Some Of This Is Completely Delusional. Some Of It May Actually Be Pretty Smart

Some Of This Is Completely Delusional. Some Of It May Actually Be Pretty Smart

Notes From the Field By James Hickman (Simon Black)  April 14, 2025

It’s been nearly two weeks of whipsaw, roller coaster tariff moves and countermoves… all of which threatens to upend not only economic stability, but even the global financial system as we know it.

 I can’t stress this enough: what we’re witnessing right now will almost certainly go down as one of the most monumental events in US economic history. And the consequences will have far-reaching implications far beyond a trade war or potential recession.

It’s fair to say that the approach to tariffs so far has been erratic… almost bipolar. And the instability has already caused tremendous damage to consumer, business, and investor confidence.

 But last week we saw a glimmer of something that might actually look like a real strategy.

 Stephen Miran is the Chairman of the Council of Economic Advisors, i.e. one of the most important people in the administration right now. And in a speech last week to the Hudson Institute, he very succinctly laid out what looks like a plan.

 Some of it is completely delusional. But some of it is actually pretty smart and suggests there may be a bigger picture here. There’s still a LOT of risk about whether or not it will work, and frankly some terrible assumptions. But it’s worth understanding.

 First, the delusional--

 Miran explained in his speech that he believes the US generously provides the rest of the world with vital “public goods” which are very “costly” to America.

 And one of those “costly” public goods, Miran states, is providing the world with US dollars and Treasury Securities. And by “Treasury Securities”, he means the US national debt.

 This part is outright delusional. In Miran’s view, it’s almost as if America is doing the world a favor by racking up a $36 trillion debt. Gee aren’t we great guys for borrowing your money and running multi-trillion-dollar deficits each year?!?

Miran claims that US Treasury securities are “costly to provide”.  Uh…

 Seriously? On the contrary, it’s an exorbitant privilege.

Having the reserve currency is the only reason why the US government gets away with such a massive debt and enormous budget deficits each year. It’s the only reason why there can be so much political chaos over and over again… yet the rest of the world still buys US Treasury securities.

 These are obvious benefits. Yet Miran complains that having the world’s reserve currency is some major burden to America that the rest of the world should have to pay for...

... except that they already do! The rest of the world literally pays for the reserve currency when they buy US government bonds! Duh. Also, when they import US inflation, or when they look the other way and pretend to not notice the $36 trillion national debt.

 Yet Miran weirdly believes that foreign nations do not ‘pay’ for their dollars (do they steal them?). And he outlines several ways in which the world could start paying for this vital public good.

 One of those ways-- and I still can’t believe he said this out loud-- is that foreign countries “could simply write checks to Treasury that help us finance global public goods.”

 Wow. They think Brazil should just send money to the US government each year for the privilege of buying Treasury bonds. I’m sure they would pay up with joy and gratitude.

 So, this is some of the stuff that is completely delusional.

 But Miran went on to describe what might be the end goal: isolating (and hurting) China while bringing back some high-tech manufacturing jobs to the US.

 In fairness, not all manufacturing jobs are making socks and underwear. China does do a lot of that stuff-- in fact they still produce 70% of the world’s apparel.

 But China also produces mid-range goods (like automobiles, pharmaceuticals) as well as some very high-end manufactured goods (like high-tech industrial machinery).

 In short, China produces across the entire value chain. And to hear Miran describe it, the goal is to ‘steal’ the low-end manufacturing (i.e. apparel, cheap trinkets, and other low margin products) from China and redistribute all of that production to other countries.

 The idea is to take ~$100+ billion of revenue from Chinese factories and sprinkle those orders around Vietnam, Cambodia, Malaysia, Thailand, etc. $15 billion here, $20 billion there.

 Because those countries are so much smaller, an extra ~$20 billion in exports will be a major boom for their economies, making them much more prosperous and dependent on the US.

 They would obviously agree to zero tariffs and trade barriers with the US, and with their newfound prosperity, buy more US-manufactured goods.

 So, in summary--

1) Destroy China’s low-end production/export sector by shifting US imports to other countries

2) Those countries agree to eliminate trade barriers

3) Their economies prosper, and they import more from the US

4) America reshores mid-range and high-end manufacturing

5) The administration cuts large numbers of government workers, freeing up labor to staff those new manufacturing jobs.

6) More jobs, more trade, more tax revenue… primarily at China’s expense.

 I’m reading between the lines a bit, but this seems to be the strategy that Miran outlines.

 It’s a bit devious-- an attempt to take out their #1 adversary while America still has the ability to do so.

Could it work? Well, that’s far from certain.

Again, as we wrote last week, it appears that China is dumping US Treasury bonds and buying the euro in an attempt to cozy up to Europe. So, it seems the Chinese are trying to make their own deal and isolate the United States.

 This is why we’re no longer witnessing a trade war. This is full-blown economic warfare… and we’ll be lucky if it remains just that.

 The world’s two largest economic superpowers are now engaged in deliberate efforts to hurt one another… which means, again, this will likely go down as one of the most important events in global economic history.

To your freedom, James Hickman  Co-Founder, Schiff Sovereign LLC

 LINK

What Matters More Than the Stock Market

What Matters More Than the Stock Market

Notes From the Field By James Hickman (Simon Black)  April 12, 2025

Yesterday when I was talking to my friend and business partner Peter Schiff, he made it clear: China is trying to drive a wedge between the US and Europe by dumping US bonds, and buying euros. (Gold too, for that matter!)

This would account for why the dollar has been sinking against the euro… and why Treasury yields have surged.

I sat down to record a podcast about this because, frankly, it’s the most important thing happening right now. This topic is critical to understand—not just what’s happening, but why this is no longer a trade war… it's an economic war.

Think about it: the world’s two largest and most dominant superpowers are directly threatening each other’s economic interests. And that could spiral out of control quickly if cooler heads don’t soon prevail.

You can watch or listen to the podcast here.

If you missed it this week, we also wrote about:

Escalation gets real: No more sex with Chinese women

Even the US government is ordering embassy employees in China to discontinue romantic relationships. If she's into you, assume she's a spy. 

Read here → 

OK- it's almost definitely China who's dumping Treasury bonds

If you thought this was just a trade war, think again—China may have just fired the first real shot in an all-out economic war.

Read here → 

It's like the dumbest AOC logic applied to global trade

Imagine crashing the global economy because someone forgot how to divide—welcome to U.S. trade policy in 2025.

Read here →

 Recent Twitter Highlights:

YouTube Shorts  https://www.youtube.com/watch?v=EfwpDLnzjlg

The Hidden Risk Behind Tariffs: What Nobody's Talking About

James Hickman  Co-Founder, Schiff Sovereign LLC

OK— It’s Almost Definitely China Who’s Dumping Treasury Bonds

OK— It’s Almost Definitely China Who’s Dumping Treasury Bonds

Notes From the Field By James Hickman (Simon Black) April 10, 2025

Yesterday I wrote to you that something very fishy was going on in the bond market. And not just fishy— potentially destructive for the federal government and US economy.

For the past several days, US government bond yields have been surging at a rate not seen since at least 2008. And in some cases not since the early 1980s.

And this is a very, very big deal.

 Higher bond yields not only mean that consumer interest rates (like mortgages) become more expensive. But they also dramatically increase the government’s borrowing costs.

 Bear in mind, the US government is already spending $1.1 trillion per year, just to pay interest on its $36 trillion national debt. That’s 22% of all US tax revenue, i.e. twenty-two cents out of every tax dollar collected go to pay interest on the national debt.

 (Plus another 47c out of every tax dollar go to Social Security and Medicare. And that’s before you get to other mandatory entitlements like Medicaid, food stamps, and more...)

 That annual interest payment is rising quickly; the government has roughly $10 trillion worth of debt this year to either finance, or refinance, which could easily result in hundreds of billions of dollars in additional interest expense each year.

 So higher interest rates are a very big deal for a debt junkie like Uncle Sam.

 That’s why it’s so alarming that bond yields are rising so quickly.

There’s realistically only a few ways this could happen.

 One way that yields might have risen so quickly, which I suggested yesterday, is that big Wall Street firms could have been shorting the Treasury market, causing bond yields to rise.

 Possible, yes. But not super likely.

 Many of those big Wall Street investors might have feared retaliation by the Trump administration. Or that, at a minimum, the President would single them out in social media, creating a lot of complications for their personal lives and businesses.

 But I think we can safely take this possibility off the table; given yesterday’s furious stock rally in which markets surged, any Wall Street firm shorting the bond market would have closed out its short positions and piled back into the stock market.

In other words, the trend of rising bond yields would have ended yesterday afternoon.

But that didn’t happen. Bond yields continued rising and are up again today.

 The US government’s 30-year bond has been especially hard-hit and is up another another few basis points today, notching an astonishing 50-basis point (0.5%) increase in just a few days.

 So with Wall Street busy trading the stock market, that only leaves a handful of possibilities.

It’s also unlikely that big banks (JP Morgan, Citi, etc.) would have dumped their US government bonds, because they have regulatory constraints in terms of what types of assets they are allowed to hold.

 Plus, any major selling of bank-owned Treasury bonds would have resulted in significant increases to bank reserves on the Fed’s balance sheet— and that doesn’t seem to have happened.

 So at this point the most likely culprit is some disgruntled foreign country, whose government or central bank wanted to lash out and punish the US government over the tariffs.

 Two or three days ago that could have been anyone. France. Germany. Japan. Etc.

 But after yesterday’s announcement which paused tariffs for almost the entire planet, there’s only one suspect: China.

After the tariff pause, there wouldn’t be any point for the European Central Bank or German government to sell its Treasury bonds. Why risk Donald Trump’s wrath when a deal is at hand?

China, on the other hand, is stuck with a 100%+ tariff. So they definitely still have an ax to grind.

 The concept of “face” (mianzi) runs very deeply in China; this is the idea that every individual, business, and even the government must uphold a reputation for strength. It would be culturally unthinkable for the Chinese government to accept tariffs without responding aggressively.

Dumping a portion of their vast US Treasury holdings is an easy way to send a message to Washington: “we can hurt you too.”

 If I’m right, it means this trade dispute has now graduated to full-blown economic warfare. And we could see some pretty rapid escalation.

For example, if China keeps dumping its Treasury bonds (and hence raising US interest rates), I wouldn’t be surprised to see the US administration sanction the CCP and Chinese central bank, essentially freezing the bonds that they own and preventing any further sales.

 China could escalate with export controls over vital rare earth minerals, which are essential in the electronics industry.

 Then there’s the possibility that each government could expropriate foreign-owned assets, i.e. US business operations in China, or Chinese investments in the US.

 Then would come the cyberattacks, and more.

 We can hope for cooler heads to prevail. But history is full of examples of how economic warfare can very quickly spiral out of control and escalate into much larger conflicts. And, at the moment, that seems to be the direction that this is heading.

 
To your freedom, James Hickman  Co-Founder, Schiff Sovereign LLC

https://www.schiffsovereign.com/trends/ok-its-almost-definitely-china-whos-dumping-treasury-bonds-152480/?inf_contact_key=6086b62d58e663d5fb93e186ed5d020f6bf72b7be6507ffa57af3236798ca349

Is China Dumping US Government Bonds?

Is China Dumping US Government Bonds?

Notes From the Field By James Hickman (Simon Black)  April 9, 2025

You probably saw the headline this morning that China is retaliating against US tariffs with an 84% tariff of its own.   This trade war is obviously far from over… which probably means that financial markets are in for a lot more volatility.   Most people focus on the stock market. And that has obviously been a wild ride.   But what’s happening in the bond market right now is actually a much bigger deal.

 Remember that US government bonds have been considered a “safe haven” asset for decades. And that was the case, very briefly, late last week. Investors dumped stocks and then parked all that cash in the bond market.

 As a result, demand for bonds surged, and yields plummeted to as low as 3.8%.

 But that sentiment has very, very suddenly reversed. And in a matter of days, US government bond yields have spiked.

 The 30-year Treasury yield, for example, is normally quite stable and moves very slowly. But its very sudden surge over the past three days has been its quickest increase in more than 40 years. The 10-year Treasury yield has also surged at its fastest clip since the 2008 financial crisis.

 This sudden rise in Treasury yields-- what’s supposed to be a very safe and boring asset class-- is a very big deal.

 For consumers, it almost certainly means higher interest rates; many consumer loans, including 30-year mortgages, are based on US government bond yields.

 So higher yields means that it will be more expensive to borrow.

 And that’s especially true for the federal government. Remember, the Treasury Department has to refinance more than $8 trillion worth of US government bonds just between now and the end of the year.

 Plus, on top of that $8 trillion, they’ll probably issue at least another $2 trillion in new debt just to finance the deficit.

 So higher interest rates are an absolute killer and will cost the government hundreds of billions of dollars more per year, just to pay interest on the national debt.

 Why is this happening, i.e. why are yields increasing so quickly?

 Well, about the only thing that can cause yields to rise so quickly is a major supply and demand imbalance, i.e. too many investors are selling their bonds, and not enough investors are willing to buy them.

 And this could easily result from someone (or multiple parties) deliberately dumping their bonds and flooding the market.

Who might do such a thing?

 Well, perhaps some of the big Wall Street firms-- many of which have already expressed anger and dissatisfaction over the tariff policy. And some of them might simply not want to own US government bonds anymore.

 Remember, it wasn’t that long ago (September 2022) that then-British Prime Minister Liz Truss unveiled her economic plan. It was a pro-business, pro-market plan that involved tax cuts and more.

 But bond investors were concerned that Ms. Truss’s plan would result in a significant deficit. So they dumped their British government bonds (known as gilts). Bond yields skyrocketed, and the British pound went into freefall.

 It’s possible the same ‘bond vigilante’ mentality might be at work here.

 It’s also possible that some disgruntled foreign country could be divorcing themselves from the US dollar. Maybe it’s a supposed ally, like France. But it could just as easily be China (which owns more than $1 trillion of US Treasury securities).

 If true, the havoc that China can wreak by dumping their Treasury bonds and causing an interest rate spike in the US will substantially exceed any economic damage from their 84% retaliatory tariff.

 Perhaps it’s all of the above-- multiple countries AND bond vigilantes together.

 Who knows. But if this trend continues and US government bond yields keep rising, that pressure could be enough to get the President to back down.

 One thing’s for sure: gold is going higher. No surprise there; after an initial sell-off in which investors sold everything, gold has been surging back to its record highs.

 Most likely this is because foreign governments and central banks have resumed their buying in an effort to distance themselves from the US dollar.

 The interesting part about this is that gold companies are now also going higher.

 We have been talking about this for months. And months. We said that gold is at an all-time high, yet gold miners and related businesses were dirt cheap. We also said that bizarre anomaly won’t last.

 Well, it appears that investors have finally woken up to the new reality, and gold companies are now finally moving much higher.

 No matter what happens from here, it’s becoming more and more clear that there will definitely be a major reset in the global financial system (and gold may be a part of that).

 In fairness, it’s also worth pointing out that there may be a grand strategy here by the Trump administration. We’ll discuss this more soon but suffice it to say they’re obviously making a huge gamble with the future of the US economy.

 
To your freedom,  James Hickman   Co-Founder, Schiff Sovereign LLC

https://www.schiffsovereign.com/trends/is-china-dumping-us-government-bonds-152455/?inf_contact_key=3da8ba2b61deaf22190dff286cd8b2f25ed554ec5cb65b266886a8a7a9bbed85

China: I See Your Trade War And Raise You A Cyberwar

China: I See Your Trade War And Raise You A Cyberwar

Notes From the Field By  James Hickman (Simon Black) April 2, 2025

It was sometime in the spring of 323 BC when Alexander the Great-- the “King of the World”-- passed through the gates of ancient Babylon for the last time.

He had already conquered the city nearly a decade before. But his men were worn out from fighting in India and Persia, and Babylon was a secure place to give his army a much-needed rest.

They remained there for a few months, until, quite suddenly, Alexander became extremely ill on either the 10th or 11th of June and then died.

The cause of his death is unknown. Some say he was poisoned. Others blame malaria, typhoid fever, or complications from his battle wounds.

 What is certain, however, is that he left behind no legitimate male heir, as his wife was still pregnant at the time of his death. So almost immediately a power struggle broke out as to who would succeed him.

 Macedonian tradition at the time dictated that whoever buried Alexander’s body would be the rightful claimant to his empire.

 Well, Alexander’s dying wish was to be buried at an oasis in North Africa-- more than 1,000 miles away. So you can just imagine the nearly year-long cat-and-mouse game where all of these generals and nobles vying for the throne continually tried to steal Alexander’s corpse from one another.

There were assassinations, sabotage, secret missions, and more, not to mention full-blown warfare among the various factions which ultimately lasted for decades-- ironically far longer than Alexander reigned.

 In the end, Alexander’s empire broke apart. And one of the victors-- a former general and bodyguard, named Ptolemy-- ended up taking over Egypt and established a ruling dynasty that lasted for centuries.

 Their economic system in the ancient Ptolemaic Kingdom was essentially what we would today call “national capitalism”.

 The bureaucracy was massive. Absolutely massive. Onerous regulations controlled commerce and trade. Nothing was produced that wasn’t in the government’s interest. Caravan routes and waterways were owned by the state, and their use was heavily taxed.

There were taxes on salt, stamp duties on legal documents, taxes on inheritance, and a sales tax of 10%. Plus, the tax on income reached as high as 50%.

Then there were the tariffs.

 The Ptolemaic Kingdom possessed some of the finest technology in the world at that time; their fields were the most productive, and their manufactured goods were among the highest quality on the planet. So, their exports were vast and lucrative… and they traded with markets as far away as China.

 Yet even though Ptolemaic Egypt’s productive technology gave them many competitive advantages over other kingdoms, the state decided at a certain point that it needed to ‘protect’ its domestic industries. So, they imposed heavy tariffs.

 The results were rather predictable. Without the benefit of low-cost imports, prices rose significantly. Greek olive oil, which cost just 21 drachmas in Athens, sold for 52 drachmas in Egypt. Trade dried up, hurting both the domestic and foreign economies alike.

 Trade disputes soon festered into trade wars, which quickly became actual wars.

 The loss of blood and treasure mounted, while rivals (like Carthage, and eventually Rome) became stronger.

 This is the basic principle behind ‘mercantilism’, i.e. the prevailing zero-sum economic philosophy that dominated the world for thousands of years. It’s based on the idea that, in order for me to win, you have to lose. I become wealthier by taking from you.

Adam Smith finally codified why this way of thinking was stupid when he published An Inquiry into the Nature and Causes of the Wealth of Nations in the year 1776. Smith, the father of capitalism, realized that wealth and abundance were infinite, and that trade was not a zero-sum game. Both sides could become better off.

 Yesterday-- supposedly ‘Liberation Day’-- constituted a gigantic step backward from capitalism… back to the zero-sum mentality of mercantilism.

I’ve written before that, yes, America has very legitimate gripes with respect to some of its foreign trading partners.

 But it seems naive that these can be solved with across-the-board tariffs on essentially the entire planet.

 If Apple doesn’t want to sell iPhones in China, they can choose to do that on their own. It seems silly to make hundreds of millions of Americans pay higher prices for imported goods to ‘avenge’ Apple’s lost profitability from Chinese import duties.

 There are so many things wrong with this policy… and very few ways in which it could go right.

 In order for tariffs to be a win, the rest of the world would just need to take it in the teeth. No other nation could impose retaliatory tariffs. Foreign businesses would need to cut their prices, and foreign central banks would need to devalue their currencies.

 US consumers would need to be very forgiving and buy the narrative that the price inflation due to tariffs is “transitory”, and that domestic production will soon bring prices back down.

 Most importantly, US businesses will need to immediately begin building new factories in America and ramp up domestic manufacturing.

But this is far easier said than done. New factories will require a host of state and local permits, and that bureaucracy could bog down industrial construction for years.

 Not to mention that many building materials for all of these new factories will need to be imported. There are exemptions in the tariffs for copper, lumber, and steel, but other imported construction materials will be 10% to 50% more expensive now.

 In short, build all of these factories will take a great deal of time and be lot more expensive. Consumers will be expected to pay the price in the meantime.

 One of the biggest questions, of course, is what happens next.

 History tells us that trade disputes often escalate into larger conflicts. And is anyone naive enough to think that the Chinese will simply bow obsequiously?

Perhaps they’ll use their army of hackers to take down parts of the US power grid and launch a mini cyberwar. Or perhaps they’ll cease exporting critical rare earth metals to the US-- so kiss your iPhone goodbye.

 We also could easily see a number of countries (including in Europe) retaliate by canceling visa-free travel for US citizens… and several countries start pulling their funds out of the United States-- either in retaliation or out of fear.

 This might even lead to the US imposing capital controls in order to stop foreigners from moving their money out.

 Bottom line, it could get very messy, very quickly.

To your freedom,  James Hickman   Co-Founder, Schiff Sovereign LLC

https://www.schiffsovereign.com/trends/china-i-see-your-trade-war-and-raise-you-a-cyberwar-152427/?inf_contact_key=8f59fbfeda267ecf87272576cc8252e4611c10abb7b3657801e6f799df81c049

If tomorrow is “Liberation Day”, today is “Rational Day”

If tomorrow is “Liberation Day”, today is “Rational Day” [Podcast]

Notes From the Field By James Hickman (Simon Black) April 1, 2025

Tomorrow is being billed as Liberation Day— where tariffs will supposedly free America from those pesky, parasitic foreign markets. 

But what’s actually going to happen? 

This is the subject of today’s podcast. 

We discuss:

• How odd it is that no Liberation Day details have leaked... which makes us wonder if there actually are any plans or details to leak.

• If this administration truly believes tariffs are so obviously great for the economy, why would they wait until now instead of doing it day one, as they did with so many other executive actions?

• What might actually unfold, and what it means for markets that are already jittery.

• Questions any rational investor should ask themselves about their goals— for example, are you speculating on share price, or investing in a company’s long term prospects?

• Will tariffs make successful companies immediately and permanently less valuable?

To answer these questions, we bring up examples of well managed, value companies we present to our investment research subscribers, particularly undervalued real asset businesses.

One example’s entire market valuation is less than the cash it has in the bank. Plus it’s profitable and pays a dividend.

Finally, we discuss:

• The long shot scenario of what would need to occur for tariffs to actually work as intended.

• The very plausible scenario that America could become a manufacturing powerhouse again—not thanks to tariffs, but technology.

• The surprising company we identify which likely stands to gain the most from this AI/ automation/ robotics boom.

If tomorrow is “Liberation Day,” then today is the day to be rational.

I encourage you to give it a listen.   You can listen in here.
(For the audio-only version, check out our online post here.)

 
To your freedom,   James Hickman   Co-Founder, Schiff Sovereign LLC

https://www.schiffsovereign.com/podcast/if-tomorrow-is-liberation-day-today-is-rational-day-podcast-152417/?inf_contact_key=e745a29e46b25bd195d2830673917e3f2ec2094b0cea6b68b61d0db7a8f697f7

Here’s How The US Might Force Foreign Nations Into Submission

Here’s How The US Might Force Foreign Nations Into Submission [Podcast]

Notes From the Field By James Hickman (Simon Black)  March 27, 2025

On June 8, 1974, President Richard Nixon dispatched Treasury Secretary William Simon and his deputy to Saudi Arabia in an attempt to strike one of the most critical—and secretive—economic deals in modern history.

 Three years earlier, in August 1971, Nixon had severed the final link between the US dollar and gold, officially ending the Bretton Woods system. That meant foreign governments could no longer redeem their dollars for gold, effectively turning the dollar into a pure fiat currency backed by nothing but political promises.

 After Nixon’s move, the US could effectively ‘print’ and spend as much money as it wanted—something that Congress enthusiastically embraced.

Inflation soared, confidence in the dollar plummeted, and foreign countries began dumping dollars as a result.

 So Washington hatched a plan.

 The mission to Riyadh was a covert, high-stakes operation to engineer artificial demand for the dollar.

 They went to convince Saudi Arabia— the world’s largest oil producer— to sell its oil exports exclusively in US dollars. In return, the US would offer military protection, political support, and access to sophisticated weaponry.

 It was the birth of the petrodollar.

 Pretty much every country on earth was buying oil from Saudi Arabia. And if Saudi Arabia was only selling oil in US dollars, it meant that every country on earth had to continue to own US dollars... and by extension, continue buying US government bonds.

 This arrangement has continued for half a century and allowed the US to run massive deficits, ‘print’ money at will, and export inflation around the globe—all while maintaining an illusion of monetary stability.

 Today, there is once again grumbling around the world about reliance on the US and its currency.

 Even allies like France and Germany are actively working on diversifying out of the US dollar and investing their savings at home, rather than buying more US government bonds.

 In response, the Trump administration seems intent on resetting the global financial system and almost forcing foreign countries to continue holding US debt; insiders within the administration refer to it as the ‘Mar-a-Lago Accord’, and given the ongoing tariff announcements, it appears they are actually putting the idea into action.

I wrote about this earlier in the week: this is an extremely high-risk gamble.

But there’s one thing the US has going for it... a way to ‘engineer’ demand for US dollars and encourage foreigners to buy US government debt.

Back in the 1970s, the need for oil forced foreign nations to continue owning US dollars.

The oil of today is technology. And foreign nations will most likely line up to get their hands on US technology.

The US is still the leader in advancements like AI and high performance computing, quantum, other advanced semi-conductor technologies, robotics, small scale nuclear, and more.

Obviously other countries possess some of this technology; China still leads in supercomputing and has plenty of its own AI. But much of the core infrastructure— especially advanced semiconductors— is dominated by the United States.

 This is potentially an advantage that the US government might exploit (through export controls and more) in order to force foreigners to continue owning dollars... and Treasury bonds.

This is the topic of our podcast today— and we also discuss:

• How the Mar-A-Lago Accord is an enormous gamble

• What happens to the US dollar if the gamble doesn’t pay off

• How they’re also might plan on dismantling Federal Reserve independence

• A 1960s-era economist’s view on why the reserve currency is doomed

• Peter Schiff’s father Irwin, and his testimony to Congress in 1968

• And the right way to solve America’s debt problems.

You can listen in here.

(For the audio-only version, check out our online post here.)

 
To your freedom,  James Hickman   Co-Founder, Schiff Sovereign LLC

https://www.schiffsovereign.com/podcast/heres-how-the-us-might-force-foreign-nations-into-submission-152387/?inf_contact_key=707e5136e6e8b905295283bef11310858dcae2ba3297e07f93219ba341147496

This Looks Like A Divorce. And It’s Going To Be A Messy One

This Looks Like A Divorce. And It’s Going To Be A Messy One

Notes From the Field By James Hickman (Simon Black)  March 25, 2025

“I think we are making a mistake,” said the Vice President, in what the media is criticizing as an unclassified text message discussion.

The administration was discussing if, when, and how to strike against the Houthi rebel group in Yemen, which has been menacing commercial ships in the Red Sea since late 2023.

The media is focusing on the fact that someone had inadvertently (or perhaps intentionally) added a reporter from the Atlantic to the chat group. But once again the media has missed the point.

What matters far more is how JD Vance crystalized the current situation: that just “3 percent of US trade runs through the Suez [Canal, where the Houthis strike]. 40 percent of European trade does...”

In other words, this Houthi situation is far more important to Europe than to the US... so Europe should take the lead, step up, and do something about it rather than wait for America to once again ride to the rescue.

“I just hate bailing Europe out again,” Vance says, with other administration officials in agreement about “European free-loading”.

This is a telling exchange which reflects the mood right now. The Trump team believes that the US unfairly has to shoulder the security burden for Europe. And, frankly, their position is totally valid.

But to play devil’s advocate, the Europeans would say, “Well, that’s the price you pay for the exorbitant privilege of having the world’s reserve currency.”

And that’s not a crazy assertion either. Just ask Liz Truss.

If you don’t remember Ms. Truss, she was British Prime Minister for all of 51 days; back in September 2022, her government announced its ‘mini-budget’ which proposed significant tax cuts combined with government subsidies for household energy expenses.

The result would have been higher budget deficits, which the government intended to finance by borrowing more money.

Unfortunately for Truss, her proposals were poorly received, and investors dumped their British government bonds.

Yields collapsed. The pound went into free-fall. And Ms. Truss-- the Prime Minister of one of the largest and most powerful economies in the world-- had to resign in disgrace… all because the bond market didn’t like her economic plan.

That’s what happens when you DON’T have the global reserve currency.

America, on the other hand, does have this special benefit; every foreign government and central bank on the planet has to own US dollars… which is why the US government gets away with the fiscal equivalent of murder.

America’s government runs multi-trillion-dollar deficits year after year, yet does nothing about it.

They borrowed trillions of dollars to pay people to stay home and NOT go to work. They have constant threats of government shutdowns and debt ceiling crises. They spend more money each year paying interest than they spend on national defense. And the extreme level of waste is simply appalling.

No other country in the world would get away with all of these shenanigans.

So, if we’re intellectually honest, Europe has a point. The rest of the world willingly ignores the US government’s dismal financial condition… and in exchange they expect Uncle Sam to take care of the Houthis.

In a way, both sides are right. Both sides have valid points. Yet each side also believes the other to be completely wrong and irrational. There doesn’t seem to be any room for compromise or mutual understanding.

In divorce court this is known as “irreconcilable differences”. And it’s getting messy.

The US and Europe have spent decades as the world’s ultimate ‘power couple’; they enjoyed a massive trade relationship, an iron-clad military alliance, top secret intelligence-sharing, industrial cooperation… you name it. Europe and the US have been in bed together for quite some time.

But this relationship is clearly fractured, and it’s declining at a rate not seen since World War II.

The US may still be hoping that Europe will eventually come around. And this seems to be the strategy: threaten them with tariffs until Europe’s weak leadership buckles and bends the knee.

But that doesn’t seem to be happening. Europe is finding its legs. And its backbone.

Friedrich Merz, for example, the presumptive German Chancellor, recently scored a major victory by amending his country’s Constitutional requirement to maintain a balanced budget.

He had to sell his soul and betray voters to get it done. But Merz stated (after the election, of course) that he was willing to do “whatever it takes” to Make Europe Great Again and fend off the threat of Russian invasion.

He’s now planning close to $1 trillion in government spending, almost all of it financed by more debt. It will include a massive defense buildup, plus a bonanza of the Green party’s climate initiatives.

For his part, French President Emmanuel Macron has also been planning “a new paradigm”, as he calls it.

In a recent speech, Macron spelled out Europe’s obvious problems. The border has been overrun, and their security is in shambles.

 “We have delegated everything that is strategic,” Macron complained. “our energy to Russia. Our security . . . to the United States. And equally critical perspectives [like rare earth minerals] to China.”

Even Europe’s food supplies are being imported from foreign nations, Macron laments. “Who would be foolish enough to outsource their food?”

“We must take them back. This is what strategic autonomy is all about,” he says. Bottom line, Europe is too dependent on foreign nations, including and especially the US.

He goes on to challenge Europe to fight against US “competition” and become a world leader in AI, quantum computing, space, biotechnology, and nuclear energy within five years… and to get there by deregulating and investing heavily in innovation.

Where will they get this investment capital? Well, he mused that “every year, our savings amounting to around 300 billion euros a year go to finance the Americans. . . This is absurd.” Macron believes that money should remain in Europe to fund R&D.

None of this sounds like Europe willing to accede to US demands… nor a Europe that will submit to the “Mar-a-Lago Accords” (which would, among other things, force Europe to hold 100-year US government bonds).

It looks very clearly like Europe is preparing to stand on its own… which, again, looks a lot like a divorce. And potentially quite a messy one. It’s also unfolding very rapidly, right in front of us.

Bottom line, if even Europe thinks it’s “absurd” to buy hundreds of billions of euros each year worth of US government bonds, I can only imagine what China must think.

And this leads me to believe that a new global financial system could be here sooner than anyone realizes.

To your freedom,  James Hickman  Co-Founder, Schiff Sovereign LLC

PS   We’ve been predicting for years that a new global financial system will end up displacing the US dollar. And the implications are enormous. Gold, for starters, should continue to do extremely well-- despite the fact that it is at an all-time high. So should gold stocks. Many foreign stock markets (which are significantly undervalued relative to the US) should also perform very well.

 https://www.schiffsovereign.com/trends/this-looks-like-a-divorce-and-its-going-to-be-a-messy-one-152372/?inf_contact_key=9224eb4317aea966d09652ffd63d614e7c981c2f99e1cf7586cea13df5aa4037

Nothing Combats Climate Change Like a Four-Lane Highway Through the Amazon

Nothing Combats Climate Change Like a Four-Lane Highway Through the Amazon

Notes From the Field By James Hickman (Simon Black)   March 21, 2025

About eight months from now in November 2025, over 50,000 world leaders, bureaucrats, activists, celebrities, and VIPs will descend upon the Brazilian city of Belém for the United Nation’s annual climate change lollapalooza, otherwise known as COP30.

These esteemed experts will gather to lecture the world on how desperately the rest of us peasants need to cut carbon emissions. They’ll make “bold commitments” to end fossil fuels and pledge to save the Amazon rainforest.

But first they’ll fly in on their private jets, then convoy down to the conference site in luxury gas-guzzling SUVs.

Naturally, our moral overlords can’t be expected to sit in traffic like a filthy commoner. Their time is clearly too valuable.

So fortunately the Brazilian government is bulldozing thousands of acres of the aforementioned Amazon rainforest to build a special four-lane highway... so that visiting climate dignitaries can be whisked from their private jets to their luxury hotel suites in a matter of minutes.

Seriously. You can’t make this stuff up.

It’s called Avenida Liberdade—“Liberty Avenue”—a freshly paved road slicing right through a protected stretch of Amazon jungle, all so VIPs don’t get stuck in traffic on their way to dine on truffled wagyu beef— while telling everyone else to eat bugs and weeds to combat climate change.

But this really shouldn’t be surprising— such hypocrisy is extremely ‘on brand’ for the UN’s signature climate conference.

At COP27 in Egypt, over 400 private jets descended on Sharm El Sheikh, belching emissions into the atmosphere so climate VIPs could discuss… how to cut emissions. The gourmet menus featured $100 Angus beef medallions served to attendees who blamed cow flatulence for global warming.

In fact, the UN’s “State of Climate Action 2022”, which was released days before COP27, listed meat consumption as one of the key initiatives that political leaders need to tackle.

But at least it showed where the UN stands on human rights abuses at the hands of brutal authoritarian regimes like that of Egyptian President Abdel Fattah el-Sisi: murderous dictatorships are okay, as long as they bow to the climate agenda.

The next year, the theme of COP28 (the 28th year of holding the conference) was: “No more waiting. It’s time to take action.”

The bold action they took was to convene panels dedicated to gender identity and feminism—because naturally, pronouns are the key to stabilizing the planet’s temperature.

30 years of private jets, meat consumption, and felling rainforests has accomplished nothing other than providing luxury parties for elitists to discuss how regular people should suffer in the name of combating climate change.

The most ridiculous part is that the perfect solution already exists: nuclear energy.

But they completely ignore it. They’re more willing to pave through the rainforest so they can discuss pronouns, rather than acknowledge nuclear energy as the obvious answer.

Fortunately, no one actually listens to these hypocrites. And anyone in the know is already getting behind nuclear.

Tech giants like Meta, Google, Amazon, and Microsoft have all inked deals to secure their own nuclear power sources, many through extremely safe small modular reactors.

These evil capitalists will end up doing more to combat climate change than three decades of bureaucrats.

Funny thing, combating climate change isn’t even really the tech companies’ primary goal; the bigger issue is that the US power grid is already stretched to the max. And they know that power consumption will grow dramatically in the coming years because of AI, robotics, and more.

These companies are looking to safeguard their own power supplies. So they took matters into their own hands. They know nuclear is safe, cheap, and absurdly efficient. A single rock of uranium can power a small city for a day.

So they cut their own deals and made their own investments. But they’re not alone.

The state of South Carolina is getting back into nuclear power. And, even at the federal level, there is significant support emerging for nuclear power. In fact the new US Energy Secretary was formerly a board member at a small-scale nuclear start-up.

Unfortunately the US is currently lagging behind other countries in its nuclear ambitions; China, India, and many other countries are building nuclear reactors at a furious pace.

This also means that demand for uranium— the key fuel for nuclear power— is set to soar as these new nuclear plants come online around the world.

At the moment, however, there simply isn’t enough uranium being produced to match demand. Not even close. And that supply/demand imbalance almost certainly means a dramatically higher future price for uranium.

This is a classic real asset opportunity: the most promising energy asset on earth is facing skyrocketing demand and dwindling supply. Yet at the moment it is still cheap.

It’s only a matter of time before that changes drastically.

To your freedom,  James Hickman  Co-Founder, Schiff Sovereign LLC

https://www.schiffsovereign.com/trends/nothing-combats-climate-change-like-a-four-lane-highway-through-the-amazon-152344/

This High-Risk Gamble Is Putting The Future Of The US Economy At Stake

This High-Risk Gamble Is Putting The Future Of The US Economy At Stake

Notes From the Field BY James Hickman (Simon Black)  March 24, 2025

Russian-born Lydia Lopokova was not happy with her accommodations at the posh Mount Washington Hotel.  The world-famous former ballerina complained that, in room 219, “the taps run all day, the windows do not close or open, the pipes mend and unmend.” Not to mention the hotel pool was absolutely frigid, even for someone who had grown up in frosty Saint Petersburg.

Lopokova coped by practicing her ballet moves late in the evening-- the only time when the crisp New Hampshire mountain air made it tolerable enough to exercise.

But perhaps she was just being petty; US Treasury Secretary Henry Morgenthau was staying right below her in room 119… and Lopokova’s constant grande jetes and pirouettes reportedly kept him awake all night.

It was early July 1944. And delegates from all over the world had descended upon the picturesque town of Bretton Woods, New Hampshire for the most important monetary conference in history.

(The Mount Washington Hotel was specifically chosen because it was the largest structure in all of New Hampshire… and the only facility capable of accommodating such a large group.)

The event was truly international; the New Yorker magazine celebrated the “gathering of Colombians, Poles, Liberians, Chinese, Ethiopians, Filipinos, Icelanders, and other spectacular people.” Lopokova described the atmosphere as a “madhouse”.

But she had no choice… for her husband, the legendary British economist John Maynard Keynes, was the star of the show.

Keynes in many ways was like Albert Einstein-- he had transcended his profession and become something of a cultural icon. And all throughout the conference, other delegates waited patiently for a photo while reporters frantically wrote down his every utterance.

“Lord Keynes,” said his colleague Lionel Robbins, “was photographed from at least 50 different angles. . . Lord Keynes standing up, Lord Keynes sitting down . . . and so on and so forth.”

But despite Keynes’s celebrity and gravitas, it was the Americans who had called the Bretton Woods Conference… and it was the Americans who were running the show. The United States was out to create what one of Morgenthau’s top lieutenants had called “a New Deal for a New World”.

Everyone in room knew that World War II was nearing its conclusion. The Allied invasion of Normandy had succeeded, and Nazi general Gerd von Rundstedt was about to advise Hitler to make peace. So, it was time for the allies to contemplate a post-war future.

US President Franklin Roosevelt’s message to delegates was to “take counsel with one another” to determine “the shape of the future which we are to win.”

It was a polite gesture to pretend that there would be debate and compromise among the various nations. But it was clear to all that “the future” which Roosevelt referenced would be 100% dominated by the United States. And everyone had precisely 21 days to get on board the America Train.

The primary agreement was that the US dollar would be fixed to gold… and all other nations would peg their currencies to the US dollar. The dollar would become the global reserve currency.

Keynes was furious, and at one point he screamed at senior US officials over their “lunatic proposals.” (The New York Times wrote that “the majestic beauty of the surroundings is in striking contrast to the temporary bedlam which broke out” at the event.)

Great Britain was being stripped of all power and prestige-- even losing traditional export rights to its own colonies. For Keynes, the entire event was a constant, humiliating reminder that there was no room in the New World Order for Great Britain.

But Keynes was also realistic; British debt-to-GDP had swelled to a whopping 240% in 1944, up from just 29% prior to World War I. Britain simply didn’t have the economic muscle to be the world’s dominant superpower.

So, in the end, he signed the Bretton Woods Agreement (though later complained that no one had been given “a chance of reading through a clean and consecutive copy of the [final] document.”)

In other words, the contract which formally unseated Britain as the global economic superpower had its most preeminent economist’s signature on it.

We may very well be watching the early stages of a similar seismic shift in global finance-- a move that may displace the US as the global economic power. And in the end, there could likely even be a formal contract with a prominent American’s signature on it.

As one of Donald Trump’s top economic advisors, Stephen Miran, recently wrote, “We may be on the cusp of a generational change in the international trade and financial systems.” He would know; he coined the term “Mar-a-Lago Accord”, and its basic principles are playing out in real time.

Their central idea is to throw free trade and free markets out the window… and acknowledge that both (1) US-led global security and (2) access to America’s lucrative consumer market are esteemed privileges that foreign nations must pay handsomely for.

To be fair, the premises are not crazy. For example, they question why America should have “free trade” with a foreign nation that doesn’t respect US intellectual property rights. Or why the US should bear the costs of providing security to nations which don’t pay their NATO obligations in full.

These are not unreasonable assertions. But what they’re talking about is still a fundamental reset in the global financial system that has existed for decades. And that’s a high-risk gamble.

First off, countries must bow to America’s political agenda. If not, tariffs will be imposed. And these guys honestly believe that tariffs are revenue-positive.

Miran writes that “tariffs provide revenue, and if offset by currency adjustments, present minimal inflationary or otherwise adverse side effects. . .”

He then cites the 2018-2019 trade war against China as an example of tariffs not sparking inflation-- primarily because the Chinese devalued their currency. He ignores other examples (Smoot-Hawley) of tariffs wrecking the economy.

Furthermore, access to the US consumer market, plus the promise of security and military support, must be ‘bought’ by foreign governments and central banks who must swap their US government bonds for long-term “century” bonds which potentially pay no interest.

Again, countries which do not comply will face tariffs.

We’re already witnessing the plan’s first phase: tariffs on Canadian and Mexican products. Europe is on deck. This does not seem to be an idea or wild theory-- it’s happening right in front of us.

Will it work? Who knows. If the US government manages to browbeat enough nations into submission, it’s possible there could be some trade re-balancing, additional tax revenue, and decreased interest cost on the national debt.

But there’s also significant risk that even allied nations say, “enough is enough”, i.e. that they turn their backs on the US and dump the dollar for good.

In this case, the Mar-a-Lago proponents believe the Federal Reserve would step in to ‘print’ all the money necessary to finance the bond market.

Remember, during the pandemic, the Fed printed roughly $5 trillion… and we got 9% inflation. There’s $28 trillion worth of US government debt set to mature over the next four years alone. If foreigners turn their backs on the dollar, and the Fed has to print a good chunk of that $28 trillion, inflation could easily skyrocket.

Make no mistake-- this is a high stakes gamble with a potentially binary outcome.

They either succeed… and manage to reinvigorate America’s standing with most of the world; or they fail… and torpedo the US economy, spark a nasty bout of inflation, and destroy the US dollar’s dominance in global trade.

Either way, it means a new global financial system. And it’s playing out in front of our very eyes.

To your freedom,  James Hickman  Co-Founder, Schiff Sovereign LLC

https://www.schiffsovereign.com/trends/this-high-risk-gamble-is-putting-the-future-of-the-us-economy-at-stake-152356/

It’s the Difference Between $70 and $140 Million

It’s the Difference Between $70 and $140 Million [Podcast]

Notes From the Field By James Hickman (Simon Black) March 18, 2025

A few years ago, I was at a private conference listening to a CEO of a silver mining company explain—quite matter-of-factly—how silver prices were being manipulated.

He laid out the whole playbook: how major Wall Street traders would flood the market with short positions in paper silver, drive the price down, and simultaneously accumulate physical silver at rock-bottom prices. Then, once they’d cornered enough physical supply, they’d let prices rise, selling into the momentum they themselves created.

It was a textbook case of market manipulation—illegal, unethical, but enormously profitable.

But what stuck with me wasn’t the CEO’s explanation. It was the reaction of some of the “finance elite” in the room.

A few of them scoffed. You could practically see them rolling their eyes. Manipulate silver? Why would anyone bother? They arrogantly dismissed the notion outright.

Fast forward a couple of years, and guess what happened? JP Morgan paid a nearly $1 billion fine for precisely this kind of manipulation. Several traders went to prison.

Turns out, the “conspiracy theory” was, in fact, reality.

The reason why it happened is because it could happen. Silver is a small enough market where a few large players can force those kind of price fluctuations.

And to me, that is the primary reason why we likely won’t see a sustained run up in silver prices.

Gold has now hit $3,000 per ounce. So could speculation drive silver to ridiculous heights? Absolutely. The Wall Street traders might even pull the reverse of what they did last time and intentionally drive prices up.

But there is a key difference between silver and gold– gold has an obvious catalyst for higher prices: central banks are buying up gold literally by the metric ton in their efforts to diversify away from the US dollar.

The silver market, on the other hand, is simply too small to absorb that amount of capital.

Gold also provides central banks with the best wealth density to easily store vast fortunes of value.

Think about it like this— a barrel of oil is worth about $70. If you fill up that same barrel with silver, you’d have about $1.5 million of value.

But fill it up with gold and suddenly it’s worth about $140 million!

In other words, gold is the one of the most ‘dense’ forms of wealth in existence… and that’s the primary reason why central banks are loading up on it, instead of silver.

We discuss all this in today’s podcast, as well as another precious metal that central bankers might consider accumulating— and it’s not silver.

We also talk about what gold’s latest milestone means, if investors are too late to the party, and some alternative ways to gain exposure to what will likely be a continuing run up in gold prices.

One of those alternatives is investments in profitable, well-managed precious metals companies which are at the moment incredibly undervalued.

That’s because central banks are buying gold, not gold companies.

The last three precious metals companies that we showcased in our 4th Pillar investment research newsletter fit this exact criteria, and are up 27%, 21%, and 40% respectively.

We still think this is a very sensible approach worth considering.

You can listen here.

Also, you can access the transcript of this video, here.

https://www.schiffsovereign.com/podcast/its-the-difference-between-70-and-140-million-podcast-152326/

$3,000 Gold Is Not The End Of This Story

$3,000 Gold Is Not The End Of This Story

Notes From the Field By James Hickman (Simon Black) March 17, 2025

On November 1, 2023, just as the price of gold reached its record high price of $2,000 per troy ounce, I clearly stated my position that $2,000 gold was just the beginning.

As usual, my argument was grounded in history. Back in the 1960s and 1970s, US government spending soared thanks to the mounting costs of the Vietnam War coupled with incredibly expensive social initiatives dubbed ‘The Great Society’.

The national debt exploded as a result.

Then, throughout the 1970s, the US suffered an incredibly humiliating withdrawal from Vietnam, complete with a helicopter airlift from the US embassy in Saigon. The Cold War with the Soviet Union was at its peak. Serious trouble brewed with Iran. War broke out in the Middle East.

Civil unrest and ‘mostly peaceful’ protests were also a constant problem in the 1970s, and major cities like New York, LA, and Chicago became synonymous with violent crime.

It was also a time of soaring inflation, weak leadership and political chaos in the US, not to mention rampant criminality in the federal government.

All of this led to a significant loss of confidence in America’s standing on the global stage.

Simply put, the world stopped making sense, and gold became a safe haven from that chaos. That’s why the gold price rose more than 20x over the course of the decade.

When I wrote to you back in late 2023, I described a number of similarities between the 1970s and the 2020s. Chaos and criminality. Weakness and war. Humiliation and inflation. Oh, and that little thing called Covid.

Similarly, the world stopped making sense in the 2020s.

And based on that conclusion, I wrote that $2,000 gold was just the beginning of a much bigger story... and that the price of gold would continue to surge.

It’s not hard to understand why.

Back in late 2023 when I wrote that article, the US national debt was around $33 trillion (it’s up $3+ trillion since then).

The federal government had recently ended its fiscal year (FY23), in which it spent every tax dollar collected just to pay interest on the debt, plus mandatory entitlements like Social Security and Medicare.

100% of US government ‘discretionary’ spending, which includes everything from the military and homeland security, to national parks and federal courts, had to be funded with more debt.

I assumed that this trend of higher spending and higher debt would continue. And it did.

The following year, in FY24, the government spent an unbelievable $1.1 trillion just to pay interest on the national debt— vastly exceeding the defense budget. Plus the FY24 budget deficit increased to more than $1.8 trillion.

So the fiscal situation has only become worse. Not better.

The other issue that I foresaw driving backlash against the dollar was the heavy-handedness of the US government against other nations.

Whenever foreign governments (or even foreign businesses) did things that the US government didn’t like, the Biden administration’s knee-jerk reaction was to impose— or at least threaten— sanctions.

In many respects the only reason that the US government even has the power to sanction other nations is because the dollar is the dominant global reserve currency.

If Costa Rica threatened to sanction other countries, everybody would just laugh... because Costa Rica has no power. But America has enormous power, simply because the rest of the world has to use US dollars for global trade and commerce.

I concluded that, sooner or later, foreign governments would get tired of being pushed around by the US government and start seeking alternatives to the dollar. This is also happening.

One thing that modern history makes very clear is that global monetary regimes tend to reset every few decades.

We can go back to the year 1867 in which the International Monetary Conference in Paris ultimately led to a global gold standard.

This gold standard lasted for a few decades... until World War I broke out. One by one, sovereign governments suspended their gold standards, causing significant disruption to the global monetary regime.

Three decades later, the global financial system was reset at the Bretton Woods Conference which anointed the US dollar as the global reserve currency... on the understanding that the dollar would be backed by gold.

This system lasted for 27 years, when, in 1971, Richard Nixon took the US dollar off the gold standard; this led to a system of “fiat currencies” around the world which were backed by nothing but phony promises from politicians and central bankers.

That system was adjusted once again in the late 1990s in the wake of the Asian financial crisis, and Russia’s sovereign debt default, in which most of the developing world piled into US dollars to hold their reserves. Foreign ownership of US government bonds skyrocketed as a result.

That system has lasted for a few decades— during which period a number of countries (like China) bought up trillions of dollars of US government debt.

Well, we are now witnessing in real time what appears to be another reset in the global financial system. And in some respects, it may even be planned.

The main problems that foreign governments and central banks have against the US dollar— the Treasury Department’s heavy-handedness, the constant threat of sanctions or tariffs, and the unimaginably high levels of debt— are still absolutely present.

And on top of that, this new administration is actively floating what has been dubbed the Mar-A-Lago Accords, i.e. an agreement to force America’s foreign bondholders to reset the financial system.

Just as predicted, all of this uncertainty has been incredibly bullish for gold— primarily because foreign governments and central banks are aggressively seeking an alternative to the US dollar.

At the moment, nobody really knows what the next global financial system will be.

Personally I don’t think the dollar is going to disappear as a reserve currency. But “King Dollar” probably won’t dominate the world— instead perhaps it will be “Earl Dollar” or “Viscount Dollar”, in a mix with other currencies.

No one knows for sure. And that’s why central bankers have been buying gold— because it’s the only asset in which they can have complete confidence. No matter what the new global financial system looks like, gold will continue to have value.

It has been those central banks buying up gold (literally by the metric ton) and pushing prices to record highs.

We said in November 2023 that $2,000 was just the beginning. We’ve just hit $3,000 gold.

I won’t say that is “just the beginning.” But it certainly is not the end to this story.

To your freedom,  James Hickman   Co-Founder, Schiff Sovereign LLC

 https://www.schiffsovereign.com/trends/3000-gold-is-not-the-end-of-this-story-152316/

Freedom Is Like Inflation: You Lose 2-3% Every Year

Freedom Is Like Inflation: You Lose 2-3% Every Year

Notes From the Field By James Hickman (Simon Black)  March 13, 2025

My grandfather was born on April 19, 1915 in a dirty, one-room shack in the town of Bonham, Texas. Given the era, they had no electricity and no running water. And the family considered themselves fortunate that both mother and baby survived childbirth.

Pretty much everyone in the area was a farm laborer; they worked long, hard days in the unforgiving Texas heat trying to beckon life from ungenerous soil. But it was a living-- one that my grandfather joined at an early age.

He was 14 years old-- considered a “man” by the standards of his time-- when the Great Depression struck.

Few people, including my grandfather, would have understood that the worst economic crisis in American history was a manmade virus cooked up in the laboratory of political incompetence. All he knew was that banks in his home town failed… and many of his neighbors lost their life savings overnight.

This led to a lifelong mistrust of the banking system-- not just for my grandfather, but for an entire generation.

Throughout his life he kept his savings in an old coffee can. It wasn’t a lockbox or combination safe. He didn’t even bother hiding it; my grandfather literally just stuffed bills and coins into a metal can under the kitchen sink. He didn’t worry much about security because everyone in town knew and trusted one another, and no one would dare violate another man’s home… let alone his coffee can.

The other thing he did was save. If there was one thing my grandfather hated, it was spending money. On anything. You name it.

Food? He grew it himself and fished at the nearby lake. Medical care? The man barely ever went to the doctor in his entire life. Insurance? He had no concept of what that even was. Recreation? No one had time for such trivialities.

So, he saved just about everything he earned, depositing his meager wages with a satisfying and encouraging ka-ching into the ‘Bank of the Coffee Can’ week after week.

Whenever the coffee can became overly full, he knew it was time to invest his savings into something more durable and long-lasting.

But I’m not talking about stocks. In fact, given that he lived through the Crash of 1929, my grandfather believed that only a reckless, crazy person would buy stocks. And this trauma was shared by much of his generation.

So instead, he emptied out the old coffee can and invested in the one thing that he truly understood: land, i.e. one of the realest of real assets.

He always knew, worst case, he could plant more food on his new land. And this security had far more value to him than any other asset.

Then the cycle would begin anew: work, save, work, save… until, eventually, the coffee can would fill up again. He’d then use that money to buy building material and then build a small house on the land. No construction crew, no contractors. Just his own two hands and some basic tools.

Once complete, he’d put the house up for rent-- I remember he typically charged by the week to coincide with the farm laborers’ weekly pay. And, again, everything was settled in cash… so the coffee can began to fill more quickly.

Soon there was enough money to build another small house. Then another. And another. This man was living a real-life version of the old board game Monopoly; the only thing he didn’t do was trade his houses out for hotels.

But he wasn’t unique. My grandfather was extremely typical of his generation: highly productive, self-reliant savers who worked hard and never expected anything for free.

In their value system, being unproductive was frowned upon. Vagrancy was a crime. If there were any jobs available, you were expected to have one, no matter what it was. If there were no jobs available, you were expected to be looking for one-- or figure out how to produce something of value on your own.

My grandmother was cut from the same cloth. And the two of them eventually had a pretty substantial real estate portfolio of rental homes.

One particular complex had about a dozen or so houses on it, and my grandmother was in charge of collecting all the rent. They built her a small office near the entrance of the property, and not being one to waste resources, my grandmother decided to open a beauty salon there.

Bear in mind, my grandmother never went to cosmetology school. She didn’t have a license. She didn’t pass through a myriad of state and local permitting inspectors. She just hung her shingle out one day and customers started showing up. And because she provided good service, the customers kept showing up.

This is the sort of thing you used to be able to do in America. The government didn’t smother its citizens with endless regulations; if you wanted to start a business, you started one. No one asked permission to produce.

This is an incredible contrast to the America of today. God help you if you want to start a restaurant in the State of California, where you’ll spend years in the permitting, licensing, and inspection process, only to have employees go on strike over Gaza while customers brazenly steal from you with legal impunity.

That may be an extreme example, but government regulation at the federal, state, and local levels continues to strangle businesses-- small and solo businesses in particular.

A few years ago, the Institute for Justice sampled 102 lower-income occupations in American and found a total of 2,749 license requirements across the fifty states, demanding hundreds of dollars in fees, exams, and an average 362 days of bureaucracy.

These are for vocations like tree-trimmer, hair-braider, fisherman, auctioneer, locksmith, upholsterer, florist, and even farm laborer.

(Neil Gorsuch, sitting US Supreme Court Justice, bemoans similar statistics in his excellent book Overruled, which I can’t recommend enough.)

But this didn’t happen overnight. From my grandparents’ era to today, the bureaucratic, administrative state crept in little by little.

The effect is much like inflation where you lose 2-3% of your purchasing power year after year. One year’s inflation is no big deal; it’s only after looking back 10 or 20 years can we see how expensive things have become.

I really appreciate the tremendous efforts by Elon Musk and the people at DOGE to cut government spending. It needs to happen-- responsible spending is critical to solving America’s $36+ trillion debt crisis.

But perhaps even more important is turning back the clock on regulations… and going back to an era where you didn’t need to ask permission to be productive.

To your freedom,  James Hickman

Co-Founder, Schiff Sovereign LLC

https://www.schiffsovereign.com/trends/freedom-is-like-inflation-you-lose-2-3-every-year-152295/