MAMARONECK, NEW YORK – Greetings from the suburbs of New York City…
It’s time for our Friday mailbag edition, where I answer the latest questions you’ve sent in.
This week, readers question my decision to buy Series I Savings Bonds, and my choice to stay away from bitcoin at current prices…
Others weigh in on our stay at my dad’s one-bedroom apartment while he goes through cancer treatment…
And finally, one reader wants to know how we find good places to camp.
All this and more below, so let’s get right to it…
Reader question: WHOA, Tom! Why the U-turn all at once from hard assets to one of the most overvalued currencies on the planet? I will be interested in your rationale of tying up $50,000 for five years in a security – almost guaranteed to become mostly worthless – instead of simply purchasing more precious metals. Even depositing 27 American Eagles in a bank safety deposit box is far safer than the future worth of your I Bonds.
Either you really do not believe the Gold-to-Dow ratio will continue to sink to 5:1 (or lower) or you place unwavering trust in the faith and credit of the U.S. government.
The Series I Savings Bond (inflation-protected savings bonds) issued by the Treasury is currently yielding 7.12%. Anyone with a Social Security number can buy up to $10,000 of them, per year.
My family and I maxed out our allowance. The interest is taxable. You have to hold them for at least a year… and if you redeem within five years, you lose three months of interest as a penalty, which I didn’t think is a big deal.
This doesn’t mean that my feelings about gold or the Dow-to-Gold ratio or even the government’s financial position have changed. It’s just that we already have enough gold and we might need those dollars soon and physical gold is illiquid.
The dollars we used to buy those bonds would otherwise be sitting in our checking account earning nothing. So I parked them in Series I savings bonds to earn a little interest.
Everything considered, 7.12% seems like a great interest rate. Did I mention Grandpa liked the idea, too, and he bought his maximum allowance?
Reader comment: Just a quick observation. I don’t really understand why you, Dan Denning, and Bill Bonner are ignoring an asset class that has exploded unlike anything we have ever seen this past decade. It has now topped $3 trillion. There is no investment that can come anywhere near it.
I feel the three of you are denying your subscribers a once-in-a-lifetime opportunity. I ask you to invite Teeka Tiwari to sit down with you and discuss this asset class. He has helped create more millionaires through his crypto recommendations than anyone else!
Good question. I’ve thought about this topic a lot.
On one hand, people ask us about bitcoin and cryptos all the time, so it’s obviously a subject readers want to hear more about.
And you make a good point. It’s been one of the best “trades” in all of capital market history… and seems like it still might have further to run…
So why don’t we recommend it? Are we doing readers a disservice by not even talking about it?
(Actually, Dan and Bill recommend a 1% allocation to crypto in The Bonner-Denning Letter, and I’m sympathetic to that position.)
I can’t speak for Dan or Bill. But for me, I just haven’t yet seen how I can add any value to the crypto conversation. I use a very specific methodology – which involves sifting through a lot of overlooked and obscure ideas – to find investments. I’m a contrarian.
Crypto was once contrarian. It isn’t contrarian anymore. It’s not my “foxhole.”
Can people still get rich from crypto? Possibly. Am I anti-crypto? No. It’s just I want to stay in my foxhole. But I do think a 1% allocation is probably a wise strategy, even if I haven’t done that myself.
It’s funny we’re talking about this though, because, yesterday, my old friend and former Palm Beach Letter co-worker, Tim Mittelstaedt, told me about a new crypto project, and it intrigued me…
The account pays 20% interest, your savings are pegged to the dollar so you don’t have exchange rate risk, and you can buy insurance against de-pegging risk by accepting a lower yield.
Amazing!
Tim was the guy who came up with “Income for Life,” one of the world’s best-kept retirement secrets. He doesn’t call me very often with ideas.
How do they pay 20% interest on a checking account deposit? (You even get a debit card which you can use in stores.) I don’t know… but I was intrigued to find out…
Reader comment: The time being spent with your father, the children’s grandfather, will be precious in your thoughts and in their thoughts for the rest of your lives. And he has the warmth of loved ones around him at his time of need. Priceless.
Even in such a small space, it’s clear your family unit has learned to be so condensed that it’s comfortable. At least from the pictures. Be sure to check with your dad periodically if he needs a break and his own space a few times over this period. He is going through a life-threatening illness. You can totally afford a hotel room a couple of times if he may need that. Doubt he would tell you. Hugs to the family.
Excellent advice. Thank you. We offer him space, or to get a hotel. But he says he loves having us here, even though he has to sleep on a blow-up mattress in the living room while we’re sleeping in his room.
Reader question: I’ve been following your Postcards since I subscribed to Bill Bonner’s newsletter. You were traveling with your family through China at that time. I am planning to travel across the country with my wife this next summer in a 23-foot travel trailer. We plan to stay off the interstates as much as possible, and stay in state parks, Bureau of Land Management and Corps of Engineers campsites, on military bases, and in small, private RV camps.
Remembering your description of how you traveled across the USA, eventually stopping in Driggs, Idaho – I have some questions for you, which you may have already addressed in a postcard that I missed.
You wrote that you sometimes stopped to camp in city parks and the like. So, were you able to research their presence in advance, or did you simply stop in a little town at the end of a travel day and start looking for a good place to camp? Assuming hypothetically that you found there was a city park with space to park your rig, did you then seek permission to camp there, and if so, how did you go about it? Are there any other tips that you might suggest in these cases?
The reason I ask about obtaining permission is that I have read William Least Heat-Moon’s Blue Highways and I remember him writing that he occasionally was interrupted in the middle of the night by the local police asking what he was doing there. I frequently pray for our police and ask God to keep them – far away from me. I hope to see your reply (or a link to a prior Postcard) soon.
We just stopped wherever at the end of a travel day and started looking for somewhere to camp. We used the Allstays app to find good campsites near us. (I wrote about that in a few Postcards, including here and here.)
We never had an issue finding a spot this way. Not even in the most popular hiking towns like Moab, Utah, or along California’s coast highway, even during the peak summer camping months.
There are plenty of spaces – although we did have a small rig, which made things easier. You don’t need permission to camp at the city or town park. Just find a space and pay at the honor box.
The city parks we stayed in were never manned. And if the cops came around, it was to keep us safe, not boot us out or harass us.
And that’s all for this week! As always, please keep your questions and comments coming at [email protected]. I’ll address as many as I can in future Friday mailbag editions.
– Tom Dyson
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