The Future of Banking: When Will We No Longer Need Cash?

The Future of Banking: When Will We No Longer Need Cash?

Andrew Lisa   Tue, January 24, 2023

In 1950, Americans could pay for dinner at a restaurant even if they left their money at home for the first time in history. That was the year Diners Club introduced the world’s first credit card.

More than 70 years later, the cashless society that’s been promised since then still hasn’t materialized. Despite direct deposit, BNPL, Apple Pay, Venmo, cryptocurrency and the rest, green paper rectangles with pictures of dead presidents still have a home in our wallets.’

If mobile banking apps and blockchains didn’t bring death to the dollar, is the long-awaited cashless society a myth, or is the generation coming of age today the last that will ever see paper money outside of a museum?

The Writing Is on the Wall for the Good Old Greenback

According to The New York Times, central banks across the world are experimenting with digital versions of their money — kind of like Bitcoin, but issued by the state and controlled as a currency. Sweden, China, Japan and others are introducing these digital currencies alongside old-fashioned cash. The plan in large would be to phase out paper money gradually over time.

According to the Atlantic Council, the U.S. Federal Reserve recently began working on a bank-to-bank digital currency of its own designed to speed up transfers between the world’s financial institutions. Unlike the previously mentioned countries, America’s central bank digital currency (CBDC) is only for wholesale transactions and isn’t yet a consumer currency — “yet” being the key word.

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

https://finance.yahoo.com/news/future-banking-no-longer-cash-120025072.html

What Does This Look Like 10 Years From Now?

What Does This Look Like 10 Years From Now?

Simon Black   January 23, 2023

On March 2, 1629, after years of escalating tensions with his own government, King Charles I of England dissolved parliament and ordered all the politicians to go home.

He was only in the fourth year of his reign, but Charles was already a very unpopular king. One of his worst habits was frequently abusing his power and taking unilateral executive actions-- raising taxes or passing new regulations-- which would ordinarily require the approval of parliament.

But Charles hated going through parliament, and he routinely found ways to bypass them; often he would creatively interpret obscure passages of ancient laws as justification to do whatever he wanted.

In one instance, Charles decided that a 400+ year old law, which had first been decreed under Henry III in the early 1200s, gave him the authority to demand payment from everyone in the country making more than 40 pounds per year. It did not.

In another example, he claimed that ‘tradition’ entitled him to collect customs and duties on various imports, even though English law clearly required parliamentary approval on all imposts.

Charles also famously demanded money from wealthy merchants and banks, calling them “forced loans”. He even seized literally TONS of silver from the Royal Mint that was being stored on behalf of wealthy individuals and foreign governments.

Parliament made attempts to block Charles; when he asked for money to raise an army and go fight in the Thirty Years War (which had been raging in Europe since 1618), parliament refused. When he wanted funds to bail out a close relative in Denmark, parliament again refused him.

Sometimes their disputes even spilled into the courts, where judges had to determine the legality of the king’s taxes and regulations.

But nothing was ever settled, and no compromises reached. In fact the conflict continued to escalate, until Charles finally dissolved parliament in 1629… effectively shutting down the government.

This is an often-repeated story throughout 5,000+ years of human history; there have been countless examples of dysfunctional governments and terrible leadership that fail to reach a rational compromise over the nation’s finances.

And such examples tend to be a hallmark of a nation in decline.

In the case of Charles, he would go on to be arrested, tried, and executed, and England plunged into a civil war.

Louis XV of France, and his successor Louis XVI, also routinely fought with their parliaments over royal finances. France would soon go bankrupt and dive head-first into revolution.

These are lessons worth noting, given that the United States government is once again at the precipice of default.

The national debt now stands at nearly $31.5 trillion. This is the current statutory ‘debt ceiling’, meaning that the Treasury Department no longer has the legal authority to borrow more money.

This means that yet another government shutdown is potentially on the table, as is a default on the national debt.

If this story sounds familiar it’s because this has already happened in recent history-- in 2011. And 2013. And 2018. And 2019.

Now it’s happening again. And unsurprisingly, both sides have dug in and claim they are unwilling to negotiate their demands.

To say this is yet another humiliation for the United States is a massive understatement. The entire world can see that, not only is the US government incapable of managing its finances… but also that its politicians cannot rationally solve problems. It’s pitiful.

What I really want to focus on today, however, is the future: what do you think this problem will look like 10 years from now?

Today it’s already a terrible embarrassment… and a major problem.

The national debt is so big that, this fiscal year, the Treasury Department will spend close to $1 TRILLION just to pay INTEREST.

This is happening at a time when:

1) Interest rates are rising (which means that the government’s annual interest bill will increase)

2) The economy is slowing (so tax revenues will decrease)

3) Government spending is still outrageous, with a $1+ trillion deficit expected this fiscal year

This is a pretty disastrous scenario. And if you plot this trend line starting from where we are today, it’s easy to imagine what might happen over the next decade.

If deficits are already $1 trillion per year right now, how high will they be in a decade? If the national debt is $31.5 trillion today-- roughly 120% of US GDP-- how high will it be a decade from now?

It’s silly to assume that the United States can simply keep growing the national debt forever without consequence. It’s silly to assume they can run trillion dollar deficits every year without consequence.

Today those consequences are just embarrassments and minor inconveniences. Ten years from now they may be major catastrophes.

This is the entire point of having a Plan B. The future is far from certain-- and it’s possible that voters finally elect competent leadership who act responsibly and arrest the nation’s decline.

And that’s a nice hope, and it would be great if it happens.

But it’s a lot more rational to focus your energy on things that you can control. And that’s a Plan B.

If your government is on a clear path to more humiliation and fiscal ruin, it makes sense to ensure you don’t have all of your eggs in one basket.

To your freedom,

Simon Black, Founder  Sovereign Research & Advisory

https://www.sovereignman.com/trends/what-does-this-look-like-10-years-from-now-145298/

The Easiest 833x Return You Will Ever Make

The Easiest 833x Return You Will Ever Make

January 16, 2023  Simon Black, Founder   Sovereign Research & Advisory

At precisely 8:13PM eastern time on the evening of October 28, 2003, a lonely 19-year old schoolboy took to the Internet to complain about the latest love interest who had left him dejected and angry.

“Jessica,” he wrote to the precisely zero people who paid attention to his LiveJournal blog, “is a bitch. I need to think of something to take my mind off her. I need to think of something to occupy my mind. Easy enough, now I just need an idea.”

It took about an 90 minutes… and a fair amount of booze… for inspiration to strike. And by 9:48PM he wrote an updated post, describing his “idea”.

He wanted to hack into the school’s official servers and download the photographs of every student on campus; he would then write a program that would randomly select two of those photos, place them side-by-side on a website, and allow other students to vote on who was more attractive.

At 11:09PM, his new website was complete. He called it FaceMash, and it attracted 22,000 page views in the first four hours.

The website’s creator, of course, is Mark Zuckerberg. And his FaceMash site eventually went on to become Facebook (originally called ‘The’ Facebook).

It was an instant sensation among users and quickly began to attract venture capital firms. Investor Peter Thiel bought 10% of the company for $500,000 the following year, in September 2004.

Three years later it was worth $15 billion. And when the company went public in May of 2012, it was worth more than $100 billion.

Today Facebook’s stock market capitalization is about $350 billion. So investors who bought in at the IPO 12 years ago have made about 3.5x their money, or about 12% per year. That’s a very solid return.

And of course, investors who were able to buy Facebook shares when it was still private are up 20x or more, which is incredible.

But returns like this are nothing compared to another investment where you can easily and consistently return 100x to 1,000x.

I’m talking about tomatoes.

Yes I’m serious.

Think about it: you can buy a pack of 100 organic, non-GMO ‘beefsteak’ tomato seeds for about three bucks (real price at WalMart). That works out to be 3 cents per seed.

It takes minutes (really seconds) to plant a tomato seed, after which, within a week or two, life will come bursting out of the soil. Before long, a full, healthy plant will have grown and begin producing tomatoes.

One plant can yield about 10 pounds of tomatoes. And even at a discount grocer, organic tomatoes cost at least $2.50 per pound.

So from a single seed (3c investment), you get $25 worth of tomatoes… a return of 833x. And given how quickly tomatoes grow, you can generate that 833x return in about four months. Pretty astonishing.

Now, tomatoes obviously require a little bit of work. They need some water, and, depending on where you live, occasional weeding and de-pesting.

But any investment requires work. Even owning Facebook stock means keeping up with quarterly reports and earnings calls (which any investor should absolutely be doing). And frankly it’s a lot more fun to be out in the garden than analyzing a company’s annual financial audit.

It’s not just tomatoes either. A lot of micro-scale agriculture comes with ridiculously high returns.

An egg-laying chicken, depending on breed, can run around $30 (though some are cheaper and others more expensive).

Chickens lay roughly 1 egg per day under the right conditions. And at roughly 30c per free-range, organic egg at the grocery store, your investment return works out to be 1% PER DAY. Junk bonds, by comparison, yield around 8% per year.

Fruit trees are another great example. A backyard apple tree can cost around $20 to $30, and, depending on species and other factors, it can yield about 50 pounds per season after several years once it begins bearing fruit.

At $1.50 per pound of organic apples, that’s $75, or about 3x per season. And the trees can produce for decades… so you could end up making 100x or more, while also increasing the value of your home.

Now, my point here isn’t to encourage you to become a tree farmer or to start raising chickens in your backyard… and certainly not to abandon sensible financial investments.

(Nor do I want to trivialize agriculture; just like any other kind of investing, you have to know what you’re doing in order for it to work.)

But we do live in a bizarre world where pessimism seems to be a dominant force. And it’s easy to understand why.

This ridiculous war is dragging on forever. Inflation is still far too high. Politicians are still far too destructive. Corporate layoffs are piling up. The stock market is falling.

Plus everyone seems to be talking about recession. ‘Experts’ are making predictions about how likely it will happen, when it will come, how severe it will be, etc. Their gloom is almost becoming a self-fulfilling prophecy.

The anticipation alone is agonizing; these forecasts for recession are like waiting on pins and needles for the oncologist to call with our cancer screening results: good or bad, we just want to get on with it already.

So it’s easy to feel frustrated these days, and even a little bit out of control.

And my comments on micro-scale agriculture are really just to show that there are small opportunities available to us every day to take back control.

It doesn’t have to be complicated or exotic.

Something as simple as planting a tomato seed is an easy way to start taking back control… while generating a return that makes Facebook stock look pitiful by comparison.

To your freedom,  Simon Black, Founder   Sovereign Research & Advisory

https://www.sovereignman.com/investing/the-easiest-833x-return-you-will-ever-make-145153/

These Historical Parallels Are Really Spooky

These Historical Parallels Are Really Spooky

Simon Black, Founder  Sovereign Research & Advisory  January 13, 2023

By the third century AD, it was hard to imagine Rome being in worse condition. Historians literally refer to this period in Roman history as the Crisis of the Third Century. And it was brutal.

Roman citizens couldn’t believe what they were experiencing... it was incomprehensible to them that their fatherland had become so weakened.

Inflation was running rampant. The Empire was stuck in a quagmire of foreign wars and had suffered some humiliating defeats.

Rome experienced multiple bad pandemics, coupled with even worse government response.

Foreign invaders were flooding across their borders on a daily basis. Trade broke down, causing shortages in many vital goods.

And terrible social strife dominated people’s daily lives. Ordinary Roman citizens were at each other’s throats, and it was a time of disunity and outrage.

One contemporary writer of the era named Cyprian described the situation as follows:

“The World itself... testifies to its own declines by giving manifold concrete evidence of the process of decay... There is a decrease and deficiency in the field, of sailors on the sea, of soldiers in the barracks, of honesty in the marketplace, of justice in court, of concord in friendship, of skill in technique...”

Cyprian wasn’t just describing Rome’s obvious decline. Rather, his summary is an indictment of Rome’s inability to stop its decline.

Everyone in the imperial government knew what was happening in Rome. They simply lacked the ability to do anything about it.

Historian Arnold Toynbee called this the “Challenge and Response” effect... and it’s an interesting idea.

The concept is that every society has to deal with certain challenges; if the challenges are too great, the society will not survive... i.e. the desert is too harsh, the tundra is too frozen, etc.

But sometimes a society becomes so decadent, so prosperous, that it loses its ability to address challenges. It no longer has the social capital necessary— unity of purpose, the ability to compromise, the capacity to engage in rational debate.

That is the position where Rome found itself in the 3rd century AD. And I believe the West is quickly heading in this direction.

This is the subject of today’s podcast.

We start out talking about Rome’s mortal enemy... and how, after more than a century, Rome emerged victorious as the lone superpower in the Mediterrannean.

Everything was great, and peace and prosperity reigned for more than 200 years.

But over that time, the decadence set in. Wheras once Romans had valued hard work, freedom, and unity of purpose, their entire value system changed.

People expected, then demanded, to be taken care of by the state. Corruption became commonplace. The bureaucracy multiplied. Social conflict soared.

And eventually Rome lost the ability to meet its challenges.

I make a lot of historical parallels to our modern world, including some specific examples of absurdities which occurred just in the last couple of days.

But I also discuss why, in the end, these conditions actually create unique opportunity for creative, hard working, talented people.

You can listen to the podcast here.

To your freedom,   Simon Black, Founder  Sovereign Research & Advisory

https://www.sovereignman.com/podcast/challenge-and-response-145150/

Why It’s Time To Be Optimistic About The Future

Why It’s Time To Be Optimistic About The Future

January 9, 2023 Simon Black, Founder Sovereign Research & Advisory Group

Around 23,000 years ago on the southwestern shores of the Sea of Galilee, a small paleolithic tribe of hunter-gatherers made an incredible discovery that would forever alter the course of human history.

They realized that, instead of relying on fishing, hunting, and foraging for edible plants, they could actually grow their own food, right out of the ground. We know this happened because archaeologists have uncovered roughly 90,000 seeds from the site-- including different species of barley, various nuts (almonds, pistachios) and fruits (raspberries, figs).  More strikingly, the remains of several small dwellings have been excavated. And a number of stone tools were found on the site, including a grinding stone and several flint blades and sickles.

These findings are clear evidence that the tribe most likely lived on this ancient farm where they planted, harvested, processed, and consumed their own food, making it the world’s first known agricultural settlement.

That was a pivotal moment in human history.

Prior to the development of agriculture, human beings roamed from place to place constantly in search of food. But agriculture meant that, for the first time ever, our ancestors could put down roots and build a real civilization. Permanent construction. Institutions. Structure. Economic activity.

In the paleolithic era prior to agriculture, hunting and gathering food typically required the participation of nearly everyone in the tribe.

But after the development of agriculture and improvement of growing techniques, it only took a few people to grow enough food to feed the rest of the tribe. Everyone else was able to devote their time to other value-creating endeavors, like research, education, construction, defense, etc.

They learned how to store their surplus food production, to create savings and security for the future… as well as to trade with other tribes.

Agriculture also gave them the ability to grow industrial commodities, like cotton, papyrus, and medicinal flowers, which helped create new industries and technologies like writing, textiles, and healthcare.

Eventually their agricultural production grew to such an extent that small settlements like the one near the Sea of Galilee turned into villages, villages into towns, and towns into cities.

It’s difficult to overstate the importance of this development; nearly everything that we enjoy today begins with our ancestors coming out of their caves and planting the seeds of civilization.

For ancient civilizations, agriculture was wealth. Precious metals were well-known to them, but these people understood very well that you couldn’t eat gold and you couldn’t clothe yourself in silver. Gold and silver were simply a medium of exchange used to trade agricultural commodities… but the actual ‘wealth’ was the agriculture itself.

This is one of the common elements of the most advanced civilizations in early history-- the Sumerians, Egyptians, Yangshao, Indus peoples, etc. were all extremely prolific agriculture producers. They recognized that their success depended on their ability to efficiently grow and produce highly-valued products… AND to produce far more than they could consume.

This is what it meant to be ‘wealthy’ in the ancient world, and it remained that way for thousands of years.

(There were obviously many civilizations and kingdoms who attempted to grow wealthier by conquering others. But the basic motivation was the same: conquering more land meant having more production, and hence more wealth.)

But little-by-little the concept of ‘wealth’ started to change. Instead of real, tangible goods and the ability to produce, wealth became defined by the accumulation of money itself.

This change began in earnest in the 1500s, when European rulers began importing enormous quantities of gold and silver from their colonial mines in the Americas; the Spanish, for example, imported thousands of tons of silver just from a single mine in Bolivia.

In this way, they weren’t actually producing anything… other than more money. So they were essentially trying to become wealthier by creating more money, rather than producing valuable goods and services.

(Naturally it didn’t take long for inflation to set in, and Europeans suffered rising prices for more than a century, in part due to the incredible, sudden influx of gold and silver devoid of any increase in the actual production of goods and services.)

This is the view of ‘wealth’ that remains today; it’s no longer about the production of valuable goods and services. Instead, wealth is defined by money. And money has become synonymous with wealth, rather than as a medium of exchange.

In modern times it’s actually even more absurd. In our world, debt is actually wealth… in that the bonds of heavily indebted governments (like the US) are considered a form of money, and hence wealth.

Moreover, the notion that a government should produce more than it consumes and live within its means is viewed as preposterous. No one cares about deficits. Instead, politicians assume there will always be an endless line of willing suckers ready to buy more bonds.

This whole mentality has even given rise to a popular and growing economic theory known as MMT, or Modern Monetary Theory, which contends that government deficits are completely irrelevant. Its most well-known work, in fact, is literally called The Deficit Myth.

In short, MMT says you don’t have to actually do anything to create wealth. Governments can simply conjure infinite quantities of money out of thin air and everyone will live happily ever after.

(Naturally MMT proponents claim their position is grounded in ‘science’ and supported by several complex mathematical models. Therefore they’re right and you’re just an ignorant fool.)

We can even see signs of MMT’s influence in the stock market, where investors developed an ethos that, similar to deficits, profits don’t matter. And businesses with no hope of ever achieving profitability became worth tens of billions of dollars.

Seemingly everything became valuable over the past several years, regardless of productivity, profitability, or practicality.

Perhaps most egregious was back in 2019 when a concept artist sold TWO editions of his ‘work’-- a banana duct-taped to the wall-- for $120,000.

At that point the concept of ‘wealth’ had truly devolved to sheer lunacy.

But that time seems to have come to an end, and I believe we are seeing signs of a shift back to a more traditional view of wealth.

All it took was a devastating war, record-high inflation, unprecedented rate hikes, and an appalling level of government incompetence, to finally realize that a $120,000 banana is just stupid…

And that’s reason enough to be optimistic.

Over the past several years, bad businesses and dumb ideas soared in value because central banks printed gargantuan sums of money, corrupting the very concept of wealth itself.

But people now realize that central bankers are only human. They make mistakes too. They cannot walk across the water and maintain pristine economic conditions forever and ever until the end of time.

Moreover, people are starting to figure out that, while central banks can create trillions of dollars worth of money with the push of a button, they cannot produce a single microchip, a grain of wheat, a drop of oil, a line of code, nor any of the other valuable goods and services that an economy really needs.

And this is why I’m really optimistic.

There’s a whole lot of chatter about recession these days-- whether it’s coming, how bad will it be, how long will it last, etc.

But I think that’s an overly simplified way of looking at it. There’s already a recession-- primarily for $120,000 bananas and other idiotic ideas. Cheers to that.

But for those with a more traditional view-- that wealth is not defined by rapidly depreciating pieces of paper, but rather the ability to efficiently produce highly-valued goods and services-- a new era of opportunity is just beginning.

To your freedom,   Simon Black, Founder   Sovereign Research & Advisory

https://www.sovereignman.com/trends/why-its-time-to-be-optimistic-about-the-future-145095/

This Family Escaped… Because They Had A Second Passport

This Family Escaped… Because They Had A Second Passport

Notes From the Field By Simon Black  Janury 2, 2023

On November 26, 1927, a 47-year old Austrian naval officer stood at the altar of the Nonnberg Abbey in Salzburg to marry his young, 22-year old bride. His name was Commander Georg Ritter von Trapp; and hers-- Maria.  They were the couple who would become famous from the 1965 movie The Sound of Music, a popular musical which was loosely based on their true story.

Von Trapp came from a naval family; his father was a decorated officer who had been elevated into nobility for his service, and Georg followed in his father’s footsteps when he entered Austria-Hungary’s Imperial Naval Academy in 1894 at the age of 14.

And more than 20 years later, von Trapp distinguished himself as one of the most successful submarine commanders of World War I.

But Austria-Hungary was on the losing side, and the war had devastated the empire.

By the time the war ended in 1918, Austria-Hungary’s economy was near collapse. Food supplies had dwindled, plus the famous Spanish flu pandemic had set in (which nearly killed the Emperor).

The empire disintegrated in a matter of months; its former territories became independent states, including the newly landlocked Republic of Austria. So Commander von Trapp had suddenly become a naval officer with neither a navy, nor even a coastline.

He initially retired and enjoyed a life of leisure; his first wife was a wealthy heiress, so the von Trapps had money. When she died in 1922, she left him with a vast fortune... along with seven children.

Five years later von Trapp married his children’s nanny, Maria, who was just 22 at the time.

At first the family continued to live comfortably on their estate near Salzburg. But von Trapp lost his fortune in the early 1930s during the Great Depression, and the family was forced to make ends meet by singing at concerts.

They became relatively famous and went on tour, singing their way across Europe during the late 1930s. But when Germany invaded Austria in 1938, von Trapp could see the writing on the wall and knew it was time to leave.

The Sound of Music ends with the von Trapp family dramatically escaping the Nazis and fleeing Austria by literally walking over the mountains into Switzerland. But the filmmakers completely made that up.

In reality, the von Trapps simply went to the local station and boarded a train for Italy.

But the reason they were able to do so amid the Nazi’s occupation of Austria is because Commander von Trapp had a second passport.

Georg von Trapp was born in the city of Zadar (modern day Croatia), where his father was stationed at the time.

Back then, Zadar was part of the Austro-Hungarian Empire. But after the empire was formally dissolved following World War I, Zadar became (strangely) part of the Kingdom of Italy.

And since von Trapp had been born in a city that was now part of Italy, he was eligible for Italian citizenship.

Commander von Trapp was famously a staunch Austrian. But even a patriot like him could see the value in having a second passport; it’s like an insurance policy to mitigate the what-if’s. The unknown. The unexpected. The unthinkable.

And if there’s anything we should have learned from the past few years, it’s that the unthinkable absolutely happens. Life can change fundamentally, overnight. And having a second passport, or at least foreign residency, can really help mitigate those unthinkable risks.

Von Trapp probably wasn’t contemplating Nazi occupation of Austria when he became eligible for Italian nationality in 1918. In fact the Nazi party wouldn’t even become prominent in Germany for at least a decade.

But as a former submarine commander, Von Trapp understood risk and uncertainty. And he knew that having Italian nationality would help his family be better prepared for a world full of unknowns.

This made their departure quite simple. Instead of a dramatic escape, they merely used their Italian papers to leave Austria and cross the border into Italy.

(They didn’t remain in Italy for very long; almost immediately they traveled to London, and then finally to the United States where the family eventually settled in Vermont.)

I was able to do the same thing for my in-laws recently; my wife’s family is from Ukraine, and we were able to get them out of Kiev, across the border to Poland, and eventually to Cancun, because they have legal residency in Mexico.

And the reason they have legal residency in Mexico is because both of my kids were born there. Under Mexico’s nationality law, whenever foreigners give birth in Mexico, the child automatically becomes a Mexican citizen, plus both parents AND both sets of grandparents are eligible for permanent residency.

So because my kids were born in Mexico, my in-laws became Mexican residents. And this really smoothed their departure from Ukraine.

(Once they arrived in Mexico, we applied for US visas for them, which were quickly granted. And they are now at my home in Puerto Rico under a two-year refugee status.)

Another benefit of a second passport is that it often passes down to the next generation. My kids, for example, have five passports. Their children will inherit all of them, as will their children’s children.

So even if the unthinkable doesn’t happen again in my lifetime, my kids will still have the insurance policy, as will their children and grandchildren.

But a second passport isn’t just for warzones and catastrophes.

A second passport ensures you always have another place to go. It gives you more options for retirement. More places to live. More places to do business and invest. Better ease of travel. Often there may even be tax, healthcare, legal, and pension benefits.

And, with very few exceptions, there's no downside whatsoever.

(A handful of places, like Israel, require citizens to serve in the military, but this is very rare.)

Now, I don’t want to give you the impression that a second passport is some Panacea that's going to solve all of your problems. That’s not the idea.

But it can be a great help to mitigate crazy, unforeseen, life-wrecking risks. Both for you, and for future generations of your family.

It’s a rare thing to be able to put in a little bit of effort today, and have that effort create lasting benefit for generations to come. But you can absolutely do this with a second passport.

Best of all, you might even be entitled to one already; one of the best ways to obtain a second passport is through ancestry, or bizarre accidents of birth like Georg von Trapp.

Italy is one of those places; if you have grandparents from the old country, you might very well be eligible for Italian citizenship and a second passport. And there are many other countries too, including Ireland, Greece, and more.

You can read more about citizenship by ancestry here, including a number of countries that offer it.

If you’re inclined towards New Year’s Resolutions, I’d definitely encourage you to put citizenship by ancestry on your list for this year. Again, it takes some up-front effort. But the benefits can truly last for generations.

To your freedom,  Simon Black, Founder  Sovereign Research & Advisory

https://www.sovereignman.com/international-diversification-strategies/this-family-escaped-because-they-had-a-second-passport-144898/

A $0.25 TRILLION Monthly Deficit? What Could Possibly Go Wrong??

A $0.25 TRILLION Monthly Deficit? What Could Possibly Go Wrong??

Simon Black December 13, 2022

On the fifth of April in the year 1853, a diplomat from the United Kingdom with the most quintessentially British name — Stratford Canning — arrived by boat to Constantinople and immediately took an emergency meeting with Sultan Abdulmejid of the Ottoman Empire.

After decades of relative peace, Europe was once again on the brink of war. Russia was a rising power at the time, and, eager to flex its muscles, Russia threatened to invade the Ottoman Empire over completely ridiculous reasons.

Everyone knew that much of Europe would be drawn into a pointless conflict. And that’s why Britain, the dominant superpower at the time, sent Stratford Canning to try to prevent a war.

The British thought they were in good hands. After all, Canning had nearly five decades of experience in diplomacy. Certainly he of all people would be capable of maintaining peace.

Sadly for the British (and everyone else in Europe), Canning was a total failure. Not only did this man, with his five decades of experience, fail to prevent the war, but he actually escalated the conflict by convincing Sultan Abulmejid to reject Russia’s peace proposal.

Russia didn’t appreciate the rejection. And by the end of June, Russian troops invaded Ottoman-controlled territory.

This conflict became known as the Crimean War, and it was pretty much a disaster for almost everyone involved, including Russia… and especially the Ottoman Empire.

Russia suffered nearly half a million casualties from the war. They depleted their treasury and severely injured their economy. And most of all, Russia’s imperial army — which everyone had previously assumed to be among the best in Europe — was found to be second rate and poorly equipped.

But the Ottoman Empire fared even worse.

The empire was already in extreme decline by the mid 1800s. And about the only thing the Ottoman Empire had going for them economically was that they had ZERO foreign debt. That is, until the Crimean War.

In 1854, the Ottoman Empire took on its first foreign debt; the war was costly and they needed money. But once they started borrowing from foreigners, they never stopped. Even after Russia finally threw in the towel and the Crimean War ended in 1856, the Ottoman Empire kept borrowing.

Meanwhile the Ottoman economy continued deteriorating. The Ottoman government was full of self-righteous, entitled bureaucrats who harassed the private sector with mountains of regulations and debilitating taxes.

The Ottoman Empire also saw its share of bad luck. A number of pandemics swept the empire, including a nasty Bubonic Plague outbreak in 1876, which added to the government’s economic woes and forced them to borrow even more.

In fact, by 1876, the imperial government had borrowed so much money that debt service took up roughly HALF of their entire tax revenue.

More importantly, Ottoman borrowing costs had soared. They borrowed money at less than 5% at the beginning of the Crimean War in 1854. But by the mid 1860s, foreign lenders typically demanded 10% or more.

Needless to say the Ottoman Empire eventually defaulted on its gargantuan debt. And once they did, their foreign lenders took control of the imperial government and its finances; the Ottoman Empire effectively lost its sovereignty and became a client state of its European lenders.

History has no shortage of similar examples — once powerful and thriving empires who mismanaged their economies, took on enormous debts, and became weak through sheer financial insanity.

The US government seems to have willfully chosen to ignore these lessons time and time again.

Back in 2018, as the US national debt was closing in on $25 trillion, I pointed out that Treasury Department was projecting to increase the debt by roughly $1 trillion per year.

This was at a time when the economy was strong, tax revenues were at record levels, etc. There were no major wars, no financial crises, no major disasters.

And I wondered — if the government can rack up a trillion dollar deficit when everything was great, “what’s going to happen to the US federal deficit when there actually IS a financial crisis or major recession?”

Well, we got our answer in 2020 when COVID struck. They added $5+ trillion to the debt, practically in an instant, and acted like it was no big deal.

Yet even though the government claims the pandemic is over, today they’re STILL spending absurd quantities of money.

Yesterday the Treasury Department announced that the federal budget deficit for last month alone was a whopping $248.5 billion.

That’s a near quarter of a TRILLION dollar deficit. In a SINGLE MONTH.

This wasn’t a one-time anomaly either. The deficit over the past six months (June-Nov) totals nearly $1.3 trillion, an average monthly deficit of more than $200 billion.

All of this deficit spending adds to the national debt, which, duh, eventually needs to be repaid.

Whenever the Treasury Department borrows money to pay for these outrageous deficits, they do so by issuing bonds. And those bonds are sold to investors with terms ranging from 28 days all the way up to 30 years.

The average maturity for US government debt is about five years. This means that, every year, roughly 20% of US debt matures and needs to be repaid.

Naturally the government doesn’t have the money to repay its debts. So instead they borrow new debt to repay the old debt. It’s basically a Ponzi scheme.

To make matters worse, interest rates have been rising rapidly; last year the government borrowed money at 0.1% or less. But today they have to pay 4% or more.

That’s a huge difference.

Thanks to rising rates, the US government will spend nearly $1 trillion this fiscal year… just to pay INTEREST on its debt. And if rates keep rising (or remain this high), that figure will only grow as they continue to refinance their debts.

History shows that it’s very difficult to remain a superpower when you have to spend vast sums of money just to pay interest.

And yet the people in charge remain completely oblivious to this fact… and pretend like absolutely nothing could go wrong.

This is plenty of reason to have a Plan B...

PS: If you can see what is happening, and where this is all going, you understand why it is so important to have a Plan B. That’s why we published our 31-page, fully updated Perfect Plan B Guide, which you can download here.

To your freedom, Simon Black, Founder  Sovereign Research & Advisory

https://www.sovereignman.com/trends/a-0-25-trillion-monthly-deficit-what-could-possibly-go-wrong-144706/

The Coming Bonanza in Distressed Debt

The Coming Bonanza in Distressed Debt

December 12, 2022  Simon Black & Sovereign Research & Advisory Group

On the morning of June 20, 1783, the Continental Congress of the United States was just starting its daily session at Independence Hall in Philadelphia when the building was suddenly mobbed by hundreds of angry people.

It turned out the protesters were soldiers who had fought in the American Revolution. And they wanted their money.

By the summer of 1783 the American Revolution was effectively over; the British had already surrendered at Yorktown more than 18-months prior, back in October 1781, and everyone was just waiting for the diplomats to conclude the final peace treaty.

In the meantime, the fledgling government of the United States had already started work on building a new nation. But one of the biggest challenges they faced was their enormous mountain of debt.

The national and state governments in the US had borrowed vast sums to finance the war, and they owed money to just about everyone — including the French, Dutch, and Spanish, not to mention plenty of private investors in the US.

Moreover, the US and state governments owed money to their soldiers; most of the troops had been paid in IOUs, especially during the latter part of the war. Plus farmers and merchants who had provided critical supplies to the US Continental Army had also been paid in stacks of IOUs.

And with the war formally winding down in 1783, there were a lot of people who wanted to the government to make good on its IOUs… hence the protest in Philadelphia.

The protesters, however, were unsuccessful. The politicians managed to escape (temporarily relocating their capital to Princeton, New Jersey), and the event was deemed an insurrection. Several protesters were arrested, and Congress later held a formal investigation into the matter.

And yet no one was actually paid. The men who had fought and bled for independence were largely abandoned, and most people soon believed their IOUs to be worthless.

Now, these IOUs essentially constituted government debt… like a bond. And it didn’t take very long for savvy New York banking houses to see an opportunity and to start buying up all the IOU/bonds they could find.

Bankers bought IOUs from former soldiers and farmers for pennies on the dollar, and then leaned heavily on their political influence to ensure the IOUs would be repaid in full.

Their plan worked. By 1790, the new federal government had passed a series of laws, taxes, and tariffs, guaranteeing repayment of the debt.

The bankers made out like bandits. And ironically, the same farmers and ex-soldiers who sold their IOUs for pennies on the dollar were the ones who ended up paying the new taxes in order to repay them.

This is a far too common theme in the history of finance; large, politically-connected players often take advantage of the little guy. But sometimes circumstances offer the little guy a chance to hit back.

I believe we are entering one of those periods now.

The first important point to understand is that the last 14 years or so has seen some of the most unprecedented financial conditions in 5,000 years of human history.

Literally never before have interest rates been kept so low, for so long, in virtually every major corner of world.

In the US — the largest economy in the world — interest rates were held at zero for years. And multiple countries totaling over 20% of global GDP actually had NEGATIVE interest rates.

It turns out this policy had a lot of consequences. And one consequence was that governments and corporations borrowed enormous amounts of money.

Hopelessly bankrupt governments with a history of default (like Argentina) were able to issue ONE HUNDRED YEAR bonds paying irrationally low rates.

And companies with very little hope of becoming profitable were able to borrow a ton of money; they then used a lot of that money to buy back their stock, artificially boosting the stock price and giving the appearance that everything was going great.

But now there are a lot of governments and businesses in a serious pickle. Interest rates have been rising rapidly.

The global economy is slowing. And it’s starting to look very likely that a number of governments and businesses won’t be able to pay their debts.

I originally brought this idea up more than two years ago at the beginning of COVID, suggesting that a lot of companies would be wiped out from the twin threat of lockdowns plus heavy debt burdens.

But that COVID distressed debt bonanza didn’t materialize… because the government stepped in and bailed everyone out. Plus central banks slashed rates back to zero, kicking the debt can down the road even further.

Financial conditions have changed substantially since then. Interest rates are MUCH higher across the board than they were two years ago.

Residential mortgage rates have climbed from 2.75% to 7.32%. The US 6-month Treasury was just 0.03% last summer. Today it’s 4.75%.

And corporate “junk bonds” yielded as low as 3.8% last year. Today those junk rates are nearly 10%.

That last point is really important, and I’ll give you an easy example. We all know how the cruise industry struggled once the pandemic hit, and those struggles continue today.

Carnival Cruise Lines is hurting so badly that the company’s ‘gross profit’ is negative, meaning that it costs the company more to operate their cruise ships than they generate in revenue.

In Q2, for example, Carnival generated $1.2 billion in cruise revenue. But they spent $1.7 billion on fuel, food, crew salaries, etc., resulting a NEGATIVE gross profit of -$500MM. And that’s BEFORE paying for corporate management, administrative expenses, etc. (which totaled another $400 million).

And it’s also before Carnival paid a single penny of interest or principal on its debt.

They’re clearly in a tough spot. And it was even worse last year and the year before.

Yet Carnival has been able to keep the party going by taking on debt; its total debt is now nearly $30 billion, up from less than $10 billion in 2019, pre-COVID.

That’s a lot of debt, given that Carnival’s total equity is only around $8 billion. So it’s ‘debt to equity’ ratio is nearly 4:1.

When rates were still low and their business was somewhat healthy, Carnival was able to borrow money at just 1%.

But now that their business is in the dumps, and interest rates have increased substantially, Carnival is borrowing money at 10.5%.

Remember, the company doesn’t even make enough money to pay its 1% debt, let alone 10.5% debt.

And what’s worse is that these bonds will eventually need to be paid back; in the next 12 months alone, Carnival will have to repay nearly $1 billion in debt. And they simply don’t have the money.

This is a classic distress situation. And it’s no wonder that investors have been dumping Carnival bonds.

But it’s not just Carnival, or even the cruise industry. You’d be surprised at how many companies are in a similar situation — heavily in debt and unable to pay. They’re basically walking dead, which is why they’re commonly referred to as ‘zombie companies’.

Zombie companies have been with us for years; they’ve only been able to survive thanks to cheap interest rates and government bailouts.

But, again, financial conditions have changed dramatically. And if interest rates stay high (or go higher), I think it’s likely that we’ll see a wave of bankruptcies and asset sales, possibly over the next 12 months.

This means that there may be a coming bonanza in distressed debt. And, for a change, one where the little guy has a major advantage.

To your freedom,  Simon Black, Founder   Sovereign Research & Advisory

https://www.sovereignman.com/trends/the-coming-bonanza-in-distressed-debt-144702/

Based on a True Story

Based on a True Story

Notes From the Field By Simon Black  November 11, 2022

More than 3,000 years ago, between the 12th and 13th centuries BC, the legendary king of Ithaca, Odysseus, set sail from the ancient city of Troy to begin the journey home.

The stories of the Trojan War, and of Odysseus’s voyage home, have been passed down to us in the form of epic poetry from Homer. Most of it is pure fiction. But like modern film, TV, and ‘true crime’ podcasts that abuse dramatic license to entertain their audiences, Homer’s epics may in fact be “based on a true story”.

The Trojan War, for example, likely happened. The bit about the horse, on the other hand, probably didn’t.

It’s certainly possible (and even probably) that one of the key leaders in the war had an arduous journey back home to Greece, spurring ancient entertainers to weave elaborate tales of sirens and sea monsters.

One of the most important parables in Homer’s tale of the long journey home for Odysseus is the story of Scylla and Charybdis.

Odysseus’s journey took him through a particularly narrow stretch of sea; on one side of the strait was a small, rocky island where a six-headed monster named Scylla lay waiting to destroy any ship that dared to pass.

According to Homer, Scylla was such a dreadful monster that “no one-- not even a god-- could face her without being terror-struck.”

But on the other side of the narrow strait was the deadly whirlpool of Charybdis, which would swallow up the entire vessel and all the men on it.

Odysseus’s impossible task, of course, was to swiftly and stealthily sail right down the middle… to just barely avoid the whirlpool of Charybdis, while somehow managing to avoid the long grasp of Scylla.

For a while, Odysseus refused to believe the situation was hopeless; he was convinced that he would be able to sail, unscathed, between Scylla and Charybdis without a single loss.

After all, he was a king. And an unparalleled expert when it came to sailing. Surely he would be able to succeed.

And yet everyone who had ever come before Odysseus had believed the same thing. But no one had ever succeeded. Literally every ship that ever tried to sail between Scylla and Charybdis had been destroyed by one of the two evils.

Eventually reality set in, and Odysseus knew that had would have to choose between the lesser of the two evils.

He chose the monster Scylla.

Odyssesus realized that sailing too close to the whirlpool would mean losing his entire ship and everyone on it. Sailing too close to the 6-headed monster would mean losing, at most, six men.

Odysseus concluded that it was better to lose six men was than to lose everyone.

And that’s precisely what happened; as his ship sailed through the strait, just barely avoiding the whirlpool, “Scylla pounced down suddenly upon us and snatched up six of my best men.”

But the rest of the crew (and the ship) survived the challenge and passed through the strait.

This story is one of the best allegories of the state of the global economy today.

Central bankers and economic policymakers are like Odysseus. They have managed to sail the global economy into a very narrow strait.

On one side of today’s economic strait is the evil inflation monster. And this monster is guaranteed to chew up and spit out incalculable quantities of unsuspecting, unprepared people.

Yet on the other side of the economic strait is the full-blown collapse of the sovereign bond markets… and by extension, collapse of the global financial system.

Like Odysseus, central bankers were at first in denial. They didn’t want to believe they were even in such dire economic straits. They infamously rejected the notion that inflation existed at all. Then they claimed it was transitory.

Then they finally started trying to do something about it-- to turn the ship around. But it was too little, too late.

Now they find themselves squarely in the middle of these evils-- inflation, and collapse of the sovereign bond market. And they’ll be forced to choose between the lesser of the two evils.

Inflation is, by far, the lesser evil.

The US national debt has doubled in the past decade, to $31 trillion. It will almost certainly double in the next decade, especially considering the massive $15+ trillion Social Security bailout that will be necessary by 2032.

The US government already spent $680 billion last fiscal year just to pay interest. And that was with record low interest rates.

Central bankers have been raising rates rapidly this year. But continuing to do so will bankrupt the Treasury.

Remember that the US government has to refinance roughly 20% of its debt every year. Now that interest rates are so much higher, the government’s total interest payments will soon soar past $1 trillion, then $2 trillion annually.

This would be devastating to national finances and potentially force a default. Central bankers know this, which is why they prefer to let inflation reign rather than risk a sovereign default.

The government announced earlier this week that inflation had decreased to ‘only’ 7.7%. Don’t be fooled; inflation is still very much the major economic story of our time.

This is the story of our podcast today-- how central bankers find themselves between Scylla and Charybdis.

This podcast was actually a live recording, taken today at our Total Access event in Mexico City.

We’ll discuss why there are many forces that will continue to push prices higher for years to come, why the central banks are powerless to do anything about it, and how you can still take back control.

You can listen in here.

To your freedom,  Simon Black, Founder  Sovereign Research & Advisory

https://www.sovereignman.com/podcast/based-on-a-true-story-144241/

Three Global Cities Where You Can Still Beat Inflation

Three Global Cities Where You Can Still Beat Inflation

Notes From the Field By Simon Black  November 8, 2022

Inflation is undoubtedly one of the biggest stories of our time.

It’s a story of abject failure — of how the ‘experts’ who have been entrusted to pull the giant levers of the economy were asleep at the wheel.  The ‘experts’ failed to anticipate how their irresponsible spree of spending and monetary expansion would create inflation. They failed to notice it. They failed to do anything about it in a timely manner.

And now that central bankers have switched to this new HAIR ON FIRE, ULTRA-PANICKY monetary policy, they’re failing to instill even a modicum of confidence in the future.

These people don’t have any real solutions. The central bankers themselves have admitted publicly that their maniacal interest rate hikes will have zero impact on bringing down food prices, gasoline prices, or fixing supply chain challenges.

Meanwhile the politicians who helped light this inflation blaze by dumping trillions of dollars into the economy want to ‘fix’ the problem by... dumping more money into the economy. It’s genius!

Certainly a lot of people are holding out hope that today’s election results will help arrest the destruction.

And hope is great. But it’s not a Plan B, let alone a Plan A.

There are different ways of dealing with inflation, ranging from smarter places to park your savings, moving your investment allocation to real assets, small-scale food production, and much more.

Another way, at least for people who have the ability to do so, is living in a place where your money goes much, much further than back in your home country.

And today I asked my team to outline a few picks — cities that are still bargains in terms of cost of living and have the added benefit of being major global travel hubs. This works great for digital nomads, or semi-retirees who are still on the go.

Mexico City, Mexico

Juarez International Airport (MEX) is the most connected airport in the world outside of the US in 2022, according to OAG, a global travel data firm.

It offers direct flights as far away as Seoul, Korea, and Tokyo, Japan. In Europe, it offers flights directly to London, Paris, Madrid, Barcelona, Amsterdam, Frankfurt, and Munich.

And of course it offers direct flights to destinations all across the United States, and into South America, including Santiago, Chile, São Paulo, Brazil, and Buenos Aires, Argentina.

Mexico City is becoming popular among digital nomads and remote workers because it offers all the amenities of the world-class mega-city it is, for a fraction of the cost of Paris, Tokyo, or New York City.

Mexico has not seen the same supply chain problems as most of the rest of the world. It didn’t destroy its economy during COVID, and the Mexican peso has remained relatively strong.

Still, Mexico is a very inexpensive place to live. Even in Mexico City, one of the most expensive places in Mexico, a single person could live comfortably on about $1,900 per month (for everything — rent, food, entertainment, etc.).

And once you visit Mexico City, you realize what incredible value it offers. It is beautiful, bursting with parks, and overflowing with cultural attractions, museums, and events.

In Polanco, one of the nicest neighborhoods that is also popular with expats, there is free public WiFi throughout the entire community.

The median download internet speed in Mexico City is about 60 Mbps, according to speedtest.net. That speed can easily handle streaming and online gaming.

BUT Mexico City is huge, and this median speed doesn’t tell the whole story...

For example, Sovereign Research CEO Viktorija, who lives in Mexico City, reports download speeds of 1000 Mbps on fiber optic internet. But she pays close to $80 per month (including phone/TV too), which is considered expensive for Mexico City.

Mexico City in general has an easy-going, laid back vibe. You won’t find rabid, woke mobsters accosting you outside of restaurants here.

Mexico also has an easy residency process. You only have to earn about $2,500 per month, OR have about $35,000 in savings to show sufficient financial independence for temporary residency.

Retirees can skip right to permanent residency, which is truly permanent; it never has to be renewed.

They must show investments or bank balances of about $145,000 OR a pension equivalent to about $3,600 per month.

Cancun also deserves an honorable mention.

Its international airport (CUN) offers flights direct to more US and European cities than MEX, and can take you directly as far as Istanbul.

Cancun is not just for tourists. It is an incredibly affordable place to live on amazing beaches.

Very nice rentals start at about $2,000 per month for houses, and about $1,500 for spacious condos.

For example, one 2-bedroom 3-bathroom waterfront condo near the desirable Hotel Zone is asking just $1,650 per month.

Istanbul, Turkey

Istanbul International Airport (IST) offers direct flights to over 300 cities around the globe.

Istanbul, in many ways, is truly at the center of the world. From there you can fly direct to any continent except Australia and Antarctica.

This includes destinations as far away as Los Angeles, Mexico City, São Paulo, Tokyo, and Singapore.

And of course, Turkey is extremely well connected to Europe.

Istanbul is even less expensive than Mexico City. A single person could live comfortably on $1,200 per month.

But in addition, the dollar is currently very strong against the rapidly inflating Turkish lira. That means you can get even more for your money.

Istanbul’s median internet download speed is around 37 Mbps, and the city provides free WiFi hotspots in certain areas.

Another major benefit of Turkey is its economic citizenship program. You can buy citizenship and a second passport for a $400,000 investment in real estate.

For the right person, this is quite compelling. While other citizenship by investment programs require you to buy specific real estate which is generally overpriced, ANY property over $400,000 in Turkey qualifies.

That could, for example, land you a 3-bed 2-bath private villa with a pool and ocean views less than an hour from the airport. Or a sleek, modern 3-bed 2-bath condo in the city center.

Istanbul could become your base of operation to travel the world. And when you aren’t there, you could rent out your real estate to generate income.

Bangkok, Thailand

Suvarnabhumi Airport (BKK) on the outskirts of Bangkok offers direct flights to 108 destinations.

You won’t find many direct flights to the Americas. But its a great option to connect directly to Asia, Australia, and most of Europe.

Bangkok’s internet is excellent, with median download speeds around 218 Mbps.

While Bangkok is a bit more expensive than Mexico City and Istanbul, a single person could still live well on less than $2,200 per month.

And in addition to the low cost of living, Bangkok offers access to high quality inexpensive healthcare.

Any medical process you could want is available in Thailand, from an executive exam checkup to heart bypass surgery (which generally costs about one fifth of the $100,000 US price tag).

Bumrungrad International Hospital feels more like going to a luxury hotel than a hospital. Plus the majority of its doctors have received training in the US.

These are some of the best connected global travel hubs with a low cost of living. But that doesn’t mean they are your only options to stay connected.

Are you willing to endure one more leg to Lisbon, for example, in order to have the benefits of Portugal?

That is for you to decide. You can explore all your options, with various criteria, in one place with our Global Explorer map.

To your freedom, Simon Black, Founder Sovereign Research & Advisory

https://www.sovereignman.com/trends/three-global-cities-where-you-can-still-beat-inflation-144095/

The International Hypocrisy and Ignorance Conference Begins!

The International Hypocrisy and Ignorance Conference Begins!

Notes From The Field By Simon Black   November 7, 2022

It’s finally here. Today’s the day. More than 35,000 people have begun descending on the picturesque Egyptian resort town of Sharm El Sheikh to participate in the 27th United Nations Climate Change Conference, known as COP27.

Or as I prefer to call it, the International Hypocrisy and Ignorance Conference.

The absurdity starts with the selection of Egypt as the host country, and Egyptian president Abdel Fattah el-Sisi’s prominence as a heavily featured speaker at the event.

You are probably aware that el-Sisi runs a brutal, highly authoritarian, dictatorial regime in Egypt. He has murdered protesters, tortured activists, snuffed out political opponents, censored the press, and more.

In Egypt’s 2018 presidential ‘election’, for example, el-Sisi miraculously won 97% of the vote, making him even more popular than Joe Biden.

El-Sisi is such a thug that, just last year, he drew a rare rebuke from the UNITED NATION’s Human Rights Council.

Yet only a few months later the very same United Nations saw fit to give el-Sisi the privilege of hosting its COP27 climate summit, effectively legitimizing his regime and setting him up to glad hand with the 90+ other world leaders who will be in attendance.

The fact that he has literally murdered his own people is irrelevant. El-Sisi has bent the knee to the Holy Altar of Climate Change, therefore his brutality is being casually overlooked.

Frankly the UN might as well hold the next conference in western China’s Xinjiang province, where the Uyghur concentration camp is located, and everyone can pretend like there’s no genocide going on across the street.

Even the media has turned a blind eye; despite them having an obvious bone to pick with el-Sisi over his regime’s censorship of the press, there has been barely a word of protest written.

This glaring lack of outrage is pretty bizarre behavior for an institution that is professionally outraged, demonstrating once again that the media has zero moral consistency.

But this doesn’t begin to scratch the surface of the COP27 absurdity.

We know there are at least 35,000 registered attendees from 190 countries coming to the event, plus countless more entourage, security, and support staff who are traveling with their national delegations to Sharm El Sheikh.

Roughly 90 presidents and prime ministers are expected to attend, including Joe Biden, French president Emmanuel Macron, German chancellor Olaf Scholz, and the UK’s Rishi Sunak.

On top of that are all the corporate CEOs, celebrities, and billionaires who will be there as well.

In short, there’s going to be a LOT of private jets, flying a very long way to Egypt. Last year’s COP26 in Scotland tallied over 400 private jets that swooped in for the event.

It certainly does seem hypocritical for these people to preach about everyone reducing CO2 emissions after they fly 10 hours on a Gulfstream 650.

But that’s always been the theme with these major policy trends — the rules are for THEE, not for ME. We saw the same behavior during COVID, where hypocritical politicians ignored their own lockdowns while expecting everyone else to suffer.

Even more absurd is how meat will be so heavily featured this year.

Yes that’s right. In the past, climate action has been predominantly about slashing fossil fuels — and given where energy markets are right now, they’ve done a pretty good job of destroying the oil and gas industries.

But now this year, COP27 takes aim at the meat industry, blaming global warming on cow flatulence.

The UN’s State of Climate Action 2022, in fact, which was released a few days ago, lists meat consumption as one of the key initiatives that political leaders need to tackle.

The stated UN goal is for politicians to limit per-capita meat consumption to 79 calories per day. And one proposal on the table is to levy a ‘meat tax’ in order to make it prohibitively expensive to consume meat.

This tax proposal is already gaining ground; New Zealand PM Jab-cinda Arden is seriously raising the possibility of taxing farmers and ranchers based on their livestock’s CO2 emissions.

But naturally such ideas don’t apply at COP27.

In fact, the conference organizers have set up a special gourmet restaurant, just for attendees. You can see the menu for yourself at copgourmet.com, and check out the ‘VIP set menu’ featuring (among other items) $100 angus beef medallions, which you can wash down with unlimited alcohol for an additional $135.

The rest of us plebeians, on the other hand, are expected to eat bugs and weeds in order to save the planet.

You can probably see the trend here — the laundry list of insanity from this COP27 event is extraordinary. And technically the event hasn’t even started yet; there’s still nearly two weeks to go.

The agenda for COP27 is jam-packed full of woke rituals and progressive virtue signaling. There are special meetings, for example, of the ‘women and gender constituency’. And next Monday, November 14th is COP27’s “Gender Day”.

Because apparently gender identity has something to do with climate change???

I mean, these people really go out of there way to be as silly as possible. It’s virtually impossible to take them seriously.

Most egregiously, there is practically zero discussion on the COP27 agenda about nuclear power.

Uranium is one of the most efficient, energy-dense fuel sources in the world. Nuclear power has an incredibly high Energy Return on Energy Invested (EROEI), yet CO2 emissions that are lower than even than solar and wind.

You’d think that an organization which pretends to care so much about CO2 emissions would at least engage in serious debate about implementing such a technology.

But it’s not even on the agenda. Instead they’re showcasing meat taxes and gender identity as the solutions to save the world from the apocalypse that they’re peddling.

Welcome to the International Hypocrisy and Ignorance Conference 2022.

* Final point: the upside of these climate conferences is that they leave us with interesting investment opportunities to profit from their insanity. And one big trend that’s making a big comeback (and will feature at COP27) is carbon credits. Keep an eye on this, because it’s very likely to become a colossal trend.

To your freedom,  Simon Black, Founder   Sovereign Research & Advisory

https://www.sovereignman.com/trends/the-international-hypocrisy-and-ignorance-conference-begins-144013/