Category: simonblack

Rejoice, America, the federal government is FINALLY going to step in and fix the biggest problem of our time.

Naturally I’m not talking about the border. Or inflation. Or the national debt. Or America’s waning geopolitical power. Or the looming insolvency of Social Security. Or rising crime. Or the broken education system. Or the country’s vast social divisions.

No, those problems are nothing compared to the horrendous crisis that has swept the nation.

But fortunately, our saviors in government are going to do something about it.

I’m talking, of course, about the iPhone crisis. Yes, I’m sure it was on the tip of your tongue.

Last week the Justice Department announced the decision to charge Apple with antitrust violations, saying it has illegally monopolized the smartphone market.

Now, all kidding aside, there are so many things that are utterly stupid about this case, it’s hard to even know where to begin.

First, should this really be the priority for the Justice Department right now? There is so much brazen lawlessness in the country being committed by, you know, actual criminals.

But apparently the Justice Department thinks that Apple’s success is the biggest problem of all.

I suppose we shouldn’t be surprised given that this is the same Department that started investigating angry parents at school board meetings.

Naturally if Americans don’t like Apple products, people could simply stop using them. But the government thinks everyone is just a stupid peasant incapable of making such decisions. So, the Justice Department will decide for us. Hallelujah.

This leads me to the second point– how is it that Apple has a monopoly? Have these people never heard of a little company called GOOGLE and its Android mobile operating system?

Of course, people have a choice.

It’s really, really hard to not laugh out loud when you read the Justice Department’s legal complaint against Apple. They start by dredging up the ghost of Steve Jobs– a guy who’s been dead for more than 12 years– and accusing him of trying to “force” developers and users to use their products.

(Apparently Steve Jobs was holding a gun to your head while he was dying of cancer…)

They go on to claim that Apple unfairly created a proverbial ‘walled garden’, i.e. a closed-off iOS ecosystem where they famously control the end-to-end experience for its users.

Apple’s approach is not unique. Plenty of companies create proprietary systems that lock their users in.

Nvidia has a software system called CUDA which similarly chains users and developers. Video game consoles (Xbox, PlayStation, Nintendo) all have different standards, so the same game cannot be played on multiple systems. And each aggressively recruits game studios to develop content exclusively for their consoles.

Streaming services like Netflix and Amazon Prime develop content that can only be accessed exclusively through their platform.

Printer manufacturers have developed proprietary technology to prevent their customers from using third-party ink cartridges.

The list goes on and on and on. Companies routinely create incentives to keep customers using their products… and disincentives to prevent customers from going over to the competition.

But apparently the most senior officials at the Justice Department don’t realize that this is a completely normal business practice– one that Apple happens to have mastered.

Another hilarious point is how the Justice Department aims to prove its case:

Apple’s iMessage platform isn’t designed to communicate with Android devices. And Justice cites a 2022 exchange between Apple CEO Tim Cook and a reporter, in which the reporter said,

“It’s tough. Not to make it personal, but I can’t send my mom certain videos” because of the lack of iMessage and Android integration.

Tim Cook quipped back, “Buy your mom has an iPhone.”

This is seriously considered ‘evidence’ in the Justice Department’s case against Apple. Their logic is so flimsy that it literally hinges on a joke made by the CEO two years ago. Cook said, “Buy your mom an iPhone”, therefore Apple has an illegal monopoly. Totally bizarre.

Another absurd point is that these Inspire Idiots cannot even apply their own logic evenly.

I wrote recently about how the Biden Administration is currently intervening in the steel industry in a way that will actually create a monopoly.

The President personally intervened to stop Japan-based Nippon Steel from buying the company US Steel.

On top of its acquisition bid (which would have rewarded shareholders handsomely), Nippon Steel promised to invest $1.4 billion into American factories.

But the US government rejected the deal (as if it were their business to begin with), and instead insisted that US Steel should be sold off for parts to competitor Cleveland Cliffs.

It’s obviously pathetic that the government is forcing US Steel shareholders to take an inferior bid. But even more, by forcing the sale to Cleveland Cliffs, the government is essentially creating a monopoly for that company, which will produce up to 90% of American steel used in vehicles.

But according to the government, Cleveland Cliffs’ new monopoly will be good because the union bosses are in favor of it.

Yet two weeks earlier, the government opposed merger between grocery store chains Kroger and Albertsons, because they said it would create an unfair monopoly that the unions opposed.

The lesson here is pretty obvious: if the union bosses like your deal, then it’s not an unfair monopoly. If the union bosses oppose you, then the government will sue the crap out of you.

Apparently, Apple’s biggest mistake was not groveling to union bosses.

The irony is that even if Apple does have a monopoly, it only got that way by attracting customers.

I’m personally not an Apple guy. I use Linux on my computer and a unique mobile operating system called GrapheneOS.

But Apple’s share of smartphone sales in the US is 60%. The market has spoken. It approves of the company and its products.

What’s the government’s approval rating?

Congress is at 12%. Not a single federal political leader has higher than a 48% approval rating in a recent Gallup poll.

The government sucks so much at just about everything that it does, that it often seems they are actively trying to destroy America.

There are so many things wrong in this country that need fixing, and what does the government decide is the biggest evil we face as a nation?

Not the national debt. Not the potential for World War III. Not Social Security going bankrupt, inflation, the border crisis, or soaring crime rates.

They’re going to waste taxpayer resources to save people from iPhones.

They’ve already spent years building their case… which all hinges on a joke that CEO Tim Cook made about buying your mom an iPhone.

The real joke is that these Inspired Idiots are running the show. And it’s a joke on taxpayers and voters everywhere.

Now, who wants to bet that Nancy Pelosi’s husband shorted Apple stock a day before the case was announced?

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On June 5, 1947, US Secretary of State George Marshall gave the commencement speech at Harvard University.

This was just two years after the end of World War II, and in this speech, he first proposed giving $12 billion (approximately $170 billion in 2024 dollars) in economic assistance to help rebuild Western European economies ravaged by the war.

But it was about more than just throwing money at the problem.

What became known as the Marshall Plan was also meant to remove trade barriers, increase economic cooperation between countries, and prevent the spread of communism.

Remember, this was at a time when people still widely understood that capitalism was a win/win system where people take risks and work hard to create value and mutual prosperity.

By the 1950s, it was obvious that the Marshall Plan was playing a key role in the recovery of Europe’s economy and laying the foundations for the post-war boom.

It was in this spirit of cooperation— and gratitude for the US— that the US and the Netherlands got together in 1956 to sign the Dutch American Friendship Treaty (DAFT). Yes, I chuckled at the acronym too.

The point was to make it easier for Americans to live and invest in the Netherlands, and vice-versa, and it’s still in force today.

The treaty allows US entrepreneurs and freelancers to obtain legal residency in the Netherlands for the purpose of starting a business, with an initial requirement of depositing approximately EUR 4,500 (about $4,900) in a Dutch bank.

In the digital age, this allows a wide range of self-employed professionals, like IT consultants and freelance writers, to easily benefit from DAFT without needing to establish a traditional brick-and-mortar business.

And after five years of total residency, you can apply for Dutch citizenship.

Now, nothing against the Netherlands, but you may not want to live in a place where it rains about half the year. Or a 6+ hour time zone difference from the US might not work for you.

But the same treaty offers an even better deal in the six Dutch territories of the Caribbean— Aruba, Bonaire, Curaçao, Saba, Saint Maarten, and Saint Eustatius.

Under the treaty, US citizens are entitled to obtain legal residency in one of these islands without even having to start a local company or invest money.

To maintain your residency, you need to keep closer connections to the island, and cannot leave the country for longer than 12 consecutive months unless it’s for medical reasons.

Plus, this one strategy may allow them to accomplish several goals.

For example, some of the most basic elements of a Plan B include gaining foreign residency and cutting your tax rate.

By gaining this easy residency and moving outside of the US, you could also use the Foreign Earned Income Exclusion to earn $126,500 tax free in 2024. Double that for married couples, and add the Foreign Housing Exclusion, and you’re talking about well over a quarter million dollars each year you can earn tax free.

And because of the tax rules on these islands, in most cases, you should be able to minimize or even eliminate your taxation there entirely (although you should definitely consult a tax professional who understands your particular situation).

Finally, this strategy puts you on a five year path to be able to naturalize in the Netherlands, which comes with the sixth best passport in the world. That’s an amazing passport to pass down to future generations.

There is a downside however… in order to become a Dutch citizen, you generally must renounce your other citizenships. (They do. However, make exceptions if giving up your original citizenship would create a serious hardship or disadvantage.)

But that’s under current Dutch law. That could change in five years; after all, Germany recently did away with this requirement.

Now, DAFT is obviously not for everyone. But the larger point is that it’s a good way to think about implementing a Plan B to combine multiple benefits of a single strategy.

For a remote worker who wants to move to a warmer climate, obtain a foreign residency, cut their taxes, and gain a second passport, this ticks a lot of boxes.

You may have entirely different goals.

But chances are, you can find ways to craft your own Plan B in a similar manner that allows you to gain multiple benefits from a single action.

For example, we recently wrote about the Greek Golden Visa, which allows you to gain a foreign residency by buying property. It’s a great “back up residency,” since there are minimal requirements to spend time within Greece.

It’s also a way to gain some investment return from your Plan B, by renting out the property when you’re not there. Plus, Greece offers great tax incentives to retirees who move there.

So you could gain a foreign residency now, and use the rental income to pay for the home you plan to retire in.

Even something as simple as contributing to a tax-advantaged retirement account can allow you to employ multiple strategies to not just cut your taxable income, but also save for retirement.

Depending on the structure, you could also gain more control and options over where your retirement money is invested or capitalize a new business from your retirement account without penalties.

There are a lot of tools out there to take back so much of your freedom and prosperity. It makes sense to use them to their full potential.

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I’m on my way back home from Mexico City after an incredible weekend event here with more than 100 of our Total Access members.

First things first, if you’ve never been to Mexico City, I highly recommend it. A lot of people have a misconception that the city is some kind third world dump. It’s not. And most first-time visitors are stunned by the vast green areas, expansive parks, tree-lined streets, museums, architecture, and modern lifestyle.

In my opinion it also has some of the best restaurants in the western hemisphere. You can eat extremely well in Mexico City, but you don’t pay very much for it.

The event we held for our Schiff Sovereign Total Access members was also pretty great.

I started off the conference explaining why we should expect higher inflation in the future– and I’ve written about this extensively. The US government’s own projections call for $20 trillion in additional debt over the next decade. And frankly we think they’re woefully underestimating the problem.

But even $20 trillion will likely prove catastrophic. That would mean the US national debt will reach $55 trillion.

If yields remain at today’s levels (roughly 4.5%), then the government will have to spend nearly $2.5 trillion per year, just to pay interest on the debt. That would make interest on the debt the #1 expense of the federal government, triggering a vicious cycle in which the Treasury Department would have to borrow more and more each year just to be able to pay interest on the money they’ve already borrowed.

To say this is unsustainable would be a massive understatement. And we believe that the Federal Reserve will step in to bail out the government by slashing interest rates to zero (or even negative levels).

Think about it– if the national debt is $55 trillion, but the interest rate on that debt is literally 0%, then the government’s annual interest bill is zero… essentially saving them $2.5 trillion per year.

Sounds great. But it would come at substantial cost.

For the Federal Reserve to lower rates, it would require them to dramatically increase the money supply, what we typically refer to as ‘printing money’. They’re not actually printing physical currency– it all happens electronically. But the effect is the same: it’s highly inflationary.

When the Fed ‘printed’ $5 trillion during the pandemic, the US economy saw 9% inflation. So, if the Fed prints $20 trillion or more to push interest rates down to zero, how much inflation will be see then?

No one knows. But it probably won’t be their magical 2% target.

My partner Peter Schiff came on the stage later and made similar comments. And with this inflationary scenario in mind, we sketched out a number of strategies, both personal and financial, that would make sense in the coming years.

It would be easy to study this problem and come away with a sense of dread. After all, a $55+ trillion national debt and $2.5 trillion in annual interest expense looks pretty scary. (Remember, these are based on the government’s own forecasts.)

But if you can understand the trend and its consequences, then you can also take completely rational steps to reduce their impact. That’s the entire concept behind a Plan B.

Peter and I both see overwhelming evidence of substantial inflation in the future. But this means we can prepare for it now, rationally. And we outlined a number of strategies to do so.

One rather obvious one is gold. And we talked about why gold will likely become very important in the future. My personal view is that gold will eventually displace the dollar as the global reserve standard, i.e. how foreign governments and central banks settle their accounts.

With a $55+ trillion projected national debt, and $2.5 trillion in annual interest expense, it’s hard to imagine the rest of the world continuing to allow the US dollar to remain the dominant reserve currency.

And it would be a similar outcome if the Fed ‘prints’ tens of trillions of dollars.

Either way, we see the dollar’s reign as the dominant reserve currency coming to an end over the next decade.

But since no one trusts the Chinese government, or some new ‘BRICS dollar’, gold is the most likely candidate to replace the US dollar since every government and central bank on the planet already owns it… and has confidence in it.

Gold has the added benefit that no single government controls it. And so single country dominates gold production; China, Russia, the United States, Canada, etc. all produce substantial quantities each year.

We later heard from a colleague of mine who runs one of the largest precious metals storage facilities in the world, based in Singapore. He gave me an insider’s view of the gold and silver markets, and sketched out why there may be a shortage coming, especially in silver.

He explained how many of the world’s largest commodities and metals exchanges have seen dwindling stockpiles… while many mines are doing direct ‘offtake’ agreements with large industrial consumers (like electronics companies).

The end result has been a trend of declining physical silver availability, and he believes this will ultimately drive the silver price much higher.

He added that silver is currently quite cheap compared to gold, with the silver/gold ratio currently at about 90:1, versus its historic average over the past several years of roughly 70.

We also had a presentation from a venture capital firm that talked about buying shares of prominent startups (Airbnb, SpaceX, etc.) in the secondary market, i.e. from employees or early-stage investors seeking liquidity. It’s an interesting way to take a discounted position in a high growth business whose value could explode in an inflationary environment.

As one could expect right now, there was also ample discussion about cryptocurrency, including a mini-debate between Peter and our guest Mark Moss, who also spoke at the event. More on that another time.

Perhaps my favorite part was hearing from the former President of Mexico, Vicente Fox. He spoke in the morning about how many short-sighted and dangerous leaders are ruining the world… and I couldn’t agree more.

During a Q&A session later, he told the crowd about the time that George W. Bush came down to Mexico to convince him to support the war in Iraq.

Former President Fox told us that Bush’s team rolled out maps of Iraq onto his desk and pointed at a tiny speck, saying, “There are the weapons of mass destruction.”

Fox stared closely at the table and brought his face closer to where they were pointing, and said, “It looks like mierda de mosca to me…” That’s Spanish for ‘fly shit’.

I want to extend my sincerest thanks to all the members who joined us for a wonderful weekend in Mexico City. The event, the restaurants, the personal discussions with each of you, and the camaraderie were all unforgettable.

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On March 2, 1901, a group of prominent American businessmen, including J.P. Morgan, Charles Schwab and Andrew Carnegie, came together to form the largest business enterprise the world had ever seen.

Through the consolidation of Carnegie Steel Company along with several other steel and iron businesses, they formed US Steel.

And it was immediately the world’s first billion-dollar corporation.

But that was just the beginning. US Steel quickly became a symbol of American industrial might.

It played a crucial role in building the infrastructure of the United States, supplying steel for skyscrapers, bridges, automobiles, and railroads. During both World Wars, US Steel’s production capacities were pivotal in supporting the Allied military efforts.

By the 1940s, there was hardly a more fitting icon of American prosperity.

But things slowly started to change.

After World War II, the economy globalized and trade flourished. US Steel suffered from increased competition from foreign steel producers, and then, in later years, a decline in the American manufacturing sector.

Slowly the company diminished to just a shadow of what it used to be.

The decline of US Steel culminated in a bidding war last year by larger rivals who were eager to absorb the company.

Another American steel producer named Cleveland-Cliffs offered to buy US Steel for roughly $7 billion.

But Japan-based Nippon Steel offered double the amount— $14.1 billion— and also promised to inject $1.4 billion in capital to upgrade US factories. Somewhat poetically, $1.4 billion was the exact original capitalization of US Steel back in 1901.

Naturally, US Steel accepted the higher offer. $1.4 billion in foreign investment would do a lot of good for the company, for the steel industry, and for the US economy.

You know how the people in charge always love to talk about manufacturing jobs? Well, a $1.4 billion foreign investment gets you a LOT of manufacturing jobs.

Case closed, right? Of course not!

Cleveland-Cliffs (the company that lost the bid to Nippon Steel) was bitter that they didn’t win, fair and square, in a free market. So they decided to play dirty.

The CEO called-in his friends in the Biden Administration. And sure enough, Joe Biden personally came out, guns blazing, to slam the Nippon Steel acquisition.

Team Biden has now pushed the deal over to the US Committee on Foreign Investment, which has been tasked with investigating “national-security concerns”.

Come again? US Steel is a has-been company in decline that’s supposed to be acquired by a US ally. To pretend that this is a national security concern is a complete joke.

Cleveland-Cliffs then rallied the United Steelworkers union, whose president vocally asserted that  “the only buyer the union accepts for the [sale of US Steel] is Cleveland-Cliffs.”

Wait a minute— who exactly is the owner of US Steel? Call me naive, but I thought it was the shareholders.

Yet apparently the basic fundamentals of capitalism don’t matter to Joe Biden, or to the United Steelworkers union.

In their view, the union is in control, and the union gets to decide who the new owner will be… even if the purchase price is vastly inferior.

Nothing official has been announced. But the Cleveland-Cliffs CEO is already bragging about how he killed Nippon Steel’s acquisition:

“We have been in total contact with the [Biden] administration, so I know what’s going on… This deal is dead… There is no more lobbying, there’s no more negotiation. It’s over.”

And like a vulture circling overhead, Cleveland-Cliffs indicated that they intend to scoop up US Steel’s assets for a bargain… potentially even less than their original bid.

And once Cleveland-Cliffs absorbs US Steel, it will control ALL US blast furnace production, and up to 90% of American steel used in vehicles, according to the Wall Street Journal.

That’s a virtual American steel monopoly.

The reason I raise this issue is because, just a few weeks ago, the Federal Trade Commission (FTC) sued to stop a merger between two grocery store chains (Kroger and Albertsons), claiming that the deal would create a monopoly and hence harm consumers.

Wait a minute— if a potential monopoly of grocery store chains is bad, then why isn’t a clear monopoly in the steel industry equally bad?

You’d think the FTC would apply the same logic to US Steel. But they’re not. The FTC has been completely silent on the matter. And the reason is obvious: the United Steelworkers union wants the Cleveland-Cliffs merger to happen, so the FTC won’t stand in its way.

If there has ever been any question about who has the power in this administration, the answer should now be plain as day: this government will do whatever the unions want.

Forget the voters, consumers, or shareholders— unions have the most sway, the most money to put into political campaigns, the most voters to drive to the polls.

And of course, forget what’s actually good for the country and the economy. The Inspired Idiots in charge are completely beholden to union bosses.

That’s a pretty bad sign if you expect things in this country to turn around anytime soon.

A roaring economy is exactly what the US needs to claw its way out of its massive national debt, and restore faith in the US dollar.

Instead, it’s doing everything possible to kill competition and productivity.

And that’s a good reason to have a Plan B.

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Located in Mediterranean Sea about halfway between Greece and Turkey is the island of Crete… which has attracted human civilization for more than 100,000 years.

Today roughly 600,000 people call the island home. But millions of tourists also visit the popular vacation spot each year. It’s known for it’s beaches, wine, and olive groves.

And at the moment, real estate is fairly reasonably priced.

It’s certainly not rock bottom cheap, but for such a popular destination, home prices could hardly be called expensive.

For example, a modest two bedroom stone villa next to a manicured olive grove with gorgeous views of the sea is listed for around €275,000, or USD $300,000.

 

A place like this on Airbnb could easily fetch $125 to $150 per night and would be fully booked for much of the year.

Now, I’m not here to encourage anyone to buy investment property in Greece. Personally I think there are much better investments right now. But buying property in Greece does have something special going for it that most traditional investments don’t have:

You can become a Greek, i.e. European resident, if you buy property.

Having residency in a foreign country is a completely sensible thing to do. It means that, in almost every case imaginable, you’ll have another place to go if you ever need it.

There are a number of places in the world that allow you to buy property in exchange for legal residency; often these programs are called “Golden Visas.”

But you would only want to go down that path if you actually enjoy spending time in the country.

And for some people, Greece is paradise. The weather, culture, ruins, history, food, etc. appeal to plenty of people who want to spend time or even retire there.

Portugal was the first of several countries in Europe to launch a Golden Visa back in 2012.

But as usual, the deal was too good to last. Swarms of foreigners came in, property prices went through the roof, and locals complained that housing was unaffordable.

So last year, the government of Portugal made their Golden Visa program much, much less attractive, and for the most part, property purchases no longer qualify.

Greece is the best game in town right now as far as European Golden Visa programs are concerned. 98% of the country’s territory, including hundreds of its idyllic islands, remains eligible for a Golden Visa in exchange for a property purchase of just €250,000.

But last year, the government raised the minimum investment threshold to €500,000 in the country’s most sought-after regions, including parts of Athens, Thessaloniki, and the islands of Mykonos and Santorini.

And we wouldn’t be surprised if they restricted the program further— after all, that is what tends to happen to these programs. So if you like the program, it’s better act soon.

Again, buying property under a Golden Visa program doesn’t make sense if you don’t enjoy spending time in the country.

But when it’s possible to get residency (which is a solid step in your Plan B) while generating positive cashflow from your rental income when you’re not using the place, that’s a pretty good deal.

Of course, Greece isn’t the only place in the world you can do this.

Panama still offers residency in exchange for a roughly $300,000 property investment— an amount which still goes a long way in Panama.

Panama’s program has also changed over time, so it also probably won’t last forever.

Then there are places like Mexico where you don’t even have to purchase a property to obtain legal residency; you just need to prove that your income or savings meets a modest threshold.

If someone asked where is the easiest place to gain residency in the Western Hemisphere, I think Mexico ticks that box. Almost anyone qualifies, and it is easy to maintain.

The larger point is that these aren’t radical steps. But they do give you another option.

And in a world full of Inspired Idiots, with so much looming risk and uncertainty, having additional options just makes sense.

But great options don’t last.

We go through periods where one residency may be easy and simple to obtain, and over time those rules change and become more difficult and cumbersome.

So when you find something that works for you, take action and make it happen.

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[Editor’s Note: Today’s article was written by a colleague who recently traveled to Russia. These are his observations about the current situation on the ground.]

Today in Russia, there is unmistakable tension in the air.

You definitely don’t want to speak out against the war or the current regime— it’s almost guaranteed way to lose your job or end up in a prison.

That’s why everyone is so careful about what they say, and to whom they say it. Unless you know someone really, really well, you have to avoid any potentially controversial topics.

The TV blasts propaganda on a daily basis, effectively brainwashing millions of people. It’s surprising how many Russians seems to believe the news… or at least pretend to believe it.

The national elections took place this past weekend. Despite the official numbers reporting 77% voter turnout, most people I spoke to didn’t plan on voting since, “the result will be the same anyway.”

This is all eerily reminiscent of the Soviet Union.

Yet at the same time— and completely unlike the days of the Soviet Union— the Russian economy is doing surprisingly well.

Western nations thought that their sanctions would cripple Russia. But that hasn’t happened. Russia’s unemployment rate currently stands at a historically low 3%— less than even the United States.

A friend in the tourism business has been very busy selling tour packages to a luxury hotel in the UAE in the past couple of years.

And a business person who imports and resells industrial equipment told me business is very good for him now, because sanctions have forced his foreign competitors to exit the Russian market.

In this way, sanctions have actually benefited many sectors of the economy since Russia is no longer able to import products from Europe and the US. So many Russian businesses have created new products to replace these imports.

To give you an example, European cheeses and meats are very popular in Russia. But now, rather than be imported from France and Italy, they are produced by local Russian companies.

Large auto brands like Toyota and Volkswagen have been replaced— either by significantly cheaper Chinese brands (which offer decent quality at a much lower price), or by Russia’s own automotive brand, Lada.

 

For workers, salaries have also gone up— in large part because of labor shortages.

Roughly one million Russians have reportedly left the country since the start of the war— and most of these people are in their prime working years.

The government is also paying quite handsomely to recruit people into the military; contract soldiers earn the equivalent of $2,200 per month— which is a fairly hefty salary in Russia, especially someone of limited education.

The government seems to be trying to balance economic needs with the war effort. And as a result, almost anyone with a stable job (and who pays taxes) has been able to easily avoid the military draft.

You might be also surprised to learn, in fact, that draft evasion is just an administrative offense in Russia, as opposed to a criminal offense.

It’s usually naturalized foreigners, i.e. people who originally come from former Soviet republics like Tajikistan, Kyrgyzstan, and Azerbaijan, who don’t know the rules about the military draft. Consequently, these foreigners are on the front lines in substantial numbers.

Criminals also make up a significant percentage of contract soldiers. And due to lack of proper training and equipment, many of them will not come back. A lot of people here think this is a deliberate ‘social cleansing’.

It’s also one of the reasons why Moscow is now one of the safest cities in the world.

The city was incredibly safe even before the war. But it’s on a whole different level now.

While vehicle theft and break-in are somewhat of an epidemic in places like San Francisco, such crimes are simply unheard of now in Moscow.

If you go to any random cafe in the city, you’ll find most people don’t even bother watching their bags or laptops. Delivery guys will leave their expensive electric bikes unlocked while they go upstairs to people’s apartments to drop off food.

I should also point out how incredibly cheap Russia is.

Moscow is one of the largest, most advanced and cosmopolitan cities in the world. The standard of living is extremely high.

Yet life in the city is now objectively cheaper than every other major city in the world. And I’m not just talking about Tokyo, New York, London, and Sydney.

Moscow is even cheaper than Sao Paolo. Mumbai. Johannesburg. Bangkok. Even  Tbilisi, Georgia. And that’s especially true if you’re spending dollars or euros.

A 2-hour 80 km taxi ride from one of Moscow’s several airports (again, it’s a huge city) cost me just $26. Lunch in a mid-level restaurant with wine was about $15 per person.

Sure, you might pay similar prices in a tier-2 or tier-3 town somewhere in Latin America, but, again, in terms of standard of living, Moscow is on the same level as London.

So at this point I believe it is the most undervalued city in the world.

Perhaps most surprising is that Russia’s bureaucracy has been completely overhauled.

I was shocked to learn that government employees now work for 12 hours a day, six days a week. And they actually strive to be efficient and helpful.

When you renew your passport or drivers license, for example, you’re invited to leave a review about the service you received. Government workers’ salaries actually depend on these reviews… so they have a financial incentive to provide good service.

It’s similar with public works projects— they strive to be fast and efficient. And there have been a great number of those lately.

Infrastructure in Moscow and elsewhere seems to be improving by the day. New metro lines and roads are everywhere. Airports are modernizing, even despite the war.

And given the backlash that Russian citizens have faced around the world, the government has encouraged domestic tourism, with several mega-projects under development in resort towns on the Black Sea.

Overall Russia (and Moscow in particular) is a veritable tale of two cities. On one hand, there is palpable tension in this country, and the constant risk that if you slip up and say the wrong thing to the wrong person, then you could easily wind up in prison.

Suffice it to say that the Russian state has little tolerance for dissent.

Yet on the other hand, Moscow is one of the nicest, safest, most advanced, yet simultaneously cheapest of tier-1 global cities.

The Russian economy has proven robust. Income taxes remain low (the top rate is just 15%). The government is shockingly efficient.

Western leaders continue to believe that their “devastating” sanctions will cripple the Russian economy, and that the Kremlin will soon be on its knees begging for peace.

They are sorely mistaken.

After this trip it’s clear to me that Russia has the capability to continue this war for a long, long time.

 

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On November 5, 1605 Guy Fawkes was caught in the cellars of the Parliament building in London in what became known as the Gunpowder Plot— a conspiracy to assassinate King James I and restore a Catholic monarch to the English throne.

Guy Fawkes was arrested, tortured, and executed.

And his name, ‘Guy’, became an extreme insult. If someone called you ‘guy’ in the early 1600s, fists might fly— after all, it referred to a traitor who tried to murder the king.

The term ‘guy’ was also used to insult people’s looks or clothing, as the public often burned effigies of Guy Fawkes that were made to look grotesque or shabbily dressed.

Over time, though, ‘guy’ took on a different meaning. Today it’s just an informal way to refer to a man.

This is common in languages. Over decades… and even centuries… words tend to change meaning.

In the last few years, however, a handful of people have hijacked languages, and decided for everyone that words have new meanings.

But they never give us a nice new definition you could look up in the dictionary. The words mean whatever they want them to mean at any given time.

And that has been the fate of many words, for example, violence and genocide.

According to Merriam-Webster dictionary, violence is, “the use of physical force so as to injure.”

But over the past few years, woke activists have hijacked this word and redefined it to meet their absurdly broad criteria. Misgendering a trans person, for example, is considered “literal violence.”

Transgender actor Laverne Cox may have started that trend as far back as 2014, claiming “Misgendering trans people is an act of violence.”

More recently a school district in Philadelphia, plus various “Gender 101” university courses, have claimed the same.

Call me old fashioned but I always thought violence required actual physical contact.

But they don’t stop at violence.

The Trans Radical Activist Network (TRAN) claims that deliberate misgendering of trans people is akin to participating in a genocide against them.

The Daily Kos, a progressive political website, claimed Trump’s plan to ban gender reassignment surgery and puberty blockers for minors was, “a genocidal plan against all transgender existence in the United States.”

Growing up I recall the word genocide being used exclusively to describe holocaust-level atrocities— the murder or attempted murder of entire ethnic groups or minorities.

Pol Pot waged genocide against millions of Cambodian intellectuals. Hutu militias wiped out hundreds of thousands of ethnic Tutsis during the Rwandan genocide of the 1990s.

Yet today, people who are against transgender athletes participating in women’s sports are accused of committing genocide.

Another example: In 2019, Finnish politician Paivi Rasanen tweeted a Bible verse that was considered homophobic.

She was investigated for two years and ultimately indicted on three counts of “war crimes and crimes against humanity”. She was found not guilty, but the prosecution has appealed.

These terms— war crimes, crimes against humanity, violence, etc. have been completely hijacked by the woke mob… and they have no real definition anymore. Genocide means whatever some rabid activist wants it to mean.

This is why Canada’s new ‘hate speech’ law caught my eye.

Prime Minister Justin Trudeau’s government recently passed the “Online Harms Act”, claiming that it’s all about protecting children. And that certainly sounds like a noble intention. After all, who could possibly be against protecting children?

But the bill also states that, “Every person who advocates or promotes genocide is guilty of an indictable offence and liable to imprisonment for life.”

It also demands life in prison for any crime, “motivated by hatred based on race, national or ethnic origin, language, colour, religion, sex, age, mental or physical disability, sexual orientation, or gender identity or expression.”

Now, I happen to be in favor of free speech… and that even extends to offensive, idiotic speech that has no place in a civilized society. So throwing someone in prison for life because of words seems ridiculous to me… especially given the bizarre double standard of woke justice.

Bear in mind that criminals who commit actual violence are routinely turned back onto the streets because bail is ‘racist’. But hate speech is considered a crime that may now carry a life sentence.

If genocide still meant ‘the systematic murder of entire groups of people’, this new Canadian law might not be too scary.

But we live in a world where some very powerful people think that misgendering someone is akin to genocide.

Trudeau in particular has already bent laws to increase his own authority. He silenced his opposition throughout 2020-2021, and when the Freedom Convoy protested his mandates, he de-banked them, imprisoned them, and denied them bail.

He seized authority that voters never gave him, and he used it to hurt people.

Does anyone honestly think that this new law won’t be abused to do the same thing? The government can lock somebody up for life now based on ideas which have no longer have any defined meaning.

What is Justin Trudeau’s definition of genocide? Or violence? Or war crimes? What is his definition of hate?

I’d love to know. But I doubt they’ll ever tell us.

And that’s the problem with these woke people— they love to accuse people of things, but they never define the thing that they accuse people of.  

Inspired Idiots like Trudeau are on a crusade, and are delusional enough to think they are actually making the world a better place.

But destroying things as fundamental as language, and threatening life in prison over whatever the definition happens to be today, makes people less free.

This is a guy who smeared the Freedom Convoy— protesters with legitimate grievances against the government— as “misogynistic and racist”, and wondered aloud “do we tolerate these people?”

And when a government starts pushing life in prison over behavior that they can redefine in their sole discretion, it should be pretty easy to understand why you ought to think about a Plan B.

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Dwight Eisenhower had a huge problem in 1948.

After winning the war in Europe and defeating the Nazis, “Ike” was one of the most popular and recognizable men in the world… and publishing houses were falling all over themselves for his memoirs.

Doubleday, a New York based publisher, won the bid by paying a massive $635,000 advance for the book rights. That’s worth tens of millions in today’s money, putting him in the same category as the Obamas’ two book, $65 million publishing deal.

Eisenhower’s problem, however, was the US tax code; $635,000 would immediately bump him into the highest income tax bracket with a 91% marginal rate, and he would have to fork over the vast majority of that income to the government.

But for some bizarre reason, the Treasury Department issued an unprecedented tax ruling in Eisenhower’s favor; they claimed that he was not a professional author subject to income tax.

Rather, the Treasury Department explained, the former general was merely profiting from the sale of an asset, i.e. his life experience, and was thus only required to pay capital gains tax of 25%.

I doubt anyone in the Treasury Department actually believed such a weak argument; most likely there were a few very powerful people trying to help Eisenhower out, and they made up some ridiculous justification to cut his tax rate.

Obviously this tax ruling no longer exists, and Eisenhower was one of the few people to benefit from it. But for a very, very short time in the United States, the government peddled the ridiculous fiction that certain ‘income’ was really just a ‘capital gain’.

There is now a growing chorus of shrieking sirens within the government that is trying to do the opposite– pretend that ‘unrealized’ capital gains are really income in disguise.

Joe Biden tried to make this case on Monday when he rolled out his new 10-year budget proposal… which is every bit as absurd fiction as Eisenhower’s tax ruling.

“Fairness” is a big part of the President’s budget proposal. Sounds good. After all, who’s not for fairness?

Except that they never bother to define their terms. Exactly how much is a “fair share”? No one actually says. All we know is that it’s never enough.

Part of his proposal is to enact a “25% minimum tax” on the wealthiest Americans with a net worth in excess of $100 million.

25% of what, exactly? Who gets to decide how much a person’s “income” is?  What qualifies as income?

It’s obvious from the President’s explanation that they want to count unrealized capital gains as income.

In other words, if you buy shares of Apple, and your Apple stock goes by 10%, they deem that 10% to be income even though you haven’t sold a single share or received any money for the investment.

This creates a lot of complications and questions.

For example, consider that Hunter Biden (by his own admission) is holding on to $10 million on behalf of the ‘Big Guy’.

Based on the President’s logic, this means that the Big Guy’s wealth, i.e. ‘income’, has increased by $10 million even though he supposedly never actually received any money.

Moreover, Hunter Biden has been able to make millions of dollars by monetizing his family’s name; this makes the Biden ‘brand name’ an obvious asset. And given all the money that Hunter has made, any reasonable financial model would easily value this brand name asset in excess of $100 million, and hence be subject to the wealth tax.

Ultimately the wealth tax is a pointless idea anyhow. Even in the President’s own budget proposal, the projected revenue from a wealth tax doesn’t move the needle on America’s endless deficits.

The proposal shows, in fact, that the US national debt still continues to rise, quickly reaching 130% of GDP and shooting well past $50 trillion… even assuming his wealth tax is passed.

Yet he also assumes that America can continue to rack up massive deficits year after year without any consequences.

Mr. Biden thinks inflation will remain low. Unemployment will remain low. Interest rates will remain low. And zero reforms will be made to Social Security and Medicare benefits, even though the programs’ trust funds are set to run out of money in ten years.

This is such a bizarre fantasy… and another important reminder that the people in charge aren’t even capable of acknowledging the problems (that they themselves have created), let alone speaking honestly about the solutions.

Now, we are not pessimistic people; on the contrary, I think there is a tremendous amount of opportunity in the world and I am wildly optimistic about the future.

However it would be foolish ignore such obvious risks.

Even the President’s new budget proposal forecasts that the national debt will spiral out of control. And interest payments on the debt will consume a greater and greater percentage of tax revenue.

The only real solution is for the Federal Reserve to slash interest rates and start creating more money again, all in an effort to bail out the Treasury Department.

We believe this will be highly inflationary. After all, when the Fed created $5 trillion during Covid, we got 9% inflation. This time around they’ll most likely have to create $15+ trillion.

But this doesn’t mean the world is coming to an end. Rather, if we can anticipate inflation over the next few years, it means we can take steps now to minimize the impact.

And it just so happens that many fantastic inflation hedges are incredibly cheap right now, some even hovering near record lows.

More on this soon.

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If you saw Christopher Nolan’s blockbuster Oppenheimer, you might remember the scene in which Dr. Oppenheimer travels to Chicago to meet with physicist Enrico Fermi, who had just achieved the world’s first ever self-sustaining nuclear chain reaction.

This really happened– it was December 2, 1942, and Enrico Fermi’s experiment was a massive scientific breakthrough.

Fermi and his team proved that a fission reaction could be controlled… and therefore the vast amount of energy inside of an atom’s nucleus could be harnessed for other purposes.

Obviously, the US government was singularly focused on turning that immense nuclear energy into the biggest bomb the world had ever seen. But Fermi’s discovery also paved the way for nuclear power.

Proponents envisioned a world powered by nuclear energy where the cost of electricity would be practically free… and the benefits to mankind incalculable.

It all came down to efficiency; the amount of nuclear power that could be generated from a single rock of uranium was equivalent to thousands of tons of coal in a conventional power plant.

The cost of electricity would plummet. And that cheap energy would mean that consumers would pay far less for utilities, saving plenty of money that could be put to other uses.

Cheap energy also means that the production costs of just about everything would fall; cars, houses, food, etc. all become cheaper.

Cheap energy also helps countries develop more rapidly and increase economic growth, resulting in greater national prosperity and more tax revenue for the government.

The promise of nuclear energy was extraordinary– it was a win/win/win. So naturally when other nations began to develop the technology on their own, it set off an arms race to stockpile as much uranium as possible– mostly to ensure that no one else could make weapons.

The United States government bought up entire warehouses full of it and made an exclusive deal with the Belgian Congo (which had the world’s largest uranium reserves), simply to make sure that other countries couldn’t get their hands on any nuclear fuel.

Then, over the years, the US government slowly sold down its uranium inventory, little by little.

Mining companies also added new supply to the uranium market, ensuring there was plenty of uranium to meet growing demand.

But then a series of infamous accidents took place– Chernobyl, Three Mile Island, etc. The public freaked out, and the entire nuclear power industry nearly vanished.

Now, an objective analysis shows that, any way you slice it, far more people have died from accidents related to coal, oil, natural gas, and other forms of electricity production than have ever died from nuclear power accidents.

In fact, more people have died from accidents related to wind power than have died from nuclear.

But nuclear power still suffered a terrible blow to its reputation, and it remained that way for a very, very long time.

Power companies scrapped their plans for new nuclear power plants, and the demand for uranium collapsed, prompting many mining companies to shut down their operations.

The existing nuclear power plants that remained in business, however, continued buying uranium from the government… so those stockpiles from the 1950s continued to dwindle.

And that takes us to today: nuclear is finally making a comeback.

Unfortunately, most of the West (as usual) is missing the boat; the vast majority of new reactors will be in China, India, and other rapidly growing nations who understand that no other energy technology offers the same advantages as nuclear.

Western politicians are still stuck in their idiotic, Dark Age beliefs that wind and solar are the way to go. But these are both completely inefficient and extremely expensive technologies.

The amount of energy it takes to produce solar panels relative to the electricity that solar panels actually generate is a laughable pittance; this is known as ‘Energy Return on Energy Invested’, or EROEI… and with nuclear power, it’s off the charts.

Plus, nuclear power also has one of the lowest levels of CO2 emissions of any energy source.

(It’s also worth noting that emerging nuclear reactor technology promises to slash costs even further of establishing a new nuclear plant and increase safety even more.)

This means that nuclear has the potential to provide massive economic AND environmental benefits. Virtually no other technology has that capability… which is why it’s only a matter of time before the world ‘rediscovers’ nuclear.

Again, it’s already happening in Asia. In fact, it’s possible to literally count all the planned / in-progress nuclear power plants that will be coming on line in the next few years, and then estimate the annual uranium demand.

One of the best researchers in this field, by far, is my colleague Adam Rozencwajg, who has spoken at a few of our Total Access events; Adam has gone through the trouble to count up all the new reactors and their projected uranium needs, and the answer is very clear:

Bottom line, uranium demand is set to skyrocket. Yet supply isn’t going anywhere, not for a while.

It takes many years to get a new uranium mine up and running– sometimes even longer than it takes to build a new nuclear power plant.

So, you can see how there’s likely going to be a massive imbalance in uranium supply and demand.

I first started talking about uranium in September of 2022 when spot prices hovered around $40 per pound.

Today, uranium trades for more than $90 per pound. But I think it could go much, much higher from here.

In fact, global uranium demand already exceeds new mining production. In the past, whenever this happened, there were always vast government stockpiles to keep the power plants supplied.

But now the government stockpiles have dwindled. So, we could easily see a major uranium shortage… and prices go through the roof.

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At 3:15 in the morning on May 10, 1774, King Louis XV of France passed away after a grueling, two-week battle with smallpox.

Upon hearing the news, his heir and grandson– 19-year old Louis XVI, reportedly cried out, “God protect us, I am too young to rule. . . I have learned nothing and the universe will fall upon me.”

But the new young king did manage to make at least one very bold decision almost immediately: he appointed a controversial French economist named Turgot to head up the nation’s finances.

Everyone knew by 1774 that France was in serious trouble. The national debt had soared to a record high thanks to so many years of war, extravagant spending, corruption, and blatant mismanagement.

Annual interest payments on the debt were becoming so vast that France had to borrow more money just to pay interest on the money they had already borrowed. And lenders were becoming increasingly worried that the government would default.

As a result, interest rates rose considerably. Investors who loaned money to the French government demanded rates as high as 12% to compensate themselves from the risk of potential default.

Louis XVI knew that this was completely unsustainable, and that France was headed for a major crisis if the government didn’t take urgent action to reverse course.

And that’s why he hired Turgot– possibly the only person in the kingdom with the balls to do what was necessary.

It wasn’t rocket science; Turgot knew exactly what needed to be cut. It was obvious:

By the early 1770s, the court at Versailles included the entire royal family, along with a whopping 886 aristocrat freeloaders– plus their wives and children. Add to that number 295 cooks, 56 hunters, 47 musicians, plus various other secretaries, chaplains, physicians, and other entourage, plus thousands of guards to protect everyone.

In total the royal court had over 16,000 mouths to feed, not to mention the handsome salaries paid to all of these useless officials.

The annual pensions alone, which were paid just to a handful of the king’s closest friends, consumed more than TEN PERCENT of the government’s annual budget.

But on top of this blatant spending problem, France also had a productivity problem. High taxes, excess regulation, and government price controls virtually eliminated any incentive to produce. Plus businesses faced endless battles with the guilds, which were essentially the unions of that era.

So, when Turgot was charged with fixing the country’s financial woes, he knew exactly what to do. And he sketched out his plan to the king the very night that he was appointed:

“In the present moment, I confine myself, Sire, to call to your recollection three ideas: No national bankruptcy. No increase of taxes. No new loans. . . To obtain these three points there is but one method– that of reducing the expenditure. . .”

Turgot knew that the economy needed to become more productive, so he wasn’t willing to raise taxes. He wouldn’t cause a financial crisis by defaulting on the debt. And he certainly wasn’t going to increase the debt by borrowing more money.

The solution was obvious, and Turgot got to work almost immediately.

With the King’s support, he made deep, deep cuts to the royal court. He also liberated trade and commerce by taking power away from the guilds, eliminating price controls, and reducing regulation.

And it worked. By the end of 1775, Turgot had balanced the budget and restored France’s creditworthiness such that he was able to refinance a large portion of the French debt with foreign investors at a rate of just 4%.

He turned everything around in just barely a year.

Unfortunately for France, however, Turgot had made a lot of enemies. The nobles, the guilds, and even the church hated him. So, on May 12, 1776, the King gave in to the pressure and fired Turgot. France then quickly resumed its decline.

The larger point is that it is possible to turn a giant ship around. France was in dire straits when Turgot took over. But he managed to reverse course in a year.

The US is now at a similar point (though frankly much worse) as when Turgot took over French finances.

France’s budget deficit in 1774 was roughly 10% of total tax revenue, while the budget deficit in the US last year was closer to 40%. Nevertheless, it’s still possible for America to turn things around.

And just like France in 1774, the answers are obvious. Turgot knew that every other government expenditure combined paled in comparison to France’s #1 cost: the royal court.

Similarly, everything else in the US government budget combined pales in comparison it its #1 cost: entitlement spending.

Obviously, there is plenty of fat to trim everywhere in the US government; the Defense Department routinely wastes tens of billions of dollars, let alone the billions wasted in other departments.

And while those cuts would be helpful, they won’t amount to anything unless the #1 issue is tackled.

Entitlement spending, which includes Social Security, Medicare, and various welfare programs which the government now politely calls “income security”, cost a whopping $3.75 TRILLION in Fiscal Year 2023. This is the obvious place to start.

But Joe Biden made it very clear in last night’s State of the Union that he has absolutely no intention of doing that.

He could have been honest. He could have leveled with voters that there is almost no chance of balancing the budget without obvious entitlement reform… and that failing to balance the budget will result in an existential financial crisis.

At a minimum he could have said nothing.

But instead, he specifically ruled out entitlement reform (for the second year in a row) and explicitly said, “If anyone here tries to cut Social Security or Medicare or raise the retirement age I will stop them!”

Now, Joe Biden may think that he’s doing the right thing. But this is classic Inspired Idiocy.

When Hawaii’s Supreme Court recently ruled that the “Spirit of Aloha” takes precedence over the second amendment, they thought they were doing the right thing. Or when the FTC sued last week to block a grocery store merger, they thought they were doing the right thing.

Even the eco-terrorists who sabotaged a Tesla factory in Germany this week believe they’re doing the right thing.

Inspired Idiots always think of themselves as righteous. Unfortunately, they’re completely misguided and almost always wrong. They understand nothing, but they’re really passionate about it.

And that’s the danger.

This coming fiscal crisis is completely avoidable if the people in charge would simply take it seriously. But the President pledged last night that he will do absolutely nothing to stop it, and in fact continue making it worse.

The good news is that, while the Inspired Idiots in charge keep steering the country directly into the crisis, individuals can take rational steps to mitigate the worst consequences… and potentially even benefit from the opportunities that arise.

That’s why it’s so important to have a clear understanding of these obvious risks, and to have a Plan B.

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