This Trifecta of Market Declines is Rare… And Not Good

This Trifecta of Market Declines is Rare… And Not Good

Notes From the Field By James Hickman (Simon Black)  April 30, 2025

 In today’s podcast, we explore the rare phenomenon of simultaneous declines in the stock market, bond market, and currency market—a powerful signal of capital flight out of the US.

 We talk about when and where this has happened before, and why the Federal Reserve’s diminishing control over interest rates won’t fix it.

 We also discuss what higher rates mean for the commercial real estate market, and how that reverberates through the banking system.

 And we answer the question: is gold overbought, and inching towards a correction?

 The podcast also covers:

• Why gold, not Bitcoin, remains the ultimate safe haven for central banks.

• Why the US dollar's dominance is fading—and what comes next.

• The case for gold stocks over physical gold in today’s environment.

Give it a listen here.

CLICK HERE to listen to today’s podcast.

(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/this-trifecta-of-market-declines-is-rare-and-not-good-152715/?inf_contact_key=9208cbe90b3b1fba0e934d8d0d4741c056374244ed3079802af78ca168e4c2a0

Bizarrely, Gold Is The Opposite Of The Bitcoin Effect Right Now

Bizarrely, Gold Is The Opposite Of The Bitcoin Effect Right Now

Notes From the Field By James Hickman (Simon Black)  April 28, 2025

You’ve probably heard the story.

As the legend goes, on a late-summer morning in 1929, Joseph Kennedy — patriarch of the famous Kennedy family — was headed into his office in downtown New York City. As he sat for a quick shoe shine, the young boy buffing his shoes, barely a teenager, eagerly offered him stock tips.

 Kennedy listened politely, but inside, he felt a jolt of alarm.

Supposedly he rushed to his office, dumped his entire stock portfolio, and moved heavily into cash. And just weeks later the stock market collapsed.

 There’s a good chance this story isn’t true; I’ve often heard it told with Sir John Templeton in place of Joe Kennedy... and when urban legends can’t even get their protagonists straight, that’s usually a sign of fiction.

 Curiously, however, a similar thing actually happened to me.

It was March 2009— six months after the Global Financial Crisis kicked off that wiped 50% off the S&P 500.

 I was living in Punta del Este, Uruguay at the time and was coincidentally getting my shoes shined before heading to the airport for a trip to Asia.

 The shoe shiner, an elderly Uruguayan man, asked me what I did for a living. I mentioned something about finance, at which point he cautioned me to avoid the stock market.

 At that point the S&P was at its crisis-era low... and would go on to nearly 10x over the next 16 years.

 Another story that is true is from August 1979: Businessweek magazine famously declared "The Death of Equities," capturing the widespread view that stocks (which had suffered in the 1970s) would continue to languish.

Yet the stock market was just about to unleash a multi-decade bull run.

 In April 2019, the same Businessweek ran a cover asking, "Is Inflation Dead?", again capturing the popular idea that there would never be inflation again. That turned out to be 100% incorrect.

Then there was the famous Bitcoin craze in November 2017: families across America spent their Thanksgiving holidays opening up Coinbase accounts and bidding up the price of Bitcoin to its (then) all-time high. Crypto subsequently entered a multi-year bear market...

Anytime I see popular bandwagons, I become nervous. And I’m starting to see some signs of that with gold.

 One glaring signal is that Costco— which sells gold to its customers— sold out its most recent inventory of American Eagle Gold Coins in less than four days. Gold demand is surging among retail investors.

Dealers are reporting crazy volumes. The media is talking about gold daily now, whereas in the past they used to go weeks or months without a mention of gold.

 The Wall Street Journal even ran an article this past weekend entitled “How to buy gold”.

 Big investment bank analysts who, heretofore had ignored gold or been extremely bearish, are suddenly its biggest champions. Even the notorious Goldman Sachs is now projecting nearly $4,000 gold this year.

 And only a handful of analysts are bearish.

Look, we’ve been talking about gold for years... and in particular since 2023 when it became obvious that there were long-term catalysts.

It’s pretty easy to understand: central banks around the world are trading in their US dollars for gold, simply because they don’t have confidence that the dollar will last as the global reserve currency.

 And central banks don’t have a lot of options; there are only so many non-dollar asset classes that can absorb hundreds of billions of dollars worth of capital flows. Gold is one of the most convenient.

I’ve explained before that, because of these capital flow trends and catalysts, we could easily see $5,000 or even $10,000 gold over the coming years.

 But at the same time, the trend line for the gold price has been incredibly steep ever since its low in 2022. And, again, there are now signs that a retail gold mania may be forming.

I’m not saying that gold is too expensive or that it’s time to sell. These short-term market trends are extremely difficult to predict, and I tend to ignore them.

 Instead, I focus on the long-term big picture. And that’s a lot easier to see: the US fiscal situation is in major decline. The government is doing very little about it. And the rest of the world is already diversifying away from the dollar.

All of these trends are good for gold.

 Who knows what investors will do over the next few months? But over the next five years, you can make a very strong case that central banks will continue to buy gold and send the price higher.

 At the same time, I recognize that it’s difficult for some people to buy an asset when it’s at/near its all-time high... especially when it may suffer a short-term correction.

 This is why we’ve been writing about an alternative to gold; because, while gold is near its all-time high, many gold companies are still undervalued relative to gold itself.

 I’m talking about really solid, profitable gold miners trading at less than TWO times forward earnings. It’s ridiculous.

 In a way it’s the opposite of the crypto phenomenon with Microstrategy (MSTR)— the company which primarily owns and holds Bitcoin.

 Microstrategy (technically now called “Strategy”) owns 553,555 Bitcoin worth $52 billion. That’s pretty much their biggest (and nearly only) asset.

 Yet the MSTR’s market cap is $92 billion.

 In other words, the Bitcoin-related company is worth nearly double the amount of Bitcoin it holds. This makes no sense.

 With gold, it’s the opposite. Gold is near its all-time highs... but the gold-related companies are cheap and undervalued.

 Some investors are starting to notice— for example, multiple precious metals companies we have published in our investment research service have risen by 40-60%.

 One has more than doubled in price... yet is still trading at a forward multiple of just 2x.

 So, gold is bizarrely the opposite of the Bitcoin effect with Microstrategy: gold is at a record high, but gold companies are cheap. I’ll say it again— this is not going to last 

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

 https://www.schiffsovereign.com/trends/bizarrely-gold-is-the-opposite-of-the-bitcoin-effect-right-now-152700/?inf_contact_key=d4ae7d46f485af16ae3e89540a8231548dcae2ba3297e07f93219ba341147496

America’s “Suez Moment” Has Arrived

America’s “Suez Moment” Has Arrived

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

Don Edgar considered himself extremely lucky.

It was early in the morning on November 6, 1956, and the World War II veteran turned journalist for Britain’s Daily Express was one of just two reporters invited to witness Britain’s invasion of Egypt.

Standing on the bridge of a British warship, Edgar wrote that it was “the most impressive military operation the British had put on for many a year, with parachutists, marine commandos, tanks, aircraft, and a naval bombardment.”

Naturally he would say so. Edgar was British.

The rest of the world, however, was not terribly impressed. And the United Nations-- along with the US, Canada, Australia, and more, raced to condemn Great Britain for its aggression.

Britain naturally felt justified. Egypt had recently seized the Suez Canal-- one of the most important waterways in the world linking the Mediterranean and the Red Sea.

For Britain, the Suez Canal was a critical transport route for Saudi oil, not to mention a major asset; the British government had purchased a 44% stake in the canal back in the 1870s for a mere 4 million pounds, and the annual dividend soon exceeded their entire purchase price.

So, when Egyptian President Gamal Nasser nationalized the canal in July 1956, the British weren’t willing to take that lying down. To them it felt like theft.

Prime Minister Anthony Eden called it “piracy”, and he was willing to go to war to take the canal back.

Unfortunately for Eden, he underestimated the Egyptians’ resolve to fight.

Nasser responded by blowing up dozens of transport and cargo ships, effectively clogging up the canal and rendering it useless.

Eden also didn’t count on the immense global backlash… and not just diplomatically.

It was bad enough that pretty much every country on earth, from the United States to the Soviet Union, joined together in denouncing the invasion.

Britain was also severely punished by financial markets. Foreign capital fled the country. The British pound plummeted. Both the stock market and the bond market crashed.

It was absolutely brutal. Britain’s main stock index fell 170 points, roughly 8% in the span of ten days. Bond prices fell by 15% and bond yields surged as a result.

And the British government had to burn through roughly 15% of its total foreign reserves ($279 million at the time) just to keep its economy afloat.

Britain simply didn’t have the economic resources to withstand such intense financial pressure-- much of which was inflicted by the United States. So, the Brits quickly backed down and accepted the ceasefire terms dictated by the UN.

What started as an almost patriotic mission to reclaim British patrimony ended in a humiliating withdrawal-- and one that left no doubt in anyone’s mind that Britain was no longer a major superpower.

Financial markets do crash from time to time, often in reaction to government policy or some exogenous event. But it’s extremely unusual to have the trifecta, i.e. a major decline in the stock, bond, AND currency markets, simultaneously.

For example, if a government announces a major tax increase, then most likely the stock market will suffer a sudden decline. Higher taxes are bad for business, and valuations will take a hit.

But higher taxes would make bonds a more attractive investment (since the additional tax revenue makes the government more creditworthy).

So, stocks would fall, yet bonds would benefit.

As another example, slashing interest rates would typically be perceived as good for business… so stocks would rise. But the reduced rates (which may invite higher inflation) could be perceived as bad for the currency… so the dollar might drop as a result.

There are always trade-offs, and capital tends to move in/out of various asset classes.

But again, it’s extremely unusual for all of these assets to decline, so dramatically, at the same time. And it’s usually a pretty clear sign that capital is fleeing your country, i.e. foreign investors are pulling a lot of money out, quickly.

Usually if this freak occurrence does take place, it happens to some little banana republic. Zimbabwe and Venezuela come to mind.

But for a wealthy, developed country to suffer such financial humiliation is extremely rare… and signals that something has gone terribly wrong.

Again, this happened to Britain during the Suez Crisis. It also happened to Japan after their big crash in the 1980s.

Even the US was humbled in 1971 when the dollar was taken off the gold standard; the Dow Jones Industrial Average fell 7% that August, the bond market fell (i.e. bond yields rose by more than 100 basis points), and the dollar lost 15% against other major currencies.

The US was able to recover back in the 70s, however, because it managed to maintain its position as the global reserve currency-- and even still, it took a decade of stagflation before they managed to right the ship.

This month we witnessed the same pattern. After the Liberation Day nonsense, the US stock, bond, and currency markets all crashed (and gold surged to $3500 as a result). Substantial foreign pressure mounted.

And, at least for the moment, it appears that the US government is capitulating; just like Britain in 1956, the US government lacks the financial sturdiness to withstand the pressure.

Also, just like Britain in 1956, this may be the moment that future historians mark as the end to US global primacy.

It seems naive to think that the rest of the world will simply move on and forget about Liberation Day. Most likely this fiasco will accelerate the US dollar being displaced as the world’s dominant reserve currency.

No one knows yet what that new system will look like. And it’s because of the “I don’t knows” that gold surged to a peak of $3500.

Central banks have been the key driver of that trend, because, while they don’t know what the next reserve currency will be, they do know that they’ll be able to trade for it with gold.

I still believe this long-term trend will hold, i.e. central banks will continue to trade their US dollar reserves for gold.

But at the moment, gold is looking a bit overbought; its surge in price has been nearly a one-way street, and I wouldn’t be surprised if there were a short-term correction.

On that note, it’s very difficult to find anyone today who is bearish on gold… and when everyone has jumped on the same bandwagon, I start getting a bit nervous.

Fortunately, there are still a number of absurdly cheap gold companies, like mining, service, and streaming businesses, that are trading at ridiculously low multiples.

We’ll talk about this more next week. 

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

https://www.schiffsovereign.com/trends/americas-suez-moment-has-arrived-152688/?inf_contact_key=c5773ac3508d5deab6dbc79edbe13d30b51161ba063939a3213f94f46454e7e9

So… Is It Over? And The Surprising Player That Is Holding The Cards

So… Is It Over? And The Surprising Player That Is Holding The Cards

Notes From the Field By James Hickman (Simon Black)  April 23, 2025

Franklin Roosevelt pressed the red emergency button to stop the elevator on the way down to his private dining room. The King of Saudi Arabia was waiting for him, but the President wanted to smoke a couple of cigarettes first.

 It was 11:30 in the morning on Valentine’s Day, 1945. World War II was nearing its end, and Roosevelt had just come from the famous Yalta Conference with Winston Churchill and Joseph Stalin to discuss what post-war Europe would look like.

 But on the way back home, Roosevelt went out of his way to meet with the Saudis. Legendary amounts of oil had been discovered in the Arabian desert a few years before and knew that such vast energy reserves would be strategically important to the United States after the war.

 The problem was that Roosevelt was on death’s door at that point. His doctors had urged him not to go, but the President overruled them, sensing that the trip would solidify American interests.

 He was right-- it was a critically important trip. But the doctors were right too-- it was obvious the trip had taken its toll, and a senior aide described FDR as “helpless in fatigue”.

 The quick smoke break on his way to the lunch meeting was Roosevelt’s quick moment to relax, gather his wits, and put his game face on before taking on King Abdulaziz.

 Apparently, the cigarettes did the trick, because Roosevelt was able to summon enough strength to build great rapport with the King.

 As US Marine Colonel William Eddy (who was present at the meeting) later described, “the King and the President got along famously together” and became fast friends.

 Roosevelt and Abdulaziz discovered they were the same age, both deeply interested in agriculture, and even shared similar physical handicaps.

 In fact, Roosevelt gave one of his own wheelchairs to the King as a goodwill gesture, which Abdulaziz later recalled was “my most precious possession [from] my great and good friend President Roosevelt.”

President Roosevelt with King Ibn Saud aboard USS Quincy, 14 February 1945. Naval History & Heritage Command, Public domain, via Wikimedia Commons.

Roosevelt died less than two months later. But he had planted the seeds of a relationship with Saudi Arabia that soon became very important… and eventually critical to the United States.

 In the 1940s and 1950s, the US economy grew leaps and bounds and had an insatiable appetite for energy; Saudi oil played a key role in fueling that growth, and both nations prospered from the relationship.

 Their amity was put to the test in the 1970s when the US dollar was taken off the gold standard. World leaders revolted, and the dollar’s standing as the global reserve currency could have ended very quickly.

 But Saudi Arabia stuck with the dollar. And in 1974, the two countries inked a new economic cooperation deal: the US would provide security and technology, and the Saudis agreed to maintain their currency peg to the dollar… which ultimately meant that oil would still be sold exclusively in US dollars.

 If the Saudis had gone the other way and abandoned the dollar, America could have lost its global financial dominance by the end of the 1970s.

 Instead, Saudi Arabia’s commitment encouraged (and realistically forced) the rest of the world to continue to hold US dollars, even if just for the sole purpose of buying oil from OPEC.

 As a result, the US dollar has remained the global reserve currency through this day-- which is the ONLY reason why America can have a $36+ trillion national debt or run multi-trillion-dollar deficits each year… and yet the world keeps buying US government bonds.

 Saudi Arabia could now be poised for another big decision that will have a major impact on America’s future dominance.

 But first-- as of today, it appears that the Trump administration may be climbing down from hard-nosed positions they had adopted as recently as Monday.

 Suddenly now the President doesn’t want to fire Fed Chairman Jerome Powell. Suddenly the gazillion percent tariffs on China are “too high”. Suddenly Elon thinks that he is spending too much time at DOGE.

 Granted, all of this could change by the time I finish writing this article. Such are the times in which we live.  However, it seems that the administration is feeling the pressure from the bond market rout, the stock market rout, the currency market rout.

 It’s all very Truss-ian, i.e. reminiscent of 2022 when then-British PM Liz Truss had to resign after domestic financial markets crashed and investors vomited all over her economic plan.

 Obviously, the guys in the US aren’t going to resign. But it appears that they’re capitulating to investors’ demands: “Go back to the way things were in March… keep hitting the woke universities, keep policing the border, keep doing all the other stuff. Just leave trade alone.”

 So, is the economic war already over? Who knows. But even if they really are backing down, it remains to be seen if the rest of the world will simply forget about the past month and move on.

 How much trust and confidence will other nations continue to have in the dollar, and in the United States? Already, over the past several years, there has been serious effort from the Usual Suspects (i.e. Russia, China, Iran, etc.) to de-dollarize.

 Some of their efforts have been laughable. Others have made great progress.

And Saudi Arabia may once again be the key swing vote.

 Saudi’s Crown Prince, Mohammed bin Salman (MBS), knows his kingdom’s oil will eventually run out, and he’s desperately seeking to build a real economy to replace it.

 On one hand, Saudi Arabia has a longstanding relationship with the US-- though one that has clearly soured over the years. On the other hand, he has the Chinese offering all sorts of cash and prizes.

 China knows that the petrodollar, i.e. selling oil in US dollars, is a key driver for global US dollar demand… which props up the US government and supports America’s gargantuan national debt.

 Chipping away at that dollar demand will really hurt the United States. China wants this to happen. And they’ve been pushing Saudi Arabia to start selling oil in Chinese yuan, i.e. petroyuan.

 Bottom line, MBS is going to have to make a decision about whether partnership with China or the US is better for his kingdom over the next several decades.

 If he sticks with the US and rejects Chinese overtures, it will go a long way in keeping other countries in line, eliminating doubts about America, and maintaining the dollar as the reserve currency-- for now.

 On the other hand, if he decides that China is the better option and starts selling oil in yuan, it could be crippling for the US economy.

 Foreigners holding trillions of US dollar assets would no longer need to maintain such vast dollar reserves. The dollar would plummet as a result, US government bond yields would skyrocket, and inflation would surge.

 Saudi Arabia is holding a lot of cards right now regarding the fate of the dollar… which is a key reason why Donald Trump himself is heading there in a few weeks.

 Make no mistake-- this is a monumental story in the making.

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

https://www.schiffsovereign.com/trends/so-is-it-over-and-the-surprising-player-that-is-holding-the-cards-152673/?inf_contact_key=1a1395d576eb132fe2337702a4b5f5e6b51161ba063939a3213f94f46454e7e9

China Has Officially Deployed Its Digital Arsenal

China Has Officially Deployed Its Digital Arsenal

Notes From the Field By James Hickman (Simon Black)  April 22, 2025

By 1970, US commanders in Vietnam were optimistic that they had “functionally severed” North Vietnamese forces.   The generals were particularly boastful about their taking out the Ho Chi Minh Trail—a sprawling network of roads, footpaths, and tunnels through Laos and Cambodia that let North Vietnamese forces move troops and supplies into South Vietnam, bypassing the fortified border.

 After bombing it into oblivion, a senior US Air Force general declared, “Gentlemen, what we have here is the end of North Vietnam as a viable fighting power.”

Unfortunately, the ‘experts’ were wrong again.

 Only weeks after declaring victory, US forces found themselves locked in a brutal and unexpected battle at Fire Support Base Ripcord— a base the US was constructing as a launchpad for future operations.

The North Vietnamese brought in artillery, mortars, rockets, anti-aircraft weapons, and wave after wave of ground troops. All of that firepower, manpower, and ammunition moved hundreds of miles through dense jungle terrain, across borders, and into South Vietnam—right under the nose of US airpower that had supposedly rendered the the Ho Chi Minh Trail defunct.

 Their ability to move silently helped the Viet Cong guerrillas wage a shadow war of ambushes, sabotage, and infiltration—blending into the population by day and striking by night.

 The Viet Cong’s psychological victories eroded US public support. Morale among American troops declined, and political dissent at home surged.

 US troops at Fire Support Base Ripcord held out for nearly a month under constant bombardment and ground assaults. But by late July, with casualties mounting, the last Americans were airlifted out under enemy fire.

 It was a scene that foreshadowed what would play out in Saigon just a few years later as the US abandoned the war.

 And it was through the use of these guerrilla tactics— Distract. Disrupt. Discourage. Dismay.— that a substantially weaker force was able to defeat a much more powerful army.

China is starting to do the same thing in this economic war with the United States. And they’re targeting America’s youth.

For example, TikTok’s ‘Blackout Challenge’ encourages the app’s young users to asphyxiate themselves until they lose consciousness, which led to the death of a 13-year old California boy in February of this year.

A 15-year old in Oklahoma died from the ‘Benadryl Challenge’. Concussions and other serious injuries have resulted from the ‘Skullbreaker Challenge’ where kids ‘prank’ others by kicking their legs out from under them as they jump.

Curiously, Chinese teens haven’t succumbed to the same contests. Instead, viral math problems challenging users' problem-solving skills regularly trend on Douyin, China’s version of TikTok.

One popular influencer is a 12-year-old girl who has gone viral for teaching college-level math, explaining complex problems in a simplified manner.

 Last week, we got another look at how TikTok figures into China’s guerrilla economic warfare arsenal.

 Chinese influencers began pointing American consumers toward a new app: DHgate— a Beijing-based e-commerce platform that sells items directly from the Chinese factories which manufacture brand-name goods.

Their pitch: why pay $120 for name-brand yoga pants when the same exact item, just without a brand label, can be yours for $15?

Within days, DHgate exploded in popularity—climbing to the #2 spot on Apple’s App Store in the US, just behind Temu (another Chinese-owned e-commerce app) and ahead of ChatGPT.

 Yoga pants, handbags, sunglasses, sneakers, you name it—products stripped of their logos and exposed for what they are: glorified drop-shipped Chinese goods with a 700% markup.

 Of course, the sudden surge in popularity wasn’t organic; it was orchestrated.

 Chinese influencers produced videos explaining how major Western brands were bilking their consumers and outsourcing production to these very same factories.

 TikTok made sure those videos went viral in the US.

 Even 145% tariffs would only push the price of $15 yoga pants up to $36.75— still much less expensive than buying from Lululemon.

 China’s guerrilla strategy is clear: They want US consumers to question who is the enemy— the ones selling you affordable clothing, or the ones increasing your cost of living?

 This drives a wedge between consumers and the US government— why would my government prevent me from buying affordable goods? Tariffs could quickly become as unpopular among Americans as the Vietnam War was in the 1960s.

 China is weaponizing TikTok to turn US consumers against the government... and against major US brands.

 They pulled back the curtain on how the economy really makes the sausage—exposing that a $2,000 handbag comes from the same factory, made of the same materials, with the same quality stitching as the $40 knockoff. Americans are paying thousands for a label, not for a superior product.

 You can bet that all the data that has been gathered from TikTok has been sent back to the mothership to be analyzed and weaponized. China clearly understands how to use that information for marketing and messaging in ways that could give them a huge edge in the escalating economic warfare.

 American consumers may quickly feel that China is not the enemy robbing them blind; instead, they may view China as the ones offering a better deal.

 The US government, on the other hand, suddenly looks like the bad guy for keeping prices high and products out of reach.

 And this is just the beginning.

 What happens when a billion-dollar marketing machine—fueled by foreign data, run through a CCP-influenced algorithm, and distributed on the most addictive app in the world—starts targeting not just consumer wallets, but the foundations of America’s consumer-centric economy?

 An erosion of trust in American brands. A growing resentment toward US trade policy. A subtle, creeping, deliberate narrative that China gives you value, while your own government gives you inflation.

 This is now the guerrilla phase of the economic war.

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

https://www.schiffsovereign.com/trends/china-has-officially-deployed-its-digital-arsenal-152661/?inf_contact_key=a69ecd8fedfc404ab33b8f59fe470a34f378a691fa2de2618ccb1c27deca348f

Preparing For The Escalation That’s Likely To Come

Preparing For The Escalation That’s Likely To Come

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

There’s rumors floating around alleging that top secret plans from the Chinese Communist Party have been leaked, indicating that China’s President Xi Jinping views this conflict with the US as the opening to a complete and total war.

Personally I’m skeptical if these leaked documents exist, and if they are legitimate. I don't think anyone has any way to know.

But I will reiterate my view that, while I don’t believe war is imminent or certain, it’s clear that the US and China are closer to conflict now than they have been since at least the 1960s when China participated in the Vietnam War.

It’s not hard to understand why. The two largest economic powers in the world are deliberately trying to hurt one another. And history is full of examples of economic wars which escalate into much larger conflict.

We can certainly hope that cooler heads prevail. But as we used to say in the military, hope is not a course of action... and it’s imperative to acknowledge that this major risk exists.

How might things escalate?

First on the list is the very real and immediate risk of a cyberattack from China.

In fact that’s already happening.

Remember SolarWinds— the massive cyberattack in 2020 where state-sponsored foreign hackers compromised a widely used IT management platform to infiltrate US government agencies and major corporations?

That single attack gave the CCP access to countless US networks.

More recently, a top Chinese official admitted Beijing’s responsibility for the Volt Typhoon cyberattacks targeting US infrastructure, in a closed-door December 2024 meeting.

In 2015, Chinese hackers breached the US Office of Personnel Management and stole sensitive data on over 22 million federal employees, including security clearance files and fingerprints. They were inside the systems for months before they were detected.

And just this week, major US banks including JPMorgan raised the alarm after discovering the email system of the Office of the Comptroller of the Currency (OCC)— a US banking regulator— had been hacked, potentially to steal credentials that gain further access to systems and information.

It doesn’t really matter which of these can be directly linked to the CCP. Russian hackers, North Korean infiltrators, Chinese non-state entities— they are all in it together.

And the fact that China seems to leave everything intact after their attacks, without damaging or disrupting systems, is actually the scariest part.

We’re talking sleeper viruses. Malware that’s already inside the system.

And the target? Some of the most critical infrastructure in the country. The power grid. Water systems. Financial institutions. These aren’t exactly hardened digital fortresses. In fact, many of these systems are laughably insecure.

The US energy sector in particular still operates on shockingly low-tech infrastructure with outdated code. Same story with large parts of our financial system.

I’ve written before about how SWIFT—the nerve center of global financial transfers—was recently running outdated Windows (version 7!!) operating systems.

Bottom line, Chinese hackers and malware are embedded in vulnerable US systems. They have access. They have credentials. Let’s not be naive about this.

Imagine waking up one morning and your bank app doesn’t load. Your credit card doesn’t work. You can’t send a wire, can’t make payroll, can’t even pay your rent. Maybe you don’t even have electricity, or clean running water.

A Plan B for this scenario has never been more important.

The first step is easy— buy a secure home safe, and keep enough cash on hand to pay for a month or two of necessities.

Add some precious metals which allow you to maintain physical custody of some savings, with no third party in between you and your money. Have gold and silver coins and bars in a variety of weights so you could spend them in an emergency.

Holding some cryptocurrency isn’t a bad idea either— offline, on a hardware wallet that can also go in the safe. Again, this takes some of your savings out of the vulnerable financial system, and allows you to maintain physical custody of your funds.

Here’s another key point aside from money: China manufactures over 40% of the world's active pharmaceutical ingredients— the chemical compounds which make up drugs— and up to 95% of particular compounds, such as crucial ingredients in the antibiotic penicillin.

So even if the final product isn't labeled "Made in China," the underlying ingredients may still originate from Chinese manufacturers.

That’s a significant role in the global pharma supply chain that could cause massive disruptions if they chose to weaponize it. 

So if you take regular medication, make sure to keep extra on hand.

Having a power generator is another good backup plan, whether it runs on propane or gasoline, or solar panels and batteries. The same goes for extra water storage.

Again, I’m not saying that there’s some imminent danger. But we shouldn’t ignore the risk. And the point is that there’s no downside to taking sensible precautions.

That’s the basic premise of a Plan B: identify the biggest threats against your safety and prosperity, and take reasonable steps now that give you confidence in the face of uncertainty.

These are all fairly easy steps to take that give us options to respond to whatever happens, since none of us know exactly how any of this will play out.

Soon, we’ll discuss additional Plan B strategies that give you even more dexterity in the event of prolonged system disruptions, and equally disruptive potential emergency responses from the US government.

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

https://www.schiffsovereign.com/trends/preparing-for-the-escalation-thats-likely-to-come-152552/?inf_contact_key=6f0cbd6941df8d38cfa6f0a90e96eddd0c973b8936282bcfa17ad90af1aa6cc5

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