Inspired Idiot of the Week: American Psychological Association

“Can Selecting the Most Qualified Candidate Be Unfair?” asked researchers in a recent study published by the American Psychological Association.

And the short answer, according to this new ‘science’, is a resounding YES: hiring the most qualified people based purely on their merit and talent is unfair.

Naturally they don’t actually discuss WHY. They just take it as a well-known fact that merit-based hiring is bad, while diversity & inclusion hiring is good.

The actual experiments that the researchers discussed in their paper had to do with how easily they could brainwash and manipulate people into believing that “merit-based hiring and promotion processes [are] significantly less fair.”

Quite easily, it turns out. The results of their experiments show that they can easily “disrupt the perceived fairness of meritocracy”.

They’re also excited to take their research even further by “exploring whether the manipulations developed here can be effective” in other ways, like making “diversity policies” less “polarizing”.

By lifting its countenance upon this research and publishing it in the Journal of Experimental Psychology, this ideological drivel is now considered ‘science’.

So, the next time some Inspired Idiot wails about how wonderful diversity and inclusion is… and justify their position by saying things like “studies show” and “the science says”, we can thank the American Psychological Association.

Now, this is just one research paper written by a few fanatical academics pushing their agenda. It’s hardly anything to get bent out of shape about.

But it is a small example of the direction of the nation. And that direction can be summed up in a single word: WRONG.

I’ve written extensively how the problems facing the US aren’t even really political at this point. It’s a question of arithmetic.

The government’s own baseline forecast estimates an additional $20 trillion in new debt over the next decade, on top of the $34 trillion debt they already have.

Most likely this will result in a substantial amount of inflation, plus loss of reserve status for the US dollar, over the next 5-7 years.

I’ve also argued that the US has a very narrow window of opportunity to turn things around. And one of the key ways to do that is to increase productivity.

If there were a true economic bonanza in the US— a surge in production of goods and services— then that would largely solve the problem.

Massive economic growth would lead to a major increase in tax revenue… meaning that the government could solve its perennial deficit problem simply by generating more revenue, as opposed to cutting costs.

And by the way, I’m not talking about raising tax rates.

Just look at the history of taxation in the US: since the end of World War II, the top individual income tax rates in the US have varied tremendously— from as low as 28% in the 1980s, to as high as 91% in the 1960s. Yet despite these fluctuations, the government’s overall tax revenue (as a percentage of GDP) has been very consistent— around 17% of GDP.

In other words, it doesn’t matter how high they raise tax rates. Overall tax revenue, i.e. the government’s ‘slice’ of the economic pie, will remain the same.

The implication? The only real way to generate more tax revenue is to make the pie bigger.

And it doesn’t take a genius to figure out how to do this: stop debilitating large and small businesses with mountains of rules and regulations.

Every day there seem to be calls for more anti-business, anti-capitalism, anti-productivity policies. New reports to file. Wealth taxes. Or my favorite, the Labor Department’s recent 800-page proposal to make sure your small business builds enough bathrooms to conform to everyone’s gender identity.

These sorts of things take economic productivity backward, not forward.

And this new ‘science’ by the American Psychology Association— demanding that businesses should NOT hire people based on merit— is just another small step backward.

It’s the wrong direction, plain and simple. And it’s why I’m not holding my breath that the Inspired Idiots in charge will suddenly start doing what’s necessary to turn the ship around.

Again, though, this should not be a cause for panic or dread.

I’ve also written extensively that rational, thinking people can mitigate the consequences of this Rule by Inspired Idiots.

Gold, for example, tends to perform extremely well in the chaotic, inflationary times that I anticipate. And one potential low-cost approach would be to buy options on long-term gold futures as a hedge against inflation down the road.

We’ll explain more about this, as well as the benefit of owning real assets, next week.

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It’s not a prediction. It’s arithmetic.

Thousands of years ago during the late Bronze Age– most likely between 1100 and 1200 BC, two ancient civilizations were exhausted after nearly a decade of warfare.

On one side was the ancient Achaean peoples led by the Mycenaean king Agamemnon. On the other was a legendary Hittite city that had already been in existence for more than 2,000 years.

Back then the city was called Wilusa. Today we know it as Troy.

The general consensus among historians today is that, most likely, the war did take place. But it obviously lacked the drama and intrigue of Homer’s epic tale, the Iliad.

 We all know the story: after nine grueling years of war, Odysseus hatched a plan to sneak through the impenetrable gates of Troy. Guided by Athena, the goddess of wisdom and warfare, the Greeks built a hollow statue of a horse and hid their soldiers inside.

The horse was left as a gift for the Trojans with an inscription of goodwill and peace. And, according to Homer’s legend, the Trojans took the bait.

But there were a few people who predicted severe consequences, including a Trojan priest named Laocoon, who famously warned, “Timeo Danaos et dona ferentes.

Translation: “Beware of Greeks bearing gifts.”

This was a time in human history in which oracles and prophets were a normal part of life. People in the ancient world regularly sought counsel from ‘seers’ who claimed to have some special power to predict the future.

And frankly this addiction to prophesy lasted for thousands of years. Even famous historical leaders into the 19th and 20th centuries like Napoleon, Joseph Stalin, and Adolf Hitler reportedly took advice from fortune tellers and astrologers.

But if we really analyze Laocoon’s legendary warning about the Trojan Horse, he wasn’t making a prediction about the future. He was just looking at obvious facts and exercising good judgment and common sense.

That’s what good ‘predictions’ are anyhow. No one has a crystal ball to see the future like some prophetic oracle from ancient mythology.

And I wanted to be clear about this point… because when we write about future financial consequences, like a debt crisis down the road, or the US dollar losing its reserve status, etc., we’re not making ‘predictions’.

Rather, we’re looking at obvious facts and trends, then exercising good judgment and common sense. And the facts are very clear.

We don’t peer into a crystal ball when we say that the US national debt is set to increase by $20 trillion over the next decade. This is publicly available information pulled directly from the Congressional Budget Office’s own forecast.

It’s not some magical prophesy when we say that Social Security’s trust funds will run out of money in a decade. This information comes directly from the official report of the Social Security Board of Trustees.

Nor are we exercising any special powers when we say that the Federal Reserve is completely insolvent. We’re just looking at the Fed’s own quarterly financial statements which show an unbelievable $1.3 TRILLION in unrealized losses.

You get the idea. There’s nothing mystical about the ‘predictions’ we’re making; we’re simply citing official reports and connecting the dots that almost everyone in the ‘expert class’ chooses to ignore.

Sure, we think that an insolvent Federal Reserve, plus $20 trillion in new debt, plus Social Security’s bankruptcy, will probably have consequences. But we’re also careful to acknowledge where we might be wrong.

I’ve written several times that the US government still has a very narrow window of opportunity to get its house in order. Sadly, they are not taking advantage of that window.

It’s also possible that an AI-led economic boom could dramatically increase productivity and tax revenue in the US, similar to the Internet boom in the 1990s.

But given that there are so many prominent figures in both government and within the AI community itself, trying to restrain AI’s growth, I’m skeptical that an economic boom will happen in time to forestall the most severe consequences of America’s gargantuan debt.

This is why we feel that our analysis is on very solid ground. And that leads me to solutions.

There’s an old Danish proverb (frequently mis-attributed to Mark Twain) which translates as “Predictions are hard. Especially about the future.”

But sometimes they’re not. Or better yet, I’d say that predictions are hard… except when you’re not actually making predictions.

Again, we’re looking at clear and obvious facts.

Social Security, for example, states that the program will “become depleted and unable to pay scheduled benefits” within 10-12 years. That’s not a ‘prediction’. That’s arithmetic.

For rational, thinking people, however, this should not be a cause for panic. Instead, it should a reason to take action and solve the problem on an individual basis… rather than wait for Inspired Idiots in the government to fix it.

And there are plenty of options. Setting up a more robust retirement structure like a solo 401(k), for instance, allows you to contribute a lot more money for retirement, plus it provides a wider range of investment options like real estate, crypto, and more.

And even if the Inspired Idiots miraculously come together to solve the Social Security problem, you won’t be worse off for having set aside more money for retirement.

Ditto for other risks we discuss.

Real assets, for example, generally tend to perform very well during inflationary periods. Yet many real asset producers are currently trading at historic lows.

There are highly profitable, debt-free, dividend-paying companies out there whose share prices are extremely cheap. And if the future inflation scenario we’ve outlined takes hold, those types of companies typically experience extreme gains.

But if we turn out to be wrong, it’s hard to imagine being worse off buying shares of a successful, dividend-paying business at historic lows.

This is a great way to think about a Plan B: consider solutions that make sense regardless of what happens (or doesn’t happen) next.

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The Fed asks America to fill in the blanks _______

It’s interesting to see how so many mainstream voices are starting to express concern about the gargantuan size of the US national debt.

For most of the past decade, even as the debt spiraled out of control and passed $20 trillion, $25 trillion, $30 trillion, etc., hardly anyone in the media said a word about it. If anything, they would insist that the ‘debt doesn’t matter.’

That tune is finally starting to change. And the latest example came last night when 60 Minutes interviewed the Chairman of the Federal Reserve, Jerome Powell.

The US national debt now stands at more than $34 trillion. It will surpass $35 trillion by the summer and likely $36 trillion by the end of the year.

It’s growing so quickly that the interviewer asked about the debt, “Thirty years from now, it is projected to be $144 trillion. . . [I]s the national debt a danger to the economy in your view? I have the sense this worries you very much.”

The answer to almost any sentient human being, of course, is “absolutely yes.” And the Fed Chairman admitted as such. Sort of. He said:

“In the long run, the US is on an unsustainable fiscal path. . . Over the long run, of course it does [worry me very much] . . . It’s time for us to get back to putting a priority on fiscal sustainability. And sooner is better than later.”

Now a term like “the long run” is a funny thing because it can mean just about anything. To some people in finance and economics, “the long run” can mean five years. To others, fifty years.

Saying “the long run” is like asking your audience to fill in the blanks with whatever timeframe they think that means.

 But this is intellectually dishonest… and it frankly makes the country worse off.

We’ve written about this extensively here at Schiff Sovereign: the US government’s own internal projections (which come from the White House and the Congressional Budget Office) forecast that the debt will increase by $20 trillion over the next decade.

And this is a true crisis in the making.

Consider that, by 2033, the government will have to spend 100% of federal tax revenue simply to pay for THREE things: Social Security, Medicare, and Interest on the Debt.

EVERYTHING else in government, including military spending, veterans’ benefits, and the electricity bill at the White House, will have to be funded with more debt… which only makes the problem worse.

This will be a fiscal black hole from which there is no escape. And it’s less than 10 years away.

We’re not being sensationalist or dramatic here; this is a simple arithmetic problem based on the government’s own projections. And frankly those projections are optimistic.

Their estimate for $20 trillion in new debt, for example, does not include any money for Social Security, which will require a multi-trillion-dollar bailout over the next decade. Their estimate also assumes there will be no war, no new pandemic, no national emergency, and no new idiotic, expensive legislation.

So, a more conservative estimate of the national debt is probably closer to $60 trillion or more by 2033. This means that interest payments on the national debt will take a greater and greater share of tax revenue.

The Congressional Budget Office forecasts admit this, stating that as the national debt increases, “the cost of financing the nation’s debt grows, [and] net outlays for interest increase substantially. . .”

The US government’s interest expense “rose by 35% last year, [and] are projected to increase by 35% again this year.”

No institution, not even the US government, can possibly expect to stay solvent when their interest expense grows by large double digits each year.

Now, it’s not like this is top secret information. The Congressional Budget Office posts this forecast on its website for the entire world to see. Surely the Fed has access to the Internet. Surely, they’ve seen these projections.

Yet the way 60 Minutes set up its question– by referencing the debt 30 years into the future– to how the Fed Chairman kept saying “the long run” and “sooner is better than later”, all gives people a false sense of security that the US has more time to resolve this crisis than it actually does.

This is an arithmetic problem, plain and simple. And the realistic window of opportunity to solve it is 5-7 years, at most.

The other disingenuous part about the Chairman’s comments was that, in addition to using terms like “the long run”, he encouraged “fiscal sustainability” without mentioning any specifics.

To some, “fiscal sustainability” might mean slashing welfare programs. To others, raising taxes on corporations and wealthy people.

So once again the Fed Chairman tacitly asked the audience to fill in the blanks and imagine for themselves what “fiscal sustainability” means.

This is also intellectually dishonest.

Social Security is, by far, the #1 most expensive line item in the federal budget. It dwarfs even Defense spending.

So, there is no “fiscal sustainability” at this point without making major cuts to Social Security. Nothing else– no other budget cuts– will matter unless there is a complete overhaul of retirement benefits and qualifications. It’s the only real lever the government has to balance the budget.

Ultimately this means defaulting on decades of promises that the US government has made to people currently in the work force.

Naturally no one wants to talk about this… including the Fed Chairman. So again, it’s left to the audience’s imagination to fill in the blanks.

Personally, I’m not holding my breath a solid majority in Congress will have the willingness and courage to cut entitlements. And frankly I presume the Inspired Idiots in charge will keep making things worse.

But the good news is that there is still a reasonable window for any independent-minded individual to take completely rational steps to reduce the consequences of what lies ahead.

And we’ll continue to talk about more of these solutions in the future.

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Inspired Idiot of the Week: Lizzie Warren edition

Last week when I wrote about the dumbest guy of the week, I should have known it wouldn’t be a one-time thing.

A week ago I wrote about Congressman Jamaal Bowman, who was demanding that the US government make “at a minimum” $14 trillion worth of reparations payments.

(Remember, this is the same guy who ‘accidentally’ pulled the fire alarm in the Capitol on September 30, 2023, which just happened to disrupt a critical Congressional vote that he was hoping to stall.)

As a member of Congress, Bowman surely knows that the national debt is already $34 trillion. He surely knows that last year’s deficit was nearly $2 trillion. He surely knows that Congress itself projects another $20 trillion in new debt over the next decade.

Yet in addition to all that debt, Mr. Bowman wants to dole out an additional $14 trillion in reparation payments.

And his plan for how to come up with the money? “We [spend] it into existence,” he says. In other words, more debt.

One can only marvel at this intellectual giant’s grasp of economics.

But the competition for the biggest Inspired Idiot is fierce. And this week the Senator from Massachusetts, Elizabeth Warren, carries the torch.

First some quick background.

In August 2022, Amazon announced plans to acquire iRobot, which makes the robotic ‘Roomba’ vacuum cleaner, for $1.7 billion.

And boy did that infuriate Elizabeth Warren.

She quickly wrote a letter to the Federal Trade Commission (FTC) urging it to “use its authority to oppose the Amazon–iRobot transaction.”

Why? Well according to Warren’s inspired idiot logic, she claimed that the deal “could harm consumers”, as if we helpless little people will somehow suffer grievous bodily injury if Amazon buys a vacuum cleaner company.

Now, Amazon was probably planning to use the iRobot device to harvest even more consumer data, just like Amazon does with just about all of its other products and services.

Call me old-fashioned, but I believe consumers are capable of making that decision themselves, i.e. whether they are willing to trade privacy for convenience. I’m not. Others are.

But Ms. Warren is making the decision for everyone. She clearly knows what’s in your family’s best interest more than you do. And thank goodness we have people like Elizabeth Warren making these decisions on our behalf.

So, this week, after nearly 18 months of pressure from Senator Warren— plus more regulatory scrutiny from inspired idiots in the European Union— Amazon finally walked away from the deal… citing insurmountable regulatory hurdles.

The immediate response was that iRobot, devoid of additional funding that Amazon would have provided, immediately laid off one-third of its work force.

You did it Lizzy! You saved the day!

Regulatory red tape almost always hurts the economy. But in this case, there’s a clear line of destruction, from a single Inspired Idiot to hundreds of people who lost their jobs as a direct result of her fanaticism.

I remember a similar case in 2019 when New York Rep. AOC opposed a planned Amazon headquarters that would have brought tens of thousands of jobs, and hundreds of millions in tax revenue to New York.

Her major beef was that, in exchange for billions in investment, Amazon would have received a partial tax break. AOC wasn’t having any of that.

So she chased Amazon out of town… then actually celebrated the lost investment, lost job growth, and lost tax revenue as a victory for the people!

It’s no surprise that, over the past five years, other large companies and wealthy individuals have fled the state to lower tax, more business-friendly jurisdictions (like Florida). And New York now has a massive financial deficit.

Bizarrely, voters keep re-electing these Inspired Idiots.

AOC hasn’t lost her job. Elizabeth Warren hasn’t lost her job. But iRobot staff have lost theirs.

Now, Sen. Warren has been a very special talent this week… because in addition to slaying the jobs of hundreds of workers at iRobot, she also sent another nasty letter to the CEO of Walgreens.

Walgreens recently announced that they were closing several locations in some of the crappiest neighborhoods in Massachusetts, Warren’s home state.

Naturally Warren whined that “these closures are occurring within the larger legacy of historic racial and economic discrimination that has created significant pharmacy and food deserts and lack of access to transportation in these neighborhoods.”

Yes, that may be true. I imagine no impoverished neighborhood would want to lose a vital drug store.

But maybe they ought to consider the reasons why Walgreens is leaving, which are completely obvious: it’s unprofitable (and dangerous) to operate in high-crime areas where half of your merchandise is shoplifted.

Yet Inspired Idiots like Warren (and the people who run these big cities) decriminalize shoplifting. Local prosecutors won’t do anything. The police can’t do anything. Security guards in the stores can’t do anything.

Why should any rational business owner continue operating in such an environment?

One of the honorable mentions this week goes to Rep. Ayanna Pressley, another Inspired Idiot who made these comments on the Walgreens matter:

“When a Walgreens leaves a neighborhood, they disrupt an entire community, and they take with them baby formula, diapers, asthma inhalers, lifesaving medications, and of course jobs. These closures are not arbitrary, and they are not innocent. They are life threatening acts of racial and economic discrimination… Shame on you Walgreens!”

Now, the three politicians who signed this angry letter to Walgreens— Senators Warren and Markey, plus Rep. Ayanna Pressley, have a combined 76 years in government.

You’d think that with 76 years they could have done something to lift their constituents out of grinding poverty by now.

But no, the problem is clearly racist pharmacies which—gasp—make perfectly rational business decisions to close unprofitable stores.

Warren obviously has enough pull to torpedo the Amazon/iRobot deal. But apparently, she’s a helpless babe when it comes to actually cleaning up the streets and delivering economic opportunity for her constituents.

These stories are important to highlight. The country is on a clear trajectory to the mother of all financial crises over the next 5 to 10 years, and there is only a narrow window to escape that outcome.

Averting disaster should be politicians’ top priority— encouraging productivity, cutting red tape, and being friendly to both large and small businesses.

But their approach instead is to shame companies, over-regulate the economy, and destroy jobs.

These people are dangerous lunatics, and they’re making things worse— not better. This is why it’s so critical to have a rock-solid Plan B for what’s coming down the road.

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The US has a $6 trillion problem over the next twelve months

Yesterday the Treasury Department announced that they expected to increase the national debt by a whopping $760 billion this quarter alone… and another $202 billion next quarter.

In short that means almost $1 trillion added to the national debt just in the first half of this year. And, again, these are the Treasury Department’s own estimates.

Obviously, that’s a pretty horrible result; even a senior Treasury official acknowledged that they have “significantly increased” their bond sales and the national debt. Not that they’re doing anything to stop the trend.

But there’s an even greater risk that the Treasury Department faces this year that is hardly being discussed anywhere.

Over the next twelve months, more than $6 trillion in existing US government debt is set to mature… and will need to be paid back somehow.

So, to give you an example, back in 2014, the federal government issued $264 billion in 10-year Treasury notes.

Well, it’s now 2024, i.e. ten years later. Meaning that $264 billion worth of 10-year notes issued in 2014 will become due and payable this year.

In 2017, they issued $368.8 billion worth of 7-year notes. And those 7-year notes issued in 2017 are due and payable this year.

You get the idea. The point is that the total sum of Treasury Bonds, Notes, and Bills outstanding that will become due and payable this year exceeds $6 trillion.

So, in ADDITION to the $1 trillion in NEW debt that they’re forecasting just in the first six months of 2024, the Treasury Department is also going to have to pay back $6 trillion of existing debt.

Naturally the Treasury Department doesn’t have $6 trillion lying around to pay back its bondholders. So instead of paying anyone back, they just borrow new money to repay the old money.

Now, this doesn’t actually increase the national debt. If they borrow $6 trillion in new bonds, but then pay back $6 trillion in old bonds, the net change to the debt is ZERO.

So, what’s the problem?

The problem is that interest rates are MUCH higher than they were 2, 3, 5, 7, and 10 years ago when those old bonds were first issued.

In 2021, for example, the Treasury Department issued almost $1 trillion in 3-year bonds back when interest rates were nearly 0%.

But since those 3-year bonds from 2021 are due and payable this year, the Treasury Department will have to borrow new money at today’s interest rates… which are hovering around FOUR percent.

And higher interest rates mean that the government’s annual interest bill will soar.

Think about it like this– $6+ trillion of existing debt needs to be refinanced. And given how much higher interest rates are, this will likely cost the government more than $200 billion per year in additional interest payments.

PLUS, they’re expecting $1 trillion of new debt in the first six months of the year, plus probably another $1 trillion in the second half of the year.

Altogether, the government’s total interest bill could easily increase by more than $300 billion per year in 2024.

And this same trend will continue in 2025, 2026, and beyond.

Right now, gross interest on the debt is already roughly $1 trillion per year. But in three years’ time, annual interest could surpass $2 trillion annually. And in 10 years, annual interest could reach $4 to $5 trillion.

Anyone who thinks this isn’t an obvious, catastrophic problem in the making (which demands immediate attention) needs to have his/her head examined.

And yet the government is full of people who shake hands with thin air and happily ignore the present and future carnage that they’re creating.

Don’t hold your breath for the Inspired Idiots in charge to fix this; I’ve written before that there is a VERY narrow window of opportunity to solve this problem… but they’re doing absolutely nothing about it.

But that doesn’t mean that you or I have to be held hostage by their incompetence.

I’ve argued that one of the highly probable consequences of this mess will be SIGNIFICANT inflation. After all, most likely it will be the Federal Reserve that facilitates all this new debt.

This is what the Fed has done for most of the past 15 years. Just look at the huge run-up in the national debt between 2020 and 2022; over 80% of that money (~$5 trillion) came from the Federal Reserve.

And if creating $5 trillion in new money resulted in 9% inflation, how much inflation will we see if the Fed creates $15 to $20 trillion of new money? No one knows for sure, but it probably won’t be 2%.

But if we can make such a strong argument for inflation… and anticipate a steep rise in prices over the next 5-10 years, there’s no reason why we can’t take steps NOW to reduce the impact of future inflation, or even benefit from it.

This doesn’t even necessarily require a lot of capital. For example, one could invest in long-term options on certain assets (including gold or silver futures), so that a small amount of money could pay out very large returns down the road.

The key point is that there are plenty of sensible ways to plan for future inflation, which we will continue to discuss in future letters.

But this isn’t even Plan B thinking anymore. Anticipating inflation should be Plan A.

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A “Plan B” with an incredible view

Imagine waking up on a tropical mountain setting as the sun rises over the valley below.

You take a dip in your infinity pool before eating a breakfast complimented by fresh mango and papaya from your own garden. And the beans for your morning coffee came from a farm just down the road.

You could spend the day surfing. Or you might drive ten minutes into town to meet up with the American and British expat community that hangs out at a local bar.

During this visit, you’re relaxing on a two-week vacation. But you were especially grateful to own this home during the pandemic, when you and your family escaped here for several months to work remotely and wait out the insanity.

It’s fortunate that you had applied for legal residency a few years before, which gave you the right to enter the country, even when most governments closed their borders to tourists in 2020.

And when the time for retirement comes in a few years, the low cost of living here will help stretch your fixed income.

Is this an idyllic vacation home or a Plan B?

It’s both.

Quite often people start by traveling abroad somewhere and finding a place that they really, really enjoy spending time. At first it might just be a few days, then a few weeks.

But after several trips, they start looking at the real estate market… then eventually pull the trigger after finding an idyllic property that fits their needs.

Initially they might only use it as an occasional vacation home for a few weeks each year, renting it out to other tourists the rest of the time to generate a decent income stream.

But as the years go by and the world starts to become even more bizarre and conflict-prone, they start spending more and more time there, just to escape the madness.

Ultimately, they realize that, if things ever got truly crazy back home, they could always come here to their private safe haven. And just knowing that they have that option gives tremendous peace of mind.

This is just one way to look at a Plan B, and it’s not exactly radical or drastic. The idea is to start with something that you really enjoy… and then grow from there.

If you really like a particular destination, there’s no downside in cultivating roots there, buying a really nice, undervalued property that you love, or going through the process to establish legal residency.

Legal residency is great, because it means that you have the right to go to that country and stay indefinitely, even under extreme circumstances like COVID.

This is different from being a tourist, where you can be shut out of a country… and be limited in how long you can stay.

(Having legal residency in a foreign country also makes things a lot easier if you ever want to open a local bank account, buy a car, obtain a driver’s license, etc.)

Each country has its own residency rules. Some places are notoriously difficult to obtain residency— like the United States unless you walk across the southern border.

But most places have fairly simple requirements, and a number of countries have set up specific programs to attract foreigners who might be willing to spend some money in the country and/or buy property.

In Panama, for example, you can obtain residency by purchasing real estate for roughly $300,000. And that money goes a long way in Panama, where there’s plenty of quality property for sale between $100 and $200 per square foot.

In Mexico, you don’t even have to purchase a property to obtain legal residency; you just must prove that your income or savings meets a modest threshold.

These are just a few examples; we have a ton of other research on our website since everyone has his/her own desires and priorities.

For some, their Plan B might be a remote farm on the South Island of New Zealand. For others, a chic condo in the city center of Lisbon. And for others, a beachfront villa in Latin America or the Far East.

The world is an enormous place, and it’s full of options. Most likely there are several out there which could work for you.

Again, what we’re talking about here is not exactly a radical idea.

It’s hardly controversial to assert that there is a lot of conflict in the world… and way too many Inspired Idiots running the show.

We’ve mapped out how, in the United States for example, the government’s own baseline forecast for the next ten years estimates $20+ trillion in NEW debt. There will be consequences galore from this debt explosion.

But as we wrote yesterday, it’s not just about the dollar and the financial consequences. It’s also about personal risks stemming from ‘mostly peaceful’ protests, political clashes, culture wars, or even an actual shooting war.

These aren’t exactly long-shot risks anymore, and any rational, thinking person ought to be considering a backup plan.

Having a second residency is a great insurance policy to protect against those sorts of personal risks.

And if you choose wisely, i.e. select a place where you actually enjoy, it’s hard to imagine there’s any downside in having an additional place to go.

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This story from the 3rd century will sound quite familiar to you

When Publius Licinus Valerianus (known as Valerian) became Roman emperor in September of 253 AD, people across the empire must have breathed a sigh of relief.

“Finally,” many Roman citizens probably thought, “There’s an adult in the room.”

The Roman Empire at that point was in the midst of its infamous ‘Crisis of the Third Century’. The Empire was recovering from a nasty pandemic known as the Antonine Plague. Inflation was soaring. Conflict with their enemies– especially in the Middle East– was intensifying.

Social tensions were growing. Crime was rising. Trade was declining. The economy was on the ropes. Taxes were going up.

And there had been far too many years of political instability in the Empire prior to Valerian’s ascension.

But Valerian was a guy with decades of experience. He was a longtime Senator, plus he had previously held one of the top positions in Rome’s executive branch. So, people naturally thought he would be the solid leader that Rome needed.

Unfortunately, Valerian turned out to be a complete disaster.

Valerian continued bankrupting the Roman treasury and running sky-high deficits. He zealously demanded ideological conformity and persecuted anyone (most notably Christians) who expressed philosophical or intellectual dissent.

He promoted his son– a moronic, free-spending playboy– to a position of high power.

And perhaps most importantly, Valerian was completely incompetent when it came to Rome’s border, and the empire became overrun by barbarians during his rule.

By 260 AD, after seven years of Valerian’s destructive reign, Romans were fed up… especially those who lived near the border.

Fortunately, the emperor traveled East to personally supervise Rome’s war against Persia (modern day Iran), a rising power that had grown more belligerent.

So, with Valerian distracted in Iran, a Roman military officer who was in command of the empire’s key border on the Rhine River decided to take matters into his own hands.

The commander’s name was Postumus. And in 260, he fought back against the barbarian invaders who had been coming across the border for years. In fact Postumus delivered such a decisive blow that the barbarians wouldn’t dare try crossing the Rhine for another ten years.

Finally, someone had taken real action against the migrant threat after years of the Emperor doing nothing. Citizens in the border provinces (modern day France and western Germany) were thrilled.

So thrilled, in fact, that they declared independence from Rome and made Postumus their leader.

Valerian was powerless to stop it. Literally. At that point he had been captured by the Persians and spent the rest of his life in captivity. True story.

Obviously, this historical tale probably rings familiar to many readers. Not that we wish for Joe Biden to end up in an Iranian prison like Valerian did. But clearly the guy has a lot to answer for.

Yesterday Ian attacked a US military installation in Jordan, killing three and wounding dozens more American service members. And it’s not a one-time thing. Iran has attacked US military targets over 150 times in the past few months alone.

But the guy with decades of experience has hardly done a thing in response. The fact is that no one on the planet is intimidated by Joe Biden, who is rightfully perceived as a weak, inspired idiot with unimaginably bizarre priorities.

America’s border catastrophe is a perfect example; it’s clear the federal government isn’t doing its job to keep illegals out.

It’s also clear that the surge in migrants at the southern border has caused, at a minimum, massive financial strain in many US cities.

The federal government knows there’s a problem. Yet they do nothing about it. And they waste resources to try to prevent the State of Texas from doing anything about it.

Again– unimaginably bizarre priorities.

It’s not just the US, either. The United Kingdom has been overrun by hundreds of thousands of pro-Palestine supporters, many of whom chant for “Jihad” and “Hamas” and advocate for Sharia law in the UK.

But the government’s priority seems to be making sure the ‘mostly peaceful’ Islamists aren’t offended by angry Brits who are shocked at what their country has become.

In Canada, police in Quebec have advised residents to NOT post camera footage of thieves stealing packages from their front porches… because we have to respect the criminals’ privacy.

Another city in Ontario allowed a 50-year-old man (who identifies as a 15-year old girl) to compete in a girl’s swim meet, with concerned parents shielding their daughters in the locker room.

These developments aren’t accidents. They don’t just spontaneously occur.

They are the deliberate result of the inspired idiots in charge who think their nation’s priority should be criminals’ privacy. Or the well-being of illegal migrants. Or 50-year men who think they’re teenage girls. Or not offending angry Islamists.

YOU are NOT their priority. And you never will be.

They view you as nothing more than a financial dairy cow to be milked in order to pay for their idiotic ideas. And if you question them, you get labeled as “anti-science” or “xenophobic” or some such nonsense.

I spend a lot of time writing about the economic consequences of this ‘Rule by Inspired Idiots’ (which is the dominant political system in the West, whether it’s Joe Biden or Justin Trudeau).

And the economic consequences are-a-plenty.

In the US alone, the BASELINE government forecast over the next 10-years is an additional $20 trillion in NEW debt; and I’ve written that this will likely lead to major inflation, loss of reserve status for the dollar, and other major catastrophes.

But the social consequences of Inspired Idiots are equally great and cannot be ignored.

This is why it’s critical to understand that a Plan B is more than just protecting one’s savings and investments.

It’s about taking completely rational steps to reduce social and safety risks as well.

I’m not a pessimistic person. Quite the contrary, I’m wildly optimistic about the future and opportunities to come.

But I also recognize that Rule by Inspired Idiots presents vast and growing social risks that could become much worse over the next several years.

We’ll talk about some ideas for how to get started soon.

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Biden Demands Texas Stop Repairing Potholes in Federal Highways

What follows below is purely satire. But just barely. We hope you have a good laugh after a long week.

Texans have long complained about the pitiful condition of many of US federal highways that pass through their state.

But eventually the state government grew tired of waiting around for the Biden administration to repair the federal highways, prompting Texas Governor Greg Abbot to take matters into his own hands.

Last week the governor ordered the Texas Highway Department to begin fixing federal roads— starting with Interstate 45, which runs through both Houston and Dallas.

President Biden and his team responded with outrage and challenged the governor’s order in court, claiming that Texas has overstepped its Constitutional authority by repairing federal highways.

The Biden administration also claimed that Texas’s repairs were inhibiting the federal government from not doing its job.

“Look, we have loyal party members that we have been paying handsomely for several years to monitor the pothole situation in Texas,” said Secretary of Transportation Pete Buttigieg, in remarks he released just before leaving for six weeks of vacation.

“Right now they are conducting an environmental impact study on the potholes, which should be complete by 2027. Then we will form a commission to determine whether repairing the potholes will contribute to global warming. That decision should be reached by 2029, and, if they give the green light, road crews could start repairs as early as 2031. That’s totally reasonable.”

“And by the way,” Buttigieg added, “The people we have hired are majority two-spirit genderless pansexual undocumented migrant Muslims of color.  So for Texas to be repairing the roads is, frankly, racist, misogynistic, xenophobic, Islamophobic, anti-LGBTQ+, and anti-science.”

The United States Supreme Court apparently agreed and ordered the State of Texas to cease its repair efforts.

But the Lone Star State has thus far refused to comply. And governors of dozens of other states have now expressed solidarity with Texas in what is now being dubbed the Pothole Rebellion.

In response, this morning President Biden sent a brigade of bulldozers and other heavy machinery from the US Army Corps of Engineers to re-introduce potholes onto federal highways in Texas.

“Don’t mess with America’s roads,” the President said this morning in a speech attended by 5 bystanders, “When the Louisiana… the Louisi. You know the thing! You need F-16s. Louisiana Purchase! Fair and square. You need F-16s. Or was it F-17? My dad always said, ‘Joey, it’s F-17.’ Or maybe he said B-fiffy-toos, they’re going to leave even bigger potholes.”

He then bent down and appeared to be playing with an imaginary dog before the press was ushered away.

For her part, Vice President Kamala Harris— who has been appointed the administration’s “Pothole Czar”— explained her view in a recent interview, saying:

“We’ve been to the potholes. We’ve been to the potholes. And you go in thinking about a decision, that you’re thinking, in this decision, about the potholes that you’re thinking about. And really, you know, it’s all about justice. We’re thinking about justice.”

Despite such perfectly cogent remarks, however, the Biden administration seems to be having a difficult time articulating its position.

And the public is left wondering— why is it so bad for Texas to repair federal highways within in its own state, especially if the federal government refuses to do so?

Anxious to turn the tide of public opinion, however, prominent media personalities on CNN and MSNBC have weighed in on the matter to steer Americans back towards the Biden camp.

“Texas repairing its own potholes is a threat to democracy!” railed MSNBC’s Rachel Maddow last night, before demanding that the Texas governor be brought up on criminal charges for endangering the environment.

Jen Psaki, former White House Press Secretary turned MSNBC starlet, went even further, saying, “Texas— and any states that support Texas— are engaging in insurrection. And these rebel states should therefore have their electoral college votes suspended in the 2024 general election. You know, to protect democracy.”

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A Big Announcement About the Future of Sovereign Man

After nearly 15 years of flying solo in this business, I’m excited to announce that Sovereign Man is officially joining forces with my old friend Peter Schiff.

(Our new venture is called Schiff Sovereign, and you can check out the new website at www.SchiffSovereign.com).

Peter, as you may know, is one of the most prominent and outspoken (and often controversial) voices in global economics; he’s a best-selling author and a regular on Financial TV… and he’s been doing this even longer than I have.

He’s also one of my closest friends. And given that we see the world so similarly, we decided to merge into this new venture.

In terms of our content and vision, absolutely nothing is going to change. Peter and I both recognize that the world is run by inspired idiots… people like Congressman Jamaal Bowman, whose latest genius idea is for the US government to pay $14 trillion in reparations.

I wrote to you about this moron yesterday; people like Bowman don’t care about silly details like “where will we get such an absurd amount of money?” They just want to “spend it into existence.”

So, this would be $14 trillion of debt, on top of the additional $20 trillion in debt that the government is already forecasting over the next 10 years, in addition to the current $34+ trillion national debt, in addition to whatever new crazy spending these inspired idiots think up next.

Peter and I both believe that such savage stupidity will create major consequences over the next several years.

If you fast forward ten years from now, the US national debt will be roughly $55 trillion. Interest payments could easily consume $3+ trillion per year of tax revenue, leaving very little money for anything else, including the military.

Social Security will have run out of money. And the US dollar will have probably lost its status as the world’s global reserve currency.

These aren’t wild conspiracy theories; rather they are based on the federal government’s own forecasts. But inspired idiots like Jamaal Bowman refuse to take these challenges seriously, and instead want to drag the country in the opposite direction.

Despite such significant consequences, however, Peter and I both believe that this is not the end of the world. In fact, we see a lot of opportunity ahead.

Think about it– if you can forecast major consequences and risks that are likely to occur down the road, you can set yourself up now to make sure they won’t have a major impact on your life.

You can even set yourself up to benefit from them financially.

This is the whole concept of a Plan B… which will remain at the very core of this organization.

Peter and I are both excited about the new venture, and about bringing tons of great content– including videos, podcasts, and emails– to our vast combined audience.

The only real difference is that the emails you receive will now be coming from “SchiffSovereign.com” instead of SovereignMan.

Oh, plus I’m also taking the opportunity to drop my longstanding penname (Simon Black) and will henceforth be using my real name, as you’ll see below.

Thanks again for being a reader; and Peter and I are both excited to continue raising the bar as high as possible.

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The Dumbest F@&%ing Guy of the Week

Chances are there will never be a formal inquiry about the insurrection of September 30, 2023.

Nancy Pelosi won’t hire a Hollywood producer to stage theatrical prime-time specials showing members of Congress grilling witnesses. The mainstream media won’t constantly wail about it for the next several years. And no one will ever be prosecuted. Ever.

And yet, the video footage is very clear: on September 30, 2023, a domestic terrorist blatantly committed an act of insurrection by attempting to subvert democracy in the Land of the Free.

His name is Jamaal Bowman. And he happens to be a congressman representing constituents in New York City.

That afternoon, Congress was about to vote on a key piece of legislation that would keep the government temporarily funded in order to prevent a shutdown that would have gone into effect only hours later.

But Bowman– and many members of his party– did not want the vote to take place, simply because they wanted to embarrass the opposition.

So, the guy deliberately pulled the fire alarm, causing the building to be evacuated. This isn’t some conspiracy theory– the cameras plainly showed Bowman pulling the fire-alarm, and he admitted to it.

Now, Bowman’s attempt to subvert democracy has been swept under the rug. But he is still finding plenty of new ways to be a complete idiot.

This genius’s latest crusade is to demand that descendants of former slaves receive, “at minimum”, a whopping $14 trillion worth of reparations.

Bear in mind that $14 trillion is more than half the size of the entire US economy, more than three times federal tax revenue. It’s an absurd amount of money… raising an obvious question: where in the world does he think this money will come from?

“Where did the money come from,” Bowman mused, “when Covid was destroying us?”

His answer? “We spent it into existence.”

Ladies and gentlemen, all of America’s financial problems have been solved by the economic mastermind, Jamaal Bowman. We simply have to create the money out of thin air and give it to people according to the wishes of politicians.

Let the good times roll! No one even has to work anymore, the government can just spend money into existence, and, poof, everyone can be rich.

Of course, when the government spent $4 trillion into existence during COVID to pay people to NOT work, we ended up with 9% inflation.

But don’t worry, Bowman says, the MINIMUM $14 trillion he’s proposing doesn’t have to be paid all at once. It could be paid over 5 to 10 years.

Oh. Phew. Well, that makes it so much better.

Of course, since the US government doesn’t actually have $14 trillion, they would of course have to borrow the money– most likely from the Federal Reserve, which would create that money out of nothing.

And this $14 trillion would be in ADDITION to the $20 trillion (which is optimistic) that both the White House and Congressional Budget Office estimate will be added to the US national debt over the next decade.

So, between the baseline $20 trillion in new debt over the next 10 years, plus Bowman’s genius $14 trillion idea, that would be $34 trillion in new debt over the next decade.

Bear in mind that the national debt right now is $34 trillion. So, this idiot is talking about doubling the debt in ten years.

Naturally, though, Bowman doesn’t think there will be any consequences whatsoever.

Now if we’re intellectually honest, Bowman’s idea has no chance of passing. But it does give us a very clear picture of the caliber of people who are in charge.

People like Bowman are inspired idiots. They have absolutely no idea how anything works yet expect the world to conform to their clueless fanaticism.

Amazingly, despite being a certifiable moron, 133,567 voters in the greater New York City area saw fit to elect this guy in a landslide victory.

(That said, Bowman’s district usually has bad taste in elected officials; it also first elected Chuck Schumer to Congress in the 1970s, as well as Charles Rangel— who railed against the wealthy only to be censured for 11 financial ethics violations, including tax evasion.)

There’s a good chance that more inspired idiots like Bowman are on the way.

History suggests that bad economic times and financial crises tend to give fanatical socialists the opportunity to win election.

They promise the world– free money for everyone, no consequences. It’s as ridiculous as the kid who runs for high school class president that promises to put Coca Cola in the water fountains. But plenty of voters are gullible enough to believe the lies.

Ironically, Bowman even acknowledged the stubborn inflation problem– because he said, more than likely, the actual reparation figure will have to be $16 trillion instead of $14 trillion, in order to adjust for inflation by the time the legislation passes.

So while yesterday I wrote that the deep challenges facing the US are still technically fixable… it’s important to point out that America is run by inspired idiots like Jamaal Bowman.

And they simply do not have what it takes to understand the dark problems facing the United States, let alone the ability to pass solutions quickly and rationally.

This guy literally pulled a fire alarm to prevent a critical vote to keep the government funded. And he was cheered by his colleagues.

Does anyone honestly think these people will negotiate like reasonable adults and make the vital, tough decisions to reform Social Security, or cut wasteful government spending?

Does anyone think they will be able to inspire confidence in America as the stewards of the world’s reserve currency? Does anyone trust them to prevent World War III?

So yes, America’s challenges are technically fixable. But with inspired idiots like Bowman running the show, it’s not looking good.

* As a final point, I want to reiterate that these challenges are not the end of the world.

Yes, inflation will likely be very severe in the future. The US dollar’s loss of reserve status will likely have substantial negative effects. And the consequences of Social Security running out of money in 2033 is incalculable.

But given that we can anticipate these risks, we can also do something about it. And taking action now, while there’s still time, can dramatically reduce their impact.

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