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

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

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

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

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

The national debt exploded as a result.

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

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

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

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

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

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

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

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

It’s not hard to understand why.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

To your freedom,  James Hickman

Co-Founder, Schiff Sovereign LLC

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

Is the US Headed Toward Recession?

Is the US Headed Toward Recession? [Podcast]

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

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

US productivity was surging.

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

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

But America decided to move in the opposite direction.

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

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

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

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

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

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

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

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

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

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

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

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

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

Tariffs throw cold water on the whole thing.

This is what we discuss in today’s podcast.

We also touch on:

• Recent stock market swings

• The valuation of stocks now, and historically

• Who is investing in the stock market today

• What could drive investors into bonds

• And more.

You can listen here.

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

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

https://www.schiffsovereign.com/podcast/is-the-us-headed-toward-recession-podcast-152224/

Can Tariffs Replace the Income Tax? We Did the Math

Can Tariffs Replace the Income Tax? We Did the Math

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The Controlled Demolition of the US Dollar’s Reserve Status

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

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

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

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

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

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

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

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

But there are consequences to that...

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

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

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

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

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

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

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

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

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

That could be the outcome over the next four years.

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

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

Click here to listen in to today’s episode.

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

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

https://www.schiffsovereign.com/podcast/the-controlled-demolition-of-the-us-dollars-reserve-status-podcast-152164/

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

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

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

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

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

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

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

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

The US government should heed this warning.

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

That’s the subject of today’s podcast.

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

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

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

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

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

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

You can listen to the full podcast here.

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

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

https://www.schiffsovereign.com/podcast/the-latest-bad-premise-could-be-a-disaster-for-the-us-dollar-podcast-152145/

This Might Actually Work: America’s Golden Visa

This Might Actually Work: America’s Golden Visa

Notes From the Fiefld By James Hickman (Simon Black)  March 4, 2025

In 2012, Puerto Rico was in the depths of a nearly decade-long recession and looming debt crisis.

The island had lost about 10% of its population— mostly young, educated professionals, i.e., the most lucrative members of its tax base.

So politicians did something radical: they established incredibly attractive tax incentives in order to attract new residents. Among others, the incentives provide a 4% corporate tax rate to approved businesses, and a 0% tax rate on investment income.

This attracted thousands of individuals and businesses from the US mainland.

That’s because, while US citizens typically have to pay taxes to the US government no matter where they live or earn their income, Puerto Rico is a rare exception where bona fide residents can escape US federal income taxes, according to the US tax code.

And Puerto Rico’s tax incentives were successful in attracting a lot of wealth to the island. In fact, I moved there myself and established a business under the incentives.

Countries often use their tax or immigration policies to attract new residents or businesses.

Also in 2012, for example, Portugal was facing a severe economic crisis. So in response, the government introduced its golden visa program, which provided residency to individuals who purchased qualifying real estate in the country.

The plan worked: by 2023, Portugal had issued over 11,000 golden visas to investors and 18,000 members of their families, attracting around €7 billion in foreign investment.

But by late 2023, after locals became fed-up with rising real estate prices, Portugal ended the real estate investment option.

But Portugal’s success inspired other European nations to launch similar programs. Some, like Spain’s, are also being terminated due to its success and rising real estate prices, while others programs like Greece’s, have merely raised the investment requirement. Still other countries, such as Hungary, are introducing their own programs.

Now, the United States is considering a similar approach with what the President is calling the “Gold Card” instead of “Green Card”.

At first glance that may seem seem odd, given that the US is already a highly attractive destination for investors and foreigners.

But the US is also the most indebted country in the history of the world. And it has a notoriously horrible immigration system.

For example, why on earth does the “Green Card Lottery” exist? The US should be awarding permanent residency to the best and brightest immigrants, not randomly picking out of a hat who gets to come in.

Unlike current US investor visas, the proposed “Gold Card” would require a significantly higher investment of $5 million, which is pretty steep just for residency.

But once again, the program it would replace is idiotic.

The existing US Immigrant Investor Program, the EB-5, requires an investment of around $1 million.

But it requires investors to navigate the Byzantine US immigration system. This includes submitting a business plan to State Department bureaucrats, as if they’re qualified to judge the merits of a business.

The old EB-5 program has injected billions into the US economy, but it has also faced scrutiny for fraud and administrative backlogs.

This proposed “Gold Card” visa differs in that it there is no mandate to generate US jobs, and there is no cap on the number of visas they can issue.

So the theoretical upper limit on revenue is huge.

The President mused, “if we sell a million, that’s $5 trillion... If we sell 10 million, which is possible — 10 million highly productive people coming in... that’s $50 trillion. That means our debt is totally paid off, and we have $15 trillion above that.”

Based on our analysis, we don’t think that’s a realistic estimate.

Outside of the United States, there are only about 120,000 “Ultra High Net Worth” individuals globally who are worth more than $50 million, according to UBS’ latest Global Wealth Reports.

So at a price tag of $5 million, those 120,000 people would be the primary target.

Even if half of them came to the United States, which is an extremely high estimate, it would be $300 billion, which doesn’t really move the needle.

But if they were to reduce the price tag to, say, $1 million, especially if it could be paid over time, then the global market could potentially generate millions of applications, and the total revenue potential for the federal government could go into the trillions.

It’s also worth pointing out that new foreign residents who cough up a million dollars to become new US residents should have a significantly positive impact on the economy.

The President also teased an idea of providing tax incentives as well, that they would only owe tax on their US income, and not their foreign income.

Currently, citizens and Green Card holders owe tax to the US government on their worldwide income. What the President is referring to is known as “non-domiciled” or “non-dom” tax regime, where only income earned in the US would be taxed.

“Non-dom” tax regimes are nothing new. The UK had a very popular one until they screwed it up last year. As a result, many welathy foreigners who were living in London are now fleeing to places like Switzerland, where you can negotiate a tax deal directly with the government.

There’s no clearer contrast to the right and the wrong approach to attracting wealth and talent to your country.

America should be considering all its options if there is any hope of reversing the decline.

And this is a good sign of that mindset. However, the outcome is still far from certain.

On the other hand, from an individual American’s perspective, it’s great that there are already golden visa programs around the world that can help you diversify internationally with foreign residency, property ownership, and investment.

Because if you live, work, invest, and have everything you hold dear in one jurisdiction (which happens to be the most indebted government in the history of the world) that’s a significant risk.

With problems the size of America’s, you don’t want all your eggs in one basket.

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

https://www.schiffsovereign.com/trends/this-might-actually-work-americas-golden-visa-152159/

Get Ready to Pay

Get Ready to Pay for Paris Hilton’s New House [Podcast]

Notes From the Field by James Hickman  (Simon Black) January 14, 2025

In 1913, 24-year-old Charlie Chaplin arrived in Los Angeles, drawn by an offer from Keystone Film Company. Coming from a poverty-stricken childhood in London and a successful vaudeville career, Chaplin found in Los Angeles a place of limitless potential.

The city was largely undeveloped, surrounded by orange groves, open fields and dirt roads where coyotes still roamed. But it offered the perfect backdrop for the burgeoning film industry— mountains, oceans, deserts— and a chance to escape the constraints of traditional theater.

While San Francisco had flourished during the gold rush, Los Angeles was entering its own boom, fueled by filmmaking. Chaplin quickly became the silent era’s most famous actor, transforming the medium while the city grew into the heart of the movie industry.

Like Chaplin, Los Angeles embodied the spirit of creative freedom, shaping modern entertainment for a century.

The city, especially Hollywood, became synonymous with the film industry, and perhaps took that for granted.

Like California in general, LA assumed that however poorly it treated its residents, however burdensome the regulation, however high the taxes, people would still come flocking like there was gold in the hills.

If you ever wanted to be the author of your own decline, follow the example of California, and Los Angeles in particular.

Hollywood has chased away its own industry to burgeoning film locations like Georgia, New Mexico, and Toronto. Georgia especially is raking in the benefits from LA’s decline.

Los Angeles was a one industry town, and they chased it away.

They forced countless lockdowns on the city during COVID, even threatened to cut off water to those who dared to invite guests over. They declared themselves a sanctuary city against federal law, inviting illegals to enjoy a multitude of free benefits— then expected federal dollars to pay for it.

They cut police, and refused to enforce basic laws against things like shoplifting, or keep even serious criminals in prison. They destroyed education, from elementary to university.

And every business and individual is absolutely drowned in useless permitting.

Oh, and with all their idiotic spending priorities, somehow fire fighting, in an area prone to wildfires, seems to be the only thing they were unwilling to properly fund.

Who would want to continue doing business there? Or invest there? Or live there?

And tax revenue and talented workers are part of the exodus.

California ran things into the ground until they no long had money for basic services.

But hey, at least people can still get private insurance when the government fails them!

Oh wait, California has also run them out of town. Because of California’s regulatory burden many insurance companies no longer do business in the state. And that has left a number of people, including those whose homes have burned down, without insurance.

California has long relied on federal bailouts to fund all these idiotic policies. Their COVID lockdowns were paid for with federal tax dollars, and they’ve received bags of cash from the Biden administration to help pay for migrant care.

The damage from these fires could easily exceed $50 billion, and again, since they have chased away insurance companies, I have a funny feeling that California is going to have its hand out to the federal government once again to help people rebuild form a crisis that was not only preventable but a direct result of political incompetence.

Would you be surprised if the federal government came to their rescue, and US taxpayers ended up paying for poor Paris Hilton’s burned out mansion, because no one would give her insurance?

There used to be a saying, "As California goes, so goes the nation."

And to be frank, I think that’s right. The US itself has some deep challenges brought on by the last several years of horrific leadership and terrible priorities.

There is, starting next week, an opportunity to makes things right and get it back on track. And I am certainly rooting for them to pull it off.

If they don’t, we don’t have to wonder what the future of the US looks like— the whole world can see the failures of the left, in Los Angeles today, laid to waste.

And it is a snapshot of what might come if the incoming leadership isn’t able to right the ship.

Tune in to today’s podcast where we talk about this in greater depth, including at the end explaining our whole ethos on building a Plan B.

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

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

https://www.schiffsovereign.com/trends/get-ready-to-pay-for-paris-hiltons-new-house-podcast-151973/

The US Government Has To Sell $28 Trillion Of Debt In The Next 4 Years

The US Government Has To Sell $28 Trillion Of Debt In The Next 4 Years

Notes From the Field BY James Hickman ( Simon Black )  February 19, 2025

Last summer, the Federal Reserve wanted you to believe that inflation was a thing of the past.

Sure, just about every category of consumer goods had increased in price. Electricity rates had increased 5% year over year. Rent and housing costs were up 5%. Hospital care had become 6% more expensive. Food prices were up. Fuel prices were up. Auto insurance had risen by a whopping 18.6%.

Yet, bizarrely, the overall inflation average was just 2.9%. And based on that number alone, the Federal Reserve had all but declared victory against inflation.

We knew it was BS. And, after diving into the numbers, it didn’t take us very long to realize why.

It turned out that, back in the summer of 2024, used car prices were falling dramatically— down around 11% year-over-year.

You probably remember what happened: during the pandemic, supply chain snarls and factory closures caused used car prices to go through the roof. Eventually, prices peaked... and then started to fall.

By July 2024, used car prices were still on their way down... essentially returning to a more ‘normal’ level. And based on the way that the government calculates inflation, the huge drop in used car prices dragged down the overall average, making the headline inflation rate appear smaller than it really was.

We wrote about this last summer. And we predicted that the decline in used car prices would soon cease... essentially eliminating the key drag that was holding the inflation rate down.

That has now happened. And as of last month, used car prices are no longer falling... and the overall rate of inflation is once again on the rise.

This is where our discussion begins in today’s podcast, and it’s an important one. We talk about why, at this point, lingering inflation is a major challenge. And it’s becoming a more likely scenario.

There are obviously some forces within the government that are working really hard to cut spending. There are also legions of misguided (or flat-out corrupt) politicians who are fighting to prevent those budget cuts from happening.

It’s a see-saw right now and could go either way. But, at least for now, the government is still spending taxpayer money like a drunken sailor.

Last year’s budget deficit was nearly $2 trillion. They’re already on track to repeat that this year. All of that deficit spending adds to the $36+ trillion national debt.

But what makes matters even worse is that an unbelievable $28 trillion of the national debt will have to be refinanced over the next four years, according to Federal Reserve data. (We show you the Fed’s data in the podcast— it’s a chart you’ll want to see.)

The key problem, of course, is that interest rates are significantly higher today than they were several years ago. So when the Treasury Department refinances that $28 trillion in debt, it will be at a MUCH higher rate.

Think about it— if most of that debt was sold at a 2% rate, but now they have to refinance at 5%, then that’s an extra 3% interest to pay on $28 trillion— or $840 billion per year in additional interest.

Remember that the government’s interest bill is already $1.1 trillion per year. So in four years it could easily eclipse $2 trillion per year. Again, this is just the amount of interest.

It’s also pretty clear that a lot of foreign governments and central banks— who own a huge chunk of that $28 trillion which needs to be refinanced— are looking to diversify away from the dollar.

It’s already happening; obviously there are the loudmouthed BRICS countries that have started trading with one another in their own currencies, and thus begun reducing their dollar holdings. But even supposed ally nations in Europe are starting to trade their US dollar reserves for gold.

This is setting up a precarious situation... because if foreign governments and central banks continue reducing their dollar exposure, then who is going to buy up all that $28 trillion worth of US government debt that needs to be refinanced?

Well, the only remaining lender is the Federal Reserve. And as we’ve discussed before, the Fed buys government bonds by printing money... which ultimately causes inflation.

During the pandemic, the Fed printed $5 trillion and we got 9% inflation. Over the next four years the Fed might have to print a good chunk of that $28 trillion just to help refinance US government debt. So what will inflation be? No one knows. But probably not their magical 2% target.

The only way out is to slash government spending. And certainly there is a lot of low hanging fruit for DOGE to cut, which could get the deficit (and therefore inflation) under control.

But this is far from a risk-free proposition. And that’s why it still makes so much sense to have a Plan B.

We discuss all this, and more, in today’s podcast— and we hope you take time to listen in here.

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

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

https://www.schiffsovereign.com/podcast/the-us-government-has-to-sell-28-trillion-of-debt-in-the-next-4-years-podcast-152106/

Is This the Biggest Heist of All Time?

Is This the Biggest Heist of All Time?

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

We recently received a question from a reader asking for my thoughts on crypto.

He said we’ve been talking about gold a lot lately, the gold price, and how the price could go a lot higher. Shouldn’t we hold the same views on crypto, given everything that has happened with Bitcoin over the last year or so?

We ended up doing a whole podcast about this today, We talk a lot about gold, and a lot about crypto. To clarify, I’m not anti-crypto. In fact, I brought Bitcoin to our audience’s attention back in 2013, when the price was under $100.   But there are some differences to gold.

Right now, I think there are some major catalysts that could drive the price of gold much higher. It’s a matter of arithmetic, and we walk you through the math on it.

The other important thing is that while gold is at an all time high, gold related businesses have been in the dumps for a long time. And that’s a bizarre anomaly that is simply not going to last.

Conversely, that same dynamic doesn’t seem to exist with crypto related businesses.

And we talk about, in today’s podcast, Microstrategy, as perhaps the best example.

This is essentially now a Bitcoin holding company, with 478,000 Bitcoin, valued at around $45 billion. Yet Microstrategy’s market cap is almost double that.

So if the point is to buy Microstrategy stock as a proxy for Bitcoin, you’re actually paying double the price.

Versus with gold, we have the opportunity to pay less than two times forward earnings for gold companies that have an all in production cost of $1,500 per ounce— roughly half the price of gold.

So it’s a completely different dynamic, and we explore all this and more in today’s podcast.

We even talk about the Microstrategy convertible notes, and why it’s frankly wildly inappropriate at this point to even compare “crypto” and gold.

You can listen to the podcast here.

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

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

https://www.schiffsovereign.com/podcast/is-this-the-biggest-heist-of-all-time-podcast-152072/

With Gold At an All Time High

With Gold At an All Time High, This Gold Company is Still Insanely Cheap

Notes From The Field By James Hickman (Simon Black) February 10, 2025

And almost on cue, gold is at another all time high today and rapidly closing in on $3,000 per troy ounce.

It’s not hard to understand why.

We’ve been talking about this for quite some time— foreign governments, central banks, and even some large foreign corporations now are trading their dollars for gold. And that’s going to have some unfortunate, negative consequences for the US.

I’m sincerely pulling for Elon and DOGE. I really am. And I think they’ve got a great shot at cutting hundreds of billions of dollars from the federal budget. These guys aren’t messing around and have no qualms about cutting everything that doesn’t make sense.

I also hope Congress and the White House find the courage to make critical reforms to Social Security (though I am less optimistic about that one).

And the final piece to the puzzle of getting America back on track, of course, is slashing regulation and getting back to capitalism. There certainly seems to be a lot of momentum in this direction.

The math is pretty clear: if they manage to succeed at these key challenges, then there is a good chance for the US to grow its way out of debt. But even that is going to take many, many years.

In the meantime the Treasury Department will still need to rely heavily on foreigners to buy (and continue to hold) US government bonds.

I’ve explained before that foreigners own roughly half of all fixed-rate, “marketable” US government debt. So they’re a pretty important lender.

And in order for this turnaround plan to work, the Treasury Department will need those foreign bondholders to keep investing and reinvesting in America’s national debt.

But right now there are a lot of foreign countries that are deeply concerned about holding US Treasury securities. This administration has already threatened even its friends and neighbors with tariffs, and the last administration had an endless fetish for sanctions.

Think about it like this: imagine you hold a good chunk of your money in a faraway bank, and your banker was constantly threatening to freeze your account and cut off access to your funds.

Sure, maybe it’s a very nice and prestigious bank. But after so many threats, would you still keep all of your money there? Would you still want your paycheck direct deposited into that bank, month after month? Or would you start looking around at alternatives?

That’s what’s driving the gold price right now. Foreign governments and central banks are wary about holding official US securities, gold is the most viable alternative. Just like dollars, gold has universal marketability— no central banker is worried about whether they’ll ever be able to sell their gold.

Plus virtually every other government and central bank owns gold, which means it can already be used to settle current and capital account deficits if necessary.

Concern over sanctions, inflation, and America’s gargantuan national debt led foreign officials to buy up more gold over the past couple of years. Overall, they made roughly $80 billion in excess gold purchases in 2023-2024, causing the gold price to jump from about $1,800 to over $2,900.

$80 billion is a drop in the bucket for foreign governments and central banks; they have 100x that much worth of US dollar reserves.

So if $80 billion of excess purchases resulted in a $1,000+ price jump in the gold price, what will happen if they buy $1 trillion or more in gold? That’s the potential scenario that could play out.

Either way, gold is at an all-time high today. But, quite bizarrely, gold-related companies are still at ridiculously cheap levels.

To give you an example, there is a company we presented not long ago to subscribers of The 4th Pillar, our premium investment research service; it’s a profitable gold company with an excellent, clean balance sheet, very little debt, and strong growth. In fact the company even pays a healthy dividend to shareholders.

Yet when we published our research on the company, it was only valued at a mere 5x Free Cash Flow. That’s practically nothing.

The stock has now more than doubled in price as some investors are starting to realize what we discovered and presented to our subscribers many months ago.

But even now, because current and projected earnings have continued to increase, the company is still extremely undervalued even though it doubled in price.

We still see a number of similar opportunities, i.e. gold-related businesses that may be paying strong dividends, have debt-free balance sheets, and are profitable, yet still trade at outrageously low valuations despite gold’s all-time high.

Another report we sent out to our premium subscribers just last week profiled an undervalued gold mining company that has an all-in production price of just $1,500 per ounce. And yet the business is valued at TWO times its expected earnings this year.

It’s really unusual to see such an anomaly, and it almost certainly will not last.

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

https://www.schiffsovereign.com/trends/with-gold-at-an-all-time-high-this-gold-company-is-still-insanely-cheap-152066/