We See Boom Ahead for Nicaragua Despite Travel Advisory

RANCHO SANTANA, NICARAGUA – We love introducing our children to local children in the countries we travel in. We hope it expands their minds.

Often, they can’t communicate with words, so they find other ways. Our kids have played soccer with local kids in a dozen countries, for example. Frisbee, too. We carried one with us around the world and it was a great icebreaker.

This morning we visited a local charity called FunLimón. It serves the community around Rancho Santana. There’s a basketball court, a baseball field, a farm, a gym, and a playground there.

Plus FunLimón employs a bunch of teachers and offers classes in useful subjects… like computers, English, electrical engineering, woodworking, and female self-defense.

Here we are participating in the morning English class. (We’re trying to organize a soccer game at FunLimón later this week, too.) 

Kate and the kids in a morning English class

Trophy Asset

Greetings from Nicaragua!

Kate and the kids are nearby doing their schoolwork. I’m sitting on our veranda, cup of Nicaraguan coffee nearby.

I’m writing this message to you by hand with a pen and paper, as I do every day. Later I’ll transcribe it on my laptop, send it by email, and we’ll jump in our vintage Jeep (see it here) and head over to the clubhouse for an evening swim and some supper.

Rancho Santana is not like other resorts around here. It’s what they’d call in the investment business a “trophy asset,” which means there isn’t anywhere else that matches it in terms of quality. This protects its value because there’s no competition in this segment of the market.

Properties and lots inside Rancho Santana are in very short supply. Plus the people who built and live in Rancho Santana are here for the long haul. It’s what they call “strong hands” in the investment business. (Our neighbor and host, Bill Bonner, is one of these strong hands.) 

That said, Nicaragua has been having some political problems. The U.S. State Department has advised Americans not to come here. Tourism around here has dried up, property prices have fallen, and some resorts have even had to close their doors.

But this will pass soon – as it always does – and Nicaragua will boom again. (I heard there’s been an uptick in sales recently from expats wanting to lock down properties while they’re still cheap.)

Rancho Santana will be fine regardless. They haven’t even had to lay off any staff.

We Put “Crazy” Behind Us

Kate and I are all about eliminating “crazy.”

We’ve gotten rid of all our stuff. We’ve gotten rid of our apartments and our cars. And we’ve gotten rid of bills. We just float from place to place, dragging our kids and a suitcase behind us.

It might sound a little “rootless,” but we’ve found this lifestyle to be so much simpler and elemental. Our biggest obligation each day is figuring out what the kids are going to eat!

We’ve done the same with our savings and investments. No more crazy. Just physical gold and a few royalty stocks hidden under the mattress.

And instead of watching the stock market – and all the drama and stress it stirs up – we look at the Dow-to-Gold ratio. The Dow-to-Gold ratio eliminates “crazy” and gives us a more “sober” picture of the world.

The Dow-to-Gold ratio was at 16.15 this morning. It peaked at 22.25 in 2018 and it’s on its way to below 5. Once it falls below 5, we’ll know it’s safe to return to the stock market.

– Tom Dyson

P.S. A man just came up to our veranda and offered me lobster. He’d just caught them in the waters below us. 

P.P.S. The staff here are outstanding, by the way. They treat us like dignitaries, organizing tours, transportation, rescuing us when our Jeep breaks down, and even removing a skunk from our bathroom the other night! The majority of workers here speak excellent English, too.

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

Today, readers continue the conversation on Tom’s divorce story… and ask for clarity on quick movements in the market recently…

Reader comment: I was moved by your honest article. I, too, had to get divorced from my wife to realize how deeply I cared for her. No one’s life is perfect. I was hiding from myself and was afraid to let go of some of my deepest secrets and hidden flaws. After we were divorced and didn’t talk to each other for almost a decade, she reached out to me because she saw some of my music online.

Long story short, we rekindled a friendship that lasts to this day. She is the only person on the planet who literally knows more about me than anyone else except myself. We can not be together due to some differences in personality, but I know that she does love me and accepts me as I am. There is no price a man can put on that kind of love.

As I just stated above, this is something that cannot be measured in worth to me. My first wife (before the one I am talking about) was another story. She was selfish and cruel. She took my only child and turned her against me. She stole a part of life from me I will never know and can never have now due to my age. I am not upset about it anymore, but I do feel a twinge of jealousy when I see a happy family with parents who have children who care about them.

Now that I am older, I wish I had a significant other to care for me when I am REALLY old, but I fear this may not be in the cards for me. Only time will tell and I AM still hopeful. What you have now is an unshakable bond that is worth all the gold in the universe, just as I do (in a way) with the second ex-wife… my truest friend in the universe. PLUS you have your children! That makes you among the richest folks on the planet, regardless of how much money and freedom you also now enjoy.

Tom’s response: Thank you for your message. Both my parents are single, too. My mother is a widow. And my father is twice divorced. I hope you find a significant other. Kate and I tell the kids we are “rich” all the time… but then we explain that “being rich” has nothing to do with money or gold.

Reader comment: Thanks soooo much for telling the truth about your divorce. I really respect both you and Kate for doing that. I believe this would be a much better world (MUCH BETTER) if more people could see and then tell others the truth about themselves.

Reader comment: I appreciate you sharing the lovely celestial photo from Nicaragua. And your story about your healing session and the video confession that put a rift in your marriage… Most marriages aren’t perfect, you know. What is important is that you are back with Kate and your children.

If your love for your family is genuine, just be happy and enjoy it. I have to spend many months each year away from my family for my business abroad. When I am away sometimes I break down and cry because I miss them so much. I finally decided last year that, from that point on, I would try to spend the majority of my time with my family no matter what.

Reader comment: We can’t have a second chance twice. Be thankful to your creator each day that Kate gave you a second chance. Read the bible daily. When God is in the marriage, it will be as strong as a threefold cord; it will never be broken. Have a nice life!

Reader comment: To me, marriage has always been about the family more than the romance. Not to say I wasn’t madly in love with my wife before and when marrying her. Besides being in love, the desire of having kids was the main driving force behind our marriage. We really wanted to form a family when we met. And yes, there were many junctures in my marriage when I wanted to get out, but my wife and I stuck it out somehow and here we are.

Unfortunately, marriage causes many parents so much pain that it overpowers the joy of being together as a family… Work, finance, and self-seeking mindset often are the causes, as you know. Now that you are back with your family, I hope you never forget how desperately you missed them while you and Kate were apart – that is, if you indeed had those moments of desperate care for your family.

Reader comment: We have been married 50+ years and today I find my husband addressing issues that he just couldn’t address before now. I’m sure he would say the same for me. I’m very glad we stuck it out through all our difficulties.

In another 30 years, you will still be growing. God has a long timeline. He patiently builds us into the people he designed us to be, as long as we don’t resist him. In many cases, old people finally get real with both him and themselves after a lifetime of avoidance or resistance.

Reader question: Why are gold miners (and silver) taking a beating just like all other stocks? I thought that gold and silver might hold their ground but they have been pummeled, too.

Tom’s response: I don’t like to comment on short-term movements because they don’t tell us anything about the future. It was just a bunch of crazy weak-handed investors expressing their fear all at the same time. Let’s keep our eyes on the big picture and focus on the strategy, not the short-term results. 

Reader question: Gold and silver have been falling along with stocks, especially today. Does that change anything? And what does it mean when people are not flocking to gold and silver? I understand your premise is gold is the safe haven. Thank you and wishing you and your family continued happiness.

Tom’s response: As I mentioned above, this doesn’t change anything. Please don’t try to read meaning into the movement of an asset over ONE DAY. Because there is no meaning. It’s just people buying and selling with a little extra intensity than normal.

Meaning from market price, movements can only be discerned over months and years. The one exception might be the stock market. The stock market affects social mood because so much wealth in the real economy is tied to the level of the stock market. So if the stock market falls suddenly, it can act as a pin to a bubble and cause a shift in sentiment.

Reader comment: Thanks for being a “one-trick pony” as one reader called you last week, leading us all to buy more gold. This week’s horror show on the stock market is proving you are right.

My question is this: Last Monday and Tuesday as the panicked selling really got going, investors were fleeing into the usual safe havens of U.S. Treasury bills and gold, and the price of gold went up commensurately. But by Thursday and Friday of last week, the price of gold (as well as gold stocks) was collapsing fairly dramatically.

I can’t believe that so many investors were selling, rather than buying, gold at that point. And I didn’t hear any of the usual financial channel talking heads say anything sensible about why this was happening with gold.

One financial guru suggested that the Bank of International Settlements (BIS) in Switzerland is behind this mysterious suppression of the price of gold, but he didn’t clarify why the BIS would not want the price of gold to soar in the U.S. at this moment, or how it would sell enough gold to stop it from happening. Your thoughts, please? 

Tom’s response: All sorts of shadowy dealings happen in the gold market. It’s a tiny market compared to stocks and bonds and currencies, and the banks and hedge funds love to play silly buggers with it. Did you know some traders at J.P. Morgan were charged last year under RICO statutes for illegally manipulating the gold market?

Anyway, my point is, some days gold will go up and some days it will go down. And some days it will go up and down quite a lot, as it did on Friday. We’ll never know why and we don’t need to. These fluctuations have no bearing on our worldview, so try not to pay attention.

What matters is that we’re in a valuations bear market and gold is going to rise relative to stocks for the next five to 10 years, until the Dow-to-Gold ratio goes below 5.

Reader question: How can you stay focused on American financial dramas while you are enjoying a tropical paradise?

Tom’s response: It’s hot outside and I’ll get sunburned if I go to the beach. Kate and the kids are doing their schoolwork. So I watch the markets. It’s more drama than anything on Netflix right now.

As always, please keep writing us at [email protected]! Kate and I read all your notes, and we find them so encouraging and comforting.