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July
06
2021

How to Protect Yourself From a Fragile Economy
Tom Dyson

Here’s an easy way to think about the big trends of the next decade or two…

We’re now at an inflection point in the markets that’s the inverse of the great inflection point of the early 1980s.

Back then, there was only one trade you needed to make – sell your gold and silver and buy stocks and bonds with the proceeds.

Today, it’s the inverse. The trade we need to make is sell our stocks and bonds and buy gold and silver.

The reason is simple. In the early ’80s, they had inflation. They didn’t want it. So the feds worked hard to snuff it out.

Today, the feds say inflation is too low. They want more of it. So they’re working hard to summon it.

Treasury Secretary Janet Yellen says they must “go big” with stimulus.

Federal Reserve Chairman Jerome Powell says he’s going to let inflation “run hot” but keep interest rates at zero for the foreseeable future.

Listen to what the feds say and take them at their word when they say they’re going to summon inflation. Then, do the opposite of what worked in the 1980s.

Sometimes, things are just that simple. More below…

Homeschool Unit Studies

Greetings from London…

Three years ago, my family and I set off on the ultimate homeschool field trip.

We’ve seen the Taj Mahal, the Great Pyramids, the Great Wall of China, the Grand Canyon, Mount Rushmore, and hundreds of other educational sites…

Seeing the pyramids on camelback in Cairo, Egypt

We’re now doing something Kate calls “unit studies.” We pick something we want to learn, and then we immerse ourselves in that thing for several months.

Here in London, we’re exploring some of the world’s greatest museums (like the British Museum and the Tate). When we lived in Driggs, Idaho in the winter, our unit study was skiing and snowboarding.

Krav Maga is another example of a unit study. We want to travel to Israel and learn self-defense for a few months.

We also want to go to Mexico and learn Spanish. We want to learn how to cook. And how to paint. And how to build a house. And how to play musical instruments. And maybe work with horses.

Studying in units like this allows us to see the world. But it’s in a way that’s deeper and more comfortable than the fast-moving travel style we used before we settled down in Driggs.

I imagine we’ll do two or three of these unit studies a year.

Anyway, this is our homeschooling dream right now. Will things actually work out like this? We’ll see…

Things of Importance

Why did I move so far away from my parents 20 years ago? Why have so many of my peers done the same? Why do many of you live so far away from your children?

Don’t we want to be in each other’s everyday lives? Or are other things in life – like work – more important?

Now Mum’s gone, I regret living so far away from my parents for all these years.

Kate and I would like our children to live nearby us when the time comes for them to leave home. But how do we make that happen?

We’re not sure, but it’s something we ask ourselves often. We cherish the time we have with our family now more than ever. And we want to soak up every second we have with our kids before they grow up and start their own lives.

Protect Yourself Against a Fragile Economy

Now, back to the economy…

I recently watched this interview with the late industrial titan and corporate predator, Sir Jimmy Goldsmith. He was on the Charlie Rose Show. It was filmed in 1994.

Goldsmith warned that outsourcing production to low-wage nations like China was putting the interests of Big Business and Wall Street above the interests of the people.

It would destabilize American society, he said.

I loved his quote about offshoring and globalization: “The poor people in rich countries end up subsidizing the rich people in poor countries.”

Twenty-five years later, real wages in the U.S. have stagnated for all but the top 10%… America’s industrial heartland has collapsed… and a massive bubble in debt, equity, and real estate has formed, leaving our economy fragile and prone to crashes.

The good news is, because of COVID-19 and a brewing Cold War with China, these trends have probably reached their apogee.

The bad news is, it’s going to be a painful adjustment for both sides.

My analysis points to inflation in the U.S… big losses for sovereign bond investors… and a rewiring of the world’s banking and payments system around something other than the dollar and paper currencies…

In other words, sell stocks and bonds, buy gold…

– Tom Dyson

Tom Dyson is the editor of Postcards from the Fringe and Tom’s Portfolio. He’s a former London banker and money manager.

In 2018, Tom sold his furniture, handed back the keys to his Florida apartment, and set off on a two-year trip around the world. His Postcards from the Fringe e-letter is a chronicle of life on the road with his ex-wife, three kids, and a suitcase.

Tom also documents his thoughts on the markets and the global economy in his Postcards. He’s well-known for his contrarian ideas, among them, buying bitcoin when it was selling for just $6 in 2011… right before it climbed 302,000%… as well as his “all in” bet on gold in 2002, right before it became that decade’s best-performing investment.

But that wasn’t the last time Tom went all-in on gold. Starting in 2018, he bet nearly $1 million on a gold strategy he developed. He believes it could be the biggest moneymaking opportunity of the next two decades. In Tom’s Portfolio, he breaks down the ideal portfolio to take advantage of this strategy.

www.rogueeconomics.com