simonblack – Page 138

Genius: FATCA has brought in just $13.5 billion in revenue on a cost of $1 trillion

Earlier this week the State Department released its latest statistics for people who have renounced their US citizenship.

2015 was another record year, with 4,279 people divorcing themselves from the US government and heading to greener pastures elsewhere.

This was the third year in a row that broke the previous year’s record, showing that this is obviously a growing trend. The number one reason for which is quite simple: tax.

Many of these individuals were Americans already living overseas who are still subject to the pay taxes to the IRS on their worldwide income.

For 2015, the first $100,800 in earned income for Americans living abroad is generally tax free. However, higher income earners are still forced to pay their “fair share” of all the bombs, drones, and federal folly even though they don’t live in the United States.

Most countries don’t do this. If you’re Canadian, or French, or even Chinese and you move abroad you’re no longer subject to taxation in your home country presuming you earn your income overseas.

Americans living overseas are also subject to additional reporting requirements and IRS scrutiny due to the Foreign Account Tax Compliance Act (FATCA).

FATCA is an insane, extraordinarily narcissistic law that requires reporting both from individuals with foreign assets as well as from every financial institution on the planet.

Individuals living abroad are more likely to have foreign assets, so they’re disproportionately affected by the additional compliance.

For financial institutions abroad, the cost of implementing FATCA has been estimated by various foreign governments, banks, chambers of commerce, and financial media, at anywhere between $200 billion and more than $1 trillion.

Yet despite FATCA’s trillion-dollar price tag, the Wall Street Journal reports that the US government has taken in just $13.5 billion in revenue from hidden foreign accounts that FATCA is supposed to eliminate.

Obviously the cost vastly exceeds the benefit. It’s insane. Plus FATCA has driven nearly 15,000 Americans to renounce the citizenship since President Obama signed it into law in 2010.

These former Americans are often criticized for taking such a controversial step, one that is derided as being “unpatriotic”.

This criticism makes no sense when you take a larger view of history.

The State Department estimates that there are up to 6 million Americans living abroad.

Given the average size of a Congressional district at roughly 700,000 citizens, there should theoretically be eight members of Congress representing the interests of Americans living abroad.

Yet expats have no representation. There is not a single person in Congress fighting for expats, even though they are still subject to pay tax.

More than 240 years ago, residents of the colonies had a term for this. They called it “Taxation without Representation”. This idea is as old as America itself.

And in 1776, American colonists divorced themselves from the British government. Much of this was tax motivated.

In the Declaration of Independence, Thomas Jefferson expressly writes that among the reasons for independence is “imposing taxes on us without our consent.”

Former US citizens are following in these footsteps.

This is appropriate to point out, especially this year as voters in the Land of the Free delude themselves into believing that they’re going to choose their next leader.

This is total nonsense. As we discussed in this week’s podcast, the US electoral system is completely anachronistic, just like the monetary system, the banking system, etc.

This idea of having delegates, super-delegates, and the electoral college probably made sense in the election of 1788, when less than 2% of the US population was able to vote.

Today it no longer makes sense. It is an illusion of Republican Democracy. In reality your vote doesn’t count.

Let’s be honest about the world we’re living in. Particularly in politics, money counts more than anything.

If you really want to change anything, the most important ballots you can cast are with your money and with your feet.

By divorcing yourself from a government bent on indebting future generations in order to drop bombs by remote control on brown people across the world, you’re taking a conscious step to reduce their resources.

Your hard work and sweat no longer support debt, war, and freedom-killing regulations.

Renunciation is one step that many former Americans have taken to affect this change.

Understandably the idea is far too radical for most people. But there are still many completely legitimate steps that anyone can take to reduce the amount that you owe and starve the beast.

It’s a far more powerful option than punching a chad in a voting booth.

It’s a far more effective way to create “real change” than punching a chad in a voting booth.

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One of the world’s last great boomtowns

[Editor’s note: Our Chief Investment Strategist Tim Staermose is filling in for Simon today from Yangon, Myanmar.]

Since so much of Asia is on holiday for the Lunar New Year, I decided to travel to Myanmar to check out how the economy is developing.

Myanmar was once the wealthiest economy in Southeast Asia. But decades of isolation and military rule have turned it into the poorest.

Myanmar is, no doubt, the Cuba of Southeast Asia.

For the last few years, however, the country has started emerging from this isolation. The military government has begun to relax its stranglehold and play nice with the rest of the world.

Just since my last trip to the country a few years ago, I can hardly believe the extraordinary progress.

A few years ago there was hardly any mobile phone coverage. All bandwidth was strictly controlled by the Army, and we pitiful civilians had no access to the network.

As late as 2013, only 7 in 100 people had a mobile phone. Now every second person in Yangon has one– usually a new Chinese-made smart phone.

A local SIM card, with 1GB of data, valid for one month can be purchased for about $6.

(That might sound cheap, but $6 is expensive in Myanmar compared to local wages. But mobile service prices are falling fast.)

Mobile technology is becoming an indispensable part of the economy.

Yesterday we stumbled upon an enterprising young lady from the Dala district, on the south side of the Yangon River from the downtown area, who offered to take us on a tour of the district.

She was able to line up rickshaws, make appointments, and keep in touch with all the people we met along our route, all from her smartphone while in the pedicab.

This was an impromptu tour, completely unplanned by us, so she had to think quickly and get things done as we travelled along.

Just three years ago, this would have been completely impossible.

ATMs and credit cards also work now.

Before, not even the few 5-star hotels in Yangon could accept credit card payment.

That was partly due to international sanctions against Myanmar (so VISA, AMEX and MasterCard were banned from doing business with the country), and partly due to lack of payments processing technology.

But, that’s all changed, too. My friends and I have been regularly withdrawing cash from foreign bank accounts at the ATMs here.

To be clear, there are still plenty of challenges for the country, as it struggles to emerge from over 50 years of isolation and disastrous economic policies.

Wandering around the derelict shells of what used to be magnificent, colonial style buildings in downtown Yangon, it serves as a clear reminder of how civilization can, and sometimes does decline.

The stench coming from the open sewers next to the pavements was a pungent reminder that the basic infrastructure of the city has not changed a great deal since the 1960s.

(On the positive side, there is a certain old world charm to Myanmar that doesn’t exist in too many other places around the world. In this respect it is very reminiscent of Havana.)

One thing above all is clear to me, though. For all its richness in oil, gas, timber, minerals, gems, soil, water, etc., Myanmar’s greatest asset is its people.

I have found people from all walks of life here to be open, honest, friendly, and, in most cases, hardworking and industrious.

Given the right tools, technology, and sufficient investment capital, this country truly does have an exceptionally bright future.

Fortunes will be made here, both by enterprising locals, as well as foreigners who have the foresight to invest wisely in one of the world’s last great boomtowns.

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Don’t count on banks and governments to go gentle into that good night…

Pop quiz: What was the top grossing movie in the world the last time the US tax code was overhauled?

The answer is Top Gun. And the year was 1986.

(Other major hits that year include Karate Kid II, Crocodile Dundee, and Ferris Bueller’s Day Off)

Think about it– this a tax code that was created for a highly industrialized economy. And that might have made sense thirty years ago.

But in the decades since, everything has changed. The world is flat. Globalized. And completely digital. An antiquated tax code based on geography and industrial manufacturing simply doesn’t make any sense today.

Our banking system is in a similar position. Banks today continue to insert themselves in the middle of every financial transaction imaginable, just as they did centuries ago.

Savings, lending, transfers, payments, foreign exchange—all of these transactions are highly centralized (and manipulated) by a private cartel that has no business existing in our modern world.

Today there are so many platforms available where we can send and receive peer-to-peer payments on our mobile phones.

We can hold deposits in the Blockchain. We can raise capital to start a new business on any number of crowdfunding platforms.

Banks are no longer necessary for any financial transaction. And yet they still bully their way into dominating the financial system.

This banking system might have been appropriate centuries ago when Medieval merchants needed a centralized way to extend credit. But it just doesn’t make sense today.

Similarly, global trade continues to be underpinned by a reserve currency issued by the greatest debtor that has ever existed in the history of the world.

This might have been appropriate in 1944 when they created a dollar-based financial system after World War II. But it no longer makes any sense today.

Banking, trade, and even our systems of government and the way we organize ourselves as a society, are all based on anachronistic traditions that don’t belong in the 21st century.

These systems are changing. And it’s already happening. All the alternatives and resources already exist.

This happens from time to time in human history. Kingdoms and Empires gave rise to the feudal system. And the feudal system was ultimately displaced by the nation state.

This time is not different, and it’s foolish to think the nation state will last forever.

Dominant reserve currencies have changed over time, from the Byzantine gold solidus, to the Venetian ducat, all the way to the US dollar today. We cannot expect the dollar to maintain its position forever.

We can see these changes happening already.

Wealth and power are shifting. Central bankers are running out of ammunition. Almost every major western government and central bank is on the brink of insolvency if not already bankrupt.

Developing nations are already creating their own alternatives to the US-dominated financial system. Modern technology is turning the commercial banking system into an endangered species.

And people are finally starting to get sick and tired of their system of government, advocating for the most extreme outsiders they can find.

Isaac Newton told us that an object in motion tends to stay in motion. And these changes are very much in motion.

40 centuries of human history demonstrate that political and banking elite will not simply roll over for financial system 2.0 to take over. They will not go gentle into that good night.

And that’s why these great changes bring both great risk, as well as great reward. Or more appropriately, the potential for both great loss and great opportunity.

Join me in today’s podcast as we discuss these risks and rewards, as well as so many more examples of outdated institutions that you might not have ever noticed before.

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After 1,428 years here’s what brought down the world’s oldest business

In 578 AD, a Korean immigrant named Shigemitsu Kongo made his way to Japan at the invitation of the royal family.

Buddhism was on the rise in Japan at the time; though it had only been introduced a few decades prior, the Empress consort had been actively encouraging the adoption of Buddhism across Japan.

But since the Japanese had no experience building Buddhist temples, they looked overseas for help.

That’s where Kongo came in.

Shigemitsu Kongo was a renowned temple builder, and the royal family in Japan commissioned him to build the Shitenno-ji temple, which still stands today in Osaka.

Kongo saw an incredible opportunity. Buddhism was catching on fast, and he knew he could be kept busy for decades building temples.

It turned out to be centuries. Over 14 centuries, in fact.

Shigemitsu Kongo formed his construction company Kongo Gumi in 578 AD, and it lasted 1,428 years.

It’s extraordinary that any single enterprise could last so long.

Even as late as 2004, temple building accounted for more than 80% of the company’s revenue, which exceeded USD $60 million.

But ten years ago the company finally went under due to the massive debt burden they had accumulated.

It started back in the 1980s. Japan was in the midst of an epic financial bubble thanks to unconstrained credit growth and expansion of the money supply.

Go figure, central bankers artificially suppressed interest rates, keeping them way too low for way too long. And it created a huge asset bubble.

Asset prices in Japan got so out of control that for a short time during the 1980s, it was said that the grounds of the imperial palace in Tokyo were worth more than all of the real estate in the entire state of California.

As part of this bubble, banks had relaxed their lending standards and were handing out loans to just about anyone.

And many Japanese companies took on vast amounts of debt, including Kongo Gumi.

Debt was like a popular drug. Everyone was doing it.

But when the bubble burst in 1989, asset prices collapsed. And companies that had borrowed heavily were left with nothing but debt.

Kongo Gumi didn’t go out of business right away. The company was able to limp along for more than two decades on basic life support.

Soon they were borrowing money just to pay interest on the money they had already borrowed, even though interest rates were at record lows.

But eventually the company’s revenues were no longer sufficient to service the debt.

And in 2006 Kongo Gumi was forced into liquidation.

This company lasted over 1,400 years.

They survived countless political crises, wars, and natural disasters.

They survived the Meiji Restoration in the 1800s, a period in which the government set out to eradicate Buddhism from Japan, and hence, the temple building industry.

They even survived two atomic bombs.

What Kongo Gumi couldn’t survive was debt.

It doesn’t matter if you’re an individual, a company, a government, or even a central bank; if your balance sheet doesn’t add up, sooner or later you’re going under.

It’s concerning to see consumer debt once again on the rise in the Land of the Free, at the fastest pace since the days of the financial bubble.

Perhaps most appropriate was a Superbowl commercial from Quicken Loans advertising how easy they have made it to obtain a loan.

“Push button. Get mortgage.” says the commercial.

More appropriate would be “Push button. Get into debt. Then buy more useless stuff.”

It’s a blatant snapshot of how far along we are in this latest financial bubble.

Of course, most western governments are in this position as well; they can go further into debt with a few strokes of the pen.

No surprise that many governments must borrow money to pay interest on money they’ve already borrowed, even at a time when interest rates are at record lows!

And yet the leading mainstream economic minds claim that debt (and money printing) are actually CURES to economic problems, and not causes of them.

As my colleague Tim Price points out, medieval doctors used to advocate leeches as a way to cure sick people.

Yet this approach turned out be largely ineffective and tended to kill the patient.

Sometimes the final consequences take years. Even decades.

Old, established institutions have the ability to kick the can down the road, just like Kongo Gumi did.

And even in terminal decline they can even give the appearance of strength.

Just a few years before its demise, Kongo Gumi was still a media darling that seemed strong, fit, and likely to last another 1,400 years.

The LA Times, for example, ran a story in 2003 praising the company for its deft ability to outlast Japan’s tough economic conditions.

Kongo Gumi folded less than three years later.

This is an incredibly important lesson: debt is a killer. And no one is immune to this inevitability.

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Inside the battle for control of the Federal Reserve

[Editor’s note: This letter was penned by Tim Price, London-based wealth manager and author of Price Value International.]

A Shandong 5000 electroglide flatbed currency printing machine named ‘Ted’ has edged ahead in a fiercely competitive fight for the chairmanship of the US Federal Reserve, narrowly in front of its major rival, the Heidelberger Druckmaschinen high speed sheet fed rotary offset press, christened ‘Heidi’.

In an ominous sign for supporters of the Heidelberger Druckmaschinen candidacy, a number of US Senate Republicans are circulating a letter supporting the Shandong 5000 model in its quest to replace Janet Yellen at the head of the world’s most important central bank.

The Shandong 5000 is a six colour high speed flexo letterpress printing machine which can churn out up to $200 trillion in high denomination bills in less than 60 seconds.

In a subtle technical innovation, these bills can then be immediately declared illegal and holders of them instantaneously vaporized.

The only other serious contender, a 70 ton Komori Super Orlof Intaglio based in Tokyo, melted after recent deployment by the Bank of Japan.

Senate Democrats rounded on the nomination of a Chinese printing machine in what critics interpreted as a thinly veiled racial slur that ran the risk of igniting an international trade war.

Supporters of the Shandong 5000 electroglide pointed out that the only domestic US manufacturer of high speed, sheet fed rotary 1-10 Intaglio currency printing machines filed for insolvency 60 years ago after using Alan Greenspan for consulting services.

Some Wall Street analysts were skeptical that a flatbed currency printing machine was really the best fit for the task at hand.

Marti Venal at SalesWeasel GoldFelon pointed out that in the 21st century, digital central bank reserves could be created effortlessly electronically without any resort to the printing press whatever.

His colleague Dwight Craven added that three staffers at the Federal Reserve had recently been crushed to death by the accidental toppling of a two mile high mountain of hundred dollar bills following the January 14th 11:02 a.m. Part 57 iteration of the Fed’s latest 8,000-stage quantitative easing programme.

“The Heidelberger Druckmaschinen boomlet is now looking like a Heidelberger Druckmaschinen backlash,” added Venal.

Republicans seem more welcoming of the Shandong 5000 candidacy, despite some disagreements over the machine’s reliability.

The Shandong 4000 series was prone to overheating, occasional power outages, and sometimes exploding spectacularly showering shards of molten steel at supersonic speed over its support workforce.

This made the Shandong 4000 only slightly less dangerous than a full service investment bank.

The Heidelberger printer has long been a bogeyman for some liberals.

They regard the machine as a close colleague of former Treasury Secretary Robert Rubin whose backing for the financial sector and appetite for unrestrained deregulation has been widely blamed for the banking crisis.

There has also been criticism as to the robustness of the Heidelberger currency printer in light of the near-constant requirement to print money 24/7, 365 days a year, and concern as to whether components of the printer have been ethically sourced.

“It used to take 5,000 Chinese workers to make the cylinder of one of our machines,” said a company spokesman.

“We have since found out that titanium is more hard-wearing.”

Over in Europe, monetary authorities have commissioned 14,000 Wolf-Krugman ultra-speed printing machines in order to prepare for March’s looming currency offensive.

The Bank of England, meanwhile, is preparing to unveil its new currency bazooka, a QE-969 Howitzer railgun capable of shooting money at 5,800 MPH into the economy, rendering it instantly inert.

In other news: The last remaining skeptic of the effectiveness of money printing was fired from the ECB. By a giant cannon. Into Switzerland.

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Thirteen years ago my life changed forever.

Colin Powell, then US Secretary of State and the most credible person in George W. Bush’s cabinet, made the case for war in Iraq on February 5, 2003.

As a young military intelligence officer at the time, watching from a makeshift army base in Kuwait not far from the Iraq border.

Back then I was a true believer, trusting that the government was a force for good “making the world safe for democracy. . .”

But that night it all changed.

Powell told the world unequivocally that Iraq had weapons of mass destruction, an assertion that history has proven categorically wrong.

But within the intelligence community, many people knew the appalling truth immediately.

That night it became clear to me that the government was lying and that the whole case for war was being fabricated.

It was crushing, like finding out everything I’d been told throughout my life was total bullshit.

So for the first time, I broke out of the spell and began questioning. Everything.

I started learning about the extraordinary political power of the military industrial complex that President Eisenhower warned about.

That led me to the fraud of many previous wars going as far as the Mexican War in 1845, one deeply criticized by Abraham Lincoln himself.

That led me to the Constitution, to which all military officers swear an oath to support and defend…

… and it surely didn’t seem like supporting or defending the Constitution in waging an ill-conceived, illegal war.

Needless to say I couldn’t talk to my professional colleagues. Everyone was so gung-ho, I felt like an outcast.

When I returned home, things didn’t improve.

While I was away the country had noticeably turned into a police state.

Yet people seemed oblivious to the change, drinking in the propaganda like a spiked punch bowl.

All the loud, bombastic nonsense and pledges of allegiance were merely illusions masking modern day serfdom.

It was the summer of 2004, I remember hearing on TV that the Libertarian Party’s national convention was starting in Atlanta.

I immediately hopped in the car hoping to find some sympathetic minds.

And at the convention I did meet some wonderful, freedom-minded people.

But the event was an unproductive circus, something like a cross between a high school pep rally and a Star Trek convention.

People in costume ran up and down the aisles chanting for their favorite candidate and getting into impromptu debates about the Constitution and Ayn Rand.

As nice and intelligent as everyone was, it felt like a giant freedom pity party.

I didn’t just want to complain. I wanted to fix it. I wanted to do something about it. And solutions were sorely lacking.

So I started educating myself more.

I dove into the federal balance sheet. I learned about the petrodollar and the debt.

That led me to the complete scam of central banking, fiat currency, and the fractional reserve system.

I realized that the political and banking elite have given us more war, instability, and epic financial crises.

They’ve turned Western civilization into a giant police state. And they’ve managed to brainwash the great masses so effectively that the people are crying out for more.

And after this emotional, gut-wrenching awakening, I spent years traveling to more than 100 countries looking for freedom and opportunity.

Eventually I learned that education, prudent planning, and global thinking can rebuild much of our stolen liberty.

Yes, things are crazy.

Freedom is in decline. Governments are bankrupt. Central banks are borderline insolvent.

The financial system is in precarious condition barely held together by a patchwork of negative interest rates, currency manipulation, and misguided confidence.

We award our most esteemed prizes for intellectual achievement to phony scientists who tell us to spend our way into prosperity and borrow our way out of debt.

We give absolute power to control the money supply (and hence manipulate the price of nearly everything) to unelected bureaucrats who have a track record of failure.

Yet we call ourselves ‘free’.

It’s complete madness. And it gets crazier with each passing month.

But history shows that in any episode of great turmoil, there are always winners and losers.

I learned that by taking some basic, sensible steps, it’s possible to drastically eliminate my exposure to the risks and avoid being a loser.

So no matter what happens or how crazy things get, I know I’ll be OK.

For years I’ve called this my “Plan B”.

I know I won’t be worse off for being able to grow my own organic food, holding some savings in a well-capitalized bank outside of my home government’s jurisdiction, or keeping some physical gold and cash.

Having another passport gives me more freedom to live, work, and travel.

Legally reducing my tax burden helps me vote my conscience with my dollars and put my money where my mouth is.

I’ve learned that all of these steps make sense no matter what happens. Or doesn’t happen.

But should the negative trend in freedom and global finance get worse, I know I’ll be OK.

This confidence has allowed me to focus on all the incredible opportunities I’ve seen.

Institutions that have existed for centuries are now being disrupted by digital technology.

Banking as we know it, for example, is finished thanks to digital technology.

The digital age is even changing the way we organize ourselves as a society.

Geography no longer matters, and nearly everything is global.

A billion people are rising into the middle class in Asia and Africa. Countries are emerging from war and isolation. Wealth and power are shifting.

These extraordinary changes bring extraordinary opportunity.

So as crazy as things are, I think this is an incredibly exciting time to be alive.

I’m grateful to be active in a time that future scholars will likely regard as one of the most tumultuous and revolutionary in history.

And I’m grateful for having started the philosophical journey that began thirteen years ago today.

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Congress wants to turn the US Postal Service… into a bank

It’s news that seems ripped from the pages of The Onion. Or perhaps Atlas Shrugged.

But incredibly enough it’s actually true: earlier this week, Congress proposed a new law authorizing the US Postal Service to provide banking and financial services.

It’s called the “Providing Opportunities for Savings, Transactions, and Lending” Act, abbreviated as… wait for it… the POSTAL Act.

And it provides explicit authorization for them to provide banking services including checking and savings accounts, money transfers, and “other basic financial services as the Postal Service deems appropriate in the public interest.”

Bank of the Post Office. It’s incredible when you think about it.

The US Postal Service hasn’t turned a profit in a decade.

As a matter of fact, its total accumulated losses now exceed $51 billion, easily ranking it among the least successful companies in history.

And the only way USPS can continue to maintain its operations is with regular bailouts from the American taxpayer.

The statistics are just horrendous. Mail volume is down dramatically, which means that revenue continues to fall.

Yet the Postal Service’s expenses and pension costs keep growing, along with its debt.

Just like the US government, the US Postal Service has its own debt ceiling that’s set by Congress.

USPS reached this debt ceiling back in 2012 and has remained at that level for years.

The only way they survive is by moving liabilities off-balance sheet and regularly going back to Congress with hat in hand.

Wow, talk about a responsible financial partner– this sounds like EXACTLY the place we should want to deposit our hard-earned savings!

Seriously, why would these people even consider an idea so absurd as to let an organization with a history of failed operations take over people’s savings?

Simple. It’s a cheap source of capital.

The Postal Service desperately needs cash. So what better way to raise capital than to sucker unsuspecting Americans into opening up Postal bank accounts?

When you deposit money in a bank, you are effectively loaning the bank your money.

In exchange, they pay you a whopping 0.01% interest.

This is what almost all banks do– they borrow money from depositors and (hopefully) make credible investments and loans with other people’s money.

Except in this case, the Postal Service needs to ‘borrow’ depositors’ savings to cover losses from its other operations.

There’s a term for this. It’s called a Ponzi Scheme.

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Meet the world leader who stole his citizens’ gold–

Even before his coronation in 1626, King Charles I of England was almost bankrupt.

His predecessors King James and Queen Elizabeth had run the royal treasury down to almost nothing.

Costly war and military folly had taken its toll. The crown had simply wasted far too much money, and brought in too little.

To make matters worse, King Charles was constantly at odds with parliament.

The English government was completely dysfunctional, with constant bickering, personal attacks, and very little sound decision-making.

Parliament refused to pass the taxes that Charles needed to make ends meet. But at the same time, the King was legally unable to levy his own taxes without parliamentary approval.

So, faced with financial desperation, he began to look for alternative ways to raise revenue.

One way was relying on practically ancient, obscure laws to penalize his subjects.

The Distraint of Knighthood, for example, was based on an act from 1278, roughly three and a half centuries before Charles’ coronation.

The Act gave him the legal authority to fine all men with a minimum level of income who did not present themselves in person at his coronation.

Charles also commandeered vast amounts of land, restoring the boundaries of the royal forests to where they had been during the time of King Edward I in the 13th century.

He then fined anyone who encroached on the land, and resold much of it to industries that were supportive of his reign.

King Charles even resorted to begging; in July 1626, he requested that his subjects “lovingly, freely, and voluntarily” give him money.

When that didn’t work, the King levied a Forced Loan, effectively confiscating people’s funds under the guise of ‘borrowing’ it.

He raised about £250,000, the equivalent of about $7.5 billion today.

Emboldened by his success, Charles eventually seized assets directly, including all the gold on deposit being held at the Royal Mint– money that belonged to the merchants and goldsmiths of England.

At one point Charles even forced the East India Company to ‘loan’ him their pepper and spice inventory. He subsequently sold the products at a steep loss.

If any of this sounds familiar, it should.

Today there is no shortage of nations facing fiscal desperation. Most of Europe. Japan. The United States.

In the Land of the Free, the government has spent years… decades… engaged in the most wasteful folly, from multi-trillion dollar wars to a multi-billion dollar website.

US debt just hit $19 trillion a few days ago. And it’s only going higher.

We can already see the government’s financial desperation.

Over the years, the government has effectively levied a ‘forced loan’ totaling more than $2.6 trillion on the Social Security Trust Fund, whose ultimate beneficiaries are the taxpayers of the United States.

Bottom line, they’re ‘borrowing’ YOUR money.

Last year the government stole more from Americans through ‘Civil Asset Forfeiture’ than all the thieves in the United States combined.

In December, the US government confiscated $19.3 billion from the Federal Reserve, which, by the way, was already very thinly capitalized.

Even if you want to believe the propaganda, it’s clear that these are not the actions of a healthy, solvent government that embraces liberty.

In fact, the government published over 80,000 pages of laws, bills, regulations, and executive orders last year. Just this morning they published another 308 pages.

It’s impossible for anyone to keep up with all of these rules. And yet each can carry civil and criminal penalties, including a fine now for not having health insurance.

As Mark Twain used to say, history may not repeat, but it certainly rhymes.

Financially insolvent governments of major superpowers do not simply go gentle into that good night.

They don’t suddenly turn over a new leaf and start embracing economic freedom.

Instead, they get worse. More desperate. More destructive.

Should we honestly believe that they can continue racking up more debt than has ever existed in the history of the world without any consequences?

This is madness. At some point, fiscal reality always catches up. Maybe not at $19 trillion. Maybe not even at $20 trillion.

Maybe it takes 3 months. Or 3 years. But somewhere out there is a straw that can break the camel’s back. And that has serious consequences.

Never forget that if something is predictable, then it’s also preventable.

And facing such obvious trends, it makes all the sense in the world to take some simple, rational steps to put together your own Plan B.

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