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Digital Nomad Visas offer straightforward residency options around the world, and sometimes even get paired with special tax deals. But did you know that you don’t have to go abroad to benefit from working remotely? Today we look at five places in the US that will actually pay you to move there – in the form of financial incentives for new residents…

Relocating can come with a host of potential benefits, ranging from enhanced quality of life to radically reduced accommodation costs – and even substantial state tax savings.

Since the pandemic, we’ve heard from many of our readers who moved elsewhere in search of more freedom, lower living costs and access to better opportunities.

Some moved to benefit from lower state taxes or greater homeschooling freedom.

Others moved to the countryside – or even to places like Costa Rica and Mexico – in order to skirt the oppressive mandates and city dramas where they lived.

Simultaneously, attracting new, younger residents is vital for any town or city to flourish.
But upping sticks – even to move across state lines – is not exactly a trivial decision, and so an increasing number of states, towns and cities are offering juicy financial incentives to lure new residents.

Here are some of the top ones we found…

Places offering financial incentives for new residents in 2023

1. TULSA, OKLAHOMA: The Tulsa Remote program offers $10,000 in cash and additional benefits to remote workers – either US citizens or green card holders – who relocate to Tulsa.

However, you can’t already be living in Oklahoma, and you have to apply for the program before purchasing or renting a home there. Importantly, you have to be employed remotely for a company located outside of Oklahoma on a full-time basis …

2. ALABAMA (SHOALS AREA): Remote workers are increasingly spoilt for choice when it comes to these types of relocation incentives. Alabama, too, is looking to attract digital workers, and its Remote Shoals program offers $10,000 in cash for qualifying applicants who move there.

You’ll have to move to an eligible city in the Shoals area – including Florence, Muscle Shoals, Tuscumbia and Sheffield – within six months of being approved. You’ll get to bank 25% ($2,500) of this incentive up-front, followed by an additional 25% after six months, and the remaining 50% ($5,000) after completing one year there.

Like with many competing relocation incentives, you’ll have to be at least 18 years old and eligible to live and work in the US when applying. You’ll also have to be earning a minimum annual income of at least $52,000.

Plus, you’ll have to be employed full-time, on a remote basis, by a company outside of Colbert and Lauderdale Counties.

3. WEST VIRGINIA: Is outdoor living your thing? Thanks to a program called Ascend West Virginia, moving to one of several participating mountain communities in the state could earn you $12,000 in cash… And free access to a coworking space.. Plus $2,500 in vouchers for outdoor recreational gear rentals and related activities.

In the first year of moving there, you’ll receive $10,000 in monthly installments (i.e. $833 per month). And after completing your second year of living there, you’ll receive an additional $2,000 bonus.

You must be at least 18 years old, and be a US national (or have a green card) to apply. In addition, you must either work remotely or be self-employed outside of West Virginia (with the ability to work remotely) on a full-time basis.

You must also be able to relocate there within six months of being accepted.

4. ROCHESTER, NEW YORK: If you’re a remote worker currently living within 300 miles of downtown Rochester, New York, the Greater ROC Remote program wants YOU… to move there.

The program will pay up to $10,000 to cover your relocation expenses, and you can apply for an additional $9,000 grant if you’re buying a home there.

You’ll have to be 18 years or older, and be allowed to live and work in the US. Crucially, you already have to be employed full-time as a remote worker.

And again, you’ll have to be able to relocate within six months of being approved under the program.

5. HAMILTON, OHIO: The Hamilton Community Foundation offers up to $10,000 in financial assistance to recent college graduates who move to Hamilton.

The Talent Attraction Program (TAP) Scholarship is a “reverse scholarship”, which offers recent graduates assistance with student loan debt. Successful applicants may receive a total of up to $10,000 (at a rate of $300 per month).

However, if you cease employment, or move out of a designated neighborhood before the total funds have been disbursed, you will forfeit the right to any future payments.

To be eligible for the TAP Scholarship’s benefits you must:

• Have graduated, within the last seven years, from a STEAM program (Science, Technology, Engineering, the Arts, or Mathematics).
• Not currently be living in any of the designated areas in Hamilton, but you must plan to move to one of several eligible locations in the city.
• Be employed within Butler County, or employed full-time in a remote professional position.

And if none of these tickle your fancy, there are a fair number of other alternatives.

In next week’s episode, we’ll also unpack some of your international options, too…

In conclusion

For those with a sense of adventure, the world is brimming with new experiences and potential avenues for growth. Moving to the featured locations may not be for everyone…

But if you’re young(ish), employed remotely, recently graduated or simply looking to get out of your comfort zone, a deal-sweetened move to one of these destinations could be well worth the effort.

PS: Check out the latest episode of the Sovereign Podcast here for a number of important lessons from one of history’s BIGGEST scumbags…

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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.

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In 2021, Malaysia’s My Second Home (MM2H) visa program became way more expensive. Fortunately, the country’s autonomous Sarawak Province had a far more accessible regional version of the program.

And now, Sabah Province is following suit by launching its own affordable MM2H program…

Malaysia’s MM2H Visa: A quick recap of recent program changes…

In 2021, the financial requirements for the federal Malaysia My Second Home (MM2H) program became radically higher, which came as bad news for prospective applicants. (Foreign residents already living in Malaysia were eventually allowed to renew their visas under the old rules after a widespread outcry.)

Fortunately for new applicants, Sarawak Province launched a far more accessible provincial version of the federal MM2H program – although you’ll have to reside in Sarawak (details below).

And now, in February of 2023, Sabah Province has followed suit with its Sabah MM2H Visa program…

Note: Of the 13 Malaysian states, only two enjoy autonomy when it comes to their immigration policies –  Sarawak, and Sabah. Both are situated in Borneo, the island shared by Malaysia, Indonesia and Brunei. Sarawak and Sabah only joined Malaysia in 1963, and hence they were granted a certain level of provincial autonomy.

Why a move to Sabah in Malaysia could make a lot of sense…

Situated around 2,000 miles east of the country’s capital, Kuala Lumpur, Sabah Province is a tropical island paradise.

Boasting lush rainforests and crystal-clear waters, there is no shortage of beautiful landscapes to explore. And if you’re into hiking, outdoor living and particularly watersports, you’re in for a treat here.

The province is home to a rich cultural heritage, comprising a mix of Malay, Chinese, and indigenous cultures. Its cuisine is sumptuous, and includes local specialties like fish noodles, coconut pudding, and rice dumplings.

Sabahans, as the locals are known, are famous for their warmth and hospitality, and it’s the kind of place you could settle into and really become part of the community.

And perhaps best of all, the cost of living here is really affordable. Malaysia, on average, scores a “2/7 – Very Cheap”, in the Sovereign Cost of Living Index, and a family of four could live quite well on around $4,000 per month (rent included).

And while we don’t have a specific price estimate for Sabah, it's one of the cheapest provinces in Malaysia. So your cost of living there is likely going to be dirt-cheap.

Plus, with the addition of an attractive visa option, this deal gets even sweeter…

What we know about the new Sabah MM2H Visa program (thus far)...

On Tuesday, February 2, Sabah Minister for Culture and Environment, Datuk Christina Liew, confirmed a number of salient aspects of the incoming Sabah MM2H program during a press briefing.

Some of the confirmed details included one of the program’s financial requirements (the local bank deposit option), a health screening requirement, as well as the minimum stay requirements.

The program’s presence requirements match that of the Sarawak provincial MM2H offering (30 days each).

And while Sabah’s minimum deposit requirement for single applicants is just 20% of that of the federal program – RM200,000 (~$45,000) vs RM1 million (~$225,000) – it is 25% more than that of Sarawak. (The latter requires a deposit of RM150,000 (~$33,500) for single applicants.)

As of this writing, we don't know if, besides deposit requirements, there will also be income requirements, as is the case with the Sarawak and Federal programs, but will keep our readers updated…

According to local media reports, the program seeks to aid in the province’s post-pandemic recovery, while also capitalizing on the changes to the federal program. In addition, the provincial authorities seek to attract more applications from Chinese nationals.

Interestingly, the program will feature a health screening requirement, and visa holders will only be allowed to buy properties in Sabah that have a value of more than RM600,000 (~$134,000).

Let’s compare the Sabah program’s known requirements against those of the federal and Sarawak MM2H programs based on what we know thus far:

Requirements	Sabah MM2H	Sarawak MM2H	Federal MM2H  (2023 conditions)
Financial Requirements	Monthly income thresholds to be confirmed… Deposit in a Sabah bank:  RM200,000 (~$45,000) per single applicant; Minimum deposit requirements for couples and families TBC	a) Demonstrate monthly income:  RM7,000 (~$1,563) per month per single applicant; RM10,000 (~$2,234) per month per married couple AND… b) Deposit in a Sarawak bank:  RM150,000 (~$33,500*) per single applicant; RM300,000 (~$67,000*) per married couple	Need to do both: a) Demonstrate monthly income:  RM40,000 (~$8,936)  AND…  b) Deposit in a Malaysian bank:  RM1 million (~$225,000)*
Demonstrate Liquid Assets	Requirement TBC	N/A	RM1.5 million (~$335,000)
Minimum Stays	30 days per year (in Sabah)	30 days per year (in Sarawak)	90 days per year anywhere in Malaysia.
Applicant Age	TBC	Over 50s only;   Possible exceptions: 40 - 49 years if you buy property worth RM600,000 (~$134,000+);   30 - 49 years if your kids are in school in Sarawak, or if you’re undergoing approved long-term medical treatment there.	Over 35s only
Visa Validity	Issued for 5 years, and renewable for additional 5	Issued for 5 years, and renewable for additional 5	Issued for 5 years, and renewable for additional 5

In conclusion

While there are a number of important details – including the minimum income and potential net worth requirements – to be clarified still, this visa program could compete well with Sarawak’s offering.

So whether you’re a retiree craving island life while stretching your retirement savings, or a digital nomad in search of a tropical adventure, Sabah Province and its new MM2H visa program could be just the thing for you.

Yours in freedom,

Sovereign Research

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Benny Grossbaum was the embodiment of the American Dream.

Born in London in 1894 during the reign of Queen Victoria, Benny and his family moved to New York City (through Ellis Island) when he was still a baby.

At first the family was well off; his father ran a successful business, and they lived in a posh brownstone on Fifth Avenue in Manhattan.

But Benny was just 9 years old when his father suddenly passed away from pneumonia, and the family lost everything. The rest of his childhood was spent in abject poverty, and he later referred to this time of adversity as “the years that formed my character.”

Living in squalor also lit a fire within Benny to become wealthy; he developed a passion for money… and for study. And from the time he entered kindergarten, Benny’s teachers recognized his strong intellect and work ethic.

Benny Grossbaum flew through school. He was so advanced that he skipped several grades, all while mastering Latin and Greek. And he ultimately graduated from an Ivy League university where he studied mathematics.

This was as time, however, of significant anti-German and anti-Jewish sentiment in America. So the Grossbaum family formally changed its name… and henceforth Benny Grossbaum became known as Benjamin Graham.

You probably know that name well; Graham was a legendary investor who is considered the “father of value investing”. And during his career he taught Warren Buffett, Sir John Templeton, and a host of other prominent investors.

But Graham’s track record was far from flawless.

In 1926 as a young, 30-year old Wall Street hot shot, Graham started his own hedge fund called the Graham Joint Account.

Graham’s fund performed really well for the next few years, returning an average 25.7% per year. Not bad.

But this was the Roaring Twenties– a period of time in the United States were the economy was red hot and the stock market was booming… thanks in large part to the Federal Reserve’s rapid expansion of the money supply.

The Dow Jones Industrial Average rose 2.5x in a roughly three-year period from 1926-1929, and Graham rode that wave.

But even someone as smart as Graham didn’t see the crash coming. In late October 1929, his fund almost got wiped out when the market had its worst decline in history.

The stock market continued to tumble for the next three years, finally bottoming out in 1932; at that point Graham’s fund was down 70%, and he knew he needed to reassess his strategy.

It was from this reassessment… out of his personal failures of the 1929 crash… that modern value investing was born.

Value investing is conceptually very simple. It means we’re looking for a bargain… and we buy assets that are underpriced.

Most people do this every day of their lives. When we go shopping at the grocery store, or browse the Internet looking for discounts, we’re always trying to find a good deal.

In this way, value investors are little different than bargain hunters who research where they can get the best deal on a new pair of shoes.

But it’s been very difficult to be a value investor for most of the last decade; the vast majority of assets in nearly every advanced economy around the world– stocks, bonds, real estate, etc. were all selling at irrationally high prices.

A lot of investments were priced at absurd levels; even junk bonds sold at record high prices. The sovereign bonds of insolvent European nations traded at NEGATIVE yields. And money losing businesses with no hope (and no plan) to ever turn a profit traded at record high valuations.

It was really, really hard to find a great deal in the midst of all that chaos.

But market conditions have now changed dramatically, and there are plenty of great deals out there.

I’m particularly drawn to ‘real assets’ and businesses in real asset sectors– particularly mining companies, energy companies, agriculture companies, and companies that develop productive technology.

Real assets tend to be a great way to hedge inflation… and as I’ve written before in previous letters, I believe inflation is here to stay.

What’s incredible is that there are so many ‘real asset’ businesses that are available at extreme discounts right now… which sounds perfect. And yet very few people are buying.

Energy companies are a great example.

There are profitable, well-managed natural gas businesses right now that are selling for as little as TWO times earnings (i.e. a P/E ratio of TWO).

Bear in mind that natural gas prices in the US are only $2.70 right now… and there’s a STRONG case to be made that prices will rise substantially in the future thanks to the new Liquefied Natural Gas (LNG) export boom.

For decades, the United States barely exported any of its natural gas abroad, due in large part to the difficulties in transporting gas across oceans.

But now that LNG transport has been perfected and new LNG export terminals are being built in the US, it’s very likely that more and more US natural gas will be shipped overseas to Europe and Asia (where prices are MUCH higher).

This trend would leave less natural gas in the US… and most likely lead to higher prices… and even higher profits for natural gas companies.

And yet it’s possible to buy shares in their companies right now for just 2x earnings. That’s cheap. That’s value.

It’s not just natural gas companies; plenty of mid-size oil production companies are also selling for ultra-cheap valuations.

It really is amazing that oil companies had their most profitable year EVER in 2022. Yet nobody wants to own them.

And the reason is simple: it’s apparently evil and immoral now to own oil and natural gas companies. Fund managers (under pressure from the woke elite) have sold off their oil and gas stocks because they’re all terrified of Greta Thunberg.

Other ‘real asset’ sectors are also cheap. There are even some fertilizer companies and agriculture businesses trading for low, single-digit multiples to their current/future cash flow, and price/book ratios below 1.

Value investors have been waiting patiently for more than a decade for great bargains to emerge. And, finally, there are some high quality, well managed businesses out there that can be acquired at a steep discount.

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In 1969 while testifying to Congress, US Secretary of the Treasury Joseph Barr called out 155 Americans who were not paying their “fair share” of taxes.

Those 155 Americans had managed to reduce their federal tax liability to essentially zero by using perfectly legal deductions and credits in the tax code.

Congress was furious. Even though these taxpayers were following the law, the politicians didn’t like it. So they created a new, highly bureaucratic layer of tax complexity on the entire nation, specifically to target those 155 people.

It became known as the Alternative Minimum Tax (AMT).

But don’t worry, Congress said, this new AMT will only affect a couple hundred people…

The idea behind the AMT is to ensure that high-income earners pay at least a minimum level of taxes, regardless of the various deductions and credits they might be eligible for.

So they’re forced to calculate their taxes under two different systems:

1. The regular tax system which allows deductions for things like state income tax, local sales tax, property tax, and itemized deductions.
2. The Alternative Minimum Tax system which does not allow most deductions and exemptions.

The taxpayer must then pay the higher of the two taxes.

I don’t know about you, but doing my taxes just once is a big enough waste of time.

And again, while the AMT originally targeted just 155 specific people, within decades millions of Americans— including many in the middle class with modest incomes— were forced to calculate their taxes twice, and pay the Alternative Minimum Tax.

And while the Tax Cuts and Jobs Act of 2017 increased the exemption amount for the AMT, hundreds of thousands of taxpayers are still subjected to it. Plus, when those tax cuts expire in 2026, the AMT is expected to once again ensnare seven million taxpayers.

This story is not unique.

For example the 1913 income tax was only supposed to affect the wealthiest households in America. Just 3% of the US population paid it, and the base rate was 1% while the top rate was 7%.

By 1922— just nine years later— the government had increased the tax to beyond 50%. Plus they had created DOZENS of tax brackets, with most of the middle class having to fork over a hefty portion of their income to Uncle Sam.

But that isn’t even close to the record time between when a tax was introduced, and when the government declared its intention to increase it.

Look at the recent stock buyback tax, which politicians snuck into the Inflation Reduction Act last year.

It is a 1% tax on companies which buy back their own stock, and it went into effect on January 1st of this year.

38 days later, Aviator-Sunglasses-in-Chief announced in his State of the Union address that he wants to quadruple the tax to 4%.

That’s almost certainly a record— thirty eight days from the time a new tax took effect to the time they start trying to increase it!

Even the first income tax, introduced in 1861 (and later declared unconstitutional) took 11 months until the rates were nearly doubled, from 3% to 5%.

The key lesson is that taxes are never truly targeted, nor temporary.

But even more crazy is that increasing taxes doesn’t even guarantee more money for the government.

Top marginal income tax rates in the US have ranged from as low as 28% during the 1980s, to as high as 94% just after WWII.

But during that time US tax revenue since 1946 as a percentage of GDP has remained around a narrow band of around 19%.

In other words, the government’s slice of the nation’s economic pie is always around 19%– no matter how high or low they set tax rates.

So you’d think they’d understand the obvious implication here: if you want to maximize tax revenue, you need to concentrate on making the pie bigger… not on making your individual slice bigger.

With a bigger pie, everyone wins. But these progressive socialists don’t understand that simple maxim.

Instead they’re talking about wealth taxes, billionaire taxes, or making the rich pay their “fair share”. And they think you’re too stupid to realize that the middle class will soon be paying these taxes too.

Even the President’s campaign promises to not raise taxes on families making under $400,000 have already gone out the window. Now they want people making just $600 from online platforms like Etsy and eBay to be reported to the IRS.

Plus they’re going after undeclared tips from waiters and other food service employees. Not exactly millionaires…

These politicians are like ravenous beasts, and they’re coming to feast on your livelihood .

That’s why it makes so much sense to take advantage of the perfectly legal ways to reduce your taxes. I’m not talking about dodgy schemes and creative loopholes. I’m talking about easy deductions written right into the tax code.

We talk about these all the time— things like maximizing contributions to retirement accounts, moving overseas, or even moving to Puerto Rico can slash your tax rate (in some cases to 0(.

They think you are too stupid to notice these tax increases, or to realize that sooner or later they’ll apply to you.

But using their own legal rules to reduce what you owe is a great way of saying, I’m not as stupid as you think.

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The past week has been a bloodbath for the investment migration industry. But demand won’t be disappearing, and more countries will launch residency and Citizenship By Investment programs in response. One such country is Armenia, which is reportedly launching a CBI program shortly…

But first… Could Armenia make sense as a Plan B destination?

Armenia is a landlocked country situated in the South Caucasus region of Eurasia, sharing borders with Georgia, Azerbaijan, Iran and Turkey. Boasting beautiful and varied scenery, a rich cultural history and a low cost of living, it’s a place many people would enjoy spending some time in.

And while Armenia won’t be everyone’s cup of tea, nor will places like Turkey. Or Montenegro. Or Latvia, for that matter. (And all these countries have (or recently had) Golden Visas or Citizenship By Investment programs.)

As a plus, the country is not situated on some far-flung island in the Caribbean, making it far more practical as a Plan B – or even a Plan A – destination. Plus, Yerevan, the Armenian capital, is rated as “3/7 – Inexpensive” in the Sovereign Cost of Living Index.

On the downside, English is not widely spoken there, and Armenian is one of the hardest languages to learn. And in terms of passport power, it scores an underwhelming “C-” in the Sovereign Passport Ranking Index.

Yup – you won’t be getting into the EU or UK visa free on this travel document, although it does offer visa-free access to China.

But before you write Armenia’s passport off entirely… Consider that Turkey’s passport, scoring a “C” Grade, is THE most popular CBI passport in the world.

Furthermore, there’s always a chance that the quality of the Armenian passport could improve over time. (We compare these two options in more detail below…)

Armenia’s incoming CBI program at a glance

Let’s lead with the obvious – the Armenian government is launching a CBI program to cash in on the fact that Russian citizens have been widely banned from obtaining alternative residency and citizenship in most countries outside of Turkey, Belarus and Georgia. (And across the EU, in particular.)

As of this writing, details pertaining to the new program remain fairly sparse. What is known, however, is that the country’s Citizenship Law (in Armenian) was amended on July 7, 2022 to allow the acquisition of Armenian citizenship by means of “making a significant economic contribution” to the country.

That’s an important prerequisite for any legitimate CBI program, and lends serious credence to the Armenian government’s plans.

What will the investment options look like?

According to recently published draft legislation, Armenia will likely be offering numerous investment options, including:

An investment of $150,000 in real estate (10 year hold period).
A donation of $150,000 to a scientific or educational foundation
An investment of $150,000 in a local company (10 year hold period)
An investment $150,000 in government bonds (7 year hold period)
An investment of $100,000 in an IT company or a venture capital fund

The program will also offer a number of non-investment (i.e. skills based) options. For example, if you have:

20+ years of work experience in a publicly traded IT company
10+ years of work experience in a scientific field, and authored 5 or more scientific articles
If you are a professor in the area of healthcare…

Then you could be eligible to apply for Armenian citizenship and receive its passport (although there are likely to be some significant T&Cs (read: “minimum in-country presence requirements”).

A couple of immediate observations:

While the Armenian CBI’s real estate option costs only about a third of the Turkish one (which is $400,000), its lock-in period is also more than 3X longer (3 years vs 10 years).

Given that the minimum required donation option is $150,000 excluding fees, you can get a far superior passport in the Caribbean (think “B” Grade vs “C” Grade, along with UK and Schengen visa-free access).

Having said that, most of Armenia’s planned options will be actual investments, and you’ll likely be able to recoup your principal.

But if making a donation of $150K cuts against your grain, the government bond option might make sense – subject, of course, to all the usual potential risks, including the Armenian government defaulting on their undertakings to refund your principal.

Also, if you’re buying bonds denominated in Armenian Dram, you will likely face serious currency conversion risks, too.

But if you’ve read this far, chances are that none of these points have been complete deal-breakers for you.

So next, let’s take a look at how Turkey and Armenia – and their CBI offerings – compare as Plan B destinations…

Turkey CBI vs Armenia CBI: Will the latter be a compelling deal or not?

In conclusion

Realistically, the incoming Armenian CBI program is going to be targeting Russian and Chinese nationals – two of the most highly motivated nations in the world when it comes to acquiring alternative citizenship.

But if you’re an early adopter with a taste for adventure… and neither the Turkish nor Caribbean CBI programs meet your objectives, then the Armenian program could be well worth investigating. 

Yours in freedom,

Sovereign Research

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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, while expecting absolutely no consequences.

Suddenly all the debt and all the money printing would trigger inflation… and even a loss of sovereignty.

We may be closer to this reality than anyone realizes.

Again, history is full of examples of global power reshuffling because of a war. History is also clear that reserve currencies tend to change when global power is reshuffled.

So we have all the key ingredients right now for some pretty big implications for the US dollar… and that ridiculous “2%” inflation goal.

I talk about all of this in today’s episode, starting with the story of one of the biggest parties in world history that took place in 864 BC. The dominant superpower at the time was celebrating itself. And they thought their supremacy would last forever.

It didn’t. It never does.

I also walk you through the rise and fall of empire and reserve currencies, and I explain how even a minor decline in reserve status will be really bad for US inflation and sovereignty.

But this is not a gloomy podcast. Remember the words of Marcus Aurelius: focus on the things that you can control. And we can control a LOT.

We talk about simple ways to think about the future, why diversification is so important, and why real assets make so much sense.

It’s not a question of “which is the best currency”. ALL currencies are bad. Remember the perverse incentive structure I talked about at the beginning of this letter?

It’s really a question of which are the right assets to hold that can stand the test of time… including a reshuffling of power.

You can listen to today’s episode here, I hope you enjoy.

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Having multiple banking options makes more sense than ever in 2023. And opening a neobank account online has become both fast and simple. But what exactly are neobanks, and are they safe?  Let’s take a look at some of the pros and cons of using these below…

Having more than one place to store your money makes sense for the same reason it makes sense to have more than one bank card; if you lose one, you can still access your money.

And if those accounts are situated in more than one country, all the better.

If you were sitting in London in January of 2022 and sent ten bucks to the Canadian freedom convoy, you’d probably understand why we say this.

Or if you woke up – also around a year ago – as an ordinary Russian, to discover that your Russian bank card no longer worked while you were traveling in a Western country. And that you could no longer transfer any money in or out of Russia…then you’d fully understand the benefits of having an offshore bank account.

Having banking options means that you’re less vulnerable to the whims of individual governments… To being canceled, or to being persecuted financially based on your personal beliefs.

And you’d certainly be more shielded from the terrible games governments play (like in the case of Russians).

The thing is…

Opening an overseas bank account tends to be fairly hard – and expensive. And unless you pay a professional service provider, you typically have to travel to that country in order to have your new account opened and activated.

Fortunately for ordinary folks, the rise of so-called “neobanks” like TransfersWise (now Wise) has meant that opening a de facto overseas “bank account” has become a lot simpler.

What is a neobank?

Neobanks, also known as digital banks or online-only banks, are financial institutions that operate exclusively online without physical branches. They have become increasingly popular in recent years due to their convenience, accessibility, and competitive rates. However, there are also some drawbacks associated with neobanks.

What are the pros and cons of neobanks?

Pros:

1. Convenience: Neobanks allow customers to manage their finances entirely through their mobile devices or computers, making banking more accessible and convenient than traditional banks.
2. Low fees: Many neobanks have low or no fees for basic banking services, such as account maintenance, ATM withdrawals, and foreign currency transactions.
3. Competitive rates: Neobanks often offer higher interest rates on savings accounts and lower interest rates on loans compared to traditional banks.
4. Innovative features: Neobanks often offer innovative features such as budgeting tools, instant notifications, and real-time transaction tracking that traditional banks may not provide.
5. Global accessibility: Neobanks often allow customers to use their accounts and cards worldwide without incurring extra fees, making them a great option for international travelers or people living abroad.

Cons:

1. Limited services: Neobanks often do not offer the same range of financial products and services as traditional banks, such as mortgages, business loans, or investment services.
2. Lack of physical branches: While some neobanks have partnered with traditional banks to offer in-person support, many do not have physical branches, which may be inconvenient for customers who prefer face-to-face interactions.
3. Security concerns: Neobanks are relatively new, and their security measures may not be as well-established as those of traditional banks. Additionally, customers may be more vulnerable to online fraud and hacking.
4. Less established reputation: Neobanks are still relatively new and may not have the same level of trust or reputation as traditional banks that have been around for decades.
5. Limited customer support: As neobanks often do not have physical branches, customer support may be limited to online chat or phone support, which may not be as responsive or helpful as in-person support.

Here’s a list of famous neobanks (2023)

Please note that we don’t endorse or promote any of the below neobanks in any way – these are just some of the most widely known and used ones, and they’re listed here for informational purposes only.

• Wise (formerly Transferwise)
• Revolut
• N26
• Monzo
• Bunq

The bottomline

While using neobanks come with certain risks – including potential hacking threats and a lack of deposit insurance – they can nonetheless play a vital role in your Plan B strategy.

And while we’d personally not keep large amounts of money in a neobank, there is no downside to having ready cash available in the event of government overreach or a range of other potential crisis scenarios.

Yours in freedom

Sovereign Research

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Marcus Licinius Crassus didn’t exactly start from humble beginnings.

Born into a prominent Roman family in 115 BC, Crassus started his business career as a young man with a whopping three hundred ‘talents’ according to the ancient historian Plutarch.

(A ‘talent’ is a unit of weight used to measure gold and silver in the ancient world, so three hundred talents would be worth potentially $50 million today.)

That’s a pretty hefty sum to get started in life.

But Crassus was incredibly ambitious. He didn’t squander the money by living the life of a Roman playboy.

Instead he started potentially the world’s first-ever privatized fire department… and used it to amass a vast real estate portfolio.

Rome had already become the dominant superpower by the time Crassus was a young businessman in the 1^st century BC. And the city itself had become massive… almost overpopulated. Some parts of the city were unimaginably luxurious, with ornate palaces, beautiful monuments, and wide boulevards.

Other parts were cramped and squalid. And the close proximity of buildings in these neighborhoods made them especially prone to catching fire.

Crassus didn’t use his fire brigade for community service; in fact this was probably the furthest thing from his mind.

Instead, he would bring his firefighters to neighborhoods in Rome where homes had caught fire. People would be frantic that their house was burning down… or was about to catch fire due to the inferno down the street.

Crassus would then coolly negotiate the purchase and sale of these properties– including the homes that were already on fire– for a “trifling price” according to Plutarch.

If the owners agreed to Crassus’s outrageously low offer, he would order his men to put the fires out. If not, everyone watched as the neighborhood burned to the ground.

Crassus became so successful buying up property at ‘fire sale’ prices that, later in life, his net worth had grown to 7,100 talents… making him potentially the world’s first billionaire.

Obviously many Romans hated Crassus for the pitiless manner in which he exploited other people’s tragedy for his personal gain, in the same way that our modern society considers ‘price gouging’ during natural disasters to be highly immoral.

Ancient historian Cassius Dio writes, in fact, that people cheered, laughed, and celebrated the billionaire’s death… and according to one legend, he was executed by having molten gold poured down his throat.

Now Crassus was obviously an extreme. But let’s not kid ourselves– countless people throughout history have made money from buying high quality assets at ‘fire sale’ prices. This is actually the central theme behind deep value investing.

Warren Buffett didn’t become one of the richest people in the world by buying overpriced assets. He did it by acquiring “wonderful” businesses at substantial discounts to intrinsic value.

Problem is– it’s been REALLY difficult to find high quality assets at ‘fire sale’ prices over the past 10+ years.

Back when the Global Financial Crisis decimated the world economy back in 2008, central bankers responded by expanding their money supplies at an unprecedented rate.

In the United States, the Federal Reserve slashed interest rates to zero and exponentially grew its balance sheet from $850 billion before the 2008 crisis, to $4.5 TRILLION shortly after… essentially creating a tidal wave of new money that quickly found its way into financial markets.

Stock prices surged. Bond prices surged. Real estate prices surged. Fine art and collectibles surged. Even dubious, low quality assets like junk bonds soared to record highs.

But if this wasn’t ridiculous enough, central banks then doubled down on their folly in 2020 in response to the pandemic.

The Fed, once again, increased its balance sheet from more than $4 trillion to NINE TRILLION DOLLARS.

Unsurprisingly, asset prices boomed again. Companies with no hope of ever making money sold at historic highs. Sovereign bonds issued by insolvent European nations traded at NEGATIVE yields.

And perhaps most famously, a banana duct-taped to the wall at an art show in Miami sold for $120,000.

But that was all in the past. We’re living in a different reality now– one in which inflation is raging, the leader of the free world shakes hands with thin air, and financial markets have become downright sullen.

Stocks, bonds, crypto, real estate, etc. are all down. And frankly I think the general stock market still has as long way to fall. Same for real estate.

But there are a LOT of great assets, both public and private, that have been vastly oversold by panicky, emotional investors… and are now trading at ‘fire sale’ prices.

There are literally dozens of well-managed, profitable energy companies right now trading at low, single digit P/E ratios at a time when natural gas is barely $2 in the US.

(Cheap US natural gas, by the way, is most likely going to be a thing of the past; LNG exports to Europe are set to surge in the coming years, and that’s probably going to drastically increase gas prices in the future.)

It’s not just energy companies either. There are really great fertilizer companies, agriculture companies, productive technology businesses, and other real asset businesses selling for substantial discounts to their intrinsic value.

Again, I think the general market still has a long way to fall.

But there are already high quality, individual assets available at incredible discounts for bold, patient investors who know a good deal when they see it.

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On the evening of April 17, 1006 AD, a little more than 1,000 years ago, human beings from around the world looked up into the night sky and saw a brilliant light, the likes of which they had never before seen in their entire lives.

Most people thought it was a new star– the brightest, by far, that anyone had ever observed. Some thought it was an omen or a sign from the gods.

We know now that neither was the case. The phenomenon that everyone saw that evening was actually a supernova originating more than 7,000 light years away from Earth. And scientists now refer to it as “SN 1006”, named after the year of its observation.

SN 1006 is especially famous because it is likely the brightest ever recorded in human history.

It was so bright, in fact, that its light could even be seen in the daytime. It was also seen by people as far away as China, Iran, Egypt, and Europe.

A group of monks in Switzerland reported being able to see SN 1006 for three months after its initial appearance, while astronomers in China’s Song Dynasty continued to observe the supernova until at least December of that year.

A supernova, as you’re probably aware, is an exploding star. It’s essentially the final phase of a star’s life cycle.

When stars are born, they’re nothing but gas and dust. In time, they grow into enormous stellar forces that cast their light and power across the solar system and give life to satellite planets. Everything in their domain literally revolves around the star.

But even stars eventually peak… and decline. They deplete their primary resources, and their core begins to shrink. Eventually, with its resources completely exhausted, a star beings to collapse… at which point it can explode in a giant supernova that can cause havoc and destruction across the galaxy.

This is in many ways a great analogy for empire. Like stars, empires are born from often humble beginnings. A handful of people come together in difficult circumstances, and the odds of success are very low.

But with luck, that small group of people turns into a fledgling civilization that continues to grow… and eventually rises into a vast and powerful empire that shines its light across the region, or possibly the world.

Like a star, everything else revolves around the empire; even tiny, distant nations are in its orbit and depend heavily on the empire for trade and economic activity.

But eventually the empire exhausts itself. It eats away at itself, depleting its most precious resources until there’s nothing left.

Just like a star that declines and collapses after consuming all the hydrogen in its core, an empire consumes the very things that made it successful and powerful to begin with. And when an empire declines and collapses, just like a star, the effects of that collapse cascade across the region for years to come.

It should not be a controversial statement to say that the world’s dominant empire today, the United States, is in obvious decline.

The US has steadily depleted and destroyed the very resources that made it so powerful in the first place– things like freedom, capitalism, self-reliance, social cohesion, reputation, military strength, and fiscal restraint.

The latter bears some additional discussion.

On Friday I wrote to you that the US government had just published its annual financial report showing, among other things, that they lost a mind-blowing $4.1 trillion in Fiscal Year 2022, which was $1 trillion worse than the year before.

Going through the rest of the report, you’ll see them describe the utterly dire situation of Social Security, whose trust funds are set to run out of money within the next 10 years or so. They also forecast the national debt to reach more than FIVE HUNDRED PERCENT of GDP.

But what really struck me about this report… above everything else… was the cover letter; this is the one-page executive summary from the Treasury Secretary right at the beginning of the report.

You’d think with such horrific financial results and long-term projections that the Treasury Secretary would spend her cover letter calling for immediate reform and fiscal discipline.

But there wasn’t a single word of caution in her letter.

Instead the Secretary bragged about how great the economy is, and praised their ridiculous Inflation Reduction Act as “our nation’s most aggressive action to tackle the climate crisis.”

Come again? Wasn’t the Inflation Reduction Act supposed to, you know, reduce inflation?

But they’re not even trying to tell that lie anymore. Now they’re fully admitting that the Inflation Reduction Act was just climate change legislation masquerading as economic support.

The rest of her letter is more useless bombast… making it crystal clear that the people who prepare these reports are just fanatical bureaucrats steeped in their own self-righteousness, as opposed to responsible managers trying to solve problems.

So it’s REALLY difficult to study this annual financial report and not come away with a highly disquieting long-term outlook for the United States.

I’ve been talking about this for years, so this is nothing new to long-time Sovereign Man readers.

I’ve written extensively about the accelerated financial decline of the government. Fourteen years ago when I started this publication, I looked at the trajectory America was on and predicted rising inflation, dwindling freedom, growing social divisions, soaring deficits, and more.

But even I’ve been surprised at government officials’ complete inability to take these problems seriously, let alone come up with rational solutions.

Perhaps some day they’ll finally realize that they’re out of resources and that their star is about to collapse. They’ll look up in the sky and see the brilliant flash of light and realize, “Jeez we really need to do something about all this debt.”

But by then it will be too late.

When people across the world looked up in the night sky 1,000 years ago and saw the brilliant light of SN 1006, what they didn’t know is that the light was from an exploding star more than 7,000 light years away.

In other words, the star had actually exploded 7,000 years prior; it just took that long for the light to travel all the way to Earth and be visible to people on this planet.

Similarly, by the time the inhabitants of Planet Politician see the light of their fiscal supernova, the star will have already exploded long before then… and there won’t be anything they can do about it.

But you can.

You have all the power and all the resources at your disposal to diversify internationally, legally slash your taxes, put away more for retirement, grow your income, generate higher investment returns, protect your assets, secure your family’s future, and much more.

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