Mortgage Rates Are Effectively Negative In the Land Of The Free

Mortgage Rates Are Effectively Negative In the Land Of The Free

Notes From The Field By Simon Black   July 22, 2020   Bahia Beach, Puerto Rico

By the late 200s AD, the economy of ancient Rome was in serious distress.

There was hardly a single year during that entire century without some major crisis– civil war, barbarian invasion, plague, imperial assassination, political scandal, or economic depression.

It was so bad, in fact, that historians refer to this period as the Crisis of the Third Century. And the Roman economy suffered immeasurably as a result of all the turmoil.

In a desperate effort to make ends meet, Rome’s emperors routinely resorted to debasing the currency.

To give you an example, the antoninianus silver coin had around 50% silver content when it was first circulated in 215 AD. Within a few decades, the antoninianus had been debased so much that newly minted coins contained less than 3% silver.

Naturally this created rampant inflation; as Rome’s currency rapidly lost value, merchants had to continually raise their prices in order to keep up with the currency debasement.

So in 301 AD, Emperor Diocletian tried to combat inflation by imposing strict price controls across the empire… and he issued his infamous Edictum de Pretiis Rerum Venalium, known as the Edict on Maximum Prices.

(Unsurprisingly, Diocletian’s edict pointed the finger at evil capitalists, blaming the inflation on “men whose aim it is to restrain the general prosperity. . .”)

The edict went on to regulate every single wage and price in the empire… from a bushel of wheat to a day’s labor on a farm. And anyone who didn’t abide by the law was threatened with the death penalty.

The effect of the law was devastating. Not only did Diocletian’s edict NOT fix the inflation problem, it caused countless Romans to flee, many of whom went north to live among the barbarian tribes.

That proved even more disastrous, because Diocletian was rapidly losing taxpayers. So shortly after, the imperial government passed another law, forbidding anyone from leaving.

Every Roman was tied to their job, or to their farms. And the restrictions were generational: a son was legally bound to follow the trade and guild of his father.

This is actually a fairly common theme throughout history.

Russian Czar Ivan the Terrible, for example, decreed in 1581 that peasants were not allowed to leave their farms without the owner’s consent. And this was the norm in Europe for centuries while the feudal system was in place.

Freedom of movement is a relatively new phenomenon… something that became commonplace only in our modern time. It is one of the most important freedoms we have, and one that I believe many people will avail themselves of now.

These pandemic lockdowns have been absolutely devastating. The worldwide economic cost alone is tens of trillions of dollars. Hundreds of millions of people have lost their jobs (according to UN estimates). Millions of businesses have gone bust.

But even beyond the economic costs, the pandemic has caused a lot of people to reexamine their lifestyles.

People who live in cramped, super-expensive, highly-taxed urban areas were cooped up like hamsters for weeks, even months, barely able to even go outside.

And any rational person who understands there may be new waves of the pandemic… or entirely new pandemics that come in the future… is looking around for better options.

After all, politicians, intoxicated with their own power, have already shown us how they’re going to react– with hysteria, stupidity, and violence.

In southern California, beach goers were told to stay off the dry sand, but wet sand was OK. Officials in Nassau County, New York made it illegal to touch other people’s tennis balls.

Comrade Mayor Bill de Blasio of New York City locked everyone up in their homes and threatened to throw people in jail who ‘illegally’ attended religious services… but was totally fine when rioters, looters, and protesters took to the streets.

And Gunnison County, Colorado ordered all non-residents, including those who own homes in the area, to leave at once, and “not return until further notice.”

Fortunately nobody has to flee into the welcoming arms of barbarian tribes anymore… nor are we tied to the land like medieval serfs.

A lot of people are now realizing for the first time that they do have the freedom to move. The lockdowns forced nearly every business into remote work arrangements, and many of those will end up being permanent.

As a business owner, I think remote work is a double-edged sword. Productivity is definitely higher when people are together in an office.

But remote work is far more efficient; no more wasting time in traffic. It’s less expensive because it eliminates the need for office space. And employees tend to be happier.

So undoubtedly a lot of remote work arrangements are here to stay.

And people are starting to see now that they can live anywhere; there’s no need to stay in the city, or even suburb, just to be near the office, when you don’t have to go to the office anymore.

I’ve written about this a lot: I’m anticipating a great migration, from high-tax, high-cost, high-stupidity places, to low tax, low cost, more sensible places.

In the Land of the Free, this means Texas, Florida, Tennessee, and even states like Idaho and Wyoming.

Here’s the kicker: mortgage rates are now below 3%… which is nuts. At 3%, the real estate is essentially free.

If you imagine that inflation alone is 2% per year, then you’re effectively paying just 1% interest. And that 1% will be mostly credited back to you through various tax benefits, like a home office deduction, interest expense deduction (on a loan up to $750,000), and property tax deduction (up to $10,000).

This means that your tax-adjusted, inflation adjusted interest rate is probably ZERO, and potentially even NEGATIVE… so you can technically be paid for borrowing money now.

So it’s worth strongly considering this opportunity while it’s on the table.

 To your freedom & prosperity, Simon Black, Founder, SovereignMan.com

https://www.sovereignman.com/trends/mortgage-rates-are-effectively-negative-in-the-land-of-the-free-28337/

No Surprise: Silver Is One Of The Best Performing Assets In World

No Surprise: Silver Is One Of The Best Performing Assets In World

Notes From The Field By Simon Black  July 20, 2020  Bahia Beach, Puerto Rico

Sovereign Man is a little over 11 years old. And when we started this business, silver was worth $13 per ounce at the time.  My philosophy then, just like today, is that precious metals hold their value over the long-term. But back then, there was one key indicator that told me an investment in silver could pay off fairly quickly.

In 2009, silver was trading at a ratio of over 70:1 to gold, meaning 70+ ounces of silver was worth 1 ounce of gold. A ratio of 70 was considered quite ‘expensive’; over the last century or so, the ratio has historically hovered around 50:1, i.e. one ounce of gold was generally worth 50 times an ounce of silver.

And back in ancient times, the ratio was closer to 15:1.

The 70:1 ratio back in 2009 didn’t make sense to me. The panic of the Global Financial Crisis had prompted a lot of investors to buy gold, but silver was largely being ignored.  So we suggested to our readers that silver is a sensible long-term bet.

In fact I wrote in an article on July 7, 2009 that readers consider a long-term futures contract that would lock in the price of silver for two years at just $13.

And sure enough, within two years, the gold/silver ratio had reversed to just 35:1, and the price of silver hit a record high of roughly $50 an ounce.

Now, no financial investment should move up or down in a straight line, and we were concerned that the silver price had risen too quickly.

So, within hours of the silver peak, we sent a note to our readers suggesting that silver may be at a top, and essentially locking in a gain of nearly 300%.

Silver then spent the next few years in the doldrums… until now.

Several months ago when this pandemic became a global issue, the gold/silver ratio hit a record 120:1… and the price of silver fell below $12 per ounce.

Once again, this didn’t make sense to me.

And I’ve written to you several times over the past few months that silver would probably rise, even beyond gold, because of all the Covid response.

Central banks around the world printed trillions upon trillions of dollars, and governments have increased their debt levels even more.

In the United States alone, the national debt increased by three-quarters of a trillion dollars just in the month of June!  And the Federal Reserve expanded its balance sheet from $4 trillion to $7 trillion since the start of the pandemic.

This is not without consequence. Governments are going deeper into debt, and central banks are feverishly printing more money, at a time when economies are barely functioning.  So there’s far more money circulating in an economy that’s producing fewer goods and services… which, again, doesn’t make sense.

Plenty of governments have tried this before; when their economies falter, they just print money and hope the problem goes away.  But typically this just makes the money worth less… and real assets like gold and silver worth more.

Unsurprisingly, silver is now one of the best performing assets in the world; the gold/silver ratio has fallen to 93:1… that’s still considered quite high, but clearly much lower than 120.  And the silver price just hit $19.70 per ounce as I write this-- a gain of 68% in just four months.

This means that silver has vastly outpaced the gains in the S&P 500 stock index, and it even outpaced the gains that gold has made since the start of the pandemic.

I believe there’s a very strong case to be made that both gold and silver could continue to perform very well over the next few years.

Around the world we’re already seeing record government debt, record corporate debt, record consumer debt, record central bank balance sheets, record money creation, and plenty of economies still in various stages of lockdown.  This pandemic is far from over... and the economic consequences will linger for years.

My analysis is pretty simple: the more money that central banks print, and the more debt that governments take on, the more valuable gold and silver will become.

Right now, gold is still relatively undervalued when compared to the overall money supply… and silver is still historically undervalued relative to gold.

So, again, there’s a good case that both could still rise from here over the next few years.

But my personal philosophy about precious metals isn’t about trading them to make a quick buck.

I view gold and silver as an insurance policy: a way to hold wealth when there’s a lot of uncertainty.

And there’s a ton of uncertainty right now… social unrest, political upheaval, massive bailout programs, looming Cold War.

Yes, the world is rarely certain. There are always crises and hotspots and emergencies to deal with. But the issues that we are dealing with today are genuinely unprecedented in modern times. And we’re dealing with several of them at the same time.

Ordinarily we can have a reasonable amount of confidence in what tomorrow is going to look like… or that six months from now the world will look a lot like it does today.  But the reality is that we have no idea what tomorrow will bring. Another major outbreak? Another lockdown? Another city set ablaze?

So, even though gold and silver still have strong upside potential, I believe it’s this level of uncertainty that’s the biggest reason to own precious metals right now.

To your freedom & prosperity, Simon Black, Founder, SovereignMan.com

https://www.sovereignman.com/investing/no-surprise-silver-is-one-of-the-best-performing-assets-in-world-28263/

Federal Reserve: Everything is fine. Just like in 2008

Federal Reserve: Everything is fine. Just like in 2008

Notes From The Field By Simon Black   July 9, 2020   Bahia Beach, Puerto Rico

It’s nothing but rosy news coming from the Federal Reserve.

Recently the Fed released this reassuring statement:

“The banking system remains well-capitalized under even the harshest of these downside scenarios. . .”

In other words, everything is just fine.

Yet at the same time, the Fed also announced that it would impose restrictions on bank dividends and stock buybacks, essentially preventing banks from passing along their profits to shareholders.

If those two statements strike you as completely contradictory, you’re right.

To read the complete article, please go to…

Federal Reserve: Everything is fine. Just like in 2008 | Sovereign Man 

 To your freedom & prosperity, Simon Black, Founder, SovereignMan.com

My Ridiculous Saga to Refuse Free Government PPP Money

My Ridiculous Saga to Refuse Free Government PPP Money

Notes From The Field By Simon Black   July 8, 2020  Bahia Beach, Puerto Rico

A few months ago when the US government announced its ‘Paycheck Protection Program’ for small businesses, my first thought was, “This is going to be seriously abused.”

PPP, as it’s called, was the crown jewel in Uncle Sam’s efforts to sprinkle trillions of dollars around the US economy; the idea was that the government would guarantee loans to small businesses… and they specifically wrote the legislation for the loans to NOT be paid back.

Anyone who borrowed money under this program could have the debt forgiven as long as they met some very basic requirements.

PPP was abused almost immediately. More than $1 billion was paid out to dead people… and so far the government hasn’t even bothered trying to reclaim that money.

There’s also been rampant fraud, with countless people creating fake businesses with fictitious employees so that they could rake in all that free money.  And countless more people took money that frankly didn’t need it.

I didn’t take single penny and never had any interest in doing so. I do very well and, unlike Kanye West and the Church of Scientology, I don’t need free money from taxpayers.

But as a matter of curiosity, I applied for a PPP loan back in March because I wanted to see what the process was like.

How much money would they hand out? Would there be any due diligence or lending standards?

A lot of people might not realize this, but it’s seriously hard to lend that much money. The government set aside hundreds and hundreds of billions of dollars for PPP… which means they would have to make tens of millions of loans.

That’s incredibly difficult to do.

By comparison, giant financial institutions like Bank of America or JP Morgan Chase might do a million loans in an entire year.

The federal government is trying to make tens of millions of loans in a matter of months.

Obviously something is going to slip through the cracks, and I wanted to go through the process to find out where those cracks were.

When I filled out a PPP application for one of my companies, the process was pretty straightforward.

And in a matter of days I received a response: I had been approved, and the government was ready to loan me a six-figure sum.

This was really surprising to me given that the company I applied for is (a) profitable, and (b) has only one employee: me.

But nevertheless, the government saw fit to offer me money at terms that did not require me to pay the money back… ever.

The email included instructions and requested that I sign the loan documents, after which I would receive the money.

Again, I had no intention of borrowing any money from this program… I was just curious about the process. So I ignored the email and did nothing, assuming they would go away.

But a few weeks later I received an email from an employee at the SBA inquiring about the loan documents.

 I wrote back and explicitly told them to “terminate the loan application.” He replied and confirmed that, yes, they will withdraw my application.

But then, in late June, I received another email from an SBA employee as follows:

Good afternoon,

I am doing a follow up regarding the closing documents for your business loan. When will you be signing the documents? Please reply to this email as soon as possible.

Jeez. So I called and left a voicemail stating, yet again, that I would not be moving forward with the loan.

Finally, three days later, I received an official letter from the SBA confirming that my loan application had been terminated.

But that’s not the end of the story.

Last week I received another email from the SBA, saying “We are reaching out with good news . . .”

They went on to explain that they wanted to send me up to $10,000 as part of another program, the Economic Injury Disaster Loan program, or EIDL.

And since they already had my bank details, they were going to deposit the funds in my account within three business days.

Amazing. I didn’t even have to do anything and they were just going to put money in my account.

Seriously, why is it so hard is to REFUSE free government money?

The email contained instructions about how to opt-out:

If you do not wish to receive the EIDL Advance, please contact us by email within three (3) business days of the date of this communication at EIDLAdvanceOptOut@sba.gov, and reference your 10-digit application number and "Stop EIDL Advance" in the subject line.

So then I had to go and hunt for this 10-digit application number (which wasn’t contained in the email) and follow their instructions to refuse the money.

I haven’t heard anything back from the SBA confirming that they received my [third] cancellation request. But fortunately no money has been transferred to my account… yet.

It is pretty incredible, though… these people are practically pounding down my door trying to hand me free money, even though I’ve told them three times that I’m not interested.

And I have to imagine I’m one of millions of others who has had this experience.

There’s no way this program isn’t being massively abused, and it’s ultimately going to cost taxpayers hundreds of billions of dollars, just to start.

What’s amazing is how little anyone seems to care.

The national debt in the US has increased by trillions of dollars since the pandemic hit in early March. There’s hardly a word about it in the media.

Total public debt in the US is nearly $26.5 trillion, which constitutes 122% of GDP. That’s the highest level EVER. Even during World War II, the national debt in the US peaked at 118% of GDP.

So the US government is in deeper debt now giving people free money from Covid than when they were fighting the Nazis.  Something is seriously wrong with this way of thinking.

To your freedom & prosperity, Simon Black, Founder, SovereignMan.com

https://www.sovereignman.com/trends/my-ridiculous-saga-to-refuse-free-government-ppp-money-28150/

Under This New Law, Cryptocurrency Could Become Illegal

Under This New Law, Cryptocurrency Could Become Illegal

Notes From The Field By Simon Black    June 29, 2020  Bahia Beach, Puerto Rico

In early 1775, Benjamin Franklin and his European colleague, Charles Dumas, developed a secret method of communicating with each other.

Dumas had spent years gathering intelligence in Europe to assist the Americans in their revolt against Britain. But the two needed a secure way to pass information across the Atlantic.

So they developed a special cipher-- a crude form of encryption where letters and words were substituted for numerals.

The decryption key changed with every letter; so, for example, in a letter from Franklin dated March 2, 1781, the word “MERCHANT” was written as “23. 3. 4. 13. 6. 14. 24. 18.”

At the same time, the physician James Jay (brother to the first Chief Justice of the Supreme Court, John Jay) developed an invisible ink so that revolutionary leaders could communicate in secret.

These encrypted communications became critical to the Revolution. And it’s safe to say there would probably not be a United States if they hadn’t developed a secure way to send information.

Ironically, politicians are trying to destroy modern methods of encryption.

Over the past few months while everyone has been in mandatory isolation, cowering in fear in their homes… and over the past few weeks while the Land of the Free has been consumed with rage. . .

. . . a few US Senators have once again proven that chilling political adage-- ‘never let a good crisis go to waste.’

Exhibit A: Senate Bill 4051, the “Lawful Access to Encrypted Data Act”, which was quietly introduced last week when everyone’s attention was consumed elsewhere.

First thing’s first, like all freedom-killing bills, this one has a catchy name.

The Lawful Access to Encrypted Data Act is LEAD for short, as in “Move over China! The Land of the Free will LEAD the way in destroying the last remaining freedoms of its citizens.”

(In that way it seems more like ‘lead’, the highly toxic metal that poisons the brain and creates severe intellectual disability.)

At its core, the LEAD Act is an encryption killer. It aims to require technology companies to build ‘back doors’ into their products to ensure that the government can remotely access your data, your device, and your life.

This is nothing short of earth shattering.

Apple, for example, currently provides device encryption on its iPhones and iPads. And once you encrypt your device, only YOU can decrypt it. Apple can’t. Hackers can’t. And the government can’t.

So if your device is ever stolen (or confiscated), your data cannot be compromised.

Under the LEAD Act, this practice would become illegal. Apple would no longer be able to offer device encryption, and they’d have to provide a way for the federal government to remotely access your device, and all of its contents.

The same goes for your favorite chat applications.

WhatsApp, for example, is one of the most popular texting apps in the world. A few years ago, Facebook (which owns WhatsApp) began implementing end-to-end encryption for all WhatsApp data.

This means that any message you send someone via WhatsApp is immediately encrypted the moment it leaves your phone.

That messages arrives to the WhatsApp servers fully encrypted. So any hacker (or Facebook engineer) who intercepts the data will see nothing but a garbled mess.

And the message isn’t decrypted until it arrives to the intended recipient’s device. So the only people who can see the message in “clear text” are the two people participating in the conversation.

No one else can eavesdrop, or download the data.

But again, under the LEAD Act, this too would become illegal… and Facebook will be obligated to build in a ‘back door’ for the government to remotely access your conversations.

LEAD also requires developers of operating systems, like Microsoft Windows and Apple’s MacOS, to provide backdoor access to your computer.

It’s extraordinary to think of how far-reaching the effects of this legislation will go.

For example, do you use an online password manager like OnePassword?

They will also be required to give the government access to your data… which essentially would give the government access to EVERYTHING you do online.

Do you upload files and photos to iCloud? Yup. That too. Apple will be required to build a back door and give the government access to your data.

Any ‘zero knowledge’ encryption, whether it’s for storing files, sharing photos, texting friends, making video calls, sending encrypted emails, etc., will become illegal under this legislation.

And to be crystal clear about what that means, CRYPTOCURRENCY will effectively become illegal under the LEAD Act as well.

That’s right. Cryptocurrency relies on data encryption too.

Your ‘wallet’ is essentially a public key / private key combination. And in theory, only you are supposed to have access.

But that’s exactly what this legislation aims to prevent. The government wants backdoor access to everything.

Honestly this legislation would be hilarious if it weren’t actually true… because it shows how totally clueless these people really are.

The politicians are calling it ‘lawful access’, as if only the government would be able to use these back doors. Clearly these people understand nothing about cybersecurity.

There is no such thing as a ‘back door’ that only the government can access.

Once a technology company creates a way to remotely access a device, then that back door is available to ANYONE who can crack it.

It’s not like some hacker, or foreign intelligence agency, is going to probe the back door on your iPhone and say, “Oh, nevermind, this is only for the US government. I guess I’ll try to find another way in.”

If this law passes, not only will the government be able to access your devices, but hackers will have endless new treasures of data to steal… courtesy of the United States Senate.

It’s genius.

 To your freedom & prosperity, Simon Black, Founder, SovereignMan.com

https://www.sovereignman.com/trends/under-this-new-law-cryptocurrency-could-become-illegal-28066/

You Don’t Have a Savings Account You Have a Dwindling Account

You Don’t Have a Savings Account You Have a Dwindling Account

Notes From The Field By Simon Black    June 25, 2020  Bahia Beach, Puerto Rico

On April 5, 1933 everyone’s favorite fascist, President Franklin D. Roosevelt, signed an executive order which outlawed the private ownership of gold.  To justify the seizure, FDR used wartime authorities under the “Trading with the Enemy Act of 1917”. The law was never repealed after World War One, so Roosevelt used it to declare a national banking emergency.

Roosevelt’s order demanded that all Americans must surrender their gold to a Federal Reserve Bank by May 1, 1933, less than a month after he signed the executive order. Gold was a popular form of savings at the time; US dollars were convertible to gold, and many Americans, from wealthy business owners to rural farmers, owned gold as a form of savings.

So Roosevelt’s order affected a LOT of people. 

Anyone who failed to comply faced up to ten years in prison, and a $10,000 fine-- which was a huge sum at the time equivalent to several times a typical annual salary. And the government actually prosecuted people who refused to turn over their gold.

One man, Louis Ruffino, was convicted of hoarding gold and went to prison. He also had his 78 ounces of gold confiscated by the government, without compensation. In today’s money, that would be over $135,000.

For people who did comply with the order, the government paid them $20.67 for every ounce of gold that was turned in.

But then, shortly after the deadline, Roosevelt raised the price of gold to $35, essentially stealing nearly half of the wealth of those former gold owners.

It wasn’t until the 1970s that gold ownership was once again legal.

But before that happened, in 1971 Nixon entirely divorced the dollar from the gold standard.

Throughout the next decade the US (and much of the world) was hit by terrible stagflation-- a period of high unemployment, high inflation, higher taxes, higher debt levels, and pitiful economic growth.

When adjusted for inflation, the Dow Jones Industrial Average lost nearly HALF of its value during the 1970s.

And government bonds paid just 5.5%, at a time when inflation peaked at 10%. This means that anyone who owned bonds in the 1970s was LOSING more than 4% per year.

It was the same with bank accounts; depositors who held their savings in a bank account LOST money every year after adjusting for inflation.

Economists call this condition “negative real interest rates,” meaning that, after adjusting for inflation, the rate of interest is actually negative.

If your bank pays you 1% interest, but the inflation rate is 3%, this means that the purchasing power of your savings is actually losing 2% per year, i.e. the “real rate” is NEGATIVE 2%.

Coincidentally, this is the same situation we find ourselves in today.

For most of the last decade, in fact, REAL interest rates in the Land of the Free have been negative.

Wells Fargo, for example, offers a “Way2Save” savings account that pays a big fat 0.1% interest.

And it’s important to bear in mind that interest from your bank account is TAXABLE in the Land of the Free. So after accounting for taxes, you’re looking at around 0.08% interest.

The annual rate of inflation for 2019 was 2.3%. So this means that a depositor with a Wells Fargo savings account is LOSING 1.5% per year.

When you’re guaranteed to lose money, you don’t have a savings account. You have a dwindling account.

But GOLD is one of several assets that tends to perform very well when real interest rates are negative.

Gold has a 5,000 year history of maintaining its value; and back in the 1970s when real rates were negative, investors who bought gold made more than 10x their money over the course of the decade.

(And silver actually outperformed gold, rising from less than $2 in 1970 to more than $30 at the end of 1979.)

Gold and silver have been very attractive investments lately; in fact, gold just hit a 7-year high.

That’s not surprising given that the US national debt has increased by more than $1.2 TRILLION dollars just since the beginning of May.

And the Federal Reserve has expanded its balance sheet by nearly $3 trillion since the start of the pandemic.

These are insane figures that point to a deteriorating value for the currency… which is reason enough to own gold.

Personally, I keep some of my own precious metals on hand in a strong home safe-- so there is no counterparty risk. I have it when I need it.

But as FDR’s confiscation shows, it also makes sense to consider holding some precious metals overseas in a safe jurisdiction.

It isn’t 1933 anymore. It’s perfectly legal (for now) to own gold. And it makes a lot of sense.

If you’re new to this and looking for a great resource on getting started, I’d encourage you to download our free Ultimate Gold and Silver Guide.

To your freedom & prosperity, Simon Black, Founder, SovereignMan.com

https://www.sovereignman.com/trends/you-dont-have-a-savings-account-you-have-a-dwindling-account-28016/ 

It’s Time To Get Rid Of Your $20 Bills...

It’s Time To Get Rid Of Your $20 Bills...

Notes From The Field By Simon Black   June 8, 2020  Bahia Beach, Puerto Rico

June 17, 2020  Bahia Beach, Puerto Rico

On May 12, 1703, the Russian army under Peter the Great captured an important Swedish fort on the Baltic Sea called Nyenskans.

It was a major victory for Peter in his war against the Swedish Empire. Russia was a rising power in the early 1700s, but Peter was in critical need of a Baltic seaport to be able to trade with the rest of Europe.

The capture of Nyenskans was so important that Peter decided to move his capital there. And he renamed it Saint Petersburg.

Technically he called it “Sankt-Pieter-Burch,” which is a Dutch/German spelling of the name; Peter made tremendous efforts throughout his reign to westernize Russia, and naming his capital city in a European style was part of that effort.

Sankt-Pieter-Burch remained the capital of the Russian Empire for hundreds of years, until World War I broke out in 1914.

Germany had become Russia’s enemy. And the imperial government decided that they no longer wanted their capital city named in the German style.

So they renamed the city to Petrograd as a reflection of their updated view.

Lenin and the Bolsheviks took over Russia in 1917 and moved the capital to Moscow. And when Lenin died in 1924, the Soviet government renamed Petrograd to Leningrad.

It remained that way for nearly seven decades until communism finally collapsed in 1991… at which point the city renamed itself once again, back to St. Petersburg.

Frankly this happens all the time. Buildings, cities, provinces, and even entire countries from time to time change their names.

When values change, names change.

By 1991, Russians no longer felt like naming one of their most beautiful cities in honor of a Communist dictator… so they changed it. Big deal.

Zambia used to be called Northern Rhodesia. But after they gained independence they no longer wanted to be named after their imperialist ruler. That’s hardly controversial.

Similarly, nearly every major city in India changed its name in the 1990s and early 2000s; Bombay became Mumbai, Calcutta became Kolkata, Madras became Chennai, etc., all to shake off their colonial roots.

Again, this is perfectly reasonable.

There’s been a broad movement lately of people wanting to rename streets, bridges, airports, buildings, etc. And this too is hardly controversial.

Our social values are remarkably different than they were when many of those landmarks were built. And it’s not unusual for names to change to keep up with the times. There’s nothing wrong with that.

(There IS, however, supposed to be a peaceful, democratic procedure to change names and remove monuments. Only a fool with no intelligent argument resorts to violence and vandalism.)

The problem with renaming stuff, however, is that it can be a bottomless rabbit hole.

If we are supposed to judge everyone who has been dead for hundreds of years against the values that we hold dear today, then there really is no end.

Just look at the currency of the United States:

$1 bill? George Washington… who, despite being the single-most important factor in winning the American Revolution, also happened to be a slave owner.

$2 bill? Thomas Jefferson… also a slave owner.

$5 bill? Abraham Lincoln… who emancipated the slaves, yet also made numerous racist comments (like this quote from his first debate against Stephen Douglas in 1858:

“I, as well as Judge Douglas, am in favor of the race to which I belong having the superior position.”)

$10 bill? Alexander Hamilton. Yes, he has a catchy musical in his honor that promotes him as an abolitionist. But Hamilton married into a prominent slave-owning family, handled transactions regarding the purchase of slaves on the family’s behalf, and even once demanded that a runaway slave be returned to captivity.

$20 bill? Andrew Jackson. HARDCORE racist. Major slave owner. (which means he’ll probably be the first one to be replaced. So don’t stock up on too many $20 bills…)

$50 bill? Ulysses S. Grant… who actually fought (and won) the Civil War. Yet technically did own a slave at one point in his life.

$100 bill? Benjamin Franklin… also a slave owner.

It’s not hard to keep going.

The Commonwealth of Pennsylvania was named after the slave owner William Penn.

The Commonwealth of Virginia was named after the “virgin” Queen Elizabeth I of England, a blatant racist who wrote to the Lord Mayor of London in 1596 that ‘there are too many blackmoors’ in the city and expressed her “good pleasure to have those kind of people sent out of the land.”

The State of Louisiana is named after the King Louis XIV of France, who presided over the enslavement of countless natives across his global dominion.

And let’s not forget that the UNITED STATES OF AMERICA, along with two continents, are named after Amerigo Vespucci-- a man who enslaved thousands of people.

Do we rename cities and states? Do we rename the country? (Perhaps we call the entire nation the Republic of CHAZ.)

Do we bother weighing someone’s accomplishments against their shortcomings, or do we condemn everyone for being out of step with our modern values?

We can also apply the same logic to science, literature, philosophy…

There are so many famous authors from the past who were racist, or misogynist, or raging anti-Semites. Do we stop reading them? Should the mob torch their books?

Even many of the most prominent minds from Ancient Greece would qualify as bigots today.

Should Aristotle (who believed in ‘natural born slaves’) be banned? Should we stop teaching the Pythagorean Theorem ?

Even Abraham-- the common patriarch of Islam, Judaism, and Christianity-- was a slave owner.

So, yes, it’s not unusual or controversial to rename anything. But to judge everyone from the past based on the values of today-- there truly is no end to how much of history would need to be erased.

To your freedom & prosperity, Simon Black, Founder, SovereignMan.com

https://www.sovereignman.com/trends/its-time-to-get-rid-of-your-20-bills-27979/ 

Our New Form of Government: Rule by Twitter Mob

Our New Form of Government: Rule by Twitter Mob

Notes From The Field By Simon Black   June 9, 2020  Bahia Beach, Puerto Rico

In one of the starkest examples of how mob rule has taken over the Land of the Free, #defundthepolice is now rapidly moving from being just a hash tag, to becoming a reality.

9 out of the 12 members of the Minneapolis City Council (which is a veto-proof majority that can easily override the city’s boy mayor) pledged yesterday to completely dismantle its police department.

Their reasoning?

According to the city council president, being able to call the police “comes from a place of privilege,” and therefore must be abolished.

Actually, genius, being able to call the police comes from tax revenue… as in the money that voters pay in exchange for public services.

It’s not just Minneapolis. Across the country, cries to defund the police are growing… even though there’s no consensus about what the term even means.

For some, it means demilitarization of the police. For others, it means reducing police responsibilities, and reducing their funding accordingly. For others, it means abolishing the police altogether.

But even without a clear idea of what the concept means, the Twitter mob has already pressured politicians into taking action.

In Los Angeles, Mayor Eric Garcetti bowed to the pressure and pledged to slash $150 million from the police budget.

The New York City’s politburo, Comrade de Blasio, also promised to make substantial cuts to the NYPD budget.

Other local governments across the country, from San Francisco to Philadelphia to Baltimore, are considering similar moves.

And Congress has a stack of bills that it’s furiously moving forward.

This is all truly remarkable. There’s suppose to be system in place-- I read about it somewhere, I think it’s called ‘democracy’ or something like that-- where people vote for leaders who are supposed to represent their interests when making public policy decisions.

But this is mob rule, plain and simple. The Twitter mob decides public policy now. Not politicians. And certainly not voters.

And if you don’t grovel and capitulate to the mob, even when there’s no consensus on what the mob actually wants, then you get vilified by their rage.

It’s like #metoo all over again.

In late 2017, the actor Matt Damon, who committed an egregious crime of being born with a penis, told an interviewer that there’s a “spectrum” of sexual harassment:

“There’s a difference between, you know, patting someone on the butt, and rape… or child molestation. Both of those behaviors need to be confronted and eradicated without question, but they shouldn’t be conflated.”

Seems reasonable. Damon had an opinion… and his opinion was that molesting a child was worse than inappropriately patting a woman on the butt.

But reason didn’t matter to the Twitter mob, who immediately blasted Damon as a hetero-normative patriarchal misogynist. He later apologized, apparently for being logical, and groveled to the mob for forgiveness.

Today’s mob is far more hostile.

When Minneapolis’ boy mayor Jacob Frey rejected calls to abolish the police over the weekend, he was forced into a literal walk of shame when the marauding crowd screamed “GET THE F^#K OUT OF HERE” and waived their middle fingers in unison.

Frey left the stage and sullenly retreated through the crowd while the masses chanted, “Shame! Shame! Shame!”

Then there’s Drew Brees, one of the NFL’s all-time great quarterbacks whose entire career has been one of professionalism, integrity, and humble service.

Brees has given millions of dollars to his local community, including a $5 million pledge this year alone to help put food on the table for struggling families.

But Brees stated in an interview recently that he didn’t agree with anyone disrespecting the American flag-- in reference to other NFL players who kneel during the national anthem to protest police brutality.

The anthem kneeling is a contentious issue for some. And it would have been reasonable for the other side to explain to Brees that their intent is to protest injustice, not disrespect the flag.

But instead the Twitter mob unleashed holy hell, calling Brees a “white supremacist” and even making death threats against his family.

And that’s what you get with a mob.

Civil discourse is an impossibility. You cannot have a respectful exchange of ideas or a discussion of values.

You can’t even say, “I completely agree that terrible injustice needs to change immediately. Let’s have a rational conversation about sensible, effective solutions.”

If you don’t grovel to the Twitter mob, even when there’s no consensus what the mob wants, you’re a white supremacist who deserves to be dead.

To be clear, I’m in strong support of the fundamental ideas behind these movements.

The culture of rape and sexual abuse that persisted for so long before #metoo needed to end. And the injustices that are front and center right now need to end. I imagine good people everywhere are in favor of human rights.

But I’m not writing about the movements, or social justice, or peaceful protests. This is about the mob mentality that has quickly taken over the US, and much of the world.

History shows that well-organized, peaceful protests can be very powerful… but also that nothing good ever comes from an angry, emotional mob.

Real progress can only take place when people are able to have calm, rational discussions about ideas and solutions.

The reality is that #defundthepolice is going to happen regardless. After Covid, most cities are completely bankrupt and will be forced to slash their budgets due to lack of tax revenue.

But #defundthepolice may be just the beginning of our new form of government-- rule by Twitter mob.

To your freedom & prosperity, Simon Black, Founder, SovereignMan.com

https://www.sovereignman.com/trends/our-new-form-of-government-rule-by-twitter-mob-27873/ 

It Should Be Obvious By Now -- It Really Makes Sense To Have a Plan B

It Should Be Obvious By Now -- It Really Makes Sense To Have a Plan B

Notes From The Field By Simon Black   June 8, 2020  Bahia Beach, Puerto Rico

There are undoubtedly countless people right now who can hardly believe what they’ve been seeing over the past few months.

Global pandemic, total economic shutdown, tens of millions of jobs lost, trillions of dollars of debt and money printing, and now, social unrest, including riots and looting, brought on by yet another harrowing murder at the hands of the police.

A poll conducted by NBC News and the Wall Street Journal last week showed 80% of respondents believe the United States is spiralling out of control.

And it all happened so quickly.

We’ve been writing for years at Sovereign Man about the need to have a Plan B, consistently pointing out that this is a completely normal, rational thing to do.

A great Plan B is like an insurance policy. You hope you’ll never need to use it, but if you ever do, you’ll be really glad that you have one.

Having a Plan B is not capitulating. It’s not running away.

It’s sensible. It ensures that, no matter what happens or doesn’t happen next, you’ll be in a position of strength, regardless of what you choose to do.

If you want to march in the streets or dedicate yourself to social change, you’ll be better off with a Plan B. If you’re concerned about the policy impacts of mob rule, you’ll be better off with a Plan B.

Frankly what we’ve seen so far is potentially just a taste of what’s coming.

Just imagine how swiftly and viciously governments could react if another major outbreak of COVID-19 takes place.

Just imagine how much rage will explode in the streets depending on who wins the Presidential election in November.

And then there are other risks-- like the looming Cold War with China, spiralling deficits, etc., and we haven’t even begun to see the effects of those yet.

One key component of a Plan B is to consider-- is there at least a possibility that you might ever need to leave?

Would greater social unrest, economic upheaval, World War III, etc. prompt you to want to get out of Dodge? If so, you’ll want to have thought about that well before you start packing your bags.

So as part of a Plan B, it makes sense to have a second citizenship, or at least a second residency.

This means you’ll always have another option to live, work, invest, retire… and potentially even pass down those rights to future generations.

A Plan B also takes your finances into consideration.

Will the trillions and trillions of dollars that the Federal Reserve is pumping out cause serious damage to the dollar? Will Cold War with China compel the world to abandon the dollar as a reserve currency?

These are certainly possibilities. And that’s why gold and other real assets are also worth considering as part of a Plan B.

Retirement planning is another factor to consider; in the Land of the Free, Social Security is already set to run out of money in 2034. And as we discussed recently, post-COVID-19 estimates may accelerate the program’s cash depletion to 2029.

Therefore a tax advantaged retirement structure (like a solo-401(k) or SEP IRA) that allows you to save a LOT more money for your retirement and invest your retirement plan’s funds in a wide variety of assets-- private equity, startups, precious metals, real estate, etc.-- could be an option to explore.

There are so many other considerations-- tax planning, estate planning, family planning, asset protection… even things like homesteading or home schooling.

No two Plan Bs are the same. But the core ethos is that a Plan B makes sense, no matter what happens (or doesn’t happen) next.

There’s no downside, for example, in good tax planning that can save you money. There’s no downside in having a second passport that can provide generational benefits to your future descendants. There’s no downside in making it more difficult for people to file frivolous lawsuits against you.

Having a Plan B is like taking care of your health… it just makes sense. There’s no downside.

And, like health, it’s never too late to start.

To your freedom & prosperity, Simon Black, Founder, SovereignMan.com

https://www.sovereignman.com/trends/it-should-be-obvious-by-now-it-really-makes-sense-to-have-a-plan-b-27853/ 

Some Positive Moments Amid All The Turmoil

Some Positive Moments Amid All The Turmoil

Notes From The Field By Simon Black   June 5, 2020 Bahia Beach, Puerto Rico

Look, things aren’t feeling so bright and cheery in the US right now. And the sad truth is that there are some tough times ahead.

We usually bring you stories on Friday that are absurd or even infuriating.  I’m sure you’ve seen enough of that this week. So we thought we’d share a few moments of character and integrity shown at protests across the US, which shined through all the tragedy.

There are bad apples on all sides-- some bad apple protestors who loot and burn and destroy. And some bad apple cops who engage in terrible acts of violence.

But there are plenty of good apples on both sides too.

Protesters tackle man breaking up sidewalk for projectiles

Peaceful protesters sprang into action when they saw a man destroying a sidewalk.

The man was dressed in all black, like Antifa, and was apparently destroying the sidewalk to create projectiles to hurl at police and businesses.

But rather than let things escalate, peaceful protesters tackled the man, took his hammer, and handed him over to a group of police who were nearby.

In fact, the police were standing right there, with the man in clear view. And yet they did nothing to stop him.

Cops even almost arrested one of the peaceful protesters who handed the man over. But they let him go after someone explained the situation.

Click here to see the video.

Protesters hold line in front of business to stop looters

Undoubtedly there has been way too much violence, looting, and property destruction. Nothing takes away the moral high ground from a movement like seeing a bunch of guys walk out of an electronics store with big-screen TVs in hand.

And in the early days of these protests, the rage was palpable. Cars were torched, businesses were destroyed, and so much property was stolen.

But people are starting to take a stand against that type of chaos.

In Brooklyn, a group of protesters intervened a few days ago when looters and vandals approached a Target store.

The protestors formed a line in front of the store to stop the looters from smashing windows (and stealing store inventory).

Click here to see the video.

FBI asks for evidence of inciting violence. People send videos of cops instead.

Being an activist in the US, you have to have a sense of humor.

So when the FBI asked the public to send them video evidence of protestors inciting violence, they were inundated with videos of police officers being violent.

"The FBI is seeking information and digital media depicting individuals inciting violence during First Amendment protected peaceful demonstrations," the FBI wrote on its Twitter account.

The FBI’s website said, "If you witness or have witnessed unlawful violent actions, we urge you to submit any information, photos, or videos that could be relevant to the case."

People responded on Twitter with video of:

New York City Police ramming protesters with their vehicles,

Police appearing to aim a smoke grenade launcher at a little boy,

Police attacking, beating and throwing punches at clearly marked media with cameras,

Police spraying peaceful protesters with mace unprovoked,

Police/ National Guard firing pepper bullets at a woman filming from her front porch,

Police throwing an old man with a cane to the ground.

Click here to read the full story.

Michigan Sheriff leads protestors in peaceful march

This is starting to be a bigger trend: police are putting down their tear gas and riot shields, and joining the protestors to peacefully demonstrate for reform.

In one great example of humanity and leadership, Genesse County, Michigan’s sheriff Chris Swanson met a crowd of protestors, and actually took charge to compassionately lead their march through the city.

This is pretty extraordinary. Protests are typically leaderless, and mobs can take on a life of their own.

But Swanson took charge, telling the crowd “I want to make this a parade.” The cops put their weapons down, took their helmets off, and marched together with the protestors… which ensured that (a) the protestors’ voices were still loudly heard, (b) they could march without any threat of violence, and (c) everything remained safe and orderly.

Click here to read the full story.

To your freedom & prosperity, Simon Black, Founder, SovereignMan.com

https://www.sovereignman.com/trends/some-positive-moments-amid-all-the-turmoil-27847/ 

It Turns Out You -Can- Spot A Bad Apple. You Just Can’t Remove One

It Turns Out You -Can- Spot A Bad Apple. You Just Can’t Remove One

Notes From The Field By Simon Black   June 4, 2020 Bahia Beach, Puerto Rico

So it turns out that Derek Chauvin, the former Minneapolis police officer who was filmed murdering George Floyd last week, had 17 different complaints of serious misconduct during his career.

That puts him among the 10% worst offenders in the Minneapolis police department.

The complaints vary from being named in a brutality lawsuit, to using demeaning, unprofessional language in public, to aiming his weapon at children.  But Chauvin never got into any serious trouble.

On Monday I wrote that civilians have filed 2,600 misconduct complaints against Minneapolis police officers over the past several years. Only 12 of them (0.46%) resulted in any discipline against the officer, with the most severe punishment being a 1-week suspension.

It’s not just Minneapolis. Around the country, the percentage of civilian complaints that result in disciplinary action is astonishingly low. And the rate at which offending officers are severely disciplined, fired, or charged with a crime, is effectively zero.

A 2019 academic paper studied 50,000 civilian complaints against Chicago police to see if those complaints could be an indicator of who is/isn’t a bad apple.

The results were obvious: officers with the most complaints have the highest likelihood of being involved in a major civil rights issue. But they’re seldom removed.

The Chicago police officer who shot an unarmed 17-year old boy in 2014, for example, was among the department’s worst 3% in terms of civilian complaints, with half of the complaints alleging excessive force.

So it turns out you can spot a bad apple. You just can’t remove them… and give the boot to people like Chauvin who pose obvious risks.

There are plenty of good, duty-minded cops who would love to kick out the bad ones. But the system fails everyone miserably.  One key reason is a legal doctrine known as “qualified immunity”.

This goes back to a 1967 Supreme Court case which ruled that government officials should be shielded from personal liability while carrying out their duties.  This applies to police officers as well.

So in other words, you can’t sue the cops if they assault you during arrest, or invade of your home, because they’re technically performing their official duties.

The Supreme Court did make allowances, i.e. police and government agents would not be protected by qualified immunity if their actions violate “clearly established law or constitutional rights.”

But this is very difficult to prove.

Over the years as civilian victims have attempted to sue police officers for misconduct, courts have routinely sided with the cops. The argument is that whatever laws the police officers violated were not ‘clearly established,’ and hence the cops are protected by qualified immunity.

Here’s one absurd example:

In 2013, Fresno police officers raided a home that was suspected to be involved in a gambling operation. They seized $275,000, but only booked $50,000 as evidence.

The other $225,000 mysteriously disappeared.

The suspects sued, and amazingly, the court ruled that “there was no clearly established law holding that officers violate [the Constitution] when they steal property seized pursuant to a warrant. . .” and therefore the officers were protected by qualified immunity.

Yes, you did read that correctly. And even the Supreme Court now recognizes that qualified immunity has gone too far.

In a 2018 case, Justice Sonia Sotomayor wrote that qualified immunity is “an absolute shield for law enforcement officers, gutting the deterrent effect of the Fourth Amendment. . . it tells officers that they can shoot first and think later, and it tells the public that palpably unreasonable conduct will go unpunished.”

Justice Clarence Thomas also voiced “growing concern with our qualified immunity jurisprudence” in a 2017 opinion.

As long as qualified immunity lasts, it will continue to be abused.

Representative Justin Amash from Michigan announced a new bill, the “Ending Qualified Immunity Act”, this week. We’ll see what happens.

Another major reason why the system fails is because of the unions.

Police unions exist (in theory) to protect their officers. Like any union, they negotiate wages, working conditions, etc.  But as always, union interference goes way too far.

For example, police unions negotiate contracts with city governments that expressly prohibit officers’ careers from being blemished by civilian complaints.

Obviously there are always going fake or overblown complaints against officers. But union rules require complaints to go through a highly bureaucratic investigation process that’s closely monitored by the union.

So the unions protect their officers from scrutiny. And in the unlikely event that a complaint is sustained (0.46% in the city of Minneapolis), the unions protect their officers from any serious punishment.

In New York City, nearly 20% of the contract negotiated between the police union and the city government is devoted to disciplinary procedures and grievances.

Section 8 of Article XVI, for example, allows an officer to have his/her disciplinary record expunged under certain circumstances. And Article XXI provides several pages of lengthy protections for an officer who has been accused of misconduct.

This is why officers, even when they’re caught on film committing a crime, are often ‘suspended with pay’, never face trial, and only end up with a slap on the wrist (which can later be expunged).

In Baltimore and Cleveland, union contracts require the deletion of most disciplinary records.

Unions also ensure that officers who are disciplined have a multitude of options to have the ruling against them overturned.  This hassle makes it incredibly difficult to weed out troublemakers.

And just in case the end result wasn’t completely obvious, economist Rob Gillezeau of the University of Victoria has studied the relationship between police unionization and civilian killings.

According to his analysis, there’s an overwhelming increase in civilian shooting deaths once a local police department unionizes.

This is pretty ironic when you think about it: Bolshevik politicians LOVE unions. But this is an obvious example of how unions can be destructive and literally end up killing people.

To your freedom & prosperity, Simon Black, Founder, SovereignMan.com

https://www.sovereignman.com/trends/it-turns-out-you-can-spot-a-bad-apple-you-just-cant-remove-one-27844/