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/

Is the US Headed Toward Recession?

Is the US Headed Toward Recession? [Podcast]

Notes From the Field By James Hickman (Simon Black)  March 11, 2025

By the late 1920s, the US economy was booming and had advantages that most of the world did not yet enjoy.  Manufacturing in America was extremely competitive due to mass electrification powering factories. Farmers had traded out horses and mules for trucks and tractors.

US productivity was surging.

Global trade was still recovering from World War I, but there was enough sense at the League of Nations (the precursor to the United Nations) to campaign against trade barriers.

The final report from the World Economic Conference in 1927 concluded that “the time has come to put an end to tariffs. . .”

But America decided to move in the opposite direction.

Two politicians, Willis Hawley and Reed Smoot put forth a plan to impose steep tariffs that reached as high as 59.1% on some products.

The infamous Smoot-Hawley Tariff Act passed in 1930, and almost immediately, countries around the world imposed their own retaliatory tariffs against the US.

Global trade plummeted as a result, which became a major factor in prolonging an almost never-ending and extremely painful economic depression.

I don’t think another Great Depression is in the cards right now, but frankly all these threats of tariffs are starting to have an impact.

Stock market investors are realizing that a recession is clearly on the table, and that business and consumer sentiment across the board have taken a nose dive.

That could all rebound just as quickly as it has fallen, but the larger point is that tariffs will absolutely make the country, and the world for that matter, much worse off.

The key reason is that tariffs force the economy to operate below its maximum potential.

Think about it on an individual basis. Imagine if Tom Cruise were sacking groceries instead of making movies. I think most people would probably acknowledge that creating multi-billion dollar box office hits is a hard thing to do, and sacking groceries would be below his potential.

The same goes for a trained and experienced neurosurgeon— picking turnips is not the best use of his or her time.

The US economy is certainly capable of producing just about anything. But there’s no point in deliberately producing below your potential— i.e. taking scarce talent and resources away from more valuable more productive sectors, and instead focusing that energy to make socks and underwear.

If an economy consistently underachieves its potential, everyone is worse off as a result— regardless of whether that results in a near-term recession.

The US has the potential in small-scale nuclear reactors, and emerging technology in AI, automation, robotics, and high-performance computing to create a level of abundance and prosperity that is almost unimaginable. That advantage is specific to the United States and that reality could be just a few years away because most of that technology exists or is close.

And that’s what the US needs to get out of its $36 trillion debt problem— a productivity and innovation driven economic boom.

Tariffs throw cold water on the whole thing.

This is what we discuss in today’s podcast.

We also touch on:

• Recent stock market swings

• The valuation of stocks now, and historically

• Who is investing in the stock market today

• What could drive investors into bonds

• And more.

You can listen 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/is-the-us-headed-toward-recession-podcast-152224/

Can Tariffs Replace the Income Tax? We Did the Math

Can Tariffs Replace the Income Tax? We Did the Math

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

It was the dead of night on March 22, 1929 somewhere in the Gulf of Mexico near the port of New Orleans, and the Canadian schooner I’m Alone was waiting to offload its illegal rum.

Prohibition had been in effect in the United States for nearly a decade at that point, which meant that the production, sale, transport, and distribution of any “intoxicating liquors” carried severe criminal penalties.

But prohibition didn’t end alcohol consumption. Americans still imbibed in secret thanks to a vast network of speakeasies, bootleggers, rum-runners, and moonshine distilleries. The black market thrived

I’m Alone was one of the vessels that would ferry alcohol back-and-forth between the Caribbean and the United States. Ordinarily it would linger in international waters, just beyond the legal jurisdiction of US authorities, while smaller speedboats smuggled its cargo of illegal booze to the shore.

But on that fateful night in the spring of 1929, the US Coast Guard was feeling a little overzealous. Officials pursued I’m Alone into international waters and intercepted it.

I’m Alone’s captain refused to surrender, and a midnight chase ensued. The Coast Guard ended up shelling them with explosives, and the ship sank. One crew member drowned, and the rest were taken into custody.

The problem, of course, was that I'm Alone was a Canadian vessel in international waters. So the fact that it had been shelled and sunk by the United States Coast Guard sparked an international dispute between the US and Canada.

After years of diplomatic wrangling, an international tribunal ultimately ruled in favor of Canada, determining that the US had overstepped its legal authority. The case resulted in a financial settlement, with a sum paid to the Captain, as well as the drowned sailor’s widow.

Prohibition finally ended in 1933... but the damage had been done. Consumer demand for alcoholic beverages never went away, so all Prohibition really managed to do was create an extremely lucrative black market for booze... thus turning small-time bootleggers into powerful, nationwide crime syndicates.

(Many of the most infamous criminals of the early 20th century, like Al Capone, made vast fortunes in bootlegging, or even got their start in it.)

Such unintended consequences are inevitable any time a government imposes nationwide prohibition... or imposes some crazy tax policy or regulatory burden: people always figure out a way around it.

There are places all over the world that have extremely high import duties, and you can see the results.

For example, I lived in Uruguay long ago, and, at least at the time, the country had some of the highest import duties in the world for automobiles. I remember a friend told me that he had paid $100,000 for a generic Ford F150 that should have cost around $20,000 (it was back in 2008).

Yet there was a flourishing industry of guys who figured out how to game the system, and bring in cars from nearby countries like Brazil or Paraguay without having to pay the insane import duties on motor vehicles. People figured out a way to avoid the tax.

Then there is India, which has imposed very high import duties on a variety of goods— including gold. Smugglers there have gone as far as shoving gold into their rectums in order to avoid the tax... proving not only that people will always figure out a way, but they’ll resort to the most ridiculous means necessary.

Or look at Thailand, where drug trafficking can carry the death penalty— yet you can still buy pot and cocaine just about anywhere. The threat of consequences doesn’t matter: people will still skirt the rules.

I say this all because there is obviously a big movement in the US towards tariffs now. Somehow this word has become “beautiful”. And there seems to be an idea that the US is going to generate so much revenue from tariffs that it could even replace the income tax.

Fat chance. Let’s do the math on that...

Individual income tax is the largest source of federal revenue in the United States, bringing in $2.4 trillion in FY 2024 according to Treasury data.

Meanwhile, total imports of goods into the US in 2024 was $3.3 trillion.

This means that, in order for tariffs to generate enough revenue to replace the $2.4 trillion in income tax, the tariff rate would have to be 73% across the board (i.e. 73% x $3.3 trillion in imports = $2.4 trillion in revenue).

Let’s be honest— there’s no way people will accept 73% tariffs. Just like during Prohibition, the black market would once again thrive in the United States as bootleggers smuggle in illegal... you know, toilet paper and other boring household items.

So more likely than replacing the income tax, Americans should be prepared to pay for tariffs in addition to income taxes.

Let’s assume tariffs are only 25%, so the US manages to bring in an extra $825 billion in revenue. Well, that would certainly bring the budget deficit down to a manageable level... which is a good thing.

But it also means that the average American household would be paying an additional $6,000 per year in taxes— and one that would hit the middle class the hardest.

(This assumes full compliance with the tariffs, which is laughable. Again, people will find ways around it, as they always have.)

Of course, part of the stated goal is that the US economy will start manufacturing these products at home, therefore imports will fall and the tariffs will be pointless.

But this is also a terrible idea. There is such a thing as competitive advantage... of ‘best and highest use’. Why would anyone want to bring industries back to the US which can be done cheaper, and more efficiently elsewhere?

Does anyone seriously want Americans pulling levers in a sock factory, or bent over in the fields tending to their turnips?

The US has abundant natural resources and a productive economy, and forcing inefficiencies onto it through protectionist policies is the wrong move. The best and highest use for the US economy is to create the world’s most valuable technological innovations, not produce socks and underwear.

Now, it’s possible that automation, AI, and cheap (nuclear) power could make America a global manufacturing powerhouse again.

But this won’t happen through tariffs. It will happen through investment, innovation, and competitive advantage.

If politicians want to generate more tax revenue, the answer isn’t to slap tariffs on imports and create a labyrinth of regulations.

The solution is economic growth. And that means lower taxes, and more importantly, less regulation.

Tariffs are at best a distraction, and at worst harmful to the economy. And a growing economy is exactly what the US needs to reverse its decline.

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

https://www.schiffsovereign.com/trends/can-tariffs-replace-the-income-tax-we-did-the-math-152190/

China And Germany Are Leading The Next Round Of Global Inflation

China And Germany Are Leading The Next Round Of Global Inflation

Notes From the Field By James Hickman (Simon Black)  March 6, 2025

Between press conference bust ups, tariff announcements, peace deals, and cryptocurrency reserve proclamations, it has been a busy month and a half.

Despite all this, our global economic outlook remains relatively unchanged: we’re still anticipating a pretty serious bout of inflation around the world, and I’ll explain why.

Inflation isn’t hard to understand. We all see it when we go to the grocery store, fill up our cars, or pay for tuition, daycare, or medical services.

The pandemic was the perfect illustration of how this happens; governments worldwide locked people in their homes, halting the production of goods and services. Meanwhile, they borrowed and ‘printed’ trillions of dollars, flooding the economy with money.

The obvious result was inflation. More money was chasing fewer goods and services, so prices for just about everything increased, from stocks, crypto, and real estate to eggs and bacon.

We’ve long argued that this trend will continue. And while there was a brief respite, this cycle of debt and central bank money printing is poised to accelerate again.

Germany, for example, just announced roughly €500 billion in spending, almost all of which will be fueled by debt. And that figure appears to be just a modest down payment in their overall spending plan. They want the rest of Europe to join them in this debt binge as well.

Bear in mind, Germany is supposed to be the ‘responsible’ country that lives within its means and spends conservatively. Yet practically overnight, they have adopted a ‘whatever it takes’ mentality, and are working to eliminate legal restrictions on government expenditures so that they can spend even more.

Not to be outdone, the Chinese Communist Party earlier this week announced its own spending bonanza designed to prop up the economy and increase consumer spending.

This is all literally just from the past few days. And the implications cannot be overstated. Similar to what we saw during the pandemic, the flood of new money into the global economy will be inflationary.

We also don’t think it’s going to stop with Germany or China. Most Western nations are poised to spend beyond their means... almost as if locked in a deficit-spending ‘arms race’. So, again, our inflationary outlook has not changed.

This is why we continue to view real assets as a safe haven.

It probably also helps that, in general, real assets are at a remarkably cheap spot in their market cycle, especially when compared to financial assets.

In fact, the last time real assets (commodities specifically) were this cheap relative to stocks was in 1999 at the peak of the dot-com bubble. Commodities and related industries surged 2,000% in the years that followed, dwarfing the returns of the Dow Jones and S&P 500.

We’ve paid very special attention to real asset businesses which are trading at laughably cheap valuations even while gold is near its all time high.

Here’s a great example— last month in our highest-level investment research service, The 4th Pillar, we highlighted a precious metals business operating in one of the worlds best jurisdictions. It has a pristine balance sheet and is quite profitable, yet its stock price trades at a mere 3 times forward earnings.

In our most recent edition, which will be sent to 4th Pillar subscribers tomorrow, is another precious metals business that has been completely overlooked by investors. It too is profitable and has a fantastic balance sheet, yet also trades at a multiple of less than 3.

It’s extremely uncommon to see such healthy, well-managed businesses have enormous growth potential, yet simultaneously be so inexpensive. As a comparison, many popular tech companies have Price/Earnings multiples in excess of 30 or 40.

It’s crazy when you think about it; gold has gone through the roof, yet extremely profitable gold-related companies have seen their share prices languish.

In other words, the share prices of these precious metals companies don’t reflect the fact that gold is already near its all-time high... and they certainly don’t reflect the additional upside potential that gold could continue to surge in the coming years as foreign central banks continue to trade part of their US dollar reserves for gold.

Our investment research service, the 4th Pillar, focuses very heavily on these deeply undervalued real asset businesses: profitable companies with fantastic balance sheets and serious growth prospects that are trading at ridiculous discounts right now.

We don’t believe this anomaly is going to last, i.e. gold surging to fresh, all-time highs, yet gold company share prices languishing.

For the past few weeks we’ve been offering an annual subscription to the 4th Pillar at a steep 50% discount as well. But this too won’t last. In fact we’ll be closing out our special, promotional offer in the next couple of days.

So if you’d like to learn more about the 4th Pillar investment research— and these deeply undervalued real asset businesses, click here for more information while the promotional offer lasts.

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

https://www.schiffsovereign.com/trends/china-and-germany-are-leading-the-next-round-of-global-inflation-152170/

The Controlled Demolition of the US Dollar’s Reserve Status

The Controlled Demolition of the US Dollar’s Reserve Status [Podcast]

Notes From the Field By James Hickman (Simon Black) March 5, 2025

Even during the darkest moments of the Biden administration—the shameful withdrawal from Afghanistan, 9% inflation, bureaucrats hell-bent on destroying the economy—I still said America’s problems were fixable.

But I didn’t see any hope in the previous administration or a prospective Kamala administration to fix things and only expected them to grow worse.

We’re now a month and a half into a new administration, and it’s fair to say some things are going very well.  There are others that, depending on your view, are not.

One big concern I have is that no one is interested in reforming Social Security—a massive entitlement program whose own trustees say will run out of money over the next several years. This is a gargantuan financial crisis in the making, a ticking time bomb that no one wants to touch.

Depending on your priorities, foreign relations are also on the list of concerns.

If you're more isolationist, you might think that the unwinding of relationships and alliances is no big deal—that the world needs America more than America needs the world.

But there are consequences to that...

$28 trillion of US government debt is coming due over the next four years, and a lot of that is owned by foreign governments and central banks.

The Treasury Department needs these players to go along and reinvest—not only in America but specifically in US government bonds.

And if relationships are too fractured, they might not be willing to do that.

That could create an enormous fiscal crisis that would most likely result in a lot of inflation.

It also puts into question the US dollar’s status as the global reserve currency, which it has enjoyed for more than 80 years.

The reality, however, is that while the short-term consequences of losing reserve status could be profound, in the long term, reserve currency status is not a requirement for economic prosperity.

There are plenty of countries around the world—Taiwan, Singapore, Switzerland, etc.—that are prosperous nations and do not have the global reserve currency.

In some respects, reserve status is a huge benefit, but also a bit of a handcuff.

In today’s podcast episode, we explore what we call the “controlled demolition” of America’s reserve status—a way for America to potentially remain powerful yet lose that reserve status.

That could be the outcome over the next four years.

And today, we discuss the paths and consequences of that scenario.

Spoiler Alert: It’s probably good for gold, and possibly crypto too.

Click here to listen in to today’s episode.

(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/the-controlled-demolition-of-the-us-dollars-reserve-status-podcast-152164/

The Latest Bad Premise Could Be a Disaster for the US Dollar

The Latest Bad Premise Could Be a Disaster for the US Dollar

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

On October 20, 2022, Liz Truss resigned as UK prime minister after just 44 days in office—the shortest tenure in British history.

She was brought down not by a no-confidence vote or a party coup, but by a full-scale bond market rebellion.

Her government’s proposed mini-budget, featuring sweeping tax cuts, triggered a historic sell-off in UK government bonds (gilts), sending yields soaring and the pound crashing.

As panic spread, the Bank of England was forced to intervene to prevent a financial meltdown, and with markets, party members, and the public losing faith, Truss’s premiership collapsed.

Such is the fate of governments when they don’t control the global reserve currency.

The US government should heed this warning.

But it seems more likely to barrel ahead with the false premise: America will always remain THE dominant global superpower that can do whatever it wants.

That’s the subject of today’s podcast.

We discuss these types of false premises— Iraq has weapons of mass destruction, it will take just two weeks to stop the spread of COVID— mistakes that over and over cost the US trillions of dollars.

And nowhere is this more egregious today than in the idea that the US dollar will remain the reserve currency, whatever the US does to push other countries away.

We talk about how a series of laws has escalated the weaponization of the US dollar, starting with the PATRIOT Act in 2001, then FATCA in 2010, and the freezing of Russia’s US assets in 2022.

Now, the Mar-A-Lago Accord is being floated, which includes an idea to strong-arm US allies into swapping their US Treasuries for 100-year, non-tradeable, zero-coupon bonds.

After all, the argument goes, the US provides defense for much of the world, it is only right that other nations should pay for it in some way.

But we discuss why this is such a bad idea, and how it will only push countries into finding alternatives for the US dollar, robbing the US of its power to influence global affairs with the currency, and stripping the US dollar of much of its demand, and therefore value.

You can listen to the full podcast 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/the-latest-bad-premise-could-be-a-disaster-for-the-us-dollar-podcast-152145/