Another “Temporary” Spending Bill That Still Costs Americans 93 Years Later
Another “Temporary” Spending Bill That Still Costs Americans 93 Years Later
Notes From the Field By James Hickman (Simon Black) February 16, 2026
In January 1933, a farmer named Wallace Kramp was about to lose everything. A lender in Wood County, Ohio was foreclosing on his farm over an $800 mortgage he couldn't pay.
Kramp wasn't a bad farmer. It was actually the government’s fault: during World War I, the US government had urged farmers to plant as much as they could to feed the troops and war-torn Europe.
Another “Temporary” Spending Bill That Still Costs Americans 93 Years Later
Notes From the Field By James Hickman (Simon Black) February 16, 2026
In January 1933, a farmer named Wallace Kramp was about to lose everything. A lender in Wood County, Ohio was foreclosing on his farm over an $800 mortgage he couldn't pay.
Kramp wasn't a bad farmer. It was actually the government’s fault: during World War I, the US government had urged farmers to plant as much as they could to feed the troops and war-torn Europe.
Families like the Kramps borrowed money and used the loan proceeds to expand production. But then the war ended; European agriculture recovered, and demand for US agriculture vanished. But the American farmers’ debts didn't.
By the early 1930s, wheat that had sold for $2 a bushel during the war was going for 25 cents. Nearly 750,000 farms went bankrupt between 1930 and 1935.
These weren't giant agribusinesses. They were small, family farms.
Kramp, at least, got lucky. On January 26th 1933, his assets were up for bankruptcy auction... and Kramp's neighbors showed up to bid a combined total of $14. Then they handed everything back to him so that he could keep his property.
But most farmers weren't so lucky, and they lost everything.
That's why, a few months later, Congress passed the Agricultural Adjustment Act of 1933. The idea was to pay farmers to reduce production, prop up crop prices, and keep family farmers on their lands.
The original budget was $100 million— about $2.5 billion in today's dollars— and it was supposed to be a temporary measure.
That was 93 years ago.
But, big surprise, the "temporary" program never went away. And the Agricultural Adjustment Act of 1933 evolved into the modern farm bill— a sprawling piece of legislation that Congress renews every five years, now costing roughly $1.5 trillion per decade.
More importantly, the struggling family farmers it was meant to protect have been replaced by massive agricultural conglomerates.
For example, they receive billions to grow corn. And that subsidized corn flows into the processed food supply— much of it as high-fructose corn syrup which ends up in practically everything Americans eat and drink.
The modern farm bill then funds SNAP benefits (Supplemental Nutrition Assistance Program, aka food stamps) for more than 40 million people.
Ironically, soft drinks— full of that high fructose corn syrup— are the single largest category of SNAP purchases.
Processed foods have fueled epidemic levels of obesity, diabetes, and heart disease. The United States spends nearly $5 trillion per year on healthcare, with the government picking up roughly two-thirds of the tab through Medicare, Medicaid, and other programs.
So taxpayers subsidize Big Ag’s corn production. Then further subsidize the purchase of junk food made from that corn. Then further subsidize the medical care for Americans who become unhealthy from all of that processed food.
This is what I'd call the government spending spiral— a self-reinforcing doom loop where each dollar spent justifies even more spending.
And this isn’t even the most corrosive layer of the spending spiral... because at every step, the industries involved— agricultural conglomerates, food manufacturers, healthcare providers, insurance companies— lobby Congress to keep the money flowing.
PepsiCo alone spent $2.8 million last year lobbying to keep their highly processed junk food eligible for food stamps.
You can see the pattern— these companies benefit from ample taxpayer funded subsidies, then recycle a portion of those proceeds back into the political machine to prop up the candidates who vote in favor of those subsidies.
This is why Congress— with an approval rating under 15%— somehow maintains a 90%+ reelection rate for incumbents: their campaigns are funded by the very graft that they vote for!
The federal government now spends roughly $7 trillion per year— roughly double from ten years ago.
What exactly did Americans get for the extra trillions in government spending? Are roads smoother? Schools better? Healthcare more affordable?
None of the above. In fact, despite a 100% increase in spending, schools, healthcare, and infrastructure have all become worse.
It’s truly staggering how much all of this spending is creating a drag on the US economy.
But it works both ways: cutting spending and eliminating subsidies reverses the spiral and moves things in the right direction.
Last week we told you that RFK Jr. helped to eliminate junk food subsidies in several states. And Pepsi— suddenly devoid of a government teet to suckle— responded by slashing prices to make up that lost revenue.
In other words, they cut subsidies and prices fell. Immediately.
It’s amazing to think how a "temporary" farm program from 1933 is still costing American taxpayers 93 years later.
Just imagine what would happen if the spiral ran the other way.
To your freedom, James Hickman Co-Founder, Schiff Sovereign LLC
Why Firing 9% of the Federal Workforce Didn't Move the Needle
Why Firing 9% of the Federal Workforce Didn't Move the Needle
Notes From the Field By James Hickman (Simon Black) February 13, 2026
In January 2025, the federal government employed about 3 million people. By November, that number had fallen by roughly 270,000 workers — a reduction of about 9%. According to the Cato Institute, that was the largest peacetime federal workforce reduction EVER.
More than 150,000 employees took the "Fork in the Road" buyout offer to resign or retire. Tens of thousands more were laid off outright. Entire offices were emptied. Agencies that had been growing for decades shrank to staffing levels not seen since 2014. And yet, despite historic federal layoffs, government spending went UP last year.
Why Firing 9% of the Federal Workforce Didn't Move the Needle
Notes From the Field By James Hickman (Simon Black) February 13, 2026
In January 2025, the federal government employed about 3 million people. By November, that number had fallen by roughly 270,000 workers — a reduction of about 9%. According to the Cato Institute, that was the largest peacetime federal workforce reduction EVER.
More than 150,000 employees took the "Fork in the Road" buyout offer to resign or retire. Tens of thousands more were laid off outright. Entire offices were emptied. Agencies that had been growing for decades shrank to staffing levels not seen since 2014. And yet, despite historic federal layoffs, government spending went UP last year.
The federal government spent $7 trillion in Fiscal Year 2025— roughly $300 billion more than the year before. Bear in mind, 2025 was the year that DOGE was supposed to take a chainsaw to the budget and cut spending.
This is not a failure of DOGE. It's a revelation about the actual problem.
The total federal payroll— every salary, every benefit, for every civilian federal employee (excluding the military)— comes to about $336 billion a year— less than 5% of total federal spending.
In other words, you could fire every federal employee tomorrow— every bureaucrat, every regulator, every paper-pusher in Washington— and 95% of the spending would continue as if nothing happened.
That’s because around 60% of the budget is mandatory spending— Social Security, Medicare, Medicaid— programs that pay out automatically based on laws that were passed decades ago. Congress doesn't vote on these expenditures each year. The checks just go out.
Then there's interest on the national debt, which in total runs about $1.2 trillion per year. It’s the second-largest line item in the entire federal budget, bigger than Medicare, bigger than national defense.
(The government uses a lower number called “net” interest; they exclude hundreds of billions in interest owed to Social Security and military retirees. But unless they plan on screwing those people over, that interest still has to be paid. So, we use the “gross” interest number and not “net” interest).
All of these obligations grow automatically, every year, regardless of who's in charge or how many people show up to work.
Social Security alone grew by over $100 billion last year. Interest payments grew by another nearly $100 billion. Those two-line items, by themselves, swallowed more than the entire savings DOGE could theoretically achieve by cutting the workforce.
In fact, according to the Congressional Budget Office, more than 80% of projected spending growth over the next decade comes from Social Security, federal healthcare programs, and interest on the debt.
This is the structural problem nobody in Washington wants to talk about honestly: America's deficit problem isn't exclusively because of bad decisions today. It's a failure to address bad decisions made years ago… decades ago-- commitments that are baked into law, growing on autopilot, funded by borrowing roughly $2 trillion every year.
In an ideal world, Congress would address these entitlement programs directly. They are, after all, the biggest driver of the problem. But reforming Social Security or Medicare is the political third rail— nobody wants to touch it.
But there are other ways to move the needle as well.
The $38+ trillion national debt is manageable as long as the economy grows faster than the debt— which right now is not happening. But America still has absurdly strong economic potential to make that happen.
Treasury Secretary Scott Bessent has publicly stated that roughly 10% of the entire federal budget— about $600 billion per year— is outright fraud. Not waste. Not inefficiency. Fraud. And much of that fraud is within entitlement programs— the welfare fraud that came to light in Minnesota, the hundreds of billions in Medicare and Medicaid fraud that have been documented for years.
So, reducing fraud would be extremely helpful. Stop paying criminals!! It shouldn’t be that hard.
Then they can take a hatchet to the regulatory maze that strangles productivity; this would substantially reduce the deficit and boost real economic growth— putting America in striking distance of growing the economy faster than the debt.
To its credit, DOGE proved that the federal government could function with far fewer employees.
After the historic reduction in federal employees, services didn't collapse. The IRS still processed returns. Air traffic controllers still showed up. The essential machinery of government kept running with 9% fewer people.
That confirms what many have long suspected: a significant portion of federal workers exist to justify their own existence.
But DOGE also proved something far more uncomfortable. Whenever the executive branch tries to go beyond workforce cuts and tackle the spending itself— even fraudulent spending— someone files a lawsuit, and a judge issues an injunction.
Federal judges blocked DOGE from accessing Treasury payment systems. A coalition of 20 state attorneys general sued to halt layoffs at over a dozen agencies. Even relatively modest cuts were tied up in litigation for months.
The legal system functions as a ratchet: spending can go up easily, but it almost never comes down.
Ultimately, the spending trajectory won’t change until Congress decides to root out fraud, cut spending across the board, and stop obstructing economic growth.
But Congress won't act until voters force them to do so— which, based on the current state of American politics, isn't happening anytime soon.
The window to fix this relatively painlessly is still open. But it's narrowing. Within seven years, Social Security's trust funds will be exhausted, and the national debt will exceed $50 trillion. At that point, the math won't just be uncomfortable. It will be unavoidable.
We can hope they figure it out. But hope isn't a strategy. And that's what a good Plan B is all about— ensuring your family's financial future doesn't depend on Congress suddenly discovering fiscal discipline after decades of proving they have none.
To your freedom, James Hickman Co-Founder, Schiff Sovereign LLC
It’s Crazy That India is More Fiscally Responsible Than America
It’s Crazy That India is More Fiscally Responsible Than America
Notes From the Field By James Hickman (Simon Black) February 12, 2026
Remember when Pete Buttigieg, as Secretary of Transportation, was handed over a TRILLION dollars by Congress to spend improving America’s infrastructure?
“The main thing I’m thinking about,” he said, “is how do we make sure we take all this money— you know it’s $1.2 trillion— and actually deliver $1.2 trillion dollars worth of value. . .”
Ah yes, the classic investment strategy— shoot for a 0% return on investment.
It’s Crazy That India is More Fiscally Responsible Than America
Notes From the Field By James Hickman (Simon Black) February 12, 2026
Remember when Pete Buttigieg, as Secretary of Transportation, was handed over a TRILLION dollars by Congress to spend improving America’s infrastructure?
“The main thing I’m thinking about,” he said, “is how do we make sure we take all this money— you know it’s $1.2 trillion— and actually deliver $1.2 trillion dollars worth of value. . .”
Ah yes, the classic investment strategy— shoot for a 0% return on investment.
But Pete proceeded to fail at even that— for example, the $7.5 billion electric vehicle charging program, which promised 500,000 stations by 2030, has built fewer than 100 after nearly four years.
What makes this worse is that obviously American didn’t have an extra $1.2 trillion lying around. It borrowed the money, adding even more to the debt.
Debt alone isn’t a bad thing if it used to fund investments that create more value than they consume— generate a positive return on investment (via GDP growth) that exceeds the cost of capital.
Yet governments routinely fail to do this. That’s why their debt-to-GDP ratios (easily the MOST important metric of responsible spending) are getting WORSE each year.
Japan's debt-to-GDP ratio exceeds 260%. Greece, even after years of bailouts and austerity, is still at 150%. Italy sits around 140%.
The United States has crossed 120% and keeps climbing.
And no one seems to care. Congress is completely ignoring the national debt’s ticking time bomb... Instead, America should be leading the way— providing an example to the rest of the world what fiscal restraint and responsible governance looks like.
That’s why it’s so pathetic to see other countries get this right. And the latest example comes from India.
At 56%, India’s debt-to-GDP (the size of its national debt relative to the size of its economy) is less than HALF of the US level.
Yet India’s government is serious about bringing it down.
Finance Minister Nirmala Sitharaman presented their newest budget last week, with the specific goal to bring India’s debt-to-GDP down to 50% over the next five years.
And in order to do that, they’re investing in various sectors where they feel they can generate a strong, positive return— boosting both economic growth and tax revenue.
This includes spending on roads, ports, railways, and other “hard” infrastructure.
By comparison, “infrastructure” in the Biden-era bill was defined as anything which pushed their woke, green dream, from anti-racism to wasteful subsidies.
India is also trying to make smart investments in higher tech infrastructure.
Semiconductors and rare earth minerals are two sectors currently dominated by China— and critical to everything from smartphones to military equipment. So India is proposing to build domestic capacity in both, to ensure they're not dependent on a geopolitical rival for essential resources.
Their data center play is even more targeted; India is offering tax holidays through 2047 for foreign cloud companies that build facilities there.
Google alone has already committed $15 billion for a data center in southern India.
Compare this to how America spends its borrowed money.
$200 million for "gender equity programs" in Pakistan. $100 billion on Leftist legal graft in California alone—$25 billion on homeless programs without reducing the number of homeless, $33 billion on DEI initiatives and green subsidies. $40 million to help queer and transgender people stop smoking.
And this isn’t even part of the 10% of the federal budget— roughly $600 billion per year— Treasury Secretary Scott Bessent estimated is lost to outright fraud.
But the worst part is the trajectory.
India's debt-to-GDP is projected to drop significantly over the next several years— mostly due to spending restraint and their investments in growth.
The US, by comparison, can’t seem to stop spending money. Congress keeps spending more, refuses to rein in obvious fraud, and fails to eliminate pointless regulations.
India is also being prudent about uncertainty; they don’t know what the tariff situation is going to look like later this year or next year. So they rationally acknowledged the uncertainty... and refrained from making additional tax cuts.
There are two ways to bring down a debt-to-GDP ratio. You can slash spending. Or you can hold spending steady and focus on growth.
India chose the second path. One can argue whether that's optimal. But at least they sat down, examined their situation, set a goal, and mapped out what they believe is the best path to get there.
To be clear, India still has plenty of challenges. Their economy is projected to slow as tariffs take effect. They need more private investment. Poverty remains widespread.
And, let’s not be naive: political corruption and graft exist everywhere, including and especially in India.
But they're at least approaching their fiscal situation rationally. They've identified strategic sectors and created incentives so that the private sector can flourish. They've prioritized infrastructure that compounds growth. They've set measurable targets and are making progress toward them.
This is not radical. It should be the bare minimum for any government to simply put their country on a responsible long term trajectory.
Yet in the United States, with all its advantages—reserve currency status, abundant natural resources, the most innovative companies on Earth—the government can't manage the basics.
The national debt stands at $38.6 trillion and climbs by roughly $2 trillion every year. Interest payments alone now exceed military spending. Tax revenue covers mandatory entitlements—Social Security, Medicare—plus interest on the debt. That's it.
Everything else, from the military to national parks, runs on borrowed money.
This is obviously unsustainable.
But it’s not cause for panic. It's arithmetic.
When debt-to-GDP ratios climb past the point of no return, the playbook is predictable because it's happened over and over again throughout history. Governments inflate their way out. The currency loses purchasing power.
And real assets— precious metals, energy, agriculture, industrial metals— hold value regardless of what politicians do to the dollar.
Companies that produce these real assets are primed to do extremely well.
For example, as gold doubled and silver quadrupled, we saw some of the mining companies we research for subscribers increase by 6-11x.
To your freedom, James Hickman Co-Founder, Schiff Sovereign LLC
When Government Subsidies Stopped, Doritos Got 15% Cheaper
When Government Subsidies Stopped, Doritos Got 15% Cheaper
Notes From the Field By James Hickman (Simon Black) February 10, 2026
PepsiCo spent $2.8 million last year lobbying to keep junk food eligible for food stamps.
But last week— after Health and Human Services Secretary Robert F. Kennedy Jr. got 18 states to ban SNAP purchases of products like soda, candy, and processed snacks— PepsiCo announced price cuts of up to 15% on Doritos, Lay's, Tostitos, and other Frito-Lay products. The company's official explanation was "affordability." CEO Ramon Laguarta cited low-income consumers are switching to store brands.
But the timing tells the real story.
When Government Subsidies Stopped, Doritos Got 15% Cheaper
Notes From the Field By James Hickman (Simon Black) February 10, 2026
PepsiCo spent $2.8 million last year lobbying to keep junk food eligible for food stamps.
But last week— after Health and Human Services Secretary Robert F. Kennedy Jr. got 18 states to ban SNAP purchases of products like soda, candy, and processed snacks— PepsiCo announced price cuts of up to 15% on Doritos, Lay's, Tostitos, and other Frito-Lay products. The company's official explanation was "affordability." CEO Ramon Laguarta cited low-income consumers are switching to store brands.
But the timing tells the real story.
The Supplemental Nutrition Assistance Program— food stamps— is a $100 billion per year program serving roughly 42 million Americans. And according to the USDA's own data, about 20 cents of every SNAP dollar goes to sweetened beverages, candy, salty snacks, and sugar.
In fact soft drinks alone are the single largest category of SNAP purchases.
And, until last week, products from Pepsi’s Frito-Lay division were in 7.2% of all shopping trips paid for with SNAP (i.e. taxpayer-funded) benefits.
So when the government stopped subsidizing demand for their products, PepsiCo had to do something they hadn't needed to do in years: compete.
This is what the free market does— it forces companies to be more efficient, cut prices, and pass savings on to their customers.
But here's the thing— this is one company, one product line, one government program.
Zoom out and you can see just how much of price inflation in our daily lives is due directly to government spending— before we even get into monetary policy like printing money.
When a guaranteed buyer shows up with a bottomless wallet, prices go up.
Just look at college tuition. In 1965, Congress passed the Higher Education Act and began backing student loans with federal dollars.
Since then, tuition has risen roughly three times faster than inflation. A year at a private university that cost $2,800 in 1963 now costs over $85,000.
The New York Federal Reserve studied this directly and found that for every dollar increase in subsidized student loans, tuition rose by up to 60 cents.
The mechanism is simple: when the government guarantees the tuition money, universities raise prices... simply because they can.
Healthcare is even worse.
Before Medicare and Medicaid were created in 1965, the government's share of healthcare spending was about 31%. Today it's roughly 64%. Medicaid spending alone has grown from $13 billion in 1975 to over $900 billion today.
And— shocker— healthcare prices have risen dramatically over the same period. The US now spends nearly $5 trillion per year on healthcare, far more per capita than any other developed country, with outcomes that are often worse.
The pattern is the same everywhere you look: the government shows up with money. Prices rise to absorb it. The subsidy becomes permanent. The industry restructures itself around the guaranteed revenue. And then anyone who suggests pulling back the money is accused of "cutting" a vital service.
Now consider the scale of this in America today.
Federal spending has risen from about 18% of GDP in the 1990s to nearly 24% today. That means almost a quarter of the entire American economy is government money.
Of this, Treasury Secretary Scott Bessent has publicly estimated that 10% of the federal budget— roughly $600 billion per year— is lost to outright fraud of the Somali daycare type in Minnesota.
Then there's the legal graft. California alone received roughly $100 billion in federal grants over the past few years for DEI initiatives that produced nothing except more government jobs and campaign contributions.
So how much of America's economic output is actually real?
How much is just government money making a round trip— borrow more debt, hand it out through some boondoggle program where it is spent at a PepsiCo subsidiary, counted as "economic activity," making people obese... then more money spent on healthcare to keep them alive and paying enough taxes for the government to be able to pay interest on the debt...
It’s absurd when you think about it. We don't have a precise answer. But the Pepsi story gives us a clue. The moment the government stopped subsidizing one small corner of the economy, prices dropped by 15% within a week.
RFK didn't regulate PepsiCo. He didn't cap prices. He didn't launch an antitrust investigation. He simply stopped the government from funneling taxpayer dollars into unhealthy food... and the market corrected overnight.
Now imagine what would happen if the government stopped subsidizing entire industries— the defense contractors billing $10,000 for a toilet seat, the universities charging $85,000 for a degree in gender studies, the healthcare system where nobody can tell you what anything costs.
We might finally find out how much of this economy is real.
And that, frankly, is what makes it so hard to fix. Because so many peoples' livelihoods now depend on the government gravy train.
But this trajectory has an expiration date. The federal government borrows $2 trillion a year to keep it all going. Interest on that debt already exceeds $1 trillion annually— more than the entire military budget— and it's growing faster than any other line item.
If rates stay elevated because inflation won't come down, the cost of servicing the debt crowds out everything else.
If the government responds by printing money to cover the gap, inflation gets worse.
And it makes sense to have a Plan B that doesn't depend on Washington finding fiscal discipline before the math catches up with them.
To your freedom, James Hickman Co-Founder, Schiff Sovereign LLC
So... Is The Gold Boom Over?
So... Is The Gold Boom Over?
Notes From the Field By James Hickman (Simon Black) February 2, 2026
It wasn’t until somewhat recent history that the price of gold was less than $1,000 per troy ounce. Now (as you probably know), the price of gold has just dropped by $1,000 in only a matter of days. Silver's decline was even more violent.
Much ink has already been spilled over this, suggesting that “the gold bubble has burst”. Naturally we have a different view. It started on Thursday when the White House announced that Kevin Warsh would be nominated as the next Federal Reserve Chairman.
So... Is The Gold Boom Over?
Notes From the Field By James Hickman (Simon Black) February 2, 2026
It wasn’t until somewhat recent history that the price of gold was less than $1,000 per troy ounce. Now (as you probably know), the price of gold has just dropped by $1,000 in only a matter of days. Silver's decline was even more violent.
Much ink has already been spilled over this, suggesting that “the gold bubble has burst”. Naturally we have a different view. It started on Thursday when the White House announced that Kevin Warsh would be nominated as the next Federal Reserve Chairman.
Warsh is known to be ‘hawkish’, prompting speculation that he would keep rates higher to combat inflation. A lot of people obviously viewed this as bad for gold, prompting an unprecedented wave of selling.
So is that it? Is the precious metals boom over?
Not by a long shot.
Again, I don't say that because of any fanaticism over precious metals. I don’t fall in love with any asset.
But I do understand the big picture story driving gold prices, and that story hasn't changed.
(Note: we're going to focus on gold in this article and leave silver for another time, since silver has different factors at play.)
The first thing that’s important to remember is the reason WHY gold reached such heights over the past few years: foreign central banks.
Central banks have always purchased gold as a strategic reserve asset; this is nothing new. In fact, in 2018 and 2019, before Covid upended the world, central bank gold purchases totaled roughly 650 metric tons.
By 2022, however, central banks started purchasing a LOT more gold— roughly 1,000 metric tons per year, a 50% increase over the long-term average.
The same thing happened in 2023. And again in 2024.
Those extra central bank gold purchases caused a surge in demand... and gold prices roughly doubled in price over that three-year period.
So what was so special about 2022 that prompted central banks to start buying more gold?
Simple. It was the start of a long-term trend of foreign countries losing faith in the US government.
They watched Joe Biden shake hands with thin air. They witnessed the humiliating debacle in Afghanistan. They observed rising US budget deficits and a national debt spiraling out of control. They saw inflation rising.
All of these events made foreign governments and central banks question how much they wanted to keep buying Treasury bonds.
But the real watershed moment came after the invasion of Ukraine.
The US government's response was to freeze Russian assets; Congress then soon passed the REPO Act, giving the President authority to seize Russian sovereign reserves.
This sent shockwaves through foreign governments around the world. Suddenly they felt like their money was no longer safe in America— that the US government could freeze their reserve assets without warning.
I'm not arguing whether this was right or wrong from a moral perspective. But from a practical standpoint, though, it had an obvious consequence: foreign countries wanted to start diversifying their reserve assets away from US dollars and from the United States.
And in their efforts to diversify away from the dollar, gold became the easiest strategic reserve asset for those foreign central banks to buy.
Again, the trend continued throughout 2023 and 2024.
2024 was particularly interesting because the gold price was clearly surging— almost exclusively due to foreign central bank demand.
Yet, despite gold’s obvious rise, individual investors weren’t having any of it. In fact, in 2024, gold ETF saw net OUTFLOWS totaling MINUS 2.9 metric tons. This means that individual investors were net sellers of gold, even as foreign central banks were buying by the ton.
2025 became the year gold went parabolic, rising to $4,500 by year end.
But the key growth driver in 2025 was not central banks. In fact, foreign central banks dialed back their purchases to around 800 metric tons last year—still more than normal, but less than the record 1,100 tons from 2024.
Individual investor demand made up the difference in a big way. Net ETF inflows swung from minus 2.9 tons to plus 801 tons. That's a massive turnaround. On top of that, there was significantly more demand for gold bars and coins.
Bottom line, much of gold’s very recent parabolic price move is because small (and large) investors piled in. Those investors are now dumping their gold because they’re spooked about Kevin Warsh.
Our readers should not be surprised by this pullback; we've been talking about the possibility of a short-term shakeout for some time.
And while I'm not smart enough to know what's going to happen next week or next month, it’s clear that the real story (i.e. foreign governments and central banks losing confidence in the United States Congress) has not gone away.
Think about it— America is deeply divided. The Federal Reserve is in crisis. The US government has shut down for the second time in four months. The national debt keeps rising (now $38.6 trillion). And hardly anyone in Congress seems to care.
Do you think all of this makes foreign governments and central banks want to hold more of their reserve assets in the US, or less?
We think the answer is clearly less, and hence the trend that began in 2022 will likely continue.
Foreign governments and central banks are sitting on $10+ trillion in foreign reserves— most of that parked in US dollars.
Their “extra” gold purchases since 2022 (i.e. they amount of gold they bought each year above the historic average) only totals around $100 billion, i.e. roughly ONE PERCENT of their reserves.
Would it be so crazy to assume that they might want to diversify TWO percent? Or maybe 5%? If so, there could be a LOT more money coming in to gold.
And if a mere 1% of foreign reserves cause the gold price to skyrocket, how high will the gold price go if they park 5% or more?
Again, this isn’t something that’s going to happen tomorrow. It’s a long-term trend. But the point is that the story hasn’t changed.
Remember that in the early 1970s, the gold price increased 5x for similar reasons— US deficits and fiscal woes. But gold peaked in 1975, then fell by a whopping 40%.
A lot of people thought the gold boom was over. But it wasn’t. Again, the story hadn’t changed.
And shortly after, gold resumed its rise, climbing another 8x. It took the election of Ronald Reagan in 1980— someone who was serious about restoring fiscal order— for the trend to finally stop.
I don’t know how far gold might fall. But I do know the fundamental story hasn’t changed.
It also seems pretty obvious that many gold companies (whose share prices have plummeted since Friday) are now quite cheap.
For example, one mining company we’ve written up in our premium investment research recently confirmed that their mining costs for this year will be $1,200 per ounce or less.
Their stock price is down substantially since Friday, which is crazy. The gold price could fall to $3,000, and the company would still be trading at a single-digit P/E ratio.
(Did I mention they’re debt-free and pay a healthy dividend?) There are plenty of other undervalued gold companies out there, so definitely consider giving our premium investment research a try.
To your freedom, James Hickman Co-Founder, Schiff Sovereign LLC
What’s Next After $5,000 Gold?
What’s Next After $5,000 Gold?
Notes From the Field By James Hickman (Simon Black) January 27, 2026
In the year 578 AD, a Korean immigrant named Shigemitsu Kongo arrived in Japan at the invitation of the royal family. Buddhism was flourishing, and the Japanese needed someone who knew how to build temples. Kongo was their man.
He founded a construction company—Kongō Gumi—that would go on to build some of Japan's most iconic Buddhist temples. And, somewhat miraculously, the company stayed within the same family for over fourteen centuries.
That's roughly 40 generations. The company lived through the rise and fall of the samurai, the Meiji Restoration, two World Wars, and the atomic bomb.
But in 2006, after 1,428 years of continuous operation, Kongō Gumi went bankrupt.
What’s Next After $5,000 Gold?
Notes From the Field By James Hickman (Simon Black) January 27, 2026
In the year 578 AD, a Korean immigrant named Shigemitsu Kongo arrived in Japan at the invitation of the royal family. Buddhism was flourishing, and the Japanese needed someone who knew how to build temples. Kongo was their man.
He founded a construction company—Kongō Gumi—that would go on to build some of Japan's most iconic Buddhist temples. And, somewhat miraculously, the company stayed within the same family for over fourteen centuries.
That's roughly 40 generations. The company lived through the rise and fall of the samurai, the Meiji Restoration, two World Wars, and the atomic bomb.
But in 2006, after 1,428 years of continuous operation, Kongō Gumi went bankrupt.
Japan experienced a legendary financial bubble in the 1980s; asset prices exploded. And, like many Japanese companies during that decade, Kongo Gumi borrowed heavily to invest in real estate.
But eventually the bubble burst. Asset prices crashed. And all that remained was the debt... which Kongō Gumi could not repay.
The world's oldest company— which had survived 1400+ years of war, natural disaster, and literally even two nuclear strikes, was undone by too much debt.
It's a powerful reminder: it doesn't matter how long you've been around. What matters is your current financial reality. History doesn't protect you from math.
And this same principle applies to sovereign nations.
Japan has the worst debt-to-GDP ratio on the planet—256%— more than double the United States.
But, like the US, the Japanese government has gotten away with this insane debt level for a long time.
Part of the reason was that their central bank (the BOJ) held interest rates at near zero so that the government could borrow at almost no cost.
If interest rates are 0%, in theory you could borrow unlimited quantities of money without any consequences... but ONLY as long as interest rates remain at zero.
Unfortunately for Japan, the bond market looks like it has finally had enough.
On January 19th, Japan's new Prime Minister Sanae Takaichi announced a 21.3 trillion yen (about $140 billion) stimulus package. The bond market's response was immediate... and visceral.
Within days, Japan's 40-year government bond yield soared to 4.24%—a record high, and the first time a Japanese sovereign maturity has breached 4% in over three decades.
The 30-year yield surged to nearly 4%. Even Japan’s 10-year government bond hit 2.38%, the highest since 1999.
Higher rates are a five-alarm fire for any heavily-indebted country. And we've seen this movie before.
In October 2022, British Prime Minister Liz Truss announced a tax-cut plan that would have resulted in a higher budget deficit. The bond market wasn’t having any of that. Government bond yields skyrocketed, and the British pound plummeted.
It was so bad that the Bank of England had to launch emergency interventions, and the Prime Minister resigned after just 49 days in office— the shortest tenure in British history.
You can probably see the pattern. Bond markets first revolted in Britain, the world’s sixth largest economy. Now it’s revolting in Japan, the world’s fourth largest economy.
How long until bond markets start to revolt against the world’s largest economy?
Billionaire investor Ken Griffin connected these dots explicitly when he said last week, "What happened in Japan is a very important message to the [US] House and to the Senate. . . You need to get our fiscal house in order."
We've been saying this for years: politicians in Congress think that, because America is the largest economy with the world’s reserve currency, the rules don’t apply to them... and that they can run endless, outrageously high deficits without any consequence.
This is completely delusional.
If the US doesn’t get its fiscal house in order, the dollar won’t be the world’s reserve currency for much longer. In many respects this shift is already happening.
Just look at China: right before the 2008 Global Financial Crisis, China held less than $500 billion of US government bonds— roughly 5% of the total US national debt at the time.
By 2011, just three years later, they had increased their holdings to $1.3 trillion—nearly 10% of total US government debt.
But China has been selling off its Treasury holdings rapidly over the past two years. They've cut their position by roughly 50%, down to about $682 billion, or less than 2% of the national debt.
To be clear, I'm not rooting for China to own a larger share of the US national debt. I'm rooting for a lower national debt.
But that ultimately requires Congress to be sensible and realistic.
And it’s not like cutting the deficit is some impossible task.
A 23-year old YouTuber was able to singlehandedly uncover billions of dollars of fraud in just one city. All Congress has to do is stop it.
But they are unwilling to do so.
With such unserious, low IQ politicians in Congress, foreign governments and central banks are thinking twice about investing in US Treasury bonds. Many (like China) are selling and starting to diversify in other asset classes... including gold.
In fact, rising demand from governments and central banks around the world has been one of the key drivers in gold’s rising price.
But it's not just central banks anymore. Pension funds and insurance companies have been increasing their gold allocations as a long-term asset.
And this makes sense. Pension funds and insurance companies traditionally invest in very long–term bonds (like the 30-year) because they have to match their assets to long-term policy liabilities (like life insurance).
Clearly these companies are worried that after adjusting for taxes and inflation, owning US government bonds for THREE DECADES is simply too risky. So they’re turning to gold instead.
I don’t know where gold prices are going today, tomorrow, or next month. But the long-term trend is pretty clear: as long as Congress continues to be unserious about fixing the deficit, gold will keep going higher.
And that means companies in the real asset (especially gold) business are primed to do extremely well.
To your freedom, James Hickman Co-Founder, Schiff Sovereign LLC
Taxing Everything That’s Nailed Down
Taxing Everything That’s Nailed Down
Notes From the Field By James Hickman (Simon Black) January 22, 2026
In the ancient town of Casinum—modern-day Cassino, Italy—parts of a Roman amphitheater still stand after nearly 2,000 years. Carved into the stone, in Latin, is an inscription that translates to: "Ummidia Quadratilla, daughter of Caius, built the amphitheatre and temple for the people of Casinum at her expense."
Ummidia Quadratilla was a wealthy Roman businesswoman who funded multiple public works, all out of her own pocket. Her name was carved in stone for eternity. When she died, she was respected enough that the younger Pliny wrote admiringly about her.
Taxing Everything That’s Nailed Down
Notes From the Field By James Hickman (Simon Black) January 22, 2026
In the ancient town of Casinum—modern-day Cassino, Italy—parts of a Roman amphitheater still stand after nearly 2,000 years. Carved into the stone, in Latin, is an inscription that translates to: "Ummidia Quadratilla, daughter of Caius, built the amphitheatre and temple for the people of Casinum at her expense."
Ummidia Quadratilla was a wealthy Roman businesswoman who funded multiple public works, all out of her own pocket. Her name was carved in stone for eternity. When she died, she was respected enough that the younger Pliny wrote admiringly about her.
The Romans (and Greeks before them) called this practice euergetes—wealthy citizens funding infrastructure projects in exchange for public recognition. Rich people actually competed with one another to see who could give more since public generosity elevated one’s status.
The most generous would have parades thrown in their honor— though naturally they would have to pay for the parade.
Today’s attitudes towards taxpayers are entirely different. Politicians are constantly inventing new ways to extract more and more from people, and then publicly shame the people who pay the most money.
They call their biggest tax payers “greedy” for following the very tax code that politicians write, and then demand they pay their "fair share" without ever defining how much that is.
In tax year 2022 (the most recent data that the IRS has published), the top 0.001% of taxpayers in America paid, on average, nearly $60 million each. The top 0.0001% (about 150 people) paid in the hundreds of millions and even billions of dollars each.
(By comparison, the average taxpayer contributes about $7,333.)
You’d think that politicians would be grateful and supportive of people who write such enormous checks to the government. I mean, they ought to name an aircraft carrier for someone who consistently pays billion-dollar tax bills.
Yet, again, politicians vilify and shame them. This is a bizarre, almost cannibalistic approach. Any private business would treat its top customers with respect and dignity. At a minimum they wouldn’t vilify the individuals who pay the most money.
But guess what? Successful people are extremely mobile. It’s 2026, not 1026. No one is a medieval serf anymore, tied to the land.
California is learning this lesson the hard way. The state already has one of the highest income tax rates in America—13.3% at the top bracket.
Wealthy people have long tolerated California’s high income taxes as the price they pay for living in a place with great weather.
Yet now California voters are considering a ballot measure to impose a "one-time" 5% wealth tax on billionaires—a levy on their total assets, retroactive to January 1, 2026.
And that was finally enough. Billionaires are getting out of Dodge, because they’re not dumb enough to think that this tax will be a “one-time” thing.
The United Kingdom is experiencing something similar.
For over 200 years, the UK had a "non-dom" regime that allowed wealthy foreigners living in Britain to avoid UK taxes on their overseas income. It was one of the few things remaining in recent years which made Britain attractive to international wealth.
In March 2024, the Conservative government announced they would abolish it. The Labour government confirmed the change after winning the July election, and the regime officially ended in April 2025.
The mere announcement triggered an exodus. Over 10,000 millionaires left the UK in 2024, and thousands more followed in 2025.
They brought their money with them. No more big spending, no more employees, no more economic activity.
So what does a desperate government do when the wealthy flee?
They tax everything that's nailed down.
Here’s a great example: Britain’s Labour government recently announced plans to double the tax rate on local bars and pubs.
These establishments are already being squeezed from every direction. The government charges duty on beer, plus VAT, plus special taxes on every pint sold.
Now the Labour government is raising those tax rates by 30 to 70%, starting this April.
The response? Over 1,000 pubs have banned Labour MPs from their establishments. Prime Minister Keir Starmer got barred from one of his local pubs in London. Signs reading "No Labour MPs" are appearing in windows across the country.
But I wouldn't count on this changing anything. Remember, the UK government couldn't even be bothered to investigate the years-long grooming gang scandal until public outrage forced Prime Minister Starmer's hand—he'd initially dismissed calls for an inquiry as a 'far-right bandwagon.'
It’s all so insulting.
Bear in mind that the British government is re housing 36,000 asylum seekers in hotels at £145 per night—all at taxpayer expense.
Plus, local councils spent £52 million on diversity and inclusion officers over the past three years. Britain is still sending foreign aid to India—a country with its own space program.
Meanwhile 10 million pensioners, i.e. actual British people, lost their winter fuel payments so that the government could save £1.5 billion.
It really boggles the mind. Before raising taxes, shouldn't governments examine how they're spending the money they already take in?
The fundamental problem is that government programs, once created, are almost impossible to end. There's never an honest reckoning; spending just keeps rising, forcing governments to keep searching for new revenue.
Naturally they always want to tax the rich... But eventually “the rich” skip town, so the government starts taxing every that can’t relocate. Pubs. Property. Small businesses. The middle class.
This is why tax mitigation is part of any sensible Plan B.
It's not unpatriotic to expect the government to spend money wisely. Any rational person—not even as a Plan B, but as a Plan A—should explore legal means to minimize their tax burden.
That could mean moving from a high-tax state like California or New York to a no-income-tax state like Texas or Florida.
Maximizing retirement account contributions—a self-directed Solo 401(k) alone lets you shelter up to $69,000 per year.
For Americans willing to live abroad, the Foreign Earned Income Exclusion can shield up to $132,900 from federal taxes.
Banning politicians from the local pub might feel good. But the most rational way to respond— when the government isn’t even willing to stop funding outright fraud— is to follow the rules of their own tax code to minimize the amount of your money that they’ll waste.
To your freedom, James Hickman Co-Founder, Schiff Sovereign LLC
Ex-Treasury Secretary Compared US to Third World Countries
Ex-Treasury Secretary Compared US to Third World Countries
Notes From the Field By James Hickman (Simon Black) January 19, 2026
Former Fed Chair and ex-Treasury Secretary Janet Yellen finally told the truth.
In recent remarks at the American Economic Association, she told the audience that US finances are in worse shape than most third-world countries. She said specifically that America's “needed belt tightening is significant—larger than in most programs supported by the International Monetary Fund."
Let that sink in for a minute. Remember, the International Monetary Fund provides emergency bailout funding for countries who are on the verge of bankruptcy. And naturally this IMF funding comes with strings attached: recipient countries are required to cut spending and tighten their belts.
Ex-Treasury Secretary Compared US to Third World Countries
Notes From the Field By James Hickman (Simon Black) January 19, 2026
Former Fed Chair and ex-Treasury Secretary Janet Yellen finally told the truth.
In recent remarks at the American Economic Association, she told the audience that US finances are in worse shape than most third-world countries. She said specifically that America's “needed belt tightening is significant—larger than in most programs supported by the International Monetary Fund."
Let that sink in for a minute. Remember, the International Monetary Fund provides emergency bailout funding for countries who are on the verge of bankruptcy. And naturally this IMF funding comes with strings attached: recipient countries are required to cut spending and tighten their belts.
Greece is the classic example of what happens when the IMF shows up.
By 2010, Greek debt had spiraled to 130% of GDP and climbing. No one was willing to lend them money anymore... forcing the IMF to swoop in with a "rescue" package that came with brutal strings attached.
Pensions were slashed by 40%. Public sector wages were frozen, then cut. Over 150,000 government workers were laid off. State assets—airports, ports, utilities—were sold off at fire-sale prices to foreign investors.
Greece's economy contracted by 25%. Youth unemployment hit 60%. An entire generation was hollowed out.
Argentina has been through the IMF wringer multiple times; in fact in in 2018, Argentina received the largest bailout in IMF history: $57 billion.
The conditions? Currency controls. Spending freezes. Slashed subsidies. Inflation still ripped past 50%. Poverty rates surged past 40%. The middle class was gutted. (These conditions are what ultimately led to the election of Javier Milei).
Sri Lanka is the most recent cautionary tale.
In 2022, after years of fiscal mismanagement, the country defaulted on its debt. The IMF demanded fuel subsidy cuts, electricity price hikes, and tax increases. Inflation hit 70%. Riots erupted, culminating in protesters storming the Presidential palace.
Pakistan, Egypt, Ukraine, Ecuador, Zambia—the list goes on. Whenever the IMF shows up, a nation loses its sovereignty. Foreign bureaucrats start dictating your tax rates, your spending priorities, your pension formulas.
And here's Janet Yellen—former Fed Chair, former Treasury Secretary—calmly, academically stating that America needs a bigger fiscal adjustment than most of these countries that the IMF bailed out.
She said the quiet part out loud (though coincidentally failed to admit that she was complicit in engineering this crisis).
Now, there are several critical differences between the US versus Greece, Sri Lanka, etc.
The US has a highly robust and productive economy with far more growth potential.
America also possesses (for now) the world's reserve currency.
If Sri Lanka runs out of money, they have no choice but to accept whatever terms the IMF dictates. But the US has the luxury of ‘printing’ its own money to finance the deficit.
And that's exactly what's happening: the Federal Reserve has quietly started buying Treasuries again—expanding reserves and injecting money into a system where inflation is already climbing.
The problem is, ‘printing’ money only works as long as the world keeps accepting dollars. Foreign creditors need to trust they'll be paid back—and that the dollars they receive will still be worth something.
When that confidence erodes, they start to diversify into other assets. And we’re seeing that play out now.
Central banks around the world have been aggressively dumping US dollars and buying gold—hence why the gold price surged over 60% last year. Foreign central bankers are not waiting around to see how America’s debt challenge plays out.
The US government is running out of time to demonstrate to the world that they are serious about cutting spending. And it’s not like there isn’t plenty of fat to trim.
Yet nothing ever happens. Just look at the Minnesota welfare fraud as an example: you’d think the entire country would be united against stopping the fraud.
Instead, apologists have downplayed it. They call critics “racist” and claim that there’s plenty of fraud elsewhere, so why is everyone so focused on Minnesota daycare facilities..?
The President tried to cut funding, and he immediately got sued. Then some activist masquerading as a federal judge ruled against the President, ensuring that the fraud would keep flowing.
If there is to be any change, it’s ultimately going to come down to Congress and its extremely cumbersome appropriations process.
Bear in mind, we’re talking about an institution that can’t even agree to a basic budget without threatening a full-blown government shutdown. So I wouldn’t hold my breath that they’re going to suddenly cut out fraudulent spending.
Yet while it’s doubtful that Congress will suddenly grow a brain, a conscience, and a backbone, it is still possible that you as an individual can sidestep the risks.
Real assets—precious metals, energy, agriculture, productive businesses—hold value regardless of what politicians do to the dollar. And if fiscal instability finally forces the reckoning Yellen warned about, these are the assets that benefit most.
We've been positioning for exactly this environment in our real assets investment research service Strategic Assets.
For example, we've identified gold miners that are now up over 400% since we first highlighted them—plus producers still trading at single-digit earnings multiples despite making money hand over fist with exploding margins at $4,000+ gold.
Last week we released our latest issue, which includes this analysis in full, plus specific undervalued opportunities positioned for the chaos ahead— a core American food producer, a gold mining services company, and a miner that has cornered the market on an industrial metal necessary for all technology. We’re offering a free, full, unredacted issue of Strategic Assets as a sample.
To your freedom, James Hickman Co-Founder, Schiff Sovereign LLC
Why The Biggest “Threat To Democracy” Is The US National Debt
Why The Biggest “Threat To Democracy” Is The US National Debt
Notes From the Field By James Hickman (Simon Black) January 12 2026
On September 1, 1575, a royal courier from King Philip II of Spain arrived to the banking house of Niccolò de Grimaldi in Genoa. The Grimaldi bank had loaned Philip quite a sum of money, and the Italian bankers already knew that the king’s finances were on shaky ground. So when they opened the royal letter, it probably wasn’t much of a surprise: King Philip II of Spain was suspending all debt payments. Effective immediately.
Amazingly, this was Philip’s third bankruptcy in less than two decades—he’d already defaulted in 1557 and 1560.
Why The Biggest “Threat To Democracy” Is The US National Debt
Notes From the Field By James Hickman (Simon Black) January 12 2026
On September 1, 1575, a royal courier from King Philip II of Spain arrived to the banking house of Niccolò de Grimaldi in Genoa. The Grimaldi bank had loaned Philip quite a sum of money, and the Italian bankers already knew that the king’s finances were on shaky ground. So when they opened the royal letter, it probably wasn’t much of a surprise: King Philip II of Spain was suspending all debt payments. Effective immediately.
Amazingly, this was Philip’s third bankruptcy in less than two decades—he’d already defaulted in 1557 and 1560.
Bear in mind that Spain wasn’t some struggling backwater in the 1500s; this was the richest nation on Earth.
Spanish galleons transported 180 tonnes of silver annually from the Americas. The empire spanned four continents. Its army was Europe’s most feared military force.
Yet the King couldn’t pay his bills.
Philip’s treasury officials knew exactly what needed to be done: cut spending on endless wars, reform the tax system, reduce royal court expenses, stop borrowing at rates up to 40%.
But all of that was politically impossible. There were too many entrenched interests. Spain’s nobility controlled parliament, so naturally they refused to pass any new taxes (as they would be the ones paying!)
The Church owned vast estates and wielded enormous influence… so touching Church revenues was out of the question.
Military spending was non-negotiable— there were simply too many foreign powers threatening the empire, not to mention war in the Netherlands, skirmishes with the Ottomans, brewing conflict with England.
Every constituency had a reason why their particular spending was essential. Every reform threatened someone’s interests. So nothing changed.
They could have made reforms voluntarily. But it was easier to simply keep borrowing and make the problem worse every year.
Thing is, this approach of kicking the can down the road only lasts for so long… because, sooner or later, the creditors stop lending more money.
Why would they? Why would Italy’s Grimaldi bank keep sending money to Philip knowing that he would not pay them? No lender wants to sink money into a financial black hole.
What often happens in these situations is that foreign creditors do come back to the table. But not as bankers or lenders or bond investors.
No. Once a nation defaults (or is on the brink of default), creditors come back when they can essentially take control of the government… when they can oversee and approve expenses, tax revenues, and even legislation.
We’ve seen this multiple times even in the 21st century. In the aftermath of the 2008 Global Financial Crisis, many European nations (like Greece) were forced into ‘austerity’ programs whereby their domestic economic agenda was dictated by foreign creditors.
In 2022, the British Prime Minister was forced to resign because the bond market didn’t like her tax plan.
All of this ultimately constitutes a loss of sovereignty.
The same thing happened to Spain in the 1500s; suddenly Italian bankers had veto power over Spanish military campaigns… meaning that Philip was a king in name only, and the Spanish Empire ultimately became a subsidiary of the banks.
Within 100 years, Spain had gone from dominant superpower to a weak, second-tier player—economically exhausted and militarily overextended.
Spain had everything needed to remain a great power: vast resources, global trade networks, military strength, and smart administrators who understood what needed to be done.
What it lacked was the political will to make changes before a crisis forced those choices upon them, in a way entirely outside their control.
A similar trend is taking place in America today… though, again, it’s not too late.
Treasury Secretary Scott Bessent recently stated that he believes up to 10%—roughly $600 billion—of the US government budget is fraud. Not waste. Not inefficiency. Fraud of the sort that recently came to light in Minnesota.
And that’s not even counting the ‘legitimate graft’—the type we wrote about last week in California, where Gavin Newsom has given away nearly $100 billion to pointless Leftist initiatives.
The US still has absurdly strong economic potential. The key to reining in this future debt crisis is to cut spending, i.e. freeze the budget in place and spend the same amount of money more wisely. Stop the bleeding.
On top of that, take a hatchet to America’s bureaucratic regulatory maze. If 10% of the US budget is fraud, I’d expect at least 25% (and probably much more) of the United States Code of Federal Regulations is outright destructive.
Those two things would boost real economic growth, generate more tax revenue, substantially reduce the deficit, and bring inflation under control.
There are many paths forward, and a number of creative ways to make this happen. The problem is time. The window is still open. America still has agency over how this plays out.
But actually doing it requires political will that has been absent for decades.
And that’s the point. Staying on this trajectory—the one they’ve been on for years—is a guaranteed problem.
There are signs that some powerful people want off this ride. The fact that Bessent is even talking about $600 billion in fraud publicly is notable.
But if that doesn’t translate into action—it ultimately comes down to Congress finding the will and the courage to freeze spending… or voters becoming smart enough to elect representatives who will get the job done.
We’ve been hearing over and over again for the past several years about various ‘threats to democracy’. The legacy media seems to always be howling that some politician or some legislation is a threat to democracy.
Realistically, the biggest threat to American democracy is actually the US national debt.
Because if voters don’t wake up and demand that their Congressional representatives fix this problem, then sooner or later the bond market is going to be calling the shots— tax policy, defense spending, Social Security— voters’ wishes be damned.
And that’s about as far from ‘democracy’ as it gets.
To your freedom, James Hickman Co-Founder, Schiff Sovereign LLC
Some Clear Thinking About This Weekend’s Strike In Venezuela
Some Clear Thinking About This Weekend’s Strike In Venezuela
Notes From the Field By James Hickman (Simon Black) January 5, 2026
It’s hard to imagine America being intimidated by a guy named “Little Turtle”. And yet, in the year 1790, he was about as terrifying as it could get.
Little Turtle was the war chief of the Miami nation, one of the Algonquian-speaking tribes in the Great Lakes region, and he had made a name for himself fighting against the United States during the Revolutionary War.
Some Clear Thinking About This Weekend’s Strike In Venezuela
Notes From the Field By James Hickman (Simon Black) January 5, 2026
It’s hard to imagine America being intimidated by a guy named “Little Turtle”. And yet, in the year 1790, he was about as terrifying as it could get.
Little Turtle was the war chief of the Miami nation, one of the Algonquian-speaking tribes in the Great Lakes region, and he had made a name for himself fighting against the United States during the Revolutionary War.
(At one point he literally butchered his captives after a lopsided battle.)
More than a century before, Little Turtle’s people had waged a long war against the Iroquois over control of the land in what is today Indiana and western Ohio. So, when the American Revolution was over, he continued fighting against settlers that he felt were encroaching on his tribe’s territory.
Roughly 1500 American settlers were killed between 1784 and 1789. And when it finally became clear to the US government in 1790 that the violence would not stop, they sent an expedition under the command of General Josiah Harmar to fight the Miami.
Little Turtle was ready. And on October 21 at the Battle of Kekionga in northeastern Indiana, Little Turtle vanquished American forces.
In terms of casualty percentages, it was one of the worst defeats in US history. More importantly, given how small America’s military was at the time, the defeat became a national security nightmare. The US essentially didn’t have an Army after the battle.
In response, Congress passed a series of laws known as the “Militia Acts”, which, among other things, federalized state militias for use by the federal government.
But the new laws also gave the President sweeping authority to take command of these forces under certain circumstances, including invasion or threat of invasion “from any foreign nation or Indian tribe”.
Fast forward more than two centuries, and these Militia Acts are among the foundational legal arguments in favor of the Trump administration’s actions in Venezuela over the weekend.
Now, tremendous amounts of ink have already been spilled over Venezuela in the past 48-hours.
What I found so interesting, however, is that most of the legacy media articles, not to mention social media commentary, devolved into typical ignorant tribalism, i.e. people are frequently for/against something based on whether or not they’re for/against the person doing it.
In this case, the Left is predictably howling that the President’s use of the military was illegal and unconstitutional-- an assertion that is being repeated and reposted by millions of people.
TO CONTINUE AND TO READ MORE:
Why A Desperate America May Soon Annex Its 51st State
Why A Desperate America May Soon Annex Its 51st State
Notes From The Field By James Hickman (Simon Black) December 22, 2025
Today we’re continuing our look back at past articles that foresaw today’s headlines years in advance. Last week, we highlighted three early pieces tracing the decline of US credibility—its unsustainable debt path, the erosion of reserve currency privilege, and the rising global demand for real assets like gold.
Today we look back at this podcast I recorded on March 31, 2023. I laid out a theory that Venezuela—sitting on the world’s largest oil reserves—might one day be absorbed into the US sphere of influence, not through war, but through corporate proxies.
Why A Desperate America May Soon Annex Its 51st State
Notes From The Field By James Hickman (Simon Black) December 22, 2025
Today we’re continuing our look back at past articles that foresaw today’s headlines years in advance. Last week, we highlighted three early pieces tracing the decline of US credibility—its unsustainable debt path, the erosion of reserve currency privilege, and the rising global demand for real assets like gold.
Today we look back at this podcast I recorded on March 31, 2023. I laid out a theory that Venezuela—sitting on the world’s largest oil reserves—might one day be absorbed into the US sphere of influence, not through war, but through corporate proxies.
Drawing parallels to the East India Company and the US-backed creation of Panama, the idea was that a private entity could step in amid Venezuela’s chaos, secure its oil, and quietly serve American strategic interests.
Now, with tensions escalating, the threat of an invasion could be the method of securing this kind of control. Maduro has discussed terms for stepping down, and recently US authorities seized a Venezuelan oil tanker.
And Venezuela’s opposition leader, María Corina Machado, is now openly pitching the country’s energy sector as “a $1.7 trillion opportunity,” promising, “We will open all [oil], upstream, midstream, downstream, to all companies.”
It felt like the right time to revisit this episode.
At the center of Sovereign Man’s core ethos is the indisputable view that the United States is in decline.
I take absolutely zero pleasure in writing that statement. But it’s incredibly difficult, if not impossible, to objectively appraise the bountiful evidence at hand and not reach the same conclusion.
Consider the following:
US government finances are appallingly bad. The national debt exceeds 100% of GDP, annual deficits run into the trillions of dollars with no end in sight, and major trust funds for Social Security and Medicare will soon run out of money.
Political incompetence is mind-blowing; politicians fail to be able to even identify problems, let alone understand them, let alone reach compromises to solve them.
Ditto for central bank incompetence. These people simply cannot understand how, by keeping interest rates at zero for nearly a decade and conjuring trillions of dollars out of thin air, they engineered record high inflation. And they also fail to understand how their actions to ‘fix’ inflation are causing widespread havoc in the economy and financial system.
Social divisions across the country are extreme. Censorship and cancel culture prevail, and corporations now wag their fingers at their own customers to “be better”.
The education system is in pitiful shape, with many politicians and school board officials turning classrooms into activist training camps.
The population is terribly unhealthy. Obesity and drug addiction are epidemics. Plus there’s an obvious mental health crisis that drives far too many people to commit horrific acts of violence on innocent people, including children.
National security is in decline. Military readiness is down, yet top officials seem more concerned about diversity and inclusion rather than the ability to prevail in war.
The rule of law has been perverted, including for political purposes and self-aggrandizement. We just saw another example of this yesterday.
Even the national fertility rate continues plummeting-- an indication of the rising cost of living and social apathy.
The Wall Street Journal recently published a series of polls indicating that most Americans doubt their children will have a better future; pessimism is strong.
They also found that certain values which once defined American culture, including a sense of community, hard work, and civility, are no longer important to the majority of people.
This is all happening at a time when adversaries are circling. And that includes China.
Now, usually whenever I bring up China, there are always people who are quick to assert that China cannot possibly replace the US as the dominant superpower because they have just as many problems.
And it’s true that China has a ton of problems. They have their own debt issues, financial system chaos, and economic problems. They have social challenges, a major demographic crisis, and even a serious issue with childhood obesity.
But no civilization or empire throughout history has ever been problem-free.
Ancient Rome, even during its early republic days, had enormous problems.
They had to deal with constant revolts, civil war, the genocidal dictatorship of Sulla, famine, war, plague, and more.
Yet there’s an enormous difference between taking on challenges while you’re on the rise… versus succumbing to them while on the way down.
Rome was able to deal with its challenges and continue its rise to become the dominant superpower. China may be able to do the same.
The US finds itself in a precarious position where they have a mountain of compounding problems… and no ability to even slow them down, let alone solve them.
I’ve written before about what I call the “Four Forces of Decline”, which I define as:
1) Forces of History-- the inevitable, cyclical nature in the rise and fall of Empire. No empire, no civilization in human history has ever retained the top spot forever, and most tend to experience similar challenges on the way down.
2) Forces of Society-- the vicious way in which a society eats itself from within, vanquishing the ability and inclination to solve complex problems.
3) Forces of Economy-- the debilitating toll that enormous debts, deficits, and currency inflation take on a nation and its people.
4) Forces of Energy-- when energy is cheap and abundant, prosperity reigns. When energy is expensive, prosperity wanes. The relationship couldn’t be more clear.
Today’s podcast puts all of these together, with a particular focus on #4, Forces of Energy.
Part of being the dominant superpower in our modern world means having access to abundant energy. Yet the US government has spent the last few years trying to destroy its energy (oil and gas) industry.
They’ve been pretty successful. The President of the United States hardly misses an opportunity to bash oil companies. Politicians pass new rules and taxes to punish them. The media beats up on them. Investors have pulled funding for them.
So it shouldn’t be a surprise that US oil production, while not in terminal decline, is failing to keep up with growing demand.
Shale oil is especially problematic given that most of the highest quality “tier 1” sites have already been drilled. Many are already in decline.
This is a big deal. Shale oil is the reason why the US achieved near energy independence. With shale in decline, the US will be forced to import a LOT more energy (which, again, is critical for prosperity) from places where they have an increasingly adversarial relationship.
Russian oil is obviously off the table. So is Iranian oil. Saudi Arabia is rapidly becoming cozy with China; in fact the Saudis are now publicly considering to sell their oil in Chinese currency, the renminbi.
This is an enormous threat to the US. Saudi Arabia has been selling oil in dollars for decades; they’ve even had their currency, the riyal, pegged to the US dollar since 1986.
This concept of selling oil in US dollars is known as the petrodollar, and it’s one of the key reasons why the US dollar is the global reserve currency.
Anyone who wants to buy oil needs to own US dollars. And that pretty much includes every country on the planet. So foreigners are forced to stockpile dollars, and by extension, US government bonds… simply because they need dollars to buy oil.
As a result the US government is able to get away with the fiscal equivalent of murder. They can run multi-trillion dollar deficits every year. They can wage expensive wars in foreign lands. They can go into debt to pay people to stay home and NOT work…
… and they’ve always had a bunch of suckers overseas-- foreigners who have no choice but to buy US government bonds, simply because oil is priced in US dollars.
But what if Saudi Arabia started selling oil in renminbi?
Most likely a LOT of foreigners would dump at least some of their dollars and start holding renminbi as part of their official reserves.
America’s biggest privilege and benefit-- its reserve currency-- would vanish, practically overnight.
Suddenly the US government wouldn’t be able to run multi-trillion dollar deficits. It wouldn’t be able to go into debt to pay people to stay home and NOT work.
They’d have to be like almost every other country-- act with some fiscal responsibility.
Think about it-- if the President of Mexico shook hands with thin air, investors would be rightfully terrified and panic-sell Mexican government bonds. If South Korea ran a multi-trillion dollar deficit, its currency would probably plummet.
Back in September we saw the British pound and UK government bonds practically collapse… and the Prime Minister of one of the world’s largest democratically elected sovereign governments was forced to resign... simply because investors didn’t like her economic revival plan.
These issues are all linked. If the US continues to demonstrate incompetence and weakness… if they continue to subvert and destroy the energy industry… and if Saudi Arabia starts selling oil in renminbi…
… the consequences will be life-changing.
This is one of the biggest stories of our lives. It’s easy to miss because it’s playing out over a period of years. It gets lost in the day-to-day noise and the crisis du jour.
But rest assured this is happening in front of our very eyes; it’s a slow motion crash that’s already started.
The outcome isn’t inevitable yet. But nothing about these people’s actions demonstrate that they have the slightest clue what’s going on.
Join me in today’s podcast as we dive further into this… and I outline my “51st state” theory-- a ‘solution’ that I wouldn’t be surprised to see in the near future.
To your freedom, James Hickman Co-Founder, Schiff Sovereign LLC
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