Category: simonblack

On July 12, 1648, dozens of angry French politicians gathered at the hallowed Palais de Justice in Paris to draft the final ultimatum that would be sent to their nine-year-old king, Louis XIV.

The politicians were all members of France’s national parliament, and, like most modern politicians, they were almost all lawyers who lived extremely privileged lives at the expense of French taxpayers.

In France, most aristocrats historically came from a group known as the noblesse d’épée, essentially Knights of the Sword. They were warriors who had fought valiantly and had won their power for their dedicated service to France.

This new class of politicians, however, came from a different group known as the noblesse de robe. They had never fought or bled for France, and rather had spent their lives in academia and law school without any understanding of the real world.

And while they claimed that their political crusade was all about ‘the people’, it was obvious that they just wanted more power for themselves.

France was just coming out of the Thirty Years’ War. The King was just a boy. The chief minister– Jules Mazarin– was extremely unpopular. So, these politicians saw an opportunity to take power.

They relied on their friends in the media to create divisions in French society– Catholics versus Huguenots, peasants versus merchants– and before long there was talk of civil war. And it didn’t exactly go as planned.

On August 27, a few weeks after submitting their ultimatum, roughly 160 politicians marched to the royal palace. They were joined by a small crowd of peasants who were dumb enough to believe that these nobles actually cared about commoners’ problems.

The royal court initially decided to placate and respect the crowd, so Louis’ mother took him outside of the city for a while. The politicians and their peasant followers immediately declared victory and turned Paris into a sort of ‘autonomous zone’.

But as months went by and nothing really improved, many of the peasants began to realize that they were just pawns in the noble’s attempt to seize power and turn France into an even worse feudalist state.

Eventually the boy king returned– this time with his army. And suddenly the rebel nobles realized that their civil war was about to get real. Trained, professional fighters were about to march through Paris and vanquish all the sissy elites who had never fought a day in their lives.

Sure, the elites knew how to write angry letters. They knew how to use the media to stoke divisions and call their opponents all sorts of horrible names. They knew how to talk tough. And if they were alive today, they’d probably be really great at making TikTok videos.

But they were ultimately a bunch of cowards who weren’t even willing to get a bloody nose for their so-called beliefs. And France’s ‘civil war’ was over in no time.

This is one of the great lessons from history: it’s easy to pretend that you stand for something when the cost for doing so is absolutely nothing. You only find out what people truly believe when their own blood and livelihood is on the line.

In our modern era, we have equally incompetent, idiotic, wimpy politicians who are devoid of backbone. They have no clue how the real world works, and they live a life of lavish status courtesy of the taxpayer.

They, too, have stoked division and animosity among the population. People used to be able to disagree with one another civilly. Now countless fanatics viscerally hate the other side and call for large groups of people, whether ‘billionaires’ or ‘Trump Supporters’ or ‘oil execs’, etc. to be lined up against the wall and shot.

There is no rational discourse anymore, only shouting matches, angry Twitter feuds, and ‘mostly peaceful’ protests. The takeover of so many college campuses across the Land of the Free is a testament to how far civil discourse has fallen.

It’s so bad that a number of polls suggest up to 43% of Americans think another civil war is coming within a decade. Even Ray Dalio– billionaire founder of the world’s largest hedge fund– recently said the same thing in an interview with the Financial Times last week. Some politicians and vocal social media personalities have also called for a ‘national breakup’.

Given that there’s even a Hollywood production out in the theaters right now literally called Civil War about a future breakdown of the US, we thought it was time to weigh in with a dose of reality.

Let’s be honest: an actual “war”, i.e. shooting, violence against violence, etc. isn’t going to happen.

Just like the French civil war in the mid-1600s, the majority of the hyper-angry progressive rebels in America today are elitist cowards. One need only take a look at the people who have taken over the universities: they’re idiot kids, not terrifying holy warriors.

Sure, it’s easy to look tough and storm an administrative building when your spineless university president tacitly (or explicitly) supports your cause.

But the second there’s any real violence, i.e. someone who fights back, they’ll all run away in an instant. They can’t even take a bloody nose.

Bear in mind, these progressives are the same people who hate firearms and want to ban them. And aside from a handful of Antifa thugs, the leftists are a bunch of wimps who have zero chance in combat.

It’s also worth pointing out that most of them stand for nothing. Remember the ‘defund the police’ politicians who quickly changed their tune as soon as they got carjacked or robbed?

They’re physical and intellectual cowards, worthy of pity… not fear. And that’s why, on the list of risks that I think about, civil war is really, really far down the list.

That energy is far better devoted to real problems– like, how to prevent the erosion of one’s savings from inflation. Or how to mitigate the consequences of the dollar losing its reserve status. Or how to make sure the insolvency of Social Security doesn’t turn one’s life upside down.

These are risks that have actual solutions, so you can control the outcome. The notion of civil war might be provocative and capture headlines, but it’s a waste of time to even think about.

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If you want to understand the complete dysfunction of the federal government, look no further than the case of Marty Gruenberg.

At least for now– and hopefully not much longer– he is the petty tyrant in charge of the FDIC (Federal Deposit Insurance Corporation); he has served in that position for 10 out of the last 13 years and has been on the FDIC’s board since 2005.

In short, Gruenberg is the FDIC, and FDIC is Gruenberg.

This makes him extremely culpable for what a recent investigation into the FDIC describes as a destructive culture of “sexual harassment and interpersonal misconduct” that is “hostile, abusive, [and] unprofessional”.

For example, several FDIC meetings took place at strip clubs while female employees were openly rated on their looks… and expected to have sex with their male supervisors in exchange for promotions and higher ratings.

Senior bank examiners routinely sent dick pics to the women on their teams and spoke openly in the workplace about sex with their subordinates.

Complaints of sexual harassment at the FDIC are off the charts. Yet management seldom disciplined anyone. Quite often, in fact, agency executives ‘solved’ the sexual harassment problem by promoting serial offenders to higher positions, just to get them out of the field.

Meanwhile, black employees were told they were “token” hires to fill a quota. Gay employees were referred to as “little girls,” which led to several employees to pretend to be straight.

All of this occurred under the leadership of Gruenberg– a loyal lieutenant of the Biden-Obama- Lizzie Warren syndicate– all of whom claim to be champions of #MeToo, Black Lives Matter, and LGBTQ+ pride.

But as it turns out, these people stand for absolutely nothing. More on that in a moment.

If these findings weren’t damning enough, the investigation also revealed that Martin Gruenberg is just a terrible human being. He’s a horrific boss with a nasty personality and short temper.

Employees described Gruenberg as “aggressive,” “harsh,” “emotional,” “vitriol[ic],” “prosecutorial,” “disrespectful,” and having a “short fuse.” And it is their belief that it would be nearly impossible to have “a cultural transformation that prioritizes a more positive workplace culture” under Gruenberg.

The investigators also noted that employees across the FDIC had “a great reluctance to deliver bad news to Marty Gruenberg,” because he would explode, and “shoot the messenger” rather than focus on solving the problem.

Remember, the FDIC is the agency that oversees banks. And employees were terrified to tell the boss that banks were in trouble. Gee, what a surprise that a bunch of banks failed!

It’s worth mentioning that Gruenberg’s boss, President Biden, made a promise when he was elected:

“I’m not joking when I say this: If you’re ever working with me and I hear you treat another colleague with disrespect, talk down to someone, I promise you I will fire you on the spot. On the spot. No ifs or buts.”

Yet has Gruenberg been fired? Nope. Why is that?

Because if Biden fires Gruenberg, he’d have to nominate a replacement… who would then have to clear a risky Senate confirmation. And if that confirmation failed, the Vice Chairman of the FDIC would take over the agency.

And since the Vice Chairman is from the other party, Joe Biden is sticking with the swamp creature Marty Gruenberg.

This really just proves how these people stand for absolutely nothing. All they care about is their stupid party. They don’t care about the employees at the FDIC. They don’t care about the safety of the banking system. They don’t care about any of the principles they claim to support, i.e. #metoo, BLM, LGBTQ+, mental health, etc.

All they care about is their party.

Even Elizabeth Warren, who has been outspoken against Wall Street “boy’s clubs” and inappropriate work environments in the financial sector, has been defending Gruenberg and fighting to keep him in his job.

Almost no one is speaking out against the blatant misogyny, racism, and homophobia under Gruenberg’s watch.

Because, again, they don’t actually care. They only pay lip service to these ideas when it benefits them.

By the way, Gruenberg is far from the only case of an incompetent, destructive federal official keeping his/her job.

A recent Congressional investigation also found the FTC to be a “toxic work environment” and “beset by dysfunction and chaos stemming from poor leadership and ideological bullying of its Chair [Lina Khan]”. She, too, remains in her job.

Alejandro Mayorkas, the guy in charge of securing the overrun southern border as head of Homeland Security, also still has his job.

Rachelle Wolensky, who was in charge of the CDC during COVID, was so incompetent that even far-left news outlets wanted her resignation. You probably remember the CDC’s incomprehensible guidance regarding masks, vaccines, social distancing, and more. Plus she infamously tried to commandeer authority to take over the entire $10+ trillion US housing market… before being shot down by the Supreme Court.

She, too, was never fired.

And don’t even get me started on Tony Fauci, who was given a lush retirement with honor and distinction, not to mention a huge pension.

These are just a few of the bigger names which don’t even scratch the surface of countless career bureaucrats who should have been fired a long time ago.

Don’t get me wrong– there are so many amazing people who work for the government. But the bureaucracy has created a system where it’s easier to promote bad apples and keep them around than to fire them. No wonder so many hapless stooges rise to the top.

We talk so much about the trajectory of the US economy. And frankly, the complete dysfunction and lack of confidence in the federal government has a lot to do with it.

Fixing this is no mystery: a private company would eliminate the rot and bring in new leadership to change the culture.

But if the people in charge were going to change anything, they would have done it already. They simply don’t care.

They’d rather accept the incompetence and put the needs of their pathetic political party ahead of the country.

So even though America’s problems can be fixed, I’m not holding my breath. And that’s why it’s so important to have a Plan B.

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Did you hear the cheering in the streets? The celebratory gunfire coming from the Federal Reserve? The champagne bottles across Wall Street being uncorked?

What’s got people so excited today is the monthly CPI report— which showed consumer prices increasing by ‘only’ 3.4% year-over-year. And core inflation, which strips out food and energy prices, increased by ‘only’ 3.6%.

That was about 0.1% better than last month, so, of course, both the Fed and the White House are doing a victory lap. Expect Joe Biden to ramble incoherently about his economic prowess any moment now.

This inflation report was all the market needed to jump right back into the fantasy that inflation is licked… and the Fed can quickly and safely start cutting rates again.

But even a quick look at the numbers shows a far less optimistic appraisal.

Month-over-month inflation was 0.3%. Compounded at annualized rate, this means that the current inflation path is HIGHER.

More importantly we can see prices in the real economy… including the prices of some of the most critical commodities and natural resources in the world.

Oil prices remain high. Copper prices are at an all-time high of more than $5 a pound, up over 30% so far in 2024. Neither of these is consistent with falling inflation.

Frankly I don’t really care what the Fed is telling me about inflation. I care a lot more about what copper is telling me. And these all-time high copper prices are telling me that inflation won’t be going down to 2% anytime soon.

Think about it: copper, plus a number of other commodities including energy, are critical inputs. If their prices are surging, then nearly everything we buy, build, and even eat will also rise in price.

Furthermore, think about what really caused inflation to begin with: the Fed printed an absurd quantity of money during the pandemic, and government deficits went through the roof.

What has fundamentally changed since then?

Government deficits are still through the roof. The Fed has barely decreased its balance sheet (and they’re already positioning for another round of quantitative easing).

On top of that, the White House, in keeping with its Marxist traditions, consistently goes out of its way to make things more difficult for people to produce… especially if you happen to be producing some of the most important and critical commodities in the world.

So, the inflation picture still isn’t very pretty.

On top of that, their own recent data including both manufacturing and retail reports, show more economic weakness. Combined with the inflation outlook, signs continue to point to stagflation.

Gold may be trading near an all-time high right now, but I still think it’s the best long-term hedge against inflation (and stagflation), especially for people who are based in US dollars.

And as my business partner James wrote recently, gold will be the most likely replacement for the US dollar as global reserve standard.

That means that central banks around the world will continue to buy it by the metric ton, pushing prices even higher.

I’d also point out the massive disconnect between the price of gold, which is surging higher from central bank buying, versus the price of gold mining stocks.

Central banks buy physical gold bullion. They do not buy mining stocks. As a result, gold prices are surging higher, but gold mining companies have barely moved. So, there’s a lot of good value in that sector right now.

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By the early 400s, the Roman Empire was coming apart at the seams and in desperate need of strong, competent leadership. In theory, Honorius should have been the right man for the job.

Born into the royal household in Constantinople, Honorius had been groomed to rule, practically since birth, by the finest experts in the realm. So even as a young man, Honorius had already accumulated decades of experience.

Yet Rome’s foreign adversaries rightfully believed Honorius to be weak, out of touch, divisive, and completely inept.

He had entered into bonehead peace treaties that strengthened Rome’s enemies. He paid vast sums of money to some of their most powerful rivals and received practically nothing in return. He made virtually no attempt to secure Roman borders, leaving the empire open to be ravaged by barbarians.

Inflation was high. Taxes were high. Economic production declined. Roman military power declined. And all of Rome’s foreign adversaries were emboldened.

To a casual observer it would have almost seemed as if Honorius went out of his way to make the Empire weaker.

One of Rome’s biggest threats came in the year 408, when the barbarian king Alaric invaded Italy; imperial defenses were so non-existent at that point that ancient historians described Alaric’s march towards Rome as unopposed and leisurely, as if they were “at some festival” rather than an invasion.

Alaric and his army arrived to the city of Rome in the autumn of 408 AD and immediately positioned their forces to cut off any supplies. No food could enter the city, and before long, its residents began to starve.

Historians have passed down horrific stories of cannibalism– including women eating their own children in order to survive.

Rather than send troops and fight, however, Honorius agreed to pay a massive ransom to Alaric, including 5,000 pounds of gold, 30,000 pounds of silver, and literally tons of other real assets and commodities.

(The equivalent in today’s money, adjusted for population, would be billions of dollars… similar to what the US released to Iran in a prisoner swap last year.)

Naturally Honorius didn’t have such a vast sum in his treasury… so Romans were forced to strip down and melt their shrines and statues in order to pay Alaric’s ransom.

Ironically, one of the statues they melted was a monument to Virtus, the Roman god of bravery and strength… leading the ancient historian Zosimus to conclude that “all which remained of Roman valor and intrepidity was totally extinguished.”

Rome had spent two centuries in the early days of the empire– from the rise of Augustus in 27 BC to the death of Marcus Aurelius in 180 AD– as the clear, unrivaled superpower. Almost no one dared mess with Rome, and few who did ever live to tell the tale.

Modern scholars typically view the official “fall” of the Western Roman Empire in the year 476. But it’s pretty clear that the collapse of Roman power and prestige took place decades before.

When Rome was ransomed in 408 (then sacked in 410), it was obvious to everyone at the time that the Emperor no longer had a grip on power.

And before long, most of the lands in the West that Rome had once dominated– Italy, Spain, France, Britain, North Africa, etc. were under control of various Barbarian tribes and kingdoms.

The Visigoths, Ostrogoths, Vandals, Franks, Angles, Saxons, Burgundians, Berbers, etc. all established independent kingdoms. And for a while, there was no dominant superpower in western Europe. It was a multi-polar world. And the transition was rather abrupt.

This is what I think is happening now– we’re experiencing a similar transition, and it seems equally abrupt.

The United States has been the world’s dominant superpower for decades. But like Rome in the later stage of its empire, the US is clearly in decline. This should not be a controversial statement.

Let’s not be dramatic; it’s important to stay focused on facts and reality. The US economy is still vast and potent, and the country is blessed with an abundance of natural resources– incredibly fertile farmland, some of the world’s largest freshwater resources, and incalculable reserves of energy and other key commodities.

In fact, it’s amazing the people in charge have managed to screw it up so badly. And yet they have.

The national debt is out of control, rising by trillions of dollars each year. Debt growth, in fact, substantially outpaces US economic growth.

Social Security is insolvent, and the program’s own trustees (including the US Treasury Secretary) admit that its major trust fund will run out of money in just nine years.

The people in charge never seem to miss an opportunity to dismantle capitalism (i.e. the economic system that created so much prosperity to begin with) brick by brick.

Then there are ubiquitous social crises: public prosecutors who refuse to enforce the law; the weaponization of the justice system; the southern border fiasco; declining birth rates; extraordinary social divisions that are most recently evidenced by the anti-Israel protests.

And most of all the US constantly shows off its incredibly dysfunctional government that can’t manage to agree on anything, from the budget to the debt ceiling. The President has obvious cognitive disabilities and makes the most bizarre decisions to enrich America’s enemies.

Are these problems fixable? Yes. Will they be fixed? Maybe. But as we used to say in the military, “hope is not a course of action”.

Plotting this current trajectory to its natural conclusion leads me to believe that the world will enter a new “barbarian kingdom” paradigm in which there is no dominant superpower.

Certainly, there are a number of rising rivals today. But no one is powerful enough to assume the leading role in the world.

China has a massive population and a huge economy. But it too has way too many problems… with the obvious challenge that no one trusts the Communist Party. So, most likely China will not be the dominant superpower.

India’s economy will eventually surpass China’s, and it has an even bigger population. But India isn’t even close to the ballpark of being the world’s superpower.

Then there’s Europe. Combined, it still has a massive economic and trade union. But it has also been in major decline… with multiple social crises like low birth rates and a migrant invasion.

Then there are the energy powers like Russia, Iran, Saudi Arabia, and Indonesia; they are far too small to dominate the world, but they have the power to menace and disrupt it.

The bottom line is that the US is no longer strong enough to lead the world and keep adversarial nations in check. And it’s clear that other countries are already adapting to this reality.

Earlier this month, for example, China successfully launched a rocket to the moon as part of a multi-decade mission to establish an International Lunar Research Station.

By 2045, China hopes to construct a large, city-like base along with several international partners including Russia, Pakistan, Thailand, South Africa, Venezuela, Azerbaijan, Belarus, and Egypt. Turkey and Nicaragua are also interested in joining.

This is pretty remarkable given how many nations are participating, even if just nominally. Yet the US isn’t part of the consortium.

This would have been unthinkable a few decades ago. But today the rest of the world realizes that they no longer need American funding, leadership, or expertise.

We can see similar examples everywhere, most notably in Israel and Ukraine. And I believe one of the next shoes to drop will be the US dollar.

After all, if the rest of the world doesn’t need the US for space exploration, and they can ignore the US when it comes down to World War 3, then why should they need the US dollar anymore?

The dollar was the clear and obvious choice as the global reserve currency back when America was the undisputed superpower. But today it’s a different world.

Foreign nations continuing to rely on the dollar ultimately means governments and central banks buying US government bonds. And why should they take such a risk when the national debt is already 120% of GDP?

In addition, Congress passed a new law a few weeks ago authorizing the Treasury Department to confiscate US dollar assets of any country it deems an “aggressor state.”

While people might think this is a morally righteous idea, the reality is that it will only turn off foreign investors. Why should China, Saudi Arabia, or anyone else buy US government bonds when they can be confiscated in a heartbeat?

All of this ultimately leads to a world in which the US dollar is no longer the dominant reserve currency. We’re already starting to see signs of that shift, and it could be in full swing by the end of the decade.

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In 1983, the tiny Caribbean islands of Saint Kitts and Nevis were among the last colonies to finally gain independence from Great Britain’s dissolving empire.

The two islands joined to become one country. And with fewer than 50,000 inhabitants, its microscopic economy was almost entirely dependent on sugar production… which can be an incredibly volatile and unpredictable industry.

So, in an effort to diversify and grow the economy, the government hatched a new idea: a “citizenship by investment” program whereby foreign investors could become citizens of St. Kitts and Nevis in exchange for a sizable investment in the country (including an option to purchase real estate).

It was an extremely clever idea. Most small countries who struggle to make ends meet usually end up borrowing lots of money from investors, which is known as ‘sovereign debt’. The Citizenship by Investment program in St. Kitts & Nevis essentially created the concept of ‘sovereign equity’.

This program became highly successful. So, naturally, like all good ideas, the St. Kitts & Nevis Citizenship By Investment program was copied all throughout the region.

By 2016, five different Caribbean countries offered economic citizenship programs— St. Kitts and Nevis, Dominica, Antigua and Barbuda, Grenada, and Saint Lucia.

Then a series of hurricanes (2017), followed by the Covid pandemic, devastated the Caribbean tourism industry. So, these governments began to rely very heavily on their citizenship programs to bring in revenue.

Since there was very little to differentiate one island’s citizenship from another, the governments entered into a full-blown price war. So, whereas $500,000 was once a common price for a Citizenship by Investment program, governments began to slash the price tag down to just $100,000.

(Technically, this $100,000 option isn’t really an investment, i.e. you don’t get your money back. So, it’s really more of a donation.)

Over the years, a total of around 88,000 people have received passports through these programs.

Bear in mind that granting citizenship in exchange for an investment in the country is not some illicit, dodgy scam; these are fully transparent government programs based on legislation passed by their respective parliaments.

Clearly, as sovereign nations, it is up to them to decide how best to raise revenue. Except that the European Union disagreed and threw a hissy fit…

It turns out that the bureaucrats in the EU believe that these Caribbean citizenship-by-investment programs are security threats.

Granted, these same bureaucrats happily ignore the millions of migrants who invade Europe year after year without so much as a background check. But fewer than 100,000 ‘economic citizens’ over a 40-year period? Massive security threat.

You can’t even begin to make up some idiotic logic.

So, these Eurocrats have been making a ton of noise and pressuring Caribbean nations to stop the Citizenship by Investment programs, or, at a minimum, to raise the price in order to reduce demand. Any country who didn’t comply risked losing its visa-free travel to Europe.

So, several weeks ago, the leaders of four Caribbean countries – Antigua and Barbuda, Dominica, Grenada, and Saint Kitts and Nevis – signed a Memorandum agreeing to raise the minimum investment threshold to $200,000, effectively doubling the cost of the cheapest options.

(Saint Lucia did not sign the agreement citing “contractual arrangements” that could open them up to legal action if they raised prices. But said they intend to sign “once it becomes possible.”)

The deadline for the price change is June 30, 2024. This means that anyone who acts swiftly can still qualify under the old pricing.

Single applicants can still grab a Saint Lucia passport for as little as $121,050 including all fees, or an Antigua and Barbuda passport for $149,800 all in. Technically Dominica is a little cheaper, but we don’t recommend the program because Dominica has already lost visa-free access to the UK and Ireland.

Dependents add to the cost; you can use our CBI calculator here to see the best option for your situation.

(Remember that our Total Access members actually pay even lower price for these programs, bringing the cost to as low as $108,050.)

But again, these prices for economic citizenship will go up at the end of June.

Now, economic citizenship is just one way to gain a second passport… and it might not be the right way for you. It’s generally fast and practically guaranteed. But, let’s be honest, it’s expensive for a lot of people.

Some lucky folks can claim citizenship through ancestry, practically for free. Italy, Ireland, Greece, and Poland, for example, each offer citizenship to individuals who can trace their descent through official documentation.

Or you could naturalize in a country to gain citizenship by spending a certain amount of time living there with legal residency. In Argentina it’s as little as two years; five years in Mexico and Portugal, and ten years in Spain, Italy, and Greece.

A second passport is such a valuable part of a Plan B because it is like an insurance policy, protecting you against unknown future risks.

For example, it should be obvious that the US is a deeply divided society that is deteriorating quickly. Think about how much has changed in the past decade alone and try to imagine what society will look like ten years from now.

It’s hard to say… but the trend doesn’t look good.

A second passport is like an insurance policy for all these future risks and uncertainties.

It’s not some magical document that will solve all your problems or take every risk off the table. But having a second passport does mean that, no matter what, you and your family will always have a place to go if you ever need it.

Hopefully you don’t. Hopefully you don’t need your home insurance policy either.

But if the day ever comes that you do need it, then it will be too late at that point to get started.

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Social Security’s annual trust fund report was released yesterday… and, no surprise, the report states very clearly that trust fund balances “are projected to become depleted during 2033.”

Allow me to repeat that: Social Security’s most important trust fund will run out of money in nine years.

This is a fact, not some wild conspiracy theory; remember that the annual report is signed by top government officials including the United States Secretaries of the Treasury, Labor, and Health and Human Services… so the projection is about as official as it can get.

But if you dive into the report, you may quickly notice that even such a grim forecast may, in fact, be too optimistic.

Many of the key economic assumptions that they make in the report are wildly inaccurate. They assume, for example, that US fertility rate will be as high as 2.1 (i.e. 2.1 children born per woman). But, in reality, the US fertility rate has been falling for decades, and just hit another all-time low of 1.6 last year.

They’re also way off on other assumptions– like economic productivity. They assume (rather optimistically) that productivity growth will average 2%. Last year it was just 1.3%. And in 2022 productivity actually shrank by 1.9%.

They’re also way off-base in their assumptions about inflation, unemployment, and more.

Plus, just like the Congressional Budget Office’s long-term projections about the US economy, the Social Security trustees don’t account for any kind of future emergency, pandemic, recession, depression, war, financial crisis, or debt crisis.

The really ironic part is that the trustees’ assumptions fail to consider the future economic impact of Social Security going bankrupt.

Think about it– when Social Security’s trust funds suddenly run out of money, it’s going to trigger a major crisis in the United States. Clearly this will be disruptive and throw off their rosy economic assumptions. But they don’t account for this either.

Bottom line, Social Security’s demise is, at best, nine years away. And probably sooner.

So, what will happen when Social Security runs out of money?

Remember that 70 million retirees’ monthly benefits are essentially funded from three different sources.

The first source is payroll tax revenue; people currently in the labor force fork over a portion of their wages to pay Social Security benefits.

For decades, payroll tax revenue exceeded the total benefits that Social Security paid. And this surplus was invested into a special trust fund, which now totals trillions of dollars.

And that’s the second source of funding for the program: investment income from the trust fund, while the third source is the trust fund itself.

Again, for most of Social Security’s history, the trust fund was growing, and its investment income was compounding year after year.

But starting in 2021, Social Security’s annual costs have exceeded combined payroll tax revenue and investment income. So, in order to make ends meet, the program had to start dipping into its trust fund.

The fund’s reserves are now falling. And, again, by 2033, the trust fund will be fully depleted. This also means that there will be no more investment income… leaving payroll tax revenue as the sole source to fund Social Security.

Once this happens, the report states that retirees will have to suffer an immediate, substantial cut (roughly 25%) to their promised benefits. And most likely this cut will continue to become worse over time.

It’s not like there aren’t options to fix Social Security. The government could overhaul the program, raise the retirement age, or start allowing private asset managers to generate higher rates of return for the trust funds (while they still have money).

But everyone in government insists that they are not going to touch Social Security. Joe Biden never misses an opportunity to promise that he will veto any attempt to reform the program.

As a matter of fact, Joe Biden released a statement yesterday (after the trustee report was published) saying– literally in the first sentence– that “Social Security remains strong.”

Come again? What report was this guy reading?

Social Security is, by definition, NOT strong. The trust fund is indisputably going to run out of money in nine years. But this guy is just living on another planet. He refuses to acknowledge reality, he refuses to fix the problem, and he promises to prevent other people from fixing the problem.

Now that’s leadership.

I find it remarkable, though, how many other ‘experts’ are falling in line behind the President.

Even the Wall Street Journal, which is supposed to be a conservative-leaning paper, published an article this morning to say that Social Security’s rapidly depleting trust funds are no big deal… because Congress can always just “choose” to continue funding the program.

Uh… with what money? The budget deficit is already $2 trillion per year. So, if Congress “chooses” to continue paying out 100% of Social Security benefits after 2033, it will all be funded with more debt.

The Journal then suggests that such spending “could also mean the U.S. deficit continues to grow at a pace economists find alarming, potentially weighing on the performance of the economy.”

Could? Potentially? In what reality does multi-trillion-dollar deficit and a fully depleted Social Security trust fund NOT weigh on the US economy?

It’s astonishing how few people want to acknowledge the reality. Social Security will run out of money. Benefits are at risk. And the only way to ‘save’ the program is more debt… which means more inflation, more risk to the dollar’s global reserve status, and more consequences down the road.

That said, Social Security is a perfect example how to think about a Plan B. It is a known and obvious risk: the program will almost certainly run out of money.

But if you know this is going to happen down the road, you can take steps now to secure your retirement– like setting up tax-advantaged retirement accounts to set aside more money in an extremely tax efficient way.

It’s the same with inflation, the national debt, and the dollar; when you can make a very strong case for rising prices and decline in the dollar’s global reserve status in the future, there are ways to mitigate those risks today.

Real assets like gold, energy, uranium, and other critical minerals, plus the companies that produce them, will likely be fantastic investments in a debt-ridden, inflationary environment. And it just so happens that many of them are trading at ridiculously cheap prices right now.

(Subscribers to our premium investment research– check out your most recent edition which features an extremely well-managed, debt-free, highly profitable real asset producer that pays a nearly 9% dividend. Yet its stock sells for a laughably low, single Price/FCF multiple.)

Bottom line, there are completely logical and rational ways to solve these problems and mitigate these risks on your own. Don’t wait for Joe Biden to do it.

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“Today, it’s Climate Day,” said President Biden in a speech on January 27, 2021, “which means that today is Jobs Day.”

“Dealing with [climate change] and increasing our economic growth and prosperity, are one and the same. When I think of Climate Change, I think of jobs.”

These were among the remarks the President made before signing an executive order which created the American Climate Corps.

And while it took more than three years, Mr. Biden’s Climate Corps is finally up and running, and the President inaugurated its new website a few days ago… which currently shows more than 2,000 new jobs available, with another 20,000 coming soon.

I spent some time browsing the listings and saw positions like “Lawn Buster”, “Energy Auditor”, “Home Energy Navigator”, and “Campus Climate Action Leader”.  Many of these Climate Corps jobs focus on “Indigenous knowledge reclamation” and “youth outreach”.

Clearly it all sounds like highly productive work. It reminds me of that old Soviet joke– “we pretended to work, they pretended to pay us.”

Similarly, the climate jobs aren’t real work. Campus Climate Action Leader? Seriously? Yeah, that’s what universities in America need… more fanatical activism.

These pretend jobs are just another government boondoggle with lavish benefits and paid for by more deficit-fueled inflation.

Coincidentally, just as Mr. Biden was heralding the new pretend jobs his Climate Corps was creating, the Labor Department’s monthly jobs report was released… and the numbers weren’t great.

Blue collar job growth– mining, construction, oil and gas, manufacturing, restaurants– was basically flat or negative. The mining and energy sectors in particular are both getting killed, with significant job cuts across the board.

White collar job growth is also flat or declining, which includes jobs in technology, finance, legal, accounting, and management.

It’s notable that the motion picture industry is also seeing a major decline in jobs… which isn’t much of a surprise given last year’s histrionics. The unions went on strike, and now there are fewer jobs as a result. It’s genius.

I’d also point out that the employment services industry, i.e. recruiting firms and temp agencies, saw major job cuts. This is perhaps the canary in the coal mine suggesting the US job market has peaked and may now be in decline.

But there were a couple of bright spots. Healthcare is booming. Americans are apparently sicker than ever, and in-home healthcare is seeing incredible growth.

Social assistance jobs, i.e. handing out taxpayer-funded benefits like welfare, food stamps, and free housing, are also on the rise. This isn’t exactly a strong indicator for the US economy.

And lastly, government jobs are soaring. True to his word, Joe Biden keeps conjuring new federal jobs out of thin air, creating armies of tax police, climate warriors, and powerful bureaucrats to debilitate the US economy even further.

These government jobs offer almost nothing of value to the private economy. They don’t add to American productivity. Quite the opposite, really. More bureaucrats will make it more difficult for people to produce goods and services.

But the people in charge don’t understand such realities.

Cast in point: a few days ago, the acting Labor Secretary– who has enormous power over US businesses and the job market– demonstrated a complete lack of understanding about basic labor principles… and couldn’t even manage to answer the simple question of whether she has ever owned a business. (She hasn’t.)

Not to be outdone by his demonstrably incompetent cabinet members, President Biden gave a speech on Wednesday in which he claimed the US economy is so strong “because we welcome immigrants.”

Well, that’s certainly one way to put it.

Another way would be that the US government deliberately rolls out the red carpet for illegals who come across the southern border. Yet at the same time, talented and productive foreigners who attempt to come into the US legally are forced into an endless, highly bureaucratic immigration process fraught with uncertainty and insane costs.

It’s true that many of the millions of illegals probably have jobs. But they don’t pay a dime in income taxes… plus vast swarms of them are sucking on the teat of outrageous taxpayer-funded subsidies. Free phones. Free housing. Free healthcare. Free education. Free money. So, these migrants are really a net negative for the economy.

In the same speech last Wednesday, the President further claimed that Japan has a weak economy because they’re “xenophobic”. This wasn’t a gaffe. The guy honestly believes that the southern invasion is a major economic boon… and that Japan is missing out because they actually care who comes into their country.

Fiscal restraint, high savings rates, productivity, innovation, capitalism… these don’t factor into their thinking when it comes to economic growth.

Instead, these people believe that the path to prosperity is government jobs, higher taxes, massive deficits, debilitating regulation, diversity & inclusion (which ensures the equality of outcomes, rather than equality of opportunity), free benefits, and illegal migration.

It’s ironic that many of these were core principles of the Soviet Union… except for the illegal migration part. Even the Soviets had the good sense to secure their borders.

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Retired Canadian Army corporal Christine Gauthier lost the use of her legs in a 1989 military training accident.

But that never kept her down; she competed in the 2016 Rio de Janeiro Paralympics in canoeing, and regularly competes in other similar events.

Gauthier lives in Canada, which has a socialized healthcare system. That means her healthcare is “free”… of course when the government gives away something for “free” it often turns out to be extremely expensive.

In Christine’s case, she had an endless wait for a home wheelchair ramp, which caused even greater challenges in her life.

By 2019, she was still waiting for her “free” assistance, and it was at that point that the Canadian veteran affairs agency proposed a different solution.

They told her that she would more quickly receive MAiD treatment, which stands for Medical Assistance in Dying.

In other words, the Canadian government told this disabled veteran that instead of providing her a wheelchair ramp, they would be happy to kill her.

Several other cases have been identified of other veterans being offered assisted suicide when all they really wanted was healthcare. At least one is now dead, although the Canadian government won’t say whether it was through assisted suicide.

Of course in 2017, the Canadian Medical Association Journal estimated that assisted suicide could save the government $136.8 million per year in healthcare costs.

That’s probably why they are also planning to allow mentally ill people with no terminal condition to pursue assisted suicide. People who are depressed by climate change will be eligible for government assisted suicide in Canada starting next year.

Canada’s socialized healthcare system is so overwhelmed that it’s just easier to push people into suicide rather than to treat them. Unless, of course, you’re gender fluid.

A few weeks ago, the Ontario Superior Court ruled that the government must pay for “gender affirming surgery” for a biological male who identifies as “non-binary, although female dominant.”

What makes this case unique is that this person insists that their gender can only be affirmed by receiving “penile preserving vaginoplasty.”

So now Canadian taxpayers will be forced to pay for an experimental surgery to give this person both male and female genitals. The government has also been ordered to pay the patient’s $20,000 legal bill which brought the case to court.

Look, I’m all for people being able to identify however they want. If they firmly believe they are a potted plant, great. Just don’t make it my problem, and don’t make it my kids’ problem.

But let’s be honest, someone who wants to permanently deform their body by undergoing a dangerous and highly experiment surgery to add a second set of genitalia clearly has mental health issues.

Yet while other Canadians with mental health issues are being told to kill themselves, people who want multiple sets of genitalia are getting taxpayer-funded surgeries and moving to the front of the line.

But such bizarre priorities are not just isolated to Canadian healthcare.

A few years ago, in Manitoba, a criminal broke into a private residence and attempted to kill the homeowner while he was asleep. The man woke up after the intruder had literally stabbed him in the head, but he somehow miraculously managed to fight off the intruder, and inadvertently ended up killing his assailant. The man who was attacked and nearly killed in his own home was then sentenced to prison on charges of manslaughter.

Police in Quebec recently warned victims of porch pirates stealing packages not to post the videos online, because it could violate the thieves’ privacy.

In Ontario, a 50 year old man who identifies as a teenage girl is not only allowed to compete in girls’ swim meets, but go into the locker room and change alongside the girls.

Honestly, this list goes on and on.

It’s obvious that the people in charge are completely out of touch with real problems that real people face.

And ironically when real people with real problems get fed up and protest against their leadership, the government responds with incredible brutality.

The Freedom Convoy Protests from 2022 are a great example. People were sick and tired of their leaders’ idiotic decisions. And yes, they disrupted the capital city and blocked some roads. But the government responded with mass arrests, de-banking them and labeling them as “misogynistic and racist.” And the Prime Minister wondered aloud “do we tolerate these people?”

Of course if you block a road because of climate change or because you love Hamas, that’s perfectly fine.

If you hijack public property while shouting, “From the river to the sea,” no one will do a thing to you.

This is an insane set of priorities. And it’s not just Canada. Most, if not all, of the Western nations once hailed as liberal democracies— the UK, Australia, New Zealand, and, of course, the US—are infected with this disease that Elon calls the woke mind virus.

European countries that previously had extremely low crime rates have implemented immigration policies that have ballooned into rape crises. They now have masses of immigrants screaming for jihad in their streets.

In the US, the President has not just allowed the border to be overrun, but has actually gone out of his way to sue Texas just to maximize illegal border crossings.

The governments of the US, Canada, and other Western nations consistently fail to address the real problems: immigration, the national debt, stagflation, war, etc. These are real problems that real people are worried about.

But anyone who dares to speak out, is called a racist, white supremacist, or a litany of other offensive labels.

The west is truly a bizarre place today. If you love Hamas, the government is on your side. If you’re an illegal immigrant, the government will provide endless free benefits and never collect a dime in taxes from you.

If you think there’s 99 genders and identify as all of them, the government will coddle your mental illness at taxpayer expense.

But if you’re a normal, hardworking person actually concerned about real things, most of the people in charge don’t give a damn about you.

Your problems are not their problems.

And that’s why it makes so much sense to have a Plan B.

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In June 2022, when inflation was raging at over 9% in the US, Fed Chairman Jerome Powell admitted to a reporter, “we now understand better how little we understand about inflation.”

“Uh, that’s not very reassuring,” the reporter chuckled.

Talk about an understatement. The Fed Chairman has the power to control virtually everything in the economy.

He can conjure trillions of dollars out of thin air practically at will. He can raise and lower interest rates, push businesses and governments into bankruptcy, and cause people to lose their jobs.

Yet he flat-out admitted they didn’t have a clue about inflation.

Of course, nearly everyone else on the planet— normal people who go grocery shopping, rent their homes, fill up their gas tanks— could feel the sting of inflation back then, as they still do today.

They may not understand where inflation comes from, but they understand the profound effect it’s having on their standard of living. Many people are working harder than ever juggling multiple jobs yet struggle to afford basic necessities they once took for granted.

But the Fed doesn’t understand such realities. Just like politicians with ‘decades of experience’, central bankers live on a completely different planet than the rest of us— a place where out of touch ‘experts’ who are disconnected from the real world come up with idiotic theories that are consistently wrong.

Remember when inflation was supposedly “transitory”? Or when, TWO DAYS before Silicon Valley Bank went bust, the Fed Chairman told Congress that they saw absolutely no consequences from their interest rate hikes?

These people have been wrong at every turn. And the latest episode is stagflation— which the Fed Chairman outright dismissed yesterday afternoon.

“I don’t see the ‘stag’ or the ‘flation’…” the Fed Chairman quipped, seemingly quite pleased at how witty he sounded.

His conclusion is nuts; stagflation is hitting him squarely between the eyes, yet he STILL doesn’t see it.

The ‘stag’ data is everywhere. Even the government’s official numbers on the US economy last week showed GDP growth coming to a screeching halt. New hires are down to the lowest level in EIGHT years, and by some metrics in ELEVEN years. Productivity growth last year was an anemic 1.3%. The list goes on and on.

And the fact that the Fed Chairman doesn’t see the “flation”, i.e. inflation, is just intellectually dishonest. Even the Chairman himself has admitted over the past few weeks that inflation remains too high. Both statements cannot be true at the same time… except in the mind of a central banker.

It’s noteworthy that yesterday the Chairman completely ruled out RAISING interest rates. There will be no rate hikes. Period.

Raising interest rates is what a central bank is supposed to do when facing obvious inflation. But they’ve taken that option off the table, entirely abandoning their responsibility to keep prices under control.

But just like they didn’t understand inflation, it’s clear the Fed doesn’t understand stagflation either.

Economists will tell you that stagflation is the combination of higher inflation and lower economic output— usually inflation combined with a recession. That’s what happened quite famously in the 1970s.

But while economists and central bankers define inflation based on econometric data (that is usually incorrect anyhow), the average person recognizes stagflation in a different way: stagflation is simply a decline in your standard of living. It means you’re worse off because the economy just sucks.

Stagflation is uneven. It doesn’t hit all people in all places at the same time. Politicians and central bankers, for example, are immune to the effects of stagflation because they rarely lose their jobs and have outrageously good benefits.

The average person, however, is worse off today when compared to the last several years. It’s not a complex calculus at all. Yet the Fed just doesn’t get it.

For example, they’ve continued to talk up how great the US economy is… which is probably not how the average person feels. In fact, the Fed doesn’t even understand what’s been the key driver of the US economy over the past few years: government deficit spending.

The US government has been shoveling money into the US economy hand over first and going deeper into debt in the process. Clearly this is going to drive some economic growth. But the government isn’t even getting a 1:1 return on that deficit spending.

Think about it— last year the federal government’s budget deficit was around $2 trillion. But even before factoring in inflation, the US economy only increased by about $1.5 trillion.

You’d think that if the government spent an extra $2 trillion, that the US economy would see at least $2 trillion in extra growth. But no. The economy grew $1.5 trillion, versus a $2 trillion deficit (all of which was funded by increasing the national debt).

The level of incompetence is mind-blowing.

There are plenty of other signs that the economy is starting to lag.

Just a few days ago, Starbucks reported dismal earnings. No surprise there: when people start tightening their belts, small luxuries like $6 coffees are the first thing to go because they have to plow that money into their gas tank, electric bill, or weekly grocery trip.

This is stagflation— a small decline in the standard of living. The economy sputters, prices go up, and wages don’t keep pace.

Yet the Fed doesn’t see it.

They don’t understand stagflation.

They don’t understand inflation.

They don’t understand the catastrophic growth trend of the US national debt.

They don’t understand the risks to the US dollar and the coming loss of its status as the dominant global reserve currency.

And they don’t even understand that they don’t understand. They’re so out of touch that they still believe they have the situation under control.

Frankly it’s pretty scary that the most powerful people in the US economy don’t have a clue.

Fortunately, there is something you can do about it.

Every economic decision that policymakers (whether the President, Congress, or central bank) have ever made or WILL ever make in the future, is ultimately reflected in the currency.

If Congress runs up the debt… if the President passes a host of idiotic, productivity-killing executive orders… if the Fed launches ‘quantitative easing’ to infinity and beyond… the consequences will ultimately be reflected in the US dollar.

This could be a range of consequences, from a decline in purchasing power (inflation) to loss of reserve status in global trade.

Either way, if you don’t want to suffer those consequences, the solution is simple: don’t hold all of your savings in that currency.

Consider other options, including, in my opinion, one of the world’s oldest forms of money that has a 5,000+ year track record of value and marketability: gold.

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Columbia, Yale, and NYU are nothing compared to the violence and radicalism that the medieval University of Frankfurt reached in the 1500s.

Violence and chaos had become a major problem at nearly all universities across central Europe– especially the German ones– ever since Martin Luther had famously published his Ninety-Five Theses in the year 1517.

Practically overnight, life in Europe had become extremely divisive. People lost the ability to disagree with each other rationally or to discuss ideas with an open mind. And universities became ground zero for intellectual oppression.

Professors led the charge to stir conflict on campus and divide students into warring tribes. Ravenous mobs bullied ideological opponents and labeled them ‘traitors to the cause’. Violence, coercion, and intimidation soon became commonplace.

Students in the 1500s attacked vendors who sold books and pamphlets that espoused ideas they disagreed with. Teachers and pupils alike were attacked for wrongthink. Even local townspeople were victims to the violence and property damage. Yet university administrators seldom did anything about it.

In 1572, the town physician in Frankfurt complained that his clinic had been filled with too many victims of assault at the hands of local students. Yet, he stated, “the gentlemen at the university allow this to go on unpunished.”

Town officials set up cannons to protect their citizens from angry university students who were bent on waging ideological violence.

It wasn’t until 1578 that an obscure professor named Caspar Hofmann had the courage to speak up.

Hofmann was a professor of medicine and philosophy in Frankfurt… so he most likely had witnessed a tremendous amount of violence and perhaps even been victim of it himself.

He gave a public speech– a daring thing to do under the circumstances– in which he said:

“They defend their own opinions with the greatest fierceness and attack all others, seeking to overwhelm all who think differently from themselves with ridicule and shame; hatred and envy, malice and evil-speaking, slander and calumny are the results of such envenomed strife, and it is inevitable that the learned institutes should be corrupted by all these influences.”

Though Hofmann’s comments were made well over four centuries ago, they could just as easily describe the state of western universities today. Ridicule. Shame. Hatred. Malice. Slander.

And let’s not forget about the violence prevalent in both eras.

Today is not the first time that universities have descended into intolerance and assault. Nor is it the first time that hapless, out of touch university administrators refuse to do anything about it.

In fairness, we’re talking about a small percentage of students and universities. But it’s enough that it has become a major problem.

Just like prison long ago became a finishing school for criminals, universities are becoming training grounds for coercive activism.

Students show up and become radicalized. Rather than study science, engineering, or business, they learn how to mobilize flash mobs, doxx their opponents, hijack and deface private property, create propaganda, engage in censorship, and intimidate innocent people.

And they’re gaining real world experience in how to use fear and intimidation to capture headlines and broadcast their message.

Does this sound familiar? It does to me. I spent a good chunk of my career as an Army intelligence officer studying terrorist organizations and how they train their foot soldiers.

And, not to be dramatic, but what’s happening at some of these universities now is similar to what goes on at terrorist training camps.

Another similarity: terrorists are completely ignorant and understand very little about their cause. It takes a real intellectual dolt to blow oneself up.

I think about this whenever I hear these students chanting, “from the river to the sea”; how many of these Inspired Idiots can even name the river or sea? Probably not too many.

But such are the consequences of these universities’ woke admissions policies. Instead of accepting the best candidates based purely on merit and potential, they have selected students who espouse their extreme leftist ideology.

Stanford University famously admitted a student who, in response to an admissions essay question, “What matters to you, and why”, wrote “#BlackLivesMatter” 100 times.

In its acceptance letter, the university praised the student for his passion and inspiration and said, “you are, quite simply, a fantastic match with Stanford.” He went to Yale instead.

In many respects, it’s been the same trend across many of Americas biggest cities; voters chose elected officials who espouse their extreme leftist ideology. And just like the universities, the big cities have suffered the consequences.

The bright side is that this might actually be rock bottom… because we are starting to see a number of self-correcting mechanisms kick in.

Wealthy donors who fund these universities are withholding money until administrators clean house. Heads are starting to roll.

And, as more voters become fed up with brazen crime sprees in their neighborhoods, leftist politicians are starting to take action. Even the Governor of New York recently made it a crime to assault a retail shop worker. What a novel idea!

Businesses too are starting to retreat from their holy mountains of wokeness. Google, the company whose AI refused to depict white people, has also had enough. It recently not only fired dozens of employees who protested for Gaza at work, but also had some of them arrested.

Even the high priest of the World Economic Forum, Blackrock Chairman Larry Fink, has walked back his environmental fanaticism and demands to to block oil investments, and started working towards retirement solutions— an actual problem that desperately needs fixing.

And just yesterday, the First Minister of Scotland resigned, after his recent racist tirade against white people, because he knew he was going to fail a no confidence vote.

We’re starting to see a trend forming— some of the world’s silliest leaders are beginning to lose their grip on power.

Does that mean there is the potential that sensible politicians will be elected and prioritize what’s in the best interest of the nation? Could we actually see them cut deficits, boost productivity, and make sound decisions?

Perhaps. One can hope this trend continues.

But regardless, it will be a long, long road ahead. And even under the best circumstances, it still makes sense to have a Plan B.

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