Welcome! If this is your first time reading one of my postcards, catch up on my back issues here. And if you have questions or comments, shoot us a note anytime here or at feedback@rogueeconomics.com. | The Greatest Financial Experiment By Tom Dyson, Editor, Postcards From the Fringe BOZEMAN, MONTANA – We are living through the greatest financial experiment in history. For the last 49 years, one nation’s paper currency (the U.S. dollar) has served as the world’s store of savings. This has never been tried before. Also, it’s the first time that the world’s store of savings has absolutely no backing by gold, silver, or anything of real value. Only fiat currency. I’d probably be okay with this if the United States government – the steward and leader of this global fiat currency system – was a tower of financial strength and permanence, like a stone castle. But it’s not. It’s $27 trillion in debt. And can only afford the interest payments because it has artificially suppressed interest rates to near 0%. Furthermore, it’s made ridiculous future spending promises – estimated by some analysts to be worth more than $100 trillion – to American voters. And recently, it’s taken to printing the currency it needs to make ends meet. To date, it’s printed $7 trillion. We Don’t Want to Participate in This Madness I saw these stats over the weekend: Before the end of 2021, $8.5 trillion in U.S. government Treasury bonds come due. This is the greatest debt wall any institution has ever faced in history. I can’t wait to see how the Treasury handles it. Global debt-to-GDP has hit 331%, according to the latest figures from the Institute of International Finance. The world economy created more debt in Q2 2020 than the value of all the above-ground gold in the world. You can analyze the implications of all this from many angles. The angles are almost infinite and will very quickly give you a headache if you try to predict the future. Kate and I took the simplest angle: We don’t want to participate in this madness. Our savings are too precious to us for us to risk them getting caught up in some sort of global currency or monetary system crisis. So two years ago, we pulled everything and began a great financial experiment of our own. Basically, we attempted to create a new life as removed as possible from any potential financial collapse or failure of the Great Experiment. For Kate and me this meant: Turning our life savings into gold and burying it somewhere safe. (I use the word “bury” as a euphemism. I didn’t actually bury any gold.) Getting rid of all our possessions, including our jobs, our kids’ schools, and our hometown. We became 100% weightless, like dandelion seeds floating in the wind. (Our Netflix subscription was the only “root” we kept.) We lived out of a suitcase and traveled around the world – visiting 30 countries, including India, China, Japan, Rwanda, Germany, and Lebanon – and learned how to live “weightless” in whatever country we found ourselves in. Doing the Right Thing for Our Family and Our Money The Great Financial Experiment has not imploded yet. In fact, this year, we had a global flu pandemic and a major world-wide recession. They “upped the ante” on the experiment. But we recognize and understand the experiment could last a lot longer than anyone expects. (I’m mentally prepared to wait for another decade.) In the meantime, we found happiness in our new lifestyle. We call it the “Endless Vacation.” We have much less stress now and we feel like we’re on a permanent vacation. Our cost of living is a fraction of what it used to be. Our kids are getting a fantastic – if very unconventional – education. And above all, this lifestyle has knit us together tighter than a pack of wolves. Even if the Great Experiment turns out to be a wild success (which it won’t), we still did the right thing for our family, ourselves, and our money. The best way to measure the progress of the Great Experiment, in my opinion, is to watch the Dow-to-Gold ratio. It synthesizes the battle between “participating in the Great Financial Experiment” and “burying gold” into one simple line and one simple chart. – Tom Dyson P.S. The U.S. is our “home” country and COVID-19 forced us to stay “home” this year. So we pulled Kate’s car out of storage, bought a cheap tent trailer, five sleeping bags, and a camping stove, and we’ve been floating around the USA for the past three months, camping, seeing the national parks, and driving on backroads. It’s been fabulous... This weekend we left Idaho, drove 190 miles north, and I’m writing to you from Bozeman, Montana. Here we are camping in a friend’s driveway last night. Tomorrow, we’ll be on the move again… Camping in a friend’s driveway Like what you’re reading? Send your thoughts to feedback@rogueeconomics.com. FROM THE MAILBAG Many readers wonder if they should buy physical gold, even though it’s hitting new all-time highs… Reader question: Do you still recommend purchasing physical gold now that it has reached all-time highs? Tom’s response: Yes, I do. Remember, my trade isn’t a “buy gold” trade. I’m actually agnostic on the gold price. My big trade is a bet that gold will beat stocks over the next 10 years… i.e., a decline in the Dow-to-Gold ratio. Recently, stocks have beaten gold, so if you’re interested in playing my trade, now would be a good entry time into the trade. Reader comment: Thank you for sharing your knowledge with those of us who have been following the mainstream view of money all our lives, and need all the help we can get to wrap our heads around how the world of finance REALLY works… I asked my financial advisor and friends years ago, when gold was $300, if buying some gold would be good, but they always advised against it. I spoke with several advisers again in March, but they told me the same thing and advised me to stay in the market. Later that month, I “stumbled” on you and I have been trying to get my money out of the bank ever since. That has taken me over three months. Gold has reached $2,081 per ounce, and now that I finally have the cash, I am paralyzed. I know you have no crystal ball, but is it likely to come back down to $2,000 or less before it continues to rise, or should I jump in regardless of the price right now? Tom’s response: Mainstream financial advisors will always push stocks and bonds. The whole system has been set up for financial professionals to profit by selling stocks and bonds to retail investors. To help that, the financial industry has created very powerful narratives like, “Buy stocks for the long run,” or “Use a 60:40 portfolio” to drive this position forward. As for gold, don’t worry too much about its current price. (As I write it’s at $1,968.) My big trade is just getting started and it still has a long way to run. Reader question: Is it too late to buy physical gold? Tom’s response: No. I wrote about this in more detail in this Postcard. Reader question: The lowest premium I have been able to find on physical gold coins is around 5%. If memory serves, you never recommended paying over 4%, but now that the period dictates a rising gold price, do you feel 5% is a good rate? I can only afford one coin at a time (American Eagles) so I definitely have that going against me. Thanks for all you have taught me. Tom’s response: I don’t recommend paying more than 4% premium for physical gold. Currently, I’m seeing many opportunities to buy physical gold for less than 4%. All the top physical gold retailers – including Apmex – have gold for less than 4% (although I didn’t see any American Eagles.) Meanwhile, one reader implores Tom to create a travel guide with his experiences and other Postcards readers’ recommendations… another is happy Tom heeded his suggestion… and one advises Tom to carry extra spare tires… Reader comment: I hope that you are going to collate your U.S. road trip into one volume at some point when it’s over. My wife and I are planning a major road trip in four years, and it would be great to not only access your journey but also all of the reader suggestions, too. You might well add to your own wealth by doing that! With best wishes from England. Tom’s response: Yes, I will collate all the reader suggestions, the campgrounds we found, and the apps we use to navigate around. America is a very easy place to travel by road. Reader comment: When I was your kids’ age, my family went to Yellowstone and it snowed in July. So be prepared! Glad you made it to my recommendation of Sleeping Bear Dunes in Michigan. I don’t know how much time you spent, but hopefully, you at least were able to climb to the top of the first dune. We used to hike all the way to Lake Michigan back in the 1960s. I swear the dunes looked bigger to me back then! Tom’s response: Thanks for the recommendation. We climbed the dune to the top. That whole area was beautiful and I’m glad we made the effort to go there. Reader comment: You can get a wheel tire combo at a local Walmart. It couldn’t hurt to have two spares. Love all your adventures; you all are my favorite nomads, gypsies, adventurers. I’ve been an avid admirer from the start of your travels. Many Bon Voyages to you all. Tom’s note: Thanks for the kind words! Please keep writing us at feedback@rogueeconomics.com. 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