U.S. Dollar Is Federal Reserve Key to Avoiding Default

WEST PALM BEACH, FLORIDA – Another day… another new Federal Reserve lending facility.

This one’s designed to send dollars all over the world without anyone having to sell their Treasury bonds… (More below.)

Worst Still Ahead?

“Prepare for 100,000 to die,” says Dr. Anthony Fauci, the director of the National Institute of Allergy and Infectious Diseases.

“U.S. ‘death toll curve’ worse than China,” says a headline. “U.S. could soon be worse than Italy.”

“Coronavirus cases quadruple on the U.S.S. Theodore Roosevelt,” says another headline.

Italy says its infection has peaked. New York says its infection rate will peak in two weeks.

But what about New Orleans, Los Angeles, San Francisco, and Washington, D.C.? Is the worst still ahead for them?

Meanwhile, we’re under house arrest like everyone else.

We’re in West Palm Beach, Florida. It’s been three weeks now since we left the neighborhood.

Spirits are still high. The kids haven’t even noticed there’s a global pandemic happening outside…

I hope you’re doing well, too. 

Our Big Prediction

We have a trading strategy using the Dow-to-Gold ratio.

When the Dow is high against gold, we go to gold. When the Dow is low against gold, we sell our gold and return to stocks. Back and forth.

It’s an (almost) mechanical trading system that captures society’s big mood swings. 

Right now we’re in gold. We hope to switch back into stocks soon. 

But we’ve also made a big singular prediction.

It’s got nothing to do with our Dow-to-Gold trading system… except it supplies the explanation for why the Dow-to-Gold ratio might be about to collapse.

The big prediction we’ve been making is that the Fed’s balance sheet would EXPLODE. 

Last month, the Fed started to hyperinflate its balance sheet. But I think this is just the beginning… and the balance sheet is about to rise FAR higher than anyone expects.

It’s at $5.25 trillion this week. Could it rise to $15 trillion… or $25 trillion? I think it will…

 U.S. Dollar: The Fed’s Key Battlefield

I’ve said this many times in these Postcards. The dollar is the KEY battlefield in the Fed’s campaign to save the world economy from going bankrupt.

A rising dollar shows America is heading into a depression and the government is going out of business. It shows the Fed is losing its battle to unclog the plumbing underneath the world’s financial system. 

A falling dollar shows the Fed is printing enough dollars and lending enough money to keep the system afloat and the debt bubble inflated. 

Last week, the dollar had its greatest one-week FALL in 11 years. That must have been a big relief for officials in Washington. 

And yesterday, the Fed announced a new program to lend dollars to any overseas government that owns Treasury bonds but doesn’t want to sell them. That shows the Fed is totally aware of how important this battle is.

Is it going to win this battle? We’ll see…

– Tom Dyson

P.S. The Turkish lira fell to new lows overnight. So did the Brazilian real… and the Chilean peso. The stock market is down today. Perhaps another dollar shortage is appearing, and the dollar is about to surge again? We must watch this…

P.P.S. The paradox is, the longer this battle lasts, the more desperate the Fed gets, and the bigger the Fed’s balance sheet grows. 

In today’s exclusive Postcards Q&A video, Tom answers your questions about the Fed’s money-printing, appropriate premiums for physical gold over spot, the “daylight robbery” of taxes on precious metals, and more…

Meanwhile, one reader wonders why Tom hasn’t yet married Kate…

Reader comment: Why don’t you do the right thing and marry Kate? No wonder her father is still annoyed with you. Man-up, my friend.

Tom’s response: I’m going to make a video about this subject. Maybe I can even get Kate to join me! Stay tuned. 

And still, more readers offer their thoughts on a new paid letter – in addition to these Postcards – after Tom introduced the idea in his March 26 postcard…

Reader comment: Probably 10 years ago I got interested in newsletters. It started when I read a book by Martin Weiss, and then Sean Broderick. I love Bill Bonner’s daily article. And I do pay for the monthly publication with Dan Denning. Always a good read, and quite informative.

But we are talking about you. Why do you want to be greedy? You are just, probably, months away from the Dow-to-Gold theory to hit and then, as you said, you’ll live on dividends for perpetuity with the stocks you’ll buy. So you’ll just be another salesman, hawking your wares for what piece of the pie you can get. After all, you aren’t going to be helpful to the poor that could use some help.

Sure, your daily Postcards actually do that to some extent. You do share which way the wind is blowing, and someone like myself can be successful just following your general beliefs. Still, I wish someone would just write the truth for free and be happy with where they are in life, and be happy that they are helping others. I truly believe you will not sleep well or be as happy as you are now when you have to give paid readership winners!

Your Postcards were full of the American spirit. Travel, learn, watch your kids grow, have fun, no real problems but which way to go next. You are out of the rat race… Why get back in? I love the Postcards and will continue to read, but cannot afford your new service. 

Reader comment: Writing a subscriber-based newsletter, you will only be going back to “working for the man,” and I doubt it will make you happy. It may make some of your associates very happy, but not you. Presently, you are living life on your own terms. A free agent, so to speak. You are a gifted writer who could turn your hand to writing about anything you choose.

In fact, you could start with a novel-travelogue based on your incredible personal story. And, I think that a fine film script could be crafted based on that story. I’d go see that movie.

We don’t need another newsletter. We need the original, spontaneous, clever and useful ideas of one Mr. Tom Dyson. Reading your Postcards has been an eye-opener for me. A grateful reader.

Reader comment: Keep doing what gives you joy and focus on the family. If taking a bit of time each day to do a newsletter is something you are drawn to, then go for it. Gold has been a good part of my portfolio for quite some time so I’m not particularly interested in another newsletter. Bonner & Partners already has a lot of my business.

I really enjoy the Postcards series and the Dyson family adventures so my hope is, regardless of the newsletter decision, you keep us up-to-date on those adventures as you go forward. You have a sleep-well-at-night portfolio but what you create with your family is precious.

Reader comment: At first I felt a little betrayed by your wanting to begin monetizing your posts, but then I realized everyone is free to make money however they want and charge whatever they want. Free market, right? Win-win, as Bill Bonner says. And then I read closer to the bottom of your P.S. that you said you would continue writing these Postcards. Good enough for me. I so appreciate and enjoy reading all of your insights, both in the markets and your life in general. Keep it up!

Reader comment: I love getting your Postcards. I am finally beginning to trust that you know what you are talking about, you are sharing what you know and how you know it, and what you have done – or plan to do – in an honest, upfront way that says, “I am doing this because I believe it is the best strategy I know.”

If this was a paid newsletter, I would not be here. I would be muddling around trying to figure out who to trust and what they mean when they say the things they say. I have found that the person/company selling the information gets crazy rich and I still don’t do anything because I have doubts on their motives. I don’t have time to sort it all out… so I do nothing except cross my fingers and hope it will all work out in the end.

I would hate to lose the great wealth of information that you provide, and light on a subject I don’t really understand and have no one I trust more than you. So for me, a sold newsletter won’t be in my future. I wish you the best for you and your family. Thank you for all you have explained and taught me over the last few months. God Bless and take care.

Tom’s note: As always, thank you for your kind messages! Please keep writing us at [email protected].