Proof of Time: a different way to think about gold

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 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 on 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 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.


from Sovereign Research

The Eight-State Suicide Pact is advancing quickly…

By the early 300s AD, ancient Rome’s population was in significant decline.

Modern historians haven’t nailed down a precise number for Rome’s population— and estimates vary— but the clear consensus is that population peaked in the first or second century AD, and then began a rapid fall.

We know the reasons why. Roman citizens were sick and tired of the corruption, inflation, taxes, crime, social decline, constant chaos, etc. and they sought greener pastures elsewhere.

Bear in mind that this was happening at a time when the barbarian invasions had already begun. Every year there were more and more border incursions from the Goths, Alemanni, etc., many of whom stayed and settled in Roman territory.

This is an important to understand; even though Rome was gaining population from these migrant tribes, its overall NET population was still declining.

This means that the number of Roman citizens leaving must have been staggering.

But Emperor Diocletian decided to put a stop to all of it, and in the late autumn of 301 AD, he proclaimed his infamous Edictum De Pretiis Rerum Venalium, or Edict on Maximum Prices.

In addition to setting strict wage and price controls on EVERYTHING across the empire (in an absurd attempt to ‘fix’ inflation), Diocletian also ordered for taxes to increase… AND for everyone to be tied to the land.

No one could leave. No one could quit their job. All occupations were made hereditary, so children had to follow their parents’ profession. It was essentially the start of the feudal system.

Naturally Diocletian’s decree did not have its desired effect. Despite the emperor imposing the death penalty on anyone who did not comply, Roman citizens flouted the rules, and the population declined even more.

It’s hard to not think of this story when reading about the nascent suicide pact being discussed between several of the most ultra-progressive, high tax US states.

Earlier this month, the states of California, Connecticut, Hawaii, Illinois, Maryland, Minnesota, New York and Washington each introduced bills to impose state-level wealth taxes on residents.

This is not a coincidence. Politicians are deliberately coordinating with their counterparts in other states to ensure that the legislation passes in ALL of the eight states.

As one state senator put it, they are working together to ensure they don’t “get pitted against each other.”

Heavens forbid there’s actually competition among the states to reduce their tax rates and attract the most productive talent and businesses. That would be unthinkable.

So instead they’re all signing up for a terrible, destructive idea so that they can all be anti-competitive at the same time. It’s genius!

But of course, these people are totally delusional.

These are the states who, like Ancient Rome in the first and second centuries AD, have already  been losing a LOT of people.

California has said bye bye to hundreds of thousands of residents over the past few years since the start of the pandemic.

This isn’t a huge number in terms of the state’s overall population. The problem is, though, that a huge percentage of these people fleeing California are wealthy, high-income earners.

In other words, California is losing some of its most valuable taxpayers.

Remember that the top 1% of taxpayers in California pays roughly FIFTY PERCENT of the state taxes. So losing even a few hundred thousand people can be devastating to the state budget.

Ditto for some of the other states who have joined this suicide pact, like New York and Connecticut.

In fact Census Bureau data show these eight states are among those with the fastest declining populations. And those who leave tend to be higher-earning taxpayers. So their state budgets are being gutted.

It’s also clear that the people who leave aren’t going to other high-tax, ultra-progressive states. Californians aren’t leaving en masse so they can live in New Jersey or Illinois.

Instead, they are moving to low tax, low regulation states like Nevada, Idaho, Texas and Florida. And this new wealth tax movement will likely cause an even greater exodus.

Of course, California has a plan for that too. If its wealthier citizens decide to leave, California’s government will simply continue to enforce the tax even AFTER people relocate to another state. Not even Diocletian thought of that!

(Naturally that would be completely illegal, and the State of California’s petty arrogance will be eviscerated by the Supreme Court at some point down the road.)

It’s not just individuals; businesses are also relocating out of these states. A report from the Hoover Institute found that Texas was the number one destination, attracting at least 114 businesses which were previously based in California from 2018-2021.

Obviously this business migration trend is going to have an even deeper impact on California’s state tax revenue.

But, just like Diocletian, they’re willingfully taking a bad situation and making it much worse. Rather than simply stop the destructive behavior that’s making everyone want to leave in the first place, the politicians are doubling down and giving people even more incentive to relocate.

It’s hard to imagine that such a level of incompetence could actually be real. And yet it is.

Fortunately this is a very easy problem to solve.

First, it’s important to recognize that, whatever these politicians promise, their so-called wealth tax is NOT just for the ultra-wealthy.

Perhaps at first it will only affect $50MM+ households. But like nearly all taxes, it will eventually find its way down to the professional class, then upper middle class, etc.

Remember that even the original income tax was first meant to only hit the ultra-wealthy.

But soon the thresholds were lowered and the tax brackets expanded to cast a very wide net.

Same with the Alternative Minimum Tax; it was initially passed as a tax on a handful of people. Today it ensares millions.

Wealth taxes will likely be no different. The tax base will expand, the tax rates will increase, and before you know it, it will be part of your annual tax ritual. Never underestimate the potential creep of a new tax.

Second, also recognize that where you live ought to be a deliberate decision. Obviously everyone has a personal choice to make. But it’s an important decision, affecting everything ranging from potential wealth taxes, to how your children are being indoctrinated educated.

It makes sense to examine your values and priorities, and then make a decision about the best place to be.

Prioritization is important. No place is perfect. No place will tick every single box on your list. But you will likely find somewhere that matches the most important priorities, plus a few nice-to-have’s.

If taxes and freedom are priorities, you might see a significant boost by moving to another state where your values are shared.

There’s also the possibility of moving abroad, which can often have an even larger impact on lifestyle.

And although US residents are taxed on their global income, you can use the Foreign Earned Income Exclusion to make $120,000 in 2023 without owing taxes to the US. When you double that for married couples, and add in the housing benefit, you’re at roughly $250,000+ in nearly tax-free earnings.

You could also consider going to Puerto Rico— a US territory that sets its own tax rates.

In Puerto Rico you could cut your income tax rate to 4% and your capital gains to 0%. Those who qualify, and meet some other conditions, will owe nothing to the federal government. In many cases you don’t even have to file a federal return anymore.

Even if you’re not ready to go… or you have certain constraints in your life preventing a move at this time, it at least makes sense to consider where you might go just in case you need to make that decision down the road.

Do the research and analysis now. It will make life much easier in the future.


from Sovereign Research

A potential property option for Italy’s Golden Visa program in 2023?

When discussing the best places to live or retire in Europe, it’s impossible to overlook Italy. Boasting gorgeous landscapes, friendly people, a rich cultural history as well as reasonable living costs – especially in its southern regions – Italy is a fantastic lifestyle destination.

Italy Cost Of Living 2023

Renowned as the home of La Dolce Vita – The Sweet Life – Italy is also gaining acclaim for its so-called “La Dolce Visa” – the country’s investor residency program.

The fact that Italy does not offer a property investment option under its Golden Visa program is one of the only reasons that it isn’t a top Plan B destination in the EU.

Moreover, many people would also argue that, in the absence of a property investment option, its investor visa isn’t a “true” Golden Visa at all.

But a new piece of draft legislation, Bill DDL S 2498IF approved in 2023 – could pave the way for the introduction of a number of new real estate options for the program. (More on this below…)

However, before we get into the proposed program changes, let’s recap the current investment options first.

The Italian Golden Visa Investment Options for 2023

As things stand as of January 2023, you can obtain an Italian Golden Visa by investing:

  • €2 million in Italian government bonds
  • €1 million in projects of national interest
  • €500,000 in an Italian public companies
  • €250,000 in an innovative Italian startup

After five years of total residency, you can apply for permanent residency and then sell your investment, if you so choose.

As you can see, the minimum investment amount is a very reasonable €250,000 (in an Italian startup). But… While this price point is on a par with the Greek Golden Visa (RE option), it carries a far greater level of capital risk.

In fact, with tech oriented startup investments, the risk of a total loss of capital is exceedingly high…

So this makes the cheapest Italian Golden Visa option applicable to a very limited number of applicants only. And if you want to invest in the Italian stock market (and thus, in more mature Italian companies), the minimum investment amount goes up to €500,000.

So what is Draft Bill DDL S 2498 all about?

IF approved, the bill could pave the way for the introduction of a number of real estate options. The proposed new program options would include:

  • €1.5 million+: Italian properties located in large cities and adjacent metropolitan areas – think Milan or Rome.
  • €1 million+: Italian properties located in provincial capitals and municipalities with a population of 25,000 or more, e.g. Bari, Gallarate, Verona, Carpi, Venice, Siena, etc.
  • €750,000+: Italian properties located in municipalities with a population of less than 25,000, e.g. Pompei, Vignola, Cardito, Fasano, etc.

And even though these property options would be a very welcome addition to the program, the proposed price points are likely not going to compete very well with the property offerings in Portugal (€280K+), Greece ( €250K+) and Spain (€500K+).

And as mentioned, the Italian program’s €250,000 startup option is not particularly attractive.

Consequently, the majority of program applicants opt to invest €500,000 in a mature Italian public company instead.

But there is more potential good news though…

If approved, the proposed bill would also reduce the minimum startup investment to just €200,000 (from €250,000), and the Italian stock investment option to €400,000 (from €500,000).

Plus, to further boost the program’s appeal – and to match Greece’s offering in this regard – the proposed legislation will increase the initial residency permit validity to five years, renewable at five-year intervals.

The current initial validity is two years, renewable for an additional three years.

(The five-year mark is when you should also be able to apply for permanent residency as well.)

And the plan is to raise the maximum age of dependents from 18 years to 21 years, too.

But all of the above will only transpire if this legislation is passed in its current form…

The bottomline

For a large portion of folks we know, living in Italy – even part time – would be a dream come true. And while the Italian Golden Visa offering isn’t a slam dunk yet, it is most certainly one to keep an eye on going in 2023…


from Sovereign Research

So you’re telling me there’s a chance…

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 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 you’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.


from Sovereign Research

They finally figured out how to lower inflation!

We all know that inflation has been well above the Federal Reserve’s target rate of 2% for nearly two years now.

It peaked at over 9% last June and has remained stubbornly high since then.

But it seems like the bureaucrats have finally found a way to reduce inflation.

No, it has nothing to do with reducing regulations, cutting taxes, and re-embracing capitalism.

The bold solution that our courageous policymakers have come up with is to change the way inflation is calculated.

So rather than actually stop the destructive things they’re doing that are actually causing inflation, they’re simply inventing a new way of calculating it. It’s genius!!

The US Bureau of Labor Statistics (BLS) announced that, beginning this month, they will calculate the Consumer Price Index (the CPI, which is one of the key benchmarks of inflation) in a different manner..

But they’ve actually provided very little information about how they’re going to do that (and nothing builds confidence more than a total lack of transparency).

One small detail that we do know is that they’re only going to us one year’s of consumer expenses to calculate long-term average price weights.

But they don’t give us any more information than that.

For example, will they use average or median consumer expenditures for the year? Will they weight the first three months of the year, which had low inflation, higher than the final nine months of 2021?

Without more information, we can’t know exactly how the changes will affect inflation numbers.

But it’s a safe bet that they’ll choose weights which make inflation appear lower on paper.

This tactic of “moving the goalposts” to achieve the outcome they are looking for is becoming something of a trend…

Last year, the United States experienced two consecutive quarters in which the economy shrunk.

This has long been the standard criteria to define a recession in practically every corner on earth.

But the White House conveniently argued in July 2022 that this method is “neither the official definition nor the way economists evaluate the state of the business cycle.”

Instead, the US government says that the “designation of a recession is the province of a committee of experts…

Perfect! Who needs clear, unchanging definitions of words when we have experts to make up new standards on the fly? And when have the experts ever been wrong before?

They also did this during the pandemic, when Lord Protector Fauci refused to define what ‘herd immunity’ meant, or give any specific measure that would tell us we could take off the masks.

But when it comes to inflation, we don’t need the “experts” to tell us that it is driving up costs. We all know this when we go to the grocery store, look at home listings, and fill up the gas tank or oil burner.

And we’ve discussed the reasons for this on many occasions.

There are extremely inflationary forces at work that didn’t exist for decades.

For example, the world has been in a state of relative peace for quite some time. For decades there were no major wars, and most countries were happy to trade and get along.

But that’s no longer the case. We’re involved in a proxy war in Ukraine, and China has ramped up its divisive rhetoric.

Conflict is inflationary. Conflict makes it harder to trade among nations. It means countries become insular and impose sanctions and tariffs instead of opening up for business.

You don’t need a PhD in economics to understand that will lead to higher costs.

Another factor is that, for a long time, the manufacture of American consumer goods such as clothes and electronics trended cheaper, creating higher profit margins. And that savings was passed on to consumers.

But those days are done.

Slowly, as China’s economy grew, it was no longer so cheap to offshore manufacturing there. So the US moved to Indonesia, then Vietnam, and now Bangladesh… each of which saw its own economic growth.

Now there’s nowhere left to turn to make cheap stuff. Instead, there is an on-shoring movement to bring manufacturing back to the United States and Europe. That is obviously going to be inflationary.

Energy prices are another huge driver of inflation. History is clear that it is not just about cheap prices, but the return on energy invested. The more energy it takes to produce more energy— whether that’s hydrocarbons, solar, or whatever— the less return there is on energy invested.

And like reduced profits, that means there is less energy leftover to grow.

But not only are we having to drill deeper and explore harder to find new sources of energy. The investment to do so has been choked out by governments and environmental fanatics who demonize the entire industry.

And with all these headwinds, the US government is still borrowing well over $1 trillion a year to fund its deficit spending.

So despite the celebration over a couple months of inflation trending downwards, it is disingenuous for the “experts” to claim that inflation is falling, and the worst is behind us.

In mid-2021, at the beginning of this inflationary period, I wrote that inflation is not a passing fad that’s here one day and gone the next. It is a long-term phenomenon. Some months it will be higher, some months it will be lower. Some years it will be higher, some years it will be lower.

But over the long-term, inflation will continue driving prices higher, and making people less prosperous.

I’m not saying there will be hyperinflation. But the unprecedented last couple of decades of sub-2% inflation are likely gone.

At this point, if inflation drops to, say, 4.5% we will likely see victory celebrations from the Fed and US government.

But regardless, it makes it pretty hard to trust their numbers when they just go and change the way it’s calculated.

And that is why the official inflation numbers should have little bearing on the decisions you make.

You are far more equipped than a room full of experts to figure out how big a problem inflation is to you. Just walk down the aisles at your local store.

And if you determine that inflation is a problem, consider taking refuge in real assets.

Throughout history whenever inflation hits, it’s almost invariably been a good idea to have direct ownership of an asset that cannot be conjured out of thin air by a central bank.

Real assets include things like productive land, shares of a well-managed private business, or physical gold and silver.

Most people don’t have an easy opportunity to buy productive land or shares of a well-managed private business.

But gold and silver are totally within reach.

Yet despite the highest inflation in decades last year, gold was pretty flat.

Now it is starting to tick up, but is still about $150 dollars off its all time high of around $2,060 per ounce in 2020.

And silver costs less than half the price of its all time high of around $50.

But the reason to buy precious metals is not price speculation.

Short term, there are many different factors that drive the price, and it does not align perfectly with inflation. But it is driven by supply— which is relatively constrained— and demand— which is largely driven by central banks buying boatloads of gold, not retail investors buying coins.

Gold isn’t going to shoot to the moon like meme stocks or DogeCoin.

But long term, gold has been the best protection against inflation throughout history.


from Sovereign Research

What does this look like 10 years from now?

On March 2, 1629, after years of escalating tensions with his own government, King Charles I of England dissolved parliament and ordered all the politicians to go home.

He was only in the fourth year of his reign, but Charles was already a very unpopular king. One of his worst habits was frequently abusing his power and taking unilateral executive actions– raising taxes or passing new regulations– which would ordinarily require the approval of parliament.

But Charles hated going through parliament, and he routinely found ways to bypass them; often he would creatively interpret obscure passages of ancient laws as justification to do whatever he wanted.

In one instance, Charles decided that a 400+ year old law, which had first been decreed under Henry III in the early 1200s, gave him the authority to demand payment from everyone in the country making more than 40 pounds per year. It did not.

In another example, he claimed that ‘tradition’ entitled him to collect customs and duties on various imports, even though English law clearly required parliamentary approval on all imposts.

Charles also famously demanded money from wealthy merchants and banks, calling them “forced loans”. He even seized literally TONS of silver from royal mint that was being stored on behalf of wealthy individuals and foreign governments.

Parliament made attempts to block Charles; when he asked for money to raise an army and go fight in the Thirty Years War (which had been raging in Europe since 1618), parliament refused. When he wanted funds to bail out a close relative in Denmark, parliament again refused him.

Sometimes their disputes even spilled into the courts, where judges had to determine the legality of the king’s taxes and regulations.

But nothing was ever settled, and no compromises reached. In fact the conflict continued to escalate, until Charles finally dissolved parliament in 1629… effectively shutting down the government.

This is an often-repeated story throughout 5,000+ years of human history; there have been countless examples of dysfunctional governments and terrible leadership that fail to reach a rational compromise over the nation’s finances.

And such examples tend to be a hallmark of a nation in decline.

In the case of Charles, he would go on to be arrested, tried, and executed, and England plunge into a civil war.

Louis XV of France, and his successor Louis XVI, also routinely fought with their parliaments over royal finances. France would soon go bankrupt and dive head-first into revolution.

These are lessons worth noting, given that the United States government is once again at the precipice of default.

The national debt now stands at nearly $31.5 trillion. This is the current statutory ‘debt ceiling’,

meaning that the Treasury Department no longer has the legal authority to borrow more money.

This means that yet another government shutdown is potentially on the table, as is a default on the national debt.

If this story sounds familiar it’s because this has already happened in recent history– in 2011. And 2013. And 2018. And 2019.

Now it’s happening again. And unsurprisingly, both sides have dug in and claim they are unwilling to negotiate their demands.

To say this is yet another humiliation for the United States is a massive understatement. The entire world can see that, not only is the US government incapable of managing its finances… but also that its politicians cannot rationally solve problems. It’s pitiful.

What I really want to focus on today, however, is the future: what do you think this problem will look like 10 years from now?

Today it’s already a terrible embarrassment… and a major problem.

The national debt is so big that, this fiscal year, the Treasury Department will spend close to $1 TRILLION just to pay INTEREST.

This is happening at a time when:

1) Interest rates are rising (which means that the government’s annual interest bill will increase)

2) The economy is slowing (so tax revenues will decrease)

3) Government spending is still outrageous, with a $1+ trillion deficit expected this fiscal year

This is a pretty disastrous scenario. And if you plot this trend line starting from where we are today, it’s easy to imagine what might happen over the next decade.

If deficits are already $1 trillion per year right now, how high will they be in a decade? If the national debt is $31.5 trillion today– roughly 120% of US GDP– how high will it be a decade from now?

It’s silly to assume that the United States can simply keep growing the national debt forever without consequence. It’s silly to assume they can run trillion dollar deficits every year without consequence.

Today those consequences are just embarrassments and minor inconveniences. Ten years from now they may be major catastrophes.

This is the entire point of having a Plan B. The future is far from certain– and it’s possible that voters finally elect competent leadership who act responsibly and arrest the nation’s decline.

And that’s a nice hope, and it would be great if it happens.

But it’s a lot more rational to focus your energy on things that you can control. And that’s a Plan B.

If your government is on a clear path to more humiliation and fiscal ruin, it makes sense to ensure you don’t have all of your eggs in one basket.


from Sovereign Research

The one thing that Ron DeSantis and Greta Thunberg agree on

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 “stakeholder capitalism” is Larry Fink, who is also in Davos this week, and sits on the WEF board of trustees.

Fink is the CEO of BlackRock, a firm which controls $10 trillion worth of global corporations.

Their vision is “woke” corporations working in tandem with governments to “force behaviors” for what they decide is the greater good.

What might that look like? Well, the WEF has seriously suggested we’ll have to get used to eating bugs and weeds.

And last year, the WEF published an article called, “Psychologists say a good life doesn’t have to be happy, or even meaningful.”

Living through war or a natural disaster might make it hard to feel as though you’re living a particularly happy or purposeful life, but you can still come out of the experience with psychological richness.”

So don’t worry, the WEF says, if you experience hardships such as “infertility, chronic illness, [and] unemployment.”

A 2016 article published by the WEF declares “Welcome to 2030. I own nothing, have no privacy, and life has never been better.”

When it comes to personal choices, the author writes, “I just want the algorithm to do it for me. It knows my taste better than I do by now.”

These ideas are comically stupid, and the organization has lost credibility.

Most notably, Florida governor Ron DeSantis AND climate she-ro Greta Thunberg BOTH criticized the WEF as an irrelevant, destructive organization. Those two are about as far apart politically as it gets. And yet they agree that the WEF needs to shut up.

This is the topic of our podcast today.

We start off talking about (unsurprisingly) a historical example of a small group of non-government elites having major influence in government policy.

This is nothing new; in fact it’s quite common for arrogant, narcissistic ‘experts’ to force their ideas on to a society.

The WEF is only the latest modern incarnation. And even though it has lost much of its credibility, it’s important to remember there are always going to be ‘experts’ out there who want to tell you how to live your life.

This is ultimately what ‘freedom’ means. The word by itself almost sounds corny or cheesy. But ultimately we’re talking about your right to make your own decisions and control your own life.

If you don’t care about your freedom, you can’t expect anyone else to care about it. More appropriately, you can probably expect others (like the WEF) to try and take it away.

And that’s why it makes so much sense to have a simple, sensible Plan B. Because there are just too many of those lunatics out there.

Click here to listen in to this week’s episode.


from Sovereign Research

Thailand Elite Visa Program 2023: What are the Pros and Cons?

Thailand, for decades, has been a bucket list destination for backpackers, retirees and long-term travelers. Yet in terms of its long-term visa options, the choices used to be limited. Fortunately, the arrival of the Thailand Elite visa program in 2003 changed all of that. Let’s have a look at the program’s pros and cons below…

Thailand Elite Visa: Is it worth it in 2023?

Thailand is renowned as one of the world’s top travel destinations. The country’s islands and beaches are world renowned, and Chiang Mai, in the interior, is a hub for remote workers.

In 2019, the country welcomed over 39 million tourists, and its capital, Bangkok, won the title of “Most Popular City Destination – 2017” in the Mastercard Global Destination Cities Index.

Plus, given the country’s low cost of living, it is an obvious option for long-term, budget conscious travelers – like digital nomads, as well as retirees. (We gave the country a score of “3/7 – Inexpensive” in our Sovereign Cost of Living Index.)

Yet as in many other parts of Asia, the Thai authorities would love you to come visit – but generally not to stay there permanently.

The Thailand Elite Visa program passed the 20,000 membership milestone in 2022. The pandemic saw the program’s popularity surge, especially among Chinese nationals, who were trying to escape the draconian lockdowns in their home country.

But whether the program will work for you – or not – will mostly depend on what your objectives are.

And while none of Team Sovereign Research have had the need to apply for the program, we’ve had some friends and associates who use (and love) the program, and are now living the good life in the Land of Smiles.

How the program works

The Thai Elite program is essentially a VIP membership club that entitles you to the so-called Privileged Entry (PE) Tourist Visa.

It’s worth highlighting that the Thailand Elite Visa is NOT a classical residency program like the D7 or the Non-Lucrative Visa. All it buys you is time-limited access to the country. It will expire, and at that point you will have to pay again if you wish to continue staying in Thailand.

The program has a variety of membership tiers – valid for 5 years, 10 years, and 20 years, respectively – and each tier has differing benefits. Technically, each visa lasts only five years, but in the higher membership tiers, at least one renewal is included in your application fee. On the top tier, for example, you become eligible to stay in Thailand for as long as 20 years.

But keep in mind that on any membership tier you will only be able to stay in Thailand uninterruptedly for one year, after which you will have to leave the country – or apply for an extension.

The membership tiering at a glance

Pros and cons of the Thailand Elite Visa program

Is the Thai Elite Visa worth it? We let you decide below – starting with the cons…


IT’S NOT A RESIDENCY PROGRAM: The key “shortcoming” of the program is that it does not lead to any sort of permanent legal status in Thailand (i.e. permanent residency or citizenship). The program is essentially what one critic called a “glorified tourist visa” – albeit one that allows you to spend up to 20 years in the country.

So if your plan is to gain permanent residency, or to naturalize outside of your home country, then Thailand is a non-starter.

IT’S EXPENSIVE: With a base program pricing of $18,238 for a single applicant – that’s $3,647 per year, or $304 per month – the Thailand Elite Visa is pretty pricey.

Only you can decide if it’s worth it, BUT… Considering that accommodation is over 40% higher in a city like Lisbon than in Bangkok… and that restaurant meals are over 90% higher in Lisbon than in the Thai capital… you can see how the overall cost of living in Thailand could be significantly more affordable.

YOU CAN’T GET A JOB THERE: You need a work permit to get a job in Thailand, and the Thailand Elite Visa does not offer this as a perk. (Remember, you’re technically a tourist.)

THERE’S STILL RECURRING VISA ADMIN INVOLVED: Even though you’re on a VIP tourist visa package, you still have to report to the Thai immigration authorities every three months. Or, to be precise, your passport does…

But rather than going down to the immigration authorities offices and standing in line with regular visa holders in that signature Thai humidity, you can simply drop your passport off at a Thailand Elite Visa office – they’ll complete this step for you.

(Thailand Elite have offices in Bangkok, Pattaya, Phuket and Chiang Mai.)

Alternatively, you can also do it yourself online, by mail or in person at your nearest Thai immigration office.

But now, let’s look at the program’s benefits…


A SIMPLE ONLINE APPLICATION PROCESS: Unlike with various other digital nomad visas and residency programs, you won’t need to visit a Thai embassy to apply for your Elite Visa. You can simply complete the process online here.

FAST VISA PROCESSING: Once you’ve submitted your application online, you can expect to get approved in around four to six weeks.

AMPLE LIFESTYLE PERKS: Apart from the visa itself, you can look forward to a VIP airport meet-and-greet service, exclusive airport lounge access, fast-track airport security checks, as well as access to a 24 Program Concierge line and up to 24 limousine rides per year from your hotel or residence to the airport.

Moreover, some of the higher program tiers – such as the Elite Ultimate Privilege Membership – offers some very exclusive perks, including complimentary golf green fees (24 vouchers per calendar year), 24 spa treatments per calendar year, as well as a complimentary annual health check-up.

SPECIAL MEMBERSHIP DISCOUNTS: Visa holders also benefit from exclusive discounts at King Power Duty-Free branches, select hotels, dining establishments, leading department stores, shopping malls, and more.

The bottomline

Many commentators in the investment migration industry are quick to point out the Thailand Elite Visa program’s shortcomings – most notably the fact that it won’t lead to Thai PR or a passport.

But if you’re simply looking to enjoy long-term stints in Thailand – without the usual visa hassles, and sweetened by some convenient lifestyle perks – then the Thailand Elite program could be well worth considering.


from Sovereign Research

The easiest 833x return you will ever make

At precisely 8:13PM eastern time on the evening of October 28, 2003, a lonely 19-year old schoolboy took to the Internet to complain about the latest love interest who had left him dejected and angry.

“Jessica,” he wrote to the precisely zero people who paid attention to his LiveJournal blog, “is a bitch. I need to think of something to take my mind off her. I need to think of something to occupy my mind. Easy enough, now I just need an idea.”

It took about an 90 minutes… and a fair amount of booze… for inspiration to strike. And by 9:48PM he wrote an updated post, describing his “idea”.

He wanted to hack into the school’s official servers and download the photographs of every student on campus; he would then write a program that would randomly select two of those photos, place them side-by-side on a website, and allow other students to vote on who was more attractive.

At 11:09PM, his new website was complete. He called it FaceMash, and it attracted 22,000 page views in the first four hours.

The website’s creator, of course, is Mark Zuckerberg. And his FaceMash site eventually went on to become Facebook (originally called ‘The’ Facebook).

It was an instant sensation among users and quickly began to attract venture capital firms. Investor Peter Thiel bought 10% of the company for $500,000 the following year, in September 2004.

Three years later it was worth $15 billion. And when the company went public in May of 2012, it was worth more than $100 billion.

Today Facebook’s stock market capitalization is about $350 billion. So investors who bought in at the IPO 12 years ago have made about 3.5x their money, or about 12% per year. That’s a very solid return.

And of course, investors who were able to buy Facebook shares when it was still private are up 20x or more, which is incredible.

But returns like this are nothing compared to another investment where you can easily and consistently return 100x to 1,000x.

I’m talking about tomatoes.

Yes I’m serious.

Think about it: you can buy a pack of 100 organic, non-GMO ‘beefsteak’ tomato seeds for about three bucks (real price at WalMart). That works out to be 3 cents per seed.

It takes minutes (really seconds) to plant a tomato seed, after which, within a week or two, life will come bursting out of the soil. Before long, a full, healthy plant will have grown and begin producing tomatoes.

One plant can yield about 10 pounds of tomatoes. And even at a discount grocer, organic tomatoes cost at least $2.50 per pound.

So from a single seed (3c investment), you get $25 worth of tomatoes… a return of 833x. And given how quickly tomatoes grow, you can generate that 833x return in about four months. Pretty astonishing.

Now, tomatoes obviously require a little bit of work. They need some water, and, depending on where you live, occasional weeding and de-pesting.

But any investment requires work. Even owning Facebook stock means keeping up with quarterly reports and earnings calls (which any investor should absolutely be doing). And frankly it’s a lot more fun to be out in the garden than analyzing a company’s annual financial audit.

It’s not just tomatoes either. A lot of micro-scale agriculture comes with ridiculously high returns.

An egg-laying chicken, depending on breed, can run around $30 (though some are cheaper and others more expensive).

Chickens lay roughly 1 egg per day under the right conditions. And at roughly 30c per free-range, organic egg at the grocery store, your investment return works out to be 1% PER DAY. Junk bonds, by comparison, yield around 8% per year.

Fruit trees are another great example. A backyard apple tree can cost around $20 to $30, and, depending on species and other factors, it can yield about 50 pounds per season after several years once it begins bearing fruit.

At $1.50 per pound of organic apples, that’s $75, or about 3x per season. And the trees can produce for decades… so you could end up making 100x or more, while also increasing the value of your home.

Now, my point here isn’t to encourage you to become a tree farmer or to start raising chickens in your backyard… and certainly not to abandon sensible financial investments.

(Nor do I want to trivialize agriculture; just like any other kind of investing, you have to know what you’re doing in order for it to work.)

But we do live in a bizarre world where pessimism seems to a dominant force. And it’s easy to understand why.

This ridiculous war is dragging on forever. Inflation is still far too high. Politicians are still far too destructive. Corporate layoffs are piling up. The stock market is falling.

Plus everyone seems to be talking about recession. ‘Experts’ are making predictions about how likely it will happen, when it will come, how severe it will be, etc. Their gloom is almost becoming a self-fulfilling prophecy.

The anticipation alone is agonizing; these forecasts for recession are like waiting on pins and needles for the oncologist to call with our cancer screening results: good or bad, we just want to get on with it already.

So it’s easy to feel frustrated these days, and even a little bit out of control.

And my comments on micro-scale agriculture are really just to show that there are small opportunities available to us every day to take back control.

It doesn’t have to be complicated or exotic.

Something as simple as planting a tomato seed is an easy way to start taking back control… while generating a return that makes Facebook stock look pitiful by comparison.


from Sovereign Research

Challenge and Response

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.


from Sovereign Research