Category: simonblack

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

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

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

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

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

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

Is this an idyllic vacation home or a Plan B?

It’s both.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Unfortunately, Valerian turned out to be a complete disaster.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Again– unimaginably bizarre priorities.

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

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

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

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

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

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

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

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

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

And the economic consequences are-a-plenty.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

His answer? “We spent it into existence.”

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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“In the present position of Europe,” Napoleon wrote to his ambassador in Constantinople, “all my thoughts are directed towards England. . . nearly 120,000 men and 3,000 boats. . . only await a favorable wind to plant the [French flag] on the Tower of London.”

That was written in March 1804. And to be in Britain at the time– knowing that Napoleon was planning an invasion– must have been terrifying.

Britain was already a complete mess by 1804 anyhow:

1) There had been a terrible currency crisis only a few years before, prompting the government to suspend the gold standard. The end result was several years of nasty inflation which topped out at nearly 15%. People were furious.

2) Britain’s defeat in the American Revolution was not only a national humiliation, but incredibly costly; the national debt had soared, and government spending was still out of control by 1804. Taxes rose as a result, including a new income tax that was introduced in 1798.

3) British banks, including the infamous Barings Bank, were found to have indirectly provided loans to France… essentially helping to finance Napoleon’s planned invasion of Britain.

4) And to cap it all off, King George III was widely viewed as insane by contemporary physicians and had multiple bouts of delirium.

A mad king. Inflation. Out of control deficit spending. Steep taxes. Idiotic bankers. A looming invasion. It must have felt like very dark days in Britain in the early 1800s.

And yet they did find their way out from the depths of despair to eventually achieve unprecedented peace and prosperity.

Britain’s incredible reversal took time. Years. But eventually they defeated their enemy. They paid down their debt. They strengthened the currency. They remained the world’s dominant superpower. And they enjoyed a massive economic boom that lasted for decades.

I’ve written about this before because, frankly, it’s one of the few examples in history of a country abruptly reversing course and going from almost certain decline to unbelievable prosperity.

And I think it’s clear that the US is in this position right now.

Enemies are swarming around the world… including passionate ignoramuses within the US who seem hellbent on making the country weaker.

Wealthy activists like George Soros, for example, fund the political campaigns of ‘progressive prosecutors’ who release criminals onto the streets and refuse to prosecute crimes.

Combined with the geniuses in many city councils across the country who have de-funded their police departments and decriminalized shoplifting, the unsurprising result has been an alarming rise in crime.

Meanwhile, the people running the federal government roll out the red carpet for illegal migrants at the southern border, creating total chaos in most major cities.

They constantly issue idiotic regulations and legislation which make life more cumbersome and expensive for average Americans and small businesses– like the Labor Department’s recent 800-page proposal to make sure that interns can use a toilet which conforms to their gender identity.

Enemies are at the gate. And in some instances, including through repeated cyberattacks and other incursions, enemies have already breached the gate.

Yet the people in charge have weakened the military between their vaccine mandates, the humiliation of Afghanistan, and endless diversity & inclusion efforts. Recruiting and mission readiness are now both at historic lows.

They weaponize the justice system against their opponents and soften it for their friends and family. Rule of law has become a total joke, especially now that even high-ranking judges have become social activists whose rulings reflect their woke fanaticism rather than Constitutional law.

They suppress intellectual dissent and denounce those who disagree with them as “cave men”, “white supremacists”, “threats to democracy”, or “science deniers”. And their propaganda machine masquerading as mainstream journalism constantly feeds us these lies with a straight face.

They refuse to even acknowledge the looming fiscal crises they’ve engineered through decades of deficit spending and expensive entitlement programs. The country is only a few years from a financial cliff, yet they’re not even talking about it.

And to top it all off, the guy in charge appears to have lost his mind… just like King George III.

These are the circumstances of America today. And in many respects, they are similar to Britain in the early 1800s.

Could there be a similar, miraculous turnaround for the US? Is it possible that, ten years from now, America is firmly the world’s superpower with a booming economy and negligible debt burden?

Yes, absolutely. There is still a very narrow path forward.

It would include a complete overhaul of Social Security, plus deep cuts to expensive welfare programs which cost over $500 billion dollars each year.

I’d also anticipate a major asset sale to raise cash (and avoid going further into debt), i.e. an auction of millions of acres of government land.

It would also require serious de-regulation, which, combined with AI, could radically boost the economy, and create a productivity boom. This would not only increase economic prosperity, but also increase tax revenue and reduce the deficit.

These are just a few, extremely high-level points to illustrate that it is possible for the US to reverse course, just like Britain did in the early 1800s.

But the path to recovery is very narrow. And short. There simply isn’t much time remaining.

I’ve written before that the US probably only has around five years, if not less, before the government reaches the end of its financial rope. The national debt and entitlement spending are simply too high.

By the early 2030s, the only realistic way to ‘solve’ the fiscal problem will be full-blown default… on the national debt, on Social Security, and on just about everything else.

So, yes, there is a chance this problem can be fixed. But at the moment, I objectively see very little evidence that there’s any appetite to even discuss these problems, let alone make the difficult decisions to solve them.

And this is why it makes so much sense to have a Plan B.

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That infernal clanging you might have heard outside your bedroom window this morning was the sound of the proverbial can being kicked down the road, yet again.

With no agreement on spending anywhere on the horizon for the current fiscal year, the US Congress passed yesterday a ‘Continuing Resolution’ to keep the government temporarily funded for another six weeks.

This is nothing new; in fact, Congress has passed more than 50 Continuing Resolutions just since 2010, primarily because they almost NEVER manage to figure out the budget prior to the start of the fiscal year on October 1st.

But now there is far greater need to get it right than ever before.

I’ve been writing about this a lot lately, because, frankly, it is a critical issue. Failing to fix the spending problem spells disaster for the United States… and for the US dollar.

I wrote recently how the Congressional Budget Office projects the US government will add $20 trillion to the national debt through 2033.

$20 trillion is an absurd amount of new debt. And there are very few groups and institutions capable of loaning such a vast sum of money.

Social Security, for example, was one of the biggest buyers of US government bonds for several decades. And at this point they own roughly $3 trillion of the national debt.

But Social Security is now bleeding so much money that the program is no longer able to loan the Treasury Department any more money.

Foreigners also used to be highly reliable buyers of US Treasury bonds; even as recently as a few years ago, foreign ownership of US federal debt was more than 33%.

But foreigners are rapidly losing their appetite for US government bonds, and their ownership has plummeted to 22% very quickly.

Now, in many ways it’s good that the US no longer owes so much of its debt to foreigners.

Except that this only leaves one reliable institution remaining to buy up all that new debt: the Federal Reserve.

Remember, the Fed’s unelected Federal Open Market Committee (FOMC) holds periodic closed-door meetings to make decisions about the US money supply.

When they expand the money supply, they give it a very technical sounding name (like “Quantitative Easing”). But ultimately what this means is that they conjure trillions of dollars out of thin air with the click of a button.

It’s actually quite bizarre when you think about it; they make a few entries into an electronic ledger, and, poof, new money exists.

(It’s essentially the electronic version of having a printing press, which is why we often just say that the Fed ‘prints money’.)

The Fed then lends that money to the federal government, and the mechanism for this is buying US Treasury bonds.

Because the Fed has this special ability to print money– something which no one else is legally allowed to do– there is realistically no limit to how many bonds they can buy. If the government needs to borrow $20 trillion, the Fed has the capacity to print and lend $20 trillion.

And this is the key issue: when individuals, corporations, or even foreign governments buy US Treasury Bonds, they are buying those bonds with existing money that’s already in the system.

But when the Fed buys US Treasury Bonds, they do it by conjuring new money out of thin air.

And this new money creates more inflation.

This isn’t some wild theory; we all experienced the effects firsthand during the pandemic; the US government spent so much money in 2020 and 2021 that the national debt increased by more than $6 trillion.

The Fed created about $4 trillion of new money to buy the biggest chunk of that debt. And the end result of so much sudden, new money was 9% inflation.

So, if $4 trillion in new money caused 9% inflation, how much inflation will $20 trillion create? No one can predict the effect precisely, but it probably won’t be zero.

Remember, this $20 trillion figure for new debt is the government’s own forecast over the next ten years (and it might be on the low side).

But most of this amount, i.e. $15+ trillion, will accumulate over the next 5-7 years. So this is really the time frame for increased inflation risk… and serious threats to the US dollar.

Because with an explosion in US government debt– and renewed inflation– there is a very strong chance that foreigners will finally demand a change.

The United States and the US dollar have been in command of the global financial system ever since the Bretton Woods Agreement was signed at the end of World War II.

This agreement made the US dollar the world’s dominant reserve currency, forcing every nation, every major bank, every large corporation to hold US dollars for international trade and financial transactions.

The dollar’s reserve status is a very special privilege for the United States. But if the world finally demand a new, de-dollarized system, then foreigners would no longer need to hold US dollar assets– including US government bonds.

Even though foreign ownership of US debt is already dwindling, losing reserve status would cause that percentage to drop very quickly. And the Fed would need to print even more money to make up for the loss of foreign investors… causing even more inflation.

Now, I’ve written before that, at least for the moment, there are still a handful of ways that the US could navigate out of this mess. But options are narrowing and the window to act is closing.

Watching Congress kick the can down the road yesterday, yet again, rather than make tough decisions or even DISCUSS necessary actions like entitlement reform, etc. does not give me much confidence that they will figure this out.

And if no action is taken, the scenario I outlined above is likely to play out over the next 5-7 years.

Fortunately, this gives every intelligent, independent-thinking individual a healthy window to prepare for what’s coming.

What I wrote above is not the end of the world. I am not predicting doom and gloom. I am, however, making a strong case for an inflationary future.

But there is plenty we can do now to prepare so that future inflation won’t have a significant impact on our lives.

Energy prices, for example, could likely soar. And yet many energy producing companies are remarkably cheap right now. This is a pretty good hedge.

Gold is also worth discussing; even though it’s near an all-time high, there’s a good chance that the future financial system I mentioned earlier becomes based on gold, rather than any single currency.

And if that happens, we could easily see $10,000 gold or more, likely by the end of the decade.

More on that soon.

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Tony Fauci should be in a prison cell in Wuhan right now given how much responsibility he bears for destroying US government finances.

This guy was one of the chief architects of the hysteria that took over the US (and much of the world) back in 2020.

Yet he now admits, according to recent Congressional testimony, that his infamous six-foot social distancing edict “sort of just appeared” and was “not based on any data”.

But it was precisely those sorts of claims that prompted politicians to close schools and business across the country, and to pay people to stay home and NOT work.

The financial results of this insanity are clear; the US national debt increased by an unbelievable $6.5 trillion during 2020 and 2021. And while there is a lot of blame to go around– politicians had ample time to find their intellectual courage– Fauci is extremely culpable.

Now, the US fiscal situation was already in bad shape prior to 2020. I remember back in 2019, when the economy was booming and federal tax revenue was at a record high, the US national debt STILL increased by more than $1 trillion that year.

And I wrote to our readers wondering– if the United States government still manages to add $1 trillion to the national debt when everything is awesome, what’s going to happen when there’s a real emergency?

Well, Tony Fauci gave us the answer the following year.

But even now that Covid is over, government overspending is still extreme. And it’s not getting any better.

I’ve been writing about this a lot lately, but today I need to explain where this is headed, and why it’s so inflationary.

Consider that, according to the Congressional Budget Office’s own forecasts, the United States will add another TWENTY TRILLION DOLLARS to the national debt through 2033.

Now, 2033 is a REALLY important date, because it also happens to be the year that Social Security’s primary trust fund completely runs out of money.

Social Security is funded in large part by workers who contribute a portion of their paychecks into the program through the FICA/payroll tax.

Social Security uses that tax revenue to pay monthly benefits to retirees across the country. And any surplus left over is rolled into a special trust fund.

Over time, the accumulated surplus in the trust fund amounted to roughly $3 trillion dollars; and all that money was invested in interest-bearing government bonds.

Between the payroll tax contributions and the trust fund’s interest income, Social Security always ran a healthy surplus.

Until recently.

Starting in 2020, there were so many retirees receiving Social Security benefits that the program barely broke even for the year.

The following year, 2021, was even worse. Social Security ran a deficit for the first time ever and had to dip into its trust fund to make ends meet.

This trend kept up in 2022 and 2023 as well. In fact, the program loses so much money now that its trust fund is shrinking rapidly, and Social Security projects it will fully be depleted by 2033.

One of the many, many reasons this is so important is because Social Security will no longer be a BUYER of US government bonds. It will be a SELLER. And that’s a big deal.

For the past 90+ years, Social Security always invested its annual surplus into government bonds… which essentially gave politicians an extra pile of cash each year to spend.

But now this cash flow will reverse. Instead of Social Security sending its surplus to the Treasury, the Treasury Department now must repay the debt that it owes to Social Security.

This nearly $3 trillion repayment will happen gradually over the next ten years. And then, of course, in 2033, Social Security will be out of money and require a multi-trillion-dollar bailout.

Unfortunately, the Treasury Department doesn’t have the money to repay this $3 trillion debt, let alone another $5 to $10 trillion to bail out Social Security.

This means that, in addition to the $20 TRILLION in new debt that the CBO is projecting over the next ten years, the Treasury Department will have to borrow an ADDITIONAL $3 trillion to repay Social Security. And then even more to bail out the program

(So, this means that the government will need to find someone to buy $23++ trillion of government bonds over the next ten years… which is just an absurd amount of money.

And it will have to do this at a time when it has lost some of its biggest investors; again, Social Security can no longer afford to buy bonds. And many of America’s biggest foreign bondholders, including China and Japan, are also not buying any more bonds.

So, who is going to buy all this new debt?

The only realistic option is the Federal Reserve. And this is nothing new for the Fed.

During the pandemic, for example, the Fed magically created about $4 trillion in new money, then used that money to buy US government bonds.

Of course, their $4 trillion in new money also helped create the highest inflation in four decades.

So, if buying $4 trillion of government bonds led to 9% inflation, what’s going to happen when the Fed has to create $20+ trillion to buy government bonds?

And by the way, the CBO’s $20 trillion estimate on new government debt is probably a bit too optimistic. It assumes there will be no new war, no pandemic, no national emergency, and no idiotic legislation that causes even crazier spending.

If any of those were to happen over the next decade, the increase to the national debt would be even higher… meaning the Fed would have to create even MORE money.

$20+ trillion is a ton of debt. And with no other realistic option other than the Federal Reserve to buy that debt, it’s easy to make a very strong argument for substantial inflation a few years down the road.

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

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

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

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

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

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

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

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

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

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

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

His answer? “We spent it into existence.”

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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“In the present position of Europe,” Napoleon wrote to his ambassador in Constantinople, “all my thoughts are directed towards England. . . nearly 120,000 men and 3,000 boats. . . only await a favorable wind to plant the [French flag] on the Tower of London.”

That was written in March 1804. And to be in Britain at the time– knowing that Napoleon was planning an invasion– must have been terrifying.

Britain was already a complete mess by 1804 anyhow:

1) There had been a terrible currency crisis only a few years before, prompting the government to suspend the gold standard. The end result was several years of nasty inflation which topped out at nearly 15%. People were furious.

2) Britain’s defeat in the American Revolution was not only a national humiliation, but incredibly costly; the national debt had soared, and government spending was still out of control by 1804. Taxes rose as a result, including a new income tax that was introduced in 1798.

3) British banks, including the infamous Barings Bank, were found to have indirectly provided loans to France… essentially helping to finance Napoleon’s planned invasion of Britain.

4) And to cap it all off, King George III was widely viewed as insane by contemporary physicians and had multiple bouts of delirium.

A mad king. Inflation. Out of control deficit spending. Steep taxes. Idiotic bankers. A looming invasion. It must have felt like very dark days in Britain in the early 1800s.

And yet they did find their way out from the depths of despair to eventually achieve unprecedented peace and prosperity.

Britain’s incredible reversal took time. Years. But eventually they defeated their enemy. They paid down their debt. They strengthened the currency. They remained the world’s dominant superpower. And they enjoyed a massive economic boom that lasted for decades.

I’ve written about this before because, frankly, it’s one of the few examples in history of a country abruptly reversing course and going from almost certain decline to unbelievable prosperity.

And I think it’s clear that the US is in this position right now.

Enemies are swarming around the world… including passionate ignoramuses within the US who seem hellbent on making the country weaker.

Wealthy activists like George Soros, for example, fund the political campaigns of ‘progressive prosecutors’ who release criminals onto the streets and refuse to prosecute crimes.

Combined with the geniuses in many city councils across the country who have de-funded their police departments and decriminalized shoplifting, the unsurprising result has been an alarming rise in crime.

Meanwhile, the people running the federal government roll out the red carpet for illegal migrants at the southern border, creating total chaos in most major cities.

They constantly issue idiotic regulations and legislation which make life more cumbersome and expensive for average Americans and small businesses– like the Labor Department’s recent 800-page proposal to make sure that interns can use a toilet which conforms to their gender identity.

Enemies are at the gate. And in some instances, including through repeated cyberattacks and other incursions, enemies have already breached the gate.

Yet the people in charge have weakened the military between their vaccine mandates, the humiliation of Afghanistan, and endless diversity & inclusion efforts. Recruiting and mission readiness are now both at historic lows.

They weaponize the justice system against their opponents and soften it for their friends and family. Rule of law has become a total joke, especially now that even high-ranking judges have become social activists whose rulings reflect their woke fanaticism rather than Constitutional law.

They suppress intellectual dissent and denounce those who disagree with them as “cave men”, “white supremacists”, “threats to democracy”, or “science deniers”. And their propaganda machine masquerading as mainstream journalism constantly feeds us these lies with a straight face.

They refuse to even acknowledge the looming fiscal crises they’ve engineered through decades of deficit spending and expensive entitlement programs. The country is only a few years from a financial cliff, yet they’re not even talking about it.

And to top it all off, the guy in charge appears to have lost his mind… just like King George III.

These are the circumstances of America today. And in many respects, they are similar to Britain in the early 1800s.

Could there be a similar, miraculous turnaround for the US? Is it possible that, ten years from now, America is firmly the world’s superpower with a booming economy and negligible debt burden?

Yes, absolutely. There is still a very narrow path forward.

It would include a complete overhaul of Social Security, plus deep cuts to expensive welfare programs which cost over $500 billion dollars each year.

I’d also anticipate a major asset sale to raise cash (and avoid going further into debt), i.e. an auction of millions of acres of government land.

It would also require serious de-regulation, which, combined with AI, could radically boost the economy, and create a productivity boom. This would not only increase economic prosperity, but also increase tax revenue and reduce the deficit.

These are just a few, extremely high-level points to illustrate that it is possible for the US to reverse course, just like Britain did in the early 1800s.

But the path to recovery is very narrow. And short. There simply isn’t much time remaining.

I’ve written before that the US probably only has around five years, if not less, before the government reaches the end of its financial rope. The national debt and entitlement spending are simply too high.

By the early 2030s, the only realistic way to ‘solve’ the fiscal problem will be full-blown default… on the national debt, on Social Security, and on just about everything else.

So, yes, there is a chance this problem can be fixed. But at the moment, I objectively see very little evidence that there’s any appetite to even discuss these problems, let alone make the difficult decisions to solve them.

And this is why it makes so much sense to have a Plan B.

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