Category: simonblack

[Editor’s Note: As we’re coming up on the end of the year, we thought it would be appropriate to republish some of our most popular articles from 2017. Today’s was originally published on May 18]

On September 17, 1787 on the final day of the Constitutional Convention in Philadelphia, Benjamin Franklin was approached by a woman as he walked out of Independence Hall.

“Well Doctor, what have we got– a republic, or a monarchy?” she asked.

It was a burning question on everyone’s mind: what form of government would the Constitutional delegates establish for the new country?

Franklin didn’t hesitate. “A republic– if you can keep it.”

(The exchange was noted by Maryland delegate James McHenry and included in the Records of the Federal Convention of 1787.)

Franklin’s answer spoke volumes.

The Constitutional Convention had just ended, and it had been a bitter four months as the delegates fought and argued over every single word in the draft.

Factions had developed. Some delegates wanted a federal government with absolute power. Others wanted fewer guaranteed liberties for individuals.

Franklin knew that the representative government he had worked so hard to establish was incredibly fragile, and that it could easily slip away.

It was the same fight two years later when the 1st United States Congress fought over whether or not to establish a Bill of Rights.

As one delegate wrote, “Bill of Rights– useful, but not essential.”

Once again, after months of bitter arguments, Congress finally reached a compromise in September 1789, approving ten Constitutional amendments that guaranteed certain freedoms for the people.

More than two centuries later it’s clear that most of what they worked to achieve has completely changed.

The First Amendment, which ensures that Congress can make no law restricting freedom of speech, press, religion, and peaceable assembly, has become almost a punch line.

Ironically the greatest assault on Free Speech today doesn’t even come from government, but from university students who protest against any ideas they find offensive.

Violence on university campuses is now common as students come out of their Safe Spaces to physically obstruct and violently impede controversial speakers.

Any statement that doesn’t conform to their very narrow agenda is now considered hate speech.

And it’s the students themselves who want any sign of dissent banned, and more mandatory indoctrination of their newspeak ideology.

Then there’s the Second Amendment, which guarantees “the right of the people to keep and bear arms, shall not be infringed.”

This one seems to be under fire on a regular basis, with mainstream media from Rolling Stone to Vanity Fair calling for its outright repeal.

The Third Amendment guarantees that no soldier shall be quartered in any home without the consent of the owner.

This seems almost a quaint, obsolete historical reference at this point given that the US military hasn’t had to be housed among the civilian population… ever.

So, OK, great. The Third Amendment is still in-tact.

Then there’s the Fourth Amendment, which ensures “the Right of the People to be secure in their houses, papers, and effects, against unreasonable searches and seizures, shall not be violated.”

Forget it. The federal government spends tens of billions of dollars each year to illegally spy on EVERYONE, including Americans and American allies. This one is a total joke.

The Fifth Amendment is a big one.

It ensures that no one can be held to answer for a crime, including a felony, without grand jury indictment.

This protection died a few years ago when Barack Obama signed the National Defense Authorization Act for Fiscal Year 2012, which authorized the military detention of US citizens on US soil, no due process required.

The Fifth Amendment also famously protects against self-incrimination, ensuring that an individual cannot be called as a witness against himself.

This provision is also gone, considering that legal precedent now exists for police to force you to give up your mobile phone or computer password.

The Sixth Amendment guarantees due process, that in a criminal trial, “the accused shall enjoy the right to a speedy and public trial, by an impartial jury. . .”

This is now a complete farce given the widespread use of top-secret FISA courts, military detention facilities, and drone-strike assassinations.

The Seventh Amendment guarantees the right to a jury trial if there’s a dispute over property that exceeds $20.

Now, the $20 threshold might be a little bit outdated (not that there’s any inflation!)

But considering that the government has stolen billions of dollars worth property from Americans through Civil Asset Forfeiture in recent years, all without a trial, it seems the Seventh Amendment isn’t worth the paper it’s printed on.

Then there’s the Eight Amendment, which protects against “cruel and unusual punishment.”

I thought about this one the other day when I was walking through the terminal at DFW International Airport.

A sign caught my eye that as prominent displayed on an emergency exit door, warning passers-by that opening the door was a violation of the law and subject to up to one year in prison.

I was dumbfounded. A year in prison for opening a door?

People go to jail and do hard time for smoking certain plants (but not others), failing to file tax forms, and a number of completely obscure and innocuous crimes.

There were four federal crimes when the Constitution was ratified. Today there are thousands. On any given day you and I probably commit several of them without even knowing. And each comes with absolutely insane penalties.

The reality is that you cannot even apply for a passport anymore in the Land of the Free without being threatened with fines and imprisonment.

Last were the Ninth and Tenth Amendments, which were supposed to limit the power of the federal government in favor of the states and the people.

Those went out the window a LONG time ago, especially after 9/11.

Look, don’t get me wrong: I’m not suggesting that America is some vicious, brutal dictatorship. It’s not.

But anyone who has the courage to be honest and objective can see the obvious decay.

Benjamin Franklin’s warning is coming true. And the trend is accelerating.

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[Editor’s Note: As we’re coming up on the end of the year, we thought it would be appropriate to republish some of our most popular articles from 2017. Today’s was originally published on March 28]

A few weeks ago I caught wind of a guy who has citizenships from eight different countries.

This “octa-citizen” has passports from Canada, UK, Ireland, Belize, Grenada, Dominica, St. Kitts, and Cape Verde.

Let’s be honest– that’s probably way too many. But the concept of acquiring multiple nationalities is completely sound.

If you have one nationality, it means that a single government has total control over your life, your finances, your business, and your personal affairs.

It means that you’re chained to the consequences of that single government’s decisions, no matter how destructive, no matter whether or not your agree.

If they decide to provoke another shooting war and impose a draft… or levy debilitating taxes… or print so much money that the consequent inflation causes social unrest… then you have little recourse.

A second passport is like an insurance policy.

Sure, hopefully you never need it. And hopefully you never need the fire insurance policy that protects your home either.

But if that day ever comes when you smell smoke, you’ll thank your lucky stars that you’re covered.

Having another citizenship means that if the worst ever happens in your home country, you’ll always have a place to go where you and your family are welcome to live, work, study, invest, and do business in peace and safety.

Again, maybe that never happens. HOPEFULLY that never happens.

But it seems risky to bet everything on hope, especially when there are so many substantial risks looming.

We often discuss the pending insolvency of some of the world’s most important central banks, as well as the outright bankruptcy of nearly every major western government.

History shows that countries in this position almost invariably experience severe problems as a result of their excessive debts and irresponsibility.

And it would be terribly foolish to simply ‘hope’ that repeating these same mistakes will somehow result in zero consequences.

Having a second passport doesn’t mean that you’re crazy, pessimistic, or even unpatriotic.

It’s just a sensible thing to do.

Worst case, even if you never actually need the ‘insurance policy’ of having another nationality, a second passport will provide additional options for visa-free travel and international business.

For example, US citizens who want to travel to Brazil need to obtain a visa in advance.

But citizens from dozens of other countries, from Argentina to Belgium, do not.

Being a citizen of certain countries (like Mexico, for example) entitles you to own certain property or start special businesses.

Again, maybe you wouldn’t ever use these benefits. But it’s hard to imagine you’ll be worse off for having additional options.

More importantly, remember that a second passport can often extend to your family as well.

So even if you don’t see yourself traveling or doing business or buying property abroad, your children and grandchildren might want to do so.

Obtaining a second passport will provide those same options and benefits to them. It’s a perpetual gift that you can give to future generations of your family.

So how does one actually obtain a second passport?

Well, you can pay for one.

St. Kitts, Dominica, Antigua, Cyprus, Malta, Grenada, etc. all have formal programs which grant citizenship to foreigners in exchange for a large investment or donation.

These can cost anywhere from $100,000+ to more than $2 million… which is a LOT to spend on an insurance policy for most people.

Fortunately there are easier (and cheaper) ways.

The simplest and most cost effective way to obtain another passport, by far, is to go back to your family tree.

If you have parents or even grandparents from places like Ireland, Poland, Italy, Lithuania, and literally dozens of other places around the world, you may be able to apply for citizenship.

If you think you might qualify, the best place to start is with the local consulate nearest you.

Call and ask them– they’ll be able to walk you through the process and documentation requirements.

If you’re not part of the lucky bloodline club, no worries, there are still other options.

Plenty of countries around the world allow foreigners to become naturalized citizens after a certain period of time as a legal resident in the country.

Panama is a great example; after five years of legal residency, foreigners qualify to apply for naturalization and citizenship.

This doesn’t mean you actually need to move overseas (but trust me, it can be an amazing experience if you do.)

Many countries, including Panama, have favorable legislation where you can still be considered a legal resident and eventually qualify to apply for naturalized citizenship without actually living there.

This is an incredibly easy option– all it takes is time and patience.

As a final option, if you’re planning on having children, you might consider heading overseas for the birth.

Most countries in the Western Hemisphere award instant citizenship to any child born in their territory.

This includes the United States, Canada, Mexico, and just about every country in Latin America.

I flew some of my relatives to Chile a few years ago for this reason– their child was born in Santiago and will be able to enjoy the additional options and benefits of Chilean nationality for life.

This is literally a life-long gift you can give to your child; and it will likely pass on to their children, and their children’s children, all because of actions that you take.

There are very few things within our power that have such a lasting, multi-generational impact.

Citizenship is one of the most important.

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[Editor’s Note: As we’re coming up on the end of the year, we thought it would be appropriate to republish some of our most popular articles from 2017. Today’s was originally published on April 24]

In a poll conducted a few days ago by NBC News / Wall Street Journal, a record 57% of Americans responded that they want MORE government in their lives, and that the government should be doing more to solve people’s problems.

That’s the highest percentage since they started asking this question in 1995.

In fact, 57% is nearly double what people responded in the mid-90s.

Furthermore, the number of Americans who feel the opposite, i.e. responded that the government is doing too many things that should be left to private businesses and individuals, fell to a near record-low 39%.

Bottom line: people want more government.

It’s hard to even know where to begin with this.

First- more government is nearly an impossibility.

As I’ve written several times in the past, the US federal government already spends almost all of its tax revenue on mandatory entitlements like Social Security, and interest on the debt.

They could literally cut nearly everything we think of as government– national parks, Homeland Security, even the IRS– and still not make a dent in paying down the national debt.

According to the US government’s own financial statements, their net operating loss in 2016 was an unbelievable $1.05 TRILLION.

Think about that– they lost more than a trillion dollars in a completely unremarkable year.

They weren’t waging world war, funding a major infrastructure project, or dealing with an economic crisis.

It was just business as usual. And they STILL lost over a trillion dollars.

More government is going to cost even more money that they don’t have… which means even more debt and even more pain in the future.

The usual refrain is to pay for more government programs by raising taxes on the rich, or big corporations, or whoever the evil villain du jour is.

Anyone who thinks this actually works needs to study history.

Simply put, RAISING TAXES DOES NOT RAISE TAX REVENUE.

I wish every Bernie Sanders voter could understand this very simple fact:

Since the end of World War II, US federal government tax revenue as a percentage of GDP has been nearly constant at 17%.

In other words, while the actual dollar amount of tax revenue goes up every year due to inflation and economic expansion, the government’s slice of the total economic pie is 17%.

Yet during the previous eight decades, actual -tax rates- have been all over the board– sometimes rates were higher, sometimes rates were lower.

Back in 1963, for example, the highest marginal tax rate on individuals exceeded an unbelievable 90%.

I’m sure there are plenty of Americans who would love to see the wealthiest citizens paying 90% again.

Yet in 1963, even with rates that high, the total amount of tax revenue that the US government collected was 16.7% of GDP.

In 1988 when the highest tax rate was slashed to just 28% under Ronald Reagan, total tax revenue 17.3% of GDP.

It doesn’t matter if tax rates were high or low– the actual tax revenue that the government collects stays constant at around 17% of GDP.

This raises a point that these socialists never seem to understand:

If the government’s slice of the pie never seems to change no matter how high or how low tax rates are, shouldn’t they focus on making the pie bigger?

Duh.

And it seems intuitive that higher taxes obstruct economic growth (i.e. make the pie smaller) because there’s less money in people’s pockets to spend and invest.

Then, of course, we have to touch on the issue of competence.

It’s absurd to want a government that has a nearly interminable track record of overreach, waste, and failure, to be even MORE involved in people’s lives.

We’re talking about the same institution that wastes taxpayer money to study monkeys on treadmills…

… or spent $1 billion to destroy $16 billion worth of perfectly good ammunition…

… or $2 billion to build a website.

It’s extraordinary that these people are already in charge of educating our children, regulating our savings, and now our medical care.

It’s even more appalling that given such dismal performance people want more.

As the old saying goes, the classic definition of insanity is trying the same thing over and over again and expecting a different result.

A final point I’ll mention is that it’s concerning to see people in the Land of the Free and Home of the Brave expect the government to solve their problems.

What ever happened to self-reliance? The pioneering spirit? Good ole’ American can-do ingenuity?

In truth there are countless ways for a motivated person to solve problems. Or at least to make forward progress.

For example, to all these kids that have their hands out demanding free university education, I always ask the same questions:

How many books did you read in the last twelve months?

How many FREE online courses from Harvard and MIT did you take?

Are you actually doing anything to help yourself? Or are you just whining on social media about how no one is giving you anything for free?

America was founded as a place where people take responsibility for themselves.

But this now seems to be an outdated, minority view.

The Land of the Free is truly becoming the Land of Getting Free Stuff.

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It happened again. Last week, hackers stole 4,700 Bitcoins (over $80 million at today’s price) from mining marketplace NiceHash.

(The company pairs up people with spare computing power with others who are willing to pay to use that capacity to mine Bitcoin– and then announced they would reimburse users who lost money from the hack.)

On top of that, last month hackers stole $31 million of another cryptocurrency called Tether.

But those are only two recent attacks.

Remember Mt. Gox?

The Bitcoin exchange was founded 2010. By 2013, it was handling around 80% of all Bitcoin transactions.

Then the company halted all trading after “technical issues” caused 850,000 Bitcoins to go missing.

Those missing coins are worth over $15 billion at today’s price.

All of the crypto theft making people question the security of Bitcoin and other digital currencies.

But it’s important to remember, in these cases, “Bitcoin” didn’t get hacked… it was the exchanges or marketplaces that got hacked.

This happens almost every day; people unwittingly get their phones and emails hacked and end up losing their cryptocurrency in the process.

It reminds me of the early days of the Internet, back when WiFi was still a new thing and banks were just starting to provide online account access.

Back then, hacks were commonplace. Users didn’t know enough about wireless network security, and banks didn’t have SSL enabled… so hackers could easily ‘sniff’ data packets and steal bank login details.

Fast forward 10-15 years and all of that’s changed.

Most people at this point (hopefully) know how to secure their WiFi networks with WPA2 security or better, and banks employ much better security and encryption standards.

But with cryptocurrencies it’s still very Wild West out there, vastly increasing the chances of hacks, cracks, and theft.

You’d be amazed, for example, how many people use a ridiculously unsecure password like “123456” for a website login that stores their Bitcoin secret key.

And even if hackers don’t steal your crypto, there’s still a chance you’ll lose it.

A friend of mine bought some Bitcoin in 2010 and stored it on a laptop. Then he threw the laptop away… along with all the Bitcoin. And there’s no way to get it back.

Like just about anything, all it takes is a little bit of education to prevent a major disaster from occurring.

One approach I encourage you to learn about for storing crypto is called “cold storage.”

Before I define cold storage, a bit of background if you’re unfamiliar with how the public key/private key system works.

A public key is a code available to anyone who trades cryptocurrency with you. A private key is a secret, alphanumeric number never to share with anyone.

Imagine a cryptocurrency public key is your home address. That address is in just about every public database imaginable, from the county clerk’s property registry to the local phone book.

And if you want someone to send you mail, you give them your address. Easy.

But the simple fact that someone has your home address doesn’t give them access to the inside of your house, and the contents within it.

No, for that, they’ll need your house key. And that’s essentially what your crypto private key is: something that allows only you to access the property.

So: public key = home mailing address, private key = house key.

Clearly it makes sense to safeguard your house key. You wouldn’t make copies and distribute them in public to everyone who walks by.

Similarly it makes sense to safeguard your private key (sometimes called secret key).

When you store your cryptocurrency with an exchange, or even in a web or mobile wallet, it means that some other service or application has control of your private key.

If they get hacked, you’ll lose everything. If they go rogue, you’ll lose everything.

I’m always amazed that so many people store crypto in this way.

Part of the benefit of holding crypto is that you can essentially be your own banker, i.e. there is no middle man between you and your savings.

Bottom line, you don’t need some website storing your key online for you. With a bit of education, it’s possible to create your own wallet and store the private key -offline-.

This is what’s known as cold storage.

Bear in mind that a private key is nothing more than a string of digits, something like

5Kb8kLf9zgWQnogidRq76MzPL6TsZZY36hWXMssSzNydYXYB9KF

If you really wanted you could simply write this down on a piece of paper, or even memorize it if you’re so inclined (though those methods are prone to errors).

But one safer option is to go to a site like bitaddress.org, which is a client-side application to create a public/private key pair.

This is important, because once you load the page you can actually disconnect your computer from the Internet entirely, ensuring that no one is spying or sniffing on your activity.

(There are other steps you can take to be even more secure, like setting up a stand-alone virtual machine solely for creating a wallet– but we’ll save those for another time.)

The page will go through a process to generate a key, and when prompted, you can choose the “paper wallet” option.

At that point you can simply print your paper wallet, put it in your home safe (or wherever you store your other valuables), and never give it to anyone.

Once you’ve secured your paper wallet in your safe, the bulk of your crypto wealth is offline and safe from computer glitches or hacks.

And the next time some poor soul loses his hard drive… or another major Bitcoin exchange gets hacked… you can rest assured that your crypto wealth is safe.

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In a move almost destined to prove that laws and policies have absolutely zero meaning, the European Union released a list of “tax havens” last week… with a massive, giant, highly conspicuous omission.

The blacklist contains the names of the usual suspects– Panama, United Arab Emirates, etc., along with a few additions like Mongolia and Marshall Islands.

But, again, conspicuously missing from this list is far and away the biggest tax haven in the world– none other than the United States of America.

It’s hard for US taxpayers to imagine the Land of the Free being a tax haven.

Americans are taxed heavily on ALL of their income, no matter where in the world they live.

Americans are taxed when they earn, when they save, when they spend and when they die.

And yet, for non-Americans, the US is a treasure trove of tax-free anonymity.

Non-Americans can register completely anonymous corporations and LLCs in nearly every state in the US, with some of the stronger jurisdictions being Delaware, Nevada, Wyoming, New Mexico and South Dakota.

And their name need never appear, ever, on any of the documents.

They can establish bank accounts and brokerage accounts with those anonymous corporations. They can purchase real estate with those anonymous corporations.

Moreover, non-Americans can easily establish bank and brokerage accounts overseas, and use their anonymous US companies to engage in business all over the world.

And in many cases, non-Americans can generate unlimited capital gains on their stock and bond investments and pay absolutely zero tax to Uncle Sam.

It’s a hell of a deal, far better than what the countries on the EU blacklist offer.

The EU’s list is supposed to call out a handful of nations for refusing to comply with international tax reporting and information sharing agreements– most notably the worldwide “Common Reporting Standards” (CRS) that came into effect last year.

CRS is basically a worldwide information-sharing agreement about taxes, banking transactions, and business activity.

Dozens of countries have signed up for it.

What’s totally bizarre is that a number of jurisdictions on the EU’s blacklist are already reporting, or scheduled to begin reporting, in accordance with CRS.

Panama and Marshall Islands, for example, will begin reporting in 2018. South Korea, which also made the EU blacklist, has already started reporting.

The United States, on the other hand, is not signatory to CRS, and the US government has stated it has zero intention of joining CRS.

And yet South Korea is on the blacklist and the US is not.

These lists are completely meaningless… the whole exercise is a wasteful farce.

Even the premise is deeply flawed. These EU bureaucrats are so terrified that an individual somewhere in the world might actually be able to exercise some financial privacy.

But they can’t handle that. They turn apoplectic at the thought of not being able to know everything you’ve ever done with your money.

They’re also hell bent on taking as much of it for themselves as possible.

Rather than trying to attract talented entrepreneurs, investors, businesses, and workers with low taxes and friendly government regimes, they terrorize everyone with higher taxes and increasingly socialist policies.

It’s not working.

Nearly a decade after the financial crisis, Europe still has appallingly high youth unemployment rates (roughly 40% in Greece, Italy, Spain) and banking systems that teeter on failure.

But a clear track record of failure has never stopped self-aggrandizing politicians from trying the same thing and expecting different results.

The end game of this insanity is that the EU now blames other countries for the failures of its own idiotic policies.

It’s all quite pathetic.

The good news here is that very little will really change.

Some of the countries on the black list may modify their tax codes to appease EU bureaucrats.

But some of the best tax strategies in the world won’t change in the slightest.

Bear in mind, there’s absolutely nothing wrong with taking legal steps to reduce the amount of tax that you owe. On the contrary, it’s just good sense.

US judge and legal philosopher Billings Learned Hand summed it up best when he wrote,

“Any one may so arrange his affairs that his taxes shall be as low as possible; he is not bound to choose that pattern which will best pay the Treasury; there is not even a patriotic duty to increase one’s taxes.”

And regardless of the EU’s temper tantrum, there are still countless ways for businesses in the 21st century to slash their tax bills.

One of them is Puerto Rico’s Export Services Act, also known as Act 20.

I’ve written about this a number of times– it’s an incredibly attractive law that allows all sorts of businesses to domicile in Puerto Rico with a corporate tax rate of just 4%.

This applies to industries ranging from various online businesses to consulting services, financial services, marketing services, and much more.

And ANYONE can realize these benefits, regardless of whether or not you’re a US citizen.

As a US territory, Puerto Rico isn’t on anyone’s blacklist.

And even despite all the misfortune the island has endured over the past year, the government there is doubling down on the tax incentives… and recently expanded a number of programs to make them even more attractive.

Puerto Rico may prove to be a fantastic option for your existing or prospective business; I’ve even structured one of my businesses there, and we’re looking at setting up another one there too.

These tax incentives are real… and could legally save you tens of thousands… hundreds of thousands… even millions per year.

That level of savings can have an enormous impact on your life, and it’s worth considering.

If you’re interested in learning more about it, we’ve created a report that explains the tax incentives in greater detail and tells you how to get started reducing taxes in Puerto Rico.

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Recently a group of archaeologists and anthropologists published a really interesting, comprehensive study of prehistoric civilizations and their sources in wealth.

It turns out that the most prosperous people and civilizations across ancient history– and I’m talking 10,000+ years ago before any recorded history– were those who harnessed new technologies to become more productive.

Back then it was all about agriculture.

And while it all seems so simple and obvious to us now, the use of large animals like horses and oxen to plow fields was considered game-changing technology for these prehistoric tribes.

The researchers surveyed data across a number of civilizations and found a much higher level of prosperity in places that used animals, versus places where farmers plowed their fields by hand.

The use of animals was a huge multiple of human labor, so farmers could extend their fields far beyond what was ever thought possible… and hence produce a massive surplus of food.

Moreover, they soon discovered that animal manure was an effective fertilizer that only enhanced crop yields.

More volume, more efficiency, higher yields… precisely the results that great technology produces.

Quite simply, the people and civilizations which embraced and used the technology prospered. Those who didn’t got left behind.

We’ve seen this over and over again throughout history. The printing press. The advent of machinery in the Industrial Revolution. The emergence of the microchip. The Internet.

Now it’s the technology behind cryptofinance which absolutely has revolutionary power to disrupt the existing financial system.

Think about it– every single financial function that banks currently monopolize, from deposits to lending to money transfers and currency exchange, can already be done better, faster, and cheaper outside of the banking system.

Banks take days to transfer funds. Blockchain transactions take an hour, maybe minutes… sometimes seconds.

Banks charge exorbitant fees to change from one currency into another, as if they have to put a ton of work into finding a buyer for their customers’ euros and US dollars. Give me a break.

Online platforms can do it at practically no cost.

Banks also charge exorbitant fees to make loans; it’s pretty standard for borrowers to pay at least a 1% to 3% origination fee up front, before you start paying interest.

Yet Peer-to-Peer sites squash these costs down to almost nothing.

Banks no longer have a competitive advantage in finance, and it’s only going to get worse for them.

The technology is powerful and game-changing. And again, those who don’t adapt will be left behind.

On the flip side, it’s obvious that a lot of people have made a lot of money in cryptocurrency.

And that’s great. Plenty of money has been made… and there may likely be plenty more money to be made speculating in the cryptocurrencies themselves.

But the big money has always been made by the folks who were on the forefront of developing the technology and applying it to bigger and bolder uses… NOT speculating on price volatility.

Back in ancient times, once people discovered that horses and oxen could multiply the labor of human beings, there were probably plenty of traders who made money speculating in animal prices.

But the real wealth was made by people who applied that new ‘technology’ to bigger problems and fundamentally changed the way their societies did business.

This will very much be the case with crypofinance.

The real prosperity isn’t in chasing the Bitcoin price higher, and certainly not in the latest ICO craze.

The real prosperity will be for the visionaries, entrepreneurs, and investors who back them– those who develop this technology and apply it in ways that fundamentally change the way we engage in finance and commerce.

So if you feel like you ‘missed’ Bitcoin, don’t worry: we’re just at the beginning of this phase… you haven’t missed anything.

In fact we haven’t even begun to scratch the surface of those application opportunities.

And the wealth and value that will be created from them will absolutely dwarf all the gains made in crypto so far. We haven’t seen anything yet.

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My colleague, Sean Goldsmith, just returned from a tour of the Caribbean.

He met with several local governments about their ‘citizenship by investment’ programs – a way to receive a passport by donating money or investing in local businesses or real estate.

If you have the means, this is probably the quickest and easiest way to obtain a second citizenship.

We’re exploring ways for Sovereign Man readers to get a special deal on these citizenships… and hope to make a major announcement on that front early next year.

In today’s podcast, Sean updates us on his travels and discussions with the government. And we discuss why everyone should want a second passport… especially today.

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It’s that time of year again– the time when everyone seems to be channeling his or her inner Nostradamus, peering into the crystal ball, and making predictions about what we’re going to see next year.

There’s a great quote that’s often mis-attributed to Mark Twain: “Predictions are hard, especially about the future.”

(The source of the quote is actually an old Danish proverb… though like a number of witty sayings, Twain somehow manages to get credit for it.)

It’s absolutely a true statement; the best we can do is look at big picture trends to understand the direction of where things are headed. But the detailed outcome and timing are anyone’s guess.

Having said that, I do tend to enjoy Saxo Bank’s annual “Outrageous Predictions”, if nothing else for the sheer entertainment value. It also tends to be quite thought-provoking.

Saxo just published its 2018 edition, and I thought I’d share a few with you:

1) Bitcoin collapses to $1,000

I thought this one was interesting, first and foremost, because Saxo hit the proverbial nail on the head last year in its “Outrageous Predictions for 2017,” in which they said

“we could see Bitcoin easily triple over the next year going from the current $700 level to +$2,100.”

Well, they were almost right. Bitcoin not only reached $2,100, but ripped past four figures entirely and is now hovering around $14,000 as I write this.

Saxo now predicts that, in 2018, Bitcoin will peak at $60,000 with a market capitalization of more than $1 trillion, after which a number of governments will engage in a coordinated attack to prohibit all cryptocurrencies.

Simultaneously, governments launch their own blockchains and cryptocurrencies, and Bitcoin crashes to $1,000.

2) The Federal Reserve loses control

Saxo predicts that the US economy begins to suffer in 2018, and the bond market begins to melt down. This results in a massive spike in interest rates, which the US government cannot afford.

Fearing for its own solvency, the Treasury Department assumes emergency powers to cap interest rates at 2.5%

Meanwhile, “[t]he hapless Fed will be scapegoated by politicians for the economy’s weak performance, a bond market in vicious turmoil, and the aggravation of already worsening inequality brought on by years of post-global financial crisis quantitative easing.”

3) China launches its own “petro-renminbi”

You may have noticed that oil prices, almost everywhere in the world, are quoted in US dollars.

Whether you’re talking about a barrel of oil drilled off the coast of Brazil, Saudi Arabia, Canada, or Norway, the price is nearly invariably quoted in US dollars.

This means that anyone who buys and sells oil– from foreign governments to multinational corporations– transacts in US dollars.

Given that oil is the #1 most traded commodity in the world, this relationship is an ENORMOUS boost for the US dollar. It effectively forces most of the world to hold and use US dollars if they want to use oil.

In economics this idea is known as the petrodollar. And the US has even gone to war to protect it.

But Saxo predicts that in 2018, China will launch its own Petro-renminbi (doesn’t have quite the same ring to it…) meaning that the Chinese government will establish an oil contract that’s quoted and settled in their own currency, not US dollars.

This would be an enormous deal… a major departure from decades of precedent and a huge blow to the dominance of the United States.

Saxo has a number of other predictions for 2018, some of them highly entertaining. You can read the full list here.

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Last weekend while I was in Denver, I had the opportunity to speak with a young man from the Netherlands who was attending our charity event.

It was his first trip to the United States, and I’m always interested to hear people’s first impressions.

He told me he was really overwhelmed with the size and scale of everything. China is about the only other country in the world that does everything as big as the US.

He also told me he couldn’t get over how much stuff there is to buy in the US… and how easy it is.

He’s absolutely right. The US is an amazing place for a number of reasons; it’s modern, generally safe, and boasts a high standard of living.

And, yes, as a consumer, it’s one of the best places in the world.

(Though I would suggest that there are parts of Asia that are even better; Hong Kong, for example, has a similar selection of goods and services from all over the world, yet ZERO tax.)

You can buy just about anything you want in the US, and with so many retailers competing for your business, the service, ease, and efficiency of buying anything is nearly unparalleled.

The US economy is almost DESIGNED for consumption. And, while convenient, this is a pretty bad thing over the long term.

Real wealth is created, and sustained, through production. Not consumption.

This isn’t exactly rocket science– our ancient ancestors figured this out 10,000+ years ago during the agricultural revolution.

They learned that, in order to survive and prosper, they had to produce more food than they could consume.

I call this the Universal Law of Prosperity. And if our ancestors hadn’t followed this principle, none of our modern civilization would exist today. We’d still be cave men, hunting and gathering for survival.

But the Universal Law of Prosperity is no longer the law of the land in the US.

Any high school economics student knows that 70% of US GDP is comprised of consumer spending. The common refrain that ‘the US consumer drives the economy’ is absolutely true.

Early in its history, the United States was a producer economy. Americans made stuff. Exported it. Saved their money. And reinvested.

Most of the country’s wealth and economic dominance was established in those early years.

Things started to change after World War II.

The US dollar had just become the global reserve currency under the new Bretton Woods system, and the US economy had become the world’s most dominant and powerful.

Americans began spending their newfound wealth, and soon the rest of the world grew to depend on the insatiable appetite of the US consumer.

Entire nations began basing their economic models on exporting to the US.

US consumption kept growing… at all levels. Individuals started spending far more than they earned.

The US savings rate plummeted, and even reached NEGATIVE territory for a number of years. Household debt ballooned as Americans borrowed money at record levels to buy more stuff.

The government did the same. The national debt exploded as bureaucrats squandered the public’s savings in almost legendary exploits, from that infamous $2 billion Obamacare website to the 6+ trillion in fake accounting at the Defense Department.

Ultimately it’s all consumption; the entire economic system is effectively milking the wealth and prosperity that was created in the past, like a trust fund baby that blows through his family’s fortune.

And while it’s really great to be a consumer in the US, it’s becoming more difficult to be a producer.

Case in point– according to a recent study by the Institute for Justice, about 1 in 4 workers in the US now requires some special government license. That’s up from 1 in 20 workers back in the 1950s.

Many of these are in low income, blue collar professions. And much of the time the requirements are totally irrational.

The average time required to qualify for a barber’s license, for example, is 415 days. For an interior designer, it’s an unbelievable 2,190 days.

These licenses don’t exactly make the world a better place; they’re mostly just bureaucratic obstacles that make it more difficult for lower-income workers to be productive.

We’re also seeing worrying trends with consumer debt, which is now at an all-time high.

This essentially means that Americans are borrowing from the future in order to buy stuff today, and doing so at record levels.

Credit card debt is at an all-time high. Auto loans are at an all-time high. Delinquencies (i.e. people who aren’t paying their loan balances) are RISING.

And the savings rate is once again plummeting, down to its lowest level in more than a decade.

On top of that, the US trade deficit continues to grow, all while the federal government massively outspends its income.

The national debt is now $20.5 trillion, and overall debt growth far exceeds GDP growth.

Oh, and the government is staring at yet another debt ceiling / government shutdown debacle in just 48-hours.

This time is not different. History is full of examples of formerly wealthy, prosperous nations which fell into terminal crisis because they favored a system built on debt and consumption, rather than savings and production.

I don’t want to suggest that this is an imminent crisis. It’s not.

But it is a troubling, high-impact, long-term trend. And it’s worth ensuring that you have a backup plan.

If all of your assets and all of your income depend exclusively on a heavily indebted nation with a bankrupt government continuing to persist forever without any consequences, you’re probably taking some unnecessary risks.

A good plan B involves simple, rational, legal, cost-effective (or often FREE) steps to ensure that you’ll always have a good option, no matter what happens (or doesn’t happen) next.

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While I was off at an annual charity event over the last several days, a few members of my team were dispatched through the Caribbean to meet with government officials at various island nations about their passport programs.

These programs are known as economic citizenship programs, and they allow a person to obtain official citizenship, along with a passport, by donating money or making a financial investment in the country.

One of my senior analysts wrote me from St. Kitts today.

If you haven’t been, it’s an island in the West Indies nestled between the Caribbean and Atlantic Ocean. He’s there looking to secure special terms for Sovereign Man readers.

St. Kitts has the most established citizenship program in the Caribbean.

It began in 1984 and has never been suspended (unlike some other Caribbean nations).

Although it hit a rough patch in 2014 when the Financial Crimes Enforcement Network (FinCEN) warned US banks not to work with individuals holding passports from St. Kitts and neighboring Nevis.

FinCEN essentially labeled St. Kitts as a harbor for terrorists because several Iranian nationals were granted citizenships.

In addition to those accusations, there was also lots of fraud surrounding the part of the program that deals with real estate investment.

One of the options in St. Kitts is that foreigners can buy real estate, which will qualify them for a passport.

And in the past, a number of developers would often skip town with escrowed funds before the project was completed.

Back then, I predicted the government would implement some serious reforms to shake the reputational damage. And that’s exactly what happened.

This morning my team met with a high-ranking government official who explained how much the program has changed since then.

There are a number of due diligence procedures to ensure that citizenship won’t be granted to criminal types who could tarnish the program.

Plus there are stricter controls to safeguard investors’ funds.

Most importantly, though, St. Kitts citizenship has also become a lot cheaper.

St. Kitts used to charge a non-refundable $250,000 donation to its Sugar Industry Diversification Foundation (or a $400,000 investment – plus fees – in an approved real estate project).

Sugar used to be St. Kitts’ main export, but the government stopped producing it in 2005 due to declining profitability; the donation helps plug the financial gap left by the closure of the sugar industry.

But in September, the island announced the Hurricane Relief Fund and lowered the price of citizenship to $150,000.

(Several other islands also lowered the cost of citizenship because of the hurricane, and my team is visiting all of them to arrange the best deal.)

The real estate investment in St. Kitts remains at $400,000 plus fees… and you’re allowed to sell your real estate after five years.

Most of the qualifying real estate in St. Kitts costs a LOT more than $400,000, though.

My team visited one project where the minimum price for a lot (excluding a house) runs $750,000.

It’s extremely nice, and there was a giant super-yacht parked in the marina.

But these types of projects seem quite expensive if the primary goal is to obtain a passport… which is why we’re excited about the major discounts these governments are offering on citizenship.

Of course, economic citizenship is only one way to obtain a second passport.

You can also get one at almost no cost if your ancestors came from certain countries – like Italy or Ireland, for example.

As a travel document, a European Union passport is much stronger than just about any Caribbean passport.

Plus it gives you the right to live and work in 28 countries. You might never want to, but it’s always nice to have a free option.

And if you’re unable to find any ancestors in your family tree, another path to a second passport is to obtain legal residency in a foreign country and apply for naturalization after a few years.

Note that obtaining legal residency isn’t the same as actually moving there.

In some countries, it’s possible to maintain your residency status by only visiting once every year or two.

We have a full report on the best ways to get a second passport right here.

I’ll continue to update you about my team’s travels through the Caribbean.

And I hope to share some exciting news regarding second passports with premium members soon.

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