Sovereign Man: Recent Episodes

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The blood isn’t even dry on the corpse of Kamala’s billion dollar presidential campaign, and the opportunists in her party are already shamelessly jockeying for power.

California Governor Gavin Newsom has just called a “special legislative session,” to “Trump-proof” his state and “safeguard California values”.

Naturally we’re left wondering, what exactly are those California values?

Luckily, Newsom gave us a demonstration earlier this week. As a classic tone deaf politician, he wandered around Los Angeles’ skid row neighborhood in his $1,200 shoes, with his $8 latte— and very fancy tailored suit— while being heckled by the neighborhood’s residents and homeless.

Apparently, he expects to be greeted as a hero everywhere he goes, completely oblivious to the destruction he has caused.

It appears that the value he aims to protect is that he, and he alone, should be in charge, at everyone else’s expense.

Obviously preparing for a White House run, it is also so interesting that Newsom, over the past couple of years, has gone out of his way to compare and contrast his state against his arch nemesis, Ron DeSantis, Governor of Florida.

The left seems to think Florida is the worst place in the world.

MSNBC host Joy Reid captured the angst of the left, howling that America might turn into Florida: “that kind of extreme, extremist right wing fascist type government.”

Ah yes, fascist Florida, the state which did not lock down its residents for years in the name of COVID, did not shutter business, require masks, force injections, or arrest people for walking in parks.

The state with a booming economy, with a balanced budget, despite having NO state income tax, with massive net migration, and constantly improving infrastructure— despite being pummeled by hurricane after hurricane.

God forbid America turns into Florida!

But this is one of the beautiful things about America.

As the Founding Fathers were framing the US Constitution in the 1780s, they baked in the idea that states should have tremendous autonomy.

They had all read Adam Smith’s 1776 work, The Wealth of Nations. They understood that competition between states would make America a marketplace of ideas and policies, where the best ones could win out.

And while the federal government has amassed way more power than was ever intended, you can still see the results of capitalist-style competition between the states.

It’s why California, New York, and New Jersey are losing population amidst unsustainable state government debts, crime waves, unchecked illegal immigration, and high taxes.

And it’s why states like Florida and Texas are booming— because Americans all have a choice of where they live.

But still, if you want a government that spends $35,000 per homeless person, yet doesn’t reduce the number of homeless, you can move to California.

If you want a state that promises high speed rails, but 16 years and $35 billion later has nothing to show for it, California is calling!

If you want a Governor who raises taxes on oil and gas, shutters nuclear power plants, and insists on inefficient “renewables” unable to keep up with electric grid demand from the electric vehicles he mandated, Newsom is the guy for you!

If you want to live in a place where shoplifting is decriminalized, Newsom is your knight in shining armor.

The Founding Fathers gave Americans the option to build their own Plan B… as well as Plan C, D, E, F, G, H, I, J, K, L, and M to choose which of the original 13 states they preferred.

Today, you can freely choose from 50 states to move to without asking permission.

If your number one concern in life is making sure your children have access to drag queen story hour, there are plenty of options for you in the United States.

If, on the other hand, you prefer to live in a state with sounder government finances, safer streets, better performing schools, and lower taxes, you also have options.

You even have the additional choice of the territory of Puerto Rico, if you want to legally avoid having to pay federal income tax.

And there are also about 170 other countries on earth to choose from as well, for a cheaper cost of living, access to inexpensive healthcare, a better climate, or your preferred lifestyle.

Obviously, there is still a mountain of problems to fix and challenges to overcome for the country as a whole.

But the fact that Newsom thinks he’s the guy that can get it done it just hilarious.

His idea of “Make America California” is so blind to everything that has happened in his state, including the countless residents and businesses who have fled California in disgust.

He’s also blind to the fact that “make America California” was already on the ballot in this election. And it got complete destroyed.

That’s essentially what Kamala and the guy who shakes hands with thin air were doing.

The results are clear: Americans are weaker, poorer, the country more chaotic, less unified, more pessimistic, and less respected internationally.

Newsom is so delusional he still thinks people want more of this. Honestly, it’s hilarious.

And as I wrote last week, this is actually good news for the most part.

The risk, of course, is that if the incoming government isn’t able to move the needle in the right direction and get the country back on track, there may be another giant turn to the left in a few years, not to mention some pretty severe social and financial consequences.

This is why it still makes sense to maintain a solid Plan B.

But as long as there are Inspired Idiots like Newsom who think people actually want more destruction, more likely the Left will continue to lose… and hence the better chance that the country and the world will have a brighter future.

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Well, inflation is up again. You’re probably not surprised, and neither are we.

Over the past few months, in fact, we’ve repeated again and again that inflation will keep rising, and even identified some strange reasons why.

Remember back during the early days of the pandemic when used car prices went through the roof? Supply chain dysfunction and stay-at-home orders prevented the big auto manufacturers from producing too many new cars. So, demand for used cars surged… and used car prices shot to the moon.

But used car prices eventually started to fall back to earth. And throughout this year, the government inflation reports showed steep drops in used car prices– like 10 to 12% year-over-year declines.

We made two key points about this:

1) The big drop in used car prices was essentially dragging down the inflation average. Other prices, like housing, medical care, etc. were still rising by 5% or more. But after averaging in the negative 10% used car price declines, the overall inflation rate seemed to be falling.

2) We also said this would be temporary. Used cars could only fall for so long before they reached ‘normal’ levels. And once that happened, inflation would start to rise again.

This appears to have now happened.

During the summer, for example, used car prices fell 10.9% year-over-year in the month of July. Then in August, the year-over-year decline decelerated to -10.4%. Then the following month to -5.1%. Well, the October data was released just this morning, and used cars index fell 3.4%.

In other words, we’re almost at the end of the ‘used car deflation’ benefit that dragged down the government’s inflation report. So, it’s no coincidence that we also see inflation once again rising, from 2.3% in September to now 2.6% in October.

And there are plenty of categories that are WAY more that 2.6%, especially the things that people buy on a regular basis. Health insurance is up 6.8%. Car insurance is up 14%. Airfare is up 4.1%. Housing costs are up 5.2%. Daycare is up 6%.

Sure, there are obviously categories where prices have fallen. And congratulations if you were in the market for a men’s sport coat last month– you paid 5.9% less. Plus, the all-important “dishes and flatware” category plunged 7.4%.

But these hardly make up for the big price hikes in the key categories that are essential to most people.

This is what makes the Fed’s policy actions so bizarre. Last week they cut rates, again, for the second time this cycle… which is the OPPOSITE of what a central bank would normally do in the face of rising inflation.

In the same way that they pretended inflation was “transitory” throughout 2021, they are now asserting with equal vigor that the inflation beast has been tamed.

They’re so full of self-congratulatory hubris, in fact, that Fed Chairman Jerome Powell stated that he will refuse to step down if Donald Trump demands his resignation.

Bear Powell in mind, Powell is the guy who totally missed inflation in 2021. I mean, he was MISTER Transitory. He failed to act in a timely manner and waited until mid-2022 to start hiking rates in earnest. He then failed to predict any negative consequences from the rate hikes– including the meltdown in the US banking system.

Powell even testified before Congress– just TWO DAYS before Silicon Valley Bank went bust last year– that he saw “nothing in the data” to suggest there were any risks to the Fed’s monetary policy decisions.

I would also point out that during Powell’s chairmanship, two of the most senior Fed officials were found to have been personally profiting from their monetary policy decisions through questionably timed stock trades. It was almost as if Nancy Pelosi was running the joint.

So, Powell– who has been consistently wrong in the most remarkable ways– now insists that he will NOT step down. Apparently, HE and HE ALONE can lead the Federal Reserve. And we’ve seen that arrogance before from Joe Biden, Tony Fauci, etc. It’s not a good look and doesn’t bode well for the Fed.

All that aside, it’s pretty clear that the Fed is in a bind. Inflation is rising, so they should realistically hike rates. But interest rates– even at current levels– are killing the federal government.

The US spent an unbelievable $1.1 trillion in the last fiscal year paying interest on the national debt. That will almost certainly increase for this current fiscal year. And if rates stay where they are now, the total interest bill will exceed $2 trillion in a few years.

That’s a pretty bad situation considering that interest rates are still relatively cheap on a historical basis.

But it’s not just the federal government. Current interest rates are also bad for banks.

Remember that banks across the United States bought mountains of Treasury bonds during the pandemic– at a time when interest rates were at record lows, and those bonds yielded as little as 5 basis points (i.e. 0.05%).

Thanks to the Fed’s interest rate hikes, those banks’ bond portfolios have tanked in value. (When interest rates go up, bonds lose value.) In fact, across the entire US banking system, the total unrealized bond losses exceed $500 BILLION. That’s about 20% of the total capital in the US banking system.

Naturally banks don’t want to take that hit. And the only way to unwind those losses is for interest rates to fall, i.e. the bonds once again increase in value. So, yeah, banks desperately want rate cuts too.

But the most important one is the Fed itself.

Just like banks across the country bought US government bonds during the pandemic, the Federal Reserve bought literally TRILLIONS of dollars of bonds. And their interest rate hikes have caused unbelievable losses to the Fed’s own bond portfolio.

How big are their losses? Roughly ONE TRILLION dollars.

In other words, the Fed is wildly, woefully insolvent. And at this point, they’re just out for self-preservation. Cutting rates is the only way to reduce those unrealized losses and prop up their solvency, even if that means more inflation… or even stagflation that could be worse than the 1970s.

That is especially significant since, during his last press conference, Powell admitted that the Fed has no contingency plan for stagflation. They’re not even thinking about the risk. They’re just focused on saving themselves at your expense.

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“Wow, these guys are going to be in for a rude wakening about how much power is going to be available. . .” thought Joe Dominguez, CEO of Constellation Energy.

Dominguez was one of the attendees last May at a private, invitation-only gathering of energy and tech company CEOs held at Microsoft’s headquarters. The whole point was to talk about power.

Everyone already knew that AI was consuming a lot of electricity, and they assumed this demand would grow. A lot. But they didn’t realize by quite how much until OpenAI co-founder Sam Altman told the group that just a single AI model will require as much power as a large city.

Again, that’s just ONE model. And there are plenty of them out there– Google Gemini, OpenAI, Meta AI, etc. Every major tech company– not to mention plenty of startups– have developed or are developing power-hungry AI models.

In terms of energy demand and power consumption, AI will be the equivalent of adding several states to the US over the next few years. And America’s power grid simply doesn’t have the capacity.

Joe Dominguez understood that immediately… which is why his company teamed up with Microsoft to restart the Three Mile Island nuclear power station in Pennsylvania.

But one additional nuclear power plant is barely going to move the needle on America’s energy needs… and it takes way too much time to build new ones.

In fact, the most recent nuclear power facility to come online in the US took more than a decade to build. So even if the industry gets started today (which they won’t), and the permitting process were quick and easy (which it won’t be), nuclear power is still a long way out.

But there’s an easier option for the here and now: natural gas.

I’ve written about this before– US natural gas is absurdly cheap, especially compared to global prices. That’s because there’s just so damn much of it in the US… combined with the fact that natural gas is complicated to transport.

Oil is simple. Tanker ships crisscross the planet transporting crude from country to country, so the global price for oil is similar everywhere.

But it’s not that way with gas. Natural gas has to first be decontaminated of various impurities at the wellhead in order to be transported in ‘dry’ form through pipelines, then stored underground.

At the moment there is no trans-Atlantic pipeline allowing US natural gas to flow to Europe. And building one would take years if not decades.

That’s why there’s such a tremendous price difference in natural gas between the United States and Europe. The US produces oceans of it but hardly uses it, hence a cheap price. Europe barely produces any but consumes it voraciously, so the price is more than 4x higher.

If only there were a readily available way to transport natural gas across the Atlantic… then US producers would be able to export to Europe. Natural gas would be more like oil– a global commodity whose price is more or less the same around the world. And the US price would surge.

Well, there actually is a way to do that. Natural gas can be liquefied into a condensed form (about 1/600th of the gaseous volume) and transported at -163C.

Obviously, there’s a cost to liquefying and transporting gas. But a US producer can still make so much more money selling gas to Europe– even after the additional costs are included.

And this started to happen around 2017; US producers began liquefying their natural gas and exporting to Europe in major quantities. Within a few years, LNG exports were booming.

But then, earlier this year, Joe Biden bowed to the climate fanatics and ordered his Department of Energy to cease issuing permits for new LNG export terminals… essentially shutting down export growth.

It’s safe to expect a totally different policy starting in January, i.e. more US natural gas will flow to Europe. That means less supply in the US. Natural gas prices will rise as a result… and probably by a LOT.

But don’t forget about AI.

Let’s first think about different ways to generate electricity and the types of fuels that are available.

There’s solar and wind, for example. The prices of solar panels in particular… and wind turbines to a degree, are both falling. In large part this is because the Chinese Communist Party heavily subsidizes its domestic solar panel industry.

So, wind and solar are somewhat price competitive. But they carry a security risk: do you really want China manufacturing your entire power grid? Is it possible they built a kill switch in their software?

More importantly, they’re not terribly reliable. There are times (like night!) when the sun doesn’t shine. Germany (which generates nearly 60% of its power from renewable energy) recently experienced yet another dunkelflaute, i.e. a foggy, doldrum period in which there is neither sunshine nor wind.

This doesn’t work for AI. Tech companies need reliability.

Then there’s coal… which is super reliable, not to mention cheap and efficient. But it’s one of the dirtiest fuels known to man. Google won’t get its hands dirty with that one.

Tech companies love nuclear. They understand it is, by far, the most efficient form of energy known to man. But again, new reactors are 10+ years away. AI needs power now.

And that pretty much leaves natural gas. The US has oceans of it and barely uses a fraction of its supply. It’s absurdly cheap. In fact, according to the US National Renewable Energy Laboratory, natural gas is THE cheapest fuel source per MW of electrical capacity.

It’s the cleanest of all the conventional sources. Plus, you can construct a new facility in about two years… so new power can come online quickly. And the Big Tech companies have demonstrated that they are more than willing to shell out the cash needed to finance natural gas power plants.

Between these two trends: AI power demand, and the upcoming export boom, natural gas prices are probably going to soar.

We’ve just watched the Dow Jones Industrial Average rise by 7% to an all-time high in the last week. Bitcoin has surged by more than 30% to its all-time high.

That’s nothing compared to what we could see in the natural gas price.

It’s obviously not going to happen in a week, these trends will take longer to unfold. But it’s definitely a good time to look at some of the extremely undervalued natural gas producers whose profits will boom.

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I hate to say it—and I’m sure a lot of you agree—but it’s great to see the right people so upset.

The post-election histrionics have been amusing, to say the least. And a great deal of ink has already been spilled discussing the crushing defeat of the big propaganda machine.

It’s true, though: they threw everything they had at this election. They told lie after lie after lie. They insisted Biden was fit as a fiddle, and Kamala was the rightful nominee who energized and unified her party.

Years ago, they declared Kamala the “border czar,” but leading up to the election, they insisted she wasn’t. They misrepresented everything they could about Trump—his comments about Liz Cheney, the “bloodbath” comments. They whined about Hitler, fascism, and the end of democracy.

In fact, right up to election day, this was Kamala’s central election pitch. She practically told everyone that the world would come to an end if she didn’t win.

And then, literally the next day, in her concession speech, she said that “the light of America’s promise will always burn bright.”

Wait a minute. You just said that democracy would come to an end. Now all of a sudden America’s promise will always burn bright?

She also said she was, “so proud of the race we ran. And the way we ran it,”—i.e., stealing the nomination from her boss and demonizing her opponent to the point where there were two assassination attempts against him.

She added that, “we all have so much more in common than what separates us.” Again, coming from someone whose party calls the opposition deplorable, misogynist, Nazi garbage.

In the end, nobody believed Kamala or the media. People aren’t as stupid as they think.

Perhaps the best part is that legacy media ratings were down dramatically.

CNN, for example, saw its election night coverage drop by almost 50% compared to 2020. That’s got to be a five-alarm fire, and I have to imagine that in the coming weeks and months, heads are going to roll.

Not to mention— once again, the polls were all wrong. The so-called “experts” and pollsters predicted a razor-thin, ultra-close election—and the legacy media dutifully reinforced that narrative.

They tried to make people believe Kamala was wildly popular and that everything was on a knife’s edge. But it wasn’t. Not even close.

This represents yet another blow to the “expert” class. I’m not sure if it’s the final blow, but it’s a major one.

But my greatest pleasure in all of this is watching how much the ideological leadership on the left—those preening, pearl-clutching, self-important, highly overpaid elitists—STILL don’t understand. And they refuse to engage in any self-reflection.

Their reaction has been exclusively anger. They’ve launched into tirades, hurling verbal assaults at the 73 million people (and counting) who rejected them, their lies, and their propaganda.

The reasons they gave? Well, apparently, Americans are all just too dumb to understand MSNBC’s brilliance.

MSNBC host Joe Scarbourough blamed a “Russian embrace of disinformation,” and “a radical devaluing of truth,” and wondered, “How do we reach those Americans who apparently didn’t go to civics class?”

Just keep telling them how stupid they are, Joe. I’m sure that will work.

The ladies on The View said a dominantly Latino town on the border voted overwhelmingly for Trump due to misogyny.

A guest of Joy Reid on MSNBC went even further, and said those misogynistic Latino men who voted for Trump have internalized bigotry from “the weight of colonialism”.

Sure, that’s plausible. Or maybe voters didn’t want a communist dingbat running the country.

It’s offensive when these people talk down to you, when they call half of America fascists and Nazis.

But I really hope they keep it up.

The longer they talk like that, the longer they refuse to reflect and change their tune, and the longer the media executives keep those same clowns on the air, the longer they’re going to keep losing.

And maybe, just maybe, American voters will keep ignoring the lies and putting people in power who make sensible and rational decisions.

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It started with the Antonine Plague in the late 160s AD, most likely a really bad smallpox epidemic that killed 8 million people across the Roman Empire.

Then came the barbarian invasions… a tidal wave of migrants pouring across Rome’s northern border and plundering the countryside.

The Roman government also bizarrely spent a fortune doling out vast sums of money to adversary nations– a sort of bribe (they called it ‘tribute’) to make sure that foreign powers wouldn’t attack Rome.

But instead, those adversary nations smelled weakness and used the money to build up their own military capabilities and menace the Empire… all courtesy of Roman taxpayers.

Crime rose and general security deteriorated; while merchants had once been able to travel across the empire quickly and safely to trade their wares, the rise in brazen crime and looting caused major disruptions to Roman trade.

Climate change and extreme weather events also became major problems, and agricultural productivity plummeted as a result. Famine was not uncommon.

Naturally the imperial government stepped in with one bonehead policy after another. They distracted the population with free bread and circuses. They vastly increased the size of the government– especially soldiers who would enforce imperial edicts and taxation at the point of a sword.

They spent way more money than they collected in tax revenue… so they jacked up taxes and confiscated people’s assets to pay for their bloated budget.

They also routinely debased the currency, sparking widespread inflation across the empire.

One of the clear lessons from history is that human beings have a breaking point. And Romans reached theirs. After decades of instability, crisis, humiliating foreign policy blunders, and economic stagnation, peasant rebellions began to tear the empire apart.

By the late 200s AD, various regions of the Roman Empire had broken away and declared independence; the northern provinces became known as the Gallic Empire, while the eastern provinces became the Palmyrene Empire. The original Roman Empire had essentially disintegrated… and the rest of the world couldn’t believe what they were seeing.

But in the year 270, a new emperor came to power– former general Lucius Domitus Aurelianus, known to history as Aurelian.

Aurelian’s success as emperor was nothing short of astonishing. In just five years, he managed to retake all the breakaway provinces and reintegrate the empire… and his swift military successes struck fear in the hearts of Rome’s foreign adversaries.

Aurelian also made much needed changes in the Roman government and economy. He prosecuted corruption, terminated incompetent officials, reformed the currency, and eliminated the outrageously expensive alimenta welfare program.

He was far from perfect and made plenty of mistakes. But given that Aurelian inherited an empire that was dying and disintegrated, it’s pretty miraculous how quickly he managed to turn things around and put Rome back on the right track.

America has a laundry list of its own challenges these days… most of which have grown worse each year.

The national debt is out of control and will most likely reach $36 trillion within the next couple of weeks. Total interest payments on that gigantic pile of debt reached $1.1 trillion in the last fiscal year and will almost certainly be even higher in this current fiscal year.

The nation’s largest entitlement programs– Social Security and Medicare– are in critical need of reform, given that the programs’ trust funds are set to run out of money in less than a decade.

Prices are still way too high, the inflation problem hasn’t gone away, and America’s standing around the world has taken a nosedive.

Like ancient Rome, the US federal government has bizarrely doled out countless billions to adversary nations. Afghanistan received tens of billions of dollars of military equipment in 2021, courtesy of the US taxpayer. Iran has received tens of billions more… which they have used to develop weapons technology to strike the US.

You can’t make up this level of incompetence.

But as I’ve argued several times before, these problems are still fixable. And there is, right now, a very limited window of opportunity to fix them.

At least 73 million people in the United States recognized this. They might not understand all the details, but they at least see that the country is headed in the wrong direction and needs to be fixed. Now.

Turning things around is not rocket science. And America already has the playbook: it’s called capitalism, i.e. the economic system that made the United States the wealthiest country in the history of the world.

It’s not hard. All the government needs to do is get the hell out of the way and let the private economy do its thing: create, innovate, and grow.

This means slashing stupid, productivity-killing regulations. And I can’t think of anyone better to head up that effort than Elon Musk… who at this very moment is already working on it.

Growth also means finally liberating America’s energy sector (and regulatory agencies allowing oil and gas companies to drill and produce again). It also means the government taking its boot off the throats of American businesses.

Combined with the coming productivity boom of AI, there’s a good chance that US GDP growth could reach a sustained 3%, then 4% very soon. This was the norm in the 1990s, and there’s no reason why the economy couldn’t achieve that again.

Higher growth means more tax revenue, lower deficits, and (eventually) a lower debt. The problem can slowly melt away.

It’s going to take serious effort. It’s going to take focus. It’s going to take a little bit of luck. But it is possible.

Personally, I’ve been writing for more than 15 years that America is in trouble; back in 2009 I described the effect of logarithmic decay, i.e., thanks to excessive government spending, the US would decline gradually, then suddenly.

This was an incredibly controversial idea back then, and a lot of people thought I was crazy.

But then it happened… and we’ve all witnessed the gradual– then sudden– decline, culminating in the breakneck pace of face-palming humiliation, chaos, and crisis over the past few years.

I’m a West Point graduate and Army veteran, so I take no joy in having been right about America’s decline. But at this point, right now, today, I hope to become wrong. I’m rooting desperately to become wrong.

And I have hope and confidence that the new administration can make me wrong.

I’m not saying that Donald Trump is Aurelian. But I am saying that America has a chance. I would even say it’s a very good chance. So, this is a great time to be optimistic. I certainly am.

But as we used to say in the military, “hope is not a course of action”. So, despite the positive things that may happen on the road ahead, it absolutely 100% still makes sense to have a Plan B.

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At around 4 a.m. on March 28, 1979, the quiet hum of machinery at the Three Mile Island nuclear plant in Pennsylvania was shattered by a cascade of alarms and error alerts.

It started with a relatively minor issue— a cooling pump malfunctioned, triggering an automatic shutdown of the reactor. But it quickly spiraled into a full-blown crisis.

The pressure in the reactor core rose sharply, and a relief valve malfunctioned, allowing radioactive coolant to leak out unnoticed. In the confusion, operators misinterpreted data and shut off the emergency cooling system, causing the reactor’s core to dangerously overheat, leading to a partial meltdown of the fuel rods.

As the news leaked that a partial meltdown might actually be underway, the media descended on the area, stoking fears of a full-scale nuclear catastrophe.

The government’s message shifted daily, with conflicting statements that did little to reassure an anxious public.

Pennsylvania’s governor feared ordering an evacuation would incite panic, though he ultimately recommended that pregnant women and young children within a five-mile radius evacuate. This only fueled widespread concern that the situation was far more serious than officials initially let on.

Yet by all measures, the incident was not that bad. No one died. And even in the immediate area, radiation never reached harmful levels.

In fact, the plant was not even shut down. While the unit that suffered the meltdown never reopened, another unit continued operating until 2019.

Nevertheless, public confidence in nuclear energy was obliterated that night, more than 45 years ago.

Three Mile Island became a symbol of nuclear failure, and left a lasting impression, to the point that it became a kind of social meme; even the spiciest wing sauce at the ‘Hooters’ restaurant chain is named “Three Mile Island.”

Combined with the meltdown at Chernobyl in the Soviet Union a few years later— which was actually catastrophic and deadly— these events virtually eliminated any nuclear power ambition for decades.

Then something interesting happened. No one wanted to build a nuclear power plant anymore. The public wouldn’t hear of it. So every private company with experience and expertise building those power plants shifted gears and started doing something else.

Fast forward a few decades, and nearly anyone with experience building nuclear power plants has either died or retired. The skill of building those plants has become more or less extinct.

Meanwhile, most governments around the world have become fixated on extremely inefficient wind and solar energy. They’re anti-fracking, anti-fossil fuel, and unfortunately, missing the obvious answer.

They should be going all in on nuclear power, which is far and away the most efficient energy technology known to man. It’s so extraordinary that a single rock of uranium contains enough nuclear energy to power an entire city.

Some countries understand this. China and India, for example, have been ramping up their development of nuclear power plants for several years.

But in the West, and especially in the US, nuclear plants have been decommissioned, shut down, and demolished.

Part of this is due to the lingering memory of Three Mile Island, along with the media’s relentlessly bad portrayal of nuclear energy; they have been irresponsibly selling the dream of wind and solar as the future, while demonizing nuclear as a bad idea.

In fact, only three new nuclear power plants have been completed in the US since the start of this century.

And in the meantime, America has lost so much knowledge and experience about how to efficiently build these plants that developers today are struggling to figure it out.

As a result, two of the more recent nuclear reactors to be completed were seven years late and 2x over-budget.

Despite all this, I’m optimistic.

It’s hard to keep a good idea down forever, and nuclear is an incredibly good idea. And it’s one that’s truly needed.

First of all, demand for electricity is surging. The government wants to electrify everything— for example by forcing people to buy electric vehicles, and attempting to shift people away from heating and cooking with natural gas.

On top of that, the on-shoring of manufacturing back to the US will drive even more electricity demand. Plus the intense energy demands of AI data centers will push the US electrical grid well beyond its capacity.

America needs more power. And it needs it now.

We’ve talked about natural gas as a great short-term solution because US natural gas is very cheap, clean, and safe. The plants are efficient and quick to build, thanks to the up-to-date expertise of today’s companies.

But in the long run, nuclear is the most obvious solution.

The goal should be cheap, clean, safe, and reliable energy— which is necessary for a healthy economy. And nuclear fits that role better than anything else.

Interestingly, the reactor at Three Mile Island is set to reopen.

And Microsoft is writing the check to fund it.

Billy Gates, as we call him in our household, despite all his crazy talk during the pandemic, is a huge supporter of nuclear power. So at least with respect to nuclear, he’s absolutely right.

And the company that owns Three Mile Island, Constellation Energy, saw its stock price surge over 20% in a single day after the announcement of its joint venture with Microsoft.

But there are a lot of other nuclear energy related businesses—not to mention natural gas companies— that are trading at laughably low valuations.

And these are examples of the most important resources, i.e. “real assets” that we talk about all the time.

Energy is the foundation of the economy— really of modern human existence. It’s the most necessary component that drives every other real asset, from growing food, to powering productive technology.

You even need energy to produce more energy, i.e. drill for oil, mine coal, or dig up more uranium.

Given future energy trends, and the desire for cleaner, cheaper, more efficient sources, these are exactly the kinds of real assets worth paying attention to.

Many of them are dirt cheap for now. But that’s probably not going to last.

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In the pantheon of human ingenuity, the development of iron and steel ranks up there with the discovery of fire and the invention of the wheel.

In fact, the advancement of human civilization would have been nearly impossible without iron—and the steel that it becomes.

Metallurgy (and agriculture) are ultimately what brought our ancestors out of caves and allowed them to build lasting settlements, many of which (Athens, Jerusalem, Delhi, etc.) still exist to this day.

Steel is still arguably the most important industrial commodity in the world. From railroads to skyscrapers, cars, bridges and electrical infrastructure, our modern way of life depends on steel.

This is why, when economies develop rapidly, one of the first things that happens is a surge in demand for steel, along with other essential commodities like copper, oil, and even food.

China experienced this surge in the early 2000s. India is going through it now.

This ongoing demand makes steel—and, by extension, iron—a ‘real asset’, i.e. a critical resource upon which human civilization truly depends.

We talk about real assets a lot— and they include certain commodities like steel, oil, copper, and gold, all of which serve vital functions. Agriculture and productive technology are also real assets. Water is a real asset.

And in an inflationary environment, these assets tend to perform exceptionally well.

We consistently make a very strong argument in this column that the future will likely be extremely inflationary.

After all, it seems like just yesterday that the US national debt hit $35 trillion. Yet it’s already closing in on $36 trillion. The budget deficit was $1.8 trillion last year, and the government’s own projections conservatively estimate $22 trillion in additional deficit spending over the next decade.

Technically, the situation is fixable, but it certainly doesn’t look like anyone in power is moving in that direction.

Realistically, the only “solution” will be for the central bank to print more money— potentially tens of trillions of dollars over the next decade.

As we saw during the pandemic, when the central bank expanded the money supply by $5 trillion, we got 9% inflation. How much inflation will we see if the Fed creates another $20 trillion?

No one knows for sure. But it probably won’t be zero.

Real assets, by the way, did very well during the pandemic. They also performed well during the stagflation of the 1970s.

And given that the world is looking at another major inflationary cycle, we believe that real assets are primed to outperform.

The good news is that a number of real asset producers are currently selling at absurdly cheap valuations.

We’ve said this before: while gold may be at an all-time high, many gold producers are extremely undervalued.

We think iron and steel companies are worth taking a look at as well given the importance of those commodities.

To give you an example, we wrote about one highly undervalued iron company to our subscribers of The 4th Pillar— our most exclusive premium investment research service.

This company has a unique business model because it isn’t actually a mining company; it’s a royalty company.

Owning and operating a mine involves a lot of work and risk. When the underlying commodity increases in value, the mining company generates more revenue. But inflation can also drive the costs of production higher as well.

But royalty companies don’t operate mines. They provide financing. And in exchange for providing financing, they get a cut of the revenue.

This is a unique model. Banks who provide financing receive a fixed rate of interest on their loans. Investors who provide financing receive shares in the company, i.e. a portion of the profits.

But royalty companies receive a percentage of top-line revenue… which means they will be major beneficiaries when inflation pushes up the prices for key resources like steel and iron.

This company in particular also trades at a low, single-digit price-to-earnings ratio, pays an 8% dividend, and has a solid balance sheet. We believe it has significant upside potential.

But it’s just one example of a regular theme at Schiff Sovereign: exposure to real assets can help inflation-proof your portfolio and your life.

Right now, many real assets are trading at historic lows, from gold miners to iron royalty companies to natural gas producers. Given the coming inflationary cycle, that’s probably not going to last.

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The year was 1991. The shoulder pad fashion craze of the 1980s was finally coming to an end, and Kurt Cobain’s “grunge” look was in.

The Silence of the Lambs hit the theaters and swept the Academy Awards that season (with a nice chianti and some fava beans)— Best Actor, Best Actress, Best Director, and Best Picture.

The World Wide Web became accessible to the public that year.

The Berlin Wall was a distant memory, and the Soviet Union was dissolving in front of the world’s eyes. Gorbachev resigned on Christmas Day, and the Soviet flag was lowered over the Kremlin for the last time.

Overnight America became THE dominant, unchallenged global superpower.

Simultaneously the US economy was booming. Inflation was low. And by the end of the decade, the government was actually running budget surpluses— thanks to explosive economic growth and responsible spending. Crazy concept.

America’s debt-to-GDP ratio never rose above 65% in the 90s, and was actually headed down at the turn of the century.

Yet, despite such stellar financial and economic conditions, the average yield on US government debt throughout the 1990s was 6.7%.

In other words, even though the US government was almost infinitely powerful and affluent, bond investors STILL demanded a nearly 7% return on Treasury bonds.

And the government was happy to pay; 6.7% didn’t cripple the economy— it was a completely manageable interest rate. In fact, it was considered low by historical standards, given the double-digit rates of the 1980s.

Today’s fiscal situation is far from the 1990s. Just about everything that could go wrong is going wrong for Uncle Sam today.

The US government’s credibility is in tatters. They go into debt to give money to their adversaries, and political dysfunction is so extreme that hardly a year goes by anymore without some crisis— Congressional leadership, debt ceiling, government shutdown, etc.

Meanwhile their finances are horrendous. Mandatory spending, i.e. Social Security, welfare, healthcare, plus interest on the national debt, together consume 100% of tax revenue.

Literally the ENTIRE discretionary budget, including military spending, has to be paid for with MORE DEBT.

The national debt is now closing in on $36 trillion, more than 120% of GDP. Interest on the debt exceeds defense spending for the first time in US history… and it goes higher each year.

If a country like New Zealand or Taiwan were in this position, their currencies would be in the toilet… and local interest rates would be through the roof. No one would trust them enough to buy their government bonds without demanding a huge yield to compensate them for the risk of default.

Yet despite such an atrocious financial position, the US government is still able to borrow money at 4%.

Remember, in the ‘everything was awesome’ 1990s, rates were nearly 7%. The fact that the government is so much WORSE off, yet still able to borrow at just 4%, is almost miraculous.

Technically the ‘average’ interest rate on the federal debt today is even less— just 3.1%; but even that laughably low rate is too expensive.

The national debt is now so high that, even with an average interest rate of just 3.1%, the federal government STILL spent over a trillion dollars a year on interest. And that amount will be even HIGHER next year.

We’ve explained before how this interest problem will grow exponentially until it suffocates federal spending.

But for now, while it’s a major, major problem, it is still technically fixable. But urgent action is required.

The logical solution is to cut spending while simultaneously embracing capitalism… and allowing America’s robust private sector to do what it does best.

The US has deep capital markets, innovative businesses, and talented people. With sensible immigration policies that attract skilled workers, as well as spending cuts, waste reduction, and deregulation, the government could potentially solve this debt/interest problem.

But hardly anyone is talking about this. The media is constantly whining about abortion, making up absurd stories about fascism, etc. There is almost zero discussion about a looming economic crisis that will threaten the livelihoods of 350 million people.

Most politicians aren’t thinking about it either. Who needs sensible policies when you can just print money? And that’s basically their solution.

Since 3.1% interest is ‘too high’ for the US government to afford, the plan is to ensure the Federal Reserve slashes interest rates all the way back down to zero. Maybe even negative.

Of course, the only way this can really happen is if the Fed expands the money supply (i.e. ‘prints’ money) to the tune of tens of trillions of dollars.

Janet Yellen, the US Treasury Secretary has acknowledged this last week, saying that the government has to bring its interest costs down.

Well there’s only two ways to do this— either cut spending and pay down the debt (fat chance); or print absurd amounts of money to bring interest rates down.

Remember what happened during the pandemic; the Fed printed $5 trillion in new money, and we got 9% inflation. How much inflation will we see if the Fed prints $36 trillion?

No one knows. But it will probably be more than their magical 2% target.

This is why we focus so much on real assets, i.e. the most critical and valuable resources in an economy, like energy, key minerals, food, productive technology… and the companies which produce them.

Real assets cannot be conjured out of thin air by central banks or politicians; they’re scarce, and extremely important. And that’s why they do so well during inflationary times.

And as we’ve highlighted on many occasions, many real assets just happen to be historically, laughably cheap right now… making this a very good time to set yourself up for a future defined by inflation.

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Apart from weathermen, no one besides government bureaucrats can be so wrong, so often, yet still keep their jobs.

No one was ever fired for telling Americans that COVID lockdowns would last just “two weeks, to stop the spread” and “flatten the curve”.

If we’re being generous and call that a ‘miscalculation’, they were off by about 100 weeks, i.e. 50x, in most places before COVID restrictions ceased.

Then there was the infamous Obamacare website, healthcare.gov, which the ‘experts’ in government originally estimated would cost $93 million. That’s already an absurd price tag for a website. But in the end, it cost over $2 billion, and barely functioned.

Not to mention, despite the ‘experts’ estimating a drastic decline in US healthcare costs, the actual cost of medical care in the United States actually increased after Obamacare.

The government is also notorious for missing the mark on tax estimates.

About fifteen years ago, for example, the Obama administration claimed that Americans were evading massive amounts of taxes by secretly hiding ‘trillions of dollars’ in offshore bank accounts.

Obviously there were plenty of people with undeclared accounts. But TRILLIONS? That hardly seemed a credible estimate.

Nevertheless, President Obama signed the Foreign Account Tax Compliance Act (FATCA) into law in 2010 with an aim to grab that supposed trillions of dollars of offshore money.

Among other things, the FATCA law forces EVERY bank in EVERY country around the world to disclose information on ALL of their customers to the US government.

It’s bizarre when you think about it: the US government forces other countries’ banks to comply with US laws. It would be as if the government of Saudi Arabia passed a law forbidding US grocery stores from selling bacon to Muslims on US soil.

And compliance with FATCA is extremely expensive. Banks (plus brokerages, investment firms, mutual funds, trust companies, money transmit businesses, etc.) all have to file forms, hire extra staff, pay lawyers, spend valuable time combing through records, etc. in order to comply with the law.

The overall global cost of FATCA compliance, in fact, goes into the BILLIONS of dollars annually, based on what banks report on their financial statements.

But hey. At least the government brought in ‘trillions’ of dollars of tax revenue to justify those costs.

Except they didn’t. According to IRS data, FATCA has only brought in an average of $500 million per year, on average.

Not only is $500 million peanuts compared to the federal government’s multi-trillion dollar annual deficit, it’s also peanuts compared to the multi-billion annual cost of complying with FATCA.

The benefit is simply not worth the cost.

But, again, FATCA all started with some bureaucrats’ completely fictitious estimate of how much ‘hidden’ money was sitting overseas. They were totally wrong.

Unfortunately, being wrong has never stopped the government from doubling down on a bad idea. And now they’re back to the same logic, with the same false premise.

Last week while attending the IMF/World Bank annual summit, US Treasury Secretary Janet Yellen claimed that her new army of IRS agents (thanks to $80 billion in funding from the Inflation Reduction Act) will close a “$7 trillion tax gap”.

The “tax gap” she refers to is the difference between what the government thinks it should be collecting in tax revenue, versus the amount it actually does collect.

Obviously there are plenty of people who underpay (or don’t pay) tax. But $7 trillion??? Seriously??? Where do these people come up with such ridiculous estimates?

Here’s why their number is way off. Literally since the end of World War II, the US government’s tax revenue has consistently averaged around 17% of GDP, year in, year out, with very minor variations.

In 1954, for example, federal tax revenue totaled 17.8% of GDP. In 1964, 16.7%. In 1974, 17.0%. In 1984, 16.5%. In 1994, 17.2%. 2004? 16.5%. 2014? 17.1%.

You get the idea. It’s pretty much always 17% of GDP.

How much revenue did the government collect in FY2024 (which just ended last month of September 30)?

16.9% of GDP. Pretty much a bulls-eye relative to the long-term historic average. And this leads to the obvious question: if tax revenue is right where it’s supposed to be, WHERE IS THIS SUPPOSED $7 TRILLION TAX GAP!?!?!?

Honestly, what are these people smoking to invent such a ridiculous number??

They were completely, woefully wrong with FATCA, like by 100x. And something tells me that their $80 billion worth of new IRS agents won’t even be able to find $80 billion worth of unpaid tax.

Once again, the benefit won’t be worth the cost. But they’re sure going to try.

Obviously they’ll start by auditing the wealthiest Americans. But before long they’ll run out of the super-rich and quickly move down to the middle class. There is simply no other way for the government to ‘close’ this fictitious tax gap other than an army of field agents harassing and scrutinizing regular people.

This has been a common tactic throughout history going all the way back to the Roman Empire. Bankrupt governments start with debasing the currency, i.e. inflation. And we’ve talked about that a lot in this letter.

In fact, as I wrote on Friday, Yellen also tacitly acknowledged that the US central bank will have to print trillions and trillions of dollars… which is going to generate a LOT of inflation.

But in addition to creating inflation, bankrupt governments also come up with destructive ways to increase tax revenue. And it’s not just about raising tax rates; they also become extremely aggressive with tax enforcement.

Once again, Janet Yellen spilled the beans on the government’s plan.

She knows that they have to bring down the deficit. The national debt is nearly $36 trillion and the annual budget deficit is nearly $2 trillion per year. So she flat-out acknowledged that they are going to (attempt) to make ends meet through inflation… and then stepping up tax enforcement.

Sure they’ll catch a few cheats here and there. But the vast majority of cases will be innocent people who have their lives turned upside down.

Naturally, no one talks about simplifying the tax code, making tax rates more competitive, spending money more responsibly, reforming entitlements, or dismantling the productivity-killing bureaucracy so that the economy (and hence tax revenue) can grow more quickly.

No. Their approach is to make up some ridiculous, completely unrealistic estimate for what tax revenue should be, then assume every American is a criminal tax cheat because the IRS doesn’t collect that much money.

It’s a pretty sad statement for a government that is supposed to be “of the people, by the people, for the people”.

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In the aftermath of World War II, with Europe devastated and Japan in ruins after two atomic bombs, the world faced the monumental task of rebuilding the global economy.

It had already been decided at the 1944 Bretton Woods Conference that America and the US dollar would dominate the new international financial system.

But also born from that same conference were the World Bank and International Monetary Fund (IMF)— both of which were created to help resurrect global trade and production.

The World Bank provided crucial loans for rebuilding war-torn countries, including helping to finance European reconstruction projects (including much of France’s modern infrastructure).

Meanwhile, the IMF stabilized global currencies, helping nations avoid economic collapse by offering financial assistance and ensuring currency exchange systems remained functional— all of which was vital to help resuscitate international trade.

These two institutions— the IMF and World Bank— played an incredibly important, almost heroic, role in rebuilding the global economy after World War II. And for decades they remained important pillars of the international financial system.

But that was a long time ago.

Today the IMF and World Bank are sort of like the legacy media (i.e. CNN, MSNBS, etc.)— they haven’t kept up with the times, and their own actions have made them irrelevant and impossible to take seriously.

The IMF, for example, boasts BOTH a Diversity and Inclusion Council AND a Diversity and Inclusion Office, which puts out an annual diversity and inclusion report.

The World Bank has also joined the anti-racism crusade with a formal charter to make cities more inclusive through bizarre urban development projects.

Both are also part of the Climate Change crusade. And, while, again, we are all for a clean and healthy environment, these ignorant institutions deliberately waste billions of dollars pushing counterproductive policies and subsidizing inferior technologies.

The World Bank, for example, has deliberately NOT financed a single nuclear power plant anywhere in the world since 1959— even though nuclear power is THE best solution to improve both the environment and human prosperity.

These two institutions helped save the world and rescue the global economy back in the 1940s and 1950s. Today they’re a complete joke, run by woke fanatics who do far more harm than good.

That’s why I found it strangely appropriate that US Treasury Secretary Janet Yellen showed up to the World Bank and IMF’s annual meeting, which is happening right now.

Just like the World Bank and IMF, American influence in the world is also waning… and the government is similarly run by woke fanatics who do more harm than good.

It’s ironic because, almost at the very same time as the IMF/World Bank meeting, the so-called “BRICS” nations are holding their own summit—a conference of rising powers like Brazil, Russia, India, China, and South Africa.

It’s basically the new guys versus the old guard.

While the IMF’s and World Bank’s relevance fades, BRICS represents the producer nations, i.e. those who are rich in natural resources and/or manufacturing capacity. They export. They create surpluses.

As a bloc, the BRICS nations represent around 35% of global GDP, and roughly 40% of global economic growth.

Yet at the moment they don’t even have a seat at the table. That’s because the international financial system is still controlled by the United States, i.e. the country with a massive trade deficit, a completely dysfunctional government, and a nearly $36 trillion national debt.

The BRICS countries are tired of not having a real say in global finance, especially with US government finances in such a weak state.

Frankly, the US Treasury Secretary should have been at the BRICS summit, if nothing else to make the case for American strength and credibility.

Instead, she chose to attend the IMF/World Bank convention of declining, irrelevant has-beens.

But here’s the best part:

At this meeting, with the BRICS summit in the backdrop, a reporter asked Ms. Yellen how she planned to convince other nations to continue buying US government debt— given the already massive national debt, continuing deficits, and skyrocketing interest bill.

She answered, “By making sure that we stay on a sound fiscal path…”

Come again? STAY on a sound fiscal path? Where is this sound fiscal path, and when was the last time the US was on it?

More importantly, though, the Treasury Secretary added the following: “I believe it’s very important that we remain focused on keeping the real net interest cost of the debt near historic levels and certainly under 2% [of GDP].”

This is where Yellen spilled the beans. She said the quiet part out loud.

In FY 2024 (the fiscal year that just closed a month ago on September 30th), the government spent a total of $1.1 trillion on interest. That’s roughly 3.8% of America’s $29 trillion GDP.

And this number keeps increasing every year. The national debt keeps growing (MUCH faster than GDP). And as a result, interest on the debt keeps growing.

There’s only ONE way, realistically, that the government can reduce its interest bill. And that’s by reducing interest rates. A lot.

Think about it: if interest rates were, say, 1%, then the government’s annual interest will would “only” be $360 billion per year (1.2% of GDP), instead of $1.1 trillion.

There’s only one problem— bringing down interest rates means that the Federal Reserve will have to ‘print’ a boatload of money… literally tens of trillions of dollars. And that’s going to be EXTREMELY inflationary.

Remember during the pandemic— the Fed added $5 trillion to the money supply, and we ended up with 9% inflation. What will happen if they add twenty or thirty trillion dollars to the money supply?

No one knows for sure. But it’s probably not going to be their magical 2% target.

That’s why we keep talking about real assets, i.e. the world’s most critical and valuable resources which cannot be conjured out of thin air by central banks— assets like energy, key minerals, disruptive technology, and the companies which produce them.

Real assets tend to perform extremely well in inflationary environments. And Yellen tipped her hand this week about the inflation that’s coming. They simply have no other option.

And the best part? The producers of these assets—energy, commodities, mining—are ridiculously cheap right now.

It’s a sensible move to consider in a world where central banks are about to crank up the inflation machine once again.

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There’s a really dirty four-letter word that starts with a “C”.

No, not that one. This is a word you simply cannot say around Greta Thunberg, otherwise her ears will melt off of her face.

I’m talking about coal. And it’s about to have its moment.

One reason is that global population grows each year, and every one of them needs energy in some way or another—to keep the lights on, to fuel the machines that harvest their food, to power virtually everything that keeps life going.

Second, the world population generally becomes wealthier each year. Billions of people in China, India, and Southeast Asia are better off now than they were ten years ago. As economies develop, they consume more food, more goods, more electricity— and all of that requires more energy.

More efficient technology offsets some energy use, like switching from old-school incandescent light bulbs to LEDs.

But the general rule is that as energy becomes cheaper, people tend to use more of it, i.e. the world always finds a way to use that energy savings somewhere else.

Plus there are some technologies (AI, crypto mining) which, in aggregate, consume a ton of energy.

So overall global energy demand keeps rising.

Energy supply, on the other hand, is REALLY hard to come by. Exploring for oil, drilling, constructing power plants, building hydroelectric dams, wind turbines, etc. is capital-intensive, labor-intensive, resource-intensive, and very time-consuming.

Meanwhile, many sources of energy supply are dwindling.

Some major shale fields in the US, which were once the biggest source of growth in energy supply, have peaked.

But perhaps an even more significant obstacle to supply is how the government and hyperventilating, pearl-clutching leftists do everything they can to reduce supply.

These people who stop traffic, throw glitter bombs on priceless works of art, and deface public property, in their efforts to “Just Stop Oil” want to turn the clock back to 1750 on human civilization.

Plus there are fanatics with real political power— like California Governor Gavin Newsom— who insist on replacing conventional electrical plants with extremely inefficient wind and solar.

I like clean air and water as much as anyone, but wind and solar aren’t anywhere near as environmentally friendly as people claim. They require tons of dirty minerals and chemicals, and barely produce enough energy yield to offset the inputs.

This is why big technology companies (who are looking to power their massive AI electricity needs) are going all-in on nuclear power.

Nuclear is absolutely the power of the future. It’s clean. It’s safe. It’s absurdly efficient.

By comparison, a single kilogram of Uranium can produce as much electricity as an entire square kilometer of solar panels. The difference in energy yield is not even close.

Tech companies understand this… hence why Google, Amazon, Microsoft, etc. are investing billions in nuclear energy as the ultimate solution to power their electricity-hungry AI data centers.

But it takes time to build nuclear power plants. And the most advanced “small scale” nuclear reactors are still in development.

In the meantime, tech companies still need power. The world still needs power. Lots of it. And more every year.

We’ve already talked about how natural gas (especially US natural gas) is THE cheapest energy source on earth right now. In fact, at its current price of roughly $2.40, US natural gas is priced at the energy-equivalent of oil selling for $15 per barrel. That’s cheap.

But there’s another cheap, abundant energy source that is going to be extremely relevant in powering the world’s energy needs for the foreseeable future: coal.

Yes, it’s a very, very dirty word. Climate fanatics don’t want to hear it. But until the world builds sufficient nuclear energy infrastructure, there’s still a critical need for conventional fossil fuels. And that includes coal.

Like it or not, coal is still vital to energy infrastructure, accounting for more than a third of global electricity production. In fact, global coal consumption has consistently INCREASED over the past few decades despite the environmental backlash against it.

Coal is still an extremely efficient source of energy, compared to wind and solar. On an energy return basis, it’s about 6x more efficient than wind and solar— i.e. less energy input required per unit of output.

And if you think coal is dirty, then you should check out how environmentally damaging cobalt mines are (a key ingredient in solar batteries). Not to mention, most cobalt mines in Africa are teeming with child labor.

Coal power plants have the added benefit of being very quick any easy to build. That’s why China— in addition to investing heavily in nuclear power— is also still buying a lot of coal.

It’s also worth pointing out that coal is an essential ingredient in iron and steel production. So even though the leftists hate it, coal will likely remain a key resource in human civilization for the next few decades.

However, from an investment perspective, hardly anyone wants to touch coal. Investment funds are afraid of government blow-back and the wrath of the left… so they don’t invest in coal.

And for individual investors, coal is uncool and unpopular. Thanks Greta.

As a result, there are some coal companies out there making money hand over fist. They have a bright future with plenty of demand down the road. Yet their valuations are a total joke.

We’ve highlighted two such companies for subscribers of our investment research newsletter, The 4th Pillar.

Both have still been bringing in solid free cash flow, and paying dividends up to 15%. They have very little debt, and large cash reserves.

And if the price of coal goes up (which we expect it will, thanks in large part to fanatical environmental policy), these companies will be in for a profit bonanza.

You can buy these companies for as little as 5x or 6x free cash flow; again, they’re profitable and already paying dividends.

And in a world where there’s more conflict, less global cooperation, more trade disputes, more debt, more inflation, more scarcity, etc., a commodity as critical as energy is going to become extremely valuable.

We talk a lot about why it makes sense to invest in real assets; coal is just another example of a critical real asset whose producers are almost universally cheap right now. It probably won’t last.

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The corpse of King Louis XV was still warm when his son and successor, 19-year old Louis XVI, started cleaning the royal house.

French finances were an absolute mess. The country was almost hopelessly bankrupt after decades and decades of costly warfare… and even more costly royal luxury. The young king’s predecessors, Lous XIV and Louis XV, spared no expense when it came to their comfort and grandeur, and the end result was the largest national debt in the history of the world up to that point.

Louis XVI knew something had to be done urgently. So, his first order of business was to appoint a brand new finance minister– the famed economist and philosopher Jacques Turgot.

Today we would describe Turgot as an economic libertarian; he believed in limited government, free trade, low taxes, low debts, and balanced budgets. And he came in at just the right time.

The year was 1774, and Turgot noted that the government’s annual revenue was 213.5 million francs, with annual expenses of 235 million francs– a deficit totaling 10% of tax revenue.

At the time, this was considered an absolute crisis. (The US, by comparison, hasn’t had an annual budget deficit of less than 10% since 2007!)

But Turgot got to work. Just like Elon Musk today proposes to have a “Department of Government Efficiency”, Turgot slashed spending anywhere and everywhere he could find it. He deregulated commerce, he abolished trade restrictions, and he grew both the economy AND government tax revenue… all without having to increase the actual tax rates.

Turgot’s success aside, the most important step was that the French actually recognized their financial problem in 1774.

But Americans today can’t seem to do this, even though the US government’s deficits are closer to 40% of tax revenue.

Data just reported from the Treasury Department on Friday shows a $1.833 trillion annual budget deficit for Fiscal Year 2024, which ended a few weeks ago on September 30.

That’s the third highest ever. And the only two that beat it were FY ‘20 and FY ’21—pandemic years.

But all the so-called “experts” claim this isn’t a crisis.

Bond investors, Wall Street banks, and even economists, if they do talk about it, say it’s a mild concern.

But politicians are the worst.

People like AOC come right out and say that deficits don’t matter.

A couple of years ago, Biden bragged that the annual budget deficit was only $1.3 trillion… as if that’s some sort of accomplishment.

The media is equally complicit. This is a five-alarm fire, and they’re acting like abortion access is the most important issue facing the country.

Not to downplay the abortion issue, but it affects maybe 900,000 people per year, versus 350 million Americans who are at risk of having their lives turned upside down by a collapse in government finances.

Yet when you watch the debates and coverage of the election this year, the national debt and budget deficit barely register as issues.

But this is something that isn’t even a political problem—it’s an arithmetic problem.

And it’s one that’s going to spiral out of control very, very quickly. I’ll explain how—

Government spending can be broken down into three main categories.

One, discretionary spending is the stuff Congress argues about every year through appropriations bills, i.e. the annual budgets for the military, national parks, the State Department, etc.

In FY ‘24, discretionary spending was about $1.8 trillion—basically the size of the entire annual deficit. That means you could cut ALL discretionary spending, including the military, and the government would still be running a deficit. That’s how bad it has become.

Two, mandatory spending is the largest category—programs passed decades ago that are automatically funded, like Social Security, Medicare, and welfare. These programs also automatically increase each year with inflation. Nobody wants to touch this stuff. No politician is going to take food stamps from poor people or mess with Social Security.

Third is interest on the debt. In FY ‘24, total interest on the national debt hit $1.1 trillion.

This has been increasing dramatically. Less than a decade ago, in FY ‘19, interest payments were $573 billion—now they’re twice that.

Going back further, interest payments accounted for 12% of tax revenue in FY ‘15, and that number has nearly doubled in less than a decade, to 23% of tax revenue today.

This spirals out of control fast. Tax revenue has been growing by 4.7% per year on average, while interest payments have been growing at 12.2%. It doesn’t take a math genius to see where this is heading—eventually, 100% of tax revenue will go to just paying interest.

Sure, there is some time before that happens, but exactly when should the government start taking this seriously?

Right now, the government borrows 100% of the money for its entire discretionary budget. Interest payments have surpassed the military budget for the first time in US history, and nearly a quarter of tax revenue is going toward interest.

Plus, nearly half of tax revenue goes to Social Security and Medicare, and that’s to say nothing of the defense budget, veterans’ benefits, and literally everything else the government does.

And they are still not taking the problem seriously.

But you know who is? Foreigners.

This is why central banks around the world are buying up gold, diversifying out of the dollar.

Will this trend continue? It looks like it.

The US government’s internal forecasts show another $22 trillion in debt over the next decade, with no plan or hope to get spending under control. That’s assuming there are no new wars, pandemics, crises, or bailouts—most likely, it’ll be much worse.

Foreign governments and central banks have over $8 trillion in US dollar reserves. Yet up until now, they’ve only converted a small portion of that $8 trillion into gold… driving the gold price to an all-time high.

What will happen to the gold price when the US government’s finances become a real crisis, and those same foreign institutions move hundreds of billions, or even trillions of dollars, into gold? What will happen to the value of the dollar?

Gold is already at an all-time high, and we think it’s going much, much higher.

But we also understand it’s tough for some people to buy an asset at its current all-time high, even though there’s a strong case that it can go much higher.

The good news is that gold companies, mining stocks, royalty companies, and other gold related businesses are nowhere near their all-time highs. In fact, some are trading at absurd discounts.

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It’s very hard to overstate just how obliterated the global economy was following World War II.

Europe was in ruins, with many major cities having been bombed back into the Stone Age. Japan had literally been nuked.

And just about every economy around the world that still had any manufacturing capacity was pumping out guns, bullets, and bombs; there was hardly any economic activity taking place that wasn’t somehow tied to the war.

It was sort of like Covid— the regular economy was shut down… and governments discovered very quickly that they couldn’t simply turn the global economic machine back on with the flip of a switch.

The transition from obliterated war economy to booming peacetime economy was an incredibly difficult one. So, in 1948, the United States (which was among the only developed major economies still standing) launched the Marshall Plan.

The idea was simple: America would shovel $13 billion (which, as a percentage of global GDP, is equivalent to around $5 trillion today) around the world to facilitate trade and economic redevelopment.

But alongside the financial aid came a promise: the US Navy would protect the seas, ensuring that the global flow of goods could continue unimpeded.

For decades, American naval dominance guaranteed a level of safety and stability that allowed international trade to thrive. Shipping routes were secured, costs remained low, and commerce could flow relatively uninterrupted across the world’s oceans.

The post-WWII era ushered in an unprecedented period of cooperation and prosperity, making international trade easier, faster, and more profitable.

But those calm seas are growing choppy again.

The war between Russia and Ukraine, for example, has drastically altered oil trade routes. Russian crude oil, which once flowed easily into Europe, is now making much longer journeys to places like India, where it’s refined and then sent back to Europe as diesel.

This convoluted, inefficient process is adding enormous strain and cost to shipping routes, increasing the “ton miles”, i.e. each mile that a ton of product must travel.

But this is just one example. In the Middle East, the Houthis in Yemen have launched attacks on vessels transiting the Red Sea, creating a new chokepoint in global shipping lanes. Pirates have increased their attacks in the area as well.

Many oil tankers are now rerouting entirely around the southern tip of Africa to avoid the Suez Canal, extending travel times significantly.

The further oil must go, the more tankers are needed. The problem is, these changes took place quite rapidly, yet shipbuilding is not an industry that can quickly respond to that demand.

Shipbuilding is a slow, capital-intensive process. And after years of underinvestment, there are hardly any new tankers being built. Shipyards are busy constructing other types of vessels, but the number of new oil tankers remains near record lows.

At the same time, a large chunk of the existing global fleet is over 20 years old, nearing the end of its lifespan. This imbalance is going to worsen before it gets better, leading to a serious shortage in oil tankers at the exact moment when the world needs them most.

The combination of more ton miles and fewer ships is creating a perfect storm in the tanker market.

This imbalance is inflationary. Both shipping and energy are core components of nearly every supply chain. Higher costs to transport oil mean higher costs for just about everything else we buy—from groceries to manufactured goods.

Climate fanatics can pretend that the world is ready to run off wind and solar, which is why they suppress investment in everything from new drilling, to transport ships. But the reality is, oil is still the most important energy source on earth.

Energy is a prime example of a real asset— a critical resource that keeps the economy going, and cannot be created out of thin air by governments and central banks.

And the shipping companies which transport that oil are real asset businesses… which is why we have been following this industry closely.

One company in particular that we told subscribers about in our premium investment research stands out as being uniquely positioned to capitalize on these trends.

It has a fleet of 82 ships, with an average age of just over 10 years, meaning they have plenty of life left. They can also continue to benefit from the shortage of ships as long as it lasts— which we know from the global orderbook for new ships, will be several years at least.

But this also means the company won’t have to spend huge amounts of capital in the near future buying new ships. And already, it carries little debt… yet still pays around a 12% dividend.

Again, in addition to the dynamics of debt, deficits, and dysfunction in the US government which promise to increase inflation, global conflict is also inflationary.

This is another example of the real asset companies not only poised to do well in an inflationary world, but that are also trading near historic low valuations.

This shipping company, for example, is trading at a P/E (price to earnings) ratio of just 4.44.

While we can wish all we want that the world was not becoming less cooperative, that won’t change the reality. Better to position ourselves to benefit under these conditions, by investing in companies that actually gain from that disorder.

We’ve talked a lot about this same dynamic when it comes to gold, and why central banks around the world are turning to it, and away from the US dollar.

We also talked about it recently in relation to how the prices of certain critical metals have been artificially suppressed by climate fanatics who think the days of gas vehicles are past. They are wrong.

The best way to fight back, while inflation-proofing your future, is to invest in critical real asset companies at historic lows.

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Today’s letter is about how to go back in time.

A lot of us remember 2009 as a pretty tough economy. The whole world was in bad shape. Major banks had failed, panic had set in, governments were spending money hand over fist, and debts were rising fast. It was pretty brutal.

But if there’s anything nostalgic about 2009, it would be that, almost exactly 15 years ago, gold traded below $1,000 an ounce for the last time.

Today, the price of gold is hovering at its all-time high, more than $2,600 per ounce.

We’ve talked a lot about why that is. Central banks have been buying up physical gold, literally by the metric ton, primarily because they are looking to diversify a portion of their reserves outside of the US dollar.

And central banks are sitting on a LOT of US dollar reserves— more than $8 trillion.

It makes sense that they want to diversify. There’s so much more conflict in the world, and US global dominance is waning.

Iran is now flat-out threatening the US government and promising to retaliate if America provides military support to Israel. This would have been unthinkable even five years ago. But today, adversary nations have seized on the US government’s weakness. And foreign central banks— which, again, hold trillions of US dollar reserves— have noticed.

They’ve also noticed America’s outrageous national debt, and its annual budget deficits; in fact the most recent estimate by the Congressional Budget Office of the Fiscal Year 2024 is an incredible $1.8 trillion.

So obviously these central banks see a clear need to diversify. And gold is one of the best and easiest ways for them to do that.

The gold market is big. It can handle tens of billions of dollars of inflows at a time. Plus gold is universally valued around the world with a 5,000 year history of maintaining its value. No central banker is worried about whether or not they’ll be able to liquidate their gold holdings in the future.

But central banks only buy physical gold, i.e. piles and piles of physical gold bars. They do not buy gold mines… or gold miners.

This is why there is a historic anomaly in front of us: the price of gold has soared to an all-time high. But many gold companies are laughably cheap.

This is pretty strange when you think about it; a gold miner’s revenue is denominated in… gold! And many of these companies are starting to see soaring revenues and record profits. Yet their stock prices are still languishing.

For example, one gold producer we profiled in our premium research is trading at a Price to Earnings (P/E) of just 4x. It has almost no debt. And it produces a ton of Free Cash Flow.

The company has even blown away expectations and managed to produce 100,000 ounces of gold. Yet the stock price has barely budged.

What’s amazing is that the entire company is currently valued at less than the market price of that one year’s worth of gold that it mined.

But the kicker is how little it cost this company to produce that gold.

Their “All In Sustaining Cost” (AISC)— everything spent to pull that gold out of the ground, from mining to processing— was less than $1,000 per ounce.

And in our view, buying shares in an efficient, profitable, deeply undervalued mining company with such a low cost structure is almost like going back in time to 2009 and buying up gold at less than $1,000 per ounce… especially given that the company still has millions of ounces of proven gold reserves in the ground which it has yet to extract.

I’ve written many times before— we still see significant upside for gold. Especially if Kamala is elected.

Based on the type of spending she envisions, plus her weak “vibes” and “joy” leadership, I don’t expect the dollar to last as the global reserve currency beyond her first term.

Instead, central banks will continue to turn to gold. And when central banks converted just $80 billion— about 1%— of their US reserves into gold, the price increased to over $2,600 an ounce.

What would happen to the gold price if they converted 5%… or 20% of their US dollar reserves into gold?

Even buying physical gold, right now, at all time highs, would probably work out really well.

But buying a company whose revenue is gold, yet costs a fraction of that price, could work out even better.

Gold is just one of the real assets we talk about in Schiff Sovereign Premium.

We’ve been clear that America’s debt problems can only be solved by lower interest rates and more money printing from the Federal Reserve.

That’s why we don’t believe inflation is behind us, and why we believe so whole-heartedly in the value of real assets— critical resources that cannot be conjured out of thin air by governments and central banks.

This gold producer is just one example of these massively undervalued real asset companies we’ve named in Schiff Sovereign Premium— a highly educational, month-by-month guide that is designed to help you navigate the world from a position of strength, both personally and financially.

You can click here if you want to learn more about both the Plan B strategies and compelling investment research we present.

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Over fifteen centuries ago, according to an ancient Sanskrit legend, a mythical Hindu priest named Sissa was ordered to invent a new board game to entertain the king of Taligana.

Sissa labored over the task for quite some time, but he eventually brought the King a military strategy game with a 64-square board and beautifully hand-carved pieces. Today we call this game chess. And according to the legend, the King was absolutely enamored with it.

So enamored, in fact, the King offered Sissa any reward he desired. So, the priest asked for a single grain of wheat to be placed on the first square of the chess board. Then two grains on the second square. Four grains on the third. Eight grains on the fourth. And so on.

The King of Taligana thought the request to be humble and cheap. After all, a little bit of wheat was nothing compared to the endless entertainment of this new game. So, he ordered his men to bring in the grain.

But as they continued counting, the numbers began to grow quickly.

One-quarter of the way through the board (sixteen squares), Sissa was owed around 131,000 grains– roughly four kilograms of wheat. No big deal.

But with every square the amount kept doubling. Halfway through the board Sissa is owed over 8 billion grains– about a quarter of a million TONS of wheat. And it keeps doubling from there.

By the final square, the amount of grain owed is far more than all the wheat that the world can possibly produce.

This is known in mathematics as exponential growth, i.e. when something grows at a faster and faster rate. Sort of like my kids. Or more ominously, the US national debt.

According to data just released by the federal government, interest on the national debt for Fiscal Year 2024 (which just ended last Monday, September 30) was roughly $1 TRILLION.

That’s just the interest bill.

And while that number itself is simply astonishing, it’s even more important to put it in context. $1 trillion is significantly more than the government spends on virtually EVERY other line item, including the military and Medicare.

In fact, Social Security is the ONLY federal program whose budget exceeds interest on the debt. For now. But within the next 5 years, interest on the debt will surpass even Social Security.

Just going back to FY 2020— which started pre-pandemic on October 1, 2019— the interest bill that year was “only” $345 billion. And in FY21, it only rose to $352 billion. That was just a $7 billion, or 2%, increase. No big deal.

But in FY 2022, it took a more significant jump to $475 billion. Then $660 billion. And now a TRILLION dollars.

So not only is the interest bill increasing, but the rate at which it is increasing… is increasing.

Just like grains of wheat on a chessboard, this is an exponential problem. At first it looks manageable. Even paltry. But around halfway through the chessboard, the problem starts to spiral out of control very quickly.

Technologist and author Ray Kurzweil actually refers to this phenomenon as “the second half of the chess board”, i.e. the part of the exponential growth model where the problem becomes too big to solve.

How did the most powerful nation in the history of the world reach this point?

For starters, a complete lack of discipline when it comes to federal spending. For decades now, the government has spent money as if there were no limit and would never be any consequences to increasing the debt.

This was most noticeable during the pandemic when they (and the media) engineered widespread fear and hysteria, shut down the economy, and then spent trillions of dollars to keep everyone afloat.

The national debt skyrocketed as a result. But at the time, interest rates were practically zero. So, the government’s borrowing costs were pretty negligible. That’s why the annual interest bill barely moved between FY2020 and FY2021.

But as you probably recall, rates soared in 2022. And so did the government’s interest bill.

Each year, in fact, much of the existing national debt matures; money that the Treasury Department borrowed five or ten years ago becomes due and must be paid back.

Naturally, the Treasury Department doesn’t have any money to pay back its lenders. So instead, they issue new debt to repay the old debt.

The problem, of course, is interest rates. The money they borrowed years ago was at 0% or 1%. Today it’s 4%.

Just this past Fiscal Year (2024) the Treasury Department refinanced roughly $5 trillion in debt at significantly higher interest rates… in ADDITION to the $2 trillion in NEW debt that they borrowed.

This means that NEXT YEAR’s interest bill will likely be even HIGHER.

You can see how this problem can quickly become a crisis. Again, five years ago the annual interest expense was $345 billion. Five years from now it could easily be $2 trillion.

Sure, the government’s overall tax revenue is also increasing. A bit. But the interest bill is growing much faster– at an exponential rate. You can’t have linear growth in your revenue and exponential growth in a major expense and expect to survive.

It appears that the US government has crossed the proverbial Rubicon into the second half of the chessboard. And their options are extremely limited.

On one hand, the government could slash spending, reform entitlement programs (like Social Security, welfare, etc.), and engage in a massive deregulation effort to boost economic productivity. But I’m not holding my breath.

Their other approach will be to increase taxes and print tons of money to keep interest rates artificially low.

This is already starting to happen.

The government released its new inflation data just this morning showing that core inflation is STILL on the rise. Inflation is not beat by a long shot. And yet the Federal Reserve is going full steam ahead in its rate cutting cycle.

Fed officials aren’t stupid. They know that 0% interest rates are the only hope for the US government’s financial survival.

And the chief consequence, of course, will most likely be some pretty nasty inflation.

This is why we keep saying that real assets make so much sense, i.e. crucial materials like metals, energy assets, and productive technology that are (1) useful and critical in the economy, and (2) cannot be created out of thin air by central banks or governments.

Historically, real assets perform extremely well and hold their value during inflationary times.

And the added benefit is that, right now, many of the businesses which produce real assets are at historically cheap levels. We’ll show you a great example tomorrow.

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Like most kids, I wanted to be an astronaut when I was little. Then a fireman. Then a pirate. Then a movie star.

My parents were pretty traditional so they hoped I would grow up to become a doctor. This is pretty typical; after all, parents just want their kids to be financially secure.

I think about this a lot with my kids— both of whom are extremely young. I give a lot of thought to what their world will look like in 20 years given the seismic geopolitical and macroeconomic shifts taking place.

America’s status as the world’s sole superpower is dwindling before our very eyes. The dollar’s role as the dominant global reserve currency is rapidly waning. And the rise of AI and robotics promises to upend just about every occupation imaginable, including white collar professional jobs which currently require advanced, outrageously expensive university degrees.

As my kids grow and develop, my plan is to focus on developing traits that machines cannot emulate, like genuine creativity, leadership, risk tolerance, big picture thinking, and bold decisiveness.

AI is a powerful tool they should learn to harness. But it will not be their master. After all, there’s a reason Captain Kirk was in charge of the Enterprise and not Spock.

However in terms of what the landscape for jobs or business opportunities might look like in a couple of decades, that’s anyone’s guess. I have no idea what will be the lucrative industries in a world where AI is pervasive.

In fact the only occupation I can think of which will provide absolute financial security is that of a union boss.

I’m totally joking of course. But in all honesty, being a union boss certainly seems to provide a cushy lifestyle these days. And as long as there are delusional leftists in our midst, there will always be fat cat union bosses to steal from their constituents.

For example, on Friday we highlighted that the man in charge of the dockworkers union— which briefly went on strike last week— makes about a million dollar per year, lives in a mansion, and drives a Bentley.

He’s far from alone.

Stacy Davis Gates, the President of the Chicago Teachers Union (CTU), pulls in nearly $300,000 per year.

Despite being in charge of the teacher’s union for Chicago public schools, though, she sends her child to a $16,000 per year private school.

As head of the union, Gates understands where the most important investments are made. The CTU is the largest single contributor to Chicago Mayor Brandon Johnson’s campaign fund.

Which is probably why Comrade Mayor Johnson routinely caves to the demands of the teachers union… including their newest demand for another massive (totally unaffordable) pay increase.

Bear in mind that the city has some of the worst performing schools in the country. It’s beyond outrageous.

And the CTU is against school choice; they want kids locked into attending the failing schools in their neighborhood, as opposed to giving parents the option to send their children to better schools elsewhere.

To add insult to injury, the school district already has a massive, bloated budget. The district’s total budget has increased over 97% since 2012. Yet over the same period, test scores in reading, math, and science have plummeted.

In other words, the more money the school district spends, the worse the outcome for the students.

The Chicago Teacher’s Union is totally oblivious to this reality, and they are now demanding more than $10 billion in new incentives and compensation… because they’ve clearly been doing such a great job.

Gates has already given the order to Comrade Mayor Johnson, so the wheels are in motion to bankrupt the city with CTU’s demands, and bankrupt the students’ future.

It’s pretty obvious that Ms. Gates is the one calling the shots in Chicago. Bear in mind, this is not an elected official. She’s a union boss. But she has the Comrade Mayor’s balls in her purse.

Not to be outdone, Gates’s counterpart at the national level is Randi Weingarten, head of the American Federation of Teachers (AFT)— the second largest teachers union in America.

In 2022, she said that parents concerned about critical race theory and gender ideology in schools were spreading “misinformation,” and added, “This is the way in which wars start.’’

So according to Comrade Randi, being involved and concerned about what your children are being taught in schools is the moral equivalent of Pearl Harbor.

By the way, she makes about $500,000 per year, plus massive benefits and incentives. And she, too, has the ear of some of the most powerful politicians in the country, including President Jill Biden and her husband Joe.

There are so many more examples about the power of union bosses.

I wrote recently about how a steelworkers union boss was able to get Jill & Joe to kneecap a competitor— and eliminate billions of dollars being invested in the distressed American steel industry.

The head of the FTC, Lina “Ghengis” Khan, routinely cites union concerns as she goes after businesses, even though her charter is to protect consumers, not unions.

Is this how you protect democracy? By ignoring consumers, shareholders, parents, and voters, and taking orders from unions?

These types of unelected special interests are exactly what keeps the graft going, why the deficits keep rising, and why the national debt keeps increasing.

America is full of highly paid, out of touch union bosses who steal productivity, distort capitalism, and divert resources to their benefit.

Obviously they lie through their teeth and pretend that it’s all about protecting workers. But if that were true, wouldn’t ‘the workers’ already be so much better off because of all the great deals their unions have made?

Except workers are consistently worse off.

So their union bosses are either totally incompetent… or (and?) they’re totally full of shit and don’t actually care about the workers at all.

Probably both. The union bosses are in it for themselves— for the highly paid, cushy lifestyle where they’re never held accountable for their failures. They rake in absurd salaries and massive union revenue, then use the money to buy politicians.

It’s a horrendous circle where the unions keep corrupt politicians in office, then the corrupt politicians use their power to protect the union bosses.

How ironic that the so-called party of democracy is controlled by unelected, incompetent, corrupt union bosses.

And all this does is add to America’s already gigantic financial problems.

We’ll talk about those more in a couple of days when the Treasury’s annual financial report is published.

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If you’ve ever been on a road trip through Pennsylvania, Ohio, or Indiana, you’ve probably driven past a billboard advertising Amish furniture, quilts, or cheese.

You may have even driven past a horse and buggy, driven by someone who looks straight out of the 1800s.

The Amish are a Christian sect known for their simple, traditional way of life, rooted in 17th-century Anabaptist beliefs.

Rejecting modern technology, the Amish believe that innovations like cars, electricity, and smartphones make life too easy, undermining their core values of hard work, humility, and self-sufficiency. They emphasize strength of the community over the freedom of the individual.

Different Amish groups pick and choose which technologies are acceptable to preserving their way of life. Some may appear to be living in the early 1900s, with limited electricity and even a community phone connection.

But other, stricter communities may shun every technology created after 1850.

And in this way, it struck me, that the Amish are a lot like unions.

You may have heard that the International Longshoremen’s Association, the dockworkers’ union, went on strike earlier this week.

The initial strike only lasted a few days; the companies quickly gave in to their demands, not so much out of principal, but in large part due to political pressure from the White House.

There are still a number of details to be worked out, but as it stands right now, dockworkers will receive a 62% increase in pay over six years.

Obviously any worker should be free to negotiate maximum pay with their employer. And the employer should be able to hire and fire at will based on employees’ performance and skill. That’s how a free labor market works.

But I was pretty surprised to learn that starting pay for a dockworker is over $81,000 per year. And with the increase of 62%, it will bring an entry-level dockworker to $131,000 per year.

In fact, you’d be hard-pressed to find better paid blue collar workers. According to port regulators, more than half the dockworkers at the New York-New Jersey port were bringing in over $150,000, and close to 20% earned over $250,000 per year.

Over on the West Coast, the average full-time dockworker earns almost $233,000.

I find it pretty ironic that the national jobs report came out today, as the dockworkers struck a deal.

The headlines are about blowout job gains. But when you look deeper, you see that the quarter million jobs created were, as usual, bartenders, waiters, and government employees.

Manufacturing jobs were down. And even those factory workers still employed don’t make nearly as much as the longshoremen.

But although the strike has ended, negotiations have not. This is just a tentative deal that allows further negotiations until January 15.

And as if the absurd increase in pay wasn’t enough, dockworkers are also demanding a complete BAN on automation at the docks.

It’s a bit like the Amish; they want to reject new technology… though not for religious reasons or some statement on work ethic. It really comes down to protecting their jobs.

The Union bosses understand that the 62% pay increase will create strong incentives for the transportation companies to automate. AI, robotics, etc. will be a LOT more cost effective than paying people hundreds of thousands of dollars per year… with the added benefit that robots don’t unionize.

So the unions essentially want to get rid of the competition. This will keep prices higher at the docks… which ultimately passes on additional costs to consumers for everything from food to furniture.

Maybe Kamala and Joe Biden have a point when they blame inflation on “greed”. Except in this case, it’s not corporate greed. It’s union greed.

Like I said, I have no problem with employees demanding higher wages. That’s part of the most basic tenets of capitalism.

The problem is with corrupt union bosses who distort the market, make the world less productive, and drive higher inflation for everyone else.

Automation is exactly what America needs to pull itself up by its bootstraps, and get the economy humming so that its debt and deficit problems melt away.

But there are clearly some very politically powerful forces doing everything they can to stop that.

Given that Kamala’s administration pressured the employers to offer workers an enormous pay increase, I have to assume she cares more about cushy union jobs than bringing costs for consumers down, or spurring the US economy.

Adding to the irony of the poor dockworkers strike, is that the man with the megaphone, the head of their union, makes nearly $1 million per year, lives in a 7,000 square foot mansion in the suburbs of New York City, and drives a Bentley.

Both the Bentley-driving union boss, and the fact that Kamala sides with him, shows you exactly what type of leadership this country currently relies on.

Unfortunately, that makes it unlikely that the country starts moving in the right direction anytime soon. And that’s yet another reason is makes sense to have a Plan B.

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The “green energy” revolution is one of the biggest fantasies of today.

For example, they tell us that fossil fuels are going away, that the gasoline powered internal combustion engine is a thing of the past, and that everyone wants to drive an electric vehicle (EV).

Clearly, that’s why over 90% of consumers still choose gas powered vehicles…

So the government instead has to step in to mandate electric vehicle use, attempting to force manufactures to sell 50% electric vehicles by 2030.

They conveniently ignore the fact that the American electric grid cannot handle that kind of power demand.

And if the $1 billion per EV charging station Secretary of Transportation Pete Buttigieg is spending from the trillion-dollar infrastructure bill is any indication, we’re not going to get there in six years.

Meanwhile, auto manufacturers are actually scaling back EV production as demand slows and infrastructure gaps remain vast.

Governments and activists may wish it were otherwise, but fossil fuels are not going away for decades. Yet, the belief that they are has led to massive misallocations of capital into renewables.

We’ve talked about this in regards to oil, natural gas, and the uranium required for nuclear power. All of these energy assets have been ignored by investors, or demonized by activists and governments, despite remaining absolutely critical.

And the same thing is true of the metals necessary to build traditional internal combustion engines.

Mining companies are obsessed with finding more metals like nickel and cobalt for the “green energy” revolution. Meanwhile, the specific niche metals required for gas vehicles have been neglected.

I’m talking about platinum group metals (PGMs). These include six metals—platinum, palladium, rhodium, iridium, ruthenium, and osmium—renowned for their high melting points and corrosion resistance.

Over 80% of palladium and 90% of rhodium is used in gas vehicle emissions control systems to convert toxic gases into less harmful substances.

And it seems investors have believed the lies of the climate fanatics, assuming that demand for these metals will drop precipitously as everyone flocks to electric vehicles.

This ignores, first, the actual reality that people still prefer gas vehicles.

Second, the fact that hybrid-electric vehicles are actually the most popular alternative to gas-only vehicles.

And while the EPA-regulation wants everyone to drive electric vehicles, hybrids also satisfy its 50% mandate.

Already, hybrid vehicles account for about 25% of vehicle sales in the US. And they actually use more PGMs per vehicle than traditional combustion engine cars.

But the supply of PGMs is shrinking.

South Africa, the dominant producer of platinum and rhodium, has struggled with power shortages, labor strikes, and declining investment in its mining sector. Russia, another major player, faces sanctions and geopolitical uncertainty that disrupt its palladium production.

With these two countries controlling the vast majority of global supply, the market is heading for significant deficits in the coming years. The numbers are already telling: in 2023 and 2024, the platinum, palladium, and rhodium markets all ran deficits, as in, more was consumed than produced.

Despite this looming shortage, prices for PGMs have plummeted.

Palladium is down 66% from its 2022 highs, and rhodium has crashed by 80% since 2021. This collapse in prices has put major PGM producers on the back foot, forcing them to cut jobs, and even shut down some operations.

Investors, spooked by the drop, are shorting palladium at record levels, convinced that the future belongs to EVs. But they’re missing the bigger picture.

False narratives like these are one reason why many real assets are historically cheap right now.

Real assets are physical, tangible goods like certain commodities and natural resources which have intrinsic value tied to real world uses. This includes energy assets like oil and uranium, productive technology, and fertile farmland.

It also includes critical minerals and metals, like the ones we have been discussing.

Unlike financial assets and paper money, they cannot be conjured out of thin air by central banks and government. Which is why they protect wealth against inflation.

And the type of conditions present in the PGM market is a classic example of finding a historically undervalued real asset.

A crucial, critical resource with limited supply? Check.

A burgeoning shortage, with no movement in the markets to remedy it? Check.

A historically low price for the critical resource? Check.

That’s why this summer we wrote to subscribers of our investment research service, The 4th Pillar, about a company which mines PGMs.

But rather than traditional mining, it extracts these metals from tailings— the waste left over from other mining operations.

And that means it actually gets its source material delivered to it for free…

This company has a deal with a chrome miner for the exclusive right to process the chrome mine tailings. It gives back the recovered chrome, and keeps all the extracted PGMs for itself.

It’s a symbiotic relationship with no money exchanged, no profit share, and no royalty owed.

This low-cost, efficient business model has allowed the company to stay profitable even as PGM prices have cratered.

With a rock-solid balance sheet and minimal debt, it is perfectly positioned to weather the current downturn and capitalize when the market inevitably turns.

But again, this isn’t just the story of PGMs and vehicle markets.

Everywhere you look, real assets are historically cheap.

Often these same conditions exist— the market for a critical resource has been ignored by investors, or demonized by activists, cutting into supply, while demand stays steady, or even grows.

While frustrating, these lies create enormous opportunity. The best way to capitalize is by investing in critical real asset companies at historic lows. As inflation rises and markets correct, those who invest now stand to benefit immensely.

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At a campaign rally earlier this month, President Trump promised that if he is elected, “We will keep the US dollar as the world’s reserve currency. It is currently under major siege. Many countries are leaving the dollar.”

What he’s referring to is the extreme privilege that the US has, i.e. that central banks around the world hold the US dollar in reserve as form of savings.

The entire world also conducts trade in US dollars. Since World War II, the vast majority of cross-border transactions among international businesses have been settled using US dollars.

Today, US dollars account for 54.8% of central bank holdings around the world. That’s still a lot, but it’s down from around 70% in the late 1990s, according to the latest IMF data.

And the US dollar is currently used for 42% of international trade, down from 52% in 2014, according to SWIFT, the Society for Worldwide Interbank Financial Telecommunication.

The dollar is still dominant, but it’s not a good trajectory.

This is a huge problem because, when foreign central banks hold US dollars, they generally do so by holding US bonds— which means they buy US debt.

With $35.5 trillion of debt, equal to about 123% of GDP, the US desperately needs big buyers of its bonds.

If foreigners decide to stop using the dollar, this ultimately means they won’t be buying as much US government debt… And the only real option at that point would be for the Federal Reserve to ‘print’ the money.

We all saw what happened when the Fed printed about $5 trillion during the pandemic— we got 9% inflation.

Well, the US government’s own conservative estimate is that it will take on another $22 trillion in debt over the coming decade. If the Federal Reserve had to print the majority of that, who knows how high inflation would go.

This is one of the reasons why it’s so important to the US economy that the dollar remain the world’s dominant reserve currency.

Trump is the only remaining Presidential candidate who is even acknowledging this massive risk for the US. (Bobby Kennedy also understood the issue, but he has effectively withdrawn from the race.)

But his solution doesn’t really cut it.

In the same stump speech, Trump says that he will threaten and bully countries into continuing to use the dollar. For example, if other countries say they want to “stop using the dollar,” then he could impose higher tariffs or even outright bans on imports of that country’s good and services.

But that doesn’t really work. The decision to use (or not use) the US dollar for trade isn’t made by Trump. Or Xi Jinping. Or most other world leaders and central bankers. It ultimately comes down to businesses and individuals to decide for themselves what currency to use.

If Apple decides that they want to pay TSMC (Taiwan Semiconductor Manufacturing Co) in New Taiwan Dollars, that’s a decision which those two companies will make between themselves.

And that sort of decision wouldn’t even be a high level executive, i.e. CEO or CFO level discussion. It would most likely be a mid-level manager in the finance or corporate treasure department.

They look at a number of factors, including what their vendor partners want, and what’s best for business— for example, accepting and holding certain currencies give higher rates of return.

These aren’t political decisions. They’re financial decisions. Business decisions.

Similarly, you could put your house on the market today and demand to be paid in Bitcoin. Or gold. Or perhaps a potential buyer is from Germany and wants to pay you in euros. It’s entirely up to the buyer and seller to decide on the settlement currency.

So the best way to keep the world using US dollars it not with threats, but through incentives. Much more carrot, much less stick.

In fact, threats are among the reasons why so many places around the world are interested in finding an alternative to the US dollar.

But if, on the other hand, the US government was just a little less dysfunctional, and engaged in a little more cooperation…

If politicians weren’t trying to imprison rivals from the other party, if they could recognize problems, compromise on sensible solutions, stop spending so much money, and keep the currency from suffering high inflation…

Then the world would be a lot more interested in continuing to use the US dollar. There would be a lot more trust and confidence in the US financial system.

But that doesn’t seem to be on too many people’s agenda.

It’s because of that, we anticipate the dollar will continue to lose share of global reserves, leading to (as I wrote above) more debt and inflation.

Certainly there are a few, limited scenarios in which that outcome can be avoided. And one can hope. But I’m not holding my breath.

That’s why is makes so much sense to have a Plan B.

Think about it— even central banks have Plan B. That’s why they’re buying up so much gold.

Over the past couple years, they have traded about $80 billion worth of excess US dollar reserves for gold, and that has driven the price of gold to an all time high.

Just imagine what will happen to the gold price if they buy another $300-400 billion…

Bear in mind central banks around the globe currently hold about $8 trillion in US dollars.

Converting just 5% of that to gold could easily make the price shoot past $10,000 an ounce.

And that may just be the beginning.

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Let’s play a game. I’ll give you some recent headlines, and you guess the well-known magazine.

• Here’s What the ‘Manosphere’ Gets Wrong about Cuckoldry
• How a Zombie Law Could Ban Abortion Nationwide If Trump Is Reelected
• Meet the New Autocrats Who Dismantle Democracies from Within
• Finding Math’s Beauty and Power with Drag Queen Kyne Santos

Where do you think these come from? If you guessed Teen Vogue, or even Newsweek, it would be understandable. But incorrect.

No. These headlines are from one of the premier “science” publications in the Land of the Free— Scientific American. And we didn’t even have to comb through years of articles to cherry pick those few. In fact everything we listed above was just from the last few weeks.

This is why it’s so hilarious that Scientific American endorsed Kamala Harris last week; they wrote “Vote for Kamala Harris to Support Science, Health and the Environment.”

So the publication which thinks sex fetishes, abortion, drag queens, and left wing political ideology count as “science” believe that Kamala is the pro-science candidate. Hilarious.

Even the few articles that are actually about real science have a woke, leftist bend. For example, one article is “Florida Surgeon General Spreads COVID Misinformation in Booster Guidelines.”

They go on to slam the state’s top public health official for telling people that new COVID boosters have not been widely tested on humans. So Scientific American decided that he is spreading misinformation… even though (quite bizarrely) they acknowledge in the very same article that the boosters have not, in fact, been widely tested on humans.

It’s especially ironic because one of the only other articles dealing with science is a story about a heroic scientist from the FDA who stood up against the “consensus” among the medical community in the 1960s.

Back then, all the “experts” believed that an untested drug called thalidomide was safe. This one woman questioned the science. And she was right— thalidomide caused monstrous birth defects when it was administered to pregnant women.

So, according to Scientific American, a woman who raised awareness about an untested drug is considered heroic. But Florida’s Surgeon General who is raising awareness about untested booster shots is spreading misinformation.

This double standard appears completely lost on them.

And speaking of double standards among leftist buffoons, the greatest investor of all time scored another big win recently.

Forget Warren Buffet. I’m talking about Paul Pelosi (husband of the former House Speaker and current Congresswoman from San Francisco, Nancy Pelosi) whose track record is virtually unbeatable.

This guy just has a special knack to sniff out amazing investments.

For example, Mr. Pelosi famously purchased very high-risk call options in Microsoft back in 2021; less than two weeks later, Microsoft announced a $22 billion contract with the US military… and Pelosi made an enormous profit.

It must have been a crazy coincidence.

Similarly, he loaded up on more high-risk call options of various semiconductor stocks in 2022, shortly before Congress announced the CHIPs Act (which poured billions of taxpayer subsidies into those same companies.) The companies’ stock prices soared, and Pelosi made a ton of money.

Another crazy coincidence for sure.

Just recently, Paul Pelosi decided to sell about $500,000 worth of Visa stock. And wouldn’t you know it— this week the Justice Department announced an antitrust lawsuit against Visa for illegally monopolizing the debit card market.

Visa’s stock price tumbled. But hey, Paul Pelosi had already sold. Incredible timing on his part… which, once again, must be a total coincidence.

Apparently everyone in the Washington establishment believes this to be true, because there has never been any serious investigation into the Pelosi’s potential impropriety. And if anyone so much as suggests that Pelosi has used her position for personal gain, it’s immediately labeled as “disinformation” or “misinformation.

New York City Mayor Eric Adams probably wishes for the same special treatment. Yet Adams was indicted this week on corruption charges for using his office for personal gain. I read the 57-page indictment, and the evidence against him is strong.

But the evidence against Pelosi is also strong. As is the evidence against “the Big Guy” profiting from Hunter Biden’s deals in Ukraine.

All of these people have long histories of improperly benefiting from their offices. And they’re all wrong. All of them. Yet only Eric Adams has been charged… which is pretty ironic for a party that claims to champion anti-racism.

They’re sending the black dude to jail while the old white people get to continue ripping off the public. Eric Adams is a criminal. But Paul Pelosi is the greatest investor of all time.

Just like Scientific American, the double standard is completely lost on them.

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In the 6th century BC, during the reign of Nebuchadnezzar II, Babylon flourished as a center of power, culture, and commerce.

We know this because the Babylonians were exceptional record keepers. And they chiseled everything down onto cuneiform tablets, many of which have survived through today.

Sadly the tablets aren’t tabloids. They don’t contain any juicy gossip or colorful stories of ancient times.

But they do offer extremely detailed– though often boring and mundane– records of everyday economic transactions, legal contracts, and administrative activities.

Just like future historians centuries from now should easily be able to see this evening’s closing stock prices for Apple and Tesla, we can also read about daily grain prices in ancient Babylon.

One important tablet from the reign of Nebuchadnezzar II highlights the interchangeability of gold and silver in Babylonian commerce. It records a transaction where 5 shekels of silver were considered equivalent to half a shekel of gold.

(The shekel was an ancient unit of weight approximately equal to 8.33 grams.)

This exchange rate implies a silver-to-gold ratio of 10:1.

The formal establishment of fixed exchange rates between gold and silver took a significant leap under Darius the Great in the mid-6th century BC.

Ruling over the vast Achaemenid Empire, Darius borrowed the concept of minting coins from the Lydians and introduced a bimetallic standard. He decreed that one gold “daric” coin was equivalent to 20 silver coins, creating one of the first examples of an official, fixed silver-to-gold ratio.

Over time, the ratio fluctuated due to advancements in mining techniques and changes in supply and demand. And by the era of Alexander the Great in the 4th century BC, the ratio had shifted to 13:1.

Similarly, in ancient Rome, Julius Caesar established a 12:1 ratio.

Even in the early history of the United States, The Coinage Act of 1792 legally defined the US dollar in terms of specific weights of gold and silver—1.604 grams of pure gold or 24.1 grams of pure silver—establishing a ratio of approximately 15:1.

Of course, today, the silver-to-gold ratio is whatever the market decides. Ever since the dollar was removed from the gold standard more than five decades ago, the market ratio between silver and gold has ranged from about 25:1 all the way up to 120:1. Right now it is about 85:1.

Many people have an idea about where this ratio should be. Some people think that it will inevitably fall back to 50:1 which would price silver at around $53 per ounce.

Silver could certainly rise to $53 and far beyond. But not because of some preordained ratio.

Remember, there is no fixed rule or law regulating the silver/gold ratio. There’s nothing stopping it from rising to 500:1.

And frankly I think it’s likely the ratio could rise much higher from its current 85:1.

Just think about the catalysts that could drive both gold and silver prices much higher.

Gold prices over the past few years have been pushed to all-time highs by central banks. And as I’ve argued, this is a pretty clear sign that they anticipate moving on from the US dollar as the global reserve currency.

As the US national debt continues to explode higher and the federal government appears increasingly dysfunctional, it’s becoming likely that the US dollar’s global dominance could come to an end within the next several years.

What does the post-dollar global financial system look like? What will the next reserve currency be? No one knows.

And that’s why central banks are buying gold. Because they have $8 TRILLION worth of US dollar reserves that they need to convert into something of value.

Gold, for now, represents that value. So central banks are buying it by the metric ton.

But (with minor exception) central banks do not buy silver. The market is too small, making it extremely difficult to invest billions of dollars all at once.

Silver prices are influenced more by industrial demand… and investor speculation. I’ll come back to that.

I’ve said before that a Kamala victory will likely spell the end for the dollar’s reign. This is a person who thinks that inflation is caused by “greed” and whose answer to every problem is more government spending.

The Harris deficits and inflation will likely be the proverbial straw that breaks the dollar’s back. And the consequent surge in central bank gold purchases could easily send the silver/gold ratio soaring past 200 or more.

Again, while 200 is far beyond the historical average, there’s no reason why it can’t be even higher. Historical averages are merely data points, not firm rules.

It’s far more important to pay attention to price catalysts. And gold has a major catalyst in central bank purchases.

That doesn’t mean the price of silver won’t rise. In fact, a climbing gold price alone is very like to increase the price of silver, simply because investors will speculate that it will rise.

This becomes somewhat of a self-fulfilling prophecy; investors buy an asset believing that it will rise. That increased demand causes the price to rise, encouraging more investors to buy.

We’ve seen this type of feverish speculation with plenty of asset classes in the past– including silver more than a decade ago.

But in the end, if there aren’t real demand fundamentals to support the price, the speculative mania always fades.

Bottom line, gold has clear demand from central banks that could send the price to absurd levels. Silver does not share the same catalyst.

Silver prices could absolutely skyrocket. But this would be far more likely due to temporary speculation (and those buyers tend to be finicky and sell quickly) rather than from true long-term industrial or investor demand.

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On October 23, 1944, a formidable US naval fleet sailed past the Philippine island of Leyte with more than 300 battleships, aircraft carriers, cruisers, destroyers, and submarines.

Their objective was to secure the island’s strategic gulf to support the Allied amphibious invasion (which would ultimately liberate the Philippines from Japanese occupation). Plus they intended to cut off Japan from vital resources in Southeast Asia.

The Japanese high command knew that losing the Philippines would be devastating to their war effort, so they sent the Imperial Navy to engage and destroy the American fleet in what would become the largest naval battle in world history.

The Japanese had a strong fleet, for sure. But at that point the US Navy was battle-hardened and highly experienced in complex maneuvers.

During the battle, in fact, the American fleet was able to execute a series of complicated and challenging movements known as “crossing the T”.

This tactic allowed the US Navy to unleash devastating broadsides with minimal return fire from the Japanese, effectively crippling the Imperial Navy. And after three days of intense fighting, the Allies won the battle. They soon regained control of the Philippines, all but ensuring their victory in the Pacific.

This Battle of Leyte Gulf was not only a major turning point in World War II, but it was also the last major, conventional battle for the United States Navy.

Certainly the US Navy has been deployed plenty of times over the past eight decades, but for the most part its role has been limited. They’ve carried troops, provided fire support, launched aircraft, managed logistics, and conducted exercises as a ‘show of strength’.

There have also been plenty of minor skirmishes, especially involving small patrol boats during the Vietnam War.

But in terms of actual large-scale surface warfare, i.e. fleets of ships trying to out-maneuver and fire upon one another in the open water, the last conflict was eighty years ago… meaning there is no one serving in the Navy today with any first-hand experience in such complex tactics.

Yet any potential conflict with China— which hopefully never comes— would involve precisely this type of old-school surface warfare. And that’s a big problem for America’s navy.

Forget about strategic maneuvers while guns are blazing in the heat of battle; lately it seems that the Navy can’t even steer its ships properly on calm waters in broad daylight.

This is about the most humiliating thing that could happen for a naval commander. And yet, a few years ago during a single four-month period, the Navy suffered three completely avoidable collisions, two deadly.

The USS Fitzgerald collided with a container ship off the coast of Japan due to navigational errors and procedural failures, resulting in the deaths of seven US sailors.

And two months later, the USS John S. McCain collided with an oil tanker near Singapore due to inadequate training and crew confusion, leading to the deaths of ten US sailors.

There is also clear rot in the highest levels of Navy leadership.

For example, in May, federal authorities arrested retired Admiral Robert Burke, former Vice Chief of Naval Operations— the second highest ranking Navy officer— and charged him with bribery offenses.

He’s accused of steering lucrative contracts towards a company in exchange for a $500,000 per year job, which he was given when he retired. (He should have run for Congress— they do this every day and are never arrested for it.)

Ironically, the company offers leadership training. So the corrupt Admiral hired the corrupt company to train the next generation of the Navy’s leadership. Great.

Whoever runs the Navy’s website is also apparently incompetent, because (as of today’s date which is months after his arrest and indictment) Burke’s profile is still live and boasts about his distinguished career.

Aside from embarrassing levels of incompetence and corruption, the Navy’s mission readiness is also a problem.

For starters, the Navy is shrinking. The 2018 National Defense Authorization Act (NDAA) established a policy for the Navy to have “not fewer than 355 battle force ships.”

Yet the Navy’s own website says it has roughly “280 ships ready to be deployed.” That’s 20% below the minimum target, which is especially concerning given that the existing vessels are getting old and obsolete.

The oldest ship that’s still on active duty— the USS Blue Ridge— was originally commissioned 54 years ago in November 1970. The average destroyer is 20 years old. The average aircraft carrier (the type of vessel which will be absolutely critical in a conflict with China) is 31 years old.

Yet top brass in the Navy intends to continue expanding the lifespan of these ships— while China aggressively grows its fleet with brand new ships, bigger guns, and cutting edge technology.

To make matters worse, US munitions stockpiles are also old and dwindling.

And that’s not even getting into the personnel issues in the Navy— including the full blown recruiting crisis.

In short, not enough people, not enough ammunition, not enough ships, plus rampant corruption and incompetence… all while a looming adversary continues to grow its fleet and combat capabilities.

The US Navy has a lot to fix. So what’s their big priority now?

Gender inclusivity, of course.

Last week the Navy excitedly announced that launch of its first co-ed submarine— the USS New Jersey, i.e. “Jersey Girl”. That’s literally the nickname. And the Navy called it “a testament to the strength that diversity brings to our Navy,” and, “a symbol of progress, breaking barriers.”

The video concludes saying, “The future of Naval warfare starts here, and it’s more inclusive, stronger, and more capable than ever.”

Back in 2020, I joked that, “Our enemies will tremble at the sight of our diversity and inclusion…”

Now the Navy is actually putting that in its marketing.

It’s extraordinary how short-sighted these people are. The future of Naval warfare isn’t “more inclusive”. It’s deadly. It’s bloody. It’s serious business. And it requires serious leaders who understand real world threats; who can competently develop and execute strategic plans to meet those threats; and who can maximize the value of every dollar they’re given.

These people blow through money like, well, drunken sailors. And they demonstrate over and over again that they have no clue about the real challenges that America faces.

This absurd concept of ‘inclusive warfare’ is just the latest example of how Joe Biden’s DEI obsession has set deep and dangerous roots that will continue to harm America for years to come.

We can only imagine how much worse this will become if Kamala wins… which is why it makes so much sense to have a Plan B.

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The Fed Chairman was flush with praise yesterday over the stupendous state of the US economy.

The economy is in a “good place”, he told reporters at a press conference after announcing a 50-basis point (0.5%) interest rate cut. The labor market is “strong”. Inflation is “coming down”. They’re “confident” about the future outlook. Basically, everything is awesome.

But at least a handful of reporters noticed the obvious paradox: if the economy is doing so great, then why are you slashing interest rates?

Typically, central bankers only cut interest rates when the economy is weakening… which certainly doesn’t conform to the Chairman’s effervescent outlook.

So, which is it? Is the economy strong? Or is it weak? Apparently, we’re supposed to believe that it is simultaneously both.

A handful of reporters in attendance at yesterday’s press conference were courageous enough to push him on the issue.

One reporter noted, for example, that Fed officials were anticipating several more rate cuts in the near future… simply to prevent the unemployment rate from rising any further. That certainly doesn’t sound like a super-healthy economy.

But the Fed Chairman continued to insist that the economy is solid, with the same conviction that Kamala Harris has when she declares that her “values haven’t changed”.

What I found most remarkable about yesterday’s meeting was that almost all the questions were about the labor market and unemployment; there was very limited discussion about inflation.

It was as if the Fed had cast a spell over the crowd and made people forget about all the insufferable inflation over the past few years… or at least convinced them that inflation was in the rear-view mirror.

But candidly, the Fed has to know that the inflation problem isn’t over.

Last month’s CPI inflation report, for example, showed a 2.5% annual increase in consumer prices— though excluding the volatile food and fuel prices, so-called ‘core’ inflation was 3.2%.

But remember, the overall inflation number is really just an average of various categories, like apparel, medical care, and transportation services.

It turns out that one key category— used cars— has been dragging down the average over the past few months. You probably remember that used car prices shot up to outrageous levels in the early days of the pandemic. They’re finally starting to fall. And over the last year, used car prices fell around 10%.

This 10% drop in used car prices dragged down the inflation average.

But here’s the problem: the fall in used car prices is a temporary phenomenon, i.e. used car prices can’t and won’t fall forever. Most likely this will only last a few more months, after which the overall inflation average will shoot back up.

And that’s just over the short term.

Longer term, endless multi-trillion-dollar federal deficits will keep driving inflation higher.

Right now, the national debt is a whopping $35.3 trillion. And the government’s own forecasts indicate that it will rise by an additional $22 trillion over the next 10 years. In reality the rise will be far greater.

The interest bill on this massive pile of debt is debilitating; already, this fiscal year, the total gross interest bill will exceed $1.1 trillion— far more than the government spends on national defense.

And this interest bill is rising at an alarming pace.

Consider that, just before the pandemic in 2019, the annual interest bill was around $400 billion. So, it’s surged nearly 3x in five years.

Government tax revenue has increased as well. But interest expense is surging at a far more rapid pace. And this is dangerous.

The more money the government has to pay in interest, the less money is left over to pay for other things, including Social Security, the military, etc. This will force the government to borrow even more money just to make ends meet, making its interest problem even worse.

This is really the reason why the Fed cut rates. They know that the US government cannot afford to pay even 5% on its debt… which is totally ridiculous.

Some of our readers may remember the late 1990s. Back then, the government actually ran a budget surplus, at least on paper. The national debt was low and shrinking. The US economy was booming. Inflation was just 1.5%. And there was no other country on the planet that could come close to rivaling America’s dominance.

And yet the US government 10-year Treasury Note still yielded over 6%.

In other words, despite everything being so great and the government balance sheet looking so favorable, investors still demanded a 6%+ return from the government.

Today, the US is $35 trillion in debt— about 125% of GDP— with a weak, highly dysfunctional government that embraces socialism and cannot compromise on the most basic priorities. And yet the 10-year yield today is less than 4%.

But now the Fed says even 4% is too high, therefore interest rates must fall!

And they’re right. Think about it: the national debt is expanding at an exponential pace, and it will likely pass $50 trillion within the next 5-7 years. If interest rates average 4%, that means the government will spend over $2 trillion per year just to pay interest. And that’s potentially just five years away.

The Fed knows this is totally unsustainable. They know the only way that the US government can function anymore is if interest rates are essentially 0%.

And that’s why they cut rates yesterday: because the US government can’t afford to pay 4%.

They talk about the awesome US economy and shrinking inflation rate, but these are just excuses to justify the rate cut. The real reason is that they have to bail out Uncle Sam.

Ultimately this combination of low interest rates and extreme deficits will create a lot more inflation. But if the Fed has to choose the lesser of two evils, i.e. higher inflation versus a bankrupt US government, they will easily choose the path of inflation.

That’s why it makes so much sense to own real assets.

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At some point early in 2011, I received a frantic phone call from a woman who was terrified that then-President Obama was going to “close the borders”.

She had apparently been reading some pretty dark forums on the Internet which had convinced her that Obama was going to prevent all US citizens from leaving the country… and she was intent on getting out of the country before that happened.

I spent the first part of our call trying to disabuse her of the rumor. While I acknowledge that anything is possible, I’m also a data-driven person… and there was simply zero credible evidence to suggest that President Obama was going to restrict all traffic into and out of the United States.

But, still, she wouldn’t listen. So I asked her what she wanted to do. She told me that she intended to pick up her entire life and move to Uruguay within the next 48 hours.

Well. Uruguay is a nice enough country. I lived there many years ago for a bit— it’s quiet, pastoral, and, well, there’s absolutely nothing going on. Which is fine. Some people like it that way.

Problem is, the woman I was speaking to had never been to Uruguay. In fact she had never even left the United States before. She didn’t even have a passport.

Not to mention she didn’t speak Spanish, barely knew the first thing about Uruguay, and didn’t know anyone living there.

Worst of all, she was planning on bringing her elderly mother who needed specialized care… without the first idea of how her mother would even be able to obtain the right medication in a foreign country.

But in her mind, these were all trivial concerns. Her fear of Obama closing the borders was the biggest threat in her life, and she had to act quickly.

I was pretty emphatic on the phone and told her that she would be making the biggest mistake of her life. Fortunately, in the end, reason prevailed, and she didn’t go.

None of this is a knock on her; I’m sure that under normal circumstances she’s a perfectly intelligent person. But that phone call was a pretty stark case study in how powerful certain emotions can be.

Love (or at least infatuation), for better or worse, is one emotion that can make us do some completely irrational things… especially when we’re young and naive.

Hope is another overpowering emotion that can make people ignore obvious risks and dangers.

But perhaps none is more overwhelming than fear. Fear can paralyze us. It can make us lose all sense of reason. Our primate fight-or-flight response kicks in, and the human brain seems to turn off completely.

And given the sheer volume of gargantuan, looming risks in the world right now, it’s pretty easy to feel a certain degree of fear.

For starters, there’s been a lot of talk of “World War III” brewing. And, if we’re intellectually honest, this isn’t crazy. Between conflicts in the Middle East, growing tensions with Iran and China, the never-ending war in Ukraine (including Vladimir Putin’s threats to use nuclear weapons), etc., the prospect of a wider global war breaking out is completely reasonable.

The US national debt is another enormous problem— and not just for America, but for most of the world. It’s extremely likely to result in significant inflation, global economic hardship, and the loss of the US dollar as the world’s reserve currency.

Add to that the border crisis, rising crime, and economic malaise— all of which apply to both the United States and much of Europe.

And I doubt the current state of the US Presidential election, not to mention TWO assassination attempts, is making anyone feel any less fearful.

This is why we’ve been talking about the concept of a Plan B for over 15 years.

But the key is taking rational, sensible steps that put you in a position of strength, no matter what may or may not happen next.

There’s no magic pill, no single action that will solve every problem or eliminate all risk. But there are clear, common-sense approaches.

If Kamala Harris wins the presidency, for example, it’s highly likely that taxes will increase. They literally don’t have to do anything, and the 2017 tax cuts will expire next year.

That means more money out of everyone’s pockets going to feed a government beast that wastes taxpayer money in the most insane ways imaginable.

They’ve spent billions of dollars to build a whopping SEVEN electric vehicle charging stations. TENS of billions have been given away to their sworn enemies in Iran and Afghanistan. Hundreds of billions were spent to pay people to stay home and NOT work.

This is how they spend your hard-earned money. Yet if you plan head, there are plenty of completely legal ways to reduce your tax burden, now and in the future.

Inflation is another looming problem, especially with at least $22 trillion in new debt expected over the next 5-10 years.

But there are ways to mitigate inflation’s impact as well. Real assets are trading at historically low valuations (and we’ve been especially bullish on the prospects of gold mining companies, which are incredibly cheap at the moment).

Our premium subscribers also hear all about sensible asset protection strategies, because in a struggling economy, frivolous lawsuits become a more common risk.

And with general security threats like rising crime and the possibility of war, it makes sense to have a second residency.

That doesn’t necessarily mean you need to buy a house abroad. But going through the process of obtaining legal residency in a safe, peaceful country, far removed from these issues, is a smart move.

I have a close friend who recently obtained legal residency in New Zealand. His reasoning is that if World War III breaks out and the nukes start flying, that’s where he would want to be.

His reasoning is sound. But notice that he’s not picking up his life tomorrow morning, abandoning all caution, and heading to a new place that he doesn’t know.

He’s traveled to New Zealand many times. He already has a small network. He knows where he would live. He has already filed the paperwork to obtain residency.

So if the proverbial ever hits the fan, he’ll already have all the basics in place. If not, he still has residency in a country that he enjoys spending time. There’s not much downside to his plan.

The same thinking applies to second passports.

For example, you might be surprised to find you’re already eligible for a second passport through ancestry.

There’s rarely* any downside to obtaining a second passport. Think of it like fire insurance on your home— you might never need it. But you’ll be damn glad you have one in case the need ever arises.

And in many cases, a second passport you obtain today can also be passed down to your children and grandchildren, so that future generations can obtain the same benefit for decades to come.

But remember the key to a Plan B is staying rational and not letting fear take hold. Making fear-based Plan B decisions is almost always a colossal waste of time and money.

As an example, I recently found out that there are some people on the Internet selling Pakistani citizenship. And when I heard about this initially I thought it was a joke. It’s not.

There are far more legitimate places in the world where one can obtain citizenship in exchange for a financial investment in the country, so-called “Economic Citizenship” or “Citizenship Investment Programs” (CIPs).

St. Kitts, as well as several other Caribbean nations, are famous for their citizenship by investment programs, which start around $250,000 these days.

But if that’s way too much money for you, and you don’t qualify for citizenship by descent, the most rational approach is to pursue legal residency. It’s a perfectly reasonable option.

In places like Mexico, Costa Rica, or, yes, even Uruguay, residency costs almost nothing.

Well, a few paragraphs earlier I wrote that there’s rarely any downside to obtaining a second passport. Note the asterisk. Pakistani citizenship is one of the few exceptions where there actually is* downside.

Sure, for an EXTREMELY limited group of people, Pakistani citizenship might make sense. If your dream is to move to Karachi, then, great, go for it.

But for the vast majority of people, paying $20,000 for a Pakistani passport is— AT BEST— a total waste of money.

If you’re a US citizen, then most likely you’ll end up getting a knock at the door from the Department of Homeland Security. They’ll assume you’ve been radicalized and are operating some sleeper cell, so you and your family will probably end up on some terrorist watch list.

As a matter of fact, the latest moron who tried to kill Donald Trump this week had apparently planned to purchase Pakistani passports in some bizarre plot to recruit people from the Middle East to fight against Russia for Ukraine.

In a separate incident, a Pakistani national had traveled to Iran, before heading to the US, where he tried to hire hitmen to kill Trump… but ended up in an FBI sting.

Suffice it to say, red flags go up around Pakistani passports. This is not a country where most people should want to obtain a second passport, and there’s zero upside in investing a single dollar or minute of your time on such a terrible idea.

Remember, the name of the game is Plan B. Not Plan Stupid.

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This is an anomaly we haven’t seen before.

Gold just hit yet another all-time high. But what’s strange is that, if you look at gold’s supply and demand fundamentals, the price should almost be falling. Not rising.

I’ll explain—

On the supply side, gold production is actually increasing slightly. The largest miner in the world, Newmont Mining, produced nearly 30% more gold in the first half of 2024 compared to 2023. And across the entire industry (according to the World Gold Council), global gold mining output is up slightly over 2023.

So much for shrinking supply.

But what about demand? Well, this is usually broken down into four main segments.

The first and (by far) largest segment of demand is jewelry. But global jewelry demand is down.

Signet Jewelers (which owns major jewelry brands like Kay, Zales, Jared, Blue Nile, and many others) has reported an 8.5% drop in revenue so far in 2024 versus 2023. Meanwhile China’s Gold Association reported a 27% decline in gold jewelry purchases in the first half of 2024.

Even on the high-end side, LVHM’s jewelry division (which includes the luxury brand Tiffany’s) also reported a 5.1% sales decline due to “an uncertain economic and geopolitical environment. . .”

So overall jewelry worldwide (which is THE biggest component of gold demand) is down. Worldwide.

The next segment which drives gold demand is investment demand, i.e. individual investors who buy bars and coins… but most often invest via Exchange-Traded Funds.

Well, the largest ETFs in North America (GLD and IAU, which comprise 80% of the market) are DOWN for the year, meaning they have been net SELLERS of gold, rather than buyers. Even in the month of August, these two combined for a big fat whopping 1.7 metric tons of net purchases, roughly $200 million.

That’s nowhere near enough to move the gold price.

Meanwhile, across the Pacific, all of Asia’s gold ETFs COMBINED only purchased a net 0.3 metric tons (i.e. $30 million) last month. Again, this is simply not enough demand to move the gold price.

And so far for the year, worldwide, gold ETF holdings are DOWN by about 44 metric tons.

The third category of gold demand is industrial use. You might already know, for example, that there’s about 50mg of gold in your mobile phone thanks to gold’s unique chemical properties as an electrical conductor.

So mobile phone producers (along with certain medical device manufacturers and a handful of other industries) also buy gold. It’s pretty small demand, though— industrial and technology use only makes up about 10% of global gold demand.

That said, it’s worth pointing out that iPhone sales (which is a good proxy for global mobile phone production) are down substantially, from a peak of $48 billion in Q1/2021 to just $39 billion in its most recent quarter.

So, to summarize, jewelry demand is flat or down. Investment demand for gold is flat or down. Industrial demand is too small to matter, but even that is down. Meanwhile, supply is rising.

Rising supply and falling demand? It seems like gold prices should be falling right now. And yet gold just reached yet another record high. What gives?

Well, as we’ve said before, the answer is central banks.

Poland is a great example; despite being a relatively small country, it bought 19 metric tons of gold last quarter alone. And it plans to buy at least another 125 tons in the future. That’s a lot of gold.

This is a trend taking place worldwide; central banks including China, Turkey, Qatar, India, Czech Republic, etc. have loaded up on gold this year. And in the second quarter of 2024, central banks purchased 183 metric tons of gold… which is far more than usual.

Central banks typically buy small amounts of gold, i.e. a few metric tons here and there. But over the past two years, they’ve been buying gold like crazy.

It’s pretty obvious why. They’re concerned about the world, and they’re concerned about the fate of the US dollar and US government finances.

Think about it— central banks around the world own TRILLIONS of dollars worth of US government bonds, i.e. US dollar foreign reserves. And they’re obviously worried.

Congress and the White House run outrageous budget deficits every year. The federal government’s dysfunction is a constant national embarrassment. The US national debt is set to soar by AT LEAST $22 trillion over the next decade. And inflation is far from being solved.

Foreign central banks know this. And they realize that, in a few years time, their trillions of US dollar reserves will be worth a lot less.

So they’re trying to do something about it now. And that means trading at least SOME of their dollars for gold… hence the feverish central bank gold purchases, and the all-time record high in the gold price.

We’ve already suggested that gold could easily go much higher… especially if Kamala wins. I think that’s easily a $10,000 gold price, which would suggest only a small percentage of US dollar foreign reserves invested in gold.

That doesn’t mean the gold price can’t fall in the meantime. Gold prices have been rising for so long, and, realistically, nothing goes up or down in a straight, uninterrupted line.

Some central banks will continue buying gold irrespective of its price. Others will be more conservative and try to play the market. Singapore’s central bank, for example, actually sold a bit of gold recently and are probably hoping for a pullback in prices to buy more.

But over the longer term, gold is still an extremely sensible hedge with a lot of upside.

Having said that, the real value we see right now is in gold miners.

Look at Newmont mining— and, this is not a recommendation, but just an example. Newmont is the world’s largest gold miner, i.e. more than 80% of its revenue is essentially gold.

Gold is at an all-time high, yet Newmont’s stock price is about 40% below its record high from a few years ago.

Sure, it’s a much more complicated story; you have to consider gross margins and mining costs and country risk, etc. But the larger point is that gold stocks (especially relative to gold) are very cheap right now… especially when you consider where gold could be a few years from now.

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The US Department of Transportation clearly has a lot on its plate.

America’s infrastructure is not in great shape. The American Society of Civil Engineers (ASCE) grades America’s roads, bridges, and public transportation a C- overall.

In fact 42% of US bridges are at least 50 years old, and nearly 7.5% are considered structurally deficient. 43% of public roads are rated as mediocre or poor.

Then there’s the sorry state of US railways, many of which are considered ancient by industry standards. And despite the “High Speed Ground Transportation Act” being passed SIX DECADES AGO in 1965, the amount of high-speed rail in the US is pitifully low.

There are also seemingly constant problems with US air traffic, especially at major airports.

But what has US Transportation Secretary Pete Buttigieg done thus far during his tenure to address these challenges?

Well, after Congress handed him an astonishing $1 TRILLION to fix America’s crumbling infrastructure, he’s managed to spend $7.5 billion to build a grand total of seven electric vehicle charging stations across the country. Clearly that’s money well spent.

But now Secretary Pete has shifted his gaze to America’s biggest transportation problem.

It’s not highways. Or bridges. Or even electric charging stations.

Secretary Pete is now devoting precious taxpayer resources to regulating airline points… as in the frequent flier miles and other reward points that you get whenever you fly with a major airline or even sign up for a new credit card.

Last week, the government announced that Secretary Pete has “sent letters to American Airlines, Delta Air Lines, Southwest Airlines, and United Airlines ordering them to provide records and submit reports with detailed information about their rewards programs, practices, and policies.”

First of all, what do credit card reward point have anything to do with infrastructure? And second, even if we want to accept Pete’s bird-brained logic, how could anyone possibly argue that airline miles should be anywhere near the Department’s top priorities?

Yet Secretary Pete is fixed in his duty. He claims that:

“…points systems like frequent flyer miles and credit card rewards have become such a meaningful part of our economy that many Americans view their rewards points balances as part of their savings… But unlike a traditional savings account, these rewards are controlled by a company that can unilaterally change their value.”

What an interesting point of view. Airline points are a form of savings that is controlled by a company which can unilaterally change its value.

Gee where might I have seen that before….

OH, I remember! Like how the Federal Reserve can unilaterally inflate the value of the dollar, i.e. the actual form of savings that people all over the world use? Or, even better, how the US government can destroy the value of the dollar through its reckless and irresponsible deficit spending?

It is utterly hilarious (though simultaneously pathetic) that Secretary Pete has no concept of this irony.

This is the guy who has spent $7.5 billion dollars on building seven electric vehicle charging stations, an average cost of more than $1 billion per charging station.

Guess what, Pete? Your staggering waste of taxpayer money has contributed to the decline in value of the US dollar. But, sure, keep going after those airline points, bro.

If you thought airline points were declining in value now, just wait to see how worthless they become once Pete starts regulating these programs. How many segments will you have to fly in economy class to rack up enough points for that family vacation to Key West next year? Pete will decide. It’s genius.

Sadly this is not an isolated issue within the Department of Transportation. Agencies all over the federal government have abandoned their core missions and are instead focused on their leftist agenda.

The Federal Trade Commission, for example, exists to protect consumers from monopolies. Instead they’re busy suing grocery store chains over “greed” and made-up threats to unions.

The US Committee on Foreign Investment exists to ensure that state secrets and strategic technology don’t fall into the hands of America’s adversaries. But this same agency is now killing a deal for US Steel to be acquired by a Japanese company (i.e. one of America’s biggest allies) because the labor unions don’t like it.

The list goes on and on. The State Department is handing out money to America’s sworn enemy in Afghanistan. The Treasury Department is setting up banking systems that fund terrorism.

Everything the government is doing is the exact opposite of what is needed to address THE largest threat to America— its massive debts.

They spend like drunken sailors and focus their efforts on destroying the economy… instead of allowing it to flourish and generate much-needed tax revenue.

And that’s why, even though America’s problems are still fixable, I highly doubt anyone in charge will use the rapidly closing window of opportunity to address them.

That’s why it makes so much sense to have a Plan B.

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Taylor Swift’s announcement pretty much said it all.

After last night’s Presidential debate, the pop star publicly endorsed Kamala Harris because “she is a steady-handed, gifted leader” who fights for “LGBTQ+ rights, IVF, and a woman’s right to her own body. . .”

I really try to keep an open mind and understand other people’s opinions. But I personally have an extremely difficult time comprehending how someone thinks abortion and LGBTQ rights are the most important problems facing the country right now.

This is a pivotal moment in history. The United States is in serious decline. Among other critical challenges, the national debt is $35 trillion and is set to grow by at least $22 trillion over the next decade (according to the government’s own forecasts).

The impact of this extreme debt level cannot be overstated. The US dollar will almost certainly lose its reserve status, inflation will soar, and the government will most likely default on key promises like Social Security.

On top of that is the invasion at the southern border, the threat of war, the decline in US military readiness, full-blown government dysfunction, and America’s waning power in the world.

But none of these issues makes it onto Swift’s list of priorities. And given the eight million “likes” within the first few hours of her making that post, she’s obviously far from alone.

Yes, I recognize that abortion and LGBTQ rights are concerns for some people. But the geopolitical and economic security of the world’s dominant superpower is something that affects literally every single person alive.

Kamala has positioned herself as the “joy” candidate. And sure, she’s all about abortion and LGBTQ. But from an economic and security perspective, she’s a total disaster.

She wants to give $25,000 to every first-time home buyer (without even a basic understanding that this will only serve to make starter homes more expensive by… duh… $25,000!)

She blames inflation on “greed” and insists that she’ll bring down prices by fighting grocery stores in court. She’s also floated price controls as a way to bring down inflation.

Kamala sees bigger government as the way to solve problems (even though this typically just makes things worse) and will almost certainly oversee soaring deficits that America simply cannot afford.

Again, the Congressional Budget office already forecasts a total of $22 trillion in deficit spending over the next decade– and most of that within the next 5-7 years, i.e. a theoretical Kamala administration.

And most likely her ideas will make that number much, much worse… which is what brings me to gold.

I want to clarify first that I’m not a “gold-bug”. I don’t have a fanatical view that gold is a magical solution to all the world’s problems.

But it’s obvious to me that there is tremendous upside for gold, even though it’s already at an all-time high. Here’s why:

As recently as 2020, the gold price dipped below $1,500 per ounce. Today it is trading at $2,500 per ounce.

That’s a 66% surge in price which has been driven largely by central bank purchases. In fact, most retail investors have been SELLING gold, if you look at gold ETF outflows. So, while individuals were selling, central banks were buying… sending gold prices to record highs.

In a typical year, central banks around the world buy an average of roughly 500 metric tons of gold.

But from 2022 through mid-2024, that figure doubled, with central banks purchasing an average of 1,000 tons per year.

In other words, central banks have purchased an additional 500 tons per year over the past 2 ½ years… for a total of 1,250 metric tons of ‘excess’ central bank gold demand since early 2022.

The value of these 1,250 metric tons of gold over the past few years amounts to about $80 billion.

So, think about it– central banks around the world, from Poland to China to Mongolia to India to Singapore– used some of their foreign reserve stockpiles of US dollars to buy gold.

This means that $80 billion worth of foreign reserves that was taken out of US dollars and invested in gold caused the gold price to surge from $1500 to $2500.

Guess how many US dollars in total are sitting on central bank balance sheets around the world in total?

More than $8 TRILLION.

So, $80 billion was enough to make gold rise from $1500 to $2500… yet central banks still have more than 100x as much US dollar reserves on their balance sheets.

What will happen to the gold price if the foreign central banks invest even 5% of their reserves into gold?

My guess is that the gold price will go a LOT higher. And on top of that, hedge funds and individual investors will probably jump on the bandwagon too. ETF holdings will go through the roof, and the gold price will go even higher.

The reasoning is pretty simple; as foreign nations continue to lose confidence in the US government, will they continue to hold so much of their reserves in US dollars? Probably not. And again, we’re already seeing early signs of the decline in foreign holdings of dollars.

My guess is that Kamala will push that trend into light speed.

So even though gold is already at an all-time high, I think a Kamala victory means MUCH higher prices over the next few years.

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When I was a kid growing up in the 1980s, my father used to go every summer for two weeks of military training as part of his commitment to the US Army Reserve. And whenever he flew home, we would always meet him at the airport.

But back then, my mom, sister, and I could all go straight through security and sit at the gate to wait for him. In fact that was normal all the way through the late 1990s.

Then, of course, everything changed after 9/11. The federal government took over airport security overnight, and for the past 23 years, we’ve been taking off our shoes, getting fondled by federal agents, and throwing away our liquids.

More than two decades after 9/11, most of these TSA Security rules (the majority of which have been adopted around the world) seem pretty stupid.

Does anyone honestly believe that a 3.4 ounce tube of toothpaste is OK, but 3.5 ounces of toothpaste is a security threat?

This is the kind of idiotic logic behind rules that add unnecessary inconvenience to people’s lives, without providing any discernible benefit.

The same thing applies to those ridiculous consent forms on countless websites across the Internet. Whenever we visit a site we are now forced to “accept cookies”, thanks to a law passed by the European Union’s most idiotic politicians.

They somehow think we are all safer and better off… and that our privacy is protected.

Except that our privacy isn’t protected. Mark Zuckerberg and the Google guys are still following us around the Internet watching everything we do and click. Not to mention the governments themselves grab our biometric and personal data, shove it all in a database, then leave it prone to breach by hackers.

But hey, at least we have those cookie notifications to keep our data safe, right?

It’s just another stupid rule that inconveniences people, without providing any discernible benefit.

Banking is another great example.

Some people aren’t old enough to remember, but it used to be a pretty simple process to open a bank account. You’d show up, sign some papers, and you were done. Now, we’re all threatened with imprisonment, forced to fill out a million forms, and every single transaction is scrutinized under anti-money laundering and anti-terrorism regulations.

The entire apparatus treats you like a criminal suspect rather than a valued customer. And for what?

Turns out, it’s all for nothing.

Laws like FATCA, CRS, and the USA PATRIOT Act were supposedly passed, at least in part, to cut off terrorist groups from the global financial system.

But all the regulators missed that Iran– a nation that has been blacklisted by the global financial system– sent hundreds of millions of dollars to Hamas– a blacklisted terrorist organization. And then Hamas used that money to kill innocent Israeli civilians on October 7, 2023.

The US President himself agreed to release $6 billion in frozen funds to Iran for the release of a handful of Americans. So again, what exactly is the point of all that scrutiny in the financial system?

My mother has to jump through all sorts of hoops to prove that she’s not a criminal just to withdraw some cash from her bank account. But Hamas and the Taliban get hundreds of millions of dollars funneled to them, through the US banking system.

The latest example is actually the Iraqi banking system—which was set up in part by the US government after the 2003 invasion.

Top officials from the US Department of Treasury and Federal Reserve helped oversee the establishment of Iraq’s new financial system, including the anti-terrorism and anti-money laundering controls.

Well, big shocker, it turns out that the Iraqi banking system, i.e. the system set up by the US government, was used by terrorist groups to send money to Iran and to Hamas.

So once again, what exactly is the point of all these rules and regulations, which inconvenience regular, law-abiding citizens… if groups like Hamas can still receive ample funding through the system. It’s obvious the rules are pointless and have no real benefit.

The irony here is that so many governments around the world, including the US, are some of the most outspoken opponents of cryptocurrency.

The US Treasury Department hates crypto. They say it is dangerous to have an unregulated monetary system where terrorists and drug cartels can operate with total privacy.

Yet the very banking system that THEY established is what’s actually funding terrorists.

Everyone else has to suffer through daily friction and be treated like criminals, just to send some money from point A to point B; withdrawing $5,000 in cash brings a bureaucratic shock and awe.

And this is one of the biggest reasons why I think it makes sense to own crypto.

I’m not a crypto fanatic by any means. I don’t own it to speculate on the price. And most days, in fact, I don’t know the price of Bitcoin or Ether. Nor do I care.

To me there’s no point in trading dollars for crypto, only hoping to trade crypto back for more dollars. The larger idea is that crypto represents a way to send and receive funds outside of a system run by incompetent bureaucrats who constantly make our lives worse.

It’s similar to my belief that gold makes sense as a long-term store of value; I don’t trust the Federal Reserve or the White House with preserving the value of my savings. Gold is a great way to do so… without having to rely on the financial system.

With both crypto and gold, there’s no intermediary or incompetent bureaucrat standing in the middle.

That’s also why I’ve never seen any reason to debate which is better, gold vs crypto. There’s no reason to argue about it.

Both serve a useful purpose, and both are worth considering as part of any sensible Plan B.

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It’s been three years since the guy with five decades of experience ordered his top military generals, against their advice, to rush their withdrawal out of Afghanistan.

So in their haste to comply with the boss’s orders, the US military abandoned billions of dollars worth of equipment— aircraft, guns, tanks— and left it behind for their sworn enemy the Taliban.

This made their oppressive regime even stronger, and the Taliban did not hesitate to use the abandoned weaponry against their own people.

To make matters worse, as we discussed last week, the US State Department also inadvertently gave hundreds of millions of dollars worth of foreign aid to the Taliban. Talk about clownish incompetence.

Naturally no one has lost his/her job over ANY of this. There was no accountability. And no one in the Biden administration seemed remotely fussed about the implications of equipping and enriching one of America’s biggest adversaries. Literally ZERO national security concerns.

But do you know what IS a national security concern?

Japan.

More specifically, the administration is throwing a fit over a Japanese steel company— Nippon Steel— trying to buy its American counterpart— US Steel. And the President is trying to kill the deal over “national security concerns”.

Just a reminder for anyone who hasn’t kept up with global affairs since 1945— but Japan is one of America’s staunchest allies… which is saying a lot for a country who was the world’s first and only victim of a nuclear strike.

Nippon Steel is Japan’s largest steel producer. And like US Steel, they’re also desperately trying to fend off Chinese competitors.

The thing to understand about the steel industry is that it’s a global commodity… which means that low-cost producers have a major advantage. Chinese steel producers have this advantage— they can produce steel efficiently and inexpensively, in large part because wages are much lower in China… and the Chinese firms don’t have to deal with labor unions.

(Not to mention the Chinese government also violates international trade rules by illegally subsidizing their steel industry. Shocker! China doesn’t follow the rules!)

Steel companies in the US and Japan both understand this. They know their Chinese competitors have an advantage.

So in order to stay competitive, US and Nippon Steel decided to combine forces via an acquisition. By becoming bigger, they stand a better chance to compete; they can cut costs, increase efficiencies, and increase market share to better compete with China.

And as part of the deal, Nippon Steel agreed to invest $2.7 billion of foreign capital into steel factories in Pittsburgh, Pennsylvania.

Yes, the very same Pennsylvania that is part of the United States.

But, again, this is apparently a major national security concern to the Biden people. Giving the Taliban military hardware is no big deal. But Japan investing billions into Pennsylvania steel mills? WE MUST STOP THIS DEAL AT ALL COSTS.

Of course, the actual reason for blocking the merger has nothing to do with national security.

Instead, a friend of the Biden Administration is the CEO of another US steel company, Cleveland Cliffs, which put in a rival bid to buy US Steel at roughly HALF of Nippon’s offer.

It should be obvious— the better offer should win.

But this Cleveland Cliffs CEO is a hardcore union guy. So the Biden administration loves him. And he’s calling in all of his political favors to get the Nippon deal blocked so that he can scoop up US Steel at a big discount.

He’s leading the charge with this ridiculous national security threat. I mean, the guy actually said that “Japan is not a friend,” of the US— which should come as a major surprise to countless Japanese diplomats and businessmen who work closely with the US.

According to reports within the Biden administration, the Nippon Steel deal is as good as dead… which means that Cleveland Cliffs will likely be able to take over and create an actual steel monopoly in the United States.

Where is Lina “Genghis” Khan, i.e. the head of the FTC, when you need her? She’s out prosecuting every company she can find— most recently two grocery store chains that want to merge— because of “greed”.

This is literally the reason why the FTC was created in the first place a century ago— to prevent monopolies in the US.

But instead of preventing monopolies, the Biden people are helping to create one… while preventing Japan from investing billions into the state of Pennsylvania. All because of ‘national security”. It’s genius.

The sad part is that Joe Biden is far from alone. Kamala Harris is unsurprisingly on board with this idea.

But what’s really surprising is that Donald Trump and JD Vance are also against Nippon’s acquisition of US Steel.

Frankly it’s just nuts; Nippon is ready to invest billions in America to make its dilapidated steel industry more competitive. Yet politicians on both sides are against it.

This is a perfect example of how the world is moving farther away from the peace, prosperity, and free trade it once enjoyed.

For decades, free trade generated vast amounts of wealth for investors, kept prices low for consumers, and created jobs for the working class. Now we’re seeing a sprint in the opposite direction towards protectionism, isolation, conflict, and monopolies.

And it’s coming from both sides of the political aisle.

Look, I always acknowledge that America’s economic and debt problems are fixable. But it’s news like this that make me realize that I shouldn’t hold my breath for significant improvement.

The people in charge, or who may be prospectively in charge, do not appear to be willing to make the necessary changes.

When this kind of resistance comes from both political camps, it leads to one inevitable conclusion: a period of less prosperity, more debt, and higher inflation is coming. This isn’t a pessimistic view— it’s just a rational appraisal of the facts.

And that underpins the critical response from anyone who wants to protect or grow their wealth during such times: real assets, now more than ever, make a lot of sense as a hedge against this looming instability.

There is very little downside to owning some of the world’s most important resources like energy, food, and productive technology— all critical materials that cannot be simply conjured out of thin air by governments or central banks.

And the fact that many of these are selling at steep discounts makes this strategy worth a close look.

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You wouldn’t be especially impressed by someone’s insight if they told you that the world today is full of turmoil. That’s obvious— from wars and cultural clashes to cost of living crises and a pervasive sense of negativity.

More impressive is that William Strauss and Neil Howe predicted that the 2020’s would be like this nearly three decades ago in their 1997 book, The Fourth Turning.

According to their theory, societies move through cycles approximately 80-100 years long, with each cycle divided into four distinct “turnings.” These phases mirror the seasons, with the Fourth Turning representing the harsh winter—a period of upheaval and transformation.

Strauss and Howe predicted that the next Fourth Turning would begin in the mid-2000s, ignited by a crisis that would set the stage for significant societal change.

The 2008 global financial crisis marked the beginning of this period. Since then, governments and central banks have been in a constant state of crisis management, employing measures like low interest rates and increased government spending to prop up the faltering system.

Today, as Strauss and Howe foresaw, this phase is characterized by a collapse of trust in institutions that have dominated since the start of the current cycle, just after World War II.

From the media, to government bodies like the justice system and Federal Reserve, to global organizations like the UN and IMF, these institutions are increasingly viewed as ineffective, obsolete, or downright harmful.

Historically, Fourth Turnings are marked by intense turbulence, often culminating in major conflicts or transformative events, such as the Great Depression leading to World War II, or in the cycle before that, the American Civil War.

While history doesn’t have to repeat itself exactly, the growing dissatisfaction across the developed world is palpable. Issues like healthcare costs, immigration, and rising inequality fuel a sense that society is no longer functioning as it should.

This widespread discontent often leads to political upheaval. As voters lose faith in current leaders, new political movements and parties gain traction.

But none of these ‘saviors’ are going to win by promising to cut spending.

Until their hand is absolutely forced, politicians will continue to borrow and spend as much as they can in a desperate attempt to cling to power. But to be fair, the public is also to blame— they largely demand it.

As Howe writes in the sequel to the Fourth Turning which he published last year:

“Like addicts acquiring tolerance, policy-makers have backed themselves into a corner: The public braces itself for the dark hour when the Fed can no longer ease and Congress can no longer borrow no matter how badly the economy founders.”

This scenario highlights three key trends that are likely to shape the future:

1. Huge Deficit Spending

The US deficit reached nearly $2 trillion in 2023, a historic high outside of wartime or national emergency.

In theory there is no limit to the level the deficit can reach. After all, the US Government can issue the debt and the Federal Reserve can buy it all.

But the problems show up in the value of the US dollar. Not just against other currencies— other governments are devaluing their currencies in the same way. Instead, the value of what a dollar is worth, in terms of real goods and services that people need to buy, is diminished.

The Fed is acting right now as if the inflation problem is licked. But, given the trajectory of future deficit spending, we are really just in the opening stages of a larger, wider inflation problem.

2. Increasing Conflict

The intensity of global conflicts has escalated, particularly following Russia’s invasion of Ukraine. This has accelerated a shift away from global trade and cooperation, as countries prioritize securing their own supply chains and others try furiously to develop parallel financial systems that leave them less vulnerable to the whims of US foreign policy.

This retreat from global integration is likely to increase tensions and create further instability.

3. Potential Monetary Resets

All of this leads to the potential for a monetary reset— typical during a Fourth Turning. The value of the reserve currency is being continuously debased and its status as a reserve currency can leave others vulnerable to the imposition of sanctions or even confiscation of their assets. That’s not sustainable.

There are so many possible permutations of how this could all play out that it’s difficult to say exactly what a global financial reset would look like right now.

But it would almost certainly mean the loss of the dollar’s global reserve status.

That is exactly why we always advocate having a Plan B, a solid backup plan to provide great optionality in tumultuous times.

That’s why we started Schiff Sovereign: Premium, a highly educational, month-by-month guide that is designed to help you navigate the world from a position of strength, both personally and financially.

In Schiff Sovereign Premium, we focus on what we think will work well amidst all the uncertainty, regardless of the sequence of events that occur.

It includes both Plan B strategies (such as maintaining your freedom of movement, and legally reducing your tax bill), as well as compelling investment research.

Our investment thesis focuses on real assets— the world’s most critical, valuable, and useful resources, as well as the businesses which produce them.

Real assets are a beneficiary of the huge debasement of currency that we are seeing. And right now, with central banks across the world starting to cut interest rates again, we should see that trend accelerate.

Gold in particular has already responded to the impending injection of liquidity that lower interest rates will bring, reaching all time highs on multiple occasions this year.

Gold mining stocks, however, haven’t yet followed suit… but are primed to do so. (In July’s issue, we explained why, and released research on two well-positioned companies in the gold mining industry.)

Commodities are also a beneficiary of the unfortunate trend of increasing conflict across the world. Not only are war-time economies typically inflationary, they also require a huge amount of industrial commodities.

But the chronic underinvestment in commodity supply over the past decade has set the stage for potential shortages. As these issues come to the fore, both prices and investment in production are likely to rise— a great opportunity for investors.

But even if these trends don’t play out exactly as expected, investing in companies that control some of the world’s most valuable real assets—especially including critical energy resources like natural gas and uranium—has very little downside.

If you want to learn more about Schiff Sovereign Premium, and the specific investments we have researched, click here.

At just $9 a month, it’s a no-brainer.

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I wanted to do a bit of a deeper dive today on the topic of the national debt— and answer a basic question: is the debt a terminal problem? Or is it still fixable?

I actually had a bit of a debate on the topic with my friend and partner Peter Schiff last week. Peter thinks it’s terminal… and that there’s no way it could be paid down.

Based on the math, I disagree. There are a lot of things that have to go right, and very little that can go wrong. But at the moment, it is still possible to improve America’s gargantuan national debt challenge.

The first and most important thing to understand when discussing national debt is that the really important number to consider is the Debt-to-GDP ratio… not the actual debt itself.

Today the national debt is nearly $35.3 trillion, or roughly 125% of GDP. In other words, the national debt is 25% larger than the entire size of the US economy.

Typically even a debt-to-GDP ratio of 60% is considered high. 80% is dangerously high. But developed countries in Europe, North America, and especially Japan get away with higher levels of debt because their economies are more advanced and productive.

For most of its history, the US had a very low national debt— with periodic exceptions like World War II. Even during the 1980s, the debt-to-GDP ratio hovered at around 30%… and even that level raised some eyebrows.

Older readers may remember businessman Ross Perot running for President in 1992, and a large part of his campaign was bringing down the national debt (then roughly 60% of GDP).

But by the end of the 90s, with the economy booming and the government actually running a small budget surplus, America’s debt-to-GDP ratio had dropped to around 50%.

It didn’t last.

The War on Terror was extremely expensive, and by the end of George W. Bush’s terms, debt-to-GDP had spiked back to 65%.

The debt then quickly reached 100% of GDP during Barack Obama’s first term, much of that due to bailouts and benefits paid in the aftermath of the 2008-2009 Global Financial Crisis.

The debt-to-GDP ratio hovered at around 100% during Obama’s second term, and during Trump’s first term… until the pandemic hit in 2020. The resulting economic shutdowns and insane government spending pushed the ratio to an all-time high of 133% of GDP.

Although debt-to-GDP has slightly decreased as some COVID spending programs have finally been discontinued, the ratio now stands at 122%… and it’s rising.

Ultimately to solve its debt problem, the US government must first stop making it worse. That’s the priority. So this means ensuring that debt-to-GDP doesn’t rise beyond 122%.

So that’s really the question: is it possible to stop the increase in debt-to-GDP?

Yes. But it will come at a significant cost… with plenty of challenges and uncertainties.

So let’s do some basic arithmetic. In order for the debt-to-GDP ratio to remain the same, it means that both the national debt and US economy must grow at the same rate.

In other words, if the US economy grows by 5%, then the national debt can also grow by 5%, and the ratio will stay the same.

It’s not unusual for the US economy to grow by 5% in a single year.

Bear in mind that this “nominal” GDP growth includes the impact of inflation. So if inflation is 4% in a single year, and real economic productivity growth is just 1%, then overall GDP growth will be 5% for that year, i.e. 4% + 1%.

On average in the three decades from 1989 through 2019 (i.e. pre-Covid), average GDP growth in the US was right around 5%— which, again, includes the effects of inflation. So this is a reasonable assumption.

Simultaneously, a 5% increase in the national debt (which is roughly equivalent to that year’s annual budget deficit) is a substantial number. Again, the national debt is $35+ trillion. 5% of that is a whopping $1.75 trillion.

In other words, as long as the size of the US economy grows by 5% (whether through inflation, or actual productivity growth), then the annual budget deficit could be $1.75 trillion… and the debt-to-GDP ratio would not increase.

Obviously this is an absurd sum of money. A $1.75 trillion deficit is ridiculously large. So you’d think that the federal government would be able to run its operations with a $1.75 trillion deficit.

Unfortunately that’s not the case; this year they expect to be over-budget by nearly $2 trillion.

So right off the top, they’re going to have to shave around $250 billion from the budget this year in order to achieve a deficit of “only” $1.75 trillion.

Where will they cut that money? Well remember, there are three main categories of government spending:

1. Interest on the debt: This cannot be cut without a US government default, which would undoubtedly spark an immense global financial crisis.
2. Mandatory spending such as Social Security and Medicare: No politician has the courage to touch mandatory spending.
3. Discretionary spending: This is the only realistic place where spending cuts can be made.

However, cutting discretionary spending is no small task.

For fiscal year 2025, the President’s budget is set at $1.8 trillion. Roughly $800 billion of that is military spending… and, like Social Security, few politicians have the willingness to cut Defense.

So that leaves $1 trillion for what’s called “Non-Defense Discretionary Spending”. Think NASA, the Department of Education, National Parks, etc. They’ll have to trim these budgets by 25% in order to save $250 billion and achieve a $1.75 trillion budget deficit for the year.

And remember, even making those cuts would only freeze the debt-to-GDP ratio at its current level—not reduce it.

To maintain this freeze, similar austerity measures would need to be enforced year after year, leaving no room for unforeseen expenses, emergencies, or economic downturns.

Now, the irony is that executing on this idea, i.e. slashing a significant portion of the federal government— would also liberate the economy from excessive regulation. Fewer government bureaucrats means a more productive private sector… and that’s precisely what’s needed to generate economic growth.

This, coupled with technological advancements like AI could boost productivity and real GDP growth, and could even reduce inflation. Eventually GDP could be growing faster than the national debt, and the overall ratio would fall back to a safer level.

This is still, right now, a possible outcome for the US. I’m reminded of that wonderful line from Dumb and Dumber, “So you’re telling me there’s a chance!” Yes, I am. There is a chance.

But it will require difficult decisions, politicians who understand the problem (and are willing to solve it). And a fair amount of luck that no major wars, emergencies, or new pandemics occur.

This solution also means there is no money to bail out Social Security. When the trust funds run out of money in less than ten years, retirees would take an immediate 20-30% cut in benefits. That’s year one, and it would likely only grow worse from there.

Yet this is still a far better outcome than the alternative.

If the US government does nothing— and continues to overspend by trillions of dollars each year, debt levels will likely rise far more quickly than the US economy can grow. And most likely within a few years there will finally be a point of no return where it will be virtually impossible to pay down the debt and salvage the government’s finances.

Bottom line, America cannot afford another four years of ignoring this problem, no matter how much “joy” the politicians intend to bring.

So, yes, while the debt problem is still fixable, I wouldn’t hold my breath.

This is a key reason why we emphasize owning real assets, i.e. the most critical resources in the like productive technology, key minerals, energy, and food.

Unlike fiat currency, these assets can’t be conjured out of thin air by central banks or politicians. And they historically perform very well in times like these where debt and inflation appear to be major challenges ahead.

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It’s impossible to forget those iconic images from the late summer of 2021— helicopters over the US embassy in Afghanistan. Locals dangling from the landing gear of US Air Force cargo planes desperately trying to escape. The US military frantically packing up their gear to leave the country.

It had only been a few weeks prior when the guy with five decades of experience insisted that the Taliban would never take over Afghanistan. But then it happened within a matter of days.

The intelligence community, military analysts, and State Department all cautioned against such a cavalier approach.

But Joe Biden persisted: despite all the risks, he wanted troops out of Afghanistan before September 11th.

And the results were disastrous.

America left behind thousands of local Afghans who served the US military as interpreters, administrators, etc..

Each was promised a US immigration visa so as not to be murdered if the Taliban took over. But the State Department told them to hang tight for 12-18 months while the bureaucracy processed their requests. Many of them are dead and their families tortured.

Then, of course, the US military abandoned tens of billions of dollars of equipment, weapons, ammunition, and vehicles to the Taliban.

They gave away dozens of US military aircraft, thousands of Humvees and Armored Personnel Carriers, and tens of thousands of assault rifles, all courtesy of the United States taxpayer.

Sadly that was not the final parting gift from the US government to the Taliban.

A recently released Inspector General report found that at LEAST $293 million worth of foreign aid for Afghanistan-based NGOs (non-governmental organizations) was vacuumed up by the Taliban.

“In total,” the report says, “State [Department] could not demonstrate compliance with its partner vetting requirements on awards that disbursed at least $293 million in Afghanistan. State officials acknowledged that not all bureaus complied with document retention requirements.”

The report later noted that, “Since its takeover in August 2021, the Taliban have sought to obtain U.S. funds intended to benefit the Afghan people through several means, including the establishment of nongovernmental organizations (NGOs).”

There are so many things wrong with this.

One, bear in mind that all of this money is borrowed. The US government went into debt to give money to its sworn enemy.

Two, this just extends and intensifies the shame and embarrassment of the Afghanistan withdrawal.

Is this really the behavior of the world’s dominant superpower? They spend 20 years failing to secure a country, give tens of billions of weapons to their enemy, and then hand out cash gifts… simply because their bureaucrats are too incompetent to notice?!?

This is an obvious example of why the US has lost so much of its standing and reputation around the world. China, Russia, Iran, etc. all notice this behavior. And to them, the US government looks incredibly weak.

The implications of that weakness translate into very real financial consequences, including the end of the dollar as the global reserve currency.

Why would any foreign government or institution give even MORE money to the Treasury Department? Any foreign creditor who buys US government bonds right now has to be questioning whether it makes sense to continue to do so.

Seemingly ever day there’s another embarrassing revelation about the US federal government’s incompetence. Politicians in Congress cannot even agree on a basic budget. A major Presidential candidate blames inflation on greed, and her solution to the problem is price controls!

There is virtually zero intent to even try to cut spending and run a balanced budget. The national debt keeps surging to new record highs, while projections on future budget deficits ring in at $22 trillion over the next 10 years. The inflation problem is still not solved and likely going higher.

The Federal Reserve— the most systematically important central bank in the world— is insolvent on a mark-to-market basis.

And on top of everything else, accidentally handing out money to your enemies adds to the vast body of evidence that the US government is inept at everything it does.

This is why the dollar’s days as the global reserve currency are numbered.

Having the global reserve currency means that other nations around the world (who all have to use the dollar) must have a tremendous amount of trust and confidence in the US government.

The Biden administration seems to be going out of its way to make Uncle Sam a laughing stock… which ultimately turns other nations away from the dollar.

This shift is already under way— it’s one of the reasons why central banks have been buying so much gold and reducing their ownership of US debt.

But it’s still early days. This dollar reversal trend still has several years to play out… and it will likely be one of the most consequential economic shifts of our lives.

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Over eight hundred years ago, in what is now northwestern China, the Uyghur people— long before they were carted off to internment camps by the Communist Party— ruled their own independent kingdom, known as Qocho.

Then, in the year 1209, Genghis Khan sent diplomatic emissaries to Qocho. The message was clear: the Great Khan wanted to avoid a bloody military campaign, and he proposed a peace offering instead.

Genghis Khan’s deal was simple: the Uyghur people would keep their rulers, their infrastructure, their religion, and their customs. Their soldiers would live. Their buildings would not burn. Their women would not be touched. They would even be granted a high degree of autonomy.

And in exchange, they would provide the Mongol Empire with administrative support, as the Uyghurs were famously adept in governance and literacy.

The Uyghur ruler, recognizing the military strength of the Mongols and the benefits of an alliance, voluntarily accepted these terms, avoiding destruction.

Genghis Khan is generally known to history as a butcher and conqueror. But he was also a fairly skilled diplomat; he understood that it was far better to talk and settle matters peacefully than to go to war.

Through peaceful negotiation, lives could be spared, resources conserved, and vital economic assets preserved— not just for his own empire but also for the kingdoms he sought to absorb. This meant more tax revenue for him, and prosperity for everyone.

Fast forward to the present day, and Genghis’s namesake— Federal Trade Commission (FTC) Chair Lina Khan— has taken the opposite approach. She wants to go to war… which in our modern era means lawsuits. She has no interest in diplomacy, discussion, or compromise; she just wants to sue businesses and take them to court.

Bear in mind, the FTC was created in 1914, back when a handful of huge companies wielded monopolistic control over key industries in America. So the government set up the FTC to protect consumers from being squeezed by these powerful monopolies.

But a century later, Genghis Khan is using the vast powers of her office to wage war on legitimate business… and even capitalism itself.

A few months ago, for example, Genghis decided to ban “non-compete” clauses from employment contracts. This is one of the fundamental principles of capitalism: a voluntary agreement between an employer and employee to protect a company’s investment and intellectual property.

But Genghis Khan wouldn’t hear of it. So she banned non-competes, even though she had absolutely no legal authority to do so. And this is typical of her— she just invents whatever authority she wants.

Another example we talked about a few months ago— Genghis filed a lawsuit against two major grocery store chains (Albertsons and Kroger) to prevent them from merging.

Her claim is that the merger will harm labor unions, though she offers absolutely no reasonable explanation or evidence to support this assertion.

More importantly, her job is to protect CONSUMERS…. not labor unions. But here we have it again: Genghis Khan has once again invented new authority for herself to be the Protector of Unions… even though Congress never tasked her with that mission.

The whole thing is so absurd, in fact, that the FTC has no reason to suspect that the merger of these two grocery store chains will harm anyone at all. If anything, consumers should benefit.

The supermarket industry is extremely competitive, with traditional grocers now having to compete with tech companies, co-ops, farmers’ markets, delivery apps, big-box warehouses like Costco, and even Walmart and Amazon.

For Albertsons and Kroger, it’s clear that a merger makes sense; it helps them optimize their cost structure, achieve greater efficiencies, and thus deliver savings in the form of lower prices to consumers.

And lowering prices isn’t some altruistic act by these companies; lower prices will make them more competitive.

But Genghis Khan has no understanding of how capitalism works. In the sentiment of her fellow Marxists, she views capitalism as a zero-sum game, best encapsulated by AOC’s false logic: “No one ever makes a billion dollars. You take a billion dollars.”

This way of thinking is completely false. Sure, 1,000 years ago when the real Genghis Khan was conquering the world, economics was indeed a zero-sum game. Nations got richer by plundering their neighbors, and individuals became wealthier by taking from others.

But that’s not what modern capitalism is about. It’s not a zero-sum game. Capitalism is about making the pie bigger. It’s about value creation. It’s about making everyone better off— workers, customers, investors, even the government that collects tax revenue. Everyone wins.

But FTC Chair Genghis Khan acts like it’s still the year 1209. She doesn’t understand modern economics or the value creation principles of capitalism. So her tendency is to engage in warfare— not with soldiers on the battlefield, but with lawyers in a courtroom. Albertsons and Kroger never had a chance.

For example, the FTC initially howled that the combined Albertsons and Kroger company would have too many locations. OK fine. So the companies promised to sell off a percentage of their stores, and they even found a buyer.

Then the FTC claimed there wouldn’t be enough stores, and competition would suffer.

“Damned if I do, damned if I don’t.” Again, the companies never had a chance. There’s no satisfying Genghis Khan. She doesn’t want to talk. She doesn’t want a solution. She just wants to go to war.

The hearing started yesterday, and both sides showed up to court ready to fight. I’m keeping my fingers crossed that the case is quickly dismissed, or that reason prevails in court.

Either way, it’s not a great outcome. If Genghis wins, food prices are likely to rise. But even if she loses, she’ll just find some other business to attack, or some other pillar of capitalism to assault.

In Genghis’s mind, lawfare is always and everywhere the answer. And somehow we are all supposed to become more prosperous because of it.

That’s capitalism in the 21st century, folks: the federal government will sue its way into prosperity.

Unfortunately, Genghis Khan is not isolated in her way of thinking. In fact one of her biggest cheerleaders is none other than Kamala Harris, who has applauded this lawsuit for taking on “corporate greed.”

This is the sad lie they always use try to explain inflation; rather than acknowledge that their own policies and profligate spending have led to higher prices, they blame greed. And promise to sue their way to lower prices. It’s genius.

And it’s not just Kamala either— Joe Biden, Elizabeth Warren, AOC, Bernie Sanders, and a whole bunch of other very vocal supporters (surprisingly from both parties) are all on board with this idiotic approach.

It represents an obvious risk to prosperity and success. And that is something that should be factored into the long term planning of anyone who wants to build anything of value in America.

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It almost sounded like an apology. Almost.

On Friday, Federal Reserve Chairman Jerome Powell stood in front of reporters and explained how we got here… and how inflation took hold.

To be fair, he rightly diagnosed the root causes: extreme government spending and money printing during the pandemic. And then, when the economy reopened after the lockdowns, there was a sudden surge in inflation.

The Fed and its army of experts assumed this inflation would be a temporary phenomenon—what they called “transitory.” They said that, due to the pandemic lockdowns being lifted, prices would rise suddenly, then fall back down.

This turned out to be one of the worst calls in the history of central banking. As we now know, inflation wasn’t transitory. Prices rose and continued to rise higher and higher, and they haven’t come back down.

To his credit, the chairman acknowledged this mistake on Friday.

But he was in quite a jovial mood about it, even joking with reporters about how in late 2021 they all set sail on, “The good ship transitory,” essentially making light of their enormous error that turned a lot of people’s lives upside down.

His joke got a lot of laughs from the room, and it’s nice to see there can be so much levity about a mistake that has cost Americans so dearly.

Adding to the sting is that this press briefing took place at the Federal Reserve’s annual retreat in Jackson Hole, Wyoming—one of the most exclusive and expensive resort towns in the world. And there he was, in fancy Jackson Hole, cracking jokes about blowing the inflation call—a mistake that has wreaked havoc on so many people’s lives.

To be honest it was a bit offensive… sort of like how many generals during World War I drank champagne as their men were being starved and slaughtered on the battlefield.

But again, it was at least an acknowledgment that they got it wrong. And this shouldn’t be an earth-shattering revelation. The Fed is not some all-knowing, all-powerful institution; it’s comprised of flawed human beings. Everyone makes mistakes— you, me, and the Fed Chairman too.

(Although ideally Fed officials would make fewer, smaller mistakes than the rest of us…)

Part of the reason the Fed was wrong is because they claim their decisions are data-driven. But the data they rely on is itself deeply flawed; just look at the most recent revision from the Labor Department, which is a major data source the Fed looks at when crafting policy decisions.

The Labor Department said last week that they were revising down the number of jobs created in 2023 by over 800,000. That’s a huge miss, and it proves that the data the Fed relies on to make decisions is also fundamentally flawed.

So basically our monetary system is run by flawed human beings who make far-reaching, life-altering decisions based on flawed data. What could possibly go wrong?

Quite a lot, obviously. And that’s why it’s worth briefly examining where else the Fed could get it wrong. And we see two clear items on the horizon:

One is the presidential election. A couple of weeks ago, the Fed chairman almost bragged about how the outcome of the Presidential and Congressional elections are irrelevant to them and do not factor into their economic forecasts at all.

This is completely absurd.

On the one hand, you have Kamala Harris, who wants to impose price controls, pass tax hikes, enforce arduous business regulations, push energy prices higher, and more.

On the other hand, Trump wants to reduce the independence of the Fed.

You couldn’t have more diametrically opposed policy outcomes. Yet the Fed is willfully ignoring the massive consequences of what could transpire in November. They’re not thinking about it or planning for it. And that is insane.

The second issue is the national debt. The Fed isn’t sounding the alarm bells. And in the past, it has actually supported the government spending even more money.

And it’s not like “the data” is suddenly absent here. The Congressional Budget Office (CBO) has estimated an additional $22 trillion in new debt over the next decade. And generally, the CBO is conservative— meaning the debt will likely grow even quicker than that.

Who’s going to lend that money to the Treasury Department?

The Fed should know they will play a major role in funding government debt and deficits— triggering a massive money printing operation with major impacts. Yet they don’t say a word about it. They don’t seem to be thinking about it.

We’ve been clear about our assessment of this situation: $22 trillion in new debt will almost certainly be highly inflationary. And a Kamala Harris presidency is extremely likely to knock the US dollar off its throne as the world’s dominant reserve currency.

There’s a very narrow path to avoid that outcome, but it’s looking more and more likely every day.

You’d think the Fed would be planning for it. But they don’t say a word about it, and insist these factors don’t matter to them at all.

To us, this is why it makes so much sense to own real assets—scarce critical resources such as food, energy, key minerals, and productive technology.

If the Fed proves unable to tame inflation, critical commodities like these will grow in value.

And if by some miracle we avoid major inflation, there’s little downside to owning profitable businesses which produce some of the most vital resources on the planet.

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“Oceania was at war with Eastasia. Oceania had always been at war with Eastasia.”

The world of George Orwell’s dystopian classic Nineteen Eighty-Four is divided into three totalitarian superpowers: Oceania, Eurasia, and EastAsia. And the novel’s protagonist, Winston Smith, is a mid-level bureaucrat within Oceania’s “Ministry of Truth”.

Early in the book we learn that Oceania is in the midst of a protracted war with Eurasia.

But suddenly the party announces that they were, in fact, at war with Eastasia… NOT Eurasia. Everyone was simply expected to forget that Oceania was ever at war against Eurasia.

The ideological dictatorship of Orwell’s world demanded that all citizens memory-hole the old truth and internalize the new truth “Oceania was at war with Eastasia. Oceania had always been at war with Eastasia.”

Watching what little of the Democratic National Convention I could stomach; I couldn’t help but think of this scene from Orwell’s novel.

I watched as the Party leaders this week announced new truths. For example, the Party is tough on crime. They have always been tough on crime.

Everyone is supposed to forget how their cities are overrun with crime; or how they have long since been the party of “Defund the Police”, or “catch and release” programs that put violent felons back onto the street.

They say that border security is a major priority of the Party. Border security has always been a major priority of the Party.

Again, we are all supposed to forget how they let millions and millions of illegals come across the border… and went as far as to sue the State of Texas in federal court in order to PREVENT Texas from taking up its own efforts to secure the border.

They say the Party will stand up to Iran. The Party has always stood up to Iran.

Well let’s all forget about these guys paying billions of dollars to Iran for US hostages and the failed nuclear deal… or the fact that their more radical foot soldiers have essentially set up Hamas branch offices in the United States.

They claim the Party stands for Freedom. The Party has always stood for Freedom.

Feel free to believe it. But first you have to memory-hole all of the censorship, vaccine mandates, and cancel culture they shoved down everyone’s throats over the past few years.

This isn’t even about blatant hypocrisy– though there was plenty of that on display. Remember a few years ago when they claimed that it was “racist” and “Jim Crow 2.0” for the State of Georgia to ask its citizens to show a valid form of ID before voting? Curiously, every attendant at the convention had to show ID to gain entry. But apparently that’s not racist.

Nor is this about blatant lies, exaggeration, or vague platitudes– and there were plenty of those as well.

They went on and on, for example, about Kamala’s honest character… even though she was Liar-in-Chief when it came to covering up Joe Biden’s obvious dementia.

This is about their full-blown, Nineteen Eighty-Four style memory-holing some of their most important principles and acting as if they never existed. Kamala has always been at war with Eastasia. Kamala has never been at war with Eurasia.

It’s also notable that the Party expects its members to memory-hole the real problems facing the United States.

Kamala didn’t mention the word “deficit” even once. There was no discussion of reining in outrageously high government spending. She said “debt” one time, only to claim that her opponent would increase the national debt.

She did not say the word “inflation” either, and only in a passing footnote did she even graze past the high cost of living.

These are among the issues that real people care about. But everyone is supposed to memory-hole those too, and act like the #1 issue in the country is… abortion rights.

Abortion factored very heavily into her remarks, and into the Party’s platform.

They’re still moaning the fact that the Supreme Court overturned Roe v. Wade, which essentially turned the abortion issue over to the states to regulate.

But facts don’t matter. Because according to research cited by the Wall Street Journal, last year there were a whopping 1 MILLION abortions in the US, roughly 10% MORE than before the Supreme Court overturned Roe v. Wade.

So why exactly is abortion access such a huge crisis and a bigger priority than inflation, domestic security, global security, the national debt, Social Security, and all the other problems that the country faces?

In Nineteen Eighty-Four, part of Winston Smith’s job was to alter or destroy old newspapers, films, and any other evidence that the Party had changed its policies.

The legacy media will continue to serve this role for Kamala and her Party. They’ve already expunged their own headlines from a few years ago proclaiming “Kamala Harris is the Border Czar”. Now they insist “Kamala Harris is not the Border Czar. Kamala Harris was never the Border Czar.”

They’re also memory-holing every poll that showed how Kamala was widely disliked and incredibly unpopular. Kamala is so fake and wooden that she makes Hillary Clinton look folksy by comparison. And the polls reflected that.

But those polls are gone. Poof. Now we’re expected to believe the new polls, that Kamala is exciting and popular.

Look I’ve said before that I don’t buy any of it. In fact, I’m stupefied that anyone believes these people.

But I’ve also acknowledged that the Party and the media and all of their allies will pull out all the stops to take the White House. And that scenario has major consequences.

It’s no exaggeration to say that a Kamala Presidency represents a major security and economic risk. For example, I cannot see the US dollar surviving as the global reserve currency by the end of her first term.

The outcome this November is far from certain. But their Nineteen Eighty-Four is reason enough to have a Plan B.

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Gold recently hit $2,500 marking an all time record high.

The reality is, there’s a very good case to be made that gold is still quite cheap compared to its trajectory. It’s possible that in a few years, $2,500 gold could look remarkably inexpensive.

Not to be overly dramatic, but Kamala Harris is a big reason why.

I’m not a D or R kind of guy, but it’s impossible to ignore the impact of the upcoming election on the future of the US.

At a press conference a few weeks ago, reporters asked Jerome Powell, the Chairman of the Federal Reserve, about the upcoming Presidential election and whether or not the Fed was modeling any potential policy changes depending on the outcome.

But the Fed Chairman was almost proud of the fact that the election outcome didn’t factor into their planning at all.

The Fed considers itself apolitical. Powell seemed to think it was somehow wholesome and responsible to completely ignore perhaps the single most important factor that could drive the economy in the coming years—the outcome of the Presidential election.

Two people with diametrically opposed views will clearly make a massive difference on the economy.

I saw a report yesterday that, since she stole the nomination exactly one month ago, Kamala has raised $500 million. That brings her total campaign war chest to a massive $1 billion.

It’s funny because I seem to remember Rep. AOC saying that, “No one ever makes a billion dollars. You take a billion dollars.” In this case, I’m inclined to agree with AOC.

Kamala took a half billion from Biden— the legitimate nominee— and raised another half billion by making the most outrageous claims and lying her ass off, without even bothering to sit for basic interviews or take legitimate questions.

She’s been coronated without scrutiny, and only now are we starting to see how she views the economy.

She seems to understand that a lot of people are suffering, and she at least partially diagnoses it accurately as the result of inflation. But she has no understanding of where the inflation comes from.

There’s no discussion of the government’s role in running multi-trillion dollar deficits, the unprecedented fiscal and monetary stimulus, and continuing to rack up trillions of dollars in debt every year, even though there’s no longer a national emergency.and weight of the federal government into attacking the private business sector.

Her plans will undoubtedly cause higher deficits and more inflation. For example, subsidizing housing is obviously only going to make everything cost more.

Giving new home buyers a free $25,000 just means houses will become $25,000 more expensive.

It’s exactly what happened during the pandemic when they started handing out stimmy checks— there was no increase in goods and services, just more money floating around, so prices went up.

The same thing will happen with housing and everything else the government pours “free money” into. But they have no understanding of this.

Now she’s talking about using the government and the legal system to go after priv

None of that factors into her thinking. To her, inflation is always and everywhere the result of corporate greed.

And her solutions to inflation involve essentially criminalizing “greed” and throwing the full force

ate businesses. She’s attacking grocery store chains, accusing them of being greedy when their profit margins are a measly 2-3%. Apparently, that’s greedy.

The Biden Administration has gone out of its way to destroy competition, even though competition is one of the most important factors in keeping prices low.

They attack oil companies and prevent the expansion of US energy production. Of course that makes energy prices higher, which in turn makes the price of everything else higher.

This is why it’s ultimately very difficult to see the dollar surviving as the global reserve currency through a single term of a Kamala administration. Her policies will create higher deficits, balloon the national debt, and drive up inflation.

The nature of a good reserve currency is stability. Foreign governments and institutions require stability in the reserve currency. Countries around the world are desperate for something they can actually rely on—something that won’t be inflated away or subject to a gargantuan national debt.

Another key element of a reserve currency is strength. Someone who backs pro-Hamas protesters is anything but strong.

This is why gold is reaching all-time highs.

Yes, some of it is investor speculation. But the biggest driver of gold prices is central bank demand, and they’ve been buying literal tonnes of gold.

To me, this is a clear and obvious sign that they are preparing for an end of the dollar as the dominant global reserve currency.

Gold is a likely and very reasonable reserve asset for them to hold in lieu of dollars, because it has a 5,000-year history of maintaining its value. Central bankers know that they can trade gold for other currencies or strategic assets, and it is this sentiment that is driving their gold purchases.

In short, central banks around the world are trading dollars for gold.

If Kamala wins, that trend will almost certainly continue, resulting in the eventually end of the dollar as global reserve currency.

And I’d expect the price of gold to go a lot higher from there.

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I’m currently en route to Chile, where I lived for about eight years from 2011-2018 before moving to Puerto Rico.

I remember when I first came down to Chile— the thing I found so remarkable was that it was a relatively conservative place, especially by Latin American standards. Back then the general tone was that you were pretty much left alone to do your thing.

I even recall being told by my lawyer that the Chilean constitution included the freedom to do business. I looked it up later and sure enough Article 19 Section 21 recognizes, ‘The right to develop any economic activity which is not contrary to morals, public order or national security…’

I found this quite remarkable. And during the years I lived in Chile, I encountered lots of interesting opportunities.

At the same time, like anywhere, it wasn’t perfect. Over time a number of challenges, problems, and imperfections became apparent. But overall, there was clearly still a lot of great potential.

But no place is static. Starting in 2019, there was a big social reckoning, and the atmosphere changed rather suddenly.

Leftist rioters hijacked the country. The worst of them, though a relatively small minority, would shut down highways, torch cars, and terrorize and rampage through residential neighborhoods.

They even foolishly burned down grocery stores and destroyed their own metro system. Way to stick it to the man!

It was full-blown disorder and lawlessness. And the president at the time was a hapless stooge who did nothing as he watched the country burn.

Frankly, the only thing that saved them from further violence was the pandemic. Everyone stayed home and stopped going into the streets.

But this small minority of leftists who had hijacked the nation’s sanity weren’t done. They spearheaded a political process to rewrite the constitution.

In a national referendum in 2020, over 78% of Chileans voted in favor of drafting a new constitution to replace the one from 1980.

That gave these same radicals who had been terrorizing neighborhoods the green light to elect a bunch of gender activists and climate fanatics as representatives to rewrite the constitution. It was crazy.

On July 4, 2022, they unveiled their masterpiece: their vision was to turn Chile into an eco-socialist nation, and their constitution was full of all the same gender and climate nonsense that would drive the economy into the ground and inflame social tensions.

Many Chileans agreed that their system had a lot of political and economic problems that left people behind. There was an appetite for change, which lent some level of support to the left’s desire to rewrite the constitution.

But when people finally saw this monstrous vision that the Left had put on paper, they were horrified.

They realized they were standing at a precipice, staring down into an abyss. They didn’t like what they saw, and they stepped back.

In another national referendum on September 4, 2022, Chilean voters flatly rejected the new constitution by a landslide.

There are many instances throughout history where a nation finds itself staring into the abyss. Sometimes they pull back.

Often it seems like a huge majority of people agree with, in this case, a leftist cultural revolution. But when push comes to shove, rational interests take over.

People ask themselves if this is what they want for their children. People think about how it will affect their bank accounts and livelihoods. They especially consider their financial well-being and safety, which usually drives them to make a sensible decision.

We’ve seen so much of this same insanity in the US over the past couple of years, months, and now especially over the last few weeks since Kamala stole the nomination.

As the Democratic National Convention begins today, it’s only going to get worse. Anyone bored enough to watch will have to stomach the hailing of Biden as the second coming of George Washington.

The level of propaganda that the media will crank out will also be staggering. They’ll continue to act like everyone is on board with Kamala and her agenda.

Who wouldn’t want a Gender-Queer Eco-Woke Green-DEI Utopia? Clearly if you’re against this kind of progress, you’re an extremist in the minority.

The legacy media will continue attempting to gaslight the public into believing that Kamala is wildly popular, and that it is a foregone conclusion that she will be the next commander-in-chief.

But despite the fact that she refuses to do real interviews or answer legitimate questions, everyone can see, plain as day, what she stands for.

Her economic policy is based on full-blown communism: price controls, government subsidies, regulation piled on top of regulation, higher taxes, and so on.

My guess is that number one, this supposedly great energy and electoral momentum is entirely manufactured.

And number two, while it may seem like the radical left is a massive group, most people are actually pretty moderate and not interested in socialism.

Frankly, a huge majority of Americans will go into the ballot box this November not liking either of the candidates on the ballot. But I have a feeling they know which one will be better for the economy and order.

Just like in Chile a couple of years ago, standing at the edge and staring into the abyss, I don’t think people like what they see.

But as always, I have to acknowledge that I could be wrong. And it is important to understand that whoever is elected come November, the US still faces massive challenges ahead.

There is always reason for hope. But it would be crazy not to have a plan B.

When you can anticipate risks, you can also take steps to mitigate them. And then you can come at whatever happens next from a position of strength.

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Just as Peter predicted on Wednesday after the monthly inflation report came out, Joe Biden and Kamala Harris almost immediately went into self-congratulatory mode to brag about how great they are at managing the economy.

As President Biden told a gathering of reporters on Wednesday, “I said we’re gonna have a soft landing. We’re gonna have a soft landing. My policies are working.” He then commanded them to “start writing that way”, and we have no doubt their lackeys in the media will dutifully comply.

Not that it matters. It’s clear that neither the people making the decisions, nor the “experts” advising them, nor the journalists covering them, seem to have any real fundamental grasp of the economy.

Peter wrote on Wednesday that, while the monthly inflation report was cheered for posting a 2.9% annualized rate, the details of the report showed a much different picture.

On a monthly basis, inflation is accelerating. Plus, if you strip out the temporary phenomenon of falling used car prices, the actual rate of inflation is closer to 5%.

Then yesterday, the retail sales report came out… and once again the experts cheered: the consumer is still strong! The soft landing is in sight!

Of course, this euphoria was equally misguided. The retail sales report showed that consumer spending is up 2.7% over the past twelve months. Sound fine… except the report explicitly states that they do not adjust the numbers for inflation.

So, wait a minute– if consumers are spending 2.7% more over the past twelve months, but inflation is up 2.9% over the same period, then, after adjusting for inflation, consumers are actually spending LESS.

This is not a sign of a healthy consumer economy. And data from corporate earnings back this up: everyone from McDonalds to Mercedes-Benz to Deere and even Apple have reported trouble… either slowing growth, or even outright sales declines.

Walmart reported strong growth… and the experts viewed this as yet more proof that the consumer is strong. But they’re missing the obvious: Walmart is the bottom of the retail ladder. So, the fact that more people are shopping at Walmart is a sign that consumers are struggling, i.e. willing to trade down to lower quality products to save money.

But, still, the headlines are all positive… and incredibly supportive of both Joe Biden and Kamala Harris.

This is nothing new, of course. Especially for Kamala. Ever since she stole the nomination, the fawning press coverage at both the national and local level has been nauseating.

Upon visiting the swing state of Arizona, a local paper ran a story entitled “Kamala Harris went to this Mexican restaurant. Where else should she have dined?”

Wow. Such hard-hitting journalism.

Not to be outdone, CNN ran its own Pulitzer-worthy piece, “Kamala Harris joined TikTok. See her first post”.

I’m reminded of Joe Biden’s basement campaign in 2020 in which the toughest question he ever faced was “what flavor of ice cream” did he like best.

The media is perfectly happy to go the rest of the campaign without asking Kamala a single tough question. And they’re now trying to build her up as some kind of economic savant.

Case in point, today she plans on taking this newly conjured reputation for a test drive when she unveils a bunch of idiotic ideas that are supposed to pass for an economic platform.

Her signature piece is to “call for 3 million new housing units” targeted at low income and first-time home buyers. And the media is already orgasmic in its coverage.

These people seem to think Kamala has the ability to conjure new houses out of thin air, or to order them into existence, as if she’s ordering a pizza. It’s ludicrous.

Just look at Transportation Secretary Pete Buttigieg’s track record. This guy was given $7.5 billion to build 500,000 electric charging stations across the country. He built eight. I think my cat could have done a better job than that, and probably still had plenty of money left over at the end.

Or just look at how much money the City of San Francisco, or the State of California, spend on the homeless: $24 billion over five years, which works out to $28,000 per homeless person per year. And they haven’t even come close to solving the problem.

So, I can only imagine how much money will be spent per house that Kamala dials up. The US government’s low-income starter homes will probably end up being the most expensive real estate in the world on a per square foot basis.

Not to completely ignore the private sector, Kamala also wants to create new tax incentives which will make it more attractive for real estate developers to build new low-income homes.

This is extraordinary. It’s almost as if she finally realized that lower taxes stimulate economic activity… and higher taxes reduce economic activity!

Yet bizarrely, a second major focus of Kamala’s economic platform is to raise taxes on businesses and successful individuals.

Hello, irony? This is Kamala. Seriously, lady, if low taxes are a good idea to boost production in the real estate sector, then why the hell aren’t low taxes a good idea for, you know, the rest of the economy?!?!

But the lunacy doesn’t stop there… because the other signature piece of her new economic policy is to tackle the true root cause of inflation.

And if you’re thinking “outrageous government spending” or “Fed money printing”, then you’re wrong. The true root cause of inflation, according to these people, is corporate greed.

So, Kamala plans on… I don’t even know… banning greed? She’s going to “monitor” corporations and somehow prevent price increases. No one understands what this possibly means, least of all Kamala. But again, the press is already running with it, and experts are acclaiming that it will bring down the debt, end inflation, create jobs, and pretty much every rosy scenario imaginable.

I used to think it would be really hard for someone to be more idiotic and destructive than Joe Biden. Based on details now emerging, it’s clear I was wrong.

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Sometimes I have to ask myself if the people in charge actually know how to read.

Honestly I’m not entirely sure. Perhaps they know how to read… but they choose not to do so. Because it’s pretty obvious no one is paying attention to the details in the government most recent inflation report, which was just released this morning.

Everyone is cheering the news of 2.9% inflation, which the government said is “the smallest 12-month increase since March 2021”.

Sure, on the surface, it’s decent news. And I’m sure Joe Biden and Kamala Harris are going to issue some remarks patting themselves on the back– something like, “while there is still more work to be done, today’s report shows that we are making significant progress in fighting inflation thanks to my policies. . .”

But if they just scroll down even a few paragraphs into the inflation report, they’ll see the details which really matter.

One glaring issue is that inflation first reached a low of 3% in June 2023– more than a year ago. This means that, over the past thirteen months, the annual rate of inflation has dropped from 3% to 2.9%.

That’s a decline of just 0.1% over the past year. Is this really something to celebrate? At that rate, it will take more than a decade for inflation to reach 2%.

The next issue is the month-by-month data.

The “headline” inflation number means that the Consumer Price Index has increased by 2.9% over the last twelve months. But they also track this on a monthly basis.

In May, for example, the monthly increase in inflation was unchanged at 0%. In June, the inflation rate actually fell month over month, i.e. -0.1%.

But the monthly increase from June to July increased to 0.2%. That’s not slowing inflation. That’s increasing inflation.

At least 0.2% is a relatively small number, though. So let’s skip that for now and move on to the other details, and check out the prices of the things that Americans actually buy.

Electricity prices are up almost 5% year over year. Shelter (i.e. rent and housing costs) are up more than 5%. Medical costs are up 3.3%. Services in general, which include everything from childcare to tax preparation, are up almost 5%. Transportation is up nearly 9%. Motor vehicle insurance is up 18.6%!

Even food prices are up; as the report states, “the meat, poultry, fish, and eggs index rose 3.0% over the last 12 months” while prices of vegetables fell by 0.2% year over year.

So, good news if you’re vegan I suppose. But everyone else is paying more. Also, costs to eat out, including restaurants, take-out, and fast food, are up 4.1% over the past year.

You might have noticed by now that most of these numbers are well in excess of the 2.9% headline inflation rate.

9% increase in transportation costs. 5% increase in shelter. 3.3% increase in medical. 5% increase in electricity. How does all of this inflation somehow average DOWN to just 2.9%?

Well, there was a minor dip in gasoline prices year over year, but that’s relatively minor at just 2%.

The BIG decline that’s dragging the average inflation rate down to 2.9% is USED CARS. That’s it.

According to this morning’s report, used car prices are down nearly 11% over the past twelve months. And rightfully so, to be honest. We probably all remember how prices of used cars surged during the pandemic because of a complete breakdown of the supply chain.

Well, those high used car prices have now fallen back to normal levels. This nearly 11% price drop is essentially the tail end of that cycle… meaning that future inflation reports several months from now won’t have the benefit of used car prices dragging down the inflation average.

The reality is that there’s still a lot of inflation in the real economy, and the government’s own numbers support that assertion. This temporary phenomenon of falling used car prices is masking the true inflation number.

It’s similar to how the explosion in government jobs is masking the true weakness in the private sector labor market right now. If you strip out the growth in government jobs from the labor reports, the real unemployment rate would be much higher than 4.3%. Similarly, if you take out the short-term impact of falling used car prices, the real inflation rate would be much higher than 2.9%.

Joe Biden and Kamala Harris are still going to take a bow today, as if their high deficits and anti-capitalist policies have solved the problem. But few people will be dumb enough to believe them.

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I was one of the millions of people listening to the live conversation last night between Elon Musk and Donald Trump.

And if you missed it, Trump was Trump. You pretty much know exactly what you’re getting with him, and there weren’t any major revelations.

Elon, on the other hand, came off as a genuinely concerned citizen who recognizes the problems facing the country and is exasperated why the people in charge aren’t implementing common sense solutions.

Honestly, I feel bad for the guy; Elon is blasted as a hard-core, right-wing nut job… and there are people who literally want to put him in prison because of his views.

But last night he said things like:

– “the legal system is supposed to be protecting the public from violent criminals”
– “we want safe and clean cities”
– “we want secure borders”
– “we want sensible government spending”
– “we want to restore both the perception and the reality of respect in the judicial system”
– “I’m pro-environment, but I don’t think we should vilify the oil and gas industry”

These are clearly not radical values, and my guess is that most people in the country would probably agree with his values.

About an hour into the call, Elon outlined what he thinks would bring prosperity back to the United States:

1) “Solve government overspending”. He correctly explained that extreme government deficits create inflation… so if you want to really get inflation under control, you have to stop the spending.

In theory, this shouldn’t be hard.

The Treasury Department expects to collect nearly $5 trillion in tax revenue this Fiscal Year (which ends on September 30th). And $5 trillion is an absurd amount of money.

As recently as five years ago (FY2019), $5 trillion would have been enough to pay for ALL federal spending and still have a surplus of more than $500 billion to start paying down the debt.

So, if they had simply frozen spending in place at FY2019 levels, even after adjusting for inflation and higher interest rates, $5 trillion in tax revenue this year should still be sufficient to keep the national debt from growing any further. And that’s without making any significant cuts to government spending.

But spending has increased by nearly 50% in five years. Is the government 50% better? Do taxpayers receive 50% more service? Clearly not. They’ve just let spending spiral out of control with no commensurate benefit to the taxpayer.

2) Deregulate.

Elon’s second point was that a lot of regulations are destructive and make no sense. Volumes and volumes of rules hold back businesses from innovating, hold back citizens from being productive. And that’s what the country truly needs to be prosperous– innovation and productivity.

And those were his two big points… and that if a government can do those two things, the future can be much brighter.

He’s right, and the math clearly supports this view.

Various Presidential administrations over time have increased, or decreased regulations. When there have been decreases in the number of regulations, US economic productivity tends to increase, and overall GDP growth rises. During periods of growing regulations (like right now), productivity wanes.

Higher productivity means that the economy grows faster. And a faster growing economy means more tax revenue for the government. Combined with spending constraints, this would leave plenty of money left over to pay down the debt… or simply set aside for a rainy day.

Imagine being able to obliterate a major threat to the nation, or shore up security to the power grid, or support an ally, without having to go into debt? It’s unimaginable given today’s national finances. But with real productivity growth and sensible spending, it’s absolutely a reality.

Failing to do BOTH of these things most likely results in a pretty bad outcome for the United States.

If the debt keeps spiraling out of control, and government regulators continue to constrain productivity, it’s extremely difficult to imagine the US dollar remaining the world’s primary reserve currency.

Continued deficit spending and a ballooning national debt will create even more inflation and cause foreign governments, central banks, and businesses to lose confidence in the dollar. It’s already happening… and one of the reasons why gold is hovering near its all-time high.

The US dollar’s global reserve status is one of America’s premier financial benefits. Losing it would be disastrous… and Elon’s approach is pretty much the only way to save it.

Will it happen?

With Kamala I think there’s zero chance. She does not strike me as someone who will cut spending and slash regulations. Quite the opposite. So honestly if she wins, I think it’s game over at that point. America does not have another four years to waste under the rule of Inspired Idiots.

With Trump I think there’s a chance. But a lot will have to go right, so the outcome is far from certain.

Honestly this is why it makes sense to have a Plan B. And I don’t mean that as a catchphrase or hollow aphorism.

As Elon said last night, “I think we’re at a fork in the road of destiny of civilization.” I don’t think is hyperbole; the differences in the potential outcomes are monumental. Any rational person ought to consider the probable consequences… and take sensible steps to reduce the impact.

Taxes might go through the roof. But there are completely legitimate ways to keep them low and reduce what you owe.

Inflation could easily spike. But you can hedge against inflation with real assets (many of which are absurdly cheap right now).

There are so many more examples; the point is that it’s really time to think clearly about how to navigate the road ahead.

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He was the most powerful man in the world in the year 1536. But even Charles V– Holy Roman Emperor, King of Spain, Lord of the Netherlands, Duke of Burgundy, Master of the Americas– still needed his mommy.

Like many monarchs of his era who lavished themselves with unhealthy diets, Charles had developed a nasty case of gout– a painful, often disfiguring inflammatory disease typically brought on by poor eating habits.

And Charles’s gout was causing him a LOT of pain.

So, in 1536, his mom, Queen Joanna of Spain, started looking into remedies. She had heard stories of native tribes in their far-off colony of Venezuela who healed afflictions with a medicinal oil. And Joanna ordered colonial officials in Venezuela to bring as much of this oil as possible to the Emperor.

This order has gone down in history as the first-ever oil export from Venezuela, nearly 500 years ago.

Back then, there was so much oil in Venezuela that it was literally just oozing out of the ground. And centuries later when global demand for oil skyrocketed, no one needed a PhD in geology to figure out that Venezuela would become a top producer.

By the mid-20th century, Venezuela had become one of the wealthiest countries in the world. But it all changed in 1976 when Venezuela’s government nationalized the oil industry and drove the new state-owned oil company into the ground.

This isn’t much of a surprise. In the private sector, business is supposed to be about maximizing profit.

Now, sadly, ‘profit’ has become somewhat of a dirty word. But it shouldn’t be. Maximizing profits over the long-term means that everyone has to win.

You have to treat employees well and pay them fairly, otherwise you won’t be able to attract talented people… and profit will suffer.

You have to put out quality products that fill your customers’ needs. You have to innovate. You have to cut costs, i.e. use as few resources as possible to create as much value as possible. This ultimately what profit really means.

But governments aren’t profit-seeking. They squander resources to buy votes, cover up past mistakes, pay for idiotic vanity projects, line the pockets of their cronies, or just steal for themselves.

This is ultimately what happened in Venezuela; government mismanagement of the oil sector led to multiple financial crises, stagflation, and finally full-blown socialist revolution in the 1990s.

Hugo Chavez took over 25 years ago, and, through his ‘Bolivarian Socialism’ he ran the country even further into crisis. Chavez (and his successor Maduro) plundered resources, seized assets and businesses. They chased away talented people. They heavily indebted the nation. They regulated wages and prices.

And the natural result of these idiotic measures was economic collapse.

It’s extraordinary that food shortages and starvation became widespread in Venezuela– a country with nutrient-rich soil, a year-round growing season, and abundant water resources. Venezuela should be an agricultural powerhouse. And yet there’s not enough food. Something is seriously wrong with this picture.

California shares a similar origin story. The discovery of oil turned the state into an economic juggernaut in the early 20th century, and even to this day its oil output is just behind Australia and Ecuador.

But California’s warm embrace of socialist ideals has been on hyperdrive over the past decade.

Gavin Newsom shovels outrageous sums towards the homeless, yet the problem grows worse each year. He spends even more on failed infrastructure projects, constantly whines about race, gender, sexual orientation, regulates wages, and chases business away.

Millions of Venezuelans have fled their country’s failed economy. And millions of Californians have left the state for greener pastures elsewhere. And that includes several high-profile businesses.

The latest is Chevron, which was actually founded as the Standard Oil Company of California. Chevron has been in the state for 140 years. But they announced last Friday that they’re moving to Texas.

Why? Because state bureaucrats want to put Chevron out of business.

This has been going on for years– not only from the Biden administration’s federal punishment of the oil industry… but also due to California statewide policies. These include drilling restrictions, a new “penalty”, i.e. tax, on “excess” refinery margins, climate change regulations that are virtually impossible to achieve, etc.

There are even some local governments that have piled on. The city of Richmond (in the San Francisco Bay Area), for example, is asking voters to approve a $1 per barrel tax on Chevron’s nearby refinery.

It’s no wonder that California fuel prices are among the highest in the nation.

But Gavin Newsom can’t seem to put 2 and 2 together. So, he created a special commission to investigate California’s high gas prices and make recommendations to solve the crisis.

Their report, released just days ago, is absolutely hilarious.

First off, the commission fails to make any connection between insane regulations and high gas prices. And their ‘solution’ is to essentially seize control of the industry.

According to the report, they recommend the government to “own refineries in the state to manage the supply and price of gasoline…” however they acknowledge that “the State has no experience in managing” such assets.

The commission also ponders the question: “What would drive how the State managed the refinery? Profit? Maximize production? Minimize production?”

This is actually in the report. The state wants to take over the oil refining business, but they aren’t even sure what their purpose would be.

So, in short, California’s politicians have driven gas prices up with ruinous policies. And they want to solve their own problem by letting inexperienced bureaucrats take over the state’s oil refining business without a clear purpose of what they want to achieve. What could possibly go wrong?!?

Chevron finally had enough, and they’re leaving the state. Many more will likely follow… yet the people in charge keep doubling down on the same destructive policies.

Californians already pay $1.16 more for a gallon of gasoline than the national average. But the obvious conclusion to these ideas is even higher prices, and even more inflation.

It’s a Venezuelan approach to problem solving: blame everyone else and dig yourself even deeper into a hole.

Frankly this is the same mentality that we also see from the federal government these days. And that’s a pretty compelling reason to have a Plan B.

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On Wednesday, March 8, 2023, Fed Chairman Jerome Powell was sworn in for testimony in front of members of Congress to deliver remarks about the state of the US economy.

Inflation had been raging for well over a year at that point, and, in response, the Fed had rapidly increased interest rates to levels not seen since 2007.

But nothing happens in a vacuum. The Fed cannot expect to jack up rates without some major consequences. And concerned members of Congress asked the Chairman about these potential consequences.

But Chairman Powell played them off, practically dismissing any risk to their raising rates and ‘tightening’ monetary policy, saying “nothing about the data suggests we’ve tightened too much. . .”

Two days later, Silicon Valley Bank went bust– in large part because of the Fed’s interest rate increases.

And it wasn’t just Silicon Valley Bank that was in trouble. In fact, the FDIC reported over $600 billion in unrealized losses across the entire US banking system, and most of that due to higher interest rates.

It’s not hard to understand. Banks typically invest their customer deposits in either loans or bonds. And rule #1 with bonds is that, when interest rates rise, bond prices fall.

Even a first-day intern at the Fed would have known that. The Fed chairman should have certainly known that.

It was also in their own data. Remember, the Fed is also one of the key supervisors of the US banking system, so they had access to all of Silicon Valley Bank’s financial records. They saw the losses piling up, they saw the risks.

This is what’s so bizarre. The Fed always claims to be looking at the data and says that their economic prognostications are based on data.

But again, the Fed had the data. It was glaring at them. But they failed to anticipate any consequences to their rate hikes– even TWO DAYS before a major bank collapsed.

Sadly, the Fed chairman seems to have outdone even that bad call.

Last week he told a room full of reporters that economic weakness is “not what we’re seeing” and that the economic data are “not signaling a weak economy. . . ”

He went on to say that chances of a “hard landing are low” and that “the picture [of the US economy] is not one of slowing.”

Yet once again, literally days later, a meltdown in financial markets took place worldwide… because investors finally realized that the Fed has no idea what they’re talking about.

And everyone from Pepsi to McDonald’s to Heineken to Cartier to Porsche has been reporting slower growth or declines in sales.

This morning Disney reported a slowdown in its parks division– which is typically rock solid. Proctor & Gamble reported a decline in sales of Tide laundry detergent and Charmin toilet paper. The list goes on and on.

Monday’s sudden market swoon has calmed. But in large part that sense of calm is because investors are now pricing in a near 100% chance of a 50-basis point (0.5%) rate cut at the Fed’s September meeting. There are even some expectations of an emergency rate cut before the September meeting.

Again, they claimed just a week ago that the chances of a hard landing “are low”, and that a 50-basis point cut is “not something we’re thinking about”. Yet just days later, it became clear that the economy is slowing, and unemployment is moving higher.

(It’s also notable that most of the growth in labor market now is with government jobs, which actually hurt the economy.)

So, the Fed is almost certainly going to have to reverse itself and start making big rate cuts. Frankly, they have no other option, if for no other reason than the national debt.

The US government has trillions and trillions of dollars of bonds which are maturing this year and next. And the Treasury Department clearly doesn’t have the cash to pay them back. So instead, they’ll have to reissue more bonds to pay back the old bonds. Sounds a bit like a Ponzi scheme to me.

Their problem is that the new bonds will carry a much higher rate of interest than the old bonds… which the federal government absolutely cannot afford.

Think about it: $10 trillion worth of bonds paying a 1% coupon costs $100 billion per year in interest. That’s a lot, but it’s manageable. If they have to refinance $10 trillion at 5%, the annual interest bill increases to $500 billion… which is showstopper.

So, the Fed HAS to cut rates– not only to jump start the economy and prevent a recession… but to bail out the US government and give the Treasury Department the opportunity to refinance its debt at a lower rate.

However, these rate cuts, combined with yet another round of quantitative easing (i.e. money printing), will just end up bringing a LOT more inflation to the US economy.

Naturally the Fed is not forecasting any of this. They don’t see the inflation problem ahead. They keep claiming that they’re looking at the data… yet they consistently misdiagnose what’s happening in the economy.

It’s like an ER doctor who examines a patient with a gunshot wound and prescribes a course of stool softeners. They’re missing what seems to be obvious to everyone else.

Look, these guys are human beings too. They’re not perfect, they’re going to make mistakes. But that’s the problem with this monetary system: a handful of bureaucrats with bad track records are awarded the most powerful authority in finance and expected to be infallible.

It’s a deeply, deeply flawed system, and it’s bizarre that anyone has any confidence in it.

The Fed is not all-powerful. Not only do they not see the coming danger, but they’re powerless to stop it. And Monday’s meltdown is a sign that the market is starting to figure that out.

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Athenian general Miltiades was already a hero across ancient Greece when he set sail for the island of Paros in 489 BC.

Born into stardom as the son and nephew of famous Olympic champions, Miltiades made a name for himself as one of the most important and successful commanders in the Greek war against Persia.

In fact, Miltiades was responsible for devising the incredibly unique, surprise battle plan that confounded the Persian army at the Battle of Marathon in 490 BC. The Greeks were vastly outnumbered and outmatched… but they annihilated the Persians thanks to Miltiades’ tactical genius, making him an instant celebrity-hero throughout the region.

So, when he approached the Athenian government the following year and requested to lead a special mission to reclaim lost Greek territory in the Aegean Sea, they approved his mission without question. And the Hero of Marathon set sail a few months later with a fleet of 70 ships.

Unfortunately for Miltiades, his voyage was a total disaster; his fleet was nearly vanquished, he lost a great number of men, and he was unable to take the island of Paros. So, when he returned to Athens, all of his former heroics were forgotten… and people wanted his head. Literally.

It was commonplace in ancient Greece for politicians and military leaders to be held accountable for their decisions; many were even put on trial at the end of their rule and had their administrations publicly scrutinized.

These weren’t political witch hunts; rather, they were a form of checks-and-balances whereby anyone found to have been truly incompetent, disloyal, or duplicitous would be severely punished.

Miltiades– again, the Hero of Marathon– was charged with treason for causing such severe and embarrassing losses in his ill-fated Paros expedition. He was tried, convicted, and ultimately sentenced to death… however this was eventually reduced to a fine of 50 talents (roughly $10 million in today’s money) and a lengthy prison sentence.

Sometimes I feel like the Greeks were really on to something.

Sure, the world is complicated, and there’s never any guarantee of success in warfare, business, life, politics, etc. Decision makers don’t have a crystal ball and rarely have perfect information… so there can never be any certainty about future outcomes.

But leaders have a moral and legal obligation to always do their best… and to make rational decisions and take sensible risks. Most importantly, whenever there’s new information, they have an obligation to challenge their own decisions and adjust course if necessary.

Failure to do so is arrogant, deliberate incompetence.

We saw this all throughout the pandemic; at first, there was very little information available, and politicians’ knee-jerk reaction was to enact the most extreme measures.

But six-months later there was plenty of data. And politicians had plenty of opportunity to review the updated information, summon their courage, and make better, more rational decisions.

Some places (Florida) did. Others (New York, California) stuck to their failed, idiotic, destructive policies. They kept people locked down, they kept the schools closed, and they exacted an incalculable toll on their citizens.

But they will never be held accountable for their incompetence. Instead, they end up on lucrative speaking tours, awarded highly paid consulting or board positions, or advanced outrageous sums for their memoirs.

And this leads me to what’s happening in England right now.

As you’re probably aware, a sick-o teenager in northern England stabbed a bunch of kids last week in a horrifying rampage. Nine children were wounded, and at least three have died.

Rumors quickly circulated that the attacker was a Muslim refugee who had arrived by boat to England’s shores, and violent riots quickly broke out across the country.

The government and media were quick to correct the rumor; the 17-year-old attacker (he turns 18 on Wednesday) was born in the UK and is the son of Rwandan immigrants.

Then they further denounced the rioters as “far right” and “racist”, and the Prime Minister threatened to use the full force of the law against them.

Look, it’s completely inexcusable for rioters to engage in violence and destruction of property. But it’s also inexcusable for politicians to run their country into the ground.

The media has been quick to condemn the rioters. But they are completely silent, and frankly complicit, regarding the destruction of their country.

Just like the Biden administration has been dreadfully inept at securing the southern border, governments in Europe and the United Kingdom have been welcoming illegal migrants by the million for the past several years.

The effect in both cases is unmistakable. Americans in every state, border or not, can see and feel for themselves the impact on their communities.

The White House, on the other hand, tells people that their eyes are lying to them, that illegal migrants are a massive benefit to the nation, and that “the border is secure”.

The media dutifully jumps in to denounce anyone who has a problem with the migrants as “far right” and “racist”.

This is a constant theme; you are not allowed to believe your own eyes. And if you dissent in any way from the official narrative, then YOU are the problem.

This is what we’re seeing across the UK and Europe.

People feel the impact of the migrant crisis. They see it every day. They’ve watched angry refugees marching in the streets demanding shariah law and chanting “Allah Akbar”. They’ve witnessed horrific crimes in their local communities that they’ve never seen before: honor killings, gang rapes, etc. committed by migrant refugees.

The fact that the murderer from last week’s stabbing was born in the UK completely misses the point.

Yes, the guy isn’t a migrant refugee. It was the wrong trigger. But it doesn’t change the fact that people are still sick and tired of failed policies that bring boatloads of migrants to their shores. And most of all they’re tired of being told that they’re racist simply because they want a sensible immigration system.

Now there are literal fistfights breaking out, with Brits attacking migrants, and migrants attacking Brits. It’s chaos. And it’s totally inexcusable.

But, again, it’s also inexcusable that the politicians have run their country into the ground. It’s inexcusable that they failed to change direction despite such obvious consequences. And it’s inexcusable that they cannot even acknowledge the fear and the pain that people are feeling in their communities over these failed policies.

There’s plenty of data (not to mention the perceptions and experiences of their citizens) that the refugee experiment has been a total failure. Yet they still refuse to change course… which is a major reason that problems rarely get solved.

This is why I think the Greeks had a really great idea. There should be consequences for such willful and destructive incompetence.

But something tells me that the people who make the laws probably won’t make a law that holds them accountable… which is why it makes so much sense to have a Plan B.

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We all remember it. For more than two years, every single person in the United States was subjected to the exasperating melodrama known as Dr. Anthony Fauci.

A career bureaucrat who headed the National Institute of Allergy and Infectious Disease, Fauci hypnotized much of the country and convinced people that he was the second coming of Joan of Arc– a saintly, righteous holy warrior who would lead everyone to victory. Except his sword and shield were “science”.

We never heard the end of it. Fauci claimed that he was “following the science” about social distancing, mask mandates, vaccines, school closures, and more.

And rather than accept criticism and debate about his ideas (which is the very foundation of science), Fauci continued to insist that he had all the answers. In one of his most eye-rolling assertions, he even said at one point that any criticism of him was “dangerous. . . because I represent science”.

Of course, truth has a wonderful habit of eventually coming to light. It cannot be buried forever. And according to unearthed records we know now that much of this “science” was just made up.

For example, Fauci himself appeared recently before a Congressional panel and was forced to admit under oath that his 6-foot social distancing rule “sort of just appeared”, which strikes me as extremely unscientific.

It appears now that the Federal Reserve is following the example of Dr. Fauci. And as I was watching the Fed’s press conference yesterday after their decision to do absolutely nothing, I couldn’t help but see the similarities.

Instead of “science”, the Fed now makes repeated claims that they are ‘following the data’, as if the Labor Department’s inflation reports are some sort of magical fairy leading us to a soft landing.

According to this magical fairy, there is still not yet enough confidence “that inflation is moving sustainably toward 2%”. But apparently the magical fairy thinks that there will be enough confidence next month, so the Fed has all but promised a September rate cut.

Frankly, it all sounds made up to me.

Remember the Fed’s track record? They conjured trillions of dollars out of thin air during the pandemic and failed to predict any inflationary consequences. And when inflation did appear, they ignored it and even went as far as to gaslight anyone who asked them about it.

Eventually, when they could no longer ignore inflation, they insisted that it was “transitory”. And when they stopped calling in transitory, they still waited until inflation was more than 6% before they finally did something about it.

Best of all, the Fed then failed to predict any consequences from their rapid interest rate hikes.

Well, one obvious consequence that the Fed should have known about is that jacking up interest rates causes bond prices to fall. This is basic finance– bond prices and interest rates move in opposite directions. Even a first-day intern at the Fed knows this.

And guess who owns massive quantities of bonds? Commercial banks… including Silicon Valley Bank.

You probably remember what happened in 2023: the Fed’s interest rate hikes triggered major losses in Silicon Valley Bank’s bond portfolio, rendering the bank completely insolvent.

Yet literally TWO DAYS before Silicon Valley Bank collapsed, the Fed chairman told Congress that “nothing in the data” showed any consequences from their interest rate hikes. That’s some magical fairy.

The irony is that one of the Federal Reserve’s key responsibilities is to supervise and regulate the banking system… which means that Silicon Valley Bank sent regular reports to the Fed showing that they were in deep trouble.

In other words, “the data” proved very clearly that there were serious problems in the banking system. But the Fed still didn’t notice.

So now we’re supposed to take comfort in the fact that the Fed is “carefully assessing incoming data”. Well, that’s what they’ve theoretically been doing for the past several years. But they’ve gotten it wrong over and over again.

It’s worth pointing out that “the data” is a very limited set, and the Fed has its “preferred” metrics to measure economic activity. For example, the Fed favors the Personal Consumption Expenditures index as an inflation gauge, over the Consumer Price Index.

Cherry-picking one set of data over another and shutting yourself off from a much wider body of evidence, is another reminder of failed, pandemic-era decision making.

And the Fed seems to be deliberately ignoring some of the biggest economic drivers of all.

Earlier this week, as the Fed locked itself in a room with its magical fairy, the US national debt passed $35 trillion.

The national debt (and by consequence the US budget deficit) is a CRITICAL economic factor that should be keeping the Fed up at night. Continued deficit spending will be very inflationary and make it virtually impossible for the Fed to succeed in its mission.

But there was ZERO discussion of the debt yesterday. Apparently, the magical fairy doesn’t care about such things.

A few reporters asked about the upcoming Presidential election and whether or not the Fed was modeling any potential policy changes depending on the outcome.

But the Fed Chairman was almost proud of his ignorance and insisted that they were non-partisan, and that the election outcome didn’t factor into their planning.

Come again?!?! Are these people so naive to think that there will be no difference in the economic policies of Kamala Harris versus Donald Trump?

Imagine if Bernie Sanders and AOC were running, and promised to default on the national debt, enact Medicare-for-All, provide free college tuition to everyone, forgive student debt, guarantee government jobs, and impose a $50 national minimum wage.

Would the Fed still claim indifference and insist that Fed policy would be unaffected by the election outcome?

It is so utterly bizarre that the Fed willfully ignores some of the most consequential economic drivers of our time… yet simultaneously insists they are ‘following the data’. It’s almost like Fauci is back in charge.

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There are only seven countries in the world that have a GDP in excess of $3 trillion: the United States. China. Germany. Japan. India. United Kingdom. And France.

Microsoft’s current market capitalization is also right around $3 trillion… which means that out of the 193 countries in the world that are recognized by the United Nations, 186 of them have an economy that’s smaller than Microsoft. Crazy.

Of course, much of Microsoft’s meteoric growth has taken place over the past three years because of the AI boom. And just like Nvidia is considered the most important hardware company in AI, Microsoft has positioned itself as the most important software company in AI… and they’re pretty much betting the business on it.

According to the company’s earnings release yesterday, Microsoft has generated an unbelievable $118 billion in Operating Cash Flow (OCF) over the past twelve months.

(OCF, if you’re not familiar, is a much more useful metric than ‘net income’ or ‘profit’ because it strips out all the non-cash accounting nonsense like depreciation.)

$118 billion in operating cash flow is a staggering amount of money. But what’s even crazier is that Microsoft spent almost every penny– more than $113 billion– making new investments in their business. And most of those were AI-related investments.

In short, Microsoft is a profit machine. But it’s dumping 96% of those profits into AI, in large part to justify having a $3+ trillion valuation.

Time will tell if those investments pan out, and whether Microsoft is able to build viable products that generate a sufficient return.

There’s no guarantee; AI is an extremely competitive industry where budding startups and giant tech companies are both working on the next big thing. And I have to wonder how much upside is left for a business that already has a $3 trillion valuation, relative to the competitive risks against Amazon, Google, Facebook, Apple, etc.

Yesterday the company announced that growth in their cloud ‘Azure’ business (which includes their AI revenue) was 29% year-over-year. That growth rate was slightly lower than last quarter’s 31% growth.

But even a tiny, 2% decline in growth had the market freaking out. And Microsoft stock initially plunged more than 8% in after-hours trading– roughly $250 billion in market value. That’s larger than the economy of New Zealand.

The stock recovered much of those losses this morning. But the mini meltdown is a clear demonstration of the risk involved: even a hint of a slowdown can trigger punishing losses.

Bottom line, AI is absolutely disruptive technology and a major game changer. But we’re still in very early days; there’s a long way to go, and it’s far too early to declare a winner. Yahoo looked like the dominant Internet titan in the late 1990s, but the landscape changed dramatically.

Maybe Microsoft ends up winning the race. But there’s a lot of uncertainty in drawing that conclusion right now.

One thing that’s NOT uncertain, however, is that AI someday going to be as integral to daily life as mobile phones and the Internet are today.

We also know that AI will continue to consume ridiculous amounts of electricity — electricity, which the US grid does not have right now (and Europe is in even worse shape relative to its electrical grid).

Thanks to horrendous government incentives and propaganda by the inspired idiots and climate fanatics in the media, electrical supply from “renewable sources”, i.e. wind and solar, has skyrocketed over the past few years.

It’s no coincidence that the country is simultaneously facing major capacity shortfalls and power outages… because, you know, sometimes the sun doesn’t shine, and the wind doesn’t blow.

The green fantasy is that wind and solar are going to save the planet. But if you’re honest about the math, they’re really not all that clean.

First, you must mine a lot of really dirty resources (like cobalt) in vast quantities from places in Africa which rely on child labor in extremely dangerous conditions. But you’ll never hear Greta Thunberg utter a word about that.

Then you have to manufacture 2-6x more solar panels and wind turbines… because, again, there are occasions when the sun doesn’t shine (like nighttime!) and the wind doesn’t blow.

In the end, wind and solar end up using a lot more resources per kilowatt-hour of electricity produced than many conventional sources, and a lot of the material used are really bad for the environment.

Nuclear is a far more environmentally friendly, far more efficient way to produce electricity. And hopefully that will make a comeback… though the nuclear renaissance is likely still some years away.

In the meantime, there is an incredibly cheap, abundant, and much cleaner source of fuel that can solve America’s electrical capacity shortages and power the AI revolution: it’s natural gas.

I wrote about this last week, saying that US natural gas is a ‘picks and shovels’ investment in the AI boom.

It won’t be clear for a long time who will win the AI race. In the late 1990s, Yahoo looked to be the dominant tech titan… but the landscape changed dramatically over the next decade.

But again, we do know that AI will consume more power than the US grid has available. And the ONLY viable option to supply that power right now is natural gas.

The US is one of the wealthiest nations in the world when it comes to natural gas reserves. In fact, supply is so vast that US natural gas prices are laughably cheap; relative to the amount of energy contained in a unit of US natural gas, it’s priced at the equivalent of about $15 oil. That’s cheap.

So cheap, in fact, that an electrical grid powered by natural gas can not only deliver the quantity of electricity necessary to power the nation (and AI boom), but it could dramatically reduce energy costs.

This is a big deal. Energy prices influence the price of everything. If electricity is cheap, consumers and families save money. Manufacturing costs less. Services cost less. Transportation costs less. Everything becomes cheaper and more efficient.

To be even more clear, a natural gas renaissance could generate greater US economy growth, potentially even leading to higher tax revenue and lower deficits.

In short, natural gas is one of the only ways that they’ll be able to tame the inflation problem and save the dollar. And with natural gas prices so cheap right now, it seems to me that there’s a lot more upside in the energy of the future, than in companies that are already selling for trillions of dollars.

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My sister used to be a reporter for Fox News based in south Florida and would regularly be assigned to cover NASA press conferences.

And she’s often told me about how reporters were terrified to ask any real questions. They’re not astrophysicists and don’t understand the first thing about rocket propulsion, and most of the journalists never bothered to learn even the basics of the topic.

So, the majority of the questions were very superficial; quite simply the reporters didn’t want to embarrass themselves.

This is how the media covers the Federal Reserve. Most reporters don’t have a clue about central banking, so, not wanting to look stupid, they just sit quietly and give the Fed a pass. There’s no real scrutiny.

At the same time, Fed officials are generally in lockstep with one another; it’s not like politics where the two sides constantly chastise one another. With the Fed, there is virtually no public dissent.

Even former Fed officials who have long left the bank maintain an almost mafioso code of silence.

The end result is that no one really criticizes the Fed. And because of this, the Fed has been able to cultivate a reputation that they’re in total control of the situation… even though their track record proves the opposite.

The Fed completely failed to predict inflation in 2020 after engaging in record money printing. Then they missed the warning signs in early 2021, then misdiagnosed inflation as “transitory” in late 2021, then still failed to act until early 2022.

Yet despite such failures, the Fed is still sticking to the narrative that they know what they’re doing. And with hardly anyone challenging them, it’s been easy to maintain a veneer of omnipotence.

But Kevin Warsh broke ranks this weekend. As a former Fed governor, he is the ultimate insider… and he penned an editorial published in the Wall Street Journal on Saturday blasting many of the Fed’s decisions.

Warsh describes how, when he joined the central bank in 2006, its entire balance sheet was just $800 billion. But in order to deal with the 2008 financial shock (yet another crisis that the Fed missed), they invented “quantitative easing”, or QE.

QE was just a fancy way to say they were conjuring massive amounts of money out of thin air. Informally we could say they were ‘printing money’, though almost all of the new money was created in digital rather than paper form. They click a few buttons, and, poof, new money.

Naturally the Fed promised to eventually unwind QE and drain all of that new money out of the financial system. But they never did.

On the contrary, the Fed embarked on THREE distinct rounds of QE between 2008 and 2013, increasing the balance sheet each time. In the end, the Fed’s balance sheet peaked at $4.5 TRILLION, more than 5x its size prior to the 2008 crisis.

And they kept it at that level for years. Even by 2020, the Fed balance sheet was still around $4 trillion in size.

So much for unwinding. And when the pandemic hit, the Fed quickly pulled out its QE playbook and embarked on a fourth round of money printing… exploding the balance sheet all the way to NINE TRILLION dollars.

Warsh eviscerates the Fed policymakers for failing to see such obvious consequences and explains that there is a very clear connection between the size of the Fed’s balance sheet, i.e. the amount of money it prints, and inflation.

“The monetary base is up 60% since the pandemic. Another measure of money, M2, is up 36% in the past four years. The inflation surge in the same period– cumulatively about 22%– shouldn’t have been a surprise.”

“The high priests of central bank dogma might consider it blasphemy,” he writes, but “less money printing, less inflation.” Duh.

He goes on to say, “The American people are still paying a high price for the central bank’s policy error,” and that if the Fed really wants to tame inflation, they’re going to have to slash their balance sheet, i.e. unwind most of the new money that they printed.

Fat chance.

In fact, Warsh points out that the Fed has already indicated they will NOT reduce the size of their balance sheet any longer. And Peter and I both believe the Fed will soon embark on even more QE.

Why? Because the federal government has a serious spending problem. Even the government’s own budget forecasts show an additional $22 trillion in deficit spending over the next decade.

And where will the bulk of that money come from? Most likely from the Fed. They’ll launch QE5, QE6, and beyond, to print the trillions and trillions of dollars that the US government will need to make ends meet in the coming decade.

Sure, it’s possible that the government gets real… that they cut spending, eliminate some entitlements, slash regulations, abandon idiotic green initiatives, and stop standing in the way of conventional energy.

But the window of opportunity is extremely narrow… and depends on the election this year. Plus, a lot of things will have to go right, and very little can go wrong.

So, it’s reasonable to anticipate more deficit spending, which means more Fed printing. And more inflation.

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The year was 1994. Former NFL superstar OJ Simpson has just fled from police in the infamous low speed chase in his white Ford Bronco. Pulp Fiction was playing in the cinemas.

And 29 year old Kamala Harris began dating one of the most powerful politicians in the State of California— Willie Brown.

Brown had been in politics for decades at that point and has risen to become the Speaker of California State Assembly, then Mayor of San Francisco.

(And despite having spent his entire adult life in politics, Brown somehow managed to amass a collection of $6,000 suits and expensive sports cars.)

Willie Brown was also at 60 years of age back in 1994 (he’s 90 now), three decades older than his girlfriend Kamala.

Obviously she was in it for love. I’m sure that’s the case.

But it just so happened that, barely a few months into their steamy relationship, Speaker Willie Brown appointed Kamala to multiple, senior-level positions in the state, including a seat on the California Unemployment Insurance Appeals Board and the Medical Assistance Commission.

I’m also sure that Brown appointed his girlfriend due entirely to her competence, and absolutely no other reason whatsoever.

These appointments, along with Sugar Daddy’s public support and endorsement, were integral in Harris’s later campaign to become San Francisco District Attorney, then Attorney General of California in 2010.

Willie Brown also endorsed her for Senate when she declared her candidacy in 2016, and was instrumental in securing her top endorsements, including from Joe Biden and Barack Obama.

Again, all of this success was clearly due exclusively to Kamala’s tremendous competence and nothing more.

Now, a lot of people have been remarking lately that Kamala is a DEI (Diversity, Equity, and Inclusion) hire.

But that’s completely unfair. Talk about a low blow. I mean, Kamala’s critics have completely missed the point that this woman— who claims to embody female empowerment— got her start by having sex with a powerful California politician 30 years her senior.

So let’s give credit where credit is due: she slept her way to the top well before she became a DEI hire.

In fact it wasn’t until she was picked to be Joe Biden’s running mate that she started benefiting from the DEI obsession.

Curiously, it is now considered racist to even bring this up. CNN has decided that calling Vice President Kamala Harris a “DEI Candidate” is a “pseudonym for the N-word” and “racist dog whistle”.

That’s absurd. Joe Biden’s entire presidency has been about promoting DEI candidates, and he admitted this himself recently when he said:

“To me the values of Diversity, Equality, Inclusion are literally— and that’s not kidding— the core strengths of America. That’s why I’m proud to have the most diverse administration in history that taps into the full talents of our country. It starts at the top with the Vice President.”

Biden also made it perfectly clear in 2020 that he wanted to select a woman of color as his running mate.

So why exactly is it controversial to assert that Kamala was a DEI hire? Is it also controversial that the sky is blue, or that Michael Jordan was an exceptional basketball player?

But these people in charge have a way of acting offended about even the most basic and obvious truths. It’s quite a talent.

Speaking of talent, Kamala has none.

Whenever she opens her mouth, she is as incompressible as Joe Biden yet without the excuse of age and dementia. Like this gem:

“So I think it’s very important… for us, at every moment in time, and certainly this one, to see the moment in time in which we exist and are present, and to be able to contextualize it, to understand where we exist in the history and in the moment as it relates not only to the past, but the future.”

This is also the person that was put in charge of the border security, which has been a total disaster. But in her televised explanation, she justified having not been to the border by saying she hadn’t been to Europe either.

Wow, really racking up those foreign policy credentials!

And on the topic of foreign policy, check out this inspiring quote as Kamala showcased her encyclopedic understanding of European affairs:

“Ukraine is a country in Europe. It exists next to another country called Russia. Russia is a bigger country. Russia is a powerful country. Russia decided to invade a smaller country called Ukraine, so, basically, that’s wrong.”

Note that this wasn’t an interview on Nickelodeon or some event with elementary school kids. This was an actual response in a real interview about the war in Ukraine.

One of my favorite Kamala stories, though, is when she visited Puerto Rico earlier this year.

Protesters were in the streets of San Juan, singing in Spanish. Kamala merrily clapped along, until an aide quietly whispered that the song was protesting her visit as a representation of the federal government’s “colonization” of Puerto Rico.

Her track record as a prosecutor is also far from impressive.

As the Attorney General of California, she prosecuted and incarcerated cannabis users. But in 2019, asked if she herself had ever smoked weed, she cackled and said, “I have. And I inhaled.”

In 2014, Kamala’s office argued to keep non-violent inmates (including from minor drug convictions) locked up so that the state would have free prison labor to fight wildfires.

But Kamala would prefer that her Black Lives Matters voters forget about all that.

The Big Lie they are now force-feeding us is that the party of democracy is energized and united around Kamala Harris.

Personally I think they are terrified and desperate. Deep down they know this woman is an incompetent buffoon. And more importantly, they are still incredibly fractured.

Just look what the radical left has been doing this very week.

Their Marxist foot soldiers have been busy burning American flags, defacing public monuments, and hoisting Hamas flags, while chanting “Allahu Akbar!” in the streets. Curiously most of them are white atheist 20-somethings from upper-middle class upbringings.

And some of the Left’s most prominent politicians boycotted a speech given by the Prime Minister of Israel— one of America’s strongest allies during its time of war.

This continues to look like a group that is completely out of touch, but insists that they have everything under control… which is pretty much par for the course given the last few years under Biden.

Having said all that, it would be foolish to think they won’t pull out all the stops— continue to create all the propaganda, tell whatever lie, manufacture whatever hoax, and suppress whatever truth is necessary to win.

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In 1848, a 29-year-old Sacramento shop owner named Samuel Brannan was tending the cash register at his store when a pair of shoppers asked if they could pay him in gold.

Brannan was stunned when the shoppers pulled out solid gold nuggets. The gold, they said, had been found at Sutter’s Mill, about 35 miles northeast of Sacramento.

In addition to owning the only shop between San Francisco and the gold site at Sutter’s Mill, Brannan also happened to own a newspaper. And so he immediately used his paper to start spreading the word about the gold discovery.

According to legend, Brannan supposedly kept a small vial of gold to show prospective miners, and he once allegedly ran through the streets of San Francisco shouting, “Gold! Gold from the American River!”

Brannan’s newspaper constantly ran stories claiming that all you needed was a shovel, a pick, and a pan, and you too could get rich digging gold in California.

His hyping of the gold discovery is rumored to have helped spark the rush of 300,000 people to California to dig for gold— many in 1849, giving rise to the moniker “the San Francisco 49ers.”

But Samuel Brannan was NOT among them digging for gold.

Instead, during the peak of the Gold Rush, he sold about $5,000 worth of shovels, picks, pans, and other equipment to miners each DAY at his store on the way to the Mother Lode.

That would be nearly $200,000 per day in 2024 dollars. And Brannan is cited as California’s first millionaire.

“Picks and shovels,” has become a common descriptor in investments— sometimes the best opportunity when a new “gold mine” is found is to sell the “picks and shovels” needed to mine the gold.

Right now, the biggest new gold mine out there for investors is artificial intelligence.

And Nvidia is almost single-handedly responsible for producing the hardware (GPUs) for many of the most popular AI applications like ChatGPT.

But in addition to the hardware required to run AI, there is also an ongoing energy need. And it’s not trivial.

In fact, for every dollar companies spend on a GPU (which can easily run $40,000+ each), they will have to spend another dollar for the energy to run it.

AI applications like ChatGPT can generally be broken down into two stages: training, and querying. The training phase is where they feed vast amounts of data into the algorithm so that it can ‘learn’.

And this training phase is absurdly power-hungry; training a single algorithm can be the equivalent electricity of tens of thousands of homes. It’s like a small city.

Then there’s the ongoing querying phase, i.e. the power consumed when users say “Generate an image of a cat playing the harmonica”. Millions upon millions of queries in real time require substantial energy, about 10x as much as Google uses for its entire search function.

And that figure is growing.

The problem for America’s power infrastructure is that it is already strained.

With the government pushing regulations to force people to buy electric vehicles, it will only overload the grid that much more.

And exacerbating the problem is that the people in charge now keep pushing for extremely inefficient and intermittent “green energy” like wind and solar, which simply cannot produce electricity in the same quantities as conventional sources.

In short, America’s power grid is already struggling. And AI will continue to create a surge in electricity demand that utility companies may not be able to meet.

Big technology companies know this, which is why many of them are looking at building out their own power plants… just to ensure that their data centers never run out of electricity.

The best solution by far would be small scale nuclear reactors. But that technology just isn’t quite ready yet.

So the next best reliable and inexpensive way to produce electricity is through natural gas.

US natural gas is priced at around $2.50 per million BTUs. If you look at this in terms of pure energy, $2.50 natural gas is the energy equivalent of a barrel of oil selling for about $15.

In other words, US natural gas is absurdly cheap, probably one of the most underpriced commodities in the world.

Tech companies and electrical utilities know this. So there’s a good chance that natural gas becomes the favored energy commodity for new power plants that will continue to drive the AI boom.

That’s why I believe natural gas is currently the best “picks and shovels” investment to scoop up in the AI space: energy is the one thing that these power-hungry AI applications need. And natural gas is the cheapest form of energy in the world.

It also helps that the stock prices of many of the highest quality and most profitable natural gas producers are laughably cheap. So there’s clearly a lot of upside potential from here.

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fraud(noun)/frôd/: “DECEIT, TRICKERY, specifically: intentional perversion of truth in order to induce another [person] to part with something of value or to surrender a legal right. An act of deceiving or misrepresenting.”

This is the actual definition of fraud from Merriam-Webster’s online dictionary.

Of course, anyone who has talked about fraud over the past few years has been canceled as a baseless conspiracy theorist. But at this point there are certain things that need to be said. It’s time.

The 2020 election was full of fraud. And I’m not talking about ballot harvesting or manipulation of the vote count.

I’m talking about the legacy media and Big Tech’s coordinated effort, along with dozens of intelligence officials, to scrub any mention of Hunter Biden’s laptop from the Internet just two weeks before the 2020 election.

And now it’s clear that the media was also covering up Joe Biden’s infirmities, as far back as the 2020 election. A handful of journalists are finally now starting to admit that they noticed Joe Biden’s cognitive decline back then— but said nothing.

These examples fit the textbook definition of fraud, straight out of the dictionary: the intentional perversion of truth. . . an act of deceiving or misrepresenting. So I don’t see how talking about fraud in the last election is even remotely controversial.

And the lies have continued for the past four years with the intentional cover-up of Biden’s rapid cognitive deterioration. It has been one of the biggest political frauds of all time.

The media was complicit. The big Hollywood stars and donors were complicit. World leaders were complicit. And of course the party elites were complicit.

Kamala Harris is in that group as well; she 100% knew that Joe Biden is mentally unfit to serve as President of the United States. Yet she continued to deceive the public and cover up the truth.

This, too, is fraud. Kamala Harris is a fraudster.

Yet now she is being anointed as her party’s standard bearer, even though the only reason she has her job to begin with is because she sits down to pee and has greater quantities of melanin in her skin. These are the qualifications that Joe Biden looks for when he hires people.

Any honest evaluation of Kamala shows that she is a complete failure.

She is directly tied to the policy disasters of the Biden administration, and even responsible for some of them. She was a hideous candidate in the 2020 Presidential election and garnered a whopping zero delegates.

Whenever she opens her mouth to speak, she is just as incomprehensible as Joe Biden without the excuse of dementia.

And her personality is so devoid of authenticity that she makes Hillary Clinton look as folksy and genuine as Taylor Swift.

It is incredible when you think about it; these Leftists have essentially traded one liability of a candidate (Biden) for an even worse liability of a candidate (Harris). It’s genius!

But that’s typical for the Left. They have demonstrated over and over again that they cannot learn from their mistakes.

Their ideas have proven to be total disasters— from “defund the police” to idiotic border policies to student debt forgiveness to lockdowns and vaccine mandates. But they never learn. They keep doubling down on the worst ideas.

Now they’re in complete unity about their worst idea of all: Kamala Harris. And the top people in the party are already behind her.

That includes former President Bill Clinton and his shrew wife, who put out a statement of support for Kamala Harris yesterday.

According to the Clintons, “… nothing has made us more worried for our country than the threat posed by a second Trump term. He has promised to be a dictator on day one, and the recent ruling by his servile Supreme Court will only embolden him to further shred the Constitution. Now is the time to support Kamala Harris and fight with everything we’ve got to elect her. America’s future depends on it.”

You’d think that a former President Clinton, watching the attempted assassination of another former President, would have chosen his words more carefully.

But no. Despite hollow promises to “tone down the rhetoric”, they’ve already restarted demonizing Trump in the strongest possible terms.

Even the assertions are ridiculous. Trump will “be a dictator on day one”. How exactly? He is going to somehow dissolve both chambers of Congress and the Supreme Court?

Speaking of the Supreme Court, for a former President to call the court “servile” is really undignified.

And they obviously have no intention of toning down the language, encouraging people to “fight with everything we’ve got” for Kamala Harris. It’s about as bad as Joe Biden’s “bulls-eye” comment just prior to the assassination attempt.

It all shows that, despite such obvious consequences of their lies, their propaganda, and their demonic hyperbole, these people have learned absolutely nothing. They keep making the same mistakes over and over… and continuing to commit more fraud.

Just consider that, because of their deceit, the country is stuck for another six months with a brain dead President who refers to his own Defense Secretary as “the black guy” because he can’t remember his name.

The whole world knows it now. It’s no longer a poorly guarded secret. No one can pretend any longer.

And it would be naive to think that America’s adversaries won’t take advantage of this chaos.

Their fraud has made the country weaker, and it has made the world more dangerous. But they still feel their actions are righteous based on a delusion that they’re ‘saving democracy’.

Sure. These people deprived their own voters of a choice by trying prevent anyone else from running against Joe Biden. And now they’re depriving voters of a choice by thrusting Kamala Harris down everyone’s throat.

Yet somehow the guy who was one inch away from being assassinated— thanks in large part to their own dramatic hysteria— is the threat to democracy.

Makes total sense.

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Obviously the attempted assassination of Donald Trump represents a grim milestone on America’s path of decline, as I wrote about in detail on Monday.

But the legacy media’s response to it may also go down as a major turning point: the moment they finally lost all credibility.

Now, clearly for a long time the media has been full of Inspired Idiots who don’t care about reporting the truth. Instead, they push a narrative they want people to believe about the world and the events which shape it.

For example, CNN famously described 2020 Black Lives Matters riots as “fiery, but mostly peaceful.”

In 2021, when the governor of South Dakota banned biological men from participating in female sports, CNN promptly reported that, “there is no consensus criteria for assigning sex at birth.”

NBC News was caught in 2021 colluding with the Biden administration to downplay the criminal past deeds of Tracy Stone-Manning, who the President had nominated to lead the Bureau of Land Management.

Stone-Manning was an eco-terrorist in her youth who was involved in tree-spiking activities that kill or maim loggers. But NBC News promised to take it easy on her to help push her appointment through.

Also in 2021, however, NBC News (along with just about every other mainstream ‘news’ outlet) hyped unproven allegations against Supreme Court nominee Brett Kavanaugh that went back 30 years.

And when #MeToo protestors stormed the United States Capitol and accosted Senators in an attempt to disrupt and overturn the Kavanaugh confirmation hearings, the media did not label these protestors ‘domestic terrorists’, as they did with January 6 protesters.

The media circulated outright lies about the Russia voter manipulation hoax. And the New York Times was even awarded the ‘esteemed’ Pulitzer Prize for its reporting of this thoroughly discredited story.

It’s also notable that, even after the Russia collusion story was proven to be false, the Pulitzer committee REFUSED to rescind the award it had bestowed to the Times. Their logic, apparently, is that quality reporting about blatant lies is still worthy of journalism’s highest honor.

Then, of course, in the weeks before the 2020 election, nearly every legacy news outlet outright refused to report on the laptop of Hunter Biden. The younger Biden’s laptop not only showed deep character flaws, but evidence of significant corruption and foreign influence connected to his father.

And don’t even get me started on how the legacy media reported on COVID, lock-downs, and vaccines.

But now they’ve elevated their lies and propaganda to a whole new level with the way they have portrayed last week’s assassination attempt on Donald Trump.

These “journalists” witnessed in real time an attempted— and very nearly successful— assassination of a former President, upon which they reported:

“Trump Escorted Away After Loud noises at rally” –The Washington Post

“Secret Service rushes Trump offstage after he falls at rally” –CNN

“Trump says he was shot in the ear at rally” -NPR

OK, let’s be extremely polite and give them the benefit of the doubt; immediately following the assassination attempt there were plenty of unknowns.

But even after the fog of war had been lifted— after it was clearly an attempted assassination— the Washington Post updated its headline to: “Trump safe after being rushed off stage following shooting at rally.”

In another article it said the assassin “shot at Trump,” not “shot Trump.”

Technically, that passes a fact check. But it’s sort of like describing Mount Everest as an elevated piece of land.

And the spin continued the next day.

Reuters ran an article titled, “Republicans, in wake of Trump shooting, seek to pin political violence trend on Democrats.”

This obviously ‘unbiased’ and ‘trustworthy’ news agency couldn’t simply report on the known facts of the attempted assassination. No, instead, their priority was to tell readers that it is the RIGHT, not the LEFT, that is full of violent extremists.

“A Reuters analysis of more than 200 incidents of politically motivated violence between 2021 and 2023, however, presented a different picture: In those years, fatal political violence more often emanated from the American right than from the left.”

Reuters didn’t actually cite a single example of this Right wing violence.

In fact, the only example of violence they did mention was the shooting of Steve Scalise, a Republican member of Congress who was gunned down (but survived) in 2017… by a Left wing extremist.

So… in an attempt to prove its assertion that its readers should fear Right wing violence, Reuters’ only example was an instance of a Left wing extremist shooting a Right wing politician.

Genius!

And these Inspired Idiots in the media still can’t understand why nobody trusts them.

Days after the attempted assassination, the Associated Press noted that the Left and Right now have dueling conspiracy theories about the assassination attempt— that Trump staged it for clout, or that the Secret Service was in on it.

AP lamented, “Americans are increasingly choosing their own reality, at the expense of a shared understanding of the facts.”

Gee, whose fault is that? (Remember, AP published the headline: “Donald Trump has been escorted off the stage by Secret Service during a rally after loud noises ring out in the crowd.”)

The attempted assassination of Trump was a rare event, in that it was broadcast in real time, and everyone could see exactly what happened with their own eyes from multiple angles.

And still the media tried as hard as possible to sell a completely bullshit narrative of the event.

What do you think they do with events that are not so clear, or are not caught on camera from every angle? How trustworthy are those “anonymous sources” they love to cite?

This is why the legacy media is becoming less trusted by the day.

It’s also why, despite Inspired Idiots owning the vast majority of broadcast media, they still haven’t been able to tip the scales decisively in favor of their own little cultural revolution.

Confronted with an event they knew would make their nemesis look strong and unbeatable, they resorted to cartoonish propaganda.

And I hope that proves to be the decisive moment for people to see them for what they are: liars.

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Jamie Dimon is the CEO of JP Morgan Chase, one of the world’s largest banks. And last week he issued a stern warning on the bank’s quarterly earnings call that “multiple inflationary forces” are still lurking.

File that one away under “duh”. It should be completely obvious to just about anyone paying attention to the world that many of the key drivers that rocketed inflation higher are still with us.

The Federal Reserve, of course, desperately wants to pretend that inflation is in the rear-view mirror, never to return. And they keep insisting that the downward trend of inflation justifies their interest rate cuts.

But as Mr. Dimon points out, “large fiscal deficits, infrastructure needs, restructuring of trade and remilitarization of the world” all create high risk of substantial inflation.

We agree with him.

“Remilitarization of the world”, i.e. conflict, is very expensive. The very nature of war means consuming vast quantities of resources to produce munitions that will destroy your adversaries’ resources.

Most governments don’t have the money to do this. The last time the United States was able to fund a war without going into debt was the Spanish-American War in 1898. Every other war, or even preparation for war, required significant additional debt… which ultimately resulted in printing more money.

So, in the end, warfare means more money in the system, but fewer resources. This is the very definition of inflation.

Dimon mentions trade disputes as well, which are also very expensive.

Free trade creates wealth. It allows countries and producers to specialize in what they do best, and trade for what other countries do best.

Germany is great at high tech manufacturing, pharmaceuticals, and various other industries. But they can’t produce bananas to save their life.

Fortunately, Guatemala exists. Guatemala has no high-tech industry. But they’re great at bananas. It’s a sensible trade.

When nations are in dispute with one another, trade breaks down and they start having to produce goods and services where they have no expertise.

Sometimes it works out; in one of their endless wars with France, Britain boycotted French wine… and in the process, accidentally invented port. But usually, such inefficiencies create a lot of inflation.

Dimon also mentions infrastructure needs. And that’s a massive understatement.

The US highway system is deteriorating. Amtrak is blowing money without any serious improvements. California is tens of billions of dollars over budget, and several years late, for a high-speed rail it promised from San Francisco to Los Angeles.

It doesn’t help that they put $1 trillion in the hands of an incompetent diversity hire like Transportation Secretary Pete Buttigieg.

All of this money will need to be conjured out of thin air by the central bank, which, again, is inflationary.

Lastly, Dimon also references “large fiscal deficits”, which is putting it politely.

We’ve said it many times— the government’s own internal projections expect an extra $22 TRILLION in deficit spending (i.e. new debt) on top of the $35 trillion national debt, over the next decade. Most of that will come within the next five years.

Deficits are inflationary, as we have seen over the past few years.

To be fair, there are some potential deflationary forces as well.

Increases in productivity are very deflationary. Technology, driven by artificial intelligence, could be monumental in improving productivity and keeping prices down.

Yet there are also a lot of people in government (and even within the AI industry), trying to slow down development and hold back AI.

Capitalism— which encourages competition to offer the best quality goods and services at the lowest prices— is also deflationary.

Unfortunately, many people in power despise capitalism and rail against it as racist, misogynist, or bad for the planet.

Even the President of the United States constantly moans about America’s most successful companies, claiming that their “greed” is an evil force keeping inflation high and prosperity low.

It’s quite ironic that a man who refuses to step down and clings to the Oval Office is complaining that other people are greedy. Joe Biden is the embodiment of greed.

So, I’m not holding my breath that these deflationary forces, i.e. capitalism and AI, will be kicking in anytime soon to counteract the negative effects of deficits, conflict, etc.

This is why we continue to anticipate higher inflation down the road.

Where I disagree with Jamie Dimon, however, is that I don’t think the Fed is going to do anything about it.

In theory the Fed should be holding interest rates at higher levels… or even increasing interest rates. This is the normal tool they use to reduce inflation.

But the Fed has 35 trillion reasons to not raise interest rates.

At $35 trillion, the US national debt is simply too high for interest rates to remain where they are right now.

This year alone, the US government has to refinance $6 trillion worth of debt that is about to mature. Refinancing the debt means having to pay a much higher rate of interest… easily 3% higher than in the past.

That’s a whopping $180 billion per year in additional interest costs that the Treasury Department is going to have to pay. And they’ll pile on even more interest expense next year and the year after that.

Uncle Sam simply cannot afford that bill. The Treasury Department needs rates as close to zero as possible in order to not go bankrupt. And that’s going to mean LOTS of inflation.

The Fed knows the risk. But they’re going to have to choose between inflation… versus a full-blown meltdown of US government finances, and, by extension, the US financial system.

Inflation is the obvious choice.

My guess is that they’ll just come up with some new way to calculate the CPI to pretend that inflation is lower than it actually is.

The Inspired Idiots will start claiming that the CPI is rooted in racism and demand a new inflation metric that takes into account some DEI nonsense. And poof, the inflation rate will magically plummet.

Regardless of what tricks they come up with, in such an environment, it makes sense to own critical resources that the Federal Reserve cannot conjure out of thin air. And these are real assets.

Real assets retain or even grow their value when faced with inflation. And the added benefit is that many of them are dirt cheap right now.

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Rarely are events recognized in real time as obvious historical turning points.

The attempted assassination of Donald Trump is one of them, and it will go down as a clear marker in the history of America’s decline.

It epitomizes the chaos and disorder that characterize the current state of affairs. And it escalates a sharp divide in American politics.

Of course, this isn’t the first attempted Presidential assassination. But it marks a new era where political tensions have moved clearly into political violence.

We’ve been watching it all year with the anti-Israel protests. We saw it during the BLM riots. Now it has escalated to political assassination.

A bullet came within centimeters of ending the life of a former President, and top contender for the highest political office in the land. It would have been an extremely violent death, live-streamed from hundreds of phones and cameras.

Trump survived, but at least one rally attendee is dead. He’s dead because he went to a political event to support his chosen candidate for democratically elected office. And someone decided that instead of allowing voters to decide our country’s future, he would use violence to alter the political landscape.

Is it really hard to understand what would push someone to such extremism?

For eight years, the media has been telling people that Trump is Hitler and represents an existential threat to humanity.

The clear implication of their fear-mongering is that extreme measures are justified.

And in the hours after Trump was shot, the media continued its shameful miscarriage of its duty.

CNN declared, “Secret Service rushes Trump offstage after he falls at rally,” and “Trump injured in incident at rally.”

Even after it became obvious that a bullet struck Trump, and that it was clearly an assassination attempt, the Associated Press, CNN, NBC and others continued to run with headlines with some variant of, “Shooting at Trump Rally.”

NPR’s headline read, “Trump says he was shot in the ear at rally”. Note the wording: “Trump says”, as if this was just another wild, unverified claim from the former President that needed to be run past one of their holy fact checkers.

This might seem like a subtle point to harp-on given the momentous event. But it’s not. It’s part of the decay in American institutions. The media spins, spins, spins, even in the moments after their number one target, the man they demonized above all, got shot.

And that’s also why the well-wishes from Trump’s political rivals ring hollow.

It’s one thing to criticize someone’s policies, or explain how you believe their actions or leadership will make the country worse.

But it’s hard to deny that the left’s extreme histrionics in exaggerating the existential risks of a second Trump presidency is at least partially to blame.

I think much of the blame also falls on Joe Biden.

Remember, this is the guy who promised to unite the country and “restore the soul of America”. Bang up job, Joe. Instead he has deepened divisions, to the point that ideological fault lines in America are far worse than they were four years ago.

And that says nothing about his record on inflation, national security, global security, the border, and more.

The majority of Joe Biden’s own party doesn’t want him to run. But he insists he is staying in the race. The left is terrified. They know they cannot win. If Biden had bowed out, they’d have some chance. But with Biden, they have zero chance.

So it’s not surprising that some deranged foot soldier— feeling a sense of desperation and inevitability about Joe Biden losing the election— took it upon himself to eliminate Donald Trump.

Much has been written on the Internet these days about the poor security at the event as well. But we shouldn’t be surprised about that either. Remember, Joe Biden picks his people based on diversity & inclusion credentials, not actual talent. And that includes the Secret Service.

But just to give you an idea of just how spectacularly bad the security was—

If you look at a satellite image of the rally site, you’ll see there are six structures with elevated rooftops (i.e. at least 3-5 meters in height) which had a clear line of sight to where Trump was speaking.

That means those six locations were high-risk vulnerability points that the Secret Service should have sealed off from the moment they showed up to the venue.

Instead they were wide open. And the shooter positioned himself at the CLOSEST one, less than 150 meters away. This failure to include such a tactically important position within the security perimeter is beyond inexcusable.

There are plenty of videos floating around showing crowds of people shouting at the cops, informing them of the shooter’s presence on the rooftop. But law enforcement didn’t react in time.

Is anyone really surprised? Don’t we remember the Uvalde school shooting in Texas, in which a deranged madman was murdering children, and the cops stood around and did nothing?

The escalation of political violence is deeply disturbing. But the sheer security incompetence of the incident is another national humiliation, on the order of the disastrous withdrawal from Afghanistan. America’s adversaries cannot believe what they’re seeing.

So where to from here?

Well, the Left has already tried everything to keep Trump out of power. They tried disinformation and the Russia collusion hoax. They tried impeachment. Twice. They tried full-blown lawfare. They tried to throw him in jail. They even tried to remove him from the ballot. Nothing worked.

And, now, someone has even tried to take him down with a bullet.

I don’t even want to think about the potential chaos had the bullet been an inch to the left, and it had been Donald Trump’s brains as opposed to his blood spilling onto the stage.

But he survived, and the Left is completely desperate now. Voters are soon going to choose between an enfeebled old man who can’t complete a sentence, versus a guy whose first instinct after an attempted assassination is to show strength.

It’s pretty obvious which image America needs to project right now. And for all of their talk of saving democracy, the Left is terrified of allowing the voters to choose. All of their grand plans have failed… one after another. They know they’ll lose.

I think the only other tricks up their sleeve are:

(1) Joe Biden has an ‘accident’ (which might be blamed on some MAGA guy, just to get everyone riled up), and they replace him with a viable candidate;

(2) Rampant voter manipulation.

I’m not holding my breath for the third option, i.e. they allow voters to freely make up their own minds. The Left is fanatical, and as the assassination attempt shows, they are willing to do anything to accomplish their goals.

Trying times indeed. It’s clear that having a strong network of trustworthy, like-minded people is becoming more important than ever.

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Recently, we noticed a few examples of obvious contradictions to the left’s narrative. Here’s the hypocritical, the counterproductive, and the tone-deaf stances they’ve taken, just in the past week.

Carjacker Shot By Justice Sotomayor’s Security Outside Her DC Home

Earlier this week, 18 year old Kentrell Flowers attempted to carjack a man he apparently didn’t know was a US Marshall guarding the Washington DC home of Supreme Court Justice Sonia Sotomayor.

The teenage perpetrator was shot in the face four times by the Marshall, while a different federal Marshal sprayed bullets in his direction, but missed. Kentrell, however, survived, and was arrested.

It’s hard to ignore the irony that the crime wave enabled by leftist prosecutors and judges has shown itself on the doorstep of one of the most leftist judges in America. But the irony goes deeper than that.

Sotomayor was protected by a man with a legal gun, against a teenager with an illegally acquired gun, in a city with some of America’s strictest gun control laws.

It’s notable that Justice Sotomayor has been a major advocate of gun control; in the case McDonald v. City of Chicago, she argued that governments should be able to restrict firearm ownership, and that individuals might not have a constitutional right to bear arms.

She also argued in New York State Rifle & Pistol Association Inc. v. Bruen that New York should keep its strict gun control measures.

If Sotomayor had her way, no one in crime-ridden DC would be able to defend themselves… unless, of course, they had the privilege to be guarded by an armed US Marshall.

Is This How You Protect Democracy?

Chuck Todd is the Chief Political Analyst for NBC news. This week, he revealed that a member of President Biden’s cabinet told him Biden was mentally unfit for office… two years ago.

That’s an interesting time-line for a “journalist” to break an exclusive story about someone in the highest echelons of the Biden Administration revealing that the sitting president was unable to perform his duties due to cognitive decline.

Yet Todd apparently missed the irony of his own silence as he said, “It’s the classic open secret… It’s the story everybody knows, and that everybody was afraid to talk about.”

But now that everyone saw it for themselves in the debate, Chuck Todd feels comfortable jumping on the bandwagon to oppose Biden.

Is this really considered serious journalism? Hiding a real scoop to protect a political party, and only going public when it becomes the popular thing to do?

Then there’s George Clooney, who in an opinion piece for the New York Times, wrote that he knew at a fundraiser he headlined for Biden on June 15 that Biden’s mental capacity was gone.

A month later, after the tide has safely shifted against Biden, Clooney decided it was time to express the extremely safe and mainstream view that Biden should step aside. Such bravery! Such integrity!

The journalists who were present at the June fundraiser also apparently didn’t feel the need to report President Biden’s obvious signs of decline to the public.

Meanwhile, two Democrat operatives from academia have game-planned a “Blitz primary” whereby the new party nominee will be selected by a handful of party elites. To protect democracy, of course!

And major donors to President Biden and the Democrats, such as Disney heiress Abigail Disney, say they will withhold funds from the party until President Biden is replaced.

Because nothing screams democracy like a group of wealthy elites forcing the democratically elected candidate to step aside!

But Ms. Disney took it one step further by suggesting that it’s also racist and sexist to NOT replace Biden.

“We have an excellent Vice President,” Ms. Disney said. “If Democrats would tolerate any of her perceived shortcomings even one tenth as much as they have tolerated Biden’s (and let’s not kid ourselves about where race and gender figure in that inequity)… we can win this election by a lot.”

But perhaps the most hilarious part about this all is the left freaking out about getting a taste of its own medicine.

Chuck Todd, for example, said Democrats are frustrated with Biden’s refusal to admit their concerns about his mental fitness are valid.

“He’s attacked his own party members without simply acknowledging, ‘I get it. I understand why you’re concerned.’”

Welcome to the party! These same party elites who gaslit everyone else for years over vaccines, Covid lockdowns, masks, Trump, and Joe Biden, are now complaining about being gaslit themselves.

But regardless, there is still about a 50% chance that these are the people in power when the dust settles this November. That’s a good reason to have a Plan B.

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Today’s inflation report showing ‘only’ 3% inflation, the Federal Reserve is all but guaranteed to start slashing interest rates.

The Fed Chairman essentially promised as much to Congress earlier this week, and has warned that if they don’t start cutting interest rates soon, “we could undermine the [economic] recovery.”

These guys still don’t get it. At this point it’s not even about 3% inflation (which is still too high) or 2% inflation. It’s about prices going back down to pre-pandemic levels… or just lower in general.

But that’s just never going to happen. The Fed doesn’t care about price reductions; they’re happy with a slower rate of price increases… which is totally out of touch with what people want and need.

They’ve been itching to cut rates for months… almost desperate. And in large part that’s because they’re terrified about the US government’s insolvency.

The national debt is about to pass $35 trillion. And high interest rates mean that the annual interest bill this year will exceed the US military budget– more than $800 billion– for the first time in nearly 250 years of American history.

The Fed knows that they have to slash interest rates as quickly as possible. With ultra-low rates (like 1.5%), the interest bill on a $35 trillion national debt is manageable… as long as the federal government can rein in spending and stop the debt from growing further.

Of course there are two key problems with this thinking:

First, there is zero evidence that the government will rein in spending. If anything, they seem primed to spend even more. I’ve mentioned several times before that even the US government’s own budget forecasts project more than $22 trillion in additional debt over the next decade.

Second, slashing interest rates will most likely result in significant inflation– just like we saw in 2021-2022.

We’ve written before how real assets are a safe haven from inflation, and I wanted to briefly discuss three real assets that look especially promising.

The first is physical gold and silver, which serve as a store of value– especially during inflationary times.

Higher inflation will likely trigger a surge in demand, making the price of precious metals not only keep up with inflation, but exceed it.

But there is another reason why gold will do especially well the worse inflation gets.

The worse inflation becomes, and the worse the US national debt becomes, the more likely the US dollar will lose its spot as the dominant reserve currency. And central banks all over the world– India, Poland, Singapore, etc. have been feverishly buying up physical gold over the past few years, most likely to prepare for that potential change.

So if inflation picks up, it’s a good bet that central banks will keep buying up gold– and driving prices higher.

Gold mining stocks should also do extremely well in that scenario due to their exposure to gold prices.

What’s interesting right now, though, is that despite gold being near an all-time high, share prices of many gold mining companies are incredibly cheap.

That’s because central banks– which have driven gold prices to record highs– only buy physical gold bullion. They do not buy gold stocks.

However, while the price of gold has already increased substantially, the stock prices of many great gold miners has not.

This is because most of the current demand for gold is coming from central banks. And central banks only buy physical gold— not gold mining stocks.

This means that gold stocks are currently a bargain– with a LOT of upside potential.

Last, US natural gas is another compelling real asset primed for huge growth.

Right now, natural gas prices in the US are dramatically lower than they are in Europe… and it’s easy to understand why: the US has some of the biggest natural gas reserves in the world, while Europe has almost nothing by comparison. (This is why Europe is so reliant on Russian gas).

And since Joe Biden has banned new LNG (liquefied natural gas) export terminals from the US, it’s difficult to move that US natural gas to Europe.

This is why prices in the US are less than $3, versus more than $10 in Europe. If US producers were free to export, prices in the US would rise, prices in Europe would fall, and the global natural gas prices would be more or less the same, similar to oil.

In terms of energy equivalence to oil, $3 per million BTU natural gas is the equivalent of paying around $15 – $20 for a barrel of oil. That’s cheap. And it means US natural gas is the most underpriced conventional energy commodity in the world.

But it probably won’t stay that way for long.

First, large tech companies, which are building massive, energy-hungry AI data centers, are also looking at putting in their own power plants… which will most likely be powered by natural gas.

Second, the new export terminal ban probably won’t last. There are lawsuits, legislation, and an upcoming election, any one of which could restart new LNG exports. When this happens, US natural gas prices could quickly rise.

In either case, natural gas producers stand to benefit substantially from higher prices. And it just so happens that shares of many of the best quality producers right now are laughably cheap, with low multiples relative to earnings, book value, and Free Cash Flow.

Looking at the overall investment landscape now, with many conventional stocks and indexes near all time highs, these three sectors strike me as some of the most promising investments for an inflationary environment.

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[Editor’s note: This letter was written by Schiff Sovereign’s CEO, Viktorija Simulynaite, who is on the ground in El Salvador.]

The first thing my driver said to me after I got off the plane in El Salvador was, “Welcome to my country. It’s very safe here now.”

I chuckled to myself because this seemed like such an odd greeting. But the more time I spent mingling with locals in El Salvador, the more it made sense.

The transformation that has taken place in the country over the past five years cannot be overstated.

Five years ago El Salvador had one of the highest murder rates in the world. It was basically a war zone. Gangs such as MS-13 and Barrio 18 were far more powerful than the government, and they enforced their own laws in their respective territories, sort of like the Taliban in Afghanistan.

The country’s young president, Nayib Bukele, put an end to all that when he was elected in 2019.

Bukele invoked emergency powers and arrested more than 100,000 suspected gang members, then shipped them off to a special prison far away from the rest of society. In a country of 6.3 million, that amounts to over 1.5% of the entire population that’s now locked up.

It was a controversial move to say the least… and I wonder about innocent people who may have been wrongfully imprisoned.

But El Salvadorans seem quite happy with the results; today their country boasts a lower homicide rate than anywhere else in the Western Hemisphere aside from Canada.

Simultaneously, El Salvador also put itself on the map by being one of the first countries in the world to get behind crypto; they even made Bitcoin legal tender and passed a number of pro-crypto tax incentives.

Those are pretty much the two things that El Salvador is known for these days– putting tens of thousands of criminals in jail, and Bitcoin.

But I was pleasantly surprised to find out that the country has so much more going for it.

This was a place that was scraping the bottom of the barrel just a few years ago. Even aside from the crime problem, the economy was in the dumps. Corruption and bureaucracy ruled the day, and debts were rising.

In just a few short years, however, El Salvador has managed to turn itself around, and the economy has taken off.

It’s not an accident. The government has slashed bureaucracy and established a number of incentives to bring in foreign capital and businesses.

One is the recently passed International Services Law, which offers significant tax incentives to service-based businesses, similar to Puerto Rico’s famous Act 60.

El Salvador’s law, though, is perhaps even more generous than Puerto Rico’s because it includes exemption for import duties, income taxes, municipal taxes, and more.

Service industries like call centers, data centers, software development, and other back-office services are starting to be growing industries in El Salvador, and I met a number of foreign entrepreneurs who are starting businesses in the capital.

Foreign investment is flowing in, and you can see construction projects everywhere– the capital city is quickly becoming sleek and modern, and it completely defied my expectations. Even the restaurant scene is really great.

More importantly, there’s an optimism in El Salvador– one that I haven’t seen in Europe and North America for a long time. People feel like the worst days are over and the future will continue to be much brighter.

Now, all that said, I’m not trying to suggest that El Salvador is some perfect paradise or that anyone should move their business there. I’m really writing about it as a sort of case study.

We talk a lot about how governments and politicians and “inspired idiots” wreck their economies. They rack up massive debts and engineer painful inflation and higher energy prices… and generally make things worse with their every move.

But it’s fair to point out that sometimes governments do smart things. And El Salvador is a great example.

They knew they had to figure out how to turn their economy around. And rather than go down a destructive rabbit hole of wage and price controls, which are standard approaches for bankrupt nations, El Salvador’s government got out of the way and is allowing the free market to blossom.

The one thing they have done very deliberately is market themselves.

Advanced western countries don’t do this. Joe Biden doesn’t travel the world pushing foreign nations to invest in America. Rather, he takes America’s standing for granted and simply assumes that everyone wants to invest there.

El Salvador is a tiny country plagued by a bad reputation for its past challenges.

But rather than let that reputation fester, its leaders are hustling to promote their country all over the world with a clear message: El Salvador is open for business.

It’s fascinating to watch such a positive transformation unfold for an entire nation in real time– and to see politicians deliberately do the right things to foster economic growth.

Given how many Western countries are rapidly deteriorating from their own idiotic political decisions, El Salvador is an obvious example of how much better things could be if reason and sanity were restored in government.

Imagine what the US would look like if politicians were actually cooperating and hustling to bring in new business, to make smart investments, to embrace capitalism, or even to simply rein in spending and slash bureaucratic waste…

We’re planning a boots on the ground trip to El Salvador for members of our Total Access group (i.e. our highest tier premium members at Schiff Sovereign). It’s going to be pretty great.

We’ll be meeting with senior officials and business leaders and checking out, firsthand, what’s going on in the country so that our members can see the transformation for themselves.

We’ll also eat at some of the country’s nicest restaurants and tour the beautiful countryside. And we might even leave with an investment or two.

(We’ve already had Total Access trips to places like Cuba, Singapore, the Republic of Georgia, Uzbekistan, and more, so El Salvador fits perfectly.)

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When the 56 delegates to the Second Continental Congress ratified the Declaration of Independence 248 years ago tomorrow, they were creating much more than a nation. They were giving birth to an idea.

America, at its core, is an idea. And it’s one that ranks as one of the greatest innovations in the history of human civilization, right up there with the wheel, the steam engine, the printing press, and the Internet.

The idea of America wasn’t born in 1776, however. By then it had already evolved over thousands of years.

The ancient Greeks embraced individual liberty, direct democracy, and a respect for the rule of law.

The Roman republic further refined Greek democracy and developed a more professional legal code. The early Roman Empire embodied peace through strength, ushering in nearly two centuries of geopolitical stability and economic prosperity under the Pax Romana.

The later Byzantine Empire fused Greek and Roman ideas with Judeo-Christian values. And by 1000 AD, the Republic of Venice– borrowing from Rome’s republican form of government– infused an early form of capitalism to this model.

The Dutch republic of the 1600s refined the concept of a powerful, free, capitalist society even further, as did philosophers like Rousseau, Montesquieu, John Locke, and Adam Smith.

So, when the Founding Fathers wrote the Declaration of Independence (and subsequently the US Constitution), they didn’t have to start from scratch; they drew from a rich, 2,000-year intellectual heritage of the giants who came before them.

This means that America is ultimately a composite of the very best ideas that human civilization ever had to offer— and the combined concept was then elevated to unprecedented heights.

Nothing is perfect, and America wasn’t either.

But based on this idea, the United States became the world’s largest economy in less than a century and the dominant global superpower about 80 years later. That is an unparalleled achievement which no other superpower in human history has come close to matching.

It’s also worth pointing out that the majority of the world’s most important innovations, from airplanes and air conditioning to cell phones and chocolate chip cookies, were either born or perfected in America.

Again, none of this is an accident. America’s success is the deliberate outcome from combining the best ideas from 2,000+ years of human civilization… plus some disciplined execution and a little bit of luck.

Obviously, America has weathered challenges as well. The Civil War. The Great Depression. The turmoil of the 1960s.

But its foundation of economic potential, plus a baseline of social cohesion and shared values, have always allowed the nation to overcome… and for the idea of America to persist.

The country is now at an undeniable crossroads, and it’s not just about a single election.

There are obvious signs of national decline: rising inflation, mounting debt, diminished global standing, a loss of government dignity, and stinging embarrassments like the shameful withdrawal from Afghanistan.

Even the idea of America itself is on the ropes; there are powerful forces within government, media, and the education system who seek to redefine America’s core principles.

Capitalism has been demonized and reinvented. Individual liberty has given way to a radical woke ideology. And the concept of limited government is almost a punchline at this point.

Still, there is a plausible scenario in which America’s best days are ahead.

If politicians embrace the principles that originally fueled the country’s prosperity—such as capitalism and laissez-faire productivity—America could experience an economic boom not seen since the Industrial Revolution.

By cutting taxes, slashing anti-capitalist regulation, and embracing the free market, the increase in productivity could be staggering.

This boom would lead to increased tax revenue, i.e. funds which could rebuild the military, secure the southern border, save Social Security, curb inflation, balance the budget, and chip away at the national debt.

As China buckles under the consequences of its central planning and upside-down demographic pyramid (brought on by its idiotic “One Child policy”), the United States could easily reassert its global primacy.

The dollar’s status as the global reserve currency would be unquestioned, and the world could see a new era of global peace and prosperity.

This is not a pipe dream. It’s a genuine possibility.

The other possibility is that the government does nothing to arrest America’s decline.

The debt continues to spiral further out of control. Rising deficits trigger painful inflation. Excessive regulation stifles economic growth, leaving the economy stagnant and performing far below its full potential.

Individuals are constrained by politicians’ incessant and debilitating rules about how to live, what to buy, and what to drive. The social fabric continues to tear apart with idiotic mandates, censorship, wokeness, gaslighting, and a hatred for capitalism.

Unfortunately, that is the road the country is presently on. Yes, it can be fixed. They can change directions. And we certainly hope that happens.

But as we used to say in the military, hope is not a course of action. That’s why we have a Plan B.

Having a Plan B is not being negative or pessimistic. It’s certainly not irrational. And it’s not unpatriotic.

The fierce individuality to NOT bow down to circumstances is exactly what has allowed America to persevere so many times before.

And taking sensible steps to preserve, protect, and defend what you have worked so hard to achieve in life is about as core of an American value as it gets.

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Tiffany Hart spent nearly a decade working at the World Economic Forum until she finally reached her breaking point in 2022.

“We don’t eat our own dog food,” she said of her former organization. “We [the World Economic Forum] promote inclusion and improving the state of the world and women’s issues but do the opposite.”

The Wall Street Journal released a bombshell account this weekend detailing dozens of instances and former employees, like Tiffany Hart, who spoke out about the WEF’s culture of racism, misogyny, and sexual harassment.

One woman (who was demoted after going on maternity leave) called the WEF “a psychologically violent institution” that has absolutely zero credibility to speak about women’s issues.

Jean-Loup Denereaz, formerly one of the organization’s most senior leaders, publicly humiliated a black woman on his team, and said, “What can you expect from a N–,” using the full word to her face and in front of other employees.

Another manager openly discussed in front of multiple employees how chocolate-covered marshmallows from Denmark used to be called “N- balls,” again, using the full word.

Female staffers say they were often groped by senior executives. Male employees routinely commented on their appearance and told them to lose weight. Young staffers were often propositioned and encouraged to have sexual relationships with VIPs.

Even three of WEF founder Klaus Schwab’s former assistants say he personally made routine sexual advances.

Gee, what a surprise: the creepiest megalomaniac in the world is a complete hypocrite!

But of course, rational people already knew this. Klaus Schwab and the WEF are the same guys who insist that “we” need to eat bugs and weeds to solve climate change… while they dine on filet mignon at their climate summits.

They want to ban to wood stoves and gas-powered vehicles, but they fly into Davos on their private jets— and don’t even bother to carpool!

These people force-feed us these quasi-religious beliefs about how we should live, what to think, and what to believe. They constantly howl about diversity and inclusion, women’s rights, etc.

It’s long been obvious, and now there’s even more proof: the World Economic Forum doesn’t actually stand for anything. They’re just a bunch of creepy, misguided, hypocritical racists.

Unfortunately they’re far from alone. This same cancerous hypocrisy pervades so many powerful institutions, including the government and media.

We saw this at last Thursday night’s debate: proof that virtually everyone in the media and in the party covering for Biden’s mental feebleness over the past four years has been lying.

It’s clear that they, too, stand for absolutely nothing.

And now these same people who claim to be so concerned about “democracy” are ready to disenfranchise their own voters and install someone like Gavin Newsom as the new candidate.

Newsom, of course, is another example of someone who stands for absolutely nothing.

Just the other day, Newsom gave California’s version of the State of the State address in which he compared his political opponents to literal Nazi fascists.

That’s such a common tactic for these people; their ideas are such horrendous failures that they cannot debate anything on the merits. Their ideas have no merit.

Under their watch, inflation is up, crime is up, the debt is up, border security is down, global security is down, etc.

Since they cannot claim success anywhere, their only ‘argument’ is to cancel and censor dissent, or to label their opponents Nazi fascists, white supremacists, or anti-science cave men.

What’s ironic is that someone like Newsom actually seems to know that there are problems, and he’s demonstrated that he can fix them.

When Chinese President Xi Jinping met Joe Biden in San Francisco last November, Gavin Newsom somehow found the ability and authority to clean the place up. For a few days, there were no homeless people on the streets, and San Francisco was the safest big city in the world.

But then as soon as Xi left, he let the streets go to shit again.

Clearly he knows how to solve the problem. He’s choosing to not solve it… while simultaneously claiming to care so much about the voters and streets and the cities. Again, the guy stands for nothing.

Like most institutions of the Left, the only thing they stand for is that they should be in charge.

Meanwhile, the problems pile up. Illegal immigrants overrun the southern border. Deficits and the national debt surge. Inflation refuses to be tamed. Instability festers at home and abroad.

You’d have to be clinically insane at this point to actually think these people will fix anything. They are only going to make things worse.

This is especially true when it comes to economic challenges, mostly because the people in charge (especially on the Left) have NO understanding of the real world.

Many have never in their lives participated in the private economy. They’ve never had a real job or started a business. So they don’t have the foggiest idea how their idiotic policies will wreak havoc down the road.

Obamacare is a great example: 14 years later, America has lower quality, more expensive healthcare, with less personal choice and more bureaucracy.

Yes, some people are better off. Most are worse off. Was it worth the cost?

Again, though, the Left can never justify their decisions with facts or successful outcomes. And that’s why, when people criticize or disagree, they resort to censorship, cancellation, de-platforming… Or just calling someone an anti-science racist caveman misogynist bigot.

Big shocker— it turns out they’re the ones who are the actual racists and misogynists. They stand for nothing but their own power.

And that is the whole reason why it makes so much sense to have a Plan B. And realistically, the chaos they cause is making that turn into Plan A pretty quick.

For example, people are starting to recognize that their endless runaway spending is actually a serious problem. $2 trillion deficits have quickly become the norm, and that has led directly to elevated inflation.

Yet as individuals we can mitigate inflation by investing in real assets— many of which are absurdly cheap right now and have major catalysts for growth.

The people in power are intent on raising taxes. Not just new wealth taxes and higher payroll taxes, but at bare minimum, raising taxes on the middle class by allowing the 2017 tax cuts to expire.

Yet there are many ways, as individuals, to legally reduce our tax rate, in some cases down to a flat 0%.

They are driving Social Security into the ground. But you can plan for your own retirement AND cut your taxes, with tax-advantaged retirement accounts.

They’re importing crime and refusing to prosecute criminals. But you can obtain a second residency or passport in a foreign country where you enjoy spending time. This way, you and your family will always have a place to go if the need ever arises.

These people have an overwhelming sense of arrogance, and will continue to double down on their failures.

They want us to think that they’re the ones in control… but nothing could be further from the truth.

Individuals have tremendous power to protect themselves from their destructive hypocrisy. It just takes a little bit of education and the will to take action.

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“The President is very sharp,” former congressman and MSNBC host Joe Scarborough told audiences not long ago. “Some NATO leaders have told me they were very surprised… because he is so sharp and he’s on top of everything.”

MSNBC further trotted out various guests and hosts, including Mika Brzezinski, to gush about Joe Biden’s sharpness and mentally agility.

Members of the President’s party also claimed that, in private meetings, Joe Biden was absolutely at the top of his game.

And the White House’s top propaganda officials, i.e. Anderson Cooper, Jake Tapper, and Rachel Maddow, all routinely praise Biden’s strategic foresight and supernatural ability to raise America’s position in global affairs.

Now all of a sudden the headlines read: “Panicked Dems look to replace Biden”, and “Biden must step aside”.

The CNN “analysts” last night were absolutely hilarious in their depressive response to the debate; a few of them were almost in tears about their guy’s pitiful performance.

And the New York Times this morning was full of editorials from Leftist lunatics like Thomas Friedman and Paul Krugman pleading that Biden bow out of the race immediately.

Funny. These are the very same people who have been insisting that Joe Biden hasn’t lost his edge. Now they want him to withdraw from the election.

The web of lies that they have been spinning for the past four years came crashing down hard last night. Everyone saw a mentally incompetent, enfeebled, confused man stammering and rambling devoid of any intellectual direction.

Even the rare occasions yesterday when he showed flashes of coherence, Biden had to resort to gas-lighting the American public in order to defend his record.

It was extraordinary that he said, with a straight face, that nobody wants to “screw with America”.

Come again? It was only a few months ago that Iran launched missile strikes against US soldiers at bases in Iraq and Syria.

Deliberately attacking US military personnel is the DEFINITION of screwing with America.

He went on to insist that the rest of the world respects US leadership. He bragged about how great the US economy is doing, how prosperous people are, and how he’s taken steps to secure the border.

Of course, no rational person believes such drivel. Joe Biden has been a disaster from Day 1, and he was cognitively unfit far before he became President. But the rats in the media have been covering for him and propping him up from the very beginning.

Their latest lie is that Joe Biden has a cold, which apparently caused last night’s acute dementia.

Sure. Doesn’t everybody get a severe case of dementia when they catch a cold? I guess that’s what “science” tells us.

The New York Times further reported that, “Former President Trump’s attacks were frequently false, lacked context or were vague enough to be misleading.”

Of course there was no mention of Joe Biden saying anything false, vague, or misleading.

There was no “fact check”, for example, when Biden said that everyone respects America, the military is stronger than ever, that taxing the rich will solve Social Security’s bankruptcy, or that the Border Patrol endorsed him.

(While the New York Times didn’t bother to fact check Biden, the Border Patrol Union did announce on its X/Twitter account that “we never have and never will endorse Biden.”)

It appears now, however, that these media rats know their plan failed. No one can possibly believe their lies any longer, and the rats are deserting their own ship.

Their panic would almost be gratifying if it weren’t so ominous.

Now their attention is turning to who should replace Biden; ultimately this means that the party’s senior leadership will choose a new candidate.

Ironically, this is also the same party which moans constantly that “democracy is under attack.”

But hang on— this same party also deprived its own voters of a choice.

When Bobby Kennedy announced his candidacy to challenge Joe Biden for the nomination, they refused to engage and chased Kennedy out of the party.

In short, the party made sure their own voters did not have a choice.

Now, once again, they want to deprive voters of the opportunity to choose. Instead of holding primary elections, the party bosses will decide for everyone else who will be the Presidential candidate.

Sounds democratic to me, comrades!!

The ominous part is where this might go.

It’s obvious the rats have all been lying about Joe Biden in an attempt to prop him up as a serious candidate. Their endless river of deceit about his mental sharpness was proven to be blatantly false last night.

Now they’re already plotting to subvert the democratic voting process, yet again, and force a new candidate onto voters.

Frankly, I was surprised at how much discussion there was last night about the national debt, deficits, Social Security, etc. So, they obviously know that the US has serious, serious problems and is in decline.

But arresting that decline is not a priority. Their only priority is keeping one guy out of office, no matter the cost.

These rats have no morals and absolutely no regard for voters. And they’re willing to do whatever it takes to achieve their goal. Lies. Propaganda. Gas-lighting. Censorship. Cancel culture. Weaponizing the justice system. Knee-capping democracy. Whatever it takes.

I don’t know how far they’ll go or what destructive solutions they’ll concoct. But I do know that the most likely cost of their derangement is the continued decline of America.

That’s why it makes so much sense to have a Plan B.

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Senator Elizabeth Warren gave another speech on taxes a few days ago proving, yet again, that she is coming for your money.

It’s always thinly veiled behind the refrain of making “the rich” (as defined in her sole discretion) pay their “fair share” (also defined in her sole discretion).

Frankly she’s been shrieking this refrain since before she even became a Senator. Yet for more than a decade she’s never once made her position clear. If anything, she keeps moving the goalposts.

Warren famously started by slamming billionaires, i.e. the top 0.1%. She then cast a wider net to the wealthiest 1%.

Later she derided the top 5%, claiming those evildoers should not be eligible for student loan forgiveness… or even Medicare!

And when she howls about “accountable capitalism” on her website, Comrade Warren trolls the the top 10% for having too much wealth.

This trajectory throughout her career shows an ever-expanding reach– from the top 0.1% to the top 10%. And it would be foolish to assume she’s stopping there.

Naturally Comrade Warren has no idea what she’s talking about.

For example, she ignorantly blames eye-popping federal deficits on tax cuts that go as far back as 2012– when then President Barack Obama made a compromise with Congress to extend the Bush-era tax cuts.

Warren claims, to this day, that “once Obama made that tax cut deal with [the other party], the federal deficit ballooned.”

I know Socialists aren’t great at math, but this is blatantly false. All you need to do is look at the Treasury Department’s own data.

The federal deficit actually FELL in 2013, i.e. the year after the Obama tax deal. Then it continued to decline in 2014… and in 2015.

In fact, if the federal government had simply frozen spending at 2012 levels, then the entire federal deficit would have nearly disappeared by 2016.

Instead, however, Elizabeth Warren and her merry band of Bolsheviks continued to find creative new ways to spend money. This is why federal spending has more than DOUBLED since 2012.

This is quite curious… because, despite a 2x increase in federal spending, America does not seem twice as secure against overseas threats. Infrastructure is not twice as robust. Public schools have not doubled their performance.

And if you look across all government performance– military readiness, customer service quality at the Internal Revenue Service, FAFSA student loan enrollment, Obamacare enrollment, Medicare efficiency– it’s ALL down.

One would be hard-pressed to come up with something that the government does BETTER today than it did in the past… except for racking up massive deficits.

I guess Elizabeth Warren doesn’t have anything to do with that, though.

She completely fails to see her own role in increased spending. She even fails to see how tax revenue has actually INCREASED since the tax cuts– because lower taxes promote a healthier economy.

Despite such overwhelming evidence, however, she STILL wants taxes to increase. She just doesn’t get it.

If high taxes were the key to a prosperous society, then Ivory Coast, with its record 60% tax rate– should be absolutely booming. And yet it is one of the world’s most impoverished nations.

But simple truths never stop the dangerous Bolshevik logic train.

Warren is now fighting against members of her own party who are negotiating an extension of the 2017 tax cuts.

And if you’re thinking, “Big deal, Lizzie is just one Senator, she can’t do anything on her own,” then think again. Warren is not alone. And more importantly, she has the power to hold everyone and everything hostage.

That’s because Congress and the next president don’t have to raise a finger for taxes to increase for most Americans in January of 2026.

Many of the individual tax cuts introduced by the 2017 Tax Cuts and Jobs Act (TCJA) are set to automatically expire at the end of 2025. So, in order to extend them, both chambers of Congress plus the President, whoever that might be, will have to take deliberate action to make it happen.

And Lizzie can easily hold up the process.

Thanks to Comrade Warren stonewalling her own colleagues, this is becoming more and more likely by the day. What are the implications?

For starters, the standard deduction will be reduced by nearly 50%, from $14,600 (for single filers) to approximately $8,000. So much for only soaking the rich.

There are a host of other provisions that will hit the middle class harder than anyone else. Yet Lizzie remains firm in both her resolve and her ignorance.

And again, she’s not actually alone.

Joe Biden has also proposed major tax increases: a 5% payroll tax hike, taxes on unrealized capital gains, a top rate to 44.6%, and various changes that substantially increase estate taxes.

Obviously, everything is on the table given the upcoming election in a few months. But we do know, no matter what happens, that there is a growing number of Socialist politicians who want to increase taxes… because no matter how much they collect, it is never enough for them.

This is why we encourage our readers to avail themselves of the many, completely legal ways of reducing their taxes.

For example, Americans who move to the US territory of Puerto Rico can qualify for special tax incentives that offer rates as low as 0% for eligible capital gains, and 4% total tax rate on eligible business profits.

By moving overseas, US citizens can take advantage of the Foreign Earned Income Exclusion (FEIE), which allows taxpayers living abroad to exclude up to $126,500 per year from US taxation (adjusted annually for inflation). Plus, you could exclude thousands more in housing costs.

Even if you stay where you are, contributing to tax-advantaged retirement accounts is a great way to legally optimize your current (and future) tax bill.

The larger point is that the tax code is full of ways to reduce what you owe and get ahead of any automatic tax hikes.

Unless you truly believe that you are getting your money’s worth from the ever-expanding US government budget, it makes a lot of sense to do everything you can to reduce your taxes.

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When Publius Licinus Valerianus (known to history as Valerian) became emperor in 253 AD, the Roman Empire was in the midst of the ‘Crisis of the Third Century’— plagues, inflation, escalating conflicts, growing social tensions, rising crime, declining trade, and a struggling economy.

But Valerian had decades of political experience, so everyone thought he would save the day.

Instead, he continued bankrupting the treasury with huge deficits. He raised taxes, debased the currency (which caused inflation to soar), and demanded ideological conformity. Dissenters were arrested and severely punished, and many had their property confiscated by the state.

The imperial borders were also a mess; barbarian tribes were coming across the northern border in what was tantamount to a full-scale invasion of Roman territory, while the Sassanid Persians were invading Rome’s Arabian provinces from the Empire’s eastern border.

Rome’s once-legendary military was also shrinking; in fact, the Empire had a historic military recruitment crisis on its hands.

Rome wasn’t just unable to attract the best and brightest to its ranks; it was practically unable to recruit anyone at all.

Long gone were the days when a career in the Roman legions was considered an honorable profession. Roman citizens were simply no longer interested in serving. And Roman patriotism wasn’t just dead, it was laughed at.

To address these challenges, Valerian expanded the use of mercenaries. He essentially bribed new recruits, including and especially foreigners, offering money, citizenship, and land grants in exchange for serving in the military.

This marked a clear and obvious turning point in Rome’s history: empires last because they sustain their strength– and that strength requires both a prosperous economy AND a powerful military.

And it’s incredibly difficult to have a powerful military when nobody wants to serve.

The US military finds itself in a similar position today. In fact, the US in general is going through a similar period as Rome’s “Crisis of the Third Century”, complete with political scandal and instability, inflation, massive deficits, border incursions, and even a pandemic.

And the parallels between Rome’s third century military and the state of the US military today are quite strong.

Last year, the US military missed its recruitment goal by 41,000 troops, which is a staggering, record-high figure. The active-duty US military is now at its smallest size since 1940.

As a result, mission readiness is down. Fitness standards are being abandoned. Recruiting bonuses have skyrocketed. Some politicians have even suggested offering citizenship to illegal immigrants in exchange for serving in the US military.

One of the biggest reasons for this recruitment crisis is that 77% of young people in America do not meet the basic standards to join the military, whether for physical, mental, or moral reasons.

And that last one— moral— is the fastest growing part: young people aren’t interested in serving because they are being indoctrinated to hate their country.

Teachers at Fort Lee High School in New Jersey and in Berkeley California, were recently caught, for example, teaching that Hamas is a peaceful resistance movement… while Israel is genocidal.

The teacher’s union covering school districts in Portland, Oregon recently published lesson plans which praised Hamas… yet completely failed to mention their October 7 terrorist attack murdering innocent Israelis.

By the time students make it to university, they are filled with hate for their country; it’s so palpable that the supreme leader of Iran, one of America’s biggest enemies, recently praised American university students.

“You are currently part of the Resistance Front,” the Ayatollah told America’s youth, “and have waged an honorable battle despite the relentless pressure of your government.”

The kids in the street wearing their keffiyehs and screaming about their pronouns have no interest in serving.

Meanwhile, the patriotic Americans who filled the military’s ranks for decades have been maligned as “extremists”.

These are the very people who love America so much that they were ready to die for their country— and kill the enemies of their country, which is no less consequential.

Yet instead of embracing the people the military so desperately needs, the government practically lampoons them and their core beliefs.

The Army used to have slogans like “Be all you can be,” and “Army Strong”. Those have been replaced by recruiting ads about soldiers with lesbian moms. Even the CIA recruits by catering to the woke, Diversity & Inclusion crowd.

It’s bizarre to see recruiting ads tailored to radicals who hate their country and have no interest in serving. And gee what a surprise— the woke recruiting campaigns have failed.

Now the Defense Department has resorted to bribing people.

Of course, the military has long offered recruitment bonuses and college tuition in exchange for service. But it was typically one of the reasons to join, not THE reason.

That’s no longer the case. Just ask the soldiers who make TikTok videos about why they joined:

“For a Camaro.”

“To pay my bills.”

“For the money.”

Soldiers have long been a cynical group; I remember this even from my time in the service more than two decades ago. But today it seems to be at a completely different level.

Need more evidence? Allow me to offer Exhibit A— an online recruiting advertisement for the US Coast Guard that I recently saw:

“Think you’re too old or out of shape for the U.S. Coast Guard? Think again.”

Bribing people to join only got them so far, and now they are begging people to serve who are too fat and old.

Again, strong nations need both a robust economy AND a powerful military.

We’ve written at length about America’s future economic tsunami; the government itself forecasts the national debt to grow beyond $55 trillion over the next decade. Social Security will run out of money in 9 years. The US dollar is on the road to losing its global reserve status soon.

The challenges plaguing the US military, however, add yet another dimension to America’s problems.

Mission readiness is down. Most major weapons systems, from fighter jets to naval warships, are rapidly becoming obsolete… yet there is no money to replace them. And this recruiting crisis continues to worsen.

I’ve written before that, theoretically, these challenges are fixable. And there is still a very narrow window of opportunity to do so.

But at the moment it doesn’t appear that the people in charge even recognize the problems, let alone have the willingness to solve them.

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Tim Sheehy is a former Navy SEAL who graduated from the United States Naval Academy and served multiple combat tours in Iraq and Afghanistan.

He earned a Bronze Star with Valor for his distinguished service and a Purple Heart for his wounds. And after leaving the Navy, he started a successful aerial firefighting business which now employs 200 people.

Fed up with the direction of the country, Sheehy is now running for Senate in the state of Montana and hoping to unseat his opponent— Montana’s incumbent Senator Jon Tester.

Tester has represented Montana in the Senate since 2007, during which time the national debt has increased by more than $25 trillion.

Senator Testor has certainly played his part in helping to expand the debt; he has consistently voted for almost every big-spending, deficit increasing piece of legislation that comes across his desk.

For 17 years he passed massive budget deficits; raised the debt ceiling; handed out trillions of dollars of free money during COVID; and sent endless, unchecked funds to Ukraine.

When his free-spending policies resulted in the worst inflation the country had seen in four decades, Tester then voted for the pitifully named “Inflation Reduction Act”, which has resulted in even higher food, fuel, and housing prices.

But according to Tester, it’s people like Tim Sheehy— the wounded Navy SEAL veteran who started a successful business— who are to blame.

“Tim Sheehy is not part of the solution; he’s part of the problem,” Senator Tester recently said of his political opponent.

There is it, straight from the Bolshevik playbook: success is a terrible sin, and inflation is rich people’s fault.

With control of the Senate on the line, the usual suspects in the media have predictably jumped in to malign Sheehy in every way imaginable.

For example, after Sheehy said that he grew up in rural Minnesota, the Washington Post “fact checked” the claim and said his hometown had a population of 27,000 people.

That’s some hard hitting journalism that’s staying focused on the real issues!

And if hailing from a town of 27,000 people wasn’t bad enough, the papers also pointed out that Sheehy’s childhood home had a view of one of the 11,800 lakes in Minnesota.

CRIMINAL! CRIMINAL!

If that weren’t nefarious enough, the media has also taken Sheehy to task over the $100,000 loan he received from his parents to start his current business (which is now worth nearly $1 billion).

The Washington Post also ripped into Sheehy because there has been some discrepancy about how many times he was shot in Afghanistan, and whether he was discharged from the Navy because of the shrapnel in his body, or due to injuries sustained during a submarine training exercise.

Clearly this is the issue that should be in focus. Not inflation. Not the migration crisis (which affects every single one of the fifty states). Not the incredible dangers lurking in the world.

Nope. WaPo wants to malign a Navy SEAL and downplay the guy’s service to his nation.

They’ve made an especially big deal about one eyebrow-raising episode in which Sheehy lied in order to protect one of his Navy subordinates from being punished.

There’s a sense of loyalty in the military that most people— and certainly woke activist reporters— will never understand.

To this day, twenty years after my own military service, I would still lie down in traffic for my platoon sergeant, and he would do the same for me. That bond of loyalty is even more pronounced among special operations troops like the SEALs.

But such things are incomprehensible to the left… whose only notion of loyalty is loyalty to the party— not to principle, and not to people.

Perhaps this is why they’re so LASER-focused on Sheehy. Seriously, why should the Washington Post and New York Slime even care about a Senate race in Montana?

Obviously because control of the Senate is up for grabs this year. And these supposedly objective papers are doing everything they can— including maligning a Navy SEAL— to seal their party’s victory.

These are the same “news” outlets, by the way, who ran with the Russian collusion hoax, and helped to cover up how Hunter Biden earned an undisclosed $10 million from companies in Ukraine and China while his father was Vice President.

Or, remember when Hillary Clinton claimed during her 2008 presidential campaign that she landed under sniper fire during a 1996 trip to Tuzla, Bosnia? She described having to run to their vehicles with their heads down, while footage actually shows Clinton calmly walking across the tarmac, and greeting a young girl who presented her with a poem.

Yet these so-called “journalists” are printing stories about how Sheehy’s childhood home had a lake view (in a state that’s literally called the Land of 10,000 lakes), and intimating that his Bronze Star citation may have been politically motivated.

And his opponent claims that Sheehy, a Navy SEAL and successful entrepreneur, “is part of the problem.”

What else does someone have to do or be in America in 2024 before the left admits that maybe that guy is part of the solution?

This is how insane the Left has become— and that includes the pathetic media. All the more reason to have a Plan B.

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I have written to you more times than I can count about how the US government’s own budget officials forecast a $20 trillion increase in national debt over the next ten years.

Remember, this isn’t some wild conspiracy theory. This was from an official projection released by the Congressional Budget Office (CBO) back in February.

Well, it turns out the CBO’s 10-year forecast is now much worse.

Two days ago, the CBO released an updated budget forecast. And the differences between their current forecast, and the one they released just four months ago, are pretty substantial.

Four months ago, the CBO projected that this Fiscal Year (FY24)’s annual budget deficit would come in at $1.5 trillion. Now they estimate it will be $1.9 trillion.

In other words, their deficit forecast became 27% worse in just four months.

More importantly, their forecast for the total accumulated deficit over the next ten years– which stood at $20 trillion just four months ago– has now increased to $22 trillion.

How could these numbers become so much worse in just four months?

Easy. These people at the CBO are not stupid. And estimating long-term budgets is actually a fairly straightforward process.

The Social Security Administration, for example, already knows how much they’ll be spending on benefits next year, the year after that, etc., because they have all the data about how many people were born in 1963, 1964, and so forth.

Similarly, the Treasury Department already has a good idea how much money they’ll have to spend paying interest on the debt this year, next year, etc. They know which government bonds will mature, and when. While there is some variability with respect to interest rates, budget officials can get reasonably close in estimating long-term interest costs.

The big X-factor in budget forecasts is Congress. From time to time, these people get together and pass some outrageously expensive legislation… like the Inflation Reduction Act. And these idiotic ideas are impossible for the CBO to predict.

And that’s the problem: in the last four months alone, Congress has piled on a bonanza of spending.

That’s not to say certain spending isn’t important. But there’s never any sacrifice or debate. They never say, “we want to prioritize X, which means we need to cut Y.” They just add more and more to the deficit.

And that’s why the CBO’s deficit forecast for this Fiscal Year (which ends in about three months) has exploded way beyond their estimate from just four months ago.

It’s the same with their ten-year projection; their forecasts become worse with each update.

For example, one thing they haven’t accounted for at all in their ten-year projection is that Social Security will run out of money during that ten-year window, triggering a multi-trillion-dollar bailout.

And that Social Security bailout is not included in this estimate. So, the $22 trillion figure could become much, much worse.

Even $22 trillion would mean the national debt reaching $57 trillion by 2034– an amount that would almost certainly result in the loss of the US dollar’s global reserve status.

$22 trillion in additional debt over the next decade also likely means that the Federal Reserve will have to essentially ‘print’ money in order to fund these deficits.

(And as we all experienced recently, a massive increase in US government debt fueled by a gargantuan increase in money supply from the Federal Reserve, creates lots of inflation.)

The growing national debt will likely also reduce America’s standing in the world, and we can already see that now. Adversary nations are running amok doing whatever they want with total impunity… because the US government has neither the money nor resolve to stop them.

It’s all completely and utterly pathetic.

I would point out that there is still a very narrow window of opportunity to fix this problem before it spirals out of control. But the time is now. This is not something that can be dealt with 10 years from now; in fact, most of that $22 trillion in new debt will be coming over the next 5-7 years.

But avoiding that fate will require a tremendous amount of discipline, focus, sacrifice… and the biggest missing ingredient of all: common sense.

America would need a government willing to prioritize productivity and economic growth over some destructive anti-capitalist, hyper-woke agenda.

And it goes way beyond who’s sitting in the White House. It’s 435 members of the House, 100 Senators, and countless agency heads.

It’s the (unelected) people at the Federal Reserve, and sadly, others outside government who have tremendous influence in setting national priorities.

This included CEOs who have embraced the woke left, and the media which consistently perverts what national priorities should be.

These are some of the key players who would need to be largely focused on the task at hand.

There is a lot on the line here, and what happens over the next 4-5 years will likely seal America’s fate.

If I’m honest, it’s not looking good. It’s hard to have confidence in the “leadership” and institutions right now. Maybe it will all change. Maybe voters, business, etc. will wake up. But I’m not holding my breath.

Obviously, the US still has a lot of incredible things going for it— a robust economy, and insanely large, diversified, deep capital markets.

But that’s what makes it so exasperating, especially those of us who were born and lived in a time of peak America. It’s difficult to watch them destroy something so incredible.

Realistically, though, there’s not really anything that people can do as individuals to change the system and turn the ship around.

But as individuals, we can absolutely take sensible steps to mitigate such obvious risks. And that approach makes more and more sense every day.

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Unlike Joe Biden, 81-year-old Benjamin Franklin was at the top of his game and still making incredible contributions to the United States.

It was the spring of 1787– five and a half years since the last major battle of the American Revolution– yet still more than two years before the Constitution would take effect.

This period between the Revolutionary War and the Constitutional republic was incredibly unique because the country was fully free and independent… yet it lacked any real leadership.

The governing body at the federal level– the Congress of the Confederation– had almost no power, and its roughly fifty members spent most of their sessions bickering with one another.

People became so fed up that there was serious talk of secession, and the United States almost ended before it really began.

81-year-old Benjamin Franklin helped to smooth things over when, on April 21, 1787, the Congress of the Confederation authorized him to design the first official currency of the new country– the penny.

(Congress did not expressly name Franklin in its Act, however historians widely believe they specifically intended to tap his genius.)

A national currency would be a pretty big step forward in unifying the country; at the time, commercial trade was a messy free-for-all with no standardized method of settlement.

Merchants and businesses would settle transactions in a variety of currencies– Spanish dollars, British pounds, old continental dollars, Dutch guilders, French ecu, etc. Many of the individual colonies had their own currencies too, forcing a terrible exchange rate system for which there was no real market or liquidity.

Rural settlers often relied on a barter system, and whiskey became an incredibly popular medium of exchange.

The economy was a complete mess, and Congress thought that a standardized currency would help.

So, Franklin designed a 10.2 gram copper penny– which is about 4x larger than the mostly zinc penny that exists today. On the obverse (front) side are Masonic symbols typical of Franklin, along with the English language motto “MIND YOUR BUSINESS”.

(Historians assume that Franklin used the word “business” literally, like Dr. Spock encouraging his fellow countrymen to work hard and prosper.)

Franklin’s penny did the trick in making commerce easier and more standardized, and the secession talks quickly cooled.

Then the US dollar was formally created a few years later by the Coinage Act of 1792… and for the next several decades, the US monetary system was based on real assets— physical gold, silver, and copper coins.

It wasn’t until the Civil War that the Union government started issuing paper money… though paper dollars back then were really just promissory notes; the text on the 1862 dollar stated, “The United States Will Pay the Bearer ONE DOLLAR at the Treasury in New York”.

So really this paper money represented a claim on real assets owned by the government, i.e. gold and silver coins being held by the US Treasury.

Today’s dollars are obviously no longer backed directly by real assets. However, we discussed earlier this week that, fundamentally, money today still does represent a claim on government assets.

I won’t rehash the entire article, but, in short, currency and government debt (i.e. US dollars and Treasury bonds) are very closely related. From a finance and accounting perspective they are actually both considered “cash equivalents” and can easily change forms into one or the other.

And, legally, owning government bonds ultimately entitles the investor to a claim on the government’s assets; if a sovereign government defaults, investors have legal remedies to satisfy the debt.

This is not uncommon in modern finance. One famous case from 2012 involved a US hedge fund that was seeking repayment from the government of Argentina. Argentina refused to pay, so the fund filed a lawsuit and legally impounded an Argentine naval vessel while it was docked overseas.

Again, this is what money really is today– a claim on government assets.

When everything is fine and stable, this system works pretty well. But it breaks down when there’s a dangerous explosion in government debt and money supply (again, the two are closely linked).

For years, my partner Peter Schiff and I have both made a strong argument that America’s skyrocketing national debt will most likely result in significant US dollar inflation.

And inflation clearly means that money, i.e. the claim on assets, becomes worth less and less.

This is why, when there are obvious signs of a spiral, it’s sensible to consider owning the assets directly, rather than owning a claim on the assets.

Foreign governments are already doing this; they’re ditching their US dollar holdings in favor of real assets. This is why so many governments and central banks have been loading up on gold.

So, what do I mean by real assets? These are the critically important, functionally useful, and scarce resources that a nation and economy need to function, including certain commodities, real estate, technology, and productive businesses.

But it really depends on context. Not all commodities, for example, are real assets… because not all commodities are truly critical.

Gold provides an incredibly important reserve function in global finance. Copper is crucial to human development. Our modern world does not exist without oil and gas.

On the other hand, human civilization would be just fine without sugar, cacao, amber gemstones, and a host of other raw materials.

It’s the same with technology: truly disruptive tech that makes the world better, faster, cheaper, and more productive is important. Swiping, scrolling, time-wasting apps are not important.

I think about this ‘spectrum of importance’ like university majors. Electrical engineering is a really useful and important field. Gender studies isn’t.

We’ve written countless times that the global financial system is shifting before our very eyes. US dominance is waning– and that is an unfortunate yet obvious assertion that I take no pleasure in making.

The US national debt– which the government’s own budget officials project will increase by $20 trillion over the next decade– is about to reach a bifurcation point where it will be unfixable.

On top of that, Social Security is set to run out of money in nine years. And the federal government remains completely dysfunctional.

Peter and I have long argued that the most likely minimum scenario will be major inflation. Don’t expect the government to do anything about it– they’re the ones creating the inflation.

But there’s a time-tested way for individuals to hedge that inflation risk: rather than holding 100% of one’s savings in paper money, i.e. a rapidly depreciating claim on economic resources, consider owning the most vital economic resources directly.

This means real assets that are and will continue to be incredibly important to the economy. And the good news is that many of them are dirt cheap right now. More on this soon.

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The blood was barely dry in the streets outside of the Bastille when the brand-new government of revolutionary France started confiscating assets.

It was November 2, 1789. And by a margin of 508 to 346, France’s fledgling legislators– on both the Left and the Right– voted to nationalize all of the real estate owned by the Catholic church. And that was a LOT of property.

Between the confiscated Church assets, plus the land they had just expropriated from the king only a few weeks earlier, the revolutionary government had seized roughly one-third of France’s entire land mass in less than a month.

But they didn’t stop at asset confiscation.

Remember that France was completely bankrupt at this period in its history; France’s national debt was so high that there wasn’t enough money in the Treasury to even make interest payments, let alone fund normal government operations.

So almost immediately after seizing church lands, the Legislative Assembly hatched a new scheme to bring in much-needed cash: they created a special type of government bond called assignats, which would pay a 5% interest rate and be secured by the confiscated properties.

This idea of an interest-bearing government bond, secured by real estate, proved extremely popular with investors and financiers, and the first issuance of assignats sold out almost instantly.

That first bond sale brought in 400 million livres, which was considered a substantial sum of money at the time. However relative to the size of the French national debt, it was just a drop in the bucket.

(To put this figure in context, 400 million livres would be comparable to the US government raising about $1.5 trillion today– a significant amount, but tiny compared to the $35 trillion national debt.)

France’s politicians swore that the assignat issuance was a one-time thing, with a hard limit of 400 million livres. But naturally it was only a matter of months before they issued another 800 million… then another 400 million, then another 600 million.

You get the idea.

Now, the first issuance was hard. Assignats were considered controversial, and there was a lot of debate and argument among the politicians.

But with each passing issuance, it became easier and easier to authorize more. Eventually there was almost no debate about the dangers of issuing more debt, and the majority of the French government became blind to the risks.

It took less than two years for the amount of assignats in circulation to vastly exceed the value of all the real estate which supposedly backed them. And then something very predictable happened.

The thing about assignats is that they became a type of currency in France; rather than use traditional coins like the silver ecu or copper sou, French people began to use assignats as a form of paper money.

The government even formally made assignats legal tender in April 1790.

So naturally as more and more assignats surged into the French economy, inflation rose rapidly and soon became a full-blown crisis.

Now I’ll pause here for a moment to highlight the many similarities between this monetary experiment in Revolutionary France and today’s financial system.

In 1789, assignats were technically debt. But they were also a form of money. That is true today as well.

The US government is the largest debtor in the history of the world with a $35 trillion national debt. But its debt securities (i.e. Treasury bonds, notes, and T-bills) are also a form of money.

Obviously, no one buys a coffee at Starbucks with T-bills. But governments and central banks around the world do hold US Treasury bonds as form of savings. Banks and major corporations consider the US government bonds they own as “cash equivalents”. And many large financial transactions are settled by swapping US government bonds.

So, there is still a close relationship between debt and currency.

We can also see the link between debt and inflation; just like the French engineered major inflation in the 1790s by issuing more and more debt, the US government created the highest inflation in 40 years by issuing trillions of dollars of debt during the pandemic.

Another key point is that, just like assignats represented a claim on French government assets, modern debt securities also represent a claim on government assets.

When investors buy US government bonds (or realistically any sovereign bond), they are ultimately investing in the government’s authority to tax, seize, or otherwise commandeer virtually everything in the economy.

In theory if the government were unable to make interest payment or pay back the debt, they would be able to hike tax rates, nationalize businesses, etc. to satisfy creditors.

But as the French case shows, the authority to tax an economy and seize its assets is not infinite; there is a limit on how much an economy can produce… and how much the government can tax and confiscate.

In good times this is rarely a concern. When government debts are low, no one worries about its ability to repay– the claim (i.e. total debt) is trivial relative to the size of the economy.

But as government debts spiral out of control, the claim begins to exceed the value of the assets.

France reached that level in the early 1790s. The US may be reaching that level very soon… which is a major reason why we anticipate the US dollar losing its reserve status over the next few years.

It’s important to understand these financial relationships:

1. Debt and currency (including inflation) are closely linked
2. Debt ultimately represents a claim on the government’s authority to tax the economy
3. That authority is not infinite
4. Risks pile up when the level of debt exceeds the claim on the economy

This is all somewhat of a technical explanation of why it makes so much sense to consider owning real assets as a hedge against inflation and a ballooning national debt (which, again, are closely linked).

Debt, and hence currency, ultimately represent a claim on economic resources. But when both debt and money supply are out of control, it’s much safer to directly own the economic resource, rather than the claim.

We’ll discuss this more later in the week.

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Rumor has it the Chair of the Federal Trade Commission (FTC), Lina “Genghis” Khan, has set her wrath on a major US liquor distributor for the egregious crime of selling in bulk.

The company in the path Khan’s fury is called Southern Glazer’s Wine and Spirits; they distribute alcohol to bars and restaurants across the country… and like any rational business, they offer discounts for large, bulk purchases.

Some guy who stops off at a gas station to buy a Corona beer is obviously going to pay a higher price (per beer) than a huge restaurant chain that buys tens of thousands of Corona bottles at a time.

But to Genghis Khan, all prices should be the same.

A mom-and-pop shop that buys a few dozen at a time versus a major retailer that buys thousands of cases, should pay the exact same price per unit.

Not only does Genghis Khan not understand this very basic business principle… but she’s apparently never been to Costco either.

Costco has 100+ million members, and Sam’s Club has 50+ million members, all of whom understand that when you buy in bulk, you should pay a lower unit price… and hence save a lot of money.

What rock has she been living under that she can’t understand why bulk purchases result in substantial cost savings?

It’s the rock known as academia— in which Genghis Khan spent her entire adult career writing strongly-worded papers about the dangers of competition and capitalism, before being hired by Joe Biden to run the FTC.

It’s clear that if she gets her way, Genghis Khan will only succeed in driving up prices even further.

In fact the obscure law that Genghis Khan is using to justify her raid on Southern Glazer’s is called Robinson-Patman Act, which dates back to 1936.

Congress passed it over nine decades ago to help protect small grocery stores who were suffering from rising food prices due to the Dust Bowl. It states that suppliers cannot “discriminate in price” among their customers… and from Day 1 it was a terrible idea.

The government’s own analysis showed that the Robinson-Patman Act actually caused prices to increase, rather than keep them stable or fall. Perhaps this is why no one has bothered to enforce the Robinson-Patman Act in decades.

But Genghis Khan is resurrecting this old law to drive prices higher in America. And it’s not even her first effort to do so.

A few months ago I wrote about her lawsuit to block a proposed merger between two grocery store chains: Albertsons and Kroger.

The crux of Khan’s argument— which she offered zero evidence to substantiate— was that the merger “may lead to higher prices and reduced services for consumers.”

Sure, why not. It might also lead to alien invasions or the Dallas Cowboys actually winning the Superbowl.

But if Khan had any business sense whatsoever, she’d recognize that a merger between two grocery store chains would create substantial cost savings— savings which would be passed on to consumers in the form of lower prices.

A merger also allows the combined chain to remain competitive against the vast amount of competition in the grocery industry— from Amazon and Walmart, to farmers’ markets and co-ops.

Competition is one of the key forces of capitalism that helps keep costs down. Competition forces companies to cut costs, innovate, and provide more value to customers.

But Khan is always trying to disrupt that competition. It’s the opposite of what she should be doing.

That she fails to understand such basic principles is pretty scary given her substantial level of authority. Seriously, how out of touch do you have to be to not understand bulk discounts?

New parents don’t go to 7/11 to buy a few diapers at $1.50 each. They buy the 192-pack at Costco for 23 cents each.

Genghis Khan was never elected. She has never run a business or even worked in the private sector. She is as unqualified to run the FTC as she would be to run NASA or the US military.

And yet Joe Biden thought it a good idea to give her an enormous amount of power to destroy competition and make things more expensive.

I also have to point out whenever I talk about Genghis Khan that she’s widely disliked within her own agency and appears to be a terrible boss.

An internal government investigation showed that Khan consistently mismanaged government resources and abused her authority. Career professionals within the FTC said that she is “making decisions for headlines” as opposed to following the law.

The investigation also found that the FTC is “beset by dysfunction and chaos stemming from poor leadership and ideological bullying of its Chair and her leadership staff. These findings reinforce the results of repeated government-wide surveys that found the FTC to have a toxic work environment under Chair Khan.”

That’s the energy that Genghis Khan and her inflationary horde are bringing to the US economy in their efforts to stifle competition and keep inflation high.

Frankly it is beyond comprehension how this person has not been impeached by Congress. And that’s another good reason to have a Plan B.

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“Americans are feeling uneasy for reasons that are hard to pin down,” quipped economist Paul Krugman in a New York Times interview published earlier this week.

Reasons that are hard to pin down? Bear in mind that this man received a Nobel Prize– our society’s most prominent award for intellectual achievement. Yet he doesn’t have the foggiest idea why his fellow citizens may be feeling uneasy.

Perhaps it’s the ever-lurking prospect of escalated warfare. Or the exasperation over dysfunctional government, weaponization of the justice system, and manipulative media. Or the invasion of millions of migrants streaming across the southern border, virtually unchecked.

Granted those issues may be outside of Krugman’s wheelhouse. But you’d think that he would at least understand people’s unease over inflation.

Yesterday the federal government reported that the Consumer Price Index (one of their key measures of inflation) was unchanged in the month of May… prompting officials in the Biden administration and most “experts” like Krugman to uncork the champagne bottles and toast the end of inflation.

It has now been more than three years since the US inflation rate surged beyond the Fed’s 2% threshold… and over two years since the Fed began raising interest rates in an attempt to arrest that inflation.

Yet even after all this time, inflation at 3.3% still remains in excess of the Fed’s target rate.

3.3% is obviously much lower than its peak 9%. But that’s not really the point. For everyone else who doesn’t work at the White House or Federal Reserve or New York Times, it’s not about 3% versus 9%. It’s about the 20%+ change in prices over the past three years.

And many categories have seen price increases far in excess of 20%– and housing is a great example.

The median US home size back in Q1 of 2021 was 2,284 square feet and priced at $355,000. Three years later the median US home size shrank to 2,140 square feet, yet the price increased to $420,800.

So, Americans are paying more to live in smaller homes. On a per square foot basis, the price increased 26.5% in three years, from $155/ft to $196/ft.

But it becomes much worse when you factor in financing costs.

Interest rates were 3.2% back in Q1/2021, versus more than 7% three years later. So, the average monthly payment (principal & interest) per square foot for the median US house increased from $0.68 per square foot per month in Q1/2021 to $1.33 in Q1/2024.

That’s an increase of 95%– nearly double in three years. And this increase doesn’t factor in rising costs of homeowners’ insurance, HOA dues, maintenance costs, and property taxes.

Owning, maintaining, or renting a home is a LOT more expensive than it used to be… and people are sick of it. Yes, 3.3% inflation is better than 9%. But people don’t want less inflation (that’s still too high). They want prices to go back down.

Nobel laureate Paul Krugman doesn’t get it. Neither does Joe Biden… who seems irritated beyond belief that Americans aren’t groveling kowtowing in honorific gratitude over his handling of the economy.

The dirty secret that no one in power wants to say out loud is that prices will never go back down to where they were a few years ago. This is known as deflation, and the Fed simply will not allow it to happen.

For normal people, deflation is great. Who wouldn’t want lower prices?

But when you’re the most indebted government that has ever existed in the history of the world, deflation is a terrifying outcome that must be avoided at all costs. They much, much prefer inflation.

In 1914, at the outbreak of World War I, the British government borrowed what was considered an enormous amount of money at the time– more than 600 million British pounds. They paid interest on that debt for literally 100 years… and finally paid off the principal balance in 2014.

Obviously by 2014, 600 million pounds was a pretty trivial sum… thanks to inflation. And that’s the idea– inflation erodes the value of money over time, so heavily indebted governments can benefit from the mere passage of time.

The Fed knows this. They understand very well that the US government, with its $35 trillion debt, needs inflation to continue. And that’s why the Fed will never allow prices to go back to ‘normal’.

The Fed chairman made no mention of trying to bring prices down in his press conference yesterday. None.

In fact, he’s already talking about cutting interest rates– something the Fed would ordinarily only do once inflation has been licked once and for all. There was also no mention of the Fed potentially having to INCREASE interest rates if the inflation problem worsens.

Nope, it was just more of this false sense that they have everything under control.

To make matters worse (and we’ve written about this extensively), the US government expects to add an additional $20 trillion to the national debt over the next ten years. It’s a staggering figure that will almost certainly create even more inflation.

Historically speaking, whenever the US government significantly expands the debt in a relatively short period of time, most of that financing comes from the Federal Reserve creating brand new money.

In the first two years of the pandemic, for example, US government debt surged by $7 trillion. Over the same period, the Federal Reserve created $5 trillion in new money– with most of that going to buy Treasury bonds.

In other words, the Fed ‘printed’ over 70% of the money that the US government borrowed in the first two years of the pandemic. And that $5 trillion of new money created 9% inflation.

So just imagine how much inflation the Fed will create if they print 70% of the $20 trillion that the US government will need over the next decade…

No one knows for sure. But it’s probably going to be a lot more than their magical 2% target.

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There is a well-known modern proverb (often attributed to the novelist G. Michael Hopf) that goes, “Weak men create hard times, hard times create strong men, strong men create good times, good times create weak men.”

The saying sums up the cyclical nature of the rise and fall of societies– and it’s a topic in which I have tremendous personal interest.

Having recently reached middle age, I can comfortably say with the benefit of hindsight that I was born and grew up during the American prime time– the time at which the wealthiest and most powerful country in the history of the world was at its peak.

The US is still an incredible country with so much prosperity and opportunity. But it would be completely naive and ignorant to claim that America is not in substantial decline.

Its standing in the world has waned, much of it just over the past few years. It’s hard for adversary nations to take you seriously when your President shakes hands with thin air and embassy employees in Kabul have to be evacuated by helicopter.

Financial challenges keep piling up– from the insolvency of Social Security to the $35 trillion national debt to the inflation problem that just won’t go away.

And social divisions, many of which have been bizarrely self-inflicted, seem to grow more tense by the day.

Fortunately, America’s decline began from a historically high peak. So even in its diminished state, again, it is still wealthy and powerful.

But the real concern isn’t where the country is today. It’s the trend, i.e. where the country will end up in ten years’ time if it stays on current course.

I’ve spent the past fifteen years studying similar cases throughout history– the US is far from alone as the only nation that has ever peaked and declined.

And one of the best works on the subject I’ve ever read is The Collapse of Complex Societies, by anthropologist Joseph Tainter.

“Collapse” is a strong word and conjures images of anarchy and death. But Tainter’s definition is more precise; “collapse” doesn’t mean that a society or nation ceases to exist, but that it experiences a steep decline in political, social, and economic stability.

This is what (I believe it’s clear) the US is going through right now, and the trend is accelerating.

Tainter’s book examines the common factors of how different societies throughout history declined– from ancient Mesopotamia to Western Rome. And his analysis shows that one of the key culprits in collapse is the inability of a government to recognize problems… or to solve them.

Many ancient Roman emperors were legendary for failing to recognize the horrible problems brought on by their policies and incompetence– inflation, invasion, etc.

This pretty much describes the US federal government in a nutshell.

Politicians can barely talk about problems in a civil and rational manner. And quite often they refuse to even acknowledge them.

We’ve seen this over and over again with issues such as inflation, the southern border, crime, and social security.

For example, the Social Security trustees publish a report each year stating plainly that the program is going to run out of money by 2033. But no one in Washington wants to talk about it. Joe Biden has even pledged to veto ANY efforts to reform the program.

Biden’s top officials also repeat the bold-faced lie that “the border is secure”, while actively encouraging illegal immigration. The federal government even sued Texas to stop the state from securing the border on its own.

The people in charge demonize and defund police, decriminalize theft, and elect progressive prosecutors who let violent criminals go free.

It’s the same dysfunction with federal spending. These people can’t even acknowledge that a $35 trillion national debt is catastrophic. Most politicians happily ignore it, and others come up with more outrageous spending to further the debt spiral.

They cannot acknowledge the problem, let alone discuss it rationally. Merely passing a budget now routinely devolves into a crisis.

Our view of where this trend leads is clear:

1. Inflation is coming.

There is little hope of responsible spending. The government’s own projections forecast an extra $20 trillion in new debt over the coming decade, and frankly that’s optimistic.

History shows that explosions in national debt are financed by the Federal Reserve creating new money– which ultimately causes inflation.

When the Fed created $5 trillion of new money during the pandemic, we got 9% inflation. How much inflation will $20+ trillion cause?

And the worse inflation becomes, the more urgency the rest of the world will have to replace the dollar as the global reserve currency… which will result in even MORE inflation in the US.

It’s a vicious cycle in which inflation will create more inflation. We project this is 5-7 years away.

1. Social Security is not going to be there for you.

Social Security is not a political problem; it’s an arithmetic problem. And the math just doesn’t add up.

Every year the US Secretary of Treasury signs the report saying plainly that, by 2033, Social Security’s trust funds will run out of money. Benefits will have to be permanently cut by 25% and then become worse over time.

1. Higher taxes are virtually guaranteed.

Politicians love claiming that people should pay their “fair share” but can never quite define how much that means.

And they have already moved the goalposts on who exactly owes society more— the “billionaires” became the top 1%, then quickly shot up to the top 5%, then 10% and soon it will be the top 25%.

Higher taxes won’t just be federal. State and local taxes— from sales tax to property tax— are very likely to cost more, while your governments provide much less.

1. Continued social chaos.

Every time it feels like the lack of civility and unity across Western Civilization can’t get any worse, something new erupts.

The latest is university students screaming “from the river to the sea” and “Just Stop Oil” while defacing artwork and public monuments. Rising tides of socialism and racial animosity never seem to ebb, and idiotic wokeness just won’t go away.

These social divisions will likely continue to grow.

1. Maybe most importantly, major geopolitical disruptions.

As the financial and social decline of the US becomes increasingly obvious to the rest of the world, adversaries are becoming more emboldened.

Nations like China, Russia, North Korea, and Iran are likely to grow more assertive, and there will be significant calls to replace the dollar as the global reserve currency.

Soft war incidents like spy balloons, manufactured pandemics, cyberattacks, etc. will persist— and if we’re very lucky, there won’t be a shooting war. I give it 50/50.

It’s exasperating. Anybody over the age of about 35 remembers a time when it wasn’t like this.

Yet now chaos is the norm. I’m not saying this to be dramatic– it’s important to be intellectually honest.

Part of being intellectually honest means acknowledging that, again, the US is still a great country with an incredibly powerful economy, boasting some of the most valuable businesses in the world.

And Americans still enjoy an extremely high standard of living— albeit one that has been disrupted in recent years by the combination of inflation, crime, and social chaos.

The most exasperating part is that these problems are fixable.

The US government could spend responsibly, encourage capitalism and innovation to grow the economy, and its debt problems would melt away. The dollar would remain valuable. US leadership might even earn back global trust.

But with the current people in charge, I wouldn’t hold my breath. And I also wouldn’t put all my hopes and dreams on the voters smartening up anytime soon.

Yet there are still plenty of solutions that independent-minded individuals can execute without relying on the government.

For example:

Problem: Future inflation will pose a major problem to one’s savings.

Solution: Invest in assets which do well during, or even benefit from, inflation— real assets such as energy, mining, and productive technology. Right now many of these are selling for record low prices, yet poised for substantial growth.

Problem: An overrun border and rising crime rates threaten cities and living standards.

Solution: Obtain a second residency in a foreign country where you really enjoy spending time, or even obtain a second passport. This way you and your family will always have a place to go if the need ever arises.

Problem: Social Security’s trust funds will run out of money within a decade.

Solution: Maximize contributions to retirement accounts— including a special type of 401k which could allow you to double contributions and direct where funds are invested. This lowers your taxable income, puts more money away for retirement, and allows the investments to grow tax-free.

There are solutions for people who, unlike the government, are willing to recognize the problems and actually do something about it.

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On the 1st of October 1791, the 755 freshly elected members of France’s brand-new Legislative Assembly took their seats for the first time in Paris’s famous Salle du Manege– an indoor horse-riding arena that had been converted into a giant meeting hall.

While there were numerous political parties in France at the time (and many of the members were independents), the legislators were ultimately divided into two ideological groups.

On one side were the Feuillants, who were in favor of a strong military, strong monarchy, strong economic production, and stable trade relationships with the rest of Europe.

On the other side, multiple groups formed a coalition that became known as the Montagnards. They advocated for the violent overthrow of the monarchy, price controls (punishable by death), export bans, prohibition of religion, rent forgiveness, and a constitutional right to public welfare.

When these two ideological sides first filed into the Salle du Manege in the autumn of 1791, the Feuillants sat on the right side of the hall… and the Montagnards sat on the left.

This is where the concept of the political ‘left’ vs. ‘right’ came from– the labels are based on where the two sides sat back in the early days of the French Revolution. And practically from the beginning, the Left burnished its reputation for destruction.

Even in the 1790s the Left controlled almost all of the newspapers, and they routinely ran idiotic horror stories about how the Feuillants represented an existential threat to France.

The Left claimed to be a party of the people. Yet the vast majority of their party bosses and representatives were well-to-do elites and middle-class professionals (mostly lawyers) who had never done a hard day’s labor in their lives.

They were totally out of touch with their constituents, and they were completely unqualified to fix the problems that their own policies were creating– inflation, economic depression, war, crime, and widespread social unrest.

This proud tradition of incompetence, hypocrisy, and subjugation from the Left has continued for more than two centuries, from the Reign of Terror to the Soviet Union to the extreme poverty of Cuba and Venezuela.

Today’s gifts from the Left include eco-terrorists who deface monuments and hijack public roads, while their leaders fly to climate conferences on their private jets.

They gave us “mostly peaceful” protesters. Appalling crime rates coupled with prosecutors who refuse to put criminals in jail. Gender-affirming care for children. Drag Queen Story Hour.

The Left also gave us vaccine mandates. They gave us idiotic rules, like the infamous six-foot social distancing commandment that turned out to be totally made up.

They gave us the worst lockdowns of the pandemic… and leaders who refused to follow their own decrees. While the peasants were told to cower in fear in their homes, Nancy Pelosi and Chicago Mayor Lori Lightfoot went to the salon. Gavin Newsom dined with his wealthy donors.

And anyone who disagreed was erased off the Internet… for the Left also gave us censorship and cancel culture.

They gave us hoax after hoax, from the manufactured Russia collusion lie to the Wuhan wet market nonsense. They gave us a weaponized Justice system riddled with double standards and conflicts of interest.

They gave us 40-year high inflation. Skyrocketing food and energy prices. Modern Monetary Theory, which suggests that debts and deficits don’t matter.

They gave us the worst military humiliation in at least a generation with the shameful withdrawal from Afghanistan. They gave us a world where adversary nations and groups run wild with impunity. They gave us an epic border crisis in which millions of migrants enjoy taxpayer-funded benefits.

And rather than acknowledge their own failures, the Left gave us hilarious excuses for the problems they created, blaming virtually everything on either “greed” or “climate change” or “racism” or DJT.

It’s not just the US– it’s Canada, Australia, Europe… much of the world is infected by the Left.

Europe has become overrun with refugees. Once they set foot on the continent, Europe’s legendary bureaucracy makes it virtually impossible to deport illegal migrants. And lavish public benefits continue to attract even more.

(In totally unrelated news, violent crime, rape, and murder has skyrocketed to unprecedented levels in European countries that were once considered pristinely safe.)

Voters are sick of it, and the political pendulum may be finally starting to swing in the other direction.

Europeans took to the polls over the weekend and rejected the ruling class of incompetent fools who have been wrecking the continent.

Naturally the media has dutifully begun to wail that Europe’s parliament has been taken over by jackbooted far-right extremists. Their basic logic is that everyone who is tired of their failure must be irredeemably racist and prone to revolutionary violence.

This is, of course, a familiar line that goes all the way back to the 1790s when the Left painted their political opponents as evil existential threats, even though it was the Montagnards who destroyed the country and imposed the Reign of Terror.

With such a horrific track record that literally goes back more than two centuries, it’s extraordinary that human intellect hasn’t evolved sufficiently to become immune to the Left and all of its false promises.

And yet, even after three straight years of chaos, destruction, inflation, and national humiliation, there continues to be a serious possibility that the Left will prevail once again in the Land of the Free this November, potentially sweeping both elected branches of government.

Even the mere thought is exasperating… because we already know what to expect: more deficits, more debt, more inflation, more anti-capitalist policies, more military weakness, more border crisis. War would become far more likely. The dollar will almost certainly lose its reserve status.

It’s shocking how many powerful interests are deliberately trying to make this happen.

Last week, for instance, Time magazine published the most nauseating puff piece about Joe Biden, with page after page dedicated to selling an image of a fit, strong, experienced, mentally sharp professional who commands the respect of the world. Even the ‘fact check’ section is hilariously softball.

When asked whether he was able to handle the rigor of a second term at his advanced age, Biden shot back, “I can do it better than anybody you know.”

Yes. Out of 350+ million souls in America, he and he alone is capable of leading the nation. It’s the height of arrogance. (Yet they claim the other guy is the sole narcissist.)

These people don’t solve problems; they create them… and make them worse. And America cannot afford much worse.

I’ve beaten this drum for years, but I hope it’s obvious by now that any rational, thinking individual ought to have a Plan B.

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It was March 23, 2010, when Barack Obama signed his infamous “Affordable Care Act” into law.

And in theory it was a nice idea. Healthcare in the US was incredibly expensive, and he wanted to bring costs down. But the execution was abysmal.

Since 2010, the number of uninsured Americans is still far, far beyond their most conservative projections. Medical costs in the Land of the Free have soared to record highs, vastly outpacing both inflation and wage growth.

According to the US Labor Department’s Consumer Expenditures data, for example, Americans spent 6.6% of their household budgets on healthcare back in 2010 before Obamacare was enacted.

That share has now risen beyond 8%. This means that Americans are spending more money on healthcare than before, and in many respects, they’re getting lower quality care: longer emergency room wait times. Longer referral wait times. More bureaucracy.

So, sure, making healthcare more affordable was a nice idea. But the execution was terrible.

And with Obamacare’s execution, one needn’t look any further than the debacle that became the healthcare.gov website.

They started development for the Obamacare website as soon as the legislation was signed. Its cost was originally supposed to be $93.7 million— which itself is an astonishing figure for a website. But, as usual with the government, spending quickly spiraled out of control.

According to an internal Inspector General report at the Department of Health and Human Services, healthcare.gov ended up costing a whopping $1.7 billion. And a separate analysis from Bloomberg had the total at $2.1 billion.

(It turned out, of course, that a senior executive at website development company was a college classmate of Michelle Obama’s at Princeton.)

Well, the Biden administration is not about to be outshined by the Obamas when it comes to gross financial mismanagement. And that leads us to our latest Inspired Idiot of the Week: Transportation Secretary Pete Buttigieg.

Buttigieg is already a distinguished passionate ignoramus.

When a train derailment last year was spewing toxic chemicals all over the town of East Palestine, Ohio, Buttigieg couldn’t be bothered to deal with it… because he was too busy making sure that automobile manufacturers were using female crash test dummies.

(He later on blamed Orange Man for the train derailment).

When it came time to spend $1 trillion from the federal infrastructure bill, Buttigieg went on a series of bizarre tirades claiming that “racism is physically built into some of our highways” and wailed that there were too many white construction workers.

And when a Singapore Airlines flight hit major turbulence last month, Buttigieg immediately shrieked “climate change” as the reason… even though major turbulence events were far more common 60+ years ago than they are today.

His latest crusade is the ill-fated cause of electric vehicles— which US consumers have been soundly rejecting. Today only 8% of consumers buy electric vehicles… and that number is falling.

Electric vehicle demand is so bad that auto manufacturers are starting to seriously scale back production and investment. It was only a few years ago that several major brands insisted they were going 100% electric… only to see their sales plummet.

They’re now walking back those designs and resurrecting the good ole’ internal combustion engine.

This is where the Biden administration has stepped in, recently mandating that, by 2030, 50% of passenger vehicles sold in the US must be electric or hybrid. Again, that’s more than 6x higher than today’s level.

It’s not enough that the government is ignoring consumer demand. They also want to make sure that you pay out the nose.

Like it or not, other countries (especially China) manufacture electric vehicles for far, far less than the US automaker can produce.

Yet rather than allow consumers to comply with the mandate by purchasing cheaper, foreign EVs, Team Biden is slapping huge tariffs on those cars. So, they’re going to force you to buy an EV, and they’re going to force you to spend a ton of money on it.

They’ve also completely ignored basic infrastructure issues.

US energy supply and demand fundamentals are so out of whack that there will likely be electricity shortages within the next 10 years… and that’s even without factoring in the massive new electricity demand from EVs.

A big part of this shortage is demand from power-hungry AI data centers. But there are major supply challenges as well.

Government policy at the state and federal level has forced many electric utility companies to shift to incredibly expensive and inefficient wind and solar production, while shutting down cheap nuclear power plants.

Naturally there are plenty of times when the sun doesn’t shine and the wind doesn’t blow, so the end result is less reliable electricity.

Consider that over the last 15 years, thousands upon thousands of acres of solar panels and wind turbines have been installed across the US. Yet over the same period, total electrical generation in the US has barely moved. In fact, electricity generation today is almost at the same level it was back in 2007.

Electricity supply is simply not growing to keep up with demand. And again, that’s before taking into consideration the huge bump in electricity demand that will take place when the EV mandate goes into effect in 2030.

There’s also a ton of other infrastructure to take into consideration… like the electrical charging stations that will need to pop up all over the country. Every lonely highway, every small town, every backwoods speed trap, is going to need to bring in new, expensive electric charging equipment.

And this is where Pete Buttigieg is once again on the case; he has trained his gaze now on building charging stations across America… and allocated $7.5 billion to do so.

How many charging stations do the American taxpayers have to show for this $7.5 billion investment?

1. As in… 1 2 3 4 5 6 7. Seven.

Buttigieg admitted this himself on TV recently, downplaying his failures by suggesting that it will ultimately be the responsibility of consumers to charge their vehicles at home. So, it’s ultimately your problem.

Buttigieg is one of the purest representations of an Inspired Idiot. They don’t even bother trying to understand the problem, let alone the solution. When confronted with a problem, they beat out one of the accepted lines— racism or climate change or Orange Man.

They push idiotic, impossible mandates and then issue contradictory tariffs without even realizing what they’re doing. And just like Obamacare, their mandates make people worse off.

And even when they only have ONE JOB to help the process along— build some charging stations— they can’t even manage to get that right.

With a $7.5 billion budget and just seven charging stations to show the taxpayers, Pete Buttigieg is putting the Obamacare website to shame. And he’s only getting started.

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This entire week has been full of eye-rolling— borderline eye-gouging— cowardice and deceit in the halls of Congress.

It started on Monday when none other than Dr. Anthony “the Science” Fauci appeared in front of the House Oversight Committee for two days of testimony. And every time the guy opened his mouth, we found out more about just how absurd and corrupt the COVID regime really was.

He acknowledged, for example, that the infamous six-foot social distancing rule “sort of just appeared,” and “wasn’t based on data.”

Given that Fauci asserted so much intellectual superiority throughout the pandemic— all of which was supposedly based on his unparalleled command of science— the revelation of this notably unscientific social distancing commandment is a monument to incompetence and hypocrisy.

But the most recent damning evidence comes from Dr. David Morens, one of Fauci’s most senior advisors.

Morens corresponded through private emails with Peter Daszak— the man who secured US government funding for gain-of-function research at the Wuhan Institute of Virology— with Morens coaching Daszak on how to violate federal law in the grant process.

He also bragged to Daszak that they didn’t have to worry about Freedom of Information Act, or FOIA, requests. Morens said he would simply communicate with Fauci on his private email, because Fauci was “too smart” and knew how to avoid scrutiny and oversight from the public.

Again, Morens was one of Fauci’s top lieutenants, and the men have known each other for years.

But when asked about Morens in the hearing, Fauci acted like he barely knew the guy and gave a slimy, cowardly response: “It is conceivable that I communicated with him. . .”

And then Fauci proceeded to throw Morens under the bus, saying his correspondence with Daszak was an unethical conflict of interest, and should be punished. But Fauci, of course, should not be punished…

Not to be outdone by Dr. Fauci, Attorney General Merrick Garland testified before the House Judiciary Committee on Tuesday to respond to concerns about the weaponization of the Justice Department.

Garland found it incomprehensible that anyone thought there was a double standard in the justice system. Rather than acknowledging citizens’ realistic concerns, he instead insisted that any hint of impropriety or double standards constituted “baseless and extremely dangerous falsehoods.”

Garland then nearly teared up as he proudly claimed that he has devoted his entire career to the rule of law and does “not pay attention to the political parties.”

And for good measure, he added that he “will not back down from defending our democracy.”

Yet at the same hearing he couldn’t manage to answer a question about whether he (or a family member) had ever profited or benefited from a case he was prosecuting.

For a guy riding around on his high horse to supposedly save democracy, a simple “no” should have been pretty easy. But apparently that’s too high an expectation of the country’s top public servants.

These two hearings— Fauci and Garland— grabbed a ton of headlines this week. But there was actually another Congressional hearing that, frankly, was equally important… but absolutely no one is talking about.

And that was a rather bland meeting of the House Ways and Means Committee featuring testimony from the Chief Actuary of Social Security.

Now that sounds about as exhilarating as watching paint dry… hardly comparable to the popcorn theatrics in the Fauci/Garland hearings.

But Social Security is pretty critical, directly impacting the lives of literally every working American and retiree. Most people are either paying into the system, or they’re collecting from it.

Yet the Chief Actuary stated plainly that Social Security’s key trust fund will run out of money and be fully depleted in less than a decade— sometime between April and November of 2033.

This insolvency “should come as no surprise,” he said, since for the last 13 years, the Social Security Trustees have been saying this in their official annual report. And bear in mind, the program’s trustees include the United States Secretary of the Treasury, Secretary of Labor, and Secretary of Health and Human Services… so not exactly a bunch of crazy conspiracy theorists.

The Chief Actuary also reiterated that, once the trust fund runs out in nine years, retirees will immediately have their benefits reduced by more than 20%, as the only source of funding to pay benefits will be payroll tax revenue.

But it will only get worse from there— in large part because there simply aren’t enough young workers to support a growing number of retirees.

US birth rates have been declining for decades and keep hitting fresh historic lows year after year. This is a huge problem for Social Security.

Fewer babies today mean fewer workers in the labor force 20 years from now, which means fewer people paying into the Social Security system. Yet 20+ years from now, there will be more and more retirees receiving benefits.

This math is totally backwards; a well-functioning Social Security system means having far more workers paying into the system to support a much smaller number of retirees.

This is known as the worker-to-retiree ratio. And due in large part to America’s historically low fertility rate, that critical ratio gets worse every year.

So, based on current trends, if you’re in your 20s or 30s now, Social Security is simply not going to be there for you when you hit retirement age in a few decades. You will pay taxes for your entire working lives only to have this promise yanked when it becomes your time to collect.

Maybe the plan is to import tax-paying workers into America through immigration. In fact, perhaps that’s why Joe Biden has opened the borders to millions upon millions of migrants. He’s trying to save Social Security. I’m sure that’s the reason.

Except none of those people has legal status, hence they aren’t paying into the system… in fact many of them are beneficiaries of generous taxpayer-funded benefits. How any of these progressive politicians are still in power is beyond my comprehension. But I digress…

The Chief Actuary bluntly stated that the only way forward is for Congress to either cut benefits, i.e. default on the promises they’ve made to US citizens for decades… or to substantially raise taxes.

Neither is a good option. But even if we want to pretend that these are real ‘solutions’ to the Social Security problem, it’s worth noting that nothing is being done about it. No politician wants to touch Social Security. Joe Biden insists he will veto any legislation to overhaul the program.

Social Security is a ticking time bomb that everyone is willfully and deliberately ignoring. It’s irresponsibility at its highest.

The younger you are, the more important it is to plan for this if you expect to ever be able to retire.

Retirement planning is boring, yes. Especially if you’re young. If you’re 18 years old, it’s virtually impossible to imagine your life 10 years from now, let alone 50.

And yet you’ll blink one day and realize that you just turned 45. It really goes quickly.

Time is on your side, and there are plenty of sensible ways to set aside your own retirement money.

Self-directed IRAs, solo 401(k)s, and other plans are tax-advantaged and extremely flexible. They allow you the freedom to maximize your investment options, minimize fees, and also ensure you don’t just have to hand over your savings to the BlackRocks of the world.

This is absolutely a fixable problem… as long as you’re willing to take action and exercise a little bit of discipline.

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Next month will mark 80 years since the US dollar was formally anointed as the world’s reserve currency.

It was July 1944. And with the war in Europe near its denouement, governments were already trying to plan what the postwar world would look like. Most urgently, they needed to figure out how to rebuild their devastated economies.

Just think about the mess they were in: nearly every industrialized country in Europe had been destroyed by war. Manufacturing and farming were both in the dumps, and they had very little savings to invest in economic revival.

They also had a gigantic mess when it came to international trade. Dozens of countries each had their own currencies, so commercial trade meant each government keeping 20-30 currencies in reserve.

France, for example, would have to hold Austrian schillings, British pounds, Spanish pesetas, Italian lira, Dutch guilders, Soviet rubles, etc. in reserve, just to be able to trade.

A much, much simpler solution was for every country to use the same currency to trade with each other. And there was no question about which currency would be the right choice: the US dollar.

In 1944, the United States still had a strong and powerful economy. It had robust capital markets and a well-developed financial system. It was the only country left standing.

So, representatives from more than 40 nations gathered that summer in picturesque Bretton Woods, New Hampshire and formally agreed to use the US dollar for international trade and commerce.

More specifically, each country fixed its exchange rate to the US dollar, while the US dollar was fixed to gold.

It only lasted about thirty years. By the early 1970s, the original Bretton Woods deal had been completely undone. Currencies floated freely against each other (including the dollar), and the US dollar terminated its link with gold.

And yet (thanks in part to Saudi Arabia agreeing to sell oil in dollars), the US dollar has continued to remain the dominant reserve currency through today.

For the most part that was still a sensible bet; the US has been the world’s #1 economy for the past five decades. But the cracks are obvious.

The US federal debt is a national embarrassment. At $35 trillion, the debt is far larger than the entire US economy… and it gets worse every year.

The US government is also completely dysfunctional. The vitriol and enmity, among the parties and within the parties, is so extreme that virtually nothing productive or beneficial ever takes place. The business of government now is merely two sides screaming that the other is a threat to democracy.

The President barely knows where he is half the time, and the other half he spends shredding the Constitution to engage in some anti-capitalist, inflationary, fanatical woke climate agenda.

Sadly, this isn’t a one-time blip. America’s governance and finances have been deteriorating for most of this century– starting with the endlessly expensive War on Terror, through the free-spending Obama years, to the pandemic… and now the very real prospect that the next four years could look very similar to the previous four years.

America is supposed to be a reliable, stabilizing force in the world. But today’s America has lost its grip. And foreign nations have noticed.

Most people alive today don’t remember a world in which the dollar wasn’t #1 and therefore cannot fathom a world in which this is no longer the case. But it’s irrational to assume that something will continue indefinitely, forever, simply because of the status quo today.

It’s not 1944 anymore. Back then there were no other options… and no one who even came close to rivaling the military and economic superiority of the United States.

Today both of those are in decline. It’s not to say the military can no longer fight or that the economy is in complete shambles. But America no longer has the unrivaled position it enjoyed for so long.

More importantly, the trend isn’t looking good. From an economic perspective, the national debt is set to increase by another $20 trillion over the next decade… likely triggering a nasty run of stagflation like the US experienced in the 1970s.

The US military, meanwhile, continues its downward slide. Recruitment is absolutely abysmal. Key weapons systems, fighter jets, tanks, and naval vessels are borderline obsolete.

The US Navy’s fleet of ships and submarines (which would be critical in any conflict against China) is the oldest and smallest it’s been since the end of World War II. Nearly 1,000 military aircraft will be retired from service in the next five years alone, and there is no concrete plan to replace them.

Nor is there any money to do so.

Frankly it is exceedingly difficult to believe that, in light of America’s declining power and prestige, the rest of the world will continue accepting the US dollar as the global reserve currency for much longer.

We’re already seeing signs of this change; plenty of countries are starting to trade with one another in different currencies, including Chinese renminbi and Indian rupee, and this trend will likely accelerate over the next several years.

I think it’s even possible there could be an event of some sort– perhaps the US government defaults on its debt, or there’s even a shooting war or cyberattack– which triggers a new Bretton Woods style conference.

The key difference between now and 1944 is that there was only one option back then– the US. And pretty much everyone had confidence in America.

That’s not the case today. Few rational people have the same level of confidence in the US government. Yet almost no one trusts the Chinese either.

But just like 1944, there is an obvious solution… and one that everyone already trusts: gold.

Nearly every country already holds gold as a reserve asset, so there would be very little change to the way they currently do business.

I’ve written about this before– I believe this is why so many central banks around the world have been on a gold-buying spree. In fact, this is THE reason why gold is near its all-time high: central banks have been buying it by the metric ton.

You have to understand that central banks aren’t speculators. They don’t care about price. They buy for strategic reasons… and I believe that the central bank gold purchases that have been occurring over the past few years are a key sign that the global financial regime will be changing.

Individual investors, meanwhile, have been selling gold.

North American investors have sold off more than $4 billion worth of gold ETFs in the first four months of this year, with $2 billion of that just in the month of April. And gold ETF holdings are now at their lowest level in four years.

Central banks are buying. Individual investors are selling. It seems pretty clear that people aren’t paying attention to the warning signs.

Yes, gold is near its all-time high. But that doesn’t mean it can’t go much higher… especially if there’s a catalyst. And there absolutely is.

As a final point, I would point out again that even while gold is near its all-time high, shares of high quality, profitable, dividend-paying gold miners are laughably cheap.

That’s because central banks only buy physical gold bullion (which has pushed up the price of gold). They do not buy gold stocks… hence many of these businesses are available for outrageous bargains.

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On August 4, 2017, the most hated person in the world was sentenced to seven years in prison.

You may remember the case: his name is Martin Shkreli.

Shkreli had quite infamously taken over a pharmaceutical company and jacked up the price of a medication by 50x, practically overnight. Media outrage ensued, and Shkreli– an young, arrogant braggadocio with far more ego than compassion, was summoned to explain himself to angry politicians in Congress.

Shkreli smirked and insulted his way through the Congressional hearing, leading countless people to conclude he was the biggest jerk on the planet.

And, shortly thereafter, Shkreli was raided and prosecuted by the Justice Department on charges of securities fraud.

Now this guy was no Honest Abe. But he wasn’t Bernie Madoff either. And it’s worth pointing out that not a single one of Shkreli’s investors lost money.

I have no doubt that Shkreli stretched the truth with investors; the financial industry is filled with sharks who lie to investors all the time. But those people are rarely charged or prosecuted– including the vast majority of the liars and thieves from the 2008 financial crisis.

You might remember Goldman Sachs bankers referred to their customers as “muppets” and bragged about selling them “shitty deals” and terrible investments. Zero jail time for them.

Shkreli was prosecuted because people hated him… and the government put him behind bars.

I wrote at the time that Shkreli’s arrest and prosecution represented a dark day for the justice system; it proved that you can be prosecuted in the land of the free, simply because people don’t like you.

Bizarrely I received a lot of hate mail from that article from people who accused me of defending Shkreli. I wasn’t. I was arguing that the government shouldn’t put people they don’t like in jail.

Naturally, the passionate ignoramuses cling to their mantra that “no one is above the law”. But that’s complete BS.

The amount of local, state, and federal crimes on the books could fill an entire football stadium. Every single person reading this right now is guilty of violating some rule, statute, or regulation without even knowing it.

How could anybody possibly keep up with all the rules and laws that change every single day and are constantly expanding.

In fact, just last year they added 79,066 pages to the Federal Register. Yet they also claim that “ignorance of the law is not an excuse”. It’s absurd.

There used to be sacrosanct standards of the justice system. Victims would come forward and allege a crime had taken place. The crime would be investigated, a suspect would be found, then prosecutors would bring charges.

Most importantly, the suspect would then be presumed innocent until convicted by a dispassionate prosecutor and impartial jury.

Now that system is completely distorted.

Politicians run for elected prosecutor offices (like District Attorney or state Attorney General) with the same zeal and vigor as if they were running for President.

They’re funded by fanatical leftists like George Soros, and they make campaign promises to target and prosecute political opponents.

Then, rather than investigate a crime to find an individual suspect, they investigate the individual and find a crime… even if it means inventing a new crime by stretching the law beyond reason.

Then they select the jurisdiction most suitable for their case– where the defendant is the most hated– virtually guaranteeing that there will in no way be a fair trial.

Putting Donald Trump on trial in New York City is like putting Benjamin Netanyahu on trial in Iran and expecting the Ayatollah to issue a fair and impartial judgment.

But this is the justice system now. As I wrote years ago during the Shkreli affair, “it really paints the picture when you realize that a member of the political elite can merely point his/her thumb like Caesar at the Colosseum, and then gun toting federal agents come swarming in with a laundry list of charges.”

And it was the same thing in the recent civil trial brought by New York Attorney General Letitia James– who also campaigned on convicting Trump. She claimed that he overstated the value of his real estate assets to secure favorable loans.

But there was no victim. The banks that gave the loans said they lost no money and would be happy to do business with Trump again.

Again, though he’s neither Bernie Madoff nor honest Abe, such practices are pretty standard in the industry. Bankers know this. They’re not stupid. Of course, borrowers inflate their assets.

The practice is so commonplace, in fact, that the Governor of New York had to assure other real estate developers (who were panicking and fleeing the state) that no one else would be prosecuted for those charges. Only Trump.

The outcome of the case was so lopsided that the judge had to practically invent a new form of mathematics to justify the outrageous penalty he ordered.

In 1998, then President Bill Clinton paid $850,000 to a woman who had accused him of sexual assault. They money was part of a legal settlement which included a nondisclosure agreement to keep the woman quiet. No charges were brought against him.

Hillary, of course, wiped her private email servers before handing them over to FBI investigators… which is an obvious crime. She admitted to this. No charges were brought.

No charges have been brought against Joe Biden for illegally storing classified documents. No charges have been brought against anyone on the Epstein client list.

The word justice comes from the Latin word justitia, which means righteousness. And, quite amazingly, the leftists who are cheering the perversion of the justice system right now are full of their bloated sense of righteousness.

They truly believe this is justice.

But they have memories like goldfish and have completely forgotten that the left is a tribe of cannibals: sooner or later, the leftists eat their own kind.

The people cheering right now will inevitably one day say the wrong thing. They’ll use the wrong pronouns. They have the wrong thought. They’ll fail to bend the knee, raise the fist, say the name, storm the university building, or engage in whatever ritualistic virtue signaling comes next.

Then they could find themselves at the business end of the perverted justice system that they’re cheering right now.

Who knows where it goes from here. Will the political opponents on the right ‘turn the other cheek’, or will it be full blown civil lawfare?

(If so, I would humbly suggest that Tony Fauci likely has a laundry list of actual good reasons to be prosecuted.)

The US has crossed the Rubicon.

We saw the preview during the 2020 summer of love riots, and COVID hysteria. People were, canceled, fired, blacklisted, and denounce by loved ones for daring to disagree with the narrative.

But at least it didn’t leverage the full resources of the justice system.

Now, countless people on the woke left are full of bloodlust and cheering for the perversion of the justice system. They don’t realize that one day it might be used against them.

Everybody ought to recognize this is now the legal standard in America. And to think that it ends here is naive.

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In 2007, Giuseppe Ferrarello found himself facing a monumental challenge as the newly-elected mayor of Gangi, Italy — an incredibly picturesque yet dwindling town nestled in the mountains of Sicily.

Like many rural communities across Italy and beyond, the village of Gangi was grappling with depopulation and economic decline. Once home to 15,000 people, its population by 2007 stood at just 7,000. Young people in particular were leaving to seek job opportunities in northern Italy and elsewhere in Europe, leaving behind aging parents and empty houses.

At first glance, the situation seemed hopeless. Gangi’s inland location far from the coast rendered it unattractive to tourists.

But Ferrarello refused to give up and adopted a bold strategy to revitalize his town through the “One Euro Houses program” — a pioneering initiative aimed at attracting new residents and rejuvenating abandoned properties.

Under the program, buyers could purchase local derelict houses for a symbolic price of just one euro… but with strings attached. New owners had to commit to restoring the properties within four years.

Ferrarello’s idea was successful in attracting foreign investors. And over the next few years, the little hamlet was recognized as the “Jewel of Italy,” and named one of the “The most beautiful Italian villages.”

New residents and tourists from Europe and beyond arrived, to the delight of the local businesses and artisans.

And over the following years, several towns across Italy, Spain, France, and even the UK launched their own projects offering housing at a ‘symbolic price’.

At face value it seems like a stupendous bargain to buy a house in Europe for just 1 euro. But are these offers really worth the strings attached?

Super cheap real estate deals across various EU countries exist because the properties are worthless to their current owners. These often-dilapidated homes are located in small towns far from major population centers and tourist attractions, and many have been abandoned for generations, requiring extensive renovation.

Property taxes, though modest, make these properties a burden. And buyers typically must commit to spending at least €35,000 to renovate the property within two to three years.

If you fail to meet these obligations, you risk losing a €1,000 to €5,000 insurance deposit held by the municipality, losing the property, or both.

Other costs include €1,500 in legal fees, and roughly €3,500 for mandatory civil engineering and architectural plans.

There’s also no guarantee that €35,000 will be enough to complete renovations; many of these properties are “historic,” meaning you can’t do whatever you want. Plenty of local regulations will govern what you can and cannot do.

Therefore, renovating a small, 100 square meter (1,076 sq.ft.) home can cost between €60,000 and €160,000 to bring it to a livable and rentable condition.

Engaging in such a project could certainly benefit adventurous souls with ample free time.

But there are other challenges as well. You either need to speak Italian and be prepared for the complexities of southern European bureaucracy, or you’ll have to spend even more money on project managers.

Even if you persevere through the purchase and renovation process, consider the most probable outcome — an illiquid property in a tiny village lacking appeal to both Italians and foreigners alike. Because most of these towns aren’t as successful as Gangi at reigniting their tiny economies.

But if owning a beautiful home in Italy is your goal (and part of your Plan B), it probably makes more sense to just look at the wide selection of regular cheap properties available throughout the country.

After all, owning an Italian home does offer the allure of breathtaking scenery, cultural richness, relaxation, outdoor activities, and even an investment potential… all in one picturesque package.

Even for as low as €60,000 to €160,000, you can find a nice Italian property with no strings attached — no hunting for reliable information, no applying for remodeling and construction permits, no actual renovation, and no time wasted.

Properties almost anywhere in Italy remain remarkably cheap, as the country has, so far, missed the real estate boom experienced by its European neighbors.

As of March 2024, the average Italian property price per square meter stood at €1,850, just 6.6% higher than the nationwide low recorded in February 2020.

Property prices in Spain average €2,098 per sq.m., and €2,596 in Portugal.

And 22 provinces (out of 106) across Italy have current province-wide prices below €1,000 per square meter. That’s definitely cheap.

For example, in Gangi, the original “€1 house” village, this 151 sq.m., 3-story house in the town center offers great views, is in livable condition, and is selling for just €35,000.

(Personally, I’d rather pay 35k for the finished home than have paid 1 euro and gone through all the time, money, and work to renovate it.)

And it’s not just the cheaper southern Italy that has these deals.

Genoa — a famous port city just south of Milan, and the birthplace of Christopher Columbus — is still 47% below its 2012 peak, with plenty of options below €1,000 per square meter.

Biella — less than 90 minutes from Milan and situated right at the foot of the Alps, next to lakes, mountains, and ski resorts — offers this spacious and modern 250 sq.m. apartment located right in the town’s historic area, selling for €155,000 — a very inexpensive €620 per square meter.

Now, believe it or not, this article isn’t really about buying property in Italy. To some people, Italy may be their idyllic retirement dream. Others couldn’t care less. The larger issue is how to think about a “Plan B”.

Remember, the central idea behind a Plan B is to mitigate risks by taking sensible actions — actions which make sense regardless of what happens (or doesn’t happen) in the future.

For a lot of people, a big part of their Plan B is having a second property overseas. A second home abroad, combined with residency or citizenship, is sort of like an insurance policy: you might not ever need it… but in case you ever do, you’ll be damn glad you have one.

A second residence means that you’ll always have a place to go in case, for whatever reason, you need to leave your home country. This could be enormously valuable to you and your family.

But even if that day never comes (and hopefully it doesn’t), it’s hard to imagine you’ll be worse off for owning a nice property in a place where you really enjoy spending time– which you were able to purchase on the cheap and generate modest cashflow while you’re not using it.

For some people, Italy ticks that box. For others, it doesn’t. And for others, buying a second home isn’t the right move either. Everyone has unique, individual circumstances.

The key idea is that we can apply this same logic to other elements of a Plan B, including our finances.

For example, we have long argued why inflation will grow and become a major problem for the US dollar in the coming years; it will be extremely difficult to take on $20+ trillion in new debt in the next decade without serious, serious inflation.

Real assets are a major inflation hedge. And right now, many real assets– including key commodities and the companies which produce them — are historically cheap.

We’re talking about high quality gold or copper miners that generate fantastic profits, have virtually zero debt, and pay 8%+ dividends… yet their shares trade at laughably low valuations.

If our inflation thesis plays out as expected, these types of companies will do extremely well, and shareholders could be richly rewarded.

But even if inflation never materializes (which is highly doubtful), it still makes sense to consider owning a strong, profitable business that pays a great dividend.

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In the year 1712, an English ironworker and part-time Baptist preacher named Thomas Newcomen finally put the finishing touches on a new invention that had been more than a century in the making.

Newcomen called it the ‘atmospheric engine’, and it was essentially a very crude, rudimentary steam engine that he used to pump water.

The idea had existed since the early 1600s, and a number of inventors had attempted to create something similar. But Newcomen was the first to develop a functioning engine, and his key breakthrough was including a fuel source (wood) to heat up water and create steam.

It’s remarkable that, even to this day, most automobile engines, generators, and electrical power plants still rely on Newcomen’s basic concept: burn a fuel to create heat, then harness that heat energy to generate motion and mechanical work.

Obviously, the design has been much improved since then; James Watt perfected Newcomen’s invention decades later with the first commercially viable steam engines (which ultimately kicked off the Industrial Revolution).

Inventors also discovered far more efficient fuel sources.

Coal, for example, was found to have more than twice as much heat energy per pound than wood… which is a key reason why coal became the most important commodity of the 1800s. But other commodities like oil and gas were later discovered to be even more fuel efficient than coal.

Today all three are still used in vast quantities. In fact, coal-fired power plants still produce over 2,300 gigawatts of electricity worldwide, which constitutes about 30% of global electricity production capacity.

Natural gas is also responsible for nearly 2,000 gigawatts (in addition to its widespread use in heating). And oil is clearly the most dominant fuel source for internal combustion engines which power global transportation.

Now, at the end of the day, all three commodities serve essentially the same purpose, i.e. they are fuel sources whose heat energy is harnessed to perform work. And because of this, their heat energy should be priced more or less the same.

For example, a barrel of oil contains the equivalent of 5.6 million British Thermal Units (BTUs) of heat energy. So, at a price of roughly $80 per barrel of oil, this is the equivalent of about $14.28 per million BTUs of heat energy.

Oil prices do vary from place to place. But the differences are fairly minor; the West Texas Intermediate price (used primarily in the US) is slightly lower than the Brent oil price (used primarily in the North Sea), but they are within a few percent of each other.

But natural gas is a totally different story.

In Europe, for example, natural gas prices are significantly higher than they are in the US and currently trade for roughly $9.12 per million BTUs. And only a few months ago, natural gas prices in Europe were nearly $14 per million BTUs, i.e. almost equivalent to oil price when measured in dollars (or euros) per million BTUs.

But natural gas prices in the US are dramatically lower than they are in Europe… and it’s easy to understand why: the US has some of the biggest natural gas reserves in the world, while Europe has almost nothing by comparison. (This is why Europe is so reliant on Russian gas).

And since Joe Biden has banned the exporting of LNG (liquefied natural gas) from the US, there’s basically nowhere for all that excess US natural gas to go.

This is why prices in the US are less than $3, versus more than $9 in Europe. If US producers were free to export, prices in the US would rise, prices in Europe would fall, the global natural gas prices would be more or less the same, just like global oil prices.

But, at least for now, LNG exports are banned… and that keeps prices incredibly cheap in the US. How cheap exactly?

Well remember that $80 oil is the equivalent of $14.28 per million BTUs of heat energy. US natural gas prices are $2.77 per million BTUs of heat energy. So, based on the price per million BTUs, natural gas is about 80% cheaper than oil in the United States.

Another way to say it is that US natural gas is priced at the equivalent of $15 for a barrel of oil… which makes US natural gas the most underpriced conventional energy commodity in the world.

Now, I say “conventional” because there is another option that blows natural gas away– and that’s nuclear.

The energy released in a nuclear reaction from just a single cubic foot of uranium is literally FIFTY BILLION times greater than the energy released from burning an equivalent amount of natural gas. So, nuclear is, by far, the cheapest and most efficient energy… which is why China, India, Russia, etc. are all feverishly building nuclear power plants.

The West, by comparison, is shutting their nuclear plants down. It is the dumbest policy imaginable.

So, at least for now, natural gas is America’s cheapest energy source. But it probably won’t stay that way for long.

First, large tech companies, which are building build massive, energy-hungry AI data centers, are also looking at putting in their own power plants… which will most likely be powered by natural gas.

This increased demand will certainly have a big impact on price.

The second catalyst is that the export ban probably won’t last. There are lawsuits, legislation, and an upcoming election, any one of which could reverse the ban and start up LNG exports once again. When this happens, US natural gas prices could quickly rise.

In either case, natural gas producers stand to benefit substantially from higher prices. And it just so happens that shares of many of the best quality producers right now are laughably cheap, with low multiples relative to earnings, book value, and Free Cash Flow.

We’ll talk about this more in the future, but our core view is that it makes a lot of sense to own ‘real assets’, i.e. scarce, high quality, productive assets that the world truly needs (and cannot be conjured out of thin air by central banks.)

Energy commodities like natural gas, and their highest quality producers, definitely fit that description, with the added benefit that they’re dirt cheap right now.

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This morning Spain’s Deputy Prime Minister, Yolanda Diaz, released an announcement to “celebrate that Spain recognizes Palestine State. . . [which] will be free from the river to the sea.”

This comes on the heels of her boss, the Prime Minister of Spain, announcing formal recognition of Palestine as a sovereign nation, alongside his counterparts in Ireland and Norway.

Their joint statement preached that “We believe in freedom and justice” and that “permanent peace can only be secured on the basis of the free will of a free people.”

High sounding language. Too bad the Prime Minister doesn’t apply the same logic to his own country, which is inundated with its own separatist, independent movements from the Basque Country to Catalonia to Galicia.

In 2017, for example, “the free will of a free people” in Spain’s Catalonia region voted overwhelmingly (92% to 8%) to become an independent, sovereign state. Leaders of the movement were soon arrested by the Spanish government and put on trial.

But, hey, governments these days tend to be far more interested in foreign borders than their own.

The US is overrun with migrants at the southern border… yet Congress has spent far more time worrying about Ukraine’s border.

All of these European countries that are virtue-signaling over Palestine’s borders have allowed their own nations to become completely overrun with refugees… who are then coddled at taxpayer expense with free housing, food, and other welfare programs.

In completely unrelated news, crime rates in these same countries have skyrocketed, including sexual assault of children.

But the invasion of their own borders is not a concern. They are only interested in Palestine– which they claim to be a “free people”. This is completely naive.

Palestinians aren’t free. They are hostages of the Hamas, a terrorist organization masquerading as a government.

People in Gaza are obviously suffering immeasurably. Yet for some reason none of these Inspired Idiots in Europe are willing to state the obvious about Hamas.

Hamas hold sham elections to keep themselves in power while deliberately depriving their own people of food, water, and basic services in order to pin the blame on Israel and create sympathy for their cause.

Hamas also notably puts military assets inside of the most inviolable civilian institutions, like schools and hospitals.

Yet there’s not a word about this from virtue-signaling European politicians.

It also strikes me as quite bizarre that, while they now assert that Palestine is a sovereign nation, these same people refuse to recognize Taiwan.

So, what happened to that “free will of a free people” logic? Apparently, for these Inspired Idiots, it doesn’t apply when you’re suckling on that Chinese money teat.

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On Tuesday, September 15, 1992, the two most powerful financial officials in the British government held an urgent meeting that night to review their plan for when the markets opened the next morning.

The tone of the meeting must have felt frantic… even desperate… because the value of the British pound had been falling for weeks.

Investors and speculators were rapidly losing confidence in the UK government, mostly due to the ridiculous “Exchange Rate Mechanism” (ERM) which essentially pegged most European currencies to the German Deutschemark.

Rational investors viewed the ERM as an almost comical impossibility.

Germany’s economy was light years ahead of everyone else. Germany had vastly higher productivity, far greater savings, low inflation, high growth, and much more responsible monetary policy.

So, to even pretend that a country like Italy or even Britain could fix its exchange rate to the Deutschemark, i.e. to essentially mirror Germany’s economic performance– was a total joke.

Britain joined the Exchange Rate Mechanism in October 1990. Prime Minister Margaret Thatcher had spent years trying to keep Britain out of the ERM, viewing it as giving up national sovereignty.

But Thatcher was about to retire. And the new batch of leaders insisted that pegging Britain’s economy to Germany was the way forward.

Their experiment didn’t even last two years. By the summer of 1992, inflation in Britain was more than 3x German’s. Plus, Britain had a major budget deficit.

Financial speculators correctly recognized, given the massive disconnect between the British and German economies, that Britain would not be able to maintain its fixed exchange rate with the Deutschemark.

So, traders began short selling the British pound, i.e. betting that the value of the pound would fall because the British government would devalue its currency.

The sell-off reached a crisis on September 15th, when the head of Germany’s central bank suggested to the Wall Street Journal that weaker countries (like Britain) would have to devalue their currencies.

That’s what led the British Chancellor of the Exchequer and head of the Bank of England– the two most powerful policymakers in British government finance– to meet that evening.

They knew that the German central bank’s comments would encourage even more traders to dump the British pound. So, the two men pledged to do ‘whatever it takes’ to defend the pound and defeat the speculators.

It didn’t work.

The following morning on September 16th, the Bank of England did everything it could. They raised interest rates, they bought back pounds, they bought government bonds, they made all sorts of outlandish promises.

But speculators didn’t believe any of it. They could see the numbers, and they knew that the Bank of England simply didn’t have the financial resources to maintain such an unrealistic exchange rate.

One of those speculators was George Soros, who famously bet $10 billion against the British pound… far exceeding the Bank of England’s financial resources.

By the end of that day, the British central bank had exhausted its capital and was essentially bankrupt. The British government had to bail them out to the tune of 3 billion pounds, and then announce that they were formally leaving the ERM– proving the speculators right.

This is an important story to understand, because it’s likely that something similar may happen to the Federal Reserve and US dollar over the next several years.

The Federal Reserve is already insolvent.

According to its most recent annual financial statements, the Fed has just $51 billion in equity, versus a whopping $948 billion in mark-to-market losses. This means the Fed is insolvent by roughly $900 billion.

This is a big problem. Remember that the Fed is still a bank, i.e. it has financial obligations, liabilities, and depositors that it needs to pay.

For example, commercial banks like JP Morgan and Bank of America have deposited a total of $3.4 trillion of their customers’ money, i.e. YOUR money, with the Fed. And the Treasury Department holds another $700 billion deposit at the Fed.

The Fed owes money to foreign governments. They owe trillions of dollars from repurchase agreements to banks and businesses across the global financial system.

So, yeah, the insolvency of the Federal Reserve is a pretty big deal. Yet, at least for now, no one is saying a word about it.

But just like the Bank of England in 1992, sooner or later, someone is finally going to say something… and do something… about the Fed’s insolvency.

There’s a good chance that means betting against the dollar… just like speculators bet against the pound three decades ago. And that would ultimately reduce the value of the dollar, increase inflation, and trigger a new ‘Bretton Woods’ agreement in which the US dollar is no longer the world’s reserve currency.

George Soros became known as “The Man Who Broke the Bank of England”. (Though given his malign proclivity to fund progressive activists, he is known by several other names in my household, none of them reverent.)

Within the next several years there could be some Chinese or Russian financier who becomes known as “The Man Who Broke the Fed”.

This isn’t sensational. The Fed is already insolvent by $900+ billion, according to its own financial statements. Social Security is insolvent. The US government is insolvent by tens of trillions… and they further anticipate the national debt to grow by $20 trillion over the next decade.

These are facts, not fantasies.

And this is why it makes so much sense to hedge these risks by owning real assets which are scarce, valuable, and uncorrelated to the US dollar.

Gold is a great example. And as we’ve argued before, even though it’s already near its all-time high, we believe it can go much higher from here.

More on that soon.

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On July 12, 1648, dozens of angry French politicians gathered at the hallowed Palais de Justice in Paris to draft the final ultimatum that would be sent to their nine-year-old king, Louis XIV.

The politicians were all members of France’s national parliament, and, like most modern politicians, they were almost all lawyers who lived extremely privileged lives at the expense of French taxpayers.

In France, most aristocrats historically came from a group known as the noblesse d’épée, essentially Knights of the Sword. They were warriors who had fought valiantly and had won their power for their dedicated service to France.

This new class of politicians, however, came from a different group known as the noblesse de robe. They had never fought or bled for France, and rather had spent their lives in academia and law school without any understanding of the real world.

And while they claimed that their political crusade was all about ‘the people’, it was obvious that they just wanted more power for themselves.

France was just coming out of the Thirty Years’ War. The King was just a boy. The chief minister– Jules Mazarin– was extremely unpopular. So, these politicians saw an opportunity to take power.

They relied on their friends in the media to create divisions in French society– Catholics versus Huguenots, peasants versus merchants– and before long there was talk of civil war. And it didn’t exactly go as planned.

On August 27, a few weeks after submitting their ultimatum, roughly 160 politicians marched to the royal palace. They were joined by a small crowd of peasants who were dumb enough to believe that these nobles actually cared about commoners’ problems.

The royal court initially decided to placate and respect the crowd, so Louis’ mother took him outside of the city for a while. The politicians and their peasant followers immediately declared victory and turned Paris into a sort of ‘autonomous zone’.

But as months went by and nothing really improved, many of the peasants began to realize that they were just pawns in the noble’s attempt to seize power and turn France into an even worse feudalist state.

Eventually the boy king returned– this time with his army. And suddenly the rebel nobles realized that their civil war was about to get real. Trained, professional fighters were about to march through Paris and vanquish all the sissy elites who had never fought a day in their lives.

Sure, the elites knew how to write angry letters. They knew how to use the media to stoke divisions and call their opponents all sorts of horrible names. They knew how to talk tough. And if they were alive today, they’d probably be really great at making TikTok videos.

But they were ultimately a bunch of cowards who weren’t even willing to get a bloody nose for their so-called beliefs. And France’s ‘civil war’ was over in no time.

This is one of the great lessons from history: it’s easy to pretend that you stand for something when the cost for doing so is absolutely nothing. You only find out what people truly believe when their own blood and livelihood is on the line.

In our modern era, we have equally incompetent, idiotic, wimpy politicians who are devoid of backbone. They have no clue how the real world works, and they live a life of lavish status courtesy of the taxpayer.

They, too, have stoked division and animosity among the population. People used to be able to disagree with one another civilly. Now countless fanatics viscerally hate the other side and call for large groups of people, whether ‘billionaires’ or ‘Trump Supporters’ or ‘oil execs’, etc. to be lined up against the wall and shot.

There is no rational discourse anymore, only shouting matches, angry Twitter feuds, and ‘mostly peaceful’ protests. The takeover of so many college campuses across the Land of the Free is a testament to how far civil discourse has fallen.

It’s so bad that a number of polls suggest up to 43% of Americans think another civil war is coming within a decade. Even Ray Dalio– billionaire founder of the world’s largest hedge fund– recently said the same thing in an interview with the Financial Times last week. Some politicians and vocal social media personalities have also called for a ‘national breakup’.

Given that there’s even a Hollywood production out in the theaters right now literally called Civil War about a future breakdown of the US, we thought it was time to weigh in with a dose of reality.

Let’s be honest: an actual “war”, i.e. shooting, violence against violence, etc. isn’t going to happen.

Just like the French civil war in the mid-1600s, the majority of the hyper-angry progressive rebels in America today are elitist cowards. One need only take a look at the people who have taken over the universities: they’re idiot kids, not terrifying holy warriors.

Sure, it’s easy to look tough and storm an administrative building when your spineless university president tacitly (or explicitly) supports your cause.

But the second there’s any real violence, i.e. someone who fights back, they’ll all run away in an instant. They can’t even take a bloody nose.

Bear in mind, these progressives are the same people who hate firearms and want to ban them. And aside from a handful of Antifa thugs, the leftists are a bunch of wimps who have zero chance in combat.

It’s also worth pointing out that most of them stand for nothing. Remember the ‘defund the police’ politicians who quickly changed their tune as soon as they got carjacked or robbed?

They’re physical and intellectual cowards, worthy of pity… not fear. And that’s why, on the list of risks that I think about, civil war is really, really far down the list.

That energy is far better devoted to real problems– like, how to prevent the erosion of one’s savings from inflation. Or how to mitigate the consequences of the dollar losing its reserve status. Or how to make sure the insolvency of Social Security doesn’t turn one’s life upside down.

These are risks that have actual solutions, so you can control the outcome. The notion of civil war might be provocative and capture headlines, but it’s a waste of time to even think about.

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If you want to understand the complete dysfunction of the federal government, look no further than the case of Marty Gruenberg.

At least for now– and hopefully not much longer– he is the petty tyrant in charge of the FDIC (Federal Deposit Insurance Corporation); he has served in that position for 10 out of the last 13 years and has been on the FDIC’s board since 2005.

In short, Gruenberg is the FDIC, and FDIC is Gruenberg.

This makes him extremely culpable for what a recent investigation into the FDIC describes as a destructive culture of “sexual harassment and interpersonal misconduct” that is “hostile, abusive, [and] unprofessional”.

For example, several FDIC meetings took place at strip clubs while female employees were openly rated on their looks… and expected to have sex with their male supervisors in exchange for promotions and higher ratings.

Senior bank examiners routinely sent dick pics to the women on their teams and spoke openly in the workplace about sex with their subordinates.

Complaints of sexual harassment at the FDIC are off the charts. Yet management seldom disciplined anyone. Quite often, in fact, agency executives ‘solved’ the sexual harassment problem by promoting serial offenders to higher positions, just to get them out of the field.

Meanwhile, black employees were told they were “token” hires to fill a quota. Gay employees were referred to as “little girls,” which led to several employees to pretend to be straight.

All of this occurred under the leadership of Gruenberg– a loyal lieutenant of the Biden-Obama- Lizzie Warren syndicate– all of whom claim to be champions of #MeToo, Black Lives Matter, and LGBTQ+ pride.

But as it turns out, these people stand for absolutely nothing. More on that in a moment.

If these findings weren’t damning enough, the investigation also revealed that Martin Gruenberg is just a terrible human being. He’s a horrific boss with a nasty personality and short temper.

Employees described Gruenberg as “aggressive,” “harsh,” “emotional,” “vitriol[ic],” “prosecutorial,” “disrespectful,” and having a “short fuse.” And it is their belief that it would be nearly impossible to have “a cultural transformation that prioritizes a more positive workplace culture” under Gruenberg.

The investigators also noted that employees across the FDIC had “a great reluctance to deliver bad news to Marty Gruenberg,” because he would explode, and “shoot the messenger” rather than focus on solving the problem.

Remember, the FDIC is the agency that oversees banks. And employees were terrified to tell the boss that banks were in trouble. Gee, what a surprise that a bunch of banks failed!

It’s worth mentioning that Gruenberg’s boss, President Biden, made a promise when he was elected:

“I’m not joking when I say this: If you’re ever working with me and I hear you treat another colleague with disrespect, talk down to someone, I promise you I will fire you on the spot. On the spot. No ifs or buts.”

Yet has Gruenberg been fired? Nope. Why is that?

Because if Biden fires Gruenberg, he’d have to nominate a replacement… who would then have to clear a risky Senate confirmation. And if that confirmation failed, the Vice Chairman of the FDIC would take over the agency.

And since the Vice Chairman is from the other party, Joe Biden is sticking with the swamp creature Marty Gruenberg.

This really just proves how these people stand for absolutely nothing. All they care about is their stupid party. They don’t care about the employees at the FDIC. They don’t care about the safety of the banking system. They don’t care about any of the principles they claim to support, i.e. #metoo, BLM, LGBTQ+, mental health, etc.

All they care about is their party.

Even Elizabeth Warren, who has been outspoken against Wall Street “boy’s clubs” and inappropriate work environments in the financial sector, has been defending Gruenberg and fighting to keep him in his job.

Almost no one is speaking out against the blatant misogyny, racism, and homophobia under Gruenberg’s watch.

Because, again, they don’t actually care. They only pay lip service to these ideas when it benefits them.

By the way, Gruenberg is far from the only case of an incompetent, destructive federal official keeping his/her job.

A recent Congressional investigation also found the FTC to be a “toxic work environment” and “beset by dysfunction and chaos stemming from poor leadership and ideological bullying of its Chair [Lina Khan]”. She, too, remains in her job.

Alejandro Mayorkas, the guy in charge of securing the overrun southern border as head of Homeland Security, also still has his job.

Rachelle Wolensky, who was in charge of the CDC during COVID, was so incompetent that even far-left news outlets wanted her resignation. You probably remember the CDC’s incomprehensible guidance regarding masks, vaccines, social distancing, and more. Plus she infamously tried to commandeer authority to take over the entire $10+ trillion US housing market… before being shot down by the Supreme Court.

She, too, was never fired.

And don’t even get me started on Tony Fauci, who was given a lush retirement with honor and distinction, not to mention a huge pension.

These are just a few of the bigger names which don’t even scratch the surface of countless career bureaucrats who should have been fired a long time ago.

Don’t get me wrong– there are so many amazing people who work for the government. But the bureaucracy has created a system where it’s easier to promote bad apples and keep them around than to fire them. No wonder so many hapless stooges rise to the top.

We talk so much about the trajectory of the US economy. And frankly, the complete dysfunction and lack of confidence in the federal government has a lot to do with it.

Fixing this is no mystery: a private company would eliminate the rot and bring in new leadership to change the culture.

But if the people in charge were going to change anything, they would have done it already. They simply don’t care.

They’d rather accept the incompetence and put the needs of their pathetic political party ahead of the country.

So even though America’s problems can be fixed, I’m not holding my breath. And that’s why it’s so important to have a Plan B.

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Did you hear the cheering in the streets? The celebratory gunfire coming from the Federal Reserve? The champagne bottles across Wall Street being uncorked?

What’s got people so excited today is the monthly CPI report— which showed consumer prices increasing by ‘only’ 3.4% year-over-year. And core inflation, which strips out food and energy prices, increased by ‘only’ 3.6%.

That was about 0.1% better than last month, so, of course, both the Fed and the White House are doing a victory lap. Expect Joe Biden to ramble incoherently about his economic prowess any moment now.

This inflation report was all the market needed to jump right back into the fantasy that inflation is licked… and the Fed can quickly and safely start cutting rates again.

But even a quick look at the numbers shows a far less optimistic appraisal.

Month-over-month inflation was 0.3%. Compounded at annualized rate, this means that the current inflation path is HIGHER.

More importantly we can see prices in the real economy… including the prices of some of the most critical commodities and natural resources in the world.

Oil prices remain high. Copper prices are at an all-time high of more than $5 a pound, up over 30% so far in 2024. Neither of these is consistent with falling inflation.

Frankly I don’t really care what the Fed is telling me about inflation. I care a lot more about what copper is telling me. And these all-time high copper prices are telling me that inflation won’t be going down to 2% anytime soon.

Think about it: copper, plus a number of other commodities including energy, are critical inputs. If their prices are surging, then nearly everything we buy, build, and even eat will also rise in price.

Furthermore, think about what really caused inflation to begin with: the Fed printed an absurd quantity of money during the pandemic, and government deficits went through the roof.

What has fundamentally changed since then?

Government deficits are still through the roof. The Fed has barely decreased its balance sheet (and they’re already positioning for another round of quantitative easing).

On top of that, the White House, in keeping with its Marxist traditions, consistently goes out of its way to make things more difficult for people to produce… especially if you happen to be producing some of the most important and critical commodities in the world.

So, the inflation picture still isn’t very pretty.

On top of that, their own recent data including both manufacturing and retail reports, show more economic weakness. Combined with the inflation outlook, signs continue to point to stagflation.

Gold may be trading near an all-time high right now, but I still think it’s the best long-term hedge against inflation (and stagflation), especially for people who are based in US dollars.

And as my business partner James wrote recently, gold will be the most likely replacement for the US dollar as global reserve standard.

That means that central banks around the world will continue to buy it by the metric ton, pushing prices even higher.

I’d also point out the massive disconnect between the price of gold, which is surging higher from central bank buying, versus the price of gold mining stocks.

Central banks buy physical gold bullion. They do not buy mining stocks. As a result, gold prices are surging higher, but gold mining companies have barely moved. So, there’s a lot of good value in that sector right now.

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By the early 400s, the Roman Empire was coming apart at the seams and in desperate need of strong, competent leadership. In theory, Honorius should have been the right man for the job.

Born into the royal household in Constantinople, Honorius had been groomed to rule, practically since birth, by the finest experts in the realm. So even as a young man, Honorius had already accumulated decades of experience.

Yet Rome’s foreign adversaries rightfully believed Honorius to be weak, out of touch, divisive, and completely inept.

He had entered into bonehead peace treaties that strengthened Rome’s enemies. He paid vast sums of money to some of their most powerful rivals and received practically nothing in return. He made virtually no attempt to secure Roman borders, leaving the empire open to be ravaged by barbarians.

Inflation was high. Taxes were high. Economic production declined. Roman military power declined. And all of Rome’s foreign adversaries were emboldened.

To a casual observer it would have almost seemed as if Honorius went out of his way to make the Empire weaker.

One of Rome’s biggest threats came in the year 408, when the barbarian king Alaric invaded Italy; imperial defenses were so non-existent at that point that ancient historians described Alaric’s march towards Rome as unopposed and leisurely, as if they were “at some festival” rather than an invasion.

Alaric and his army arrived to the city of Rome in the autumn of 408 AD and immediately positioned their forces to cut off any supplies. No food could enter the city, and before long, its residents began to starve.

Historians have passed down horrific stories of cannibalism– including women eating their own children in order to survive.

Rather than send troops and fight, however, Honorius agreed to pay a massive ransom to Alaric, including 5,000 pounds of gold, 30,000 pounds of silver, and literally tons of other real assets and commodities.

(The equivalent in today’s money, adjusted for population, would be billions of dollars… similar to what the US released to Iran in a prisoner swap last year.)

Naturally Honorius didn’t have such a vast sum in his treasury… so Romans were forced to strip down and melt their shrines and statues in order to pay Alaric’s ransom.

Ironically, one of the statues they melted was a monument to Virtus, the Roman god of bravery and strength… leading the ancient historian Zosimus to conclude that “all which remained of Roman valor and intrepidity was totally extinguished.”

Rome had spent two centuries in the early days of the empire– from the rise of Augustus in 27 BC to the death of Marcus Aurelius in 180 AD– as the clear, unrivaled superpower. Almost no one dared mess with Rome, and few who did ever lived to tell the tale.

Modern scholars typically view the official “fall” of the Western Roman Empire in the year 476. But it’s pretty clear that the collapse of Roman power and prestige took place decades before.

When Rome was ransomed in 408 (then sacked in 410), it was obvious to everyone at the time that the Emperor no longer had a grip on power.

And before long, most of the lands in the West that Rome had once dominated– Italy, Spain, France, Britain, North Africa, etc. were under control of various Barbarian tribes and kingdoms.

The Visigoths, Ostrogoths, Vandals, Franks, Angles, Saxons, Burgundians, Berbers, etc. all established independent kingdoms. And for a while, there was no dominant superpower in western Europe. It was a multi-polar world. And the transition was rather abrupt.

This is what I think is happening now– we’re experiencing a similar transition, and it seems equally abrupt.

The United States has been the world’s dominant superpower for decades. But like Rome in the later stage of its empire, the US is clearly in decline. This should not be a controversial statement.

Let’s not be dramatic; it’s important to stay focused on facts and reality. The US economy is still vast and potent, and the country is blessed with an abundance of natural resources– incredibly fertile farmland, some of the world’s largest freshwater resources, and incalculable reserves of energy and other key commodities.

In fact, it’s amazing the people in charge have managed to screw it up so badly. And yet they have.

The national debt is out of control, rising by trillions of dollars each year. Debt growth, in fact, substantially outpaces US economic growth.

Social Security is insolvent, and the program’s own trustees (including the US Treasury Secretary) admit that its major trust fund will run out of money in just nine years.

The people in charge never seem to miss an opportunity to dismantle capitalism (i.e. the economic system that created so much prosperity to begin with) brick by brick.

Then there are ubiquitous social crises: public prosecutors who refuse to enforce the law; the weaponization of the justice system; the southern border fiasco; declining birth rates; extraordinary social divisions that are most recently evidenced by the anti-Israel protests.

And most of all the US constantly shows off its incredibly dysfunctional government that can’t manage to agree on anything, from the budget to the debt ceiling. The President has obvious cognitive disabilities and makes the most bizarre decisions to enrich America’s enemies.

Are these problems fixable? Yes. Will they be fixed? Maybe. But as we used to say in the military, “hope is not a course of action”.

Plotting this current trajectory to its natural conclusion leads me to believe that the world will enter a new “barbarian kingdom” paradigm in which there is no dominant superpower.

Certainly, there are a number of rising rivals today. But no one is powerful enough to assume the leading role in the world.

China has a massive population and a huge economy. But it too has way too many problems… with the obvious challenge that no one trusts the Communist Party. So, most likely China will not be the dominant superpower.

India’s economy will eventually surpass China’s, and it has an even bigger population. But India isn’t even close to the ballpark of being the world’s superpower.

Then there’s Europe. Combined, it still has a massive economic and trade union. But it has also been in major decline… with multiple social crises like low birth rates and a migrant invasion.

Then there are the energy powers like Russia, Iran, Saudi Arabia, and Indonesia; they are far too small to dominate the world, but they have the power to menace and disrupt it.

The bottom line is that the US is no longer strong enough to lead the world and keep adversarial nations in check. And it’s clear that other countries are already adapting to this reality.

Earlier this month, for example, China successfully launched a rocket to the moon as part of a multi-decade mission to establish an International Lunar Research Station.

By 2045, China hopes to construct a large, city-like base along with several international partners including Russia, Pakistan, Thailand, South Africa, Venezuela, Azerbaijan, Belarus, and Egypt. Turkey and Nicaragua are also interested in joining.

This is pretty remarkable given how many nations are participating, even if just nominally. Yet the US isn’t part of the consortium.

This would have been unthinkable a few decades ago. But today the rest of the world realizes that they no longer need American funding, leadership, or expertise.

We can see similar examples everywhere, most notably in Israel and Ukraine. And I believe one of the next shoes to drop will be the US dollar.

After all, if the rest of the world doesn’t need the US for space exploration, and they can ignore the US when it comes down to World War 3, then why should they need the US dollar anymore?

The dollar was the clear and obvious choice as the global reserve currency back when America was the undisputed superpower. But today it’s a different world.

Foreign nations continuing to rely on the dollar ultimately means governments and central banks buying US government bonds. And why should they take such a risk when the national debt is already 120% of GDP?

In addition, Congress passed a new law a few weeks ago authorizing the Treasury Department to confiscate US dollar assets of any country it deems an “aggressor state.”

While people might think this is a morally righteous idea, the reality is that it will only turn off foreign investors. Why should China, Saudi Arabia, or anyone else buy US government bonds when they can be confiscated in a heartbeat?

All of this ultimately leads to a world in which the US dollar is no longer the dominant reserve currency. We’re already starting to see signs of that shift, and it could be in full swing by the end of the decade.

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In 1983, the tiny Caribbean islands of Saint Kitts and Nevis were among the last colonies to finally gain independence from Great Britain’s dissolving empire.

The two islands joined to become one country. And with fewer than 50,000 inhabitants, its microscopic economy was almost entirely dependent on sugar production… which can be an incredibly volatile and unpredictable industry.

So, in an effort to diversify and grow the economy, the government hatched a new idea: a “citizenship by investment” program whereby foreign investors could become citizens of St. Kitts and Nevis in exchange for a sizable investment in the country (including an option to purchase real estate).

It was an extremely clever idea. Most small countries who struggle to make ends meet usually end up borrowing lots of money from investors, which is known as ‘sovereign debt’. The Citizenship by Investment program in St. Kitts & Nevis essentially created the concept of ‘sovereign equity’.

This program became highly successful. So, naturally, like all good ideas, the St. Kitts & Nevis Citizenship By Investment program was copied all throughout the region.

By 2016, five different Caribbean countries offered economic citizenship programs— St. Kitts and Nevis, Dominica, Antigua and Barbuda, Grenada, and Saint Lucia.

Then a series of hurricanes (2017), followed by the Covid pandemic, devastated the Caribbean tourism industry. So, these governments began to rely very heavily on their citizenship programs to bring in revenue.

Since there was very little to differentiate one island’s citizenship from another, the governments entered into a full-blown price war. So, whereas $500,000 was once a common price for a Citizenship by Investment program, governments began to slash the price tag down to just $100,000.

(Technically, this $100,000 option isn’t really an investment, i.e. you don’t get your money back. So, it’s really more of a donation.)

Over the years, a total of around 88,000 people have received passports through these programs.

Bear in mind that granting citizenship in exchange for an investment in the country is not some illicit, dodgy scam; these are fully transparent government programs based on legislation passed by their respective parliaments.

Clearly, as sovereign nations, it is up to them to decide how best to raise revenue. Except that the European Union disagreed and threw a hissy fit…

It turns out that the bureaucrats in the EU believe that these Caribbean citizenship-by-investment programs are security threats.

Granted, these same bureaucrats happily ignore the millions of migrants who invade Europe year after year without so much as a background check. But fewer than 100,000 ‘economic citizens’ over a 40-year period? Massive security threat.

You can’t even begin to make up some idiotic logic.

So, these Eurocrats have been making a ton of noise and pressuring Caribbean nations to stop the Citizenship by Investment programs, or, at a minimum, to raise the price in order to reduce demand. Any country who didn’t comply risked losing its visa-free travel to Europe.

So, several weeks ago, the leaders of four Caribbean countries – Antigua and Barbuda, Dominica, Grenada, and Saint Kitts and Nevis – signed a Memorandum agreeing to raise the minimum investment threshold to $200,000, effectively doubling the cost of the cheapest options.

(Saint Lucia did not sign the agreement citing “contractual arrangements” that could open them up to legal action if they raised prices. But said they intend to sign “once it becomes possible.”)

The deadline for the price change is June 30, 2024. This means that anyone who acts swiftly can still qualify under the old pricing.

Single applicants can still grab a Saint Lucia passport for as little as $121,050 including all fees, or an Antigua and Barbuda passport for $149,800 all in. Technically Dominica is a little cheaper, but we don’t recommend the program because Dominica has already lost visa-free access to the UK and Ireland.

Dependents add to the cost; you can use our CBI calculator here to see the best option for your situation.

(Remember that our Total Access members actually pay even lower price for these programs, bringing the cost to as low as $108,050.)

But again, these prices for economic citizenship will go up at the end of June.

Now, economic citizenship is just one way to gain a second passport… and it might not be the right way for you. It’s generally fast and practically guaranteed. But, let’s be honest, it’s expensive for a lot of people.

Some lucky folks can claim citizenship through ancestry, practically for free. Italy, Ireland, Greece, and Poland, for example, each offer citizenship to individuals who can trace their descent through official documentation.

Or you could naturalize in a country to gain citizenship by spending a certain amount of time living there with legal residency. In Argentina it’s as little as two years; five years in Mexico and Portugal, and ten years in Spain, Italy, and Greece.

A second passport is such a valuable part of a Plan B because it is like an insurance policy, protecting you against unknown future risks.

For example, it should be obvious that the US is a deeply divided society that is deteriorating quickly. Think about how much has changed in the past decade alone and try to imagine what society will look like ten years from now.

It’s hard to say… but the trend doesn’t look good.

A second passport is like an insurance policy for all these future risks and uncertainties.

It’s not some magical document that will solve all your problems or take every risk off the table. But having a second passport does mean that, no matter what, you and your family will always have a place to go if you ever need it.

Hopefully you don’t. Hopefully you don’t need your home insurance policy either.

But if the day ever comes that you do need it, then it will be too late at that point to get started.

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Social Security’s annual trust fund report was released yesterday… and, no surprise, the report states very clearly that trust fund balances “are projected to become depleted during 2033.”

Allow me to repeat that: Social Security’s most important trust fund will run out of money in nine years.

This is a fact, not some wild conspiracy theory; remember that the annual report is signed by top government officials including the United States Secretaries of the Treasury, Labor, and Health and Human Services… so the projection is about as official as it can get.

But if you dive into the report, you quickly notice that even such a grim forecast may, in fact, be too optimistic.

Many of the key economic assumptions that they make in the report are wildly inaccurate. They assume, for example, that US fertility rate will be as high as 2.1 (i.e. 2.1 children born per woman). But, in reality, the US fertility rate has been falling for decades, and just hit another all-time low of 1.6 last year.

They’re also way off on other assumptions– like economic productivity. They assume (rather optimistically) that productivity growth will average 2%. Last year it was just 1.3%. And in 2022 productivity actually shrank by 1.9%.

They’re also way off-base in their assumptions about inflation, unemployment, and more.

Plus, just like the Congressional Budget Office’s long-term projections about the US economy, the Social Security trustees don’t account for any kind of future emergency, pandemic, recession, depression, war, financial crisis, or debt crisis.

The really ironic part is that the trustees’ assumptions fail to consider the future economic impact of Social Security going bankrupt.

Think about it– when Social Security’s trust funds suddenly run out of money, it’s going to trigger a major crisis in the United States. Clearly this will be disruptive and throw off their rosy economic assumptions. But they don’t account for this either.

Bottom line, Social Security’s demise is, at best, nine years away. And probably sooner.

So, what will happen when Social Security runs out of money?

Remember that 70 million retirees’ monthly benefits are essentially funded from three different sources.

The first source is payroll tax revenue; people currently in the labor force fork over a portion of their wages to pay Social Security benefits.

For decades, payroll tax revenue exceeded the total benefits that Social Security paid. And this surplus was invested into a special trust fund, which now totals trillions of dollars.

And that’s the second source of funding for the program: investment income from the trust fund, while the third source is the trust fund itself.

Again, for most of Social Security’s history, the trust fund was growing, and its investment income was compounding year after year.

But starting in 2021, Social Security’s annual costs have exceeded combined payroll tax revenue and investment income. So, in order to make ends meet, the program had to start dipping into its trust fund.

The fund’s reserves are now falling. And, again, by 2033, the trust fund will be fully depleted. This also means that there will be no more investment income… leaving payroll tax revenue as the sole source to fund Social Security.

Once this happens, the report states that retirees will have to suffer an immediate, substantial cut (roughly 25%) to their promised benefits. And most likely this cut will continue to become worse over time.

It’s not like there aren’t options to fix Social Security. The government could overhaul the program, raise the retirement age, or start allowing private asset managers to generate higher rates of return for the trust funds (while they still have money).

But everyone in government insists that they are not going to touch Social Security. Joe Biden never misses an opportunity to promise that he will veto any attempt to reform the program.

As a matter of fact, Joe Biden released a statement yesterday (after the trustee report was published) saying– literally in the first sentence– that “Social Security remains strong.”

Come again? What report was this guy reading?

Social Security is, by definition, NOT strong. The trust fund is indisputably going to run out of money in nine years. But this guy is just living on another planet. He refuses to acknowledge reality, he refuses to fix the problem, and he promises to prevent other people from fixing the problem.

Now that’s leadership.

I find it remarkable, though, how many other ‘experts’ are falling in line behind the President.

Even the Wall Street Journal, which is supposed to be a conservative-leaning paper, published an article this morning to say that Social Security’s rapidly depleting trust funds are no big deal… because Congress can always just “choose” to continue funding the program.

Uh… with what money? The budget deficit is already $2 trillion per year. So, if Congress “chooses” to continue paying out 100% of Social Security benefits after 2033, it will all be funded with more debt.

The Journal then suggests that such spending “could also mean the U.S. deficit continues to grow at a pace economists find alarming, potentially weighing on the performance of the economy.”

Could? Potentially? In what reality does multi-trillion-dollar deficit and a fully depleted Social Security trust fund NOT weigh on the US economy?

It’s astonishing how few people want to acknowledge the reality. Social Security will run out of money. Benefits are at risk. And the only way to ‘save’ the program is more debt… which means more inflation, more risk to the dollar’s global reserve status, and more consequences down the road.fmay

That said, Social Security is a perfect example how to think about a Plan B. It is a known and obvious risk: the program will almost certainly run out of money.

But if you know this is going to happen down the road, you can take steps now to secure your retirement– like setting up tax-advantaged retirement accounts to set aside more money in an extremely tax efficient way.

It’s the same with inflation, the national debt, and the dollar; when you can make a very strong case for rising prices and decline in the dollar’s global reserve status in the future, there are ways to mitigate those risks today.

Real assets like gold, energy, uranium, and other critical minerals, plus the companies that produce them, will likely be fantastic investments in a debt-ridden, inflationary environment. And it just so happens that many of them are trading at ridiculously cheap prices right now.

(Subscribers to our premium investment research– check out your most recent edition which features an extremely well-managed, debt-free, highly profitable real asset producer that pays a nearly 9% dividend. Yet its stock sells for a laughably low, single Price/FCF multiple.)

Bottom line, there are completely logical and rational ways to solve these problems and mitigate these risks on your own. Don’t wait for Joe Biden to do it.

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“Today, it’s Climate Day,” said President Biden in a speech on January 27, 2021, “which means that today is Jobs Day.”

“Dealing with [climate change] and increasing our economic growth and prosperity, are one and the same. When I think of Climate Change, I think of jobs.”

These were among the remarks the President made before signing an executive order which created the American Climate Corps.

And while it took more than three years, Mr. Biden’s Climate Corps is finally up and running, and the President inaugurated its new website a few days ago… which currently shows more than 2,000 new jobs available, with another 20,000 coming soon.

I spent some time browsing the listings and saw positions like “Lawn Buster”, “Energy Auditor”, “Home Energy Navigator”, and “Campus Climate Action Leader”. Many of these Climate Corps jobs focus on “Indigenous knowledge reclamation” and “youth outreach”.

Clearly it all sounds like highly productive work. It reminds me of that old Soviet joke– “we pretended to work, they pretended to pay us.”

Similarly, the climate jobs aren’t real work. Campus Climate Action Leader? Seriously? Yeah, that’s what universities in America need… more fanatical activism.

These pretend jobs are just another government boondoggle with lavish benefits and paid for by more deficit-fueled inflation.

Coincidentally, just as Mr. Biden was heralding the new pretend jobs his Climate Corps was creating, the Labor Department’s monthly jobs report was released… and the numbers weren’t great.

Blue collar job growth– mining, construction, oil and gas, manufacturing, restaurants– was basically flat or negative. The mining and energy sectors in particular are both getting killed, with significant job cuts across the board.

White collar job growth is also flat or declining, which includes jobs in technology, finance, legal, accounting, and management.

It’s notable that the motion picture industry is also seeing a major decline in jobs… which isn’t much of a surprise given last year’s histrionics. The unions went on strike, and now there are fewer jobs as a result. It’s genius.

I’d also point out that the employment services industry, i.e. recruiting firms and temp agencies, saw major job cuts. This is perhaps the canary in the coal mine suggesting the US job market has peaked and may now be in decline.

But there were a couple of bright spots. Healthcare is booming. Americans are apparently sicker than ever, and in-home healthcare is seeing incredible growth.

Social assistance jobs, i.e. handing out taxpayer-funded benefits like welfare, food stamps, and free housing, are also on the rise. This isn’t exactly a strong indicator for the US economy.

And lastly, government jobs are soaring. True to his word, Joe Biden keeps conjuring new federal jobs out of thin air, creating armies of tax police, climate warriors, and powerful bureaucrats to debilitate the US economy even further.

These government jobs offer almost nothing of value to the private economy. They don’t add to American productivity. Quite the opposite, really. More bureaucrats will make it more difficult for people to produce goods and services.

But the people in charge don’t understand such realities.

Case in point: a few days ago, the acting Labor Secretary– who has enormous power over US businesses and the job market– demonstrated a complete lack of understanding about basic labor principles… and couldn’t even manage to answer the simple question of whether she has ever owned a business. (She hasn’t.)

Not to be outdone by his demonstrably incompetent cabinet members, President Biden gave a speech on Wednesday in which he claimed the US economy is so strong “because we welcome immigrants.”

Well, that’s certainly one way to put it.

Another way would be that the US government deliberately rolls out the red carpet for illegals who come across the southern border. Yet at the same time, talented and productive foreigners who attempt to come into the US legally are forced into an endless, highly bureaucratic immigration process fraught with uncertainty and insane costs.

It’s true that many of the millions of illegals probably have jobs. But they don’t pay a dime in income taxes… plus vast swarms of them are sucking on the teat of outrageous taxpayer-funded subsidies. Free phones. Free housing. Free healthcare. Free education. Free money. So, these migrants are really a net negative for the economy.

In the same speech last Wednesday, the President further claimed that Japan has a weak economy because they’re “xenophobic”. This wasn’t a gaffe. The guy honestly believes that the southern invasion is a major economic boon… and that Japan is missing out because they actually care who comes into their country.

Fiscal restraint, high savings rates, productivity, innovation, capitalism… these don’t factor into their thinking when it comes to economic growth.

Instead, these people believe that the path to prosperity is government jobs, higher taxes, massive deficits, debilitating regulation, diversity & inclusion (which ensures the equality of outcomes, rather than equality of opportunity), free benefits, and illegal migration.

It’s ironic that many of these were core principles of the Soviet Union… except for the illegal migration part. Even the Soviets had the good sense to secure their borders.

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Retired Canadian Army corporal Christine Gauthier lost the use of her legs in a 1989 military training accident.

But that never kept her down; she competed in the 2016 Rio de Janeiro Paralympics in canoeing, and regularly competes in other similar events.

Gauthier lives in Canada, which has a socialized healthcare system. That means her healthcare is “free”… of course when the government gives away something for “free” it often turns out to be extremely expensive.

In Christine’s case, she had an endless wait for a home wheelchair ramp, which caused even greater challenges in her life.

By 2019, she was still waiting for her “free” assistance, and it was at that point that the Canadian veteran affairs agency proposed a different solution.

They told her that she would more quickly receive MAiD treatment, which stands for Medical Assistance in Dying.

In other words, the Canadian government told this disabled veteran that instead of providing her a wheelchair ramp, they would be happy to kill her.

Several other cases have been identified of other veterans being offered assisted suicide when all they really wanted was healthcare. At least one is now dead, although the Canadian government won’t say whether it was through assisted suicide.

Of course in 2017, the Canadian Medical Association Journal estimated that assisted suicide could save the government $136.8 million per year in healthcare costs.

That’s probably why they are also planning to allow mentally ill people with no terminal condition to pursue assisted suicide. People who are depressed by climate change will be eligible for government assisted suicide in Canada starting next year.

Canada’s socialized healthcare system is so overwhelmed that it’s just easier to push people into suicide rather than to treat them. Unless, of course, you’re gender fluid.

A few weeks ago, the Ontario Superior Court ruled that the government must pay for “gender affirming surgery” for a biological male who identifies as “non-binary, although female dominant.”

What makes this case unique is that this person insists that their gender can only be affirmed by receiving “penile preserving vaginoplasty.”

So now Canadian taxpayers will be forced to pay for an experimental surgery to give this person both male and female genitals. The government has also been ordered to pay the patient’s $20,000 legal bill which brought the case to court.

Look, I’m all for people being able to identify however they want. If they firmly believe they are a potted plant, great. Just don’t make it my problem, and don’t make it my kids’ problem.

But let’s be honest, someone who wants to permanently deform their body by undergoing a dangerous and highly experiment surgery to add a second set of genitalia clearly has mental health issues.

Yet while other Canadians with mental health issues are being told to kill themselves, people who want multiple sets of genitalia are getting taxpayer-funded surgeries and moving to the front of the line.

But such bizarre priorities are not just isolated to Canadian healthcare.

A few years ago, in Manitoba, a criminal broke into a private residence and attempted to kill the homeowner while he was asleep. The man woke up after the intruder had literally stabbed him in the head, but he somehow miraculously managed to fight off the intruder, and inadvertently ended up killing his assailant. The man who was attacked and nearly killed in his own home was then sentenced to prison on charges of manslaughter.

Police in Quebec recently warned victims of porch pirates stealing packages not to post the videos online, because it could violate the thieves’ privacy.

In Ontario, a 50 year old man who identifies as a teenage girl is not only allowed to compete in girls’ swim meets, but go into the locker room and change alongside the girls.

Honestly, this list goes on and on.

It’s obvious that the people in charge are completely out of touch with real problems that real people face.

And ironically when real people with real problems get fed up and protest against their leadership, the government responds with incredible brutality.

The Freedom Convoy Protests from 2022 are a great example. People were sick and tired of their leaders’ idiotic decisions. And yes, they disrupted the capital city and blocked some roads. But the government responded with mass arrests, de-banking them and labeling them as “misogynistic and racist.” And the Prime Minister wondered aloud “do we tolerate these people?”

Of course if you block a road because of climate change or because you love Hamas, that’s perfectly fine.

If you hijack public property while shouting, “From the river to the sea,” no one will do a thing to you.

This is an insane set of priorities. And it’s not just Canada. Most, if not all, of the Western nations once hailed as liberal democracies— the UK, Australia, New Zealand, and, of course, the US—are infected with this disease that Elon calls the woke mind virus.

European countries that previously had extremely low crime rates have implemented immigration policies that have ballooned into rape crises. They now have masses of immigrants screaming for jihad in their streets.

In the US, the President has not just allowed the border to be overrun, but has actually gone out of his way to sue Texas just to maximize illegal border crossings.

The governments of the US, Canada, and other Western nations consistently fail to address the real problems: immigration, the national debt, stagflation, war, etc. These are real problems that real people are worried about.

But anyone who dares to speak out, is called a racist, white supremacist, or a litany of other offensive labels.

The west is truly a bizarre place today. If you love Hamas, the government is on your side. If you’re an illegal immigrant, the government will provide endless free benefits and never collect a dime in taxes from you.

If you think there’s 99 genders and identify as all of them, the government will coddle your mental illness at taxpayer expense.

But if you’re a normal, hardworking person actually concerned about real things, most of the people in charge don’t give a damn about you.

Your problems are not their problems.

And that’s why it makes so much sense to have a Plan B.

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In June 2022, when inflation was raging at over 9% in the US, Fed Chairman Jerome Powell admitted to a reporter, “we now understand better how little we understand about inflation.”

“Uh, that’s not very reassuring,” the reporter chuckled.

Talk about an understatement. The Fed Chairman has the power to control virtually everything in the economy.

He can conjure trillions of dollars out of thin air practically at will. He can raise and lower interest rates, push businesses and governments into bankruptcy, and cause people to lose their jobs.

Yet he flat-out admitted they didn’t have a clue about inflation.

Of course, nearly everyone else on the planet— normal people who go grocery shopping, rent their homes, fill up their gas tanks— could feel the sting of inflation back then, as they still do today.

They may not understand where inflation comes from, but they understand the profound effect it’s having on their standard of living. Many people are working harder than ever juggling multiple jobs yet struggle to afford basic necessities they once took for granted.

But the Fed doesn’t understand such realities. Just like politicians with ‘decades of experience’, central bankers live on a completely different planet than the rest of us— a place where out of touch ‘experts’ who are disconnected from the real world come up with idiotic theories that are consistently wrong.

Remember when inflation was supposedly “transitory”? Or when, TWO DAYS before Silicon Valley Bank went bust, the Fed Chairman told Congress that they saw absolutely no consequences from their interest rate hikes?

These people have been wrong at every turn. And the latest episode is stagflation— which the Fed Chairman outright dismissed yesterday afternoon.

“I don’t see the ‘stag’ or the ‘flation’…” the Fed Chairman quipped, seemingly quite pleased at how witty he sounded.

His conclusion is nuts; stagflation is hitting him squarely between the eyes, yet he STILL doesn’t see it.

The ‘stag’ data is everywhere. Even the government’s official numbers on the US economy last week showed GDP growth coming to a screeching halt. New hires are down to the lowest level in EIGHT years, and by some metrics in ELEVEN years. Productivity growth last year was an anemic 1.3%. The list goes on and on.

And the fact that the Fed Chairman doesn’t see the “flation”, i.e. inflation, is just intellectually dishonest. Even the Chairman himself has admitted over the past few weeks that inflation remains too high. Both statements cannot be true at the same time… except in the mind of a central banker.

It’s noteworthy that yesterday the Chairman completely ruled out RAISING interest rates. There will be no rate hikes. Period.

Raising interest rates is what a central bank is supposed to do when facing obvious inflation. But they’ve taken that option off the table, entirely abandoning their responsibility to keep prices under control.

But just like they didn’t understand inflation, it’s clear the Fed doesn’t understand stagflation either.

Economists will tell you that stagflation is the combination of higher inflation and lower economic output— usually inflation combined with a recession. That’s what happened quite famously in the 1970s.

But while economists and central bankers define inflation based on econometric data (that is usually incorrect anyhow), the average person recognizes stagflation in a different way: stagflation is simply a decline in your standard of living. It means you’re worse off because the economy just sucks.

Stagflation is uneven. It doesn’t hit all people in all places at the same time. Politicians and central bankers, for example, are immune to the effects of stagflation because they rarely lose their jobs and have outrageously good benefits.

The average person, however, is worse off today when compared to the last several years. It’s not a complex calculus at all. Yet the Fed just doesn’t get it.

For example, they’ve continued to talk up how great the US economy is… which is probably not how the average person feels. In fact, the Fed doesn’t even understand what’s been the key driver of the US economy over the past few years: government deficit spending.

The US government has been shoveling money into the US economy hand over first and going deeper into debt in the process. Clearly this is going to drive some economic growth. But the government isn’t even getting a 1:1 return on that deficit spending.

Think about it— last year the federal government’s budget deficit was around $2 trillion. But even before factoring in inflation, the US economy only increased by about $1.5 trillion.

You’d think that if the government spent an extra $2 trillion, that the US economy would see at least $2 trillion in extra growth. But no. The economy grew $1.5 trillion, versus a $2 trillion deficit (all of which was funded by increasing the national debt).

The level of incompetence is mind-blowing.

There are plenty of other signs that the economy is starting to lag.

Just a few days ago, Starbucks reported dismal earnings. No surprise there: when people start tightening their belts, small luxuries like $6 coffees are the first thing to go because they have to plow that money into their gas tank, electric bill, or weekly grocery trip.

This is stagflation— a small decline in the standard of living. The economy sputters, prices go up, and wages don’t keep pace.

Yet the Fed doesn’t see it.

They don’t understand stagflation.

They don’t understand inflation.

They don’t understand the catastrophic growth trend of the US national debt.

They don’t understand the risks to the US dollar and the coming loss of its status as the dominant global reserve currency.

And they don’t even understand that they don’t understand. They’re so out of touch that they still believe they have the situation under control.

Frankly it’s pretty scary that the most powerful people in the US economy don’t have a clue.

Fortunately, there is something you can do about it.

Every economic decision that policymakers (whether the President, Congress, or central bank) have ever made or WILL ever make in the future, is ultimately reflected in the currency.

If Congress runs up the debt… if the President passes a host of idiotic, productivity-killing executive orders… if the Fed launches ‘quantitative easing’ to infinity and beyond… the consequences will ultimately be reflected in the US dollar.

This could be a range of consequences, from a decline in purchasing power (inflation) to loss of reserve status in global trade.

Either way, if you don’t want to suffer those consequences, the solution is simple: don’t hold all of your savings in that currency.

Consider other options, including, in my opinion, one of the world’s oldest forms of money that has a 5,000+ year track record of value and marketability: gold.

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Columbia, Yale, and NYU are nothing compared to the violence and radicalism that the medieval University of Frankfurt reached in the 1500s.

Violence and chaos had become a major problem at nearly all universities across central Europe– especially the German ones– ever since Martin Luther had famously published his Ninety-Five Theses in the year 1517.

Practically overnight, life in Europe had become extremely divisive. People lost the ability to disagree with each other rationally or to discuss ideas with an open mind. And universities became ground zero for intellectual oppression.

Professors led the charge to stir conflict on campus and divide students into warring tribes. Ravenous mobs bullied ideological opponents and labeled them ‘traitors to the cause’. Violence, coercion, and intimidation soon became commonplace.

Students in the 1500s attacked vendors who sold books and pamphlets that espoused ideas they disagreed with. Teachers and pupils alike were attacked for wrongthink. Even local townspeople were victims to the violence and property damage. Yet university administrators seldom did anything about it.

In 1572, the town physician in Frankfurt complained that his clinic had been filled with too many victims of assault at the hands of local students. Yet, he stated, “the gentlemen at the university allow this to go on unpunished.”

Town officials set up cannons to protect their citizens from angry university students who were bent on waging ideological violence.

It wasn’t until 1578 that an obscure professor named Caspar Hofmann had the courage to speak up.

Hofmann was a professor of medicine and philosophy in Frankfurt… so he most likely had witnessed a tremendous amount of violence and perhaps even been victim of it himself.

He gave a public speech– a daring thing to do under the circumstances– in which he said:

“They defend their own opinions with the greatest fierceness and attack all others, seeking to overwhelm all who think differently from themselves with ridicule and shame; hatred and envy, malice and evil-speaking, slander and calumny are the results of such envenomed strife, and it is inevitable that the learned institutes should be corrupted by all these influences.”

Though Hofmann’s comments were made well over four centuries ago, they could just as easily describe the state of western universities today. Ridicule. Shame. Hatred. Malice. Slander.

And let’s not forget about the violence prevalent in both eras.

Today is not the first time that universities have descended into intolerance and assault. Nor is it the first time that hapless, out of touch university administrators refuse to do anything about it.

In fairness, we’re talking about a small percentage of students and universities. But it’s enough that it has become a major problem.

Just like prison long ago became a finishing school for criminals, universities are becoming training grounds for coercive activism.

Students show up and become radicalized. Rather than study science, engineering, or business, they learn how to mobilize flash mobs, doxx their opponents, hijack and deface private property, create propaganda, engage in censorship, and intimidate innocent people.

And they’re gaining real world experience in how to use fear and intimidation to capture headlines and broadcast their message.

Does this sound familiar? It does to me. I spent a good chunk of my career as an Army intelligence officer studying terrorist organizations and how they train their foot soldiers.

And, not to be dramatic, but what’s happening at some of these universities now is similar to what goes on at terrorist training camps.

Another similarity: terrorists are completely ignorant and understand very little about their cause. It takes a real intellectual dolt to blow oneself up.

I think about this whenever I hear these students chanting, “from the river to the sea”; how many of these Inspired Idiots can even name the river or sea? Probably not too many.

But such are the consequences of these universities’ woke admissions policies. Instead of accepting the best candidates based purely on merit and potential, they have selected students who espouse their extreme leftist ideology.

Stanford University famously admitted a student who, in response to an admissions essay question, “What matters to you, and why”, wrote “#BlackLivesMatter” 100 times.

In its acceptance letter, the university praised the student for his passion and inspiration and said, “you are, quite simply, a fantastic match with Stanford.” He went to Yale instead.

In many respects, it’s been the same trend across many of Americas biggest cities; voters chose elected officials who espouse their extreme leftist ideology. And just like the universities, the big cities have suffered the consequences.

The bright side is that this might actually be rock bottom… because we are starting to see a number of self-correcting mechanisms kick in.

Wealthy donors who fund these universities are withholding money until administrators clean house. Heads are starting to roll.

And, as more voters become fed up with brazen crime sprees in their neighborhoods, leftist politicians are starting to take action. Even the Governor of New York recently made it a crime to assault a retail shop worker. What a novel idea!

Businesses too are starting to retreat from their holy mountains of wokeness. Google, the company whose AI refused to depict white people, has also had enough. It recently not only fired dozens of employees who protested for Gaza at work, but also had some of them arrested.

Even the high priest of the World Economic Forum, Blackrock Chairman Larry Fink, has walked back his environmental fanaticism and demands to to block oil investments, and started working towards retirement solutions— an actual problem that desperately needs fixing.

And just yesterday, the First Minister of Scotland resigned, after his recent racist tirade against white people, because he knew he was going to fail a no confidence vote.

We’re starting to see a trend forming— some of the world’s silliest leaders are beginning to lose their grip on power.

Does that mean there is the potential that sensible politicians will be elected and prioritize what’s in the best interest of the nation? Could we actually see them cut deficits, boost productivity, and make sound decisions?

Perhaps. One can hope this trend continues.

But regardless, it will be a long, long road ahead. And even under the best circumstances, it still makes sense to have a Plan B.

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It’s barely been a year since the 2023 bank crisis in which several large banks, including Silicon Valley Bank and Signature Bank, failed.

At the time, I wrote that the bank failures weren’t over, and that there would be more.

But it’s been quiet for most of the last year; the banking system has been pretty calm thanks in large part to an emergency program that the Federal Reserve created to bail out other troubled banks.

They called it the Bank Term Funding Program (BTFP), and it essentially expired a few weeks ago. In other words, no more emergency lending to troubled banks.

Barely a month later, we have already witnessed our first casualty: Pennsylvania-based Republic First (not to be confused with First Republic, which failed last year) was shut down by regulators on Friday afternoon.

Republic First had the same issues as the others that failed last year — too many ‘unrealized bond losses’ on their balance sheet.

Just like Silicon Valley Bank, Signature Bank, etc. last year, Republic First had used their customers’ deposits to buy US Treasury bonds in 2021 and 2022, back when bond prices were at all-time highs.

By early 2023, the situation had reversed. Bond prices had plummeted; even supposedly ‘safe’ and ‘stable’ US Treasury bonds had fallen substantially in price, and banks were sitting on huge losses.

Remember that bond prices fall when interest rates rise. So when the Fed jacked up interest rates from 0% to 5% in an attempt to control inflation, they were simultaneously creating huge losses in the bond market… which also meant huge losses for banks.

Silicon Valley Bank was just the tip of the iceberg. Plenty of other banks (including Bank of America) had racked up enormous bond losses. In fact the total unrealized losses in the banking sector last year amounted to a whopping $620 billion.

The Fed knew they had an enormous problem on their hands. So they created this Bank Term Funding Program, which was basically a giant game of ‘make believe’.

Through the BTFP, banks were allowed to borrow money from the Fed using their cratering bond portfolios as collateral. But instead of valuing the bonds at the actual market price, everyone simply pretended that the bonds were still worth 100 cents on the dollar.

In other words, the banks just made up prices for their assets, and the Fed allowed them to do it.

(It’s ironic that a certain former President is on trial in New York City for inflating the value of his assets, even though banks were inflating the value of their bonds through the BTFP.)

The Fed managed to prevent any further embarrassing bank failures last year by sprinkling this magical fairy dust across the banking system.

But now that the BTFP has expired, it has become obvious that problems in the banking system haven’t gone away. Republic First’s failure a few days ago is just one symptom.

Think about it: Bond prices are still down (because interest rates remain much higher than they were in 2021-2022). Banks are still sitting on massive unrealized losses.

And now that the Fed has stopped playing ‘make believe’, the bank failures have started up again.

It’s not to say that ALL banks are in terrible shape; some banks wisely used the last twelve months to get their financial houses in order.

Unfortunately most didn’t… which is why there’s still more more than HALF A TRILLION dollars in unrealized losses in the US banking system. This means that Republic First probably won’t be the only failure, unless the Fed steps in with its magical fairy dust again.

Also bear in mind that losses from their US Treasury portfolios aren’t the only problem in the banking system; for example, plenty of banks are sitting on huge potential losses from loans they made on office properties.

I don’t think the scope of this problem is anywhere near the 2008 financial crisis, which brought down some of the world’s largest banks. Not even close.

But the reality is that there are still a lot of banks with a lot of unrealized losses. And the biggest one of all happens to be the Federal Reserve.

According to its own financial statements, just released last month, the Fed’s total unrealized losses are almost $1 TRILLION — $948.4 BILLION to be more precise. And the vast majority of those unrealized losses come from US Treasuries.

So just like Silicon Valley Bank, Signature, First Republic, and now Republic First, the Federal Reserve has rendered itself completely insolvent.

In fact, total Federal Reserve capital is just $51 billion… versus $948 billion in losses. This means the Fed is insolvent 19 times over.

Think about that: the largest, most important central bank in the world… the steward of the global reserve currency… is completely insolvent on a mark-to-market basis.

You’d think that would be front page news. But no one ever talks about it. No one even wants to talk about it.

Of course plenty of people will insist that it doesn’t matter, just like they insist that the national debt doesn’t matter.

But this is yet more absurd fantasy; just look at the facts:

• The FDIC’s published reports show more than $500 billion in unrealized losses in the US banking sector.
• The Federal Reserve, which in theory would bail out the banking sector, is itself insolvent by $900 billion.
• The US government, which would bail out the Fed, is insolvent by more than $50 trillion.

It’s just debt on top of debt on top of debt. Losses on top of losses on top of losses.

Just like the BTFP, everyone wants to play a giant game of ‘make believe’ and pretend that the Fed’s solvency is not a problem, that the US government’s enormous debt is not a problem.

On the contrary, they’re huge challenges. And the ultimate consequence is going to be the loss of the US dollar as the global reserve currency.

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The barbarian chief of the Federal Trade Commission (FTC), Lina “Genghis” Khan, has some of the most bewildering priorities I’ve ever seen.

The FTC is the federal government’s most prominent business regulator; yet she doesn’t seem the slightest bit concerned that US economic growth is coming to a screeching halt. Or that stagflation is once again lurking. Or that the American manufacturing sector continues to be in a major recession.

She’s not even focused on trying to fix her own agency.

Remember, a recent Congressional investigation found the FTC to be a “toxic work environment” and “beset by dysfunction and chaos stemming from poor leadership and ideological bullying of its Chair [Khan]”. Sounds like a great place to work!

But Genghis Khan isn’t concerned about any of that.

Instead, she has fixed her warmongering gaze on… LUXURY HANDBAGS. And she is prepared to wield all the taxpayer resources at her disposal to ensure that no leather purse is left behind.

Squarely in Genghis Khan’s crosshairs are two American luxury goods producers– Coach and Michael Kors– who are currently attempting to merge; the deal was overwhelmingly approved by shareholders.

And obviously the merger makes sense to investors; giant legacy brands like Coach and Michael Kors suffer from an outdated business model that makes it increasingly difficult to compete with smaller, leaner businesses that sell almost exclusively online.

Coach and Michael Kohrs waste mountains of cash each year on expensive rents at shopping malls that simply no longer attract the foot traffic they once did.

These are massive costs for legacy brands that younger fashion startups don’t incur.

Similarly, because they are enormous companies, Coach and Michael Kors have to waste even more money on corporate administrative costs (like audit fees, company filings, huge bureaucracies, idiotic DEI initiatives) which, again, younger fashion startups don’t have.

At a certain point it makes sense for companies to merge, consolidate their assets, streamline their operations, and boost competitiveness. No wonder shareholders approved the deal.

But Genghis Khan cannot tolerate rational investors in a capitalist society making sensible financial decisions about what to do with their own privately owned shares.

So now she’s trying to block the deal, claiming that the merger will “eliminate fierce head-to-head competition.”

Come again? Has Genghis Khan seriously never heard of Louis Vuitton, Gucci, Hermes, Chanel, Prada, Burberry, Valentino, Giorgio Armani, Dolce & Gabbana, Bulgari, Ferragamo, Tom Ford, Tory Burch, Oscar de la Renta, Diesel, etc.

There’s PLENTY of competition in the luxury handbag industry.

But let’s suspend all reality for a moment and pretend that we live in an alternate universe where Genghis Khan is actually correct… and that the Michael Kors / Coach merger would kill competition.

The obvious question, of course, is… who cares?!?! Does Genghis Khan also worry if there will be less competition among private jet manufacturers? Or luxury superyachts?

And that’s the point: this deal shouldn’t even be on the radar of America’s most prominent business regulator.

But wait! There’s more!

In addition to her war on luxury handbag producers, Genghis Khan also unveiled a gargantuan, 570-page regulation last week that, among other things, bans most noncompete agreements.

This is yet another core tenet of capitalism: two willing counterparties voluntarily entering into an agreement with one another.

Noncompete agreements are completely normal in business.

Companies often have to invest a great deal of time and money to train an employee, whether to operate heavy equipment, work on a complicated project, etc.

The company is willing to make the investment in the employee. They just want to ensure they’ll receive a return on that investment, and that the employee can’t just quit and sell those skills somewhere else.

It’s not unreasonable to want to protect your investment.

It’s also a completely voluntary arrangement. If the employee doesn’t want to sign, they don’t have to take the job. And with such a strong labor market, there are plenty of other jobs out there.

But Genghis Khan doesn’t think this voluntary arrangement is OK. Genghis Khan believes that all noncompetes are the result of evil capitalist exploitation.

Just imagine if the US military was subject to this same regulation.

Think about it: when people join the Navy to become a pilot, the military spends a ton of taxpayer money to train them how to land an $80 million fighter jet on a $13 billion aircraft carrier. In exchange, the new recruit agrees to spend the next 8 years flying for the Navy.

This is basically the military equivalent of a noncompete agreement. The taxpayers agree to pay for your training. The pilot agrees to serve for eight years. It’s a great deal for everyone.

But according to Genghis Khan’s logic, Navy pilots should be able to quit as soon as they graduate from flight school and go work for Delta Airlines.

Banning noncompetes is bad for capitalism and bad for the US economy. It means that businesses will be less likely to hire and invest in employee training. It means fewer jobs. It means lower productivity. It means being less competitive in the global economy.

Naturally Genghis Khan understands none of these consequences. And this is one of the key characteristics of Inspired Idiots: they think they’re doing amazing work, and they don’t realize they’re destroying the very economic system which made the United States the most prosperous nation in the history of the world.

They think they know better than everyone… and that they’re more capable of making decisions than you are.

She can’t allow company shareholders to make business decisions. She can’t allow workers to make voluntary employment decisions.

The rest of us are all apparently too stupid and feeble to make our own decisions. She and she alone must decide what’s right for everyone.

And that paternalistic, destructive, nanny state narcissism is perhaps the worst hallmark of Inspired Idiots.

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According to this morning’s dismal publication from the US Bureau of Economic Analysis, US GDP growth crashed to just 1.6%, while inflation keeps rising at a 3.4% rate.

And ‘core’ inflation, which excludes food and energy, was up even higher at 3.7%!

All of these numbers are much worse than expected… and frankly Americans should be outraged.

Think about it: the United States is home to the world’s largest and most successful companies, many of which are on the bleeding edge of technology and productivity. America’s labor market is filled with talented workers. The country is teeming with abundant natural resources. Capital markets are the deepest and most attractive in the world.

And yet despite so much potential, this economy could only eke out a miserable 1.6% growth… with inflation continuing to persist.

This is not an accident.

It is a result of blatant mismanagement, naivety, and even incompetence, at the White House, Congress, and the Federal Reserve.

It also proves how they STILL don’t understand the basics of inflation.

Just think back to the pandemic. We all remember how they were paying people to stay home and not work. Gee what a surprise: with fewer people working and producing, ‘supply’, i.e. overall availability of goods and services, fell.

Meanwhile they shoveled money into the economy at an unprecedented rate with Paycheck Protection Program “loans”, stimulus checks, and bailouts galore.

And with absolutely nothing to do but sit at home and spend money, demand went through the roof.

The end result was not only the worst inflation in decades, but full-blown shortages ranging from microchips to baby formula.

We’re obviously long out of the pandemic. However, the fundamental supply and demand conditions have hardly changed.

Relative to supply, this White House never misses an opportunity to frustrate business in every way possible.

The FTC goes out of its way to block every value-creating, efficiency-inducing business merger because they think all mergers are bad for unions (which is absurd). These mergers could ultimately save consumers money and provide more value in the economy, but the FTC tries to kill every deal they can.

Despite rising energy prices, the Biden White House prevents energy producers from drilling for more oil. They refuse to lease federal lands to energy companies, even though it’s required by law.

Cheaper energy makes the economy more productive and reduces inflation. But the White House goes in the opposite direction and drives prices higher.

Now Biden wants to raise the capital gains tax to nearly 45%— the highest level in history.

Higher taxes are clearly bad for productivity because they create penalties and disincentives to invest in new businesses— which create new products, new supply, and new jobs.

The Biden people also have a fanaticism about the environment, and nearly everything they do to address climate change further disrupts business productivity.

Their Byzantine rules create additional business costs, reduce productivity, and at the end of the day, have very little positive benefit for the environment. The cost/benefit is totally out of whack.

Similarly, the demand side is little different than what it was during the pandemic.

Interest rates are much higher, and though consumer and business demand has cooled, government demand hasn’t cooled at all. It keeps going up.

The budget deficit was nearly $2 trillion last year, which was all paid for by borrowing against future prosperity. And if they keep doing that, there’s not going to be any future prosperity left to borrow against.

All that excess deficit money is dumped into the economy, and it has a similar effect to when the Fed prints money… except that it’s worse in many respects, because government spending is allocated by politicians who have a unblemished track record of waste.

So even though they spent trillions in the economy, the economy is not getting trillions in benefit because so much of it is wasted.

You see the trend— reduced supply, increased demand, higher inflation, slower growth.

But even after seeing the same story repeat for years, they still don’t get it.

The “experts” are still talking about WHEN the Fed is going to cut rates. And even after releasing these horrible numbers today, people still think that the bad news is only going to delay the Fed cutting rates.

Hardly anybody is saying that the Fed shouldn’t cut at all, and almost no one is saying they should RAISE rates.

Inflation is never going away unless all three pieces are working in sync: the government has to stop the deficits. The White House has to stop its jihad against capitalism. And the Fed has to get real about interest rates.

But we don’t see any of these three things happening. Not one. So, most likely we’ll continue to see more of the same story.

In fact, we can’t even call this story inflation anymore. This is already becoming stagflation.

I’ve been very clear that gold is a great asset to own during inflation… and stagflation. It wasn’t long ago that some idiot Wall Street firm downgraded gold mining giant Newmont because they “didn’t see any upside in gold”.

(Boy were they wrong. Newmont stock has soared since then.)

It goes to show you how people still believe in these fairy tales— that inflation is going to end, that the government can keep deficit spending indefinitely without consequences, and that the dollar is going to be just fine.

These are utter fantasies.

The balance sheets of BOTH the US government AND the Federal Reserve are both catastrophes already, and that spells serious trouble for the dollar, and for inflation.

Gold is a fantastic antidote to these troubles. And it’s extraordinary how few people understand that.

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In 1972, while excavating to build a factory on the Black Sea coast of Bulgaria, a backhoe operator noticed gold objects glimmering in the bucket of his machine.

The construction worker had accidentally discovered the Varna Necropolis.

Dating back to around 4500 BC, the jewelry found in this ancient burial site is the earliest evidence of the use of gold by humans, and archeologists believe that they were considered a status symbol in ancient burial rituals.

Thousands of years ago, gold was likely collected from the earth’s surface in the form of nuggets or river dust.

It wasn’t until about 3500 BC, on a hilltop located in the modern-day country of Georgia, that a group of people from the prehistoric Kura-Araxes dug the oldest known gold mine.

Known as Sakdrisi-Kachagiani, the gold mine predates Ancient Egypt and even Mesopotamia.

By around 2000 BC, commercial transactions involving gold were being recorded on cuneiform tablets in modern-day Turkey. Materials like tin and textiles were traded for a particular weight of gold, because the first known gold coins weren’t minted until around the 6th Century BC.

King Croesus of Lydia in modern-day Turkey, used these coins to standardize the weight and purity of gold.

After that, gold coins were used directly in commerce for thousands of years, until the United Kingdom formally adopted the gold standard in the early 1800s. This was the first monetary system where a country’s paper money had a value directly linked to gold.

And even today, over 50 years since the US abandoned its own gold standard, central banks around the world still hold vast quantities of gold as a reserve to store value.

Individuals and large financial institutions do the same. And gold jewelry is still extremely valuable.

That’s quite a track record. For over 6,000 years, humans have valued gold.

Fifteen years ago, Bitcoin was created. And today there are countless millions of people who believe crypto has value too.

Now, gold and crypto are completely different and seldom belong in the same sentence. But for some reason there are often heated debates between proponents of each who argue bitterly over whether Gold or crypto is better.

No other asset classes attract such conflict or controversy. You don’t see passionate oil investors engaging in riotous debates with natural gas speculators. There is no heated argument over wheat vs. soybeans.

But gold and crypto are sometimes positioned as diametrically opposed, and this is just silly. Each asset has its function.

Gold has an enormous amount of value— and I have actually argued that it is still undervalued, even at its all-time high.

I’ve written extensively about the US government’s financial woes; the national debt is closing in on $35 trillion, and that figure is set to grow by $20+ trillion over the next decade according to the government’s own financial forecasts.

In addition to the new debt, the amount of debt the US government has to refinance over the next 5-7 years is staggering— literally tens of trillions of dollars. And all of it will be refinanced at a higher interest rate.

This means that interest payments on the national debt will keep growing like a malignant tumor.

In fact this year the amount of interest paid on the national debt will exceed defense spending for the first time in US history. And it will only keep rising.

Gold will most likely do very well in that scenario. But more importantly, foreign governments will likely move away from the US dollar as the global reserve currency over the next 5-10 years… and gold is the most likely asset to replace the dollar.

Central banks are already buying more gold as a reserve. And when the dollar loses its dominant global reserve status, countries are likely to turn to gold as a stable alternative that they can trust… because they already own it.

Simultaneously, crypto also has a lot of benefits. If you hold 100% of your savings in the financial system— whether at a bank, brokerage, etc., you might be surprised to find how easily it is to lose access to your funds.

Government agencies can seize your account (without due process) even by mistake. Banks can fail. They can freeze your account and force you to prove that you’re not doing anything wrong.

Plus even the most mundane bank transfers these days are heavily scrutinized. I had an exasperating conversation with a bank not long ago when I tried to send money to my sister… and they required all sorts of paperwork and justification to send my own money to my family.

Crypto is a great way to bypass that mess… to simply send money from point A to point B directly, without any middleman whatsoever.

Crypto exists digitally, so it can be moved across borders easily and at no cost. And if you know what you’re doing, you can hold it yourself, without any third party or even special security equipment… and this is an incredibly unique feature.

The idea behind a Plan B is to figure out what you want to accomplish and figure out which tools are available to help you achieve your goals.

Well, it’s a pretty smart goal to want to have protection against the declining currency of the world’s most heavily indebted nation. It’s also a reasonable goal to want to own some assets that are completely beyond the financial system.

Crypto and gold are two completely separate tools for completely separate purposes. There’s no sense in debating crypto vs. gold. To me the answer is both.

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Veronica Perez was skeptical when city workers found her under the Los Angeles highway overpass she called home.

They presented her with an opportunity to move into a private room—a converted hotel room, part of a state initiative where some units were renovated at costs approaching $400,000 each.

Before long, Veronica found herself receiving three meals a day delivered straight to her door and participating in weekly painting classes. Additionally, she began receiving free medical care.

This was one of several California state programs meant to address homelessness. Others spent up to $4,000 per person a month putting the homeless up in motels and hotels, including some name-brand hotels like the Radisson.

California’s extreme and highly ineffective spending on homelessness has become the stuff of legend. But now the numbers have become clearer.

Last week, the state auditor released a scathing report finding that there were no systems set up to monitor the money, let alone the outcomes. In short, there is no accountability in place to determine whether these programs are worth the cost. (They’re not.)

But California’s state government continues shoveling money into a bottomless pit of incompetence.

In the five years from 2018 through 2022, California spent a total of $24 billion to address homelessness.

At the start of this period, around 140,000 California residents were homeless.

So, the state spent around $34,285 per homeless person, per year.

That amount is actually pretty close to California’s per-capita income of $45,491. So, it should have been enough to get every single homeless person off the streets.

Instead, by 2023, the number of homeless Californians had climbed to over 180,000.

And just 15,000 more people were living in California’s homeless shelters in 2023 compared to 2018. So, if you decide to call that success, it only cost taxpayers $1.6 million per homeless person taken off the streets— what a bargain!

But this wasn’t a one-off. This is consistently how California in particular, and governments in general, operate.

In 2008, California voters approved a $10 billion project to build a 500-mile high-speed rail that would connect Los Angeles to San Francisco by 2020.

Guess what? It didn’t happen.

It’s now four years after the original 2020 deadline. The government now believes it can complete a 171-mile rail (as opposed to 500 miles) between the cities of Merced and Bakersfield (instead of LA and San Francisco).

They also think they can complete this different project by… 2033 (instead of 2020). And at a cost of $35 billion (instead of $10 billion).

You might also like to know that ALL federal taxpayers from the other 49 states have chipped in, thanks to various COVID bailouts, infrastructure bills, etc. Total federal money allocated towards the failed rail project so far is $6.6 billion, and that’s just getting started.

Just like the failed homeless programs, the government has taken taxpayer money and thrown it down a bottomless pit of incompetence.

This is one of the reasons why tax planning is such an important part of a Plan B. Well, tax planning should frankly be Plan A.

The reality is that just about everyone has completely legitimate ways to legally reduce the amount that you owe.

I’m not talking about any obscure loophole or exotic tax structure. Sometimes it’s as simple as maximizing deductions (like contributions to retirement accounts, health savings accounts, etc.)

And for people who are more flexible with their lives and decisions, moving to a lower tax state can result in huge savings.

Moving to Puerto Rico can cap qualifying business income at just 4% tax, and investment income at 0%. Or moving abroad entitles you to claim the Foreign Earned Income Exclusion (which is $126,500 for single taxpayers, or $253,000 per couple).

Bottom line, there are always legitimate ways to reduce what you owe while still being 100% compliant with the tax code. And with so many Inspired Idiots in charge who keep throwing your money away, it really makes sense to consider your options.

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Billionaire Peter Thiel has one. Former Google CEO Eric Schmidt has one. Actress Kirsten Dunst has one. Singer Ricky Martin has one.

Frankly the list of American celebrities, billionaires, and famous business moguls who have second passports is incredibly lengthy… and those are just the ones that we know about.

It’s not panic, and it’s not paranoia. Almost all of these people live and work in the United States, and they recognize that the US– despite overwhelming and incredibly frustrating problems, is still a good place to be.

But they also understand the worrying trends and enormous challenges ahead… and that having a second passport is a great tool to diversify those risks.

The concept is simple; when everything in your life– your nationality, your business, your residence, your savings, your investments, your retirement, etc. is all tied to the same country, then it means you’re putting all of your proverbial eggs in one basket.

If that single country has major problems, whether social, political, or economic, then everything you’ve worked for is at risk.

Diversification is key in controlling that risk.

You can diversify your finances quite easily by investing in gold, foreign currencies, international stocks, or even crypto. And you can diversify personal risk for yourself and your family by obtaining legal residency in a foreign country– which gives you the right to live, work, invest, and retire abroad in a place where you really enjoy spending time.

Becoming a dual citizen of another country takes that personal diversification to an even higher level… because it comes with a second passport, i.e. a valuable document that can be used for travel and business.

But the biggest misconception about second passports is that they’re only for the rich and famous. And that’s just completely wrong.

In fact, two weeks ago, the President of El Salvador announced that his country will be giving away 5,000 free passports “to highly skilled scientists, engineers, doctors, artists, and philosophers from abroad.”

He said that there would be no taxes or tariffs related to moving or importing any belongings, including intellectual property.

And he indicated that they intentionally chose a small number: 5,000 new citizens would represent “less than 0.1% of our population, so granting them full citizen status, including voting rights, poses no issue.”

“Despite the small number,” he added, “their contributions will have a huge impact on our society and the future of our country.”

He’s right. El Salvador will likely receive a ton of benefit from the 5,000 skilled immigrants they welcome, and very little downside.

(This is the opposite of US immigration policy, which makes it extremely difficult for talented, skilled people to obtain legal residency… yet with open arms they welcome millions of illegal migrants who cross the southern border without so much as a background check.)

The details of El Salvador’s skilled passport program haven’t been released yet. But since the whole point is to improve the country’s economy and quality of life, it’s likely to require the applicant to relocate to El Salvador to work in the country.

Most likely the program in El Salvador won’t entice too many people from North America or Europe. But I imagine a vast number of engineers from India, doctors from Africa, etc. would be willing to move.

After all, an El Salvadoran passport is a much, much better travel document than a passport from, say, India, Bangladesh, or Ghana, because it includes visa free travel to Europe, most of Latin America, and much of Asia.

Fortunately, El Salvador isn’t the only chance to get a practically free passport.

The first thing anyone pursuing second citizenship should check is if they are part of the “lucky bloodline club”. Several European countries allow people to claim citizenship through ancestry.

Italy, Ireland, Greece, Poland, and others offer citizenship to those who can trace their descent through official documentation.

Each country varies on how many generations they allow you to go back. But if you qualify, the total cost will be minor– procuring documents, getting translations, and government application fees.

Another fairly inexpensive way to acquire a second passport is to naturalize in a country by spending a certain amount of time living there.

For example, anyone who is interested in moving to Argentina can qualify to apply for naturalization and citizenship after just two years of living there as a legal resident. It takes five years in Portugal, and ten years in Spain, Italy, and Greece.

Also, certain foreign countries, such as Mexico and Brazil, grant citizenship to any children born on their soil. They also grant permanent residency to the parents, with an expedited path to citizenship.

This is a great gift to give a child, to be born with more access to the world that they can pass down to future generations. It’s one reason extremely difficult.

When it comes to El Salvador, we’ll withhold final judgment on the program until the details come out.

But if you want a second passport, there are plenty of paths that will get you there.

And again, it’s an insurance policy that makes a whole lot of sense in such an uncertain world.

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It’s barely six months into the US government’s ‘fiscal year’ (which started on October 1, 2023) and the federal budget deficit is already $1.1 trillion.

This number is utterly astonishing.

Of course, anyone paying attention to the rapidly dwindling US financial condition knows that the national debt is now hovering around $35 trillion.

That’s up $2 trillion in the last year alone, and up nearly $20 trillion over the last decade.

More importantly, the Congressional Budget Office has projected that the US national debt will increase by another $20 trillion over the next decade.

Those numbers are obviously bad. Horrendous, really.

But what’s even worse is how much NEW debt the government actually needs to sell each year just to repay its OLD debt.

Remember, whenever the government borrows money, they issue bonds in various denominations; these bonds can be as short as 28 days, all the way up to 30 years.

Whenever these bonds mature, the Treasury Department is obviously supposed to pay them back in full. Of course the federal government doesn’t actually have money to repay its debts. So, instead they issue new debt to pay back the old debt.

And the amount of money they have to raise just to repay old debts is staggering.

Last year alone the Treasury Department had to raise nearly $20 trillion to repay maturing bonds. Plus, they borrowed an additional $2.4 trillion in brand new debt on top of the $20 trillion.

Unbelievable.

And so far in just the first three months of 2024, the Treasury Department has issued a record $7.2 trillion in government bonds– shattering the previous record for quarterly debt issuance that was set in 2020 during the pandemic.

Out of last quarter’s $7.2 trillion debt issuance, roughly $600 billion of that was brand new debt… meaning that a whopping $6.6 trillion was borrowed to refinance existing debt.

To put that number in context, the total combined value of all bank deposits in the United States is $17.5 trillion. So merely refinancing the federal debt that matured last quarter alone required the equivalent of 37% of all US bank deposits.

Now, in theory, refinancing US government bonds shouldn’t be such a big deal. After all, most bondholders typically just roll over their maturing bonds into new bonds. And the majority of the maturing bonds are short-term anyhow.

So, it’s quite common that some money market fund– which owns primarily 90-day Treasury Bills– will simply purchase more 90-day Treasury Bills whenever their existing ones mature.

No big deal, right?

Well, the problem is that bond investors are rightfully getting spooked by outrageous federal deficits, and they’re starting to demand a higher rate of return to compensate for the extra risk.

This is a major reason why interest rates have been rising– government bonds have lost a lot of appeal, and many investors no longer view them as the sacrosanct, risk-free investments they once were.

Two years ago, a 90-day T-bill paid about 0.5%. Today it’s over 5%. That’s a 10X increase in the government’s interest expense.

Another major trend is that bond investors have shifted towards the shorter duration maturities. So, instead of buying 10-year notes and 30-year bonds, they’re buying 90-day bills that have to be refinanced every three months.

This makes sense; with so much risk and uncertainty, few rational investors want to loan money to the federal government for three decades. Short-term bonds are a lot safer.

But this trend towards short-term bonds means that the Treasury Department has to constantly be in the market refinancing record amounts of debt, just like last quarter’s $6.6 trillion.

It also means that the government’s annual interest bill will continue to skyrocket– because today’s interest rates are so much higher than they were in the past.

Back in 2019, for example, investors were buying 5-year notes with a yield of less than 2%.

Those 5-year notes from 2019 are about to mature. And for investors who are willing to roll over their funds and reinvest in, say, 90-day T-bills, the new yield is 5.25%.

In other words, the government’s interest expense will increase more than 2.5x.

Remember that this year’s interest expense on the national debt is already set to exceed the national defense budget. And if this trend continues, the government’s annual interest bill will surpass $2 trillion over the next few years.

This is why we believe the Federal Reserve will ultimately step in and ‘fix’ this problem by expanding the money supply and slashing interest rates.

The US government cannot afford to pay 5% interest on the national debt. Frankly they can’t even afford to pay 1%. The Fed understands this reality, and they know that the clock is ticking.

That’s why the Fed has been so vocal about cutting interest rates over the past few months, even though inflation has been rising.

Minutes from the Fed’s meeting last month showed that they still anticipate cutting rates 2-3 times this year.

And just yesterday the Fed Chairman said that while rates may stay at current levels “longer than expected”, he all but ruled out any further interest rate increases despite rising inflation numbers.

As a final piece of evidence to support our view, the Fed has already reduced its ‘quantitative tightening’ program… which is essentially the first step towards a new round of quantitative easing, i.e. money printing.

As my partner Peter Schiff says, the Fed has lost the inflation war. But I would say they’re actually deserting the battlefield by abandoning their responsibility to keep inflation low.

The Fed believes that the insolvency of the US government is a far worse outcome than inflation, i.e. inflation is the ‘lesser of the two evils’.

And it seems clear that they’re already positioning their monetary policy to bail out the federal government.

Bottom line: this means more inflation. But don’t panic. It’s something you can prepare for, and even benefit from. More on that soon.

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When the barbarian king Rugila died in the year 434 AD, Roman Emperor Theodosius II likely rejoiced that his mortal enemy was no more.

Rugila (and his father Uldin) had been invading and terrorizing Roman territory for decades; but the Empire was so weak at that point that Theodosius was powerless to stop them.

By the early 400s, Rome was an almost unrecognizable shell of its former greatness. Nearly two centuries of civil war, plague, inflation, invasion, and economic malaise had sapped the empire of its strength and reputation… and foreign kingdoms didn’t hesitate to take advantage.

In the early 420s, Theodosius finally resorted to paying off King Rugila, essentially bribing him with an offer of 350 pounds of gold ANNUALLY.

Rugila took the money… probably bewildered at how easily he was able to bend the supposedly powerful Roman Empire to his will.

Theodosius subserviently made the payments year after year, and managed to pretend that the deal was a win for Rome.

The Emperor acted as if he was still powerful and in charge of the situation. He even tried to convince his subjects that the annual tribute was payment for some bogus service that the barbarians were supposedly providing, rather than the ransom money it really was.

And that’s why King Rugila’s death was probably such welcome news to the Emperor. Finally, the menace was gone.

But unfortunately for Theodosius, Rugila’s successor would prove to be a far greater threat.

His name was Attila, known to history of course as Attila the Hun. And he wasted no time picking up where his father and grandfather left off: capitalizing on the Roman leadership’s weakness and cowardice.

Attila’s first order of business was to renegotiate the peace deal and make even more demands of the Roman Empire. Theodosius caved almost immediately.

It became known as the Treaty of Margus; Attila walked away with DOUBLE the annual tribute (an increase from 350 to 700 pounds of gold). Plus, he forced the Emperor to eliminate trade sanctions against the Huns and open up Rome’s vast markets to Hun merchants.

Lastly, Attila negotiated a prisoner swap, receiving some very high value Hun nobles who had taken refuge in the Roman Empire. In exchange, Theodosius received a few low-level soldiers… and the Emperor had to pay an additional ransom for each one of them.

Like his father Rugila, Attila was probably astonished that the ruler of the supposedly most powerful empire in the world had no backbone, no confidence, no will to stand and fight.

So naturally Attila’s demands did not end with the Treaty of Margus. He knew an obvious advantage when he saw one, and he continued to exploit Roman weakness until the end of his life.

Despite promises of peace, for example, Attila constantly found new excuses to set aside the treaty and make incursions into Roman territory.

He crossed the Danube and laid waste to Rome’s provinces in the Balkans, forcing Theodosius to renegotiate the peace treaty once again. This time the annual tribute was tripled to 2,100 pounds of gold.

A few years later, Attila demanded to marry the sister of Valentinian, the ruler of the western portion of the Roman Empire. Valentinian refused the proposal (as well as Attila’s demand for half of the western lands), so Attila invaded Italy, plundering and pillaging along the way.

Attila finally died in 453 AD before he had the chance to completely destroy the empire. But other barbarian kings also saw the ineptitude and weakness of Roman leadership, and they followed in Attila’s footsteps.

That’s the thing about cowardice and weakness: adversaries tend to notice and take advantage. It’s no different today.

Iran, Russia, and China have all paid close attention to the weakness and cowardice of the Biden administration. They see the social and financial decay of the United States. The political instability. The woke priorities of the Defense Department. And they can barely believe their eyes.

They know that the guy with five decades of experience has no backbone… that he’s a corrupt, brainless stooge who bends to the most radical wing of his party. He stands for nothing, abandons his allies, and gives away the farm for absolutely nothing in return.

He traded away the most valuable Russian prisoner in US custody for a WNBA player. He freed up potentially tens of billions of dollars for Iran in exchange for little more than a phony promise that they won’t develop nuclear weapons. (But it seems the Ayatollah pinky swore, so it’s all good.)

He allows invasions and incursions of US territory… and not only does nothing but sues state governments to prevent them from securing the border.

He tries to prevent allies from defending themselves. He pathetically attempts to use the Strategic Petroleum Reserve to boost his sagging approval rating. And he caves anytime a belligerent nation threatens violence.

These are all signs of obvious weakness that adversaries are all too happy to exploit. Iran is just the most recent example.

After this weekend’s attack against Israel, Iran specifically warned the US against responding. Biden immediately wilted. It’s pretty clear who wears the pants in the relationship.

And just like the case of Attila, it never ends. Any treaty that is signed, any agreement that is reached, is simply a lie. They’ll never keep their word, and they’ll continue milking the obvious cowardice that is on display for the world to see.

Now, this story of weakness isn’t just about Joe Biden. Congress is also weak and ineffective. Many courts and judges now ignore the rule of law and are simply activists in robes. The military is suffering a very public recruiting crisis, along with outdated weapons systems and critically low mission readiness.

It goes beyond government too. Big Media is a left-wing propaganda machine. Premier universities cultivate radicalism. Even Boeing can’t seem to build a quality aircraft anymore.

Optics matter, and the end result is undeniable: America appears far, far weaker from even just a few years ago. And adversaries have no intention of letting up.

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There’s no limit to how much Inspired Idiots around the world hate oil companies.

It seems like almost every day there’s a story about protestors who superglue themselves to the pavement in order to block traffic. Or deface an art museum. Or interrupt a public sporting event.

Recently they even glitter-bombed the Constitution in Washington DC… because apparently the Founding Fathers caused climate change.

Bear in mind that everything these Inspired Idiots use to ‘protest’ is derived from oil.

The adhesive they use to glue their asses to the pavement is derived from oil. The plastic bottle that the glue comes in is derived from oil. The plastic glitter they use is derived from oil. The paint they use to deface buildings and artwork is derived from oil.

They travel to their protest sites by some means of transportation that, in some way, is powered by oil. Even the food that they eat is grown from oil-based fertilizers and harvested with tractors which use oil-based fuels.

Not to mention everything they consume is transported by planes, ships, trains, and trucks, which typically run on oil-based fuels.

But in addition to their blatant ignorance, their chosen tactics are laughably hypocritical.

These idiots go into the street and stop traffic, causing hours-long delays. The result? All those cars on the road are just sitting idle and burning more fuel. It sort of defeats the purpose of making the world cleaner and greener.

And their ‘solutions’ for a greener world are even more idiotic.

They demand, for example, that there should be no more oil, including heating oil. No more natural gas. No more wood-burning stoves (because the smoke will pollute the air).

So basically everyone in northern climates should just freeze to death… or move to an equatorial climate where no heating is required. Except that you’ll have to walk with your own two feet on plant-based sandals to make sure you don’t consume any oil on your way down to the tropics.

This is the hallmark of Inspired Idiots. They have no idea just how stupid they really are. They honestly believe that the world can “just stop oil” and there won’t be catastrophic, Stone Age consequences.

But it all becomes even more remarkable when the government gets involved.

The city of Honolulu, Hawaii is currently suing Exxon Mobil, Shell, Sunoco, Chevron, and several other oil companies for causing climate change.

Now, plenty of groups have sued oil companies in the past over climate change… and generally these types of lawsuits have been thrown out by rational judges.

But the city of Honolulu is trying a new approach.

Instead of suing the companies for extracting and selling oil, they are suing for misleading the public on the dangers of their product.

And they claim the City of Honolulu has suffered direct damages, in the form of flooding, beach erosion, and damage to coral reefs.

Now, a sane judge would throw this case out. But lucky for the activists, they’re in the jurisdiction of the Hawaii courts.

Remember that, in February, the Hawaii Supreme Court ruled that “the spirit of Aloha” supersedes the US Constitution. So, it should be no surprise that the Hawaii Supreme Court has allowed this case against the oil companies to proceed.

The reality, of course, is that billions of people willingly choose each day to use oil in some capacity, including superglue and glitter.

And most rational people can probably understand that oil has literally fueled the innovation and growth that is responsible for our incredibly high standards of living.

So, suing the oil companies, and trying to “just stop oil” is biting the hand that feeds.

Sure, it would be great to reduce oil consumption… Geez if only there were another technology that was multiples more energy efficient than oil, but was simultaneously clean and green?

Oh wait, that technology already exists. It’s called nuclear.

But the green fanatics don’t like nuclear either… because they are Inspired Idiots. So their one-track minds are focused on stopping oil.

Just imagine if Honolulu’s lawsuit succeeds, and the city is awarded punitive damages; it would open up the floodgates for class action lawsuits around the world. Every city, state, and country in the world would be able to sue in the name of climate change.

No oil company would survive, and no investor or entrepreneur would touch the sector. The cost of energy would skyrocket… which would increase the cost of everything. Powering your home. Heating your home. Food. Medicine. EVERYTHING.

It also means that the US will become almost completely dependent on foreign adversaries for its energy… Because guess which country dominates the market for solar panels, batteries, and the essential minerals they require? China!

So all of these lawsuits, Electric Vehicle mandates, solar panel pushes, etc. ultimately weaken US national security.

In fact, two former chairmen of the Joint Chiefs of Staff recently commented that lawsuits like the Honolulu case absolutely threaten US national security by putting America’s energy independence at risk.

You’d think the guy with five decades of experience would understand this.

Yet even the President of the United States rarely misses an opportunity to demonize the oil companies and push the United States closer to depending on China for energy.

Mr. Biden has blasted the oil companies for producing too much and causing climate change, but then complained that they weren’t producing enough oil when gas prices soared.

The self-proclaimed capitalist has also threatened to “go after” the oil companies’ profits.

He passed punitive taxes deliberately to punish the industry. He breaks US federal law by refusing to auction off concessions of federal land. He requires outrageous climate regulations, including fanatical decrees from the SEC to disclose nebulous ‘climate liabilities’ to investors.

And naturally he supports these ridiculous charades, like Honolulu’s lawsuit against the oil companies.

It’s extraordinary how many Inspired Idiots have taken over some of the most important institutions in the country. The media. The education system. The White House. Some of the highest courts in the land.

The result of this cultural jihad is that we actually live in a world where extremely powerful people are deliberately trying to destroy their country’s most critical resource. It’s mind-blowing.

And it’s an obvious reason to have a Plan B.

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[Note from James: The first thing I did this morning when I saw the US government’s latest inflation numbers was to call my friend and partner Peter Schiff to enjoy a good rant about how the Fed has completely lost the war with inflation. Peter’s thoughts are below, and I agree entirely.]

Bill Martin had a pretty serious problem in 1969.

As the Chairman of the Federal Reserve (back when people had the audacity to say “chairman” instead of “chair”, as if we are pieces of furniture), Martin was one of the few people who could say that he had central banking in his blood.

His father, William McChesney Martin Sr., was actually one of the original architects of the Federal Reserve Act of 1913, and then later served on its Board of Governors and as President of the St. Louis Federal Reserve Bank.

Bill followed in his father’s footsteps, first cutting his teeth on Wall Street, then becoming President of the New York Stock Exchange at age 31.

Following a period of military service during World War II, Bill Martin was ultimately made Chairman of the Federal Reserve by President Truman in 1951. And to this day he is still the longest serving chairman in Fed history.

Martin’s problem started surfacing in the mid 1960s. Lyndon Johnson was President, and the United States was spending an unbelievable amount of money fighting a war in Vietnam, while simultaneously funding Johnson’s “Great Society” welfare programs.

With so much government spending (most of which was financed by debt), inflation started to rise. And by 1969, US inflation reached 6%.

People weren’t happy, politicians weren’t happy, and Martin was in trouble. So he did what Central Bankers are trained to do— he aggressively raised interest rates.

The Federal Funds rate, in fact, reached 10% by the summer of ‘69, right around the time Woodstock kicked off and Neil Armstrong walked on the moon.

High interest rates cooled the economy, and inflation soon started to fall. By 1972, inflation had come down to around 3%— and everyone was convinced that the problem was over.

But we all know the rest of the story— inflation didn’t go away; the remainder of the 1970s was the worst inflationary period in US history, and inflation didn’t come back down to the Fed’s 2% target level until 1986!

There are a lot of similarities to today.

Just like the 1960s, the US government is spending outrageous sums of money that it cannot afford, most of which is financed by more debt.

Inflation shot up to a peak of 9% during 2022— in large part due to the government’s spending binge during the pandemic. But the Fed aggressively hiked rates, and inflation fell back to around 3%.

But the government just released its latest statistics this morning showing that inflation is rising once again for the third month in a row. On an annualized basis, in fact, inflation is more than 5%.

Naturally this doesn’t come as a shock to anyone who goes grocery shopping… or shopping for just about anything else. Apparently, you lose all sense of reality when you get a PhD in economics.

For the past several months, the Fed has tried to tap-dance its way out of reality. They keep claiming that the recent spikes in inflation data have been “seasonal” aberrations.

Well, there’s no mistaking it now. Inflation is not falling to 2%. It’s not falling at all.

The Fed clearly claimed victory over inflation way too early, based on a complete fantasy that they had fixed it. And they’ve already been talking very publicly about when (and not if) they will cut rates.

They’re missing the entire point.

Americans aren’t looking for lower inflation. They don’t even want zero inflation (although that would help). People want prices to go back down to pre-pandemic levels— which is what they promised back in 2022 with all the talk of “transitory” inflation.

Well, that ship has completely sailed. But the Fed still seems to think that they’ve won the inflation war and that interest rates are going to come down soon.

Notice that no one is even talking about whether interest rates need to go up even higher.

Nor is anyone suggesting that inflation may simply be beyond the Fed’s control.

As long as the federal government continues overspending by trillions of dollars each year, there’s very little that the Fed can realistically do to tame inflation.

Sure, in theory they could keep raising rates to bring down inflation… and maybe even cause a recession. But as we’ve talked about many times before, there’s just no way they can do that: higher rates will bankrupt the federal government.

Remember that the $35 trillion worth of US government bonds have to be refinanced every six years (on average).

Back in 2021, for example, the Treasury Department issued 3-year bonds (technically they’re called notes) at close to 0%.

Now it’s 2024 and those 3-year notes need to be repaid. Well, the government never actually repays anything. They just issue new bonds to pay off the old bonds, essentially refinancing the national debt every few years.

The problem, of course, is that interest rates are much higher now. Bonds that were issued at 0% a few years ago are now costing the government 5%.

This means that the government’s annual interest bill is about to skyrocket.

Prior to the pandemic the government’s annual interest expense was about $500 billion. This year it will surpass $1 trillion. And if rates stay at these levels (or go higher) the annual interest bill will pass $2 trillion in a few years.

The Federal Reserve knows this; the risk of bankrupting the Treasury Department with higher interest rates is a real possibility.

Higher rates also cause a lot of other problems in the US economy, including real estate, bank solvency, the stock market and more.

All of these risks exist because the Fed kept interest rates so low for so long— the better part of 15 years. They created enormous financial bubbles, and they’ve created a legacy of inflation and financial destruction.

It should be obvious by now that the Fed has lost… and that they are not in control of the situation.

Remember, just because inflation has declined from its peak, doesn’t mean that it’s going away.

Ultimately, we believe this is bullish for gold. Even though the gold price is near its all-time high, these realities will probably continue to push gold much higher in the long run.

And people are starting to figure this out.

Individuals and ETFs that have been selling gold for years are starting to reverse.

Even Costco is selling around $200 million a month in gold bars.

Remember, we’re in 1972 right now. This is likely just the beginning.

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Jamie Dimon, the CEO of JP Morgan Chase, did not open his annual shareholder letter with rosy language about the state of the world, or even enthusiasm about his bank’s record profits.

Instead, he describes “yet another year of significant challenges” including the war in Ukraine, war in the Middle East, extreme tensions with China, higher food and energy prices, turmoil in the banking sector, outrageous government deficits, and even major risks with the Federal Reserve’s monetary policy.

Dimon writes that “America’s global leadership role is being challenged outside by other nations and inside by our polarized electorate,” and that this is a “time of great crises”.

He went on with a few charts and thoughts about the bank’s business and financial performance over the last year… and then dedicated most of the remaining 57 pages of his letter to the serious problems which face the world.

His observations are wide-reaching– from the decay of social cohesion to the prospect of war and higher inflation, to the serious potential for a reset of the Bretton Woods system (which made the US dollar the world’s reserve currency).

Frankly the letter almost reads as a manifesto written by someone who is completely fed up with government incompetence and positioning himself to run for office. I can’t agree with everything he says, but it’s obvious that his ideas are balanced and well thought out.

There are a few points in particular worth repeating.

1.Keep it in perspective; the world is not coming to an end

“If you read the newspaper from virtually any day of any year since World War II,” Dimon writes, “there is abundant coverage on wars — hot and cold — inflation, recession, polarized politics, terrorist attacks, migration and starvation. As appalling as these events have been, the world was generally on a path to becoming stronger and safer.”

This is absolutely a true statement. It’s easy to get caught up in the negativity while missing the abundance of growth and opportunity.

In the year 1918, most people probably thought that the world was coming to an end. The Great War was at its peak, economies were faltering, inflation was surging, rationing and shortages were everywhere… and then the Spanish flu popped up and killed tens of millions of people.

Bleak times indeed. And yet the next century was the most prosperous in human history… despite a very bumpy path along the way.

This is similar to where we are today. Yes, Inspired Idiots have caused a gigantic mess. But the general trajectory of the human species is still improving.

2.That said, long-term risks should not be underestimated. Especially for the West.

Dimon finds that there is “too much emphasis on short-term, monthly data and too little on long-term trends”, and he talks about inflation as a great example.

Economists and investors tend to be almost singularly focused on monthly inflation reports in an effort to divine if and when the Federal Reserve will cut interest rates.

They’re entirely missing the point, Dimon writes. Month by month, and even year by year, inflation numbers could vary wildly. But if you look at the big picture, you’ll see substantial evidence for future inflation.

We’ve been writing about this for a long time. In fact, since inception we’ve only been focused on long-term trends… and we see these as highly inflationary.

Similar to our view, Dimon understands how “ongoing fiscal [deficit] spending, remilitarization of the world, restructuring of global trade, capital needs of the new green economy, and possibly higher energy costs in the future” are all inflationary in the long run.

The inflation might not show up next month or next quarter, but he believes (as do we) that the coming years are full of “persistent inflationary pressures”.

There are also significant risks to the current US-led global order; America’s influence is waning, and Dimon writes that the “international rules-based order established by the Western world after World War II is clearly under attack by outside forces, somewhat weakened by its own failures [and] confusing and overlapping regime of policies.”

As part of this, he talks about the distinct possibility for a reset of the post-WW2 financial system (known as Bretton Woods) that anointed the US dollar as the global reserve currency. He puts it succinctly: “we may need a new Bretton Woods.”

We’ve been writing about this for years; the dollar’s decline is a long-term trend, but for us, it’s an obvious one. You cannot run multi-trillion dollar deficits each year and still expect to be the world’s economic superpower.

It’s notable that even someone like Dimon can see this coming.

3.These problems are still solvable.

We’ve written extensively that the problems facing the US and the West are still solvable. For now. But every year that the problems continue to be ignored brings the country closer to a point of no return… where there is no way out but default.

Dimon is not shy about offering up suggestions, many of which we have written about in the past. He talks about border security, streamlining sensible regulations, and economic policies which prioritize growth.

“Unfortunately,” Dimon writes, “the message America hears is that the federal government does not value business — that business is the problem and not part of the solution.”

“There are fewer individuals in government who have any significant experience in starting or running a company, which is apparent every day in the political rhetoric that demonizes businesses and free enterprise and that damages confidence in America’s institutions.”

He says he finds it “astounding that many in Congress know what to do and want to do it but are simply unable to pass legislation because of partisan politics”.

He goes on to list a multitude of government failures and the “staggering number of policies, systems, and operations that are underperforming”, including pitiful public schools, broken healthcare, infrastructure woes (especially the energy grid), terrible immigration policy, Social Security’s looming insolvency, and more.

Dimon states very clearly that the federal government “needs to earn back trust through competence and effective policymaking.”

True statement. But I’m not holding my breath. Because in related news, the White House just announced that Joe Biden is working on yet another way to forgive student debt for 30 million Americans.

He doesn’t seem to care that the Supreme Court already rejected his previous effort to forgive student debt, saying he did not have the legal authority.

It’s pathetic that the cost of university education is so high… especially given how many degrees in an AI-world are useless. Plus many universities these days are just hotbeds of radicalization. It hardly seems worth taking on $80,000 of debt for such a dubious outcome.

But nevertheless, taxpayers have footed the bill for college and loaned out over $1 trillion to students across the country.

This is a basic tenet of capitalism (which Mr. Biden claims to embrace): debts have to be paid.

But because this guy’s poll numbers are so pathetic– especially with young people– he’s trying to score points by canceling their debts.

Well, canceling student debt means that taxpayers will lose hundreds of billions in loans that they made. So rather than taking steps to strengthen America’s balance sheet, the President is once again violating the law to make the balance sheet worse… all to improve his image among young voters.

This is hardly a way to restore trust in government. So again, I’m not holding my breath.

Dimon’s letter is worth the read if you have the time. You might not agree with everything he says, but it is rather telling that the CEO of the country’s largest bank is speaking so plainly about obvious risks.

It’s another reminder of why it makes so much sense to have a Plan B.

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Did you hear about the newest vehicle safety feature that Congress wants to mandate?

It’s not some AI sensor system, or even a newfangled airbag.

Nope. In the minds of literally several hundred lawmakers (from both parties!) the most essential safety feature that should be in your vehicle is… AM RADIO!

The “technology” behind AM radio is so old it even predates Joe Biden. In fact it almost predates the automobile itself.

But while the automobile has undergone tremendous evolution over the past 100+ years, AM radio is still essentially the same as it was back during the first broadcast on Christmas Eve, 1906: fuzzy and low quality.

Perhaps that’s why most consumers abandoned AM radio long ago, ditching it for FM, then satellite, and now streaming.

So few consumers listen to AM radio that many cars don’t even come equipped with it anymore; for manufacturers, it’s not worth spending on a part that consumers don’t want.

And for some cars— specifically electric vehicles— AM radios can cause dangerous interference with sensitive electronic components… so some EV manufacturers have removed analogue AM receivers to make their vehicles safer.

Of course, consumers who really want to listen to AM radio programs can always subscribe to digital AM streaming services.

But that’s not good enough for politicians who have a history of ignoring what US consumers want. If you’re not interested in AM Radio, well too bad. AOC and Joe Biden are going to decide for you.

The “AM Radio for Every Vehicle Act” was first introduced in Congress last May to force every vehicle manufacturer to include an analog AM radio receiver.

Their entire reasoning was captured in just a single line:

“AM broadcast stations are often used to deliver emergency alerts and news and entertainment programming; some newer vehicles do not include AM equipment.”

Is it 1955? When was the last time that anyone received an emergency alert on AM radio? Totally nuts.

Fortunately the bill went absolutely nowhere at first.

But bad legislative ideas are like cockroaches. They never actually die. They linger forever and multiply until they eventually take over the House.

Fast forward nearly a year later, and it turns out that 47 Senators and 237 Representatives have signed on in support of the deal.

And Joe Biden (probably the only guy in America who still listens to AM radio) is ready to sign it. It’s almost assured to become law.

Now, this is not the most destructive legislation in US history. In fact the main consequence of the AM radio mandate is that vehicles will cost a bit more.

But it does provide hilarious insight into their short-sighted thinking… if they’re even capable of thinking at all.

Remember, about a week ago, the Biden administration decreed that 50% of all new cars sold in the US by 2030 will have to be electric vehicles (even though only 8% of consumers choose to buy them today).

But wait— AM radio produces dangerous interference for in sensitive EV components, making electrical vehicles LESS SAFE.

So this AM radio bill, which aims to make people more safe, will actually make Electric Vehicles less safe. And Mr. Biden has decreed that at least half of Americans will be driving these less safe EVs in six years.

You just can’t make up this level of stupidity.

There’s a common line of thinking these days that the people in charge are deliberately trying to destroy America.

Well, with such idiotic and conflicting mandates, it’s getting harder to ignore that conclusion.

Politicians are forging ahead with idiotic priorities as if the country isn’t barreling towards the edge of a cliff.

They’re doing nothing about the border. Nothing about the budget deficit. Nothing about Social Security. Nothing about the decline of America’s military power. Nothing about the dollar’s rapid loss of credibility. Nothing about the mountain of regulations that debilitate economy productivity. Nothing about preventing World War III.

But hey, when it comes to the REALLY important issues like AM radio, these ‘leaders’ really get down to business.

And again, the AM mandate is a bipartisan bill.

Republicans are in favor because there are plenty of conservative talk shows on AM radio.

Democrats are in favor because they use AM radio to reach Spanish speaking voters.

Never mind what’s good for the country, or good for producers, or good for consumers. Congress has its own agenda.

This should come at no surprise; with an abysmal 12% approval rating, everyone seems to know how terrible Congress is.

Yet, quite bizarrely, 96% of incumbents were reelected to Congress in 2020. So voters seem to agree that Congress is terrible. But it’s apparently all the other Congressmen who are incompetent. Their guy is doing a great job.

This is why I have such little confidence that politicians will turn this ship around; voters keep sending the same people to Washington… who have once again proven that they are totally out of touch with America’s priorities.

This is the most critical point to understand: politicians are most likely not going to solve the problems that they themselves have created.

And yet there are solutions that each of us, as individuals, can use.

If the Inspired Idiots are bent on engineering higher energy prices and higher inflation, there are ways we can reduce those consequences and even benefit financially.

If the Inspired Idiots are going to raise taxes through the roof, there are completely legitimate ways to reduce those as well.

If the Inspired Idiots are going to bankrupt Social Security (which the program itself anticipates within a decade), there are ways to structure a robust retirement account to offset the impact.

Whatever destruction they come up with, there are ways around it. It just takes a little bit of education and the will to take action.

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Did you hear about the new streamlined tourist visa to Saudi Arabia? I’m sure you’re standing in line for it already.

No? Me neither.

I was actually stationed in Saudi Arabia for a while when I was in the Army… and, the most unique ‘tourist’ attraction, at least for non-Muslims, is a place we used to call “Chop Chop Square” where they would do the public beheadings and dismemberments of convicted criminals.

Aside from that, Saudi Arabia has virtually nothing to offer tourists. At least for now.

But over the past few years the government has set itself on a path to building massive futuristic cities and giant resorts in an effort to bring tourists and diversify its economy– including a recently streamlined visa process.

But to me, this screams of desperation… because it means that Saudi Arabia’s oil industry is in serious trouble.

As recently as just a century ago, what we know as ‘Saudi Arabia’ today was just a bunch of nomadic tribes roaming the desert who were constantly at war with one another.

Then one day a tribal leader named Abdulaziz Ibn Saud rose to power, a bit like Genghis Khan, and conquered everyone else. And in 1932, he declared himself sole ruler of the newly established Kingdom of Saudi Arabia.

Initially he wasn’t King of much at all; Saudi Arabia was mostly just a desert backwater in the early 1930s.

But things began to change quickly when a major oil discovery was made in early March of 1938. And over the years, Saudi Arabia’s prominence in the world grew dramatically.

By 1970, Saudi Arabia had overtaken the United States as the world’s #1 oil producer, with daily output more than tripling over the course of that decade to roughly 10 million barrels per day.

Ever since then there has been almost a Homeric mythology that Saudi Arabia has a sort of inexhaustible ocean of oil, and they could just turn on a spigot and fill up millions of barrels.

But that’s simply not true.

In fact, more than 40 years later, Saudi Arabia produces less oil today than they did in 1980. And there has long been speculation that Saudi oil reserves might actually be running low.

Not long ago, in fact, the Saudi government announced that they would make investments in their oil infrastructure to increase their maximum production capacity to 13 million barrels per day… but nothing further.

In other words, they set a hard ceiling for how much oil they were capable of producing, essentially shattering the mythology of their infinite oil capacity.

Then, just two months ago, they reversed their plans, and announced that their maximum drilling capacity would be 12 million barrels, and not 13 million.

Both of these should have been taken as obvious indicators that Saudi Arabia’s oil reserves are well past their peak… and that they know it.

But there is perhaps no greater indicator than the Saudi government’s desperate attempt to give its economy a gigantic sexy makeover.

For example, Saudi Arabia is building a ski resort in the desert mountains… where it occasionally dips below freezing in the winter. Then there’s Neom, the futuristic megapolis planned for the coast of the Red Sea featuring flying cabs and an artificial moon.

Then there’s The Line, a city stretching for 170 kilometers across the desert. And of course there’s the Red Sea Project, a luxurious resort the size of Belgium.

The more Saudi Arabia launches these sorts of projects, the more obvious it becomes that they are running out of oil and are desperately trying to diversify their economy while they still have time.

The fact that Saudi Arabia even started selling off small pieces of its state-owned oil company, Saudi Aramco, back in late 2019 is another indicator.

They could have IPO’d in 1988… or 2005… or any other time. But they didn’t. It seems like they know they’re in decline, and they’re trying to monetize the mythology of their oil reserves while they still can.

Now, Saudi Arabia isn’t going to run out of oil anytime soon; rather, the larger point is that supply and demand fundamentals will likely lead to much higher oil prices in the future.

And this is very inflationary.

Oil is the most important energy commodity in the world, and so its price influences the price of just about everything. If oil prices spike, then it’s not just the price of gasoline that goes up.

The cost of operating data centers with racks of servers and GPUs will increase. Food costs will increase. Manufacturing costs will increase. Virtually everything will increase in price.

Energy prices, like just about all prices, are ultimately about supply and demand. And the demand side is pretty easy to see— it will most likely continue increasing as emerging economies and global population grow.

Yes, there may be a time off in the future where oil is no longer necessary. But that’s still a long way out. Because guess what critical commodity you need to produce solar panels and wind turbines? Oil.

Meanwhile, on the supply side, it’s clear that one of the world’s biggest oil producers is in decline. At a minimum, they won’t be able to increase production commensurate with the increase in demand. And they’ve flat out admitted to that.

Meanwhile, another of the world’s biggest oil producers, the United States, is going out of its way to obstruct oil companies.

They create special taxes to penalize them. They refuse to follow the law and auction off concessions. They never miss an opportunity to demonize them.

Even in the financial industry, bankers and investors deprive the industry of the funds necessary for exploration. Hedge funds have taken over the Boards of major oil companies and forced them into inefficient green energy projects.

The United Nations hosts entire summits about phasing out oil production.

And let’s not forget about the fanatics who vandalize art museums and glitter bomb public sporting events to demand that the world “just stop” producing oil.

So, we have rising demand coupled with policies that restrict supply. The end result, predictably, has been rising oil prices, which are now hovering around $85-$90.

This is one of the reasons why the inflation numbers remain high; again, expensive energy impacts core inflation.

I write a lot about why we think the future is inflationary, and a lot of it has to do with the tidal wave of debt and government spending.

But that’s just one source of inflation. Higher energy prices are another.

Like the debt problem, however, the energy problem is also solvable. There’s plenty of oil in the world– the issue is just misguided policy. There are also other technologies (like nuclear) which can provide abundant, cheap, clean energy.

There doesn’t seem to be much appetite among the environmental fanatics who enjoy complaining, but not actually solving any problems.

Now, one way to offset this oil cost inflation is to own shares of the oil companies themselves; and right now, several of them that are very cheap since it’s apparently not socially acceptable to own them.

In our investment research newsletter the 4th Pillar, we highlighted a highly profitable oil producer that is practically debt-free, and trading at a very attractive Price/Earnings ratio of just 3.4.

The company was able to turn a strong profit when oil prices were low, and they’re positioned to do extremely well as oil prices go higher.

Of course, no one can be happy about the prospect of future inflation.

But there are solutions. And if you understand what’s likely coming, you can take steps now to reduce the impact or even potentially benefit from inflation.

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You probably heard the news: the Environmental Protection Agency (EPA) recently finalized new vehicle emissions regulations that essentially force Americans into buying electric vehicles.

The actual published regulation is 1,181 pages long… because, that’s what the US economy needs– a thousand more pages added to the 200,000+ existing pages in the Code of Federal Regulations.

But essentially the EPA is forcing vehicle manufacturers to adhere to extremely strict emissions requirements that will be virtually impossible to meet given that over 90% of consumers currently purchase gasoline-powered vehicles.

The only solution for automakers to meet these new standards will be to simply stop producing many of their gasoline-powered models and ramp up production of electric vehicles… even though consumers clearly don’t want this to happen.

Electric vehicles are already more expensive. And deliberately reducing the supply of gasoline-powered vehicles will obviously make those more expensive as well.

So, in either scenario, consumers will have to pay a lot more money to buy a car.

But this new EPA rule is especially idiotic because the current US electrical grid cannot support 50% of cars being electric. And there is no plan to get it there.

According to the Wall Street Journal, there are currently upwards of 80 million distribution transformers— the cylindrical metal boxes— on utility poles across the US.

To reach the EPA’s goal, essentially ALL of these would need to be replaced to have a higher capacity.

Currently only about 660,000 transformers are replaced each year. So, at this rate, America should be ready for the EPA’s mandate by the year 2145, i.e. more than a century behind schedule.

To acquire the massive amounts of copper needed for even larger transformers, public utilities will be competing for materials with electric vehicle, solar panel, and wind turbine producers.

This will drive up the cost of each transformer, which have already risen by 70% since 2018.

They will also have to source a special kind of steel that exactly one producer in the US makes; the company is called Cleveland Cliffs… remember them?

Recently, we discussed how Cleveland Cliffs appealed to the Biden administration, including to the President himself, to kill a deal in which Japanese-based Nippon Steel was going to buy US Steel.

The deal with the Japanese would have made US Steel more competitive. Cleveland Cliffs (and more specifically, the steel union) didn’t want that to happen. So, Team Biden wrecked it.

Now Cleveland Cliffs plans to buy up US Steel’s assets for pennies on the dollar. It must be nice to place a phone call to the President and have him destroy your competition.

So yeah, this is the steel company that has the monopoly on replacing the 80 million transformers required to achieve the EPA’s electric vehicle fantasy.

Moreover, virtually every home will also need some sort of electrical upgrade in order to have a charging port in their garage. So, get ready to fork over more money for that too.

And for people who don’t have garages, consider that it currently takes 195,000 gas stations to fuel up cars across the US. So, there would likely need to be at least 100,000 or more new electric charging stations built.

In total the Journal estimates a roughly $1 trillion price tag to upgrade America’s electrical infrastructure in time for the EV mandate… most of which will be debt-financed, of course.

Money aside, there is the even more pressing issue of insufficient power generation.

US electricity production is already in a precarious condition thanks to idiotic political decisions which have shut down nuclear plants and pushed producers into inefficient renewables like wind and solar.

Let’s just pretend for a minute that wind and solar are great for the environment (even though they’re not when you consider the full supply chain, like batteries and cobalt mining that are required.)

The reality is that wind and solar are very inefficient and require a lot more resources and time to build than conventional sources.

So, if a utility company shuts down a coal-fired power plant, it takes a lot more time and money to replace that capacity with wind and solar.

This is why the North American Electric Reliability Corporation is already forecasting electricity shortages by the year 2032. And that’s without including this EV mandate.

If you then add in all the new electric vehicles, power outages will become a regular thing in the US.

Either that, or electric producers will have to go back to gas and coal-fired power plants… which sort of defeats the EPA’s purpose to begin with.

In short, the EPA will force you to swap out your car that runs on oil, for a car that runs on coal.

Now, depending on what happens in the 2024 election, this EPA mandate could die later this year.

But if it doesn’t, there is at least a silver lining… not to mention copper, lithium, and cobalt linings too.

In 2023, the US sold about 2.4 million electric and hybrid vehicles, requiring substantial quantities of lithium and cobalt for their batteries.

If car sales remain steady, the EPA’s mandate will make sure that demand for these materials surges by over 300% in six years… and that’s just for electric vehicles in the US.

On top of that, however, there will likely be more demand for these resources in the US for wind and solar plants, plus increased global demand as well.

Yet simultaneously there is already a lack of investment in resource markets which produce these critical metals for batteries and electricity transfer.

Part of that lack of investment is because environmental fanatics also hate the mining industry, even though mining is essential to their green energy dreams.

But the Inspired Idiots have ensured that hardly anyone is investing in new lithium and cobalt mines– which are among the most critical resources for electric vehicles.

You can probably see the result of this folly: flat (or declining) supply coupled with surging demand suggests dramatically higher prices for these key minerals over the next several years… and record profits for the companies that produce them.

We’ve highlighted a number of these real asset producing businesses in our investment newsletter, the 4th Pillar. You can learn more about it here.

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Rejoice, America, the federal government is FINALLY going to step in and fix the biggest problem of our time.

Naturally I’m not talking about the border. Or inflation. Or the national debt. Or America’s waning geopolitical power. Or the looming insolvency of Social Security. Or rising crime. Or the broken education system. Or the country’s vast social divisions.

No, those problems are nothing compared to the horrendous crisis that has swept the nation.

But fortunately, our saviors in government are going to do something about it.

I’m talking, of course, about the iPhone crisis. Yes, I’m sure it was on the tip of your tongue.

Last week the Justice Department announced the decision to charge Apple with antitrust violations, saying it has illegally monopolized the smartphone market.

Now, all kidding aside, there are so many things that are utterly stupid about this case, it’s hard to even know where to begin.

First, should this really be the priority for the Justice Department right now? There is so much brazen lawlessness in the country being committed by, you know, actual criminals.

But apparently the Justice Department thinks that Apple’s success is the biggest problem of all.

I suppose we shouldn’t be surprised given that this is the same Department that started investigating angry parents at school board meetings.

Naturally if Americans don’t like Apple products, people could simply stop using them. But the government thinks everyone is just a stupid peasant incapable of making such decisions. So, the Justice Department will decide for us. Hallelujah.

This leads me to the second point– how is it that Apple has a monopoly? Have these people never heard of a little company called GOOGLE and its Android mobile operating system?

Of course, people have a choice.

It’s really, really hard to not laugh out loud when you read the Justice Department’s legal complaint against Apple. They start by dredging up the ghost of Steve Jobs– a guy who’s been dead for more than 12 years– and accusing him of trying to “force” developers and users to use their products.

(Apparently Steve Jobs was holding a gun to your head while he was dying of cancer…)

They go on to claim that Apple unfairly created a proverbial ‘walled garden’, i.e. a closed-off iOS ecosystem where they famously control the end-to-end experience for its users.

Apple’s approach is not unique. Plenty of companies create proprietary systems that lock their users in.

Nvidia has a software system called CUDA which similarly chains users and developers. Video game consoles (Xbox, PlayStation, Nintendo) all have different standards, so the same game cannot be played on multiple systems. And each aggressively recruits game studios to develop content exclusively for their consoles.

Streaming services like Netflix and Amazon Prime develop content that can only be accessed exclusively through their platform.

Printer manufacturers have developed proprietary technology to prevent their customers from using third-party ink cartridges.

The list goes on and on and on. Companies routinely create incentives to keep customers using their products… and disincentives to prevent customers from going over to the competition.

But apparently the most senior officials at the Justice Department don’t realize that this is a completely normal business practice– one that Apple happens to have mastered.

Another hilarious point is how the Justice Department aims to prove its case:

Apple’s iMessage platform isn’t designed to communicate with Android devices. And Justice cites a 2022 exchange between Apple CEO Tim Cook and a reporter, in which the reporter said,

“It’s tough. Not to make it personal, but I can’t send my mom certain videos” because of the lack of iMessage and Android integration.

Tim Cook quipped back, “Buy your mom an iPhone.”

This is seriously considered ‘evidence’ in the Justice Department’s case against Apple. Their logic is so flimsy that it literally hinges on a joke made by the CEO two years ago. Cook said, “Buy your mom an iPhone”, therefore Apple has an illegal monopoly. Totally bizarre.

Another absurd point is that these Inspired Idiots cannot even apply their own logic evenly.

I wrote recently about how the Biden Administration is currently intervening in the steel industry in a way that will actually create a monopoly.

The President personally intervened to stop Japan-based Nippon Steel from buying the company US Steel.

On top of its acquisition bid (which would have rewarded shareholders handsomely), Nippon Steel promised to invest $1.4 billion into American factories.

But the US government rejected the deal (as if it were their business to begin with), and instead insisted that US Steel should be sold off for parts to competitor Cleveland Cliffs.

It’s obviously pathetic that the government is forcing US Steel shareholders to take an inferior bid. But even more, by forcing the sale to Cleveland Cliffs, the government is essentially creating a monopoly for that company, which will produce up to 90% of American steel used in vehicles.

But according to the government, Cleveland Cliffs’ new monopoly will be good because the union bosses are in favor of it.

Yet two weeks earlier, the government opposed a merger between grocery store chains Kroger and Albertsons, because they said it would create an unfair monopoly that the unions opposed.

The lesson here is pretty obvious: if the union bosses like your deal, then it’s not an unfair monopoly. If the union bosses oppose you, then the government will sue the crap out of you.

Apparently, Apple’s biggest mistake was not groveling to union bosses.

The irony is that even if Apple does have a monopoly, it only got that way by attracting customers.

I’m personally not an Apple guy. I use Linux on my computer and a unique mobile operating system called GrapheneOS.

But Apple’s share of smartphone sales in the US is 60%. The market has spoken. It approves of the company and its products.

What’s the government’s approval rating?

Congress is at 12%. Not a single federal political leader has higher than a 48% approval rating in a recent Gallup poll.

The government sucks so much at just about everything that it does, that it often seems they are actively trying to destroy America.

There are so many things wrong in this country that need fixing, and what does the government decide is the biggest evil we face as a nation?

Not the national debt. Not the potential for World War III. Not Social Security going bankrupt, inflation, the border crisis, or soaring crime rates.

They’re going to waste taxpayer resources to save people from iPhones.

They’ve already spent years building their case… which all hinges on a joke that CEO Tim Cook made about buying your mom an iPhone.

The real joke is that these Inspired Idiots are running the show. And it’s a joke on taxpayers and voters everywhere.

Now, who wants to bet that Nancy Pelosi’s husband shorted Apple stock a day before the case was announced?

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On June 5, 1947, US Secretary of State George Marshall gave the commencement speech at Harvard University.

This was just two years after the end of World War II, and in this speech, he first proposed giving $12 billion (approximately $170 billion in 2024 dollars) in economic assistance to help rebuild Western European economies ravaged by the war.

But it was about more than just throwing money at the problem.

What became known as the Marshall Plan was also meant to remove trade barriers, increase economic cooperation between countries, and prevent the spread of communism.

Remember, this was at a time when people still widely understood that capitalism was a win/win system where people take risks and work hard to create value and mutual prosperity.

By the 1950s, it was obvious that the Marshall Plan was playing a key role in the recovery of Europe’s economy and laying the foundations for the post-war boom.

It was in this spirit of cooperation— and gratitude for the US— that the US and the Netherlands got together in 1956 to sign the Dutch American Friendship Treaty (DAFT). Yes, I chuckled at the acronym too.

The point was to make it easier for Americans to live and invest in the Netherlands, and vice-versa, and it’s still in force today.

The treaty allows US entrepreneurs and freelancers to obtain legal residency in the Netherlands for the purpose of starting a business, with an initial requirement of depositing approximately EUR 4,500 (about $4,900) in a Dutch bank.

In the digital age, this allows a wide range of self-employed professionals, like IT consultants and freelance writers, to easily benefit from DAFT without needing to establish a traditional brick-and-mortar business.

And after five years of total residency, you can apply for Dutch citizenship.

Now, nothing against the Netherlands, but you may not want to live in a place where it rains about half the year. Or a 6+ hour time zone difference from the US might not work for you.

But the same treaty offers an even better deal in the six Dutch territories of the Caribbean— Aruba, Bonaire, Curaçao, Saba, Saint Maarten, and Sint Eustatius.

Under the treaty, US citizens are entitled to obtain legal residency in one of these islands without even having to start a local company or invest money.

To maintain your residency, you need to keep closer connections to the island, and cannot leave the country for longer than 12 consecutive months unless it’s for medical reasons.

Plus, this one strategy may allow them to accomplish several goals.

For example, some of the most basic elements of a Plan B include gaining foreign residency and cutting your tax rate.

By gaining this easy residency and moving outside of the US, you could also use the Foreign Earned Income Exclusion to earn $126,500 tax free in 2024. Double that for married couples, and add the Foreign Housing Exclusion, and you’re talking about well over a quarter million dollars each year you can earn tax free.

And because of the tax rules on these islands, in most cases, you should be able to minimize or even eliminate your taxation there entirely (although you should definitely consult a tax professional who understands your particular situation).

Finally, this strategy puts you on a five year path to be able to naturalize in the Netherlands, which comes with the sixth best passport in the world. That’s an amazing passport to pass down to future generations.

There is a downside however… in order to become a Dutch citizen, you generally must renounce your other citizenships. (They do, however, make exceptions if giving up your original citizenship would create a serious hardship or disadvantage.)

But that’s under current Dutch law. That could change in five years; after all, Germany recently did away with the requirement to renounce other citizenships.

Now, DAFT is obviously not for everyone. But the larger point is that it’s a good way to think about implementing a Plan B to combine multiple benefits of a single strategy.

For a remote worker who wants to move to a warmer climate, obtain a foreign residency, cut their taxes, and gain a second passport, this ticks a lot of boxes.

You may have entirely different goals.

But chances are, you can find ways to craft your own Plan B in a similar manner that allows you to gain multiple benefits from a single action.

For example, we recently wrote about the Greek Golden Visa, which allows you to gain a foreign residency by buying property. It’s a great “back up residency,” since there are minimal requirements to spend time within Greece.

It’s also a way to gain some investment return from your Plan B, by renting out the property when you’re not there. Plus, Greece offers great tax incentives to retirees who move there.

So you could gain a foreign residency now, and use the rental income to pay for the home you plan to retire in.

Even something as simple as contributing to a tax-advantaged retirement account can allow you to employ multiple strategies to not just cut your taxable income, but also save for retirement.

Depending on the structure, you could also gain more control and options over where your retirement money is invested or capitalize a new business from your retirement account without penalties.

There are a lot of tools out there to take back so much of your freedom and prosperity. It makes sense to use them to their full potential.

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I’m on my way back home from Mexico City after an incredible weekend event here with more than 100 of our Total Access members.

First things first, if you’ve never been to Mexico City, I highly recommend it. A lot of people have a misconception that the city is some kind third world dump. It’s not. And most first-time visitors are stunned by the vast green areas, expansive parks, tree-lined streets, museums, architecture, and modern lifestyle.

In my opinion it also has some of the best restaurants in the western hemisphere. You can eat extremely well in Mexico City, but you don’t pay very much for it.

The event we held for our Schiff Sovereign Total Access members was also pretty great.

I started off the conference explaining why we should expect higher inflation in the future– and I’ve written about this extensively. The US government’s own projections call for $20 trillion in additional debt over the next decade. And frankly we think they’re woefully underestimating the problem.

But even $20 trillion will likely prove catastrophic. That would mean the US national debt will reach $55 trillion.

If yields remain at today’s levels (roughly 4.5%), then the government will have to spend nearly $2.5 trillion per year, just to pay interest on the debt. That would make interest on the debt the #1 expense of the federal government, triggering a vicious cycle in which the Treasury Department would have to borrow more and more each year just to be able to pay interest on the money they’ve already borrowed.

To say this is unsustainable would be a massive understatement. And we believe that the Federal Reserve will step in to bail out the government by slashing interest rates to zero (or even negative levels).

Think about it– if the national debt is $55 trillion, but the interest rate on that debt is literally 0%, then the government’s annual interest bill is zero… essentially saving them $2.5 trillion per year.

Sounds great. But it would come at substantial cost.

For the Federal Reserve to lower rates, it would require them to dramatically increase the money supply, what we typically refer to as ‘printing money’. They’re not actually printing physical currency– it all happens electronically. But the effect is the same: it’s highly inflationary.

When the Fed ‘printed’ $5 trillion during the pandemic, the US economy saw 9% inflation. So, if the Fed prints $20 trillion or more to push interest rates down to zero, how much inflation will be see then?

No one knows. But it probably won’t be their magical 2% target.

My partner Peter Schiff came on the stage later and made similar comments. And with this inflationary scenario in mind, we sketched out a number of strategies, both personal and financial, that would make sense in the coming years.

It would be easy to study this problem and come away with a sense of dread. After all, a $55+ trillion national debt and $2.5 trillion in annual interest expense looks pretty scary. (Remember, these are based on the government’s own forecasts.)

But if you can understand the trend and its consequences, then you can also take completely rational steps to reduce their impact. That’s the entire concept behind a Plan B.

Peter and I both see overwhelming evidence of substantial inflation in the future. But this means we can prepare for it now, rationally. And we outlined a number of strategies to do so.

One rather obvious one is gold. And we talked about why gold will likely become very important in the future. My personal view is that gold will eventually displace the dollar as the global reserve standard, i.e. how foreign governments and central banks settle their accounts.

With a $55+ trillion projected national debt, and $2.5 trillion in annual interest expense, it’s hard to imagine the rest of the world continuing to allow the US dollar to remain the dominant reserve currency.

And it would be a similar outcome if the Fed ‘prints’ tens of trillions of dollars.

Either way, we see the dollar’s reign as the dominant reserve currency coming to an end over the next decade.

But since no one trusts the Chinese government, or some new ‘BRICS dollar’, gold is the most likely candidate to replace the US dollar since every government and central bank on the planet already owns it… and has confidence in it.

Gold has the added benefit that no single government controls it. And so single country dominates gold production; China, Russia, the United States, Canada, etc. all produce substantial quantities each year.

We later heard from a colleague of mine who runs one of the largest precious metals storage facilities in the world, based in Singapore. He gave me an insider’s view of the gold and silver markets, and sketched out why there may be a shortage coming, especially in silver.

He explained how many of the world’s largest commodities and metals exchanges have seen dwindling stockpiles… while many mines are doing direct ‘offtake’ agreements with large industrial consumers (like electronics companies).

The end result has been a trend of declining physical silver availability, and he believes this will ultimately drive the silver price much higher.

He added that silver is currently quite cheap compared to gold, with the silver/gold ratio currently at about 90:1, versus its historic average over the past several years of roughly 70.

We also had a presentation from a venture capital firm that talked about buying shares of prominent startups (Airbnb, SpaceX, etc.) in the secondary market, i.e. from employees or early-stage investors seeking liquidity. It’s an interesting way to take a discounted position in a high growth business whose value could explode in an inflationary environment.

As one could expect right now, there was also ample discussion about cryptocurrency, including a mini-debate between Peter and our guest Mark Moss, who also spoke at the event. More on that another time.

Perhaps my favorite part was hearing from the former President of Mexico, Vicente Fox. He spoke in the morning about how many short-sighted and dangerous leaders are ruining the world… and I couldn’t agree more.

During a Q&A session later, he told the crowd about the time that George W. Bush came down to Mexico to convince him to support the war in Iraq.

Former President Fox told us that Bush’s team rolled out maps of Iraq onto his desk and pointed at a tiny speck, saying, “There are the weapons of mass destruction.”

Fox stared closely at the table and brought his face closer to where they were pointing, and said, “It looks like mierda de mosca to me…” That’s Spanish for ‘fly shit’.

I want to extend my sincerest thanks to all the members who joined us for a wonderful weekend in Mexico City. The event, the restaurants, the personal discussions with each of you, and the camaraderie were all unforgettable.

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On March 2, 1901, a group of prominent American businessmen, including J.P. Morgan, Charles Schwab and Andrew Carnegie, came together to form the largest business enterprise the world had ever seen.

Through the consolidation of Carnegie Steel Company along with several other steel and iron businesses, they formed US Steel.

And it was immediately the world’s first billion-dollar corporation.

But that was just the beginning. US Steel quickly became a symbol of American industrial might.

It played a crucial role in building the infrastructure of the United States, supplying steel for skyscrapers, bridges, automobiles, and railroads. During both World Wars, US Steel’s production capacities were pivotal in supporting the Allied military efforts.

By the 1940s, there was hardly a more fitting icon of American prosperity.

But things slowly started to change.

After World War II, the economy globalized and trade flourished. US Steel suffered from increased competition from foreign steel producers, and then, in later years, a decline in the American manufacturing sector.

Slowly the company diminished to just a shadow of what it used to be.

The decline of US Steel culminated in a bidding war last year by larger rivals who were eager to absorb the company.

Another American steel producer named Cleveland-Cliffs offered to buy US Steel for roughly $7 billion.

But Japan-based Nippon Steel offered double the amount— $14.1 billion— and also promised to inject $1.4 billion in capital to upgrade US factories. Somewhat poetically, $1.4 billion was the exact original capitalization of US Steel back in 1901.

Naturally, US Steel accepted the higher offer. $1.4 billion in foreign investment would do a lot of good for the company, for the steel industry, and for the US economy.

You know how the people in charge always love to talk about manufacturing jobs? Well, a $1.4 billion foreign investment gets you a LOT of manufacturing jobs.

Case closed, right? Of course not!

Cleveland-Cliffs (the company that lost the bid to Nippon Steel) was bitter that they didn’t win, fair and square, in a free market. So they decided to play dirty.

The CEO called-in his friends in the Biden Administration. And sure enough, Joe Biden personally came out, guns blazing, to slam the Nippon Steel acquisition.

Team Biden has now pushed the deal over to the US Committee on Foreign Investment, which has been tasked with investigating “national-security concerns”.

Come again? US Steel is a has-been company in decline that’s supposed to be acquired by a US ally. To pretend that this is a national security concern is a complete joke.

Cleveland-Cliffs then rallied the United Steelworkers union, whose president vocally asserted that “the only buyer the union accepts for the [sale of US Steel] is Cleveland-Cliffs.”

Wait a minute— who exactly is the owner of US Steel? Call me naive, but I thought it was the shareholders.

Yet apparently the basic fundamentals of capitalism don’t matter to Joe Biden, or to the United Steelworkers union.

In their view, the union is in control, and the union gets to decide who the new owner will be… even if the purchase price is vastly inferior.

Nothing official has been announced. But the Cleveland-Cliffs CEO is already bragging about how he killed Nippon Steel’s acquisition:

“We have been in total contact with the [Biden] administration, so I know what’s going on… This deal is dead… There is no more lobbying, there’s no more negotiation. It’s over.”

And like a vulture circling overhead, Cleveland-Cliffs indicated that they intend to scoop up US Steel’s assets for a bargain… potentially even less than their original bid.

And once Cleveland-Cliffs absorbs US Steel, it will control ALL US blast furnace production, and up to 90% of American steel used in vehicles, according to the Wall Street Journal.

That’s a virtual American steel monopoly.

The reason I raise this issue is because, just a few weeks ago, the Federal Trade Commission (FTC) sued to stop a merger between two grocery store chains (Kroger and Albertsons), claiming that the deal would create a monopoly and hence harm consumers.

Wait a minute— if a potential monopoly of grocery store chains is bad, then why isn’t a clear monopoly in the steel industry equally bad?

You’d think the FTC would apply the same logic to US Steel. But they’re not. The FTC has been completely silent on the matter. And the reason is obvious: the United Steelworkers union wants the Cleveland-Cliffs merger to happen, so the FTC won’t stand in its way.

If there has ever been any question about who has the power in this administration, the answer should now be plain as day: this government will do whatever the unions want.

Forget the voters, consumers, or shareholders— unions have the most sway, the most money to put into political campaigns, the most voters to drive to the polls.

And of course, forget what’s actually good for the country and the economy. The Inspired Idiots in charge are completely beholden to union bosses.

That’s a pretty bad sign if you expect things in this country to turn around anytime soon.

A roaring economy is exactly what the US needs to claw its way out of its massive national debt, and restore faith in the US dollar.

Instead, it’s doing everything possible to kill competition and productivity.

And that’s a good reason to have a Plan B.

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Located in Mediterranean Sea about halfway between Greece and Turkey is the island of Crete… which has attracted human civilization for more than 100,000 years.

Today roughly 600,000 people call the island home. But millions of tourists also visit the popular vacation spot each year. It’s known for it’s beaches, wine, and olive groves.

And at the moment, real estate is fairly reasonably priced.

It’s certainly not rock bottom cheap, but for such a popular destination, home prices could hardly be called expensive.

For example, a modest two bedroom stone villa next to a manicured olive grove with gorgeous views of the sea is listed for around €275,000, or USD $300,000.

A place like this on Airbnb could easily fetch $125 to $150 per night and would be fully booked for much of the year.

Now, I’m not here to encourage anyone to buy investment property in Greece. Personally I think there are much better investments right now. But buying property in Greece does have something special going for it that most traditional investments don’t have:

You can become a Greek, i.e. European resident, if you buy property.

Having residency in a foreign country is a completely sensible thing to do. It means that, in almost every case imaginable, you’ll have another place to go if you ever need it.

There are a number of places in the world that allow you to buy property in exchange for legal residency; often these programs are called “Golden Visas.”

But you would only want to go down that path if you actually enjoy spending time in the country.

And for some people, Greece is paradise. The weather, culture, ruins, history, food, etc. appeal to plenty of people who want to spend time or even retire there.

Portugal was the first of several countries in Europe to launch a Golden Visa back in 2012.

But as usual, the deal was too good to last. Swarms of foreigners came in, property prices went through the roof, and locals complained that housing was unaffordable.

So last year, the government of Portugal made their Golden Visa program much, much less attractive, and for the most part, property purchases no longer qualify.

Greece is the best game in town right now as far as European Golden Visa programs are concerned. 98% of the country’s territory, including hundreds of its idyllic islands, remains eligible for a Golden Visa in exchange for a property purchase of just €250,000.

But last year, the government raised the minimum investment threshold to €500,000 in the country’s most sought-after regions, including parts of Athens, Thessaloniki, and the islands of Mykonos and Santorini.

And we wouldn’t be surprised if they restricted the program further— after all, that is what tends to happen to these programs. So if you like the program, it’s better act soon.

Again, buying property under a Golden Visa program doesn’t make sense if you don’t enjoy spending time in the country.

But when it’s possible to get residency (which is a solid step in your Plan B) while generating positive cashflow from your rental income when you’re not using the place, that’s a pretty good deal.

Of course, Greece isn’t the only place in the world you can do this.

Panama still offers residency in exchange for a roughly $300,000 property investment— an amount which still goes a long way in Panama.

Panama’s program has also changed over time, so it also probably won’t last forever.

Then there are places like Mexico where you don’t even have to purchase a property to obtain legal residency; you just need to prove that your income or savings meets a modest threshold.

If someone asked where is the easiest place to gain residency in the Western Hemisphere, I think Mexico ticks that box. Almost anyone qualifies, and it is easy to maintain.

The larger point is that these aren’t radical steps. But they do give you another option.

And in a world full of Inspired Idiots, with so much looming risk and uncertainty, having additional options just makes sense.

But great options don’t last.

We go through periods where one residency may be easy and simple to obtain, and over time those rules change and become more difficult and cumbersome.

So when you find something that works for you, take action and make it happen.

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[Editor’s Note: Today’s article was written by a colleague who recently traveled to Russia. These are his observations about the current situation on the ground.]

Today in Russia, there is unmistakable tension in the air.

You definitely don’t want to speak out against the war or the current regime— it’s an almost guaranteed way to lose your job or end up in a prison.

That’s why everyone is so careful about what they say, and to whom they say it. Unless you know someone really, really well, you have to avoid any potentially controversial topics.

The TV blasts propaganda on a daily basis, effectively brainwashing millions of people. It’s surprising how many Russians seems to believe the news… or at least pretend to believe it.

The national elections took place this past weekend. Despite the official numbers reporting 77% voter turnout, most people I spoke to didn’t plan on voting since, “the result will be the same anyway.”

This is all eerily reminiscent of the Soviet Union.

This is how McDonalds is now called under local management.Yet at the same time— and completely unlike the days of the Soviet Union— the Russian economy is doing surprisingly well.

Western nations thought that their sanctions would cripple Russia. But that hasn’t happened. Russia’s unemployment rate currently stands at a historically low 3%— less than even the United States.

A friend in the tourism business has been very busy selling tour packages to a luxury hotel in the UAE in the past couple of years.

And a business person who imports and resells industrial equipment told me business is very good for him now, because sanctions have forced his foreign competitors to exit the Russian market.

In this way, sanctions have actually benefited many sectors of the economy since Russia is no longer able to import products from Europe and the US. So many Russian businesses have created new products to replace these imports.

To give you an example, European cheeses and meats are very popular in Russia. But now, rather than be imported from France and Italy, they are produced by local Russian companies.

Large auto brands like Toyota and Volkswagen have been replaced— either by significantly cheaper Chinese brands (which offer decent quality at a much lower price), or by Russia’s own automotive brand, Lada.

Lada Vesta – new Russian crossover, with the price tag starting at about $18,000.For workers, salaries have also gone up— in large part because of labor shortages.

Roughly one million Russians have reportedly left the country since the start of the war— and most of these people are in their prime working years.

The government is also paying quite handsomely to recruit people into the military; contract soldiers earn the equivalent of $2,200 per month— which is a fairly hefty salary in Russia, especially for someone of limited education.

The government seems to be trying to balance economic needs with the war effort. And as a result, almost anyone with a stable job (and who pays taxes) has been able to easily avoid the military draft.

You might be also surprised to learn, in fact, that draft evasion is just an administrative offense in Russia, as opposed to a criminal offense.

It’s usually naturalized foreigners, i.e. people who originally come from former Soviet republics like Tajikistan, Kyrgyzstan, and Azerbaijan, who don’t know the rules about the military draft. Consequently, these foreigners are on the front lines in substantial numbers.

Criminals also make up a significant percentage of contract soldiers. And due to lack of proper training and equipment, many of them will not come back. A lot of people here think this is a deliberate ‘social cleansing’.

It’s also one of the reasons why Moscow is now one of the safest cities in the world.

The city was incredibly safe even before the war. But it’s on a whole different level now.

While vehicle theft and break-in are somewhat of an epidemic in places like San Francisco, such crimes are simply unheard of now in Moscow.

If you go to any random cafe in the city, you’ll find most people don’t even bother watching their bags or laptops. Delivery guys will leave their expensive electric bikes unlocked while they go upstairs to people’s apartments to drop off food.

I should also point out how incredibly cheap Russia is.

Moscow is one of the largest, most advanced and cosmopolitan cities in the world. The standard of living is extremely high.

Yet life in the city is now objectively cheaper than every other major city in the world. And I’m not just talking about Tokyo, New York, London, and Sydney.

Moscow is even cheaper than Sao Paolo. Mumbai. Johannesburg. Bangkok. Even Tbilisi, Georgia. And that’s especially true if you’re spending dollars or euros.

A 2-hour 80 km taxi ride from one of Moscow’s several airports (again, it’s a huge city) cost me just $26. Lunch in a mid-level restaurant with wine was about $15 per person.

Sure, you might pay similar prices in a tier-2 or tier-3 town somewhere in Latin America, but, again, in terms of standard of living, Moscow is on the same level as London.

So at this point I believe it is the most undervalued city in the world.

Perhaps most surprising is that Russia’s bureaucracy has been completely overhauled.

I was shocked to learn that government offices are now open 12 hours a day, six days a week. And the employees actually strive to be efficient and helpful.

When you renew your passport or drivers license, for example, you’re invited to leave a review about the service you received. Government workers’ salaries actually depend on these reviews… so they have a financial incentive to provide good service.

It’s similar with public works projects— they strive to be fast and efficient. And there have been a great number of those lately.

Infrastructure in Moscow and elsewhere seems to be improving by the day. New metro lines and roads are everywhere. Airports are modernizing, even despite the war.

And given the backlash that Russian citizens have faced around the world, the government has encouraged domestic tourism, with several mega-projects under development in resort towns on the Black Sea.

Overall Russia (and Moscow in particular) is a veritable tale of two cities. On one hand, there is palpable tension in this country, and the constant risk that if you slip up and say the wrong thing to the wrong person, then you could easily wind up in prison.

Suffice it to say that the Russian state has little tolerance for dissent.

Yet on the other hand, Moscow is one of the nicest, safest, most advanced, yet simultaneously cheapest of tier-1 global cities.

The Russian economy has proven robust. Income taxes remain low (the top rate is just 15%). The government is shockingly efficient.

Western leaders continue to believe that their “devastating” sanctions will cripple the Russian economy, and that the Kremlin will soon be on its knees begging for peace.

They are sorely mistaken.

After this trip it’s clear to me that Russia has the capability to continue this war for a long, long time.

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On November 5, 1605 Guy Fawkes was caught in the cellars of the Parliament building in London in what became known as the Gunpowder Plot— a conspiracy to assassinate King James I and restore a Catholic monarch to the English throne.

Guy Fawkes was arrested, tortured, and executed.

And his name, ‘Guy’, became an extreme insult. If someone called you ‘guy’ in the early 1600s, fists might fly— after all, it referred to a traitor who tried to murder the king.

The term ‘guy’ was also used to insult people’s looks or clothing, as the public often burned effigies of Guy Fawkes that were made to look grotesque or shabbily dressed.

Over time, though, ‘guy’ took on a different meaning. Today it’s just an informal way to refer to a man.

This is common in languages. Over decades… and even centuries… words tend to change meaning.

In the last few years, however, a handful of people have hijacked languages, and decided for everyone that words have new meanings.

But they never give us a nice new definition you could look up in the dictionary. The words mean whatever they want them to mean at any given time.

And that has been the fate of many words, for example, violence and genocide.

According to Merriam-Webster dictionary, violence is, “the use of physical force so as to injure.”

But over the past few years, woke activists have hijacked this word and redefined it to meet their absurdly broad criteria. Misgendering a trans person, for example, is considered “literal violence.”

Transgender actor Laverne Cox may have started that trend as far back as 2014, claiming “Misgendering trans people is an act of violence.”

More recently a school district in Philadelphia, plus various “Gender 101” university courses, have claimed the same.

Call me old fashioned but I always thought violence required actual physical contact.

But they don’t stop at violence.

The Trans Radical Activist Network (TRAN) claims that deliberate misgendering of trans people is akin to participating in a genocide against them.

The Daily Kos, a progressive political website, claimed Trump’s plan to ban gender reassignment surgery and puberty blockers for minors was, “a genocidal plan against all transgender existence in the United States.”

Growing up I recall the word genocide being used exclusively to describe holocaust-level atrocities— the murder or attempted murder of entire ethnic groups or minorities.

Pol Pot waged genocide against millions of Cambodian intellectuals. Hutu militias wiped out hundreds of thousands of ethnic Tutsis during the Rwandan genocide of the 1990s.

Yet today, people who are against transgender athletes participating in women’s sports are accused of committing genocide.

Another example: In 2019, Finnish politician Paivi Rasanen tweeted a Bible verse that was considered homophobic.

She was investigated for two years and ultimately indicted on three counts of “war crimes and crimes against humanity”. She was found not guilty, but the prosecution has appealed.

These terms— war crimes, crimes against humanity, violence, etc. have been completely hijacked by the woke mob… and they have no real definition anymore. Genocide means whatever some rabid activist wants it to mean.

This is why Canada’s new ‘hate speech’ law caught my eye.

Prime Minister Justin Trudeau’s government recently passed the “Online Harms Act”, claiming that it’s all about protecting children. And that certainly sounds like a noble intention. After all, who could possibly be against protecting children?

But the bill also states that, “Every person who advocates or promotes genocide is guilty of an indictable offence and liable to imprisonment for life.”

It also demands life in prison for any crime, “motivated by hatred based on race, national or ethnic origin, language, colour, religion, sex, age, mental or physical disability, sexual orientation, or gender identity or expression.”

Now, I happen to be in favor of free speech… and that even extends to offensive, idiotic speech that has no place in a civilized society. So throwing someone in prison for life because of words seems ridiculous to me… especially given the bizarre double standard of woke justice.

Bear in mind that criminals who commit actual violence are routinely turned back onto the streets because bail is ‘racist’. But hate speech is considered a crime that may now carry a life sentence.

If genocide still meant ‘the systematic murder of entire groups of people’, this new Canadian law might not be too scary.

But we live in a world where some very powerful people think that misgendering someone is akin to genocide.

Trudeau in particular has already bent laws to increase his own authority. He silenced his opposition throughout 2020-2021, and when the Freedom Convoy protested his mandates, he de-banked them, imprisoned them, and denied them bail.

He seized authority that voters never gave him, and he used it to hurt people.

Does anyone honestly think that this new law won’t be abused to do the same thing? The government could lock somebody up for life based on ideas which no longer have any defined meaning.

What is Justin Trudeau’s definition of genocide? Or violence? Or war crimes? What is his definition of hate?

I’d love to know. But I doubt they’ll ever tell us.

And that’s the problem with these woke people— they love to accuse people of things, but they never define the thing that they accuse people of.

Inspired Idiots like Trudeau are on a crusade, and are delusional enough to think they are actually making the world a better place.

But destroying things as fundamental as language, and threatening life in prison over whatever the definition happens to be today, makes people less free.

This is a guy who smeared the Freedom Convoy— protesters with legitimate grievances against the government— as “misogynistic and racist”, and wondered aloud “do we tolerate these people?”

And when a government starts pushing life in prison over behavior that they can redefine in their sole discretion, it should be pretty easy to understand why you ought to think about a Plan B.

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Dwight Eisenhower had a huge problem in 1948.

After winning the war in Europe and defeating the Nazis, “Ike” was one of the most popular and recognizable men in the world… and publishing houses were falling all over themselves for his memoirs.

Doubleday, a New York based publisher, won the bid by paying a massive $635,000 advance for the book rights. That’s worth tens of millions in today’s money, putting him in the same category as the Obamas’ two book, $65 million publishing deal.

Eisenhower’s problem, however, was the US tax code; $635,000 would immediately bump him into the highest income tax bracket with a 91% marginal rate, and he would have to fork over the vast majority of that income to the government.

But for some bizarre reason, the Treasury Department issued an unprecedented tax ruling in Eisenhower’s favor; they claimed that he was not a professional author subject to income tax.

Rather, the Treasury Department explained, the former general was merely profiting from the sale of an asset, i.e. his life experience, and was thus only required to pay capital gains tax of 25%.

I doubt anyone in the Treasury Department actually believed such a weak argument; most likely there were a few very powerful people trying to help Eisenhower out, and they made up some ridiculous justification to cut his tax rate.

Obviously this tax ruling no longer exists, and Eisenhower was one of the few people to benefit from it. But for a very, very short time in the United States, the government peddled the ridiculous fiction that certain ‘income’ was really just a ‘capital gain’.

There is now a growing chorus of shrieking sirens within the government that is trying to do the opposite– pretend that ‘unrealized’ capital gains are really income in disguise.

Joe Biden tried to make this case on Monday when he rolled out his new 10-year budget proposal… which is every bit as absurd fiction as Eisenhower’s tax ruling.

“Fairness” is a big part of the President’s budget proposal. Sounds good. After all, who’s not for fairness?

Except that they never bother to define their terms. Exactly how much is a “fair share”? No one actually says. All we know is that it’s never enough.

Part of his proposal is to enact a “25% minimum tax” on the wealthiest Americans with a net worth in excess of $100 million.

25% of what, exactly? Who gets to decide how much a person’s “income” is? What qualifies as income?

It’s obvious from the President’s explanation that they want to count unrealized capital gains as income.

In other words, if you buy shares of Apple, and your Apple stock goes up by 10%, they deem that 10% to be income even though you haven’t sold a single share or received any money for the investment.

This creates a lot of complications and questions.

For example, consider that Hunter Biden (by his own admission) is holding on to $10 million on behalf of the ‘Big Guy’.

Based on the President’s logic, this means that the Big Guy’s wealth, i.e. ‘income’, has increased by $10 million even though he supposedly never actually received any money.

Moreover, Hunter Biden has been able to make millions of dollars by monetizing his family’s name; this makes the Biden ‘brand name’ an obvious asset. And given all the money that Hunter has made, any reasonable financial model would easily value this brand name asset in excess of $100 million, and hence be subject to the wealth tax.

Ultimately the wealth tax is a pointless idea anyhow. Even in the President’s own budget proposal, the projected revenue from a wealth tax doesn’t move the needle on America’s endless deficits.

The proposal shows, in fact, that the US national debt still continues to rise, quickly reaching 130% of GDP and shooting well past $50 trillion… even assuming his wealth tax is passed.

Yet he also assumes that America can continue to rack up massive deficits year after year without any consequences.

Mr. Biden thinks inflation will remain low. Unemployment will remain low. Interest rates will remain low. And zero reforms will be made to Social Security and Medicare benefits, even though the programs’ trust funds are set to run out of money in ten years.

This is such a bizarre fantasy… and another important reminder that the people in charge aren’t even capable of acknowledging the problems (that they themselves have created), let alone speaking honestly about the solutions.

Now, we are not pessimistic people; on the contrary, I think there is a tremendous amount of opportunity in the world and I am wildly optimistic about the future.

However it would be foolish to ignore such obvious risks.

Even the President’s new budget proposal forecasts that the national debt will spiral out of control. And interest payments on the debt will consume a greater and greater percentage of tax revenue.

The only real solution is for the Federal Reserve to slash interest rates and start creating more money again, all in an effort to bail out the Treasury Department.

We believe this will be highly inflationary. After all, when the Fed created $5 trillion during Covid, we got 9% inflation. This time around they’ll most likely have to create $15+ trillion.

But this doesn’t mean the world is coming to an end. Rather, if we can anticipate inflation over the next few years, it means we can take steps now to minimize the impact.

And it just so happens that many fantastic inflation hedges are incredibly cheap right now, some even hovering near record lows.

More on this soon.

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If you saw Christopher Nolan’s blockbuster Oppenheimer, you might remember the scene in which Dr. Oppenheimer travels to Chicago to meet with physicist Enrico Fermi, who had just achieved the world’s first ever self-sustaining nuclear chain reaction.

This really happened– it was December 2, 1942, and Enrico Fermi’s experiment was a massive scientific breakthrough.

Fermi and his team proved that a fission reaction could be controlled… and therefore the vast amount of energy inside of an atom’s nucleus could be harnessed for other purposes.

Obviously, the US government was singularly focused on turning that immense nuclear energy into the biggest bomb the world had ever seen. But Fermi’s discovery also paved the way for nuclear power.

Proponents envisioned a world powered by nuclear energy where the cost of electricity would be practically free… and the benefits to mankind incalculable.

It all came down to efficiency; the amount of nuclear power that could be generated from a single rock of uranium was equivalent to thousands of tons of coal in a conventional power plant.

The cost of electricity would plummet. And that cheap energy would mean that consumers would pay far less for utilities, saving plenty of money that could be put to other uses.

Cheap energy also means that the production costs of just about everything would fall; cars, houses, food, etc. all become cheaper.

Cheap energy also helps countries develop more rapidly and increase economic growth, resulting in greater national prosperity and more tax revenue for the government.

The promise of nuclear energy was extraordinary– it was a win/win/win. So naturally when other nations began to develop the technology on their own, it set off an arms race to stockpile as much uranium as possible– mostly to ensure that no one else could make weapons.

The United States government bought up entire warehouses full of it and made an exclusive deal with the Belgian Congo (which had the world’s largest uranium reserves), simply to make sure that other countries couldn’t get their hands on any nuclear fuel.

Then, over the years, the US government slowly sold down its uranium inventory, little by little.

Mining companies also added new supply to the uranium market, ensuring there was plenty of uranium to meet growing demand.

But then a series of infamous accidents took place– Chernobyl, Three Mile Island, etc. The public freaked out, and the entire nuclear power industry nearly vanished.

Now, an objective analysis shows that, any way you slice it, far more people have died from accidents related to coal, oil, natural gas, and other forms of electricity production than have ever died from nuclear power accidents.

In fact, more people have died from accidents related to wind power than have died from nuclear.

But nuclear power still suffered a terrible blow to its reputation, and it remained that way for a very, very long time.

Power companies scrapped their plans for new nuclear power plants, and the demand for uranium collapsed, prompting many mining companies to shut down their operations.

The existing nuclear power plants that remained in business, however, continued buying uranium from the government… so those stockpiles from the 1950s continued to dwindle.

And that takes us to today: nuclear is finally making a comeback.

Unfortunately, most of the West (as usual) is missing the boat; the vast majority of new reactors will be in China, India, and other rapidly growing nations who understand that no other energy technology offers the same advantages as nuclear.

Western politicians are still stuck in their idiotic, Dark Age beliefs that wind and solar are the way to go. But these are both completely inefficient and extremely expensive technologies.

The amount of energy it takes to produce solar panels relative to the electricity that solar panels actually generate is a laughable pittance; this is known as ‘Energy Return on Energy Invested’, or EROEI… and with nuclear power, it’s off the charts.

Plus, nuclear power also has one of the lowest levels of CO2 emissions of any energy source.

(It’s also worth noting that emerging nuclear reactor technology promises to slash costs even further and increase safety even more.)

This means that nuclear has the potential to provide massive economic AND environmental benefits. Virtually no other technology has that capability… which is why it’s only a matter of time before the world ‘rediscovers’ nuclear.

Again, it’s already happening in Asia. In fact, it’s possible to literally count all the planned / in-progress nuclear power plants that will be coming on line in the next few years, and then estimate the annual uranium demand.

One of the best researchers in this field, by far, is my colleague Adam Rozencwajg, who has spoken at a few of our Total Access events; Adam has gone through the trouble to count up all the new reactors and their projected uranium needs, and the answer is very clear:

Bottom line, uranium demand is set to skyrocket. Yet supply isn’t going anywhere, not for a while.

It takes many years to get a new uranium mine up and running– sometimes even longer than it takes to build a new nuclear power plant.

So, you can see how there’s likely going to be a massive imbalance in uranium supply and demand.

I first started talking about uranium in September of 2022 when spot prices hovered around $40 per pound.

Today, uranium trades for more than $90 per pound. But I think it could go much, much higher from here.

In fact, global uranium demand already exceeds new mining production. In the past, whenever this happened, there were always vast government stockpiles to keep the power plants supplied.

But now the government stockpiles have dwindled. So, we could easily see a major uranium shortage… and prices go through the roof.

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At 3:15 in the morning on May 10, 1774, King Louis XV of France passed away after a grueling, two-week battle with smallpox.

Upon hearing the news, his heir and grandson– 19-year old Louis XVI, reportedly cried out, “God protect us, I am too young to rule. . . I have learned nothing and the universe will fall upon me.”

But the new young king did manage to make at least one very bold decision almost immediately: he appointed a controversial French economist named Turgot to head up the nation’s finances.

Everyone knew by 1774 that France was in serious trouble. The national debt had soared to a record high thanks to so many years of war, extravagant spending, corruption, and blatant mismanagement.

Annual interest payments on the debt were becoming so vast that France had to borrow more money just to pay interest on the money they had already borrowed. And lenders were becoming increasingly worried that the government would default.

As a result, interest rates rose considerably. Investors who loaned money to the French government demanded rates as high as 12% to compensate themselves from the risk of potential default.

Louis XVI knew that this was completely unsustainable, and that France was headed for a major crisis if the government didn’t take urgent action to reverse course.

And that’s why he hired Turgot– possibly the only person in the kingdom with the balls to do what was necessary.

It wasn’t rocket science; Turgot knew exactly what needed to be cut. It was obvious:

By the early 1770s, the court at Versailles included the entire royal family, along with a whopping 886 aristocrat freeloaders– plus their wives and children. Add to that number 295 cooks, 56 hunters, 47 musicians, plus various other secretaries, chaplains, physicians, and other entourage, plus thousands of guards to protect everyone.

In total the royal court had over 16,000 mouths to feed, not to mention the handsome salaries paid to all of these useless officials.

The annual pensions alone, which were paid just to a handful of the king’s closest friends, consumed more than TEN PERCENT of the government’s annual budget.

But on top of this blatant spending problem, France also had a productivity problem. High taxes, excess regulation, and government price controls virtually eliminated any incentive to produce. Plus businesses faced endless battles with the guilds, which were essentially the unions of that era.

So, when Turgot was charged with fixing the country’s financial woes, he knew exactly what to do. And he sketched out his plan to the king the very night that he was appointed:

“In the present moment, I confine myself, Sire, to call to your recollection three ideas: No national bankruptcy. No increase of taxes. No new loans. . . To obtain these three points there is but one method– that of reducing the expenditure. . .”

Turgot knew that the economy needed to become more productive, so he wasn’t willing to raise taxes. He wouldn’t cause a financial crisis by defaulting on the debt. And he certainly wasn’t going to increase the debt by borrowing more money.

The solution was obvious, and Turgot got to work almost immediately.

With the King’s support, he made deep, deep cuts to the royal court. He also liberated trade and commerce by taking power away from the guilds, eliminating price controls, and reducing regulation.

And it worked. By the end of 1775, Turgot had balanced the budget and restored France’s creditworthiness such that he was able to refinance a large portion of the French debt with foreign investors at a rate of just 4%.

He turned everything around in just barely a year.

Unfortunately for France, however, Turgot had made a lot of enemies. The nobles, the guilds, and even the church hated him. So, on May 12, 1776, the King gave in to the pressure and fired Turgot. France then quickly resumed its decline.

The larger point is that it is possible to turn a giant ship around. France was in dire straits when Turgot took over. But he managed to reverse course in a year.

The US is now at a similar point (though frankly much worse) as when Turgot took over French finances.

France’s budget deficit in 1774 was roughly 10% of total tax revenue, while the budget deficit in the US last year was closer to 40%. Nevertheless, it’s still possible for America to turn things around.

And just like France in 1774, the answers are obvious. Turgot knew that every other government expenditure combined paled in comparison to France’s #1 cost: the royal court.

Similarly, everything else in the US government budget combined pales in comparison to it its #1 cost: entitlement spending.

Obviously, there is plenty of fat to trim everywhere in the US government; the Defense Department routinely wastes tens of billions of dollars, let alone the billions wasted in other departments.

And while those cuts would be helpful, they won’t amount to anything unless the #1 issue is tackled.

Entitlement spending, which includes Social Security, Medicare, and various welfare programs which the government now politely calls “income security”, cost a whopping $3.75 TRILLION in Fiscal Year 2023. This is the obvious place to start.

But Joe Biden made it very clear in last night’s State of the Union that he has absolutely no intention of doing that.

He could have been honest. He could have leveled with voters that there is almost no chance of balancing the budget without obvious entitlement reform… and that failing to balance the budget will result in an existential financial crisis.

At a minimum he could have said nothing.

But instead, he specifically ruled out entitlement reform (for the second year in a row) and explicitly said, “If anyone here tries to cut Social Security or Medicare or raise the retirement age I will stop them!”

Now, Joe Biden may think that he’s doing the right thing. But this is classic Inspired Idiocy.

When Hawaii’s Supreme Court recently ruled that the “Spirit of Aloha” takes precedence over the second amendment, they thought they were doing the right thing. Or when the FTC sued last week to block a grocery store merger, they thought they were doing the right thing.

Even the eco-terrorists who sabotaged a Tesla factory in Germany this week believe they’re doing the right thing.

Inspired Idiots always think of themselves as righteous. Unfortunately, they’re completely misguided and almost always wrong. They understand nothing, but they’re really passionate about it.

And that’s the danger.

This coming fiscal crisis is completely avoidable if the people in charge would simply take it seriously. But the President pledged last night that he will do absolutely nothing to stop it, and in fact continue making it worse.

The good news is that, while the Inspired Idiots in charge keep steering the country directly into the crisis, individuals can take rational steps to mitigate the worst consequences… and potentially even benefit from the opportunities that arise.

That’s why it’s so important to have a clear understanding of these obvious risks, and to have a Plan B.

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Carolyn Maloney must be furious.

This career politician with five decades of experience, as I wrote in at the very beginning of the year, was the chief architect of a completely ridiculous law known as the Corporate Transparency Act (CTA) which went into effect on January 1st.

The CTA was one of the dumbest pieces of legislation I have seen in a very long time. The entire premise is the classic boogeyman story that evil criminals and terrorists use US corporations to conduct their illicit activities.

This is the same lame excuse that politicians use to sh*t all over crypto.

And of course, it’s partially true. Sometimes criminals and terrorist do use US corporations and LLC structures to launder money. Sometimes they use crypto.

But criminals and terrorists also use JP Morgan Chase, HSBC, Visa, Mastercard, American Express, PayPal, US government bonds, Amazon gift cards, Verizon Wireless, iPhones, and Ford F-150 pickup trucks.

It’s not clear to me why politicians like Carolyn Maloney insist on calling out specific assets like cryptocurrency… or now US corporations/LLCs. But hey, these people have decades of experience, so they must know what they’re talking about.

(As an aside– how many people in this world are so good at what they do that they keep their jobs for decades? Even championship sports coaches and highly successful CEOs eventually get canned for poor performance. But politics is teeming with people who never seem to get fired…)

When the CTA went into effect earlier this year, I also pointed out that the US already has dozens of laws and regulations on the books which are supposed to prevent money laundering and financial crime.

But apparently Congress didn’t think those laws were effective enough… so they created a NEW law, i.e. the CTA. Naturally they didn’t bother repealing the old, ineffective laws. They just piled on more rules.

And this is how the government almost always operates. They don’t repeal stupid laws or destructive regulations. They just keep adding more and more each year. That’s why the Code of Federal Regulations goes on for roughly 200,000 pages.

Of course, it’s YOUR responsibility to keep up with all of these rules. As the old saying goes, ignorance of the law is not an excuse.

You’d think that the government would have at least invested some money in a public awareness campaign to inform the American public about this law, given that it impacts literally tens of millions of people.

But they didn’t do that. They passed the law and said nary a word about it when it went into effect in January. The only thing they DID do was impose a harsh penalty for non-compliance: up to two years in federal prison.

Perhaps the even more bizarre part about the CTA was that it is completely redundant.

The law requires EVERY small business in America to file a special report with the federal government– specifically the Financial Crimes Enforcement Network (FinCEN)– as if it’s some sort of crime to own a business anymore.

And I say ‘small business’ deliberately, because the CTA does not apply to big businesses, Wall Street banks, etc. It specifically targets the little guy.

The report is just a bunch of personal information about the owners, officers, and directors of the company. Names, addresses, that sort of thing.

This is the exact same information that taxpayers already have to provide to the IRS. So, the CTA just doubled the requirement to provide a similar report (but in a different format) to a different agency.

In sum, politicians think that criminals use US companies to launder money. There are already laws on the books to prevent criminals from doing this.

But rather than repeal and replace the inefficient laws, they piled on a new law which requires small businesses to submit a new report to FinCEN, even though the report contains the exact same information taxpayers already disclose to the IRS. Noncompliance is punishable by up to of two years in federal prison. But they didn’t say a word about it to anyone.

Such is the genius of people with decades of experience in politics.

Well, a few days ago we received a little ray of sunshine from a federal judge, who ruled that the Corporate Transparency Act is flat-out unconstitutional and goes beyond “the limits imposed by the Constitution on the legislative branch”.

This is absolutely a victory for sanity… and exactly the sort of thing we would want to see in the US.

As I’ve written so many times, the US is on a path to obvious financial ruin. The national debt is already $34+ trillion, and the government itself forecasts another $20+ trillion in new debt over the next decade.

It won’t be long (5-7 years at best) before the rapidly growing annual interest bill on that mountain of debt becomes an unaffordable catastrophe.

And the only realistic way out of this mess is for the US economy to be firing on all cylinders, with maximum productivity and efficiency. The more productive the economy, the greater the government’s tax revenue… which helps reduce the deficit and alleviate the debt pressure.

Laws like the CTA are a step in the wrong direction; it’s just pointless, time-wasting, money-wasting bureaucracy that makes people and businesses LESS productive.

So, the fact that a judge ruled it unconstitutional is a good thing.

The federal government, of course, will most likely appeal the decision. (Or they’ll simply ignore the court’s ruling altogether, which has been a popular approach with the Biden administration.)

So, if you haven’t filed your CTA report yet, you might consider waiting a little while longer to see how this plays out. There’s still plenty of time before the December 31st deadline, so it’s unlikely anyone will be hauled off in shackles anytime soon for not filing.

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It’s hard to say with a straight face that an asset hovering near its all-time high could be a “contrarian” investment. But I’m going to say it anyhow– I think gold may be a contrarian play right now.

Now, it would be easy to assume that gold is near its all-time high because everyone is buying. And normally that would be true; typically, whenever an asset soars to a record high, it’s because individual investors are piling into the market.

We’ve seen this countless times, from Bitcoin to meme stocks; once something becomes the hot thing to own, small investors– and occasionally professionally managed funds– drive the price higher.

But that’s not happening with gold. In fact, investors have been abandoning gold for years.

Publicly available data from more than 100 gold ETFs (all of which are conveniently aggregated by the World Gold Council) show that western investors have been selling off their gold ETFs for most of the past few years.

WGC data show that North American and European investors dumped over 700 metric tons of gold since May of 2022, equivalent to nearly 20% of ETF holdings.

In fact, outflows for the month of January alone (the most recent month of published data) totaled more than 50 metric tons– the second highest outflow in a year.

Most notably, however, North American, and European investors dumped 179.6 metric tons of gold September 2023 through January 2024.

This is important, because during that time period, the price of gold surged from $1820 per ounce to nearly $2100.

Strange, right? If investors were selling off substantial quantities of gold, it seems like the price should have fallen. Instead, it rose 15%. How is that possible?

Well, the reason that gold keeps going higher is because, while individual investors are selling, there’s another group that’s buying.

In fact, this group of buyers is completely price insensitive. They don’t care how much they pay per ounce. They are not even looking for a return on investment. And they have mountains of cash to spend.

The group of buyers I’m talking about is central banks and governments.

And not just the usual suspects like China and Russia either (though China did buy more than 200 metric tons in 2023). Other like Poland, India, Singapore, Czech Republic, Philippines… and even Iraq.

To me this is an obvious signal that the global financial system is probably going to change sooner rather than later. And long-time readers know we have been writing about this for years.

Reserve currencies throughout history have always come and gone.

There was a time when the Greek drachma dominated trade and commerce in the Mediterranean (due in large part to the conquests of Alexander the Great). It was displaced by the Roman denarius, then the Byzantine gold solidus, then the Venetian ducat.

Reserve currencies rise to prominence because people have confidence in the issuer, i.e. the Roman Empire, or the Republic of Venice, or the Spanish Empire.

But eventually that confidence wanes– especially as the empire debases its currency and runs up massive debts.

That’s the situation the United States is in right now.

The national debt is already $34.4 trillion. And the Congressional Budget Office expects it to rise by at least $20 trillion over the next decade.

The dollar became the global reserve currency back in 1944 when there were no other nations to rival the US.

The US was the only country that hadn’t been completely obliterated by war. It boasted the largest, freest, most productive economy. It possessed the best technology and manufacturing capacity. It had the largest pool of savings.

And it also had one of the world’s largest and most rapidly growing populations.

Yet even with such an impressive socioeconomic resume, the rest of the world wasn’t willing to blindly trust the US government with the world’s reserve currency… not without first putting some critical checks and balances in place.

First, while other nations agreed to fix their currencies to the US dollar, the US agreed to fix the dollar to gold at a rate of $35 per troy ounce.

And second, the US government had to guarantee that the dollar would be freely convertible to gold; that way, if any nation ever lost confidence in the Treasury Department or Federal Reserve, they could easily redeem their dollars for gold.

This is a pretty critical point to understand: immediately following World War II, the US was at the peak of its power. Every other developed nation on earth had been devastated by the war. Farms and factories had been destroyed. Chaos and hunger were rampant. Entire governments had been toppled.

Yet even with such a tremendous power imbalance (i.e. the US was in pristine condition compared to Europe), allied nations still weren’t willing to go all-in on the US dollar. And they demanded the gold convertibility as a guarantee.

That was 80 years ago. And it’s safe to say that the US is nowhere near the peak of its geopolitical power anymore. Adversary nations are everywhere, and the US government’s finances are an embarrassing catastrophe.

When I see central banks buying up gold at record high prices, this suggests to me that they are preparing for a new global financial system– one that is based on gold instead of the US dollar.

After all, this is the most logical scenario.

It would be naive (and deliberately ignorant of history) to believe that the dollar will go on indefinitely as the world’s dominant reserve currency, given the pitiful trend of US government finances. Even the IMF has called for a reset in the global financial system.

It’s also hard to believe that any new financial system would be centered on a Chinese currency; no one trusts the CCP, nor should they.

Gold is the most viable option to replace the dollar as the global reserve because it doesn’t require any convincing. Governments and central banks all over the world already own gold, just as they have for thousands of years.

And it’s a lot easier for everyone to have confidence in an asset class that no single nation controls.

Given the trend of their large-scale gold purchases, it appears that foreign governments and central banks may be preparing for this potential new financial system.

I’ve argued before that a gold-based financial system could send prices beyond $10,000 or more.

So, yes, even though gold is near a record high, it’s important to remember that individual investors are selling at a time when central banks are gobbling it up even more quickly.

And it’s possible they’re buying for a very deliberate reason.

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In the year 1218 on the great plains of central Eurasia, a Mongolian trade caravan was on a long expedition across the Silk Road when it reached the city of Otrar in the Khwarazmian Empire (modern day Kazakhstan).

The governor of the local province– a career politician named Inalchuq– was suspicious of the Mongol traders and thought they might be spies… so he had them all killed. He also confiscated their property, which included plenty of luxurious silk, furs, and precious metals.

Unfortunately for Inalchuq, one of the traders managed to escape, and he rode his camel all the way back to Mongolia to inform Genghis Khan what happened.

The Khan was furious. And the following year, in the autumn on 1219, he laid waste to the city of Otrar, then ultimately the entire Khwarazmian Empire.

It was one of the most brutal military campaigns in history. And for Genghis Khan, it wasn’t even really a war as much as it was personal vengeance. And he turned it into a massacre; modern historians estimate the death toll at nearly 6 million– the vast majority of whom were Khwarazmian.

Genghis Khan razed entire cities to the ground. He slaughtered women and children. He killed family members who were only trying to bury their dead. He even executed cats and dogs.

It finally ended in 1221 when Genghis Khan decided that he had waged sufficient destruction, at which point he returned to China.

Eight centuries later, in the spring of 2021, another Khan would rise to power in Washington DC. And while her methods are non-violent, they are, at least from an economic perspective, potentially even more destructive than Genghis.

This new Khan’s name is Lina Khan. And she is the head of the Federal Trade Commission, the US government agency whose charge is to regulate big business.

Now, the FTC was originally created more than a century ago back when vast monopolies (like Standard Oil) dominated critical industries. So, in response to public outcry, the government set up a special agency to investigate and prosecute monopolistic businesses who were “likely to cause substantial injury” to consumers.

That’s been the primary mission of the FTC for more than 100 years; they’re supposed to be independent professionals who seek balance between capitalism and consumer protection.

They don’t always get it right. And the agency has gone through periods in its history where it has been more aggressive, and other periods where it’s been ‘hands off’.

But under the stewardship of Lina Khan, the FTC has completely transformed from a non-partisan, non-political, professional regulator… to radical, Marxist activist.

First and foremost, Lina Khan has zero business experience. She’s an academic whose entire university career was spent trashing big business.

She wrote a number of papers as an Ivy League professor, for example, suggesting that the FTC should invent new authority for itself in order to sue some of the largest companies in America.

A reasonable person probably wouldn’t have chosen someone with zero business experience (and who hates big business) to lead the FTC, i.e. government’s chief regulator for big business.

But Joe Biden isn’t a reasonable person. So 34-year-old Lina Khan was his #1 choice.

And right from the start, Lina Khan has gone full Genghis on American business.

There are the usual suspects, of course, like Microsoft, which the FTC sued in 2022 after the software giant announced a deal to acquire video game maker Activision Blizzard.

(Khan’s case against Microsoft was so ridiculous that even the highly liberal federal judge from Northern California– who was appointed by Joe Biden– ruled in favor of Microsoft.)

But her latest target is truly one for record books.

Earlier this week Lina Khan’s FTC announced a lawsuit to block a proposed merger between two grocery store chains: Albertsons and Kroger.

The crux of Khan’s argument– which she offers zero evidence to substantiate– is that the merger “may lead to higher prices and reduced services for consumers.” She also blasts both companies, insinuating that they are unfairly profiting from higher food prices while Americans suffer the effects of inflation.

This is classic Inspired Idiot; this woman has absolutely no idea what she’s talking about.

Anyone who understands even the basics of finance can see that grocery store profitability is DOWN substantially since inflation kicked in.

Kroger’s gross profit margin was already razor thin at about 3% back in 2019 before the pandemic. When inflation spiked, it fell to the 1% range. That’s almost nothing.

These stores aren’t unfairly profiting; inflation has made them LESS profitable.

There’s also a lot more competition than there used to be. Tech companies (like Amazon) have cut in on their business. Consumers are turning to farmers markets and coops. There’s a lot more choice out there… I mean, food literally grows on trees.

So, it’s totally naive to assume that the merger of two companies will result in higher prices. If anything, the merger should result in LOWER prices.

The point of the merger is to find synergies and cut costs… which would allow them to remain competitive and pass along the savings to consumers in the form of lower prices.

Yet Ms. Khan’s 24-page court filing demonstrates a kindergartner’s understanding of finance, business, and economics. I actually laughed out loud several times as I read it.

At one point, for example, Ms. Khan cites seven different times that either Kroger or Albertsons acquired another grocery store chain. Yet– quite bizarrely for Ms. Khan– ZERO of those instances resulted in higher food prices.

It’s almost as if she is arguing against herself.

But that’s the way these Inspired Idiots always operate; they don’t have a clue what they’re talking about, and their arguments make no sense. All they know is that they’re enraged, and they think their actions are saving the world.

Bear in mind that grocery store chains like Kroger actually provide something of value. Even during the government’s most horrific lockdowns in 2020, they still managed to provide food for hundreds of millions of people every single day. That’s hard to do.

Lina Khan has never done anything close to that in her entire life. She creates nothing. She can only tear down what other people have built.

And there’s a significant cost to her fanaticism.

I’ve written countless times that the US is in deep financial trouble thanks in large part to the government’s endless deficit spending.

Working out of this problem requires maximum productivity; US economic growth needs to be at least 3% to 4% on a sustained basis…

Breaking up mergers, stopping acquisitions, and frustrating American businesses with fanatical legal action doesn’t help. It only hurts. It takes the country in the wrong direction.

So does bad leadership.

An internal government investigation shows that Khan has consistently mismanaged government resources and abused her authority. Career professionals within the FTC believe that she is “making decisions for headlines” as opposed to following the law.

The investigation also finds that the FTC is “beset by dysfunction and chaos stemming from poor leadership and ideological bullying of its Chair and her leadership staff. These findings reinforce the results of repeated government-wide surveys that found the FTC to have a toxic work environment under Chair Khan.”

Lina Khan’s reign at the FTC could easily cost tens of billions of dollars in lost economic activity… which might rival Genghis.

At least Genghis eventually got bored of waging so much destruction, and in the year 1221 he went back to China. We can certainly hope that Ms. Khan will do the same.

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Almost one year ago to the day– on February 24, 2023– Silicon Valley Bank released its 2022 annual report. And senior executives must have been pretty nervous since the report showed that the bank was nearly insolvent.

The bank had acquired a massive portfolio of more than $100 billion of US government bonds– supposedly the ‘safest’ asset class in the world– during 2020 and 2021 back when interest rates were at historic lows.

But then the Fed started hiking rates very quickly in 2022. And higher rates cause bond prices to fall– even the ‘safest’ ones like US Treasury bonds.

By the end of 2022, Silicon Valley Bank’s portfolio of US government bonds was down by more than $15 billion. And with barely $16 billion in total capital, Silicon Valley Bank was nearly wiped out.

Their 2022 annual report communicated this insolvency risk very clearly. And the bank’s leadership must have probably been expecting the stock to crash almost immediately.

And yet it didn’t. After the annual report was released and all the ‘experts’ on Wall Street had a chance to see the alarming data, Silicon Valley Bank’s stock price barely budged.

Then, just ten days later, the Chairman of the Federal Reserve testified to Congress that the Fed’s rapid interest rate hikes presented absolutely zero risk to the financial system:

“Nothing about the data suggests to me that we’ve [raised rates] too much. . .” he said.

Of course, the Fed’s rapid interest rate hikes were precisely the reason why Silicon Valley Bank’s bond portfolio had lost so much value.

But again, neither Wall Street nor the Fed (which, as a financial regulator, had unfettered access to Silicon Valley Bank’s real-time financial condition) thought there was any risk whatsoever.

We know what happened next, and Silicon Valley Bank collapsed within a week.

But there’s now a new, and even more bizarre chapter to the story.

Typically, when banks in the US fail, one of the federal banking regulators (usually the FDIC, or Federal Deposit Insurance Corporation) steps in to take over.

And that’s what happened with Silicon Valley Bank: the FDIC took over operations almost immediately to try and sort out the mess.

Bank restructurings, however, are almost always chaotic. They take time. The FDIC must liquidate assets in an orderly manner to maximize the value of the balance sheet, then prioritize claims against those assets.

Depositors obviously need to be paid. Creditors and lenders want their money too. And so, of course, does the government.

It turns out that Silicon Valley Bank also owed a tax bill to the IRS… $1.45 billion to be exact.

And since the FDIC became the legally responsible party of Silicon Valley Bank, the IRS went knocking on the door of its fellow government agency to ask for the money.

The FDIC refused.

In fact, according to the FDIC, they owe absolutely zero tax and will pay nothing.

Hilarious, right? This is literally government agency versus government agency in a dispute over taxes. And they can’t even settle the matter like grown adults, so the case is now going to federal court.

This raises an obvious point: if even a government agency like the FDIC is going out of its way to minimize its tax bill, then why shouldn’t everyone else?

There are way too many hard-core Marxists in the United States these days who insist on higher taxes, new taxes, punitive taxes. Activist groups like Pro Publica have published the illegally acquired tax returns of wealthy Americans in an effort to shame people… as if following the tax code and taking completely legitimate steps to reduce what you owe is some mortal sin.

But this case between the FDIC and IRS only proves the point made by Judge ‘Learned’ Hand decades ago, that “Anyone may so arrange his affairs that his taxes shall be as low as possible; he is not bound to choose that pattern which will best pay the Treasury.”

Taking legal steps to reduce your taxes is completely sensible. And frankly tax reduction isn’t even part of a Plan B; it should be Plan A!

Fortunately, there are plenty of ways to do this. In 2024, for example, you can reduce your taxable income by $23,000 (or $27,000 if you’re 50 or older), through pre-tax contributions to a Traditional 401(k).

For those who are self-employed or have a side business, a solo 401(k) allows an even greater tax-free contribution of up to $69,000 (and $76,500 for those aged 50 or older).

Plus, you have more freedom to invest your money as you see fit– real estate, crypto, and more.

And while you do eventually have to pay taxes when you withdraw the funds in retirement, most retirees will be in a lower tax bracket at that point. Plus, your investments will have grown and compounded tax-free for that entire time.

If you’re willing to move across state lines, you can reduce or eliminate state and local taxes. If you are willing and able to move abroad, you can potentially eliminate federal taxes as well.

For US citizens living abroad, the Foreign Earned Income Exclusion (FEIE) allows you to earn up to $126,500 as an individual, or $253,000 as a couple, tax-free (though this does not include investment income).

Plus, you can exclude even more as a housing expense, which varies depending on where you live overseas.

And for people who move to Puerto Rico, as both myself and my partner Peter Schiff did, tax rates go down to 0% on capital gains, and just 4% on business income.

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Early in the spring of 1956, only weeks after Elvis Presley released his debut studio album, and actress Norma Jean Mortenson had her name legally changed to Marilyn Monroe, a budding 25-year-old businessman from the American Midwest fatefully registered his first-ever company.

His name, of course, was Warren Buffett. And the company he founded was called Buffett Associates– which was formed with $105,000 of capital from his friends and family.

The US economy at the time was absolutely booming. Interest rates in 1956 were at historic lows. Inflation was practically zero. Economic growth was a dizzying 7%. Productivity growth was strong.

The US was no longer at war. And the national debt– which had reached a peak of 120% of GDP in the 1940s due to the costs of World War II– had been cut in half… and was falling further each year.

America was proudly capitalist, and the government actually made sound and effective investments, like the US federal highway system. Businesses reaped the benefits: corporate earnings across the S&P 500 index soared.

Yet, at the time when Buffett formed his business in 1956, stocks were still cheap… trading at less than 12x earnings (versus nearly 30x today).

It’s hard to imagine better economic or market conditions: a high growth, capitalist economy with low inflation, low debt, high productivity, and cheap stocks? Buffett could have hardly picked a better time to get started.

And, although there were plenty of ups and downs along the way, those pristine conditions lasted throughout the first several decades of his career.

Buffett is obviously one of the most talented investors to have ever lived, and he surrounded himself with other incredibly talented people.

But (and he would probably be the first to admit) his success would not have been as great without the power and dynamism of the US economy behind him.

And this is why Warren Buffett has long been one of America’s biggest economic cheerleaders.

Over the past 15+ years, Buffett has had an insider’s view of some very concerning trends. The US national debt has been rising out of control. The Federal Reserve has made a mess of the dollar. Woke fanatics have hijacked capitalism.

Yet through it all, Buffett has maintained a calm, persistent optimism in America; he routinely dismisses concerns over the debt, or the dollar, or the future of the US economy, and has seemed to believe that nothing could ever derail American progress.

But as I read through his annual letter this past weekend, it seems that even Buffett’s legendary optimism is starting to crack.

First, it’s clear that even Buffett thinks that government regulation has gone way too far.

Buffett explains, for example, that utility companies were “once regarded as among the most stable industries in America” because of their consistent profitability.

Yet he laments that the utility companies he acquired were a “severe earnings disappointment” in 2023 due to over-regulation from fanatical politicians.

Buffet complains that “the regulatory climate in a few states has raised the specter of zero profitability or even bankruptcy (an actual outcome at California’s largest utility and a current threat in Hawaii).”

“In such jurisdictions,” he writes, “it is difficult to project both earnings and asset values in what was once regarded as among the most stable industries in America.”

In the end, he tells shareholders that he “did not anticipate or even consider the adverse developments in regulatory [changes] and . . . made a costly mistake in not doing so.”

He goes on to talk about America’s dilapidated infrastructure, which is in critical need of maintenance and reinvestment. And Buffett cites the case of BNSF Railway (the largest freight rail in the US) which he acquired in 2009.

BNSF, he explains, has had to spend tens of billions of dollars to fix up its rail network “simply [to] maintain its present level of business. This reality is bad for owners. . .”

But it’s not just BNSF. And it’s not just railways. Almost ALL infrastructure in the US is in serious need of repair.

Obviously, the US government made a halfhearted attempted to address infrastructure challenges when it passed a $1 trillion investment package in 2021. But “the consequent capital expenditure” that’s truly required to fix it, Buffett writes, “will be staggering.”

One final point worth mentioning is Buffett’s comments on size. Again, when he started his first partnership in 1956, he only had $105k to invest, and he could move nimbly in and out of the market.

Today, Buffett’s company has almost $170 billion in cash, which is virtually impossible to manage efficiently. He writes that it’s “like turning a battleship”, and that the days of being quick and nimble “are long behind us; size did us in…”

Buffett, of course, is talking about his own company (Berkshire Hathaway). But the same could just as easily be said for the US government.

Think about it– if someone of Buffett’s extraordinary talent admits that he cannot efficiently deploy $170 billion, how are Joe Biden or Transportation Secretary Pete Buttigieg supposed to be able to invest that $1 trillion infrastructure money?

Quite poorly, I’d imagine.

Buffett does acknowledge that “America has been a terrific country for investors.” And he’s absolutely right. It still is, for the most part.

Nvidia is an easy example: it simply would not have been able to achieve the same level of success had it been based in most other countries. If Nvidia were a Chinese company, for example, it would have been taken over by the CCP long ago, and CEO Jensen Huang would have probably been disappeared.

But one of the most important caveats of investing applies to the US economy as well: “past performance does not guarantee future results.”

Warren Buffett enjoyed some of the most pristine economic conditions imaginable for the vast majority of his nearly 70-year career. And as I have written several times, it is absolutely possible that America’s best days are still ahead.

There is clearly a future scenario in which small-scale nuclear reactors generate clean, low-carbon, ultra-cheap energy which powers highly productive AI and robotic automation. Economic growth is off the charts, and tax revenue soars as a result. The national debt eventually melts away, and the US re-establishes its primacy by out-producing and out-innovating the competition.

But at the moment there are serious issues to contend with.

US productivity is anemic. So is economic growth. War, inflation, cyberattacks, border crisis, social conflict, the rise of adversary nations, decline of the US dollar’s dominance, etc. are all pervasive challenges.

(Not to mention potential near-term consequences– like the impact of Russia, China, North Korea, and terrorist groups sending so many of their operatives across the southern border.)

The government not only isn’t fixing these problems, but they seem to be making them worse by the day.

So, it’s important to take notice when even someone as optimistic as Buffett starts complaining.

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It’s not exactly as if the world is swimming in a sea of tranquility these days.

War in Gaza has been raging for months. War in Ukraine has been raging for years. And Russia has even threatened using nuclear weapons.

Terrorist groups brazenly attack American shipping vessels.

Iran keeps stirring the pot by shipping weapons and cash (most of which has been provided by the US) to belligerents around the world.

China continues to insist that it will “reunify” with Taiwan by force if necessary, and demonstrates its resolve for war by bombing mock-ups of US ships.

Now, the world has been in far worse shape in the past. And history shows that it is possible to pull back from the brink of almost certain conflict— the Cuban Missile Crisis is a great example.

But putting out all these fires requires serious, experienced professionals who can be laser-focused on achieving their nation’s diplomatic priorities from a position of strength.

Yet apparently the US State Department has a far higher calling than achieving peace through strength: gender neutrality.

US Secretary of State Antony Blinken recently sent a memo to State Department employees entitled, “Modeling DEIA [Diversity, Equity, Inclusion, and Accessibility]: Gender Identity Best Practices.”

The memo informs State Department employees that they should use “gender-neutral language whenever possible” because gendered terms such as “manpower”, “you guys”, “ladies and gentlemen”, “mother/father”, “son/daughter”, and “husband/wife” can be offensive.

Offensive to whom, exactly?

Does the US Secretary of State honestly believe that the word “father” is in any way offensive to the people with whom they have to negotiate?

Are Hamas terrorists triggered by the term “husband”? Will Ukrainian soldiers be outraged for praising “the brave men and women” who are fighting on the front lines?

Obviously not.

Terms like “father” and “mother” are only offensive to a tiny, tiny group of silly extremists in the US who have nothing better to do than wake up every morning and find an excuse to live in a state of perpetual victimhood.

But apparently the State Department is teeming with these whiny perpetual victims… which is pretty terrifying given the state of the world today.

Rather than focus on promoting strength, peace, and stability, there are ostensibly American diplomats who are more concerned about not being triggered by gender-specific words that have existed in the English language for more than 15 centuries.

Now, bear in mind that the entire purpose of the State Department is to interact with officials in other nations, who obviously tend to speak different languages. Yet many of these gender-neutral terms don’t even translate.

In Spanish, for example, mother is la madre and father is el padre. And if you’re referring to both parents, or you’re not sure which one, native speakers say padres, i.e. fathers.

There is no genderless word for parent in Spanish. It simply doesn’t translate.

So what exactly is the point of using this new genderless woke newspeak when it cannot even be communicated to foreign diplomats?

Now, I’ll return to the State Department soon. But I also want to tell you about a 90-year old woman named Fran Itkoff who was recently fired from her job.

Fran (who appears incredibly youthful at 90) has spent the last six decades volunteering for the National Multiple Sclerosis Society. That’s a long time.

Yet the organization recently implemented a new Diversity and Inclusion policy in which staffers must include their pronouns, i.e. she/her, at the end of an email.

Fran didn’t understand the policy and asked why putting ‘she/her’ was inclusive? It’s certainly a reasonable question.

But “why” is the most triggering word of all to Diversity & Inclusion fanatics. They have no answers, they have no logic. So they respond with rage.

90-year old Fran Itkoff was fired— as a volunteer— for asking why.

Her story started making the rounds online, so National Multiple Sclerosis Society subsequently issued a bizarre apology, which stated that, even though “Fran has been a committed champion of [the Multiple Sclerosis] cause” for six decades, they fired her “with the best intentions”.

You just have to laugh at these people. I mean, it’s obvious that the Multiple Sclerosis society cares more about pronouns than they do eradicating Multiple Sclerosis! How does this organization expect anyone to take them seriously?

But the same question applies to the State Department. By publishing this memo, the Secretary of State has made it very clear what his Department’s priorities are.

How does he expect Iran, Hamas, Saudi Arabia, Russia, China, etc. to take him seriously?

Remember, we’re not talking about a mid-sized non-profit or some random Congressman. This woke newspeak is now official guidance at the US Department of State.

I’ve written extensively that the United States faces a mountain of extraordinary challenges, from geopolitical threats to the southern border crisis to the looming national debt catastrophe.

These problems are not unsolvable. Not yet. But there is only a narrow window of opportunity— probably five years at best— to get back on track.

Unfortunately the Inspired Idiots in charge keep making things worse.

And this is a perfect example: by publishing this memo, the Secretary of State weakened America’s position in front of its adversaries. He made things worse, not better.

Obviously they don’t believe they’re making anything worse. They think their crusade for justice makes the world a better place. But they’re clearly out of touch with reality,.

And Fran Itkoff’s case is a great explanation:

Remember that the National Multiple Sclerosis Society’s new policy requires staffers to put pronouns in their emails, because stating pronouns = inclusive.

Yet the State Department’s newspeak memo states that you should not “pressure someone to state their pronouns” because it is “problematic” and sends a “harmful, exclusionary message”.

Wait, so which is it? Are we supposed to demand people state their pronouns or aren’t we?

It’s all so confusing… pronouns cannot be simultaneously “inclusive” and “exclusionary” at the same time, can they?

Well, in the Shrodinger’s Cat logic of Inspired Idiots, of course they can!

And that’s part of this 1984-style newspeak. Nothing has any fixed meaning. Everything is arbitrary and open to interpretation. There is no structure, there is no order. It’s all fluid and ever-changing… just like their definition of gender.

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On January 16, 1917– at the peak of World War I, the imperial German Foreign Minister, Arthur Zimmerman, sent an encoded telegram destined for the President of Mexico.

Zimmerman wanted to form an alliance with Mexico, in the hopes that the United States would be too distracted with potential conflict at their southern border to even think about joining the war in Europe.

So, in his effort to strike a deal, Zimmerman promised not only a military alliance, but to help Mexico “reconquer her lost territories of Texas, New Mexico, and Arizona.”

Unfortunately for the German Empire, Zimmerman’s secret cable was intercepted and decoded by a British cryptography team; it was then shared with US President Woodrow Wilson, who released it to the newspapers on March 1st.

Americans were outraged, and five weeks later, the US joined the war… with the entire nation singularly focused on one goal: beating Germany.

The United States economy answered the call with remarkable vigor.

American businesses cranked out tanks, bullets, airplanes, fuel, provisions, and anything else needed for total victory. And as a result, companies which were vital to the war effort shot up in value.

The profits of the United States Steel Corporation, for example, more than quadrupled from 1915-1917, and the company became one of the first in history to be worth $1 billion.

Other companies, including Anaconda Copper, and various food and energy producers, also performed extremely well.

But eventually the war ended, and the roaring 20s began. The economy was flush with cash. Jobs were plentiful. Prosperity was everywhere.

And eventually the values of hard work and sacrifice were displaced by a culture of leisure and recreation.

These new values were reflected in the stock market.

Radio and motion picture were the hot new consumer technologies of that era. And the Radio Corporation of America– RCA– manufactured the radios and phonographs, produced music and records, owned broadcast stations (including the original NBC), and even bought movie theaters.

RCA was basically the Netflix and Apple of its day. And during the 1920s, RCA stock rose 200x… which was really a sign of the times. This was an era of peace and prosperity, so Americans prioritized consumption and recreation over production. And RCA was the ultimate consumer recreation stock.

But then the Great Depression set in at the end of the decade; RCA stock dropped 98% from a peak of $114.75 in 1929 to $2.62 in 1932.

Suddenly, American values had changed again. Money was no longer plentiful, and people had to make tough decisions about what to buy.

Hard work and sacrifice were back in vogue, and spending money on leisure and recreation seemed absolutely insane.

Once again, this shift in values was reflected in the stock market.

Recreation-oriented companies were out, while ‘boring’ companies like Proctor & Gamble– which efficiently manufactured the most critical consumer staples– became the best performers of the era.

Energy companies also did very well, because, when push comes to shove and consumers have to make decisions about where to allocate scarce resources, energy (along with food) almost invariably ranks towards the top.

This cycle has repeated again and again throughout history. During boom times, the world’s most critical resources like food, energy, and raw materials often become forgotten investments. Meanwhile, investors chase hot fads which are usually oriented towards consumer leisure and recreation.

We’ve seen this in our own recent history.

Netflix is a great example; it’s often (hilariously) referred to as a technology company. But Netflix is obviously in the recreation business.

So is Facebook (Meta) for that matter, whose products really just enable people to waste time by swiping and scrolling through endless butt selfies.

Apple designs the devices which people use to swipe and scroll. Amazon makes it super easy for people to spend money on stuff they don’t really need.

You get the idea. These are ultimately consumer recreation businesses… and there’s nothing wrong with that. But it is worth noting that the most valuable companies in the world are predominantly in this consumer recreation sector.

That’s because most of the last 15 years has been an era of abundance, similar to the Roaring 20s. And with so much boundless prosperity, consumer recreation once again became a major financial priority, whereas something as banal as energy production simply fell off the list of core economic values.

Think about it: we constantly hear famous economists praise the “American Consumer”. No one ever talks about the American Producer. And certainly not the American Energy Producer.

But values can and do shift very quickly. Just look at Pfizer.

As recently as 2019, Big Pharma had been among the most hated sectors in the world due to sky-high drug prices. But then the pandemic came along, and suddenly everyone started exuberantly supporting Big Pharma.

Priorities shifted. And Pfizer became one of the world’s most valuable companies.

I believe that priorities are on track to shift again, given how the US government’s massive debt problems will likely lead to sustained inflation within the next 5-7 years (if not sooner).

And as financial values and priorities shift, critical resources should take precedence over consumer recreation once again.

This doesn’t mean that consumer businesses will go bust. However, the sky-high valuations that we’ve seen (like 50x Price/Earnings ratios) for recreation-oriented businesses will not last.

Conversely, critical resource businesses will likely surge in value.

These are companies which have been mostly ignored (or even deliberately injured) … which means that many such businesses are selling for historically low valuations.

But over the next several years as priorities shift again, they could easily become the ‘must own’, best performing companies in the world.

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The ink was barely dry on the Treaty of Paris in the year 1763 when the financial panic set in. Government ministers across Europe began taking stock of their disastrous finances… and the picture was gruesome.

The world had been at war with itself for nearly a decade. And though the conflict became officially known as the Seven Years War, it might as well have been called ‘World War Zero’ because it involved just about every major power on the planet.

France, Russia, Britain, Spain, Portugal, and Prussia in Europe, the Mughal Empire in India, and even the Ojibwe and Cherokee tribes in North America, all fought in the war. And the conflict cost everyone dearly. Especially France.

France was still technically the West’s dominant superpower at the war’s start in 1756; however, decades of overspending had taken a toll… and French finances were showing signs of strain.

As the Seven Years War raged on, France had to borrow more and more money to pay for it. So both the national debt, as well as its annual interest bill, rose quickly.

By the end of the war, the debt had grown so much that France was spending over HALF of its annual budget just to pay interest… which means obviously they were spending more on interest than on the military.

Economic historian Niall Ferguson has famously commented on this critical milestone:

“If you really want to see when an empire is getting vulnerable, the big giveaway is when the costs of servicing the debt exceed the cost of the defense budget.”

Throughout history, several empires in decline have reached that point– including France, the Ottoman Empire, and many more. And quite disturbingly, the latest empire set to join that club will be the United States– most likely this year.

I’ve been saying this for a while. But it’s now mainstream news given that the Wall Street Journal said Friday that “Interest costs are on pace to surpass defense this year. . .”

The US national debt currently stands at $34.3 trillion, a whopping 122% of US GDP. And as I’ve written extensively, the Congressional Budget Office forecasts an additional $20+ trillion in new debt over the next decade.

That’s an absurd level of debt. But the most alarming part is how quickly the annual interest bill is increasing.

15-20 years ago, interest on the national debt was a fairly trivial portion of the federal government’s annual budget. But in 2024, as the Journal corroborates, interest will likely surpass defense spending.

And it’s just going to keep getting worse. The US government is falling into the same trap that plagued France in the 1760s and 1770s: each year America will have to borrow more money just to be able to make interest payments on the money they’ve already borrowed.

Think about it: they have to go deeper into debt just to avoid default. Crazy, right?

And to really understand the implications, it’s critical to ask the question: where will all the new debt come from? Who exactly is going to lend the US government $20+ trillion?

Well, one potential source is the US economy itself: the government could borrow money from banks, businesses, and even individuals. But that comes at a significant opportunity cost.

Banks, for example, make constant decisions about what to do with their cash. They could make home loans, business loans, or, yes, buy US government bonds.

This means that if they buy $20 trillion worth of Treasury bonds, they’ll have $20 trillion LESS available to make home loans. And with less capital in the housing market, home prices would likely fall, and mortgage rates rise.

Investors, similarly, have tens of trillions of dollars in the stock market. So, if investors bought trillions of dollars’ worth of government bonds, they’d have to sell their stocks first, resulting in falling stock prices.

Economists call this the “crowding out” effect; the idea is that, when a government borrows tons of money, it essentially monopolizes a nation’s savings, leaving fewer resources for the productive economy to put to work. And that’s a pretty high opportunity cost.

The alternative is for the central bank (i.e. Federal Reserve) to create trillions of dollars of ‘new’ money, then use that new money to buy Treasury bonds.

This way banks can keep making housing loans. Investors can keep their money in the stock market. The Fed simply creates new money out of thin air, then loans it to the Treasury.

$20 trillion is a ton of money, more than 50% of the size of the entire US economy. So clearly if the Federal Reserve creates such a vast sum of new money, the end result would be a lot of inflation.

I’ve written about this before; we experienced a peak 9% inflation when the Fed created $5 trillion in 2020-2021. So how high will inflation be if they create $20+ trillion?

No one knows for sure, but it probably won’t be their famous 2% target.

Now, this isn’t a cause for panic. On the contrary, given that there’s such a strong case to be made for future inflation, there are plenty of sensible ways to prepare for it and potentially even benefit from it financially.

Governments and central banks, for example, are fantastic at going into debt and conjuring new money out of thin air. But they can’t summon a single barrel of oil into existence, nor clap their hands and make more productive technology appear.

In an era where politicians and central bankers have to create a tidal wave of money and debt just to avoid default, it’s sensible to have exposure to scarce, critical resources that stand the test of time.

These are known as real assets. And it just so happens that many of them are selling at historically low prices.

More on this soon.

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On September 18, 1928, at the peak of the ‘Roaring 20s’, an American investor by the name of Evelyn Gregory was sitting on a fat capital gain totaling over $133,000– worth more than $12 million in today’s money.

The top federal tax rate back then was 25%… but Evelyn wasn’t inclined to fork over such a vast sum to Uncle Sam.

So, she and her advisors engaged in a series of complex transactions designed to dramatically reduce her tax bill. In fact, her tax return that year reported a gain of just $76,007.88, instead of the full $133k.

What Evelyn did was legal… but extremely aggressive. And she ended up in a legal dispute with the IRS.

At a certain point the case ended up in US Court of Appeals for the Second Circuit, where legendary federal judge Billings ‘Learned’ Hand famously wrote:

“Anyone may so arrange his affairs that his taxes shall be as low as possible; he is not bound to choose that pattern which will best pay the Treasury; there is not even a patriotic duty to increase one’s taxes.”

(Hand went on to reiterate this view in subsequent rulings, writing later, for example, that “nobody owes any public duty to pay more than the law demands.”)

What’s really interesting about Judge Hand’s opinion is that it completely contradicted his personal beliefs.

Hand was a hard-core progressive. He believed that the government should spend big on social programs, and that it should all be paid for in higher taxes.

Frankly his political views would probably be closely aligned to Elizabeth Warren’s today.

Yet, even though he privately wished to live in a high-tax society, Judge Hand knew his primary duty was to the law– which was very clear on the matter of taxation: no one had a duty to pay any more than the law required. And taking legal steps to avoid taxes was perfectly fine.

But this was a different era in America. Judges like Learned Hand had the integrity to separate their personal beliefs from their public duty to interpret the law without passion or prejudice.

This is part of what’s known as the ‘Rule of Law’, the concept that laws in a civilized society are objective, fair, uniform, and evenly applied. And this has been a hallmark of advanced civilizations for thousands of years, going back to the Romans, Greeks, and even ancient Babylon.

History shows that societies start to break down when their rule of law becomes weaker– like when the ruling class isn’t subject to the same laws as everyone else, or when judges and kings begin making up ridiculous interpretations of the legal code.

This has been sadly happening for quite some time in the United States, and we’ve seen a number of recent instances.

In 2020, for example, three federal judges based in Illinois created a new policy which gives female and minority attorneys extra time to make their arguments in front of the court.

Someone’s life could be hanging in the balance of a court decision… yet these judges are more concerned about social justice than actual justice.

More recently, Judge Janet Protasiewicz ran for (and won) the Wisconsin Supreme Court last year, campaigning on an ultra-progressive political platform.

Rather than commit to upholding the law and objectively interpret the state’s Constitution, she essentially promised to completely ignore the law and instead rule in favor of her personal, woke ideology.

Unsurprisingly, billionaire activists like George Soros and J.B. Pritzker funneled tons of money into Protasiewicz’s campaign; she outspent her nearest opponent by 5-1 in what became the most expensive judicial race in American history.

We’ve seen similar behavior from several Attorneys Generals and District Attorneys– elected officials whose entire campaigns were based on a promise to prosecute a certain former President.

These are all despicable violations of their most solemn obligation to the Rule of Law– to apply the law fairly and interpret it objectively without injecting their personal beliefs.

The latest example came last week from the Hawaii Supreme Court.

It’s worth pointing out that even high school civics students know that the US Constitution is the supreme law of the land. Full stop.

But according to the esteemed justices of Hawaii’s Supreme Court, there is now a higher authority: the spirit of Aloha.

Yes I’m serious.

In a recent gun rights case, a man asserted his right to carry a firearm in public for self-defense.

But as the Hawaii Supreme Court ruled, “The spirit of Aloha clashes with a federally-mandated lifestyle that lets citizens walk around with deadly weapons during day-to-day activities.”

The Justices then claimed that, when interpreting laws, they may “contemplate and reside with the life force and give consideration to the ‘Aloha Spirit.’”

Come again? Was this a legal ruling or the opening remarks of a yoga retreat?

After some research, my team and I found an obscure section of the Hawaiian state statutes which actually defines with the “Aloha Spirit”:

“’Aloha Spirit’ is the coordination of mind and heart within each person. It brings each person to the self. Each person must think and emote good feelings to others.”

Unbelievable. You can practically smell the pot wafting from the halls of justice.

Honestly it sounds like Adam Neumann’s absurd mission statement for WeWork from a few years ago. But it’s hardly a foundation for a strong Rule of Law.

Pretending that the ‘Spirit of Aloha’ is a real legal framework ultimately gives justices the latitude to rule however they want, regardless of the actual law, based solely on their personal feelings.

Hey fellow justices! Should we thoroughly research case law and objectively interpret the Constitution? No, let’s emote good feelings and use the life force. Case closed.

Again, this isn’t some random judge making a rogue ruling— this is the highest court in the state of Hawaii. The justices don’t like people carrying around guns in public, so they made up an argument to ban it.

The concept of a separate, independent judiciary branch charged with objectively interpreting the law is one of the better ideas of modern society. It’s supposed to serve as a vital check and balance against government overreach and to protect individual freedom.

Yet America is quickly losing its responsible guardians of liberty. Before taking office, judges swear to set aside their personal beliefs and uphold the Constitution of the United States.

More and more of them now appear to be robe-wearing activists who lie through their teeth when taking the oath of office.

They think they’re doing good work. They think the ends justify the means. But all they’re doing is further eroding trust and confidence in the system.

We write a lot about the massive challenges facing the United States and the West in general.

The US government itself estimates, rather optimistically, that the national debt will increase by at least $20 trillion over the next ten years.

We’ve explained how this trend will likely result in major inflation and destroy the US dollar’s credibility as the global reserve currency.

On top of those serious economic and fiscal catastrophes, the US also faces myriad social problems, from the border and rising crime, to extreme disunity and polarization.

These trends from the justice system only make the problem worse; it’s hard to move forward and have a civilized society when people just make up whatever rules they want.

I’ve written before that America still has a narrow window of opportunity to turn things around. And that’s true.

But with these sorts of Inspired Idiots in charge, we shouldn’t hold our breath.

And that’s the entire reason to have a Plan B: even though the Inspired Idiots probably won’t fix anything, you can still take plenty of sensible, rational steps to ensure you’re in a position of strength regardless of what happens (or doesn’t happen) next.

This is a lot better idea than betting your entire future on the ‘life force’.

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I imagine life can often feel pretty difficult for today’s high school students.

On top of dealing with classic teenage drama like homework, hormones, pimples, parents, driving, dating, university selection, and more, students these days have to contend with a host of new challenges.

They suffered long periods of brutal Covid lockdowns. Active shooter drills are a normal part of student life. And, of course, there’s the nonstop anxiety and peer pressure of social media.

Plus, on top of everything else, students today have also been force-fed some pretty bizarre ideas.

Classical literature, advanced mathematics, and hard sciences have taken a back seat to social justice, climate justice, economic justice, etc. (as defined by the woke, fanatical left).

But there are early signs that this indoctrination is starting to break new ground.

Yesterday a close friend of mine who lives in Spain told me that his son, a high school senior, has been getting lessons in school about Central Bank Digital Currencies, or CBDCs.

If you’re not familiar with the concept, a CBDC is essentially a cryptocurrency that is controlled by the government and central bank. And so far, at least half a dozen CBDCs have been rolled out around the world, including in Russia, China, and India.

Now, governments already have the means to track you and monitor your finances.

They can force financial institutions and credit card issuers to turn over your entire financial history. They can order banks and brokerage firms to freeze your assets.

And if you remember what happened in Canada during the ‘Freedom Convoy’ protests, Justin Trudeau Castro used his ‘emergency powers’ cut the protestors off from the financial system.

They had no access to their bank accounts, ATMs, or even crowdfunding platforms.

Governments already have the power to do all of these things.

But CBDCs take this power to a much higher level… because there’s no more middleman. Government authorities wouldn’t have to bother going to banks, brokerages, and credit card companies; they could simply deactivate your funds with a mouse click.

Have fun trying to buy groceries.

Now, even though only a handful of CBDCs have been rolled out around the world, there are over 100 central banks that are developing their own CBDCs. And that includes both the United States and the European Union.

My friend’s son (again, a high school senior in Spain) explained that his teachers are absolutely gushing over the idea of CBDCs.

In a class which covers banking, mortgages, and the financial system, they’re telling the kids that, probably within a year, the new ‘digital euro’ will be rolled out. And eventually it will become mandatory.

Cash will cease to exist, and all money will be registered with the European Central Bank.

Europe’s army of bureaucrats will know what’s happening, in real time, to every single euro in existence. And there will be no way of getting around it. Financial privacy will be a thing of the past.

The teachers expressed utter joy about this, and the curriculum seems designed to get the kids excited about it too.

They say the digital euro represents incredible progress, and that it will make life easier and simpler.

Businesses will be able to collect payments more easily. You’ll be able to spend everywhere directly from your phone, and maybe cut out the need for credit cards or even traditional bank accounts.

They also say that CBDCs will be an effective way to control money laundering, criminal activity, and terrorist financing. That’s why, they explain to the students, the EU has already begun to crack-down on cash and crypto transactions over €1,000.

According to my friend’s son, most students in his class appear pretty excited about CBDCs. Hardly anyone seems fazed by the loss of privacy or increased government authority over their lives.

But intelligent people—including my friend and his son— clearly see where this is going.

We’ve already seen people lose their jobs and be canceled off the Internet for wrongthink. We’ve seen people frozen out of their bank accounts for standing up for their rights.

Frankly, the brutal use of the Prime Minister’s emergency powers against the Freedom Convoy protestors in Canada should have served as a giant wake-up call: if you hold your life’s savings in the financial system of your home country, you’re already taking an unnecessary risk.

And that’s regardless of what happens with CBDCs.

This means that having some savings outside of the financial system is a completely sensible idea. And fortunately, there are plenty of easy ways to do this, including liquid assets like physical gold and silver, cryptocurrency, and cash.

It’s hard to imagine there’s any downside for having direct access to some emergency savings. And this is one of the core principles of any Plan B: it makes sense, regardless of what happens (or doesn’t happen) next.

The CBDC trend is obviously nascent… so it’s not like the Federal Reserve or ECB is going to roll out their CBDCs tomorrow morning and make them mandatory. The sky is not falling, and there’s no reason to panic over this development.

But independent, thinking people ought to understand where this trend may lead… and more importantly, to take rational steps to minimize the consequences.

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Last week’s headlines were understandably dominated the special counsel’s report which chronicled President Biden’s “diminished faculties and faulty memory”.

So, it’s easy to understand why no one even noticed the Congressional Budget Office’s $20 trillion bombshell announcement that was released within hours of the special counsel report.

Granted, an investigation concluding that the President’s memory is “poor”, “hazy”, and “significantly limited” is a big deal… though most people probably weren’t surprised to hear this.

But frankly the Congressional Budget Office’s report is just as important– because it’s providing further evidence that the United States is headed rapidly towards complete fiscal ruin.

Every six months, the Congressional Budget Office releases a rolling 10-year “Budget and Economic Outlook”. And the most recent one from last year stated that the total cumulative deficit in the ten-year period from 2023 to 2033 would reach an astonishing $20 trillion.

This essentially means an average annual deficit of $2 trillion.

Last week the CBO released its updated forecast, this time for the ten-year period from 2024 through 2034. And their outlook has not improved: they’re still projecting a $2 trillion average annual deficit.

Perhaps more alarming is that the CBO sees the deficit problem becoming consistently worse.

“[D]eficits steadily mount,” the CBO explains, “reaching $2.6 trillion in 2034.” Relative to the size of the US economy, they estimate the 2034 deficit to reach 6.1% of GDP. That’s historic.

“Since the Great Depression, deficits have exceeded that level only during and shortly after World War II, the 2007-2009 financial crisis, and the coronavirus pandemic.”

Think about what they’re saying: the CBO projects spending to be so extreme that such levels have only been exceeded three times in modern history… and all three have been during times of national emergency.

Yet the CBO is not projecting any national emergency over the next ten years. Nowhere in their assumptions is the possibility of a war. Or a new financial crisis. Or another pandemic.

Rather, this historically high level of over-spending is simply the ‘new normal’ in the United States.

It’s also worth noting a number of other rosy assumptions in the CBO’s most recent forecast; they project, for example, that the US economy will return to an ‘everything is awesome’ era where interest rates are low, inflation is low, unemployment is low, and GDP growth is solid.

These are pretty optimistic assumptions. And I sincerely hope they’re right.

Because if they’re wrong about anything, i.e. if inflation remains high, or economic growth stalls, or there’s some national emergency, then their $20 trillion forecast will become much, much worse.

We actually already know the $20 trillion estimate will be worse; that’s because Social Security’s key trust funds are projected to run out of money in the early 2030s as well. And bailing out the trust funds will require trillions of dollars more, just as a down payment.

So, it’s not hard to see how, when viewed through a more realistic lens, the 10-year forecast could reach $25 to $30 TRILLION in total deficit spending… which essentially means new debt.

That is an absurd amount of money. Think about it like this: the CBO estimates that the size of the US economy will reach $48 trillion by 2034.

So, if the government ends up having to borrow $25 trillion, that would be equivalent to more than half of the entire US economy.

This would be debilitating for the economy. And that’s most likely why the Federal Reserve would step in to fund these deficits.

When the Treasury Department sells its bonds to private citizens and businesses, they’re essentially borrowing existing money that’s already circulating in the economy.

But when the government borrows from the Federal Reserve to finance its deficits, the Fed creates NEW money, which it then loans to the Treasury Department.

We all experienced this first-hand in 2020-2022 when the Fed created $5 trillion in new money for the government to spend. The end result was inflation that peaked at 9%.

Now the Congressional Budget Office is telling us, quite optimistically, what the government’s borrowing needs will be over the next decade. So how much inflation should we expect if the Fed has to create $20 trillion in money?

No one knows. But it probably won’t be the Fed’s magical 2% target.

Given this obvious inflation risk from the CBO’s baseline scenario, it would also be quite optimistic (and borderline naive) to assume that the US dollar will continue as the world’s dominant reserve currency beyond the next decade.

After all, what country could possibly be expected to continue buying US government bonds, or conducting cross-border trade in US dollars, in this scenario where inflation spikes and deficits soar?

And the dollar losing reserve status would only compound the problem. Without its dominance as the world’s reserve currency, foreign nations would no longer buy much US government debt… meaning that the Fed would have to print even more money to make up the difference.

Look, I’m not telling you this because I think you should be worried. This isn’t about doom and gloom. Quite the contrary– I’m incredibly optimistic about the future and the opportunities ahead.

But any rational, thinking person ought to take these risks seriously.

The federal government itself is telling us that its borrowing needs over the next decade will exceed $20 trillion, and that is under very optimistic assumptions.

To quote an old phrase from World War I, “the situation is serious, but it’s not hopeless.” And there are plenty of hedges– both financially and personally– which can dramatically reduce the impact of these future risks.

From a financial perspective, I’d start with real assets, i.e. the world’s most critical and valuable resources which cannot be conjured out of thin air by central banks and politicians.

Gold is an obvious one, which we will discuss more… because there is pretty clear scope for gold prices to soar past $10,000 or more.

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“Can Selecting the Most Qualified Candidate Be Unfair?” asked researchers in a recent study published by the American Psychological Association.

And the short answer, according to this new ‘science’, is a resounding YES: hiring the most qualified people based purely on their merit and talent is unfair.

Naturally they don’t actually discuss WHY. They just take it as a well-known fact that merit-based hiring is bad, while diversity & inclusion hiring is good.

The actual experiments that the researchers discussed in their paper had to do with how easily they could brainwash and manipulate people into believing that “merit-based hiring and promotion processes [are] significantly less fair.”

Quite easily, it turns out. The results of their experiments show that they can easily “disrupt the perceived fairness of meritocracy”.

They’re also excited to take their research even further by “exploring whether the manipulations developed here can be effective” in other ways, like making “diversity policies” less “polarizing”.

By lifting its countenance upon this research and publishing it in the Journal of Experimental Psychology, this ideological drivel is now considered ‘science’.

So, the next time some Inspired Idiot wails about how wonderful diversity and inclusion is… and justify their position by saying things like “studies show” and “the science says”, we can thank the American Psychological Association.

Now, this is just one research paper written by a few fanatical academics pushing their agenda. It’s hardly anything to get bent out of shape about.

But it is a small example of the direction of the nation. And that direction can be summed up in a single word: WRONG.

I’ve written extensively how the problems facing the US aren’t even really political at this point. It’s a question of arithmetic.

The government’s own baseline forecast estimates an additional $20 trillion in new debt over the next decade, on top of the $34 trillion debt they already have.

Most likely this will result in a substantial amount of inflation, plus loss of reserve status for the US dollar, over the next 5-7 years.

I’ve also argued that the US has a very narrow window of opportunity to turn things around. And one of the key ways to do that is to increase productivity.

If there were a true economic bonanza in the US— a surge in production of goods and services— then that would largely solve the problem.

Massive economic growth would lead to a major increase in tax revenue… meaning that the government could solve its perennial deficit problem simply by generating more revenue, as opposed to cutting costs.

And by the way, I’m not talking about raising tax rates.

Just look at the history of taxation in the US: since the end of World War II, the top individual income tax rates in the US have varied tremendously— from as low as 28% in the 1980s, to as high as 91% in the 1960s. Yet despite these fluctuations, the government’s overall tax revenue (as a percentage of GDP) has been very consistent— around 17% of GDP.

In other words, it doesn’t matter how high they raise tax rates. Overall tax revenue, i.e. the government’s ‘slice’ of the economic pie, will remain the same.

The implication? The only real way to generate more tax revenue is to make the pie bigger.

And it doesn’t take a genius to figure out how to do this: stop debilitating large and small businesses with mountains of rules and regulations.

Every day there seem to be calls for more anti-business, anti-capitalism, anti-productivity policies. New reports to file. Wealth taxes. Or my favorite, the Labor Department’s recent 800-page proposal to make sure your small business builds enough bathrooms to conform to everyone’s gender identity.

These sorts of things take economic productivity backward, not forward.

And this new ‘science’ by the American Psychology Association— demanding that businesses should NOT hire people based on merit— is just another small step backward.

It’s the wrong direction, plain and simple. And it’s why I’m not holding my breath that the Inspired Idiots in charge will suddenly start doing what’s necessary to turn the ship around.

Again, though, this should not be a cause for panic or dread.

I’ve also written extensively that rational, thinking people can mitigate the consequences of this Rule by Inspired Idiots.

Gold, for example, tends to perform extremely well in the chaotic, inflationary times that I anticipate. And one potential low-cost approach would be to buy options on long-term gold futures as a hedge against inflation down the road.

We’ll explain more about this, as well as the benefit of owning real assets, next week.

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Thousands of years ago during the late Bronze Age– most likely between 1100 and 1200 BC, two ancient civilizations were exhausted after nearly a decade of warfare.

On one side was the ancient Achaean peoples led by the Mycenaean king Agamemnon. On the other was a legendary Hittite city that had already been in existence for more than 2,000 years.

Back then the city was called Wilusa. Today we know it as Troy.

The general consensus among historians today is that, most likely, the war did take place. But it obviously lacked the drama and intrigue of Homer’s epic tale, the Iliad.

We all know the story: after nine grueling years of war, Odysseus hatched a plan to sneak through the impenetrable gates of Troy. Guided by Athena, the goddess of wisdom and warfare, the Greeks built a hollow statue of a horse and hid their soldiers inside.

The horse was left as a gift for the Trojans with an inscription of goodwill and peace. And, according to Homer’s legend, the Trojans took the bait.

But there were a few people who predicted severe consequences, including a Trojan priest named Laocoon, who famously warned, “Timeo Danaos et dona ferentes.”

Translation: “Beware of Greeks bearing gifts.”

This was a time in human history in which oracles and prophets were a normal part of life. People in the ancient world regularly sought counsel from ‘seers’ who claimed to have some special power to predict the future.

And frankly this addiction to prophesy lasted for thousands of years. Even famous historical leaders into the 19th and 20th centuries like Napoleon, Joseph Stalin, and Adolf Hitler reportedly took advice from fortune tellers and astrologers.

But if we really analyze Laocoon’s legendary warning about the Trojan Horse, he wasn’t making a prediction about the future. He was just looking at obvious facts and exercising good judgment and common sense.

That’s what good ‘predictions’ are anyhow. No one has a crystal ball to see the future like some prophetic oracle from ancient mythology.

And I wanted to be clear about this point… because when we write about future financial consequences, like a debt crisis down the road, or the US dollar losing its reserve status, etc., we’re not making ‘predictions’.

Rather, we’re looking at obvious facts and trends, then exercising good judgment and common sense. And the facts are very clear.

We don’t peer into a crystal ball when we say that the US national debt is set to increase by $20 trillion over the next decade. This is publicly available information pulled directly from the Congressional Budget Office’s own forecast.

It’s not some magical prophesy when we say that Social Security’s trust funds will run out of money in a decade. This information comes directly from the official report of the Social Security Board of Trustees.

Nor are we exercising any special powers when we say that the Federal Reserve is completely insolvent. We’re just looking at the Fed’s own quarterly financial statements which show an unbelievable $1.3 TRILLION in unrealized losses.

You get the idea. There’s nothing mystical about the ‘predictions’ we’re making; we’re simply citing official reports and connecting the dots that almost everyone in the ‘expert class’ chooses to ignore.

Sure, we think that an insolvent Federal Reserve, plus $20 trillion in new debt, plus Social Security’s bankruptcy, will probably have consequences. But we’re also careful to acknowledge where we might be wrong.

I’ve written several times that the US government still has a very narrow window of opportunity to get its house in order. Sadly, they are not taking advantage of that window.

It’s also possible that an AI-led economic boom could dramatically increase productivity and tax revenue in the US, similar to the Internet boom in the 1990s.

But given that there are so many prominent figures in both government and within the AI community itself, trying to restrain AI’s growth, I’m skeptical that an economic boom will happen in time to forestall the most severe consequences of America’s gargantuan debt.

This is why we feel that our analysis is on very solid ground. And that leads me to solutions.

There’s an old Danish proverb (frequently mis-attributed to Mark Twain) which translates as “Predictions are hard. Especially about the future.”

But sometimes they’re not. Or better yet, I’d say that predictions are hard… except when you’re not actually making predictions.

Again, we’re looking at clear and obvious facts.

Social Security, for example, states that the program will “become depleted and unable to pay scheduled benefits” within 10-12 years. That’s not a ‘prediction’. That’s arithmetic.

For rational, thinking people, however, this should not be a cause for panic. Instead, it should be a reason to take action and solve the problem on an individual basis… rather than wait for Inspired Idiots in the government to fix it.

And there are plenty of options. Setting up a more robust retirement structure like a solo 401(k), for instance, allows you to contribute a lot more money for retirement, plus it provides a wider range of investment options like real estate, crypto, and more.

And even if the Inspired Idiots miraculously come together to solve the Social Security problem, you won’t be worse off for having set aside more money for retirement.

Ditto for other risks we discuss.

Real assets, for example, generally tend to perform very well during inflationary periods. Yet many real asset producers are currently trading at historic lows.

There are highly profitable, debt-free, dividend-paying companies out there whose share prices are extremely cheap. And if the future inflation scenario we’ve outlined takes hold, those types of companies typically experience extreme gains.

But if we turn out to be wrong, it’s hard to imagine being worse off buying shares of a successful, dividend-paying business at historic lows.

This is a great way to think about a Plan B: consider solutions that make sense regardless of what happens (or doesn’t happen) next.

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It’s interesting to see how so many mainstream voices are starting to express concern about the gargantuan size of the US national debt.

For most of the past decade, even as the debt spiraled out of control and passed $20 trillion, $25 trillion, $30 trillion, etc., hardly anyone in the media said a word about it. If anything, they would insist that the ‘debt doesn’t matter.’

That tune is finally starting to change. And the latest example came last night when 60 Minutes interviewed the Chairman of the Federal Reserve, Jerome Powell.

The US national debt now stands at more than $34 trillion. It will surpass $35 trillion by the summer and likely $36 trillion by the end of the year.

It’s growing so quickly that the interviewer asked about the debt, “Thirty years from now, it is projected to be $144 trillion. . . [I]s the national debt a danger to the economy in your view? I have the sense this worries you very much.”

The answer to almost any sentient human being, of course, is “absolutely yes.” And the Fed Chairman admitted as such. Sort of. He said:

“In the long run, the US is on an unsustainable fiscal path. . . Over the long run, of course it does [worry me very much] . . . It’s time for us to get back to putting a priority on fiscal sustainability. And sooner is better than later.”

Now a term like “the long run” is a funny thing because it can mean just about anything. To some people in finance and economics, “the long run” can mean five years. To others, fifty years.

Saying “the long run” is like asking your audience to fill in the blanks with whatever timeframe they think that means.

But this is intellectually dishonest… and it frankly makes the country worse off.

We’ve written about this extensively here at Schiff Sovereign: the US government’s own internal projections (which come from the White House and the Congressional Budget Office) forecast that the debt will increase by $20 trillion over the next decade.

And this is a true crisis in the making.

Consider that, by 2033, the government will have to spend 100% of federal tax revenue simply to pay for THREE things: Social Security, Medicare, and Interest on the Debt.

EVERYTHING else in government, including military spending, veterans’ benefits, and the electricity bill at the White House, will have to be funded with more debt… which only makes the problem worse.

This will be a fiscal black hole from which there is no escape. And it’s less than 10 years away.

We’re not being sensationalist or dramatic here; this is a simple arithmetic problem based on the government’s own projections. And frankly those projections are optimistic.

Their estimate for $20 trillion in new debt, for example, does not include any money for Social Security, which will require a multi-trillion-dollar bailout over the next decade. Their estimate also assumes there will be no war, no new pandemic, no national emergency, and no new idiotic, expensive legislation.

So, a more conservative estimate of the national debt is probably closer to $60 trillion or more by 2033. This means that interest payments on the national debt will take a greater and greater share of tax revenue.

The Congressional Budget Office forecasts admit this, stating that as the national debt increases, “the cost of financing the nation’s debt grows, [and] net outlays for interest increase substantially. . .”

The US government’s interest expense “rose by 35% last year, [and] are projected to increase by 35% again this year.”

No institution, not even the US government, can possibly expect to stay solvent when their interest expense grows by large double digits each year.

Now, it’s not like this is top secret information. The Congressional Budget Office posts this forecast on its website for the entire world to see. Surely the Fed has access to the Internet. Surely, they’ve seen these projections.

Yet the way 60 Minutes set up its question– by referencing the debt 30 years into the future– to how the Fed Chairman kept saying “the long run” and “sooner is better than later”, all gives people a false sense of security that the US has more time to resolve this crisis than it actually does.

This is an arithmetic problem, plain and simple. And the realistic window of opportunity to solve it is 5-7 years, at most.

The other disingenuous part about the Chairman’s comments was that, in addition to using terms like “the long run”, he encouraged “fiscal sustainability” without mentioning any specifics.

To some, “fiscal sustainability” might mean slashing welfare programs. To others, raising taxes on corporations and wealthy people.

So once again the Fed Chairman tacitly asked the audience to fill in the blanks and imagine for themselves what “fiscal sustainability” means.

This is also intellectually dishonest.

Social Security is, by far, the #1 most expensive line item in the federal budget. It dwarfs even Defense spending.

So, there is no “fiscal sustainability” at this point without making major cuts to Social Security. Nothing else– no other budget cuts– will matter unless there is a complete overhaul of retirement benefits and qualifications. It’s the only real lever the government has to balance the budget.

Ultimately this means defaulting on decades of promises that the US government has made to people currently in the work force.

Naturally no one wants to talk about this… including the Fed Chairman. So again, it’s left to the audience’s imagination to fill in the blanks.

Personally, I’m not holding my breath a solid majority in Congress will have the willingness and courage to cut entitlements. And frankly I presume the Inspired Idiots in charge will keep making things worse.

But the good news is that there is still a reasonable window for any independent-minded individual to take completely rational steps to reduce the consequences of what lies ahead.

And we’ll continue to talk about more of these solutions in the future.

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Last week when I wrote about the dumbest guy of the week, I should have known it wouldn’t be a one-time thing.

A week ago I wrote about Congressman Jamaal Bowman, who was demanding that the US government make “at a minimum” $14 trillion worth of reparations payments.

(Remember, this is the same guy who ‘accidentally’ pulled the fire alarm in the Capitol on September 30, 2023, which just happened to disrupt a critical Congressional vote that he was hoping to stall.)

As a member of Congress, Bowman surely knows that the national debt is already $34 trillion. He surely knows that last year’s deficit was nearly $2 trillion. He surely knows that Congress itself projects another $20 trillion in new debt over the next decade.

Yet in addition to all that debt, Mr. Bowman wants to dole out an additional $14 trillion in reparation payments.

And his plan for how to come up with the money? “We [spend] it into existence,” he says. In other words, more debt.

One can only marvel at this intellectual giant’s grasp of economics.

But the competition for the biggest Inspired Idiot is fierce. And this week the Senator from Massachusetts, Elizabeth Warren, carries the torch.

First some quick background.

In August 2022, Amazon announced plans to acquire iRobot, which makes the robotic ‘Roomba’ vacuum cleaner, for $1.7 billion.

And boy did that infuriate Elizabeth Warren.

She quickly wrote a letter to the Federal Trade Commission (FTC) urging it to “use its authority to oppose the Amazon–iRobot transaction.”

Why? Well according to Warren’s inspired idiot logic, she claimed that the deal “could harm consumers”, as if we helpless little people will somehow suffer grievous bodily injury if Amazon buys a vacuum cleaner company.

Now, Amazon was probably planning to use the iRobot device to harvest even more consumer data, just like Amazon does with just about all of its other products and services.

Call me old-fashioned, but I believe consumers are capable of making that decision themselves, i.e. whether they are willing to trade privacy for convenience. I’m not. Others are.

But Ms. Warren is making the decision for everyone. She clearly knows what’s in your family’s best interest more than you do. And thank goodness we have people like Elizabeth Warren making these decisions on our behalf.

So, this week, after nearly 18 months of pressure from Senator Warren— plus more regulatory scrutiny from inspired idiots in the European Union— Amazon finally walked away from the deal… citing insurmountable regulatory hurdles.

The immediate response was that iRobot, devoid of additional funding that Amazon would have provided, immediately laid off one-third of its work force.

You did it Lizzy! You saved the day!

Regulatory red tape almost always hurts the economy. But in this case, there’s a clear line of destruction, from a single Inspired Idiot to hundreds of people who lost their jobs as a direct result of her fanaticism.

I remember a similar case in 2019 when New York Rep. AOC opposed a planned Amazon headquarters that would have brought tens of thousands of jobs, and hundreds of millions in tax revenue to New York.

Her major beef was that, in exchange for billions in investment, Amazon would have received a partial tax break. AOC wasn’t having any of that.

So she chased Amazon out of town… then actually celebrated the lost investment, lost job growth, and lost tax revenue as a victory for the people!

It’s no surprise that, over the past five years, other large companies and wealthy individuals have fled the state to lower tax, more business-friendly jurisdictions (like Florida). And New York now has a massive financial deficit.

Bizarrely, voters keep re-electing these Inspired Idiots.

AOC hasn’t lost her job. Elizabeth Warren hasn’t lost her job. But iRobot staff have lost theirs.

Now, Sen. Warren has been a very special talent this week… because in addition to slaying the jobs of hundreds of workers at iRobot, she also sent another nasty letter to the CEO of Walgreens.

Walgreens recently announced that they were closing several locations in some of the crappiest neighborhoods in Massachusetts, Warren’s home state.

Naturally Warren whined that “these closures are occurring within the larger legacy of historic racial and economic discrimination that has created significant pharmacy and food deserts and lack of access to transportation in these neighborhoods.”

Yes, that may be true. I imagine no impoverished neighborhood would want to lose a vital drug store.

But maybe they ought to consider the reasons why Walgreens is leaving, which are completely obvious: it’s unprofitable (and dangerous) to operate in high-crime areas where half of your merchandise is shoplifted.

Yet Inspired Idiots like Warren (and the people who run these big cities) decriminalize shoplifting. Local prosecutors won’t do anything. The police can’t do anything. Security guards in the stores can’t do anything.

Why should any rational business owner continue operating in such an environment?

One of the honorable mentions this week goes to Rep. Ayanna Pressley, another Inspired Idiot who made these comments on the Walgreens matter:

“When a Walgreens leaves a neighborhood, they disrupt an entire community, and they take with them baby formula, diapers, asthma inhalers, lifesaving medications, and of course jobs. These closures are not arbitrary, and they are not innocent. They are life threatening acts of racial and economic discrimination… Shame on you Walgreens!”

Now, the three politicians who signed this angry letter to Walgreens— Senators Warren and Markey, plus Rep. Ayanna Pressley, have a combined 76 years in government.

You’d think that with 76 years they could have done something to lift their constituents out of grinding poverty by now.

But no, the problem is clearly racist pharmacies which—gasp—make perfectly rational business decisions to close unprofitable stores.

Warren obviously has enough pull to torpedo the Amazon/iRobot deal. But apparently, she’s a helpless babe when it comes to actually cleaning up the streets and delivering economic opportunity for her constituents.

These stories are important to highlight. The country is on a clear trajectory to the mother of all financial crises over the next 5 to 10 years, and there is only a narrow window to escape that outcome.

Averting disaster should be politicians’ top priority— encouraging productivity, cutting red tape, and being friendly to both large and small businesses.

But their approach instead is to shame companies, over-regulate the economy, and destroy jobs.

These people are dangerous lunatics, and they’re making things worse— not better. This is why it’s so critical to have a rock-solid Plan B for what’s coming down the road.

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Yesterday the Treasury Department announced that they expected to increase the national debt by a whopping $760 billion this quarter alone… and another $202 billion next quarter.

In short that means almost $1 trillion added to the national debt just in the first half of this year. And, again, these are the Treasury Department’s own estimates.

Obviously, that’s a pretty horrible result; even a senior Treasury official acknowledged that they have “significantly increased” their bond sales and the national debt. Not that they’re doing anything to stop the trend.

But there’s an even greater risk that the Treasury Department faces this year that is hardly being discussed anywhere.

Over the next twelve months, more than $6 trillion in existing US government debt is set to mature… and will need to be paid back somehow.

So, to give you an example, back in 2014, the federal government issued $264 billion in 10-year Treasury notes.

Well, it’s now 2024, i.e. ten years later. Meaning that $264 billion worth of 10-year notes issued in 2014 will become due and payable this year.

In 2017, they issued $368.8 billion worth of 7-year notes. And those 7-year notes issued in 2017 are due and payable this year.

You get the idea. The point is that the total sum of Treasury Bonds, Notes, and Bills outstanding that will become due and payable this year exceeds $6 trillion.

So, in ADDITION to the $1 trillion in NEW debt that they’re forecasting just in the first six months of 2024, the Treasury Department is also going to have to pay back $6 trillion of existing debt.

Naturally the Treasury Department doesn’t have $6 trillion lying around to pay back its bondholders. So instead of paying anyone back, they just borrow new money to repay the old money.

Now, this doesn’t actually increase the national debt. If they borrow $6 trillion in new bonds, but then pay back $6 trillion in old bonds, the net change to the debt is ZERO.

So, what’s the problem?

The problem is that interest rates are MUCH higher than they were 2, 3, 5, 7, and 10 years ago when those old bonds were first issued.

In 2021, for example, the Treasury Department issued almost $1 trillion in 3-year bonds back when interest rates were nearly 0%.

But since those 3-year bonds from 2021 are due and payable this year, the Treasury Department will have to borrow new money at today’s interest rates… which are hovering around FOUR percent.

And higher interest rates mean that the government’s annual interest bill will soar.

Think about it like this– $6+ trillion of existing debt needs to be refinanced. And given how much higher interest rates are, this will likely cost the government more than $200 billion per year in additional interest payments.

PLUS, they’re expecting $1 trillion of new debt in the first six months of the year, plus probably another $1 trillion in the second half of the year.

Altogether, the government’s total interest bill could easily increase by more than $300 billion per year in 2024.

And this same trend will continue in 2025, 2026, and beyond.

Right now, gross interest on the debt is already roughly $1 trillion per year. But in three years’ time, annual interest could surpass $2 trillion annually. And in 10 years, annual interest could reach $4 to $5 trillion.

Anyone who thinks this isn’t an obvious, catastrophic problem in the making (which demands immediate attention) needs to have his/her head examined.

And yet the government is full of people who shake hands with thin air and happily ignore the present and future carnage that they’re creating.

Don’t hold your breath for the Inspired Idiots in charge to fix this; I’ve written before that there is a VERY narrow window of opportunity to solve this problem… but they’re doing absolutely nothing about it.

But that doesn’t mean that you or I have to be held hostage by their incompetence.

I’ve argued that one of the highly probable consequences of this mess will be SIGNIFICANT inflation. After all, most likely it will be the Federal Reserve that facilitates all this new debt.

This is what the Fed has done for most of the past 15 years. Just look at the huge run-up in the national debt between 2020 and 2022; over 80% of that money (~$5 trillion) came from the Federal Reserve.

And if creating $5 trillion in new money resulted in 9% inflation, how much inflation will we see if the Fed creates $15 to $20 trillion of new money? No one knows for sure, but it probably won’t be 2%.

But if we can make such a strong argument for inflation… and anticipate a steep rise in prices over the next 5-10 years, there’s no reason why we can’t take steps NOW to reduce the impact of future inflation, or even benefit from it.

This doesn’t even necessarily require a lot of capital. For example, one could invest in long-term options on certain assets (including gold or silver futures), so that a small amount of money could pay out very large returns down the road.

The key point is that there are plenty of sensible ways to plan for future inflation, which we will continue to discuss in future letters.

But this isn’t even Plan B thinking anymore. Anticipating inflation should be Plan A.

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Imagine waking up on a tropical mountain setting as the sun rises over the valley below.

You take a dip in your infinity pool before eating a breakfast complimented by fresh mango and papaya from your own garden. And the beans for your morning coffee came from a farm just down the road.

You could spend the day surfing. Or you might drive ten minutes into town to meet up with the American and British expat community that hangs out at a local bar.

During this visit, you’re relaxing on a two-week vacation. But you were especially grateful to own this home during the pandemic, when you and your family escaped here for several months to work remotely and wait out the insanity.

It’s fortunate that you had applied for legal residency a few years before, which gave you the right to enter the country, even when most governments closed their borders to tourists in 2020.

And when the time for retirement comes in a few years, the low cost of living here will help stretch your fixed income.

Is this an idyllic vacation home or a Plan B?

It’s both.

Quite often people start by traveling abroad somewhere and finding a place that they really, really enjoy spending time. At first it might just be a few days, then a few weeks.

But after several trips, they start looking at the real estate market… then eventually pull the trigger after finding an idyllic property that fits their needs.

Initially they might only use it as an occasional vacation home for a few weeks each year, renting it out to other tourists the rest of the time to generate a decent income stream.

But as the years go by and the world starts to become even more bizarre and conflict-prone, they start spending more and more time there, just to escape the madness.

Ultimately, they realize that, if things ever got truly crazy back home, they could always come here to their private safe haven. And just knowing that they have that option gives tremendous peace of mind.

This is just one way to look at a Plan B, and it’s not exactly radical or drastic. The idea is to start with something that you really enjoy… and then grow from there.

If you really like a particular destination, there’s no downside in cultivating roots there, buying a really nice, undervalued property that you love, or going through the process to establish legal residency.

Legal residency is great, because it means that you have the right to go to that country and stay indefinitely, even under extreme circumstances like COVID.

This is different from being a tourist, where you can be shut out of a country… and be limited in how long you can stay.

(Having legal residency in a foreign country also makes things a lot easier if you ever want to open a local bank account, buy a car, obtain a driver’s license, etc.)

Each country has its own residency rules. Some places are notoriously difficult to obtain residency— like the United States unless you walk across the southern border.

But most places have fairly simple requirements, and a number of countries have set up specific programs to attract foreigners who might be willing to spend some money in the country and/or buy property.

In Panama, for example, you can obtain residency by purchasing real estate for roughly $300,000. And that money goes a long way in Panama, where there’s plenty of quality property for sale between $100 and $200 per square foot.

In Mexico, you don’t even have to purchase a property to obtain legal residency; you just must prove that your income or savings meets a modest threshold.

These are just a few examples; we have a ton of other research on our website since everyone has his/her own desires and priorities.

For some, their Plan B might be a remote farm on the South Island of New Zealand. For others, a chic condo in the city center of Lisbon. And for others, a beachfront villa in Latin America or the Far East.

The world is an enormous place, and it’s full of options. Most likely there are several out there which could work for you.

Again, what we’re talking about here is not exactly a radical idea.

It’s hardly controversial to assert that there is a lot of conflict in the world… and way too many Inspired Idiots running the show.

We’ve mapped out how, in the United States for example, the government’s own baseline forecast for the next ten years estimates $20+ trillion in NEW debt. There will be consequences galore from this debt explosion.

But as we wrote yesterday, it’s not just about the dollar and the financial consequences. It’s also about personal risks stemming from ‘mostly peaceful’ protests, political clashes, culture wars, or even an actual shooting war.

These aren’t exactly long-shot risks anymore, and any rational, thinking person ought to be considering a backup plan.

Having a second residency is a great insurance policy to protect against those sorts of personal risks.

And if you choose wisely, i.e. select a place where you actually enjoy, it’s hard to imagine there’s any downside in having an additional place to go.

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When Publius Licinus Valerianus (known as Valerian) became Roman emperor in September of 253 AD, people across the empire must have breathed a sigh of relief.

“Finally,” many Roman citizens probably thought, “There’s an adult in the room.”

The Roman Empire at that point was in the midst of its infamous ‘Crisis of the Third Century’. The Empire was recovering from a nasty pandemic known as the Antonine Plague. Inflation was soaring. Conflict with their enemies– especially in the Middle East– was intensifying.

Social tensions were growing. Crime was rising. Trade was declining. The economy was on the ropes. Taxes were going up.

And there had been far too many years of political instability in the Empire prior to Valerian’s ascension.

But Valerian was a guy with decades of experience. He was a longtime Senator, plus he had previously held one of the top positions in Rome’s executive branch. So, people naturally thought he would be the solid leader that Rome needed.

Unfortunately, Valerian turned out to be a complete disaster.

Valerian continued bankrupting the Roman treasury and running sky-high deficits. He zealously demanded ideological conformity and persecuted anyone (most notably Christians) who expressed philosophical or intellectual dissent.

He promoted his son– a moronic, free-spending playboy– to a position of high power.

And perhaps most importantly, Valerian was completely incompetent when it came to Rome’s border, and the empire became overrun by barbarians during his rule.

By 260 AD, after seven years of Valerian’s destructive reign, Romans were fed up… especially those who lived near the border.

Fortunately, the emperor traveled East to personally supervise Rome’s war against Persia (modern day Iran), a rising power that had grown more belligerent.

So, with Valerian distracted in Iran, a Roman military officer who was in command of the empire’s key border on the Rhine River decided to take matters into his own hands.

The commander’s name was Postumus. And in 260, he fought back against the barbarian invaders who had been coming across the border for years. In fact Postumus delivered such a decisive blow that the barbarians wouldn’t dare try crossing the Rhine for another ten years.

Finally, someone had taken real action against the migrant threat after years of the Emperor doing nothing. Citizens in the border provinces (modern day France and western Germany) were thrilled.

So thrilled, in fact, that they declared independence from Rome and made Postumus their leader.

Valerian was powerless to stop it. Literally. At that point he had been captured by the Persians and spent the rest of his life in captivity. True story.

Obviously, this historical tale probably rings familiar to many readers. Not that we wish for Joe Biden to end up in an Iranian prison like Valerian did. But clearly the guy has a lot to answer for.

Yesterday Iran attacked a US military installation in Jordan, killing three and wounding dozens more American service members. And it’s not a one-time thing. Iran has attacked US military targets over 150 times in the past few months alone.

But the guy with decades of experience has hardly done a thing in response. The fact is that no one on the planet is intimidated by Joe Biden, who is rightfully perceived as a weak, inspired idiot with unimaginably bizarre priorities.

America’s border catastrophe is a perfect example; it’s clear the federal government isn’t doing its job to keep illegals out.

It’s also clear that the surge in migrants at the southern border has caused, at a minimum, massive financial strain in many US cities.

The federal government knows there’s a problem. Yet they do nothing about it. And they waste resources to try to prevent the State of Texas from doing anything about it.

Again– unimaginably bizarre priorities.

It’s not just the US, either. The United Kingdom has been overrun by hundreds of thousands of pro-Palestine supporters, many of whom chant for “Jihad” and “Hamas” and advocate for Sharia law in the UK.

But the government’s priority seems to be making sure the ‘mostly peaceful’ Islamists aren’t offended by angry Brits who are shocked at what their country has become.

In Canada, police in Quebec have advised residents to NOT post camera footage of thieves stealing packages from their front porches… because we have to respect the criminals’ privacy.

Another city in Ontario allowed a 50-year-old man (who identifies as a 15-year old girl) to compete in a girl’s swim meet, with concerned parents shielding their daughters in the locker room.

These developments aren’t accidents. They don’t just spontaneously occur.

They are the deliberate result of the inspired idiots in charge who think their nation’s priority should be criminals’ privacy. Or the well-being of illegal migrants. Or 50-year men who think they’re teenage girls. Or not offending angry Islamists.

YOU are NOT their priority. And you never will be.

They view you as nothing more than a financial dairy cow to be milked in order to pay for their idiotic ideas. And if you question them, you get labeled as “anti-science” or “xenophobic” or some such nonsense.

I spend a lot of time writing about the economic consequences of this ‘Rule by Inspired Idiots’ (which is the dominant political system in the West, whether it’s Joe Biden or Justin Trudeau).

And the economic consequences are-a-plenty.

In the US alone, the BASELINE government forecast over the next 10-years is an additional $20 trillion in NEW debt; and I’ve written that this will likely lead to major inflation, loss of reserve status for the dollar, and other major catastrophes.

But the social consequences of Inspired Idiots are equally great and cannot be ignored.

This is why it’s critical to understand that a Plan B is more than just protecting one’s savings and investments.

It’s about taking completely rational steps to reduce social and safety risks as well.

I’m not a pessimistic person. Quite the contrary, I’m wildly optimistic about the future and opportunities to come.

But I also recognize that Rule by Inspired Idiots presents vast and growing social risks that could become much worse over the next several years.

We’ll talk about some ideas for how to get started soon.

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What follows below is purely satire. But just barely. We hope you have a good laugh after a long week.

Texans have long complained about the pitiful condition of many of US federal highways that pass through their state.

But eventually the state government grew tired of waiting around for the Biden administration to repair the federal highways, prompting Texas Governor Greg Abbot to take matters into his own hands.

Last week the governor ordered the Texas Highway Department to begin fixing federal roads— starting with Interstate 45, which runs through both Houston and Dallas.

President Biden and his team responded with outrage and challenged the governor’s order in court, claiming that Texas has overstepped its Constitutional authority by repairing federal highways.

The Biden administration also claimed that Texas’s repairs were inhibiting the federal government from not doing its job.

“Look, we have loyal party members that we have been paying handsomely for several years to monitor the pothole situation in Texas,” said Secretary of Transportation Pete Buttigieg, in remarks he released just before leaving for six weeks of vacation.

“Right now they are conducting an environmental impact study on the potholes, which should be complete by 2027. Then we will form a commission to determine whether repairing the potholes will contribute to global warming. That decision should be reached by 2029, and, if they give the green light, road crews could start repairs as early as 2031. That’s totally reasonable.”

“And by the way,” Buttigieg added, “The people we have hired are majority two-spirit genderless pansexual undocumented migrant Muslims of color. So for Texas to be repairing the roads is, frankly, racist, misogynistic, xenophobic, Islamophobic, anti-LGBTQ+, and anti-science.”

The United States Supreme Court apparently agreed and ordered the State of Texas to cease its repair efforts.

But the Lone Star State has thus far refused to comply. And governors of dozens of other states have now expressed solidarity with Texas in what is now being dubbed the Pothole Rebellion.

In response, this morning President Biden sent a brigade of bulldozers and other heavy machinery from the US Army Corps of Engineers to re-introduce potholes onto federal highways in Texas.

“Don’t mess with America’s roads,” the President said this morning in a speech attended by 5 bystanders. “When the Louisiana… the Louisi. You know the thing! You need F-16s. Louisiana Purchase! Fair and square. You need F-16s. Or was it F-17? My dad always said, ‘Joey, it’s F-17.’ Or maybe he said B-fiffy-toos, they’re going to leave even bigger potholes.”

He then bent down and appeared to be playing with an imaginary dog before the press was ushered away.

For her part, Vice President Kamala Harris— who has been appointed the administration’s “Pothole Czar”— explained her view in a recent interview, saying:

“We’ve been to the potholes. We’ve been to the potholes. And you go in thinking about a decision, that you’re thinking, in this decision, about the potholes that you’re thinking about. And really, you know, it’s all about justice. We’re thinking about justice.”

Despite such perfectly cogent remarks, however, the Biden administration seems to be having a difficult time articulating its position.

And the public is left wondering— why is it so bad for Texas to repair federal highways within in its own state, especially if the federal government refuses to do so?

Anxious to turn the tide of public opinion, however, prominent media personalities on CNN and MSNBC have weighed in on the matter to steer Americans back towards the Biden camp.

“Texas repairing its own potholes is a threat to democracy!” railed MSNBC’s Rachel Maddow last night, before demanding that the Texas governor be brought up on criminal charges for endangering the environment.

Jen Psaki, former White House Press Secretary turned MSNBC starlet, went even further, saying, “Texas— and any states that support Texas— are engaging in insurrection. And these rebel states should therefore have their electoral college votes suspended in the 2024 general election. You know, to protect democracy.”

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After nearly 15 years of flying solo in this business, I’m excited to announce that Sovereign Man is officially joining forces with my old friend Peter Schiff.

(Our new venture is called Schiff Sovereign, and you can check out the new website at www.SchiffSovereign.com).

Peter, as you may know, is one of the most prominent and outspoken (and often controversial) voices in global economics; he’s a best-selling author and a regular on Financial TV… and he’s been doing this even longer than I have.

He’s also one of my closest friends. And given that we see the world so similarly, we decided to merge into this new venture.

In terms of our content and vision, absolutely nothing is going to change. Peter and I both recognize that the world is run by inspired idiots… people like Congressman Jamaal Bowman, whose latest genius idea is for the US government to pay $14 trillion in reparations.

I wrote to you about this moron yesterday; people like Bowman don’t care about silly details like “where will we get such an absurd amount of money?” They just want to “spend it into existence.”

So, this would be $14 trillion of debt, on top of the additional $20 trillion in debt that the government is already forecasting over the next 10 years, in addition to the current $34+ trillion national debt, in addition to whatever new crazy spending these inspired idiots think up next.

Peter and I both believe that such savage stupidity will create major consequences over the next several years.

If you fast forward ten years from now, the US national debt will be roughly $55 trillion. Interest payments could easily consume $3+ trillion per year of tax revenue, leaving very little money for anything else, including the military.

Social Security will have run out of money. And the US dollar will have probably lost its status as the world’s global reserve currency.

These aren’t wild conspiracy theories; rather they are based on the federal government’s own forecasts. But inspired idiots like Jamaal Bowman refuse to take these challenges seriously, and instead want to drag the country in the opposite direction.

Despite such significant consequences, however, Peter and I both believe that this is not the end of the world. In fact, we see a lot of opportunity ahead.

Think about it– if you can forecast major consequences and risks that are likely to occur down the road, you can set yourself up now to make sure they won’t have a major impact on your life.

You can even set yourself up to benefit from them financially.

This is the whole concept of a Plan B… which will remain at the very core of this organization.

Peter and I are both excited about the new venture, and about bringing tons of great content– including videos, podcasts, and emails– to our vast combined audience.

The only real difference is that the emails you receive will now be coming from “SchiffSovereign.com” instead of SovereignMan.

Oh, plus I’m also taking the opportunity to drop my longstanding penname (Simon Black) and will henceforth be using my real name, as you’ll see below.

Thanks again for being a reader; and Peter and I are both excited to continue raising the bar as high as possible.

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Chances are there will never be a formal inquiry about the insurrection of September 30, 2023.

Nancy Pelosi won’t hire a Hollywood producer to stage theatrical prime-time specials showing members of Congress grilling witnesses. The mainstream media won’t constantly wail about it for the next several years. And no one will ever be prosecuted. Ever.

And yet, the video footage is very clear: on September 30, 2023, a domestic terrorist blatantly committed an act of insurrection by attempting to subvert democracy in the Land of the Free.

His name is Jamaal Bowman. And he happens to be a congressman representing constituents in New York City.

That afternoon, Congress was about to vote on a key piece of legislation that would keep the government temporarily funded in order to prevent a shutdown that would have gone into effect only hours later.

But Bowman– and many members of his party– did not want the vote to take place, simply because they wanted to embarrass the opposition.

So, the guy deliberately pulled the fire alarm, causing the building to be evacuated. This isn’t some conspiracy theory– the cameras plainly showed Bowman pulling the fire-alarm, and he admitted to it.

Now, Bowman’s attempt to subvert democracy has been swept under the rug. But he is still finding plenty of new ways to be a complete idiot.

This genius’s latest crusade is to demand that descendants of former slaves receive, “at minimum”, a whopping $14 trillion worth of reparations.

Bear in mind that $14 trillion is more than half the size of the entire US economy, more than three times federal tax revenue. It’s an absurd amount of money… raising an obvious question: where in the world does he think this money will come from?

“Where did the money come from,” Bowman mused, “when Covid was destroying us?”

His answer? “We spent it into existence.”

Ladies and gentlemen, all of America’s financial problems have been solved by the economic mastermind, Jamaal Bowman. We simply have to create the money out of thin air and give it to people according to the wishes of politicians.

Let the good times roll! No one even has to work anymore, the government can just spend money into existence, and, poof, everyone can be rich.

Of course, when the government spent $4 trillion into existence during COVID to pay people to NOT work, we ended up with 9% inflation.

But don’t worry, Bowman says, the MINIMUM $14 trillion he’s proposing doesn’t have to be paid all at once. It could be paid over 5 to 10 years.

Oh. Phew. Well, that makes it so much better.

Of course, since the US government doesn’t actually have $14 trillion, they would of course have to borrow the money– most likely from the Federal Reserve, which would create that money out of nothing.

And this $14 trillion would be in ADDITION to the $20 trillion (which is optimistic) that both the White House and Congressional Budget Office estimate will be added to the US national debt over the next decade.

So, between the baseline $20 trillion in new debt over the next 10 years, plus Bowman’s genius $14 trillion idea, that would be $34 trillion in new debt over the next decade.

Bear in mind that the national debt right now is $34 trillion. So, this idiot is talking about doubling the debt in ten years.

Naturally, though, Bowman doesn’t think there will be any consequences whatsoever.

Now if we’re intellectually honest, Bowman’s idea has no chance of passing. But it does give us a very clear picture of the caliber of people who are in charge.

People like Bowman are inspired idiots. They have absolutely no idea how anything works yet expect the world to conform to their clueless fanaticism.

Amazingly, despite being a certifiable moron, 133,567 voters in the greater New York City area saw fit to elect this guy in a landslide victory.

(That said, Bowman’s district usually has bad taste in elected officials; it also first elected Chuck Schumer to Congress in the 1970s, as well as Charles Rangel— who railed against the wealthy only to be censured for 11 financial ethics violations, including tax evasion.)

There’s a good chance that more inspired idiots like Bowman are on the way.

History suggests that bad economic times and financial crises tend to give fanatical socialists the opportunity to win election.

They promise the world– free money for everyone, no consequences. It’s as ridiculous as the kid who runs for high school class president that promises to put Coca Cola in the water fountains. But plenty of voters are gullible enough to believe the lies.

Ironically, Bowman even acknowledged the stubborn inflation problem– because he said, more than likely, the actual reparation figure will have to be $16 trillion instead of $14 trillion, in order to adjust for inflation by the time the legislation passes.

So while yesterday I wrote that the deep challenges facing the US are still technically fixable… it’s important to point out that America is run by inspired idiots like Jamaal Bowman.

And they simply do not have what it takes to understand the dark problems facing the United States, let alone the ability to pass solutions quickly and rationally.

This guy literally pulled a fire alarm to prevent a critical vote to keep the government funded. And he was cheered by his colleagues.

Does anyone honestly think these people will negotiate like reasonable adults and make the vital, tough decisions to reform Social Security, or cut wasteful government spending?

Does anyone think they will be able to inspire confidence in America as the stewards of the world’s reserve currency? Does anyone trust them to prevent World War III?

So yes, America’s challenges are technically fixable. But with inspired idiots like Bowman running the show, it’s not looking good.

• As a final point, I want to reiterate that these challenges are not the end of the world.

Yes, inflation will likely be very severe in the future. The US dollar’s loss of reserve status will likely have substantial negative effects. And the consequences of Social Security running out of money in 2033 is incalculable.

But given that we can anticipate these risks, we can also do something about it. And taking action now, while there’s still time, can dramatically reduce their impact.

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“In the present position of Europe,” Napoleon wrote to his ambassador in Constantinople, “all my thoughts are directed towards England. . . nearly 120,000 men and 3,000 boats. . . only await a favorable wind to plant the [French flag] on the Tower of London.”

That was written in March 1804. And to be in Britain at the time– knowing that Napoleon was planning an invasion– must have been terrifying.

Britain was already a complete mess by 1804 anyhow:

1) There had been a terrible currency crisis only a few years before, prompting the government to suspend the gold standard. The end result was several years of nasty inflation which topped out at nearly 15%. People were furious.

2) Britain’s defeat in the American Revolution was not only a national humiliation, but incredibly costly; the national debt had soared, and government spending was still out of control by 1804. Taxes rose as a result, including a new income tax that was introduced in 1798.

3) British banks, including the infamous Barings Bank, were found to have indirectly provided loans to France… essentially helping to finance Napoleon’s planned invasion of Britain.

4) And to cap it all off, King George III was widely viewed as insane by contemporary physicians and had multiple bouts of delirium.

A mad king. Inflation. Out of control deficit spending. Steep taxes. Idiotic bankers. A looming invasion. It must have felt like very dark days in Britain in the early 1800s.

And yet they did find their way out from the depths of despair to eventually achieve unprecedented peace and prosperity.

Britain’s incredible reversal took time. Years. But eventually they defeated their enemy. They paid down their debt. They strengthened the currency. They remained the world’s dominant superpower. And they enjoyed a massive economic boom that lasted for decades.

I’ve written about this before because, frankly, it’s one of the few examples in history of a country abruptly reversing course and going from almost certain decline to unbelievable prosperity.

And I think it’s clear that the US is in this position right now.

Enemies are swarming around the world… including passionate ignoramuses within the US who seem hellbent on making the country weaker.

Wealthy activists like George Soros, for example, fund the political campaigns of ‘progressive prosecutors’ who release criminals onto the streets and refuse to prosecute crimes.

Combined with the geniuses in many city councils across the country who have de-funded their police departments and decriminalized shoplifting, the unsurprising result has been an alarming rise in crime.

Meanwhile, the people running the federal government roll out the red carpet for illegal migrants at the southern border, creating total chaos in most major cities.

They constantly issue idiotic regulations and legislation which make life more cumbersome and expensive for average Americans and small businesses– like the Labor Department’s recent 800-page proposal to make sure that interns can use a toilet which conforms to their gender identity.

Enemies are at the gate. And in some instances, including through repeated cyberattacks and other incursions, enemies have already breached the gate.

Yet the people in charge have weakened the military between their vaccine mandates, the humiliation of Afghanistan, and endless diversity & inclusion efforts. Recruiting and mission readiness are now both at historic lows.

They weaponize the justice system against their opponents and soften it for their friends and family. Rule of law has become a total joke, especially now that even high-ranking judges have become social activists whose rulings reflect their woke fanaticism rather than Constitutional law.

They suppress intellectual dissent and denounce those who disagree with them as “cave men”, “white supremacists”, “threats to democracy”, or “science deniers”. And their propaganda machine masquerading as mainstream journalism constantly feeds us these lies with a straight face.

They refuse to even acknowledge the looming fiscal crises they’ve engineered through decades of deficit spending and expensive entitlement programs. The country is only a few years from a financial cliff, yet they’re not even talking about it.

And to top it all off, the guy in charge appears to have lost his mind… just like King George III.

These are the circumstances of America today. And in many respects, they are similar to Britain in the early 1800s.

Could there be a similar, miraculous turnaround for the US? Is it possible that, ten years from now, America is firmly the world’s superpower with a booming economy and negligible debt burden?

Yes, absolutely. There is still a very narrow path forward.

It would include a complete overhaul of Social Security, plus deep cuts to expensive welfare programs which cost over $500 billion dollars each year.

I’d also anticipate a major asset sale to raise cash (and avoid going further into debt), i.e. an auction of millions of acres of government land.

It would also require serious de-regulation, which, combined with AI, could radically boost the economy, and create a productivity boom. This would not only increase economic prosperity, but also increase tax revenue and reduce the deficit.

These are just a few, extremely high-level points to illustrate that it is possible for the US to reverse course, just like Britain did in the early 1800s.

But the path to recovery is very narrow. And short. There simply isn’t much time remaining.

I’ve written before that the US probably only has around five years, if not less, before the government reaches the end of its financial rope. The national debt and entitlement spending are simply too high.

By the early 2030s, the only realistic way to ‘solve’ the fiscal problem will be full-blown default… on the national debt, on Social Security, and on just about everything else.

So, yes, there is a chance this problem can be fixed. But at the moment, I objectively see very little evidence that there’s any appetite to even discuss these problems, let alone make the difficult decisions to solve them.

And this is why it makes so much sense to have a Plan B.

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That infernal clanging you might have heard outside your bedroom window this morning was the sound of the proverbial can being kicked down the road, yet again.

With no agreement on spending anywhere on the horizon for the current fiscal year, the US Congress passed yesterday a ‘Continuing Resolution’ to keep the government temporarily funded for another six weeks.

This is nothing new; in fact, Congress has passed more than 50 Continuing Resolutions just since 2010, primarily because they almost NEVER manage to figure out the budget prior to the start of the fiscal year on October 1st.

But now there is far greater need to get it right than ever before.

I’ve been writing about this a lot lately, because, frankly, it is a critical issue. Failing to fix the spending problem spells disaster for the United States… and for the US dollar.

I wrote recently how the Congressional Budget Office projects the US government will add $20 trillion to the national debt through 2033.

$20 trillion is an absurd amount of new debt. And there are very few groups and institutions capable of loaning such a vast sum of money.

Social Security, for example, was one of the biggest buyers of US government bonds for several decades. And at this point they own roughly $3 trillion of the national debt.

But Social Security is now bleeding so much money that the program is no longer able to loan the Treasury Department any more money.

Foreigners also used to be highly reliable buyers of US Treasury bonds; even as recently as a few years ago, foreign ownership of US federal debt was more than 33%.

But foreigners are rapidly losing their appetite for US government bonds, and their ownership has plummeted to 22% very quickly.

Now, in many ways it’s good that the US no longer owes so much of its debt to foreigners.

Except that this only leaves one reliable institution remaining to buy up all that new debt: the Federal Reserve.

Remember, the Fed’s unelected Federal Open Market Committee (FOMC) holds periodic closed-door meetings to make decisions about the US money supply.

When they expand the money supply, they give it a very technical sounding name (like “Quantitative Easing”). But ultimately what this means is that they conjure trillions of dollars out of thin air with the click of a button.

It’s actually quite bizarre when you think about it; they make a few entries into an electronic ledger, and, poof, new money exists.

(It’s essentially the electronic version of having a printing press, which is why we often just say that the Fed ‘prints money’.)

The Fed then lends that money to the federal government, and the mechanism for this is buying US Treasury bonds.

Because the Fed has this special ability to print money– something which no one else is legally allowed to do– there is realistically no limit to how many bonds they can buy. If the government needs to borrow $20 trillion, the Fed has the capacity to print and lend $20 trillion.

And this is the key issue: when individuals, corporations, or even foreign governments buy US Treasury Bonds, they are buying those bonds with existing money that’s already in the system.

But when the Fed buys US Treasury Bonds, they do it by conjuring new money out of thin air.

And this new money creates more inflation.

This isn’t some wild theory; we all experienced the effects firsthand during the pandemic; the US government spent so much money in 2020 and 2021 that the national debt increased by more than $6 trillion.

The Fed created about $4 trillion of new money to buy the biggest chunk of that debt. And the end result of so much sudden, new money was 9% inflation.

So, if $4 trillion in new money caused 9% inflation, how much inflation will $20 trillion create? No one can predict the effect precisely, but it probably won’t be zero.

Remember, this $20 trillion figure for new debt is the government’s own forecast over the next ten years (and it might be on the low side).

But most of this amount, i.e. $15+ trillion, will accumulate over the next 5-7 years. So this is really the time frame for increased inflation risk… and serious threats to the US dollar.

Because with an explosion in US government debt– and renewed inflation– there is a very strong chance that foreigners will finally demand a change.

The United States and the US dollar have been in command of the global financial system ever since the Bretton Woods Agreement was signed at the end of World War II.

This agreement made the US dollar the world’s dominant reserve currency, forcing every nation, every major bank, every large corporation to hold US dollars for international trade and financial transactions.

The dollar’s reserve status is a very special privilege for the United States. But if the world finally demand a new, de-dollarized system, then foreigners would no longer need to hold US dollar assets– including US government bonds.

Even though foreign ownership of US debt is already dwindling, losing reserve status would cause that percentage to drop very quickly. And the Fed would need to print even more money to make up for the loss of foreign investors… causing even more inflation.

Now, I’ve written before that, at least for the moment, there are still a handful of ways that the US could navigate out of this mess. But options are narrowing and the window to act is closing.

Watching Congress kick the can down the road yesterday, yet again, rather than make tough decisions or even DISCUSS necessary actions like entitlement reform, etc. does not give me much confidence that they will figure this out.

And if no action is taken, the scenario I outlined above is likely to play out over the next 5-7 years.

Fortunately, this gives every intelligent, independent-thinking individual a healthy window to prepare for what’s coming.

What I wrote above is not the end of the world. I am not predicting doom and gloom. I am, however, making a strong case for an inflationary future.

But there is plenty we can do now to prepare so that future inflation won’t have a significant impact on our lives.

Energy prices, for example, could likely soar. And yet many energy producing companies are remarkably cheap right now. This is a pretty good hedge.

Gold is also worth discussing; even though it’s near an all-time high, there’s a good chance that the future financial system I mentioned earlier becomes based on gold, rather than any single currency.

And if that happens, we could easily see $10,000 gold or more, likely by the end of the decade.

More on that soon.

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Tony Fauci should be in a prison cell in Wuhan right now given how much responsibility he bears for destroying US government finances.

This guy was one of the chief architects of the hysteria that took over the US (and much of the world) back in 2020.

Yet he now admits, according to recent Congressional testimony, that his infamous six-foot social distancing edict “sort of just appeared” and was “not based on any data”.

But it was precisely those sorts of claims that prompted politicians to close schools and business across the country, and to pay people to stay home and NOT work.

The financial results of this insanity are clear; the US national debt increased by an unbelievable $6.5 trillion during 2020 and 2021. And while there is a lot of blame to go around– politicians had ample time to find their intellectual courage– Fauci is extremely culpable.

Now, the US fiscal situation was already in bad shape prior to 2020. I remember back in 2019, when the economy was booming and federal tax revenue was at a record high, the US national debt STILL increased by more than $1 trillion that year.

And I wrote to our readers wondering– if the United States government still manages to add $1 trillion to the national debt when everything is awesome, what’s going to happen when there’s a real emergency?

Well, Tony Fauci gave us the answer the following year.

But even now that Covid is over, government overspending is still extreme. And it’s not getting any better.

I’ve been writing about this a lot lately, but today I need to explain where this is headed, and why it’s so inflationary.

Consider that, according to the Congressional Budget Office’s own forecasts, the United States will add another TWENTY TRILLION DOLLARS to the national debt through 2033.

Now, 2033 is a REALLY important date, because it also happens to be the year that Social Security’s primary trust fund completely runs out of money.

Social Security is funded in large part by workers who contribute a portion of their paychecks into the program through the FICA/payroll tax.

Social Security uses that tax revenue to pay monthly benefits to retirees across the country. And any surplus left over is rolled into a special trust fund.

Over time, the accumulated surplus in the trust fund amounted to roughly $3 trillion dollars; and all that money was invested in interest-bearing government bonds.

Between the payroll tax contributions and the trust fund’s interest income, Social Security always ran a healthy surplus.

Until recently.

Starting in 2020, there were so many retirees receiving Social Security benefits that the program barely broke even for the year.

The following year, 2021, was even worse. Social Security ran a deficit for the first time ever and had to dip into its trust fund to make ends meet.

This trend kept up in 2022 and 2023 as well. In fact, the program loses so much money now that its trust fund is shrinking rapidly, and Social Security projects it will fully be depleted by 2033.

One of the many, many reasons this is so important is because Social Security will no longer be a BUYER of US government bonds. It will be a SELLER. And that’s a big deal.

For the past 90+ years, Social Security always invested its annual surplus into government bonds… which essentially gave politicians an extra pile of cash each year to spend.

But now this cash flow will reverse. Instead of Social Security sending its surplus to the Treasury, the Treasury Department now must repay the debt that it owes to Social Security.

This nearly $3 trillion repayment will happen gradually over the next ten years. And then, of course, in 2033, Social Security will be out of money and require a multi-trillion-dollar bailout.

Unfortunately, the Treasury Department doesn’t have the money to repay this $3 trillion debt, let alone another $5 to $10 trillion to bail out Social Security.

This means that, in addition to the $20 TRILLION in new debt that the CBO is projecting over the next ten years, the Treasury Department will have to borrow an ADDITIONAL $3 trillion to repay Social Security. And then even more to bail out the program

(So, this means that the government will need to find someone to buy $23++ trillion of government bonds over the next ten years… which is just an absurd amount of money.

And it will have to do this at a time when it has lost some of its biggest investors; again, Social Security can no longer afford to buy bonds. And many of America’s biggest foreign bondholders, including China and Japan, are also not buying any more bonds.

So, who is going to buy all this new debt?

The only realistic option is the Federal Reserve. And this is nothing new for the Fed.

During the pandemic, for example, the Fed magically created about $4 trillion in new money, then used that money to buy US government bonds.

Of course, their $4 trillion in new money also helped create the highest inflation in four decades.

So, if buying $4 trillion of government bonds led to 9% inflation, what’s going to happen when the Fed has to create $20+ trillion to buy government bonds?

And by the way, the CBO’s $20 trillion estimate on new government debt is probably a bit too optimistic. It assumes there will be no new war, no pandemic, no national emergency, and no idiotic legislation that causes even crazier spending.

If any of those were to happen over the next decade, the increase to the national debt would be even higher… meaning the Fed would have to create even MORE money.

$20+ trillion is a ton of debt. And with no other realistic option other than the Federal Reserve to buy that debt, it’s easy to make a very strong argument for substantial inflation a few years down the road.

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Do you hear alarm bells ringing? Neither do I. And that’s a huge problem.

Granted, global power fanatics at the World Economic Forum just kicked off their 5-day cocaine and sex party festival in Davos, so they’re too tied up at the moment to notice this looming disaster.

And the White House is obviously too preoccupied with wrecking the economy and keeping Hunter Biden out of jail.

It’s clear that just about everyone is ignoring what should be the biggest news of the day… an ominous milestone that may just signify the point of no return. I’ll explain–

Recent data published by the Congressional Budget Office show that, last year, “Discretionary Spending” in the Land of the Free totaled $1.7 trillion dollars.

Remember, “Discretionary Spending” is one of the three broad categories of federal spending; the other two are interest on the debt and mandatory spending.

Interest on the debt and mandatory spending (which includes programs like Social Security and Medicare) are like your monthly mortgage payment– they get sucked out of the Treasury’s Department’s bank account every month. Congress doesn’t even debate or discuss those categories.

All of the haggling and bickering and politicking in Congress is purely over discretionary spending. And it includes almost everything else we think of as ‘government’, i.e. military, national parks, homeland security, embassies around the world, etc.

So here’s what’s remarkable:

Again, discretionary spending totaled $1.7 trillion last year– which includes US military expenditures.

However, the other spending categories– mandatory spending (Social Security, Medicare, etc.) and interest on the debt– were so vast that the federal government still had an enormous deficit for the year.

How enormous? $1.7 trillion enormous.

Look at those numbers again: Discretionary spending for the year was $1.7 trillion. The fiscal deficit for the year was also $1.7 trillion.

Conclusion? The government needed to eliminate ALL discretionary spending last year– including the military– in order to balance the budget.

Think about that. US spending is now so high that nearly everything we think of as government– from the United States Marine Corps to Yosemite National Park– needs to be completely eliminated in order to make ends meet.

Alarm bells should be ringing everywhere. But they’re not. Hardly anyone in power has even noticed.

Now, the US government has obviously been running huge deficits for decades. But it was rarely this bad.

In Fiscal Year 2018, for example, discretionary spending was $1.3 trillion. But the budget deficit was much less– about $700 billion. Sure, that was bad. But not like 2023.

Going back even further, to 2007, discretionary spending was about $1 trillion. But the budget deficit was $162 billion that year– i.e. bad, but manageable.

This problem has clearly become MUCH worse over time. And the government’s own projections show the trend will continue.

White House and Congressional Budget Office estimates forecast that this current fiscal year (FY24) may be slightly better; they’re projecting $1.6 trillion in discretionary spending… but ‘only’ a $1.425 trillion deficit.

But within about six years, the federal budget deficit will exceed ALL discretionary spending… every year.

In other words, by 2031, the US could permanently cut all discretionary spending, including the military, and STILL have a budget deficit.

As I’ve discussed many times before, there are very few options in this scenario.

One option is to default on the debt. But this is extremely unlikely given that it would cause a catastrophic financial crisis around the world.

A second option is to dramatically slash (and eventually eliminate) key programs like Social Security, Medicare, etc. But few politicians have the willingness to do so.

A third option would be an enormous asset sale, i.e. selling off Yellowstone National Park to China and other foreign investors. I will give you a lot more detail about this soon and show you exactly what the US owns… and why even such a radical approach still wouldn’t solve the problem.

Most likely the US will resort to the same tactic that bankrupt governments have relied on for centuries: inflation.

Septimus Severus was Roman Emperor in the 190s AD and found himself in a similar position; Rome’s fiscal deficit was massive, and he didn’t have enough money to pay his troops. So over a four-year period, he debased the Roman denarius coin from 81.5% silver, down to 54% silver.

Debasing the coinage meant that he could produce more coins with less silver… and hence pay his soldiers with increasingly worthless money.

The United States will likely do the same thing but updated for modern times; the Federal Reserve will step in with a new ‘quantitative easing’ program that creates trillions upon trillions of dollars out of thin air.

This money will be used to finance US government deficits at artificially low (perhaps even negative) interest rates.

But just like the debasement of Roman currency, this approach will eventually create serious inflation in the US.

Remember– I’m talking about a few years from now, not today. Inflation has fortunately been falling over the past several months, and I certainly hope that trend continues.

But if you look at the government’s own forecasts, it’s clear that there are very few options other than inflation after about 4-5 years from now, if not sooner.

This isn’t some wild, pessimistic conspiracy theory. I’m talking about the actual results from the last fiscal year, and the government’s own forecasts which project a terminal fiscal crisis by 2031.

That means it’s absolutely critical to look at these problems rationally… because politicians certainly aren’t doing that.

But there are solutions. If the data show that inflation could be a major problem down the road, then you still have a few years to plan for it and reduce its impact on your life.

And one of the best ways to do that is to own high quality real assets, i.e. scarce, critical, valuable resources that cannot be conjured out of thin air by central bankers or politicians.

We’ll have a lot more on this soon.

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Relax, it’s satire… Although it is getting harder to tell.

Pentagon Informs White House it Nuked Russia Three Weeks Ago

In a casually delivered press release, the Pentagon confirmed today that it had, in fact, launched a nuclear strike against Russia three weeks ago, but had simply forgotten to loop in the White House on this minor development.

“It’s been a busy month,” shrugged Defense Secretary Lloyd Austin, as he sipped his morning coffee, surrounded by a room of shell-shocked reporters. “You know how it is. Emails pile up, nuclear codes get entered, and before you know it, you’ve initiated World War III without telling the boss.”

The revelation came to light only after an aide to President Biden, while browsing Twitter, stumbled upon a meme about the nuclear apocalypse and questioned its accuracy.

The White House says they are “reviewing the situation” and has added a new rule to their daily briefings: “Check if we’ve nuked anyone.”

But when asked by reporters, President Biden seemed to downplay the seriousness of the situation.

“I’ve nuked countries before. This isn’t America’s first nuclear war, after all. In fact my son, Beau, died in a nuclear strike after he founded the Space Force,” the President said, before wandering aimlessly off stage.

Pentagon officials are not being forthcoming with details on whether the strike was intentional or not.

But we do know that the Defense Department’s highly-trained nuclear launch team— which is responsible for securing the nuclear codes and executing launch instructions— was suddenly replaced last month after right-wing extremists were discovered in their ranks.

One long-time member of the nuclear launch team, for example, was found to have shared a social media post last Independence Day saying, “Happy Birthday, America.”

And another veteran member of the launch team was caught displaying an American flag on his front porch.

These are both “well-known extremist dog whistles” according to White House press secretary Karine Jean-Pierre, which resulted in the President suspending the entire nuclear launch team roughly one month ago.

He ordered that the old team be replaced by a new team comprised entirely of pansexual persons who identify as Muslim women of Palestinian descent.

It turns out that the military ranks were very thin on pansexual persons who identify as Muslim women of Palestinian descent. So the Pentagon had to hastily recruit and train a new, completely inexperienced team in order to comply with the President’s demand.

The nuclear strike on Russia took place roughly a week after the new launch team was in place. However the White House insists that the team’s inexperience has nothing to do with the strike.

“It’s racist, homophobic, and misogynistic to suggest diversity in our ranks had anything to do with a nuclear strike which may or may not have been an accident,” Press Secretary Karine Jean-Pierre said.

When pressed for more details on if it was intentional, Defense Secretary Austin commented, “Never let the enemy know your next move. Let our enemies unequivocally understand that the same thing, or something different, may or may not happen to you, either intentionally, or unintentionally. That is how to project strength.”

New York City Hires Illegal Immigrants to Teach: “Already in the Schools Anyway”

An ingenious solution to kill two birds with one stone, or a recipe for disaster?

New York City has decided to bring on hundreds of illegal immigrants to fill vacant teaching positions.

As Chancellor David C. Banks explained, “These undocumented migrants are already in the schools anyway, being housed in the gymnasiums and cafeterias due to lack of space elsewhere. We figured, hey we have a teacher shortage right now. So we’ve hired 230 immigrants across the city.”

These immigrant teachers will also be allowed to sleep in their classrooms.

“The benefit there,” Banks said, “is unprecedented access to teachers. Parents can simply knock on the door at any time, which especially helps the disadvantaged who may not be able to afford Internet and email.”

We asked one of these new teachers how he felt about the program, to which he replied, “Que? No hablo ingles.”

But Chancellor Banks was ready for any skepticism on language barriers.

“It will be the duty of students to understand the native language of their teachers. Anything else would just be extremely xenophobic.”

In addition, the city plans to replace school bells with live Mariachi bands, in order to employ even more disadvantaged migrants. They too will be allowed to live in the schools.

In fact, plans include an entire school/ migrant camp hybrid moving forward.

“These migrants, they have so much to teach our kids,” Banks said. “I can’t think of a much more culturally enriching experience than to walk through and experience a migrant camp on the way to school, while practicing sports, and on the playgrounds. We couldn’t design that kind of immersive curriculum if we tried.”

Indeed, several unregistered taco and empanada food stands have sprung up in the school parking lot over the past week. But teachers and students don’t mind.

“The quality of the food is way better than what they serve in the cafeteria,” one teacher told us. “And it’s a fraction of the price.”

Meanwhile the girls’ volleyball team finds the crowds at their practices quite encouraging.

“I’m actually putting in extra effort, because I know the migrants in the stands are ready to whistle and cheer with each play. They’re super sweet, one even said, ‘¡Mamacita, estás que ardes!’ which I think means, ‘your mother would be proud.’”

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Earlier this week, leaders from both major parties in the Land of the Free announced a grand bargain that, in theory, should avoid a government shutdown later this month.

According to their agreement, Congress will supposedly cap its ‘discretionary’ spending at $1.6 trillion for Fiscal Year 2024. That’s down from about $1.7 trillion in FY23.

So, yes, technically this $100 billion reduction represents about a 6% decrease over last year. And if we want to be even more cheerful about it, we could call it a 9% decrease on an inflation-adjusted basis.

If we’re being intellectually honest, that’s a step in the right direction for the US. A tiny, tiny, tiny step in the right direction.

How tiny, you ask?

Well, pretty much non-existent; the agreement to cut spending is an almost entirely symbolic gesture that won’t do much good.

Before we go further, it’s important to understand that government spending is generally categorized into three distinct buckets.

The first bucket is interest on the debt. And, at least for now, this is non-negotiable. It has to be paid.

And I don’t mean it ‘has to be paid’ in the moral sense that “America always pays its debts.”

I mean, legally, interest on the debt is automatically paid. Just like your monthly mortgage, interest payments on the US national debt get automatically sucked out of the Treasury Department’s bank account.

The second bucket is what’s known as “Mandatory Spending”, which includes programs like Social Security and Medicare. Just like the interest bucket, Mandatory Spending gets sucked out of the Treasury Department’s bank account every month.

Those two buckets– Interest payments and Mandatory Spending– constitute the vast majority of US federal spending.

The third bucket is known as Discretionary Spending… because it’s at Congress’s discretion.

Discretionary spending is what results from all their debates and arguments over annual appropriations, for everything from the military to the national parks. It also includes supplemental spending for pandemic bailouts, Ukraine, Hunter Biden artwork, etc.

So, the announcement this week was about a $100 billion reduction to Discretionary Spending.

But consider that Mandatory Spending (which Congress doesn’t touch) on Social Security alone surged $281 billion last year… and will likely increase by a similar magnitude this year.

So that single increase to Mandatory Spending will more than wipe out the entire $100 billion Discretionary Spending reduction.

Easy come, easy go.

Then there’s interest on the debt, which increased by $177 billion last fiscal year. It will probably increase by at least that much this year… which, again, more than wipes out the entire $100 billion in Discretionary Spending reduction.

If you drill down into the numbers, you’ll see pretty clearly that there are very few credible paths forward for the United States.

One path is to drastically… and I mean almost entirely… slash Discretionary Spending.

Look at it this way– last year’s Discretionary Spending was $1.7 trillion. The government is claiming that their annual budget deficit last year was also $1.7 trillion.

This means that, in order to balance the budget, they would have to almost completely eliminate ALL discretionary spending. No more military. No more Homeland Security. No more government.

In other words, one of the only ways to balance the budget would be a Zombie Apocalypse in Washington DC.

The second path forward is to make major cuts to Mandatory Spending… which would involve politically unpopular overhauls to Social Security and Medicare.

Few politicians have the courage to do so. And given that they can’t even agree on basic priorities for Discretionary Spending, it seems unlikely that they’ll come together for more difficult cuts to Mandatory Spending.

This leaves the third path forward: to prioritize economic growth and productivity… by slashing regulations and actually make it easy once again for people to do business.

And this approach would really work. If real (i.e. inflation-adjusted) economic growth were 3% or even 3.5%, instead of 2%, then America’s fiscal woes would be over within a decade. And this is totally achievable.

With just 3% real growth, tax revenues would soar, the budget would be balanced, and the national debt would be trivial in comparison to the size of the US economy.

Seems like the obvious approach, right? Except that they’re doing the opposite… foisting even more regulatory burdens onto small business.

It’s no surprise that tax revenue last fiscal year was down 9% from the year before; that’s a testament to not only a weakened economy, but the Byzantine regulatory state that they’ve created over the past few years.

The most recent example is the Corporate Transparency Act (CTA), the completely idiotic and destructive piece of legislation that I discussed last week.

The CTA exists because the government thinks that its tax revenue should be higher. And they’re right– federal tax revenue SHOULD be higher.

But the government never points the finger at themselves. They never conclude that dwindling tax revenues are the result of their criminal mismanagement of the economy, including all the excessive regulations which debilitate business.

No, to them, the only possible reason why tax revenues are down is because of criminal tax evasion. So, their solution is to create even more regulation which forces business owners to file information reports to the government.

The even more pathetic part is that US businesses already must provide this information to the IRS.

But Congress doesn’t care. Instead, they demand that taxpayers provide the exact same information– but in a different format– to a separate agency within the Treasury Department.

Saddling small businesses with more paperwork is hardly the sort of thing that is going to make the US economy more productive.

So, they’re not going to eliminate Discretionary Spending. They’re most likely not going to find the courage or wisdom to cut Mandatory Spending.

And it sure as hell doesn’t look like they’re going to prioritize growth and productivity.

That leads to the fourth and final option: inflation… which, from a historical perspective, is what almost ALWAYS happens in these scenarios.

We’ll talk a lot more about this soon.

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The top two headlines in today’s Wall Street Journal say it all: The first one is “US Inflation Accelerated in August as Gasoline Prices Jumped”. And the second explains that “Exploding Budget Deficits” are here to stay. These are technically two different stories about two separate issues. But I’ll show you how they’re related, and […]

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By the late 1800s, the South Pacific island chain of Samoa faced an existential crisis. After squabbles between German, British, and American forces over the previous decades, Germany had taken the western islands of Samoa, and asserted its unpopular control over the people. The eastern islands, however, were controlled by the United States with a […]

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In a world full of unimaginable absurdity, we spend a lot of time thinking about the future… and to where all of this insanity leads.

“Future Headline Friday” is our satirical take of where the world is going if it remains on its current path. While our satire may be humorous and exaggerated, rest assured that everything we write is based on actual events, news stories, personalities, and pending legislation.

September 8, 2024: Fauci Face Condom Sales Fall Flat in First Week

In early 2023, a leading British medical research non-profit called the Cochrane Collaboration published a comprehensive analysis of 78 different studies which looked at whether or not face masks were effective in controlling the spread of COVID-19.

Cochrane is a non-partisan organization which focuses purely on data, and they’re funded by national governments, including Britain’s National Institute for Health and Care Research, Germany’s Ministry of Health, and the US National Institutes of Health.

The results of the Cochrane study were clear; the Oxford epidemiologist who led the analysis stated unequivocally, “There is just no evidence that [masks] make any difference. Full stop.”

Yet as COVID-19 cases started to rise in September of 2023, Dr. Anthony Fauci— who was no longer part of the federal government— still appeared on national television to recommend that Americans mask up… despite the total lack of evidence that masks worked.

Then the so-called “election strain” of COVID-19 continued to spread across the world throughout late 2023 and into 2024, leading many to fear new government mandates for public masking.

President Biden is still reportedly masked up and camped out in the White House basement, more than 12 months after his wife Jill came down with the election strain in September of 2023.

The CDC, however, has been surprisingly candid in admitting that a new approach to masking is needed.

CDC Director Mandy Cohen said this morning that “The Cochrane study may show that masking doesn’t provide any benefit. But it doesn’t prove that masking hurts. So still we think people should do it.”

“The one risk we have to balance, of course,” the director continued, “is the learning development of small children. Masking prevents them from seeing faces of their peers and adult caregivers.”

“So today I am excited to announce a new partnership with our old friend Dr. Anthony Fauci. The CDC will be recommending his new product called Fauci’s Face Condoms!”

According to product details, Fauci Face Condoms provide a clear latex barrier which fits snugly over the head and neck so that facial features and lips can still be seen clearly, while the air reservoir tip above the head contains a filtration system.

And while the CDC says it hasn’t yet had any time to study the effectiveness of the new Face Condoms, they point to the company’s slogan: Hey, it couldn’t hurt!

Fauci’s Face Condoms are available at Target, CVS, and Walmart and come in a variety of activism branding, including Pride, Support Ukraine, and Black Lives Matter.

But just one week after launch, stores report underwhelming sales of the Face Condoms. Target has even moved the product to its Halloween costume section after some customer backlash.

Dr. Fauci commented, “Obviously some right-wing extremists and anti-science cave-men will be adamantly against anything that might help put this pandemic behind us. After all, an attack on my face condoms is an attack on science itself.”

Fauci continued, “But I’m sure the majority of Americans will be happy to follow the science once they are educated on the benefits of my Face Condoms.”

When questioned on the lack of scientific proof that the Face Condoms work, Fauci responded with the company slogan, “Hey, it couldn’t hurt,” and winked.

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When the first shot rang out at Dealey Plaza on November 22, 1963, most bystanders didn’t even realize that it was the sound of gunfire.

But Texas Governor John Connally was an avid hunter. He recognized the sound, sensed danger, and turned behind him to check if President Kennedy was OK.

Moments later, the second shot was fired, striking Connolly in his back. And as he looked down and saw his blood-soaked shirt, he shouted, “My God, they’re going to kill us all.”

President Kennedy, of course, did not survive. But Connally eventually made a full recovery. And, having achieved near mythical status in the State of Texas, he was re-elected twice more as governor.

Then, in 1971, President Richard Nixon asked Connally to be Treasury Secretary. Connally accepted the post despite having almost zero experience in finance or economics. And when questioned later by reporters about his obvious lack of credentials, he famously quipped, “I can add.”

(Connally later declared personal bankruptcy.)

The US economy was in bad shape at the time; Nixon’s predecessor, Lyndon Johnson, had spent aggressively on the Vietnam War while simultaneously spending billions of dollars– a prodigious sum in the 1960s– on education, anti-poverty, and welfare programs.

And inflation rose to around 6% thanks in large part to this excessive government spending.

Developed countries around the world began to rapidly lose confidence in the US dollar and the American government’s ability to manage its finances. And the Treasury Department started receiving demands from foreign governments who wanted to redeem their US dollars for gold.

Nixon was in a bind about how to fix the economic mess. And it was Connally– full of Texas swagger (and little else)– who convinced the President to formally end the dollar’s convertibility into gold.

Nixon made the announcement on Sunday night, August 15, 1971, unilaterally ending the “Bretton Woods” international monetary system that had been in place since 1944.

The announcement became known as the “Nixon Shock”. And “shock” is probably the right word. Foreign governments were in a panic; their entire financial system had been snatched away, overnight, without any warning. And politicians don’t tend to handle uncertainty very well.

This is where Connally stepped in yet again to smash foreign governments in the face with their new reality. “The dollar is our currency,” he told his fellow finance ministers in late 1971, “but it’s your problem.”

Connally was essentially pointing out that the rest of the world didn’t have an alternative to the US dollar. Nearly every nation on earth conducted international trade in US dollars. And because they had no other alternative, the US government could do whatever it wanted… including rack up huge deficits and painful inflation.

And that’s what happened. With no reason to restrain itself or have any financial modesty whatsoever, US government spending soared. Deficits piled up year after year, leading to a particularly nasty episode of stagflation in the 1970s.

Connally was a major architect of this mess, leading one of his critics to later say, “He ain’t never done nothin’ but get shot in Dallas. . .”

In fairness to Connally, that judgment isn’t entirely true. One of his lasting legacies was scaring the world into setting up an alternative to the US dollar.

Europeans in particular were freaked out by the Nixon Shock… so much, in fact, that western European nations eventually banded together to form their own currency as an alternative to the US dollar; today the euro has about a 20% share of global financial reserves.

But with a 60% market share, the US dollar is still dominant. For now.

More than fifty years after the Nixon Shock, the US government still has no financial restraint. Annual deficits easily top $2 trillion, nearly 10% of GDP. America’s fiscal situation is so bad that, within the next decade, 100% of tax revenue may be consumed just to pay for mandatory entitlements (like Social Security) and interest on the debt.

If that weren’t bad enough, the Treasury Department has also made a habit of weaponizing the US dollar, i.e. threatening individuals, businesses, and foreign governments to bend to its will or else be cut off from the global financial system.

It’s no wonder that there’s been so much in the news lately about alternatives to the US dollar. Late last year, for example, Saudi Arabian officials said that they were “open” to selling oil in a currency other than US dollars (i.e. Chinese yuan).

And just a few weeks ago, members of the “BRICS” alliance expanded their membership in an effort to directly challenge the dollar’s dominance.

Now, I’ve been writing about the eventual decline of the US dollar for several years. More than a decade ago, for example, I argued that the market would seek an alternative to the US dollar “gradually, rather than suddenly”.

That was considered a highly controversial assertion back then. Today, the dollar’s decline is a mainstream view.

But even though I held this view way before it became popular, I have to be contrarian now and say the burgeoning “BRICS” agreement is NOT the end of the dollar.

The BRICS members include Argentina– a country that is perennially in a state of default and hyperinflation; Ethiopia, which has a GDP per capita of just $925; and South Africa, a borderline failed state.

China is obviously the anchor of the BRICS alliance. But at the same time, no one really trusts the Chinese government. And America, for all of its problems, is still viewed as a more reliable steward of the global reserve currency than the CCP… whose threats against Taiwan are not inspiring confidence.

What is clear is that the international financial order is going to change. The United States can no longer impose the “Connally Doctrine,” i.e. the dollar is our currency but your problem.

This is hardly controversial anymore. The US cannot have a gargantuan debt, uncontrolled spending, incompetent leaders, and a weakened military, and yet still expect to be the world’s dominant reserve currency.

I think a far more likely scenario is that there will be an event… probably some time between 2028 and 2035, that triggers a formal agreement to reset the global monetary system.

It could be Social Security running out of money (currently projected in 2033), which requires Treasury to borrow $10+ trillion to bail it out. Or perhaps another debt ceiling showdown that results in a default on the national debt. Or it could be another major banking crisis. Or even a major global war.

Whatever the cause, I suspect this event will compel leading nations to call a formal conference, similar to the Bretton Woods conference in 1944 that established the first modern financial order.

The US will be much weaker at that point. But it will still have a seat at the negotiating table.

Today, BRICS is a very loose affiliation of countries who don’t trust each other. This isn’t going to replace the dollar.

My view is that whatever agreement ultimately knocks King Dollar from its throne will have the US Treasury Secretary’s signature on it.

But regardless of how it plays out– and what ultimately triggers it– the dollar’s decline remains an extremely likely outcome.

Technically the dollar’s problems are still fixable. The national debt is fixable. All problems are fixable.

However America’s pitiful leadership seems to lack both the ability and desire to enact real solutions. And as long as this trend holds, it makes sense to plan on the dollar’s eventual decline as the world’s primary reserve currency.

And this means real assets… and in particular exposure to gold.

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In a world full of unimaginable absurdity, we spend a lot of time thinking about the future… and to where all of this insanity leads.

“Future Headline Friday” is our satirical take of where the world is going if it remains on its current path. While our satire may be humorous and exaggerated, rest assured that everything we write is based on actual events, news stories, personalities, and pending legislation.

September 1, 2029: Fed’s New CDBC “FedCoin” Hacked After Just Six Days

Neither the Treasury Department nor Federal Reserve have commented on the issues with the brand-new FedCoin system since it went offline over 36 hours ago.

But what we have been able to gather so far is that the problems started six days after the launch of the highly touted digital currency meant to replace the US dollar.

Rumors on the dark web began to swirl that a hacker group calling itself Reserve Raiders had infiltrated the FedCoin servers, and transferred itself $10 billion.

One alleged member commented, “FedCoin’s security was equivalent to one of those spring locks you can open by sliding a credit card between the door. It has eight-months-from-retirement written all over it.”

Another added, “We could have taken any amount we wanted— just kept adding zeros. We stopped at $10 billion because we honestly just felt bad. And of course if we conjured too much money out of thin air to steal, it would just hyper-inflate and be worthless to us.”

Only a few hours later, the entire FedCoin infrastructure stopped functioning.

That includes checking and savings accounts, as well as FedCoin’s online bond marketplace. The status of the already purchased bonds is unclear, but off-market indicators suggest people are lining up to panic-sell them as soon as the system comes back online.

Personal wallets, which the Fed airdropped $20 worth of FedCoin into for each user who downloaded the wallet before the launch on August 25, are also offline.

“I figured I’d just use the $20 to buy a pack of gum,” one user told us outside of a 7/11, “I was able to open the app, but the transfer never went through. I just kept getting a timeout error message.”

Early institutional adopter JP Morgan swapped over $200 billion worth of deposits in traditional USD for the same amount in FedCoin. Now bank customers are wondering how secure the new digital currency is.

JP Morgan has told customers that the Fed has privately assured them that all deposits are safe. “And anyway,” the bank’s CEO commented, “if the money was somehow lost, the government would simply print more to bail us out. We’ve been prime supporters of their FedCoin project, they wouldn’t leave us hanging.”

Some experts have speculated that because of the traceability of FedCoin, the hackers would be unable to spend it.

However, others argue that it would not be difficult to use a “tumbler” to swap out the stolen funds for legally acquired FedCoin. This, however, would require a large and complex operation of laundering— unless, of course, privately held funds are as easily hacked as the Federal Reserve’s system.

That is why many speculate that the entire FedCoin system went offline— in a desperate attempt by the government to freeze the funds before any further damage could be done.

But again, we won’t have definite answers to any of these questions until the Treasury and Fed decide to finally issue a statement.

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I’ll never forget the first time I met “Captain No”. I was a young, 17-year old new cadet at West Point about to take my first Physical Fitness test– a semiannual requirement in the military that involved a bunch of push-ups, sit-ups, and running. The physical fitness test was proctored… meaning that a veteran Army […]

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In a world full of unimaginable absurdity, we spend a lot of time thinking about the future… and to where all of this insanity leads. “Future Headline Friday” is our satirical take of where the world is going if it remains on its current path. While our satire may be humorous and exaggerated, rest assured […]

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Gold has its merits. It has been valuable for thousands of years, and has some industrial applications as well. But holding a kilo of gold in your hand, all you can really do is admire it, and appreciate that it is a great store of wealth. Holding a kilo of uranium, you have in your […]

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In a world full of unimaginable absurdity, we spend a lot of time thinking about the future… and to where all of this insanity leads. “Future Headline Friday” is our satirical take of where the world is going if it remains on its current path. While our satire may be humorous and exaggerated, rest assured […]

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On December 18, 1912, a grizzled 75-year old J.P. Morgan was summoned to Washington DC and forced to appear before the Bank and Currency Committee of the US House of Representatives. The early 1900s was an era of rising socialism in the United States (similar to today); and there was plenty of mainstream media back […]

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With a current annual budget deficit of $1.6 TRILLION – set to hit $2 trillion by the time the fiscal year ends in September – the US Federal Government is putting drunken sailors everywhere to shame. At the end of the 2019 fiscal year (just before Covid-1984 hit), the US national debt was $22.7 trillion. […]

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By the time Wang Mang seized the imperial throne of China’s Han dynasty in the year 9 AD, he had already been a long-standing politician and government bureaucrat with decades of experience. Not that Wang’s experience was especially helpful to the people of China. As a seasoned politician, Wang’s biggest skills were setting up his […]

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“Scary” is the word that the Wall Street Journal used this weekend to describe the looming financial crisis in the US. They said bluntly, “Washington has laid the seeds of a crisis that Wall Street can no longer ignore.” I’ve been writing about this for 14 years; back then, it was highly controversial… almost conspiratorial… […]

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In a world full of unimaginable absurdity, we spend a lot of time thinking about the future… and to where all of this insanity leads. “Future Headline Friday” is our satirical take of where the world is going if it remains on its current path. While our satire may be humorous and exaggerated, rest assured […]

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Looking to make Argentina your second home? The country’s Rentista Visa program offers retirees and folks with passive income (e.g. from property rentals) the ability to obtain residency there. Plus, you can apply for Argentinian citizenship after just two years of residency. Let’s get into the details below… A closer look at Argentina’s Rentista Visa […]

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Another day, another downgrade for America. Today it’s Moody’s Investor Service, one of the three major credit rating agencies alongside Fitch and S&P. Last week Fitch downgraded the sovereign debt rating for the United States of America. And late yesterday, Moody’s downgraded the ratings of several US banks. The implication? The seismic activity that we […]

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Last week, the credit rating agency Fitch downgraded the US national debt. Predictably, senior officials like Treasury Secretary Janet Yellen claimed Fitch’s “flawed assessment was based on outdated data” and that the downgrade was “entirely unwarranted.” What a joke. Just consider the US government’s surging interest payments on the national debt— This Fiscal Year (which […]

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Looking to retire in the EU, but not 100% sure where you’d like to settle yet? The Latvian Retirement Visa could be just the thing for you. Boasting low income requirements and requiring relatively few supporting documents, it is arguable THE easiest EU retirement visa to get… Let’s get into the details below… Applying for […]

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In a world full of unimaginable absurdity, we spend a lot of time thinking about the future… and to where all of this insanity leads. “Future Headline Friday” is our satirical take of where the world is going if it remains on its current path. While our satire may be humorous and exaggerated, rest assured […]

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In late 2019, right before Covid-1984 and Tony “the Science” Fauci became household names, Sovereign Man hosted an event for our Total Access members on the idyllic island of St. Lucia. As is customary for these intimate get-togethers, we invited a leading local law firm, real estate developers, as well as some local banking reps […]

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Elizabeth Warren, the Senator from Massachusetts, is full of great ideas. Her image of the perfect world is one of nonstop government regulation. All business must be controlled… by her, of course. Only an ex-professor knows best how the 330+ million person American economy should function! Warren’s first brainchild was the Consumer Financial Protection Bureau […]

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The Federal Reserve– the most critically important central bank in the world– is completely, hopelessly insolvent. This isn’t some wild conspiracy theory or overly dramatic interpretation of the facts; we’re extremely data-focused in this organization and base our conclusions on indisputable, open-source figures. And the facts in this case are crystal clear: the Fed’s own […]

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In a world full of unimaginable absurdity, we spend a lot of time thinking about the future… and to where all of this insanity leads. “Future Headline Friday” is our satirical take of where the world is going if it remains on its current path. While our satire may be humorous and exaggerated, rest assured […]

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Costa Rica, a small country nestled in Central America, boasts a unique blend of natural beauty, modern convenience, and a highly appealing investor visa program for those seeking a flexible “Plan B” residency. And priced from just $150,000, the program could make sense for a wide range of people. Let’s get into the details below… […]

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I landed in Panama last night for a quick business trip, and I have to say, I’m really astonished at the political situation here. Central American countries like Panama are often referred to as “Banana Republics”. The term refers to largely impoverished nations with underdeveloped economies which are controlled by a corrupt ruling class. I […]

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Some time in the year 136 AD, in the ancient town of Lanuvium located just south of Rome, a private club known as the ‘Society of Diana and Antinous’ hired a local scribe to chisel the group’s bylaws onto a large marble slab. You can just imagine the club’s Board of Directors hovering over the […]

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Despite announcing the imminent closure of their Golden Visa Program on February 19, 2023, the Portuguese government has opted to keep the program open in a surprising – if very welcome – about-turn. Let’s get into the details below… Portugal’s Golden Visa program is here to stay (albeit with some major changes) In the worlds […]

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The legendary walls of Constantinople were supposed to have been impenetrable. At least, that’s what the citizens thought. But shortly after midnight on Tuesday, May 29, 1453, they watched in horror as Turkmen mercenaries from the Ottoman Empire breached a section of the walls that had stood proudly for more than 1,000 years. The city […]

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In a move that surprised literally no one in the industry, St Kitts and Nevis recently extended their Limited Time Offer (LTO) on Citizenship By Investment. In today’s episode, we take a look at the country’s CBI offering – and the discount deal – as it stands in 2023. Let’s get into the details below… […]

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In a world full of unimaginable absurdity, we spend a lot of time thinking about the future… and to where all of this insanity leads. “Future Headline Friday” is our satirical take of where the world is going if it remains on its current path. While our satire may be humorous and exaggerated, rest assured […]

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On the 26th of February in the year 1401, an English priest named William Sawtrey was hauled before his Archbishop to learn whether he would live or die. Sawtrey wasn’t a witch or satanist, or even a criminal. He was, however, an early leader in a breakaway religion known as Lollardism, which both the Church […]

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In a world full of unimaginable absurdity, we spend a lot of time thinking about the future… and to where all of this insanity leads. “Future Headline Friday” is our satirical take of where the world is going if it remains on its current path. While our satire may be humorous and exaggerated, rest assured […]

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Fancy an extended remote working trip on a sun-drenched island in Greece? Launched in 2021, the Greek Digital Nomad Visa offers remote workers the ability to stay for up to 12 months – AND you have the option to extend your stay for as long as you like. Let’s get into the details below… Greece: […]

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Brazil is a country that has featured frequently in the pages of Sovereign Man as an excellent potential Plan B destination – and with good reason. Wrapping up our recent focus on Latin American Residency By Property Investment options, today we take a look at this exciting country’s Residency By Investment options… Brazil: An exciting […]

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In last week’s episode, we featured a Latin American country – Ecuador – where buying property worth just around $45,000 can earn you a residency permit. (And we were very surprised by our readers’ enthusiastic responses!) So today, we feature another South American country with a cheap, property-based residency program: Colombia… Colombia: Another Latin American […]

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On the 18th of September, in the year 324 AD, 52-year old Constantine the Great finally won the victory that he had been fighting for two decades to achieve: sole control of the Roman Empire. At that point the Roman Empire had suffered more than a century of extreme turmoil– recession, inflation, invasion, humiliation, and […]

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On the evening of March 5, 1770, a thirteen year old boy named Edward Garrick deliberately provoked a British soldier who was on guard duty outside the Boston Custom House. It was a dumb thing to do. Like a lot of teenagers, Garrick didn’t think before running his mouth. He even poked the soldier in […]

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In a world full of unimaginable absurdity, we spend a lot of time thinking about the future… and to where all of this insanity leads. “Future Headline Friday” is our satirical take of where the world is going if it remains on its current path. While our satire may be humorous and exaggerated, rest assured […]

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Well, that didn’t take long. From the time the US government managed to sign the debt ceiling resolution, it took just thirteen days for the national debt to soar by nearly $600 billion. At that pace, they added over $500,000 to the national debt every second. The US national debt has now breached $32 trillion… […]

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1866 was not an auspicious year to start a business in the United States. America had just been devastated from a five year long civil war– one of the bloodiest conflicts in US history. Plus the country was in the midst of a severe economic recession. 1866 was also the year that a major investment […]

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As far as Plan B residencies were concerned, nothing we’ve seen has ever come close to Panama’s former Friendly Nations Visa. (Which became distinctly less “friendly” in 2021.) Fortunately, however, the country is still home to several attractive residency options in 2023. Let’s get into the details below… Panama’s acclaimed Friendly Nations Visa became a […]

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In a world full of unimaginable absurdity, we spend a lot of time thinking about the future… and to where all of this insanity leads. “Future Headline Friday” is our satirical take of where the world is going if it remains on its current path. While our satire may be humorous and exaggerated, rest assured […]

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On Friday morning July 23, 1982, news broke around the world that a consortium of Japanese companies was acquiring Rouge Steel… which until that point had been a wholly-owned subsidiary of the Ford Motor Corporation. It was unthinkable: the Japanese were buying up an American steel company??!? But it was just one of the first […]

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As our founder, Simon Black is fond of saying, legally reducing your taxes is the highest investment return you’ll ever make. If you’re American, Uncle Sam will want to take a bite out of your earnings no matter where in the world you live. But nonetheless, most people can unlock some powerful tax benefits by […]

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In a world full of unimaginable absurdity, we spend a lot of time thinking about the future… and to where all of this insanity leads. “Future Headline Friday” is our satirical take of where the world is going if it remains on its current path. While our satire may be humorous and exaggerated, rest assured […]

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The team at Sovereign Man are a bunch of avid data geeks. So as a rule, if we’re giving you a list of virtually anything, you can rest assured that it’s informed by data. Today, we take a look at five excellent countries to live in, based on a number of holistic quality metrics. At […]

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When Sextus Julius Africanus was born in the city of Jerusalem around the year 160 AD, the Roman Empire was still near the peak of its power.

By the time Sextus was born, Antoninus Pius had ruled the empire with a steady hand for more than twenty years; his reign was peaceful and highly effective, and he left behind a strong economy and vast public treasury.

The following year in 161 AD, when Sextus was still just a baby, Marcus Aurelius became emperor and ruled wisely for nineteen years as an assiduous, diligent philosopher king.

Sextus was a young man just starting to make his way in the world when Marcus Aurelius passed away in 180 AD. And this is when things really started to unravel in Rome.

Marcus Aurelius was followed by his complete dirt bag of a son, Commodus (who was probably every bit as evil and insane as he was portrayed in the film Gladiator).

Commodus ruled brutally for twelve years until his assassination in 192 AD, after which several more emperors rose to power and were assassinated within a matter of months.

Finally Septimus Severus rose to power in 193 AD and ruled for 18 years; he nearly bankrupted the empire with his constant warfare and expansion of the state, and he heavily debased the denarius coin from 81.5% silver to 54% silver.

Septimus Severus was succeeded by his son Caracalla, whose first order of business was to murder his brother… and then further debase the currency and bankrupt the treasury.

Caracalla was assassinated after six years and succeeded by Macrinus, who himself was overthrown and executed barely a year after becoming emperor.

Macrinus was succeeded by the sexually tormented adolescent Elagabalus, who is purported to have offered half of the empire to any doctor who could turn him into a woman.

Elagabalus was slain after four years in power, then succeeded by his cousin Severus Alexander. His 13-year reign was marked by a massive border crisis and further debasement of the currency; but most notably, during the reign of Severus Alexander, his imperial troops began running wild outside of the law and began indiscriminately assassinating anyone they wanted.

By the time Severus Alexander himself was assassinated in 235 AD, the young baby boy I told you about in the beginning of this letter– Sextus Julius Africanus– was 75 years old.

Sextus was born at the end of the Roman Empire’s period of dominance. And throughout the course of his life, he witnessed and lived through Rome’s gradual– then sudden– decline.

As a child and young adult, Sextus lived in a Rome that was powerful and unparalleled, and he enjoyed an incredible era of peace and prosperity.

By the time he entered adulthood, the cracks were already visible. Inflation grew rampant. The economy began stagnating. Multiple pandemics had taken place. The barbarians started flooding across the border. The treasury was depleted. And the imperial government became completely dysfunctional, incapable of even basic administration or responsibility.

Sextus Julius Africanus experienced all of this decline first hand. It must have been exasperating. And frankly, many of us today can probably empathize.

When I started Sovereign Man back in 2009, I had a very clear thesis in mind: the United States (along with the West in general) is in decline.

Back then that was a controversial statement to make. Today it’s painfully obvious.

What’s more, the decline seems to be accelerating, conforming to the mathematic model of logarithmic decay; it’s similar to how Hemingway described going bankrupt in The Sun Also Rises: “gradually, then suddenly.”

And we can see it just about everywhere.

From a fiscal perspective, the US is a complete train wreck. The national debt is about to pass $32 trillion as I write this, equivalent to roughly 122% of GDP– a record high.

On top of that, though, the government continues to overspend by trillions of dollars each year, making the debt problem even worse. And Social Security’s trust funds are set to run out of money within ten years.

The currency is also in the dumps. The Federal Reserve debased the US dollar as heavily as the Romans debased their own currency, causing rampant inflation.

Plus, between the Fed’s incompetence and the US government’s irresponsible spending, the dollar is on the verge of losing its status as the world’s dominant reserve currency.

Socially we can see the country coming apart as well. Socialism is on the rise. Cancel culture and censorship reign. Sociopolitical divisions are high.

The education system is crumbling… and the teachers’ unions couldn’t possibly care less. Homeless and crime rates are appalling. Public trust levels are at record lows.

Many politicians at the highest levels are either stupid, incompetent, corrupt, dangerously narcissistic, medically unfit, or all of the above. And the most recent debt ceiling fiasco shows their ineptitude to even be able to negotiate a timely solution among themselves.

Throughout all of this chaos, tensions with Russia, China, and Iran are on the rise… while the US military is being weakened by woke politics, fiscal mismanagement, and terrible leadership.

It seems like every few days there’s another major embarrassment… from a guy who never met a staircase he can’t fall up, to the humiliating withdrawal from Afghanistan, to a major crisis in the US banking system, to ‘mostly peaceful’ protests, to the debt ceiling soap opera.

And every one of these emboldens America’s adversaries.

Many of us are old enough to remember a time when such things were unthinkable, when America’s reputation for strength was unquestionable.

But these days, a major, national humiliation is just another Tuesday afternoon in the Land of the Free.

It’s exasperating. And Sextus Julius Africanus probably felt the same way, shaking his head in disbelief as he lived through the decline.

To be clear, even despite America’s gargantuan challenges, it is still possible to solve these problems and navigate out of this mess. And the basic ideas are quite simple: Capitalism. Productivity. Fiscal restraint. Self-reliance.

But the people in charge don’t seem to have a clue what they’re doing. And this is why it makes so much sense to have a Plan B.

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In the late summer of 408 AD, a barbarian army under the command of Alaric, king of the Visigoths, set out on a leisurely march across the Italian countryside towards the city of Rome… so that he could burn it to the ground.

Alaric had been promised money by the Roman government in exchange for a military alliance between Rome and the Visigoths; but just before the money was supposed to have been paid, the Romans canceled the deal.

Talk about a bonehead move.

Alaric was a decorated warrior at the head of a powerful army. And the Western Roman Empire, by comparison, was barely even functional anymore. The government was bankrupt, the currency was a joke, the economy was in the dumps, the military was weak, the borders were nonexistent… and there was no sense of unity in Roman society.

So it clearly made no sense to turn Alaric into an enemy. But then again, the emperor in the west was a weak, incompetent stooge named Honorius, whose legacy is so horrendous that he consistently ranks among the worst emperors in Roman history. And there’s some pretty stiff competition on that list.

Alaric, to his credit, actually tried to avoid conflict with the Romans and work out a resolution. But Honorius refused to negotiate… so Alaric gathered his troops and marched towards Rome.

Now, at that point in history, the city of Rome itself wasn’t even the capital of the western empire anymore; it had been moved to Milan, and then to Ravenna. But Rome was still among the largest and most prominent cities in the world, even in the early fifth century. And Alaric knew that sacking it would send shockwaves across the empire.

Alaric and his barbarian army were practically unopposed on their way to Rome; according to the ancient historian Zosimus, in fact, their march was so leisurely it was as if they were “at some festival” rather than heading to war.

They arrived in the fall of 408 AD and encircled the city, cutting it off from any resupply… meaning it would only be a matter of time before residents all starved to death and the Visigoths plundered the city.

The destruction of Rome was an unthinkable cataclysm. And so, with the barbarians literally at the gates, Honorius finally agreed to negotiate a deal. And it was a costly one– many times more expensive than their original agreement.

That should have been the end of the story… and yet Honorius found a way to screw it all up again.

Early the following year in 409 AD, Honorius tried to double-cross Alaric by sending troops to ambush the Visigoths. The attack failed, and Alaric was infuriated by this violation of their treaty.

Again, to his credit, Alaric tried to negotiate a peaceful solution, and he asked for lands, titles, and tribute as compensation.

But Honorius– who at that point was a highly experienced diplomat– instead sent an insulting letter back to Alaric. Talks quickly broke down, and Alaric turned back towards Rome in late 409.

Once again– and only after the barbarians were at the gate– the government finally agreed to Alaric’s demands… and the destruction of Rome was narrowly avoided for a second time.

Yet then Honorius managed to screw it up for the third time in a row.

The following year, in 410 AD, Alaric and Honorius were set to meet near the capital city of Ravenna to discuss peace and cooperation.

But Alaric and his men were ambushed just prior to the meeting by Roman troops. He survived. And, completely fed up with Honorius, Alaric took his troops back to Rome for the third (and final) time in two years.

The Visigoths entered the city on August 24, 410 AD through Rome’s Salarian Gate, about 3 kilometers north of the Colosseum.

Alaric and his men spent three full days sacking the city. Almost everything of value was stolen or destroyed. Cultural treasures were defaced, monuments were ripped down, buildings were burned to the ground, and the city’s residents were killed or enslaved.

It was difficult to not think of this story when news broke about the debt ceiling ‘resolution’ late last week, because the two situations share many parallels.

The sack of Rome in 410 AD was a crisis of their own making. Decades of terrible strategic and financial decisions had reduced Rome to a shell of its former greatness, weakening the western empire considerably. Their enemies noticed.

The United States is in a similar position; decades of terrible decisions have led to a $31+ trillion national debt that grows by leaps and bounds every single year. Through its completely irresponsible addiction to spending, the government has weakened the country considerably… and America’s adversaries have noticed.

In the early 400s, Rome was led by a complete buffoon who, despite all of his years in government service, engineered a crisis by refusing to negotiate or to take an obvious risk seriously… only to ultimately cave and narrowly avoid an earth-shattering catastrophe.

This is a clear similarity to the debt ceiling fiasco that we saw play out over the last few months. The risk was obvious… and yet the guy who shakes hands with thin air refused to negotiate until the last minute, just barely averting disaster.

Waiting until the last minute to just barely avoid a major catastrophe is not a viable problem solving strategy. Neither is kicking the can down the road.

Yet every few years the debt ceiling becomes a major crisis. They consistently wait until the last minute, hastily negotiate a short-term patch, and kick the can down the road for another few years while they take the country even deeper into debt, until the whole cycle begins anew.

The Romans tried to do the same thing with the Visigoths: negotiate a terrible, last minute solution. Make the problem worse. Repeat.

This approach didn’t work in the early 400s, and it won’t work today. As the sack of Rome demonstrated, when you’re constantly taking things to the brink of disaster, eventually someone is going to go too far.

A worldwide financial meltdown triggered by the United States defaulting on its debt was very narrowly avoided. This time. Who’s to say that when this comes up again in 2025 that some idiot politician won’t take things too far?

The really ridiculous thing about the debt ceiling crisis was that it shows the inability of the US government to negotiate responsibly… with itself! This was literally a case of American politicians trying to resolve their differences with other American politicians.

How is this going to work out when the people on the other side of the table aren’t from another US political party… but from the Chinese Communist Party?

It’s worth thinking about given how the specter of conflict continues rising; just over the weekend, a Chinese naval vessel intentionally maneuvered to within 150 meters of US and Canadian ships in the Taiwan Strait. And this was just one of many obvious escalations in recent months.

The last point worth mentioning is that the sack of Rome illustrates how dangerous complacency can be.

When Alaric showed up in 408 AD for the first time, the city’s destruction was avoided. When he showed up the second time in 409 AD, the city’s destruction was avoided again.

So you can probably imagine that when Alaric and his barbarian army were on the way to Rome for the third time in 410 AD, the city’s residents probably felt confident that their leaders would once again figure out a last minute solution.

That misplaced confidence in their incompetent leaders cost Romans dearly.

It’s worth remembering that you don’t have to bet everything you’ve worked to achieve on today’s pitiful leadership; there are plenty of steps you can take to reduce your exposure to the risks that they’ve created (and continue to ignore).

You can, for example, hold a portion of your savings in an alternative asset like gold, which has a 5,000 year history of holding its value, especially in times of crisis.

You can set up more robust structures to help you save for retirement… which makes a lot of sense given the looming insolvency of Social Security’s major trust funds.

And you can even establish legal residency or citizenship in a foreign country, giving you a place to go in the event that you ever need to leave.

Some of these options take time to establish. And you don’t want to make the same historical mistake of waiting until the last minute– just before a crisis– to start taking action.

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Moving abroad comes with enough curveballs and complexities as it is. And trying to navigate a new country in a language you don’t speak can become exhausting fast. Fortunately, there are scores of expat-friendly countries where English is widely spoken. Today, we highlight ten of our favorites…

Let’s get into the details below.

If you’re a remote worker, an extended stay abroad is generally not a vacation – you have to work, and work efficiently. And if you don’t speak the local language, it can create time-consuming friction points – not to mention compounding frustration.

Also, for expat retirees, speaking the local language can mean the difference between integrating socially and being constantly lonely. In both cases, a simple solution is to choose a country where English is widely spoken.

And if a place is affordable, expat-friendly, and has an accessible residency program to boot – bonus.

Of course, there is no perfect place. One country may have a super low cost of living, yet crime could be a growing problem. Another may be both cheap and welcoming to expats, but they can’t keep the lights on. Others may be near perfect for you, but easy residency options are non-existent….

So in most cases, you’re likely going to have to make some trade-offs.

Here are ten countries that are commonly considered expat-friendly, with decent(ish) residency options (especially for Americans), and where English is widely spoken.

(Although – spoiler – they’re not all renowned as being cheap destinations…)

Source: Sovereign Cost of Living Index (Living Costs and English Proficiency data)

You’ll notice that none of these countries are particularly appealing from a tax perspective (with the exception of Malta and Dubai). If paying lower taxes is your key priority, be sure to check out our recent Knowledge Series article on 20 countries with no or low taxes.

Then – as for the rationale behind including India…

The Subcontinent is not exactly in Sovereign Man’s regular wheelhouse…

But we recently spoke with a global security strategist working in the development sector. He and his wife moved to Delhi from London around six months ago. He reports that while the frenetic pace of urban India and the city’s air pollution took some time to get used to, their quality of life there is exceptional.

For a fraction of their living costs in London, they now get to live in a 5-bedroom mansion in one of the city’s swankiest areas. Their garden is a verdant, expansive sanctuary. They have several domestic staff working for them full time – and they even have a full-time driver!

So while India may not suit everyone’s career and lifestyle tastes, for them the move to Delhi made a lot of sense…

And given the wealth of stylish, affordable Airbnbs to choose from there, you could totally investigate this option before making up your mind. (Plus, Americans are eligible for the Indian e-Visa, which is valid for up to six months…)

An asynchronous work schedule will be essential, however, as the time difference between Delhi and New York City is a whopping 9 hours and 30 minutes…

IMPORTANT: It’s also important to note that visa and residency requirements can change suddenly, so it’s always advisable to check the latest requirements from your nearest consulate for the country in question.

Contemplating a longer-term stint overseas?Discover all your best residency and citizenship options, along with step-by-step guidance on how to apply, by joining Sovereign Confidential.

Sovereign Confidential is the most comprehensive international diversification service on the planet, with our global, in-depth catalog spanning over 12 years. Members also benefit from our Monthly Letters series, covering a range of mission-critical topics, including:

1. The best options for second residency and citizenship — potentially for next to nothing
2. How US citizens can easily and cheaply get residency in the Netherlands via the DAFT visa program
3. How to legally and significantly reduce your taxes
4. How to pass 100% of your estate to your family — tax-free
5. How to create a firewall around your assets — and especially your home…
6. And much, much more!

Find out how Sovereign Confidential can help you secure your own robust Plan B here.

The bottomline…As with investing, it pays to look beyond the beaten path when it comes to your international residency options. The world is a big place filled with opportunities. All it takes to prosper – despite all the uncertainties we face today – is access to the right knowledge, and the will to take action.

Yours in freedom,

Team Sovereign Man

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With only days to go before the federal government of the Land of the Free defaults on its debt, it appears that a compromise may finally be on the horizon.

As part of the bargain, both sides have agreed to slash part of the $80 billion in new funding that the IRS was awarded last year.

This is quite a blow to the President, who sold his plan to beef up the IRS last year by saying that the agency would capture up to “a trillion 300 million billion dollars if we hire more IRS agents.”

A trillion 300 million billion? That sure does sound like a lot of money.

Mr. Biden, of course, never seems to have much of a handle of arithmetic (nor anything else).

At one point he explained that Covid-19 had taken “200 billion lives”, and then further commented that “just the outbreak, has taken more than one hundred year, look, here, the lives, it’s just, just think about it.”

Quite sadly he even recently claimed that his son Beau died during a military deployment to in Iraq. In reality, Beau returned from Iraq in 2009, but died of brain cancer in 2015. You’d think his dad would know that.

And this is on top of the countless videos out there of the President shaking hands with thin air, wandering aimlessly at official functions, reading instructions from teleprompters such as “repeat for emphasis”, and stopping mid-sentence with a thousand-yard stare.

Now, Biden isn’t the first leader in history who showed signs of dementia.

King George the III of England famously thought a tree was the king of Prussia. Margaret Thatcher, and Ronald Reagan showed signs of dementia towards the end of their terms in office.

But there is a key difference.

President Biden has deliberately surrounded himself with incompetent lunatics.

For example, his Vice President’s latest inspiring quote is, “It’s very important… for us at every moment in time, and certainly this one, to seize the moment in time in which we exist in our present, and to be able to contextualize it, to understand where we exist in the history and in the moment as it relates not only to the past, but to the future.”

Profound. A college freshman smoking his first joint couldn’t have said it better.

What’s crazy is that this sort of verbal incontinence is pervasive across the rest of government.

After a three month absence in the Senate due to shingles, 89-year-old Senator Dianne Feinstein returned to Washington and informed a reporter, “I haven’t been gone. I’ve been working.”

The reporter asked for clarification if the Senator meant she had been working from home.

“No, I’ve been here [at the capitol]. I’ve been voting,” she responded, before adding cryptically, “Please, you either know or don’t know.”

And here’s a direct quote from Senator John Fetterman questioning banking CEOs in a recent Senate hearing:

“That’s like if you have I mean like an-and they also realize that that now they have it’s an in a guaranteed, a guaranteed way to be saved by noma again, no matter, by-by-by how?”

After an awkward silence from the men he was interrogating, Fetterman continued, “shouldn’t you have a working requirement after we sail your bank bills-in your bank? Because they seem me-more preoccupied than when snap requirement for works for hungry people but not about protecting the tax papers that will bail no matter whatever does about the bank, the crash.”

Now, I don’t want to poke fun of someone’s legitimate medical condition. Dementia is a devastating condition. And in Fetterman’s case, he suffered a terrible stroke during his senate campaign. It’s certainly not his fault— it could happen to anyone.

But America has become such a touchy, hypersensitive culture, that it’s considered gauche to even question whether someone who suffered a stroke, or suffers from dementia, is still fit for office.

So if you think you’re entitled to an elected representative who actually knows where she is… well then the entire establishment closes ranks around the politician to defend them and labels you a bad person.

The most we can possibly expect of elected leaders right now is that they have a pulse.

Full control of their mental faculties? Not relevant. Backbone and integrity? Laughable.

This is a pretty terrible trend given that the US is riddled with so many serious, malignant problems. This debt ceiling crisis is only the latest one… and they haven’t solved it. Even if their bargain is successful, they’re only punting the problem into the future by little more than two years.

Social Security’s insolvency is looming. America’s military readiness is falling. More bank crises are looming. The dollar is in danger of losing its global dominance. Geopolitical threats are growing.

You’d think that voters would want the best possible leaders who are at the absolute top of their game.

But no. Instead, you just need a pulse.

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Given the hefty price tag, Malta’s Citizenship By Investment (CBI) offering is not something we’ve written about much historically. But with CBI programs – and EU ones, in particular – dropping like flies in recent years, we figured we’d cover this option… While it still exists.

Let’s get into the details below.

Malta: A look at the Rolls Royce of European CBI programs in 2023…Malta is a gorgeous island nation situated in the Mediterranean Sea. We’ve previously written about its Golden Visa… And its Retirement Visa… And its Global Residency Program – but hardly ever about its Citizenship By Investment offerings (both past and present).

Today, however, European Citizenship By Investment programs and Golden Visas are under pressure.
We had just completed the five stages of grief over Montenegro, Ireland and the UK’s programs getting terminated… When we heard the bad news about Portugal’s Golden Visa.

Plus, there is the ongoing legal wrangle between Brussels and Malta over their program…

So rather than waiting to see what happens next, today we take a look at the EU’s only remaining Citizenship By Investment option.

(Which, in line with the strict marketing guidelines issued by Residency Malta – a government agency that oversees investment migration to Malta – is not to be referred to as either a CBI or by its former name, the Malta Individual Investor Program.)

The official name is “Naturalization for Exceptional Services by Direct Investment”. I.e., one is not even allowed to refer to it as a “program”.

(But if it walks and quacks like a duck…)

In any event.

Why Malta’s citizenship (and its passport) could make a LOT of sense…Malta boasts one of the world’s most powerful passports, scoring an impressive A-grade in the Sovereign Passport Ranking Index. (It also offers THE best travel document among all the world’s CBI programs).

The island itself, while home to only 518,000 people, is an excellent place to live. The Maltese are very entrepreneurial, and enterprising expats tend to enjoy the environment a lot.

And as an added bonus, English is one of its two official languages. The other being Maltese – an amazing combination of Arabic, Italian and English.

Here are the salient program details at a glance…

| Official Program Page | Visa-free access | Part of the European Union? | Part of the Schengen Area? | Timeline to citizenship (and a second passport) | | Komunita.gov.mt | Access the Schengen Area, the UK, the US, Canada and many more desirable countries… | Yes | Yes | 3 Years (€600,000 investment option); OR 1 Year (€750,000 investment option) |

And yet, we’ve not written much about the Maltese citizenship offering. Not because we don’t like it; in fact, we think it’s an exceptional option – but because of its eye-watering price tag.

More on this below…

Malta: A detailed look at the investment requirements…(Towards Naturalisation for Exceptional Services by Direct Investment.)

Malta requires you to invest both time and money if you want to become a citizen there. Here is how the program works:

But wait, there’s more…

In addition to parting with the substantial amounts of cash outlined above, the Maltese authorities also require you to either rent or purchase local real estate in Malta.

You have to buy a property in Malta worth at least €700,000, and keep it for a minimum of five years after receiving your citizenship.

OR you can lease a property with a minimum annual rent of €16,000 for five years or more.

So, if you choose to rent, you will need to spend at least €80,000 on rent over five years ($16,000 X 5 Years = €80,000).

This means that your total minimum cash outlay is going to be €690,000, if you choose to rent a property in Malta, and €1,310,000 if you decide to buy. You will need to add government and service provider fees to these amounts. And then you’re looking at 36 months of residency before applying for citizenship.

Why the residency requirements ahead of naturalization?Malta is a member of the EU. That means they need to keep a lot of EU bureaucrats – who dislike CBI programs – at least somewhat happy.

So, besides performing rigorous applicant due diligence, Malta requires you to hold residency in the country for at least 12 months before you can apply for citizenship to prove your “bonafide connection” to the nation.

Still, this doesn’t mean that you will need to live there for an entire year if you want to apply for citizenship and a passport. All you will need to do is visit the country once to complete all the required paperwork.

After you become a citizen, there is no requirement to live in Malta… or anywhere in Europe, for that matter, unless you want to.

Is spending €690,000+ on an EU passport really worth it? Europe – and Southern Europe, especially – offers an amazing lifestyle, but passports from this region come with a sky-high price tag.

If money is not an issue, then spending €690,000 or more could make sense. However, if you want to live in Europe, but don’t require a passport from there immediately (or at all), then a residency option like Portugal’s D7 Visa or Spain’s Non-Lucrative Residency could do the job, too.

And neither of these require you to invest a penny.

However, under these options, you will have to spend six months or more each year on the ground, or you will lose your residency.

If you plan to spend much less time than that in Europe each year, then consider one of the European Golden Visas: They are cheaper than CBIs, and provide you with residency (not citizenship), allowing you to live in a country indefinitely… or not at all.

And if you must obtain a second passport ASAP – for example, if you plan to renounce your US citizenship soon – then you could just participate in one of the streamlined and cost-effective CBI programs in the Caribbean.

NOTE: Our Total Access (TA) members benefit from deep discounts on a range of CBI programs around the world – including all five of the Caribbean ones. For example: you can save up to $35,000 on your CBI application as a family of four. To find out more about the benefits of TA membership, click here.

In conclusion

The EU is determined to stop all CBI programs within its borders. They already succeeded with Cyprus, and now they want to do the same to Malta. We don’t know how this standoff will eventually play out, but there is a good chance that the Maltese CBI option may eventually disappear.

So if you are interested in Maltese citizenship today, you better take action soon…

Yours in freedom,

Team Sovereign Man

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In a world brimming with bewildering headlines, we spend a lot of time thinking about the future… and to where all of this insanity leads.

“Future Headline Friday” is our satirical take of where the world is going if it remains on its current path. While our satire may be humorous and exaggerated, rest assured that everything is based on actual events, news stories, personalities, and legislation.

May 26, 2028: Pampers Faces Backlash for Trans-Baby Ad Campaign

Procter & Gamble, the parent company of the formerly popular diaper brand Pampers, is facing a major backlash over Pampers’ latest ad campaign.

Pampers, which is the largest global brand in P&G’s consumer stable and accounts for more than 10% of the conglomerate’s net sales, recently hired the 14-month old trans-baby influencer Taylor.

Taylor’s parents rose to prominence during the pregnancy for successfully winning a lawsuit against the state of Texas to have the baby’s gender assignment from birth be based on identity.

“We weren’t going to let some kook doctor tell us that an arbitrary flap of flesh made our child a boy, when we knew she identified as female,” said Taylor’s father— a female-to-male trans man who gave birth to the baby.

“From the moment of conception, I knew our child was a girl. Even the way she rolled around while still in my belly made it obvious to me, and to Taylor’s co-parent, that our baby would identify as female.”

Taylor’s gender assignment court case sparked national outrage, and the fury multiplied when the baby began receiving gender affirming care at the age of six months. But to Pampers’ new head of marketing, this was exactly the right story for their brand.

“Pampers is sort of anti-science in how we have always viewed babies’ genders based on their little pipi’s or whatever. It’s time we elevate the brand to become more inclusive… and force our customers to evolve and be less Medieval in their thinking,” said Karen Peters, who became VP of Marketing at Pampers less than three months ago.

Ms. Peters, a recent graduate of Yale University’s Prince Harry School of Inclusion, also stated that “the entire Board of Directors at Procter & Gamble is behind me 100%.”

P&G stock is down 70% since the ad campaign began, and a company spokesman confirmed this morning that Ms. Peters is on a leave of absence.

May 26, 2029: No Deal Just Six Days From Social Security Default

“We thought we had until 2033 to figure this out,” Rep. Harry Sisson commented about Social Security’s looming default. And that was once true.

In the late 2010s, the Social Security annual trustee report projected that the program’s once mighty trust funds would become fully depleted by 2035. But by the early 2020s, the trust funds’ projected insolvency date had advanced to 2033.

And with each passing year of this decade, as US economic growth waned and 8% inflation stubbornly persisted, Social Security’s cash outflows accelerated, moving up the program’s default.

Late last year, Treasury Secretary Eric McDonnell quietly announced over the holiday break that the latest insolvency date for Social Security would be June 1, 2029… just over five months from the date of his announcement.

Congress and the White House have been trying to reach a deal for the past several months before Social Security’s funds run dry, something that would immediately trigger deep cuts to every American retiree’s monthly benefit. But the talks have produced little compromise.

Some members of Congress have advocated cutting from other government programs in order to make room for more Social Security funding, like the $77 billion spent last year housing border refugees in hotels across America.

But President AOC has taken a hard line against any cuts to government spending, saying, “We demand a clean bailout of Social Security. 100%. I’m not willing to negotiate for the future of the American people.”

Members of her own Socialist party believe the President is taking too soft a position on the issue.

“You never want to waste a good crisis,” said Senator Machaela Cavanaugh of Nebraska. “We have all the momentum we need to raise the national wealth tax from 5% to 10%; households who make more than $150,000 can easily afford to pay it.”

The House has already passed a bill that would provide short-term funding to Social Security while requiring that qualified asset managers from the private sector invest the funds, instead of merely putting all the money in US government bonds. However the President has referred to this proposal as “whacko”.

With just six days to go before Social Security runs out of money, prospects for a compromise look bleak. President AOC cut short her trip to India yesterday, where she unsuccessfully attempted to dissuade Prime Minister Singh from selling off their US dollars.

Without reaching a deal, retirees collecting Social Security will see their payments cut to just 68% of their previous benefits, as early as next month, and likely decline further from there.

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At 11:15am on July 7, 1919, a US Army convoy consisting of 81 military vehicles departed Washington, DC for a perilous journey to San Francisco.

The army convoy wasn’t responding to an emergency or preparing for battle. In fact, since World War I had just ended, the United States was shifting focus back to its own domestic challenges. And one of those challenges was the pitiful state of America’s road network.

There were hardly any roads in the US back in the early 1900s, and most of the ones that existed weren’t paved. That was actually the entire purpose of the Army’s 3,251 mile cross-country convoy: to demonstrate just how BAD the roads really were.

Among the convoy’s participants was a 28-year old Army officer named Dwight Eisenhower, and he wrote extensively about the journey.

He observed that much of America was almost impassable, even for military vehicles. Roads in the Great Plains turned into bottomless mud pits when it rained, and Eisenhower wrote that during one particularly rainy day, 25 trucks slid off the road.

By the time they got to Utah, the dusty desert roads clogged up their engines, causing them to abandon a dozen vehicles along the way. And the steep grades of the western forests and mountains caused their travel to slow to a pedestrian pace.

Eisenhower found humor in the convoy’s ever-present troubles, writing later that they were like “a traveling troupe of clowns.” But despite his positive outlook, the need to improve America’s infrastructure was burned into his memory.

Decades later when Eisenhower became the military governor of occupied Germany after World War II, he witnessed first hand how much better and more efficient the German autobahn road network was. And he knew the United States needed to modernize its highway system.

Eisenhower became US President a few years later in 1953. And the following year he appointed Lucius Clay to head the national highway project.

Clay was a civil engineer and former Army general who had spent his career overseeing complex infrastructure projects, leading large organizations, managing enormous budgets, and solving major logistics challenges.

He was even responsible for organizing the miraculous Berlin Airlift in 1948-1949, in which over 270,000 flights brought 2.3 million tons of supplies into West Berlin during the Soviet blockade; it was considered logistically impossible… but Clay pulled it off.

In short, Lucius Clay was eminently qualified for the job of establishing an interstate highway system in the United States.

When Eisenhower presented Clay’s report to Congress, virtually everyone agreed that America’s lack of infrastructure was a problem. And both political parties understood that building a highway system was critical for national defense and economic growth.

Naturally they disagreed on several issues; for example, Eisenhower wanted to fund the project with tolls. Others in Congress wanted to issue debt, while others wanted to fund it with taxes.

But in the end, both Congress and the White House quickly reached a compromise to pass the Federal Highway Act. And on August 13, 1956– less than two years from when Lucius Clay took charge– the groundbreaking of the first interstate highway took place near St. Louis, Missouri (I-70).

The US interstate highway system is a monument to the sensible, efficient way that the federal government was once able to solve large, complex challenges.

There used to be grown-ups in charge who could clearly recognize a problem, rationally discuss practical solutions, prudently consider the consequences, and quickly reach a compromise to make it happen.

They also used to put competent people in charge of things… real leaders with actual qualifications and experience.

In contrast, the guy who is in charge of the federal highway system today is Transportation Secretary Pete Buttigieg.

Pete was nominated for the job despite having zero experience leading complex organizations, no idea how to manage a huge budget, and no knowledge about transportation or infrastructure.

What could possibly go wrong?!?

Under Pete’s leadershit, supply chains broke down. Seaports became a total disaster. Highways have continued to crumble. Airports achieved historic chaos, including FAA outages and record flight cancellations.

And America’s rail system became a literal hot mess.

Curiously, after a February train derailment in East Palestine, Ohio spewed toxic chemicals and fumes, Buttigieg couldn’t even manage to comment on the crisis for weeks. He did, however, find time to insist that

Ford and General Motors should use female crash test dummies.

Anyone else with such a pitiful track record would have been fired long ago.

But not Pete. Instead, he was awarded a massive $1.2 TRILLION budget from the 2021 infrastructure bill. And much of this money will be spent according to his personal discretion.

Essentially this means that Pete Buttigieg now manages the world’s largest infrastructure fund.

Infrastructure is a popular asset class among many private investors, and plenty of asset management firms set up infrastructure funds to develop toll roads, railways, etc.

Brookfield Asset Management, for example, has more than $100 billion worth of infrastructure funds in its stable.

But Pete now has more than 10x that amount under his management. In fact his $1.2 trillion “fund” is larger than all of the world’s private infrastructure funds COMBINED.

Yet again, Pete has no experience managing large sums of money. He has no real investment experience.

In fact, to give you a sense of Pete’s dimwitted investment ethos, he said at one point that his main concern was to “make sure we take all this money, this $1.2 trillion… and actually deliver $1.2 trillion worth of value”.

A professional asset manager would strive to deliver a 5x or 10x return on investment. But not Pete. Pete’s tiny reptile brain can’t figure out how to generate a 1x return.

Let’s be honest, though… what more could we possibly expect from an administration that has a diversity and inclusion obsession and hires people based exclusively on pointless ‘identity’ characteristics?

In Pete’s case, one of the biggest reasons he has the job is because he’s gay. And this is really sad; someone’s sexual orientation shouldn’t matter one bit. The only thing that should matter is competence, of which Pete has none.

Even if one were to agree that ‘identity’ characteristics are important… can they at least still pick qualified people??!?!

But the guy who shakes hands with thin air doesn’t pick qualified people. All he thinks about (assuming he’s still capable of thought) is what’s swinging or not swinging between your legs. How much melanin content you have in your skin. Who you sleep with.

These are the only characteristics that matter.

Brains? Irrelevant. Integrity? Laughable. Experience? Preposterous!

Pete is obviously far from being the first diversity hire in US history. But he’s emblematic of a much larger trend that puts diversity and inclusion ahead of delivering results to the American public… at a time when America is in critical need of delivering results.

Similarly, this debt ceiling fiasco further demonstrates the government’s inability to deliver results.

In Eisenhower’s era, they worked together and got things done. It wasn’t perfect and there was plenty of disagreement. But they knew how to compromise for the good of the nation.

Today, POTUS literally starts the conversation by flat-out rejecting any compromise… which is the exact opposite of what the country needs. Apparently his four decades of experience only taught him how to be childish, petty, and destructive.

Despite all of America’s problems, I’ve been very clear that there IS still a way out of this mess. However one of the key ingredients is capable leadership… and that’s far from a sure thing.

We can certainly hope that sensible, practical people take charge in the near future. But hope is not a viable course of action. And it’s for that reason that it makes all the sense in the world to have a Plan B.

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I’ve just returned home to Puerto Rico from a wonderful weekend in Panama City, Panama where we hosted an exclusive event for our Total Access members.

We chose Panama for a specific reason: the first conference I ever held back in 2011 was in Panama.

Twelve years ago I stood on stage in front of the audience and explained my core ethos: the United States, and the West in general, were in social, political, and economic decline.

I took no pleasure in saying that, but my lack of joy didn’t make it any less true.

I explained to the audience back in 2011 that America’s vast national debt— and specifically the outrageously high growth rate of the national debt, was going to one day create a huge problem for America’s finances.

Similarly, I said that the dollar would eventually run into serious trouble, and even be in danger of losing market share as the world’s dominant reserve currency.

Twelve years ago I even showed the audience a chart of a logarithmic decay curve.

The idea behind logarithmic decay is that something declines very slowly and gradually at first. But over a period of time, the rate of decline becomes faster and faster until it’s practically a vertical drop down.

Civilizations decline logarithmically— gradually, then suddenly.

Back in 2011, I told the crowd that we don’t know where we are on that chart. Are we just starting the slow part of decline? Are we in the middle? Or are we standing on the edge of the steep, downward slide?

I explained that we wouldn’t know until after the fact.

Most of all I told the audience that the decline of the US would be one of the biggest stories of our lives, and it would come to dominate so many aspects of our existence.

I suggested, for example, that we’d see significant inflation, social chaos, and extreme political dysfunction.

Back then these assertions were considered highly controversial. Today they are front page news.

I mean, the government is days away from default and led by a guy who shakes hands with thin air.

This morning’s headline from the Wall Street Journal says it all: “Debt-Ceiling Fight Sends Investors Hunting for New [Safe] Havens”. And the article goes on to explain how even AMERICAN investors are dumping US Treasury bonds because they no longer have confidence in the government.

And this is in part why I decided to hold this weekend’s Total Access event in Panama— to return to the very first place where I made those ‘controversial’ assertions that have come true.

I also wanted to showcase Panama as a sort of case study.

Panama is a very small central American country. But if you’ve never been, you would be really surprised.

The capital city’s skyline resembles Miami, with its soaring towers, world-class hotels, and rooftop night clubs. Having lived in Panama, and routinely revisited over the past two decades, I’ve witnessed the extraordinary economic growth and development in this country first hand.

No place is perfect, of course. But overall, Panama is a major success story, and it’s not an accident.

Success, like personal health, is not rocket science.

Unless you’re trying to be a highly competitive world-class athlete, better health is simple: don’t overeat, try to avoid processed sugars, get some exercise, don’t smoke, don’t drink to excess, etc. In short, better health is the result of good choices and a little bit of discipline.

It’s the same thing for countries. Panama made reasonable investments in infrastructure and avoided overspending. They made good choices and exercised some fiscal discipline. And they’re much better off than they were 12 years ago.

The US, on other hand, is much worse off than it was 12 years ago. And that decline is the result of terrible choices and ZERO discipline.

But despite the discussion of decline, the event was not one of doom and gloom. Far from it. We don’t dwell in “the end is nigh” predictions. On the contrary, I’m actually quite optimistic.

I explained to our audience this weekend, in fact, that there is a very simple way out of all these problems— and I’ll write some articles about that soon.

But we also focused on several interesting opportunities that, in many respects, are a result of this decline.

One of those themes is real assets, which I’ve written about many times before… and will continue to do so.

The term ‘real assets’ covers a lot of ground, but it typically includes commodities and natural resources, real estate, high value collectibles, and productive technology. In general, these are assets that cannot be conjured out of thin air by governments or central banks.

One of the guest speakers from this past weekend’s event showed our audience a very simple chart demonstrating the long term relationship between the price of real assets relative to financial assets.

And the chart shows very clearly that real assets have literally never been cheaper than they are right now, compared to financial assets.

(For people who love statistics, real assets are multiple standard deviations below their long-term arithmetic mean relative to financial assets.)

Inflationary times tend to be accompanied by real asset booms.

In the 1970s inflation era, for example, assets like gold, oil, and farmland performed incredibly well. Real estate in hot markets like southern California boomed (obviously before the state government went insane). Home prices in Beverly Hills went up 7x during the 1970s.

And then of course there were incredible success stories in technology from the 1970s, including two little startups called Apple and Microsoft.

I’ve been very clear in my view that, absent a massive productivity boom (which is possible thanks to AI), the US is once again looking at a long-term inflationary period.

Real assets have the potential to do very, very well. And it certainly helps that they’re literally cheaper than they’ve ever been.

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In a world brimming with bewildering headlines, we spend a lot of time thinking about the future… and to where all of this insanity leads .

“Future Headline Friday” is our satirical take of where the world is going if it remains on its current path. While our satire may be humorous and exaggerated, rest assured that everything is based on actual events, news stories, personalities, and legislation.

May 19, 2027: Pentagon Slashes Veteran Pensions for Undocumented Immigrants

Defense Secretary Ayanna Pressley announced an emergency measure this morning to protect America’s national security:

“Today, I am honored to announce that, effective immediately, the Department of Defense is contributing 25% of all Veteran pensions towards housing for undocumented immigrants. This is a matter of national defense— defending our nation’s immigrants against the cold, danger, and stigma of being unhoused on American streets.”

Under the new policy, every military retiree and combat-disabled veteran will receive 75% of their current monthly pension, while the remaining 25% will go directly to fund housing for undocumented immigrants. Veterans who identify as coming from historically oppressed backgrounds will be exempt from the policy, the Secretary explained.

“Veterans know more than anyone what it means to sacrifice for our country,” Pressley said. “Now we are asking them to fight in a different way: with their hearts. And also their wallets.”

Pressley continued that this is the least the US military could do, since it was involved in the historical destabilization of Central and South American countries, which produced the problems these migrants are fleeing in their homelands.

Asked how long she expects the temporary measure to last, Pressley responded, “As long as it takes.”

This is the federal government’s latest effort to deal compassionately with the surge of migrants across the southern US border.

Previously, the State Department attempted to raise funds for undocumented migrants by quintupling the application fees on foreigners who go through the lengthy, bureaucratic, formal process of actually applying for US visas at American consulates abroad.

But that bold effort did little to offset the costs of housing migrants who cross the borders and enter the United States through the informal, undocumented immigration system.

Some policymakers have called for Green Card holders to pay a recurring monthly fee in order to fund their less fortunate counterparts, or even be required to sponsor a migrant family in their own home.

The latest New York Times/MSNBC poll showed that 63% of Americans believe Social Security and Medicare should be extended to undocumented immigrants, regardless of age.

However, only 6% of respondents said they would be willing to contribute 25% of their own Social Security benefits to the cause of housing undocumented migrants.

May 19, 2034: 94-Year-Old Nancy Pelosi Announces One Last Term

In a surprise announcement, 94-year-old Congresswoman Nancy Pelosi once again said she will seek one last term in the 2034 elections for the House.

This came as a shock to her heir apparent, San Francisco Councilwoman Anita Chance running for Pelosi’s seat, who Pelosi endorsed last month.

However when asked, Rep. Pelosi seemed to not only forget about the endorsement, but also to have forgotten that she hasn’t been Speaker of the House for the past decade.

“We need to finish the job we started, and for that we need an effective, the experience… it, it, with me as Speaker, we can finally pass the bill. We can, at long last, see what’s in it. It won’t cost a thing, zero.”

The revered and celebrated leader is already out-polling all her competitors in the race. However, others have questioned Rep. Pelosi’s fitness to serve after her six-month absence from the House last year due to a bad case of eczema.

Pelosi’s absence resulted in delays to raising the debt ceiling from $60 to $66 trillion, causing the US to default on its debt for the third time in a decade.

The crisis was resolved when Rep. Pelosi was wheeled into the Capitol on her hospital gurney to cast the deciding vote.

However, the 24-term Congresswoman said that concerns over her mental capacity are rooted in “sexism, ageism, white supremacy.”

Pelosi cited her 35% annualized investment portfolio gains as evidence that she is still competent to serve.

Senator Fetterman, gearing up to run for his third six-year term in the Senate, seemed to agree:

“Look, if you have, you have, eclectic leadership. It’s going to work. She deserves as much as all the things, the things. And to hold accountable, it’s next accessory… she has it.”

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Who wouldn’t like to pay zero personal income taxes? (We certainly would!) If you’re open to moving to another country – and give up your citizenship, if you’re American – then this could be your financial reality, too. In today’s episode, we look at ten countries with no personal income tax, along with some other ways of legally reducing your taxes by moving abroad…

How you can legally pay little or no personal income tax in 2023…For most working folks around the world, tax bills are one of their most significant expenses. And for most of us, parting with up to half our annual income – only for the government to squander it – does not sit well at all.

Now, if you’re an American, Uncle Sam will want a large bite out of your earnings no matter where you live in the world.

Unless, of course, you renounce your US citizenship – which is a complex process, and was nearly impossible during the pandemic. However, if renunciation is NOT on the cards for you – but relocation is – then a move to Puerto Rico could cut your effective income tax rate to the single-digit range.

And if you’ll be leaving the USA for elsewhere in the world, the Foreign Earned Income Exclusion (FEIE) could provide you with tax relief for up to $120,000 of your earned income.

But for most other nationalities, severing ties with their home tax collection agency tends to be a LOT simpler: All you really have to do is move abroad.

There are several countries in the world that don’t levy any personal income tax. And in general, the countries offering this perk do so to stimulate economic development and attract foreign investment, business, and skilled professionals to their shores.

All governments require income to function though, so in most tax-free countries, expect to pay some form of consumption based taxation. (E.g. Value-Added Tax (VAT), a.k.a. Sales and Use Tax, if you’re from the USA. More on these alternative taxes below.)

Which countries don’t have any personal income taxes in 2023?Here’s a list of some of the countries that don’t levy personal income tax on their residents:

| COUNTRY | PERSONAL INCOME TAX | VALUE ADDED TAX (STANDARD RATE) | COST OF LIVING | ENGLISH PROFICIENCY | | Saudi Arabia | 0% | 5% | Inexpensive (3/7) | Very Low (5/5) | | Kuwait | 0% | 0% | Inexpensive (3/7) | Low (4/5) | | Oman | 0% | 5% | Inexpensive (3/7) | Very Low (5/5) | | United Arab Emirates (Dubai) | 0% | 5% | Expensive (5/7) | Moderate (3/5) | | Qatar | 0% | 0% | Expensive (5/7) | Low (4/5) | | Cayman Islands | 0% | 0% | (Extreme 7/7) | Very High (1/5) | | Bahamas | 0% | 12% | (Extreme 7/7) | Native /Very High (1/5) | | Bermuda | 0% | 0% | (Extreme 7/7) | High (2/5) | | Monaco | 0% | 20% | (Extreme 7/7) | High (2/5) | | Bahrain | 0% | 10% | Inexpensive (3/7) | Low (4/5) |

Source: Sovereign Cost of Living Index (cost of living and English proficiency data)

Ten countries with LOW personal income tax rates (2023)

| COUNTRY | PERSONAL INCOME TAX (2023) | SALES TAX / VALUE ADDED TAX (STANDARD RATE – 2023) | COST OF LIVING | ENGLISH PROFICIENCY | | Andorra | 0-10% | 4.5% | Inexpensive (3/7) | Low (4/5) | | Macau | 0-12% (progressive) | 0% | Expensive (5/7) | Moderate (3/5) | | Maldives | 0-15% (progressive) | 8% | Inexpensive (3/7) | Moderate (3/5) | | Hong Kong | 2-17% (progressive) | 8% | (Extreme 7/7) | Moderate (3/5) | | Montenegro | 9-15% (progressive) | 21% | Very Cheap (2/7) | Low (4/5) | | Serbia | 10% | 20% | Very Cheap (2/7) | High (2/5) | | Bulgaria | 10% | 20% | Very Cheap (2/7) | Moderate (3/5) | | Paraguay | 10% | 10% | Very Cheap (2/7) | Low (4/5) | | Hungary | 15% | 27% | Very Cheap (2/7) | High (2/5) | | Russia | 13% | 20% | Inexpensive (3/7) | Moderate (3/5) |

NOTE: In addition to consumption-based taxes, there may also be social security contributions to consider in many of these countries – and they may not be cheap. Additionally, tax laws can be complex and subject to change, so it’s always a good idea to consult with a tax professional before making any decisions about your tax situation.

So as you can see from the above table, there’s no perfect place: Places like Qatar and Bahrain aren’t known as bastions of liberty – or for their pleasant climates. (Temperatures of up to 110 degrees Fahrenheit are routinely recorded in Qatar during summer.)

And even the “lifestyle destinations” like Monaco, Bermuda and the Bahamas have their downsides. (In the form of extremely high costs of living).

Yet if you can live with searing summer temperatures and bigger-is-better aesthetics, then Dubai in the UAE could certainly be worth considering. Thanks to their government’s continual focus on economic diversification, Dubai today is a global financial center and thriving hub for trade and commerce.

And with scores of multinational companies favoring the city as the location for their Middle East and Africa headquarters, it is a truly phenomenal place to build a career as an expat. Yet again, whilst average salaries here tend to be very generous, the cost of living is certainly not cheap…

In conclusionWhen it comes to zero-tax destinations, you can typically choose between either less livable, or hellishly expensive.

Nonetheless, as we wrote previously, Dubai does strike a happy balance between the living costs, English language and quality of life considerations.

Yet there are scores more countries offering single-digit personal income tax rates – PLUS far better climates, and a higher degree of overall livability…

Georgia (the country), as a single example, has a graduated individual income tax, with rates ranging from just 1.00% to 5.75 percent. The country also has a corporate income tax rate of just 5.75%, making it a great place to run a business, too.

(And while its living costs are still fairly low, relatively speaking, rental accommodation is now costing a LOT more than it used to 18 months ago…)

So if you’re not sold on any of the zero-tax destinations featured above, stay tuned for a forthcoming episode on countries with low personal income tax rates – coming soon…

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Getting my in-laws out of Ukraine last year felt like it was as complicated as planning the Normandy invasion.

My wife is Ukrainian, and her family had been stuck in Kiev since the start of the war. For months leading up to the invasion, they ignored the Russian troops massing on the border and casually rejected my offer to fly them out of the country.

But then the shooting started… and it was pure pandemonium in Kiev. The airport closed, many roads were closed, the trains were full, and key border crossings were locked down.

The only reason we were able to get them out of the country at all was because my wife and I recently had both of our children in Mexico. And as I’ve written before, any child born in Mexico automatically becomes a Mexican citizen at birth… PLUS the parents and both sets of grandparents receive permanent residency.

So, as grandparents to my kids, my in-laws were eligible for Mexican residency. It was a ton of effort to process their paperwork through a war zone, and then figure out the logistics of actually moving them… but we were ultimately successful and got them out.

Their first stop, unsurprisingly, was Mexico. My wife and I were still in Cancun at the time as my son had just been born. But within a month or so, we returned back home to where we live in Puerto Rico, and my wife’s family came with us.

This is where the real pain began… because I wanted to set them up with their own house– for their privacy, and mine.

But finding a place to rent in Puerto Rico– especially last year– was about as complicated as… well, moving a Ukrainian family out of a war zone.

Housing supply started becoming very tight across the entire United States ever since the summer of 2020. And this is especially true in Puerto Rico.

I’ve written before that Puerto Rico boasts several extraordinary tax incentives; it’s one of the only places in the world where US citizens can move and NOT pay a dime of tax to the federal government.

This isn’t some loophole or illegal tax evasion; it’s the LAW. While Puerto Rico is a US territory, the island has its own tax law. And US federal tax code (section 933) clearly states that personal, business, and investment income sourced in Puerto Rico is excluded from US federal income tax.

Instead, we’re subject to Puerto Rican tax rates. And thanks to the generous incentive programs, those tax rates are as low as ZERO. It’s incredible.

Naturally a lot of people residing on the US mainland realized that 0% tax rates were incredibly attractive. So a LOT of folks started moving here to Puerto Rico back in 2020 and 2021.

But Puerto Rico is a small island, and there’s very little housing supply. So the sudden influx in expats caused an unbelievable surge in home prices. And if you think Florida real estate got pricey, you should really see Puerto Rico.

The highest-end communities on the island reached prices that have only been seen in Monaco and Hong Kong.

But even in Puerto Rico’s more modest neighborhoods, home prices went through the roof. So did rents.

It was under these market conditions that I had to find a place for my in-laws to live… so even people with dilapidated, poorly maintained homes acted as if they owned the Taj Mahal.

Now, Puerto Rico’s exuberant property market is the result of some unique supply and demand circumstances (which are finally starting to cool off). But the rest of the United States has seen plenty of housing insanity too.

And it’s still going on.

Remember, the Federal Reserve is supposedly pulling out all the stops right now to tame inflation. And as part of that campaign, they’ve been aggressively raising interest rates for more than a year without any regard or even awareness for the consequences.

Just three days before Silicon Valley Bank’s collapse back in March, the Chairman of the Federal Reserve told Congress that everything in the financial system was just fine.

Yet SVB went bust (three days later) in large part BECAUSE of the Fed’s interest rate hikes; the bank had bought $120 billion worth of US government bonds, most of that in 2020 and 2021.

Now, US government bonds are supposed to be the ‘safest’ asset class in the world. But even government bonds lose value when interest rates rise; this is the immutable law of the bond market– when rates go up, bond prices fall.

But the Fed didn’t see it coming. They didn’t realize that their rapid interest rate hikes would wipe out banks’ bond portfolios, triggering a wave of insolvencies.

Similarly, they failed to anticipate back in early 2020 that printing trillions of dollars to stimulate the economy during the pandemic would create inflation.

This shouldn’t have been hard to predict. I predicted it. So did a lot of other people. But the Fed totally missed it.

Later they insisted there would be no inflation. Then they wrongly predicted inflation would be ‘transitory’. Then they admitted “how little we understand about inflation”, which is frankly terrifying.

And now they’re raising rates under the foolish assumption that this will solve the problem… proving that the Fed STILL does not understand inflation.

Inflation is the result of a number of complex factors. For example, the Biden administration’s crusade against capitalism has deliberately targeted oil companies. And gee, what a surprise, oil prices have risen considerably as a result of tightening supply. This is a huge driver of inflation.

Conflict is also very inflationary, and there’s plenty of that in the world. During times of peace, economies allocate resources towards productive investments. Trade flourishes. Prosperity booms.

During times of conflict, however, economies allocate towards destruction. Trade wanes. Central banks print a lot of money. And the result is typically higher prices for scarcer goods.

There are also major demographic trends at work. Millions of Baby Boomers are retiring, reducing the number of productive workers in the economy. And it’s the same story with Generation Z, which has millions of people who simply never entered the work force to begin with.

But raising interest rates won’t change any of these trends.

Raising interest rates won’t suddenly turn Joe Biden into an articulate, sagacious philosopher-king. Raising interest rates won’t stop the war or make China back off.

Ironically, though, raising rates CAN actually make inflation worse. And housing is a great example.

In March 2021, the median US existing home sale price was about $273,000 according to Zillow. The national average 30-year mortgage rate back then was 2.96%. So with a 20% down payment, the monthly mortgage on a median (middle class) home in America would have been $924.

Today, the median home sells for about $339,000. With 20% down and a 6.35% interest rate, the payment is now $1,704 per month… 84% higher than in 2021.

This is extremely inflationary.

It might not show up in the official statistics given the squirrelly, dishonest way that the government calculates housing inflation.

But when there are 4 million families in the market to buy a home right now (according to the National Association of Realtors) whose housing costs will soar by 84%, it’s hard to argue this won’t contribute to inflation.

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On the morning of February 23, 1944, US President Franklin Roosevelt sent an important telegram to two of his key allies overseas– British Prime Minister Winston Churchill, and Joseph Stalin of the Soviet Union.

World War II was still raging. And while the allies had seized the upper hand, peace was more than a year away.

Surprisingly, though, Roosevelt didn’t write to his allies to discuss the war. He was already thinking about what the world would look like AFTER the war was over… and in the telegram, Roosevelt invited them to participate in a conference on “postwar economic collaboration”.

The United States was already the largest and most powerful economy in the world. America was the only major power that hadn’t been devastated by war. And, most importantly, the US was so RICH that they were the world’s primary creditor.

Britain, in fact, was heavily in debt to the United States… and at the time was actually negotiating to borrow even more money. So Churchill couldn’t exactly refuse Roosevelt’s invitation.

44 allied nations ultimately attended what would become known as the Bretton Woods Conference that took place in July 1944. This event famously established a new, post-war monetary system in which the United States and US dollar became the epicenter of global commerce and finance.

What a lot of people don’t know is that a sort of ‘pre-conference’ took place the month before, in June 1944, in Atlantic City.

That site was chosen specifically for its cooler weather. British economist John Maynard Keynes suffered from a terrible infection in his heart valves, and hot weather made him feel much worse.

Keynes even pleaded to senior Treasury official Harry Dexter White, “For God’s sake do not take us to Washington. . .” where the weather was sweltering in the summer.

In the end they settled on Atlantic City, specifically for Keynes’s health. And the first meeting to shape the new global financial system even took place on the beach!

Despite the balmy setting, however, Keynes was a thorn in the side of the American delegation; he was adamantly opposed to a post-war economic system in which the US dollar had total dominance.

As an alternative solution, Keynes advocated for competing reserve currencies… as well as a special central bank reserve currency that he wanted to call the ‘bancor’.

In the end, though, Keynes was overruled. The United States was the only country capable of calling the shots, and the rest of the world accepted America’s new dominance.

It’s been this way for the past 80 years. Even today, the US dollar continues to be used for the the majority of cross border trade, foreign reserves, and international financial transactions.

But as I have written many times before, this status is not written in stone. And it’s beginning to change very rapidly.

One very recent development is that, in China, the yuan just overtook the US dollar as the most widely used currency for international trade.

China has essentially been the manufacturer to the world for decades and does business with nearly every country on the planet.

Yet, up until last month, most of China’s trade was conducted in US dollars. If a Chinese manufacturer sold machinery to a Brazilian company, for example, or if a Chinese producer bought cobalt from Indonesia, those transactions traditionally took place in US dollars.

Over time, however, China has been gradually using its own currency for trade. And other countries have been happy to go along.

So now, for example, China might buy cobalt from Indonesia using yuan instead of US dollars.

This means that other countries will start holding more and more yuan to trade with China… and hence fewer and fewer US dollars.

This is not an accident. Back in 1944, the US was very aggressive in whipping the rest of the world into accepting the US dollar. China is following the same playbook– aggressively rallying other countries against the US dollar and towards the yuan.

And it’s really becoming obvious.

After a recent visit to China, French President Macron urged Europe to move towards independence from US foreign policy, and to rely less on the US dollar.

France… which is literally America’s oldest ally, one of the largest economies in Europe, and a key leader of the European Union, is pushing against the dollar.

In addition, China and France recently completed their first yuan-settled LNG (liquified natural gas) trade. Again, this shows a shift from France solely using the US dollar for foreign trade, to also using the yuan.

Just before that, China and the United Arab Emirates made history with the first ever LNG trade settled in yuan. Then Brazil and China reached a deal to ditch the US dollar and trade in their own currencies.

Malaysia’s Prime Minister has proposed an “Asian Monetary Fund” to reduce dependence on the US dollar. Malaysia also struck a deal with India to trade in the Indian rupee.

India and Russia are settling oil deals without US dollars.

Then there is “BRICS”— Brazil, Russia, India, China, and South Africa which account for about 40% of the global population and a quarter of the global economy.

At a Bretton Woods-esque summit planned for this summer, BRICS will discuss creating a new currency, potentially pegged to gold, which they can use to trade.

Most importantly, Saudi Arabia is open to breaking the petrodollar and to start selling oil in yuan; on top of this, Saudi’s crown prince recently stated that he was “no longer interested in pleasing the US”.

The pace at which countries are turning away from the US dollar reminds me of the Hemingway line I mentioned recently about going broke: “gradually, then suddenly.”

I’ve been warning readers about the decline of the dollar’s reserve status for over a decade. And it may have seemed controversial back then that the dollar could be dethroned.

Now it is blatantly obvious. This is no longer a prediction, it’s happening in front of our very eyes.

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In a world brimming with bewildering headlines, we spend a lot of time thinking about the future… and to where all of this insanity leads .

“Future Headline Friday” is our satirical take of where the world is going if it remains on its current path. While our satire may be humorous and exaggerated, rest assured that everything is based on actual events, news stories, personalities, and legislation.

May 12, 2030: New York City Announces Gourmet Solution to its Rat Infestation

New York City appointed its first Rat Czar seven years ago, back in 2023, when the city’s rat population had grown out of control.

Most experts at the time agreed that New York’s alarming rat infestation was a result of pandemic policies which forced everyone— including animal control workers— to remain at home for months.

Since then, the Rat Czars’ policies have all focused on fixing the problem by influencing human behavior.

They started with strict controls on trash disposal. Later, the czars introduced cleanliness mandates for private residences, and they empowered the newly-created Rat Department to conduct random inspections of people’s homes.

Violators are subject to fines and Civil Asset Forfeiture, the proceeds of which all go directly to the Rat Department. Last year the Rat Department collected record fines after its controversial “Rat Out Your Neighbor” campaign.

But despite these efforts, the rat infestation has continued to surge, and rats are now a major fixture in the daily lives of nearly every New Yorker. In fact the city government recently announced that NYC has passed a grim milestone— the rat population now exceeds the human population.

Environmental activists, however, saw this as an opportunity to team up with the Rat Department, to help take a bite out of climate change.

Partnering with the World Economic Forum (WEF), the Rat Department will start fighting the infestation by encouraging New Yorkers to consume rat as part of their normal diet. They’ve even designed a new marketing campaign to de-stigmatize the human consumption of rat meat.

The 92-year old head of the WEF, Klaus Schwab, commented, “Elected officials in New York City have been leaders in passing laws to reduce beef consumption, the farming of which is a huge contributor to climate change. Now, if New Yorkers can replace what little beef they do consume with rat, their population will decline, and the earth will heal.”

He then added, “I meant the rat population, of course.”

One ad uses social media influencers to portray rat meat as a chic, luxury food item. Another points out that lobster was also once considered disgusting filth and only fit for prisoners to eat.

The campaign will also include pop-up sidewalk grills throughout the city, where Michelin-rated chefs will encourage New Yorkers to try their gourmet rat-fare.

Swedish Prime Minister Greta Thunberg was among the first to applaud the move, saying, “People got used to the idea of eating bugs. I think they will come around to the idea of eating rats soon enough.”

May 12, 2032: US Treasury Announces First Yuan-Denominated Bond

Ever since last year’s default on the $52 trillion national debt, the US government has been unable to sell bonds and borrow money from international capital markets.

This morning, however, the Treasury Department announced a return to the global financial community with a brand new US government debt security that will be denominated in Chinese yuan.

Credit rating agency S&P Global has already awarded a BBB grade on the US Treasury’s new experimental bond, just enough to be considered “investment grade”.

Meanwhile, China’s Chenxin Credit Rating Group lifted its rating of the US from a CCC- to CCC+.

After completing the native land acknowledgment ceremony at this morning press conference, Treasury Secretary and Presidential candidate Cori Bush was quick to praise the new bond:

“Today, we celebrate a milestone in international finance as we proudly welcome our nation’s first yuan-denominated bond. This is not just a victory for our party— the Democratic Socialists of America. It is a victory for all Americans, in each of the 54 states of our great nation, as our new Yuan bond will enable us to partly ease the capital controls we imposed last year.”

The Secretary further thanked China for its support and approval:

“We’re thrilled that Beijing has given us the green light to sell US debt in their currency, and we’re deeply moved by their generosity in increasing our credit rating.”

The Treasury Department estimates that this yuan bond issuance will raise approximately $2 trillion after adjusting for the exchange rate.

Given this year’s massive Social Security shortfall, desperately needed upgrades to US military equipment, substantial investments required to rehabilitate US infrastructure, and a host of other major spending needs, the Secretary was asked how this $2 trillion would be spent.

She replied succinctly, “On justice.”

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Steeped in history and rich in culture, Malaysia is one of Southeast Asia’s most underrated destinations for digital nomads and the geoarbitrage crowd. In today’s episode, we take a look at why the country – and its new(ish) Digital Nomad Pass – could make a lot of sense in 2023…

A closer look at Malaysia’s Digital Nomad VisaGeoarbitrage – earning hard currency at home and living in a far more affordable country – is a term that’s been bandied about a lot in recent years. (And since the meteoric rise of remote work, in particular.)

While massive influxes of foreign remote workers have made cities like Barcelona, Lisbon and Tbilisi far less affordable than they used to be five years ago, there are still ample places in the world that have not become too “mainstream”…

Countries where the cost of living alone could make a move there worthwhile. Malaysia is one such a country – and it has a LOT going for it.

Modern convenience, exceptional value for money, AND a paradise locationIn Malaysia, you can easily cut your living costs by 50% or more compared to the US, the UK or Australia, while enjoying similar modern amenities.

It’s an advanced economy with developed infrastructure. The country’s capital — Kuala Lumpur — is sophisticated and beautiful. And many expats choose it as their base.

Penang — a tropical island with amazing beaches — is another highly livable area favored by Western retirees and digital nomads.
But for the lion’s share of expat arrivals, the main drawcard is Malaysia’s cost of living. A one-bedroom apartment in a nice area of Kuala Lumpur will cost you around $500 in 2023, and a three-bedroom is only around $920 monthly.

Penang is even cheaper. A one-bedroom apartment in a nice expat area will cost you around $410 per month, and three-bedroom apartments are not much more expensive.

The country’s mobile download speed is around 43 Mbps, while fixed broadband internet is 94 Mbps.

Additionally, Malaysians are generally very friendly, and many speak fluent English.

So that’s a lot of pros.

Just keep in mind that the weather is properly tropical there. You may find adjusting difficult if you aren’t partial to never-ending heat and humidity.

Being an Islamic country, you may also find that pork dishes and alcohol aren’t as readily available as back home.

But if none of these issues bother you, Malaysia could be an excellent destination for an extended remote working trip…

In addition, the country recently introduced a bona fide Digital Nomad Visa called the DE Rantau Digital Nomad Pass, and its conditions are very reasonable…

Malaysia’s DE Rantau Digital Nomad Visa at a glance…

| Initial residency validity and renewals | Initial: 1 year Renewals: Once, for 1 more year. | | Financial requirements | Monthly Income: $2,000 Your immediate family is covered by the same amount. | | Personal Safety | Safe (3/7) | | Climate | Bearable (4/5) | | Expat’s cost of living level | Very cheap (2/7) | | Can the DNV lead to PR or citizenship? | No | | Tax situation | Standard conditions apply: Territorial taxation after 183 days on the ground. Only your Malaysia-sourced income will be taxed. |

Source: Sovereign Cost of Living Index

A nice benefit of the program is that you can start your application for the Nomad Pass online.

The key requirement is really that you’re earning enough to support yourself whilst living in Malaysia (just $2,000 per month).

You’ll also be required to prove that you’re either employed, or have steady freelance contracts, and the Malaysian authorities want to see a copy of your highest academic qualification. (Holding a higher education qualification should count in your favor.)

You’ll also need to obtain a “letter of good conduct” (issued by the authorized body in your country of current residency).

Obtaining this document is one of the more challenging steps in preparing your visa application…. Because the “letter of good conduct” is not a commonly used document in countries like the USA. (Hence, US Embassies won’t be able to issue you one.)

HOWEVER… the FBI can issue you with an Identity History Summary a.k.a., the so-called Rap Sheet. (You’ll need to have your fingerprints taken for this.)

In other countries, this is also known as a Police Clearance Certificate. And these alternative documents can tick the relevant box for the Malaysian authorities.

Another challenge can stem from the certification of copies of documents like birth certificates (especially if you’re already traveling abroad).

A possible solution is to schedule an appointment with your nearest US embassy and confirm, under oath, that the documents are in fact legit. (Contact that embassy for more information.)

You’ll also have to sign a so-called “personal bond”. This is an undertaking that you’ll respect the conditions of your visa, and the laws of Malaysia.

Once approved, you’ll be required to pay a refundable security deposit as the primary applicant. Americans and Canadians currently have to pay RM 2,000 (~$450).

And finally, you’ll need to obtain a tax registration number from the Malaysian Inland Revenue Board. (More on the taxation situation below.)

Once you’re approved, you’ll also need to obtain health insurance covering you (and any dependents) for the duration of your stay.

Your initial visa will be issued for 12 months. After it expires, you can extend it once for an additional 12 months. And you can include your spouse and children under the age of 18 years in your application at no additional cost.

The application fees are RM 1,050 (~$230) for a single person and RM 530 (~$115) for each dependent. And according to the official program website, applications are processed within around six to eight weeks – which is reasonably fast.

However, you should probably bank on this process taking at least two to three months.

There is however, a significant restriction to be aware of.

The Malaysian Nomad Pass allows you to stay long-term only in West (peninsular) Malaysia. It does NOT allow you to reside in Sabah or Sarawak — Malaysia’s two autonomous regions located on the island of Borneo. (You can, however, still travel there as a tourist.)

A word on digital nomad taxation in MalaysiaAfter spending six months in Malaysia, you will become a tax resident. Hence you’ll be subject to tax rates reaching 30% for income above ~$445,000.

On the bright side, Malaysia is home to a territorial tax system, meaning that only your income generated inside Malaysia will be taxed.

Does it mean that all remote workers are off the taxation hook then?

You will not be taxed on your passive income coming from outside Malaysia, such as your pension, rental income, investment income, etc.

But your earned income can be an issue. Just like in other countries with territorial taxation, since you do your work while living in Malaysia, local tax authorities will likely consider it locally-sourced. (Definitely discuss this with a Malaysian tax advisor.)

In conclusionGiven that the Malaysia My Second Home (MM2H) program has become a LOT more restrictive in recent years, the introduction of the Malaysian Digital Nomad Pass has been great news for folks seeking to spend meaningful periods of time there.

And while there are some paperwork related challenges to be aware of, the experience of living in Malaysia should be well worth the effort. You can apply on this website if Malaysia ticks all the boxes as your ideal destination. So as the saying goes – seize the day and apply.

Yours in freedom,

Team Sovereign Man

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On the afternoon of Sunday, June 7, 2020, a 36-year-old Chinese national named Wang Xin was at Los Angeles International Airport waiting to board Air China flight 988 back to his native Tianjin.

Things were tense in the US; Covid-19 was still raging, George Floyd protests were erupting all around the country, and Wang couldn’t wait to get home.

But he never made it. Before boarding his flight, Wang was approached by several men who flashed their badges and identified themselves as US federal agents. Wang was then taken into custody and questioned… and he eventually told the agents the truth.

Wang had already been in the US for 18 months at that point working within the University of California system to conduct cutting-edge genomics research. One of the published papers that he co-authored in late 2019, for example, focused on “TMEM131 family proteins in intracellular collagen assembly”.

Some of his work had even been funded by the National Institutes of Health.

But Wang confessed to federal agents that day that he was actually a People’s Liberation Army officer with the rank of Major, and that he had been ordered by his PLA superiors to “bring back information” about the University of California’s research, laboratory, personnel, and more.

This is all tantamount to industrial espionage. And Wang is far from alone.

At an event I attended this past weekend, I had the chance to spend a lot of time with a former CIA officer who spent more than 20 years working at the agency. As a former intelligence officer myself, he and I had a lot to talk about.

He reminisced about how one of his early assignments at the CIA was to track some Chinese intelligence operatives who were posing as university students in the United States… which is something he said is incredibly common.

Quite often Chinese intelligence operatives spend 6-8 years in school, completing PhDs in difficult “STEM” subjects like electrical engineering of advanced genomics.

But China doesn’t stop at just sending its operatives to American universities. They make sure their people subsequently get hired at prominent US companies, especially in industries like technology, energy, pharmaceuticals, etc.

Yet even then, as my CIA colleague explained, the spy’s value is minimal to the Chinese government. It takes another 15 to 20 years for them to work up the corporate ladder and have access to critical technological secrets.

Only then can the spy provide the Chinese Communist Party with highly prized secrets.

China is essentially willing to patiently invest DECADES of painstaking effort to achieve its intelligence objectives. And that’s pretty normal for the Chinese; their leadership tends to establish clear goals and long-term strategic visions that often look 30+ years into the future. A single decade is nothing for them.

Now, China’s authoritarian government obviously has a mountain of reprehensible flaws, and they have no intention of changing for the better. But one thing’s for sure: they know how to play the long game… and use it to their advantage.

Contrast this with the US government, which at present cannot even plan beyond the next few weeks.

Remember that the legal limit for the national debt was breached on January 19, 2023. And ever since then, the Treasury Department has had to resort to “extraordinary measures” in order to keep the government funded.

Now, it’s utterly pathetic that the federal government of the largest and supposedly ‘most prosperous’ economy in the world has to borrow trillions of dollars each year to make ends meet.

Consider that the Treasury Department collected a record $5 TRILLION in tax revenue last year; as recently as 2019, $5 trillion would have been more than enough to fund the entire government AND STILL run a budget surplus.

And yet, today, even $5 trillion is not enough money. So, the US government still needs to go deeper into debt in order to keep the lights on. Like I said, utterly pathetic.

But what’s worse is their inability to resolve this problem.

The guy who shakes hands with thin air insists that he will not negotiate a single penny of spending cuts in order to reach a compromise with Congress on raising the debt ceiling.

Obviously, it’s silly to think that the federal government shouldn’t cut spending. And it’s downright impossible to argue that there isn’t plenty of fat to trim.

Yet POTUS simply refuses to make a single cut, even though it’s precisely what the country needs.

And we can’t just chalk it up to the guy being senile and demented, either– this is a criminal level of incompetence, because it is deliberate and reckless.

Maybe he’ll change his tune before it’s too late. But it’s not just the debt ceiling issue. Nor is this short-sightedness a problem that is unique to Joe Biden.

Both Congress and the White House, for example, understand that Social Security’s trust funds are set to run out of money in less than ten years. And yet both sides and both political parties have agreed to take Social Security ‘off the table’. No changes to the program. No discussions. No solutions.

There’s a looming deadline to fix Social Security… and yet they’re happy to just kick the can down the road… just as previous Congresses and administrations have done.

These people are incapable of thinking long-term and solving challenges that are 10+ years out. At the moment they can’t even compromise on the next month’s debt ceiling crisis.

Quite simply they’re unwilling and/or unable to play the long game. And the country is worse off for it. The whole world is worse off for it.

This is why it makes so much sense to have a Plan B– something which requires long-term thinking.

We just talked about Social Security and how they refuse to do anything about it. But we can easily think long-term and set up the right kind of structure, like a solo 401(k), which provides more flexibility to save money for retirement.

We can also acknowledge the risks of America’s obvious financial and social decline and think about long-term solutions.

One option is to establish legal residency in a foreign country you enjoy visiting, which, over a few years, can lead to a second passport for your entire family. This will give you more freedom and opportunity, and act like a sort of insurance policy if you ever need it.

It takes time to set up, of course. But this isn’t a problem for people who play the long game… and recognize that there’s no downside in being prepared for obvious risks.

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In a world brimming with bewildering headlines, we spend a lot of time thinking about the future… thinking about where this trajectory leads.

So, here is our latest edition of “Future Headline Friday”. This is our satirical take of where this world is going if we stay on this current path. While it may be humorous and exaggerated, rest assured that it is rooted in actual events, news stories, and legislation.

May 5, 2027: New York Bans Traditional Cooking in All New Construction

New York has made history by becoming the first state to ban most traditional cooking methods in new construction.

Electric ovens will no longer be permitted in new buildings, and their sale within the state is now illegal. Homeowners caught importing electric ovens or stoves will face hefty fines and criminal penalties, equivalent to the felony charges that local prosecutors bring for the illegal trafficking of gas and propane stoves.

Following the signing of the new law, all appliances sold or installed in the state must be solar-based. Despite initial discussions, the law does not make exceptions for electric ovens powered entirely by solar energy. Instead, all new solar ovens must utilize energy directly collected from the sun for cooking purposes.

This groundbreaking legislation is the latest in New York’s pioneering efforts to reduce the impact of cooking on climate change. In 2023, the state banned gas stoves and fossil-fuel heating in all new residential construction. A year later, the sale of new gas stoves and heating systems was completely outlawed.

The state subsequently banned cooking with gas and charcoal grills, as well as gas-powered fire pits, even refusing to grandfather in existing equipment. To enforce this ban, New York spent billions on grill buyback programs.

The New York legislature is also considering a bill that would criminalize repairing old gas and electric stoves, in an effort to accelerate the transition to cleaner cooking methods.

As New York embraces a future of eco-friendly culinary practices, the nation will be watching closely to see if other states follow suit in the fight against climate change.

May 5, 2029: First Dual-Spirit, Non-binary, Undocumented Latinx Lesbians Sworn into Cabinet Position

Today marks a landmark day in American history. Cris Santos, who uses ze/zir pronouns, was sworn in this morning as the new US Transportation Secretary by Chief Justice Lina Khan.

Santos is the first dual-spirit, non-binary, undocumented Latinx lesbians to ever hold a cabinet post. Ze first came to the US across the southern border back in 2023 after the Title 42 provisions expired, and ze rose to prominence after Netflix released a docu-series of zer journey.

Although Santos has no formal experience in transportation, government regulation, managing large budgets, leading complex organizations, nor even speaks the English language, President AOC has been a staunch advocate of zer appointment.

“Zer lived experience makes zem more than qualified to oversee our transportation systems. Any statement to the contrary is violent hate speech,” the President wrote last week.

Today’s ceremony had to be rescheduled multiple times as Secretary Santos has been unable to travel to Washington due to the months-long FAA system failure, interstate highway closures, and the collapse of multiple rail bridges.

Santos did not address these transportation challenges in zer remarks today. However, after completing the land acknowledgment ceremony, Santos did tell the nation through an AI voice translator, “My top priority as Transportation Secretary will be to ensure our highways, airways, and railways are as diverse and inclusive as possible.”

Secretary Santos will have a staggering $8 trillion to spend under the newly passed infrastructure bill; Santos stated that ze is “dedicated to spending the money wisely enough so that taxpayers see at least $2 trillion of benefit.”

When asked about the remaining $6 trillion, ze explained that the concept of receiving a return on investment is “rooted in economic injustice” and would have no place in zer department.

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George Washington was already on his heels in late 1777.

The British army had recently taken New York and Philadelphia, plus Washington had suffered recent defeats at the Battles of Brandywine and Germantown.

Washington knew that unless he could regroup, rearm, and retrain his beleaguered forces, the fledgling American Revolution could soon be lost. So on December 19, 1777, his army of 12,000 marched to their winter encampment site in southeastern Pennsylvania– an area known as Valley Forge.

According to George Washington himself, his men lacked clothing, shoes, food, blankets, etc. giving rise to an almost mythological level of suffering that winter.

And it’s true– conditions were incredibly harsh. There were very few supplies available, and nearly 1 out of every 5 soldiers died from disease, cold, or starvation at Valley Forge during the winter of 1777-1778.

Washington was exasperated; the situation was so bad that his army barely had any ammunition to fight… and he pleaded with the Continental Congress to provide more funds for war.

But Congress had no more money.

The brand new United States of America, which at that point hadn’t even existed for 18-months, was completely bankrupt. Tax revenue was almost nonexistent. Credit was difficult to obtain. And the national currency– the Continental Dollar– was so weak it was practically in hyperinflation.

Washington’s army was simply too broke to fight. And if the situation had remained that way, the British could have probably won the war in 1778.

(Fortunately for the United States, though, France stepped in the following spring with major military and financial support, giving George Washington the resources he needed to win.)

Nearly two and a half centuries later, the US is rapidly heading towards a similar situation: too broke to fight.

Treasury Secretary Janet Yellen announced yesterday that the federal government could become unable to pay its bills as early as June 1st– just 30 days from now– if Congress and the President don’t reach a compromise on the debt ceiling.

It’s so shameful that the United States of America– supposedly the wealthiest and most advanced democratic nation in the world– finds itself in this position every few years.

On one hand this fiasco demonstrates an appalling level of political dysfunction– the complete inability of politicians to honestly discuss complex problems, make good faith compromises, and execute sensible solutions.

But more importantly, it lays bare the US government’s perennial lack of fiscal discipline. And this is not a single party issue: the federal government has not run a budget surplus in 25 years, during which time both parties have been in control of Congress and the Presidency.

There’s always some reason, some excuse, to go deeper into debt every year. And that’s why there have been SIX debt ceiling crises or government shutdowns just since 2011. That’s basically one major fiscal emergency every two years.

And every time it gets worse. The US national debt is now $31.5 trillion, which is actually THE statutory debt limit as allowed by law. As soon as they raise the debt ceiling, the national debt will likely soar beyond $32 trillion.

Bear in mind that the size of the entire US economy is only $26.5 trillion. So the “debt-to-GDP” ratio is 120%.

Today’s debt-to-GDP ratio, in fact, is MORE than it was back in the 1940s when the United States borrowed heavily to fight World War II.

At least back then they were fighting the Nazis and had a good reason to rack up mountains of debt. But what does the nation have to show for all of its debt today? Spending trillions to pay people to stay home and NOT work. Abandoning $100 billion worth of military equipment to the Taliban. Spending billions of dollars to make highways less racist.

The level of waste is astonishing. And there’s no end in sight.

The Congressional Budget Office projects that the US will rack up an additional $20 trillion in debt over the next decade, essentially averaging a $2 trillion budget deficit every year for the next 10 years.

But America doesn’t have ten years to get its fiscal house in order.

I’ve written extensively in the past that the US government’s days of reckless spending are numbered… and running short.

Think about it– what would happen in India if the President was fiddling (or shaking hands with thin air) while their government was 30 days away from defaulting on their national debt? Most likely their bond market could collapse and the currency would plummet.

But in the Land of the Free, there are no consequences… simply because the US dollar is still the world’s reserve currency.

Every other country, government, central bank, and large corporation in the world uses US dollars for international trade– mostly because of tradition, the perception of American supremacy, and the fact that Saudi Arabia sells oil in US dollars.

But these conditions are rapidly changing. Saudi officials are mulling a deal to accept Chinese yuan for oil. And, with so many humiliating episodes of US government failure, perception of American supremacy around the world is falling.

Several countries, including Brazil, Russia, and China, have already agreed to distance themselves from the dollar, and the anti-dollar momentum continues to build.

As this trend continues and foreign countries reduce their dollar holdings, the US government will simply be unable to go into debt and spend as much money as it wants.

America will then be just like every other country– forced to live within its means. And that means steep budget cuts… including to military spending.

Bear in mind that critical national defense assets are already becoming worn out or obsolete.

The average US Air Force fighter aircraft is more than 32 years old. And due to budget constraints, pilots are unable to fly a sufficient number of training missions to ensure that they are combat ready.

The US Navy, meanwhile, is a total train wreck. The fleet is shrinking, the ships are old, and the maintenance infrastructure is even older. In short, the Navy doesn’t have the resources to keep its fleet ready for battle.

One notable example is the USS Rushmore, an amphibious warfare ship that was recently scheduled to conduct a training exercise with the 31st Marine Expeditionary Unit.

Now, the 31st Marine Expeditionary Unit is a rapid-response force that’s supposed to be able to deploy on a moment’s notice. And the training exercise was specifically planned to take place in the north Pacific as a sort of flex against China.

But unfortunately the USS Rushmore was so badly in need of repairs that the training exercise had to be canceled at the last minute. The rapid-response force was grounded. China noticed.

These obviously aren’t Valley Forge conditions. But as these trends continue to play out, America may soon find itself too broke to fight.

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Last September– a bit more than seven months ago– my father died. Technically he was my step-father, but he was every bit my dad, and I loved him. The loss was hard.

We didn’t do a memorial service right away, though. My mother understandably just wasn’t in the right frame of mind. So we waited… until last weekend, and held the memorial service at the George Bush Presidential Center at Southern Methodist University in Dallas.

It was a good thing my mother booked such a large venue; the memorial service was incredibly well attended, and nearly 500 people came to pay their respects.

After the service was over, I wanted to get my mind off the day’s events, so some friends and I popped upstairs to check out the Bush presidential museum… which was currently presenting an exhibit aptly named “Freedom Matters”.

I couldn’t agree more.

Access to the museum, however, is tightly controlled. And you can only enter after going through an airport-style security checkpoint. You know the drill– empty your pockets, take off your clothes, and submit to an angry authority who treats you like you’ve just been booked at the county jail.

My friend Jim was lucky enough to receive extra screening; after setting off the metal detector, he was pulled aside and assumed the “I surrender” pose while gruff security personnel waved a magnetic wand near his genitals.

Curiously the security wand kept going off, prompting the increasingly irate guard to demand “what is this? What’s in here?”

I couldn’t help myself and shouted, “It’s his dignity!” Apparently Jim forgot to remove it before going through security.

The irony seemed to be lost on the guards, whose brusque treatment of museum visitors was taking place directly in front of an exhibit literally called “Freedom Matters”.

At the front of the exhibit was a large banner– I snapped a photo– defining freedom, according to a former Soviet dissident:

“Can a person walk into the middle of the town square and express his or her views without fear of arrest, imprisonment, or physical harm? If he can, then that person is living in a free society. If not, it’s a fear society.”

I thought about this quote for a few moments, glanced back at the security guards wanding another unlucky visitor, and quickly realized– based on this definition– that the US is quickly becoming a fear society.

You can no longer freely express views without fear of reprisal anymore– especially if those views conflict with the radical woke left.

Personal opinions can easily be viewed as hate speech, misinformation, violence, etc. And we’ve all seen too many instances of people’s lives being ruined by cancel culture. But I’ll come back to this.

After wandering around the museum for a while and enjoying some jokes with my friends, I finally returned home to the AirBnb I’m renting with my family, very close to where I grew up in the Dallas area.

It’s the quintessential American suburb: clean, quiet, safe, and stable. The house where I’m staying is at the end of a picturesque tree-lined cul-de-sac, and on the other end of the street is a large park where small children were playing organized sports in the afternoon.

Parents chatted with each other on the playground while their kids bounced around the jungle gym. Retirees were out walking their dogs. Even the postman drove by and greeted some of the residents by name. Everyone was happy… and it was basically perfect.

This isn’t the famous ‘American Dream’. It’s not a dream. This is real life as it’s supposed to be… the pinnacle of civilization, the product of more than two centuries of hard work and responsibility. It is the American Reality.

That’s why it’s so frustrating to watch the people in charge dismantle it. Brick by brick, neighborhood by neighborhood, they’ve been chipping away at this vast, enviable middle class prosperity, ripping it away in front of our very eyes.

They’ve encouraged “mostly peaceful” violence and caused an alarming rise in crime as a result of their soft “criminal first” policies.

They’ve sent the cost of living to record highs, and yet have no understanding how their spending practices could have possibly contributed to inflation. They’ve expanded the national debt to a record high $31.5 trillion and plan to keep overspending tax revenue by trillions of dollars every year.

They’ve worked hard to re-engineer childhood education (and have succeeded in many school districts). Biology has been rewritten to conform to new woke ethics. Math is racist. And parents who complain about the decline in educational standards are threatened by the federal government.

The most comical part of this suffering is the abject political dysfunction that’s on display every single day of our lives.

Consider that, amid deadly and toxic train derailments, airplanes around the country that have been grounded, total chaos at the national seaports, Transportation Secretary Pete Buttigieg’s priority right now is ensuring that Ford and General Motors use female crash test dummies.

It’s so ridiculous it almost sounds made up. And yet it’s completely true.

Or consider that the Treasury Department is now weeks away from defaulting on the national debt, once again, having reached its statutory debt limit. Congress is required to pass a law to raise the debt ceiling.

Yet the President of the United States refuses to negotiate a single penny in spending cuts in order to reach a compromise with the House of Representatives. Not a penny.

Simultaneously the guy was shown on video recently unable to remember how many grandchildren he has, or even the fact that he had recently returned from a trip to Ireland.

These examples of extreme incompetence never end. It’s so aggravating. Even terrifying.

That’s why I write so much about taking simple, sensible steps to reclaim control.

For example, if you think Pete Buttigieg is doing a great job as Transportation Secretary, then by all means, please continue to overpay your taxes and give him as much of your money as possible.

If, on the other hand, you recognize that he is demonstrably incompetent, completely unqualified to be Transportation Secretary, and was only given the position because he checks a diversity box (and agreed to endorse candidate Biden in 2020) then you might want to consider the multitude of completely legal ways to reduce your tax bill… and stop giving Pete so much money to waste.

It’s perfectly normal to feel angry or disgusted with America’s terrible leadership. But it’s a lot more effective to channel some of that energy into reducing their impact on your life.

There absolutely are ways to reduce your tax bill, to mitigate the effects of inflation, to still make phenomenal investments, to fund your retirement, and to ensure that you’re in a position of strength no matter how destructive they become.

There’s no downside in doing this. If this decline reverses and America starts to dig its way out of this hole, you won’t be worse off for putting yourself in a stronger position.

And that is actually still a possibility. This country has so much potential upside from its entrepreneurial brilliance, talented workforce, immense resource wealth, and more. That’s why it’s so bewildering to see how badly the people in charge are screwing it up.

At the moment, though, it’s difficult to see any real change on the horizon. As President Biden said in his re-election announcement, he wants to “finish the job”. By that I presume he means completely destroying the country.

This is nothing new; history is full of superpowers who eradicate themselves from within. They lay waste to the very ideals that made them strong and prosperous to begin with, they create divisions and disunity, and they subject themselves to horrendous, weak leadership.

But it’s one thing to understand the decline of empires and civilizations through the lens of history. It’s quite another to watch it happen from your living room window.

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Today, we’re trying something new and unique. In a world brimming with bewildering headlines, we spend a lot of time thinking about the future… thinking about where this trajectory leads.

So, today we’re launching our inaugural edition of “Future Headline Friday”. This is our satirical take of where this world is going if we stay on this current path. While it may be humorous and exaggerated, rest assured that it is rooted in actual events, news stories, and legislation.

April 28, 2032: Health Canada Now Fast-tracks Assisted Suicide to Fight Cimate Change

Ever since 2029’s national debt default, the waiting period for Medical Assistance in Dying (MAID) provided by Canada’s national healthcare program has stretched to more than two years.

Canadian public health officials noted that requests for assisted suicide skyrocketed after the government imposed another 8-month stay-at-home order during the 2030 chicken pox pandemic.

However, after last year’s full government restructuring, when Health Canada became a subsidiary agency of the Ministry of Climate Change, officials soon realized that this lengthy waiting period for assisted suicide was damaging to the environment.

“We all know there are simply too many people in the world. The science is very clear on this point,” the Minister told reporters in a virtual press conference yesterday morning.

“The government’s first responsibility is to the planet, and when we have such a long list of heroic Canadians who want to do the right thing and reduce their carbon footprint, we need to prioritize their transition.”

The Ministry further announced that, in addition to fast-tracking assisted suicide to fight climate change, it would also update the medical guidance to ensure that physicians now recommend assisted suicide as treatment for a variety of conditions ranging from kidney stones to restless leg syndrome.

A new panel is also exploring whether to offer assisted suicide to those who have no underlying condition, but have opted to upload their consciousness to the meta-cloud.

“My body is really redundant at this point,” said Diane Young, a vocal proponent of assisted suicide. “Downsizing to only meta-life reduces my carbon footprint by 97%. It’s a no brainer. It would be selfish to not do so.”

April 28, 2031: Chairperson of Autonomous Seattle Says Diplomatic Immunity Was Breached in Recent Trip to US

Entering its second year of federal recognition as an independent socialist commune, Autonomous Seattle still depends on the US government for nearly all of its financial assistance.

However, last years’ $64 billion in aid only covered about 70% of Autonomous Seattle’s budget.

This paid for non-negotiable programs such as Universal Basic Income, annual reparations, and ethical drug-use parlors. However, Autonomous Seattle was forced to close its fire department, and cut its Adaptive Compassionate Aid Battalion (or ACAB), formerly known as the Seattle Police Department, by 50%.

To secure a larger 2032 operating budget, the Chairperson of Autonomous Seattle, Comrade Che, visited President Newsom in Washington last week.

However all did not go according to plan as the Chairperson overheard a low-ranking official in the Newsom administration refer to “her travel schedule.”

Comrade Che is, of course, nonbinary, and misgendering is a serious crime under Autonomous Seattle’s Universal Human and Animal Rights Charter.

While the US official was immediately terminated, no charges were brought forward over the misgendering, which Comrade Che referred to as “literal violence.”

As the violent act was perpetrated by a US government official, the Chairperson says this is a breach of diplomatic immunity.

Chairman Che said they are willing to drop the complaint if the Newsom Administration agrees to a $40 billion 2032 aid package.

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Citizenship By Investment (CBI) programs – and the European ones, in particular – have come under mounting pressure from Brussels in recent years. Yet occasionally, new programs still come online. Egypt’s Citizenship By Investment (CBI) program has been in existence since March of 2020. But is it worth considering?

In today’s episode, we find out…

How attractive is Egypt’s Citizenship By Investment program in 2023?Before we get into today’s topic, it has to be said…

There is a massive difference between having a CBI program, and having a CBI program that actually works. The five Caribbean CBI programs typically run like clockwork.

And if you work with Sovereign Man’s trusted suppliers in Turkey, you should have a seamless experience there too. But in places like North Macedonia? Not so much.

And if you risked it in Vanuatu, you’ll now be the proud owner of a very expensive, bright green booklet that doesn’t get you into the EU.

(NOTE: Grenada CBI applicants experienced some temporary delays around mid-2021 due to a dispute between the government and one of the country’s flagship CBI property developers. But according to a trusted supplier on the ground, applications there are once again running smoothly.)

So whenever a new program launches, we first take a wait-and-see approach, and obtain credible feedback from our network before reporting on it.

But with that said, let’s take a look at Egypt’s CBI program, which recently turned three years old…

The Egyptian CBI program at a glanceIn March 2020, Egypt enacted its brand-new Citizenship By Investment program, with a donation amount starting at $250,000, and a real estate investment option starting at $500,000.

Back then, the program did not strike us as particularly attractive.

Neighboring Turkey offered a much better deal, requiring applicants to invest only $250,000 in any property in the country.

And besides the lower investment threshold, the Turkish passport beats the Egyptian one as a travel document (C-grade versus D-grade).

And Turkey is arguably much more livable than Egypt… if you ever decide to live in either of these places.

So two years ago, Turkey was the clear winner.

But since then, two things have happened that altered this comparison to some degree:

Turkey increased its real estate-related threshold to $400,000, and
Egypt has lowered its investment and donation requirements.

On March 7, 2023, Decree 876/2023 introduced various changes to the Egyptian CBI program.

Here are the current investment requirements…

Egyptian CBI: The current investment options at a glanceDonation of $250,000. The amount did not change, but applicants can now pay the sum in installments over one year. During that year, applicants receive temporary residence permits, and only receive citizenship after paying the amount in full.

Real estate investment of $300,000 (down from $500,000). Applicants can pay in installments over one year.

However, as a rule, only new, government-owned property qualifies. And you will need to hold the property for at least five years. (In Turkey, you can buy anything you want, including secondhand properties. More on this below.)

A bank deposit of $500,0000 with a holding period of three years. After the holding period, applicants can withdraw the money in Egyptian pounds at the current exchange rate and with no accrued interest.

A capital investment of $350,000 (down from $400,000), accompanied by a $100,000 donation. Also, there is no longer a requirement to own at least 40% of a company’s shares. This means applicants can invest in any Egyptian company, whether established or new.

Did these changes make the program more attractive? Not really.

In our opinion, the donation option is still overpriced – it’s at least twice what CBI programs in the Caribbean charge for a much better passport.

And the bank deposit option is an almost-guaranteed way to lose money. (The Egyptian pound undergoes periodic devaluations against the US dollar.)

The only investment option that piques our interest is the property route – albeit with a couple of caveats.

Given the shift to government owned properties only, the argument that Egypt’s burgeoning population growth will drive up residential property prices may become largely irrelevant.

Also, considering Egypt’s history of political instability, coup d’etats, economic crisis and currency devaluations, the Egyptian property market will likely still see plenty of turmoil in the years to come.

And in the past ten years, the inflation-adjusted local property prices have decreased by 50%.

So based on all of the above, we are of the opinion that the Egyptian CBI could arguably make for an interesting longer term real estate play… provided that you have hair on your teeth, and that you are willing to hang on to it for substantially longer than the minimum five-year lock in period.

Additional factors to considerWe contacted one of the leading Egypt-based service providers for more details about the latest round of program changes.

They confirmed that:

• Generally, only new projects qualify, and
• Developers must be government-owned.

In addition, if you want to sell your property before the five-year hold period is over – but still want to keep your citizenship – you must donate $250,000 to the Egyptian government. After five years, you can sell the property and keep your citizenship.

And besides the $300,000 property investment, remember that you must also transfer $100,000 directly to the country’s Treasury once your application is approved.

This amount is non-refundable.

The total amount you will need to pay to become Egyptian will be just over $400,000 – pretty much in line with Turkey.

But in Turkey, the entire sum goes towards the property purchase, with no donations. This makes the Turkish CBI program more attractive in our opinion, especially considering that Turkey is arguably more livable and objectively boasts a better passport.

In conclusionAt Sovereign Man, we are in the business of presenting our readers with options. And while the Egyptian CBI program is not going to appeal to a lot of people, as far as “uncorrelated passports” go, Egypt’s travel document scores very highly.

So for some people, it could be a valuable asset. But given the program’s high price point and lackluster passport power, we don’t see this program gaining significant traction.

Yours in freedom,

Team Sovereign Man

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It is becoming increasingly clear that the world is losing faith in the United States dollar… and rapidly turning to alternatives. And that’s a huge deal for the United States.

For nearly eight decades, the US economy and US government have enjoyed the unparalleled benefits of the dollar being the world’s reserve currency.

This means that nearly every government, central bank, commercial bank, and large corporation in the world holds at least some US dollars. Foreign companies use the dollar to trade with one another. Foreign governments and corporations often issue bonds in US dollars.

And most of the world’s major commodities, including oil, are priced and traded in US dollars.

The dollar’s dominance is so ridiculous that even when Airbus— a European aircraft manufacturer— sells jets to Air France, that transaction is settled in US dollars.

This has been an enormous benefit to the United States; every other country in the world that engages in international trade and commerce HAS to hold US dollars… which means that foreign institutions end up parking vast sums of money in the US financial system.

And that money creates additional capital that gets put to work to grow the US economy.

Think about that again: rather than invest their own money to grow their own economies, foreign governments and institutions are essentially forced to invest a big part of their savings for the exclusive benefit of the US economy… simply because they need access to the world’s reserve currency.

A lot of that money ends up in the hands of the US federal government; in fact, foreigners own roughly $7.5 trillion of US government bonds… which has been an absurdly good benefit for the Treasury Department.

Whenever the federal government has come up with some stupid, expensive idea… like paying people to stay home and NOT work… foreigners have always helped pay for it by buying more US government bonds— again, simply because they need to own US dollars.

But as I wrote to subscribers as far back as August of 2015, the dollar’s reserve currency dominance “is by no means written in stone. The US dollar is not the first global reserve currency, and it won’t be the last.”

Throughout history there have been many reserve currencies, from the ancient Greek drachma to the gold solidus of the Byzantine empire, the Venetian gold ducat, the Spanish real de ocho, to the British pound. No reserve currency lasts forever.

History shows that a reserve currency is displaced whenever the rest of the world loses confidence; this typically happens when the government’s finances deteriorate severely.

Back in 2015 I warned that America’s finances were also deteriorating, which posed a risk to the dollar’s dominance: “The US government is insolvent. Its major institutions and pension funds are insolvent. The central bank is borderline insolvent.”

That assertion is even more true today. In fact I would remove the qualifier “borderline” when describing the central bank; the Federal Reserve is, according to its own calculations, totally insolvent.

And the rest of the world is really starting to take notice. The French in particular have been complaining for years about the US dollar, and just recently the French President has been urging Europeans to seek financial independence from the United States.

Leaders from countries including Saudi Arabia, the UAE, Malaysia, Brazil, and India have all recently expressed openness, or even desire, to move beyond the US dollar in international trade.

Saudi Arabia is flirting with the idea of selling oil in Chinese yuan, and just a few weeks ago the first Liquified Natural Gas (LNG) contract in Chinese yuan was transacted.

These are just anecdotes, of course. But there’s a lot of hard data showing that the dollar’s reserve status is waning.

According to the Society for Worldwide Interbank Financial Telecommunication, or SWIFT, the U.S. dollar is currently used to settle about 40% of international trade.

That’s still a lot. But even as recently as 2014, SWIFT reported the dollar was used for 52% of global trade.

Dollar reserves held by foreign governments are also declining.

According to the International Monetary Fund, the US dollar now accounts for 58.4% of foreign reserves held by central banks around the world, compared to roughly 70% in the late 90s.

Foreign central banks also seem to dump their US dollars in exchange for a more traditional store of value; that’s why central banks around the world bought more gold in 2022 than they have since 1950.

This is all hard data showing that the world’s discontent with the US dollar has finally translated into action. And it suggests that the US dollar’s loss of global reserve status is only a question of when, not if.

Again, this is a huge deal for America.

The only reason the US government has been able to get away with a $31.5 trillion national debt, multi-trillion dollar deficits “that cost nothing”, and all the other insane government dysfunction, is because the dollar is the world’s reserve currency.

What do you think would happen if the government of Bulgaria ran a massive deficit every single year… or if the President of South Korea shook hands with thin air?

Their currencies would probably plummet and their bonds markets collapse.

Just last year, in fact, we saw the British pound go into freefall, the bond market plummet, and the Prime Minister forced to resign, simply because investors did not like her economic plan.

But the US government has been able to do whatever it wants… for decades… simply because they have the reserve currency.

You’d think that the federal government would do everything in its power to protect such an extraordinary privilege.

But instead they seem to be going out of their way to destroy it. It’s pure insanity.

Even now, with the country weeks away from defaulting on the national debt, the President of the United States still refuses to negotiate a single penny in spending cuts in order to raise the debt ceiling.

Foreigners are watching this mess… and they’re not impressed. And this is yet another reason why they’re moving so quickly to reduce their dependency on the dollar.

Frankly this might be a good thing. The US government is like a spoiled, hard partying rich kid who has squandered the fortune that his great grandfather worked so hard to build.

Maybe the kid needs to go broke and have his fancy cars repossessed in order to (hopefully) relearn the value of money, responsibility, and conservative financial management.

It’s important to remember, in fact, that the United States became the most powerful economy in the world BEFORE the dollar became the global reserve currency. Same with the UK and British pound before.

So it’s possibly that losing some of the dollar’s reserve status might just be the spark that the US government needs to get its act together. Only time will tell.

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By the summer of 1563, all of Britain had plunged into chaos over religion and the Reformation.

King Henry VIII broke away from the Catholic church back in the 1530s, sparking a near civil war within the kingdom. Protestants killed Catholics, Catholics killed protestants, and extreme social tensions lasted for decades.

Universities were at the heart of this conflict; rather than focus on real subjects like science and mathematics, students and professors became radical social activists and turned their schools into ideological echo chambers. Sound familiar?

One of the few students who actually wanted to learn was a Scottish teenager named John Napier; Napier had been enrolled at the University of St. Andrews at the time, but he quickly realized that he would never learn a damn thing in that environment. So he dropped out… and started traveling in search of a real education.

No one quite knows exactly where he went or what he did. But when he returned to Scotland eight years later as a young man, Napier had become an intellectual giant.

You might not have ever heard of him, but John Napier was truly one of the great minds of his era. And modern science owes a tremendous debt to his work… in particular his development of logarithms.

If it’s been a few years since you studied math (or ‘maths’ for my British friends), logarithms are the inverse of exponential functions.

Simple example: we know that 102 (or 10 squared) = 10 x 10 = 100. So, the number 10 raised to the power of 2 equals 100.

The inverse of that is to say that the ‘base 10’ logarithm of 100 = 2. Or in mathematical terms, 100 log10 = 2

Napier devised an entire system of logarithms. And this was actually a tremendous leap forward in mathematics, because logarithms made it so much easier for scientists and researchers to calculate solutions to complex problems.

One of the many important applications to come out of Napier’s work is the concept of ‘logarithmic decay,’ which models many real world phenomena.

The idea behind logarithmic decay is that something declines very, very slowly at first. But, over a long period of time, the rate of decline becomes faster… and faster… and faster.

If you look at it on a graph, logarithmic decay basically looks like a horizontal line that almost imperceptibly arcs gently downwards. But eventually the arc downward becomes steeper and steeper until it’s practically a vertical line down.

Logarithmic decay is like how Hemingway famously described going bankrupt in The Sun Also Rises– “Gradually, then suddenly.”

In fact logarithmic decay is great way to describe social and financial decline. Even the rise and fall of superpowers are often logarithmic in scale. The Kingdom of France in the 1700s infamously fell gradually… then suddenly.

We can see the same logarithmic decay in the West today, and specifically the United States.

The deterioration of government finances has been gradual, then sudden. Social conflict, censorship, and the decline in basic civility has been gradual, then sudden. Even the loss of confidence in the US dollar has been gradual… and is poised to be sudden.

Back in 2009 when I started Sovereign Man, I spoke a lot about ideas that were highly controversial at the time.

I suggested that Social Security’s trust funds would run out of money. That the US government would eventually be buried by its gargantuan national debt. That the US dollar would eventually lose its international reserve dominance. That inflation and social conflict would rise.

The main thesis, quite simply, was that the US was in decline. And whenever I spoke at events, I used to talk about logarithmic decay, saying:

“As a civilization in decline, you never really know quite where you are on the curve. You could be way over here on the horizontal line, at the very beginning of the decline… or you could be standing on the precipice about to hit the vertical slide down.”

Well, now we have a much better idea of where we are on that logarithmic decay curve. Because these ideas about the national debt, inflation, social security, social conflict, etc. are no longer theories. Nor are they even remotely controversial.

Just last week, US Speaker of the House Kevin McCarthy said in a speech that “America’s debt is a ticking time bomb”. Social Security’s looming insolvency is now openly discussed in Washington and regularly reported in the Wall Street Journal.

We’ve all seen with our own eyes (and even experienced) inflation, social divisions, and censorship.

And as for the dollar, we continue to see a multitude of cracks in its dominance. Most notably, Saudi Arabia is considering a plan to sell oil not just in US dollars, but also in Chinese yuan.

Plus the international development bank of the BRICS nations (Brazil, Russia, India, China, and South Africa) announced earlier this month that they will start moving away from the dollar.

Is it any surprise? The US government is weeks away from defaulting on its national debt over the latest debt ceiling debacle. And yet the guy who shakes hands with thin air refuses to negotiate a single penny in spending cuts to help reduce trillions of dollars in future deficit spending.

The whole world is watching in utter disbelief at the astonishing level of incompetence that has infected the highest levels of America’s once hallowed institutions, including news media, big business, and the government itself.

America– and the West by extension– really are on the precipice of that logarithmic decay curve… the part where the horizontal line becomes a vertical line down.

It has taken years… even decades to reach this point, gradually. We’re now at the “suddenly” part.

Now, it’s important to note that the outcome is far from inevitable. Plenty of declining superpowers in the past have pulled themselves out of a tailspin, at least temporarily.

Aurelian’s reforms helped re-establish Rome’s dominance in the late 200s after nearly a century of chaos. The declining Ottoman Empire recovered substantially during the Tanzimat period in the 1800s. King Charles III of Spain made many successful reforms to revive his crumbling empire in the 1700s.

There are many historical precedents for recovery, so all is not lost. But at the moment there is little evidence to suggest any major change on the horizon.

I’m not saying this to be alarmist. Quite the contrary, in fact. Because one of the key pillars of our thinking here at Sovereign Man is that, despite the ineptitude of our governments, we as individuals have the tools, power, and freedom to solve these problems for ourselves… and even prosper doing so.

Simple example: Social Security’s trust funds will run out of money within a decade, and this will be a huge problem for literally tens of millions of people who depend on the progam.

However there are numerous tools available to solve this problem; a more robust and powerful retirement structure like a self-directed, solo 401(k) plan, for example, allows you to set aside up to $73,500 per year for your retirement.

Similarly, if you expect a government with deteriorating finances to raise taxes (which they almost always do), you can take completely legal steps to reduce what you owe.

If you anticipate inflation continuing, you can arrange your investments to capitalize on the surge in real assets, like minerals, energy, and productive technology.

You can also take steps to diversify geographically, even internationally, to reduce risks to your family’s freedom.

These solutions barely scratch the surface of the plentiful options at your disposal. All it takes is a sensible understanding of the problem… plus the willingness to take action.

And rational, informed action is always a better option than despair.

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Amidst a slew of recent Golden Visa program closures across Europe, the continent’s top residency by investment program is more popular than ever – AND its imminent price increase for certain areas has been delayed.

In today’s episode, we take a look at some of the factors contributing to the program’s success…

A look at Europe’s most popular Golden Visa program (and why you should consider it)

Frequently promoted internationally as “a giant open air museum”, Greece is a truly fascinating country. It is the cradle of democracy, and birthplace of Western civilization.

The country offers an excellent climate, healthy, sumptuous food and a relaxed, welcoming vibe. It’s a wonderful place to spend time; especially if you avoid the crowds of dusty Athens and the throngs of Instagram “influencers” in Santorini.

Plus it’s part of the EU and the Schengen Area, so residents enjoy access to both.

The country’s cost of living is low — and the cost of housing, currently, is exceptionally affordable:

The low cost of living aspect, in particular, caught our attention, especially because the Greek Golden Visa program grants residency in return for a real estate investment of just €250,000 (~$274,000)…

Quick Greek Golden Visa program facts* Top-selling EU Golden Visa program – over 28,000 residency permits issued to date * Currently the most affordable property-based option (€250K – tied with Latvia) * No minimum in-country presence requirement (0 days per year) * Residency permits issued within 2-3 months * Multiple properties with the combined value of €250K can be used to apply.

Moreover, given that the Portuguese government has decided to shutter their (until now) acclaimed Golden Visa program, the option to still get a property-based Plan B in Southern Europe should not be squandered:

If getting a relatively affordable, super flexible EU Plan B in place is on your to-do list, then now is NOT the time to vacillate. (More on that in a bit.)

But first, let’s take a look at the program’s investment options below:

| Greek Golden Visa Program Summary | | Program Investment Options | Additional Costs | Minimum Stays | Does it lead to citizenship? | | €250k (~$274K): Real Estate.(Increasing to €500k (~$548K) in several of the country’s more attractive locations later in 2023.)OR;€400K (~$438K): Term Deposit, or investment in VC Funds, Greek Treasury Bonds, Mutual Funds or Alternative Investment Funds, etc.OR;€800K (~$877K): Corporate Bonds or Shares | Additional 24%VAT on newconstruction projects,OR;Transfer tax of 3%on other properties;Service provider fees (variable)Legal fees (variable). | None | Yes, after 7 years of residency, along with a number of important requirements we discuss in more detail below.(Greece allows dual citizenships.) |

Caveat emptor: Considering the paltry financial situation of the Greek government and the country’s banking sector, we cannot recommend you pursue anything other than the real estate option. And if you do, make sure you understand all the risks associated with your investment very well…

What makes the Greek program so compelling?The Greek Golden Visa has two major factors going for it:

First, its low minimum investment requirement, and second, the fact that you don’t need to visit Greece to keep your residency active.

As long as you maintain your investment, you can renew your visa indefinitely every five years.

The downside — a Greek passport, in practice, is hard to obtain. At the time of naturalization, you’ll need to be fluent in the Greek language, and be highly knowledgeable regarding Greek culture and history.

And while you can renew your GV residency permit without living there a single day, it takes seven years of residency to become eligible for naturalization.

And during this time you cannot be absent for more than six months per year. Moreover, the Greek authorities will also be checking whether you paid Greek taxes during this period.

Greece: Another Golden Visa Program that’s going through changes…To qualify for the Greek Golden Visa, applicants must purchase a property (commercial or residential) with a value of at least €250,000 (~$274,000). This is the lowest investment amount required among all programs in Europe (if you’re purchasing a property).

And combined with the general affordability of the Greek housing market, investors flooded the Greek GV program. This has fuelled sharp real estate price increases in the country’s main cities, and started making local real estate unaffordable for locals.

Just like in Portugal, this issue prompted the government to enact new restrictions (in Greek).

The minimum investment threshold will soon go up to €500,000 (~$548,000) for real estate purchases in certain parts of the country.

You now have until July 31 of 2023 (instead of April 30) to put down a 10% deposit on a property in these areas, otherwise you will have to pay double in some parts of Athens (namely North, Central and Southern Sectors of the city), Thessaloniki, Vari-Voula-Vouliagmeni, as well as the entire islands of Mykonos and Santorini.

You’ll still, however, have to complete the transaction inside of 2023.

If these areas are your preference, then you need to hurry up. Even though the price increase has been delayed by an additional three months, you will be running against the clock to identify and buy a suitable property…

Watch out for VAT charges on new RE projects…Depending on the type of property you opt to purchase, additional VAT charges – a whopping 24%, to be exact – may apply. The good news however, is that the current center-right government decided to waive these charges on new properties until 2024.

This means that Greek real estate is now even cheaper for foreign investors.
And you can rent out your property for profit, with no restrictions.

A word on your tax situation in GreeceWith a GV residency permit, you don’t have to live in Greece. But if you do decide to reside in Greece, you need to consider the country’s taxation. The good news is that in the past few years Greece enacted several important tax incentives.

For starters, they introduced a flat income tax rate of 7% for foreign pensioners who transfer their tax residence to the country.

Then, to attract wealthy individuals, the government announced a Non-Dom tax regime, allowing you to pay a flat tax rate of €100,000 (~$110,000) per year on any of your income derived outside of Greece. (You will also need to invest €500,000 (~$548,000) or more in the Greek economy, however. Real estate qualifies.)

And not to overlook employees and self-employed individuals, Greece also allowed a 50% discount on your income generated in Greece, making it a rather attractive place to relocate to.

NOTE: Sovereign Confidential members – remember that you have access to a deep-dive Black Paper on Europe’s Golden Visa programs, including Portugal, Spain, Greece, Cyprus, Latvia, Italy and Ireland.

In addition, you also have access to deep-dive reports on the above tax incentives and those found elsewhere across Europe.

The bottomline…Having the option to live in Greece whenever you want – or need to – is the kind of optionality we can get behind. Greece offers a generous, streamlined, fast and predictable Golden Visa program.

And given the current low pricing, PLUS the option to buy any piece of property on the open market, it’s one the most compelling programs of its kind still remaining in 2023.

So if this is something you’re considering, don’t let this opportunity get away from you.

PS: Sovereign Confidential members – we have an exceptional legal supplier for this program, with offices based in both Athens and Thessaloniki. (AND they’ve got access to quality, available property stock, so get in touch if you’d like their details.)

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Thousands of years ago on the 27th of July, 54 BC, the famed Roman senator Cicero wrote a letter to his friend Atticus complaining about all the corruption and bribery that was destroying Rome’s political system.

There was an important election taking place that year for Roman consul, which had once been considered among the highest political offices in the republic.

But by 54 BC, the consuls were just political stooges… because the real power was held behind the scenes by none other than Julius Caesar, and his rival Pompey the Great.

Caesar and Pompey both spent enormous amounts of money to make sure their people won the elections; it was very similar to how today’s biggest political donors spend millions of dollars to push their hand-picked candidates into office. The politicians are just puppets; the real power is the money behind them.

Caesar and Pompey were certainly wealthy guys at the time. But the election of 54 BC set off a financial arms race between the two, with each one trying to out-spend the other to manipulate the election.

One of Pompey’s candidates– a man named Scaurus the Younger– was actually charged with extortion.

Two other candidates allegedly attempted to bribe a large voting bloc known as the centuria praerogativa for a whopping 10 million sesterces; this would be the equivalent of hundreds of millions of dollars today.

Another candidate alleged that the two outgoing consuls had been bribed with four million sesterces. The bribery allegations went on and on.

The election of 54 BC was so corrupt and cost so much money that Caesar, Pompey, and their candidates had to borrow heavily from investors to finance all the bribery.

And this is what led Cicero to remark to his friend Atticus, “Bribery is raging. And I will show you a sign of it: the interest rate has gone up from 4% on the 15th of July to 8% [on the 27th of July].”

In other words, the politicians and their financial backers spent so much money to rig the election that they had borrowed nearly all of the capital in Rome’s financial system… causing a spike in interest rates.

This makes sense when you think about it: the election of 54BC created a sudden, overwhelming demand for loans; Caesar and Pompey borrowed heavily in a very short period of time. Just like the basic law of supply and demand, that surge in demand for capital caused an increase in the “price of money”, i.e. interest rates.

Now, imagine being an ancient Roman businessman in the summer of 54 BC looking for a small business loan, perhaps to finance expansion or fund the season’s agricultural harvest.

But then you find that there’s no more money… or only very expensive, high-interest loans available… because the politicians had already borrowed all the money in the financial system.

Economists call this the ‘Crowding Out’ effect, i.e. what happens when someone borrows so much money that there’s very little capital left over for everyone else.

In modern times that ‘someone’ is typically the government, i.e. government borrowing is so extreme that they monopolize all the liquidity in the financial system, thus causing interest rates to rise and ‘crowding out’ the private sector from accessing capital.

And we’re starting to see the Crowding Out effect in our daily lives.

For most of the past 15 years, the Federal Reserve kept interest rates in the US at nearly zero. Capital was infinite. And if the government wanted to borrow more (which they did every year), the Fed simply created more money.

Between 2008 and 2022, in fact, the size of the Federal Reserve’s balance sheet soared from $850 billion to $9 trillion… a more than 10x monetary expansion.

One obvious effect of such reckless monetary policy has been historically high inflation… which ultimately prompted the Fed to reverse course and hike interest rates.

What few people talk about, though, is that the Fed has also begun the lengthy process to reduce the size of its gargantuan balance sheet… essentially draining liquidity from the financial system.

Right now the Fed’s balance sheet stands at around $8.6 trillion, down from a peak of $9 trillion a year ago. So there’s still a looooooong way to go before they get back to the 2008 level of $850 billion, or even the pre-pandemic $4 trillion.

And this takes me back to the Crowding Out effect.

We all know the federal government is addicted to unsustainable spending. Just look at the debt ceiling fiasco– the Treasury is weeks away from default, and yet the guy who shakes hands with thin air refuses to make any spending cuts.

The Congressional Budget Office currently projects an average $2 trillion annual budget deficit, EVERY YEAR, for the next 10 years. And this estimate is probably quite optimistic; it doesn’t take into consideration any exigent funding requirements like war, natural disasters, or pandemics.

Nor does it take into consideration the multi-trillion dollar bailout required to save Social Security in only a few years’ time.

But even if we go with the government’s own projection of $2 trillion per year, that’s STILL a lot of money to borrow.

For most of the past 15 years, the government never had to worry about borrowing; the Federal Reserve was always standing by to create more money and lend it to the Treasury Department at record low rates.

But now the Fed has reversed course. They’re not loaning any more money to the federal government… meaning Uncle Sam has lost its #1 lender.

One of the government’s other top lenders– Social Security– is also out of the picture. Social Security has loaned trillions of dollars to the federal government over the years. But now the government is going to have to pay back those loans in order to keep the program funded, PLUS provide an additional bailout on top of that.

Another major lender– China– is also off the table. In fact China has SUBSTANTIALLY cut its holdings of US government debt, from a peak of $1.3 trillion, down to $848 billion today… a reduction of more than 34%.

You’re probably starting to see this ‘Crowding Out’ effect; with nearly all of its top lenders gone, yet absolutely no plans to restrain spending, the federal government is already starting to monopolize debt markets.

The amount of available capital in the financial system is falling due to the Fed’s new monetary policy. And the government is sucking up every available penny for themselves.

That leaves very little capital (compared to the last several years) available for businesses… which is actually fantastic news for investors.

Over the past decade when the money supply was expanding and capital was abundant, businesses could easily raise money from investors or borrow from banks.

And the investment terms were usually very one-sided in favor of the business; companies with no hope of ever turning a profit commanded valuations going into the tens of billions of dollars. And some businesses even sold bonds with negative yields.

But today’s conditions are totally different: businesses have to compete with the government for scarce capital. And as a result, many deals are now outrageously good for investors.

Just because the economy has slowed doesn’t mean there aren’t great investments out there. Quite the contrary. There are incredibly productive and innovative businesses all over the world that can achieve enormous success, regardless of economic conditions.

In fact the most successful company in the world today– Apple– is a great example. Even during peak stagflation of the 1970s, Apple earned sensational profits after releasing its highly innovative Apple II.

There will most certainly be similar examples from today’s businesses. And yet, because of this Crowding Out effect, they’re all having to roll out the red carpet to investors in order to raise money.

Well it’s about time. Investors have spent the last several years overpaying for stocks, bonds, real estate, NFTs, and just about every asset under the sun.

But right now, finally, investors can get fantastic deals on great businesses. We just don’t know how long these generous conditions are going to last.

Personally I think the Federal Reserve is going to chicken out– and we’ve talked about this before.

Their rapid interest rate hikes have already caused so much financial destruction, including multiple bank failures. Next up we’ll probably see defaults in commercial real estate, corporate bonds, municipal bonds, and even a sovereign government or two overseas.

Most importantly, though, the Fed’s higher interest rates will eventually bankrupt the US government. The national debt is already $31.4 trillion, and it increases by $2 to $4 trillion per year. They simply cannot afford to pay 5% interest.

The Fed knows this… which is why I expect them to chicken out and start slashing rates again. The survival of the government depends on it.

And when they do, financial conditions will reverse again. Companies will easily be able to raise capital, and the deals that we see now will no longer exist.

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If you open up U-Haul’s website and have a look at the discount page, you’ll see a huge graphic at the top of the screen advertising “Discounts on One-Way Rentals from the Midwest to the West Coast.”

It shows a map highlighting middle America, with arrows pointing west to California, and urging customers to “Take advantage of huge discounts… for select routes.”

The price to go from Dallas to San Francisco, for example, is discounted 44% compared to going in the other direction.

I find this absolutely hilarious.

It means that so many people are booking one-way U-Hauls OUT of California, that U-Haul is desperate to find ANYONE to drive their trucks back to California.

And is it any wonder why?

California has some of the highest living costs in the country when it comes to rents, home prices, and energy. They also have one of the highest tax burdens in the nation.

And what do California’s residents get for all of these costs and taxes?

Well, San Francisco spends about $58,000 per homeless person… and still can’t manage to keep them, their feces, and their syringes off the streets.

Unsurprisingly, San Francisco County has lost 7% of its population just since 2020 according to Census data.

And it’s not just individuals and families who are fed up. Businesses are wringing their hands as well.

Whole Foods is the latest major business to close its flagship San Francisco store after operating for just 13 months, citing rampant crime in the area.

This follows Amazon closing all of its cashier-less “Go” stores in the city, and Walgreens also shuttering many locations.

You’ve probably seen the videos of the mobs running into stores and grabbing everything they can carry, or shoving merchandise into giant garbage bags, and then simply walking out of the store.

Yet ultra-leftist progressive prosecutors allow it to happen. California even recently amended the laws to decriminalize this type of “petty” theft. I imagine if you own a retail store in California that is routinely plundered, the problem doesn’t feel petty to you.

On a larger scale, California is doing everything it can to force businesses out of the state.

I’m not just talking about the insane taxes and regulations which have forced multiple corporate headquarters to relocate to places like Texas, Florida, and beyond.

The latest absurdity is that the State of California passed a new law where a special commission of political insiders now has the power to regulate the profits of oil and gas refiners.

File this one away under “Most Destructive Ideas Ever”. I mean, a state committee is literally empowered to establish the maximum profit margin for an entire industry. How is this not full-blown modern communism?

The state’s politicians are practically begging oil and gas refiners to shut down, or to take their business elsewhere. And this is pretty insane for a state that has a history of severe energy shortages.

Yet California’s politicians are actually cheering this as a victory, praising their own courage and heroism. The governor himself said, “California took on Big Oil and won… With this legislation, we’re ending the oil industry’s days of operating in the shadows.”

(Bear in mind that most of these oil companies are publicly-traded corporations which issue hundreds of pages of financial disclosures and public filings every single year… so we’re curious to which “shadows” the governor is referring…)

Amazingly enough, after all of their anti-business, anti-productive policies, California’s governor is lamenting that his state will have a $22.5 billion budget deficit this year.

Gee I wonder why. Who could POSSIBLY have predicted that productive businesses and talented individuals would leave the state!?!

It’s the same story in so many places — New York, New Jersey, Chicago, etc.

In fact Chicago just elected an ultra-progressive, super-woke mayor who blames everything from high crime to dysfunctional education on ‘greedy corporations’.

Yes, it certainly must have been the greedy corporations that were responsible for this past Saturday night’s mayhem in Chicago, in which hundreds of teenage kids descended upon downtown Chicago to wreck havoc and destroy property.

Yet the Mayor-Elect’s grand solution to this chaos is to “find the revenue” by raising taxes on companies operating in the city.

In completely unrelated news, Walmart announced that they will be closing about half of their Chicago-area stores, because they simply can’t make money amidst so much crime and political cannibalism.

Furthermore, census data shows that Cook County, where Chicago is located, has lost nearly 3% of its population since 2020.

One mover was Ken Griffin, the billionaire founder of the $62 billion hedge fund Citadel, who moved the firm and himself from Chicago to Miami last year.

But Griffin said taxes weren’t even the biggest reason: it was safety. After a colleague was robbed at gunpoint in broad daylight in the financial district, Griffin knew it was time to go.

Yet Chicago’s new mayor has supported the “defund the police” movement, and he pledges to send fewer cops to respond to calls, opting instead to put Emergency Medical Technicians in the line of fire.

It’s extraordinary how these politicians keep doubling down on the same destructive actions… and are then PROUD of themselves for doing such a great job.

Even more bizarre is that these people keep getting voted back into power.

The United States Congress, for example, has an approval rating right now of 18%, which is near a record low. Almost everyone agrees the organization is a total failure.

And yet every two years when Congressional elections take place, the incumbent (on average) wins more than 90% of the time. Isn’t that astonishing?

Let’s be honest with ourselves: it’s nice to hope for the best. But when the representatives of a failed institution win re-election more than 90% of the time, the odds of any meaningful change are quite low.

So whether it means simply heading to a new county, crossing state lines, or even moving abroad, perhaps it’s time to at least consider the option of voting with your feet.

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Cyprus’ Digital Nomad Visa (DNV) has not garnered as much media attention as the Portuguese or Spanish DNVs. And while its requirements aren’t super lenient, the island is nonetheless a highly compelling option – especially for English-speaking digital nomads.

Let’s have a look at the program below…

Cyprus: An excellent island destination for English-speaking digital nomadsFancy an extended remote working stint in a gorgeous island location? Located at the crossroads of Europe, Asia and Africa, Cyprus is a truly unique and alluring place.

And while neither the country’s cost of living nor its DNV program’s financial requirements are exceptionally low, it broadly scores really well as a quality lifestyle destination:

Source: Sovereign Cost of Living Index

Cyprus is the third-largest (and third-most populous) island in the Mediterranean, and it’s been a coveted trophy among conquering nations for centuries.

Populated mostly by ethnic Greeks, the country also boasts a substantial Turkish population. Tensions between these two groups led to outright conflict in 1974, followed by the island’s division into two countries — The Republic of Cyprus (Greek), and the internationally unrecognized Northern Cyprus (Turkish).

(Note: The Republic of Cyprus is a member of the European Union, and it is their Digital Nomad Visa program we’re focusing on today.)

Scores of global airlines fly to Cyprus on a weekly basis, and a flight from Athens to Larnaca, for example, only takes around one hour and 40 minutes.

Given the island’s history as a British colony, almost everyone on the island speaks English. So if you are looking for an English-speaking environment (and an amazing climate), Cyprus should suit you well.

And while the country’s median fixed broadband internet download speed is fairly slow – only 38 Mbps – you’re not likely to experience any issues in its major population centers. Also, its mobile internet is much faster, with an average download speed of 73 Mbps.

The Cypriot Digital Nomad Visa program at a glanceThe “Cyprus Digital Nomad Visa” program allows nationals from outside of the EU to work remotely in Cyprus for one year. (EU citizens don’t need special permission to live and work in Cyprus. And if you’d like to stay longer, you can. More on this topic below…)

Let’s take a look at what you can expect…

| CYPRUS DIGITAL NOMADVISA PROGRAM | KEY PROGRAM CONSIDERATIONS | | Visa validity | Initial validity: 1 year (12 months); Renewals: 2 years, for a total stay of up to 3 years | | Recurring income requirements | Monthly income requirements (after tax): Primary applicant: €3,500 (~$3,844); * Spouse: Additional 20% – €700 (~769); * Per dependent child: Additional 15% – €525 (~$576); * Family of 4: €5,250 (~$5,767). | | Fixed local address required | Yes | | Clean criminal record required | Yes | | Health screening requirement | Yes | | Health insurance required | Yes | | Can the DNV lead to PR or citizenship? | No | | Digital nomad tax situation* | Standard conditions apply: Residence-based (worldwide) taxation after 183 days on the ground. Many tax breaks are available, however… |

And how does the program’s income requirements compare to those of other DNVs in Europe?

| DNV Program | Iceland | Cyprus | Greece | Portugal | Croatia | Spain | | Monthly income requirements: Primary applicant | ISK 1 million (~$7,338) | €3,500 (~$3,845) | €3,500 (~$3,845) | €3,040 (~$3,340) | €2,365.45 (~$2,598) | €2,160 (~$2,373) |

As you can see from the above table, Cyprus’ financial requirements are on the pricier side of the spectrum – but it’s still pretty accessible; especially for solo applicants.

Unfortunately, however, you won’t be able to apply for the Cypriot DNV on the basis of savings only; for that, you’ll be better off investigating the Croatian program.

To check out some of the other European Digital Nomad Visa programs, click here.

Another downside of the Cypriot program – if you want to apply for it, you must first travel to Cyprus, as online applications aren’t possible. Consult this website to learn more about the application procedure.
Finally, as of March 3, 2022, there is an active cap of 500 residence permits to be issued to digital nomads. However, we suspect the ceiling will be raised if the program proves successful…

What can I expect to spend on living expenses?Cyprus is fairly inexpensive, especially if you settle outside of Limassol, the county’s primary tourist hotspot.

For example:

A one-bedroom apartment in an expat area in Nicosia — the country’s capital — will cost you around $630 per month. And $1,100 will get you a nice three-bedroom apartment.

In Limassol, however, rentals are more expensive. You can expect to pay upwards of $1,100 for a one-bedroom apartment, and $2,300+ for a three-bedroom place.

The difference between the cost of living in these cities is significant, so be sure to do your homework properly when you’re investigating accommodation options.

A word on Digital Nomad taxes in CyprusIn Cyprus, you typically become a tax resident after you spend the initial 183 days in the country. And with a top tax rate of 35% on personal income, Cyprus does not look like a tax haven.

Yet, Cyprus can be very tax efficient, depending on your situation. The Cypriot government offers multiple tax breaks and exemptions for expats relocating to the island. You will likely pay no taxes to Cyprus on your worldwide income, even if you spend more than six months yearly on the ground there.

Also, Cyprus has multiple double-taxation treaties, which can help you avoid being taxed twice on the same income.

The bottomline…If working remotely from an English speaking island location, combined with EU visa-free travel privileges sounds like your bag, then the Cypriot DNV program could be well worth a look.

And given the country’s relatively low cost of living, idyllic location and attractive tax incentives, you may well be tempted to stay there longer term.

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Sovereign Man’s founder, Simon Black, has long held some fairly contrarian views. Discover ten of his most recent hard-hitting quotes on subjects ranging from the Fed’s mismanagement of inflation and SVB’s demise to the banking crisis and government hypocrisy – all sourced from recent episodes of the Sovereign Podcast.

And if you like what you’re reading, be sure to sign up for The Sovereign Podcast now.

1. On the disastrous behavior of the Fed:

My favorite one to beat up on, though, is the Federal Reserve… Seriously, I actually think it’s very important to beat up on the Federal Reserve because the Federal Reserve, the central bank in the US, is the most cared for agency.

Nobody says an unkind word about the Federal Reserve, right? …people beat up on the SEC. They beat up on the White House. They beat up on Congress… They beat up on the national parks. They beat up everybody in government. But not the Federal Reserve, right? Technically, the Federal Reserve is independent from the government, but it obviously has this huge role in the US… and there’s a lot of overlap between the Fed and the government.

But nobody says an unkind word. Nobody scrutinizes the Fed. Nobody criticizes the Fed… everybody just sort of bows down to [it].

The Fed says, let there be 0% rates, and it was good. And nobody questions the almighty Fed, partly because I think people are afraid of looking stupid, because so many people… don’t understand central banking, so they’re going to sit in a room with a guy who’s the chairman of the Federal Reserve.

This is the great and powerful Oz, and they’re terrified of the man behind the curtain. So they don’t want to look stupid, so they just go, okay, well, the Fed raised rates. The Fed cut rates. Nobody really questions any of this, but they should, because what the Federal Reserve does [this] over and over again, they engineer these bubbles.

They engineer huge consequences. [And] they’re totally asleep [at the wheel].

From: What Else Are The “Experts” Ignoring?

2. On the decline of the US:

But the major trend is essentially the decline – the peak and decline – of the United States, the dominant superpower. And you could say, really, the West in general, but specifically the US… And I don’t think it’s controversial anymore to say that the US. Is in decline.

I started saying this when I started Sovereign Man back in 2009, and it was a very controversial thing to say back in 2009.

But I was one of the people saying it in 2009, saying, look, this is not a pretty picture. You got a lot of debt, you got a lot of deficits, you got wars, you’ve got really funny stuff happening with the currency and the central bank and so many things that just don’t make sense.

This is obviously a place that’s past its peak, and I don’t take any pleasure in saying that, but I think it’s important.

Again, I went to West Point. I served in the military. I have absolutely no pleasure in saying that the United States has passed its peak. But I think any rational individual who’s being intellectually honest has to take a very sobering appraisal of the facts, the actual objective facts, not the political spin, but the actual facts and data that are publicly available and out there for everybody to see and make an honest assessment.

Because… throughout history… there’s never been a dominant superpower that’s lasted forever…

From: Silicon Valley Bank’s collapse proves the US is in obvious decline

3. On the cyclicality of civilizations:

History is so cyclical. Rise and fall, rise and fall… Quite often, most dominant superpowers – the Romans and the French and everybody – at a certain point just simply assumed that their power and dominance would last forever.
But it never does.

And if you understand those cycles of history, you understand, [if] you take… an intellectually honest approach to examine the facts and circumstances that are publicly available for anybody to see…

I think any rational person would draw the same conclusion, saying, this is a place that’s in decline, it’s past its peak, and that doesn’t mean the world is coming to an end.

It doesn’t mean that civilization and life as we know it is going to fundamentally disappear forever. No, of course not.

That would be super dramatic. There are, of course, people out there talking about the collapse of this and the collapse of that. But that’s silly. The world isn’t coming to an end. Nobody’s going to spontaneously combust.

But a shift to transition away from US dominance, a shift in transition away from the dominance of the dollar as the main predominant reserve currency in the world, that’s a really big deal.

It means that people, I think, especially in the US… have some thinking to do, have some planning to do…, and you really have to take some steps to reduce the risk and your exposure to some of that, because it’s a really, really big deal.

Again, if you look to history and you see the economic effects of transition from being the dominant superpower to going into decline, it’s usually a really big deal.

Very seldom, if ever, do we have an example of some dominant superpower that goes into a period of decline and everything’s just fine. There’s [major] economic consequences, there’s [major] social consequences.

From: Silicon Valley Bank’s collapse proves the US is in obvious decline

4. On the demise of Silicon Valley Bank:

… how are future historians going to regard our time? There’s going to be something that they circle on the calendar. It’s going to be some iconic event that’s going to say this is what really signaled the decline. What will that be? Will it be the withdrawal from Afghanistan? Will it be COVID-19?

…I think they could point to… elections… they could point to so many different things.

But to be fair, I think it’s possible that the Silicon Valley Bank collapse last week could be one of the things that they circle as that iconic event.

I’m not trying to be dramatic but I think it’s important to understand that the Silicon Valley Bank collapse and the subsequent consequences… this is a really really big deal and I think a lot of people don’t fully appreciate how big of a deal this really is.

I want to briefly summarize some of these points because the long-term implications for this are really extraordinary.

Number one, it’s important to remember Silicon Valley Bank did not go bust because they had bought some crazy high risk investment.

Banks notoriously take their customers money and they go and buy stuff with it. They go and buy assets, they make loans, they buy bonds, they do all sorts of stuff.

Back in 2006, 2005, banks were going out and buying these ridiculous super-high-risk mortgage bonds.

They were out making loans to unemployed homeless people and they were doing it with your money, with our money, with depositors money, taking these crazy risks and pretending like there was never going to be any consequence to that whatsoever.

Obviously it was stupid. It almost brought down the entire US economy, the entire US financial system, the global financial system, which is why they called the global financial crisis the GFC when it finally busted in 2008.

Silicon Valley Bank wasn’t doing any of that.

Silicon Valley Bank didn’t go bust because they’d been making loans to unemployed homeless people. They went bust because they bought US government bonds…

From: Silicon Valley Bank’s collapse proves the US is in obvious decline

5. On Barnie Frank and stress-testing legislation for banks:

Barney Frank was hardcore left leaning, hated big businesses, hated big banks, loved high taxes, all that sort of stuff. He was the guy who was the architect behind the legislation that requires stress testing and deeper supervision and scrutiny of banks.

Well wouldn’t you know it? This guy, after he retired, suddenly discovers capitalism, embraces his newfound love for capitalism… became a director on the board of directors of one of these banks that just went under.

This is the guy that wrote the legislation, and a lot of good that did.

And it’s just another example of politicians [who] just don’t actually understand the problem. They might have had good intentions, but it doesn’t matter because they go and they create these rules.

Fast forward ten or 15 years and it turns out all the rules ended up doing absolutely no good whatsoever. What’s going to happen now? They’re going to come up with new rules, right?

This is what they always do. They come up with new rules. They go, oh well, the old rules didn’t work, so what do we need? We need new rules. So they come up with more rules and more rules and more rules and this ridiculous cycle never ends…

From: Silicon Valley Bank’s collapse proves the US is in obvious decline

6. On what went wrong at Silicon Valley Bank (SVB):

Yes, Silicon Valley Bank was stupid about the way they did it.

They bought $120,000,000,000… in bonds. Most of that was long-term bonds with maturities going ten to… 30 year maturity.

I mean they were taking on huge interest rate risk. At some point somebody in that bank should have been like, hey guys, you realize if interest rates go up to like three 4%, we’re going to be totally screwed.

But apparently nobody realized that. So they just kept buying these ultra-long-term government bonds. And again the regulators saw it. It’s not like the regulators didn’t have access to that information.

The regulators were supervising them the whole time and said, oh great job Silicon Valley Bank. Nothing to see here. You’re doing a great job.

So Silicon Valley Bank is not some innocent babe in this whole scenario. They were totally stupid. And obviously the fact that senior management was selling stock before the collapse, it looks really bad, but a lot of things they’re doing look really bad.

But you got to look at the government’s role in all of this, passing all these rules that amounted to nothing. The regulator’s rules. The regulators saw all of this information and not just a couple of months ago.

It’s going back two years. I mean the regulators should have seen in 2020, hey, you guys are loading up on a lot of long term debt that’s going to expose you to interest rate risk. But they didn’t. Nobody said a word.

From: Silicon Valley Bank’s collapse proves the US is in obvious decline

7. On the US government failing its own audits:

…Twenty years ago Congress passed something called the Sarbannes-Oxley Act, which imposed CRIMINAL penalties for company executives who fail their audits.

If the federal government were held to the same standard as the private sector, dozens of officials should be facing jail time right now. Instead they’ll retire to their generous, fully-funded pensions and receive lavish board seats and prestigious awards.

They will never be held accountable.

You, on the other hand, will have to bear the costs of their incompetence, in the form of higher taxes, inflation, reduced Social Security, and other broken promises.

Personally I find it extremely unethical and unjust that the irresponsible, criminally incompetent decisions of politicians and bureaucrats should be paid exclusively by the citizens. It’s just like all the destructive decisions they made during the pandemic.

They will never be held accountable for the mental health crisis, the suicides, the substance abuse, the entire generation of children who fell behind.

Nope. There will never be so much as an inquiry. Instead they’ll make millions from their memoirs where they cast themselves as heroic saints who saved the world.

From: Biden is a liar, and these financial documents prove it.

8. On the merits of international diversification:

Most people have a peasant mentality. Throughout human history, in fact, the vast majority of people never thought much beyond their tiny village, let alone traveled. But there have always been some people who have had the intellectual courage and curiosity to think far beyond their own borders.

And they’ve often been richly rewarded for it. Adopting a global mindset essentially means thinking about the entire world when considering your options. And more options is almost always more beneficial….

…The larger point here again, isn’t to suggest like, oh, you should get on a plane tomorrow or go set up a company in Timbuktu or anything like that.

The idea is really just to highlight that point, that sophisticated people throughout history have always understood that there is great opportunity beyond their own borders. And this is still absolutely true today.

And the basic logic behind this is that when you start thinking globally, you give yourself a lot more options.

From: Why it makes so much sense to diversify internationally

9. On small groups of non-government elites having major influence on public policy:

…This is nothing new; in fact it’s quite common for arrogant, narcissistic ‘experts’ to force their ideas onto a society.

The WEF is only the latest modern incarnation. And even though it has lost much of its credibility, it’s important to remember there are always going to be ‘experts’ out there who want to tell you how to live your life.

This is ultimately what ‘freedom’ means… we’re talking about your right to make your own decisions and control your own life.

If you don’t care about your freedom, you can’t expect anyone else to care about it…
And you can probably expect others (like the WEF) to try and take it away.

And that’s why it makes so much sense to have a simple, sensible Plan B. Because there are just too many of those lunatics out there…

From: The one thing that Ron DeSantis and Greta Thunberg agree on

10. On politicians’ hypocrisy and double standards:

[During Covid]: The High Priests of Public Health decided that if anyone died for lack of cancer screenings, a drug overdose, or suicide, that was OK. As long as you didn’t die of COVID.

If your kids lost two years on their social and educational development, if your business closed, if your entire life was turned upside down, that was fine too. Everyone was expected to sacrifice for the greater good.

Everyone, of course, except for the politicians.

We’re starting to see this same attitude applied towards Climate Change. Most recently, the ruling class had its big climate summit in Egypt called COP27; they flew in on their private jets and ate expensive steak, while their ideas for the rest of us include travel restrictions, taxes on cow farts, and eating bugs and weeds.

You just can’t make up this level of incompetence and hypocrisy. The trend, though, is very real.

Momentum towards climate regulation is only picking up speed. And it doesn’t look like there’s anything on the horizon to stop it. It would at least be somewhat digestible if their ideas were actually sensible. But instead their ‘solutions’ are borderline insane. They spent an entire day at COP27 talking about gender identity, as if that has something to do with the climate.

They obsessed over incredibly inefficient sources of energy (like corn-based ethanol, which has soundly been proven to be one of the WORST and most INEFFICIENT forms of energy).

But was there any discussion at COP27 about nuclear power? None.

And that makes it really difficult to take these people seriously. They reject good ideas. And they keep coming up with bad ideas… which ultimately means less efficiency, more taxes, and more regulations.

From: Climate Change is the new human sacrifice

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On March 11, 2011, an earthquake in the Pacific Ocean caused a tsunami to strike Japan.

You probably remember seeing this in the news, because, directly in the path of the tsunami sat the Fukushima nuclear power plant.

As the waves crashed into the reactors, the plant’s cooling systems lost power and the nuclear reactors overheated. Pressure built until explosions spewed radioactive materials into the environment.

Now, Japan realized that the Fukishma nuclear accident was a major anomaly… and that the historical data clearly show that nuclear power is safe. So they moved on and continued investing in nuclear.

Yet half a world away, Germany decided to shut down its own nuclear power plants because of what happened in Fukishima… even though Germany is obviously not prone to tsunamis and rarely experiences severe earthquakes.

It was a knee jerk reaction— not at all based on “science”. And instead of investing in nuclear, Germany spent tens of billions of euros on far less efficient renewable power.

One key problem, of course, is that Germany didn’t plan on having a fully renewable energy grid unil more than 25 years later in 2038.

So in the meantime while they would be building wind and solar energy plants across Germany, they planned on filling their energy void by importing natural gas… from Russia.

You can obviously see where this is going.