Sovereign Man

Wells Fargo stole the headlines yet again today for defrauding its clients. The bank was fined $1 billion today for selling over 500,000 clients auto insurance they didn’t need (which in some cases caused the owners to default on their car loans and get their cars repossessed) and for charging erroneous fees to mortgage borrowers. If you still bank with Wells Fargo, maybe this will finally serve as a wakeup call to take your money elsewhere. But this is just the latest in a long string of fraudulent bank behavior… Wells Fargo also opened millions of fraudulent accounts for their customers without their permission – in some cases moving money from existing accounts (without the customers’ knowledge) to fund the new accounts. And of course there was the entire mortgage fiasco, where banks would recklessly lend depositor funds to unemployed people to buy homes they couldn’t afford… which ultimately led to the collapse of the financial system (which was then bailed out by taxpayers). And there’s interest-rate fixing scandals, rogue traders losing billions of dollars, commodity price manipulation, forex fraud… the list goes on and on. These banks willfully and repeatedly abuse the trust placed with them by the public. Yet people continue to allow this to happen… all while making .05% interest! In today’s podcast, I explain a few steps you can take to get your money out of the banking system and achieve much higher yields – with less risk than keeping your money with a bank. Sovereign Man readers know I get fired about with these banking abuses. That’s one of the reasons I started my own bank. And I’ve got a few choice rants in today’s podcast. Again, you no longer have to participate in this system. There are plenty of alternatives today. Tune in to today’s podcast here.

On Monday, I shared a recording from aboard the Investor Summit at Sea, hosted by my friends, the Real Estate Guys. This is one of the only conferences I attend each year as a speaker. And that’s because I get so much value from the other speakers and attendees – guys like Chris Martenson, Adam Taggart, Robert Kiyosaki, Peter Schiff and G. Edward Griffin. Yesterday, I was on a panel with Peter Schiff, Chris Martenson and Adam Taggart. And I recorded the discussion for Sovereign Man readers who couldn’t be there in person. This panel largely centered around agriculture. As you probably know, I’ve got some experience in the industry… I took thousands of acres of bare, central Chilean land and transformed it into farmland that will soon yield one of the world’s largest blueberry and walnut crops. But, our discussion didn’t center on my personal experiences with agriculture. Instead, we dug into agriculture’s global supply and demand fundamentals. 200,000 people a day are coming into the world each day. And they all require food. Also, the number of calories being consumed per capita worldwide is increasing. On top of that, as developing countries like China and India get richer, the quality of the calories they consume changes – from beans, rice and veggies to more meat (which requires far more resources to produce). And while demand for food is soaring, arable farmland is on the decline. This is one of the most important problems of our day. And it’s not an easily solvable one. We also touch on geopolitical risks like water rights and the economics – and risks – of farmland investments in developing countries (another topic I know well). A lot of folks say we won’t have a global food shortage because we can just start farming in Africa. But I’m sorry to say that’s not the solution. It takes a tremendous amount of logistics to produce and transport food. And Africa just doesn’t have it. In today’s difficult financial and economic climate, there’s a lot to focus on… and to be wary of. Agriculture’s growing global supply and demand imbalance is one of the trends that certainly has my attention. But even with favorable fundamentals, just like with other asset classes, you can make some major mistakes when investing in this space. I also closed out the panel by asking everyone what they’re doing with their own money. You’ll want to hear what these smart guys have to say. Tune in right here…

I’m writing you today from a cruise ship, on my way to Puerto Rico. Every year, I get together with some of the smartest guys in finance and investing for my friends, the Real Estate Guys, Investor Summit at Sea. I almost never speak at conferences outside of Sovereign Man events. But I always make an exception for this one. It’s rare that you get to spend a week chatting with and learning from guys like Robert Kiyosaki, Peter Schiff, G. Edward Griffin, Chris Martenson and Adam Taggart. And it’s great to spend quality time with the many Sovereign Man readers that attend each year. But for those of you that can’t attend, just before we got on the boat I recorded a fantastic conversation I had with Chris Martenson and Adam Taggart from Peak Prosperity. I spent some time with Chris and Adam last year and they’re really great and smart guys. We’re very aligned philosophically, so I was curious to hear their thoughts on the economy today… and where they see some opportunities. I enjoyed this conversation more than any other podcast in recent memory. In our wide-ranging discussion, we covered everything from where we see energy prices going to the geopolitical risks we see today (including the recent tragedy in Syria) to the insane, cash-burning business models of today’s tech darlings. We all agree the stock market today is “priced to fantasy” and toward the end of our discussion, we shared some specific things you can do, right now, to protect your capital and still prosper while waiting for the inevitable correction. We talk about gold, raising cash, investing in cash alternatives (including assets that are actually safer and higher-yielding than cash in the bank) and what we’re all personally doing with our own money today. I hope to sit down with these guys again for another talk because there’s still a lot to cover. And I look forward to sharing more insights with you from my time at the Summit. In the meantime, I’d strongly encourage you to take some time and listen to this excellent discussion. The perspectives Chris, Adam and I share will help you navigate this difficult time of volatility, rising interest rates and historically high prices. You can listen right here…

I was in the gym earlier today trying to ward off the effects of trans-Pacific travel and 12 hours of time zone changes when the news flashed across the TV that the US government was issuing another round of tariffs against China. This may be the dumbest move they could possibly make. It’s so stupid, in fact, that I couldn’t contain myself in print. For this, I had to go to audio… and record a pretty epic rant on the absurdity of tariffs. In short, if China is crazy enough to produce and sell steel to the United States at prices that guarantee they’ll LOSE MONEY, the US government shouldn’t impose tariffs. They should send the Chinese a fruit basket. China is basically giving the US free money. Don’t be ridiculous. Take the money. The US is NOT the loser in this situation. America is the winner. The Chinese are willing to sell steel at below their cost of production. Duh. But the US government insists that they need to protect the American steel industry because it’s vital to national security. Seriously? The largest, most advanced economy in the world thinks that the production of a basic commodity is vital to national security? If that’s the case, then what else is vital to national security-- the lumber industry? Hip Hop? Twitter? Steel is a tiny industry in the US that employs around 90,000 people. Starting a trade war over this (which is historically BAD for everyone’ prosperity) is just plain silly. This is my favorite podcast I've done in at least a year. You can tune in here…

On the morning of May 18, 1927 in Bath Township, Michigan, a 55-year old municipal worker named Andrew Kehoe used a timed detonator to set off a bomb he had planted at the local school. Kehoe was Treasurer of the School Board, so he had unfettered access to the school. According to friends and neighbors, he was having personal issues with his wife (who he had murdered days prior) and extreme financial difficulties. He was also severely disgruntled about having lost a local election the previous autumn. Whatever his reasons, Kehoe took out his rage on the 38 schoolchildren he killed that day. It remains the deadliest attack on a school in US history. Sadly, it wasn’t the first-- there were numerous reports of school shootings throughout the 1800s and before. And as we all know too well, it wouldn’t be the last. Last week’s shooting in Florida is another tragic stain in the pages of US history. And it’s completely understandable that emotions are running high now. People are demanding action. They want their government to “do something.” The problem, of course, is what we’ve been talking about so far this year in our daily conversations: emotional decisions tend to be bad decisions-- and that includes public policy. We keep hearing the phrase “Common Sense Gun Laws,” for example. And that certainly sounds reasonable. Who could possibly be against common sense? [As an aside, I do wonder why “common sense” is only reserved for the gun control debate. Why doesn’t anyone demand common sense airport security? Or a common sense federal budget?] But it’s never quite so simple. Many of these “common sense” solutions are emotional reactions. As an example, the Florida shooter in last week’s tragedy is only 19 years old. So now one of the proposals being tossed around is to have a minimum age limit to be able to purchase a firearm. I suppose if the shooter happened to have been 70 years old, people would be talking about having a maximum age limit instead. Yet neither of these “common sense solutions” really solves the problem. A big part of this is because no one really knows what’s causing the problem to begin with. We know that there are far too many people committing acts of violence in schools and other public places. And, sure, a lot of the time they use firearms. But we’re also seeing murderous rampages with cement trucks, U-Hauls, and everyday appliances like pressure cookers. Any of these can be turned into a weapon of mass destruction. But the debate only focuses on firearms. One side presupposes that more regulations and fewer guns will make everyone safer. The other side of the debate, of course, argues that more guns and fewer regulations will make everyone safer. The reality is that there’s no clear evidence that either side is correct. Australia is often held up as an example of a nation that passed strict gun laws (including confiscation) in 1996 following several mass shootings. And yes, gun violence dropped precipitously. Australia now has one of the lowest murder rates in the world. But contrast that with Serbia, for example, which is the #2 country in the world in terms of guns per capita (the US is #1). Serbia has a strong gun culture and fairly liberal laws. Yet its gun violence rate is incredibly low, on par with Australia’s. There are plenty of examples in the world of places that passed strict gun laws, and violence decreased (Colombia). Others where violence INCREASED after passing strict gun laws (Venezuela, Chicago).

As I write this, bitcoin is trading at $8,600. That's down more than 50% from the December highs of $20,000. But is this selloff a natural correction, or something to be worried about? That's one of the questions I ask my guest Tama Churchouse in today's podcast. Tama was an investment banker for a decade, most recently with JPMorgan. Then he went on to manage a family office. And in 2013, he started buying and learning about bitcoin. He started writing a small note to friends and family about the crypto market and it caught on. He decided to make it a full-time job. And that's led Tama to become one of the most connected writers/investors in the crypto space. He actually just returned from one of the most exclusive crypto gatherings in the world… It's called the Satoshi Roundtable. It's invitation only and about 100 people make the cut. The attendees are CEOs of major crypto firms and some of the core developers for major cryptos - it's the who's who of the industry. Tama was invited because he serves on the board of one of the top blockchain firms in the world. And during our discussion, he shares a few insights from what he heard in these closed-door meetings (and how these leaders in the field, many of whom are billionaires, feel about the crypto selloff). Tama also explains why he thinks bitcoin is here to stay, but why 95% of all cryptos will ultimately be worth zero. As you know, I've been writing a lot this year about avoiding big mistakes. We discuss this in regard to crypto and Tama shares what he thinks is the easiest way to avoid making big mistakes in the sector. And, of course, Tama and I share what we think 2018 holds for the crypto market (his view on this is great - it's something I hadn't heard before). This is one of the best podcasts I've recorded in awhile. And I'd encourage you all to check it out. I always tell people to learn as much as possible about crypto before buying even one cent of bitcoin. And I guarantee you'll leave this podcast better-educated and more informed on the crypto space. You can tune in here.

In today’s podcast, I talk with our Chief Investment Strategist, Tim Staermose, about the global economy. We’re in the midst of one of the longest economic expansions in history. Most assets are trading at all-time highs. Meanwhile, debt is also at all-time highs. But we don’t have a crystal ball… this boom could easily continue for longer than anyone expects. However, Tim notes the US economy largely runs on cheap money and cheap oil. And right now, both interest rates and oil prices are on the rise. Most people aren’t talking about it, but oil prices have jumped 50% in the past seven months. And that means, sooner or later, people will be spending more money at the pump and more money on debt payments – which leaves less money for everything else. But if you look hard enough, you can still find value in today’s market. In this podcast, Tim shares the one sector where he’s personally investing. You can tune in here.

In today’s podcast, we discuss the recent crypto meltdown (led by Ripple) and how it plays into our recent theme of avoiding huge mistakes. Here’s the thing about big mistakes… they’re usually obvious and avoidable. Like when the Social Security Board of Trustees told the world in its 2017 report that the “Trust Fund reserves will be depleted by 2035”… and that an “immediate and permanent reduction” in benefits to all current and future Social Security recipients is a reality. The government is telling you Social Security is running out of money. What are you doing about it? Likewise this morning, when Bloomberg reported China (the world’s largest foreign holder of US Treasurys) is considering slowing or halting purchases of US government debt. This would have potentially catastrophic financial implications… and it’s been a worry for a long time. But most people simply ignore the possibility. You can tune in here to learn about some of the big problems that are coming down the pipe and some simple steps you can take to prepare for them.

My colleague, Sean Goldsmith, just returned from a tour of the Caribbean. He met with several local governments about their ‘citizenship by investment’ programs – a way to receive a passport by donating money or investing in local businesses or real estate. If you have the means, this is probably the quickest and easiest way to obtain a second citizenship. We’re exploring ways for Sovereign Man readers to get a special deal on these citizenships… and hope to make a major announcement on that front early next year. In today’s podcast, Sean updates us on his travels and discussions with the government. And we discuss why everyone should want a second passport… especially today.

In today’s podcast, I chatted with Silver Bullion’s founder Gregor Gregersen. Silver Bullion is a precious metals storage company based in Singapore. While here in Singapore, Gregor and I discussed why the gold versus Bitcoin debate is misguided. It’s not an either-or proposition. Instead, with systemic risks in the financial system, the case for holding both precious metals and cryptocurrency makes sense. And Silver Bullion offers solutions for both asset classes. [Full disclosure: I’m a director of Silver Bullion.] Gregor’s a software engineer with experience in finance. He recently published a 35-page white paper on an exciting way to hold encrypted, secure Bitcoin in cold storage for decades. And with software Gregor developed himself, you can now store gold at their facility, borrow money with your gold as collateral and buy Bitcoin. You also don’t want to miss Gregor’s opinion on why cryptocurrency and gold will survive the next financial crisis.

In today’s podcast, I tackle the subject of Initial Coin Offerings (ICOs). Regular readers know I’m skeptical of cryptocurrencies. And I think many ICOs are outright frauds. We’ve seen celebrities like Paris Hilton, Jamie Fox and Floyd Mayweather all endorse ICOs. A friend of mine who’s raising money in an ICO even told me these things are a bubble. Still, we see more and more companies raising capital from a rabid public. But regulators are already sniffing around. And there are two things that could cause this bubble to crash… quickly. You can listen here.

In today’s podcast, I discuss the recent Paradise Papers fiasco – the massive leak of sensitive, offshore financial information held by the Bermudan law firm Appleby. This thing has been a complete witch hunt in the media… The whiny journalists paint the wealthy and famous who parked money offshore as criminals… Though they begrudgingly admit their actions are completely legal. We explain why the wealthy, gasp, actually do some good for society and why we’d much rather the wealthy are able to keep more of their wealth than hand it over to the government to squander. But the Paradise Papers issue is more than just a media circus – it’s class warfare. You won’t want to miss my theory of why people are so angry today and why it’s only going to get worse. You can listen here.

Bitcoin hit another all-time high today on the back of two, major announcements. Dedicated Sovereign Man readers know I don’t pay much attention to Bitcoin’s price. Instead, I focus on the market cap and demand fundamentals. In today’s Podcast, I explain my thoughts on the future demand of Bitcoin and other cryptocurrencies and what these two announcements mean for the sector. And I share the role of investor psychology in cryptocurrency speculation… And why most people buying crypto today will get crushed – even if Bitcoin hits $1 million a coin.

In today’s podcast, Sovereign Man’s Chief Investment Strategist Tim Staermose joins me to talk about the risks in today’s market… We cover the rise of passive investing, and why we think it could cause chaos when the market turns – with some of the biggest and most popular stocks (like Apple and Amazon) falling 10% or 20% in a day. We also discuss the massive amount of debt in the system today and how capitalism has turned upside down. Tim also explains his value-investing strategy that has led to a 97% success rate in his advisory service, The 4th Pillar… And he shares a couple of his favorite opportunities today. You can listen to the full discussion here.

Today’s Notes is a bit different… I recorded a conversation I had with my colleague Sean Goldsmith about my recent travels to Venezuela. I explain how I exchanged my US dollars on the black market for Bolivar (with a taxi driver I’d never met before)… and how the situation in Venezuela will get worse before it gets better. Plus, I share observations and stories of things I saw on the ground in one of the world’s poorest and most dangerous countries. Then we discuss the tragedy in Puerto Rico… and why I think Puerto Rico is still one of the greatest opportunities in the world today. They’ve run the numbers, and their tax incentives like Act 20 and Act 22 are helping the island. I expect the amazing incentives will stay in place. And, although the hurricane was devastating, the financial aid that comes along with the storm is a catalyst to get Puerto Rico back on its feet. You can listen to our conversation below.