In the two weeks since “Liberation Day”, we’ve received plenty of very smart, thoughtful questions from our readers. So today we recorded a special Q&A podcast to cut through the chaos and confusion these new trade measures have sparked in the markets. We answer: Is the President’s top economic adviser correct that the US dollar’s reserve status is “hurting” the US economy? What’s happening with gold? Why did it initially drop, and then soar? Can the BRICS bloc switch entirely to yuan trade settlement, and, if so, who wins? Do foreign countries actually own US debt— or does the US hold all the cards through third-party custodians? What’s with the historic whipsaw in Treasury bond yields, and how big of a deal is this? Why would China buy Treasuries at the highest possible price, only to lose tons of money when they sold? Can China afford to weaponize their dollar reserves—or are they shooting themselves in the foot? And... humorously, why I think Jeff Bezos deserves the Nobel Peace Prize... You can listen in below. https://youtu.be/vYgSXw_PuME Podcast transcript can be accessed here. Any other questions, just let us know.

Yesterday when I was talking to my friend and business partner Peter Schiff, he made it clear: China is trying to drive a wedge between the US and Europe by dumping US bonds, and buying euros.If that’s true, it constitutes a major reset of the global financial order. I sat down to record a podcast about this because, frankly, it’s the most important thing happening right now. It’s critical to understand—not just what’s happening, but why this is no longer a trade war… It's an economic war. Honestly, I’m more concerned than I’ve been in years about this escalating into an actual war. The world’s two largest and most dominant superpowers are directly threatening each other’s economic interests. You can watch or listen to the podcast here. https://www.youtube.com/watch?v=5wHDvpsYG5U You can access the podcast transcript here.

I want to present two choices for you to pick from. One is a world leader who was recently sued by a transgender prison inmate who felt that this person’s recent executive order was unfair. The second is another world leader who has suspended elections, forcibly presses people into the military, has closed his border, and has complete control over the press and the flow of information. If you were forced to label one of these two as a dictator, which would it be? Most people would probably think the second guy. And yet our dear friends in the legacy media continue to insist it is the first. There’s already been so much ink spilled this week over who called who a dictator, and the press has been obligingly deranged in its coverage. But we received enough questions from readers asking for our thoughts on the matter that we thought we’d weigh in on Ukraine, Zelensky, and the standard of being a dictator in 2025. https://www.youtube.com/watch?v=lcj4D54lFRA

Last summer, the Federal Reserve wanted you to believe that inflation was a thing of the past. Sure, just about every category of consumer goods had increased in price. Electricity rates had increased 5% year over year. Rent and housing costs were up 5%. Hospital care had become 6% more expensive. Food prices were up. Fuel prices were up. Auto insurance had risen by a whopping 18.6%. Yet, bizarrely, the overall inflation average was just 2.9%. And based on that number alone, the Federal Reserve had all but declared victory against inflation. We knew it was BS. And, after diving into the numbers, it didn’t take us very long to realize why. It turned out that, back in the summer of 2024, used car prices were falling dramatically— down around 11% year-over-year. You probably remember what happened: during the pandemic, supply chain snarls and factory closures caused used car prices to go through the roof. Eventually, prices peaked... and then started to fall. By July 2024, used car prices were still on their way down... essentially returning to a more ‘normal’ level. And based on the way that the government calculates inflation, the huge drop in used car prices dragged down the overall average, making the headline inflation rate appear smaller than it really was. We wrote about this last summer. And we predicted that the decline in used car prices would soon cease... essentially eliminating the key drag that was holding the inflation rate down. That has now happened. And as of last month, used car prices are no longer falling... and the overall rate of inflation is once again on the rise. This is where our discussion begins in today’s podcast, and it’s an important one. We talk about why, at this point, lingering inflation is a major challenge. And it’s becoming a more likely scenario. There are obviously some forces within the government that are working really hard to cut spending. There are also legions of misguided (or flat-out corrupt) politicians who are fighting to prevent those budget cuts from happening. It’s a see-saw right now and could go either way. But, at least for now, the government is still spending taxpayer money like a drunken sailor. Last year’s budget deficit was nearly $2 trillion. They’re already on track to repeat that this year. All of that deficit spending adds to the $36+ trillion national debt. But what makes matters even worse is that an unbelievable $28 trillion of the national debt will have to be refinanced over the next four years, according to Federal Reserve data. (We show you the Fed’s data in the podcast— it’s a chart you’ll want to see.) The key problem, of course, is that interest rates are significantly higher today than they were several years ago. So when the Treasury Department refinances that $28 trillion in debt, it will be at a MUCH higher rate. Think about it— if most of that debt was sold at a 2% rate, but now they have to refinance at 5%, then that’s an extra 3% interest to pay on $28 trillion— or $840 billion per year in additional interest. Remember that the government’s interest bill is already $1.1 trillion per year. So in four years it could easily eclipse $2 trillion per year. Again, this is just the amount of interest. It’s also pretty clear that a lot of foreign governments and central banks— who own a huge chunk of that $28 trillion which needs to be refinanced— are looking to diversify away from the dollar. It’s already happening; obviously there are the loudmouthed BRICS countries that have started trading with one another in their own currencies, and thus begun reducing their dollar holdings. But even supposed ally nations in Europe are starting to trade their US dollar reserves for gold. This is setting up a precarious situation... because if foreign governments and central banks continue reducing their dollar exposure, then who is going to buy up all that $28 trillion worth of US government debt that needs t...

We recently received a question from a reader asking for my thoughts on crypto. He said we’ve been talking about gold a lot lately, the gold price, and how the price could go a lot higher. Shouldn’t we hold the same views on crypto, given everything that has happened with Bitcoin over the last year or so? We ended up doing a whole podcast about this today, We talk a lot about gold, and a lot about crypto. To clarify, I’m not anti-crypto. In fact, I brought Bitcoin to our audience’s attention back in 2013, when the price was under $100. But there are some differences to gold. Right now, I think there are some major catalysts that could drive the price of gold much higher. It’s a matter of arithmetic, and we walk you through the math on it. The other important thing is that while gold is at an all time high, gold related businesses have been in the dumps for a long time. And that’s a bizarre anomaly that is simply not going to last. Conversely, that same dynamic doesn’t seem to exist with crypto related businesses. And we talk about, in today’s podcast, Microstrategy, as perhaps the best example. This is essentially now a Bitcoin holding company, with 478,000 Bitcoin, valued at around $45 billion. Yet Microstrategy’s market cap is almost double that. So if the point is to buy Microstrategy stock as a proxy for Bitcoin, you’re actually paying double the price. Versus with gold, we have the opportunity to pay less than two times forward earnings for gold companies that have an all in production cost of $1,500 per ounce— roughly half the price of gold. So it’s a completely different dynamic, and we explore all this and more in today’s podcast. We even talk about the Microstrategy convertible notes, and why it’s frankly wildly inappropriate at this point to even compare “crypto” and gold. You can listen to the full podcast below. https://youtu.be/gdIO-mYQWj8

In the year 1025, the Byzantine Empire stood at the height of its final golden age. Basil II had just died, leaving behind a vast and wealthy empire stretching from Southern Italy to Armenia. At the heart of its economy was the solidus, a gold coin that had served as the bedrock of Mediterranean trade for centuries. Merchants from Venice to Baghdad had so much confidence in its purity that the solidus became the primary currency for international trade as far away as China. And this ‘reserve currency’ status allowed Byzantium to project economic power far beyond its borders. But as the empire declined, so did its currency. Successors debased the solidus to cover military costs, mixing in copper and silver until it was barely recognizable. By the late 11th century, merchants could no longer rely on the Byzantine government to maintain the purity of the solidus... so traders turned to a new, up-and-coming alternative: the Venetian ducat. This pattern has repeated itself for thousands of years: reserve currencies come and go, and are eventually displaced by another. Before the solidus, Rome had set the standard with its denarius, but centuries of inflation and political collapse led to its demise. After Venice, the Spanish real de ocho became the world’s preferred trade currency, thanks to galleons loaded with New World silver. When Spanish power faded, the Dutch guilder took over, only to be replaced by the British pound sterling, which reigned until two world wars left Britain financially exhausted. Even the US dollar, during its first two and a half decades as the global reserve currency, was based on gold, until in 1971, the dollar was removed from the gold standard. The whole concept of fiat currency (i.e. paper currency which relies entirely on trust and confidence of the issuing government) holding coveted reserve status is a new phenomenon. That means trusting the largest debtor in the history of the world, trusting the US financial system, abiding by the US government’s regulations, and dealing with the whims of their central bank—despite its mismanagement, soaring debt, and reckless policies. So much can go wrong. And at some point in the future—whether years or decades from now—the US dollar will lose its status as the world’s reserve currency. No currency has ever held that title forever, and it’s naive to assume the dollar will be the exception. When that moment comes, future historians will look back in astonishment, wondering how it lasted as long as it did. Because a system built entirely on trust can only survive as long as that trust remains. And for most of this century, the US government has proven time and again that it cannot be trusted. We explore this topic in depth in today’s podcast, and discuss how and why gold will be the beneficiary of the dollar’s loss. We also discuss: The short term “wins” possible by using tariffs as a political tool The long term damage to the dollar done by threatening allies What could replace the dollar as the global reserve currency The benefits of holding physical gold (for individuals and central banks) Investments that offer exposure to gold’s upside, without paying all time highs for physical bullion We also mention a gold company that we are profiling this month for subscribers to our investment research newsletter, The 4th Pillar, which focuses on real asset investments. And if you’d like to learn more about The 4th Pillar, which we are offering at a discount for a limited time, click here. You can listen to the podcast here. https://youtu.be/ALVdo5Xu0Ms

Yesterday, Nvidia—the company which makes GPUs, including for AI— suffered the largest single-day market value loss in history. The stock dropped 17.4% wiping $600 billion from its valuation in hours, and actually pulling the entire Nasdaq Composite down 3.4%. To put that in perspective, this amount of value loss is like if the entire company of Netflix AND AT&T simply disappeared. What caused this? A Chinese AI startup called DeepSeek. Over the weekend, it revealed a new large language model (LLM) that matches the output of OpenAI’s ChatGPT and similar models but at a fraction of the cost. Here’s the kicker: DeepSeek trained its LLM with just $5 million and 2,000 low-tech Nvidia GPUs. Compare that to ChatGPT’s $100 million budget and over 100,000 cutting-edge GPUs. Venture capitalist Marc Andreessen called this AI’s Sputnik moment. And that’s true. It was 1957 when the Soviets launched Sputnik into space, which made the Americans realize how much they needed to catch up. There was a lot of panic yesterday, and it’s easy to understand why. The whole industry felt they had a competitive advantage that no longer exists. But the reality is, this is good news for everyone. And this is the topic of our podcast today. Many of you know that I’m the chairman of a emerging technology company which makes extremely powerful and efficient semiconductors. It’s completely unrelated to AI, so DeepSeek doesn’t have any impact. But I reached out to a number of people in the business to help me understand this better. And overall there are a few conclusions that are pretty obvious. One, Nvidia is still going to be able to sell all the GPUs they can produce. The difference is now they will be selling to more people. The days of Nvidia delivering GPUs by armored car are long gone. And now these professional grade chips are going to be available to even the lowliest of AI start-ups. It also means that AI start ups can launch their businesses and develop their technology with a smaller amount of money. Instead of having to raise half a billion dollars just to get started, they can create a viable product for just a few million dollars now. That means more innovation, and hence more productivity for everyone. The last thing is the market rout yesterday was classic overreaction and panic that extended to sectors that still have me scratching my head. There was even a sell-off in natural gas stocks, which is absurd. We talk a lot about real assets, and why they are such a smart buy right now. And natural gas companies are a great example. Some of these businesses are well managed, profitable, dividend paying, and have pristine balance sheets. And yet the market is now giving them away. We discuss all this and more in today’s short podcast. https://youtu.be/iNV0PQOLSN8 PS- Starting today we’re launching a promotion on The 4th Pillar, our premium investing newsletter that focuses on undervalued real asset businesses. Click here to learn more.

The Wall Street Journal this morning released its latest economic forecast survey. This is where they ask leading economists what they think inflation and economic growth will be in 2025 and beyond. The results were pretty incredible. Between the last survey, in October before the election, and this month’s survey, the predictions for US economic growth have increased dramatically. Optimism is clearly everywhere, not just in the economic forecasts but also the labor market, stock market, etc. One of the reasons for that, obviously, is that Americans were just promised a New Golden Age of prosperity. We’ve written before, many times, that America’s gargantuan fiscal challenges are still fixable. But a Golden Age? Is that really feasible? Well, above everything else at this organization, we are intellectually honest, and we let the math be our guide. And in today’s podcast, we actually do the math at a high level and discuss whether that Golden Age actually is possible. Spoiler alert: it is! But it’s gong to require what I believe are modest budget cuts— roughly $300 billion— and significantly higher economic growth. When you think about it, it’s really something to be said that the US, i.e. the most advanced economy in the world, only clocks around 2% “real” GDP growth each year. Given America’s population growth, the literally tens of trillions of dollars of investable capital, the massive pool of talent, and innovation, 2% growth is utterly pathetic. Talk about under-achieving your potential. It’s deregulation, ease of doing business, and tax policy that can really move the needle on that growth. And these are all completely realistic goals. At the same time, there are so many forces and entrenched special interests that will battle against reform. So while there’s plenty of reason to be optimistic, it’s not a forgone conclusion. That’s why it makes so much sense to have a Plan B. We talk about all this and more in today’s podcast, as we walk through the math on the New Golden Age. https://youtu.be/utZXEbMAm7Y

It’s hilarious how Joe Biden spent his entire four year administration using tech companies to suppress dissent and censor critics. He now claims those same tech companies are a threat to democracy. He just awarded the Presidential Medal of Freedom to billionaire George Soros, who notoriously uses his money to meddle in elections and fund ultra-woke leftist politicians. But billionaires who fund causes on the right are... a threat to democracy. Biden further believes that he is not responsible for any of the inflation of his tenure, and he expresses no concern about his massive deficit spending and debt accumulation. He simply doesn’t understand: the inflation we are still experiencing has literally been caused by his trillions in deficit spending. And with the national debt now at $36.2 trillion on Joe Biden’s final business day in office, the government is dangerously close to the point of no return. Without serious budget cuts... without a massive regulatory overhaul... and without a major reset in the way the government does business... the US could quickly slip into a debt spiral. The federal government already spends 100% of its tax revenue just to pay for mandatory entitlement spending and interest on the debt. In fact, interest on the debt already exceeds $1 trillion per year, and could easily DOUBLE to more than $2 trillion over the next couple of years. The incoming administration has an extremely limited window of opportunity to put the economy and government finances back on track. I think they have a good chance, and I’m absolutely rooting for them. But success is far from certain... and for that reason it still makes so much sense to have a Plan B. I hope you’ll join us for this discussion in today’s podcast, where we also cover: Why interest rates are rising, despite the Federal Reserve’s cuts Banks’ HUGE missteps that led to massive unrealized losses in their bond portfolios The Federal Reserve’s only option left to bring rates down, and how it will cause inflation Trump's potential to turn things around, and what happens if he fails The real reason he’s talking about "Buying Greenland" The role of real asset investments in hedging against inflation Why real assets will do well no matter what happens next I encourage you to listen to this super insightful conversation, which is well worth the time to understand where the US is heading. https://youtu.be/yz-3mnjuyr8

In 1913, 24-year-old Charlie Chaplin arrived in Los Angeles, drawn by an offer from Keystone Film Company. Coming from a poverty-stricken childhood in London and a successful vaudeville career, Chaplin found in Los Angeles a place of limitless potential. The city was largely undeveloped, surrounded by orange groves, open fields and dirt roads where coyotes still roamed. But it offered the perfect backdrop for the burgeoning film industry— mountains, oceans, deserts— and a chance to escape the constraints of traditional theater. While San Francisco had flourished during the gold rush, Los Angeles was entering its own boom, fueled by filmmaking. Chaplin quickly became the silent era’s most famous actor, transforming the medium while the city grew into the heart of the movie industry. Like Chaplin, Los Angeles embodied the spirit of creative freedom, shaping modern entertainment for a century. The city, especially Hollywood, became synonymous with the film industry, and perhaps took that for granted. Like California in general, LA assumed that however poorly it treated its residents, however burdensome the regulation, however high the taxes, people would still come flocking like there was gold in the hills. If you ever wanted to be the author of your own decline, follow the example of California, and Los Angeles in particular. Hollywood has chased away its own industry to burgeoning film locations like Georgia, New Mexico, and Toronto. Georgia especially is raking in the benefits from LA’s decline. Los Angeles was a one industry town, and they chased it away. They forced countless lockdowns on the city during COVID, even threatened to cut off water to those who dared to invite guests over. They declared themselves a sanctuary city against federal law, inviting illegals to enjoy a multitude of free benefits— then expected federal dollars to pay for it. They cut police, and refused to enforce basic laws against things like shoplifting, or keep even serious criminals in prison. They destroyed education, from elementary to university. And every business and individual is absolutely drowned in useless permitting. Oh, and with all their idiotic spending priorities, somehow fire fighting, in an area prone to wildfires, seems to be the only thing they were unwilling to properly fund. Who would want to continue doing business there? Or invest there? Or live there? And tax revenue and talented workers are part of the exodus. California ran things into the ground until they no long had money for basic services. But hey, at least people can still get private insurance when the government fails them! Oh wait, California has also run them out of town. Because of California’s regulatory burden many insurance companies no longer do business in the state. And that has left a number of people, including those whose homes have burned down, without insurance. California has long relied on federal bailouts to fund all these idiotic policies. Their COVID lockdowns were paid for with federal tax dollars, and they’ve received bags of cash from the Biden administration to help pay for migrant care. The damage from these fires could easily exceed $50 billion, and again, since they have chased away insurance companies, I have a funny feeling that California is going to have its hand out to the federal government once again to help people rebuild form a crisis that was not only preventable but a direct result of political incompetence. Would you be surprised if the federal government came to their rescue, and US taxpayers ended up paying for poor Paris Hilton’s burned out mansion, because no one would give her insurance? There used to be a saying, "As California goes, so goes the nation." And to be frank, I think that’s right. The US itself has some deep challenges brought on by the last several years of horrific leadership and terrible priorities. There is, starting next week,

In the year 500 AD, just a few decades after the fall of Western roman empire, the standard of living for a typical European peasant was pretty grim. Squalid hovels. No sanitation. Short life expectancy. Even food was by no means guaranteed. If you go forward in time, even 1,000 years, the standard of living of a typical medieval peasant in the year 1500 was little changed from his predecessor an entire millennium before. Human civilization barely budged, in fact, until the late 1700s and the advent of the Industrial Revolution, where the combination of new technology, and cheap, abundant energy propelled our species into an era of unprecedented prosperity. As technology became even better, and energy even cheaper, that upward trend has accelerated. On the table in front of us right now are a handful of key technological trends that have the potential to drive human prosperity at warp speed. One of those in particular is the cheapest and most boundlessly efficient energy the world has ever seen. So naturally the US government is doing everything it can to block it and obstruct its progress. It’s obvious that the US, and the world, is for the most part, a big mess. The sheer volume of debt in the world is a major concern and one that creates more inflation, and less prosperity. It’s also a problem that is growing each year at an exponential rate. But this energy issue is a perfect example of how easy it should be to get things moving back in the right direction: just stop going out of your way to deliberately harm your country and its economy. Think about it. If you had to set the table with four key pieces and resources that were necessary to grow out of a gargantuan debt problem, and create widespread prosperity: You would want to have emerging technology for cheap, nearly limitless energy. You would want to have world changing technology to boost productivity to unimaginable levels. You would want to have one of the most successful people who has ever lived, dedicated to dismantling a destructive, bureaucratic administrative state. And you would want to have an incoming government on board with spending restraint and much needed reforms in the public sector. That’s pretty much what’s in front of us right now. On the other hand, if your goal was to make things as bad as possible, you would probably engage in a massive debt bonanza and spending blowout, hobble highly beneficial emerging technology, obstruct conventional energy production, and block win/ win foreign investment deals. These are all things we’ve seen the outgoing administration do just in the last couple weeks. And it almost looks deliberate, by a petty fool, angry he was pushed out by his own party, and lashing out at the country. There is a lot of upside potential on the other side of this, but it is by no means guaranteed, and there is still plenty of risk ahead. That’s why it still makes so much sense to have a Plan B. https://www.youtube.com/watch?v=12v_EGhl2_Y Listen in to today’s episode here.

If you examine the anatomy of a crisis, it seems like almost all of the big ones start with a completely false belief system. “Two weeks to stop the spread”. “Iraq has weapons of mass destruction.” “We’ll be greeted as liberators.” “The debt doesn’t matter because we owe it to ourselves.” One of my favorites was the faulty premise that underpinned the 2008 Global Financial Crisis: “real estate only goes up in value.” Nearly every “expert” believed it. The Fed. Major commercial banks. Wall Street analysts. Big hedge funds. Ratings agencies. In retrospect it seems ludicrous. Of course real estate can lose value. It’s an asset. There’s risk. And that’s what happens after the crisis— people look back and wonder “how could anyone have believed something so stupid?” Today, we’re in the midst of several other false belief systems. And one of those— as I wrote to you yesterday— is about the Federal Reserve. In yesterday’s letter I explained that the Fed is THE most important central bank on the planet, because it is the primary custodian and issuer of the US dollar, i.e. the world’s primary reserve currency. Yet at the same time, the Fed is hopelessly insolvent with over $800 BILLION in unrealized losses versus capital of just $44 billion. This makes the Fed the MOST insolvent bank that has ever existed in the history of the world. Yet, so far, no one seems to care. The false premise is “It doesn’t matter that the most important institution to the global financial system is hopelessly insolvent. They can always just print more money...” Future historians will not look kindly on this false logic. And people will wonder how anyone could have believed something so stupid. This is the topic of today’s podcast. We walk through the hilarious history of recent financial crises— how various entities failed, how the government responded... and how everyone keeps repeating the same mistakes over and over again. It’s as if these banks are just begging to fail. They’re literally now on the third iteration of repeating the same mistakes since 2008. And you won’t want to miss the end, where we conclude with a great way to think about how to protect yourself from the fallout of this next brewing crisis. We also talk about the way out— how high-speed economic growth could help the Fed (and the US government) out of its gargantuan financial problems. But in case this doesn’t happen, we walk through some very sensible strategies to deal with the potential fallout. You can watch the video here, or listen to the audio here.  

Governments love to tell you tariffs are about "protection". But protection from what? More affordable goods? A higher quality of life? In today’s podcast, we dig into the many, many unforeseen consequences of the new tariff policies. For example: Examples from countries where I’ve lived which have heavy tariffs and import duties— and how those countries are vastly worse off as a result. Their citizens are poorer and less prosperous. That’s because taxing something always leads to less of it... which ultimately means a decline in standards of living. Hooray tariffs!! They just slapped some of the highest tariffs on products the US doesn’t even make— like socks from Vietnam or underwear from Bangladesh. Do they really want America to be a ‘socks and underwear economy’? Is this really the future of economic growth? And even if so, where are they going to get the workers to staff those factories? Are America’s 20-year olds, who, heretofore have been posting butt-selfies on Instagram for a living, really going to put down their iPhones to go work in factories making socks and underwear? Plus there are painfully obvious reasons why American-made goods will become more expensive... due to tariffs on raw materials. We can’t imagine how big the customs bureaucracy will become to enforce tariffs... let alone the complexity and confusion, when, say, a Swiss-owned vessel sailing under a Panamanian flag crewed by Danes and Filipinos carries chromite from Zimbabwe, granite from Mozambique, and graphite from Tanzania into a US port... And then there’s the golden opportunity that tariffs give China to assert global leadership. April 2, 2025 may be the date that future historians mark as the day American dominance ended. Why tariffs are just the first phase... and how this escalates from trade wars, to capital controls... loss of visa-free travel, cyber attacks, and more. You can listen in here. https://youtu.be/CLc4XAiSO4E You can access the podcast transcript here.

What does it really mean to have a Plan B— especially these days? We’ve used the term Plan B for almost the entire 15 years since I started this business in 2009. Back then the national debt was really starting to become a major problem. The Federal Reserve was printing trillions of dollars to bail out irresponsible bankers. The economy was on the ropes after the Global Financial Crisis. Plus a guy who told business owners, “You didn’t build that,” had just become President of the United States— and then bizarrely awarded the Nobel Peace Prize. So the need for a “Plan B” seemed pretty obvious. Today there is a lot more reason to be optimistic. There’s people coming to power that want to take a wrecking ball to the rot, corruption, and inefficiency that has been plaguing the country for far too long. Frankly, I’m rooting for them. I’m even willing to pitch in and help. To be frank, I’m not comfortable with a world where China is the dominant superpower. And there certainly seems to be a real opportunity right now to get the country back on track. Let’s not be naive though. There are still serious challenges ahead. And the people coming to power have a very narrow window to get things back on track. But we haven’t had this much reason to be optimistic in quite a while. This isn’t just about an election or single individual, but rather a clear sign from the entire country, sick and tired of being lectured by out of touch “experts.” Voters practically demanded a return to sanity and prosperity, even if it means dismantling large chunks of a broken system. In today’s podcast, we talk about what it really means to have a Plan B in this kind of environment, where there’s reason to be optimistic, yet major challenges remain. This, after all, is the entire point of a Plan B; to put yourself in a position of strength, and take advantage of great opportunities, while hedging clear and obvious risks. We talk about that a lot in today’s episode. We actually start with our CEO Viktorija, fresh off of a Total Access trip to El Salvador, telling us about the VIP treatment our group received from senior levels in both the public and private sector. Then we transition into things that America needs to get right in short order. And the consequences if this doesn’t happen. We then discuss the concept of a Plan B, versus having a dangerous “bunker mentality”, and how to think about hedging those risks, both in terms of investments, as well as non-financial solutions. https://youtu.be/HGNFy5IU7CM One of the key ideas is taking steps that make sense, regardless of what might or might not happen int he future. And one example of this is building strong relationships with people who share your values. That’s the whole idea of what “community” is supposed to be. And this is exactly the type of community that we have developed with our Total Access group. There are incredible VIP trips, exclusive investment conferences, compelling private investment opportunities, in-depth research, world class discounts, and a whole lot more. But ultimately, the thing we are most proud of is the community and camaraderie among members. That is consistently what our Total Access members rate as the biggest benefit to our organization. Many say they have found their tribe. We usually keep membership closed, and only open up enrollment a few times each year. We are doing that right now, and you can check out more about Total Access here.

Right at the beginning of the year in early January, I wrote to you about one of the dumbest laws to hit the books in the Land of the Free in a VERY long time. It’s called the Corporate Transparency Act. The article was called, “Get ready to spend two years in prison,” because, two years in prison is literally the penalty for noncompliance. You see, the do-gooders in Washington decided that there is too much criminal money laundering taking place in the US banking system. Nevermind that these brainiacs have already passed countless other laws to combat money laundering... all of which seem to be dismal failures. So they decided to pass yet another anti-money laundering law, which requires every company in America to file a special report to the federal government disclosing the names of its owners. So if you own a Delaware LLC, for example, to own your family investments, then they wanted you to file this report... even though you ALREADY report the exact same information to the IRS each year. Well that doesn’t matter. The government wants you to send the same info— but in a different format— to another agency within the Treasury Department. And if you don’t file the report, they threatened everyone with up to two years in prison. Obviously “ignorance of the law is not an excuse”. They just expect you to keep up with the flood of new laws, plus agency rules, plus court decisions which might modify or nullify all the rules and laws. Case in point: earlier this week, a VERY sensible federal judge thankfully issued a nationwide injunction on the Corporate Transparency Act, suspending compliance requirements until a final ruling. This is great news; it means that, at least for now, you do not have to comply with the CTA. But it also illustrates how quickly the laws change. Like literally every single day. It’s practically a full-time job to keep up with all the changes... and it’s virtually impossible to have a functioning society when the rules are so fluid. This is the topic of this weekend’s podcast— we hope you enjoy and look forward to speaking with you again next week.

On November 20, 1945, an international tribunal first convened in the Bavarian city of Nuremberg to prosecute key leaders of Nazi Germany for crimes against humanity. The Nuremberg Trials were a key aspect of holding individuals accountable for the brutal acts and genocide committed under Nazi rule. High-ranking officials, including Hermann Göring and Rudolf Hess, faced charges, and they tended to grab most of the headlines. But plenty of lower ranking officers, and even doctors, faced trial as well. Naturally they tried to defend themselves by claiming they were “only following orders”. But the Nuremberg Trials established a clear precedent that moral responsibility falls on the individual who committed the crime. “Only following orders” is simply not a valid justification for blatant wrongdoing. It’s always dangerous territory to bring up the Nazis in any intellectual argument because it’s just so sensational. But in this case the analogy is an important one because we’re ultimately talking about accountability. Bureaucrats and politicians in the US government commit outrageous, egregious acts of wasteful mismanagement on a daily basis. A lot of it is even deliberate. And yet no one is ever held accountable. The conservative writer Thomas Sowell once argued that “it is hard to imagine a more stupid or more dangerous way of making decisions than by putting those decisions in the hands of people who pay no price for being wrong.” People in the private sector pay for their mistakes all the time. Businesses who don’t deliver value soon find themselves without customers. Employees who don’t do good work find themselves out of a job. But government officials have squandered trillions of dollars. They locked down businesses, forced experimental vaccines on children, censored free speech, and violated just about every right imaginable. How many have been truly held accountable? At the moment the answer is precisely zero. Fauci retired to a multi-million dollar book deal. Joe Biden and Nancy Pelosi will be honored throughout the rest of their lives. Marty Gruenberg (head of the FDIC and worst human being in government) still has his job. Even most of the worst Members of Congress won their reelections. That’s where today’s discussion begins. We actually recorded a podcast talking about this idea of government accountability. I’ve written a lot that America has, right now, a very narrow window of opportunity to fix its mountain of challenges, or at least get seriously on the right path. Those challenges will be difficult to fix without fundamentally addressing the culture of failure, the standard of mediocrity, and the habit of waste in the federal government. Even if the economy starts growing by leaps and bounds, the US government still won’t be able to fix its gargantuan fiscal crisis if an unaccountable bureaucracy is still there to suffocate progress. This is a MUST FIX for America to have a real chance at success. You can listen to the full discussion here.

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. And they said,

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,

Tomorrow is being billed as Liberation Day— where tariffs will supposedly free America from those pesky, parasitic foreign markets. But what’s actually going to happen? This is the subject of today’s podcast. We discuss: How odd it is that no Liberation Day details have leaked... which makes us wonder if there actually are any plans or details to leak. If this administration truly believes tariffs are so obviously great for the economy, why would they wait until now instead of doing it day one, as they did with so many other executive actions? What might actually unfold, and what it means for markets that are already jittery. Questions any rational investor should ask themselves about their goals— for example, are you speculating on share price, or investing in a company’s long term prospects? Will tariffs make successful companies immediately and permanently less valuable? To answer these questions, we bring up examples of well managed, value companies we present to our investment research subscribers, particularly undervalued real asset businesses. One example’s entire market valuation is less than the cash it has in the bank. Plus it’s profitable and pays a dividend. Finally, we discuss: The long shot scenario of what would need to occur for tariffs to actually work as intended. The very plausible scenario that America could become a manufacturing powerhouse again—not thanks to tariffs, but technology. The surprising company we identify which likely stands to gain the most from this AI/ automation/ robotics boom. If tomorrow is “Liberation Day,” then today is the day to be rational. I encourage you to give it a listen. https://youtu.be/jNUtSydVBsw (Podcast transcript is available to you here.)

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, by the late eleven hundreds,

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. Download Transcription as PDF 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,

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. Download Transcription as PDF 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.  

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. Download Transcription as PDF 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 Co...

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.

On June 8, 1974, President Richard Nixon dispatched Treasury Secretary William Simon and his deputy to Saudi Arabia in an attempt to strike one of the most critical—and secretive—economic deals in modern history. Three years earlier, in August 1971, Nixon had severed the final link between the US dollar and gold, officially ending the Bretton Woods system. That meant foreign governments could no longer redeem their dollars for gold, effectively turning the dollar into a pure fiat currency backed by nothing but political promises. After Nixon’s move, the US could effectively ‘print’ and spend as much money as it wanted—something that Congress enthusiastically embraced. Inflation soared, confidence in the dollar plummeted, and foreign countries began dumping dollars as a result. So Washington hatched a plan. The mission to Riyadh was a covert, high-stakes operation to engineer artificial demand for the dollar. They went to convince Saudi Arabia— the world’s largest oil producer— to sell its oil exports exclusively in US dollars. In return, the US would offer military protection, political support, and access to sophisticated weaponry. It was the birth of the petrodollar. Pretty much every country on earth was buying oil from Saudi Arabia. And if Saudi Arabia was only selling oil in US dollars, it meant that every country on earth had to continue to own US dollars... and by extension, continue buying US government bonds. This arrangement has continued for half a century and allowed the US to run massive deficits, ‘print’ money at will, and export inflation around the globe—all while maintaining an illusion of monetary stability. Today, there is once again grumbling around the world about reliance on the US and its currency. Even allies like France and Germany are actively working on diversifying out of the US dollar and investing their savings at home, rather than buying more US government bonds. In response, the Trump administration seems intent on resetting the global financial system and almost forcing foreign countries to continue holding US debt; insiders within the administration refer to it as the ‘Mar-a-Lago Accord’, and given the ongoing tariff announcements, it appears they are actually putting the idea into action. I wrote about this earlier in the week: this is an extremely high-risk gamble. But there’s one thing the US has going for it... a way to ‘engineer’ demand for US dollars and encourage foreigners to buy US government debt. Back in the 1970s, the need for oil forced foreign nations to continue owning US dollars. The oil of today is technology. And foreign nations will most likely line up to get their hands on US technology. The US is still the leader in advancements like AI and high performance computing, quantum, other advanced semi-conductor technologies, robotics, small scale nuclear, and more. Obviously other countries possess some of this technology; China still leads in supercomputing and has plenty of its own AI. But much of the core infrastructure— especially advanced semiconductors— is dominated by the United States. This is potentially an advantage that the US government might exploit (through export controls and more) in order to force foreigners to continue owning dollars... and Treasury bonds. This is the topic of our podcast today— and we also discuss: How the Mar-A-Lago Accord is an enormous gamble What happens to the US dollar if the gamble doesn’t pay off How they’re also might plan on dismantling Federal Reserve independence A 1960s-era economist’s view on why the reserve currency is doomed Peter Schiff’s father Irwin, and his testimony to Congress in 1968 And the right way to solve America’s debt problems You can listen in here. https://www.youtube.com/watch?v=N1E5Wkyr_HA (Podcast transcript can be downloaded here.)

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] It was the same way that a merchant in China in the nin...

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. Open Podcast Transcription [00:00:03.670] – Holly So the government got bigger this week. Are we celebrating?   [00:00:08.750] – Simon Ha ha, well, some people are.   [00:00:10.180] – Holly Some people are.   [00:00:11.470] – Simon That’s okay. The government did get a lot bigger this week because they just found another way to spend an absurd amount of money. And it’s interesting thing because this is their solution to everything. The solution to everything is we need, whatever the problem is, the solution is more government. And whatever the previous problem was that we solved with more government. Well now the problem is we need even more government.

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.

A few years ago, I was at a private conference listening to a CEO of a silver mining company explain—quite matter-of-factly—how silver prices were being manipulated. He laid out the whole playbook: how major Wall Street traders would flood the market with short positions in paper silver, drive the price down, and simultaneously accumulate physical silver at rock-bottom prices. Then, once they’d cornered enough physical supply, they’d let prices rise, selling into the momentum they themselves created. It was a textbook case of market manipulation—illegal, unethical, but enormously profitable. But what stuck with me wasn’t the CEO’s explanation. It was the reaction of some of the "finance elite" in the room. A few of them scoffed. You could practically see them rolling their eyes. Manipulate silver? Why would anyone bother? They arrogantly dismissed the notion outright. Fast forward a couple of years, and guess what happened? JP Morgan paid a nearly $1 billion fine for precisely this kind of manipulation. Several traders went to prison. Turns out, the “conspiracy theory” was, in fact, reality. The reason why it happened is because it could happen. Silver is a small enough market where a few large players can force those kind of price fluctuations. And to me, that is the primary reason why we likely won’t see a sustained run up in silver prices. Gold has now hit $3,000 per ounce. So could speculation drive silver to ridiculous heights? Absolutely. The Wall Street traders might even pull the reverse of what they did last time and intentionally drive prices up. But there is a key difference between silver and gold-- gold has an obvious catalyst for higher prices: central banks are buying up gold literally by the metric ton in their efforts to diversify away from the US dollar. The silver market, on the other hand, is simply too small to absorb that amount of capital. Gold also provides central banks with the best wealth density to easily store vast fortunes of value. Think about it like this— a barrel of oil is worth about $70. If you fill up that same barrel with silver, you’d have about $1.5 million of value. But fill it up with gold and suddenly it’s worth about $140 million! In other words, gold is the one of the most ‘dense’ forms of wealth in existence... and that’s the primary reason why central banks are loading up on it, instead of silver. We discuss all this in today’s podcast, as well as another precious metal that central bankers might consider accumulating— and it’s not silver. We also talk about what gold’s latest milestone means, if investors are too late to the party, and some alternative ways to gain exposure to what will likely be a continuing run up in gold prices. One of those alternatives is investments in profitable, well-managed precious metals companies which are at the moment incredibly undervalued. That’s because central banks are buying gold, not gold companies. The last three precious metals companies that we showcased in our 4th Pillar investment research newsletter fit this exact criteria, and are up 27%, 21%, and 40% respectively. We still think this is a very sensible approach worth considering. You can listen here. https://youtu.be/-KNn7mYehr8 Also, you can access the transcript of this video, here.

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.