I left my job almost two years ago. Kate and I sold all our things. (We’re divorced.) We hit the road with our three kids. We don’t have anywhere to live.
We left “the matrix” in another important way, too.
When we left America, we drained our bank accounts and retirement accounts of cash and converted all our savings into gold and silver.
Why did we do this? We don’t want to be “in the system” anymore. It’s unbalanced and unstable.
When we made our move, 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), 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.
That’s why for the past two years, we’ve been sitting on the sidelines in precious metals, until it’s safe to return to the financial system.
When it finally is safe, we’ll sell all our gold and invest in a select group of stocks. Our money will stay there – I hope – generating bigger and bigger dividends for the rest of our lives.
How will we know when it’s safe, though? For that, we follow the Dow-to-Gold ratio…
The Ultimate Barometer
The Dow-to-Gold ratio is the ultimate barometer of systemic “health.”
The Dow is the aggregated stock price of 30 of the largest, most iconic businesses in the world. Gold is an inert metal. It’s the investment equivalent of hiding your money under the floorboards.
By presenting these two as a ratio, I get a barometer.
I’ve looked through over 100 years of stock market history. The last times the system “reset,” depending on how bad things got, the ratio went below 5.
On the flip side, when things were ripping – as they were in the late 1990s, for example – the ratio got as high as 41.
The thing about this barometer is, unlike other price series in financial markets, it doesn’t bounce around much. Once it begins a trend, it tends to stay in that trend for many years.
The charts below tell the whole story…
When we started our travels and arrived in Africa in November 2018, the barometer was above 20. Today, it’s at 13.8.
It’s falling again.
I believe this is the start of a longer trend… a signal that the system is going to break soon. Maybe it’s started to break already?
Either way, while we wait for the Dow-to-Gold ratio’s “rendezvous with destiny” (as Bill Bonner calls it), we remain in our financial “cabin in the woods.”
The system still looks to me like the Titanic speeding through an ice field.
The government is still “managing” the economy – with more financial engineering, more unsound money, bigger deficits, and more soothing words… except it’s unraveling even faster now.
We’re sticking with gold and silver.
Editor, Postcards From the Fringe
P.S. As you know, as part of our revelation two years ago, Kate and I also went “all in” on gold.
I invested nearly $1 million of my own money in our Dow-to-Gold strategy. But there’s more to it than just buying bullion. And on Wednesday, May 20, I’m sharing the details in an urgent briefing.
To make sure you don’t miss it, reserve your spot right here.