes from the writings of yourself, Bonner, Stansberry, etc. Keep up the good work

Tom’s response: Thank you for your messages! I share them with my family, and they keep us going. Please keep writing us at [email protected].