Category: simonblack

It was only a few days ago that the Japanese government’s Financial Services Agency published its oddly-titled “Annual Report on Ageing Society”.

(Like everything in Japan, English translations often hilariously miss the mark…)

This is a report that the Ministry of Finance puts out every year. And as the name implies, the report discusses the state of Japan’s pension fund, and its future prospects for taking care of its senior citizens.

Bear in mind that Japan has the oldest population in the world; Japan ranks #2 in the world for average age (46.9, just behind Monaco), #1 in the world for the greatest percentage of citizens over the age of 70, and #1 in the world for life expectancy.

In a nutshell, this means that Planet Japan has more people collecting pension benefits, for more years, than anywhere else.

Yet at the same time, Japan’s pension fund is completely insolvent. There simply aren’t enough people paying into the system to make good on the promises that have been made.

At present there are only 2 workers paying into the pension program for every 1 retiree receiving benefits in Japan.

The math simply doesn’t add up, and it’s only getting worse. Planet Japan’s birth rate is infamously low, and the population here is actually DECLINING.

So, fast forward another 10-15 years, and there will be even MORE people collecting pension benefits, and even FEWER people paying into the system.

This year’s ‘Annual Report on Ageing Society’ plainly stated this reality; it was a brutally honest assessment of Japan’s underfunded pension program.

The report went on to tell people that they needed to save their own money for retirement because the pension fund wouldn’t be able to make ends meet.

This terrified a lot of Japanese workers and pensioners.

So the government stepped in to quickly solve the problem… by making the report disappear.

Prime Minister Shinzo Abe apologized for the report, calling it “inaccurate and misleading.”

And Finance Minister Taro Aso– himself a pensioner at age 78 (though in typical Japanese form he looks like he’s 45)– simply un-published the report.

It’s no longer available for download on the website. It just went away. Finance Minister Aso-san followed that up by saying the report was inappropriate because it used words like ‘shortfall’.

I find this so incredible; it’s not like this pension problem is a tiny issue quietly lurking in the corner. This is an ENORMOUS challenge. And they’re pretending like it doesn’t exist.

It’s as if Godzilla is rampaging through Tokyo and everyone just plugs their ears singing “lalalalalala”.

Obviously this is not an issue that exists solely on Planet Japan. Most of the world has insolvent pensions.

Worldwide, the total public and private pension gap is tens of TRILLIONS of dollars. Nearly every government and corporate pension has made promises it cannot keep.

In the United States alone, the government’s own calculations estimate that Social Security is underfunded by $53.8 TRILLION.

And the problem isn’t getting any better. Birth rates keep falling, and for the first time, next year, the worker-to-retiree ratio will reach 2.7, below the necessary 2.8 workers to sustain the program.

Europe is no better off. For example, Greece and Russia have ALREADY had to make adjustments to their pension payouts.

It’s clear as day: pensions are promises that governments will not be able to keep.

Eventually, it’s a reality people are going to face. And most countries – like the US, Japan and most of Europe – willfully and dangerously chose to ignore it.

So here are the news: the younger you are, the more likely you’ll spend your entire career paying into a pension system that won’t be there when it’s your turn to collect.

That makes it even more important to save.

While every country has different rules, there are always ways to make sure you don’t become a victim of someone else’s stupidity.

Annuities in Australia, RRSPs in Canada and solo 401(k)s in the United States are just a few of these options that give you much more flexibility than a traditional retirement account.

You could buy cash-producing real estate or start a side business selling something on Amazon, and stuff all that extra income into tax-advantageous retirement funds.

Even if governments somehow find a miraculous way to save the system, you’ll never be worse off having set aside more money for retirement.

But it’s a near mathematical certainty that most government-sponsored retirement funds are going bust. Taking matters into your own hand is the obvious solution that absolutely everybody should consider.

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Sun Tzu, the legendary Chinese general of the 6^th century BC Zhou Dynasty, famously wrote in the Art of War:

“When you engage in actual fighting, if victory is long in coming, then men’s weapons will grow dull and their ardor will be damped. If you lay siege to a town, you will exhaust your strength.”

Modern day governments understand this principle very well. And that’s lesson #1 I want to discuss today.

If you’ve turned on a television, seen a newspaper, or casually browsed the Internet today, you probably saw some startling news about more protests erupting in Hong Kong.

I told you about this earlier in the week when I was on the ground there– over a million people took to the streets to demonstrate against a Draconian new law that the Hong Kong government is proposing which aims to make it easier to extradite political dissidents to mainland China.

People in Hong Kong are militant about their freedom, and they’re refusing to bend the knee over this proposed law.

Yet the government is still pressing ahead despite overwhelming opposition. So much for representative democracy.

Other governments around the world have spoken out about it, including even the United States, which issued a statement expressing “grave concern” about the law.

(I’m sure Julian Assange and Edward Snowden are still in disbelief that Uncle Sam has a problem with the extradition of political dissidents…)

But… China understands its Sun Tzu very well. This is a siege. Foreign governments, media, and people in Hong Kong are all attacking against this proposed legislation.

However, the attackers will eventually exhaust their strength.

All of these foreign governments will go back to minding their own problems. The people in the streets will go home. The media will grow tired of reporting on the story and turn their attention to Donald Trump’s latest Twitter rant.

China just needs to be patient and wait for its enemies to exhaust their strength. And then, one day when everyone has been worn down by life’s distractions, they’ll pass the law.

Time is on their side. Protests and demonstrations only delay the inevitable.

There’s a second lesson that’s come out of these Hong Kong protests that I want to discuss today, and it’s about the police.

People are in the streets of Hong Kong to voice their disgust over this bill… and the police are right there with them, firing tear gas into the crowds.

We like to think that the cops’ sole purpose is to catch criminals and put them in jail.

But these images out of Hong Kong are a stark reminder that, even more important than catching criminals, their ultimate fealty is to the political class and ruling elite… to protect the government from the people, instead of the other way around.

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It was precisely 20 seconds past 9:44am on November 14, 2017 that Japan Railways train number 5255 departed from Minami Nagareyama Station on the outskirts of Tokyo.

Hardly anything seems noteworthy about a train leaving a station. It happens countless times each day all over the world.

Except THIS particular train was supposed to depart FORTY seconds past 9:44am. So it left the station 20 seconds early.

In virtually every other country in the world, a train departing 20 seconds early would not even be noticed. Nor would anyone care.

But this is Japan. And in Japan, the 5255 train departs at 9:44:20. Not a second earlier. Or later.

The early departure was such a big deal that the train company conducted an investigation into how such a transgression could have possibly occurred.

And then the CEO issued a formal apology explaining what steps the company was taking to ensure it wouldn’t happen again.

20 seconds…

Clearly this is one of the most unusual places in the world.

I actually refer to it as “Planet Japan”, because out of the 120+ countries that I’ve visited, Japan is by far the most… different, with a culture so unique it’s practically Martian.

Japan is a land of endless paradoxes.

Think back to 2011 when the country was devastated by a 9.0 magnitude earthquake.

Rather than panicking and looting, Japanese people sat quietly outside of their demolished homes waiting patiently for the authorities to tell them what to do, even while the nearby nuclear reactors were melting down.

Yet this is also the country where women are routinely groped on crowded subways, and used panties are sold in vending machines for sexual pleasure.

Streets in Tokyo are spotless. Yet you can walk for miles without seeing a single garbage bin.

This is a culture so serious that they perfected ritualistic suicide. Yet they go bonkers for cartoons and animated mascots.

The paradoxes extend to the economy as well.

In 1945 after being obliterated by the first atomic weapons in history, the Japanese people set themselves to the task of development. And they quickly built their economy into one of the most prosperous in the world.

Today Japan is wealthy and extraordinarily well developed. But the economy has been stagnant for decades.

Japan’s primary stock index, the Nikkei 225, is currently around 21,000… a level it first surpassed in March of 1987 when Lethal Weapon was the #1 movie in the world.

In other words, the stock market has returned zero gains to investors after three decades.

Japan is a land of extraordinary innovation. Just about everything here, from robotics to machinery, down to some of the most basic, everyday items (like toilets!) are cutting edge and different.

Yet there’s minimal entrepreneurship in Japan. And there’s a rampant problem with suicide among young workers (which reached a 30-year high in 2018).

The Japanese government’s debt burden is the highest in the world. At roughly 1.1 QUADRILLION yen (that’s fifteen zeroes, or about USD $10 trillion), Japan’s debt is more than twice the size of its entire economy.

And it’s only getting worse.

Then there’s the Social Security system… which is already draining the treasury. Japan’s population is THE oldest in the world, with the highest percentage of people over the age of 65, yet the longest life expectancy.

Recently a 90-year old pensioner voiced concern about the future solvency of Social Security, to which the Japanese finance minister commented, “How much longer do you plan to live?”

(Just a reminder- Soylent Green is people…)

Last year, it took 95% of the government’s tax revenue to service the debt, and pay for their national Social Security system. 95%!

Only 5% was left over for literally everything else in government. And that’s why the Japanese government has to keep borrowing.

The central bank has obliged, pushing interest rates down to NEGATIVE levels. The current yield on the Japanese 10-year government bond is a big fat MINUS 0.12%.

So you have to actually pay this bankrupt government money in order to lend to them.

Crazy, right? Who would do something so insane?

Pretty much every institution in Japan.

Major corporations. The central bank. Even individual investors– mom and pop pensioners, invest their cash in these negative yielding bonds that have no hope of ever being credibly repaid.

And of course, Japanese commercial banks buy these government bonds as well, meaning that pretty much everyone on Planet Japan with money in the bank is exposed to this garbage.

Don’t get me wrong– Planet Japan is truly wonderful: modern, captivating, and richly rewarding. It’s one of my favorite places to visit.

But it’s a great example of why a Plan B is so important.

It’s all fine and good to hope for the best… that the central bank will be able to print money forever, that the government will be able to borrow money forever, that every bank and major corporation will keep lending forever… and that there will never be any problems until the end of time.

But in light of such compelling evidence, that’s certainly wishful and dangerous thinking.

Plan B logic is pretty simple: if your government is completely bankrupt, you probably don’t want to hold 100% of your assets there.

If your central bank keeps printing money into oblivion, you probably don’t want to keep 100% of your savings in that currency.

If your banks are loading up on negative-yielding government debt (or any other garbage investments), you probably don’t want to keep 100% of your money there.

Obviously I’m not just talking about Japan here. Much of Europe and North America is in the same boat. Or at least the same choppy waters. So the same principles apply.

These steps aren’t pessimistic or gloomy. Having a Plan B is just common sense and absolutely worth your consideration.

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There are truly so many things to love about Hong Kong.

Most visitors would probably gush about the exotic night life or legendary cuisine (the Cantonese, they say, eat anything with four legs… except the table.)

All of those things are fine and good. But at the top of my own list of things that I love about Hong Kong is that that this place is a veritable monument to the awe-inspiring forces of capitalism.

When Hong Kong was handed over to the British in 1897, it was nothing more than a remote fishing village with a handful of illiterate peasants.

Within a few decades it would grow to be one of the most modern and prosperous places on planet.

There’s no secret it its success: Hong Kong has long been famous for being one of the freest places in the world, where free market capitalism reigned supreme instead of bureaucratic stooges.

Talented entrepreneurs came here because they knew they would be unconstrained to build, achieve, and create value, where the only limitation was the extent of their own ambition.

You can still see it everywhere; Hong Kong has the highest concentration of skyscrapers in the world with world-leading infrastructure that cuts through mountains and beneath the sea with ease and sophistication.

And the prosperity here is boundless. Hong Kong enjoys one of the highest standards of living in the world and one of the highest GDPs per capita.

Banks here are extremely liquid and well-capitalized. Plus the government has minimal debt and is awash with cash despite having one of the world’s lowest tax rates.

That’s not too shabby for a place that has virtually zero natural resources.

All of this success is due in large part to Hong Kong’s freedom; and that freedom has become a cultural value here, something that people cherish. When it’s under threat, they protect it.

Over the weekend while I was here, people in Hong Kong staged a MAJOR protest, estimated at more than 1 million people. That’s more than 10% of the entire population.

They were out in the streets protesting against a new law that will make it easier to extradite political dissidents to mainland China– something the locals here find morally reprehensible.

They’ve been fighting against growing influence from the mainland ever since the British handed control back to China in 1997.

China promised to keep its hands off for at least 50 years, but they haven’t kept that promise, and the communist party has been slowly sinking its teeth into Hong Kong ever since.

Every time that happens, people in Hong Kong fight back, en masse, to safeguard their prized freedoms.

But as hard as they fight, they can also see the writing on the wall: the Chinese government is not going to stop chipping away at the liberties that made Hong Kong what it is.

So they instinctively know that they need a Plan B.

Having a Plan B is not about Doom and Gloom. It’s an insurance policy against future risks, no different than insuring your home against a fire.

Obviously no one expects their home to catch fire, or lies awake at night terrified that everything is going to burn to the ground.

We purchase insurance policies because it’s a sensible thing to do. And then we go on with our lives.

That’s a Plan B. And for many people, a big part of that is having a second residency– so that if things ever take a turn for the worst in their home country, they have a place to go with their families to live, work and continue prospering.

People understand that intuitively here. Even the weekend edition of the local paper had a front-page report about real estate in Canada– which is a popular investment here.

They buy overseas property as an investment… and a way to obtain residency (there are many countries where buying real estate entitles you to residency)

So if things in Hong Kong remain good, their foreign investment property will generate cash flow and appreciate in value. That’s a win.

But if things take a turn for the worst, they already have a place to go– a home, with legal residency, where they can relocate in a matter of hours. That’s an even bigger win.

This is an absolutely sensible precaution that anyone in the world who has the means should consider.

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Rejoice, it’s Friday. Here is our weekly roll-up of bizarre and disturbing stories from around the world.

1. Local government seized countless children based on falsified drug test results

For years, the county of Ozark, Alabama hired a private laboratory to analyze paternity and drug tests.

These were pretty critical tests… because the county would rely on those test results to determine whether or not to take someone’s children away from them.

It turns out that lab’s owner, Brandy Murrah, was FALSIFYING those results.

Instead of running a legitimate operation, Murrah pocketed the money, and faked the test results.

Then she forged a doctor’s signature to certify the results.

The only reason Murrah was ever caught is because an innocent woman who failed a drug test tracked down the doctor to ask him about the results.

The doctor was bewildered and said that he never saw any such test results… and the trail of fraud led right back to Brandy Murrah.

That woman says her custody battle for her children was negatively affected because of this fraudulent drug test. And she’s likely not alone.

The Department of Human Services says they believe there may have been a “tidal wave” of cases where children were taken away from their parents based on falsified test results.  

Pretty extraordinary… especially given that Murrah had a criminal history of fraud. And yet she was still put in this important role that has such an enormous impact on people’s lives.

Click here for the full story.

2. Australian federal police retaliate against journalists

Last week the Australian Federal Police raided the home of a journalist for unauthorized disclosure of national security information.

In April 2018, the journalist published an article in the Daily Telegraph about Australia’s surveillance state.

She described the plans of the Australian Signals Directorate (ASD)– basically the Aussie version of the NSA– to begin spying on Australian citizens, without warrants.

The intelligence agency currently only deals with international threats. But the plan was to allow the ASD to access citizens’ communications, and grant them the power to force private organizations to turn over data on customers.

The article included photographs of top secret documents outlining the plans.

Just a few days later, the Federal Police raided ABC’s Sydney headquarters over 2017 stories alleging murder and misconduct by Australian Special Forces in Afghanistan.

No arrests have been made. But both news organizations have said openly that these government actions threaten freedom of the press. They vowed to protect their sources.

Click here, and here for the full stories.

3. US federal Court tells the DEA to reassess marijuana harmfulness

Parents of children with severe diseases have had enough of the government’s health advice.

They teamed up to challenge federal government’s placement of Marijuana as a Schedule 1 drug. Schedule 1 means the Drug Enforcement Agency (DEA) considers marijuana to have “no currently accepted medical use and a high potential for abuse.”

But the parents disagree. They see the marijuana extracts help their children with severe epilepsy and neurological disorders. And they say the DEA’s scheduling of marijuana is a risk to the health of their children, and everyone else who uses medicinal marijuana products.

At first the lawsuit was dismissed. But now a federal court revived the challenge. The court ordered the DEA to act on the plaintiff’s descheduling petition “with all deliberate speed.”

This is the farthest a challenge to the DEA scheduling of a drug has ever gone.

Click here for the full story.

4. US State Department to require social media accounts for visa approval

Uncle Sam wants to see what you’ve been Tweeting.

The US government will begin to require foreigners who want to visit the country to disclose their social media accounts on the visa application form.

You can indicate that you don’t have any accounts, but they warn that lying will be severely punished.

Click here for the full story.

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I’ve been in Australia for a little while now as part of my many professional responsibilities.

In addition to running Sovereign Man and several other businesses, I am also the Chairman of the Board of Directors a company that’s listed on the stock exchange here in Australia.

I’ve been on the Board for almost two years, and I’ll admit it’s been one hell of an experience.

I say this because most of us don’t realize how much financial markets are stacked against the little guy.

But through my capacity on the board of a listed company – as an “insider” – I’ve seen first hand the things that go on behind the scenes.

Big banks, institutions, high-frequency traders, hedge funds and even the companies themselves… there’s just no limit to how far they’ll all go to fleece the shareholders in every way.

Take director pay, for example. As a director, I chose to not receive any compensation. But that is extremely unusual.

Most of the time, company directors shower themselves with generous fees and option packages, in many respects sucking value out of the business at shareholder expense.

I’ve also seen a number of cases where company executives and directors set up external management companies that charge exorbitant fees to the company, sometimes exceeding the company’s annual profit.

That was actually the case with the company that I’m involved with here.

Before I joined the board, there was a small group of insiders who bled the company dry with their outrageous fees. They were essentially stealing from the shareholders.

Remember, shareholders own the company— all the assets and the cash belong to them.

Yet these sorts of arrangements– where a small group of insiders suck cash and value from a company for their own benefit– are sadly the norm.

And regulators are completely toothless.

When examples of the most rampant fraud are brought to their attention, they do absolutely nothing.

That’s what ultimately prompted us to take the largest stake in this company… and throw the directors off the Board.

We recently tried to take over another listed company that was blatantly stealing from shareholders.

Whenever those shareholders organized a meeting to vote the directors out, the directors would conjure new shares out of thin air, vote them for their own benefit, and cancel the shares the next day.

That’s outright fraud.

But, again, the regulators did nothing about it.

It seems that almost all insiders who have the means and the abilities will find every way possible to steal from shareholders.

It’s disgusting, it’s commonplace, and one of the biggest reasons I dislike investing in stocks.

The odds are overwhelmingly stacked against you. And smaller investors end up being the main course in a feeding frenzy among all the different insiders.

There are, of course, very rare exceptions to this rule: the few times I do invest in the stock market is when the upside is obvious and incredibly compelling— as Jim Rogers says “when the money is just lying in the corner, and all I have to do is walk over and pick it up.”

This includes buying shares of a profitable, well-managed business for dramatically less than its actual value– sometimes even less than the amount of cash the company has in the bank.

Deals like that are rare, but they do exist. And they are among the few opportunities in the stock market that are always bound to get my attention.

The reason is simple… when a company’s stock price is so low that it’s selling for substantially less than it’s worth, much of the risk has already been eliminated.

This means more reward, less risk.

Yesterday we told you about Kitagawa Industries… we bought shares at a steep 24% discount to the amount of cash the company had in the bank. That was crazy for a mature, profitable business with a long and successful operating history.

The risk was incredibly low, with plenty of upside.

Within 17 months a competitor saw the true value of the business and took it over at a MUCH higher price– netting us a 249% gain.

Kitagawa Industries is not an isolated case either…

Nam Tai Properties is another great example. When our Chief Investment Strategist, Tim Staermose, first found it, the business had $261 million in CASH and $221 million in real estate.

Yet the whole company was valued at just $204 million. That means that in theory, you could have bought the whole company for $204 million, put that entire sum in your pocket and STILL had $57 million of cash left over, PLUS $221 million of real estate.

It was an unbelievable deal. And after Tim’s exhaustive due diligence– flying to Hong Kong to personally investigate the company’s assets, we bought shares and made a 108% return in just 18 months.

Tim consistently finds and shares these kind of recommendations with members of our flagship investment service, the 4th Pillar– including the two examples above.

And he has the track record to prove it. Since 2015, Tim has produced an average return of 40.8%, and 26 out of 27 closed positions have been winners. That’s a 96% success rate.

He has been able to achieve such reliable results because his number one focus is the preservation of capital: “If you focus on the downside, the upside takes care of itself.”

Last week, Tim published his 100th issue of the 4^th Pillar, with another fantastic investment find– a deal that he thinks is one of the best he’s seen in years.

To celebrate this tremendous milestone, we are offering a very rare promotion– a 50% discount on an annual subscription to the 4^th Pillar.

And to give you an even better idea of how Tim thinks and evaluates opportunities, you can download a free preview of a recent 4th Pillar issue.

Inside, Tim shares the details of a company awash with cash and paying an astronomical dividend.

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[Editor’s Note: Today’s note was penned by one of our international contributing editors.]

Yesterday I called my bank in Denmark, Nordea, and couldn’t believe what they told me…

They offered to lend me money at MINUS 0.12% for a ten-year mortgage.

In other words, the bank would PAY ME to take out a loan.

Of course, as a Sovereign Man editor, I’ve written a lot about negative interest rates. But most of these cases were always reserved for big banks or institutions.

That no longer seems to be the case…

Now, negative interest rates ARE the norm. Thousands, if not tens of thousands of Danes will go out and take out mortgages that will pay them every month.

This is completely mind-boggling to me. But it just highlights how broken the financial system really is.

Everything about this is in complete violation of the law of prosperity Simon Black’s been writing about for years: produce more than you consume and invest the difference.

Now, institutions and governments are incentivizing people to consume, instead of save. In fact, they’re paying people to go into debt.

That is not how prosperity is created. Instead of encouraging people to invest their surplus capital in productive investments, people are penalized for saving in the first place.

It’s like everything has been turned upside down.

Some of the most popular investments on the planet are the ones that burn the most cash (Tesla, Netflix, Uber, etc.)

Insolvent governments in Europe are able to borrow at negative yields, with no afterthought whatsoever as to the consequences.

And bankrupt governments like Argentina are able to borrow for 100 YEARS and pay next to nothing for it (even though Argentina went bankrupt twice in the last thirty years alone).

None of this makes any sense.

Here in Europe, bank deposits yield close to 0%.

In 2016, the Swiss government even asked its citizens to delay their tax payments as long as possible, because the government didn’t want to pay negative interest rates on those balances.

And in the United States, banks rob their customers blind time and time again by lying, stealing and deceiving them.

It’s extraordinary to me that these are the options we have with our money today.

Luckily, it isn’t all doom and gloom.

As my friend Simon says it: the world is a big place… and sometimes, we can make this insanity play to our advantage.

Just in the same way that I can get paid to borrow money…

And that bankrupt governments can borrow at negative yields….

And that companies losing BILLIONS each year with no end in sight can be some of the most popular investments in the world…

It also works the other way around.

Occasionally, we can find extremely well-managed businesses that are profitable, have a pristine balance sheet and pay generous dividends to their shareholders, that are selling for rock-bottom prices.

Our in-house Chief Investment Officer, Tim Staermose, editor of the 4th Pillar, spends his time scouring the corners of global stock markets for these opportunities.

One example he found was a boring Japanese company called Kitagawa Industries.

It had $151 million of cash in its bank account… Yet the value of ALL its shares was just $114 million– 24% lower than its net cash balance.

In other words, you could have theoretically bought every single share of Kitagawa for $114 million, put the entire $151 million bank balance in your pocket, shut the company down, and walked away with a tidy $37 million profit.

Make no mistake, this wasn’t some hot cash-burning start-up. It was a mature, profitable business with a long and successful operating history.

There was absolutely no good reason for it to be selling at such a large discount and no rational shareholder would ever agree to a deal like that.

But markets aren’t rational… so Tim recommended members of our flagship investment service, the 4th Pillar,  buy the shares.

And sure enough, less than one-and-a-half years later, a competitor recognized the opportunity and took over the entire company– generating a 249% return for our members in just 17 months.

As you can see, there are always pockets of value where you can make the insanity of the financial system work for your benefit. It just takes patience and willingness to do the hard work to find them.

For over eight years, Tim has been putting in the hard work for our members.

In fact, he just published his 100th 4th Pillar issue where he shared his latest thoughts on ten more deeply undervalued opportunities – just like Kitagawa Industries – that are trading at BUY levels right now.

You can click here to download a redacted preview of one of these opportunities. Inside, Tim shares the details of a company so awash with cash that it’s paying an astronomical dividend.

And to celebrate our 100th issue we’re offering a rare 50% discount for the next few days. Click here to learn more about the 4th Pillar and Tim’s latest opportunities.

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Happy Friday everyone. Here’s our weekly roll-up of some of the most bizarre (and occasionally happy) stories from around the world that we’re following:

NYC schools training teachers to discriminate against white students

A new mandatory, $23 million “anti-bias” program is training New York City school teachers to discriminate against white children, no matter what.

The New York Post recently published remarks from one training session, in which the instructor defined ‘racial equality’ as favoring non-white students over white students, regardless of any other circumstances.

In another session among NYC school superintendents, attendees were asked to discuss various life experiences that inspired them to fight for social justice.

One high-ranking school official– a white, Jewish man, described his family’s experience in the Holocaust and Nazi concentration camps.

He was publicly chastised by his own colleagues, with one woman saying “This is not about being Jewish! This is about black and brown boys of color only. You better check yourself.”

According to a middle school teacher interviewed by the Post, the training teaches ‘replacement thinking’ and encourages educators to become ‘liberated’ from their ‘whiteness’.

Click here to read the full story.

Australian man fined for giving money to a homeless man

A motorist from Perth, Western Australia named Luke Bresland was fined A$50 earlier this year when he gave A$1.50 (that’s a little more than 1 US dollar) to an apparent homeless man who washed his windshield while stopped at a traffic light.

When the light turned green, Mr. Bresland continued on his journey, only to be pulled over by a local policeman.

The policeman asked him if he had given money to the homeless man, and then cited him for violating a local ordinance.

Under local law, it is illegal for anyone in a vehicle to buy or offer to buy an article or service from a person who is on the road.

Citations under this law are so rare that one prominent local lawyer in Perth claimed he had never heard of it, and congratulated the police for finding a law that even lawyers were unfamiliar with.

Mr. Bresland entered a NOT GUILTY plea and prepared to fight against this absurdity in court, prompting local police to withdraw the charges and rip up the citation.

One small victory for common sense this week.

It’s official: You can record the police in public places

You’d think it would be obvious that you can record anything in a public place– people, plants, pets, even police.

But there have been countless arrests of people who were charged (and subsequently manhandled) for recording police, even in public spaces.

The arrests finally subsided last December after a federal judge in Boston ruled that it is unconstitutional to arrest anyone for recording public officials, even if they are doing so (or attempting to do so) in secret.

Since 2011, in Boston alone, at least eleven felony cases were filed in court against people who were recording the police in public; they were all charged with violating an obscure state wiretapping law.

Last week the same judge reinforced that decision and ordered the Boston police department to inform all of its officers that people have the right to record the police anywhere in public during the performance of their duties.

Click here to read the full story.

CPS agent strip searched young children in their own home

In 2017, a Kentucky mother named Holly Curry popped into a local cafe to buy some muffins. She left her children in the car– it was a cloudy, 67 degrees (about 19C).

Within 10 minutes, the cops were already on site, telling Curry that they were calling in Child Protective Services.

The next day, a CPS official arrived to Curry’s home and demanded entry, claiming that any refusal would result in the forfeit of her children.

The official was allowed inside and began to ask questions of Curry. Then, without asking for Curry’s permission, the investigator took the three children and undressed them all, down to their genitals, to check for bruises and signs of abuse.

Curry was eventually found not guilty of child neglect. But she filed a federal lawsuit to protest this gross perversion and invasion of privacy on the part of government officials.

We’re particularly interested in the outcome of this as it may be an important precedent in either reining in this sort of disgusting abuse of power… or additional license to let it continue unchecked.

Click here to read the full story.

Source

from Sovereign Man http://bit.ly/311ADmn
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Five years ago, a company called Yo raised $1.5 million at a $10 million valuation.

What did investors and end-users get for this much money? An app that allowed users to send the message “Yo,” (and NOTHING else) to their friends.

It didn’t take long for the company to blow through all that cash in typical Silicon Valley manner, and let go of all its employees.

At the peak of investing hysteria, it was that easy to scoop up a couple million dollars to fund your company, no matter how worthless the idea.

With so much easy money from low interest rates and booming stocks, people were dumping money into anything with a pulse.

There’s still a lot of money out there today. But investors have tightened their purse strings and become more discriminating with where they put their money.

Last year’s venture capital was distributed to fewer businesses, and it went to more established companies over startups.

It hasn’t been this hard for early-stage companies to get venture capital investments since 2011. And the number of SaaS (Software as a Service) investments is also at a seven-year low.

With the stock market looking shaky, and investors starting to worry, people are focusing on removing risk, not diving into uncertain new businesses.

But anyone looking to start a company shouldn’t feel like the chance to get funding has passed. There is still one big pool of money that NEEDS to be invested.

We’ve talked about using Opportunity Zones as a way to save big on capital gains taxes. People are dumping their gains into Opportunity Funds to defer taxes after exiting asset classes at almost all-time highs.

In order to take advantage of the tax savings, those funds need to invest that capital inside one of almost 9,000 designated underdeveloped areas in the US called Opportunity Zones.

Right now there are billions of dollars sitting in Opportunity Funds… and the clock is ticking. Opportunity Funds have to deploy 90% of their capital in Opportunity Zones within 6-12 months of receiving the money from investors.

If you have ever wanted to start a business, but worried about having to raise a lot of money, or attract investment capital, this is your chance.

Starting a business in an Opportunity Zone is a way to tap into billions of dollars of capital.

Instead of paying a huge tax bill, investors can put their gains into equity in your company and defer paying capital gains tax until 2026 (plus get a 15% discount if they hold the investment for seven years).

In the meantime, all that money that would have gone to taxes will be growing your company instead.

And a huge plus to investors is that any growth they spur in your business will be tax-free if they hold the investment for ten years.

That means you and your investors can focus on long term growth– not cheap gimmicks that don’t last.

Plus the IRS guidance on Opportunity Zones keeps getting better.

The whole point of these Zones is to bring investment and jobs into neighborhoods that need it most. So the IRS says a business must be active (you can’t just sit on real estate without improving it), and must earn 50% of its income inside the Opportunity Zone.

But the IRS gave three different ways to satisfy the income requirement:

1. Either your employees (and independent contractors) spend at least 50% of their work time within the Opportunity Zone.
2. Or at least 50% of the wages of your employees (and contractors) come from performing services within an Opportunity Zone.
3. Or at least 50% of the income of your business is generated by tangible property located in an Opportunity Zone, and the management or operational functions are performed within the Opportunity Zone.

This leaves the door open to all sorts of businesses.

A storefront business would easily apply, because all sales are in the OZ.

But even something like a landscaping company could work even if all of its clients are outside the Zone, as long as the physical equipment and business headquarters are located there.

Keep in mind that you don’t even have to employ anyone other than yourself.

And there is a wide range of business possibilities. For instance, many of these Opportunity Zones are in beautiful wilderness areas that would be perfect for nature tourism.

Bigger ideas can work too.

The Pearl Fund is a new Venture Capital Opportunity Fund looking for tech-startups with potential to grow at least 10x. Its ultimate goal is to fund “the next Apple or Google.”

But tech startups will have to be careful to deploy the capital properly to meet the requirement of doing business within the Opportunity Zone.

Still, it could be worth the extra effort to attract investors. If you go from an initial $1 million investment to a $100 million valuation in ten years, your investors will pay no capital gains on the $99 million growth.

But you do have to act quickly. A lot of the capital will flow into these funds by the end of the year, because after that, it will be too late to get the 15% discount on deferred capital gains.

And remember, these funds MUST invest their capital within a year of receiving it, which means they are hungry for good businesses to fund.

So this could be the perfect time to start your business.

Source

from Sovereign Man https://www.sovereignman.com/trends/here-is-how-your-startup-can-access-millions-in-investment-funding-25210/
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In 1956, BMW released a brand new line of roadsters, the 507.

It was a slick convertible and became a hit with celebrities. In 1959, the very first Bond girl from Dr. No – Ursula Andress – took possession of this brand new BMW 507 roadster.

It was re-designed 40 years later into the BMW Z8, which is the car that Pierce Brosnan drove in James Bond, The World is Not Enough.

But the original 1956 model didn’t lose its appeal. Like many high-end cars from the 50s, it became a collector’s item.

Today, the car easily fetches more than $1 million at auction.

Between 2005 and 2019 alone, the car increased in value by over 800%.

That’s 600% more than the stock of BMW itself – which only rose 200% in the same time frame.

The reason behind this surge in value is simple: you can’t go back in time and make more of these cars. There will never be another 1956.

That means these cars will likely keep growing in value as they get more and more rare.

That’s one of the reasons I like collectibles so much. They derive intrinsic value from their scarcity.

And at a time when central banks are busy printing trillions of dollars at every turn to inflate mainstream assets into bubble territory, looking to assets that are inherently valuable makes a great deal of sense to me.

That trend isn’t limited to just cars by the way. There are many types of collectibles that derive immense value from the past.

A great example is fine art. In 2017, a recently discovered painting by Leonardo da Vinci sold for $450 million at auction.

And last week, I told you about 3,000-year-old Egyptian art that was selling for millions of dollars in New York.

That’s a track record of wealth preservation longer than most of recorded human civilization.

That should tell you something about the ability of these assets to preserve wealth in the future.

So as a means to preserve wealth in the long term, it makes sense to consider owning some collectibles instead of having 100% of your net worth in fundamentally flawed paper currencies.

I like collectibles so much that I recently invited our Total Access members – our highest-level of membership – to a full weekend in California dedicated to collectibles and learning about the opportunities available to everyday investors.

It was an impressively educational event. In fact, even I learned a lot– especially about art as an asset class.

And I encourage everyone to learn more about this time-tested wealth preservation strategy.

We also talked about vintage guns, stamps, and even historical documents and books.

And we covered the most straightforward way for beginners to get started with collectibles: numismatic gold coins.

These are gold coins that were minted when the US dollar was still backed by gold, and that carry historical significance.

For example, some were printed in very short supply during a critical time in American history, and are highly sought after by collectors.

Others are simply high-quality, timeless coins.

One such example is the $20 St Gauden, minted from 1907 to 1933. It’s one of the most sought after coins today, and widely considered one of the most beautiful coins ever minted.

A classic 1907 St Gauden in good condition will set you back roughly $1,480 today – the cheapest price it’s traded at in over a decade.  

That’s because numismatic coins derive their value not only from the gold content inside but also from the “collector’s premium” they carry that can reach multiple times the value of the gold itself.

For example, in the late nineties, the $20 St Gauden traded at a 300% premium to its gold value. Today, it trades at just 19% above its value in gold.

That’s an incredible bargain. In fact, it’s an all-time low.

But I suspect it won’t stay that way for long. Premiums tend to soar during times of crises. Between May and October 2008 alone, the premium on the coin rose 50%.

And at a time when most assets are in bubble territory, gold is one of the only asset classes that’s gone virtually nowhere over the last five years.

Numismatic coins that are trading at historically low premiums are an incredible opportunity to not only pick up gold at a cheap price, but also to add enormous upside potential through the all-time low premiums. That builds in a solid margin of safety, and great upside.

This is the kind of low-risk, high-reward opportunities that I like. But I also know from experience that mispriced arbitrages like these don’t last forever.

I’m not saying you should go out and dump all your life savings on collectible gold coins. But if you have no exposure to collectibles, the $20 St Gauden might be a cheap and simple way to start building a position.

Source

from Sovereign Man http://bit.ly/2HFn9ER
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