Tom and Kate Get Remarried

DRIGGS, IDAHO – Big personal news today… Kate and I got (re)married yesterday!

We didn’t have any wedding guests. But we had three young witnesses… who were later paid in cake for their services.

And of course, you, our dear readers, who have supported, encouraged, and propelled this love story all along, were there with us in spirit.

Here we are outside at the county courthouse in Driggs with the official document…

World’s Worst Refugee Crisis

Switching gears… The biggest refugee crisis in the Americas is happening in Venezuela.

More than one-sixth of the population has fled in the last six years, according to the Financial Times. And if the current trend persists, the Venezuelan flight is about to become the worst refugee crisis in the world, even worse than Syria.

I spoke with my contacts in the capital city of Caracas – one is a taxi driver and the other is a real estate investor – to get the latest news…

Gone Haywire

I’m fascinated with Venezuela. Why? It’s a beautiful country with a long history of prosperity. It was once the richest country in South America. It’s only in recent years that things have gone haywire.

A very multicultural society, with lots of rich, educated people who now live in other countries, but love their homeland.

Very lucky from a natural resources perspective, including excellent chocolate, Amazon rainforest, the Angel Falls (the highest uninterrupted waterfall in the world), and mountains… and a central position between Brazil and Colombia, and just across the Caribbean from Florida. (Venezuela has some of the world’s most spectacular beaches.)

I’d been to Venezuela several times on my travels over the years… and always loved it.

Then Chavez took power in 1999 and the place went to Hell, including a hyperinflation, a complete destruction of Venezuela’s best industries (including oil and tourism), a massive surge in murders (Caracas has the second-highest murder rate in the world), and a mass exodus of refugees.

I visited Venezuela again in 2016, and I saw gigantic lines of people waiting to buy food and pharmacy products… I saw slums that stretched across mountainsides… I paid for things in giant wads of nearly worthless currency…

I hired my own driver because I’d heard the taxi drivers would rob me. I rented an Airbnb apartment because I’d heard the hotels were dangerous, too.

Capital controls prevented me from using ATMs or credit cards, so I had to carry $100 bills in my luggage and change them on the black market. (The upside of having dollars during a local hyperinflation was that everything was absurdly cheap.)

This is what $10 looked like after I converted it into bolívares on the black market…

End of the Hyperinflation

Over these last few years we’ve been a traveling family, I’ve harbored a fantasy of taking Kate and the kids to Venezuela… buying a little boutique hotel on La Isla Margarita (Margarita Island) or Los Roques (two popular Venezuelan beach destinations)… and living happily ever after.

So I like to keep tabs on the country…

I spoke to my contacts in Caracas last week just to check in and get the latest news.

I learned that Venezuelans are no longer using its currency, the bolívar. They’re using dollars now. That’s good… it means the hyperinflation is over.

Unfortunately, both my contacts said Venezuela is still too dangerous to visit, especially for a family, and until Nicolás Maduro loses power, that’s not likely to change.

One of my friends there – the real estate investor – told me he was offered a hotel recently on Margarita Island. The owners wanted $5,000 for it.

He said he declined the offer because crime is so bad on Margarita Island, and thieves would inevitably strip the place of all its copper and appliances whenever he wasn’t there to defend it.

– Tom Dyson

P.S. I’ve introduced Dusty (13) to newsletters. Here he is reading Steve Sjuggerud’s True Wealth, which is the perfect newsletter for him…

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

One reader is skeptical about Tom’s Dow-to-Gold strategy…

Reader comment: Tom, based on my experience over four decades of investing experience, going “all in” on anything is a mistake. Too many variables that are unforeseeable and out of our control.

I will turn 70 next year. My retirement income will come from delaying Social Security until then, rental properties income, a large number of dividend-paying stocks, bond interest from a bond ladder, and income from two joint ventures I have been involved with for some time. This will provide me with a monthly income from diversified sources that is more than I earned during my peak corporate years.

I have a small amount of gold and silver just as a reserve, but more likely, I will pass that on to grandkids who will cash it in. If my retirement funding strategy were being “all in” on gold, and only cashing in when the Dow-to-Gold ratio hits a certain number, I may find myself eating a lot of dog food until that ratio arrives. (Plus, probably having to find a new wife.)

You have said that you EXPECT the ratio to be 5 sometime between five to 10 years from now. That’s a long time for someone with monthly expenses in retirement to wait… and a lot of dog food to eat in the meantime. To me, starting early, diversifying your income sources, and saving consistently more than you earn is the key.

Meanwhile, another comes to Tom’s defense when he was called narcissistic by one reader…

Reader comment: I have only been reading your Postcards for about a year. I missed the world tour but have thoroughly enjoyed the USA tour!

Don’t worry about the comment that you are narcissistic. There are many good traits included in that personality profile. In fact, extremely healthy ones! My personal view is that you are a servant of all. To your family, friends, and those you don’t know and will never meet. There is no higher compliment that I know of because it involves unconditional love towards others. Thank you… and wish you all the best that life has to offer.

And finally, concern over government confiscation of gold…

Reader comment: I have really enjoyed your Postcards over the past two years and your opinions on gold. You must remember that in 1933, FDR called in all gold, except numismatic gold, at $20/oz and gave $20 Federal Reserve Notes in return. He then repriced gold at $35/oz. This stood until 1970’s, when gold could not be exchanged for paper currency.

Gold now goes for $1,800/oz, and the $20 bill from 1920’s is worth a little more than $2. Treasury Secretary Janet Yellen says something will have to done about cryptocurrency, whatever that means.

They probably will go after your gold again and start a new Fed crypto, which they will control.

Tom’s note: As always, thanks for your messages. Please keep your questions and comments coming at [email protected], and I’ll do my best to address them in one of our Friday mailbag editions.