It was a good week to be on a government payroll and a bad one to be paying for it. Here are a few of the most absurd stories from the last several days in case you missed them.

Too tired to go to work? The Australian government has your back!

Michele Duffy, 63, advises students at Victoria University in Melbourne. She asked to work from home two days a week to cut the “physical fatigue” of commuting. She has no medical condition precluding her from going to work in person; she just doesn’t feel like it.

Her employer, the university, disagreed. Her job is dealing with students face to face, and somebody has to be at the desk when they walk in.

Finally Ms. Duffy’s manager offered that she could work from home one day per week, on Fridays, the quietest day.

That wasn’t good enough for Duffy. So she took the university to the Fair Work Commission, Australia’s workplace tribunal. Since 2023, the tribunal can overrule employers who turn down such flexible-work requests.

The tribunal agreed the university was within its rights to refuse Duffy’s request… but then ordered them to comply regardless.

“I do not consider that it was necessary for Ms. Duffy to establish that there was a medical reason [for her to stay home],” the commissioner of the tribunal wrote.

The next logical step in this slippery slope is employees who can demand to be paid when they don’t feel like working at all!

One man, five government salaries, and nobody noticed for three years

Speaking of shamming at work, Kashim Chowdhury, 55, went on trial in London this week, accused of holding five full-time government jobs at once.

Over three years, prosecutors say, he worked his way through eight employers in a chain of overlapping government jobs, among them an east London council, the Home Office, the environment department, the UK Health Security Agency and the Department of Health.

All of these were work-from-home jobs; the man claimed he needed to work from home to look after his sick mother.

At the peak, in 2023, he was drawing five full-time salaries at the same time.

His managers rated his work “largely ineffective” and “exceptionally poor”. Yet he was never fired and the paychecks kept coming.

Apparently it’s perfectly acceptable to be exceptionally poor at your job if you work for the British government.

The only reason he finally got caught is because a government data-matching exercise called the National Fraud Initiative flagged his name… not because any of his managers did the obviously right thing and fired him.

Clearly if one man could hold five of those jobs at once, do all of them badly, and go three years without anyone noticing, then none of those jobs needed doing in the first place.

Update: California’s bullet train money went to a tiki bar

If Britain looks bad for paying the same guy to do multiple jobs, California really raises the bar of incompetence and largess.

I recently went through where the first $15 billion of money for California’s non-existent bullet train went. What I couldn’t work out was why nobody had audited any of it. The inspector general, whose job that is, said his office was half-staffed. Now he has found the time to read the consultants’ expense claims.

On September 15 he reported that four consulting firms, the accounting firm KPMG among them, had billed about $600,000 in travel that state rules or their own contracts didn’t allow. That was more than half of everything he looked at. The claims included first-class flights and car rides to a night club until 2:30 in the morning, a cigar lounge in Washington, DC, a tiki bar and an escape room.

One legal consultant billed for about 30 trips between Denver and Sacramento in a year: $40,800 in travel costs, plus $86,500 in billable hours for the time he spent getting there. That is roughly $4,000 a trip before he did any legal work.

Voters approved this train in 2008 for $33 billion, with service by 2020. The current estimate is that it will cost up to $231 billion and be finished by 2040.

$26,450 per student, and 62% of them still can’t do math

And while we’re talking about California, the state released its annual test results on Thursday under the headline “New Statewide Data Shows Continued Progress for California Students.”

Progress??? Their own report shows only 49% of students met the state’s basic English standard, and just 38% met the math standard. Both are still below 2019. Among low-income students, 61% fell short in English and 73% in math.

Governor Gavin Newsom’s statement called the results “important evidence that our sustained investments are making a difference.”

Here are the investments, according to the Legislative Analyst’s Office, the legislature’s nonpartisan budget staff: about $143 billion on K-12 schools in the year these tests were taken, roughly $26,450 per student.

The state’s answer is to spend 7% more this year, about $28,250 per student.

It’s a great plan! When has spending more money ever failed to produce solid results in California?

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For a lot of Americans, the beachfront condo has become unattainable.

In Naples, Florida, the median beachfront condo on the market is listed at about $2 million. And that’s before factoring in condo fees and skyrocketing insurance costs.

Now compare that to an apartment we found during research for members of our flagship service, Plan B Confidential, in João Pessoa, a midsize beach city on Brazil’s northeast coast.

The apartment has four bedrooms, nearly 2,000 square feet, and three parking spaces. It’s in Cabo Branco, the prime beach address in town, a hundred meters from the water… and the building has a pool, a sauna, and only two apartments per floor.

The asking price was about $230,000. That’s less than $120 a square foot, plus condo fees of less than $300 per month.

The beachfront condos in Naples cost about FIFTEEN times as much per square foot.

And the Brazilian apartment comes with something no Florida condo can offer: buying it qualifies you for a backup residency, i.e., the legal right to live in Brazil if you ever need to.

Brazil lets foreigners apply for residency by buying property. In most of the country the property has to be worth at least $200,000 or so.

But Brazil’s government wants investment in the poorer north and northeast, so the minimum there drops to about $140,000. João Pessoa is in the northeast, which means that four-bedroom qualifies with room to spare.

The residency permit runs for four years, and after that you can apply to make it permanent. To keep the residency, you hold onto the apartment and spend two weeks in Brazil every two years.

And while you hold it, you can rent it out, potentially paying for your own backup residency and vacation home abroad. Average rental yields in Brazil are around 6%, and in an upcoming report on Brazilian real estate, we break that down further by region.

Argentina and Mexico offer the same kind of value. Our Argentina report found a two-bedroom in Caballito, a central, residential neighborhood of Buenos Aires, listed at $169,000, or about $165 a square foot.

In Mexico, our report highlighted Playacar, a quiet neighborhood on a golf course next to the center of Playa del Carmen. The two-bedroom condo we found there is on the ground floor and comes fully furnished, with a big terrace beside the pool.

The asking price works out to about $220,000 at today’s exchange rate, or roughly $170 a square foot. That’s more than Buenos Aires, but cheap next to anything on an American beach.

(Listings come and go, so treat these as examples of what the money buys.)

While things are good, foreign real estate could simply be a vacation home you visit once a year that generates rental income while you’re away.

Two-bedrooms in Playacar rent long-term for about $1,100 to $1,400 a month. Over a year, that’s a gross yield of maybe 5 to 7% of what you paid, before expenses.

In Argentina, renting out an apartment makes sense again. For years the law forced landlords into three-year contracts and restricted how much they could raise the rent.

Then President Javier Milei scrapped those rules at the end of 2023, and within six months rental listings in Buenos Aires rose more than 170%.

Residency in Argentina and Mexico is even easier than in Brazil, because you don’t need the apartment at all.

In Mexico, you only need to prove that your income or savings meets a modest threshold; right now about $75,000.

Argentina gives residency to foreigners who can show steady passive income from outside the country— dividends, interest, rent, etc. Lawyers there tell clients to show about $2,000 a month for best chances of approval.

Bear in mind that neither government takes the money. You show it and you keep it… and you could hold either residency without owning a thing in the country.

But for the value, owning real estate there might be part of your Plan B anyway.

So in all three countries you end up with a legal right to live there and a cheap place to go that pays rent until you need it.

The logic is simple. If you live, work, invest, and have everything you hold dear in one jurisdiction (which happens to be the most indebted government in the history of the world), that’s a significant risk.

The US government is $40 trillion in debt, Congress won’t cut anything, and the difference gets covered by printing money, which drains the value of your savings. Moving some savings into stronger jurisdictions, establishing a second residency, and taking every legal step to cut your tax bill all mean that no single government’s incompetence has total claim over your life.

That’s what a Plan B is.

And the thing that finally gets you to go might be nothing more dramatic than a cheaper life. When our team went through João Pessoa earlier this year, a 25-minute Uber ride cost about $5, and a steak dinner at a decent restaurant ran about $25.

None of this is radical. It’s not about fleeing. It’s about having the option to go somewhere you actually enjoy— somewhere you might already vacation— and having the legal right to stay there indefinitely if you ever need to.

 

P.S. The Brazil, Argentina, and Mexico apartments in this article came out of country reports we published this year in Plan B Confidential. We regularly publish these types of reports that go neighborhood by neighborhood with listings, rents and agents, and they spell out what each residency requires, step by step.

Click here to learn more.

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In January 2021, two months before US inflation took off, a reporter asked Federal Reserve Chairman Jerome Powell how much inflation the Fed was willing to tolerate.

Powell acted like he’d never heard of inflation— like it was crazy to even ask. He dismissed the notion of inflation entirely and said it was “far away and unlikely.”

Then he doubled down. “Frankly,” the Fed Chairman bizarrely claimed, “we welcome slightly higher inflation.”

Yes, of course, the central economic problem of our time: too LITTLE inflation. What a joke.

A few months later prices started climbing faster than Americans had seen in years, and Powell found his new favorite word: “transitory.”

As inflation rose, he kept saying it was “transitory”, and it took inflation hitting 5% for Powell to finally admit that it was “probably a good time to retire that word.”

Prices finished 2021 up 7%, the most since 1982. The Fed still didn’t raise interest rates until March 2022, and by just a quarter of a point. Even with 7% inflation, the Fed wasn’t taking it seriously.

But then they suddenly panicked. Their attitude on inflation went from “huh?” to five alarm fire in a matter of months, prompting the Fed to jack interest rates up from near zero to 4.75%. It was the fastest pace of rate hikes since the 1980s.

By early 2023, Jerome Powell had a lot of explaining to do. So when he sat in front of the Senate Banking Committee on March 7 that year, plenty of people were asking if his abrupt, panicked rate hikes were going cause problems in the banking sector.

No, said a clearly unworried Powell. “I think nothing about the data suggests to me that we have [raised rates] too much,” he said.

Literally three days later, Silicon Valley Bank, the 16th-largest bank in America, collapsed… specifically because of those rising interest rates.

Remember, when you deposit money at a bank, they don’t just keep your cash sitting in a vault. They either loan it out to someone, or invest it in bonds— especially US government bonds.

The thing about bonds is that they lose value when interest rates rise. So when Jerome Powell rapidly hiked interest rates, banks were sitting on big losses in their bond portfolios.

But it’s sort of like owning a stock that’s down: you haven’t actually LOST money unless you sell. In the meantime you’re just sitting on a paper loss, or what accountants call an “unrealized loss.”

Yet that’s what killed Silicon Valley Bank.

By the end of 2022, SVB was sitting on about $15 billion of unrealized losses— which made it technically insolvent.

Customers figured that out and panicked. They pulled more than $40 billion out in a single day (nearly a quarter of its deposits), and regulators shut the bank down the next day.

Two more banks went under shortly after… all because rising interest rates caused banks to suffer huge unrealized bond losses.

But rates are MUCH higher today, so banks’ unrealized losses are growing.

According to the FDIC, the federal agency that insures bank deposits, those losses added up to $327 billion as of June 30. The next quarterly report for Q3 (which ended September 30) hasn’t come out yet. But it will almost certainly be MUCH worse.

The yield on the 10-year Treasury hit 5.35% recently. That’s up from 4.4% back in June, when the last FDIC report came out.

To be clear, I’m not suggesting this is going to bring down the banking system. In fact, at the moment, it will NOT. Banks as a whole have enough equity to absorb those losses.

But a rapid increase in unrealized losses will likely drag down bank stocks and force executives to cut costs, and the interest banks pay you is always one of the first things to go.

Once these unrealized losses hit the banks’ Q3 and Q4 financial statements, I’m betting you’re probably going to see a cut in the interest rate your savings account as banks shore up more capital.

So it’s worth considering other options for your cash deposits.

For one, the federal government likely pays more than your bank does: a 90-day T-bill, which is a three-month loan to the US Treasury, pays about 4.1% right now. Even the 28-day T-bill pays almost 4%.

Then there’s the option of moving some money overseas.

I don’t mean a secret Swiss bank account from a spy movie. Foreign banks report their American customers to the IRS, and having a foreign account is not about hiding money.

The real reason to have a foreign bank account is far more practical: it puts a portion of your savings in another jurisdiction. It’s a useful asset protection measure… with the added benefits of better service and higher interest rates.

We research a number of foreign banks for members of our Plan B Confidential service. One sent its bankers to our Plan B conference in Panama City last month, where they opened accounts for attendees on the spot.

It’s a private, safe, well-capitalized bank. That means it has plenty of its own money to absorb losses, which is exactly what Silicon Valley Bank ran out of.

It also pays 4% interest on a savings account.

And you can open the account remotely. That’s very rare these days. US reporting rules have made Americans such a compliance headache that many foreign banks won’t take them at all, and the ones that do usually want you to show up in person.

You can learn more here about Plan B Confidential, which comes with a Rolodex of vetted service providers, from immigration attorneys to tax advisors to private bankers, including, of course, our contacts at this bank.

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In 1938 the airline business was brand new— only 35 years had passed since the Wright brothers’ first flight at Kitty Hawk.

Hardly anyone had even seen an airplane. A coast-to-coast round trip cost about $260, half the price of a new car, so passengers were mostly very wealthy.

The airlines were small, and during the Depression they were losing money. Congress was afraid they would undercut each other into bankruptcy, and the country would lose an industry it needed for its mail and its defense.

So lawmakers created the agency that became the Civil Aeronautics Board. For the next forty years, the Board set the airfare on every interstate route in America. They even decided which airlines were allowed to fly those routes.

The idea was well intended; they viewed airlines as an element of national security that needed protection.

But whatever good intentions the Board started with, by the 1970s it was just a soulless bureaucracy that stifled competition and said “no” to everything new.

An airline that wanted to CUT its prices needed the Board’s permission. So did anyone who wanted to start a new major airline.

Between 1950 and 1974, 79 new airlines applied to the Board. Zero were approved.

The consequences were obvious; remember, the Board only regulated interstate routes, so the public could see the difference.

For example, in 1965, a California airline called PSA flew Los Angeles to San Francisco for $11.43. Because the route was within the state, it was unregulated.

Meanwhile, the cheapest ticket from Boston to Washington— about the same distance, but across state lines and hence regulated by the Board— was $24.65.

In other words, federal regulation more than doubled the fare.

By the late 1970s Americans were hurting. The Arab oil embargo of 1973 had nearly quadrupled the price of oil, which stayed high. It was the decade of stagflation: prices had nearly doubled in ten years, inflation was running near 9% by the fall of 1978.

President Jimmy Carter was looking for anything he could do to bring prices down.

He understood that more competition means lower prices. “Of all our weapons against inflation,” he told the country in a televised speech on October 24, 1978, “competition is the most powerful.”

That same day he signed a law phasing the Board out, and by 1985 it no longer existed.

Sure enough, within six years the average airfare had fallen, even though inflation was still raging elsewhere in the economy.

And this was Jimmy Carter… hardly a free market champion.

Yet he kept doing it. In 1980 alone he deregulated banking, trucking, and the railroads, calling it “the capstone of my efforts… to get the federal government off the backs of private industry.”

Ronald Reagan beat him that November… and in his second week in office finished Carter’s phase-out of federal price controls on oil, and continued deregulation from there. Two presidents who agreed on practically nothing agreed on boosting competition.

Nothing on that scale has happened since. For forty years the pile of rules has kept growing, and you pay for it every day.

Start with the airlines, where the ban on competition outlived the Board. No foreign airline may carry passengers between two American cities. Europe opened its domestic routes to airlines from other EU countries in 1997. Comparable fares there are well below America’s.

Under the Jones Act, a 1920 law, anything shipped between two American ports must travel on an American-built ship owned and crewed by Americans. Fewer than 100 large oceangoing ships qualify.

No American yard has built a liquefied natural gas tanker since 1980, so no American-built ship can carry Texas gas to Boston. New England consequently buys its winter gas from overseas instead.

Ironically, after hurricanes pummeled Puerto Rico in 2022, the government suspended the Jones Act so a foreign tanker could bring diesel to the island; this suggests that politicians already know how cumbersome and expensive the Jones Act is.

Hospitals need permission to exist, too. In 35 states medical facilities can’t open or expand without state approval, and states with these laws have about 30% fewer hospitals per person.

The National Association of Home Builders found that regulation adds about $132,000 to the price of a new home. Hardly any of that has to do with safety or quality.

Want to build a power line, a pipeline, or a mine? Consulting firm McKinsey estimates $1.5 trillion of investment is stuck in federal permitting.

Want to cut hair? That takes nearly a year of state-mandated training. One in five American workers now needs government permission to do their job.

And right now the government is keeping cheaper cars out. Chinese companies build a decent mid-size SUV for around $20,000 that American automakers would have to compete with. So Chinese cars face a 100% tariff, and the Commerce Department, citing national security, banned cars with Chinese-linked software. Americans pay more as a result.

The pattern is hard to miss: wherever the government gets involved, prices go up.

It has happened every single time the government stepped in to make something more affordable— education, housing, child care, healthcare.

Competition and technology are the only forces that have EVER brought prices down for good, and almost every rule in that pile exists to stop one or the other.

America got rich on competition yet has spent forty years legislating it away.

A real overhaul of the rules would do for the whole economy what Carter’s law did for airfares. Clear them away and the country will build more, make more, start more businesses…

None of this is difficult. Jimmy Carter did it with a signature. But the politicians refuse, and waiting on them is not a plan.

And that’s exactly why it makes sense to have a Plan B.

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The two most recent inflation reports both showed the same thing: prices in the US are 3.4% higher than they were a year ago.

And the politicians could hardly contain themselves.

After the first report, the White House’s top economic adviser, Kevin Hassett, declared that inflation is “clearly decelerating.” After the second, Jason Smith, the chairman of the House Ways and Means Committee, announced that “more relief may be just around the corner.”

I’m not sure that anyone views price hikes at any level being good news. Normal people don’t want prices to rise more slowly; they want prices to stop rising, or better yet, to come back down.

But that’s never going to happen; even the Federal Reserve’s own goal is for prices to keep rising 2% a year.

Bear in mind that prices are ALREADY almost 30% higher than they were before the pandemic.

Now, there are solutions to this. In fact we often write about how real assets— gold, energy, productive technology, and the metals that build everything— are safe havens from inflation.

A government can print money by the trillion, but it can’t print an ounce of gold or a barrel of oil.

But there’s another way to beat inflation that most people never consider: go where your money goes farther.

America has become one of the most expensive countries in the world.

The typical American rental now lists for nearly $2,000 a month, and in larger metropolitan areas, rent is much higher. The median home price is now over $400,000 in the US, and with mortgage rates over 7%, not to mention a hefty down payment, affordability is difficult.

Housing costs may not be your biggest bill; it might be healthcare, child care, or several things at once. Priorities differ, but everyone knows what they spend their money on.

And whatever that is for you, there are places around the world where it costs a lot less.

In Cebu, a coastal city in the Philippines, a two-bedroom condo rents for $450 to $700 a month. A private doctor visit costs $10 to $25.

You could live the way you do now and keep the difference… or you could pay a little less than you do now and get a LOT more: a modern condo with a pool, a housekeeper, dinners out several times a week.

And you don’t have to pack up and move to give yourself that option. You don’t even have to buy property.

All you need is a legal residency, i.e. the right to live in another country whenever you choose.

It’s a smart idea to set one up now, while countries still make it easy. If you decide later that you do want to go, you already have it.

But the rules don’t stay easy. Residency programs change constantly; thresholds rise, rules tighten, and some get eliminated entirely.

Panama used to have all sorts of easy ways to get residency; there was even a visa for investing in reforestation.

The most accessible route has long been the Friendly Nations visa, which applies to citizens of countries with economic or diplomatic ties to Panama, including the US. In 2019, all it required was registering a company in Panama and depositing as little as $5,000 in a local bank account.

Since 2021 it has required a $200,000 investment in Panamanian real estate, the same amount in a Panamanian bank, or a local employment contract.

I still think Panama is one of the best options out there.

Home prices have definitely gone up since we held an event there in 2023; we heard as much at our conference in Panama City last month. But they’re still quite modest compared to the US.

Retirees who become residents also get a permanent discount card for the rest of their lives— meaningful cuts on everything from flights and restaurants to medical care and entertainment.

Mexico isn’t the bargain it once was. The peso has strengthened, and a dollar buys more than 10% fewer pesos than it did at the start of last year.

But Mexico is still right next door, residency is easy to get, and the cost of living is low by any developed-world standard.

In Europe, Greece is the most accessible entry point for anyone wanting residency, and the cost of living there is well below American levels.

And in the Philippines, where that Cebu condo is, roughly $3,000 a month buys a life that looks upper-class back home: a full-time housekeeper who cooks, regular dinners out, private doctors, and a secure building with a gym and a pool.

A residency in one of those places, set up before you need it, is a great cost of living focused Plan B. And it works like insurance.

You don’t call an insurance company while the roof is on fire; you shop around for quotes, figure out the best mix of price and value, and make the decision in a calm and peaceful setting.

The low costs and the easy rules aren’t likely to stay this way, so it’s better to think about doing this now.

Inflation isn’t going away, no matter how many victory laps the politicians take. But a residency in a country where your money goes farther gives you the right to go live there whenever you choose.

It’s a unique way to beat inflation.

P.S. The right residency depends on your age, your income, and how much time you actually want to spend there.

Our flagship service, Plan B Confidential, covers the programs I mentioned here and many others— what each one costs, how to qualify, and what it takes to keep it— along with on-the-ground reports on living costs, healthcare, and real estate in places like Mexico and the Philippines. Members also get our Rolodex of trusted service providers.

Click here to learn more about Plan B Confidential.

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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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It was a big week for creative problem-solving. Britain fixed a failed government energy company by starting a second, Canada is balancing its budget by renaming the spending, and Boston paid $335,000 to call itself racist and failed. Here are a few of the most absurd stories in case you missed them.

Britain fixes its failed government energy company with a second one

Before the 2024 election, Britain’s Labour Party promised that a new state-owned company called Great British Energy would help families save up to £300 a year on their energy bills.

So far electric bills have increased instead.

Not to worry. On Tuesday, Prime Minister Andy Burnham announced his fix: create a SECOND state-owned energy company to basically do the same job as the first.

After all, when one state-owned enterprise fails miserably, the only logical solution is to create a second state-owned enterprise and expect a different result.

Canada’s plan to balance the budget: change the definition of ‘spending’

We’ve long said that when the deficit and inflation numbers become bad enough, politicians will simply reinvent the way they calculate these figures.

Canada has now done just that.

Prime Minister Mark Carney has promised to balance Canada’s gruesome budget deficit. But his plan is to change the definition of the word ‘spending’.

Carney’s big idea is to only count day-to-day operating costs as ‘spending’. And anything else that he deems to be an ‘investment’ won’t count.

We all understand the difference. In your own household, the electric bill is considered an expense. Purchasing shares of Newmont Mining is considered an investment.

Now, my wife has tried to stretch this definition a time or two by insisting that a beach vacation or pretty necklace is actually an investment.

Carney is applying this same logic to an entire national economy. It’s completely subjective and inconsistent, plus it lacks any transparency.

Giving money away on woke priorities? Not an expense! It’s an investment in community! Paying Canadians to turn in their completely legal firearms? Not an expense! It’s an investment in safety! (more on this below)

Carney has now reinvented the math, making Canada look just as ridiculous as WeWork when then CEO Adam Neumanm spoke of his company’s “Community-Adjusted Earnings”.

Canada’s last line of defense is the gun owners it’s disarming

Mark Carney isn’t done with his insanity. He recently told the New York Times that it’s his job to look at the “extreme tail risk” that Donald Trump orders military action against Canada.

According to Carney himself, in the absurd likelihood of a US invasion, US forces would overrun Canada’s defenses within a week, possibly within two days. After that, Carney will be counting on “small groups of irregular military or armed civilians” to fight on with ambushes and sabotage, like the Afghan mujahedeen against the Soviets.

The trouble is that Canada has banned more than 2,500 makes and models of “assault-style” firearms since 2020, and the government is paying gun owners to hand them in.

So apparently Canadians are expected to fight house to house with hockey sticks… until the government comes for those too.

Boston paid $335,000 to call itself racist… and failed

If any place in America can say it made the right call on slavery early in its history, it’s Massachusetts. The state’s chief justice declared slavery finished in 1783; he cited the state constitution that “all men are born free and equal.”

Yet the city government in Boston has still chosen to put itself on trial more than two centuries later.

In 2022 local politicians set up a task force to study reparations for slavery, with one member positively giddy that the research would give it the “evidentiary pool from which to argue for [reparations].”

So the city spent $335,000 of taxpayer money to hire a Tufts University team led by historian Kerri Greenidge.

She came with all the right awards. Her 2022 book The Grimkes, about a slaveholding family that produced two famous abolitionist sisters, had been a finalist for the National Book Critics Circle Award and won a prize from the American Historical Association.

Apparently if you write about slavery, no one bothers to check whether it’s accurate. They just give you awards.

But it turns out Greenidge’s book was “riddled with factual errors.” It cites letters held at the University of Michigan which don’t actually exist. It references other historians’ research that doesn’t exist. In short, it’s about as accurate as a Hollywood adaptation.

Ms. Greenidge naturally clapped back and claimed that pointing out her errors is an “attack on Black women [in] academics…”

So, Boston was willing to spend taxpayer money to call its own taxpayers racists, and the expert they hired turned out to be another race grifter with no credibility.

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Michael Walters had just started his first full-time job out of university when he was diagnosed with non-Hodgkin lymphoma, a blood cancer.

His doctors in Auckland, New Zealand, tried several rounds of chemotherapy, radiation and immunotherapy. None of it worked.

Then they told him about CAR-T, a treatment that takes a patient’s own immune cells out, re-engineers them in a lab to attack the cancer, and puts them back in.

A hospital in Melbourne, Australia, quoted him as much as $600,000, far more than his family could pay.

So in late June, Walters flew to Shanghai, where the same therapy costs a fraction as much.

It’s not that the Chinese invented it; CAR-T is an American technology.

But China is running the exact same playbook that Japan used on American technology after World War II— copy the American invention, perfect the manufacturing, and flood the market with cheap, state-subsidized products.

CAR-T’s big breakthrough came in 2012 at the University of Pennsylvania, where a 6-year-old became the first child to beat leukemia with it.

China took it from there. Its regulators let hospitals launch their own trials with far less central oversight than America requires, and by 2017 China was running more CAR-T trials than the US.

“China has basically done to CAR-T cell therapy the same thing that it’s done to other industries, which is, they’ve industrialized it,” said Dr. Sairah Ahmed, who runs a CAR-T program at MD Anderson Cancer Center in Houston.

According to Ahmed, CAR-T costs $150,000 to $230,000 in China, versus $550,000 to $850,000 in America. She has even advised some of her overseas patients to go to China for it.

Michael Walters did his CAR-T in China. And on August 18, he learned his lymphoma was in complete remission.

In 2021 China opened CAR-T to foreign patients, and now they’re flying in from all over. Walters’ hospital alone has treated patients from 12 countries.

To be clear, we’re not lamenting this at all. If China can take American research and sell the treatment for a fraction of the price, that’s a win for humanity.

But it also highlights how China has been working on its global image as a tourism hotspot.

Citizens of dozens of countries can now visit China for up to 30 days without a visa. Nearly 23 million foreigners entered China in the first half of this year, up 20% from a year earlier.

With their medical advances, they’re trying to push into medical tourism as well. It’s the same idea: open the doors and bring in foreign money.

It’s strange when you think about it— advanced medical tourism in one of the world’s most authoritarian regimes. No one had that on their bingo card 20 years ago.

Because that’s the crazy thing about China— while foreign tourists are arriving in record numbers, any Chinese national with the means to leave is moving out of the country.

Moreover, wealthy Chinese are flooding overseas “citizenship by investment” programs in places like Antigua and St. Lucia in order to quickly obtain a second passport.

They’re not stupid. They know their wealth and prosperity exists in China only as long as the government says it does. They know their freedom exists only as long as the government says it does… which is really to say there’s no freedom or prosperity at all.

They know they’re only one misstep away from being disappeared like Jack Ma, the Alibaba founder who criticized state regulators.

Or tennis star Peng Shuai, who disappeared after accusing a senior CCP official of sexual assault.

Or real estate mogul Ren Zhiqiang, who disappeared after speaking out against China’s COVID policies.

Or countless others.

Wealthy Chinese can also see the crumbling fiscal facade. Behind the modern skylines and futuristic robotics, they know that China in deep financial trouble, especially at the regional and provincial levels.

By Bloomberg’s count, 21 of China’s 31 provincial governments have budget deficits exceeding 100% of tax revenue. It would be like the US government having a $6 trillion deficit every single  year.

Last year China’s general government deficit (national, regional, local) was roughly 10% of GDP… which is just absurd.

And local tax officials are now turning their sights on China’s rich (and eventually middle class) to make ends meet.

According to Bloomberg, Chinese tax authorities have formed special squads to hunt down the wealthy; sometimes an entire team is assigned to target a single individual.

Often these tax bills are not even based on the law, or any sensible calculation of taxable income. Instead it’s just demands and extortion: give us money, otherwise we’ll confiscate your assets and send you to a reeducation camp.

All of this is prompting wealthy Chinese to hit the exits, or at least prepare their Plan B’s.

China certainly does have some shiny bright spots. But they’re vastly outweighed by an authoritarian government of central planners.

America’s government is also weighed down by debt and bureaucracy, and some American politicians are already proposing similar ideas: wealth taxes, plus exit taxes on anyone who gives up their citizenship to escape them.

The difference is that America’s problems can still be fixed with some rational thinking. China needs a time machine. Nobody can go back and reverse the one-child policy or undo decades of communism or vote the Communist Party out of office.

But hoping the politicians come to their senses is not a plan, and that’s exactly why it makes sense to have a Plan B.

P.S. The Chinese families rushing for foreign passports now are doing it in a hurry, with a tax bill already on the table.

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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Eight years ago in the summer of 2018, an automated monitoring system at the US government’s Social Security Agency flagged a questionable transaction and immediately forwarded it to a human worker at the agency to investigate.

It took more than a year for a Social Security employee to look into it. And it was painfully obvious— Social Security was paying too much ‘supplemental security income’ to the recipient.

In fact, the guy receiving the benefits check every month was legally obligated to report this overpayment… but he did not.

The Social Security employee then contacted the recipient to question him. No response. The employee tried a second time. No response.

Then, in the words of Social Security’s inspector general, “the employee took no further action.”

The government worker just shrugged and closed the case. There was no attempt to recoup the overpaid money. The recipient continued to be overpaid. No follow-up.

Today, eight years after the waste was discovered, literally nothing has happened to correct the mistake.

And that’s just one case.

It comes from a report that the inspector general just released, in which he audited 100 random transactions that had been flagged by the same automated monitoring system.

Every single one of the 100 flagged transactions were all similar instances of waste or outright fraud.

Yet out of the 100 flagged transactions, Social Security employees simply ignored 63 of them. 17 were marked ‘complete’ when they were not complete. Only 20 out of the 100 were actually handled properly.

That means that Social Security failed to fix fraudulent and/or wasteful overpayments 80% of the time.

Bear in mind that, in total, the automated monitoring system has flagged over 400,000 cases of potential waste and fraud. At a similar 80% failure rate, that’s potentially billions of dollars that taxpayers are flushing down the drain.

And that’s only for Supplemental Security Income; it doesn’t count fraud and waste from the actual Social Security retirement checks. Or Medicare. Or Medicaid. Or anything else for that matter.

Everyone knows about the rampant fraud at Minnesota’s infamous ‘Learning Centers’. And fraud like that requires courageous people to put their safety at risk to document the fraud.

In this case, Social Security’s own internal system flags nearly EVERY SINGLE CASE of fraud and waste. And yet the agency still did nothing 80% of the time.

So taxpayers are essentially footing the bill TWICE— once for the overpayment, and then more money to pay lazy workers who do nothing about it.

Social Security is hardly alone. Earlier this year, Vice President JD Vance said his anti-fraud task force had found 186,000 dead people collecting food stamps.

In January, the FCC’s inspector general found phone companies billing Lifeline, the federal program that pays for low-income phone service, for 94,000 dead customers in California.

And by the government’s own accounting, improper payments— money sent to the wrong person, in the wrong amount, or for the wrong reason— come to about $3 trillion since 2003.

None of this is secret. Yet nothing ever changes.

When the inspector general asked why Social Security employees didn’t work the alerts, he said the agency bureaucrats “could not provide an explanation.”

I’d say the explanation is pretty obvious. They’re either in on it, or they don’t care. Either way it should be grounds for termination.

Unfortunately it’s impossible to fire anyone who works for the federal government.

Remember when the executive branch tried mass layoffs across more than a dozen agencies last year? 20 state attorneys general sued. Judges issued injunctions. And the job cuts were tied up in court for months, with taxpayers footing the legal bills.

A private company full of workers being paid to do nothing would quickly go bankrupt. The federal government just piles on more debt to cover it, and then pretends the exploding debt is consequence-free.

Well, the bond market disagrees.

The 10-year Treasury yield has skyrocketed past 5.25%, its highest level in decades. And one of the reasons is that bond investors are tired of lending to a government that operates like this.

We’re supposed to believe that ‘democracy’ will deliver us from this, that voters will hold politicians accountable and elect a Congress that will cut the deficit. I’m not holding my breath.

Given the astonishing rise in yields, it looks like the bond market is going to hold Congress accountable. As yields continue to rise, borrowing will eventually become so expensive that Congress will be forced to cut spending.

Maybe that happens when government bond yields hit 6%. Maybe 8%. Maybe 10%. Nobody knows for sure. But there is an interest rate that will be so high, Congress will be forced to take action and cut spending.

When those cuts do finally come, they’ll be far more painful than what it would take to fix this now.

Seriously, cutting the deficit today should be simple: fire the people who ignore the alerts. Stop the fraud the government already knows about. It should be pretty easy.

But at the moment, no one seems interested in any meaningful cuts… which means the bond market will keep pushing yields up.

In finance, whenever bond investors get tired of loaning money to governments and push yields higher, they’re known as ‘vigilantes’. In this case, vigilante justice for Congress can’t come fast enough.

P.S. When the bond market finally forces the issue, spending cuts will only be part of the answer.

A government that can’t borrow cheaply prints the difference, and that inflation comes straight out of your paycheck and your retirement account.

That’s what a Plan B is for. Our flagship service, Plan B Confidential, is built for exactly this.

It covers everything from real assets that hold their value when the dollar doesn’t, to foreign residency and second citizenships, offshore banking, and legal ways to cut your tax bill, all backed by boots-on-the-ground research from countries around the world. You can learn more about it here.

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Earlier this year, Paramount agreed to buy Warner Bros. for $110 billion.

As with any merger that size, the US Justice Department reviewed it to make sure it wouldn’t hurt competition or consumers. Federal regulators approved the deal a few months later, and that should have been the final hurdle.

But not in the State of California.

California’s Attorney General Rob Bonta decided to insert himself into the transaction, arguing that the merger would mean higher prices and fewer movies in theaters. Bonta is a lawyer and career politician… but apparently he has some special knowledge about the film industry that no one else possesses.

And so, by July of this year, Bonta had decided that out of all the other problems on his desk— massive violent crime, fentanyl deaths, uncontrolled fraud— the one issue that needed his attention the most was a movie studio merger.

Paramount asked Bonta what it would take to make him happy. The company offered a binding commitment to release 30 films per year in theaters, and to keep both of its Los Angeles studio lots open. Bonta wouldn’t even engage in negotiations.

Instead he sued Paramount to block the deal. “There is no debate here,” he said.

Asked about reports that Paramount might leave California over the fight, he called it “a desperate last-ditch effort to try to blackmail my office.”

A week later, a judge froze the merger.

But the real risk his lawsuit created was for Californians. Paramount is the last major studio still headquartered in Hollywood, and Bonta was giving it every reason to take its headquarters, its jobs, and its taxes to another state.

And that’s what Paramount started to do: move.

State officials in Tennessee wrote to Paramount CEO David Ellison and invited the company to move there. Paramount’s board signed off on a relocation plan, with the headquarters going first.

They event started shopping for 400,000 square feet of office space in Nashville.

It was literally a Plan B for Paramount. And they worked swiftly to build it.

Ellison then set October 1 as the deadline for a settlement; either California would negotiate, or Ellison would leave the state.

So at that point they had both their Plan B (a relocation to Tennessee) AND a clear red line under which circumstances they would execute it (no settlement by October 1).

This is really a great example for how to think about a Plan B: Paramount decided in advance that they would leave California if the state rejected their Warner Bros. acquisition. The company knew exactly where it would go, and identified the specific instance that would set the whole plan in motion.

Attorney General Bonta called it “blackmail”. But he’s an idiot who has never run a private company in his life. Honestly, he’s such a moron that he thinks he can freeze a perfectly legal and valid deal, sue a company, insult the executives… and still expect them to remain in the state.

Eventually Governor Gavin Newsom had to step in… a moron in his own right, but smart enough to realize that Paramount was actually going to leave. Newsom also realized that Bonta would almost certainly lose the lawsuit and come away with nothing.

So the governor pushed his own attorney general aside and worked behind the scenes to get a deal done.

Last week, with Paramount’s deadline just days away, California finally settled. Paramount now expects to close the merger within weeks.

And what did Bonta get for all of the trouble he caused?

Paramount agreed to spend an extra $1.5 billion on US production over five years. That’s $300 million a year, a big fat 1% on top of the roughly $30 billion a year it already spends on content.

It also agreed to keep both studio lots open and release the same 30 films a year it offered before he sued. So essentially no real additional benefit.

Bonta tied up months of time in federal court, all on state taxpayers’ dime, haggling over how many movies Hollywood should release each year. They ended up with essentially the deal Paramount offered before the lawsuit, plus 1% additional spending on movies.

It’s genius.

But Paramount was in the driver’s seat because the CEO had a Plan B. He could see the writing on the wall and recognized that he needed another option if things continued to get worse  in California.

It’s a great way to think about risks and having a Plan B, and the thinking doesn’t change with size: decide in advance where your red lines are, and put the pieces in place while things are calm.

This includes options like having a second residency already lined up or legally approved (just like Paramount’s proposed move to Tennessee). That second residency might be out of state, or even out of the country.

Other options include having some assets outside of your home jurisdiction— like a foreign bank account, or even precious metals stored abroad.

This way, if your red lines get crossed, you’ll already know exactly what to do, and be able to execute with ease.

P.S. Understanding and executing on your options is exactly what our Plan B Confidential service is for. Every month it covers second residencies and citizenships, foreign banking, and legal tax strategies, with boots-on-the-ground reports from more than 120 countries and a Rolodex of vetted service providers for when you decide to act.

Click here to learn more.

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Every September, world leaders take turns at the podium of the United Nations General Assembly in New York and give pointless speeches.

If they really cared about CO2 emissions, they’d skip the event entirely, because the only thing coming out of their mouths is lies and hot air.

But a few days ago when it was Argentina’s turn, President Javier Milei spoke honestly and boldly.

He told the auditorium the UN “has become a useless organization whose only purpose is to sustain a caste of fatally arrogant parasites masquerading as well-intentioned bureaucrats.”

He then piled on a heap of charges to prove his point.

Milei said the UN “allowed chaos, violence and international terrorism to flourish,” and that it had “sheltered bloodthirsty dictatorships and regimes that stone women in the streets.”

Of course, this type of hypocrisy is nothing new for the UN.

We’re talking about a body that has appointed China, Cuba, and Venezuela to their Human Rights Council.

Then Milei turned to the pandemic. He said UN agencies pushed lockdowns that were “a global experiment in social control disguised as science,” which he said is why Argentina quit the World Health Organization.

“There’s no shortage of words or resolutions. What is lacking is consequences.”

He’s right, and the proof is the people in that very room who run  the place.

The United Nations, along with other ‘supranational’ bodies like the EU and NATO, has become a sort of retirement home for failed politicians who destroyed their own countries with terrible ideas and worse execution.

In June 2024, after running his country into the ground, Belgian prime minister Alexander De Croo came out of a national election with barely 5% of the vote.

He resigned that night and left behind a deficit so large that the EU opened disciplinary proceedings against Belgium.

Yet while Belgian voters threw him out for being incompetent, the United Nations made de Croo the head of its its development agency (UNDP) with a $5 billion annual budget to advise poor countries on how to manage their finances.

It’s the same job the UN gave to former New Zealand prime minister Helen Clark in 2009, a few months after voters threw her out.

Then theres António Guterres, former Portuguese prime minister who was thrown out of elected office by the voters. The UN then elevated Guterres to the unelected office of running its refugee agency. And he later became Secretary General in 2017.

Speaking of former Portuguese politicians, António Costa resigned as prime minister of Portugal in November 2023, hours after police arrested his chief of staff in a corruption investigation.

Police found more than €75,000 in cash inside the prime minister’s official residence, stuffed in envelopes hidden between books and in champagne crates.

Prosecutors put Costa himself under investigation, after which EU leaders decided he was fit to be President of the European Council, the group of the EU’s 27 national leaders that sets the bloc’s direction.

Former British prime minister Gordon Brown was thrown out of office by his voters in 2010. The UN subsequently invented a brand-new title for him: “Special Envoy for Global Education.”

And another ex-prime minister who was ousted from office, the ridiculously unpopular and failed Keir Starmer, is reportedly waiting in the wings for his fancy (and unelected) EU/UN post. Rumor has it that he wants to be the next secretary general of NATO… or even of the UN.

This is the pattern that Argentina’s president has correctly identified: incompetent politicians who couldn’t manage their own countries are often put in charge of global organizations.

Unsurprisingly, the UN’s track record looks exactly like you’d expect.

Last year the world had more armed conflicts than in any year since it was founded in 1945; ironically, the UN was founded “to save succeeding generations from the scourge of war.” Great work!

The UN passed nine rounds of sanctions to stop North Korea’s nuclear program. North Korea carried out six nuclear tests anyway.

UN peacekeepers have spent 20 years trying to keep Hezbollah’s weapons out of southern Lebanon. Hezbollah armed itself anyway.

In 2015, it promised to end extreme poverty by 2030. Poverty is still everywhere.

The UN is also a gigantic financial failure. All of these ex-politicians rake in pretty serious salaries, in addition to massive benefits ranging from security details to tax-free earnings. It literally pays to be a failed politician.

Partly as a result of such lavish spending, the UN is now in serious financial straits…

In January, the UN’s secretary-general even warned of the organization’s “imminent financial collapse” and “race to bankruptcy”.

The same guys who want to tell developing nations how to manage their finances can’t manage to stay afloat themselves.

The biggest irony is that these are the same politicians that their respective democratic nations already threw out. Yet now they’ve all been elevated to jobs where they can’t be fired, don’t answer to voters, and were never elected by anyone.

Milei was right: what is lacking is consequences.

The only real consequence the UN may ever face is bankruptcy… and that can’t come fast enough.

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Chinese President Xi Jinping landed at Joint Base Andrews Wednesday for a three-day state visit, and Donald Trump was waiting for him at the foot of the red carpet.

That’s highly unusual. US presidents typically receive foreign leaders at the White House.

In fact, with the exception of popes, no president had met a foreign leader on the tarmac since 1962, when JFK went out to greet British Prime Minister Harold Macmillan.

Judging by the media’s reaction, however, you would think Trump bent the knee and swore fealty to his communist overlords.

There was a short clip of US troops on their hands and knees, smoothing the carpet before Xi stepped out of the plane. It went viral. Chinese were gleeful, and Americans were disgusted, at what appeared to be a humiliation ritual… even though smoothing out the red carpet is pretty standard.

The over-analysis continued. When B-1 bombers passed overhead— Trump flinched and Xi didn’t move a muscle— the Twitterverse exploded with commentary about what that means for American primacy.

Then there were hot takes on Xi’s every smile, every Trump fidget. Commentators claimed that Xi speaking Mandarin through his translator was ‘asserting language dominance’ over Trump.

It’s all ridiculous. I honestly don’t remember an event where so much irrelevant minutia was over-analyzed for hidden meaning.

The larger point is that the US is clearly treating China like an equal— something that America does not do for anyone else. When the President of France, or Ukraine, or anywhere else comes to town, the President receives them at the White House.

China, on the other hand, is now a peer… not a superior. But definitely not a junior partner.

The biggest takeaway, though, seems to be lost on everyone… but hit me right between the eyes.

At a formal White House ceremony the next morning, Xi declared that “the Thucydides Trap can be overcome. . .”

The Thucydides Trap, of course refers to the famous ancient Greek historian who wrote of the Peloponnesian Wars between Athens and Sparta. Athens was a declining power and Sparta was the rising power; and the theory asserts that rising and declining powers often go to war against one another.

World War I was an obvious example of the Thucydides Trap. Britain was in decline. Germany was rising fast. War became inevitable.

When Xi made this assertion, most of the media coverage treated his remarks as a wonderful message of peace and reassurance.

BUT NO ONE BOTHERED TO QUESTION HIS PREMISE, i.e. that America is permanently in decline and will be surpassed by China.

Xi obviously likes this analogy because he views China as the rising power… eventually the world’s superpower… and the US as the declining power.

What he essentially said was: America is finished, we’re going to pass you… and while that historically has led to war, I’m going to be super magnanimous and claim that I prefer peace.

Talk about being presumptuous. This guy comes to America’s house and tells everyone that he’s going to dominate?!?

Obviously he believes this— he’s the one who has been steering China for 14 years.

And yes, America is in decline. Between the $40 trillion in debt, Social Security running dry in a few years, foreign central banks dumping dollars for gold, and a Congress too dysfunctional to fix any of it, that much is indisputable.

But America is not in PERMANENT decline.

The problems that the US faces can be fixed with some rational thinking and a few hundred signatures: cutting fraud and waste. Immigration reform. Social Security reform. Regulatory reform to boost productivity growth.

None of this is difficult. But Congress can’t seem to muster the will to make it happen, and voters keep sending the same corrupt idiots to office.

But if you think America has a debt problem, China has even worse debt challenges. Plus their entire economy is run by communist bureaucrats and businesses who ‘innovate’ by stealing other people’s intellectual property.

And that doesn’t even scratch the surface of their biggest challenges.

America needs some sensible politicians to fix its problems. China needs a time machine.

They’d have to go back in time to reverse their one-child policy… or undo decades of communism that created a business culture where screwing up means getting shipped off to a ‘reeducation’ facility.

Say the wrong thing and you get disappeared like Jack Ma, who was the richest man in China until he criticized the regulators in 2020, then vanished for three months, and now gets rolled out for the occasional proof of life.

There’s a reason why wealthy Chinese people leave the country. People who have the means hit the exits.

And, seriously, eight decades later, these guys are still whining about Taiwanese independence. Get over it already!

Undoing all of that requires a complete cultural reset.

So when he boasts about becoming the next dominant superpower, Xi is way over his skis.

America has a regulatory problem. China is literally communist. Nothing happens there without the Party’s permission, and it has to steal every idea it can’t come up with itself.

Yes, China has had a good run for the past ~20 years. America’s has been miserable. But past performance is no indication of future returns.

If anything, Xi’s remarks should shame Congress into finally lifting a finger to do the right thing and pass sensible reform.

And you’d think more of the pathetic press would have the dignity to call that out as well.

Unfortunately, Congress and the media tend to attract the worst people on earth, so don’t hold your breath waiting for either one to find a spine.

Time will tell if America can reverse course… and if China can live up to Xi’s fantasy. But that’s why it makes sense to have a Plan B.

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Late last week, Congress and the White House established a new law authorizing the President to impose tariffs of up to 100% on any country that ranks among the five biggest buyers of Russian oil or gas.

This law had broad, bi-partisan support and passed by a whopping 86-11 margin in the otherwise deadlocked Senate, and 262-159 in the House of Representatives.

Their big idea is to penalize anyone who supports Russia economically by buying their oil & gas, and that specifically singles out China and India— the biggest buyers of Russian crude.

In fairness, India and China aren’t buying Russian oil to help prop up Putin or assist him in winning the war. They don’t really care. They just like the fact that Russian oil is REALLY cheap right now. It’s a good deal, and they like scoring good deals for their country.

At the moment there is no international law preventing anyone from buying Russian oil & gas; this restriction is something the US wants to impose in order to force Russia into a peace over Ukraine.

And it may very well be a good idea in terms of bringing an end to the war in Ukraine. We make no judgment on the moral implications.

Unfortunately the world is not so black and white, especially when you have a $40 trillion national debt. When your fiscal situation is in such dire straits, you have to weight the pro’s and con’s.

And the con’s are numerous: given its gargantuan national debt and the need to borrow an ADDITIONAL $2 trillion per year just to finance the budget deficit and stay afloat, the US government has to rely on foreign creditors more than ever.

In short, America desperately needs cash-rich foreigners to continue buying US government bonds.

It’s a bit difficult to shove this rule down their throats and tell foreign countries, “We will force you to stop buying cheap Russian oil,” yet simultaneously ask those same countries to loan you hundreds of billions of dollars.

The strangest part is that this is nothing new.

Back in February 2022, days after Russia invaded Ukraine, the US and its allies froze about $300 billion of the Russian central bank’s reserves.

Again, whether it was justified is beyond the point. US government bonds had long been considered the safest asset on earth. But every central banker on the planet learned that day that US Treasury bonds were only safe as long as their country stayed on America’s good side.

That’s why foreign governments and central banks have been quietly diversifying away from US government bonds and buying gold… because no other government can freeze the physical gold in their own vaults.

In fact, for the first time in decades, the world’s central banks now hold more gold than they hold US Treasury securities.

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

Japan, the biggest foreign lender of all, has seen its Treasury holdings fall every month since April.

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

That’s a fairly slow burn over 15 years; it’s not panic selling. But it’s a clear and obvious trend.

These same foreign nations have also been openly discussing how to rely less on the US financial system.

The BRICS countries, led by China, India, Russia, and Brazil, met in Delhi earlier this month and agreed to settle more of their trade in their own currencies.

This is a big deal; if India starts accepting Chinese yuan, or Russia accepts Indian rupee, these nations by definition won’t need to hold as many US dollars. And a decline in demand for US dollars translates into less demand to hold dollar-denominated assets like US government bonds.

Xi Jinping arrived at the White House yesterday, and he came to negotiate on trade as the leader of one of America’s three largest creditors.

China has serious leverage; even though they have been selling their Treasury bonds slowly over time, they still own a ton of them. And if Xi wanted to, he could dump them in a heartbeat and cause a complete collapse of the bond market. Interest rates would skyrocket.

To be clear, such a move would wound China as well. But America would be hurt the most. It’s a nuclear option he could exercise, and it gives him real negotiating power.

America seems to think it’s still the 1990s when everyone was begging to buy US government bonds… which is exactly what gave them the leverage to be able to weaponize the US dollar.

That is simply no longer the world we live in. US finances are incredibly weak. And every time America tries to flex its US dollar power over the financial system, more foreign lenders walk away.

It’s not clear to me if anyone in Washington even understands this reality. No one seems to be questioning, “Will this action increase or decrease foreigners’ demand to buy US dollars and US government bonds?”

And I doubt anyone is really doing any real analysis to weight the benefits of, say, peace in Ukraine, against the potential costs of losing more foreign lenders.

By the way, if you’re thinking, “Big deal, America can finance its own deficits,” it cannot.

The entirety of ALL net private savings in the US, i.e. the total amount that corporations and households manage to save, is only about $2.2 trillion each year. The budget deficit for FY2026 is projected to be about $2.1 trillion.

So basically the US economy would need to dump 95% of its total net savings into US government bonds, leaving just $100 billion to finance EVERYTHING ELSE in the economy, from data centers to mortgages to every other investment.

This is why the US needs foreigners so much. When you burn up that much money, you can’t afford to turn away any lender.

If they keep alienating foreigners, there will essentially be only one lender remaining— and that’s the Federal Reserve, which has the ability to create money out of thin air.

We all saw how that works during the pandemic, when the Fed created roughly $5 trillion to finance all of the debt-fueled government bailouts. The result of that money creation was 9% inflation.

This is why we continue to write that real assets make so much sense.

The Fed can create money by the trillion, and the government can borrow to oblivion. Neither can print an ounce of gold or a barrel of oil. And that’s why real assets tend to hold their value, and often climb, exactly when paper money is falling apart.

Owning a piece of the companies that produce real assets— metals, energy, productive technology— is a great way to protect yourself from higher prices and inflation.

P.S. Since 2022, Schiff Sovereign’s investment research service, Strategic Assets, has focused on exactly those companies: the metals, energy, food, and ships an economy actually runs on.

A company gets featured only when it is already profitable, carries little or no debt, and trades cheap against the cash it is generating. Two precious metals producers on our research list are up more than 300% and nearly 400%, and earlier this year we locked in gains of more than 10x on a small silver producer.

You can learn more about Strategic Assets here.

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Song Jian was very good at math.

He was one of China’s top missile scientists, and his specialty was the equations that steer a rocket to its target.

In 1978 Song traveled to Helsinki for an engineering conference, where he came across researchers applying the same kind of math to human beings. Their idea was that a country’s population could be steered toward a target number, just like a missile.

Back home, Song ran China’s population through the model. It took about five minutes on his missile ministry’s computers, and the answer came back: if Chinese women kept having three children apiece, China would top 4 billion people by 2080.

China’s population was about 1 billion at the time.

In 1980 Song’s projection landed on the desks of the Communist Party’s leaders, and by September they had their solution: one child per family, enforced with fines, forced abortions, and sterilizations.

The policy stayed in place until 2016, and China is still living with the results.

Just 7.9 million babies were born in China last year, down from 9.5 million the year before and the fewest in modern China’s history. Deaths outnumbered births by more than 3 million, and the population shrank for the fourth year in a row.

A shrinking population is horrible for an economy. Economic growth comes from greater productivity (like technological breakthroughs). But it can also come from higher population, i.e. MORE people producing more goods and services.

China has fewer workers every year; its working-age population peaked in 2011 and fell by another 6.6 million last year, to about 850 million.

Worse, China’s population pyramid is upside down: four grandparents and two parents lean on one grown child. Already 323 million Chinese are over 60, nearly a quarter of the country.

Sure, there’s AI and robotics. In 2024 China installed more industrial robots than the rest of the world combined. But that might be a partial fix at some point in the future. The shortage of young workers is a huge problem today.

I wrote a few weeks ago that China needs a time machine, because no government can go back and conjure up a bunch of 25-year-olds.

China is trying to raise the birth rate anyway, paying parents about $540 a year for every child under three. But even if that works, a baby born today won’t show up for work until the 2040s.

That leaves immigration as the only way to raise the population and increase the number of young workers in the labor pool.

China has never been a country of immigrants, but they’re desperate enough to try.

Last October they launched the “K visa” for young science and technology graduates. Unlike America’s H-1B work visa, it doesn’t require a job offer.

Before the pandemic China had also become the second most popular destination for African students, behind only France. And last year China promised thousands of scholarships across Latin America and the Caribbean.

No one really wants to live in a totalitarian surveillance state, but the one advantage that China has is value for the money: it offers a high standard of living, while the cost of living is fairly low.

The average production worker at a mid-size or large Chinese company makes about $1,000 a month. In an inland city like Chengdu, a one-bedroom apartment outside the center rents for about $260— about a quarter of the paycheck.

Obviously an American manufacturing worker makes a lot more money, but the typical American rental goes for almost $2,000 a month, almost 8x as much. So there’s a lot more value for the money, i.e. value for the salary, in China.

And for young workers from Africa or the Caribbean, that’s an attractive enough deal that they’re willing to overlook the totalitarianism.

So far the results are modest. The last census counted about 850,000 foreigners living in China, a country of 1.4 billion. It won’t necessarily always be this way, but for now the arrivals don’t come close to filling the hole.

And here’s the flip side: the Chinese who have the means to leave the country are moving abroad.

For a decade China has ranked first or second in the world for millionaires lost to emigration— an estimated 15,000 of them in 2024 alone.

All told, the UN estimates that China loses about 300,000 more people than it gains every year. That’s small for a country of 1.4 billion. But the people leaving are the ones with money and options.

So China has two problems stacked on top of each other: too few births, and more people leaving than arriving. As I said, China still needs a time machine to fix its problems.

America’s problems are nothing like that. Problems that the US faces can be fixed with some rational thinking and a few hundred signatures.

It shouldn’t be hard. But they can’t seem to muster the will to make it happen.

Social Security’s main trust fund runs dry in 2032, which triggers an automatic 22% cut to every retirement check. Every single year, the program’s own actuaries publish a menu of fixes. Congress hasn’t picked one.

The Government Accountability Office, Congress’s own auditor, estimates the federal government loses between $233 billion and $521 billion a year to fraud. Congress hasn’t stopped that either.

None of this takes a miracle. It takes a vote and a pen. And the politicians refuse, which is exasperating.

America’s own population problem is the same kind of unforced error.

China had a one-child policy. America, informally, has a no-child policy. It isn’t written down anywhere. It’s made of prices.

The average age of a first-time homebuyer is now 40 years old— the oldest ever. And with median home prices selling at record levels, those same homebuyers have to scratch together six-figures in savings just for a down payment.

They’re contending with 7% mortgages too, meaning that housing has become completely unaffordable for the young.

The government deserves much of the credit— the National Association of Home Builders calculates that federal, state, and local regulation now adds about $132,000 to the price of a new home, more than a quarter of the total. Each of those rules was signed into law by some level of government, and each can be signed back out.

Then comes the kid. Just having the baby runs about $20,000 in medical bills, and even parents with good insurance pay about $2,700 of that themselves. After that come the diapers, child care, and more.

What a surprise: the US fertility rate is down to about 1.6 children per woman, the lowest ever recorded, and well short of the 2.1 it takes to hold a population steady.

That’s a real problem. But unlike China’s, it’s fixable. Nobody has to invent a time machine. The politicians just have to stop making so many unforced errors.

P.S. Fixable isn’t the same as fixed. Congress has had the answers on its desk for years and does nothing. Hoping the politicians come to their senses is not a plan, and that’s exactly why it makes sense to have a Plan B.

That’s what Schiff Sovereign’s flagship research service, Plan B Confidential, is for— actionable research on second residencies, foreign banking, and legal tax strategies, with boots-on-the-ground reports from more than 120 countries. Click here to learn more.

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Some time in the middle of the second century AD, on the shores of the extremely picturesque Lake Iznik in modern-day Turkey at the site of the ancient city of Nicaea, a boy named Cassius Dio was born into a locally prominent family.

His father was a Roman politician, his mother was Greek, and young Cassius Dio grew up in a bilingual household speaking Greek and Latin at a time when the Roman Empire was at its absolute peak.

There was widespread peace and prosperity— so much so that the emperor at the time, Antoninus Pius, spent his entire 20+ year reign without ever coming within 500 miles of a Roman legion.

His was the most peaceful reign the empire ever had. The imperial government busied itself with foreign trade missions, including to Han China; and with perfecting the delivery of clean drinking water across the empire— a feat that wouldn’t be repeated until 1804.

In short, the Romans had a 19th century standard of living as far back as the 2nd century AD, and this is the environment of wealth and abundance in which young Cassius Dio grew up.

But by the time he was an adult and had followed in his father’s footsteps to become a politician, things had changed.

In the decades between his childhood and adulthood, Rome had taken a turn for the worse. The empire had seen multiple wars, plague, barbarian incursions, and assassinations of several emperors.

At one point the Praetorian Guard had even auctioned off the empire to the highest bidder.

But Cassius Dio knew his history, and he knew that Rome had seen tough times before. There had been the civil war between Julius Caesar and Pompey, the depravity of Caligula, and the insanity of Nero. Yet Rome always came back better and stronger than ever.

So Cassius Dio assumed at first that this time would be no different. Rome was in the midst of difficult times by the 190s and early 200s, but it would recover stronger than ever, just as it had in the past.

It was only later in life, after watching things go from bad to worse that he realized this time actually was different. Rome was not coming back.

And it was at this point that he wrote, rather bitterly in his histories of the empire, “Our history now descends from a kingdom of gold to one of iron and rust.”

This is how we opened our Plan B conference this past weekend in Panama City, Panama— with a historical tale. We told the story of Cassius Dio and explained that, yes, dominant superpowers often go through tough times, and they often recover.

France under Louis XIV went through multiple peasant rebellions and a civil war, yet it recovered and maintained its status as a superpower.

The US went through World Wars and financial crises, and also maintained its status as the dominant superpower.

But sometimes superpowers reach a point where this time really is different. Nothing is certain, and recovery is still possible. But it makes perfect sense to prepare for challenging times ahead.

If the US dollar, for example, loses its status as the global reserve currency, there will absolutely be consequences, and the impact will be widely felt. Ditto for the rising US national debt.

The rest of our event focused ways to mitigate those consequences.

We had attendees and speakers from all over the world, which was quite refreshing. We even had the mayor of Panama City open the event, welcoming our guests at dinner on Thursday night, and come again to our farewell dinner on Saturday night.

It was really nice to see someone of influence in government who was bending over backwards to support anything and everything that our members needed.

My friend and partner Peter Schiff was also on stage with me, and he told the audience where he sees serious cracks in the bond market. This has major implications for the US dollar, the prospect for inflation, and the general future of the United States.

Peter and I both agree that not all is lost. I presented some very simple ideas for the US to get back on track, none of which are remotely controversial.

Bottom line, with the prospect of continued productivity growth from AI, robotics, small modular nuclear reactors, and cheap energy, combined with some modicum of fiscal responsibility, the US can still be OK.

But, at least at the moment, there does not seem to be any interest in Congress to rein in spending and stop the explosion of the national debt.

And this is why having a Plan B is so important. It would be completely foolish to believe that a $40 trillion national debt, the looming insolvency of Social Security, $2 trillion annual deficits, and an annual interest bill that mops up 25% of tax revenue will all be consequence-free.

That’s why we presented so many options from around the world. We had speakers presenting about second citizenship programs, foreign residency, global real estate, tax planning, multiple options for gold storage, as well as some discussion about tokenization and crypto.

We even had bankers from a well-capitalized private bank opening accounts for people on the spot.

This is important stuff. A good Plan B is like an insurance policy— you don’t wait until your house burns down, you get sensible coverage in advance to mitigate specific risks.

The whole point of a Plan B is to be in a position of strength regardless of what happens, or doesn’t happen, next. It’s not complicated, but it takes some sensible and deliberate planning.

For more than 15 years we’ve been providing some of the best research in the world on these topics.

Every month it covers second citizenships, foreign residency, foreign banking, and legal tax strategies, with boots-on-the-ground reports from more than 120 countries and a Rolodex of vetted service providers for when you decide to take action.

So even if you weren’t at our event, make sure you have access to Plan B Confidential. Click here to learn more.

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Ed Sheeran played his hit song “I Don’t Care” on his recent tour stop at MetLife Stadium in New Jersey.

By the time he sang it, the crowd had already been told that not caring wasn’t an option.

His opening act was the rapper Macklemore, who used his set to explain: “One of the reasons why I wanted to come on this tour was because I wanted to stand up here on stages and stadiums across America, and say two words that are very near and dear to my heart. Free Palestine.”

Then he performed his protest song “Hind’s Hall” while footage of the destruction in Gaza played on the screens.

Doing that, two nights in a row, got him kicked off the tour.

Robert Kraft, who owns the New England Patriots and Gillette Stadium outside Boston, refused to host Macklemore at Sheeran’s two upcoming shows there, citing “a broader history of antisemitic rhetoric and imagery.” Other stadium owners on the tour joined him.

With stadiums refusing to have Macklemore, the tour’s promoter cut him from the remaining dates.

Macklemore didn’t care. He said his mission was accomplished. “I didn’t need 10 shows from Ed,” he wrote on Instagram afterward. “I needed two. Two chances to stand in front of 90,000 people.”

To be clear, Macklemore has every right to say whatever he wants at his own shows, to people who paid to hear it. But activists don’t seem to think the venue owners, stage crews, and Ed Sheeran himself have the right to refuse to be a part of Macklemore’s protests.

Biting the hand that feeds, Macklemore criticized Sheeran, who he said “couldn’t get past his public facing, ‘I don’t take sides.'”

Sheeran answered like a normal adult.

“There is a reason I do not use my professional platform for politics— my audience includes young people, often children, of all backgrounds,” he wrote. “Those who come to my shows do not expect a political forum.”

In other words, some people just want to go to a damn concert.

It was Macklemore or the tour, the promoter had warned, and Sheeran said he would never “abandon the touring crew and the other support acts and musicians who rely on me for work and to make a living.”

But fanatics argue that nobody gets to stay out of it.

Macklemore said so himself: “There is no neutral position between the oppressor and the oppressed.” The logic is that Gaza has to be solved, so Gaza has to be shoved down people’s throats.

And for his heinous crime of neutrality, Ed Sheeran is being canceled.

The day Sheeran posted his statement, every supporting act on the tour quit in protest. One of them wrote that “artists must not be silenced when they speak up for the oppressed.”

In Ireland, a radio station pulled Sheeran’s music from its playlists.

An Irish newspaper op-ed called him a “gutless coward.” The Irish actor Liam Cunningham wrote, “We know who Ed Sheeran is now.”

Even the children’s YouTube star Ms. Rachel piled on. No surprise there— her toddler show features a nonbinary “they/them” co-star and she now campaigns on Gaza, so she’s in the business of promoting political views where they don’t belong.

“Ed Sheeran is making a political statement to his fans when he does a concert to support Ukraine,” she wrote, “but considers Palestine too dangerous and political.”

And yes, Sheeran played a Ukraine benefit in 2022. But everyone there bought a ticket FOR the cause. Nobody at MetLife bought a ticket for Gaza.

Sadly, the fanatics do it because it works.

Macklemore pledged the $1 million he’d earned on the tour to Palestinian relief groups, and challenged Kraft to match it.

Kraft answered that Sheeran had already called him, told him he was donating $2 million “to aid in the region to fight this humanitarian crisis,” and asked Kraft to match it, which Kraft did.

It hasn’t bought Sheeran any peace. Tomorrow he plays Philadelphia, and two activist groups have announced a protest outside the stadium. They call it “his first show after caving to Zionist threats.”

Even when the activists successfully bully people into supporting their cause, it’s not enough for them. Nothing is acceptable but total, undying fealty to their political opinions.

And every cause claims the same right to your attention and support.

If nobody is allowed to be neutral about Gaza, nobody is allowed to be neutral about the climate, or race, or gender. Each of those causes has its own true believers, and they’re just as certain as Macklemore that THEIR emergency can’t wait.

So climate activists glue themselves to the road you take to work, and deface priceless works of art. Your kid’s school teaches gender ideology, and the parents who object get treated like domestic terrorists.

Then the ballgame opens with a knee for BLM. Try to get a coffee and the Starbucks baristas write their political slogans on your cup. Go to the movies and get lectured by Hollywood. Watch a football game and get shamed by the shaving brand Gillette, somewhat ironically, over toxic masculinity.

And what are you supposed to do? Raise a fist in solidarity? Be aware…? Give some corrupt activists money, so they can spend it on mansions for personal use, as the leaders of Black Lives Matter did?

Taken to its logical conclusion, your life gets consumed by things you’re forced to care about and can’t affect anyway. And it’s all at the service of people who’d rather hold you captive than entertain you, or teach your kids, or serve you coffee— the things you’re paying them to do.

Not every place lives like this. There are many cities, states, and countries where this type of behavior is not tolerated.

Most of the time I write about a Plan B as a way to protect your savings, and your freedom, from a bankrupt US government.

But this is also what a Plan B is for. Freedom is about lifestyle too, including freedom from the fanatics who insist that nobody gets to stay out of it.

It’s the option to opt out— somewhere to live where you can raise your kids, drive to work, watch a ballgame, order a coffee, and go to a concert without any of it turning into somebody else’s protest.

P.S. If you’d rather choose where you live by how you want to live, that’s what Schiff Sovereign’s flagship research service, Plan B Confidential, is for— actionable research on second residencies, foreign banking, and legal tax strategies, with boots-on-the-ground reports from more than 120 countries.

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It was January 2000. AOL had just announced it was buying Time Warner in what was then the biggest merger in history. Fourteen dot-com companies had bought Super Bowl ads, one of them starring a sock puppet that sold dog food.

The US economy was growing at one of its fastest paces ever; GDP was up nearly 5% the year before— and that’s real growth, before adding inflation, which itself was just 1.4%.

Unemployment was 4%, the lowest in thirty years. And there was no other country on the planet that could come close to rivaling America’s dominance.

Best of all, the federal government was running a surplus… a real one. It was so strong that, even excluding the Social Security surplus, the government took in $86 billion more than it spent.

So the Treasury didn’t need to borrow any money. Naturally it still held bond auctions, because when you issue the global reserve currency, you have to give investors a safe place to park their money. But Treasury was retiring more debt than it issued, and even started buying its own bonds back early.

And after wondering what “the meaning of the word is is”, Bill Clinton bragged that the country was “on track to pay down nearly $300 billion in debt” by the end of the year.

And in the middle of all that, the 10-year Treasury yield hit 6.79%.

In other words, investors wanted a 6.79% annual return to hold extremely safe US government bonds… at a moment when America was on top of the world and the government’s finances were in their best shape in decades.

That interest rate was not a crisis. After all, the government didn’t have to borrow to keep the lights on or the military funded or Social Security solvent. So they didn’t really care.

The Treasury’s interest bill was shrinking as a share of tax revenue every single year.

Imagine that.

Fast forward to earlier this week, and after a hot inflation report and with oil back above $100, the same 10-year yield briefly crossed 5%.

The reaction was instant panic.

Imagine being able to go back in time for a moment… back to January 2000. Imagine talking to an economist back then. You explain that you’re from the future, and that in 2026, the national debt is $40 trillion and growing faster than the economy. The foreign central banks that used to buy America’s debt are dumping Treasuries and buying gold instead.

You explain that there are wars in Ukraine and Iran, socialism is creeping back into American politics, and Congress can barely function.

You then ask the economist from January 2000 to guess where they think the 10-year yield would be, given all of that bad news.

They’d probably guess 10%, maybe 12%, and they’d be amazed to hear it only just crossed 5%.

So why did it take so long?

Because after the 2008 financial crisis, the Fed cut rates to zero… and left them there for seven years. There were a few ceremonial hikes, but when COVID arrived, the Fed slashed rates right back to zero.

It was able to do this because the Fed conjured trillions of dollars out of thin air… and used that money to buy bonds and suppress yields.

The 10-year was so low, in fact, that the federal government could issue those notes at less than 0.5%.

For thirteen years money was essentially free, and an entire generation came to believe that was normal. It wasn’t, and that era is clearly over.

Think about what an opportunity that was: when you can borrow at 0.5%, $2 trillion in debt costs just $10 billion a year. Investing that money at even a measly 1% means the government would be making money on its debt.

A 1% hurdle rate is not particularly high. But Congress couldn’t manage even that much.

Despite racking up tens of trillions in debt, there’s realistically nothing to show for all of that money: the national debt has quadrupled since the financial crisis, while the economy has only doubled.

Now, each year, much of the national debt matures, and the Treasury doesn’t have the money to pay it back. So they have to issue new debt to repay the old debt.

Problem is, the new debt is issued at much higher rates. They were paying 0.5% on the old debt. The new yield of 5% is TEN times the interest on the same amount of debt.

And with an average maturity of about six years, most of the $40 trillion rolls over within just a few years… which means before long the annual interest bill will reach $2 trillion per year.

Add nearly $3 trillion for Social Security and Medicare, and that’s the vast majority of tax revenue.

Literally everything else, including the military, roads, and light bill at the White House, is funded with more debt.

In 2000, the government could shrug at a 6.79% yield because it was paying debt down. Today everyone’s panicking at 5% because Congress borrows $2 trillion a year and can’t stop.

So, is Congress going to suddenly find its inner fiscal discipline?

I’m not holding my breath.

That leaves exactly one way to get the 10-year back down, and it’s the same way the Fed did it back in 2020: conjure more money out of thin air and make capital infinite.

And as the world discovered shortly after in 2021 and 2022, the consequence of that policy is inflation.

P.S. In 2000, a 6.79% Treasury with 1.4% inflation was a fantastic deal. Today’s 5% Treasury with the inflation that’s coming is a losing one.

Real assets are where you come out ahead: gold, energy, and industrial metals rise when the dollar falls. The profitable, debt-free companies that produce them are what we research in Schiff Sovereign’s Strategic Assets.

You can learn more about Strategic Assets here.

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On Sunday afternoon, the power went out at ExxonMobil’s refinery in Channahon, Illinois, a southwest suburb of Chicago.

Oil refineries run at tremendous heat and pressure, so whenever the power goes out, all that heat and pressure has to go somewhere. It’s basic physics. Hence why the plant burned it off through the flare stacks, with black smoke visible for miles.

The power came back around 7 p.m., but the plant stayed down, and as of Monday ExxonMobil still hadn’t said when it would restart, likely up to a week.

Bear in mind this is a plant that processes about 275,000 barrels of crude a day— close to 10% of the region’s fuel supply.

But that’s not what caused the highest diesel prices ever.

Even before this refinery was taken out of commission, the national average price of diesel went above $6 a gallon last week for the first time ever. Filling up a long-haul semi truck now costs more than $1,000.

It’s important to note that a barrel of crude oil is almost useless until somebody turns it into something. A refinery cooks the crude and breaks it apart into gasoline, diesel, jet fuel, heating oil, the raw material for plastics, etc.

Everyone knows about the squeeze on oil due to the war with Iran. But the shortage of REFINERIES is another issue.

Sure, the wars have taken a toll on refineries and other fuel plants. Iran bombed Bahrain’s only refinery, shut ever since. It also wrecked half of Shell’s Pearl GTL in Qatar, the world’s largest plant for turning natural gas into diesel, jet fuel and lubricants. Ukrainian drones, meanwhile, have cut Russia’s refining by roughly a third.

And the rest of the world’s refineries can’t pick up the slack.

US refineries are already running at almost 98% of capacity. There’s no spare refining capacity, and that’s because governments have treated refining as the enemy of humanity for the past decade.

For example, ten years ago Britain had six refineries. Then the UK government announced a ban on new gasoline and diesel cars and piled punitive taxes specifically on refineries, and today Britain is down to four.

I guess the “Just Stop Oil” fanatics are happy now. They actually declared victory last year and hung up their hi-vis (oil-based) vests, and quit (oil-based) gluing themselves to things, because “no new oil” had become official government policy in the UK.

California, meanwhile, imposed a new penalty tax on refinery margins, and then passed climate change regulations for refineries that are virtually impossible to achieve.

Unsurprisingly, in the past year, California lost two refineries: Phillips 66’s in Los Angeles and Valero’s in Benicia near San Francisco. That’s 17% of California’s refining capacity.

Then Newsom panicked and changed his tune, realizing that California fuel prices would surge. He suddenly promised to “work closely with refiners.” He directed his own energy commission to pause the punitive refinery tax for five years. He even pushed legislators to consider paying hundreds of millions of dollars to Valero to keep their plant open.

Too little, too late. The refiners left, or idled their plants. You can only bite the hand that feeds so many times before they take action.

But of course, everyone will pay for Newsom’s idiocy, because diesel moves everything. So much of American imports arrive at California ports (like the Port of Long Beach), and trucks haul it across the country from there. Trains do the rest.

And nearly every big truck and freight train runs on diesel, which is now a lot more expensive in California. So the cost of Newsom’s lunacy is paid by every consumer.

Harvest is starting across the Midwest right now, and everything from tractors to grain dryers burns fuel. Phosphate (another critical fertilizer ingredient) is mined and hauled with diesel.

So the farmer pays $6 a gallon, the trucker pays $6 a gallon… and consumers reimburse these costs in the form of higher prices.

And let’s not forget, winter is coming.

Heating oil is diesel by another name (it comes out of the same refinery), and about 5 million American homes heat with it, more than 80% of them in the Northeast. One Gulf oil executive warned last week of “a very difficult winter coming in Northwest Europe. This is only the beginning.”

Bottom line, the power outage at Channahon is a problem. But it’s a small problem compared to the larger war on refineries.

With the spare refineries gone, even the slightest issue at remaining refineries now shows up in the price of diesel, food and everything else that moves on a truck.

Unexpected disruptions from war and power outages are one thing.

But governments deliberately villainizing refiners and chasing them out of town, for the crime of creating the energy the world desperately relies on, is another.

Their green policies and ESG mandates also helped drive a decade of underinvestment in the physical things civilization runs on: ships, mines, oil fields, smelters… and refineries.

Now the world is in the midst of a destructive war. When there is no spare capacity, every disruption has to be resolved by price, and the companies that own the scarce, strategic assets collect the difference.

And owning a piece of those companies yourself is the best way to protect yourself from higher prices and inflation.

P.S. That’s the whole point of Schiff Sovereign’s investment research newsletter, Strategic Assets: profitable, low-debt companies that own or move real things, bought while they’re still cheap.

Two oil tanker owners we featured when nobody wanted them are up more than 180% and 130%— one of them runs the ships that haul diesel— and our palm oil grower is up nearly 140%.

If you’d like to see the full research, you can learn more about Strategic Assets here.

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