Welcome to the Paul and Vicki Terhorst Travel, Early Retirement, and Contemplation Page

 We are Paul and Vicki Terhorst. We retired young and are now perpetual travelers.
This page lets you know our whereabouts, how to contact us, and what's going on in our lives.

We updated this page from Bangkok, Thailand on February 1, 2016.
To read articles by us in Live and Invest Overseas scroll down to TIMELESS .  
Find Vicki's Contemplation Photos at the very bottom of this page.


We begin with a few photos of Bangkok fun with Vicki eating an ice-cream 'steak' dinner and art exhibits of local and foreign artists.




Paul celebrated his 67th birthday in January with a 17 day escapade to Paris, Rennes and Barcelona.

 Paul writes yearly predictions for Live and Invest Overseas 
for their subscription newsletter Overseas Retirement Living. 
This January LIO also published Paul's predictions column in the Simon Letter. 


My predictions for 2015 were right on the money, every one of them.

I went against the crowd and predicted a flat year for stocks. Other forecasters called for an average 8.2% rise, and some saw twice that. But I called it flat, "plus or minus 5%." The market was indeed flat, with the S&P down just -0.7%. On Dec. 31, the last day of trading, the S&P fell -0.9%. If traders had given themselves a holiday on New Year's Eve, the index would have been slightly up for the year. During the year returns on stocks, bonds, and cash converged and approached zero across the board.

I predicted the Fed would raise interest rates, and we got a quarter point rise in December. I predicted steady growth in the United States of about 3% (actual 2.2%); 5.3% unemployment at year end (actual 5%); little inflation (actual 0.5%); continued cheap oil (actual US$37); and a weaker euro to 1.15 (actual 1.09). I recommended U.S. real estate last year, and U.S. home prices rose sharply. I doubted lower oil prices would lead to war. I predicted airlines would cut their fuel surcharges, and most have done so.

I predicted a flat year for gold, and flat it was. I predicted Europe would barely avoid a triple-dip recession, which it did. I predicted emerging markets would slow, hurt by FATCA and leftist governments. Latin American fell even more than expected, with leftist presidents in Venezuela, Argentina, and Brazil leading the way down. 

I said China would grow by 6%, and China grew by slightly more than that.

On to next year to see if I can keep my record intact…

I see better U.S. stock markets in 2016. For one thing election years tend to be good for stocks. After a flat 2015 I think we'll get going again in the new year. If you're comfortable with stocks by all means stay the course. I'm looking at an up market of perhaps 5% to 10%.

On oil prices Goldman Sachs looks to oil to fall to as low as US$20, and Bloomberg says "options traders bet on oil falling to as low as US$15 a barrel." We could see prices in that low range during the year, but I believe suppliers will finally begin to cut back. My best guess: oil will return to US$40 by the end of 2016, about where it is now.

Opec has said oil will stay below US$100 until 2040 at the earliest. I have enough trouble looking out a year, now Opec looks out twentyfive years. Good for them, maybe someone will find the forecast useful.

As an aside, year-end prices for two oil benchmarks, Brent crude (Europe) and WTI (West Texas Intermediate, in the United States), converged. Over the past few years Brent was three or four bucks higher than WTI, reflecting oversupply from the shale oil boom in the United States. But the United States now permits oil exports, and shale producers have cut back. Both tend to reduce the supply of U.S. WTI. Look for WTI to propel higher than Brent over the new year.

I see gold flat again. Natural resources may have finally hit bottom, and I look for oil, copper, iron ore, and so on to begin to come back later in 2016. I think resources will come back slowly, though, and only take off when we see higher worldwide growth. Avoid the sector for now.

I predict a stronger dollar, as measured against the dollar index of other reserve currencies (yen, euro, etc.). I see parity with the euro, with one euro equal to one dollar. Last year the dollar moved up against nearly all the world's currencies, with India and a few other exceptions. The lockstep dollar-up cycle will likely end against some currencies during the year.

Remember that nearly all small countries, and some big countries including China and India, actively control their currencies. So whether the Thai baht goes up or down depends largely on whether the Thai government wants it to go up or down.

I expect tame inflation, but more than in 2015. 

I believe U.S. real estate will again do well. If you're thinking of buying a home in the United States, you'll probably want to move before mortgage rates increase further. 

In recent years I predicted the U.S. economy would improve, giving the Fed a chance to raise interest rates. The economy did well—then again, not that well. The Fed waited and waited to raise rates. Finally, last month we saw a tiny raise of .25%. The Fed will collect more data before taking further action. Markets see the next rise in March 2016, and perhaps another later in the year.

I've given up watching the Fed and whether rates go up. The Fed moves so gradually, and telegraphs those moves so well, markets pay little 
heed to the deed. I emphasize that interest rates remain as important as ever. Raising rates too fast shuts down the economy; lowering rates too 
fast pokes inflation up. The Fed remains key. I just doubt we'll see any precipitous moves.

Several months ago I opined that we're probably closer to the next recession than the last one. With interest rates at near zero, the Fed would have to go to negative rates to prime the pump in another recession. Negative rates cause distortions, as people refuse to pay to leave money in the bank. We're better off with higher rates, to give the Fed a cushion next time the economy requires easing.

Some observers point out the similarities between the 1950s and the present. The 1950s moved forward with slow growth, low interest rates, 
low inflation, in short, much of what we see today. I'm comfortable with the analogy, and believe we can look to the 1950s for guidance. In the 
stock market, for example, the Dow tripled from June 13, 1949 to Sept. 23, 1955. The market continued to do well until the mid-1960s. Dividend 
stocks did well, which makes sense considering low interest rates. Still, we need to reflect on the differences with the 1950s, too. According to the 
New York Stock Exchange, for example, in 1952 only "6.5 million Americans owned common stock (about 4.2% of the U.S. population)." In 2016 many more Americans own stocks, either outright or in pension or other funds.

Beyond economics, I predict more student protests on college campuses complaining of rape and racism, low pay scales for grad students, lousy job prospects, and more. Strikes at University of Missouri, where students brought down the president in one day, marked the beginning 
last November. 

I predict the Mets will win the World Series. 

I see more terrorism in Europe, perhaps in the United States. 

I predict Hillary Clinton will be elected president.

In conclusion I see another ho-hum year in 2016. The Chicken Littles out there—those warning of a dollar collapse, or a stock-market or world economy or you-name-it collapse—will be wrong again. As they say, bears make headlines while bulls make money. Still, I want to add a note of 
caution. I'm concerned about both the misconception of black swans and about how dramatic change takes place.

First, black swans. You've may have heard references to black swans. "A war between Israel and Iran (or between China and Taiwan or between North and South Korea) might be the black swan out there." Or "hyperinflation may be the black swan out there." But the term "black swan" refers to unpredictable, surprise events. If we see and consider the possibility of a given war, or hyperinflation, or whatever, by definition those are not black swan events. If we see and consider the possibility of a given war, or hyperinflation, or whatever,  by definition those are not black swans. Black swans come out of nowhere, like the Sept. 11, 2001 attack or sub-prime mortgage collapse in 2007. We never foresee them. Sure, we often rationalize black swan events after the fact. "I saw it coming." But very few of us see black swans coming.

Nassim Nicholas Taleb developed black-swan theory. He made the case that rare, unexpected events—black swans—pop up more often than we'd expect. He points out that the sub-prime mortgage crisis started small, no one noticed. But the United States and world economies were
at tipping point. As the crisis unraveled people began to fear for their money market accounts. Lehman collapsed. Companies could no longer sell commercial paper. Congress and the Fed had to act quickly to avert a worldwide panic. Second, dramatic change. 

I've predicted another ho-hum year. I hope I'm right. But historian Niall Ferguson points out that every now and again we get catastrophe. His book, “Civilization: the West and the Rest,” concludes that the fall of Rome occurred not over a long period but fairly quickly: "Archaeological evidence from the late fifth century—inferior housing, more primitive pottery, fewer coins, smaller cattle—shows that the benign influence of Rome diminished rapidly in the rest of Western Europe. What one historian has called ‘the end of civilization’ came within the span of a single generation."

In 1945 Winston Churchill represented the British Empire and Stalin the USSR. They took their seats alongside Roosevelt (later Truman) to reshape the world after the war. Yet just two or three years later the British Empire largely ceased to exist. In 1991 the USSR
ceased to exist.

So black swans lurk out there, even though we're unable to predict what they are. Sudden, dramatic change can very quickly topple empires and those who run them. Ferguson refers to "violent acceleration, less like the slow and predictable changing of the seasons and more like the elastic time of our dreams." Dramatic change may be just around the corner or years away.

How to protect against a cataclysmic event like the Great Depression or dot-com bubble? Live well. Do it now. Diversify. If you wish you can try to imagine what you'd do in a catastrophe. I go through the exercise from time to time. I find the process useful or, if not useful, at least reassuring. I'm reminded how very adaptable humans become in times of crisis.

I also recommend you read The Plague, a short book by Albert Camus. Camus wrote the book after World War II; for Camus the plague symbolized Nazi occupation. Camus shows what normal people do when under extreme pressure, in this case the notion they would likely be dead within 48 hours. Or not. Camus concludes that most people stay true to form, just more so. So the light-hearted become more light-hearted, the sad more sad, the weak devastated, the shady and underhanded outright criminals. The book can help us understand what our families and friends, and ourselves, will likely do in a crisis.

Have a rollicking 2016, I see a good year ahead. Remember to plan and invest for the long term, but to live for today.

Most of all, please take these predictions with a grain of salt. I do this forecasting every year to help you think about these variables in a more organized way. I've been right so far. 

But who knows where black swans lurk?

Paul Terhorst

Sidebar on Terrorism:
Terrorism's wanton nature shakes us up, whether in Paris (Charlie Hebdo, Bataclan Theatre), in Beirut or San Bernardino, or when a bomb brings down a Russian airplane carrying tourists home from Egypt.

Two considerations. First, we should avoid crowds and busy areas, probably anywhere in the world. Sad to say, but we increase our exposure in large gatherings. The Paris attacks, Erawan bombing in Bangkok, the Boston marathon killings, all were directed at busy venues. Avoid them.

Second, keep your perspective. In 2013 some 18,000 people died worldwide in terrorist attacks. Many were in countries you're unlikely to visit, like Iraq, Syria, and Afghanistan. By contrast over 1.2 million people died in traffic accidents. Harper‘s Index noted the number of American civilians who died worldwide in terrorist attacks in 2010: 8. Minimum number who died after being struck by lightning: 29. We're 35,000 times more likely to die of a heart attack than a terrorist attack. I get upset by terrorist attacks, I know you do, too. But as a practical matter other ways to die, or not, top the list.

Photos from our December trip to Phnom Penh:

More Articles by Paul

Practical advice for anyone preparing for an early retirement overseas: 

November adventure in Burma: On The Burma Trail

    Overview of 2016

We are in Bangkok until mid March. From Bangkok we fly to Kiev, Ukraine. 
In April we will travel around both Armenia and Georgia. 
In May Vicki flies to the West Coast of the USA while Paul stays put in France and Spain. 
Early June you'll find us in Paris and then we head back to Bangkok.
July Paul has a guy trip to Vietnam planned.  
And still on the agenda, at some point after September, Vicki plans to visit Buenos Aires.


Paul's recent writing, two articles a month, has been for Live and Invest Overseas subscription 
newsletters:  "Overseas Retirement Living" and "The Simon Letter".  

Click on TIMELESS to go to our Timeless page which has links to old articles by Paul and a few by Vicki about our travels and reflections. These articles are available for free on the Live and Invest Overseas website.
We wrote Cashing In on the American Dream, published by what is now Bantam Doubleday Dell, in 1988.  Even though the book is out of date and out of print, it is still considered a classic read for anyone considering early retirement.

Contemplation Photos

 Thank you for visiting our page.
Our email address is paulvic@yahoo.com.