Sovereign Man

First it was Pets.com, and all the unbelievably stupid Internet businesses in the 1990s. Investors were so eager to buy dot-com stocks, all you had to do was put an “e” in front of your business or product and you’d immediately be worth millions. It didn’t matter that most of these companies didn’t make any money. Investors kept buying. Later on after the dot-com bubble burst, another big craze developed in junior mining stocks-- shares of small exploration companies looking for big mineral deposits. The epicenter of the junior mining industry is in Vancouver, Canada, and the stock exchange there (TSX-V) throttled to record highs. Shares of companies with literally no profits, no revenue, and no assets were worth tens of millions of dollars. Then that bubble burst. A few years later, a new hot craze developed-- in cannabis companies. The market has been flooded with companies (many of them curiously based in Canada’s poor climate and high cost structure) with plans to grow medicinal marijuana. Their stock prices have soared, with valuations in some cases exceeding $1 billion. Every time the bubble bursts with these big trends, most of the companies get wiped out. Only a handful survive-- primarily the ones who focused on building long-term, sustainable businesses instead of chasing a quick buck. From the ashes of the dot-com bubble, companies like Amazon, Godaddy, eBay, etc. emerged in-tact and are still successful today. Similarly, while many junior mining companies went completely bust, a handful are still operating and quite profitable. And there will be a few extremely successful cannabis companies over the next several years who step over the remains of their innumerable, defunct competitors. Clearly today’s big craze is crypto and blockchain. Like the dot-com bubble in the 90s, you could add the concept of blockchain to just about anything and have a ‘business’ worth millions, no matter how idiotic the original idea. (Someone will soon pitch me an idea for an app to publish grocery lists into the blockchain. It’s absurd.) And like all the other big investment fads in the past, most of the companies in this space won’t exist a few years from now. There are lot of reasons for that, starting with the fact that building a business is hard. I’ve done it successfully a few times. And unsuccessfully more times that I care to remember: it’s incredibly difficult, so the odds are against most of these companies anyhow. But more importantly, these big investment fads always attract people looking to make a quick buck. And that doesn’t work in the long-run. Case in point: earlier this week a company called HIVE Blockchain Technologies went public. It’s stock price is already up over 3x… since MONDAY, from an opening of 62 cents to $1.89. Just prior to that, the company closed a private placement at 30 cents… and a few months ago the company was selling shares between 1 and 3 cents. In other words, a handful of speculators made more than 600x their money in just a few months with a company that has ZERO revenue, simply because ‘Blockchain’ is so popular right now. This has become the norm in the world of crypto and blockchain. ICOs, another hot crypto fad, have been racking up huge returns of their own. ‘Tokens’ issued by crypto startups that have no profit or revenue are seeing similar gains of 2x to 10x or more in a very short period of time. In the case of HIVE, the company is in the business of mining cryptocurrency. And based on its current stock price,

Yesterday I recorded a new podcast with my US-based tax attorney to talk about the Trump administration’s new tax plan... or as I like to call it, the plan to have a plan. Clearly they’re trying to do something positive and significant. But to say that their strategy is light on details at just a single page would be a massive understatement. Rather than rehash and recap what has already been covered in the media, my attorney and I dove into some of the more important issues: what’s NOT in the plan, what are the major details to sort out, and what’s SAFE? Personally, I’m extremely skeptical of major tax reform… though I’d be happy to be proven wrong. As I’ve written a number of times, the last time the tax code was updated was 1986. Tech-savvy consumers were still using 5 ¼ inch floppy disks. Many of our readers hadn’t even been born yet. The 1986 tax code was perfectly reasonable for an industrialized economy dominated by large companies like General Motors. Today, technology makes it possible for companies to generate income across the world through products and services that are entirely digital. Yet today’s companies are still forced to use the same hopelessly outdated tax code. It’s such an embarrassing anachronism, it would be like the US government using those 1980s era 5 ¼ inch floppy disks to run its nuclear program. Oh wait… The reason I’m skeptical, though, is that each and every line item in the tax code has a certain group of beneficiaries that’s willing to fight tooth and nail to keep it. There are people who benefit from all the deductions that the administration wants to eliminate. There are even people who will fight to keep the widely-hated Alternative Minimum Tax and Estate Tax. And the larger problem, of course, is that millions of taxpayers and businesses have made plans and structured their affairs in a way to conform to the current tax code. Pulling the tablecloth out from underneath them and suddenly changing the rules could end up causing some serious blowback. So it’s enormously difficult to please a firm majority. And even if they manage to pull this off, they’ll still be accused of not being ‘revenue neutral.’ This is the part I find to be completely absurd. The tax code is going to affect hundreds of millions of people and businesses in the largest, most complex economy in the world. Economist cannot possibly predict with any accuracy how a radical overhaul of the tax code is going to impact the US government’s tax revenue ten years from now. Nevertheless, this is going to be one of the primary arguments against the plan. One of the points my attorney and I discussed is what will remain safe, i.e. what they’re NOT going to touch. Retirement accounts are CLEARLY in that category. If you have an IRA or 401(k), that’s not going to be touched. It would be politically disastrous for everyone. This means that establishing a robust retirement structure like a self-directed SEP IRA, or a solo(k), is still a fantastic option, regardless of what they do with the rest of the code. With a self-directed SEP IRA, for example, you create a new retirement plan with a contribution limit that increases from $5,500 to as much as $54,000 per year. That’s almost 10-fold. Plus the contributions are tax-deductible, meaning you can aggressively (and LEGALLY) reduce the amount of income tax that you owe. Meanwhile, the idea of a self-directed IRA structure is that your...

Yesterday I told you that the US government had recently released its annual financial report to the public. And the numbers are pretty gruesome. For example, the government’s “net loss” in fiscal year 2016 more than doubled, from MINUS $467 billion to MINUS $1 trillion. It’s astonishing that anyone could manage to lose so much money, let alone in a year where devoid of major wars, recessions, financial crises, or infrastructure projects. But what else can we expect from an institution that spent billions of dollars to build a website? Today I wanted to highlight a few other items from the government’s report that are worth repeating: 1) The federal government failed its own audit. Again. (page 37) Auditors have a bad reputation. People typically conflate ‘auditor’ with the guys at the IRS who harass taxpayers. This isn’t the case. Auditors actually work for you. Their job is to be an independent, objective set of eyes. They go into a company on your behalf and review all the records to make sure that there’s no fraud or deceit. Every year, big companies submit their financial statements to auditors for inspection, and auditors spend weeks doing their own studies to determine if those statements accurately reflect the company’s true condition. In fact, our agriculture company is undergoing an audit right now by a large, international accounting firm. It’s important: audits provide an independent assessment to the shareholders indicating that everything we’ve said about the company is true. Needless to say, when a company fails its audit report, it’s a BIG deal. That’s what happened to the US government. The government submits its own financial statements each year to the Government Accountability Office (GAO), its in-house auditor. But the GAO gave the federal government a failing grade, yet again, and specifically singled out the Defense Department for “serious financial management problems.” If this were a private company, the senior executives would be out on the street and probably facing criminal charges. 2) The government’s single biggest asset is $1 trillion in student debt (p.81) This is pretty sad. Like any large business or bank, the US federal government holds a number of financial investments. Big banks, for example, have bonds, loans, and mortgages on their balance sheet. For borrowers and homeowners, a mortgage is a liability. We owe the bank money. But to a bank, a loan is an asset; they’ve loaned the money, and they’re the ones receiving interest payments each month from us. The government also holds loans as financial assets-- specifically student loans. As of September 30, 2016, America’s youth owed the federal government $953.6 billion from student loans. By the end of December, that number increased another $100 billion to $1.05 trillion. This constitutes the US government’s single biggest asset, even more than the aggregate value of their aircraft carriers or national parks. In other words, the government’s most lucrative asset is the continued indentured servitude of young people in the Land of the Free. 3) This is just the tip of the iceberg… there’s so much more to tell you. Click here to listen in on today’s podcast-- I’ll explain how, based on the government’s own numbers, their actual “net worth” is nearly MINUS $100 TRILLION. We’ll debunk so many myths from the debt sheep who think it doesn’t matter.

[Editor’s note: We have made this content available as an audio and video podcast, but I encourage you to watch the video with the slides.] https://www.youtube.com/watch?v=wsYe8_FFkoA In the video I mention a preview issue of our 4th Pillar Investment Service. Click here to download it. For most of the past week, we’ve been spending a lot of time talking about trading overvalued paper currency for high quality, undervalued businesses. Right now, this is an absolute no-brainer to consider. If you’re holding US dollars, it’s critical to understand that the President of the United States, as well as key members of the Federal Reserve, ALL want the US dollar to get weaker. This means you have an opportunity right now to trade overvalued US dollars, which will likely get weaker, for high quality, undervalued businesses, which will likely get stronger. This is easier said than done, of course. Problem #1 is finding a great business. Problem #2 is making sure that you don’t pay out the nose for it. Netflix, for example, may be a very nice business with a lot of growth potential… and even more investor hype. But if you’re going to buy shares, be prepared to pay dearly for them. It will take several decades for Netflix to generate enough cashflow to recoup your investment. Successful investors never overpay. Instead, they patiently seek out great businesses whose shares they can acquire for bargain, discount prices. This is not rocket science. Successful, rational investing is a skill, and one that can be learned. Last week I promised to explain how my team finds and analyzes these types of deals to ensure that we can generate strong returns while taking minimal risk. I ended up recording a full presentation about it. Even if you’re already an experienced investor, I’d encourage you to watch this presentation, or listen to the accompanying audio. The presentation explains, for example, why conventional valuation metrics are deeply flawed. Most people are probably familiar with the famous “P/E” ratio. I’ll show you why P/E ratios are worthless… and teach you about a FAR better metric to look at… one that few people have ever heard about. Once you understand it, you’ll never look at investments the same way ever again. https://www.youtube.com/watch?v=wsYe8_FFkoA In the video I mention a preview issue of our 4th Pillar Investment Service. Click here to download it.

One of my interesting friends is in town visiting Chile for a few days. His name is Gianni-- he's originally from Croatia but lives in Vancouver, and has spent most of his career in the mining business. Gianni is especially bullish on copper… primarily because he thinks the Age of Big Oil is coming to a rapid close. He believes that conventional gasoline vehicles will be increasingly replaced with electric cars, which simultaneously reduces demand for oil AND increases demand for copper. For investors, this presents an interesting opportunity. Oil and copper prices have been strongly correlated for decades; in other words, as oil prices went up, copper prices went up. This made sense in the past since both commodities were affected by the same macroeconomic forces. Fast growing economies tend to consume a lot of copper and oil, pushing up prices. But now Gianni thinks it’s time for those prices to de-couple. You may recall that German carmaker Volkswagen is in hot water after being caught falsifying its emissions data. The press is calling it “dieselgate.” Volkswagen has already been fined $15 billion by the US Justice Department, and roughly $2 billion of that is supposed to be earmarked to build electric vehicle charging stations across America. This increase in EV charging infrastructure may very well create additional demand for electric vehicles… meaning that oil is going to start losing a LOT of customers, while electricity is going to gain. Copper remains one of the most important commodities in electrical infrastructure, so prices may very well rise much higher in the future as a result of what’s starting to happen now. Take a listen to today’s podcast, in which Gianni and I discuss the future of energy, as well as ways to profit from this long-term global trend.

What I’m about to tell you is a true story. And by the end of it, I hope it will be pretty clear that we’ve been programmed to put far, far too much trust in the banking system. We’re told that banks are supposedly “risk free”. And yet every scrap of publicly available evidence shows that banks take every opportunity to prove that they cannot be trusted with other people’s money. They have been caught colluding to fix interest rates, exchange rates, and commodities prices to the detriment of their own customers. They make insanely stupid bets with their depositors’ savings… and then when the bets go wrong, they go to the taxpayer with hat in hand claiming that they’re too important to go bust. But most importantly, as my story will show you, they act with a sanctimonious sense of self-entitlement… that it’s no longer YOUR money in the bank. It’s their money. And they’re going to do whatever they damn well please with it. Take a listen in today’s podcast… the first I’ve put out in a very long five months.

One of the most profound moments of my entire adult life came to me when I was learning about my family history, which I’ve managed to trace back over eight centuries. I discovered so many incredible stories from the past, and the indelible conclusion that I’ve reached is that it’s an absolute miracle that any one of us exists. The last few millennia have seen war, plague, and some of the worst conditions this species have ever experienced. Looking back at my own ancestors’ lives I’m astonished at how many close calls I’ve had to never being born. I’ve calculated the odds, I had a 99.99999% chance of never existing. But despite the odds, my ancestors survived. All of our ancestors survived. And because of that string of luck, I’m here today. And so are you. These days, we have it easy by comparison. Most of us don’t have to deal with genocide, pandemic killer diseases, and civil war… yet we still have our own threats to face. Governments across the West have amassed unprecedented amounts of debt, and are adding even more with each passing day. Banks and whole financial systems are highly illiquid and in many cases even insolvent. Our threats are financial. They are political. They are existential. And they are just as dangerous. History is generous with examples of how governments, pressed by bankruptcy, have almost invariably turned to plunder the wealth of their citizens. As well as how insolvent financial systems have culminated in extraordinary crises that have fundamentally changed the face of society. It’s difficult to ignore these lessons today, especially when we can see things moving in the same direction. It’s no secret that the US government is bankrupt. They tell you themselves each day as they publish how much debt they owe, to the penny, for the world to see. It’s no secret either that the Federal Reserve is out of capital on a mark-to-market basis, which you can find stated very clearly in the reports they publish every Thursday. The information is all right there for anyone who cares to look. People who ignore these obvious realities do so at their own peril. In many respects the purpose of our lives is to survive and pass wealth on to the next generation. And that’s only possible if we can recognize the obvious trends and take action to prepare ourselves for what’s to come. Luckily, given the modern technology available now in 2016, mitigating these risks is something that anyone can do. And by taking the right steps it is more than possible to turn this period of chaos into one of opportunity. Listen in to today’s podcast as I share some deep family history and the steps you can take to ensure that no matter what happens next you are in a position to not only survive, but thrive.

I’ve never been so happy to be so wrong. Britain’s referendum on whether or not to stay part of the European Union was marred by some of the most blatant propaganda we’ve seen in the West in a very, very long time. But… at the end of the day, the British government at least accurately counted the votes. No shenanigans. “Leave” prevailed. So the UK will officially be leaving the European Union. This has led to some unprecedented moves in the financial markets. The pound is at its cheapest level in decades. High quality British companies are now trading for extraordinary discounts. Investors are panic-selling because they don’t know what’s going to happen next. Britain has been part of the EU for four decades, and now that’s coming to an end. Nothing scares people more than their fear of the unknown. In fact, for decades, the political, media, and financial establishments have been pushing people along a very clear path that they wanted us to follow. Elections always represented the illusion of choice between establishment candidates and their establishment policies. This referendum, just like the surge of candidates like Bernie Sanders and Donald Trump, constitute a major revolt. Simply put, this wasn’t part of the plan. So the system is in complete panic. This is a huge opportunity, especially for foreign investors who have an unprecedented chance to pick up high quality British assets on the cheap. I wanted to dive into this, so I rang up my colleague Tim Price, London-based wealth manager and one of the sharpest investors I know. Tim and I discuss several options in both stock and the currency markets, and he even highlights what investments to avoid. You can listen in to our call here. Note: Tim and I cover the following… and MUCH more: * Will the UK experience a major financial recession? * The pound has cratered. Is it a buy? * Sell this currency instead. * Why the polls are always wrong. * Will the US dollar remain strong? * Avoid this entire industry if you’re buying stocks. * What you want to think about buying… and when.

In our daily conversations, we regularly discuss how important it is to own real assets-- especially precious metals. There’s so much risk in the financial system right now. Just consider your own bank account, for example. If you’re in the West, more than likely your bank is -extremely- illiquid, meaning that they only keep a small portion of your funds in reserve. The rest of your money is gambled away in the latest investment fad; and as we’ve reported recently, banks are once again making low-money down home loans to subprime borrowers with YOUR money. This is the same playbook that nearly causes the entire financial system to collapse back in 2008. Now, here’s the thing—and a lot of people don’t realize this: the money in your bank account isn’t really YOURS. Sure, your name is on the bank account. But as soon as you make a deposit, that money belongs to the bank. And you become one of their many, many unsecured creditors. It hardly seems worth the risk, especially given the paltry 0.1% interest they’re paying you. We’ve talked a lot about different solutions, like holding physical cash, as well as precious metals. But when we use the term ‘precious metals,’ most people immediately think of gold. That makes sense, of course. Gold is the most famous and most widely held precious metal. But there are three others, namely palladium, platinum, and silver. Silver in particular may be worth a closer look; we wrote to you several months ago that silver was very cheap on a relative basis, especially compared to gold. And so far this year silver has been a top-performing commodity. So today I thought it appropriate to take some time and specifically explore silver. I sat down this afternoon with the founder and CEO of one of the fastest growing storage and precious metals trading firms in the world, based here in Singapore, and I think you’ll learn a lot from his insights into what he considers the ‘forgotten’ precious metal. You can listen in below.

No one likes to pay for insurance. If you don’t smoke, if you go to the gym regularly, and if you generally eat well, it just might not seem worth it. Especially when the average cost of insuring against just catastrophic health incidents can take up about 4% of your income. But most of us do it anyway. After all, paying small amounts over time feels a lot better than having to write a huge check when you’re at your worst. It’s become the norm to take out insurance against just about every possibility— We buy car insurance in case we get into a car wreck. We buy house insurance in case our house catches on fire. We buy life insurance in case we die sooner than expected. However, there’s one huge threat to our livelihoods that very few insure themselves against: financial disaster. In comparison to your house suddenly bursting into flames, financial panic is far more predictable and frequent. Given that the average business cycle lasts about 6 years, the average person will see at least 10 recessions in their lifetime. So while we may not know exactly the day or month that it will hit, we know it’s coming. And unlike a heart attack, financial crises don’t come out of nowhere. They can be diagnosed ahead of time. In today’s podcast as I do a physical on the United States’ economy, in which the vitals are showing serious signs of strain and weakness: * Incomes have stagnated across the country, accompanied by a major decline in living standards * The federal government’s cash balances are so low, that on some days it has less than some private companies * Banks have made it a habit of holding very little cash reserves, leaving them vulnerable to any shocks to the system * The Treasury has begun blatantly siphoning off funds from the Fed * Hundreds of pages of regulations are being passed each day to make you less free * The government and central bank are already stealing from you Join me as I show how the decline in freedom, government bankruptcy, and an insolvent financial system are all related. I also cover several ways that you can insure yourself quickly and easily against all of this. Listen in here.

I come to New York City every year because it’s where the annual meeting of the Atlas 400 group is held. If you’ve not heard of Atlas, it’s a social club… primarily for like-minded, high achieving, self-made individuals. I always go out of my way to attend the annual meeting because the other members are some of the most interesting people I know. The late Jim Rohn used to say that you are the product of the five people you spend the most time with. And while I’m not certain this is entirely true, I do think it makes sense to surround yourself with high quality individuals that you can learn from. That’s why I come here each year. And I learned so much this weekend from the high caliber of people in attendance. I learned from one of the world’s foremost collectibles experts, for example, what are the ‘no brainer’ collectibles investments right now that are likely to go up dramatically in value over the next few years. One of the most astute financial minds I know walked us through a detailed scenario outlining how the financial system can (and likely will) rapidly unwind. These weren’t even his own conclusions; the people in the group are incredibly well-networked, and this particular gentleman has been advised by senior members of the financial establishment. We had an incredibly inspiring presentation by a cutting-edge genomics firm, co-founded by the doctor who first decoded the human genome; they’re very close to revolutionizing medicine and making it possible for all of us to live longer, higher quality lives. And there was another presentation about effective philanthropy and some of the best ways to give back. I also made a brief presentation to the group about ongoing discussions I’ve been having with senior government ministers about a unique second passport program. Bottom line, there’s a little bit of everything at these events. I wanted to pass this information on to you, so this morning I sat down and recorded what I learned this weekend in today’s podcast. But in addition to those lessons, I also articulate my thoughts about what’s happening in this country. Hundreds of years ago, America used to be the Land of Opportunity where people who worked hard and took risks could be richly rewarded for their efforts. This idea attracted some of the most productively-minded people in the world, and vast fortunes were made as a result. Even in government, politicians made astute decisions that enhanced the national prosperity. In the early 1800s, for example, when the US was still in its infancy, the government purchased 827,000+ square miles of land from France for less than $15 million. It became known as the Louisiana Purchase, and today that amount would be valued at roughly $263 million in 2016 dollars. When adjusted for inflation, that’s the equivalent of buying land today in the US at just over 40 cents per acre. A few years later, the US government bought Florida from the Spanish for the equivalent of just $89 million in 2016 dollars. What unbelievable deals. Back then the government spent taxpayer funds to buy valuable, productive land for just pennies per acre. (Again, those prices are adjusted for inflation…) Today they spend over $2 billion to build a website that doesn’t work. It’s a night and day difference that highlights just how out of control things have become, and how far from its origins the Land of the Free has fallen. But this is not a bad news story by any means. And in today’s podcast, we explore these obvious trends, the no-brainer solutions, and the incredible opportunities that surround us in th...

“What is it about this place that makes it so poor?” It was a simple question posed to me by a friend as we walked the streets of Managua, Nicaragua earlier this week. Nicaragua is a lovely place. But it’s poor. Very poor. It’s the least developed economy in Central America... and that’s saying something. But it’s worth considering: what makes an economy like Nicaragua so poor? And what makes others so wealthy? Having traveled to nearly 120 countries, I’ve seen the full range of rich and poor nations. And I’ll tell you, it has nothing to do with natural resources or anything like that. I often have meetings with senior ministers and government officials around the world who tell me all about the amazing resources they have in their country. “We have so much forestry land,” or, “Our bauxite reserves are among the highest in the world…” Irrelevant. Venezuela has incredible oil reserves. Yet they’ve been living in poverty for years. (Now that oil prices are down the Venezuelan government has had to declare every single Friday a holiday because they can’t afford to keep the lights on.) Ukraine has some of the most exceptional farmland on the planet. But the country is totally broke. 150 years ago, Hong Kong was a tiny village of illiterate fisherman. 50 years ago in Singapore they used to defecate in the streets, and visitors would have to step over rivers of feces in the downtown area. 25 years ago Estonia was still part of the crumbling Soviet Union. None of those places has any resources to speak of. But they’ve become among the wealthiest in the world. What’s the difference between Hong Kong and Ukraine? Singapore and Venezuela? Estonia and Nicaragua? One of the things I’ve learned in my travels over the years is that wealthy nations do have some common characteristics. The first set is cultural. Wealthy nations have a culture that values hard work. Knowledge. Productivity. Innovation. Risk-taking. Saving. Self-reliance. I’m not trying to say that people in poor countries don’t work hard. Far from it. The point is that if working hard and saving money are strong CULTURAL values (which tends to be the case in Asia), a country is going to do better. Second, wealthy nations have much better institutions. The rule of law is strong. Private property rights are strong. Corruption is limited. Regulation is sensible. Taxation is reasonable and efficient. It’s simple; no one wants to do business in a corrupt dictatorship. Bad institutions drive away foreign investors. And as capital is one of the critical components of economic growth, choking off external investment suffocates an economy. Last (and most importantly), wealthy nations have an “inclusive” economy. This means that people aren’t medieval serfs toiling away for the establishment. If someone develops skills, works hard, and takes risks, they’ve got a good chance of moving up the socioeconomic food chain. Economists call this “income mobility”. In the United States it’s known as the “American Dream”. Yet all three of these factors are starting to disappear in the US… and in the West in general. America’s self-reliant, risk-taking, hard working, pioneering culture helped propel it to become the wealthiest nation on the planet. But these traits are rapidly vanishing, displaced by a culture that values instant gratification, consumer debt, and government handouts. The institutions are faltering as well. Rule of Law is less predictable, with the government changing the rules in its sole discretion whenever it likes.

The Internet practically exploded this morning after a detailed report was published proving that dozens of corrupt politicians around the world have been stealing public funds and hiding the loot overseas. In other news, the Pope is Catholic. Not to make light of this, but this hardly comes as a surprise. There’s some Grade A filth in positions of power who routinely funnel public funds into their own pockets. Whether they secret the funds offshore, buy expensive flats in London, purchase Bitcoin, or stuff cash under their mattresses seems hardly relevant. The real issue is that systems of government routinely put morally bankrupt individuals in control of trillions of dollars of cash. Seriously, what do people expect is going to happen? Yet this never seems to be concern. The media outcry always seems to focus on the manner in which public officials hide their assets, not the fact that the funds were stolen to begin with. This report targets the illicit use of offshore corporations, specifically those set up by a single law firm in Panama. In reality, this issue hardly boils down to one firm. There are thousands of law firms all around the world, including in the UK and the United States, that register companies for their clients. Some of those companies end up being used for nefarious purposes, including fraud and theft. But it’s crazy to presume that corrupt officials and con artists are the only ones who would ever need a company in one of these “shady” jurisdictions. (Those “shady” jurisdictions, by the way, include Wyoming, South Dakota, and Delaware.) Alongside the report is a video with a scantily clad porno actress named Lisa Ann, star of “Who’s Nailin’ Paylin,” a satire in which Ms. Ann spoofs former Vice Presidential candidate Sarah Palin engaged in sexual… congress. No I am not making this up. In her video, the porn starlet explains that only arms dealers and scumbags set up asset protect vehicles like anonymous shell companies, which can include something like a Delaware LLC. Never mind that people in the Land of the Free are living in the most litigious society in human history. Or that last year the US government stole more money and private property from its citizens through civil asset forfeiture than all the thieves and felons in the country combined. Given such obvious realities, you’d have to be crazy to NOT take steps to protect your savings. But if a porn star says that you’re a scumbag who ‘gets in the way of justice’ by setting up a Delaware LLC to safeguard your assets and reduce your legal liability, it must be true. So let it be written. Look, the anger and disgust of seeing corrupt people getting away with a crime is understandable, particularly when that crime is stealing from taxpayers. But nobody ever seems to attack the real problem-- that these people are ever put in positions enabling them to steal taxpayer funds to begin with. Instead the spotlight is always on how they hide it. That’s like focusing on what color T-shirt the ax murderer was wearing. My concern is that is if corrupt officials shift tactics and start buying gold, there will be calls to outlaw gold. Or if they start holding cash, there will be even louder calls to ban cash. These reports are incredibly damning for the dozens, even hundreds or thousands of bad actors who abuse the system. But at the same time they create a mass hysteria that puts law-abiding taxpayers who value their financial privacy into the same category as some corrupt Af...

Yesterday I received a rather desperate phone call from a relative of mine named Sam. I used to spend a LOT of time with Sam growing up. And back then he was an amazing guy. Sam was the kind of person who was so charismatic that you felt happy and excited just being around him. He was an incredibly positive person with a keen interest in helping others. I remember how frequently he used to start some meaningful project to benefit his community, or quite often less-fortunate people thousands of miles away that he had never met. Sam was also incredibly successful. He was just one of those people who always seemed to be able to make money. And over the course of his life he amassed substantial wealth. Sam was constantly learning and creating; he was in to art, science, technology... a real Renaissance man. Most of all, Sam was a person of rock-solid integrity. He stood up for his values, and the rest of us deeply respected him. I’m really grateful to have had his mentorship for so long, and I know that I’m a better person as a result of his influence. But starting around 15 years ago, Sam started to change. He went through a major personal crisis… the kind of thing you hope to never have to experience in life. It was absolutely terrible. And the entire family rallied around him in support. I personally spent several years of my life going to bat for Sam, and I sacrificed a lot for him. The whole family did. But Sam never recovered. In fact he just got worse. He started making the most incredibly bizarre financial decisions, squandering away his wealth in ways that just seemed completely crazy to the rest of the family. He had dozens of businesses at that point, and ALL of them were losing money. But he refused to make any changes. He refused to tighten the business spending. In fact he started spending even more, squandering what little wealth he had left. We tried to help. Some of his accountants approached us at one point and gave us a snapshot of Sam’s finances. It was gruesome. This guy had easily been the wealthiest person we had all known. But he had been reduced, at least on paper, to poverty. His debts were astronomical, and he hardly had any savings or assets left other than his house and a few fancy antiques. But Sam refused to believe it; he insisted on living like the multi-millionaire he had always been, even though he no longer had any income to support his lifestyle. It was so bad that the entire family had to chip in and start putting money into his bank account on a monthly basis. But whatever amount we could muster was barely enough to cover Sam’s most basic living expenses, let alone all the luxury he was accustomed to. And we couldn’t even begin to make a dent in Sam’s debt burden, which was growing by the day. We found out later that he had even gone into debt with some pretty shady characters. We tried intervening again and again. But Sam wouldn’t listen. And despite all the help and support we had extended him, Sam ultimately turned on his own family, attacking the people who loved him most. He used to ring us up, and sometimes even show up on our doorsteps in the middle of the night, demanding money… screaming that we had an obligation as a family to pay him. He even got violent with some of my relatives; with others he broke into their houses and stole from them. At some point there was a complete mental breakdown, and he became totally paranoid. He started taking letters from the mailbox and reading our mail. And he even ratted out a few of my relatives to the authorities fo...

In his History of the Peloponnesian War, ancient Greek historian Thucydides told us the tale of a dominant regional power (Sparta) that felt threatened by the rise of a competing power (Athens). Sparta felt so threatened, in fact, that all the moves they made to keep the Athenian rise in check eventually escalated the power struggle into an all out war. Modern political scientists call this the Thucydides Trap. The idea is that when, out of fear, a dominant power takes certain steps to keep its competitor at bay, these actions ultimately lead to war between the two. There’s a lot of concern that the US and China will fall into the Thucydides Trap. This is certainly a valid concern. Both are nuclear superpowers with some of the largest militaries in the world. But in 2016, modern warfare is not about tanks and aircraft carriers anymore. Modern warfare is insurgent, cyber, and financial. In fact, if you look at the state of the financial system and the tactical brinksmanship between the US and China, it’s clear that the two are already in a Thucydides Trap. This power struggle is leading to financial warfare of nuclear proportions; and as with any war, there will be a lot of casualties. Just over the last several months we’ve seen many exchanges of fire between the two nations. * The US government claimed legal jurisdiction over the Bank of China, one of the largest banks on the mainland. * The Chinese launched the Asian Infrastructure Investment Bank, a supernational bank designed to compete with the Western-dominated IMF. * The US blacklisted one of China’s largest telecom companies, forbidding any US company from doing business with China’s ZTE. * China has been rapidly expanding its global payment network, UnionPay to become a direct competitor with Western systems like Maestro, Visa, and Mastercard. And don’t forget, China could unleash its nuclear option at any time-- dumping its vast trillion+ pool of US government debt, which would potentially cause a major crisis for the US dollar. It’s a bit sad, because almost EVERY action of the US government only escalates the conflict further… and the Chinese eagerly follow suit. This is how World War III starts. And it will be financial. Listen in to today’s podcast and learn more about how this conflict will unfold… and how to not to end up as collateral damage.