WEST PALM BEACH, FLORIDA – Gold made an eight-year high this week. But this is just the beginning.
Gold is already at all-time highs in just about every currency on the planet. Next we have to take out gold’s all-time high in U.S. dollars of $1,900, set in 2011.
Meanwhile, the Dow-to-Gold ratio keeps falling… (More below.)
Our Financial Cabin in the Woods
I’ve described our approach as the Henry David Thoreau of investment strategies.
In the 1840s, Thoreau lived in a cabin in the woods for two years. He wrote Walden, a famous book about his experience.
In 2018, Kate and I went to live in our own “financial” cabin in the woods.
We sold all our liquid assets, drained our bank accounts, and handed in the keys to our apartments. I sold my car, all my furniture, and converted everything to physical gold and silver.
It wasn’t an investment or a specific speculation to make money. We simply decided we didn’t want to live in the financial system anymore. So we took a financial sabbatical… and decided to go live in the “woods” for a while.
In my eyes, the whole system resembled a giant and completely inappropriate experiment. I was seeing cracks everywhere – sudden air pockets in the stock market… irrational pricing… fragility.
I saw a total rejection of saving in favor of debt. I saw efforts to prop up the markets using unsound money and financial engineering. Things like quantitative easing (QE). And artificially lowered interest rates. And huge government deficits.
The economy seemed almost like it was begging to liquidate itself. And yet the feds kept pushing it up and talking it up.
The most disconcerting part of it all was that no one seemed to care. It felt like we were riding on the Titanic, speeding through an ice field…
Today, as I write to you, Kate and I remain in our financial “cabin in the woods.” And as I study economics and watch the financial news, nothing has changed.
The feds are still “managing” the economy… with more financial engineering, more unsound money, bigger deficits, and more soothing words.
The system still looks to me like the Titanic speeding through an ice field… except it’s traveling even faster now.
So we’re sticking with gold and silver. We’ll stay there, on the sidelines, until it’s safe to return to the financial system. How will we know when it’s safe?
The Dow-to-Gold ratio is our ultimate barometer. When it falls below 5 again, we’ll know it’s time to trade in our gold and silver and return to stocks.
The ratio is at 14.1 today.
– Tom Dyson
P.S. Bill Bonner just wrote an urgent briefing about the crisis we’re in… the feds’ role in it… and what he sees coming – for our government, our economy, and our society. It’s a MUST read. Just go right here…
Like what you’re reading? Send your thoughts to [email protected].
FROM THE MAILBAG
Tom’s British boarding school story (catch up on the first three parts here, here, and here) – and his concern that his stories may be too self-indulgent – struck a chord with readers…
Reader comment: I went to a boarding school in America – Arizona to be precise. Much different. I suppose because they weren’t trying to turn us into good British soldiers with stiff upper lips. I can relate to the bells for everything but the school was co-ed, we wore Levi’s most of the time, and it was a working cattle ranch.
I don’t think it’s self-indulgent to share your story; I suspect you’re writing as much for yourself as for us, and it certainly explains how you came to be so emotionally frozen in your earlier years. And it helps us get to know you so keep it up.
Reader comment: I thoroughly enjoy hearing of your life’s experiences. Tell you what – those experiences are of the most interest. You wonder if you should share them. You probably do have some memories and experiences that are either way too private, or too sacred to share. That’s as it should be. However, do not apologize for “getting personal,” because that’s the stuff of good, effective, and even great public exposition, whether written or oratory.
So thank you, Tom, for getting up close and personal. I not only enjoy it, I am helped and instructed by it, whether your experiences be of financial and investing concern, or more especially, of personal and family concern. Money can buy a lot, but the currency of life’s lessons learned brings us the much greater treasures – happiness, joy, and a sense of well being that lasts forever. God bless you.
Tom’s note: Thanks for all the kind messages! Please keep your comments and questions coming at [email protected]. Kate and I read every note you send us.