Sovereign Man

At the center of Sovereign Man's core ethos is the indisputable view that the United States is in decline. I take absolutely zero pleasure in writing that statement. But it's incredibly difficult, if not impossible, to objectively appraise the bountiful evidence at hand and not reach the same conclusion. Consider the following: US government finances are appallingly bad. The national debt exceeds 100% of GDP, annual deficits run into the trillions of dollars with no end in sight, and major trust funds for Social Security and Medicare will soon run out of money. Political incompetence is mind-blowing; politicians fail to be able to even identify problems, let alone understand them, let alone reach compromises to solve them. Ditto for central bank incompetence. These people simply cannot understand how, by keeping interest rates at zero for nearly a decade and conjuring trillions of dollars out of thin air, they engineered record high inflation. And they also fail to understand how their actions to ‘fix' inflation are causing widespread havoc in the economy and financial system. Social divisions across the country are extreme. Censorship and cancel culture prevail, and corporations now wag their fingers at their own customers to “be better”. The education system is in pitiful shape, with many politicians and school board officials turning classrooms into activist training camps. The population is terribly unhealthy. Obesity and drug addiction are epidemics. Plus there's an obvious mental health crisis that drives far too many people to commit horrific acts of violence on innocent people, including children. National security is in decline. Military readiness is down, yet top officials seem more concerned about diversity and inclusion rather than the ability to prevail in war. The rule of law has been perverted, including for political purposes and self-aggrandizement. We just saw another example of this yesterday. Even the national fertility rate continues plummeting-- an indication of the rising cost of living and social apathy. The Wall Street Journal recently published a series of polls indicating that most Americans doubt their children will have a better future; pessimism is strong. They also found that certain values which once defined American culture, including a sense of community, hard work, and civility, are no longer important to the majority of people. This is all happening at a time when adversaries are circling. And that includes China. Now, usually whenever I bring up China, there are always people who are quick to assert that China cannot possibly replace the US as the dominant superpower because they have just as many problems. And it's true that China has a ton of problems. They have their own debt issues, financial system chaos, and economic problems. They have social challenges, a major demographic crisis, and even a serious issue with childhood obesity. But no civilization or empire throughout history has ever been problem-free. Ancient Rome, even during its early republic days, had enormous problems. They had to deal with constant revolts, civil war, the genocidal dictatorship of Sulla, famine, war, plague, and more. Yet there's an enormous difference between taking on challenges while you're on the rise… versus succumbing to them while on the way down. Rome was able to deal with its challenges and continue its rise to become the dominant superpower. China may be able to do the same. The US finds itself in a precarious position where they have a mountain of compounding problems… and no ability to even slow them down, let alone solve them. I've written before about what I call the “Four Forces of Decline”, which I define as 1) Forces of History-- the inevitable, cyclical nature in the rise and fall of Empire. No empire, no civilization in human history has ever retained the top spot forever, and most tend to experience similar challenges on the way down.

In 1898, a Polish author named Jan Bloch published a 3,000+ page volume on modern warfare entitled Future War and its Economic Consequences. Bloch had studied military technology and saw the rapid pace with which destructive new weapons and munitions were being developed. And he came to the conclusion that the next war would be absolutely devastating. Bloch predicted, in fact, that the days of classical warfare-- cavalry charges and large troop movements on an open battlefield-- were over. And that the next war would entail long, bloody, pointless trench warfare that would be unimaginable in its destruction. In short, he predicted World War I. Bloch was even invited to speak at a diplomatic conference in the Hague in the following year in 1899, and he urgently warned the attendees to do everything they could to prevent war. The experts listened politely… and then completely ignored him. 15 years later Bloch's prediction came true when the Great War broke out. Millions died. Europe was destroyed. And yet in retrospect it was all so obvious. The warning signs were there all along. But somehow the people in charge not only managed to NOT avoid war, they managed to steer directly into the path of destruction. This is often the case with major world events, including wars and major economic catastrophes. They're seldom accidents, nor do they sneak up without announcing themselves years in advance. And after the crisis is over, it all seems so obvious in retrospect. Yet the people in charge failed to see it coming, and often contributed to the cause. Another great example is the Global Financial Crisis of 2008, where banks and financial institutions engaged in high-risk behavior that nearly brought down the entire global economy. Once again, the people in charge not only failed to notice, but they played a key role in engineering the crisis to begin with. The Federal Reserve slashed rates to just 1% after 9/11 in the early 2000s, which led to a massive asset bubble. The Fed didn't seem to notice. Then when they started aggressively raising interest rates in 2005 (to help fight inflation), asset prices fell dramatically. The Fed failed to predict this too. Banks lost billions of dollars as a result, and many banks failed entirely. This triggered a chain reaction in the financial system and the worst economic crisis since the Great Depression. And the Fed not only missed the warning signs, they steered directly into the disaster. We've just seen a similar crisis unfold with this month's bank runs. The Fed slashed rates to zero, sparking yet another major asset bubble. The Fed failed to notice. Banks paid record high prices to buy US government bonds using their depositors' funds. The Fed failed to notice. Then when the Fed aggressively raised rates, they failed to predict that asset prices (including bonds) would plummet in value, causing widespread solvency problems at banks. Banks have even reported $600+ billion in unrealized bond losses to the Federal Reserve-- one of the banks' primary supervisors. And yet the Fed still failed to notice. In fact just three days before Silicon Valley Bank went bust, the Fed insisted to Congress that everything was fine in the financial system. These experts are consistently wrong. And it reminds me of World War I: the warning signs were obvious, yet the people in charge failed to notice… and steered directly into the path of disaster. So in today's podcast, I spend some time exploring an important question: what other key risks are lurking out there which the people in charge have failed to notice? At this point, frankly, it would be stupid to assume that the government and central bank have everything under control. What are they missing? I talk about five separate risks today-- including further fallout from these aggressive interest rate hikes. We also discuss Social Security (which is a pretty obvious risk), war,

Throughout history, whenever there has been a major shift in the world, it has usually been accompanied by a single iconic event that is associated with that change. For example, historians often point to 476 AD as the year that the Western Roman Empire fell, when Odoacer and his barbarians forced the abdication of the Emperor Romulus Augustus— even though it was obvious that Rome was in decline way before 476. People also often associate the start of the Great Depression with the stock market crash of 1929 (even though there were many signs of economic distress well in advance of that). But these clean, precise dates are only chosen in retrospect. People experiencing the events at the time rarely understand their significance. I think it's possible that future historians may look back at Silicon Valley Bank's collapse as one of those iconic events that signals a major shift... potentially the end of American geopolitical and economic dominance. I'm not making this assertion to be dramatic; rather I think that anyone who takes an objective look at the facts— the appalling $31+ trillion national debt the government's addiction to spending and multi-trillion dollar deficits social dysfunction and “mostly peaceful” protests the decline in military strength rampant inflation and central bank folly extreme government incompetence insolvency in major programs like Social Security — will reach the same conclusion that the United States is past its peak and in decline. Now on top of everything else we can add a loss of confidence in the US banking system. Obviously I take no pleasure in acknowledging the US is in decline. But that doesn't make it any less true. And this has been Sovereign Man's core ethos since inception back in 2009. Back when I started this company it was considered extremely controversial when I said the US was in decline, or that there would be larger problems in the banking system, or that the breakdown of social cohesion would only get worse. But today these challenges are so obvious that they're impossible to deny. You can never solve a problem until you first admit you have one. And most of the corrupt sycophants masquerading as political leadership are incapable of admitting problems, nor discussing them rationally, let alone solving them. But you and I do not have that disability. We are free to exercise the full range of human ingenuity and creativity with which we have been fortunately endowed. So while the people in charge continue to never miss an opportunity to demonstrate their uselessness, we have a whole world of freedom and opportunity at our disposal. This is the topic of today's podcast. First I review the huge issues with the Silicon Valley Bank collapse. Honestly when you look at it from a big picture perspective, it's littered with mind-numbing incompetence. The politicians who received donations from SVB's Political Action Committee missed it. The Wall Street hot shots missed it. The credit ratings agencies missed it. The regulators missed it. The Federal Reserve missed it. But now the Federal Reserve has launched a new program that exposes the US dollar— and everyone who uses it— to significant risk. Think about this from the perspective of foreign governments and central banks. Foreigners bought boatloads of US government debt over the past few years, especially in the early days of the pandemic. In fact foreign ownership of US government debt has increased by $1 trillion since the start of the pandemic, and now amounts to more than $7.6 trillion. But thanks to Fed policy, these foreign institutions are in the same boat as Silicon Valley Bank— they're sitting on huge losses in their bond portfolios. They've also suffered from pitiful returns, high inflation, AND exchange rate losses. In short, any foreign institution that bought US government bonds over the past few years is sitting on huge losses....

Last June, during the European Central Bank forum, the host asked the chairman of the Federal Reserve about inflation. The Fed Chairman responded, “I think we now understand better how little we understand about inflation.” “Uh, that's not very reassuring,” the host chuckled. Talk about an understatement. It's downright terrifying. This is the Fed Chairman— the High Priest of finance— who has the power to control virtually everything in the economy. He can conjure trillions of dollars out of thin air practically at will, raise and lower interest rates, push businesses and banks into bankruptcy, and cause people to lose their jobs. And here he is acknowledging that they didn't have a clue about inflation. Thank goodness that was 8 months ago! Certainly by now they've really learned everything they need to know. Wrong. They still don't have a clue. This week Fed officials have been busy giving speeches in advance of their interest rate policy meeting later this month. And they keep complaining that the unemployment rate is too low. Too many people have jobs!! The Fed is trying to put more people out of work... under the assumption that if more people are unemployed, there will be less spending in the economy, and therefore inflation will fall. But this is such idiotic thinking. They may very well be successful in pushing millions of people into the unemployment line. But everybody knows that as soon as this happens, the government will step in and bail those people out with generous unemployment benefits. Think about it— the government did this in the 2008 recession, doling out luxurious unemployment benefits that lasted for YEARS. And during COVID they paid people to NOT work and stay home. So it's practically a given that the government will dish out fresh new benefits to newly unemployed workers. And where will the government get all that money from to pay unemployment benefits? From the FED! Duh. How do these Fed officials not understand this?!?!? Another thing the Fed has totally missed is the ‘quality' of the employment numbers. They fret that there's too much job growth in the US— because they're just looking at the QUANTITY. But if you take even a casual look beyond the headline numbers, you'll see that most of the job growth is for waiters and bartenders. The US labor market doesn't have red hot job growth for software engineers, biomedical researchers, or senior investment analysts. America is essentially becoming a bartender economy now. This is going on in front of their very eyes, but the Fed can't see it. If you look at the official minutes and records from the Fed's policy meetings, you can see what they actually discuss... and it becomes even more obvious they still don't understand inflation. They STILL blame inflation on Putin and the evil virus. There is ZERO discussion about how the government destroyed the economy and labor market with lockdowns, or how oil companies are being chased out of town (leading to higher energy prices), or all the idiotic new rules penned by the woke capitalism mob. And of course there's zero discussion about the Fed's own role in slashing interest rates to zero (and keeping them there for the better part of a decade), or printing more than $8 trillion since the 2008 recession. There's no discussion of the $31+ trillion government debt, or last year's $4 trillion deficit, or the impact of idiotic legislation like the poorly named “Inflation Reduction Act”. Ultimately they consistently prove that the people in charge of managing the US dollar have still learned absolutely nothing. When you think about it, that goes for nearly every major institution. The White House appears to have learned nothing, the media has learned nothing, the high priests of climate change have learned nothing. The good news though, is that everyone else— who feel the impact of these destructive policies— is learn...

Two weeks ago, I told you that the US government had just published its annual financial report. The government by its own admission lost $4.1 TRILLION in FY 2022. And this is 34% worse than the the previous year's $3.1 trillion loss. And the rest of the financial report only gets worse from there... They describe Social Security's extreme insolvency, projecting total unfunded liabilities of the program to be $76 trillion. And they forecast that US government debt will one day reach 566% of GDP. I've written about this extensively over the years, because history tells us that the consequences of this type of financial mismanagement are severe. This is not the first time that a country has had a lot of debt, nor the first time incompetent leadership has consistently failed to recognize and solve big problems. So in today's podcast episode we go back in time thousands of years to heed the lessons of one of history's biggest scumbag rulers. Unsurprisingly, he raised taxes, debased the currency, violated the rule of law, confiscated property, eliminated dissent, vastly expanded the government, and created all sorts of idiotic and destructive laws. BUT, this is fixable. And today we actually discuss some common sense ideas to demonstrate how easy it should be, at least conceptually, to take giant leaps in the right direction once again. Unfortunately, the people in charge seem to have zero interest in doing any of that. So I wouldn't hold my breath waiting for politicians and bureaucrats to ride to the rescue. But at the same time, as I often point out, this is not a bad news story. The world is not coming to an end. In fact, I believe the world is still full of abundant and incredible opportunities, despite the trajectory of its largest superpower. And we close this episode with the core central message of this organization: we have control over our own lives. Regardless of what they do or how badly they screw up, you do not have to go down with a sinking ship. You have the power to solve these problems for yourself. You can listen to today's podcast here. Download Transcription as PDF Open Podcast Transcription [00:00:00.810] Today we're going to go back in time to the 26 September in the year 480 BC to a very critical island in the Mediterranean. Now, if you know your history, you might be thinking, I know what he's going to talk about, because 480 is a very famous year. 40 BC is a year where Greece, which I'm going to do Greece and air quotes for right now. I'll explain why in a moment. Greece and Persia, they're at war with each other in a in a war that historians is often described as this epic battle between eastern civilization and western civilization.   [00:00:28.900] If Greece loses against Persia, there is no Socrates, there is no Plato, there is no Western civilization. So it's a really important year. 480 BC was the famous battle of thermopole 300 Spartans fending off the Persian. There are other people there as well. There's 700 Thespians and some others as well.   [00:00:44.910] But this very small number of people in this, like the battle of the Alamo, fighting off the whole army so that everybody else can live and regroup and defeat the Persians, this is followed by the Battle of Salamis, this famous naval battle. Salamis was a very important island in the Mediterranean. And this battle of Salamis where the Greeks vanquished this much larger Persian fleet and embarrassed Xerxes, and it was the turning point in the war, again, supposedly took place on September 26, 480 BC. I say supposedly took place. This is according to very painstaking astronomical calculations.   [00:01:16.970] It's not like the Greeks tell us, oh, it was September 26. There was no such thing as September in 480 BC. So the people have gone back and done these astronomical calculations to figure out the date of this based on information that we know.

Imagine if Elon Musk stood up one day and told the world, “My #1 goal is for Tesla stock to lose 2% of its value every year.” First of all, people would probably rightfully conclude that Elon had finally lost his mind. And second, everyone would dump the stock. Who would possibly want to own an asset where the management is TRYING to lose 2% every year? Yet that's precisely the stated goal of the people who manage our currencies. They tell us flat out that they WANT 2% inflation, i.e. they WANT the dollar, euro, etc. to lose 2% every year. Obviously these ‘experts' have completely failed to achieve their goal lately… but the larger point is that incentives are clearly not aligned. In the case of businesses, managers generally have the same incentives as their shareholders. Elon's wealth only increases if his stockholders' wealth increases. But the people who manage currencies (politicians and central bankers) do not share the same incentives as the people who own the currency (i.e. responsible individuals who save money). Savers want the currency to be stable. Politicians want it to lose value. It's a totally perverse incentive structure… but it may get a lot worse-- at least for the United States. And it has a lot to do with the war in Ukraine. History is full of examples of former superpowers who lose their dominance. Egypt. Greece. Rome. France. The Ottoman Empire. Mongolia. And quite often there's a ‘changing of the guard', a reshuffling of the world order, when a rising power and declining power are involved in a war. Carthage was once the dominant power in the western Mediterranean. But after losing the Punic Wars, Rome asserted its dominance over the region. Spain was once the dominant power in Europe. But after the Thirty Years War, it became clear that France was the new superpower on the continent. The two powers don't even need to be fighting each other; after World War II, for example, it was clear that the US had surpassed Britain as the dominant superpower, even though both nations were on the same side during the war. Today we see the same ingredients that may result in another reshuffling of the world order: a declining power (US), rising power (China), and a war. Today is the first and hopefully only anniversary of the war in Ukraine. And I spend some time in today's podcast episode exploring the larger implications, specifically focusing on the US dollar. I think it's very probable that, whenever this war finally ends, China will emerge as a clear superpower. That doesn't mean America will vanish. But it would mark the start of a new era in which the US can no longer do whatever it wants… and quite possibly share the dollar's ‘reserve status' with China. For decades now, the US has enjoyed the exorbitant privilege of being the primary issuer of the world's reserve currency. This gives the US the luxury of having endless demand from foreign investors who have to own US dollar assets, and specifically US government debt. Because of this endless demand from foreigners, the US government has been able to get away with the fiscal equivalent of double-homicide: multi-trillion dollar deficits, a $31.5 trillion national debt, etc. Yet despite such irresponsible spending, foreigners STILL buy US government bonds… simply because the US dollar is the world's reserve currency. Anyone who wants to participate in global trade, buy oil from Saudi Arabia, etc. HAS to own US dollars… and hence hold their noses every time Nancy Pelosi said “it costs nothing”. But imagine a world where the US dollar is no longer king. Sure, the dollar would still be relevant. But not king. Maybe a duke or viscount. Without its status as the undisputed king of currencies, suddenly the US government wouldn't be able to get away with outrageous deficits anymore. The Federal Reserve wouldn't be able to get away with printing trillions of dollars, or slashing interest rates to zero,

There's hardly anything that POTUS loves to brag about more than his ‘economic success'. He is, after all, a self-proclaimed “capitalist”. Even in last week's State of the Union address, he boldly claimed that he “cut the deficit by more than $1.7 trillion-- the largest deficit reduction in American history.” And he's made that same assertion over and over and over again. Unfortunately it's a complete lie. And just yesterday the Treasury Department released financial documents proving it. Every year the federal government publishes an annual financial report; it's sort of like what big public company like Apple does. The annual report contains financial statements, plus hundreds of pages of discussion, details, and footnotes. And yesterday afternoon they released the annual financial report for Fiscal Year 2022, which just ended a few months ago. It goes without saying that the government's financial condition is completely atrocious. Their “net financial position”, which is sort of like the net worth of the federal government, fell to MINUS $34.0 trillion… which is worse than the MINUS $29.9 trillion in FY21. The projected social security funding deficit also got worse… from $71 trillion to $75.9 trillion. The real headline to me, though, is the budget deficit lie. The President claims that deficit last fiscal year was $1.4 trillion, and that he (and he alone?) brought it down by $1.7 trillion. But that's not true at all. It turns out that the “budget deficit” is actually an inaccurate figure that can easily be manipulated. If you're a finance or accounting type, you might be surprised to learn that the budget deficit is determined on a ‘cash basis' and not ‘accrual basis'. This means that officials can easily accelerate certain revenues and push off certain expenses to massage the data and make the budget deficit appear better than it really is. Businesses aren't allowed to do this. Nearly every other organization in the country of any reasonable size has to follow strict accounting rules, booking revenue when it's earned, and accruing expenses when they're incurred. This provides a more honest, transparent, and standardized way of reporting financial results. So whenever they talk about the ‘budget deficit', this is really just a manipulated number that doesn't conform to proper accounting standards. Naturally this raises an important question: how much would the federal government's annual budget deficit be if they conformed to those proper accounting standards? i.e. the same ones that every major corporation has to follow? Well, lucky for us, we don't have have to guess. Because the government actually publishes that number too. They call it their “Net Operating Cost”. And it essentially represents the REAL budget deficit. It turns out that the FY22 Net Operating Cost of the federal government was MINUS $4.1 trillion. And that figure was MUCH worse than FY21's Net Operating Cost of $3.1 trillion. So this guy did not, in fact, “cut the deficit”. The real deficit, as determined by Net Operating Cost, INCREASED by a trillion dollars. There's so much more in this report, though. One of the other interesting points, in fact, is that the government actually failed its audit. Again. The Comptroller-General states very plainly that there are numerous “material misstatements” in the government's financial reporting and internal controls. There are actually laws that are supposed to prevent this from happening. 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,

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. If you're thinking about retirement, more options will greatly increase the chances of finding the right place that has the right weather, cost of living, medical care, and lifestyle that you desire. If you're thinking about business, considering your overseas options will greatly increase your chances of finding high quality, cost effective labor… or lucrative new markets to sell your products and services. If you're thinking about investments, looking abroad increases the likelihood of finding wonderful, well-managed businesses trading at a steep discount to intrinsic value. Or a trophy property selling for less than the cost of construction. This is the topic of our podcast today-- we discuss WHY it makes so much sense to look abroad, and cite some very specific examples. We talk about asset protection, for example, and I explain why foreign asset protection structures are so much more effective. (I also explain why asset protection structures exist to protect against professional criminals who abuse the legal system to steal from law-abiding, hard-working people.) I cite specific legislation from some of the best jurisdictions to show precisely why they are so much more effective at helping to protect honest people from thieves. We also discuss taxes… and specific ways that thinking globally can dramatically reduce your taxes. These are all completely legal. We're not talking about any ‘loophole' that requires a creative interpretation of the tax code. I tell you about one international strategy, for example, to slash your tax bill by 50%. It's no loophole. In fact there's an entire section of the tax code dedicated to it. Bottom line, diversifying internationally doesn't mean you need to go anywhere or do anything exotic. It just means expanding your thinking to consider a wider variety of options… and that can have an enormous benefit in your life. You can listen in to today's episode here. Download Transcription as PDF Open Podcast Transcription [00:00:00.890] Today we're going to go back in time to the 8 January in the year 1198 Ad. To the ruins of the ancient Septicoleum Temple, located in the city of Rome. Now the Septic Soleum temple doesn't exist anymore. It was demolished hundreds of years ago. But if you know Rome at all, it was used to be located nearby, the Circus Maximus.   [00:00:21.030] And on that day, the 8 January 1198, the Pope Celestein III, he had just died at the tender young age of 92 years old. And the College of Cardinals met very quickly at that Roman temple, the Septicoleum Temple, to elect his successor. By Vatican standards, the deliberation was very quick. The vote only took two ballots. You probably know, the black smoke and the white smoke and all of that.   [00:00:45.790] It was very, very fast. They had two ballots. And so very quickly they chose their new Pope. It was a young guy's, 37 year old Italian nobleman. His name was Latario Descendy.   [00:00:55.390] Latario descende chose as his new papal name. He chose innocent III. And right from the beginning, this young guy, he's young, he's full of energy, he's actually quite fixated on power. Innocent III felt that his predecessor had really weakened papal authority. You got to remember that for a long time the Church was the dominant influence in everything in Europe.   [00:01:19.600] Politics, economics, daily life. They controlled everything. And over time, at this point,

Gold is really an amazing metal when you think about it. It doesn't corrode. Coins buried underground or sunk at the bottom of the ocean for hundreds of years are routinely pulled up and brushed off, and they're good as new. This strength and durability is precisely what makes gold so interesting as an inflation hedge. It undoubtedly takes a lot of work to produce a gold coin or bar-- so much labor, energy, technology, etc. A gold coin essentially represents all of the work… all of the effort and labor… that went into producing it. This is not unique. In the same way, a bushel of wheat represents all the labor that went into producing the grain. An iPhone represents all the labor and effort that went into producing it. Except that wheat doesn't last. iPhones don't last. Gold does. So gold essentially encapsulates all of the resources, including TIME, that went into producing it… in a way that lasts forever. Right now, for example, it costs major mining companies about $1,270 to mine a single ounce of gold. So if you buy gold today, you're essentially locking in a $1,270 production cost. This is the reason that gold does such a great job of maintaining its value against inflation, because, over time, production costs tend to increase. And higher production costs eventually result in higher prices. This is true with just about any product or industry. We've seen companies like Procter&Gamble, Unilever, CocaCola, McDonalds, etc. all increase prices because their production costs are rising. Again, though, you cannot use a Big Mac as a store of value. It won't last forever. It won't even last a day. But gold lasts. You can buy a Canadian Maple Leaf coin today, and, ten years from now, your 2023 coin will be worth exactly the same as a brand new coin minted in 2033. And if you anticipate that inflation will push up production costs over the next decade (which tends to happen), you can easily make a case that gold prices will be higher by then. This is the topic of our podcast episode today; we take a deeper look at why gold has long-term value-- a variation of ‘proof of work' that I call Proof of Time. We start out in Yap Island, in Micronesia, and discuss how the natives there developed one of the most advanced financial systems in the history of the world based on the concept of ‘Proof of Work'. Anthropologist William Furness wrote that, despite the Yapese having no understanding of economics, they realized that “labor is the true medium of exchange and the true standard of value.” I believe this is true. But more than labor, I believe that TIME is real standard of value. Time is the ultimate scarce resource. No one, no matter how rich or powerful, can create any more of it. And once it is used, it is gone forever. Labor is one of the ways that we use time. And gold is a rare asset that transmits both time and labor… forever. We also talk about different BUY signals for gold. We talk about miners' gross profits-- and why it makes sense to think about buying when profits are low… or even when the price of gold falls below the price of production. In a way that's like buying a house for less than the cost of construction; it's a SCREAMING deal and definitely worth considering. Gold isn't at that level right now. But it could be soon… and that's why it's worth understanding how to think about gold, and many other assets, through this lens of ‘time'. You can listen to this week's episode here. Download Transcription as PDF Open Podcast Transcription [00:00:00.970] Today we're going to go back in time to the 26 January in the year 1543. Our location is absolutely nowhere, just the middle of nowhere in the middle of the Pacific Ocean. A tiny speck that you'd have to zoom and zoom and zoom in just to find a little tiny island that's a couple of dozen square miles, an area at most. Now, this is a time in history where you've got super powers that are...

As a member of the Boards of Directors of several companies, I regularly attend board meetings to help oversee and guide businesses. One company in our portfolio is run by some very sharp and talented young guys who have created one of the first metaverse advertising companies. It's growing rapidly, and they're even expanding into video games now. In a recent board meeting, the management team was telling me about their ‘KPIs' for this year; KPI stands for ‘key performance indicator', which is essentially a key metric that a company monitors to get an overall sense of the business. Apple, for example, probably monitors iPhone sales very closely as a major KPI. These guys at the metaverse business had a long list of KPIs. And as they were explaining the metrics to me, at a certain point I had to stop them. I told them that, first of all, you can only focus on so many things at once. You cannot prioritize everything. You have a certain amount of time, money, people, and energy, and leaders need to make deliberate decisions about how to allocate those resources. And second, you have to focus on things that you control. I told the guys that they cannot control the number of daily active users in the metaverse, or in the video games where they're advertising. But they can absolutely control the number of advertisers they work with, the properties in their inventory, etc. I'm telling you this story because I think it's a sensible way to think about a Plan B. Right now, it feels like the world is chain-smoking crisis after crisis. Consider inflation, for example, which has remained stubbornly high. I can't do anything to bring down price levels; there are only a handful of policymakers who have that ability, and they clearly don't get it. What I can do, however, is focus on the things that I can control in my own life. And I can absolutely control, for example, the impact that inflation has on me, because of the decisions that I make with my savings and income. I can't control the solvency of Social Security either. But I can make sure that I have plenty of money stuffed away for my own retirement, regardless of what happens to the Social Security trust funds. But today I really wanted to discuss how the future is far from certain. We discuss regularly in these letters that the US, and the West in general, have set themselves on a very destructive trajectory. Too much debt, too much spending, too much money printing, too much conflict, etc. And based on this current, destructive trajectory, if we fast forward 10-20 years, it doesn't look good. I also write a LOT about various historical examples of once great empires that fell from glory for many of the same reasons. But again, the future is not certain. If there's anything we've learned over the past few years, it's that ANYTHING can happen. The world can change overnight. And today I wanted to tell you a different story... not one of decline, but really more of a turn-around story. It's the story of a country that was on the brink of disaster... heavily indebted up to its eyeballs and about to be invaded. And they also happened to have a head of state with hardcore dementia who reportedly went around shaking hands with trees. But they fixed it. They managed to right the ship, turn everything around, and usher in a period of unprecedented peace and prosperity. So it is possible. But in case this turnaround doesn't happen... well, that's why we have a Plan B. This is the topic of our podcast today; you can listen in here. Click here to listen in to this week's episode. Open Podcast Transcription [00:00:01.050] Today we're going to go back in time to April 215 two, to a place called Ludlow Castle, located in the West Midlands region of England. It's about today, an hour and a half drive or so from Birmingham, and we find on that day in Ludlow Castle, lying on his deathbed,

On January 24, 1971, a Swiss-German university professor managed to raise money from the European Commission to fund his new idea— he wanted to start a business conference that would become a major global brand. He secured the funding and held the first conference the following month in the tiny Swiss town of Davos; it was a smashing success— more than 400 executives attended. The following year, the President of Luxembourg was a featured speaker. And for decades since, attending the annual conference at Davos has become a rite of passage among the world's business and political elite. The professor turned conference organizer, of course, is Klaus Schwab. And the organization he started is now known as the World Economic Forum (which is meeting right now for its 2023 event). The WEF has turned into an overzealous, supranational, undemocratic organization with a dangerous amount of power; Schwab openly brags about the influence he has with world leaders. For example, in 2017 Klaus Schwab spoke about all the world leaders who had previously been involved with the World Economic Forum through its Young Global Leaders program. He named Russian President Vladimir Putin, former German Chancellor Angela Merkel, and Canadian Prime Minister Justin Trudeau, as examples to explain, “what we are very proud of... is that we penetrate the cabinets” of governments around the world. Schwab said that half of Trudeau's cabinet were Young Global Leaders of the WEF. And Trudeau is a great example of the type of world the WEF wants to create; one where the government can, for example, form “public-private partnerships” to freeze your bank accounts for protesting against being required to take a vaccine in order to earn a living. And yes, representatives of the big banks and pharmaceutical companies are present in Davos this week. The WEF's goals aren't a theory. Schwab wrote a book about it. You can read exactly what his worldview is, and see how it has made its way into legislation and national policy. Just four months after Covid was declared a pandemic, Schwab published a book called Covid-19: The Great Reset, arguing that the pandemic presented a “unique window of opportunity” for global elites to reshape “the direction of national economies, the priorities of societies, the nature of business models and the management of a global commons.” The WEF was instrumental in promoting Covid lockdowns, vaccine mandates, and censorship of “misinformation.” In 2021 in a now deleted Tweet, the WEF wrote, “Lockdowns are quietly improving cities around the world.” Months before the outbreak of Covid, it hosted a “Global Pandemic Exercise” to simulate “an outbreak of a novel zoonotic coronavirus.”   One recommendation the conference put out was for governments “to partner with traditional and social media companies” to “combat mis- and disinformation” to ensure “that false messages are suppressed.” Naturally, an unelected group of global elites would have the final word on what constituted disinformation and needed to be suppressed. The WEF also sees combating climate change as the perfect crisis to exploit to push through its anti-capitalist agenda. For example, in a recent article, the WEF argued for “uneconomic growth” in order to prevent climate change. It linked GDP growth to the number of natural disasters that occur, and even the likelihood of war. Their lesson: humanity is better off if people are poorer. Well, most people. Certainly not the very important elites flying in on private jets to Davos, Switzerland this week for the WEF's annual conference. They pretend to extol the virtues of representative democracy. But you'll find absolutely none of that in the room. Instead it is a bunch of people who think they know better, and everyone else should live according to their will and dictates. For example, a close partner in Schwab's “public-private partnerships” to promote “stake...

By the third century AD, it was hard to imagine Rome being in worse condition. Historians literally refer to this period in Roman history as the Crisis of the Third Century. And it was brutal. Roman citizens couldn't believe what they were experiencing... it was incomprehensible to them that their fatherland had become so weakened. Inflation was running rampant. The Empire was stuck in a quagmire of foreign wars and had suffered some humiliating defeats. Rome experienced multiple bad pandemics, coupled with even worse government response. Foreign invaders were flooding across their borders on a daily basis. Trade broke down, causing shortages in many vital goods. And terrible social strife dominated people's daily lives. Ordinary Roman citizens were at each other's throats, and it was a time of disunity and outrage. One contemporary writer of the era named Cyprian described the situation as follows: “The World itself... testifies to its own declines by giving manifold concrete evidence of the process of decay... There is a decrease and deficiency in the field, of sailors on the sea, of soldiers in the barracks, of honesty in the marketplace, of justice in court, of concord in friendship, of skill in technique...” Cyprian wasn't just describing Rome's obvious decline. Rather, his summary is an indictment of Rome's inability to stop it's decline. Everyone in the imperial government knew what was happening in Rome. They simply lacked the ability to do anything about it. Historian Arnold Toynbee called this the “Challenge and Response” effect... and it's an interesting idea. The concept is that every society has to deal with certain challenges; if the challenges are too great, the society will not survive... i.e. the desert is too harsh, the tundra is too frozen, etc. But sometimes a society becomes so decadent, so prosperous, that it loses its ability to address challenges. It no longer has the social capital necessary— unity of purpose, the ability to compromise, the capacity to engage in rational debate. That is the position where Rome found itself in the 3rd century AD. And I believe the West is quickly heading in this direction. This is the subject of today's podcast. We start out talking about Rome's mortal enemy... and how, after more than a century, Rome emerged victorious as the lone superpower in the Mediterannean. Everything was great, and peace and prosperity reigned for more than 200 years. But over that time, the decadence set in. Wheras once Romans had valued hard work, freedom, and unity of purpose, their entire value system changed. People expected, then demanded, to be taken care of by the state. Corruption became commonplace.The bureaucracy multiplied. Social conflict soared. And eventually Rome lost the ability to meet its challenges. I make a lot of historical parallels to our modern world, including some specific examples of absurdities which occurred just in the last couple of days. But I also discuss why, in the end, these conditions actually create unique opportunity for creative, hard working, talented people. You can listen to the podcast here. Open Podcast Transcription [00:00:01.290] Today we're going to go back in time nearly 3000 years ago to the year 821 BC. To a city called Tyre, which is located in modern day Lebanon. Now, I want to give you an appreciation for just how old Tyre is, because if we go back to 821 BC, tire had already existed for nearly 2000 years prior to that. That's basically the the difference between us and Julius Caesar, right? So that's how old Tyre is.   [00:00:29.050] That even nearly 3000 years ago, it was already nearly 2000 years old. So that's an old, old city. And again, it still exists today. It's got a population of around 200,000 people. This is a real city today, located again on the Mediterranean and modern day Lebanon thousands of years ago.   [00:00:46.110]

By the turn of the 18th century, Great Britain was well on its way to becoming the dominant naval power of Europe. Brits had come to understand that a strong navy and merchant fleet were necessary to grow powerful and prosperous as a nation. And a mythology was already building around the Royal Navy. However all was not rainbows and buttercups. In 1796, the Royal Navy lost control of the Mediterranean. And in 1797, despite several victories, including repelling a French invasion of the British Isles, the navy also suffered two mutinies. And the threat of French invasion persisted. It was amid this backdrop that a young poet named Samuel Taylor Coleridge wrote The Rime of the Ancient Mariner. In it, a mariner is cursed to wander the earth telling his story about his grave error of killing an albatross which had led his ship out of icy, mist-shrouded seas. One of the most famous lines occurs as the ship is stuck in a silent and motionless sea, with stagnant air which refuses to fill the sails: “Water, water, every where, And all the boards did shrink; Water, water, every where, Nor any drop to drink.” The ship had drifted into what is known as the doldrums. This is the area between the distinct trade winds systems of the northern and southern hemispheres. Trade winds easily carry ships across the ocean; you can just sit back and let nature do the work. In the doldrums, conversely, the sea is silent and winds still. You can't move forward, and you can't go back. It's not immediately dangerous, like a storm. But it is extremely dangerous to be stuck, with dwindling supplies, just waiting for a catalyst. (In Coleridge's poem, the men were despondent, depressed, and constantly expecting disaster.) As we enter 2023, this is essentially the psychological condition of most of the world. In the US, for example, there's no major cataclysm; the job market still seems to be fine, and inflation has ticked down ever so slightly. But everyone seems to be braced for something much worse to come; businesses have started to freeze hiring, and some are laying off workers. They are conserving cash, and not being very aggressive with innovation or investment. Economic activity has declined, as everyone holds their breath waiting for a recession. And these conditions can actually cause a recession, because it is expectation driven. This behavior is also driven by the endless chorus of “experts” predicting the future. Of course, no one can predict the future. And it is doubly absurd to take the word of “experts” who have been so extremely wrong about everything... For example, central banks and Treasury officials who failed to predict the dot-com bubble, sub-prime loan housing bust, 2008 Global Financial Crisis, sovereign debt crises, inflation, and supply chain problems... are among the leading voices making economic predictions for 2023. Does anyone actually still take these people seriously??? It's more important than ever to decide for yourself how to react to the current conditions. This is the subject of today's podcast— having the independence of mind to reject the experts and take back control, in light of the abundance of opportunity that truly exists today. You can listen to the podcast here. Open Podcast Transcription [00:00:01.370] Today we're going to go back in time to Sunday, March 30 in the year 1519. It was Easter Sunday, and on that day, a group of imperial emissaries from the Aztec empire arrived to what is today the modern day Mexico and the city of Veracruz on the Caribbean coast. And they arrived there. They traveled a great distance from their capital city of Tenochtan and arrived arrived to meet foreign visitors that had arrived. They'd heard that these foreigners were there and arrived to the shore.   [00:00:30.110] And of course, we know that the visitors were in fact Spanish invaders led by Ernan Cortez.

On December 10, 1896, in the picturesque seaside town of San Remo, Italy, the famed Swedish chemist breathed his last breath after suffering a devastating stroke, and died. Nobel was an incredibly wealthy man at the time of his death, and most of his wealth had been placed in a trust. (In doing this, Nobel managed to sidestep Sweden's gargantuan inheritance tax that had been in place since 1884, AND the Kingdom of Italy's estate tax.) Nobel's death is commemorated every year on December 10th, at the annual banquet which honors the newest recipients of the Nobel Prize. That's tomorrow. And among the honorees at this year's banquet is the former head of the US central bank, Mr. Ben Bernanke. I'm sure Bernanke is a wonderful human being who certainly tried his best. But, as you may recall, he was the “expert” who established the precedent of slashing interest rates to zero and conjuring trillions of dollars out of thin air. When Bernanke first became Fed Chairman in 2006, the central bank's balance sheet was about $850 billion. And as the housing market began to decline, he continually insisted that there wouldn't be a housing crash… nor a recession… nor certainly a major economic crisis. He was completely wrong on all three accounts. Within a couple of years, the entire global economy had nearly collapsed. Bernanke responded by printing so much money that the Fed's balance sheet ballooned to $4.5 trillion (from $850 billion). And he cut rates to zero. Bernanke had this power because the nature of our financial system awards dictatorial control of the money supply to a tiny group of unelected central bankers. And Bernanke was the chief of that unelected committee. Bernanke faced some criticism for his actions, most vocally by then Congressman Ron Paul. But similar to the incorrect predictions he made about the economy and housing, Bernanke insisted that there would be no consequences… that the Federal Reserve could continue to keep rates low and print money, and nothing bad would happen. Once again, this view proved to be totally wrong. And we're seeing the consequences now with record high inflation. It's not Bernanke's fault. He's human. He made mistakes. All of us have. The real problem is having a system that gives supreme control to a tiny group of imperfect, mistake-prone human beings. The Fed has virtually zero oversight, zero accountability. They do whatever they want, and hundreds of millions of people have to suffer the consequences of their actions. More perversely, though, they're held up as “experts”. And even though they're just as human as the rest of us, these “experts” are somehow seen as infallible. We experienced the same thing during the pandemic; a tiny, unelected group of public health “experts” were given near totalitarian control over how hundreds of millions of people were allowed to live their lives. And we were expected to suspend all doubt and scrutiny, and to believe everything they say without question… because they were the experts. The most absurd part of all, though, is that even when they're proven to be completely and totally wrong… these “experts” are awarded our society's most esteemed prizes for achievement. Again, Bernanke may be a wonderful guy who tried his best. But his approach had devastating consequences. He created one of the biggest financial bubbles in human history. And tomorrow he's won the Nobel Prize. This makes about as much sense as giving the Nobel Peace Prize to Henry Kissinger or Barack Obama. Or the special 2020 Emmy award to New York's governor Andrew Cuomo. Or when Will Smith received a STANDING OVATION when he won the 2022 Academy Award for Best Actor, literally minutes after assaulting Chris Rock on stage. Or Vladimir Putin receiving the French Legion of Honor. Or Kamala Harris winning Time Magazine's Person of the Year. Or the New York Times and Washington Post winning the 2018 Pulitzer Priz...

On the 21st of February, 1978, workers for the state-owned electrical company in Mexico City, Mexico were digging in a neighborhood near city center to bury some cables. After digging about two meters below the street's surface, they hit a large rock that their equipment could not penetrate. As they dug further, around the rock, they discovered it wasn't natural… but instead a large stone disk that was at least hundreds of years old. Archaeologists uncovered the rest. And it turned out that site had once been the location of the main Mexica/Aztec temple, known as Hueyi Teocalli in the native language. Over the past several decades, the temple has been a treasure trove of Aztec cultural artifacts, providing incredible insight into how this civilization lived. And among other things, archaeologists have found the remains of more than 600 skulls on the temple grounds-- most likely victims of the Aztec's human sacrifice rituals. Human sacrifice has been a common practice throughout the history of many civilizations, from the Aztec and Maya, to the Celts and Babylonians. And there always tended to be some High Priest or ruler who decided in his sole discretion that a blood offering to their gods was necessary… for the ‘greater good' of their society. (Naturally the rulers rarely offered their own blood; it was always some peasant who had to be sacrificed.) This decree was rarely questioned. After all, the High Priest was an expert. And anyone who dared question his authority would most likely end up being the one sacrificed. So people had an incentive to keep their mouth's shut and go along with the ritual. Though we're not quite as barbaric today, you can still see evidence of human sacrifice in our modern world. And COVID was a clear example. 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. Nancy Pelosi was infamously caught going to the hairdresser during home district of San Franciso's lockdown... and then blamed the hairdresser for the transgression. Clearly Ms. Pelosi cares about the working class. Chicago Mayor Lori Lightfoot was also caught going to the hairdresser after locking her constituents down, but she then justified her behavior saying “I take my personal hygiene very seriously.” Then California's governor Gavin Newsom was caught breaking bread with friends at a fancy restaurant in Napa Valley during his state's lockdowns. The list goes on and on. 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.

You've probably been following the news that FTX, one of the largest cryptocurrency exchanges in the world, is in hot water. And frankly that characterization is an insult to hot water. FTX has already filed for bankruptcy. Potentially $10 billion or more of customer money is at risk. The new CEO states that the company's internal controls were “a complete failure”. And the company's founder, Sam Bankman-Fried, has proven himself to be, at a minimum, an irresponsible, reckless child, if not a full-blown fraudster. It's easy to lay the blame exclusively on him. And he clearly deserves a lot of it. But a failure (if not fraud) of this size cannot be perpetrated by a single individual. Even Bernie Madoff had accomplices. Or people who should have noticed but were totally negligent at their jobs. In fact the Madoff scandal is a great example. Madoff's firm had to undergo routine regulatory examinations. And yet, year after year, the Securities and Exchange Commission completely failed to notice the rampant fraud. In the aftermath of the Madoff scandal, a US Department of Justice investigation concluded that in the SIXTEEN YEAR period between 1992 and 2008, the SEC had “more than ample information” and that they “could have uncovered the Ponzi scheme well before Madoff confessed.” The report further blames the regulatory agency's failure on “systematic breakdowns in which the SEC conducted its examinations and investigation.” Talk about being asleep at the wheel... In the case of FTX, there were also a lot of people who failed to notice what was happening. Most notably, Sam Bankman-Fried became the #6 biggest political donor in the United States; 99.6% of his contributions went to progressive candidates. Did any of those politicians really scrutinize where the money came from? Did any of them ask for audited financial statements to make sure the money was clean… or to make sure that the guy wasn't spending his customers' money? Apparently not. Politicians happily cashed the checks and didn't ask any questions. This is an outrageous failure. Politicians constantly pass rules and regulations making financial compliance far more onerous for everyone else. (If you don't believe me, try going down to your local bank and withdrawing $25,000 in cash… and see how quickly they treat you like a criminal suspect. You'll be there all day filling out forms and justifying your actions.) But do they apply those same rules to themselves? Absolutely not. They just take the donations. It's a despicable double standard. Also culpable in this massive failure are the prominent venture capital firms who enabled this overgrown man-child to go rogue. Sam Bankman-Fried raised at least $1 billion from investors, including firms like Softbank and Sequoia Capital. Softbank, of course, is infamous for its enormous investment in WeWork, effectively encouraging CEO Adam Neumann to recklessly spend other people's money. It seems that Softbank didn't learn its lesson, because they once again dumped a mountain of cash on a guy who is even worse than Neumann. More importantly, however, Sequoia and Softbank are hard core, sophisticated investors. They have huge teams of lawyers, bankers, and analysts. And, even though FTX is a private company, as investors they would have had access to the company's financial statements. In other words, they should have seen the impropriety. They should have seen it, and they should have done something about it. But they didn't. They stood by once again in silence, enabling Bankman-Fried's irresponsibility. Despite this colossal failure of a major player in the crypto sector, however, it's important to separate FTX (the company) from crypto (the idea, and the asset class). In my view, FTX isn't even a crypto business. It's a financial institution, little different than Bank of America. Whenever you make a deposit at Bank of America, that money becomes BOA's asset. In other words,

More than 3,000 years ago, between the 12th and 13th centuries BC, the legendary king of Ithaca, Odysseus, set sail from the ancient city of Troy to begin the journey home. The stories of the Trojan War, and of Odysseus's voyage home, have been passed down to us in the form of epic poetry from Homer. Most of it is pure fiction. But like modern film, TV, and ‘true crime' podcasts that abuse dramatic license to entertain their audiences, Homer's epics may in fact be “based on a true story”. The Trojan War, for example, likely happened. The bit about the horse, on the other hand, probably didn't. It's certainly possible (and even probably) that one of the key leaders in the war had an arduous journey back home to Greece, spurring ancient entertainers to weave elaborate tales of sirens and sea monsters. One of the most important parables in Homer's tale of the long journey home for Odysseus is the story of Scylla and Charybdis. Odysseus's journey took him through a particularly narrow stretch of sea; on one side of the strait was a small, rocky island where a six-headed monster named Scylla lay waiting to destroy any ship that dared to pass. According to Homer, Scylla was such a dreadful monster that “no one-- not even a god-- could face her without being terror-struck.” But on the other side of the narrow strait was the deadly whirlpool of Charybdis, which would swallow up the entire vessel and all the men on it. Odysseus's impossible task, of course, was to swiftly and stealthily sail right down the middle… to just barely avoid the whirlpool of Charybdis, while somehow managing to avoid the long grasp of Scylla. For a while, Odysseus refused to believe the situation was hopeless; he was convinced that he would be able to sail, unscathed, between Scylla and Charybdis without a single loss. After all, he was a king. And an unparalleled expert when it came to sailing. Surely he would be able to succeed. And yet everyone who had ever come before Odysseus had believed the same thing. But no one had ever succeeded. Literally every ship that ever tried to sail between Scylla and Charybdis had been destroyed by one of the two evils. Eventually reality set in, and Odysseus knew that had would have to choose between the lesser of the two evils. He chose the monster Scylla. Odyssesus realized that sailing too close to the whirlpool would mean losing his entire ship and everyone on it. Sailing too close to the 6-headed monster would mean losing, at most, six men. Odysseus concluded that it was better to lose six men was than to lose everyone. And that's precisely what happened; as his ship sailed through the strait, just barely avoiding the whirlpool, “Scylla pounced down suddenly upon us and snatched up six of my best men.” But the rest of the crew (and the ship) survived the challenge and passed through the strait. This story is one of the best allegories of the state of the global economy today. Central bankers and economic policymakers are like Odysseus. They have managed to sail the global economy into a very narrow strait. On one side of today's economic strait is the evil inflation monster. And this monster is guaranteed to chew up and spit out incalculable quantities of unsuspecting, unprepared people. Yet on the other side of the economic strait is the full-blown collapse of the sovereign bond markets… and by extension, collapse of the global financial system. Like Odysseus, central bankers were at first in denial. They didn't want to believe they were even in such dire economic straits. They infamously rejected the notion that inflation existed at all. Then they claimed it was transitory. Then they finally started trying to do something about it-- to turn the ship around. But it was too little, too late. Now they find themselves squarely in the middle of these evils-- inflation, and collapse of the sovereign bond market.

Today's podcast starts off in the year 1175 BC, where the legendary Pharaoh Ramses III was readying himself for battle against one of the most mysterious enemies in all of human history. Ramses was literally fighting for the survival of his kingdom, and for all Egyptian civilization. And fortunately for Egypt, he won. But it came at a great price. Ramses' treasury was depleted from costly battles (not to mention the vast numbers of expensive monuments and temples that he built). And so to make ends meet, he did what any politician would do-- he raised taxes. The ancient Egyptians were legendary record keepers; we have detailed accounts of their commercial activities, financial transactions, and even tax receipts. And we can easily observe the trajectory of Ramses' economic frustration: tax receipts were declining, evasion was becoming rampant, and production continued to decline. It's ironic that, even though Ramses III saved his civilization from marauding invaders, his dynasty soon collapsed due to economic mismanagement. This is an important lesson that politicians have to relearn over and over again: taxation is a huge disincentive. Whenever you impose a tax, you get less of it. Policymakers understand this in theory; as Mayor of New York City, Mike Bloomberg famously imposed a ‘soda tax' on sugary drinks. He knew that imposing such a tax would curb people's behavior and they would purchase less soda. This is also why taxes on cigarettes and alcohol exist; politicians understand very well that people will consume less of something that is heavily taxed. But for some reason, they fail to apply the same logic to productive economic activities. They fail to understand that if you place heavy taxes on capital gains, you'll end up with fewer investments. If you increase corporate tax rates, businesses will leave for lower tax jurisdictions. And if you impose absurd taxes on oil companies… then oil companies won't invest or produce as much. Duh. Yet this seems to be the new rallying cry of the ruling mob; they claim that “war profiteering” oil companies are benefiting from the “windfall of war” and generating “excess profits”. And their solution, naturally, is an ‘excess profits' tax. There is actually precedent for this. The US government started passing excess profits tax as early as 1916. And it still ranks as one of the most complex, bureaucratic, incomprehensible taxes in history. Trust me, if you think your taxes are complicated now, try being a US company during World War I. They rolled it out again during World War II, charging a tax as high as 95% on ‘excess profits'. Obviously the concept of ‘excess profits' raises a number of questions: ‘excess' according to whom? But naturally the people who come up with these ideas have no understanding of business of finance. A few months ago, for example, the President of the United States was whining about Exxon-Mobil's profitability, and he proclaimed: “We're going to make sure that everybody knows Exxon's profits.” Now I know the guy is a bit slow and doesn't usually know where he is half the time. But apparently he doesn't even realize that Exxon is a public company, i.e. Exxon's profits aren't some closely guarded secret. They HAVE to report their profits. Exxon already makes sure that everybody knows Exxon's profits… Yet even the most basic understanding of capital markets and financial reporting remains elusive to the people who set economic policy. Now there's obviously an election next week, so I'm not terribly concerned about an Excess Profits tax becoming reality. But here's something they could (and would) probably do. There's a rather obscure tax called the Accumulated Profits Tax that's already on the books. This is a tax that corporations are supposed to pay if they hold ‘excess' (there's that word again) cash profits. This tax is rarely enforced. But that's more of a policy choice than anything...

First, I am really grateful for all the well-wishes and congratulations we received on the birth of my son. He's doing great, and I'm over the moon. I decided to record a podcast about the experience-- why my wife and I decided to have our first child here last year, as well as our second child this year, and tell you how great the experience was. Naturally, though, we start with a historical perspective. Today's episode begins in ancient India with one of the most famous figures in human history. It turns out that, in addition to being a spiritual icon, he was also an extreme biohacker. We talk about the evolution of medicine, and how healthcare used to be a ‘patient-first', science-driven field. Individual healthcare practitioners today are still that way. Doctors, nurses, and medical researchers have answered a noble calling to help the sick. But the healthcare industry itself is now ruled by insurance companies and political hacks who have managed to increase the cost of care, make it much more bureaucratic, and severely dilute the doctor-patient relationship. I share a story of my step father, who died several weeks ago after being chewed up by a healthcare system that did not seem designed to help him. This is one of the big reasons why we had our children in Mexico; it's a much more liberated healthcare system. In Mexico, we have a very close relationship with the physician, who is unconstrained by bureaucratic policies and idiotic regulations. And if some stupid rule ever does come up? It's Mexico. We ignore it. The births of my children were both fantastic experiences. The hospital was great. The physicians and nurses were great. And the cost? Imagine Nany Pelosi closing her thumb and index finger into a small circle saying, “It costs nothing.” Frankly it's almost embarrassing that the all-in cost of my child's birth was about $1,750, including the ‘Presidential Suite' at one of the best private hospitals in the country. My children are both Mexican citizens (in addition to the four others that they receive from mom and dad). Plus parents AND grandparents are both entitled to permanent residency in Mexico. This proved especially useful for my in-laws; my wife is from Ukraine, so we were able to get the family out of Kiev and relocate them here to Cancun-- because they now have permanent residency. I tell you the whole story in today's episode, which you can listen to here. Open Podcast Transcription [00:00:01.140] Today we're going to go back in time more than 2500 years ago to the mid 500 BC. To the Kingdom of Kashi on the Ganges River in northern India. Now you might not have heard of the Kingdom of Kashi, a lot of people haven't, but it's actually quite historically significant for a couple of reasons that we're going to get into. At the time, in the mid 500s, there was a guy in his mid thirty s, a guy that some of you might know. This name Siddharta Gotama.   [00:00:27.520] And if you don't know his name, you will in a moment. But this is a person who was born into wealth and power and money and status and he renounced it all. As a young man he said, I'm not interested in the money. What I am interested in is spiritual enlightenment. And that might sound a little bit hokey today, but back then that was actually quite a popular social value.   [00:00:49.210] A lot of people said, you know, I want to seek spiritual enlightenment and their culture and their civilization. That was a prized value. And he walked away from all of his worldly possessions and decided that the way he wanted to do that, he was going to hit the road. And he became essentially a wandering beggar. And during that time he experimented with some really extreme conditions.   [00:01:07.920] At the time, in fact, there was a commonly held belief that if you starved yourself that eventually you would achieve spiritual enlightenment. And this seems crazy to us,

We start our podcast today more than 2,500 years ago at a time when the dominant superpower in the western world was the Achaemenid Empire of Persia. Their civilization had reached an unfathomable level of wealth and sophistication; historical records show that, at peak, the Persian treasury had more than $300 BILLION in savings (in today's money). They had an intricate road network, a highly-functioning postal system, impressive engineering works, and had even invented a crude form of refrigeration and air conditioning. Most of all they had a fearsome military. It was huge. And it was terrifying. Simply put, an invading Persian Army had never been defeated. And yet, early in the 5th century BC, when they went to war against a rapidly rising power in Greece, the Persians suffered a humiliating defeat. Then again. And again. And again. The losses changed the perception of their Empire forever. Practically overnight their reputation sank, and they were no longer viewed as a terrifying superpower able to dominate the world. We've seen this story over and over again throughout history, from Ancient Rome to the Mongols to Imperial Portugal in the early 1800s. Simply put, dominant superpowers almost invariably have an equally dominant, fearsome military that inspires awe and intimidation in the rest of the world… and especially in the superpower's adversaries. But superpowers have a life cycle. They rise, peak, and decline. And at some point during the decline, the military begins to show signs of weakness. Often times there's some specific event-- something happens that's so humiliating to the superpower that it shocks the world. This is what happened to the Persians in 490 BC. And it's what happened to the United States in 2021. As a West Point graduate and US Army veteran, I still hold in my heart that the US military is the finest fighting force on the planet. But facts are facts, and the US military is showing clear signs of decline. Most of it is due to incomprehensible failures of leadership. Today we discuss that decline; I reference a brand new report by the Heritage Foundation, its 2023 Index of US Military Strength, which provides an extremely honest (and distressing) analysis of the US military's capabilities, capacity, and readiness. The report spells out in nearly 600 pages of painstaking detail how the US military is rapidly losing (or has already lost) its technological advantages. It shows how there are not enough forces to defend American interests against a major adversary like China. And most importantly, the report concludes that the military is simply not ready. These conclusions have far-reaching implications. History has shown over and over again that once a superpower's veneer of invincibility is pierced, it rapidly loses its status. And that's even more true when another competing power is on the rise. Loss of status as the world's sole superpower goes far beyond reputation and military conflict. The economic consequences are devastating. That's because dominant superpowers also tend to own the world's primary reserve currency-- in this case, the US dollar. Being the world's reserve currency means that commercial and financial transactions around the world are conducted primarily in US dollars. So for example, a Brazilian merchant and its supplier in India do business with each other in US dollars. Futures contracts for gold, copper, crude oil, etc. that are traded in foreign commodities exchanges (like the Dubai Gold & Commodities Exchange) are denominated in US dollars. The dollar is so dominant that when Airbus (a European aircraft manufacturer) sells its jets to European airlines, they typically close those deals using US dollars instead of euros. And giant European companies (like Nestle, BP, and Volkswagen Group) issue corporate bonds in US dollars. You get the idea. All of these USD financial and business transactions around the ...

In the mid 1400s, the head of the Byzantine Empire was a career politician with decades of experience who most people thought would be a capable leader. Instead, through a series of hilariously terrible decisions, he managed to take his already weak empire off the cliff, and into the dustbin of history, in just a few short years. And one of the ways he did that was by deliberately giving up the most strategic resource his empire possessed. We're seeing a similar story play out today-- the people with decades and decades of experience are doing all the wrong things to vanquish one of the most strategic resources in our modern world: energy. Think about it-- the people in charge have demonized an entire industry. They punish oil companies with creative taxes and insane regulations. They refuse to follow the law and lease federal lands to oil and gas companies. They drag their feet in the permitting process. They constantly antagonize energy companies and blame high fuel prices on the industry's “greed”. In short they do everything they can to destroy a critical resource that the nation depends on for growth and prosperity. This is our topic for today's podcast. We start off walking through the comical incompetence of Emperor Constantine XI from the Byzantine Empire… and then go through some key issues to know about in the oil and gas sector. In short, supply is tight… and probably not getting better. Demand is increasing. It's a really important trend to understand. But we leave with some good news. This is fixable, both long-term and short-term. But the short-term fix is going to rely on a few surprising characters from our past that may become some of the most exciting economies in the world. Open Podcast Transcription [00:00:00.610] Today we're going to go back in time to January 6 and the year 1449 to the city of Mistress and the Peloponnesian Peninsula of Greece. Now, at the time, Greece was a pretty important part of the Byzantine Empire. Byzantine Empire, as you probably know, was really just the continuation of the the ancient Roman Empire that had been around for a really long time. And at its peak, the Roman Empire encompassed virtually the entire known Western world, from Hispania, North Africa, central and Eastern Europe, Britannia, all the way to the Dardanellesh and modern day Turkey. At a certain point in the third 4th century, there was a formal demarcation of the Roman Empire.   [00:00:40.510] And they said, you know what? There's going to be two empires are going to be an Eastern Empire that's based in Constantinople, modern day Istanbul, and a Western Empire that's going to remain in Italy. And the two empires were basically two different empires. They had two different emperors, imperial courts, imperial armies, their own palaces. Everything was totally separate and distinct.   [00:00:57.840] The thing is that while the Western Empire was in decline, right, the original Rome was in serious, serious decline. With the barbarian invasions and the tax farmers and the desertions and everything that they were suffering there, the Eastern Empire was thriving. It was growing. It was getting better and more powerful. And even by the time the Western Empire collapsed in 476, the Eastern Empire was really just getting started.   [00:01:19.380] It hadn't even peaked yet. The Eastern Empire wouldn't peak for more than a century after the fall of the west, and it stayed very powerful for a very, very, very long time. We can actually tell this because the Eastern Empire, they minted a special coin. It's called the gold solidus solidst coin. And the solids gold coin was something like reserve currency.   [00:01:38.610] It was like the US. Dollar. Today we're in the same way. You might have a merchant in India doing business with somebody in New Zealand, and they'd conduct that transaction in US. Dollars.   [00:01:48.810]

Lately we've been led astray over and over again by supposed ‘experts' with decades of experience who can't seem to stop making colossal mistakes. But I'm not just talking about individuals. I'm talking about institutions too. And one institution in particular that's been an abject failure lately has been the central bank. That includes the Federal Reserve in the United States, the Bank of England in the UK, and more. The Federal Reserve, for example, despite its leaders' decades of experience, completely failed to predict that their policies over the past few years would have any consequences. It's extraordinary. These people honestly thought that they could print trillions of dollars, keep interest rates at 0%, and that there would never be any consequences until the end of time. And then, when inflation began to take hold last year, they failed to recognize it. They chastised people who pointed it out. Later, when they finally did acknowledge inflation, they insisted it was transitory. And then when they ‘retired' the term transitory, they promised to do something about the growing inflation problem… eventually. Finally, in March 2022, they made a very ceremonial 0.25% interest rate increase. File that away under “too little, too late”. But now their tune has changed. Now their policies smack of panic and desperation, and they sound like they're running around with their hair on fire with no clue what to do next. It hardly inspires confidence. Earlier this week we saw another example. The Bank of England made a stunning announcement that they would step in to prop up their rapidly-declining bond market. Investors around the world cheered the news, and global financial markets surged. The euphoria lasted about 24 hours. The next day, markets tanked again as investors realized, “Hang on… I don't believe these people.” Central banks have enjoyed unparalleled respect and gravitas for the past 30 years; going back to Alan Greenspan in the 1990s, central bankers have been viewed as infallible superheroes who always know what to do. Now they just look like a bunch of amateurs. In today's podcast, I walk through my analysis about what might happen next. Specifically, I argue why I think there's NO WAY they'll follow through on their interest rate increases. Simply put, continuing to do so will bankrupt their governments. Ultimately this means that inflation, at least some inflation, is here to stay. And I also discuss a couple of key asset classes, plus one surprising country, that can do well in this mess. Click here to listen. Open Podcast Transcription [00:00:00.850] Today we're going to go back in time, october 19, 1469, to the city of Viadali in modern day Spain. Now, I say modern day Spain because at the time, spain was really just a series of independent kingdoms. You had Castile and Navarro and and Aragon and so many different kingdoms across the peninsula, counties and Duchies, and there was no unity to Spain at all. And there in the city of Adelaide, in the cathedral that day, standing at the altar, was a 17 year old kid from Aragon. His name is Ferdinand.   [00:00:31.570] He came from a noble house called the House of Tristomera. Ferdinand, by all accounts, was somewhat of a genius. He was considered to be a child prodigy. He was chess and checkers prodigy, even as a child, beating the pants off of everybody in the court. He was an athlete, he was a horseman, he was a great soldier.   [00:00:50.600] He was battle hardened in combat. He was known as a great military commander. And people even said they wrote about at the time, they even said he was good looking. So he pretty much had everything going for him that you could ask for as a 17 year old kid. And on top of that, he was in line for the throne of Aragon.   [00:01:04.920] Standing next to him at the altar was his cousin, which seems incomprehensible to us,

John Adams famous wrote to his wife Abigail in the year 1780: “I must study politics and war, that my sons may have the liberty to study mathematics and philosophy. . . in order to give their children a right to study painting, poetry, and music. . .” So that their children can major in gender studies and waste their lives on Tik Tok. OK so I added that last part myself. But I believe the quote most accurately sums up the natural decline of empire. When enough time passes, a dominant superpower begins to lose the cultural traits that made it great to begin with. Instead of being energetic, ambitious, and hungry, the population becomes complacent. Meanwhile, hard-working rivals become wealthier by the day… rising, ascending, and eventually eclipsing the declining superpower. History has been witness to this natural cycle over and over again, from the ancient Greek conflicts between Athens and Sparta, to the decline of France and rise of Great Britain in the 1700s. The United States is the modern superpower that is now in obvious decline; we write about this all the time at Sovereign Man, so this should hardly be a controversial statement. As former US Treasury Secretary Larry Summers once said, “There is surely something odd about the world's greatest power being the world's greatest debtor.” And he's right. The economic and financial data are clear: the US has enormous debts, huge deficits, awful inflation, and insolvent pension funds (like Social Security). The social divisions are palpable. Trust levels in institutions, government, and corporations are at historic lows. It's true that the US has been divided before. And the US has also seen its share of financial crises. But simply put, America has never been battered simultaneously by so many debilitating trends. This is truly new territory for the world's dominant power. Now, it's important to not get emotional about US decline. We're talking about facts and doing our best to make a rational analysis. And one of my conclusions is that we may be experiencing the end of an era. For the past several decades, the US was the undisputed global superpower. And there was a great deal of peace and prosperity in the world. After all, so many countries-- China, India, Russia, etc. were getting rich selling their products and resources to the United States. Who would possibly want to screw up that balance? We've seen this same cycle over and over again throughout history: peace and prosperity go hand and hand. But things are different now. Other countries are stronger than they used to be. The US is much weaker. The power dynamics have been disrupted… and the cycle of peace and prosperity is being displaced by chaos and conflict. This is our topic for today's podcast. We start in ancient Rome and discuss how the unparalleled dominance of the Roman Empire in the early 1st Century brought an unprecedented period of stability, peace, and prosperity to the western world. Frankly it's quite similar to what we enjoyed for the past 30 years. But the Pax Romana, as this period is known, did not last. Neither is the Pax Americana. We see chaos and conflict all over the world now… much of it due to the decline of the US, much of it due to bonehead incompetence from the supposed ‘experts' who run the show. And this new era of chaos and conflict has some pretty serious implications. Don't worry-- it's not the end of the world. In fact, there are some really interesting opportunities for anyone with the independence of mind to look at these facts and trends rationally. And we discuss some of these in today's podcast, including things like real assets, and investing in neutrality. I explain, for example, what today would be the equivalent of having a Swiss passport in 1935. Or which specific asset classes are extremely relevant in a world where resource nationalism is a real possibility.

In the year 1566, at the end of the reign of the legendary Suleiman the Magnificent, his Ottoman Empire was the world's dominant superpower. Ottoman territory extend across three continents over nearly 2.3 million square kilometers. Its military was powerful… and feared. The economy was strong and the treasury plentiful. But in time that changed. Subsequent Ottoman rulers became complacent. The government became bureaucratic. The military became softer. Society became decadent. As a whole, they lost the elements that made them strong and powerful to begin with, and the empire began to dwindle. Over time, France ascended as the dominant superpower; Paris became the global center of politics, commerce, and the arts. And no other European power could come close to France's wealth or military capabilities. But eventually the French, too, lost their way, and were eventually displaced by the British Empire as the world's leading superpower. To this day the British Empire is still the largest ever in the history of the world, totaling more than a quarter of the world's land mass. They dominated global trade and oversaw a period of relative peace now called the Pax Britannica. Yet they too eventually declined, and the British Empire was ultimately displaced by the United States, which has now been the world's leading superpower for decades. It goes without saying that the United States is also in decline; that's not intended to be an emotional or controversial statement. From a rational academic perspective, it's very difficult to not see obvious and familiar signs of an empire in decay. I group these into four fundamental forces of decline-- The first are the Forces of Energy, both natural and political, which have created rising energy costs that are now bordering on an energy crisis. We discussed this at length in last week's podcast, when I walked you through the dynamics of how it now requires much more energy to produce energy than ever before. In other words, oil producer are having to burn more oil now to fuel their equipment, for every barrel of oil that they pump from the ground. This is a critical trend to watch; the past few centuries have proven a very clear link between energy and prosperity, and more expensive energy is a nasty, long-term barrier to economic growth. The second major category of forces causing decline in the US are the Forces of Society. We can see this every day in the social and political divisiveness, censorship, media manipulation, the appalling decline in trust, rising crime rates, popularity of socialism, wokeness, etc. The third category are Forces of Economy. Here we can see evidence in the absurd level of money printing, inflation, the national debt, rising taxes, multi-trillion dollar spending packages that “cost nothing”, etc. And the fourth category are the Forces of History. This is the inevitable course of empire-- rise, peak, and decline, and it includes all the geopolitical events we've witnessed, from the debacle in Afghanistan to the war in Ukraine and rise of China. Each of these groups of forces are contributing to an obvious US decline. It is by no means a one-way street. And there are many elements that could be improved. The widespread adoption of nuclear power, for example, could result in an economic bonanza in the US, which would keep the party going for quite some time. But for now, the trajectory of the US appears to be heading down. Again, that shouldn't be a controversial statement, and I'd encourage anyone to look at the situation rationally and dispassionately, and not through the lens of patriotism or fear. For a long time I've asked myself-- what comes next? Who will be the dominant superpower after the US decline? And I've often thought that China is the answer… simply because it is the only viable power large enough to displace the US. But China has always been an imperfect answer.

The year 1776 is legendary for precisely one thing: the Declaration of Independence. But 1776 was actually a REALLY big year. Because in addition to the formation of the United States (which undoubtedly had an extraordinary impact on the course of the world), 1776 also saw two other historic trends take shape. The first was the birth of capitalism. 1776 was the year that Scottish economist Adam Smith published his famous work An Inquiry into the Nature and Causes of the Wealth of Nations, which was the first book ever to outline the case for free markets and laissez-faire governments. Not to take anything away from impact that US independence had on the world, but you could easily make an argument that the idea of capitalism has been just as profound to human history. Capitalism is responsible for more wealth creation and more prosperity in the past 246 years than every economic system combined over the previous 5,000. That's a pretty significant impact. But we're not even finished yet with the big events from 1776. Because that year saw something else take place that was truly profound… again, potentially outweighing the impact of both US independence AND capitalism. It was the invention of the steam engine… which at the time may have been the most disruptive technology in human history up to that point. For thousands of years prior, nearly all work done on the planet was powered by muscle, i.e. human beings and animals toiling away in fields and factories. Just about everything required physical labor. The steam engine changed all of that. For the first time on a mass scale, an inanimate fuel source (like coal or wood) could power machinery, which could do the work of dozens, even hundreds of people. It was the steam engine that really kicked off the Industrial Revolution and brought about an extraordinary period of growth to the world, where wealth and standards of living increased like never before. Over time, human being figured out better, faster, cheaper ways to produce energy to fuel their machines. And there is an inextricable link between prosperity… and cheap energy. When energy is cheap and abundant, societies are able to invest heavily in growth; they have more resources (i.e. more energy) available to grow, to produce goods and services, to invest in the future. When energy is expensive and scarce, the opposite happens. A society has to spend most of its energy just to sustain itself, and there is limited surplus left over for growth and investment. After generations of enjoying cheap energy and declining costs that fueled unparalleled prosperity, we are now facing steeply rising energy costs. And I don't even mean in dollar terms. Sure, the cost of a barrel of oil has more than doubled in the last year. Gasoline prices and electricity prices are high too. But what I'm really talking about is the cost, in energy, of producing energy. Oil wells, for example, require electricity or diesel fuel to power their pumpjacks. So oil wells essentially consume oil in order to pump oil. In the past, this ratio of oil produced vs. oil used was quite attractive. For every barrel of oil it burned in fuel, an oil well would produce 30-40 barrels of output. And that was a great cost/benefit ratio. But this ratio is falling rapidly, making energy a lot more expensive. And that's a terrible trend. Again, cheap and abundant energy is a critical factor in driving prosperity. More expensive energy has the opposite effect. Europe is already in a full-blown energy crisis, and many developing countries aren't able to get their hands on enough energy to sustain themselves agriculturally. So this is already becoming a major issue, and it could potentially become much worse. Obviously the war doesn't help. But there has also been a deliberate political agenda to drive investment and enthusiasm away from fossil fuels towards more expensive,

Years ago when I was in the military, I had the privilege of serving with some of the finest people I will ever know in my entire life. It's not a cliché. Many of my brothers in arms were incredibly honest, hard working, dedicated, loyal, intelligent, creative, courageous, and more. And yet, if I'm being brutally honest, I also have to acknowledge that I also served alongside quite a few scumbags. I remember one enlisted soldier in my unit who was arrested by Secret Service agents one day because he had been counterfeiting $100 bills on a Laserjet printer. (He should have been a central banker instead.) Others routinely beat their wives and children. Others were petty criminals and kleptomaniacs. It was a small number, for sure. But there were certainly plenty of bad apples in the military. And there are always going to be bad apples in any large organization-- whether it's the Army, or the entire federal government. This is important. Because we live in a time when apparently the solution to EVERYTHING is MORE GOVERNMENT. Bigger government. And more expensive government. This week, just like that… poof. The government became much bigger. Politicians are cheering this legislative ‘victory' as the dubiously-named ‘Inflation Reduction Act' was passed and signed into law on Tuesday. As I've said before, the bill will probably make inflation worse. But even more, the bill aims to expand the size and scope of the federal government… as if it weren't big enough and powerful enough already. And this takes me back to bad apples. There are already millions of people who work for the federal government. Even if just the bottom 10% are bad apples-- people who abuse their positions and power for personal gain, or because of their ideological fanaticism, then a lot of terrible things can happen. The IRS is going to potentially hire tens of thousands of people. If even 10% of those are bad apples, the damage they'll cause is incalculable. Exhibit A: Just take a look at the CDC. This week they admitted, rather sheepishly, that nearly everything they did during the COVID pandemic was wrong. The CDC acknowledged being plagued by a horrific culture of selfishness, bureaucracy, fear, careerism, and ineptitude, and that they need a “reset”. “It's not lost on me that we fell short in many ways,” said CDC Director Rochelle Walensky, in an honest assessment of her agency's response to COVID. Of course there are some smart, good-natured, intelligent people who work for the CDC. But with such a toxic culture, the entire organization became a Bad Apple within the government. And the consequences that resulted will be felt for years to come. Thanks in part to the CDC's response to COVID, the US economy ground to a halt. The supply chain broke down. Mental health, substance abuse, and domestic violence problems skyrocketed. Censorship and cancel culture reigned. And trust in major institutions, including the medical industry, plummeted. Constantly expanding the size and authority of government only increases this risk of terrible consequences. Yet it seems to be the only solution that politicians can ever come up with. This is the topic of our podcast today: bad apples… and why having a Plan B is really so important.

It's been another historic and mind-blowing week to say the least. Over the last several months we've heard some of the most ridiculous lines of BS from politicians. Things like, “The economy is not in recession.” Last year's humiliating withdrawal from Afghanistan was an “extraordinary success”. Multi-trillion spending bills “cost nothing”. “The border is closed. The border is secure.” And so much more. But yesterday the Attorney General of the United States made a public statement during which he told the world that “upholding the rule of law means applying the law evenly, without fear or favor.” The Attorney General was trying to justify his department's raid on Donald Trump's private residence earlier this week by claiming that no one is above the law. And that's 100% correct. The rule of law is supreme in America, and no one is above the law. Except for Nanci Pelosi, Paul Pelosi, Paul Pelosi Jr., every Federal Reserve official who was caught trading the stock market, Hunter Biden, the mysterious “Big Guy”, Hillary Clinton, Christopher Steel, Andrew Cuomo, every Bush administration official who committed war crimes, etc. Except for all of those people, and everyone else who is above the law, no one else is above the law in America. Millions of people must have simultaneously laughed out loud. Naturally the Attorney General made no effort to speak plainly and admit that, at a minimum, the raid looks really, really bad. Nor to offer understanding as to why people would be suspicious of the government's motives. Nor even to acknowledge that it was unprecedented. This is exactly the sort of response that makes people lose even more trust in their government officials… at a time when the trust deficit is already at a historic low. This is the topic of our podcast today: trust. We start off by talking about taxes-- because, believe it or not, trust and taxes are closely linked. There are countries (like Greece or Italy) where tax evasion is rampant. And one of the reasons why is because people have no trust or confidence in their governments. Lack of trust is a really, really bad trend. It makes growth and prosperity more difficult. But rather than actually fix the trust deficit with honesty, transparency, and plain talk, they keep making the problem worse. This is what makes having a Plan B so obvious… and today we also discuss why looking at some options abroad might make a whole lot of sense. Click here to listen in to today's episode.

There's an old saying that people often misattribute to Albert Einstein-- that ‘the definition of insanity is repeating the same thing over and over again while expecting a different result.' The saying has become a bit of a cliché, but there is actually some truth to it. About 80 years ago, a psychologist named George Kelly became fascinated with the way human beings make decisions, and he developed a framework that he called the Personal Construct Theory. Kelly's Personal Construct Theory suggests that people behave and make decisions based on their unique sets of life experiences. For example, a child who is constantly spoiled and coddled by helicopter parents may (according to Kelly's theory) grow up to expect constant support and safety nets… and make life decisions accordingly. Kelly theorized that, over time, human beings often behave poorly and make bad decisions because their personal constructs are flawed. In fact in his 1955 book The Psychology of Personal Constructs, Kelly wrote “we may define a [psychological] disorder as any personal construction which is used repeatedly in spite of consistent invalidation.” Kelly, in other words, defined insanity (or at least a psychological disorder) as repeatedly relying on a flawed way of thinking. This is clearly the psychological state of most of our ‘leadership' today. They have a very specific worldview, which, like Kelly's theory suggests, is based on their experiences. The President of the United States loved to brag during his campaign about his decades of political and diplomatic experience. The Speaker of the US House of Representatives likewise has decades of experience that has formed the foundation of her worldview and decision-making process. Anthony Fauci has decades of experience atop one of the largest public health agencies in the world. But it turns out that these collective decades and decades of experiences have resulted in terrible decisions… and even worse outcomes. Based on Kelly's theory, however, these people are incapable of learning from their mistakes and making better decisions. Even though their decisions have been consistently wrong, these people are unable to adjust their thinking. They continue relying on the same, flawed decision-making constructs, which are based on their decades of experience. Kelly used the right terminology for this-- a psychological disorder. And that aptly sums up the ‘leadership'. These are the so-called experts. And they broke the world. But as I've written before, their regime is quickly coming to an end. Listen in to today's podcast as we walk you through four key examples of their disorder that we suffered through literally just in the past few days.

For this week's podcast I had the pleasure to speak with Viktorija once again, fresh off a long flight from Istanbul and several weeks in Europe. We had a really in-depth discussion that covers a lot of ground. We talked about Mexico City… and why it's such a pleasant surprise: cheap, chic, clean, civilized, and more. We also spent time discussing Citizenship-by-Investment programs, including why Turkey's program is so attractive. Click to listen in.

Prince Harry ventured out of his nine-bedroom, $14.7 million oceanfront compound in California earlier this week to deliver a speech to the United Nations General Assembly. The fact that Prince Harry is even addressing the UN General Assembly is absurd itself. But even more absurd were his weeping, whiny, wimpy remarks: “The right thing to do is not up for debate,” Harry told his audience of mostly masked onlookers. “And neither is The Science.” So, the guy who was born with the ultimate silver spoon up his arse believes that there should be no debate about science. Or what's “right”. He continued to lament the “rolling back” of Constitutional rights in the US, climate change, COVID disinformation on social media, and more. “The only question is whether we'll be brave enough, and wise enough, to do what is necessary,” the unelected sage continued, without elaborating on what, exactly, he and The Science have decided is “necessary” or “right”. This is our topic for this week's podcast. We start off talking about what another unelected body-- the Federal Reserve (i.e. the US central bank)-- has deemed “necessary” and “right”, which has just so happened to have engineered stupifyingly high inflation. I also explain why the unelected Federal Reserve is VASTLY more powerful than the President of the United States. Think about it -- because the Fed has supreme executive authority over setting interest rates in the United States, that gives them unbelievable power over the entire US economy, as well as critical financial markets. And yet, there are ZERO checks and balances with the Fed. If the President does something stupid (gee when would that ever happen), his executive actions can be blocked by the courts. But if the Fed does something stupid (like conjuring trillions of dollars out of thin air), there's NOTHING that anyone can do. We can't sue them. We can't fire them. We just have to suck it up, buttercup. Then there are ‘Emperors' like Larry Fink of Blackrock, another unelected Crusader who has weaponized our own money against us, to force us to submit to his woke fanaticism. And of course there are the unelected professional weepers like Prince Harry who constantly want to tell us what to be outraged about, and how to live our lives. In his UN speech, Harry painted a very bleak, sinister picture of the world. And that's great for Harry. But I choose to not live in Harry's world… where everyone is outraged and terrified, and they can't manage to find their big boy pants. Yes, there are a lot of risks out there, most notably from people like Harry who have anointed themselves our social and financial overlords. But the world is still full of opportunity and triumphs as well. People with courage and independence of mind can always choose which world to live in-- Harry's wimpy, fearful world, or the world of your own making. Click here to listen to today's episode.

It's rare to find someone, anyone, who has yet to witness, hear about, or directly experience the devastating consequences of the supposed leadership that ‘experts' have unleashed on us over the past few years. They have engineered and mishandle crisis after crisis after crisis… The world over, from California to Sri Lanka, people everywhere are suffering from their incompetence. Western Europe is on the verge of a major energy crisis; the 4th-largest economy in the world (Germany) is dimming its street lights lights and thinking about firing up its coal power plants (previously considered UNTHINKABLE!) because they're running out of energy. Even in Texas, which could be considered the world's 10th-largest economy by GDP, the independent energy grid is so fragile that power companies are remotely turning down people's home thermostats to save on energy supply. We have also just seen a leaked hour+ video showing the 'authorities' in Uvalde, Texas-- fully armed law enforcement professionals-- ignoring the literal screams of dying children only a few dozen feet away. Instead they texted on their phones and sanitized their hands. You know, because of Covid. I guess that was the priority. All of this is an utter indictment of how pitifully our experts and authorities have betrayed us. In short, the people in charge broke the world. But the good news is that their reign of ineptitude is rapidly coming to an end.. That much is obvious. And even better, there are a lot of solutions and technologies on the horizon that could make this all go away relatively quickly... just as soon as they get out of the way. You can listen in to that discussion in today's podcast, which you can access here.

As longtime readers know, I've been a tremendous fan of Lee's since I was a small child. He was wise beyond his years and packed a great deal into his short life. I put one of his quotes up on our former office's walls in Santiago. It reads: “To hell with circumstances; I create opportunities.” This idea is especially apt for the times we live in. It's easy to be incredibly frustrated about the state of the world right now. The ‘experts' in charge — whether in the media, Federal Reserve, tech companies, etc. — have led us astray and allowed devastating consequences to take root. Witness massive inflation, the conflict in Europe, the fracturing of society along ideological, medical and skin color lines, the debacle in Afghanistan… These were all engineered by the ‘experts' in charge, and none more so than the response to Covid-1984, which brought the global economy to its knees. People traditionally placed great trust in experts. In the United States, the media once held a place of great esteem; CBS News anchor Walter Cronkite was often cited as “the most trusted man in America.” And although healthy skepticism always has existed about the government, I recall a time when people largely thought that it had their best interests at heart. I'd venture that none of this is true any longer. Trust in media, business, and especially government has dramatically eroded over the past two years. If someone is deigned to be an ‘expert' these days, the antennae go on high alert. For example, we start today's podcast discussion with a Tale of Two Headlines, in which we present to you side-by-side the headlines by both Bloomberg and CNBC. One says one thing, and the other the opposite, both conclusions undergirded by ‘experts.' This gives us a great indication of the prowess of so-called experts, especially when it comes to their handling of the economy (or lack thereof). Today we also talk about where things are likely going in the economy, how we ended up here, and most importantly, how to keep a clear and rational outlook. It's irritating and sometimes exasperating to see where the experts have led us all. But it's important to remember that the world is not coming to an end. For anyone who has the courage and discipline to embrace it, there's an abundance of opportunity out there. For more on this, we invite you to listen to today's discussion, here.

Happy Canada Day to our Canadian friends. And Monday, of course, is Independence Day in the United States. It'll be an odd one for sure. Many cities are reportedly cutting back on their fireworks displays due to… yes… supply chain shortages. And many people may scale down their traditional backyard grilling due to insanely high food price inflation. There's undoubtedly a lot of reason for concern right now, and people of all personal philosophies across the political spectrum feel it. Those on the left are angry about recent Supreme Court decisions and concerned that they may lose other rights. Those on the right fret about cancel culture. Almost everyone is concerned about inflation… and we constantly hear the cry that ‘Democracy is under attack'. There's a mountain of problems and no real solutions on the horizon. More importantly, it seems like intense social factions have developed. Public “debate” and civil discourse is governed by those who feel but don't think… by people who are professionally outraged but outrageously ignorant. And it is under these odd circumstances that citizens celebrate the birth of their nations this weekend. Today I wanted to provide a little bit of historic context. There are problems, yes. But you might have a more hopeful outlook for the future after hearing more about the early days of America. Click here to listen to today's conversation… and we wish you a safe and relaxing holiday weekend.

Today's missive looks a bit different from our normal Friday roundup. As you probably know, a few big rulings came down from the United States Supreme Court over the past 24 hours-- one on gun control, the other on abortion. Predictably, the rulings were accompanied by a great deal of noise and outrage. We're keeping our fingers crossed that ‘mostly peaceful' protests don't start up again. More importantly, we wanted to weigh in with a healthy dose of rationality. My bet is that the vast majority of angry protesters have probably not bothered to read any of the Justices' opinions. They probably never read the original Roe v Wade opinion. They probably don't know who was Roe and who was Wade. They probably haven't even read the Constitution. All they know is that they're outraged. Lately we've been hearing a refrain over and over again that “Democracy is under attack.” Yes I agree. And this is part of what that attack looks like. A representative democracy means that elected leaders make laws, and judges determine whether or not those laws are Constitutional. The latter is the sole responsibility of the Supreme Court. The Justices examined the cases, and they made a decision about what is/isn't Constitutional. Yet those rulings don't conform with what the Twitter mob or mainstream media want. Instead, they expect the Justices to simply invent new laws based on their personal beliefs and opinions. That's not how a democracy is supposed to work. A truly civilized society adheres to its democratic values, even when the system delivers an outcome that people don't like. A democracy only survives because it remains a democracy in both good times and bad. Trying to overturn outcomes through violence and intimidation is the mark of a society that has lost its way. And we've seen far too much of that approach over the past couple of years. What we present to you today is a rational discussion. It's not about the rulings themselves. We're not talking about abortion or gun control. Instead we're talking about how the Constitution is supposed to work… and how to turn down the noise. Spoiler: a little bit of education goes a long way. So if you find yourself accosted by an outraged family member, friend, co-worker, or protester this weekend, ask them if they've actually read the rulings, and if so, what specific assertions in the text do they disagree with? You'll probably get a dumbfounded look… but possibly inspire someone to educate themselves before getting outraged next time. If you want to read the rulings yourself (which I highly recommend) you can do so here: https://www.supremecourt.gov/opinions/21pdf/20-843_7j80.pdf https://www.supremecourt.gov/opinions/21pdf/19-1392_6j37.pdf You can listen to the podcast here:  

In late 2019, a team executive for the NBA's Houston Rockets Tweeted a very brief statement of support for pro-freedom protesters in Hong Kong. Hardly anyone should have noticed; he didn't have much of a following, and it was an incredibly harmless comment. Yet that single Tweet caused a massive firestorm. The Chinese government lost its mind -- how dare this American peasant say anything that's counter to our interests?!?! And like that… poof… China's government censors erased the Houston Rockets off the face of their Internet. It was an amazing display of speed and efficiency. And to be frank, my biggest surprise of 2021 is how well the US has adopted this Chinese-style censorship. It is fast. It is efficient. And it is shockingly brutal. Nowhere is this more obvious than with Covid-1984. A number of Lord Protector Fauci's emails have recently come to light which show the ridiculous lengths they went to last year to squash any opposition to their policies. The ‘Great Barrington Declaration' was a joint statement signed by THOUSANDS of scientists around the world, including professors and medical professionals from Harvard, Stanford, Oxford, plus Nobel laureates, etc. These scientists argued for a more common sense, humane approach towards Covid. Lockdowns, they said, came at a significant cost to mental health and childhood development… and the costs of the lockdowns should be carefully weighed against the benefits. But according to their email exchange, Fauci and his colleagues wanted a “quick and devastating published take down” of the Great Barrington Declaration. The idea of ‘trusting science' quickly turned into ‘trust only the science that WE put in front of you. Don't trust any other science.' It has become so absurd that Fauci has now anointed himself as the Holy Duality; last month on CBS television he claimed “I represent science”. So Fauci and science are one and the same. Now, we are quick to point out in this column that the government is generally incapable of doing anything right. Or at a minimum, incapable of doing anything quickly or efficiently. But I have been really surprised at how quickly and efficiently they've been able to commandeer total control of the narrative. They have the media and tech companies in line. They have major medical associations in line. They've convinced hundreds of millions of people that they are the only source of truth and information, regardless of their obvious lies and bias. And anyone who publicly expresses independent thinking, or dares to challenge this narrative (no matter how strong the evidence) is canceled off the Internet with a Chinese-level of efficiency. This is the topic for today's podcast as we assess the incredibly bewildering year that we've all just experienced. You can listen in here.

It's a simple question of arithmetic. Imagine you could go back in time to 1871 and ask one of your long lost ancestors to invest $2,500 for the benefit of future generations. That amount of money wasn't insignificant… but certainly not a major fortune; it would be worth roughly $50,000 in today's money. When placed in the right structure, and benefiting from compounding returns over the next 150 years, that $2,500 initial investment would be worth an astounding $1.4 BILLION today. Now, sadly none of us owns a time machine. But we do have the power to be that long lost ancestor to future generations. In other words, there's little stopping you from setting aside some savings in a long-term structure-- like a trust, or even a smart contract-- that could have an enormous impact on the future. $50,000 invested in the right structure today at, say, a 10% compounding return, will be worth $73 billion in 150 years. Granted we'll all most likely be long gone by then. And inflation will definitely have eaten up a large chunk of that return. But it's still going to be an enormous amount of money. And with the right planning, you have the power to decide, today, how that money will be spent and allocated in the future. If you wanted to, you could leave behind strict instructions (which are legally binding) to have the assets liquidated at a certain point in the future, and donated to your favorite charity. Or you could provide future trustees the discretion to make certain donations based on causes that are important to you today. The point is that it's possible to continue growing your wealth long after you're gone, and to still exercise significant control over how it can impact the world and future generations. This is the topic for today's Freedom Podcast, which you can listen to here.

In the early summer of 1514, Spanish conquistador Ponce de Leon returned home to the court of King Ferdinand as a hero. De Leon was among the first of Spain's conquistadors to discover gold-- right here in Puerto Rico. And that was enough for him to be knighted and bestowed all sorts of royal honors. By that time, Europe had been suffering a shortage of gold and silver for nearly a century; mines and mints had closed down all across the continent, triggering what economic historians call ‘The Great Bullion Famine' in the mid 1400s. So the supply of money, i.e. gold and silver, was essentially stagnant. Technically European money supply was falling, because most European kingdoms ran a trade deficit with Asia and the Middle East. Yet at the same time, European economies were finally starting to grow again following the consequences of the Black Plague and the Hundred Years War. English wool production, for example, nearly tripled between the mid 1400s and the early 1500s. So with more goods and services being produced at a time that money supply was falling, prices declined. This essentially what deflation is. Wages, rents, and food prices in Spain, for example, dropped 25% over a century, according to economic historian E.J. Hamilton. Now that actually sounds pretty good. But to Europe's rulers, this deflation was a total catastrophe. And it sparked a number of international expeditions to find more gold. Ponce de Leon was just one of many conquistadors to discover rich mineral deposits in Latin America… and then enslave the local populations to mine them. The end result was a veritable mountain of gold being transported back to Spain, triggering a flood of new money into Europe's economies. Suddenly there was a surge in the money supply… yet roughly the same amount of goods and services being produced. You can probably imagine what happened next: inflation. These are clearly simple concepts; it doesn't take a Ph.D. in economics to understand that, when you flood the financial system with money, it's going to have an impact on prices. That was true in Spain in the 1500s. And it's true today as well. Earlier this year when the government announced sharply higher inflation for the month of March, the Federal Reserve deemed the inflation to be ‘transitory'. That was six months ago. Inflation has surged even higher since then. It's not hard to understand why. First off-- the Fed expanded the money supply last year more than in any other year in US history except for 1943. That's obviously going to have an impact. At the same time, the government forced businesses to close… and then paid people to stay home and NOT work. So essentially we had a LOT more money in the system, but far fewer goods and services being produced. This has predictably created substantial inflation. Here's what's really interesting, though. In its announcement yesterday, the Fed tacitly acknowledged this big inflation problem. They understand that their zero interest rate policy and their bonanza of money printing are both driving prices higher. They also understand that inflation is a MAJOR concern. But then they essentially said, “Yeah, we'll get to it in a couple of months.” This was astonishing. To give you an example, the Fed has been engaged in a ‘bond buying' program… which means that they're flooding the financial system with $120 billion per month in new money. This is definitely a major factor that contributes to inflation. Yet according to its announcement yesterday, the Fed is not even going to START the process of terminating this program until November. And even then, it will take them until the middle of NEXT YEAR before it's been fully wound up. What's more, the Fed suggests that they might start raising interest rates by the end of 2022… and only HALF of the voting members think that's a good idea. Unreal.

When Gideon Gono became the Governor of the Reserve Bank of Zimbabwe in late 2003, his country was already suffering from terrible hyperinflation. Throughout the 1990s, inflation in Zimbabwe averaged well over 20%. And just a few years later inflation had reached 200%. That's when Zimbabwe's government hired Gideon Gono to fix the inflation problem. Gono had a reputation as a sharp, competent banker. He had previously been the managing director of Zimbabwe's largest bank-- Bank of Credit and Commerce-- so the government thought that Gono had the skills to turn Zimbabwe's economy around. Despite his keen understanding of money and finance, however, Gono's policies plunged Zimbabwe even further into hyperinflation. Inflation was running at 600% per year when Gono took over the central bank. And at first, inflation fell to ‘only' 133%. But by 2007, four years into his term, inflation in Zimbabwe reached more than 60,000%. And by the end of 2008, nearly 80 BILLION percent. Such figures are incomprehensible. I've been to Zimbabwe several times and have heard a number of first-hand accounts from residents who lived through this period. There were food shortages, fuel shortages, electricity shortages, and more. Unemployment skyrocketed. Crime rates soared. It was complete and total despair. What could have possibly caused such chaos? Simple. Gono printed absurd quantities of money. And that tidal wave of money flooding into Zimbabwe's economy caused prices to spiral out of control. By 2006 they had to issue a new currency, essentially chopping a few zeros off of the old currency. Then they started printing million, billion, and trillion dollar bank notes, with which you could barely buy a loaf of bread. In his later memoirs, Gono acknowledged the inflationary risks of his actions. He knew that prices would rise. But as he explains, the situation was so bad that the only sensible course of action was to keep printing more money! Gono's book, Extraordinary Measures for Extraordinary Challenges, reads something like Julius Caesar's Commentaries on the Gallic War… or Andrew Cuomo's ridiculous book on leadership during Covid. They're all fairly pompous and self-aggrandizing; Gono even defends his actions, saying “To ensure that my people survive, I had to print money. I found myself doing extraordinary things that aren't in textbooks.” He's a true hero. It's ironic, however, that Gono is considered almost a joke among central bankers for failing to control hyperinflation, and he's soundly criticized for having printing so much money. Yet in an interview with Newsweek, it was Gono wagging his fingers at Western central bankers, saying, “The whole world is now practicing what they have been saying I should not. . .” In other words, most central banks in the world have resorted to printing unimaginable quantities of money, just like Gono did. What's interesting is that Gono made those comments back in 2009-- during the first Global Financial Crisis. Central banks responded to the big crash back then by printing money and expanding their balance sheets; the Federal Reserve, for example, created so much money after the financial crisis that its own balance sheet increased from $850 billion (in 2008) to more than $4 trillion by early 2020. And then Covid happened. In the last 18 months or so, the Fed has printed so much money that its balance sheet now stands at more than $8.3 trillion. That's nearly TEN TIMES the size from 2008, before the last financial crisis. By comparison, the US economy has grown 23% in ‘real', i.e. inflation-adjusted terms since 2008. So, the last 13 years has seen 23% real economic growth… and 946% growth in money supply. Last year in particular, M2 money supply grew at a higher rate than any other year in US history aside from 1944. And in completely unrelated news, US inflation over the past several months is near its highest level in more t...

It's not generally in my nature to heap praise upon a place with a 53% tax rate, a 25% VAT, or one of the top ten highest tax burdens in the world. But as I often remark, nearly every place in the world has something great going for it… some unique competitive advantages that set it apart from its peers, balanced against a multitude of disadvantages. Iran is a great example; it suffers from long-term economic decay, constant sanctions, and an authoritarian government. Its disadvantages are numerous. But at the same time the country is an archaeological dream, full of well-preserved ruins from civilizations so old that they were studied by ancient Greek scholars. This is a unique advantage. And for a few people, that sole advantage may outweigh Iran's numerous disadvantages. After all, everyone has his/her own particular set of priorities. Another example: earlier this year when my wife and I were planning out the birth of our child, we chose to have the baby in Mexico. It was a deliberate decision made after careful consideration of our priorities. We wanted extremely high quality and personalized care from physicians, midwives, etc. who would be available to us around the clock. And I didn't want COVID restrictions factoring into the birth at all. I wasn't going to risk being in a place where local rules or hospital policy would have forced my wife to wear a mask during labor… or to keep me out of the delivery room. We very rationally laid out our priorities. And after some research and investigation, we landed on Cancun. For us, it was an incredible decision. Cancun, and Mexico in general, are far from perfect; there are certainly plenty of disadvantages. But for my particular priorities at that moment in time, it was absolutely the right place for me. And that leads me to Sweden. There are plenty of disadvantages. High taxes. High cost of living. Cold weather and lack of sunshine. But for some people those problems might be outweighed by Sweden's long-standing COVID freedom. To this day there are still countless cities, towns, states, and provinces around the world that continue to restrict freedom. They've created first and second class citizenships based solely on someone's vaccine status. It doesn't matter if an individual has a severe medical condition-- like an autoimmune disorder, for which the FDA itself states, “no data are currently available on the safety of COVID-19 vaccines for people with autoimmune conditions.” Yet if someone, under advice of their physician, chooses to delay being vaccinated until more data is available for their particular condition, they can be denied basic freedoms, including being a functioning member of society, or potentially having a job. On the other hand, a registered sex offender with a bad case of tuberculosis is welcome with open arms. Politicians and policymakers have also waffled on mask mandates, school openings, and more. Sweden has famously taken a completely different approach during the pandemic-- one that they have been constantly derided for in the woke media. But Sweden's generally light touch with COVID has proven to be quite effective; they did not suffer the economic devastation. And more importantly they did not suffer the mental health devastation. Sweden has not dehumanized its population… nor cultivated a mentality where people view others as filthy, disease-infested vermin rather than friends and neighbors. And yet their COVID track record is just as good, if not better, than its peers in North America and Western Europe. Again, Sweden is not without its challenges and silly rules. But we thought it was worth investigating further… so I asked our CEO Viktorija to spend some time there are report on her findings. She tells us all about it in today's podcast; you can listen in here.

301 AD was a big year for the Roman Empire. That was the year that, amid spiraling inflation, Emperor Diocletian issued his Edict on Maximum Prices, essentially fixing prices of just about everything across the Roman Empire. The price of wheat, a day labor's wages, a quart of olive oil, transportation rates-- everything was established by the Emperor's edict, and enforced under penalty of death. Diocletian's edict infamously didn't work, and the empire plunged into even more severe inflation. The other big event of 301 AD was the introduction of the solidus gold coin, roughly 4.5 grams of nearly pure gold. And while the Romans had a history of debasing their other coins, like the silver denarius and sesterce, the government actually did a pretty good job maintaining the value and purity of the gold solidus. Even hundreds of years later, after the western empire in Rome had fallen to the barbarians, and imperial power was concentrated in Byzantium, the gold solidus was still approximately as pure as it was in the early 300s. That's an extraordinary track record for currency stability. Confidence in the gold solidus was so high, in fact, that various tribes and kingdoms around the world used the coin for trade and savings. This became a source of pride for the Byzantine Empire; Justinian I, who ruled in the mid 500s, stated that the solidus was “accepted everywhere from end to end of the Earth,” and that it was “admired by all men in all kingdoms, because no kingdom has a currency that can be compared to it.” It wasn't until the mid 11th century, more than seven centuries after the introduction of the solidus, that an Emperor began to debase the currency. Just like Hemingway described going bankrupt, the debasement of the solidus was gradual… then sudden. Emperor Constantine IX, who ruled from 1042 to 1055, reduced the gold purity down to 87.5%. His successor brought it down to 75%. By the end of the century it had been reduced to just 33%. The rest of the world took notice. The Byzantine Empire's political, economic, and military power were waning. And with the rapid debasement of the solidus, international traders looked for other options. Soon the rising Italian city states, particularly Venice and Florence, began minting their own gold coins; Italy was rapidly becoming the dominant economic power in Europe, so their ducats and florins became widely accepted, essentially replacing Byzantine coins for international trade. Throughout history, in fact, reserve currencies have routinely changed, just as frequently as power and wealth shift. For example, the Spanish real de ocho was the dominant reserve currency for hundreds of years, just as the Spanish Empire was the dominant power in the world. But eventually Spain's wealth and power waned, and the real de ocho was replaced. The Dutch guilder dominated European trade in the 1600s and 1700s, just as the Netherlands' wealth and power soared. Yet they were displaced by the British Empire and pound sterling in the 1800s and early 1900s. Both the United States and the US dollar have held this status for the last 80 years. And at the moment this is still the case. History, however, is very clear on this point: wealth and power shift. Reserve currencies change. And it would be foolish to assume that this time is different. Reserve currencies hold their status because the rest of the world has confidence-- confidence in the soundness of the currency, confidence in the power and prestige of the country that issues it. But let's be honest: the rest of the world is probably not brimming with confidence in the United States right now. They're looking at this shameful, disgraceful catastrophe in Afghanistan and wondering, “Is this seriously the world's dominant superpower?” But it's more than Afghanistan. It's endless deficits. It's ridiculous spending initiatives that pay people to stay home and NOT work.

While traveling across Europe recently, Sovereign Man's CEO (Viktorija) became quite ill and needed some urgent medical treatment. First, she's doing fine, and we're grateful for that. Second, it's not COVID. I know that in the collective mind of most of the world, and for especially public health experts, no other disease exists except for COVID. In the US, for example, CDC data on influenza show that, in a ‘normal year' (2019, for example), the hospitalization rate for patients with influenza is around 65 per 100,000 people. But, miraculously, in 2020/2021, the hospitalization rate for influenza dropped 99%, down to just 0.8 patients per 100,000 people. Do these people actually expect anyone to take this data seriously? Are we honestly supposed to believe that they managed to virtually eradicate the flu? Or is it possible that, maybe just maybe, the hospital system is counting influenza cases as COVID? Perhaps all that government COVID data isn't as accurate as they claim. Anyhow I digress-- back to our CEO. She started feeling some terrible abdominal pain last week that persisted for several days. On Tuesday she was in such bad shape that I urged her to go to the Emergency Room. She's presently visiting family in Lithuania, so she went to the best private clinic in the country, located just outside of the capital city of Vilnius. When she video called me a few hours later to check in, she was hooked up to an IV in a private room, clearly feeling much better. But she admitted to me that she was concerned about how much the bill would be. She had been undoubtedly scarred by a medical procedure in the US several years ago where the hospital bill rang up to more than $150,000, and she was terrified the clinic in Lithuania would charge her the same. “Relax,” I told her, “it's probably going to be a couple of thousand euros.” We were both wrong. The total bill for her Emergency Room visit was 140 euros… about $163 at today's exchange rate. We write a lot in this column about the importance of having a Plan B, and specifically the importance of having a second passport or residency. The idea is to ensure that, no matter what happens, you and your family will always have another place to go. It's the ultimate insurance policy. And just like a flood or fire insurance policy that covers your house, you hope you'll never have to use it. But you'll damn glad you have it in case the worst ever happens. Unlike a fire or flood insurance policy, however, having a second residency or citizenship is an insurance policy that can provide a lot of extra benefits. As Viktorija's case shows, one of those benefits might be access to inexpensive, high quality medical care. She tells us all about her experiences in today's podcast, as well as the “beautiful mess” of vaccine passports that's breaking out across Europe. In Lithuania right now, for example, there are plenty of businesses standing up to vaccine passports, insisting that they'll continue to serve unvaccinated customers. She also tells us about how she recently traveled through an airport in Europe where no one was wearing masks. It's a great story-- you can listen in here.

Think back to where you were two years ago today. For me, I was in Trakai, Lithuania. It was Day 4 of our 10th annual Sovereign Academy entrepreneurship camp. My dear friends Bill and Marco were giving a joint lecture to the students on hiring, firing, and building culture within a business. Craig Ballantyne was up next with a talk about Instagram marketing. And I was going to finish up the afternoon with a presentation on sales and negotiation. Maybe you were on holiday. Or, since August 4, 2019 was a Sunday, perhaps you were spending a relaxing weekend with family and friends. Now imagine if someone had come up to you two years ago and said-- A few months from now, a novel Coronavirus will spread around the world. The virus will definitely be a problem, and a LOT of people will needlessly die. Yet government data will eventually show the virus to have a 98.3% survival rate… and a survival rate of more than 99.8% for people under the age of 75 who aren't morbidly obese. Despite this data, however, the virus will be treated as the worst thing in the history of the world by politicians, the media, and unelected public health officials. They will wage a crusade to eradicate the world of this virus, no matter the cost. They will systematically dismantle the core pillars of modern society, from private property rights to individual liberty. Some of the most advanced representative democracies in the world, like Australia, will literally deploy the military to the streets in order to keep people locked in their homes… essentially at gunpoint. And governments will indebt themselves by tens of trillions of dollars, going so far as to pay people to stay at home and NOT work. Politicians will assume unlimited spending authority and use the pandemic as an excuse for every entitlement pet project they've ever conceived. Inflation around the world will surge as a result of this orgy of debt and money printing, but central bankers will dismiss the data and pretend that everything is fine. Meanwhile, the scientific community will lose all objectivity. They'll claim, for example, that protesters against racial injustice are exempt from following public health lockdowns because of their moral righteousness. Yet simultaneously they'll say that people protesting against public health lockdowns are a danger to society. Pharmaceuticals companies will be given total immunity from prosecution and liability to develop a host of vaccines to combat the spread of the virus. The initial clinical trial data will show significant promise in keeping people safe from severe infection. However long-term studies, by definition, will not exist for a number of years. Despite these limitations, world governments will push these vaccines on the global population. Some will make vaccination mandatory; others will subjugate the unvaccinated population and take away their most basic freedoms until they submit. Personal choice will no longer be an option. Anyone who hesitates or dares ask a question will be ridiculed as a selfish murder by social media. And the Big Tech companies will squash intellectual dissent. Even prize-winning, highly respected scientists will be censored for expressing views that don't conform to the official narrative. And then, after nearly 18 months, just when you think the pandemic is over, a new variant will emerge… and public health officials will go right back to the same policies all over again. If someone had said this to you two years ago, you might have thought they were completely delusional. And yet, all of it has happened. It's been a long time since I've written about this topic.  That's partly because of my wishful thinking that the worst had subsided. But to be perfectly honest, I've also steered clear of the topic lately because I didn't feel like being canceled by Big Tech. (It turns out that trying to appease Big Tech is a dumb idea; YouTube tempor...

By the summer of 1849, Karl Marx was still an obscure writer struggling to make an impact. He had published The Communist Manifesto-- a short, 23-page pamphlet-- the previous year in 1848. But as yet it had failed to catch on. Marx was operating a fledgling newspaper in Germany at the time. But he kept getting in trouble with the German tax authorities for failure to pay taxes. (This taxation double-standard still exists today. Marxists LOVE high taxes… but only if they're not the ones paying.) That's why Marx was forced to leave Germany (technically Prussia) in 1849-- after having also been previously expelled from France and Belgium too. Marx infuriated the local authorities so much, in fact, that he was also denied Prussian citizenship. This made him officially stateless. And in an ironic twist of fate, Marx ended up in Great Britain-- the wealthiest country in the world at the time, and the birthplace of modern capitalism. The reason was simple: Britain had few barriers to entry for immigrants-- something that was quite rare in the 19th century. Thousands upon thousands of refugees, exiles, and radicals immigrated to London as a result. Marx was among them. Yet the fact that he had benefited from the laissez-faire policies of this free market society did not change Marx's views on capitalism. He still hated the system and blamed it for everything that went wrong. Marx and his family lived in abject poverty in their earliest years in London. He constantly had debt collectors knocking on his door, and landlords routinely evicted him from his home. Of course, people don't realize the real cause of Marx's financial troubles was that he almost never had job. He thought it was degrading to work so that someone else could profit from your labor. So he simply refused to work. Marx subjected his family to live in filthy, squalid conditions, and his children often went without food. In fact only three of his seven children even survived to adulthood. Yet Marx still refused to work. And he continued to whine that capitalism was the source of his economic hardship; not once did Marx turn the lens onto his own fanaticism as the root cause of his poverty. This is also ironic, because modern day socialist and communist parties love to praise workers and talk about giving benefits to the working class. It's just like taxation: Marxists love work… as long as they're not the ones actually doing it. Honestly the entire Marxist philosophy is complete hypocritical. And there are people today who call themselves Marxists (like the BLM co-founders, who are self-avowed Marxists). Yet they probably don't have the foggiest idea that their patron saint literally watched his children go hungry because he'd rather complain about capitalism than go get a job. Socialists are the same way; even though (according to a recent Axios poll) 41% of Americans view socialism in a positive light, most of these people don't actually understand the first thing about socialism. When they say ‘socialism' they think it means Sweden, free university, and six weeks of paid vacation. They have no idea how wrong they are. One key difference that people fail to understand is that, while Marx despised capitalism, he never made it personal. He didn't shame individual people for their success, or automatically assume that rich people were evil. The only reason Marx was lifted out of poverty, in fact, was because a wealthy capitalist gave him money. In our modern world, however, so-called socialists love to make it personal. They ridicule people on social media because of their success. Activist newspapers illegally leak confidential tax information in an effort to ‘name and shame' wealthy people. Even Marx didn't stoop to that level. This is the topic of our podcast today: Marxism, socialism, and communism… and why most people who claim to embrace these ideas don't have a clue what they're talking about.

Nearly every year in his annual Berkshire Hathaway shareholder letters, Warren Buffett spends a few pages talking about the dynamism of the American economy. His message is clear: the United States has faced adversity before. It will again. But America always prevails and you should never bet against it. That theme has certainly held true during Buffett's life. He was born in 1930 and came of age at a time when the US had become the world's undisputed dominant superpower. Buffett's entire business career, in fact, took place at a time when America was on the rise. But even Buffett would have to acknowledge that times have changed. Today the government is obsessed with passing regulations that create obstacles to growth and new business formation. They'd rather pay people to stay home and NOT work rather than encourage production and innovation. They rack up enormous quantities of debt without a single thought to the long-term consequences. They engineer inflation. They stifle competition. And they constantly ridicule anyone who took a chance, worked hard, and became successful. Not only do they want to raise your taxes, they want to shame you because of your hard work and success. Buffett knows this now from personal experience. Last month, in an effort to make wealthy people look bad, Buffett's private personal tax returns were illegally leaked on the Internet for everyone to see. He never had to deal with that sort of rage before in his life. Moreover, when Buffett was a young man, he never had to contend with fanatical mob of woke Marxists. And he never knew a time when the biggest companies in America bent the knee in subservience to them. And while there have always been small groups of Communist sympathizers and socialists in America, Buffett made his fortune at a time when the vast majority of people understood the awesome, prosperity-generating powers of a capitalist system. But today, socialism is totally mainstream, with New York Magazine last month proclaiming that “Socialism isn't a dirty word anymore.” And according to a recent Axios poll, most Gen Z (ages 18-24) have a negative view of capitalism. Bottom line, the America of today is not the same America where Buffett made his fortune. This isn't to say that there aren't extraordinary opportunities to create wealth and become successful. Of course there are-- opportunities abound everywhere, both within the US, and around the world. But it would be foolish to ignore these trends, or the fact that the country may be past its economic and political peak. To paraphrase former Treasury Secretary Larry Summers, how much longer can the worlds biggest debtor continue being the world's biggest superpower? How much longer can a country which debases its currency, embraces socialism, silences intellectual dissent, brainwashes its youth, and encourages unproductive behavior, continue being the world's most dynamic economy? These are not controversial statements. They're relevant, important questions that any independent-minded person might consider. This is the topic of today's podcast, which you can watch here (on YouTube) or here (on SovereignMan.tv), or listen to here:

The most astute investors in the world understand that there is no such thing as a risk-free investment. Every investment carries at least some risk; stocks, bonds, venture capital, real estate... even something as simple as keeping money in a bank.… they all carry some degree of risk. Sharp investors take steps to identify and hedge their risks, so if the worst happens, they'll still be protected. Stock market investors, for example, might purchase ‘put options' which increase in value in the event that their stocks fall. That way, if there's a crash, the investor is protected from any major losses. Bondholders often purchase credit default swaps, which is like an insurance policy in case the bond issuer defaults. And real estate investors routinely buy insurance to mitigate the risk of property damage caused by fire, flood, and hail. These are all sensible precautions that can dramatically reduce an investors' risk. And this is ultimately what a Plan B is all about-- taking sensible steps to reduce obvious, often substantial risks. Inflation is an easy example; we've long argued that misguided government and central bank policies (like paying people to stay home and NOT work, or conjuring trillions of dollars out of thin air) would eventually create painful levels of inflation. This was a significant risk, but one that could be mitigated with certain investments (like gold, which is up 16% since the start of the pandemic, or silver which is up nearly 60%.) But there are plenty of risks that don't have anything to do with money or finance. Over the past year, for example, we've seen an aggressive erosion of our freedom, angry mobs hijacking our children's education, increased tensions with China, etc. These are all obvious risks. And one type of ‘insurance policy' to protect against these sorts of non-financial risks is looking abroad and making sure that you and your family always have another place to go. That means having either a second passport, or at a minimum, legal residency in another country. Like any other insurance policy, you might never need to use it. No one goes to bed at night complaining that they haven't been able to ‘cash in' on their home's fire insurance policy. But if you ever really need it, you'll be extremely happy that you took the steps to set up residency in another country. Besides, there's very limited downside in having another option to travel and live somewhere, especially if it's a place that you and your family really enjoy spending time. This is the topic of our podcast today; Viktorija is actually in Panama at the moment applying for residency there, and she recently obtained legal residency in Mexico too. We talk about both of those, and much more. You can watch it here (on YouTube) or here (on SovereignMan.tv). Or can access the podcast here:

In late 2019, the real estate firm Knight Frank published a list of the most expensive streets in the world, i.e. the individual neighborhoods with outrageously pricey real estate. The top 10 list included four streets in New York City (57th Street, Central Park South, Fifth Avenue, and Park Avenue), three in Hong Kong, two in London, and one each in Los Angeles and Palm Beach. But global real estate changed immeasurably the following year in 2020. Places like Manhattan have seen a population exodus after 18 months of idiotic pandemic rules, rising taxes, and destructive woke policies, while other cities and neighborhoods have seen a surge in demand. So that top 10 list is certainly going to change. One of the places that may very well make an updated list of most expensive streets in the world is an upscale neighborhood in... Puerto Rico. We talked about this several times in the past-- Puerto Rico has some of the most attractive tax incentives in the world. People of just about every nationality can benefit for Puerto Rico's tax incentives. But they're especially attractive to US citizens. With the direction that the US is headed-- Marxist politicians, higher income taxes, higher estate taxes, wealth taxes, etc.-- a lot of people have become fed up and are leaving the US to take advantage of Puerto Rico's tax incentives. But this has created a major supply and demand imbalance in real estate; in the most popular expat neighborhoods, property prices have skyrocketed. And there are a few pockets of the Puerto Rican real estate market that have seen prices quadruple in the past year and are now as expensive as MONACO. Puerto Rico is not alone, of course. There are cities and neighborhoods all over the world that have seen major price increases. COVID-related migration is definitely a factor. But another key driver of higher real estate prices is central bank policy. As we discussed a few weeks ago on our podcast, the Federal Reserve in the United States has not only kept mortgage rates at record low levels, but they have printed hundreds of billions of dollars in the last few months alone to ‘support' the US housing market. This seems completely bizarre: the median US home price has never been more expensive. Most local real estate markets are booming. Why do these people think the housing market needs their support?? Viktorija and I devoted today's episode of the Sovereign Man Freedom Podcast to housing; it's a topic that affects just about everyone, everywhere in the world, whether you're renting an apartment in Toronto, buying a house in Austin, selling a flat in London, or investing in a REIT in Sydney. We talk about some reasons WHY property prices have risen so much, and some key metrics to monitor to get a sense of where prices are going in the future. You can watch it here (on YouTube) or here (on SovereignMan.tv). Or download and listen to our podcast here:

One of the wonderful people I've been fortunate to get to know in my life is legendary investor and prolific author Jim Rogers. I've known Jim for nearly 10 years now. He's a great guy and I've learned so much from him-- about finance, markets, travel, writing. But above all that, one thing in particular really stuck out: fatherhood. It seems like every time we've ever had dinner or drinks together over the past decade, Jim always brings up the topic of having children. He didn't have children until later in life; he's written about this extensively, saying that he never wanted kids and was quite content with his success and career. But when he started having children at age 60, he realized that he couldn't imagine his life without them. And literally every time Jim and I have hung out, he has always encouraged me to have kids. I never took the idea seriously… until last year. Amid all of the fear, anger, violence, and totalitarianism that was gripping the world, I became convinced that it was the right time to have a child. You see-- I'm an optimist. I believe wholeheartedly that no matter how many problems people create, no matter how dark the chaos, there's always a solution. Human beings are natural tool creators. We solve problems and overcome challenges-- and this is especially true for people who can think independently and plan proactively. I know that this chaos-- the Marxism, the Woke fanaticism, the Covid-1984 totalitarianism-- isn't going away anytime soon. But I'm also wildly optimistic about the future, because I know there are plenty of solutions to de-risk these challenges… and at the same time I see a world full of vast opportunities. And all of that is what brought me to Mexico-- my child was born here in Cancun earlier this month. I could not have asked for a better experience. Becoming a father has been an unimaginable joy… and choosing to have the baby in Mexico was one of the best decisions I've ever made. Yes, the “Plan B” benefits are nice; baby automatically received Mexican citizenship (which will be passport #5), and mommy and daddy both received Permanent Residency. But the benefits go way beyond that. The medical care, staff, facilities, lifestyle, costs, etc. have really been extraordinary. In this week's podcast episode, I talk all about it… and tell a few stories about our experience here that are truly unbelievable. You can watch the video here. Or listen to the podcast here.

In last week's podcast -- the first podcast episode we've published in a few years -- Viktorija and I discussed how central banks engineer inflation… and why inflation is probably here to stay. In this week's episode, we dove even deeper into the topic to discuss a different type of inflation: ASSET price inflation. Remember that inflation rises whenever the amount of money in an economy increases relative to the amount of services and products available to purchase. And that even includes assets. There are only 500 companies in the S&P 500, which essentially means there's a fixed number of assets available for investors to purchase. So whenever the central bank prints trillions of dollars, much of that money finds its way into the stock market, bidding up the stock prices of S&P 500 companies. The bizarre part is that this increase in stock prices doesn't mean that a company has become more successful. In fact, Coca Cola is a great example here. Over the past decade, Coca Cola's revenue has fallen. Its equity has fallen. Its profit has fallen. Its debt levels have exploded. Coca Cola has clearly become a LESS valuable company over the past decade. And yet its stock price has soared to record highs. Coca Cola's record stock price has nothing to do with the company's success; it has everything to do with the tidal wave of cash that the Federal Reserve has printed. Much of that money has made its way into the stock market, pushing up share prices-- even when the companies are in decline. This is asset price inflation. We discuss this phenomenon in a lot more detail in today's podcast… including why it's so dangerous (because asset price bubbles always pop, eventually). Moreover, we discuss alternative asset classes-- like venture capital and private equity, as well as why right now is such a great time to start a business. You can watch the video here: https://youtu.be/uRrfGLoQ78A Or download this week's episode of our Freedom Podcast here:

It feels like it's easily been two years since I've recorded a public podcast. But after yesterday's article about inflation, I realized that I had so much more to say. Inflation-- which is essentially the slow destruction of a currency-- is already a major issue that's capturing headlines. But there are plenty of reasons why it could be far worse in the future. This isn't anything to be afraid of. But it's definitely a topic to learn a lot more about. Understanding inflation is critical to making sound, long-term financial decisions, and creating a great Plan B. But it's a complicated topic. To properly understand inflation, it's imperative to first learn about how central banking works; for example, why does the Federal Reserve buy so many mortgage bonds? What's the actual mechanism for ‘creating' money, and how does this new money make its way into the economy? (We talk about all of this in today's podcast, including the absolutely ridiculous and infuriatingly cozy relationship between the Fed and the biggest commercial banks.) More importantly, what are the long-term factors that could drive inflation a LOT higher? We discuss some of the obvious ones, like the federal government's insatiable appetite to spend money. But there are a lot of other obscure reasons-- like the fact that there are fewer farmers and fewer acres of farmland planted in the United States than at any other point in history going back to at least the late 1800s. That last one could be a pretty big deal; US food imports have been doubling roughly every 10 years. So the US is going to reach a point where it has to import a large quantity of its food, and pay for it all with a rapidly depreciating currency. You can probably imagine the impact that trend could have on future food prices. There's a LOT more to discover here-- like why the Fed keeps supporting a housing market that's totally on fire, what they actually mean when they say inflation is ‘transitory', and what types of businesses might make solid investments in this environment. We even walk through the details of the last financial crisis-- and how the it mirrors what's happening today. It's been so long since we published one of these, I had to ask our Sovereign Woman, Viktorija, to help me out and guide my comments in the right direction. I sincerely hope you're able to learn something from this and come away with a much better understanding of how to factor inflation into your own Plan B. You can watch the video here: Or listen to the audio here:

This morning I reached out to my old friend and colleague Peter Schiff to talk about some uncomfortable truths that very few people are discussing right now. I wrote to you about this yesterday: banks are in trouble. You can't expect to shut down practically an entire world economy that is in debt to the tune of $250 TRILLION and not expect massive loan defaults. The last financial crisis in 2008 was caused by a spike in loan defaults. We're about to see another spike of loan defaults due to all the layoffs and business closures… only this time the problem is much, much bigger than it was in 2008. And Peter and I discuss some potential scenarios. Be forewarned, they're not pleasant. Think about it like this: before the last financial crisis, US government debt was ‘only' about $9 trillion. It's nearly tripled since then. The Federal Reserve's balance sheet prior to the last crisis was $850 billion. It ballooned to $4.5 trillion, more than 5x as much. This means that we could see US government debt reach $40 to $50 trillion, the Fed's balance sheet exceed $20 trillion. Could that possibly have negative implications for the US dollar? You bet. Peter and I talk about what might happen with the dollar, and more. You can listen in here. * Editor's note: As you'll hear in the podcast, Peter promotes a number of his businesses, mutual funds, etc. We need to be clear that those comments are his alone, and that we are not recommending in any way that listeners make any investment with any of Peter's businesses.

I thought in this age of insanity that we are living in, nothing would surprise me anymore. But sure enough, there was a headline in the Financial Times the other day, “Central banks should consider giving people money.” It seems almost impossible that someone could believe in something so ridiculous. And yet this is the world we are living in. The path to prosperity is now based on unelected central bankers conjuring millions of dollars out of thin air. Bankrupt governments are issuing bonds with negative yields, meaning they are being paid to go deeper into debt. And there are more than $13 trillion of these negative yielding bonds in the world. If anything this makes a compelling case for why people should consider owning gold. It's a store of value with a 5,000 year track record of withstanding inflation, political crisis, and monetary stupidity. I've been suggesting people consider buying gold for quite some time, especially over the last year. I argue that the supply of gold, is actually declining, yet the demand will increase in large part due to all of this central bank lunacy. And that has absolutely been happening. The price of gold is up more than 25% over the last year, and just surpassed $1,500 per ounce. But unlike most other assets like real estate, stocks, bonds, etc, gold is still far from it's all time high. There could still be plenty of gains ahead. And silver would have to triple before it reaches it's all time high. Every summer for the past eight years, I've enjoyed a week or two in the italian countryside at a 400 plus year old villa. Here I relax with friends, family, business colleagues, and some of our Total Access members who fly in from around the world, to break bread and enjoy really stimulating and entertaining conversations. This year Peter Schiff has been one of my guests. He's an old friend who shares many of the same beliefs. And when our conversation this morning turned to gold, I thought it appropriate to record it, and make a Podcast out of it. In our conversation we talk about why gold and silver have plenty of room to rise, and a number of different ways to invest.