The Dirty, Four-Letter Word That Keeps the Lights On

The Dirty, Four-Letter Word That Keeps the Lights On

Notes From the Field By James Hickman (Simon Black) October 24, 2024

There’s a really dirty four-letter word that starts with a “C”. No, not that one. This is a word you simply cannot say around Greta Thunberg, otherwise her ears will melt off of her face. 

I’m talking about coal. And it’s about to have its moment.

One reason is that global population grows each year, and every one of them needs energy in some way or another—to keep the lights on, to fuel the machines that harvest their food, to power virtually everything that keeps life going.

Second, the world population generally becomes wealthier each year. Billions of people in China, India, and Southeast Asia are better off now than they were ten years ago. As economies develop, they consume more food, more goods, more electricity— and all of that requires more energy.

More efficient technology offsets some energy use, like switching from old-school incandescent light bulbs to LEDs.

But the general rule is that as energy becomes cheaper, people tend to use more of it, i.e. the world always finds a way to use that energy savings somewhere else.

Plus there are some technologies (AI, crypto mining) which, in aggregate, consume a ton of energy.

So overall global energy demand keeps rising.

Energy supply, on the other hand, is REALLY hard to come by. Exploring for oil, drilling, constructing power plants, building hydroelectric dams, wind turbines, etc. is capital-intensive, labor-intensive, resource-intensive, and very time-consuming.

Meanwhile, many sources of energy supply are dwindling.

Some major shale fields in the US, which were once the biggest source of growth in energy supply, have peaked.

But perhaps an even more significant obstacle to supply is how the government and hyperventilating, pearl-clutching leftists do everything they can to reduce supply.

These people who stop traffic, throw glitter bombs on priceless works of art, and deface public property, in their efforts to “Just Stop Oil” want to turn the clock back to 1750 on human civilization.

Plus there are fanatics with real political power— like California Governor Gavin Newsom— who insist on replacing conventional electrical plants with extremely inefficient wind and solar.

I like clean air and water as much as anyone, but wind and solar aren’t anywhere near as environmentally friendly as people claim. They require tons of dirty minerals and chemicals, and barely produce enough energy yield to offset the inputs.

This is why big technology companies (who are looking to power their massive AI electricity needs) are going all-in on nuclear power.

Nuclear is absolutely the power of the future. It’s clean. It’s safe. It’s absurdly efficient.

By comparison, a single kilogram of Uranium can produce as much electricity as an entire square kilometer of solar panels. The difference in energy yield is not even close.

Tech companies understand this... hence why Google, Amazon, Microsoft, etc. are investing billions in nuclear energy as the ultimate solution to power their electricity-hungry AI data centers.

But it takes time to build nuclear power plants. And the most advanced “small scale” nuclear reactors are still in development.

In the meantime, tech companies still need power. The world still needs power. Lots of it. And more every year.

We’ve already talked about how natural gas (especially US natural gas) is THE cheapest energy source on earth right now. In fact, at its current price of roughly $2.40, US natural gas is priced at the energy-equivalent of oil selling for $15 per barrel. That’s cheap.

But there’s another cheap, abundant energy source that is going to be extremely relevant in powering the world’s energy needs for the foreseeable future: coal.

Yes, it’s a very, very dirty word. Climate fanatics don’t want to hear it. But until the world builds sufficient nuclear energy infrastructure, there’s still a critical need for conventional fossil fuels. And that includes coal.

Like it or not, coal is still vital to energy infrastructure, accounting for more than a third of global electricity production. In fact, global coal consumption has consistently INCREASED over the past few decades despite the environmental backlash against it.

Coal is still an extremely efficient source of energy, compared to wind and solar. On an energy return basis, it’s about 6x more efficient than wind and solar— i.e. less energy input required per unit of output.

And if you think coal is dirty, then you should check out how environmentally damaging cobalt mines are (a key ingredient in solar batteries). Not to mention, most cobalt mines in Africa are teeming with child labor.

Coal power plants have the added benefit of being very quick any easy to build. That’s why China— in addition to investing heavily in nuclear power— is also still buying a lot of coal.

It’s also worth pointing out that coal is an essential ingredient in iron and steel production. So even though the leftists hate it, coal will likely remain a key resource in human civilization for the next few decades.

However, from an investment perspective, hardly anyone wants to touch coal. Investment funds are afraid of government blow-back and the wrath of the left... so they don’t invest in coal.

And for individual investors, coal is uncool and unpopular. Thanks Greta.

As a result, there are some coal companies out there making money hand over fist. They have a bright future with plenty of demand down the road. Yet their valuations are a total joke.

TO READ MORE:  https://www.schiffsovereign.com/trends/the-dirty-four-letter-word-that-keeps-the-lights-on-151675/

A Real Asset With A 12% Dividend Yield

A Real Asset With A 12% Dividend Yield

Notes From the Field By James Hickman / Simon Black October 17, 2024

It’s very hard to overstate just how obliterated the global economy was following World War II. Europe was in ruins, with many major cities having been bombed back into the Stone Age. Japan had literally been nuked.

And just about every economy around the world that still had any manufacturing capacity was pumping out guns, bullets, and bombs; there was hardly any economic activity taking place that wasn’t somehow tied to the war.

It was sort of like Covid— the regular economy was shut down... and governments discovered very quickly that they couldn’t simply turn the global economic machine back on with the flip of a switch.

The transition from obliterated war economy to booming peacetime economy was an incredibly difficult one. So in 1948, the United States (which was among the only developed major economies still standing) launched the Marshal Plan.

The idea was simple, America would shovel $13 billion (which, as a percentage of global GDP is equivalent to around $5 trillion today) around the world to facilitate trade and economic development.

But alongside the financial aid came a promise: the US Navy would protect the seas, ensuring that the global flow of goods could continue unimpeded.

For decades, American naval dominance guaranteed a level of safety and stability that allowed international trade to thrive. Shipping routes were secured, costs remained low, and commerce could flow relatively uninterrupted across the world's oceans.

The post-WWII era ushered in an unprecedented period of cooperation and prosperity, making international trade easier, faster, and more profitable.

But those calm seas are growing choppy again.

The war between Russia and Ukraine, for example, has drastically altered oil trade routes. Russian crude oil, which once flowed easily into Europe, is now making much longer journeys to places like India, where it’s refined and then sent back to Europe as diesel.

This convoluted, inefficient process is adding enormous strain and cost to shipping routes, increasing the “ton miles”, i.e. each mile that a ton of product must travel.

But this is just one example. In the Middle East, the Houthis in Yemen have launched attacks on vessels transiting the Red Sea, creating a new chokepoint in global shipping lanes. Pirates have increased their attacks in the area as well.

Many oil tankers are now rerouting entirely around the southern tip of Africa to avoid the Suez Canal, extending travel times significantly.

The further oil must go, the more tankers are needed. The problem is, these changes took place quite rapidly, yet shipbuilding is not an industry that can quickly respond to that demand.

Shipbuilding is a slow, capital-intensive process. And after years of underinvestment, there are hardly any new tankers being built. Shipyards are busy constructing other types of vessels, but the number of new oil tankers remains near record lows.

At the same time, a large chunk of the existing global fleet is over 20 years old, nearing the end of its lifespan. This imbalance is going to worsen before it gets better, leading to a serious shortage in oil tankers at the exact moment when the world needs them most.

The combination of more ton miles and fewer ships is creating a perfect storm in the tanker market.

This imbalance is inflationary. Both shipping and energy are core components of nearly every supply chain. Higher costs to transport oil mean higher costs for just about everything else we buy—from groceries to manufactured goods.

Climate fanatics can pretend that the world is ready to run off wind and solar, which is why they suppress investment in everything from new drilling, to transport ships. But the reality is, oil is still the most important energy source on earth.

Energy is a prime example of a real asset— a critical resource that keeps the economy going, and cannot be created out of thin air by governments and central banks.

And the shipping companies which transport that oil are real asset businesses... which is why we have been following this industry closely.

One company in particular that we told subscribers about in our premium investment research stands out as being uniquely positioned to capitalize on these trends.

It has a fleet of 82 ships, with an average age of just over 10 years, meaning they have plenty of life left. They can also continue to benefit from the shortage of ships as long as it lasts— which we know from the global orderbook for new ships, will be several years at least.

But this also means the company won’t have to spend huge amounts of capital in the near future buying new ships. And already, it carries little debt... yet still pays around a 12% dividend.

Again, in addition to the dynamics of debt, deficits, and dysfunction in the US government which promise to increase inflation, global conflict is also inflationary.

This is another example of the real asset companies not only poised to do well in an inflationary world, but that are also trading near historic low valuations.

This shipping company, for example, is trading at a P/E (price to earnings) ratio of just 4.44.

While we can wish all we want that the world was not becoming less cooperative, that won’t change the reality. Better to position ourselves to benefit under these conditions, by investing in companies that actually gain from that disorder.

We’ve talked a lot about this same dynamic when it comes to gold, and why central banks around the world are turning to it, and away from the US dollar.

We also talked about it recently in relation to how the prices of certain critical metals have been artificially suppressed by climate fanatics who think the days of gas vehicles are past. They are wrong.

The best way to fight back, while inflation-proofing your future, is to invest in critical real asset companies at historic lows.

To your freedom,  James Hickman  Co-Founder, Schiff Sovereign LLC

PS-

Our premium investment research service, The 4th Pillar, has provided recent, in-depth reports on several undervalued real asset businesses, which we believe are set to boom under these conditions

https://www.schiffsovereign.com/trends/a-real-asset-with-a-12-dividend-yield-151662/

How to Buy Gold for $900 per Ounce

How to Buy Gold for $900 per Ounce

Notes From the Field By James Hickman / Simon Black  October 11, 2024

Today’s letter is about how to go back in time.

A lot of us remember 2009 as a pretty tough economy. The whole world was in bad shape. Major banks had failed, panic had set in, governments were spending money hand over fist, and debts were rising fast. It was pretty brutal.

But if there’s anything nostalgic about 2009, it would be that, almost exactly 15 years ago, gold traded below $1,000 an ounce for the last time.  Today, the price of gold is hovering at its all-time high, more than $2,600 per ounce.

We’ve talked a lot about why that is. Central banks have been buying up physical gold, literally by the metric ton, primarily because they are looking to diversify a portion of their reserves outside of the US dollar.

And central banks are sitting on a LOT of US dollar reserves— more than $8 trillion.

It makes sense that they want to diversify. There’s so much more conflict in the world, and US global dominance is waning.

Iran is now flat-out threatening the US government and promising to retaliate if America provides military support to Israel. This would have been unthinkable even five years ago.

But today, adversary nations have seized on the US government’s weakness. And foreign central banks— which, again, hold trillions of US dollar reserves— have noticed.

They’ve also noticed America’s outrageous national debt, and its annual budget deficits; in fact the most recent estimate by the Congressional Budget Office of the Fiscal Year 2024 is an incredible $1.8 trillion.

So obviously these central banks see a clear need to diversify. And gold is one of the best and easiest ways for them to do that.

The gold market is big. It can handle tens of billions of dollars of inflows at a time. Plus gold is universally valued around the world with a 5,000 year history of maintaining its value. No central banker is worried about whether or not they’ll be able to liquidate their gold holdings in the future.

But central banks only buy physical gold, i.e. piles and piles of physical gold bars. They do not buy gold mines... or gold miners.

This is why there is a historic anomaly in front of us: the price of gold has soared to an all-time high. But many gold companies are laughably cheap.

This is pretty strange when you think about it; a gold miner’s revenue is denominated in... gold! And many of these companies are starting to see soaring revenues and record profits. Yet their stock prices are still languishing.

For example, one gold producer we profiled in our premium research is trading at a Price to Earnings (P/E) of just 4x. It has almost no debt. And it produces a ton of Free Cash Flow.

The company has even blown away expectations and managed to produce 100,000 ounces of gold. Yet the stock price has barely budged.

What’s amazing is that the entire company is currently valued at less than the market price of that one year's worth of gold that it mined.

But the kicker is how little it cost this company to produce that gold.

Their “All In Sustaining Cost” (AISC)— everything spent to pull that gold out of the ground, from mining to processing— was less than $1,000 per ounce.

And in our view, buying shares in an efficient, profitable, deeply undervalued mining company with such a low cost structure is almost like going back in time to 2009 and buying up gold at less than $1,000 per ounce... especially given that the company still has millions of ounces of proven gold reserves in the ground which it has yet to extract.

I’ve written many times before— we still see significant upside for gold. Especially if Kamala is elected.

Based on the type of spending she envisions, plus her weak “vibes” and “joy” leadership, I don’t expect the dollar to last as the global reserve currency beyond her first term.

Instead, central banks will continue to turn to gold. And when central banks converted just $80 billion— about 1%— of their US reserves into gold, the price increased to over $2,600 an ounce.

What would happen to the gold price if they converted 5%... or 20% of their US dollar reserves into gold?

Even buying physical gold, right now, at all time highs, would probably work out really well.

But buying a company whose revenue is gold, yet costs a fraction of that price, could work out even better.

Gold is just one of the real assets we talk about in Schiff Sovereign Premium.

We’ve been clear that America’s debt problems can only be solved by lower interest rates and more money printing from the Federal Reserve.

That’s why we don’t believe inflation is behind us, and why we believe so whole-heartedly in the value of real assets— critical resources that cannot be conjured out of thin air by governments and central banks.

This gold producer is just one example of these massively undervalued real asset companies we’ve named in Schiff Sovereign Premium— a highly educational, month-by-month guide that is designed to help you navigate the world from a position of strength, both personally and financially.

You can click here if you want to learn more about both the Plan B strategies and compelling investment research we present.

To your freedom,  James Hickman   Co-Founder, Schiff Sovereign LLC

https://www.schiffsovereign.com/trends/how-to-buy-gold-for-900-per-ounce-151648/

America Is Now On “The Second Half Of The Chess Board”

America Is Now On “The Second Half Of The Chess Board”

Notes From the Field By James Hickman / Simon Black October 10, 2024 

Over fifteen centuries ago, according to an ancient Sanskrit legend, a mythical Hindu priest named Sissa was ordered to invent a new board game to entertain the king of Taligana.

Sissa labored over the task for quite some time, but he eventually brought the King a military strategy game with a 64-square board and beautifully hand-carved pieces. Today we call this game chess. And according to the legend, the King was absolutely enamored with it.

So enamored, in fact, the King offered Sissa any reward he desired. So, the priest asked for a single grain of wheat to be placed on the first square of the chess board. Then two grains on the second square. Four grains on the third. Eight grains on the fourth. And so on.

The King of Taligana thought the request to be humble and cheap. After all, a little bit of wheat was nothing compared to the endless entertainment of this new game. So, he ordered his men to bring in the grain.

But as they continued counting, the numbers began to grow quickly.

One-quarter of the way through the board (sixteen squares), Sissa was owed around 131,000 grains-- roughly four kilograms of wheat. No big deal.

But with every square the amount kept doubling. Halfway through the board Sissa is owed over 8 billion grains-- about a quarter of a million TONS of wheat. And it keeps doubling from there.

By the final square, the amount of grain owed is far more than all the wheat that the world can possibly produce.

This is known in mathematics as exponential growth, i.e. when something grows at a faster and faster rate. Sort of like my kids. Or more ominously, the US national debt.

According to data just released by the federal government, interest on the national debt for Fiscal Year 2024 (which just ended last Monday, September 30) was roughly $1 TRILLION.

That’s just the interest bill.

And while that number itself is simply astonishing, it’s even more important to put it in context. $1 trillion is significantly more than the government spends on virtually EVERY other line item, including the military and Medicare.

In fact, Social Security is the ONLY federal program whose budget exceeds interest on the debt. For now. But within the next 5 years, interest on the debt will surpass even Social Security.

Just going back to FY 2020— which started pre-pandemic on October 1, 2019— the interest bill that year was “only” $345 billion. And in FY21, it only rose to $352 billion. That was just a $7 billion, or 2%, increase. No big deal.

But in FY 2022, it took a more significant jump to $475 billion. Then $660 billion. And now a TRILLION dollars.

So not only is the interest bill increasing, but the rate at which it is increasing… is increasing.

Just like grains of wheat on a chessboard, this is an exponential problem. At first it looks manageable. Even paltry. But around halfway through the chessboard, the problem starts to spiral out of control very quickly.

Technologist and author Ray Kurzweil actually refers to this phenomenon as “the second half of the chess board”, i.e. the part of the exponential growth model where the problem becomes too big to solve.

How did the most powerful nation in the history of the world reach this point?

For starters, a complete lack of discipline when it comes to federal spending. For decades now, the government has spent money as if there were no limit and would never be any consequences to increasing the debt.

This was most noticeable during the pandemic when they (and the media) engineered widespread fear and hysteria, shut down the economy, and then spent trillions of dollars to keep everyone afloat.

The national debt skyrocketed as a result. But at the time, interest rates were practically zero. So, the government’s borrowing costs were pretty negligible. That’s why the annual interest bill barely moved between FY2020 and FY2021.

But as you probably recall, rates soared in 2022. And so did the government’s interest bill.

Each year, in fact, much of the existing national debt matures; money that the Treasury Department borrowed five or ten years ago becomes due and must be paid back.

Naturally, the Treasury Department doesn’t have any money to pay back its lenders. So instead, they issue new debt to repay the old debt.

The problem, of course, is interest rates. The money they borrowed years ago was at 0% or 1%. Today it’s 4%.

Just this past Fiscal Year (2024) the Treasury Department refinanced roughly $5 trillion in debt at significantly higher interest rates… in ADDITION to the $2 trillion in NEW debt that they borrowed.

This means that NEXT YEAR’s interest bill will likely be even HIGHER.

You can see how this problem can quickly become a crisis. Again, five years ago the annual interest expense was $345 billion. Five years from now it could easily be $2 trillion.

Sure, the government’s overall tax revenue is also increasing. A bit. But the interest bill is growing much faster-- at an exponential rate. You can’t have linear growth in your revenue and exponential growth in a major expense and expect to survive.

It appears that the US government has crossed the proverbial Rubicon into the second half of the chessboard. And their options are extremely limited.

On one hand, the government could slash spending, reform entitlement programs (like Social Security, welfare, etc.), and engage in a massive deregulation effort to boost economic productivity. But I’m not holding my breath.

Their other approach will be to increase taxes and print tons of money to keep interest rates artificially low.

This is already starting to happen.

The government released its new inflation data just this morning showing that core inflation is STILL on the rise. Inflation is not beat by a long shot. And yet the Federal Reserve is going full steam ahead in its rate cutting cycle.

Fed officials aren’t stupid. They know that 0% interest rates are the only hope for the US government’s financial survival.

And the chief consequence, of course, will most likely be some pretty nasty inflation.

This is why we keep saying that real assets make so much sense, i.e. crucial materials like metals, energy assets, and productive technology that are (1) useful and critical in the economy, and (2) cannot be created out of thin air by central banks or governments.

Historically, real assets perform extremely well and hold their value during inflationary times.

And the added benefit is that, right now, many of the businesses which produce real assets are at historically cheap levels. We’ll show you a great example tomorrow.

To your freedom,   James Hickman  Co-Founder, Schiff Sovereign LLC

https://www.schiffsovereign.com/trends/america-is-now-on-the-second-half-of-the-chess-board-151643/

Real Assets are Historically Cheap Right Now Here’s One Example

Real Assets are Historically Cheap Right Now. Here’s One Example.

Notes From the Field By James Hickman / Simon Black / Sovereign Man October 2, 2024

The “green energy” revolution is one of the biggest fantasies of today.

For example, they tell us that fossil fuels are going away, that the gasoline powered internal combustion engine is a thing of the past, and that everyone wants to drive an electric vehicle (EV).

Clearly, that’s why over 90% of consumers still choose gas powered vehicles...

So the government instead has to step in to mandate electric vehicle use, attempting to force manufactures to sell 50% electric vehicles by 2030.

They conveniently ignore the fact that the American electric grid cannot handle that kind of power demand.

And if the $1 billion per EV charging station Secretary of Transportation Pete Buttigieg is spending from the trillion-dollar infrastructure bill is any indication, we’re not going to get there in six years.

The “green energy” revolution is one of the biggest fantasies of today.

 Meanwhile, auto manufacturers are actually scaling back EV production as demand slows and infrastructure gaps remain vast.

Governments and activists may wish it were otherwise, but fossil fuels are not going away for decades. Yet, the belief that they are has led to massive misallocations of capital into renewables.

We’ve talked about this in regards to oil, natural gas, and the uranium required for nuclear power. All of these energy assets have been ignored by investors, or demonized by activists and governments, despite remaining absolutely critical.

And the same thing is true of the metals necessary to build traditional internal combustion engines.

Mining companies are obsessed with finding more metals like nickel and cobalt for the “green energy” revolution. Meanwhile, the specific niche metals required for gas vehicles have been neglected.

I’m talking about platinum group metals (PGMs). These include six metals—platinum, palladium, rhodium, iridium, ruthenium, and osmium—renowned for their high melting points and corrosion resistance.

Over 80% of palladium and 90% of rhodium is used in gas vehicle emissions control systems to convert toxic gases into less harmful substances.

And it seems investors have believed the lies of the climate fanatics, assuming that demand for these metals will drop precipitously as everyone flocks to electric vehicles.

This ignores, first, the actual reality that people still prefer gas vehicles.

Second, the fact that hybrid-electric vehicles are actually the most popular alternative to gas-only vehicles.

And while the EPA-regulation wants everyone to drive electric vehicles, hybrids also satisfy its 50% mandate.

Already, hybrid vehicles account for about 25% of vehicle sales in the US. And they actually use more PGMs per vehicle than traditional combustion engine cars.

But the supply of PGMs is shrinking.

South Africa, the dominant producer of platinum and rhodium, has struggled with power shortages, labor strikes, and declining investment in its mining sector. Russia, another major player, faces sanctions and geopolitical uncertainty that disrupt its palladium production.

With these two countries controlling the vast majority of global supply, the market is heading for significant deficits in the coming years. The numbers are already telling: in 2023 and 2024, the platinum, palladium, and rhodium markets all ran deficits, as in, more was consumed than produced.

Despite this looming shortage, prices for PGMs have plummeted.

Palladium is down 66% from its 2022 highs, and rhodium has crashed by 80% since 2021. This collapse in prices has put major PGM producers on the back foot, forcing them to cut jobs, and even shut down some operations.

Investors, spooked by the drop, are shorting palladium at record levels, convinced that the future belongs to EVs. But they’re missing the bigger picture.

False narratives like these are one reason why many real assets are historically cheap right now.

Real assets are physical, tangible goods like certain commodities and natural resources which have intrinsic value tied to real world uses. This includes energy assets like oil and uranium, productive technology, and fertile farmland.

It also includes critical minerals and metals, like the ones we have been discussing.

Unlike financial assets and paper money, they cannot be conjured out of thin air by central banks and government. Which is why they protect wealth against inflation.

And the type of conditions present in the PGM market is a classic example of finding a historically undervalued real asset.

A crucial, critical resource with limited supply? Check.

A burgeoning shortage, with no movement in the markets to remedy it? Check.

A historically low price for the critical resource? Check.

That’s why this summer we wrote to subscribers of our investment research service, The 4th Pillar, about a company which mines PGMs.

But rather than traditional mining, it extracts these metals from tailings— the waste left over from other mining operations.

And that means it actually gets its source material delivered to it for free...

This company has a deal with a chrome miner for the exclusive right to process the chrome mine tailings. It gives back the recovered chrome, and keeps all the extracted PGMs for itself.

It’s a symbiotic relationship with no money exchanged, no profit share, and no royalty owed.

This low-cost, efficient business model has allowed the company to stay profitable even as PGM prices have cratered.

With a rock-solid balance sheet and minimal debt, it is perfectly positioned to weather the current downturn and capitalize when the market inevitably turns.

But again, this isn’t just the story of PGMs and vehicle markets.

Everywhere you look, real assets are historically cheap.

Often these same conditions exist— the market for a critical resource has been ignored by investors, or demonized by activists, cutting into supply, while demand stays steady, or even grows.

While frustrating, these lies create enormous opportunity. The best way to capitalize is by investing in critical real asset companies at historic lows. As inflation rises and markets correct, those who invest now stand to benefit immensely.

To your freedom,  James Hickman  Co-Founder, Schiff Sovereign LLC

https://www.schiffsovereign.com/trends/real-assets-are-historically-cheap-right-now-heres-one-example-151519/

PS-
The 4th Pillar is our highest tier investment research service that focuses entirely on undervalued real asset businesses. Based on our track record, an annual membership is well worth the $1,995 cost.
If you’re interested in subscribing you can do so here.

So What About Silver?

So What About Silver? 

Notes From the Field by James Hickman / Simon Black

September 25, 2024  In the 6th century BC, during the reign of Nebuchadnezzar II, Babylon flourished as a center of power, culture, and commerce.

We know this because the Babylonians were exceptional record keepers. And they chiseled everything down onto cuneiform tablets, many of which have survived through today.

Sadly the tablets aren't tabloids. They don't contain any juicy gossip or colorful stories of ancient times.

But they do offer extremely detailed-- though often boring and mundane-- records of everyday economic transactions, legal contracts, and administrative activities.

Just like future historians centuries from now should easily be able to see this evening's closing stock prices for Apple and Tesla, we can also read about daily grain prices in ancient Babylon.

One important tablet from the reign of Nebuchadnezzar II highlights the interchangeability of gold and silver in Babylonian commerce. It records a transaction where 5 shekels of silver were considered equivalent to half a shekel of gold.

(The shekel was an ancient unit of weight approximately equal to 8.33 grams.)

This exchange rate implies a silver-to-gold ratio of 10:1.

The formal establishment of fixed exchange rates between gold and silver took a significant leap under Darius the Great in the mid-6th century BC.

Ruling over the vast Achaemenid Empire, Darius borrowed the concept of minting coins from the Lydians and introduced a bimetallic standard. He decreed that one gold "daric" coin was equivalent to 20 silver coins, creating one of the first examples of an official, fixed silver-to-gold ratio.

Over time, the ratio fluctuated due to advancements in mining techniques and changes in supply and demand. And by the era of Alexander the Great in the 4th century BC, the ratio had shifted to 13:1.

Similarly, in ancient Rome, Julius Caesar established a 12:1 ratio.

Even in the early history of the United States, The Coinage Act of 1792 legally defined the US dollar in terms of specific weights of gold and silver—1.604 grams of pure gold or 24.1 grams of pure silver—establishing a ratio of approximately 15:1.

Of course, today, the silver-to-gold ratio is whatever the market decides. Ever since the dollar was removed from the gold standard more than five decades ago, the market ratio between silver and gold has ranged from about 25:1 all the way up to 120:1. Right now it is about 85:1.

Many people have an idea about where this ratio should be. Some people think that it will inevitably fall back to 50:1 which would price silver at around $53 per ounce.

Silver could certainly rise to $53 and far beyond. But not because of some preordained ratio.

Remember, there is no fixed rule or law regulating the silver/gold ratio. There's nothing stopping it from rising to 500:1.

And frankly I think it's likely the ratio could rise much higher from its current 85:1.

Just think about the catalysts that could drive both gold and silver prices much higher.

Gold prices over the past few years have been pushed to all-time highs by central banks. And as I've argued, this is a pretty clear sign that they anticipate moving on from the US dollar as the global reserve currency.

As the US national debt continues to explode higher and the federal government appears increasingly dysfunctional, it's becoming likely that the US dollar's global dominance could come to an end within the next several years.

What does the post-dollar global financial system look like? What will the next reserve currency be? No one knows.

And that's why central banks are buying gold. Because they have $8 TRILLION worth of US dollar reserves that they need to convert into something of value.

Gold, for now, represents that value. So central banks are buying it by the metric ton.

But (with minor exception) central banks do not buy silver. The market is too small, making it extremely difficult to invest billions of dollars all at once.

Silver prices are influenced more by industrial demand... and investor speculation. I'll come back to that.

I've said before that a Kamala victory will likely spell the end for the dollar's reign. This is a person who thinks that inflation is caused by "greed" and whose answer to every problem is more government spending.

The Harris deficits and inflation will likely be the proverbial straw that breaks the dollar's back. And the consequent surge in central bank gold purchases could easily send the silver/gold ratio soaring past 200 or more.

Again, while 200 is far beyond the historical average, there's no reason why it can't be even higher. Historical averages are merely data points, not firm rules.

It's far more important to pay attention to price catalysts. And gold has a major catalyst in central bank purchases.

That doesn’t mean the price of silver won’t rise. In fact, a climbing gold price alone is very like to increase the price of silver, simply because investors will speculate that it will rise.

This becomes somewhat of a self-fulfilling prophecy; investors buy an asset believing that it will rise. That increased demand causes the price to rise, encouraging more investors to buy.

We've seen this type of feverish speculation with plenty of asset classes in the past-- including silver more than a decade ago.

But in the end, if there aren't real demand fundamentals to support the price, the speculative mania always fades.

Bottom line, gold has clear demand from central banks that could send the price to absurd levels. Silver does not share the same catalyst.

Silver prices could absolutely skyrocket. But this would be far more likely due to temporary speculation (and those buyers tend to be finicky and sell quickly) rather than from true long-term industrial or investor demand.

To your freedom,  James Hickman  Co-Founder, Schiff Sovereign LLC

PS-  If you value this type of financial and political analysis, this is just a taste of what you’ll get with Schiff Sovereign: Premium. At just $9/month, it’s packed with incredible insights, including both Plan B strategies and compelling investment research. It’s a highly educational, month-by-month guide that is designed to help you navigate the world from a position of strength, both personally and financially. https://www.schiffsovereign.com/trends/so-what-about-silver-151499/

And, Right On Cue, Gold Hits Another All Time High...

And, Right On Cue, Gold Hits Another All Time High...

Notes From The Fuield By James Hickman (Simon Black)  September 16, 2024

This is an anomaly we haven’t seen before.

Gold just hit yet another all-time high. But what’s strange is that, if you look at gold’s supply and demand fundamentals, the price should almost be falling. Not rising.

I’ll explain—

On the supply side, gold production is actually increasing slightly. The largest miner in the world, Newmont Mining, produced nearly 30% more gold in the first half of 2024 compared to 2023. And across the entire industry (according to the World Gold Council), global gold mining output is up slightly over 2023.

So much for shrinking supply.

But what about demand? Well, this is usually broken down into four main segments.

The first and (by far) largest segment of demand is jewelry. But global jewelry demand is down.

Signet Jewelers (which owns major jewelry brands like Kay, Zales, Jared, Blue Nile, and many others) has reported an 8.5% drop in revenue so far in 2024 versus 2023. Meanwhile China’s Gold Association reported a 27% decline in gold jewelry purchases in the first half of 2024.

Even on the high-end side, LVHM’s jewelry division (which includes the luxury brand Tiffany’s) also reported a 5.1% sales decline due to “an uncertain economic and geopolitical environment. . .”

So overall jewelry worldwide (which is THE biggest component of gold demand) is down. Worldwide.

The next segment which drives gold demand is investment demand, i.e. individual investors who buy bars and coins... but most often invest via Exchange-Traded Funds.

Well, the largest ETFs in North America (GLD and IAU, which comprise 80% of the market) are DOWN for the year, meaning they have been net SELLERS of gold, rather than buyers. Even in the month of August, these two combined for a big fat whopping 1.7 metric tons of net purchases, roughly $200 million.

That’s nowhere near enough to move the gold price.

Meanwhile, across the Pacific, all of Asia’s gold ETFs COMBINED only purchased a net 0.3 metric tons (i.e. $30 million) last month. Again, this is simply not enough demand to move the gold price.

And so far for the year, worldwide, gold ETF holdings are DOWN by about 44 metric tons.

The third category of gold demand is industrial use. You might already know, for example, that there’s about 50mg of gold in your mobile phone thanks to gold’s unique chemical properties as an electrical conductor.

So mobile phone producers (along with certain medical device manufacturers and a handful of other industries) also buy gold. It’s pretty small demand, though— industrial and technology use only makes up about 10% of global gold demand.

That said, it’s worth pointing out that iPhone sales (which is a good proxy for global mobile phone production) are down substantially, from a peak of $48 billion in Q1/2021 to just $39 billion in its most recent quarter.

So, to summarize, jewelry demand is flat or down. Investment demand for gold is flat or down. Industrial demand is too small to matter, but even that is down. Meanwhile, supply is rising.

Rising supply and falling demand? It seems like gold prices should be falling right now. And yet gold just reached yet another record high. What gives?

Well, as we’ve said before, the answer is central banks.

Poland is a great example; despite being a relatively small country, it bought 19 metric tons of gold last quarter alone. And it plans to buy at least another 125 tons in the future. That’s a lot of gold.

This is a trend taking place worldwide; central banks including China, Turkey, Qatar, India, Czech Republic, etc. have loaded up on gold this year. And in the second quarter of 2024, central banks purchased 183 metric tons of gold... which is far more than usual.

Central banks typically buy small amounts of gold, i.e. a few metric tons here and there. But over the past two years, they’ve been buying gold like crazy.

It’s pretty obvious why. They’re concerned about the world, and they’re concerned about the fate of the US dollar and US government finances.

Think about it— central banks around the world own TRILLIONS of dollars worth of US government bonds, i.e. US dollar foreign reserves. And they’re obviously worried.

Congress and the White House run outrageous budget deficits every year. The federal government’s dysfunction is a constant national embarrassment. The US national debt is set to soar by AT LEAST $22 trillion over the next decade. And inflation is far from being solved.

Foreign central banks know this. And they realize that, in a few years time, their trillions of US dollar reserves will be worth a lot less.

So they’re trying to do something about it now. And that means trading at least SOME of their dollars for gold... hence the feverish central bank gold purchases, and the all-time record high in the gold price.

We’ve already suggested that gold could easily go much higher... especially if Kamala wins. I think that’s easily a $10,000 gold price, which would suggest only a small percentage of US dollar foreign reserves invested in gold.

That doesn’t mean the gold price can’t fall in the meantime. Gold prices have been rising for so long, and, realistically, nothing goes up or down in a straight, uninterrupted line.

Some central banks will continue buying gold irrespective of its price. Others will be more conservative and try to play the market. Singapore’s central bank, for example, actually sold a bit of gold recently and are probably hoping for a pullback in prices to buy more.

But over the longer term, gold is still an extremely sensible hedge with a lot of upside.

Having said that, the real value we see right now is in gold miners.

Look at Newmont mining— and, this is not a recommendation, but just an example. Newmont is the world’s largest gold miner, i.e. more than 80% of its revenue is essentially gold.

Gold is at an all-time high, yet Newmont’s stock price is about 40% below its record high from a few years ago.

Sure, it’s a much more complicated story; you have to consider gross margins and mining costs and country risk, etc. But the larger point is that gold stocks (especially relative to gold) are very cheap right now... especially when you consider where gold could be a few years from now.

To your freedom,  James Hickman   Co-Founder, Schiff Sovereign LLC

https://www.schiffsovereign.com/trends/and-right-on-cue-gold-hits-another-all-time-high-151422/

Shocker: Iran Funneling Billions Through the Fed’s System

Shocker: Iran Funneling Billions Through the Fed’s System 

Notes From The Field By James Hickman / Simon Black September 9, 2024

When I was a kid growing up in the 1980s, my father used to go every summer for two weeks of military training as part of his commitment to the US Army Reserve. And whenever he flew home, we would always meet him at the airport.

But back then, my mom, sister, and I could all go straight through security and sit at the gate to wait for him. In fact that was normal all the way through the late 1990s.

Then, of course, everything changed after 9/11. The federal government took over airport security overnight, and for the past 23 years, we’ve been taking off our shoes, getting fondled by federal agents, and throwing away our liquids.

More than two decades after 9/11, most of these TSA Security rules (the majority of which have been adopted around the world) seem pretty stupid.

Does anyone honestly believe that a 3.4 ounce tube of toothpaste is OK, but 3.5 ounces of toothpaste is a security threat?

This is the kind of idiotic logic behind rules that add unnecessary inconvenience to people’s lives, without providing any discernible benefit.

The same thing applies to those ridiculous consent forms on countless websites across the Internet. Whenever we visit a site we are now forced to “accept cookies”, thanks to a law passed by the European Union’s most idiotic politicians.

They somehow think we are all safer and better off... and that our privacy is protected.

Except that our privacy isn’t protected. Mark Zuckerberg and the Google guys are still following us around the Internet watching everything we do and click. Not to mention the governments themselves grab our biometric and personal data, shove it all in a database, then leave it prone to breach by hackers.

But hey, at least we have those cookie notifications to keep our data safe, right?

It’s just another stupid rule that inconveniences people, without providing any discernible benefit.

Banking is another great example.

Some people aren’t old enough to remember, but it used to be a pretty simple process to open a bank account. You’d show up, sign some papers, and you were done. Now, we’re all threatened with imprisonment, forced to fill out a million forms, and every single transaction is scrutinized under anti-money laundering and anti-terrorism regulations.

The entire apparatus treats you like a criminal suspect rather than a valued customer. And for what?

Turns out, it’s all for nothing.

Laws like FATCA, CRS, and the USA PATRIOT Act were supposedly passed, at least in part, to cut off terrorist groups from the global financial system.

But all the regulators missed that Iran– a nation that has been blacklisted by the global financial system– sent hundreds of millions of dollars to Hamas– a blacklisted terrorist organization. And then Hamas used that money to kill innocent Israeli civilians on October 7, 2023.

The US President himself agreed to release $6 billion in frozen funds to Iran for the release of a handful of Americans. So again, what exactly is the point of all that scrutiny in the financial system?

My mother has to jump through all sorts of hoops to prove that she’s not a criminal just to withdraw some cash from her bank account. But Hamas and the Taliban get hundreds of millions of dollars funneled to them, through the US banking system.

The latest example is actually the Iraqi banking system—which was set up in part by the US government after the 2003 invasion.

Top officials from the US Department of Treasury and Federal Reserve helped oversee the establishment of Iraq’s new financial system, including the anti-terrorism and anti-money laundering controls.

Well, big shocker, it turns out that the Iraqi banking system, i.e. the system set up by the US government, was used by terrorist groups to send money to Iran and to Hamas.

So once again, what exactly is the point of all these rules and regulations, which inconvenience regular, law-abiding citizens... if groups like Hamas can still receive ample funding through the system. It’s obvious the rules are pointless and have no real benefit.

The irony here is that so many governments around the world, including the US, are some of the most outspoken opponents of cryptocurrency.

The US Treasury Department hates crypto. They say it is dangerous to have an unregulated monetary system where terrorists and drug cartels can operate with total privacy.

Yet the very banking system that THEY established is what’s actually funding terrorists.

Everyone else has to suffer through daily friction and be treated like criminals, just to send some money from point A to point B; withdrawing $5,000 in cash brings a bureaucratic shock and awe.

And this is one of the biggest reasons why I think it makes sense to own crypto.

I’m not a crypto fanatic by any means. I don’t own it to speculate on the price. And most days, in fact, I don’t know the price of Bitcoin or Ether. Nor do I care.

To me there’s no point in trading dollars for crypto, only hoping to trade crypto back for more dollars. The larger idea is that crypto represents a way to send and receive funds outside of a system run by incompetent bureaucrats who constantly make our lives worse.

It’s similar to my belief that gold makes sense as a long-term store of value; I don’t trust the Federal Reserve or the White House with preserving the value of my savings. Gold is a great way to do so... without having to rely on the financial system.

With both crypto and gold, there’s no intermediary or incompetent bureaucrat standing in the middle.

That’s also why I’ve never seen any reason to debate which is better, gold vs crypto. There’s no reason to argue about it.

Both serve a useful purpose, and both are worth considering as part of any sensible Plan B.

To your freedom,  James Hickman  Co-Founder, Schiff Sovereign LLC

PS-

If you’re not sure how to get started on a Plan B, check out Schiff Sovereign: Premium, it’s packed with incredible insights, including both Plan B strategies and compelling investment research. It’s a highly educational, month-by-month guide that is designed to help you navigate the world from a position of strength, both personally and financially.

https://www.schiffsovereign.com/trends/shocker-iran-funneling-billions-through-the-feds-system-151402/

Three Key Trends That Will Shape the Future of America

Three Key Trends That Will Shape the Future of America

Notes From the Field By James Hickman / Simon Black  September 5, 2024

You wouldn’t be especially impressed by someone’s insight if they told you that the world today is full of turmoil. That’s obvious— from wars and cultural clashes to cost of living crises and a pervasive sense of negativity.

More impressive is that William Strauss and Neil Howe predicted that the 2020’s would be like this nearly three decades ago in their 1997 book, The Fourth Turning.

According to their theory, societies move through cycles approximately 80-100 years long, with each cycle divided into four distinct "turnings." These phases mirror the seasons, with the Fourth Turning representing the harsh winter—a period of upheaval and transformation.

Strauss and Howe predicted that the next Fourth Turning would begin in the mid-2000s, ignited by a crisis that would set the stage for significant societal change.

The 2008 global financial crisis marked the beginning of this period. Since then, governments and central banks have been in a constant state of crisis management, employing measures like low interest rates and increased government spending to prop up the faltering system.

Today, as Strauss and Howe foresaw, this phase is characterized by a collapse of trust in institutions that have dominated since the start of the current cycle, just after World War II.

From the media, to government bodies like the justice system and Federal Reserve, to global organizations like the UN and IMF, these institutions are increasingly viewed as ineffective, obsolete, or downright harmful.

Historically, Fourth Turnings are marked by intense turbulence, often culminating in major conflicts or transformative events, such as the Great Depression leading to World War II, or in the cycle before that, the American Civil War.

While history doesn’t have to repeat itself exactly, the growing dissatisfaction across the developed world is palpable. Issues like healthcare costs, immigration, and rising inequality fuel a sense that society is no longer functioning as it should.

This widespread discontent often leads to political upheaval. As voters lose faith in current leaders, new political movements and parties gain traction.

But none of these ‘saviors’ are going to win by promising to cut spending.

Until their hand is absolutely forced, politicians will continue to borrow and spend as much as they can in a desperate attempt to cling to power. But to be fair, the public is also to blame— they largely demand it.

As Howe writes in the sequel to the Fourth Turning which he published last year:

“Like addicts acquiring tolerance, policy-makers have backed themselves into a corner: The public braces itself for the dark hour when the Fed can no longer ease and Congress can no longer borrow no matter how badly the economy founders.”

This scenario highlights three key trends that are likely to shape the future:

1. Huge Deficit Spending

The US deficit reached nearly $2 trillion in 2023, a historic high outside of wartime or national emergency.

In theory there is no limit to the level the deficit can reach. After all, the US Government can issue the debt and the Federal Reserve can buy it all.

But the problems show up in the value of the US dollar. Not just against other currencies— other governments are devaluing their currencies in the same way. Instead, the value of what a dollar is worth, in terms of real goods and services that people need to buy, is diminished.

The Fed is acting right now as if the inflation problem is licked. But, given the trajectory of future deficit spending, we are really just in the opening stages of a larger, wider inflation problem.

2. Increasing Conflict

The intensity of global conflicts has escalated, particularly following Russia's invasion of Ukraine. This has accelerated a shift away from global trade and cooperation, as countries prioritize securing their own supply chains and others try furiously to develop parallel financial systems that leave them less vulnerable to the whims of US foreign policy.

This retreat from global integration is likely to increase tensions and create further instability.

3. Potential Monetary Resets

All of this leads to the potential for a monetary reset— typical during a Fourth Turning. The value of the reserve currency is being continuously debased and its status as a reserve currency can leave others vulnerable to the imposition of sanctions or even confiscation of their assets. That’s not sustainable.

There are so many possible permutations of how this could all play out that it’s difficult to say exactly what a global financial reset would look like right now.

But it would almost certainly mean the loss of the dollar’s global reserve status.

That is exactly why we always advocate having a Plan B, a solid backup plan to provide great optionality in tumultuous times.

That’s why we started Schiff Sovereign: Premium, a highly educational, month-by-month guide that is designed to help you navigate the world from a position of strength, both personally and financially.

In Schiff Sovereign Premium, we focus on what we think will work well amidst all the uncertainty, regardless of the sequence of events that occur.

It includes both Plan B strategies (such as maintaining your freedom of movement, and legally reducing your tax bill), as well as compelling investment research.

Our investment thesis focuses on real assets— the world’s most critical, valuable, and useful resources, as well as the businesses which produce them.

Real assets are a beneficiary of the huge debasement of currency that we are seeing. And right now, with central banks across the world starting to cut interest rates again, we should see that trend accelerate.

Gold in particular has already responded to the impending injection of liquidity that lower interest rates will bring, reaching all time highs on multiple occasions this year.

Gold mining stocks, however, haven’t yet followed suit... but are primed to do so. (In July’s issue, we explained why, and released research on two well-positioned companies in the gold mining industry.)

Commodities are also a beneficiary of the unfortunate trend of increasing conflict across the world. Not only are war-time economies typically inflationary, they also require a huge amount of industrial commodities.

But the chronic underinvestment in commodity supply over the past decade has set the stage for potential shortages. As these issues come to the fore, both prices and investment in production are likely to rise— a great opportunity for investors.

But even if these trends don’t play out exactly as expected, investing in companies that control some of the world’s most valuable real assets—especially including critical energy resources like natural gas and uranium—has very little downside.

To your freedom,  James Hickman   Co-Founder, Schiff Sovereign LLC

https://www.schiffsovereign.com/trends/three-key-trends-that-will-shape-the-future-of-america-151390/

How Genghis Khan Is Driving Your Grocery Bill Higher

How Genghis Khan Is Driving Your Grocery Bill Higher

Notes From the Field By James Hickman / Simon Black August 27, 2024

Over eight hundred years ago, in what is now northwestern China, the Uyghur people— long before they were carted off to internment camps by the Communist Party— ruled their own independent kingdom, known as Qocho.

Then, in the year 1209, Genghis Khan sent diplomatic emissaries to Qocho. The message was clear: the Great Khan wanted to avoid a bloody military campaign, and he proposed a peace offering instead.

Genghis Khan’s deal was simple: the Uyghur people would keep their rulers, their infrastructure, their religion, and their customs. Their soldiers would live. Their buildings would not burn. Their women would not be touched. They would even be granted a high degree of autonomy.

And in exchange, they would provide the Mongol Empire with administrative support, as the Uyghurs were famously adept in governance and literacy.

The Uyghur ruler, recognizing the military strength of the Mongols and the benefits of an alliance, voluntarily accepted these terms, avoiding destruction.

Genghis Khan is generally known to history as a butcher and conqueror. But he was also a fairly skilled diplomat; he understood that it was far better to talk and settle matters peacefully than to go to war.

Through peaceful negotiation, lives could be spared, resources conserved, and vital economic assets preserved— not just for his own empire but also for the kingdoms he sought to absorb. This meant more tax revenue for him, and prosperity for everyone.

Fast forward to the present day, and Genghis’s namesake— Federal Trade Commission (FTC) Chair Lina Khan— has taken the opposite approach. She wants to go to war... which in our modern era means lawsuits. She has no interest in diplomacy, discussion, or compromise; she just wants to sue businesses and take them to court.

Bear in mind, the FTC was created in 1914, back when a handful of huge companies wielded monopolistic control over key industries in America. So the government set up the FTC to protect consumers from being squeezed by these powerful monopolies.

But a century later, Genghis Khan is using the vast powers of her office to wage war on legitimate business... and even capitalism itself.

A few months ago, for example, Genghis decided to ban “non-compete” clauses from employment contracts. This is one of the fundamental principles of capitalism: a voluntary agreement between an employer and employee to protect a company’s investment and intellectual property.

But Genghis Khan wouldn’t hear of it. So she banned non-competes, even though she had absolutely no legal authority to do so. And this is typical of her— she just invents whatever authority she wants.

Another example we talked about a few months ago— Genghis filed a lawsuit against two major grocery store chains (Albertsons and Kroger) to prevent them from merging.

Her claim is that the merger will harm labor unions, though she offers absolutely no reasonable explanation or evidence to support this assertion.

More importantly, her job is to protect CONSUMERS.... not labor unions. But here we have it again: Genghis Khan has once again invented new authority for herself to be the Protector of Unions... even though Congress never tasked her with that mission.

The whole thing is so absurd, in fact, that the FTC has no reason to suspect that the merger of these two grocery store chains will harm anyone at all. If anything, consumers should benefit.

The supermarket industry is extremely competitive, with traditional grocers now having to compete with tech companies, co-ops, farmers' markets, delivery apps, big-box warehouses like Costco, and even Walmart and Amazon.

For Albertsons and Kroger, it’s clear that a merger makes sense; it helps them optimize their cost structure, achieve greater efficiencies, and thus deliver savings in the form of lower prices to consumers.

And lowering prices isn’t some altruistic act by these companies; lower prices will make them more competitive.

But Genghis Khan has no understanding of how capitalism works. In the sentiment of her fellow Marxists, she views capitalism as a zero-sum game, best encapsulated by AOC’s false logic: “No one ever makes a billion dollars. You take a billion dollars.”

This way of thinking is completely false. Sure, 1,000 years ago when the real Genghis Khan was conquering the world, economics was indeed a zero-sum game. Nations got richer by plundering their neighbors, and individuals became wealthier by taking from others.

But that’s not what modern capitalism is about. It’s not a zero-sum game. Capitalism is about making the pie bigger. It’s about value creation. It’s about making everyone better off— workers, customers, investors, even the government that collects tax revenue. Everyone wins.

But FTC Chair Genghis Khan acts like it’s still the year 1209. She doesn’t understand modern economics or the value creation principles of capitalism. So her tendency is to engage in warfare— not with soldiers on the battlefield, but with lawyers in a courtroom. Albertsons and Kroger never had a chance.

For example, the FTC initially howled that the combined Albertsons and Kroger company would have too many locations. OK fine. So the companies promised to sell off a percentage of their stores, and they even found a buyer.

Then the FTC claimed there wouldn’t be enough stores, and competition would suffer.

“Damned if I do, damned if I don’t.” Again, the companies never had a chance. There’s no satisfying Genghis Khan. She doesn’t want to talk. She doesn’t want a solution. She just wants to go to war.

The hearing started yesterday, and both sides showed up to court ready to fight. I’m keeping my fingers crossed that the case is quickly dismissed, or that reason prevails in court.

Either way, it’s not a great outcome. If Genghis wins, food prices are likely to rise. But even if she loses, she’ll just find some other business to attack, or some other pillar of capitalism to assault.

In Genghis’s mind, lawfare is always and everywhere the answer. And somehow we are all supposed to become more prosperous because of it.

That’s capitalism in the 21st century, folks: the federal government will sue its way into prosperity.

Unfortunately, Genghis Khan is not isolated in her way of thinking. In fact, one of her biggest cheerleaders is none other than Kamala Harris, who has applauded this lawsuit for taking on “corporate greed.”

This is the sad lie they always use try to explain inflation; rather than acknowledge that their own policies and profligate spending have led to higher prices, they blame greed. And promise to sue their way to lower prices. It’s genius.

And it’s not just Kamala either— Joe Biden, Elizabeth Warren, AOC, Bernie Sanders, and a whole bunch of other very vocal supporters (surprisingly from both parties) are all on board with this idiotic approach.

It represents an obvious risk to prosperity and success. And that is something that should be factored into the long term planning of anyone who wants to build anything of value in America.

To your freedom,  James Hickman  Co-Founder, Schiff Sovereign LLC

PS-

This doesn’t mean it’s impossible to build or maintain wealth in America. But in this type of environment, there are certain steps that are necessary to take in order to make sure you can come at the problems these people cause from a position of position of strength.

That’s why we started Schiff Sovereign: Premium, a highly educational, month-by-month guide that is designed to help you navigate the world from a position of strength, both personally and financially.. Click here to learn more.

https://www.schiffsovereign.com/trends/how-genghis-khan-is-driving-your-grocery-bill-higher-151339/

Can Elon Musk Save The US Dollar?

Can Elon Musk Save The US Dollar?

Notes From the Field By James Hickman / Simon Black  August 13, 2024

I was one of the millions of people listening to the live conversation last night between Elon Musk and Donald Trump.

And if you missed it, Trump was Trump. You pretty much know exactly what you’re getting with him, and there weren’t any major revelations.

Elon, on the other hand, came off as a genuinely concerned citizen who recognizes the problems facing the country and is exasperated why the people in charge aren’t implementing common sense solutions.

Honestly, I feel bad for the guy; Elon is blasted as a hard-core, right-wing nut job… and there are people who literally want to put him in prison because of his views.

But last night he said things like:

- “the legal system is supposed to be protecting the public from violent criminals”- “we want safe and clean cities”- “we want secure borders”- “we want sensible government spending”- “we want to restore both the perception and the reality of respect in the judicial system”- “I’m pro-environment, but I don’t think we should vilify the oil and gas industry”

These are clearly not radical values, and my guess is that most people in the country would probably agree with his values.

About an hour into the call, Elon outlined what he thinks would bring prosperity back to the United States:

1) “Solve government overspending”. He correctly explained that extreme government deficits create inflation… so if you want to really get inflation under control, you have to stop the spending.

In theory, this shouldn’t be hard.

The Treasury Department expects to collect nearly $5 trillion in tax revenue this Fiscal Year (which ends on September 30th). And $5 trillion is an absurd amount of money.

As recently as five years ago (FY2019), $5 trillion would have been enough to pay for ALL federal spending and still have a surplus of more than $500 billion to start paying down the debt.

So, if they had simply frozen spending in place at FY2019 levels, even after adjusting for inflation and higher interest rates, $5 trillion in tax revenue this year should still be sufficient to keep the national debt from growing any further. And that’s without making any significant cuts to government spending.

But spending has increased by nearly 50% in five years. Is the government 50% better? Do taxpayers receive 50% more service? Clearly not. They’ve just let spending spiral out of control with no commensurate benefit to the taxpayer.

2) Deregulate.

Elon’s second point was that a lot of regulations are destructive and make no sense. Volumes and volumes of rules hold back businesses from innovating, hold back citizens from being productive. And that’s what the country truly needs to be prosperous-- innovation and productivity.

And those were his two big points… and that if a government can do those two things, the future can be much brighter.

He’s right, and the math clearly supports this view.

Various Presidential administrations over time have increased, or decreased regulations. When there have been decreases in the number of regulations, US economic productivity tends to increase, and overall GDP growth rises. During periods of growing regulations (like right now), productivity wanes.

Higher productivity means that the economy grows faster. And a faster growing economy means more tax revenue for the government. Combined with spending constraints, this would leave plenty of money left over to pay down the debt… or simply set aside for a rainy day.

Imagine being able to obliterate a major threat to the nation, or shore up security to the power grid, or support an ally, without having to go into debt? It’s unimaginable given today’s national finances. But with real productivity growth and sensible spending, it’s absolutely a reality.

Failing to do BOTH of these things most likely results in a pretty bad outcome for the United States.

If the debt keeps spiraling out of control, and government regulators continue to constrain productivity, it’s extremely difficult to imagine the US dollar remaining the world’s primary reserve currency.

Continued deficit spending and a ballooning national debt will create even more inflation and cause foreign governments, central banks, and businesses to lose confidence in the dollar. It’s already happening… and one of the reasons why gold is hovering near its all-time high.

The US dollar’s global reserve status is one of America’s premier financial benefits. Losing it would be disastrous… and Elon’s approach is pretty much the only way to save it.

Will it happen?

To Read More:

https://www.schiffsovereign.com/trends/can-elon-musk-save-the-us-dollar-151290/