Billionaire Hedge Fund Manager Urges Diversification Out Of The Dollar

Billionaire Hedge Fund Manager Urges Diversification Out Of The Dollar

Notes From The Field  By Simon Black March 29, 2021  Sovereign Valley Farm, Chile

Ray Dalio is the founder of one of the largest investment firms in the world and has amassed a personal fortune nearing $20 billion from his business and investment acumen.  In short, he understands money and finance in a way that most people never will. And it’s for this reason that his latest insights are so noteworthy.

In a recent, self-published article entitled “Why in the World Would You Own Bonds When. . .”, Dalio makes some blunt assertions about the alarming US national debt, the decline of the dollar, and other negative trends in the Land of the Free.

Here’s a summary of the major points:

1) Interest rates are now so low that “investing in bonds (and most financial assets) has become stupid.”

Dalio points out that bond yields are so low today that investors would essentially have to wait more than 500 years to break even on their bond investments after adjusting for inflation.

That’s why sensible people are already ditching the bond market.

JP Morgan’s CEO Jamie Dimon recently said he wouldn’t touch a US government 10-year Treasury Note “with a ten foot pole.” Neither would Dalio, as he told Bloomberg this month.

2) This is a big problem for Uncle Sam. Investors are ditching US government bonds at a time when the US is “overspending and overborrowing”.

They just passed a $1.9 trillion stimulus, and they have another $3 trillion spending package ready to go, plus plenty of momentum for Universal Basic Income, health care, Green New Deal, and just about everything else.

In short, the government is going to have to sell a LOT of bonds (i.e. increase the debt) at a time when investing in bonds has become stupid.

3) This creates a huge problem for the US dollar.

“The frightening thing about this,” Dalio says, is that many investors have already come to the conclusion that bonds are terrible investments.

So these investors could decide to dump the bonds they already own “at the same time as the [US] government has to sell a lot bonds.”

Just imagine-- the US government could easily have to sell another $4 trillion worth of bonds over the next 12-months to cover its massive budget deficit, plus all these wild spending programs.

But then on top of that, investors who currently own US government bonds may decide to dump another $3 trillion worth of the bonds in their portfolios.

This would mean that $7 trillion worth of bonds flood the market at a time when few people want to buy them.

4) As Dalio explains, this would cause one of two things to happen:

“Either interest rates will rise,” in order to entice investors to buy bonds, or the Federal Reserve “will have to print substantial amounts of money to buy [the bonds] that the free-market buyer won’t buy.”

And it’s pretty clear they’re going with option B.

Last year, the Fed was by far the single largest buyer of all the newly issued US government bonds. Yet as Dalio writes, “when they print money and buy those bonds. . . that lowers real rates and it accelerates a depreciation in the value of the dollar, and it also raises inflation pressures.”

5) So what are the potential consequences?

“The real risk, the big risk,” Dalio told Bloomberg, “is of a monetary inflation . . . and that monetary inflation means that even when the economy weakens, inflation rates rise.”

This is essentially stagflation, i.e. rising inflation coupled with a sluggish economy.

6) When does Dalio see these consequences starting to arise? “Late this year.”

7) There are plenty of bigger picture issues too. Dalio acknowledges that the US government is going to need a LOT of money to finance all this spending, so taxes will likely rise. A lot.

As Dalio writes, tax increases “could be more shocking than expected.”

He also believes that “the chances of a sizable wealth tax bill passing over the next few years are significant.”

8) Dalio writes that, as a result of such tax policy and other destructive rules, “the United States could be perceived as a place that is inhospitable to capitalism and capitalists.”

And the combination of high taxes, high inflation, and hostility towards capitalism may compel many investors and businesses to shift their capital and operations overseas and “run from less hospitable places to more hospitable places.”

9) But don’t expect the US government to sit idly by while capital leaves the country. Dalio believes there is “the possibility of capital controls” to prevent money from exiting the United States, as well as “prohibitions against capital movements to other assets” outside of the US dollar like “gold, Bitcoin, etc.”

So, in short: too much debt and money printing leads to a declining value of the US dollar, and potentially stagflation.

As a result, the government is likely to drastically raise taxes and chase business and capital away from the United States, leading to capital controls and prohibitions on alternative investments.

This is not some wild conspiracy theory or crazy conjecture. This is one of the wealthiest, most successful fund managers in human history bluntly calling the end of the US-dollar debt supercycle.

We’ve been writing about this theme for more than a decade, so our readers will not be surprised by either Dalio’s comments, or the solutions he proposes.

His top recommendation, for example, is “a well-diversified portfolio of non-debt and non-dollar assets.”

And in Dalio’s view, diversification means “currency diversification, country diversification, as well as asset class diversification.”

In other words, don’t keep all of your eggs in one basket, one country, or one currency.

You can read the entirety of this article here, or watch his interview with Bloomberg.

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

https://www.sovereignman.com/international-diversification-strategies/billionaire-hedge-fund-manager-urges-diversification-out-of-the-dollar-31723/

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Gold Vs. The Stock Market

Gold Vs. The Stock Market

Notes From The Field By Simon Black

March 16, 2021  Sovereign Valley Farm, Chile

More than 3,000 years ago in the early 12th century BC, Greco-Roman legend tells us of a mythical pair of monsters located in the Strait of Messina in southern Italy.  The monsters were named Scylla and Charybdis. And both Homer’s Odyssey and Virgil’s Aeneid describe the terror of sailors who came into contact with them.

Scylla was on one side of the Strait, and Charybdis on the other. But because the Strait is so narrow, it was impossible for sailors to avoid both of the monsters, essentially forcing the captain to choose between the lesser of two evils. In Homer’s narrative, for example, Odysseus is advised that the whirlpools of Charybdis could sink his entire ship, while Scylla might only kill a handful of his sailors.

So Odysseus chooses to sail past Scylla: “Better by far to lose six men and keep your ship than lose your entire crew.”

The story is a myth. But the idea of having to choose between two terrible options is very real.  It appears that the Federal Reserve has landed itself in this position.

 In its efforts to boost the economy during the pandemic, the Fed slashed interest rates so much that the average 30-year mortgage rate for homebuyers reached an all-time low of 2.65% earlier this year.  

Similarly, AAA-rated corporate bond yields reached record low 2.14% last summer.  The US government 10-year Treasury Note dropped to a record low 0.52%.

And the 28-day US government Treasury Bill rate actually turned negative for a brief period-- something that has never happened before.  The effects of such cheap rates are obvious.

With corporate borrowing rates so low, the stock market has boomed. With consumers able to borrow money so cheaply, home prices have surged to an all-time high.

Yet in slashing interest rates to record lows, the Fed has essentially sailed right into the Strait of Messina. And they’re about to find themselves stuck between two monsters.

On one side of the Strait is the Inflation Monster, which grows stronger and more menacing with ever dollar the Fed conjures into existence.

Last year the Fed increased the supply of US dollars in the financial system (M2) by 26%-- the single largest annual increase since 1943.

The Fed has nearly doubled the size of its balance sheet in the last 12 months alone, and nearly 10x’d its balance sheet since the financial crisis of 2008.

In simple terms, the Fed ‘prints’ money (albeit electronically) and sprinkles it around the financial system.

This is a form of debasement, not much different than how ancient Roman emperors cut corners by reducing the purity of their gold and silver coins.

Historically speaking, debasing the currency eventually causes inflation.

There are famous historical episodes, like Zimbabwe, Venezuela, or the Weimar Republic, where the government’s endless money printing caused hyperinflation.

But there are countless ‘quieter’ examples of inflation-- like in Brazil, where inflation is now over 5%, or Turkey, where the annualized inflation rate is about 15%.

15% isn’t exactly hyperinflation. But it does make life pretty uncomfortable, especially when wage growth fails to keep pace. Every year people find themselves poorer and worse off.

Yet the Federal Reserve ignores these countless historic examples, recently claiming to Congress that relentless money printing will not cause inflation.

The Fed’s reasoning is that, because their money printing hasn’t caused inflation yet, it never will. This is pretty dangerous logic, given that rule #1 in finance is ‘past performance is no guarantee of future results.’

But I’ll come back to that in a moment, because on the other side of the Strait is the Market Monster.

Like the Inflation Monster, the Market Monster grows larger with ever dollar the Fed creates. It FEEDS on cheap interest rates.

Look at the US stock market: prior to the pandemic, the Dow Jones Industrial Average reached a record high of just over 29,000 points. Today, the market is more than 10% higher

And yet--

1. Corporate earnings are DOWN. The average Earnings per Share in the S&P 500 is 30.47% LOWER than prior to the pandemic.

2. Corporate revenue is also down. Yet corporate DEBT is substantially higher.

3. The US economy as measured by GDP is weaker. Consumer spending is still lower than before the pandemic. Unemployment is higher.

4. Government debt is hilariously out of control, and the new ruling party just announced that they want to raise taxes.

Lower profit, lower revenue, higher debt, higher taxes-- NONE of these trends should be favorable for stocks. Yet the market is UP, with the average Price/Earnings ratio in the S&P 500 now an incredible 40x.

The Fed knows that the strength of the stock market… along with the real estate and bond markets… is based on cheap interest rates.

They also know that if they raise rates, these markets could suffer a dramatic downturn.

So the Fed has two options to choose from, and neither is good: raise rates and cause markets to crash. Or, don’t raise rates, and risk inflation.

They’ve pretty much already told us they’re choosing inflation.

I’m not suggesting that the US is going to turn into Zimbabwe and suffer terrible hyperinflation.

But inflation levels similar to Brazil or Turkey are definitely possible. It happened before in the 1970s when inflation hit double digits-- and stayed that way for years.

And given the Fed’s refusal to acknowledge the slightest chance of inflation (heresy!), it makes sense to consider preparing for the possibility.

I would point out again that gold has a 5,000 year track record of performing well during times of inflation.

It’s also among the few major asset classes that’s NOT currently at a record high.

Unlike the stock market, which has reached an all-time high despite lower earnings and higher debt, gold is down 16% from its peak even though inflation expectations are the highest they’ve been in years.

On that basis, gold looks pretty undervalued.

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

Gold vs. the stock market | Sovereign Man

It Took 25 Years For Stocks To Recover ‘Inflation Losses’ From The 1970s

It Took 25 Years For Stocks To Recover ‘Inflation Losses’ From The 1970s

Notes From The Field By Simon Black  March 15, 2021  Sovereign Valley Farm, Chile

The ink isn’t even dry on the $1.9 trillion ‘Covid stimulus’ bill that was signed last Thursday in the Land of the Free. Yet they’re already talking about another “big, bold” spending package.  This new bill will supposedly aim to fix up America’s dilapidated infrastructure, and it’s rumored to come in at another $1 to $2 trillion.

I say “supposedly aim,” of course, because 90% of these bills have little to do with their stated objective. Most of the spending from last week’s ‘Covid stimulus’ had very little to do with Covid.   Hundreds of billions of dollars, for example, are earmarked to bail out bankrupt states, i.e. the ones who chased away their most valuable taxpayers with nonstop vitriol and exorbitant tax rates… and who imposed the most severe lockdowns and business closures.

This is particularly interesting because those lockdowns have now been proven to be completely ineffective.

Even the New York Times gets it; the paper published an article over the weekend acknowledging that Covid rates in the state of Florida, which has been ‘open’ for several months and never imposed a statewide mask mandate, are lower than many states which have severe lockdown orders.

So basically the Covid bill is nothing more than a bailout for the states which torpedoed their economies with ineffective and unconstitutional public health policies.

The next ‘infrastructure’ bill will likely be just as wasteful… and dishonest in its intentions.

But this is the norm now: no one cares how much money these people spend. Both the Federal Reserve, and the Treasury Secretary (who used to be the head of the Federal Reserve) publicly advocate for MORE spending.

And now that the Bolsheviks are in charge of the federal government, they’re emboldened to keep spending as much money as they want.

They know their opportunity is NOW; they can pass trillions of dollars of spending bills without anyone kicking up much of a fuss.

And it’s clear there’s going to be a flurry of spending with no end in sight.

A decade ago it was incomprehensible to spend a trillion dollars in a single piece of legislation; even the taxpayer-funded bailout of the banking system in 2008 ‘only’ cost $700 billion.

Now they spend a trillion dollars like it’s nothing.

Of course, the federal government doesn’t have a trillion dollars to spend. So every one of these stimulus packages is funded by debt… hence the soaring national debt that will shortly hit $30 trillion, roughly 150% of GDP.

Here’s where it gets really interesting--

In the 12 months between early March 2020, just prior to the pandemic, and March 2021, the US national debt increased from $23.5 trillion to $28 trillion.

That’s an increase of $4.5 trillion.

In the same period, the Federal Reserve’s balance sheet increased from $4 trillion to $7.5 trillion… an increase of $3.5 trillion.

The numbers are pretty obvious: the Federal Reserve has monetized more than 75% of all US government debt that was issued in the last year.

In other words, whenever the government needs money for these massive spending initiatives, the Federal Reserve simply pushes some buttons, conjures trillions of dollars out of thin air, and ‘loans’ that money to the Treasury Department through its intermediaries in the banking system.

So the playbook is essentially to ‘print’ money and spend it wastefully.

This hardly seems like the path to prosperity. Yet astonishingly, both the Federal Reserve and the Bolsheviks who control the government are delighted by this practice.

Let’s be intellectually generous and say that there ‘might’ possibly be consequences to this course of action. Recklessly expanding the money supply typically results in inflation, and there’s already plenty of evidence to suggest that inflation is rising.

Inflation makes people poorer. Yet, again, both the Fed and the Treasury Secretary actually WANT inflation.

The Fed has already announced that it is willing to accept higher rates of inflation in the coming years; and the Treasury Department frankly NEEDS higher inflation in order to make the national debt more manageable. ($30 trillion will seem like a lot less money a decade from now if inflation is high.)

So in summary:

- The central bank is rapidly expanding the money supply at an unprecedented rate.

- The federal government is borrowing money at an unprecedented rate.

- Both of these trends typically cause inflation.

- Key economic policymakers want inflation and view it as a good thing.

It seems pretty obvious that their interests, and your interests, are clearly not aligned. And a rational person ought to at least consider the possibility of inflation, i.e. the purchasing power of your money will decrease.

During times of inflation, saving money makes you poorer each year. Bank deposit rates fail to keep up with inflation rates, so every year the purchasing power of your hard-earned savings dwindles.

Instead people typically buy assets-- like stocks, real estate, private companies, etc. because asset prices tend to do very well during inflation.

But that’s not always the case.

For example, the S&P 500 stock index in the US was at an all-time high in late 1968. Inflation was already on the rise, though, thanks to massive government spending from the Vietnam War and LBJ’s ‘Great Society’ spending initiatives.

By 1974, inflation was more than 11%. But the stock market had lost more than 40% of its value.

It would take until 1993-- TWENTY FIVE YEARS later-- until the S&P 500 reached a level that, after adjusting for inflation, exceeded its high from 1968.

So, buying an asset class that’s already at its all-time high just prior to an inflationary period isn’t necessarily a no-brainer option.

This presents a perplexing challenge, because most major asset classes, including stocks and real estate, are already at record highs.

But there’s at least one asset class which is well below its all-time highs, and also has a track record of strong performance during inflation.

I’m talking, of course, about gold and silver. More on them later this week.

To Your Freedon and Prosperity

Simon Black, Founder, SovereignMan.com

https://www.sovereignman.com/trends/it-took-25-years-for-stocks-to-recover-inflation-losses-from-the-1970s-31500/

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Warren Buffett: “Retirees Face A Bleak Future”

Warren Buffett: “Retirees Face A Bleak Future”

Notes From The Field By Simon Black

March 2, 2021 Cancun, Mexico

Warren Buffett minced no words in his most recent annual shareholder letter (which came out over the weekend) when he told investors that “retirees face a bleak future.” Buffett was referring to the pitifully low interest rates that dominate fixed income investments (like bonds and annuities).

In September 1981, he writes, investors could buy a 10-year US government bond yielding nearly 16%. Now, inflation was a lot higher in the 1980s than it is today. But even after adjusting for inflation, the average annual yield for any investor who held that 1981 bond to maturity over the next decade would have been 5.7% per year.  Today, that same 10 year bond yields just 1.4%. But the official inflation rate in the United States is also 1.4%. This means that, after adjusting for inflation, your net yield today is ZERO.

What’s even more incredible is that there are obvious signs inflation may be on the rise; for example, the most recent Producer Price Index of wholesale price inflation reached its highest level since 2009.

Yet simultaneously the Federal Reserve keeps saying that they want to keep interest rates low. And they’re doing their best to push the 10-year yield even lower than 1.4%.

In other words, inflation could go higher, and interest rates lower. So anyone who buys bonds will actually suffer a negative yield after adjusting for inflation.

And this is precisely what Buffett was talking about.

Retirees-- along with pension funds and charitable endowments-- often buy fixed income investments (like bonds) because of their perceived safety and predictability.

The stock market can be all over the map. Some days it’s up, some days it’s down. But bonds (in theory) are stable investments that pay a fixed sum of cash, every single month or quarter.

But it’s gotten to the point now that those ‘safe’ investments can actually cost you money, especially after adjusting for inflation.

Anyone who actually wants to earn a halfway decent return on investment must now seek out riskier and more volatile assets.

Stocks are the next best choice for most people. But the stock market has become absurdly overpriced. There are still undervalued gems, but they’re more and more difficult to find.

Coca Cola is a great example of how overpriced the market is; Coke’s earnings actually peaked in 2010, more than a decade ago. At that time, the company earned $2.53 per share and had $14 billion in long-term debt.

Its earnings have been in decline ever since. Last year Coca Cola earned $1.79 per share, a decline of 30% from its peak in 2010. And over the same period its long-term debt has nearly tripled to $40 billion.

Revenue is down, earnings are down, free cash flow is down, debt is up. Any rational person would look at this data and conclude that Coca Cola’s stock price should have been in the dumps since 2010.

But that’s not the case. Coke stock has more than doubled, and it’s not far off from its all-time high.

This makes absolutely no sense, yet it exemplifies the sorts of risks that stock market investors have to take today, simply because-- as the saying goes-- “There is no alternative.”

If interest rates were at normal levels, no sane investor would pay record high prices for a declining business. But this is what people feel compelled to do with their money now because it doesn’t seem like they have any other option.

Buffett knows this, and he has routinely lamented the overpriced stock market for the past few years in his annual letters, along with outrageous fees charged by big funds and Wall Street investment banks.

To Buffett, stocks aren’t securities to be traded. Instead, they represent shares in a business, and shareholders should view themselves as partners in that business. And the best investments are “wonderful,” well-managed businesses that can be acquired at a discount.

This year Buffett summarized his ethos by saying:

“Productive assets such as farms, real estate, and yes, business ownership, produce wealth-- lots of it. Most owners of such properties will be rewarded.”

One issue Buffett didn’t mention in this annual report is the sad state of finances for nearly every pension fund in the world… and that makes retirement prospects even more bleak.

Social Security, for example, is underfunded by tens of trillions of dollars according to the program’s Trustees (which include the Treasury Secretary of the United States).

Social Security’s finances have been so mismanaged that the trust funds are set to run out of money as early as 2029. And it’s not like the federal government (which already runs a multi-trillion dollar deficit) is in any position to bail out the program.

So retirees really do face bleak prospects.

This isn’t intended to be a downer, but hopefully a call to action. Because there’s plenty you can do about it.

Only a handful of people in the world have the ability to set interest rates and inflation policy, or to manage Social Security back to health. Chances are you’re not one of them. Neither am I.

But we do have the power to use every tool at our disposal to fix these challenges for ourselves.

And that’s the bottom line: unless you want to be like Buffett and still be working in your 90s, you absolutely have to set aside more money for retirement.

There are plenty of ways to do that. For example, anyone with the ability to generate side income can set up a solo 401(k) and set aside north of $50,000 per year for retirement in an incredibly tax advantaged way.

That side income can be just about anything; you could sell products on Amazon, start your own website, consult, drive for Uber, flip real estate, etc.

Whatever your talents and skills are (and I’m sure they’re numerous), you can set up a robust retirement structure and dramatically boost your retirement savings.

You just need the right information… and the willingness to take action.

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

https://www.sovereignman.com/investing/warren-buffett-retirees-face-a-bleak-future-31198/

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“Nobody Owes More Than The Law Demands.”

“Nobody Owes More Than The Law Demands.”

Notes From The Field BY Simon Black February 24, 2021  Bahia Beach, Puerto Rico

There used to be a show from the 90s called America’s Funniest Home Videos, where host Bog Saget would show silly home movies that people sent in from across the country.  The videos typically featured people doing stupid things. And if the video was funny enough, someone could have won the $100,000 grand prize.  All of that was pre-Internet, of course. Now there are people amassing fortunes on YouTube with audiences that rival hit TV shows.

Today, a nine year old boy named Ryan Koji is the highest earning YouTuber. Last year he raked an estimated $30 million from about 12 billion views, all from videos of him opening and playing with toys on camera for his 42 million subscribers.

Another YouTuber named Logan Paul earns $10-$15 million per year, just for being generally annoying and obnoxious on camera.

But he certainly doesn’t keep that much money, because he lives in California. So between federal and state taxes, his income tax burden is around 50%.

And Logan Paul said that high tax rate is the main reason that he is moving to Puerto Rico.

He’s applied for a tax incentive we have discussed many times: most, if not all, of Paul’s income should qualify under the Export Services Act (now called Chapter 3 of Act 60) to be subject to just a 4% corporate tax rate. That could save him $5-7 million PER YEAR.

According to the rules, he will still have to pay himself a reasonable salary. But even that amount will only be subject to Puerto Rico’s top income tax rate of 33%.

The rest will be taxed by Puerto Rico at 4%. And his US federal tax rate will be ZERO.

That’s because bona fide residents of Puerto Rico, a US territory, don’t owe federal taxes on income that’s sourced in Puerto Rico.

And that makes Puerto Rico a phenomenal tax option for US citizens; it’s one of the easiest ways that investors and entrepreneurs can legally slash their taxes.

Like any place, Puerto Rico has advantages and disadvantages. The infrastructure is horrendous, and government corruption is so profane it’s almost comical.

But I’ve been living here under the same tax incentives for a couple of years now, and I can honestly say that the benefits definitely outweigh the drawbacks.

And over the last year there’s been a surge of people moving here, mostly from the US. They’re business owners, entertainers (including some hip hop stars), fund managers, and self-employed professionals (like doctors, lawyers, etc.)

They’re pretty much all here for the tax benefits. They expect taxes in the US, both at the federal and state levels, to increase. So moving here is a no brainer.

It’s not like you need to be earning millions of dollars to benefit from these tax incentives either. There are plenty of location-independent, middle class workers living down here, many who came during the pandemic.

They have regular jobs, and basically asked their employers to start paying their Puerto Rican companies. And, poof, overnight, their tax rate went to 4%.

It’s not just Americans; in Europe, many people have found that one of their best options to save on taxes is moving to Andorra-- a tiny independent nation with a population under 80,000 nestled in the mountains between France and Spain.

Andorra’s tax rate is just 10% and the country has fast fiber optic Internet; and that’s one of the reasons why Andorra has become popular with YouTubers.

In fact several Spanish YouTubers moved to Andorra recently, escaping Spain’s 54% top income tax rate.

In response, Spanish media unleashed an onslaught of hatred, condemning the YouTubers as unpatriotic.

One popular television personality said, “I think it’s unsupportive. Railroads and pensions have to be paid for.” And another newspaper published an article criticizing a fitness star’s “unlikely excuses” for moving to Andorra-- as if she needs to justify her personal decision to move.

Of course, some YouTube celebrities thrive on controversy, and they’re likely hoping to face criticism for their decision to avoid taxes in a completely LEGAL way.

Logan Paul, for example, explained to his audience:

"It's getting crazy here in California you know, paying taxes and for what? Because, the potholes in the streets are not fixed. There are homeless people everywhere, a dearth of employment, Covid not handled the right way... I don't love it."

And that’s the real point. It would be one thing if the taxes you paid were curing cancer. But they’re not.

Tax dollars are, at best, being squandered by an inefficient bureaucracy. At worst, they’re being used to oppress the very people who pay those taxes.  There is no moral obligation to pay more, when there are legal ways to pay less.

A famous judge named Learned Hand settled this long ago when he wrote:

“Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the treasury. There is not even a patriotic duty to increase one's taxes... there is nothing sinister in so arranging affairs as to keep taxes as low as possible... nobody owes any public duty to pay more than the law demands.”

Moving is one of the ways to legally reduce what you owe. But that doesn’t mean you have to move across the ocean.

Sometimes it makes a big difference to simply move to a different city, province, or state, like leaving California or New York, for Texas and Florida.

But even if you’re not willing to move, there are still ways to legally reduce what you owe. 

You could, for example, maximize your deductions, like maximizing contributions to tax efficient retirement accounts.

That one is a no brainer since it delivers the multiple benefits: you can contribute pre-tax income to reduce what you owe, plus you ensure you’re not depending on Social Security program for retirement, which is on track to run out of money by 2029.

To your Freedom & Prosperity Simon Black, Founder, SovereignMan.com

https://www.sovereignman.com/trends/nobody-owes-more-than-the-law-demands-30987/

P.S. Join the Official Sovereign Man Telegram Channel: https://www.sovereignman.com/tg

Some Clear Thinking On $50,000+ Bitcoin

Some Clear Thinking On $50,000+ Bitcoin

Notes From The Field By Simon Black  February 22, 2021 Bahia Beach, Puerto Rico

There are famous stories that come out of the Great Depression in which very astute financiers sold all of their stocks just before the big crash of 1929.  Joseph Kennedy famously dumped his portfolio after receiving stock tips from a shoeshine boy. And Bernard Baruch, one of the wealthiest financiers on Wall Street, said after the crash,  “Taxi drivers told you what to buy. The shoeshine boy could give you a summary of the day’s financial news as he worked with rag and polish. An old beggar who regularly patrolled the street in front of my office now gave me [stock] tips. . .”

Now, these comments make it seem like taxi drivers and shoeshine boys don’t have financial sense. And that’s wrong.

Someone’s profession and their level of financial sophistication don’t necessarily go hand in hand; there are plenty of astute janitors, and plenty of idiot fund managers.  But I did think about Baruch’s remarks recently when an Uber driver started talking to me about cryptocurrency.

Again, his opinions are just as valid as anyone else’s. But what I found remarkable is that the only thing he knew about his portfolio was how much he’s ‘up’.  He told me about how he’d invested in a few small tokens, and that’s he’s up 3x on this, and 5x on that, and 2x on another.

There was zero discussion about the technological merits of any particular coin. He didn’t talk to me about what made their software better, or the unique proposition that any of them offers to the financial system.

He didn’t even know the basics of what he had purchased. All he knew was how much he was ‘up’, and that his portfolio was going to keep going up.

And that’s the thing about crypto: there’s a level of fanaticism that we’ve not seen before in modern history with regards to a single asset class.

There are pro-crypto people who are self-avowed “HODLers”, which is crypto-speak for “I will never sell ever… regardless of technological competition or radical changes to the marketplace.”

This is a completely emotional position to take.

But the fanaticism is on both sides. Equally, there are anti-crypto people who still claim that it’s a scam, or ‘worthless’.

Just this morning in the Wall Street Journal, in fact, some reporter wrote that Bitcoin’s “fundamental value is zero.”

This just screams ignorance. Bitcoin is software. Software is technology. And any technology that (a) serves a real purpose, and (b) has a large number of users, is by definition NOT worthless.

Bitcoin has tens of millions of users and provides actual utility, i.e. transferring value from one user to another.

Bitcoin is no more ‘worthless’ than SWIFT-- the organization whose completely outdated technology facilitates international wire transfers.

Yet with Bitcoin at $50,000+, the fanaticism has reached epic levels, and people on all sides are screaming about it. One group insists that it’s going to zero. The other insists that it’s only going up.

It’s hard to make sense of the market with so much noise, so I wanted to make a few rational comments.

[EDITOR's NOTE: Bizarrely, Sovereign Man's email service provider is refusing to send out this email in its entirety because it focuses on cryptocurrency. So, click here to see the rest of Simon's remarks on our website.]

To continue reading, please go to the original article here:

https://www.sovereignman.com/investing/some-clear-thinking-on-50000-bitcoin-30936/?inf_contact_key=8ad9b2d98ced9b13f54618b72178abeb16358d5485884e2f31e6019a0d26c8b0

Simon Black, Founder, SovereignMan.com

Gold Is One Of The Few Assets That’s NOT At A Record High

Gold Is One Of The Few Assets That’s NOT At A Record High

Notes From The field By Simon Black

February 23, 2021   Bahia Beach, Puerto Rico

On December 24, 1943, in the midst of World War II, General Dwight Eisenhower formally took command of all Allied forces in Europe.  This was a big deal after such a pivotal year.   1943 saw Hitler suffer a devastating loss in Stalingrad; and by the end of the year, he had nearly lost Italy.  The Allies could see the light at the end of the tunnel. Victory was within reach, and they were already working on a plan codenamed Operation Overlord-- the invasion of Normandy-- that would begin the final push against Hitler in the summer of 1944.

Eisenhower’s appointment was the ultimate admission of US military supremacy; as Supreme allied Commander, he outranked everyone, including British and French generals.  But the US was the natural choice to take charge.  At the time the US government was pumping everything into the war effort. Military spending was already at a record high in 1942, the first full year that the US was involved in World War II.

But by the end of 1943, military spending had tripled.

The US national debt exploded as a result, surpassing 60% of GDP. That was an unconscionable figure, more than twice as much debt than the US racked up during the Civil War, or World War I.

Money was tight, and the Treasury Department did everything it could to raise cash. Tax rates soared, with the highest marginal rate hitting 94%. They were constantly pushing the public to buy War Bonds.

But most importantly, the Federal Reserve vastly expanded the money supply, essentially ‘printing’ whatever money the federal government needed to pay for the war effort.

1943 was a record year for monetary expansion, in fact. “M2 money supply,” a key measure of the amount of money in the financial system, grew more in 1943 than almost any other year in US history, before or since.

And then along came Covid.

Last year the US federal government spent so much money on Covid relief that the national debt increased by an astonishing $4.5 trillion. And they’re about to pass another $1.9 trillion spending package on top of that.

Bear in mind that the Congressional Budget Office’s projected ‘baseline deficit’ for this fiscal year was already more than $1 trillion. So now they’re piling even more on to that amount.

Just like in the 1940s, it’s the Federal Reserve that’s picking up most of the slack.

Last year the Fed printed so much money that M2 money supply increased the most in any year since 1943.

At least in 1943 they were fighting the Nazis; in 2020 they conjured ridiculous sums of money out of thin air to pay people to stay home.

Plus the record-setting money expansion is set to continue this year.

Based on the monetary programs the Fed is already executing, M2 money supply will increase by another $2.3 trillion this year, or roughly 12%.

And that’s before they do anything new. If Covid-21 mysteriously surfaces, or the government decides to spend another $2 trillion in stimulus, or they pass the Green New Everything, the money bubble will expand even further.

I cannot understate this: this extraordinary expansion of the money supply is risky. And the primary risk is inflation.

It’s a simple concept-- the more money they create, the less valuable the rest of the money becomes.

And we’re already seeing some early signs of inflation and dollar weakness. For example, the dollar is down against nearly every major currency over the past six months.

Also, last week the Labor Department announced that January’s Producer Price Index reached its highest level in more than a decade.

Plus, several commodities, ranging from copper to cotton to crude oil, have surged in price, with the CRB Commodity Index up 15% so far this year.

Commodities are essentially raw materials that make up the products we consume-- everything from mobile phones to new home construction.

So when commodity prices increase, it costs more to produce the goods that we consume… and that often means that companies have to charge us more for their products.

This is inflation.

It’s noteworthy that the Federal Reserve has already announced that they’re willing to allow higher rates of inflation if prices start to rise.

So they’re not even being vague about their intentions.

This raises the obvious question: how is someone supposed to protect their savings at a time when both the Treasury Department and Federal Reserve are waging holy jihad against the dollar?

There is seemingly no amount of money too great to print, no amount of debt that’s off limits.

Typically in an inflationary environment like this, it makes sense to own high quality assets. This is a big reason why the stock market has been doing well.

But a lot of people may be understandably uncomfortable buying stocks at near record-high valuations, i.e. paying 1,000x earnings for a mature, listed business.

The average company in the S&P 500 carries a Price/Earnings ratio of nearly 40 right now, nearly 3x the long-term median. It’s only been higher just prior to the dot-com crash, and the Global Financial Crisis in 2008/2009.

The same goes for real estate; with interest rates so low (again, thanks to the Federal Reserve), the cost to borrow money to buy property is practically nothing. And this has driven up the price of real estate because people can afford to borrow (and pay) more.

Whether stocks, real estate, or anything else, it’s hard to find refuge in an asset that’s already surged to an all-time high.

Ironically, one asset that’s NOT at its all-time high is GOLD. This is almost comical considering the inflationary environment that we’re in, and the fact that gold is a traditional inflation hedge.

Many commodities, stocks, real estate, cryptocurrency, and bonds have soared in price. But gold is actually down over the past ~6 months. So by comparison, gold is relatively cheap.

To Your Freedom & Prosperity  Simon Black, Founder, SovereignMan.com

P.S. Join the Official Sovereign Man Telegram Channel: https://www.sovereignman.com/tg

https://www.sovereignman.com/investing/gold-is-one-of-the-few-assets-thats-not-at-a-record-high-30953/

This Free Gift From The Government Is Going To Expire In A Few Years

This Free Gift From The Government Is Going To Expire In A Few Years

Notes From The Field By Simon Black

February 18, 2021  Miami, Florida

In the early first century AD, in the final years of his reign, the Roman emperor Augustus imposed a new tax on his subjects called the vicesima hereditatium.  In Latin this means literally “twentieth of inheritance”, and in effect it was a 5% tax (i.e. 1/20th) on money and property that was inherited after someone died.

Augustus exempted close relatives from paying the tax-- so someone’s children, for example, didn’t have to pay. But everyone else had to fork over a piece of the action to the Roman state.  Subsequent Roman emperors modified the law; Trajan, a second century AD emperor, created a ‘floor’ for the tax, so that anyone who inherited below a minimum amount wouldn’t have to pay.

And, as you can imagine, the tax rate rose over time.

Rome wasn’t the first civilization to come up with an estate or inheritance tax; there’s evidence going all the way back to ancient Egypt that the Pharoahs taxed the property of the dead.

And these days, estate and inheritance taxes remain a perennial favorite of bankrupt governments who are in need of cash.

To them, the only good wealthy person is a dead wealthy person, and there’s nothing they love more than stealing the assets of dead rich people.

After all, the political consequences are minimal: dead people don’t cast ballots (unless they’re voting for Joe Biden.)

The mere concept of a death tax is pretty offensive when you think about it. They tax you when you earn. They tax you when you save. They tax you when you spend. And they even tax you when you die.

But like all taxes, there are always ways around it.

There are steps you can take, for example, to dramatically reduce your income tax (i.e. the taxes you pay when you earn). You can maximize tax efficient retirement contributions, move to a lower tax state, take advantage of Puerto Rico’s extraordinary tax incentives, etc.

You can take steps to reduce taxes when you save-- for example, establishing a robust retirement account like a solo 401(k), or a foreign structure like a Maltese pension plan.

Similarly, you can take completely legal steps to ensure the government doesn’t confiscate your assets once you’ve passed away.

And frankly now is the best time to think about doing this if you’re in the Land of the Free.

This isn’t just for older people. In fact, thinking about estate tax is especially true right now IF YOU’RE YOUNG!

First-- some background.

Just like the Roman Empire under Emperor Trajan, the US federal government has a wealth limit, below which your ‘estate’ is not subject to any tax after you pass away.

But those limits vary from year to year.

2001, for example, was a terrible year to die.

That’s because the estate tax exemption back in 2001 was just $675,000. And the net value of your estate over that amount was taxed at a whopping 55%.

Over time, the exemption went up. And after the tax reform of 2017, the estate tax exemption is now $11.7 million per person, $23.4 million per couple.

Let’s be honest: that’s a lot of money. And most people will think, “Big deal, I’m worth less than $23.4 million, so I don’t even need to think about estate tax.”

But just remember that the $23.4 million exemption is set to expire in 2026, at which point the exemption drops back down to $6 million per person.

Again, though, you might think, “But I’m worth less than $6 million, so I still don’t need to think about estate tax.”

But consider the following:

A) The Bolsheviks who have invaded the media and political establishments LOVE the idea of taxing dead people.

And as the US national debt continues to rise, and the Bolsheviks continue spending unbelievable amounts of money on everything from the Green New Deal to Universal Basic Income (aka ‘Covid Relief’ in disguise), they’re going to need more funding sources.

So it’s totally possible they could whip the estate tax exemption back down to a MUCH lower level.

B) States also have estate and inheritance taxes.

Even if the federal exemption level doesn’t change, bear in mind that states have different limits and taxes too.

For example, Rhode Island’s estate tax exemption is much lower-- around $1.5 million. Washington state’s estate tax maxes out at 20%, and Nebraska’s top inheritance tax rate is 18%.

C) This matters even more if you’re young.

If you’re a broke 20 year old, you might think that making a few million bucks sounds impossible. Don’t underestimate yourself. Life is long and full of opportunity. And as crazy as the world is, talented people of integrity will always be able to create value and build wealth.

I know it’s a difficult exercise when you’re young, but if you think 70+ years down the road, you could easily find yourself having achieved far more financial success than the estate tax exemption.

So taking steps now while the exemption is high makes a lot of sense.

And that’s the entire point: right now the exemption is far greater than most people’s level of wealth, which makes it a golden opportunity to think about estate planning.

For example, setting up a properly structured domestic trust is a great option to consider.

Through a trust, you could still essentially retain control over your assets, but move them out of your taxable estate forever.

Here’s an example: Imagine you’re starting a new business. On day 1, your business is essentially worthless. So you set up a perpetual, revocable trust in South Dakota and move, say, 40% of the shares into your trust.

In time, your business becomes successful and ultimately worth $15 million.

But since 40% of it is held in the trust, at the time of your passing, you -personally- would only own 60% of the shares, i.e. $9 million.

Depending on what the exemption level is at that time, hopefully many decades from now, you may or may not owe estate tax.

But the 40% of the shares that your trust holds, worth $6 million, is completely free of estate tax, presuming the trust is properly structured.

This is one way to shield at least a portion of your assets from estate tax.

It makes sense to consider moving appreciable assets into a trust. You might want to think twice before putting depreciating assets (like a car) into a trust.

But putting shares of a well-managed business, cryptocurrency, or real estate, into a trust, means that as those assets appreciate in value, ALL of it can be shielded from estate tax.

Again, even if you’re well below the exemption level, it makes sense to think about doing this. Because the Bolsheviks could decide tomorrow morning that they want to yank the exemption back down to a much lower level.

Right now, for most people, the current $23.4 million is enormous. They’ve given everyone the opportunity to move (in practical terms) virtually unlimited assets out of our taxable estates.

We know this opportunity is set to end in a few years. And they could change the rules and end this exemption much sooner than that.

So it really makes sense to think now about the future while the window of opportunity is wide open.

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

https://www.sovereignman.com/trends/this-free-gift-from-the-government-is-going-to-expire-in-a-few-years-30899/

With Apologies To Drunken Sailors Everywhere. . .

With Apologies To Drunken Sailors Everywhere. . .

Notes From The Field By Simon Black  February 9, 2021  Bahia Beach, Puerto Rico

The year was 1977.  Disco was in. Star Wars was the biggest movie of the year. The world’s first personal computer was announced-- the Commodore PET, which came with 8 kilobytes of memory.  And the Gross Domestic Product of the United States reached $1.9 trillion-- more than double what it had been just ten years prior.  As you probably know (or possibly remember), though, most of the GDP “growth” during the 1970s wasn’t because the US economy was strong. Quite the opposite, actually.

The 1970s was a period of economic stagnation and inflation. The economy was in such bad shape that, between January 1, 1970 and December 31, 1977, the S&P 500 grew exactly ZERO percent.

Yet food and fuel prices kept spiraling out of control. This is a big reason why GDP kept rising in the 1970s despite such a weak economy.

We’ll come back to 1970s inflation in a moment; for now, I’ll point out the coincidence that the latest COVID stimulus bill which Congress seems ready to pass, is also $1.9 trillion.

In other words, the amount of money they want to spend in a SINGLE legislative package is the same as the size of the entire US economy in 1977. And 1977 is still fairly recent history.

Even today, $1.9 trillion is nearly 10% of the size of the US economy, and roughly 50% of expected federal tax revenue this fiscal year.

Before this COVID spending plan was announced, the Congressional Budget Office estimated in early January that the budget deficit this year in the Land of the Free would be $2.3 trillion (up from their $1.8 trillion estimate a few months before.)

Now they’ll have to add another $1.9 trillion to the total, tentatively bringing this year’s budget deficit to $4.2 trillion.

It’s important to note, of course, that the politicians and public health officials keep moving the goalposts on when life will go back to ‘normal’.

Their latest estimate is that, after hundreds of millions of people are vaccinated, then possibly by late fall there will be “a degree of normality”.

But naturally if there’s the slightest hint of anyone getting the sniffles this fall, they’ll likely slap everyone back down into stay-at-home orders and quarantines. And this means MORE stimulus.

Stay home. Be afraid. Dehumanize yourself and others. Believe what you’re told. Obey. Collect your free government money.

Among the countless, obvious problems with their plan is that they only have one way to pay for it: debt.

The national debt in the United States is nearly $28 trillion right now (up from $23 trillion pre-COVID). And the debt will sprint past $29 trillion soon and reach $30 trillion within the next few months.

At $30 trillion, the national debt will be roughly 1.5x the size of the entire US economy. That will also be a record high-- even higher than when the US was fighting the Nazis in World War II.

The challenges with this approach, of course, are that

(a) someone actually has to have trillions of dollars lying around; and

(b) be willing to lend such prodigious sums to the US federal government.

That’s a pretty tall order.

Most foreign countries don’t have that sort of money. Europe and Japan, for example, are flat broke. And those who do have the money (China) don’t have any interest in financing US government deficits.

You can see this in the data: foreign ownership of US government debt has actually been declining over the past few years, giving a very strong indication that they’re unwilling and/or unable to loan more money to Uncle Sam.

So, with foreign lenders off the table, the Treasury Department will have to look to other sources.

Social Security’s trust funds have long been a source of plunder. But with the program having already turned cashflow negative (and set to run out of money possibly by the end of this decade), this isn’t a viable option any longer.

That leaves the Federal Reserve-- America’s central bank. The Fed has the ridiculous authority of being able to conjure unlimited quantities of money out of thin air in its sole discretion. And as a result, they’ve been buying up the vast majority of US government debt for most of the past decade.

Prior to the Global Financial Crisis in 2008, the Fed’s balance sheet was around $850 billion. Since then, they’ve created so much money that their balance sheet has ballooned to $7.4 trillion.

This takes me back to the 1970s.

Starting in around 1970, the Federal Reserve began heavily slashing interest rates and pumping more money into the economy in an effort to boost GDP.

The plan was successful; like I wrote earlier, the US economy ‘grew’. But so did inflation and unemployment.

Inflation in particular was miserable during the 70s, reaching 14% by its peak in 1980. And most of this happened because they borrowed too much and created too much money.

I wrote about this recently-- economic prosperity isn’t rocket science. All that’s required is some basic fiscal restraint, economic freedom, and a stable currency. The free market takes care of the rest.

History shows that bad things tend to happen when politicians and bureaucrats try to engineer prosperity by debasing the currency.

Yet these people continue to print and spend money like drunken sailors… which is frankly an insult to drunken sailors everywhere. Even drunken sailors eventually realize when they’ve run out of money.

It’s entirely possible that such unprecedented debt and money expansion could cause serious problems with the currency-- including 1970s style inflation.

Don’t fall into a logical trap and believe that inflation will never be a problem, simply because it hasn’t been a problem yet.  Rather, acknowledge that the US was extremely lucky for inflation to have been relatively benign over the last decade.  But after the year we just had, it would be foolish to assume that the next decade will be as tame as the previous one.

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

https://www.sovereignman.com/trends/with-apologies-to-drunken-sailors-everywhere-30789/



Five Ways To Loosen Big Tech’s Grip On Your Life

Five Ways To Loosen Big Tech’s Grip On Your Life

Notes From The Field By Simon Black

January 25, 2021  Bahia Beach, Puerto Rico

I imagine there are countless people right now who feel a wide range of emotions when it comes to Big Tech companies. Anger. Disgust. Confusion. Fear.  We’ve watched with exasperation as Google, Facebook, Twitter, YouTube, etc. have systematically squashed intellectual dissent; their actions have been so commonplace that there’s even a name for it: “De-platforming”.  We all know there’s a ton of garbage on the Internet, including from mainstream sources.

But de-platforming has proven to be wholeheartedly biased, totally arbitrary, and often comically ridiculous. This isn’t just about the election or the Capitol. For example, if you dare utter a word on social media that goes against the infinite and infallible wisdom of the Chinese-controlled World Health Organization, then you might find yourself banned. 

YouTube even suspended a renowned epidemiologist– a bona fide pandemic expert– because he opposed lockdowns and was hence ‘dangerous’.

Facebook censored more than 22 million posts in Q2 of 2020 for ‘hate speech’. Naturally, its entirely up to Facebook to define hate speech and judge whether or not you’re using it.

#killallmen, for example, is NOT considered hate speech. And even by the company’s own admission, hate speech against men, or white people, is a low priority.

It’s clear these companies have an enormous amount of unchecked power. They have the ability to erase you from the Internet, destroy your reputation, and, if you’re someone who makes money online, terminate your livelihood.

But the only reason they have this power is because we’ve given it to them. Hundreds of millions of people have intertwined their entire lives into the Big Tech ecosystem, to the point that they know absolutely everything about us.

People post practically every detail of their lives on Instagram. They tell Zuckerberg what they like and dislike on their Facebook profiles. They tell Jack Dorsey what they believe in on their Twitter feeds.

They give Google free license to spy on every single email that’s sent or received; Google even keeps track of the things that you buy, archiving receipts from online purchases in your inbox and aggregating all of it into your advertising profile.

Through its Maps, Drive, and Calendar applications, Google has access to our schedule, our location, and our confidential files.

They know what we’re searching for. They know what we’re saying. They know what we’re doing.

And at a certain point, a rational human being might be compelled to say “enough is enough”. How can anyone possibly trust these people with their data anymore?

The good news is that there are tons of solutions.

In fact, distancing yourself from the Big Tech companies is one of the easiest ways you can declare your own independence and regain a bit of freedom and security. Below I outline a few options to consider:

1. Absolutely use a VPN

Your device, whether your mobile phone, laptop, or even smart TV, has an IP address, and it’s something that the tech companies use to track you.

Whenever you go to Google’s homepage to search for something, for example, Google already knows it’s you.

And many websites around the Internet will track you by IP address, often sharing this information with Google, Facebook, etc.

Using a VPN helps create anonymity online because you’re no longer accessing those websites from your own IP address.

Right now, for example, even though I’m sitting at home in Puerto Rico, I’m using a VPN service and accessing the Internet through a server in Panama. So any website I visit thinks that I’m in Panama.

There are several VPN providers which, as a policy, do NOT keep logs of their customers’ activities, including VyprVPN and NordVPN.

2) Change your search engine

There’s more to the world than Google search, and plenty of other search engines exist which won’t spy on you. Among them– DuckDuckGo, which is based in the United States, and SwissCows, which is based in Switzerland.

3) Change your web browser

If you use Google Chrome, chances are pretty good that your browser is constantly feeding data back to the mother ship. Everywhere you go on the Internet, Chrome is telling Google about it.

But there are plenty of other browsers out there which are far more privacy oriented. “Brave” is one such browser; it’s open-source, which means that its source code is freely available. And it is automatically set up to block trackers and ads to help protect your privacy.

If you do those three things: VPN, change your search engine, and change your browser, you will take a giant leap forward in distancing yourself from Big Tech.

Those three steps will make it much more difficult for Facebook and Google to track you. But here are a few more to consider:

4) Consider more privacy-oriented chat applications

In a couple of weeks, WhatsApp (which is owned by Facebook) will force all users to accept its new privacy policy. Among other things, this means that ALL of your contacts will be shared with Zuckerberg.

There are better options– like Signal. Signal is ultra-secure, built for privacy, and its source code is open source. There are versions for iOS, Android, PC, Mac, and Linux.

5) Ditch Gmail

You might think that Gmail is free, but you’re paying for it with your personal data.

Google’s algorithms automatically scan every incoming email and mine data about you, all of which ends up in your advertising profile.

There are plenty of other services to use, free and paid. If you’re interested in encryption and security, you might consider Switzerland-based ProtonMail, or Iceland-based CTemplar.

There are endless possibilities to reduce Big Tech influence in your life, and these suggestions barely scratch the surface.

More advanced readers might ditch their operating system altogether for an open-source Linux distribution, or even load a custom ROM on their phone to replace Google’s Android.

For now, start small. These suggestions above are easy steps to get started, and they’ll make a huge difference.

On another note… We think gold could DOUBLE and silver could increase by up to 5 TIMES in the next few years.

That's why we published a new, 50-page long Ultimate Guide on Gold & Silver that you can download here.

Inside you'll learn...

How you could Double Your Money with an asset

That Has a 5,000 Year History of Prosperity

​Why gold could potentially DOUBLE, and why silver could increase by up to 5 TIMES

​The 5 smartest, safest and most lucrative ways to own gold and silver (and one way you should definitely avoid)

​Why gold is the ultimate anti-currency and insurance policy against the systematic destruction of the US dollar (that everyone should at least consider owning)

​Why ETFs are a lurking timebomb and why you want to avoid them like the plague

​And everything else you need to know about buying, owning, storing and investing in precious metals

​This 50-page report is brand new and absolutely free.   Download For Free

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

https://www.sovereignman.com/trends/five-ways-to-loosen-big-techs-grip-on-your-life-30556/ 

Everything’s Fine, There’s Absolutely Nothing To See Here

 Everything’s Fine, There’s Absolutely Nothing To See Here

Notes From The Field By Simon Black January 19, 2021   Bahia Beach, Puerto Rico

In the darkest corners of our human instincts lies a psychological phenomenon that is the result of millions of years of evolutionary biology.  It’s called “tonic immobility”. And it refers to a form of paralysis that occurs when we’re terrified and facing extreme mental or emotional trauma.

Tonic immobility is common in nature. Animals in the wild will often freeze in place when confronted by a predator; the idea is that making no movement, and doing absolutely nothing, increases their chances of survival because the threat will simply go away.

But as anyone who has ever been on safari or seen a nature documentary knows, the danger seldom goes away on its own.

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This instinct to ‘do nothing’ in the presence of danger runs very deep in our instincts; and it’s related to a cognitive quirk within our brains that psychologists call ‘normalcy bias’.

We’ve discussed this before. Normalcy bias is what causes human beings to believe, even in the face of obvious perils, that everything is going to be just fine.

Humans are creatures of habit. We easily fall into routines—waking up, going to work, stopping by the coffee shop on the way, spending time with the family in the evening, etc. And those routines define ‘normal’ for each and every one of us.

When the routine is disrupted, we often have a difficult time coping—even with little things. If the bakery down the street is out of the croissant flavor that we order every morning on the way to work, we’re irritated by it and don’t want to break routine by trying something new.

And major disruptions to our ‘normal’ are met by severe psychological backlash. Our brains simply refuse to acknowledge it.

This is normalcy bias. It’s one of the reasons why denial is the first stage of grief. We cannot accept the loss of a loved one who has been part of our routine– our brains won’t allow it.

Or occasionally we might find out someone has passed, and our first reaction is, “But I just saw them last week!” Again, our brains have an extremely difficult time grasping the concept that our deeply entrenched ‘normal’ is about to change.

And that’s why, when faced with something obvious that threatens our ‘normal’, it’s common for us to instinctively do nothing. Our brains are hard wired to believe that the danger will resolve itself and everything will go back to ‘normal’.

Many of us felt this way in 2020.

When the pandemic struck, it was terrifying. No one really understood anything about it; the media practically made it out to be a flesh-eating superbug that would vaporize everyone immediately.

And in the face of this threat, it was easy for politicians to convince people to literally do absolutely nothing: stay home, and shelter in place.

The idea was that if we waited long enough—if we froze in fear long enough—then the danger would pass.

And people maintained a belief throughout the year that life would eventually return to normal, no matter how crazy the world became.

When we were locked down in our homes, we believed that life would return to normal.

When mostly peaceful protestors were rioting and raging in the streets, torching private businesses that had absolutely nothing to do with their cause, we believed that life would return to normal.

When angry Marxists political candidates raged that they want to confiscate private property and nationalize entire industries, we believed that life would return to normal.

Today there are literally tanks lining in the streets of Washington DC and attack helicopters roaming the skies. A new US President is set to be inaugurated tomorrow with more than 20,000 troops guarding him.

They have already announced sweeping legislative and policy changes, ranging from substantially higher taxes to Green New nonsense to debilitating business regulations that will likely frustrate an already weakened economy.

There is absolutely zero fiscal or monetary restraint in government; there’s hardly a single policy initiative that doesn’t carry at least a trillion dollar price tag.

No one cares about the national debt—which is set to reach $30 trillion within the next few months, or the fact that the central bank balance sheet will likely pass $10 trillion this year.

Their solution to everything is to squash productivity and print money.

Yet still, countless people believe that life will return to normal. For them, part of their ‘normal’ is that America is safe, stable, and powerful… and always will be.

Their brains simply cannot accept a reality in which the country they love so dearly has changed. And it’s not going back.

This is normalcy bias, and it compels countless people to do absolutely nothing in the face of obvious threats.

When you see a government racking up trillions of dollars a year in wasteful new debt, and a central bank printing trillions of dollars of new money, a rational person would take steps to preserve his/her savings.

When the Treasury Secretary states in black and white that the Social Security trust funds will run out of money in a few years, a rational person would take steps to safeguard his/her retirement.

When the nation has become so fractured in conflict that it takes tanks and 20,000+ troops to hold a ceremony in the capital, a rational person would create a Plan B and have some backup options.

But normalcy bias makes us believe that everything is going to back to normal. So we freeze in place and do nothing.

There are plenty of solutions to mitigate these threats. But the most important thing to do right now is overcome normalcy bias.

On another note… We think gold could DOUBLE and silver could increase by up to 5 TIMES in the next few years.

That's why we published a new, 50-page long Ultimate Guide on Gold & Silver that you can download here.

Inside you'll learn...

How you could Double Your Money with an asset

That Has a 5,000 Year History of Prosperity

​Why gold could potentially DOUBLE, and why silver could increase by up to 5 TIMES

​The 5 smartest, safest and most lucrative ways to own gold and silver (and one way you should definitely avoid)

​Why gold is the ultimate anti-currency and insurance policy against the systematic destruction of the US dollar (that everyone should at least consider owning)

​Why ETFs are a lurking timebomb and why you want to avoid them like the plague

​And everything else you need to know about buying, owning, storing and investing in precious metals

​This 50-page report is brand new and absolutely free.   Download For Free

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

https://www.sovereignman.com/trends/everythings-fine-theres-absolutely-nothing-to-see-here-30486/