The Fed Just Became the World’s #1 Gold Salesman..

The Fed Just Became the World’s #1 Gold Salesman...

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

To the surprise of absolutely no one, the Federal Reserve announced its decision yesterday to cut interest rates… and kept the door open to further rate cuts in the future.

The funny thing is that we’ll never truly know why.

Sure, it’s possible that Fed officials honestly felt that the economy needs lower rates (despite obviously persistent inflation risks).

Of course, it’s also possible that Fed Chairman Jerome Powell finally caved to all the insults and pressure from the President.

Or that the rest of the FOMC members looked at what’s happening with Lisa Cook and submitted to inevitability, fearing that they too would be investigated for mortgage fraud (or some other criminal matter) if they didn’t cut rates.

Again, we may never know their real motivations. But it’s clear that the White House has gotten its way.

The President and Treasury Secretary believe that lower rates will stimulate the economy, raise wages, raise asset prices, improve housing affordability, and broadly create conditions for economic prosperity… and they’ve been pushing hard for rate cuts.

Lower rates will also help bail out the US government— whose national debt is so gargantuan that the Treasury is set to spend $1.2 trillion this Fiscal Year (which ends on September 30) just to pay interest.

The Trump administration sees lower rates as the key to slashing that annual interest bill.

Of course, a better solution would be to cut spending, bring the budget closer into balance, and reduce America’s debt-to-GDP ratio.

Putting America’s fiscal house in order would also attract investment in US government bonds the old-fashioned way— by restoring confidence that the US Treasury can pay back its debts through growth, strength, and prestige.

But making such cuts is politically difficult. Even the party that claims to be fiscally conservative isn’t really that interested in meaningful spending cuts.

So, they’re going with Plan B-- push the Fed to lower interest rates.

But as we’ve argued before, they’re setting themselves up for disappointment.

Remember what happened last year— between September and December 2024, the Fed cut rates three times for a total of 1%. Yet over that same period, US government bond yields actually INCREASED by 1%.

This proves that the Fed can’t just snap its fingers and force interest rates lower simply by having a committee meeting.

Interest rates are ultimately determined by supply and demand for money. So if they Fed really wants to see lower rates, they’re going to have to intervene directly in the bond market.

They’ve done this many times before-- this is when the Fed ‘prints’ money, i.e. what they call “quantitative easing”. And the most recent example was during the pandemic when the Fed created about $5 trillion of new money.

They used that money to buy government bonds-- essentially creating artificial demand for Treasurys that pushed yields down to record lows.

And life felt pretty good for a while-- people were able to buy homes and finance mortgages at rates lower than 3%. The government was able to sell 10-year debt for less than 0.5%.

But all those trillions of dollars of new money from the Fed came at a consequence: inflation soared to 9%— the highest in decades.

This is the major tradeoff that the Fed is facing right now: the White House wants lower interest rates. And the Fed seems to be capitulating to the pressure.

But for interest rates to get really low (and remain there), the Fed will almost certainly have to engage in more Quantitative Easing… and that means more inflation.

That alone is going to push a lot more capital into the gold market.

For the past few years, foreign governments and central banks have been selling off their US dollar reserves and funneling that money into gold; this has been the primary reason why gold has soared to all-time highs.

And with the Fed’s capitulation on rates, this trend will continue.

It’s also very likely that pension funds, insurance funds, and other long-term institutional investors will seek refuge in gold as well, driving the price even higher.

To be clear, this isn’t a prediction that gold is going to go up every day, or every month, or even every year.

But if you take a longer-term view—say, 8 to 10 years when the US national debt hits $60 trillion and Social Security runs out of funds— the case for owning gold becomes even more compelling.

I don’t hold this view because I’m a “gold bug”. I’m not fanatical about a hunk of metal. But I do understand these long-term trends, and in my view, we’re still in the early innings.

Another option is to buy gold-related companies, which can offer powerful leverage to the metal itself.

Central banks buy physical gold. They do not buy shares of gold companies. That’s why, even as gold surged, many of the companies we researched traded at dirt-cheap valuations—as low as 2-3x earnings in some cases.

But investors are starting to catch on and pay attention to these deeply undervalued businesses; in fact, we’ve seen several companies in our portfolio gain up to 4x, some even just over the last few months.

Given that Q3 earnings are coming up just around the corner, we believe that some of these gold (and related silver and platinum) companies are about to post record earnings and could see their share prices soar even more.

If you’re interested, we publish all of this investment research, including detailed analysis of deeply undervalued gold companies, in our premium service. 

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

 https://www.schiffsovereign.com/trends/the-fed-just-became-the-worlds-1-gold-salesman-153549/?inf_contact_key=73f20574993185f6b10b61e547506ad4801195387ba98c7f473ffe7a3ca49389

Is It Time To Ring The Bell On Gold?

Is It Time To Ring The Bell On Gold?

Notes From the Field By James Hickman (Simon Black)  September 4, 2025

In our April edition of our premium investment research service, we told subscribers about a highly promising precious metals company— one that we thought was deeply undervalued.

The company had rapidly grown its production nearly 20x in just a few years, not to mention they had also paid off ALL of their debt. Yet they were still trading at just a few times earnings.

With strong cash flow, solid management, and rising gold and silver prices, it was precisely the kind of deep-value setup we look for. This company is now up 5x just since April.

We’ve been very bullish on the precious metals story for the past few years; we have been writing very consistently that gold prices would continue surging higher because central banks around the world are losing confidence in the dollar.

Just this week we told you that foreign governments and central banks now own more gold than they own US government bonds; it’s the clearest sign yet that foreign powers are lining up against the dollar.

Yet while we have been predicting higher gold prices for years, we have been particularly bullish on gold (and other precious metals) companies, i.e. mining, royalty, and service businesses.

And this prediction has also been correct; while precious metals prices are rocketing higher, shares of the companies which produce these metals are performing even better.

Silver, for example, has increased by 33% since April, while one of our silver companies has increased by 400%.

Another silver company we highlighted in March is up 230% in six months.

A gold company we highlighted more than a year ago has increased by 300% in the same time frame that gold has shot up 100%.

We said this would happen. And we said that when investors realized what they were missing, the rise in these companies’ values could happen very quickly. This is precisely what we’re seeing now.

Month after month through our premium investment research service (called the 4th Pillar), we have presented our subscribers with companies that were debt-free, well-managed, extremely profitable... yet trading at laughably cheap valuations.

While the general stock market right now is trading near record-high price/earnings ratios, our featured precious metals companies were trading at multiples as low as TWO.

There’s just one problem: the market is starting to notice. After all, these are all publicly traded companies.

Everyone can see their quarterly financials. Quarter 1 of 2025 was solid. Q2 was exceptional. Q3 earnings are coming out soon, and they will be even better.

************************************

What we have been saying for years is no longer a secret. It’s all out in the open now, and investors are piling in to these gold and silver businesses.

The thing is, these companies still look pretty cheap, simply because they are making so much money and their earnings are growing rapidly.

So despite rising by up to 5X, we believe many of these precious metals companies could still double again in value over the next few months as countless investors start piling in.

We want to make sure our readers still have the chance to participate in this rally over the next few months. 

So if you haven’t yet invested in this historic boom, we think the next few months are set to be absolutely enormous... and could be the last opportunity to get in during this phase of the cycle.

That’s why we really want to encourage you to join our our premium investment research, the 4th Pillar.

In just this month’s edition— which comes out tomorrow— you’ll read about several undervalued gold and silver companies which our chief analyst believes are still primed for major growth over the next few months.

You’ll also hear about another unique real asset company that has a storied history going back to George Washington in the 1790s.

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

https://www.schiffsovereign.com/trends/is-it-time-to-ring-the-bell-on-gold-153473/?inf_contact_key=6d1c8da66d77ade6da29a8ac73ccce713a5186b0959d36194e900cf71a9c9586

Foreigners Own Less US Government Debt—Is That a Good Thing?

Foreigners Own Less US Government Debt—Is That a Good Thing? [Podcast]

Notes From the Field By James Hickman (Simon black) 

The US owes a LOT less money to China today than it did a few years ago. As recently as three years ago, for example, China held $1.3 trillion worth of US government bonds. Today they’re down to around $750 billion.

In other words, China’s government has decided to cut back on its US dollar Treasury holdings by more than 40% over the past three years.

And at first, that might sound like a good thing— HOORAY! More independence from foreign creditors! America is better off without that Chinese money! Right?

But in reality this is a huge problem. Because it’s not just China.

• Going back to the years before Covid, roughly a third of US debt was owned by foreigner governments and foreign central banks.

• But then federal debt skyrocketed during the pandemic, and US government credibility plummeted. Even the government’s credit rating has been slashed.

• As a result, foreigners across the board began stepping back from Treasury securities.

• Today foreign ownership of US debt is less than 25%, and falling. This is a significant drop in just a few years.

Why it matters:

The US Treasury relies heavily on foreign capital to fund the federal government’s gargantuan (~$2 trillion) deficits. So if foreigners’ appetite to buy US government debt is waning— at a time when federal deficits are exploding higher— where will the Treasury Department come up with the money?

There are essentially two answers. Either (1) the Federal Reserve will “print” the money, or (2) domestic investors within the US economy will buy government bonds and fund the deficit.

But both of those options come at a significant cost.

Consequences of the Fed funding US government deficits:

• In order for the Federal Reserve to buy US government bonds (and essentially fund the government’s annual budget deficit), the Fed must first expand the money supply.

• We often refer to this as “printing money” even though it all happens electronically. The Fed calls it “quantitative easing”, or QE, but it’s all the same thing.

• The consequence of QE is inflation. Serious, serious inflation.

• Think about it— during the pandemic, the Fed’s QE created roughly $5 trillion in new money... resulting in 9% inflation.

• Creating enough money to fund federal budget deficits over the next decade could result in the Fed having to print $15+ trillion. So most likely that’s going to be a LOT of inflation.

Consequences of the US economy funding government deficits:

• American investors, i.e. banks, funds, corporate treasury departments, etc. could also buy more US government bonds in order to offset waning foreign demand.

• But this capital comes at a big opportunity cost

• Any private capital that goes in to the Treasury market means less money available to buy stocks, fund venture capital, or finance real estate mortgages

• The net result is lower stock prices, higher mortgage rates, and slower innovation.

Why China is first to ditch US government bonds:

After sanctions on Russia, which included freezing their Treasury holdings, other countries got spooked — especially China.

• China probably fears becoming the next target of US financial weaponization.

• This may also be an indication that they will eventually invade Taiwan

• So China is hedging: they’re selling their US government bonds and buying literal metric tons of physical gold— driving gold prices to record highs.

The bottom line:

The shrinking foreign appetite for US debt is a glaring red flag. It signals waning confidence in US fiscal credibility and could lead to a capital squeeze at home — or nasty inflation spiral if the Fed fills the gap.

Many Americans might cheer the idea of being less reliant on Chinese or other foreign money. But in reality, foreign investment in government debt is the closest thing to a ‘free lunch’ in economics.

It means that foreigners are financing federal deficits, meaning less inflation at home, and allowing private capital to invest directly in the US economy.

Losing this benefit is a bad thing for America.

You can listen to my full thoughts on the matter in this brief Podcast.

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

Finally, you can find the podcast transcript for your convenience, here.

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

https://www.schiffsovereign.com/podcast/foreigners-own-less-us-government-debt-is-that-a-good-thing-podcast-153214/?inf_contact_key=2a6ba1599a555917052563664b72615eb218dc52b043bf6dfa73846fd56e3920

Gold Just Hit Another All-Time High—What’s Next?

Podcast: Gold Just Hit Another All-Time High—What’s Next?

Notes From the Field By James Hickman (Simon Black)   September 3, 2025

You might be surprised to know that the government is facing yet another shutdown at the stroke of midnight on September 30. 

A lot of people might be thinking two things: First— “again?” And second— what about the “One Big Beautiful Bill”? 

The One Big Beautiful Bill, signed into law on July 4, did not, in fact, contain all the necessary resolutions to fund the government for the next fiscal year (which starts on October 1). 

As a result, Congress still needs to pass 12 appropriations bills in order to avoid a shutdown at the stroke of midnight on September 30. 

From what we can tell, the Trump administration seems to be pushing for spending cuts this time around, which is great. I sincerely hope they are successful, because the country desperately needs fiscal restraint. 

But at this point, it’s up to Congress—and that’s far from a foregone conclusion. 

The most likely scenario is they’ll just punt any real decision-making and instead pass a stopgap continuing resolution that will merely add to the deficit. 

In short, America will remain on its current trajectory—which the Congressional Budget Office estimates about $25 trillion in additional deficit spending over the next ten years. 

This is why so many foreign governments and central banks are aggressively working to establish some kind of alternative to the US dollar as the global reserve currency. 

Most likely, they won’t be very successful—simply because nobody trusts the Chinese or the Russians. India has far too many capital controls. So does Brazil. 

And as large as these countries may be in combined economic power, they have completely different economic priorities. Plus they don’t even trust one other. 

So the prospect of some “BRICS dollar” emerging as a serious competitor to the US dollar’s reserve status is laughable. 

But there actually is a serious competitor already—and that’s gold. 

The reason why is simple: no single country controls gold. There’s no supranational agency that can regulate the gold price. Gold is a free market, all about supply and demand, and it happens to be an asset nearly every central bank on the planet already owns. 

This is the reason why gold has surged to an all-time high—because foreign central banks just keep buying so much of it. 

And they’re doing it to reduce their exposure to the US dollar, and to reduce the hold and power the US government has over them. 

We think this trend is absolutely going to continue. 

And that’s why we’re still in the early days of this gold boom. 

In today’s podcast, we discuss all this, as well as:

• The global sell-off of US Treasuries and the pivot by foreign central banks toward gold.

• Why foreign governments and central banks now own more gold than US Treasuries for the first time in decades.

• Historical lessons—from the Byzantine empire to Venetian gold ducats—on what happens when trust in a currency breaks down.

• How central banks are also eyeing platinum and strategic assets as alternatives to the dollar.

• Why well-managed gold and silver producers could deliver outsized returns compared to the metals themselves.

• How owning gold today is a hedge against US fiscal chaos and a way to offset the increased costs of inflation.

• Why we’re still in the early innings of a gold bull market, even with prices already at record highs.

You can listen to the full podcast here.

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

Finally, you can find the podcast transcript for your convenience, here.

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

Dollar ALERT: Foreign Central Banks Now Own More Gold Than USD

Dollar ALERT: Foreign Central Banks Now Own More Gold Than USD

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

For centuries, the Byzantine Empire’s gold coin, known as the solidus, had been the backbone of global trade in the medieval world; nearly pure gold, the solidus was trusted by merchants from Baghdad to London.

But by the 11th century, multiple emperors had chipped away at its gold content—watering it down to pay for wars, bureaucracy, and the costs of an empire in decline.

By the time Alexios I took power in 1081, the solidus was barely 40% gold, and merchants never knew which version they were getting or how much real gold it contained.

Alexios tried to restore confidence by minting a new coin in 1092, one he called the hyperpyron—which literally means “super-refined” in Greek.

At 85% purity, it didn’t have the same purity as the old solidus, but the hyperpyron was credible enough to restore trust... for a little while.

But then history repeated itself over the next century; later emperors debased the hyperpyron, just as their predecessors had debased the solidus. And by the late 1200s, there was no more trust in the currency.

When Venice launched the ducat in 1284— at over 99% pure gold— it also came with a pledge that the Venetian government would never debase it.

Combined with Venice’s trade power and rapidly growing wealth, the ducat quickly became the literal gold standard for international trade.

So much, in fact, that by the mid-1300s, the once-mighty Byzantine Empire was pawning its imperial jewels in exchange for Venetian ducats.

(It would be the loose equivalent of the US government selling off national parks in exchange for Swiss francs...)

That was the moment it became obvious to everyone that the Byzantine Empire was no longer the world’s dominant superpower... and that the world’s reserve currency had changed hands.

This pattern repeats itself throughout history. Most reserve currencies have a long, slow decline, as well as clear moments that stand out.

Today, the US government isn’t quite pawning Mount Rushmore for Swiss francs... but we are witnessing a clear moment that demonstrates a loss of confidence in the US dollar:

Foreign governments and central banks now own more gold than they own US Treasury securities.

That means that foreign nations trust in gold more than they trust in the US government.

We’ve been saying this for years: foreign central banks are selling their dollars, and using those dollars to buy gold.

Why? Because the US government’s massive debts make it a less trustworthy lender. While it’s unlikely that the US would outright default, it is very likely that Uncle Sam will eventually turn to the money printer as the “solution” to its debt challenge.

And any foreign central bank which owns a ton of US debt doesn’t want to be paid back with inflated dollars. Better to minimize that exposure now and pare down their dollar holdings.

What do they buy instead? Gold.

Not because central bankers are ‘gold bugs’. But because gold has a 5,000 year history of maintaining value. Because it is dense wealth they can hold physically in their vaults. And because there is a large enough global market to be able to buy or sell metric tons at a time.

This growing gold demand from foreign central banks has been the main driver of gold’s massive bull run— from $1,700 per ounce just three years ago, to over $3,500 per ounce today.

I take no pleasure in pointing this out, but it is becoming clear that foreign governments and central banks simply no longer have the confidence in the US that they once did.

You can see the momentum building; just this week in China, Putin, Xi Jinping, and India’s Modi stood before the world urging trade in national currencies and laying the groundwork for a new financial system designed to chip away at the dollar’s dominance.

And it’s not hard to figure out why.

According to its own projections, the US Treasury will need to sell over $22 trillion in new debt over the next ten years. That’s not a worst-case scenario—that’s the baseline forecast.

Foreign governments and central banks are traditionally one of the largest buyers of US government debt. Yet they’re clearly starting to back away from Treasury bonds... and the US dollar.

This means that the Treasury Department will struggle to find lenders over the next several years... which very likely means relying on the Federal Reserve to ‘print’ the money they need... which of course would be highly inflationary.

This isn’t a doomsday prediction. It’s not a partisan argument. It’s just the reality that America is facing.

Most likely nothing catastrophic will happen tomorrow. Or this month. Or this year. But America is clearly running out of time.

This is not a time for panic; in fact it’s critical to understand that there are rational ways to prepare for the challenges down the road.

We’ve been suggesting gold (and silver) for a number of years, both of which have proven to be excellent shelter.

At $2,000 gold we said this was just the beginning. At $3,000 gold we said that the story was still in its early days. At $3,500 gold, I’m still telling you that this story has much longer to play out.

Nothing goes up or down in a straight line, so there will always be pullbacks and corrections. But the case for gold easily goes to $5,000... and potentially well over $10,000.

That’s not based on any idolatry or fanaticism... but rather a cogent, rational understanding of how global central banking works.

The bottom line is that the world is losing confidence in the US dollar as the global reserve currency. And, right now, there is no alternative. Except for gold. And for that reason central banks (over the long run) will keep stockpiling it... and driving the price higher.

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

Podcast: The Rise of National Capitalism

Podcast: The Rise of National Capitalism

Notes From the Field By James Hickman (Simon Black)   August 19, 2025

Few people understand how the Federal Reserve actually works— and frankly, I’m not sure the President or Treasury Secretary are among them.

That’s not an insult, just based on what they say. Let me explain.

Most people think the Fed sets “the interest rate” for everything—mortgages, car loans, 10-year yields. But that’s not how it works. The Fed only sets a very narrow rate—the overnight lending rate between banks.

Everything else, from your mortgage to the government’s long-term borrowing costs, is determined by the bond market. And as America’s debt spirals past $37 trillion, the bond market—not the Fed—is in control.

This misunderstanding matters. Because when Treasury Secretary Bessent says he’s going to “get rates down,” what he really means is printing money.

That’s the only lever left: the Federal Reserve creates money electronically and uses it to buy government bonds.

The consequence of that is inflation: more money in the system means higher prices. Sometimes it shows up in financial assets—stocks, bonds, real estate—can also surge to record highs as a result of inflation. Other times inflation hits the grocery store, your utility bill, or your insurance premiums.

Lately, it’s been both. Inflation is everywhere.

But this administration is also openly floating the idea of a sovereign wealth fund—borrowing billions (or trillions) and putting that money directly into the stock market. Intel. Nvidia. Strategic stakes in American companies.

It’s not socialism, and it’s not free markets. It’s something in between: a blending of state and corporate power. Call it National Capitalism.

If that sounds far-fetched, remember—they’re already talking about taking a stake in Intel. Why would they stop there?

This administration is full of people whose entire background is borrowing massive sums of money at low interest, pouring it into enormous projects, and pocketing the spread.

There’s nothing wrong with that. That’s what they know. That’s what they do. Trump is a very successful real estate developer who has personally borrowed billions of dollars throughout his career.

So of course when they look at the economy, their instinct is to repeat the same playbook on a national scale—borrow cheap, buy big, and hope the gap between cost and return pays for everything.

But when the government itself becomes one of the biggest stock buyers, what happens to markets? They explode higher.

And you’re going to want to own assets when that happens.

This is the subject of today’s podcast.

We dive into:

• Why the Fed’s “rate cuts” don’t control the 10-year or 30-year Treasury yields—and why the bond market is now in charge.

• How the U.S. is spending $1.2 trillion a year just on interest payments, and why refinancing old debt at today’s higher rates keeps driving costs up.

• The Fed’s true method of lowering rates: creating new money, buying bonds, and fueling asset bubbles—at the cost of more inflation.

• The absurdity of how the US banking system works.

• How every time the Fed “prints money” to bail out a crisis—9/11, 2008, the pandemic—it ends up inflating specific bubbles: housing, stocks, crypto, collectibles, and now consumer prices across the board.

And we wrap up with a quick look at Total Access—our highest level membership built around forging lasting relationships with other members in extraordinary settings. It combines world-class networking and internationalization strategies with unforgettable, once-in-a-lifetime travel experiences.

Right now, Total Access membership is open for a limited time. You can learn more here.

And you can listen to the full podcast here.

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

Finally, you can find the podcast transcript for your convenience, here.

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

https://www.schiffsovereign.com/podcast/podcast-the-rise-of-national-capitalism-153361/?inf_contact_key=49fec45d35a8308179ee21de4a018f6fc9b359cd3c30ad03dee6fdfba69fa879

At Least Social Security Will Go Bankrupt With Good Customer Service

At Least Social Security Will Go Bankrupt With Good Customer Service

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

I know it’s cliche, but one of the happiest days of my life was a bit more than four years ago when my daughter was born in Cancún, Mexico.  My wife and I chose Mexico deliberately— given all the COVID craziness that was going on (especially in the US), we wanted to be in a place where the pandemic wasn’t going to factor into our lives at all. And Cancun was perfect.

Add in world-class healthcare at affordable prices, and it was an easy call. Plus babies born in Mexico automatically become citizens, and both parents and grandparents receive permanent residency.

Pretty much everything about her birth went really smoothly. The Mexican paperwork was shockingly easy, and we were able to get her passport and our residency cards very quickly.

The most difficult part by far was the US side.

We couldn’t fly back to Puerto Rico until she had a US passport. But thanks to the State Department’s broken online system (which crashes constantly and conjures bizarre errors) we were scrambling for a slot.

(It’s also bizarre that, despite millions of Americans traveling to Cancun each year, the US government put its consulate 4 1/2 hours away in Merida... not exactly convenient.)

Once there, storm-trooper style security treated a newborn’s bottled milk as a threat, and then we sat for more than an hour while bureaucrats invented reasons to say “no” to her passport application.

In the end, we finally got what we needed—but the whole process revealed the deeper truth: in the US, government offices act as if citizens work for them. They’ve forgotten their purpose is to serve, and citizens are left with inefficient, indifferent, even borderline inhumane experiences.

Some other countries take a different approach; they treat citizens like valued customers, and bureaucrats are measured on the efficiency and quality of their service.

When the US first launched the Department of Government Efficiency—DOGE—I thought this should be a critical piece of the reform.

Yes, of course, slash fraud, waste, and abuse. But even more urgently, reset the entire culture of how the US government does business with its citizens.

I recently found a glimmer of hope that this may be happening.

Late last week, Social Security marked its 90th birthday since being signed it into law in 1935 at the height of the Great Depression.

Ever since, generations of Americans have accumulated stories of painfully navigating this massive institution— too often about waiting rooms, endless forms, and mind-numbing incompetence.

But something unusual has happened in the last few months. Frank Bisignano, the new commissioner, took over. He comes from a CEO position in the private sector, and seems to be running Social Security like a business.

He’s pushed a digital-first strategy, incorporated AI tools, and focused on simple things that most people in the private sector would take for granted.

Processing backlogs are coming down. Efficiency is up.

Barely a year ago, you had to spend nearly 30 minutes on hold when you called Social Security. Today, the agency says the wait is under five minutes—while serving nearly twice as many people.

You can also now schedule appointments before going into an office— imagine that. And the average wait time at a Social Security office has also been slashed down to just six minutes.

The Social Security website has been overhauled as well, so taxpayers are able to obtain much more information and handle their service needs online. Crazy that it took until 2025 to make this happen.

Oh, and it turns out that the Social Security website— until very recently— used to be offline nearly 30 hours per WEEK for scheduled downtime. They’ve now eliminated this and MySocialSecurity is now available 24/7.

Frankly, the bar for government performance is so low that saying “the website now works” is heralded as a massive breakthrough.

But still, it’s encouraging to see what’s possible when someone with a private-sector mindset actually tries to fix things. In just a few months, one of the worst bureaucracies in Washington has shown major improvement.

Unfortunately, there’s one thing the Commissioner can’t control: Social Security’s looming insolvency.

Social Security’s finances are up to Congress, and that picture is bleak.

Social Security is almost out of money. Everyone in Washington knows it. At best, there’s less than eight years until Social Security’s major trust fund runs out of money. And it will probably take place sooner than that.

Just like fixing bad government service, fixing Social Security’s solvency is not complicated. At this point there are only a few levers to pull: either raise taxes, or roll back retirement age.

The trustees and Social Security’s own actuaries have spelled out these solutions for years, practically begging Congress to act.

They’ve also been clear— the sooner that Congress works to solve the problem, the less painful the solution will be.

If they raise payroll taxes now, the tax hike will be minor. If they wait until 2032, the increase will be brutal.

Similarly, if they pass a law today to phase in an increase to the retirement age, the change will be minor. If they wait a decade, the increase will be much more dramatic.

Yet Congress is—predictably—the least capable group on the planet when it comes to handling obvious problems.

Sure, most likely they won’t let Social Security fail. But the longer they wait, the more likely the eventual fix will simply be a multi-trillion-dollar bailout funded by “printing” money.

The national debt will continue its upward surge, taxpayers will fork over more money, and inflation will quicken.

Bisignano, Social Security’s new “CEO” commissioner, shows what is possible when government changes its posture.

Instead of the usual “F-you, take a number” attitude, Bisignano’s team worked to serve people more efficiently and respectfully. That massive cultural shift moved the needle almost instantly—wait times fell, backlogs shrank, and an agency long known for dysfunction suddenly became usable.

It shouldn’t stop there. The same mindset could be applied to bigger problems—Social Security’s solvency, immigration, debt. None of these are mysteries. The solutions already exist. It’s not rocket science. What’s required is competence and a willingness to act early, before the problems metastasize.

But that’s the catch. The most incompetent body of all—Congress—is the one charged with making those decisions.

And until voters stop sending the same clowns back to Washington, nothing changes.

These are people who can’t balance a budget, can’t read a balance sheet, and can barely string together a coherent thought—yet they’re entrusted with fixing the nation’s most critical programs.

It’s no wonder every solution comes too late, costs too much, and creates another crisis in the process.

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

https://www.schiffsovereign.com/trends/at-least-social-security-will-go-bankrupt-with-good-customer-service-153350/?inf_contact_key=e21695cdb5f635a85ef471c2b0f9388bba8ff3863183781c7b2987210877c199

The Debt Problem Was Actually Scarier In The 90’s Here’s How They Solved It

The Debt Problem Was Actually Scarier In The 90s. Here’s How They Solved It. Podcast

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

I was still just a kid as the US headed into the 1992 US Presidential election, but I remember the excitement around my home town as Ross Perot entered the race as an independent candidate.

Perot was from Dallas, where I grew up. And he was one of the first tech billionaires, long before the dot-com boom.  Like Elon today, Perot knew that America was heading down a dangerous fiscal path. At the time, the US government was spending about 28% of its annual tax revenue just to pay interest on the national debt.

PIC

It wasn't because the debt was so vast. Actually back then it was just a fraction of today's debt.

The real problem was that sky-high interest rates from the 1980s (15%+) had pushed the government's borrowing costs and annual interest bill to the moon.

So Ross Perot decided to run for President under a promise to fix the deficit.

Few people understood anything about the deficit back then. So Perot used his vast fortune to buy TV time where he would explain the problem in hour-long presentations. I remember  learning things from him that I'd never even heard about before-- Treasury markets, bond yields, government accounting, mandatory spending, and more.

Perot single-handedly dragged America's deficit issue to the front page and started a national conversation; so even though Bill Clinton ultimately won the election, Perot succeeded in making deficit reduction a top priority.

It was interesting times politically. Clinton was rocked by scandals, impeached, and deeply hated by the other party... quite similar to the situation today. They didn't have social media back then, but 'talk radio' pundits raged 24/7 with the same ferocity of today's Twitter mob.

Yet even with such conflict and division, Congress and the White House managed to work it out. And over the next decade, interest costs fell from 28% of tax revenue down to 18%. And by the end of the 1990s the government was posting strong budget surpluses.

How did they do it? It wasn't rocket science or black magic. They simply took a common sense approach to spending-- they held spending increases to minimal levels, all while tax revenue soared thanks to a tech-fueled economic bonanza.

Over the ten-year period between 1991 and 2000, government expenditures only rose by 35%. Adjusted for inflation that's just 5.5% over the entire decade.

Meanwhile tax revenue nearly doubled over the same period. Poof. Problem solved. And America stormed into the 21st century with a record budget surplus, and its interest costs and national debt under control.

Could this happen today? Maybe. There are a lot of similarities. The US government currently pays roughly 22% of tax revenue just to cover the annual interest bill on the national debt, and this amount is growing rapidly. Not to mention, interest costs plus mandatory entitlements (like Social Security and Medicare) already consume 100% of tax revenue.

If they don't solve this problem, America is going to be looking at a major fiscal crisis in the coming years.

Unfortunately few people in power seem to be taking this seriously. The White House is far more focused on tariffs and trade rather than the obvious problem-- excessive spending. And when it comes to deficit reduction, their approach is to seize control of the Fed to push through interest rate cuts.

Congress, meanwhile, seems completely oblivious to the problem.

One of my major concerns is that American voters tend to oscillate from one side to another. So if the guys in power now don't solve this problem now, voters could swing hard to the Left in 2028, quite possibly to a card-carrying socialist.

There are certainly a lot of socialists emerging in American politics. And they all see deficits as a "revenue problem" and believe that higher taxes will fix every challenge.

Well, we did the math in today's podcast: "taxing the rich" won't make a dent in the deficit problem. Neither will wealth taxes, or any of the other idiotic proposals that socialists come up with.

The only way to fix this is to cut spending... and to spend the money much more responsibly.

Fingers crossed that they see the light. And soon. But I wouldn't hold my breath just yet on major fiscal reform... which is why it's so critical to have a Plan B.

Listen in to today's podcast, in which we cover:

• The 70% tax rate fantasy – Even taxing every dollar over $10 million at 70% doesn’t cover a single year’s interest on the debt.
  
  

• Why huge new taxes barely move the needle – A wealth tax might grab $200–250B upfront, then $60–100B/year. Yet the debt is growing by trillions annually.
  
  

• Behavior matters – People restructure income, delay gains, and move capital. The socialists' 'wealth tax' projections will never match reality.

• Their entire philosophy is to treat the private sector like an ATM while refusing to cut a cent of waste.
  
  

• The problem with the socialists who want to "seize the means of production" is that they've never produced anything!
  
  

• The spending problem – The top 2% already paid ~$1 trillion in taxes in 2021 (28% effective rate on $3.5T income).
  
  

• Since July 4th, the US has added nearly $800 billion to the debt— about $500B of it brand-new spending.
  
  

• The real “third side” of the coin – It’s not just a revenue problem or a spending problem—it’s decades of baked-in waste, fraud, and mismanagement in federal budgets.
  
  

• Zero-base budgeting: A common-sense approach where agencies start at zero and justify every dollar… something almost no one in Washington is willing to consider.
  
  

• Bond market reality check – The Fed can nudge short-term rates, but long-term rates are set by the bond market—
  
  

• This means that political control of the Fed may not deliver the rate cuts they expect.
  
  

• Socialist footholds in major cities – from NYC to Chicago to Seattle, socialists  are winning local races and pushing radical tax-and-spend agendas.

The bottom line:

Confiscating more from the productive economy doesn’t fix the problem; it fuels it. The only real solution starts with cutting waste and ending the government’s addiction to spending.

Until that happens, individuals need their own Plan B—whether it’s hedging against inflation with real assets, diversifying internationally, or building networks with like-minded people who see what’s coming.

That’s exactly why we built our Total Access community. Over the years, it’s become more than just an exclusive group—it’s sparked friendships, partnerships, and a global network of people who are prepared, connected, and two steps ahead. After 15+ years in this business, it’s the thing I’m most proud of.

Listen to the full breakdown here.

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

Finally, you can find the podcast transcript for your convenience, here.

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

https://www.schiffsovereign.com/trends/podcast-the-debt-problem-was-actually-scarier-in-the-90s-heres-how-they-solved-it-153299/?inf_contact_key=4b7a85caadcfd64048d54c60ca26ef2c6284348d8861bd17e5bddf76463f0190

37 Trillion Reasons To Have A Plan B

37 Trillion Reasons To Have A Plan B

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

On Friday afternoon last week, the US national debt hit another ignominious milestone: $37 trillion. And there’s absolutely no end in sight.

 Perhaps the wildest part is how quickly the debt is rising. Just before the One Big Beautiful Bill was passed on July 4th-- barely a month ago-- the national debt was ‘only’ $36.2 trillion. So, the debt increased a whopping $800 billion in a mere 36 days.

 To be fair, about $300 billion worth of that amount was ‘pent up’ debt that couldn’t be reflected on the national balance sheet until they increased the debt ceiling last month.

 But there’s still roughly half a trillion dollars in fresh spending that went out the door over a five-week period. That is an insane pace of outflows.

 The other big problem, of course, is that the debt is becoming a lot more expensive-- in other words, the average rate of interest that the US government pays on the national debt is steadily rising.

 As of July 31st, 2025, Uncle Sam is paying an average 3.352% on the entire national debt.

 That sounds pretty low… until you look back a couple of years and see the average interest rate was just 1.5% in early 2022.

 This means that interest rates have doubled in just 2 1/2 years. Combined with the rapid increase in the national debt, America’s annual interest bill is quickly spiraling out of control.

Back in Fiscal Year 2021, the US government spent around 13% of its tax revenue to pay interest on the debt.  This Fiscal year 2025, it will take around 22% of tax revenue to pay interest on the national debt.

That’s an extraordinary increase in just four years. And it’s quite likely this trend will continue, i.e. interest will eat up a larger and larger portion of the annual budget.

 Why? Because the debt keeps rising… plus interest rates are MUCH higher than they were a few years ago.

 Think about it: over the next twelve months alone, nearly $9 trillion of US government debt will mature; that’s nearly 25% of the entire US national debt maturing over the next YEAR.

 Obviously, the government doesn’t have $9 trillion lying around to repay this debt. So instead, they’ll simply issue new debt (i.e. government bonds) to repay the old debt.

The key problem is that the new bonds they’ll have to issue will carry a significantly higher interest rate than the old bonds from a few years ago. And this will continue to push up the government’s average interest rate.

 Our analysis-- with a lot of help from Grok-- is that it will take more than 40% of tax revenue, just to pay interest, by the year 2033 (which happens to be the same year that Social Security’s major trust funds are set to run out of money).

So, it’s not hard to see why the White House is so adamant about bringing interest rates down… and why the President is pushing the Fed Chairman to cut rates.

 The President may very well get his way. Last week, a key Fed official who was a member of their interest rate committee (called the FOMC) suddenly and inexplicably resigned. She literally quit with no explanation and with almost immediate effect.

 The White House responded quickly by appointing none other than Stephen Miran to fill the post; Miran, as you are probably aware, is one of the key architects behind Trump’s entire economic agenda-- everything from the tariff bonanza to the so-called “Mar-a-Lago Accords”.

Not to mention, Miran has publicly called for a weak dollar… which is clear conflict given that one of the Federal Reserve’s key mandates is to maintain a stable currency.

 I imagine it will be pretty hard for Miran to maintain a stable currency when he’s working so hard (and successfully) to weaken it.

 Point is, Miran will almost certainly be a strong advocate on the Fed to dramatically lower interest rates-- and to ‘print’ money-- in order to weaken the dollar and bail out the Treasury Department.

 The White House will also appoint a new Fed Chairman next year once Jerome Powell’s term expires in the spring.

 It’s not a sure thing, but the Trump administration is clearly doing everything it can to take control of the Fed and steer US monetary policy towards lower rates.

 If they’re successful and manage to hijack the Fed, the end result will likely be a new round of Quantitative Easing (i.e. ‘printing money’), leading to a nasty bout of inflation.

But if they’re not successful, the government’s annual interest bill will probably continue to spiral out of control, eventually leading to… a nasty bout of inflation.

This isn’t exactly controversial; in fact, throughout human history, inflation has almost always been the consequence of governments’ financial mismanagement.

 The good news is that America has been in this position before. As recently as the 1990s, the US government was spending well more than 20% of tax revenue just to pay interest on the national debt.

 Congress and the White House both acknowledged the problem, and they worked together to address it-- primarily by reigning in spending.

Could the same thing happen over the next decade? Of course. But at the moment there seems to be zero appetite for cooperation… or to restrain spending.

 So, again, the current trajectory almost certainly leads to inflation.

 Now, this doesn’t mean the world is coming to an end. Civilization as we know it is not on the brink of collapse. Future inflation is a very solvable problem. But it requires taking sensible, proactive precautions now… all part of a rational Plan B.

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

https://www.schiffsovereign.com/trends/37-trillion-reasons-to-have-a-plan-b-153287/?inf_contact_key=9dcaeade37b81f827c7e8647bd613d74595bc1afdf8fc89706dc8022d918b6bd

Foreigners Own Less US Government Debt—Is That a Good Thing? [Podcast]

Foreigners Own Less US Government Debt—Is That a Good Thing? [Podcast]

Notes From the Field By James Hickman (Simon black)  July 23, 2025

The US owes a LOT less money to China today than it did a few years ago. As recently as three years ago, for example, China held $1.3 trillion worth of US government bonds. Today they’re down to around $750 billion.

In other words, China’s government has decided to cut back on its US dollar Treasury holdings by more than 40% over the past three years.

And at first, that might sound like a good thing— HOORAY! More independence from foreign creditors! America is better off without that Chinese money! Right?

But in reality this is a huge problem. Because it’s not just China.

• Going back to the years before Covid, roughly a third of US debt was owned by foreigner governments and foreign central banks.

• But then federal debt skyrocketed during the pandemic, and US government credibility plummeted. Even the government’s credit rating has been slashed.

• As a result, foreigners across the board began stepping back from Treasury securities.

• Today foreign ownership of US debt is less than 25%, and falling. This is a significant drop in just a few years.

Why it matters:

The US Treasury relies heavily on foreign capital to fund the federal government’s gargantuan (~$2 trillion) deficits. So if foreigners’ appetite to buy US government debt is waning— at a time when federal deficits are exploding higher— where will the Treasury Department come up with the money?

There are essentially two answers. Either (1) the Federal Reserve will “print” the money, or (2) domestic investors within the US economy will buy government bonds and fund the deficit.

But both of those options come at a significant cost.

Consequences of the Fed funding US government deficits:

• In order for the Federal Reserve to buy US government bonds (and essentially fund the government’s annual budget deficit), the Fed must first expand the money supply.

• We often refer to this as “printing money” even though it all happens electronically. The Fed calls it “quantitative easing”, or QE, but it’s all the same thing.

• The consequence of QE is inflation. Serious, serious inflation.

• Think about it— during the pandemic, the Fed’s QE created roughly $5 trillion in new money... resulting in 9% inflation.

• Creating enough money to fund federal budget deficits over the next decade could result in the Fed having to print $15+ trillion. So most likely that’s going to be a LOT of inflation.

Consequences of the US economy funding government deficits:

• American investors, i.e. banks, funds, corporate treasury departments, etc. could also buy more US government bonds in order to offset waning foreign demand.

• But this capital comes at a big opportunity cost

• Any private capital that goes in to the Treasury market means less money available to buy stocks, fund venture capital, or finance real estate mortgages

• The net result is lower stock prices, higher mortgage rates, and slower innovation.

Why China is first to ditch US government bonds:

After sanctions on Russia, which included freezing their Treasury holdings, other countries got spooked — especially China.

• China probably fears becoming the next target of US financial weaponization.

• This may also be an indication that they will eventually invade Taiwan

• So China is hedging: they’re selling their US government bonds and buying literal metric tons of physical gold— driving gold prices to record highs.

The bottom line:

The shrinking foreign appetite for US debt is a glaring red flag. It signals waning confidence in US fiscal credibility and could lead to a capital squeeze at home — or nasty inflation spiral if the Fed fills the gap.

Many Americans might cheer the idea of being less reliant on Chinese or other foreign money. But in reality, foreign investment in government debt is the closest thing to a ‘free lunch’ in economics.

It means that foreigners are financing federal deficits, meaning less inflation at home, and allowing private capital to invest directly in the US economy.

Losing this benefit is a bad thing for America.

You can listen to my full thoughts on the matter in this brief Podcast.

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

Finally, you can find the podcast transcript for your convenience, here.

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

https://www.schiffsovereign.com/podcast/foreigners-own-less-us-government-debt-is-that-a-good-thing-podcast-153214/?inf_contact_key=2a6ba1599a555917052563664b72615eb218dc52b043bf6dfa73846fd56e3920

We Talked To One Of America’s Most Experienced Trade Negotiators

We Talked To One Of America’s Most Experienced Trade Negotiators

Notes From the Field By James Hickman (Simon Black)   July 31, 2025

It wouldn’t be an overstatement to say that global trade is one of the most important issues happening in the world right now.

On April 2nd—so-called “Liberation Day”—the President upended decades of established business and trade practices that virtually every major government and corporation on the planet has relied on. All of those rules, good and bad, were thrown out the window. Overnight. And that makes this new tariff regime one of the largest worldwide disruptions to business (alongside the pandemic) since World War II.

I’ve been wanting to learn more about this from someone who really knows what they’re talking about... someone who has real experience with international trade deals and knows the system inside out.

So last week, during a live call with our Total Access members, I interviewed one of America’s most senior and successful trade negotiators. And I learned more in that hour-long conversation about global trade than I have in decades of my own international business experience.

First things first, her experience is pretty unparalleled.

She started her career at the Office of the US Trade Representative (USTRO) during the administration of George H W Bush in the early 1990s, and throughout her career she had spent years sitting across the table from Chinese, Korean, Russian counterparts, trying to hammer out government trade deals that would be good for America.

I’ll be blunt— I came into the conversation with a really negative assumption that any career bureaucrat would be ideologically toxic. I thought that the people negotiating these deals would constantly be injecting their personal politics and fantasies... or that they wouldn’t be competent enough to make good deals for the country.

I was flat out wrong. There wasn’t even a hint of ideology. And by the end of the call I couldn’t tell who she voted for, or whether she leaned left or right. Nor did I care.

Instead, I actually felt grateful that the United States has had someone as sharp as she representing the country’s interests at the negotiating table. For her, trade deals are all business, and she’s damn good at it.

She never once implied that President Trump is wrong or naïve. But she also didn’t express unbridled enthusiasm for the administration’s vision of these trade deals either.

Instead, with a mix of extreme insight and dry humor, she gave us an incredible perspective on how the trade system actually works—and what we can expect in the coming months and years.

For example, I asked her point-blank: Is the US even in a position to demand major trade concessions?

Her answer surprised me: absolutely yes.

She explained that even though China’s consumer market is growing—and even though the Chinese government has been preparing for this moment since Trump’s first term—China is still nowhere near as valuable an import market as the US. Not even close.

Nearly every country on the planet is desperate to export its goods to the United States. And because of that, she said, Trump has tremendous bargaining power.

I even asked her about Trump’s tendency for hyperbole; he tells stories about world leaders calling him and “begging” him to drop tariffs. I always roll my eyes at such stories because they don’t sound remotely plausible.

But, again, she corrected me and said these stories are most likely true... simply because the US is in such a strong negotiating position. And there are a number of countries whose leaders would literally beg the President to drop tariffs... because steep US tariffs would send their economies off a cliff, and their politicians out of power.

Again, she’s not a rabid MAGA fanatic. She’s a seasoned, career trade negotiator who’s seen this process from every side over multiple US Presidents.

We also talked about the mechanics of how trade deals are negotiated, and the blatant mistakes that some countries (including Mexico, recently) make. She also explained how unrealistic it is to expect dozens of them to be signed in such a short timeframe.

Ordinarily, she told us, a single trade deal can take years to fully negotiate and finalize all the details. And the details can go on for hundreds of pages.

Now they want dozens of deals in a matter of weeks; these aren’t really “trade agreements”, she said, more like frameworks. In business terms, it’s like a term sheet or letter of intent.

The problem with these frameworks is that they are only a few pages and very light on details, therefore they will almost certainly leave massive gaps—ripe for abuse, noncompliance, and future disputes.

And based on that, it’s not clear whether there will be any long-term benefit from Liberation Day. There might be, but it’s not a sure thing at all.

She also confirmed what we’ve long suspected—China is better positioned to wait this out than the United States.

China has reduced reliance on US exports and doesn’t face political pressure from voters or donors. If both China and the US are damaged, she said, America is more likely to blink first.

She ended with a warning: don’t expect any clarity tomorrow (August 1, i.e. the supposed deadline for the trade deals).

Again, there might be a handful of trade ‘frameworks’, but these are just outlines. The real negotiations haven’t even started. Disputes are inevitable. Tariffs will keep switching on and off. And she expects this chaotic trade environment to last another few years.

Just a quick note that we’ll be opening enrollment to Total Access soon—our most valuable and highest tier membership at Schiff Sovereign. We bend over backwards for our members— including setting up regular, members-only calls like the one I just wrote about with a career trade negotiator— to provide the ultimate insider access and front row seat to the world’s most important trends.

We further provide our members with private investment research and Plan B internationalization strategies (like the best and fastest ways to obtain a second passport).

Members also receive complimentary access to ALL premium content that we provide at Schiff Sovereign.

But the best thing about Total Access is building real relationships—because in today’s world, that’s what actually matters. The most valuable currency you can have isn’t dollars or gold, it’s a trusted network of like-minded people who see the world clearly and act decisively.

Our members come from all walks of life—investors, entrepreneurs, doctors, engineers, even the occasional celebrity—but they share common values. They understand that the world is changing fast. That inflation is real. That governments are out of control. And that having a Plan B is essential.

That’s why we host private dinners, organize boots-on-the-ground trips, and bring members together in extraordinary places.

Sometimes that looks like the recent trip to Turkey, where members explored opportunities in the country’s citizenship by investment program. Other times it looks more like the luxury super-yacht cruise that just concluded along the coast of Croatia.

We also host conference-style events in promising locations like El Salvador, with really interesting speakers, such as the former President of Mexico who joined our event in Mexico City.

Total Access is also how our members were able to participate in private investment opportunities like Grok, a robotics venture, and an exclusive citizenship deal directly from a European head of state.

Yes, we go to interesting places. Yes, we produce world-class research. But the real value is in the people you meet and the relationships you build.

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

https://www.schiffsovereign.com/trends/we-talked-to-one-of-americas-most-experienced-trade-negotiators-153260/?inf_contact_key=4630f2a53fafd3409d70278092f091f84c89db51b04f05ba577c35d9bf429d28

Project “Hijack the Fed” is now in full swing [Podcast]

Project “Hijack the Fed” is now in full swing [Podcast]

Notes From Te Field By James Hickman (Simon Black)  July 30, 2025

To the surprise of absolutely no one today, the Federal Reserve’s Open Market Committee chose to do nothing at the close of its two-day meeting.

The White House is furious about the decision; the President believes that the Fed should be slashing rates, and that the current “high” rate of interest is costing the US government hundreds of billions of dollars each year in excess interest.

(I put “high” in quotes because interest rates are still well below historic averages...)

Now, I am no fan of the Fed. Quite the opposite— the organization is a total failure.

Just consider that section 2A of the Federal Reserve Act (passed in 1913) states that the Fed is supposed to maintain a stable currency. Yet the US dollar has lost 97% of its purchasing power under the Fed’s stewardship over the past 112 years.

Personally I think it’s difficult to find another organization that has been so terrible at its core mission for so long.

Yet even with that scathing criticism in mind, it’s still not the Fed’s job to bail out the US government’s finances.

If Congress and the White House want to pay a lower interest rate on the national debt, then they can make the hard decisions to cut spending, balance the budget, and attract foreign investment by acting like responsible adults.

Unfortunately none of that seems to be in the cards.

So instead there seems to be a clear plan being hatched: Project “Hijack the Fed”.

Let’s start from the basics:

In order to fund its roughly $2 trillion annual budget deficit, the US government has to sell debt (bonds) to investors to plug its funding gap. And this responsibility falls to the Treasury Department.

Ordinarily, Treasury would sell a mix of US government bonds, ranging from ultra-short-term 28-day T-bills, to very long-term 30-year bonds.

Lately, however, the Treasury Department has been focused on selling mostly short-term bonds... simply because those rates are lower. The yield on a 12-month T-bill, for example, is just 3.86%, whereas the yield on 10-year Treasury is almost 5%, so it’s a difference of roughly 1%.

In some ways it’s sensible to take the lower rate. But it’s a risky strategy.

If interest rates suddenly rise, then the US government could wind up paying even MORE interest in the next few years, just to save 1% today.

So clearly the Treasury Department must have some confidence that rates won’t be going higher... and will probably be headed lower.

Last month Secretary Bessent even said this out loud: “What I’m going to do is, I’m going to go very short-term. . . Wait until this guy [Fed Chairman Jerome Powell] gets out, get the rates way down, and then go long-term.”

In other words, he’s going to keep selling the lower-interest short-term debt. Then, once Jerome Powell’s term as Fed Chairman ends next year, the Treasury Secretary thinks that HE will be able to “get the rates way down”, at which point he’ll start selling long-term debt to lock in lower rates.

This is a stunning admission that the Treasury Secretary (and by extension the White House) think that they will be able to steer interest rates much lower through their new Fed pick next year.

Coincidentally, Treasury Secretary Bessent also happens to be on Donald Trump’s shortlist to be the next Fed Chairman.

So let’s skip over the obvious legal and reputational issues involved in such a move.

The bigger problem is that there’s only one way for the Fed— even if Secretary Bessent becomes Chairman— to “get the rates way down”... and that is by expanding the money supply, i.e. what we often refer to as printing money.

And just as we saw during the pandemic when the Fed printed $5 trillion, large-scale money printing can easily lead to some nasty inflation.

Why it matters:

We’ve been talking about the next inflation cycle for a while, explaining why 2033 is the key date to keep in mind; this is when Social Security’s major trust fund will run out of money, prompting the Fed to print trillions of dollars and trigger inflation.

But given the Treasury Department and White House’s plan to hijack the Fed, it’s possible that the next inflation cycle could start up again as early as next year. 

This isn’t a foregone conclusion. But it makes sense to pay close attention to what they’re doing, because it’s starting to look pretty obvious that they plan to print a lot of money starting next summer.

Today’s podcast:

I want to stress that I’m not predicting some imminent doom. The end of the world is not upon us. There is no reason for rational people to panic.

But it is becoming increasingly obvious where this trend will lead. The Treasury Secretary of the United States of America is flat-out saying that he’s going to “get the rates way down” as early as next summer. And it would be foolish to ignore the inflationary consequences of his plan. 

We discuss all of this in depth in today’s podcast episode, including:

• Will the next inflation cycle mean painfully higher food and fuel prices, or perhaps just an inflated stock and real estate market?

• Why there’s a straight line linking the post-GFC (2010-2016) stock market bubble and ‘asset price inflation’, to the rise of Donald Trump and Bernie Sanders.

• We explain that, while the Fed has a lot of influence over short-term interest rates, they can’t control long-term rates (including mortgage rates) without printing tons of money. And, yes, that means inflation.

• How the next phase of money printing could make the 2020–2021 pandemic inflation look tame by comparison; it’s all about the sheer volume of money at stake, i.e. $5 trillion versus potentially $20+ trillion.

• Why the US could hit a fiscal wall sooner than anyone thinks, where 100% of tax revenue is consumed JUST by debt interest, Social Security, and Medicare.

• We also talk about sensible ways to position yourself for inflation in ways that make sense regardless of what happens (or doesn’t happen) next.
  

  You can listen to today’s episode here. For the audio-only version, check out our online post here.

Finally, you can find the podcast transcript for your convenience, here.

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

https://www.schiffsovereign.com/podcast/project-hijack-the-fed-is-now-in-full-swing-153252/?inf_contact_key=b77adc9ca4b44f7e8f3324639582485f45f52772a67910d275469a1ff0808c0a

The Illusion Collapses

The Illusion Collapses

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

When King Louis XV died in 1774, nearly all of France breathed a collective sigh of relief.

The late king, along with his predecessor— the legendary Louis XIV— had indebted France up to its eyeballs with endless war, waste, and lavish spending.

Sure, Versailles was gorgeous. But the interest payments were eating the royal Treasury alive. And everyone knew that France was in serious trouble... so when the king died, people became hopeful that change was coming.

The new king, Louis XVI, was young, bright, energetic, and wildly popular. People desperately believed that he would finally be the one to reform the system and fix the nation’s gargantuan problems.

And initially things went very well. One of the young king’s first orders was to appoint an economic libertarian named Jacques Turgot as his chief minister.

Turgot made his principles crystal clear from day one: France would not declare bankruptcy. It would introduce no new taxes. And it would incur no new debts.

In short, Turgot planned to fix the nation’s finances through massive spending cuts—something everyone acknowledged was long overdue. He also aimed to improve the efficiency of the state, and there were plenty of obvious, sensible reforms to be made there as well.

Unfortunately for France, it didn’t last long.

Turgot made enemies fast— which wasn’t very surprising given that he was threatening the political class’s taxpayer-funded gravy train. Nearly everyone— the Church, the media, the nobles— turned on Turgot and called for his removal.

So by May of 1776, just 18 months after Turgot took office, the King dismissed him.

At that point, it became painfully clear that the necessary reforms weren’t going to happen. In fact France went in the opposite direction— providing major financial support to America— until finally hitting rock bottom in 1789 at which point France suffered its own revolution, along with the Reign of Terror, multiple wars, hyperinflation, and more.

When it comes to making much needed reforms, I see a lot of similarities between 1770s France and 2020s America.

When Donald Trump won the 2024 election, there was real cause for optimism.

Trump had a strong economic record already. He talked during the campaign about the need to cut the deficit. He hammered the regulatory state. He made it clear that America couldn’t keep limping along funded by infinite debt and magical thinking.

Then he brought in real firepower.

Elon Musk was elevated to head the DOGE initiative to take a chainsaw to government waste. Like Jacques Turgot in 1774, Elon found all sorts of garbage in Washington: redundant agencies, overlapping missions, and entire programs that were taxpayer-funded scams.

Most importantly, Elon identified spending cuts that, along with a strong deregulatory push to unleash growth, could have steered the ship in the right direction again. America’s debt problems wouldn’t vanish overnight, but they could start improving.

Plus, after years of ‘leadership’ from Joe Biden, i.e. a guy who shook hands with thin air and abandoned tens of billions of dollars of military equipment to America’s sworn enemy in Afghanistan, the US had elected someone whose first instinct upon his attempted assassination was to cheer Americans to fight.

Things certainly started well. In his first days as President, Trump issued a handful of powerful executive orders. The border was closed. DOGE started to gain traction. The woke nonsense ground to a halt.

But then he went all-in on tariffs, arguing they were the solution to America’s financial problems. Instead of offering the stability that businesses need to plan and grow, however, the ‘plan’ was a chaotic mix of on-again, off-again policies with no clear objective.

Then, just as DOGE was proposing serious spending cuts, the government did a 180 and backed a massive funding bill that added trillions to the deficit. Nearly everything that Elon found was ignored.

And in the end, Congress rescinded a whopping $9 billion of waste out of the hundreds of billions identified.

Then Trump and Elon had a falling out. Elon walked. And, just like that, it started to look—once again—like business as usual in Washington.

Still, optimists could hold out hope. Maybe it was just a year-one strategy—pass the big spending bills early, stabilize politically, and tackle reform in year two.

I’ve long argued the window is still open to arrest America’s decline. But they are pushing it dangerously close to the edge.

And then came Epstein.

No, it’s not an economic issue. It doesn’t directly affect bond markets or Social Security or the Fed.

But it is a major crack— perhaps the final crack— in the illusion that anything is going to change.

They are refusing to hold Epstein’s buddies accountable, to reveal what happened, and to deliver on a key promise of transparency that they made repeatedly.

 And instead of leveling with the public—even if the truth was ugly—they chose to gaslight voters.

Trust in every major institution was already near historical lows prior to this Epstein issue. Now it will only get worse.

The Swamp, the Deep State, the runaway bureaucracy— whatever you want to call it, clearly lives on.

They’re not cutting the deficit. They haven’t significantly rolled back regulations. Reforming Social Security isn’t even on the table, just 8 years from insolvency. Spending keeps accelerating, with no plan to slow down.

Meanwhile, interest on the national debt has already blown past $1 trillion annually, which could easily triple within a decade.

Foreign governments and central banks—once the biggest buyers of US debt—are quietly backing away.

The White House is already planning on installing their own yes-men to the Federal Reserve, virtually guaranteeing a money-printing bonanza in the years to come... with the obvious effect being tons of inflation.

If you had put your Plan B on hold, it’s probably time to dust off the cobwebs.

The world’s not ending. America will not cease to exist. But it’s becoming ever more likely that the fiscal, social, and inflationary challenges ahead cannot be ignored.

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

https://www.schiffsovereign.com/trends/the-illusion-collapses-153204/?inf_contact_key=98fc82d484be096c2c8e8401c5ba74ad611c10abb7b3657801e6f799df81c049