The Candlestick Makers Are Back, and This Time They're Not Joking
The Candlestick Makers Are Back, and This Time They're Not Joking
Notes From the Field By James Hickman (Simon Black / Sovereign man) September 3, 2026
In 1845, the French economist Frédéric Bastiat petitioned parliament on behalf of the nation's candlestick makers. They were being ruined, he wrote, by an unscrupulous rival that was flooding the market with light at a price no honest candlestick maker could match.
The Candlestick Makers Are Back, and This Time They're Not Joking
Notes From the Field By James Hickman (Simon Black / Sovereign man) September 3, 2026
In 1845, the French economist Frédéric Bastiat petitioned parliament on behalf of the nation's candlestick makers. They were being ruined, he wrote, by an unscrupulous rival that was flooding the market with light at a price no honest candlestick maker could match.
This light-producing rival, of course, was the sun.
And Bastiat satirically demanded "a law requiring the closing of all windows, dormers, skylights, inside and outside shutters, curtains… in short, all openings, holes, chinks and fissures" to ensure that no sunlight could enter French homes.
Think of the jobs this would create. "If more tallow [curtains] be consumed, there will arise a necessity for an increase of cattle and sheep," the petition argued. "Thousands of vessels would soon be employed in the whale fisheries [for oil]."
Bastiat, one of history's most famous proponents of free markets, was obviously joking. He wrote the petition to mock the tariff wall that sheltered France's industries from cheap foreign goods— block the cheaper competitor, protect the domestic producer, count the jobs saved.
No one counted the cost of protectionism: everyone else paying more for everything, and the whole country became poorer.
Yet decade after decade since, every new innovation has been met with exactly this kind of uproar. And nobody is joking.
It wasn't so long ago that taxi drivers were up in arms over Uber undercutting their prices. In June 2015, nearly 3,000 of them shut down parts of Paris, burning tires and blocking airport roads, because Uber's cheap service didn't require the professional taxi license that could cost $270,000.
The French government caved within a day, ordering police to seize the unlicensed Uber drivers' cars.
Now the wheel has turned. Waymo's robotaxis launched in Atlanta in June 2025, bookable through the Uber app of all places. And Uber drivers say the competition is cutting their pay.
Naturally the Atlanta Rideshare Drivers Union wants the city to slap a $0.50 to $1.00 fee on every robotaxi ride, paid into a "driver transition fund," plus a ban on robo pickups at the Atlanta airport.
If only they could tax the sun for the candlestick makers.
The federal government runs the same play, just bigger.
In January 2025, the Commerce Department finalized its ‘Connected Vehicle Rule’, which bans cars with Chinese-linked software from the US market, starting with the 2027 model year.
The stated reason is national security: keeping foreign adversaries out of the cameras, microphones, and GPS units on American streets.
That's a real concern, to be fair. But then came the carve-outs.
Volvo, majority-owned by China's Geely, got authorization in May to keep selling. Ford, after talks with the department, decided its China-built Lincoln Nautilus doesn't need an exemption at all.
But Polestar— owned by the same Chinese parent as Volvo— was shut out and is leaving the US market.
The Commerce Department doesn't publish these decisions or its reasoning, so nobody outside the building knows why one Geely brand got a green light and the other got kicked out of America.
Let’s be honest: if these Chinese cars were really a security threat, there would be no carve-outs to negotiate. There would be a flat ban. No exceptions.
The real threat of cheap Chinese cars is to the profits of American automakers; Chinese cars are very inexpensive— like a decent quality mid-size SUV for around $20k. So many US buyers would start driving Chinese that the American automakers would either have to adapt and compete... or suffer catastrophic losses.
The end result of these bans is less competition, meaning Americans end up paying more for their vehicles.
Just add this to the long list of things which governments, from city councils to federal regulators, make more expensive.
Yesterday we wrote about how federal influence over local building codes adds $132,000 to the average new home.
Today it's how they're making buying a car and taking a quick trip more expensive.
Ask California how it's doing on that nonexistent high-speed rail… $15 billion and 18 years in, without a mile of track. Or ask Europeans, where climate fuel mandates are already tacking surcharges onto every plane ticket.
The receipts are everywhere: everything the government touches becomes more expensive.
College tuition is up about 1,200% since 1980— the surge began as soon as the federal government made itself the nation's student lender.
Since Obamacare passed, the average family health insurance premium has nearly doubled.
Even junk food became more expensive due to government food subsidies; in fact the moment 18 states pulled soda and snacks off the food stamp list, PepsiCo cut prices on Doritos and Lay's by up to 15%.
Housing, transportation, food, healthcare, education— all swamped by government interference, all quickly became less affordable.
And underneath all of it, bringing the whole pot to a boil, is the inflation that politicians and regulators caused with their own spending.
Yet who do they blame? Greedy corporations.
Inflation has nothing to do with greed. It has everything to do with incompetence and irresponsibility.
Bastiat's joke was that nobody would ever actually file the candlestick makers' petition. Yet 181 years later, what started as satire is taking place every single day.
A political class that treats cheaper goods and services as a threat is deliberately choosing to make the country poorer.
To your freedom, James Hickman Co-Founder, Schiff Sovereign LLC
PS: A government that treats cheaper as a threat isn't going to start choosing growth anytime soon. That's exactly why we publish Plan B Confidential— our flagship research on legal, practical ways to diversify your savings, your income, and even your residency beyond any single government's bad decisions.
Your Mortgage Is Now Competing With Google and the Pentagon
Your Mortgage Is Now Competing With Google and the Pentagon
Notes From the Field by James Hickman (Simon Black / Sovereign Man) September 1, 2026
Hardly a week goes by without another data center announcement, and the projects have gotten so big that they're now measured in gigawatts.
A gigawatt is a billion watts of electricity. Running around the clock, one gigawatt is enough to supply about 800,000 average American homes— and a single large data center is now built at that scale.
Your Mortgage Is Now Competing With Google and the Pentagon
Notes From the Field by James Hickman (Simon Black / Sovereign Man) September 1, 2026
Hardly a week goes by without another data center announcement, and the projects have gotten so big that they're now measured in gigawatts.
A gigawatt is a billion watts of electricity. Running around the clock, one gigawatt is enough to supply about 800,000 average American homes— and a single large data center is now built at that scale.
The data center that Meta is building near El Paso is designed for a full gigawatt and comes online in 2028.
Plus Meta just announced plans to grow its campus in Louisiana to 5GW. And OpenAI's Stargate program, spread across sites in several states, is planned for 10GW.
These projects are also spectacularly expensive, and even the richest companies on earth have stopped paying for them out of pocket.
Earlier this month Google borrowed $25 billion from the bond market. It was the company's third major bond sale this year, which brings its 2026 borrowing to more than $70 billion.
Google needs the money because its capital expenditures budget this year is about $200 billion, and in Q2 they spent more cash than they brought in for the first time in more than two decades.
Meta is doing the same thing. In late July, a BlackRock-led group raised $12.5 billion of debt for that El Paso site, where Meta will be the sole tenant for twenty years.
The group had to pay about 7.5% to get the deal done, one of the highest yields on any blue-chip data center bond to date. That comes on top of the $25 billion in bonds that Meta sold in May, and another $30 billion borrowed for the Louisiana campus.
And that's just two borrowers. The total borrowings right now related to AI and data centers is truly staggering.
But it’s not just tech spending that’s driving the bond market. Let’s not forget about the US federal government, which is on track for a $2.1 trillion deficit this fiscal year.
That's just the NEW amount of debt they have to borrow this year just to keep the lights on and pay all the Somalis.
The White House is asking Congress for a $1.5 trillion Pentagon budget next year, more than 40% above this year's and the largest defense request (as a percentage of GDP) since World War II.
So between tech spending and the federal deficit, that’s already several trillion dollars in capital that needs to be borrowed from the bond market... THIS YEAR.
Here’s the problem: America’s “net private savings”, i.e. the sum of ALL undistributed corporate profits, plus total household net income, is only about $2.2 trillion.
In short, the federal government already requires nearly ALL of the net private savings from literally every household and every company across America... just to make ends meet.
Meanwhile the biggest foreign lenders are backing away.
Japan, the UK, and China— the three largest foreign lenders to the US government— all cut their Treasury holdings in June. China now has their lowest Treasury holdings since 2008, down more than 13% from last year.
In short, foreigners are not coming to the rescue. So there is very little capital left over to lend for data centers and AI expansion.
And that says nothing about the tens of millions of other borrowers— small businesses, home buyers, etc. who need to borrow money.
This is why interest rates are rising— it’s simple supply and demand: demand for capital is at an all-time high. Yet supply of capital (at the moment) is fixed. And when the supply/demand fundamentals of capital get out of whack, interest rates rise.
Families who need to buy a home now are standing in the same line as Google, Meta, and the Treasury Department, competing for the same money.
That’s why the average 30-year mortgage rate is 6.7%, and will likely go MUCH higher from here...
... unless the Fed starts printing money again.
Technically the Fed doesn’t physically ‘print’ anything, it’s all electronic. And they don’t call it ‘money printing’, because that would be too embarrassing. They refer to it as ‘quantitative easing’. But it has the same effect— increasing the supply of capital to meet the demand, thus causing interest rates to fall.
Mortgage rates fall. Treasury yields fall. Everyone is able to borrow for less.
Which sounds great... except that conjuring money out of thin air invariably triggers more inflation. So if you can borrow more cheaply but have to pay more for everything, are you really any better off?
It’s obvious the White House wants the Fed to cut rates... which means firing up a fresh round of Quantitative Easing. And Congress certainly won’t mind being able to borrow more.
Pretty much all politicians, regardless of party affiliation, want lower interest rates. Given the choice between high mortgage rates and higher inflation, politicians will pick higher inflation every time.
And that's exactly why it makes sense to have a Plan B.
To your freedom, James Hickman Co-Founder, Schiff Sovereign LLC
Breaking Down $15 billion Spent on California's Train to Nowhere
Breaking Down $15 billion Spent on California's Train to Nowhere
Notes From the Field By James Hickman (Simon Black / Sovereign Man) August 28, 2026
In November 2008, California voters approved a ballot measure to build a bullet train from San Francisco to Los Angeles. It was supposed to be fast enough to make the journey in under three hours. And passengers could hop on by 2020, for a total cost of $33 billion.
Eighteen years later, there is nothing to ride.
Breaking Down $15 billion Spent on California's Train to Nowhere
Notes From the Field By James Hickman (Simon Black / Sovereign Man) August 28, 2026
In November 2008, California voters approved a ballot measure to build a bullet train from San Francisco to Los Angeles. It was supposed to be fast enough to make the journey in under three hours. And passengers could hop on by 2020, for a total cost of $33 billion.
Eighteen years later, there is nothing to ride.
Emblematic of the progress so far is a field outside Fresno, where lonely viaducts poke into the sky with no rail connecting them. The locals call it their own Stonehenge.
And the state’s 2026 revised business plan now says it will cost $126 billion to complete... by 2040. Eighteen years into a 12-year project, they’re now saying they need another $93 billion and 14 more years.
Why is the price nearly four times higher than the original estimate?
Well, let’s try to answer that by tracking where the $15 billion already spent has gone.
The California High-Speed Rail Authority's own business plan shows that about $9.1 billion went to three construction contracts covering 119 miles of the project. Those contracts are for the civil work only, meaning dirt, pipes, power lines, and concrete.
For that, California got about 80 miles of finished roadbed, i.e. the raised, graded earth that the track will eventually sit on, plus various bridges and overpasses.
In case you’re not keeping score, that works out to $77 million per mile... but that doesn’t include the actual train tracks.
No, California plans on building the rail, the electric wire, and the signals with an additional $3.5 billion contract— which was just awarded in June (i.e. 18 years in to a 14-year project).
And $3.5 billion of rail only encompasses a very small portion of the total distance they need to build.
For a rough comparison, Brightline— a private company in Florida— finished a Miami to Orlando line in 2023, with 235 miles of track, stations, and trains, for about $6 billion, or $25 million a mile.
So California’s is three times what Florida’s cost WITHOUT including the cost of the rail, the trains, and the stations.
Extraordinary. Where did all this money go?
They claim that $1.57 billion went to buying property— the narrow strip of land under the 119 miles (i.e. less than a third of the project).
But if you look at real estate prices in the area (Central Valley farmland went for about $12,000 an acre when the buying started), the actual land value was worth maybe $35 million at the time.
In other words, the state OVERPAID what the land was worth by 30x. I’m sure absolutely zero politicians or their families profited from that overpayment.
The next $3.6 billion went to studies, i.e. environmental reviews, and something the state calls “program-wide support”. That's the second-biggest item on the bill.
The Authority started in 2008 with ten employees and hired a consulting firm to run the project. By 2018 the state had grown its own staff to about 190, with the consulting firm employing 485 people on the job.
This outside firm is generating hundreds of millions of dollars per year to do nothing.
When the state auditor went looking for what all those people had produced, 145 of the 184 deliverables were missing.
Not deliverables like rails and bridges. We’re talking about reports. The consultants couldn’t even manage that.
Governor Gavin Newsom's reaction was to promise a purge. Yet the same firm still runs the project. And every slip in the schedule means the firm gets paid more. In fact this year's plan added another $145 million for consultants.
In July the project's own Inspector General wrote that the Authority "has obscured basic facts about the project" and made oversight harder for the legislature.
For example, in January, the Authority agreed to pay one of its contractors $537 million to settle nearly 600 claims for extra costs.
What claims? Were the claims real? Nobody knows, because nobody has audited it. The Inspector General, whose job that is, says his office is half-staffed. Maybe he should hire an outside consulting firm.
How could anyone look at all this and not see the same kind of fraud the Somalis are running in Minneapolis?
You take tax dollars and funnel them through layers of government employees, consultants, contractors, and unions, all of them tied to the political establishment. In return, those people spend a slice of their ill-gotten gains keeping the politicians who make it possible in office.
California's version may be ‘legal’ graft. But that hardly makes it different. It might be worse, since at least in Minneapolis the people on the take can be prosecuted.
Who's to say the contractor didn't earn an extra $537 million? Who's to say the consultants' reports weren't worth every dollar of the $3.6 billion?
And when someone tries to get to the bottom of it, they make asking questions illegal.
Nick Shirley, the YouTuber whose video of empty tax-funded Minneapolis day cares went viral last Christmas, walked into a Los Angeles immigrant-services nonprofit this summer and asked where the $80 million in government money it has taken over the last four years went.
But they were ready to silence him, because two months after the Minneapolis video, that same nonprofit had co-sponsored a bill letting its staff sue anyone who posts videos of them online. Newsom signed it into law on Saturday.
Starting in October 2027, anyone who works at, volunteers at, or gets help from an immigration nonprofit can sue whoever posts their picture online, for at least $4,000 plus attorney's fees.
And these are the same people who mock anyone who suggests an election might not be secure.
Why wouldn't you trust them to count the mail-in ballots at 3 a.m.?
Nobody should bet a family's future on these people getting better. The tax-funded gravy train isn't slowing down if they have anything to do with it.
And that's exactly why it makes sense to have a Plan B.
To your freedom, James Hickman Co-Founder, Schiff Sovereign LLC
PS: Schiff Sovereign Premium is our guide to building that Plan B: legally cutting your tax bill, gold and precious metals strategies, research on undervalued real asset businesses, and diversification moves that keep your money and your freedom of movement out of any one government's reach.
Breaking Down $15 billion Spent on California’s Train to Nowhere | Schiff Sovereign
The Whole World Is Stockpiling Like It's 1939
The Whole World Is Stockpiling Like It's 1939
Notes From the Field ByJames Hickman (Simon Black / Sovereign Man August 24, 2026
On June 7, 1939, US President Franklin Roosevelt signed a new law authorizing $100 million (a lot of money back then) to buy rubber, tin, tungsten, etc., and put it all in storage.
The United States was still at peace at the time. World War II had not yet broken out, and global trade was still relatively seamless.
The Whole World Is Stockpiling Like It's 1939
Notes From the Field ByJames Hickman (Simon Black / Sovereign Man August 24, 2026
On June 7, 1939, US President Franklin Roosevelt signed a new law authorizing $100 million (a lot of money back then) to buy rubber, tin, tungsten, etc., and put it all in storage.
The United States was still at peace at the time. World War II had not yet broken out, and global trade was still relatively seamless.
But anyone reading a newspaper could see what was coming. Hitler had annexed Austria the year before and swallowed the rest of Czechoslovakia that March. Japan had been at war in China for two years.
Every commodity on Roosevelt’s list had one thing in common: America produced next to none of it. Nearly all of the rubber used by US companies, for example, came from British Malaya and the Dutch East Indies. A lot of tin came from Malaya as well.
Congress and Roosevelt were being appropriately cautious. And within a short time they had stockpiled hundreds of thousands of tons of these strategic assets.
Then came the War. Then Pearl Harbor. And then full-blown economic chaos.
By March 1942, for example, Japanese troops had overrun Malaya and the Dutch East Indies... meaning that about 90% of America's rubber supply vanished overnight. Fortunately, their foresight to build stockpiles cushioned the blow.
This critical lesson in self-sufficiency is easily forgotten. As long as global peace and cooperation feel permanent, governments never think about resource scarcity. They assume they will always be able to trade for what they need... so why waste money stockpiling?
But global peace and cooperation can quickly turn to conflict and tension, and that is the environment we are in today.
The last major global conflict was World War II. Before it was over, 730 delegates from 44 nations literally sat down at a conference and hammered out a new framework for economic cooperation that made the US dollar the world’s undisputed reserve currency.
As a result, every country on earth has parked its savings in US government bonds for the past eight decades.
It hasn’t always been easy. The US formally ended the convertibility between the dollar and gold in the 1970s, and there was some thought to creating a new financial system. But the dollar managed to survive as king.
The dollar’s status has also been at risk throughout this century, between the skyrocketing US national debt and heavy-handed legislation (like FATCA) that the US government forced on the rest of the world.
But, still, the dollar survived. And foreign countries kept buying dollars and Treasury bonds.
But everyone has a breaking point, including foreign countries.
The US government’s response to freeze Russian assets in 2022 was the start. Then came last year’s so-called “Liberation Day”, when decades of trade policy were upended, overnight. Then came the Iran war. And now a $40 trillion national debt with no end in sight.
This has all been enough for foreign governments and central banks to finally reverse course; at first they slowed their purchases of US Treasury bonds. Now they’re actually selling... and diversifying away from the dollar.
The immediate beneficiary has been gold. And we’ve written about this— gold is the most logical asset for central bank diversification because it is already a traditional reserve asset... plus the gold market is very large and liquid.
We believe this trend will continue; gold prices will rise as a result, and quality mining companies should prosper.
But there’s a second element to this diversification story.
After Iran closed the Strait of Hormuz— which carried a fifth of the world's oil and a host of other critical resources— every government on the planet re-learned the same lesson of World War II: trade and cooperation can vanish in an instant.
And now the entire globe feels a sense of urgency to prepare for the next conflict.
Will China invade Taiwan? Will the US and China go to war? Will Russia and NATO come to blows? Nobody knows, and no government wants to be caught flat-footed, unable to import the critical resources that their economies need to function.
In Roosevelt’s era it was things like rubber and tin.
Today, these critical resources (what we refer to as ‘real assets’) start with energy— oil, natural gas, even coal... plus uranium for some countries.
Now, not every commodity is a real asset. Sugar is a commodity... but the world would be just fine without it. No government is going to stockpile orange juice, lumber, or wool. Or even rubber anymore.
But cut off a country's oil supply and it reverts to the Dark Ages.
That’s why countries are now stockpiling the strategic assets that are the vital inputs to their economies: copper, rare earths, and even the IP and hardware that power AI.
China is the clearest example. In 2025 alone it added more than a million barrels a day to an oil stockpile and now holds roughly 1.4 billion barrels— the world's largest reserve.
When Hormuz closed and the US and 31 other countries released 400 million barrels from their emergency reserves, China barely touched its pile and by July was adding to it again.
Its nuclear-fuel imports hit a record last year too, far beyond what its reactors burn; the excess went into stockpiles. And this summer Beijing put a new $9 billion state company in charge of buying mines around the world.
Saudi Arabia, on the other hand, produces plenty of oil, so they don’t need to stockpile it. But they are building nearly two gigawatts of data centers at home rather than risk being cut off from computing power.
A government that sells a Treasury still has to put the money somewhere, and the sensible places are the assets that the US government cannot freeze... and that no central bank can print. That is why the long-term direction of gold is still up.
But it’s also why energy, industrial metals, productive technology, and other vital resources— plus the companies which produce them— have a bright future.
This is the thesis behind Schiff Sovereign's investment research newsletter, Strategic Assets. A world that no longer trusts the US government moves into gold, and a world that can no longer count on trade cooperation secures its own stockpiles.
We provide research on companies that mine, pump, and build what governments are stockpiling.
Subscribers who acted on our research locked in more than 10x on a small silver producer and more than 6x on a gold and silver producer, both in under a year.
A tin producer featured last summer is up more than 3x, a zinc producer more than 2.5x, and a tanker company about 2.5x. Across the companies we have closed out, winners and losers together, the average return is 172%.
To your freedom, James Hickman Co-Founder, Schiff Sovereign LLC
Shattering the Myth That Higher Taxes Can Fix the $40 Trillion National Debt
Shattering the Myth That Higher Taxes Can Fix the $40 Trillion National Debt
Notes From the Field By James Hickman (Simon Black / Sovereign Man) August 20, 2026
In June of 1944, American soldiers were storming the beaches of Normandy, single-handedly leading the fight to defeat the Nazis.
Back home, Americans gave everything they had. Some 85 million bought war bonds. The top income tax rate hit 94%, the highest in US history. Even ordinary people paid more and more income tax to support the war effort.
Shattering the Myth That Higher Taxes Can Fix the $40 Trillion National Debt
Notes From the Field By James Hickman (Simon Black / Sovereign Man) August 20, 2026
In June of 1944, American soldiers were storming the beaches of Normandy, single-handedly leading the fight to defeat the Nazis.
Back home, Americans gave everything they had. Some 85 million bought war bonds. The top income tax rate hit 94%, the highest in US history. Even ordinary people paid more and more income tax to support the war effort.
This was the absolute peak of American patriotism and record high tax rates. And yet overall government tax revenue still only came to just 20.5% of GDP.
This matters. In the eight decades since the end of World War II, tax revenue in the United States has averaged between 17% and 18% of GDP... with very little variation.
The low was 14.2% in 1950, coming out of a recession, and the high was 20.0% in 2000, at the peak of the dot-com boom when capital gains tax rates were through the roof.
Yet throughout those eight decades, the overall average has remained quite steady— 17% to 18%... even though corporate and individual tax rates have been all over the board over the same period.
The reason is simple: as tax rates go up and down, people and businesses adjust their behavior. If marginal tax rates skyrocket, people stuff their earnings into tax shelters. Or they defer revenue. Or they come up with any number of ways to legally reduce what they owe.
It's human nature.
You probably heard that the US national debt just crossed $40 trillion yesterday. And on its current trajectory, there is no end in sight to the growth of that debt.
The federal government now routinely posts ~$2 trillion annual deficits... during periods of relative peace and prosperity.
Plenty of people (especially on the left) believe the answer is to tax the rich: sky-high marginal rates, wealth taxes, etc. But the historical data show that higher tax rates cannot and will not solve the problem.
According to IRS data, imposing a tax rate of 90% on people earning $2MM per year or more would theoretically generate $200 to $300 billion in additional tax revenue.
But remember human nature: people would very quickly change their behavior and restructure their affairs, and so the real additional tax revenue would collapse to less than $50 billion per year.
The same goes for a wealth tax. Charging billionaires and centimillionaires a percentage of their unrealized gains sounds like a nice idea to a socialist. But the consequences would offset most (if not all) of the additional revenue.
If Elon Musk were forced to sell 10% of his stock to pay a wealth tax, the share prices of Tesla and SpaceX would plummet.
Sure, the IRS would collect more money from Musk himself. But, nationwide, overall capital gains tax revenue would fall dramatically. So net tax revenue would barely budge.
The point is there are always consequences to raising taxes: less economic activity, slower growth, and higher unemployment. No country in history has ever taxed its way to prosperity.
What’s crazy is that an economy as large and dynamic as America's doesn't even need to run a balanced budget. Even a $1 trillion annual deficit would be OK— and a huge step in the right direction. The national debt would still grow, but as a percentage of GDP, it would shrink.
And it's not hard to get there. The low-hanging fruit is obvious: the Government Accountability Office, the federal government's own watchdog, estimates that hundreds of billions of dollars are lost to outright fraud and theft every single year.
Yet Congress doesn't seem to want to even try to eliminate obvious fraud.
And that's the easy stuff.
The harder part would be streamlining government operations and cutting waste and inefficiency... which could easily generate hundreds of billions in savings.
Harder still would be reforming entitlements, fixing immigration, and taking a chainsaw to the Code of Federal Regulations... all of which could trim spending and/or grow the economy (and hence increase tax revenue).
Again, the national debt is $40 trillion, yet Congress won't even do the easy stuff to fix it. Even worse, the media and the courts actively block and obstruct the people who do try.
We can hope that common sense will one day prevail, and that AI and nuclear power will supercharge the US economy to the point where America grows its way out of debt.
But in the meantime, there are now 40 trillion reasons to have a Plan B.
To your freedom, James Hickman Co-Founder, Schiff Sovereign LLC
How Medicare Became a Slush Fund
How Medicare Became a Slush Fund
Notes From the Field By James Hickman (Simon Black / Sovereign Man) August 18, 2026
Four years ago this month, Washington passed a law and named it, with a straight face, the Inflation Reduction Act. Bizarrely, their plan to ‘reduce inflation’, which had been caused by excessive government spending, was for the government to spend even more money. It’s genius!
How Medicare Became a Slush Fund
Notes From the Field By James Hickman (Simon Black / Sovereign Man) August 18, 2026
Four years ago this month, Washington passed a law and named it, with a straight face, the Inflation Reduction Act. Bizarrely, their plan to ‘reduce inflation’, which had been caused by excessive government spending, was for the government to spend even more money. It’s genius!
Among its various provisions, part of the legislation authorized the government to negotiate prescription drug prices. Seems like a nice idea in principle... but in practice it’s been a disaster.
The Congressional Budget Office released the results late last month: the Medicare drug provisions that were supposed to generate $129 billion in savings will now add $700 billion to the deficit.
Sometimes it seems like this is the whole idea; given the rampant Medicare fraud that gets uncovered on a daily basis, it’s clear that politicians have an incentive to steer MORE money into the program.
Healthcare is the easiest spending in Washington to justify. Every dollar comes with the same argument: if we don't spend on healthcare, people will die!
It ends up being so much money— a giant, dark pool of corruption— and a lot of it gets funneled straight back into the political process as campaign contributions. And it’s been going on for ages.
Back in 2002, for example, America’s biggest health-care workers union spent about $800,000 electing Rod Blagojevich governor of Illinois. He later thanked them "for electing me governor."
Weeks after he took office, Blagojevich signed multiple executive orders that fattened the union’s pockets, like forcing more healthcare workers to join... and automatically deducting union dues from their paychecks. Bad for the unionized workers, but great for the union bosses.
In New York, the Greater New York Hospital Association wrote two checks totaling more than $1 million to the state Democratic Party in August 2018, at then-Governor Andrew Cuomo's campaign's request.
Three months later the state ordered its first across-the-board Medicaid rate increase since 2008, worth about $140 million a year. Great news for the hospital association.
The cycle never ends— the unions and associations scratch the politicians’ backs, and in turn get their backs scratched. No one can rationally expect those parties to walk away from their mutual benefit.
And this is just the ‘honest’ graft and corruption... it doesn’t take into account the outright fraud.
During COVID, Medicare paid for eight test kits per month, per person, in America. Yet an inspector general later found it paid up to $454 million for nearly 39 million kits over that limit.
In June, the Justice Department found over $6.5 billion in fake health-care claims. Yet agents recovered only $182 million in cash and assets, less than three cents per dollar of fraud.
In one instance, a pair of adult day care operators fraudulently billed Medicare and Medicaid $120 million over a decade. One of their centers claimed 1,041 attendees in a single day while the building's occupancy limit was 81.
Then Nick Shirley walked into the neighborhood's facilities with a camera this summer and turned up $190 million more in suspicious billing.
And yet very little of the fraud gets stopped... in large part because a portion of what they steal from the government is funneled back to the politicians (mostly on the Left) who vote for more Medicare spending.
These same politicians install activist judges at the state and federal level, ensuring that anyone who tries to stop the fraud will be sued... and blocked by the courts.
As an example, last year Congress voted to cut off Planned Parenthood from Medicaid for one year.
Planned Parenthood sued. Judge Indira Talwani, an Obama appointee in Boston, dutifully blocked the cut within weeks, and the appeals court had to overrule her twice before the law could take effect.
Feeding Our Future, the Minnesota child-meal Somali fraud network, had the audacity to sue the state for racial discrimination when the fraudulent money train slowed down.
It’s extraordinary; there are so many checks-and-balances in place to keep the graft going.
The politicians vote to keep the money moving. The judges defend it to the last Somali. And the activists and the media scream that anyone asking questions is racist; Governor Tim Walz called the fraud talk "vile, racist lies."
The teachers' unions march the kids out of school for union causes and No Kings rallies, as if the kids had any idea what they were marching for. And the universities continue the socialist indoctrination.
Media, education, courts: the whole institutional layer exists to keep the money flowing.
So of course they want more of it.
Senator Bernie Sanders reintroduced Medicare for All last year, and the movement that just made Zohran Mamdani mayor of New York wants to make this slush fund the entire health-care system.
Even the most conservative estimate puts the price at $32.6 trillion over the first decade; that’s an astonishing amount of potential fraud.
The US could get its fiscal house in order if it shut this slush fund down. But the graft is deeply entrenched... so it’s likely that US deficit spending will continue in order to pay for it all.
Foreign governments have reached the same conclusion: The US has to go deeper into debt in order to finance hundreds of billions of dollars in fraud.
That's a major reason why foreign governments and central banks are diversifying away from the dollar. And with no obvious global currency to park their financial reserves into, they buy gold.
We have been making this argument for the past few years, since gold was below $1800. This sort of news makes the case even more strongly: the story hasn’t changed... and gold remains a great hedge for the fiscal uncertainty to come.
To your freedom, James Hickman Co-Founder, Schiff Sovereign LLC
PS: In this month’s Schiff Sovereign Premium, we made the case for a gold producer built for exactly this outlook: a debt-free, dividend-paying, highly successful gold company which just had the most profitable first-half in its company history. But it only trades at 2x cash flow.
If the fraud and deficits continue, gold should do very well... and successful producers can do even better.
https://www.schiffsovereign.com/trends/how-medicare-became-a-slush-fund-155635/?inf_contact_key=45b23aa345ce3789b19a50db4e04df60121216c3a82d754a88f6751e8a28a7b5
Even America's Enemies Trusted It With Their Money. That's Over
Even America's Enemies Trusted It With Their Money. That's Over
Notes From the Field By James Hickman (Simon Black / Sovereign Man) August 12, 2026
At 4:15 in the morning on November 4, 1956, Soviet artillery opened fire on the city of Budapest. And the subsequent firestorm was nothing short of devastating.
Two weeks earlier, students and factory workers had risen up against the Soviet-installed puppet government in Hungary. They pulled down Stalin's statue, rampaged across the city, and even managed to push Soviet forces out of Budapest.
Even America's Enemies Trusted It With Their Money. That's Over
Notes From the Field By James Hickman (Simon Black / Sovereign Man) August 12, 2026
At 4:15 in the morning on November 4, 1956, Soviet artillery opened fire on the city of Budapest. And the subsequent firestorm was nothing short of devastating.
Two weeks earlier, students and factory workers had risen up against the Soviet-installed puppet government in Hungary. They pulled down Stalin's statue, rampaged across the city, and even managed to push Soviet forces out of Budapest.
Moscow initially signaled that it was ready to negotiate and consider a full withdrawal. The bells of freedom started ringing. But it turned out to be a ruse— and Soviet leader Nikita Khrushchev swiftly sent in the tanks.
The Soviets brutally crushed the uprising in days, killing around 2,500 Hungarians and displacing 200,000 who fled the country.
In the reprisals that followed, tens of thousands more were arrested, and hundreds were hanged— including Hungary's prime minister, who was tricked into surrendering with a promise of safe passage.
President Dwight Eisenhower condemned the invasion and opened America’s doors to roughly 30,000 Hungarian refugees. He then made his case to the United Nations, where the UN General Assembly demanded a full Soviet withdrawal from Hungary. Kruschev ignored them.
Eisenhower was clearly opposed to Soviet aggression. But America did exercise restraint— the President did not touch Soviet money that was held in the US.
It’s crazy to think that, even during the height of the Cold War, the Soviets held a stockpile of US dollars within the US financial system. They had no choice. Global commerce (including oil sales) took place in dollars, so even America’s mortal enemy needed to hold US currency.
Eisenhower could have easily confiscated Soviet assets. Yet not one Soviet account was frozen. Not one asset blocked… even as Soviet tanks shelled a defenseless European capital.
Similarly, twenty-three years later when the Soviets invaded Afghanistan, President Jimmy Carter reacted harshly. He cut off certain trade with the USSR, including grain and technology. And most famously he led a 65-country boycott of the 1980 Moscow Olympics.
But even Jimmy Carter did not freeze Soviet assets.
Decades later, in August 2008, Russia invaded the Republic of Georgia. President George W. Bush condemned the invasion, sent humanitarian aid to Georgia, and ended support for Russia's World Trade Organization bid.
Yet he did not touch any Russian money held in the US.
Three presidents from both parties, across five decades, watched America's biggest adversary invade other countries... but they still chose to keep the money out of it.
America had become Switzerland: a neutral custodian that fiercely protected anyone's savings, regardless of politics. The trust ran so deep that through every proxy war and nuclear standoff, even the Soviet Union held their enemy’s currency inside their enemy’s financial system. That’s how confident the Soviets were in America’s financial neutrality.
That wasn’t about keeping Moscow happy. It showed the world that assets in America were safe... and that was traditionally a huge reason why foreign governments parked trillions of dollars in US government bonds... and why the Treasury Dpeartment could borrow endlessly to fund its deficits.
But this policy of financial neutrality changed in February 2022, after Russia invaded Ukraine. The US pushed its allies to freeze roughly $300 billion of Russian assets.
To be clear, this is not a moral discussion. I’m not arguing whether it was right or wrong; rather, this is about setting precedent. Russia did not attack or invade the United States; they attacked Ukraine— a country with which the US did not have a mutual defense treaty.
For years leading up to the Ukraine invasion, the US government had started politicizing its financial system, weaponizing the dollar, and levying occasional sanctions when foreign countries or banks stepped out of line.
But freezing the reserves of a major power was a massive acceleration.
Consequently, America’s reputation as a financial safe haven vanished on the spot.
Foreign governments were already worried about the gigantic US national debt, political dysfunction in Washington, and deep social divisions. The Russian asset freeze was the proverbial straw that broke the camel’s back.
The first lesson that foreign nations concluded was the importance of holding gold as a strategic financial reserve.
Rather than deposit US dollars in a big Wall Street bank, or hold US government bonds, foreign governments concluded that it was much safer to have physical gold sitting in their own country— no one could confiscate it, freeze it, or inflate it away.
That’s why central banks around the world began diversifying out the US dollar and into gold: roughly 2% of strategic reserves (above normalized annual net purchases) between 2022 and 2025 was invested in gold.
And that modest shift— just 2%— caused the gold price to more than double. As we covered earlier this week, central banks plan on investing a whole lot more into gold.
Gold was the key lesson of Ukraine. Then came the lesson of Iran.
Until this year, few governments worried much about the availability of critical assets like energy, food, fertilizer, microprocessors, etc.
But then US and Israeli forces struck Iran in late February, and Iran responded by closing the Strait of Hormuz. More than five months later, the strait is still too dangerous for most commercial traffic, and many countries are running short on those same critical resources that transit the Gulf.
The lesson of Iran is that the world runs on strategic assets, and access to them can vanish overnight.
Their conclusion is that, again, rather than stockpile US dollars via government bonds and bank deposits, it makes a lot more sense to stockpile strategic assets— like fertilizer, energy, etc.
At a minimum, whenever the situation in Iran comes to its conclusion, countries will have to buy oceans of oil just to top off their strategic petroleum reserves. Our guess is they'll go far beyond that and build the capacity to store even more.
And not just oil. Anything critical and strategic is now a candidate for the stockpile, because the old days of global cooperation and easy trade are gone, replaced by mistrust, conflict, and resource nationalism.
That means base metals, rare earths, and technology itself, from memory chips to sovereign compute capacity.
This trend is still in its early stages, and the companies that own and produce these critical assets stand to do very well.
We've featured many of them, from energy to metals, in Schiff Sovereign's investment research newsletter, Strategic Assets.
And this environment has been very good to them: several are trading at all-time highs right now; the crude tanker company we covered just reported the best quarter in its history, and a zinc producer is up almost 3x in under nine months.
In the most recent issue, we told readers about a small oil producer which is becoming a wildly successful profit machine; it has no debt, excellent management, yet trades at just three times its current free cash flow.
To your freedom, James Hickman Co-Founder, Schiff Sovereign LLC
The Tax Collector Now Gets a Cut of What He Finds
The Tax Collector Now Gets a Cut of What He Finds
Notes From the Field By James Hickman (Simon Black / Sovereign Man) August 11, 2026
Arguably the most famous man on the planet throughout the 1700s was the famed writer Francois-Marie Arouet, known to history as Voltaire. He wasn't just a celebrity writer and philosopher, however; Voltaire was also a wealthy capitalist and nobleman who almost single-handedly turned the impoverished region of Ferney into a highly productive watchmaking hub.
The Tax Collector Now Gets a Cut of What He Finds
Notes From the Field By James Hickman (Simon Black / Sovereign Man) August 11, 2026
Arguably the most famous man on the planet throughout the 1700s was the famed writer Francois-Marie Arouet, known to history as Voltaire. He wasn't just a celebrity writer and philosopher, however; Voltaire was also a wealthy capitalist and nobleman who almost single-handedly turned the impoverished region of Ferney into a highly productive watchmaking hub.
Through his fame and creativity, Voltaire managed to attract a small army of Swiss watchmakers to relocate across the border into France and set up shop in Ferney. As part of the deal, he personally negotiated special tax incentives for his watchmakers, exempting them from some of the most onerous French national taxes.
Voltaire's tax incentives were personally signed off by France's comptroller general, Jacques Turgot... and all of Ferney celebrated their success.
Unfortunately, even a formal deal with the French government didn't stop the local "tax farmers" from coming to collect.
For most of the 1700s, the royal court in France had delegated the collection of its complex system of taxes and duties to private citizens who were known as tax farmers.
Tax farmers would essentially bid against each other to pay the government a fixed sum of money up front each year, which the treasury would then claim as tax revenue.
Tax farmers would then have the full authority of the state to go all over the cities and the countryside to collect.
As they were obviously running a business, their primary motivation was to generate the highest possible return on investment by any means necessary. And it didn't take long for tax farmers to turn into mafia-like organizations that would send roaming gangs across the country to threaten and extort every last penny they could get from French citizens.
Even though Voltaire had negotiated directly with the French government for his region's tax exemptions, the tax farmers still came to Ferney and brutalized the local population.
Voltaire wrote to a friend in late 1775 that the tax farmers "marched about in groups of fifty, stopped all the vehicles, searched all the pockets, forced their way into all the houses and made every kind of damage," to collect money from the citizens of Ferney.
This was not an aberration; stories of widespread abuse by tax farmers were legendary in pre-revolutionary France. In the year 1783 alone, tax farmers carried out more than 4,000 house searches and arrested roughly 20,000 people. Confiscation of property, homes, clothes, and horses was routine. And the financial incentives were perverse, with the person who ratted out a suspected tax delinquent earning one-third of the confiscated property.
Unsurprisingly, most of these tax farmers would be put to the guillotine after 1789.
Sadly, this concept is starting to make a comeback in the land of the free, where governments are outsourcing tax collection to private businesses, which have a financial incentive to be excessive and overly suspicious.
A large part of this is because roughly half of the states are in financial distress. This is a consequence of the federal government pulling the plug on certain slush fund programs that have fattened state coffers since the COVID days.
As a result, states are having to find ways to make ends meet. And that starts with keeping their tax codes deliberately complex and outdated. Doing so means that almost everybody is going to be guilty of some violation, because it's nearly impossible to remain in compliance with a tax code that often contradicts itself.
States then empower private companies to go out and collect, to find infractions wherever they may be, and extort money from productive citizens. This is a much easier approach for them than doing the hard work to balance their budgets and live within their means.
Here's an easy example: it's completely normal now for a business to have remote workers. And often those workers might be in another city, another state, or even another country.
Tax rules in many states have never caught up to this new paradigm. Hence, many state governments still want their pound of flesh, even though workers don't set foot anywhere near their jurisdictions.
Rules in New York state, for example, are completely incomprehensible. A nonresident employee who works remotely from another state can still be considered a New York worker whenever staying home is for the employee's convenience rather than the employer's necessity.
There is, of course, no guidance on how necessity versus convenience is determined. It's a gray area and leaves a lot of room for interpretation by a tax collector who has a financial incentive to extort businesses with out-of-state remote workers.
The fact is, it's impossible for businesses with several employees in several states to get all of this right.
Every multi-state business is in violation of something, somewhere, and the only question is who finds it first.
And this is only one small example. There are literally hundreds, if not thousands, of outdated tax regulations at the state and local levels for which compliance is simply not feasible.
Private companies receive anywhere from 12% to 20% of the amount they collect, and they engage in any number of creative ways to find delinquents.
They'll license proprietary location data, including cell phone tower logs, toll records, and even credit card statements, and when all else fails, sometimes they'll just make stuff up to intimidate taxpayers into writing a big check.
You will absolutely hear more about this, if not experience it for yourself. Readers of this letter know without a doubt that the US federal government is in deep financial turmoil, with a national debt of nearly $40 trillion and roughly $2 trillion in annual deficits.
But many states are in far worse shape. And they don't have the luxury of being able to print the world's reserve currency to make ends meet. Rather than make the difficult choices to balance their budgets, they will turn to milking their citizens like dairy cows and outsourcing the collection to a new generation of tax farmers.
To your freedom, James Hickman Co-Founder, Schiff Sovereign LLC
P.S. Working out where your business, your assets, and your family legally belong is exactly what our flagship research service, Schiff Sovereign's Plan B Confidential, was built for.
Every month it covers second residencies and citizenships, foreign banking, legal tax reduction, and real assets, reported from more than 120 countries so the options come with real costs attached.
Central Banks Choose Between Gold and Dollars. Gold Is Winning
Central Banks Choose Between Gold and Dollars. Gold Is Winning
Notes From the Field By James Hickman (Simon Black / Sovereign Man) August 10, 2026
Every country on earth keeps a rainy-day fund: a pile of emergency savings, managed by its central bank, set aside for wars, crises, and currency runs.
These stockpiles of cash around the world are known as a nation’s “reserves”, and the people who manage those funds are called reserve managers.
Central Banks Choose Between Gold and Dollars. Gold Is Winning
Notes From the Field By James Hickman (Simon Black / Sovereign Man) August 10, 2026
Every country on earth keeps a rainy-day fund: a pile of emergency savings, managed by its central bank, set aside for wars, crises, and currency runs.
These stockpiles of cash around the world are known as a nation’s “reserves”, and the people who manage those funds are called reserve managers.
Due to America’s superpower status, managers tend to hold the vast majority of their nations’ reserves in US dollars— most commonly in US government bonds like the 10-year note.
Now, every year, a London institute called OMFIF surveys dozens of these reserve managers who collectively hold more than $10 trillion— and OMFIF asks the same question each year:
What does your central bank plan to do with its US dollars?
This year, for the first time, more reserve managers said they planned to cut their dollar holdings than increase them.
Reserve managers are the least excitable people in finance. Their job is to be boring, to hold safe assets, and to never make news. So this is not an emotional knee-jerk reaction. It is a decision that has been decades in the making and accelerated over the past few years.
The critical moment came in February 2022 when Russia invaded Ukraine; the US government froze roughly $300 billion of Russia’s reserves, i.e. assets that were held outside of Russia.
Interestingly enough, many of those frozen Russian assets were actually held in EUROPE, not the United States. But the US government still exerted control, pushing Europe to freeze those Russian-owned bonds.
Every reserve manager on the planet learned the same lesson that day: if you ever land on America’s bad side, the US government will lock you out of your national savings in an instant.
And it was at that point that central banks around the world started shopping around for more secure reserve assets that the Treasury Department cannot freeze.
Given that foreign countries collectively hold tens of trillions of assets (most of which is denominated in US dollars), they couldn’t exactly dump their holdings overnight. No one is willing to shout “FIRE” in a crowded theater; but they are, however, calmly making their way to the door.
But this process will take years, perhaps even a decade or more.
The key question is— where are they going to park their reserves, if not US dollars? There certainly have been a number of lingering options, from the “BRICs dollar” to China’s digital currency.
But the obvious answer (as we have been writing about for years here) is gold.
From 2022 through 2025, central banks bought a few hundred billion dollars worth of gold (above their normal purchases). This amounts to roughly 2% of their reserves.
Yet by parking just 2% of their reserves into gold, gold prices more than doubled from ~$1,600 back then to more than $4,000 today.
It’s important to note that the sudden spike in gold prices to $5,600 early this year wasn’t from central bank purchases— that was mostly hedge funds and retail investors piling in.
Gold prices slid back down to $4,000 as those investors exited. But central banks have started buying again; net central bank purchases amounted to 244 tonnes in the first quarter of 2026— well above their five-year average. And net purchases continued in April and May.
The big headline is that those same central bank reserve managers recently told OMFIF that they plan on moving AT LEAST another 7% of reserves out of dollars over the next decade.
Most likely the bulk of this reserve diversification will go into gold.
In other words, 2% of reserves more than doubled the gold price between 2022 and 2026. Now they plan to invest over three times that amount over the next decade. Any guesses where the gold price is headed?
These bankers also expect to pay more for gold; 61% of the central banks OMFIF surveyed estimated a gold between $5,000 and $6,000 an ounce by June 2027. And yet, even at record prices, most of them still plan to buy gold over the next two years.
Think about that. The institutions that just bought the gold price dip expect the price to go up within a year… and their stated plan is to keep buying more.
Most individual investors are very short-term in their thinking. They look at day-to-day price fluctuations and tend to follow popular trends.
Central bankers, on the other hand, ignore daily, monthly, and quarterly noise. They think strategically... and their time horizon is in years if not decades.
They’re not doing this to make money; they aren’t planning to trade their US dollars for gold, only hoping to trade their gold back for more US dollars down the road.
Rather, they’re trying to protect their national savings by purchasing strategic assets that the US government cannot confiscate.
Ultimately this is why we believe that the long-term direction of gold is still much higher— because the largest buyers in the market are still buying, and they plan to continue buying for years to come.
To your freedom, James Hickman Co-Founder, Schiff Sovereign LLC
P.S.
When retail investors dumped gold this year, they dumped the gold producers too. But these companies were built to survive far lower prices, so at today's gold they are still enormously profitable, still throwing off cash, and still trading at low multiples of the cash they generate.
Schiff Sovereign's Strategic Assets is monthly investment research on exactly these kinds of businesses: already profitable, little or no debt, trading at a low multiple of free cash flow, with catalysts the market has not priced in.
The Biggest Winners Of This War Don't Pump A Single Barrel
The Biggest Winners Of This War Don't Pump A Single Barrel
Notes From the Field By James Hickman (Simon Black / Sovereign Man) July 28, 2026
How much do you think it would cost to send a supertanker, one of the giant ships that move the world's crude oil, through a narrow stretch of water that is full of mines, where missiles hit two tankers in early July, and where a crew member has already been killed?
Last month, one shipowner agreed to make that run— through the Strait of Hormuz— for nearly $470,000 per day.
The Biggest Winners Of This War Don't Pump A Single Barrel
Notes From the Field By James Hickman (Simon Black / Sovereign Man) July 28, 2026
How much do you think it would cost to send a supertanker, one of the giant ships that move the world's crude oil, through a narrow stretch of water that is full of mines, where missiles hit two tankers in early July, and where a crew member has already been killed?
Last month, one shipowner agreed to make that run— through the Strait of Hormuz— for nearly $470,000 per day.
For perspective, in the first few months of last year, before the war, the biggest crude tankers on earth were earning as little as $36,000 a day.
The ships collecting these fortunes don't produce anything at all. They don't pump oil, they don't refine it, and they don't sell it. They just carry it from one place to another.
And that is exactly why they have become the biggest winners of this war.
When Iran effectively closed the Strait of Hormuz in late February, oil spiked to $120 a barrel in March, then calmed as ceasefires came and went. But all the while, tanker rates just kept climbing.
That's because of the arithmetic that drives the shipping business; it’s simple to understand— when the strait became too dangerous to navigate, everything had to be rerouted. So instead of a quick voyage through the strait, cargo had to be transported through far more complicated means... and ships had to sail much longer routes to avoid the danger.
The end result is that oil from the region now crosses far more ocean, and every voyage takes a LOT longer. This means ships are tied up for longer... driving demand higher for shipping.
And it’s not like this problem can be eliminated by simply adding more ships to the global fleet; supertankers take years to build, and shipyards spent the past decade producing very few.
That last part matters, because it is the reason this windfall was visible long before anyone had heard of this war.
One of the largest supertanker owners earned more than $100 million in the first quarter, excluding one-off gains from selling ships, as its fleet was making roughly two and a half times as much per day as a year earlier.
The company paid out every penny of it as a dividend, extending a streak of quarterly payouts stretching back more than fifteen years. And the second quarter will be even better: by early May, it had already booked most of its available days at nearly double its first-quarter rate.
Another major tanker owner reported nearly $200 million in profit for the quarter and declared the largest dividend in its history.
Tankers are not the only winners. One owner of bulk carriers— the ships that haul iron ore, grain, and coal— has become the target of a takeover battle in which a rival has raised its offer again and again, and the board keeps rejecting bids it says still undervalue the fleet.
All three companies are on the research list of Schiff Sovereign's investment newsletter, Strategic Assets.
They were featured in 2023 and 2024, back when shipping was about as unloved as a business can be. That was the point. Shipping moves in long cycles, and the bottom is where the next shortage is easiest to see... because years of terrible rates had stopped owners from ordering ships, and a ship ordered today does not carry cargo for three years.
Counting the ships that would exist in 2026 took no view on Iran— only a public order book.
They met a strict set of criteria: profitable, little or no debt, trading cheap against current cash flow, and operating in an industry with an aging fleet and hardly any new construction on order.
The war revealed that setup; it did not create it. As of early July, one tanker owner had more than doubled since being featured, the other was up more than 90%, and the bulk carrier owner was up more than 50% on a takeover bid rather than a rate spike.
The tankers keep paying quarterly dividends, and one payout alone equals almost 10% of the share price when that company was first featured.
We expect this pattern to repeat across real assets.
The world spent a decade underinvesting in the physical things civilization runs on: ships, mines, oil fields, refineries, smelters. Now geopolitics has turned violent. When there is no spare capacity, every disruption has to be resolved by price, and the companies that own the scarce assets collect the difference.
To be clear, we are not permabulls, and rates like these will not last forever. A durable peace would bring tanker earnings down hard, and shipping has punished euphoric buyers many times before.
Our edge is not predicting wars or commodity prices. It is applying strict criteria to well-run companies, making the case to buy when they meet the bar, and to sell when they no longer do.
That discipline is working. Of the more than twenty companies currently on the research list, six are showing a loss. The companies that we closed out returned an average of 172%.
A silver producer gained more than 950% in under a year, and others returned 540%, 240%, and 150%.
To your freedom, James Hickman Co-Founder, Schiff Sovereign LLC
Why They Won't Even Fix the Easy Stuff
Why They Won't Even Fix the Easy Stuff
Notes From the Fied By (Simon Black / Sovereign Man) July 27, 2026
The Department of Transportation's headquarters campus in Washington spans two complexes covering 1.8 million square feet across 11-acre of prime DC real estate. In the private sector, such a trophy office property would fetch north of $1 billion per year in rental income.
Yet for the federal government, two-thirds of the space sits empty according to the Government Accountability Office (GAO), the federal government's own internal watchdog. This is based on real data; the GAO toured the department's buildings last fall and counted the empty desks.
Why They Won't Even Fix the Easy Stuff
Notes From the Fied By (Simon Black / Sovereign Man) July 27, 2026
The Department of Transportation's headquarters campus in Washington spans two complexes covering 1.8 million square feet across 11-acre of prime DC real estate. In the private sector, such a trophy office property would fetch north of $1 billion per year in rental income.
Yet for the federal government, two-thirds of the space sits empty according to the Government Accountability Office (GAO), the federal government's own internal watchdog. This is based on real data; the GAO toured the department's buildings last fall and counted the empty desks.
And this is far from an isolated case. Of the 189 government buildings around the country that were analyzed by the GAO, 168 were underutilized— with occupancy averaging just 37%.
One of the worst offenders is One Aviation Plaza in Queens, which sits at 13% occupancy.
Ironically, Congress actually set a MINIMUM standard for all government buildings to be at least 60% occupied. This is the law of the land in the United States, set by the 2023 USE IT Act.
So, Congress was surprisingly trying to make things more efficient and save taxpayer money— potentially billions each year. They passed a law. But the government doesn't follow it.
The big consequence for the government violating its own law so far has been this GAO report. Nobody was fined, nobody was fired, and nothing was sold. Basically we got a PDF.
And all of that is just one category of waste at just one department. The bigger losses are to outright fraud.
In June, the Justice Department announced a record-setting healthcare fraud takedown: 455 defendants, the most ever charged in a single healthcare fraud operation, including 90 doctors and licensed medical professionals, all accused in schemes involving $6.5 billion in fraudulent claims.
Yet federal agents only managed to seize $182 million in cash and assets. No word on what happened to the other $6.3 billion.
By the government's own accounting, federal agencies made close to $200 billion in improper payments in fiscal year 2025 alone... $24 billion more than the year before.
That's money which should never have gone out the door, went out in the wrong amount, or can't be documented. And that was only across 64 programs at 15 agencies... a small fraction of the government's total footprint.
This keeps happening for a simple reason: the federal government's ~$7 trillion annual budget is too vast for anyone to keep track of... and no one is ever held accountable.
Bureaucrats who waste the money never get fired; in fact it is damn near impossible to fire a federal employee. And voters continue electing the same incompetent, crooked politicians to public office.
Even when there's public outcry over obvious fraud, the legacy media closes ranks around their party and insists that voters are racist for criticizing "Learning Centers".
None of this is free. The empty buildings, the stolen billions, the money nobody can track: it all gets paid for with borrowed money. And that deficit spending is what fuels inflation.
June's Consumer Price Index came in at 3.5%. By the Fed's own admission, inflation has now missed its 2% target for five years running.
And after all that failure, few in Washington will name the cause.
A lot of people blame oil, especially after the war with Iran sent crude above $126 a barrel. But oil has been all over the board for the last five years; it was under $60 a barrel just last fall. So why wasn't inflation falling when oil was cheap?
Because, through all of it, there has been exactly one constant: insane levels of government spending. Deficits keep rising, and the more money the government wastes, the more stubborn inflation becomes.
The central bank can't fix that; the Fed doesn't pass spending bills, Congress does. And as long as the spending stays out of control, inflation is not coming down.
And Washington has shown no appetite to bring it under control. They refuse to cut even the easiest, most obvious waste and fraud.
Nothing about this changes on its own. A government that can't bring itself to sell an empty building is not going to take on the spending that actually matters, and inflation is how they'll pay for the difference.
Which is exactly why it makes so much sense to own the real assets that hold their value when the dollar doesn't: gold, silver, and well-managed, productive businesses.
It's definitely time to be thinking about a Plan B.
To your freedom, James Hickman Co-Founder, Schiff Sovereign LLC
P.S. Our flagship service, Plan B Confidential, is built for exactly this: real asset strategies to protect your savings from Washington's spending, and residency options in countries where your money buys far more. It's backed by boots-on-the-ground research from all over the world—