It all started because the students wanted better quality education… and more teachers.

Many schools in France are overcrowded. Some lack teachers. Buildings are crumbing.

So, two weeks ago, students at a high school outside Paris blocked the entrance to their own school to protest these conditions. And the movement caught on; students at hundreds of other schools did the same.

By last week the protests had turned violent, when students (and then a bunch of people who clearly didn’t look like students) began setting fires and fighting riot police.

More than 5,000 people have been arrested so far, most of them teenagers, and 24 schools have been burned or ransacked.

Sure, this is a country where torching cars and burning down buildings is a national sport.

But it’s worth pointing out that France spends 57% of its ENTIRE economy on government. The average for rich countries is about 43%, and only Finland spends more.

So here’s a question the French might want to ask: what do you get for all that government?

For that kind of money, you’d expect the basics to be covered… like teachers. But France actually cut 3,000 teaching jobs this year, and plans to cut more next year.

At one high school in a poor suburb north of Paris, math, English, humanities, and gym classes have been canceled since the school year began because there’s nobody to teach them.

One student complained of being forced to take exams required for graduation without having had a teacher in the subject!

Yet the government spending 57% of GDP doesn’t buy proper education. Nor does it buy law and order. A protest by high school kids turned into nationwide riots, and the French state couldn’t stop it. Hundreds of students, school staff, and police officers have been hurt.

France has been here before. France’s 2005 riots began in a poor region just north of Paris, after two teenagers hiding from police were electrocuted in a power substation. The suburbs burned for weeks.

The same suburbs rioted again in 2023— and they were among the first places the school protests spread this fall.

Nearly a third of the people who live in that county are immigrants, the highest share anywhere in mainland France, and three times the national average.

France spent decades importing immigrants by the million and never bothered to integrate them. Twenty-one years after the 2005 riots, NOTHING has been fixed.

What’s crazy is that French people are demanding even MORE government to fix these problems that haven’t been fixed by their already gargantuan government.

How do they plan to pay for any of it? The French are already the second-most-taxed people in the developed world, at about 44% of GDP. Yet even that doesn’t cover the spending, so the government borrows the rest. France’s national debt is now 119% of GDP.

On October 1, in the middle of the riots, the government presented next year’s budget. It expects interest on the debt to cost more than €90 billion. That’s far more than the €65 billion it plans to spend on schools, and more than it spends on its entire military.

In other words, France now pays more to its lenders than it spends on its schools OR its soldiers… and the interest bill is still growing.

Naturally, with multiple crises hitting at once, the hard left is ready to exploit the chaos.

Jean-Luc Mélenchon is a hard-left politician and one of the top three candidates in the polls for next April’s presidential election. As the protests turned violent, Mélenchon declared that the students were harmless and said the police response had “an obvious racist aftertaste.”

Mélenchon’s answer to France’s problems is MORE government. He wants to raise the minimum wage and lower the retirement age to 60.

(Remember, France already tried to fix its bankrupt pensions by raising it from 62 to 64. That caused riots too, so the plan was suspended.)

And his plan for the national debt is to simply cancel the part that France’s central bank holds.

Bottom line, France pays for more government than almost any country, and it barely even seems like an exaggeration to say its society is collapsing in real time.

France has done everything wrong, from borrowing to immigration, and now it can’t even do the basics.

But while France may be a more aggravated case, the similarities to the US are hard to ignore.

The US government owes more than $40 trillion, roughly 123% of GDP— worse than France. Interest on the debt is already larger than the defense budget.

America gets away with it, for now, because the dollar is still the world’s reserve currency. Foreign central banks hold a lot of their strategic financial reserves in US Treasury bonds, so Congress has always had a line of foreigners waiting to lend it money no matter how large the deficit.

But that line of foreigners is now getting shorter.

At peak (in 2011), foreigners owned nearly half of all marketable US Treasury bonds. Now their share is down to about 30%.

China in particular has cut its Treasury holdings in half since 2013, and they’re now at their lowest level since 2008.

When the foreign buyers stop showing up, America finds itself with France’s problem: lenders charge more, interest eats up more of the budget every year, and there’s less money left over for the basics.

France shows how quickly a society can devolve. And that’s exactly why it makes sense to have a Plan B.

P.S. You don’t have to wait around to see whether America ends up like France.

Schiff Sovereign’s flagship research service, Plan B Confidential, covers second residencies and citizenships, foreign banking, and legal tax strategies, with boots-on-the-ground reports from all over the world, so you can put the pieces in place before you’re scrambling.

Click here to learn more.

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[Editor’s note: This letter was written by Schiff Sovereign’s CEO, Viktorija, who is originally from Lithuania but splits her time between Mexico and Panama.]

The first thing I noticed at Seoul’s Incheon airport was the luggage.

People had just left their suitcases sitting there— against pillars, next to benches, by the exits— and wandered off to the bathroom or to grab a coffee. Nobody looked back.

Forget about thieves for a minute; just try leaving an unattended bag in a US airport, and watch the place go into lockdown while the bomb squad swarms in.

A few days later I was in a small local café when the woman next to me stood up, left her phone face-up on the table, and walked off. She was gone for several minutes.

When she came back, she picked up her phone like it was nothing.

South Korea is a high-trust society. When you’re on the ground, you feel it before you can explain it. People here just assume that everyone else is going to follow the rules, and they’re almost always right.

It’s not just the obvious stuff, like Korea’s ultra-low murder rate. It’s little things too.

Last year, for example, passengers on Seoul’s metro left around $300,000 on the trains— lost wallets, money that fell out of people’s pockets, etc. About three-quarters of that cash was returned to the rightful owners. Crazy.

The Seoul subway, by the way, is the best I’ve ever been on— and I’ve been to more than 100 countries. It’s spotless, the trains show up when the sign says they will, and a ride costs a little over a dollar.

I’ve been to Seoul before, but this time I was blown away by how much had changed. The whole city feels like living in the future.

At one café, my espresso was made by a robot. At my hotel, room service arrived on a robot that drove itself down the hallway, stopped at my door, and handed over the tray.

And nobody else seemed to find any of this remarkable.

The factories are even farther along. South Korea has more robots per factory worker than ANY country in the world— about four times as many as the US.

Korea needs them. It has the same problem as America and nearly every other rich country, only worse: people aren’t having enough kids. Korea’s birth rate is one of the lowest in the world, and its working-age population is already shrinking.

But instead of waiting around for the worker shortage to solve itself, the Koreans are building machines to do the work.

I think about economic growth a lot; it’s a big part of my job at Schiff Sovereign. And South Korea’s is remarkable, if you know the backstory.

In 1960, South Korea was poorer than Ghana. Today it’s about fifteen times richer.

And the Koreans haven’t let up. South Korea puts more than 5% of its ENTIRE economy into research and development every year; only Israel spends more.

Most of that money comes from private companies. But the government keeps raising the bar too: this year’s research budget is the biggest in the country’s history.

It’s not just robotics— it’s everything from semiconductors to medical research.

In fact medical treatment is a booming industry; about two million foreigners came to Korea for medical treatment last year, which is a record. Most of them, admittedly, came for skin treatments and cosmetic work.

But Korea is also world class in regenerative medicine— stem cell treatments that repair damaged tissue, anti-aging therapies, etc. This is serious medicine, not spa tourism.

Korean regulators approved a stem cell treatment for worn-out knee cartilage back in 2012… and more than 35,000 patients have received it since.

Since last year, Korean law has also allowed patients with severe or rare diseases to receive new cell-based treatments that haven’t finished the full approval process.

It’s amazing what can happen when a country allows science and medicine to advance instead of stifling them.

To me, it all sounds a lot like America in the 1950s.

America back then was an exciting, high-functioning, high-trust society. People had a strong work ethic and shared values, and they made intelligent decisions for the future.

When America had just become the world’s dominant superpower, the Eisenhower administration built the federal highway system, and Congress paid for it with a tax on gasoline instead of borrowing the money.

Around that time, roughly 75% of Americans said they trusted the federal government to do the right thing. Today it’s less than 20%.

Frankly I think that if you’re thinking about cutting-edge medical care, Korea ought to be be on your radar.

But ultimately, Seoul is a reflection of what a high-trust society with shared values looks like… and of what a country can become when it does rational, sensible things to focus on a better future.

P.S. Finding places that work is a big part of what we do. Schiff Sovereign’s flagship research service, Plan B Confidential, covers second residencies and citizenships, foreign banking, and legal tax strategies, with boots-on-the-ground reports from all over the world.

Click here to learn more.

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$2,307,765,598,614.61.

That’s how much the national debt grew by in fiscal year 2026, which just ended last week on September 30.

$2.3 trillion in a single year is clearly and obviously runaway debt growth; think about it— the entire national debt didn’t reach $2.3 trillion until 1987.

By then the country was 211 years old, and it had been through a revolution, a civil war, two world wars, and the Great Depression. Now Congress adds that much in a single year.

Rising debt has many consequences, including inflation: when the government spends crazy amounts of money that it doesn’t have, that means more dollars chasing the same amount of goods and services. Prices go up.

In short, this mountain of debt is one of the big reasons for today’s sky-high cost of living.

What’s really bizarre is that Inflation affects EVERYONE. Yet hardly anyone understands that the root cause of the inflation is government spending.

It might be even crazier how little attention this story receives. The media chimes in whenever the debt hits a milestone; when the national debt crossed $40 trillion in August, there were a bunch of stories from the New York Times to CNN.

But that lasted for about a day. Then they went right back to their usual themes about racism, sexism, etc.

It seems like every other issue is more important than the debt. Just watch any random episode of The View and you’ll see a window into the topics monopolizing Americans’ attention instead. People are whipped into a frenzy over gender-affirming care for prison inmates, the Lincoln Memorial’s reflecting pool, and a pilot who stabbed his captain on a flydubai flight.

Attention is a scarce resource. So Congress does nothing about excessive spending because voters aren’t paying attention to the debt.

The bond market, on the other hand, is absolutely paying attention.

The investors who lend money to the US government watch this complete lack of responsibility year after year. And they know there are obvious ways to cut the deficit.

The Government Accountability Office, Congress’s own auditor, estimates that between $233 billion and $521 billion is lost to fraud every year. Yet Congress won’t lift a finger to stop it.

At some point, lenders don’t feel like loaning more money to a government that won’t even stop obvious fraud. And it’s a major reason why bond yields have skyrocketed very quickly.

The 10-year Treasury yield went from about 4.6% in early August to above 5.3% on October 1, its highest level since 2002.

Now, I have a sneaking suspicion that part of this surge in yields is deliberate… that China and a few of America’s ‘frenemies’ are intentionally pushing yields higher as a form of financial warfare, maybe to manipulate next month’s midterm elections, among other reasons.

But the reality is that this crisis is entirely of the US government’s own making, and stopping it is completely under their control. All they have to do is make some hard decisions, do the work, and cut spending.

They just won’t do it.

So there are a few ways this can end.

The hopeful one is voluntary— the 535 members of Congress and the Senate get together, realize serious cuts are needed, and do what’s necessary for the good of America.

Unfortunately I don’t think that’s going to happen anytime soon.

That leads to option two, where they are forced to cut spending under duress because the bond market makes them.

If yields continue to surge, sooner or later Congress will be forced to act. There is SOME interest rate… maybe it’s 8%, maybe 10%, that will be too high for even Congress to ignore.

It’s basic arithmetic: five years from now the national debt will be at least $50 trillion. If bond yields at the time are 8%, that means the average interest rate on the debt could easily be 5% or more. That’s $2.5 TRILLION each year just to pay interest, about twice as much as military spending.

At that point Congress would have no choice but an austerity budget: cuts to military spending, cuts to Social Security and Medicare, and a significant increase in taxes, all at once.

Then there’s option three, their preferred option: do nothing. Make no hard decisions. And wait for the Federal Reserve to bail them out by creating new money to finance the deficit… trillions of dollars a year.

This is the tactic that worked in Japan for so long. Japan’s central bank conjured new money into existence and used it to buy government bonds. Eventually the central bank owned about half of Japan’s national debt.

That let the government keep borrowing at interest rates near zero.

But sooner or later, that creates serious inflation. Japan’s inflation hit a 41-year high in 2023, and its lenders now demand the highest interest rates in three decades.

Americans have seen it too. During the pandemic the Fed created roughly $5 trillion out of thin air, and the result was 9% inflation.

So ultimately when the Fed steps in to ‘print’ money and bail out the Treasury Department, the result of that will be continued and rampant inflation.

We’ve argued for years that real assets make so much sense in this environment; governments and central banks can produce debt and fiat currency. But they cannot create a barrel of oil, a BTU of natural gas, or an ounce of gold.

That’s why real assets tend to hold their value when the currency is losing its own… and why it makes sense to own them before the inflation cycle moves into its next phase.

P.S. Real assets are the whole premise of Schiff Sovereign’s investment research newsletter, Strategic Assets: profitable, low-debt companies that produce the things a government can’t print, researched while they’re still cheap.

We locked in gains of more than 10x on a small silver producer, and a precious metals company we still follow is up nearly 400%.

You can learn more about Strategic Assets here.

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