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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Last week, Treasury Secretary Scott Bessent sat down for a fireside chat at Southern Methodist University in Dallas and told the room what the plan is for the national debt.

“We don’t have a revenue problem,” he said. “We have a spending problem.” Contain the spending, add 3% growth, and America can “grow our way out of this.”

That’s a nice idea… and, it’s possible. The key part there is the spending freeze: arrest the growth in federal spending, and the deficit will eventually melt away.

The problem, of course, is that Congress won’t even cut obvious fraud. So I don’t think taxpayers should hold their breath for sudden fiscal responsibility.

The growth side of his approach is feasible. But what does “grow our way out” of the debt actually mean?

The national debt is now a little over $40 trillion. Meanwhile the entire US economy— everything produced by every business and every worker in the country over a full year— is about $32.5 trillion.

This means the debt is 123% of GDP, i.e. the all-important debt-to-GDP ratio is 123%.

That ratio is the key indicator that bond investors watch. And it’s the number Secretary Bessent is talking about when he says the US can grow its way out of debt.

The whole point is to bring that percentage down, from 123% today to something more like 80% or 90%.

Notice what he did NOT say. He didn’t say the debt would shrink. He didn’t say the deficit would go away. Growing your way out means the debt keeps getting bigger… it just grows at a slower pace, while the economy grows at a much more rapid pace.

Specifically, the US national debt has been growing at an average 6.7% per year over the past few years… which means ‘growing our way out’ will require the US economy to expand by at LEAST 7% per year, just to make a dent in the debt-to-GDP ratio.

Now go back to Bessent’s number: he’s talking about 3% growth.

And when he says 3%, he means real growth, i.e. the economy producing 3% more goods and services than it did the year before. That means more cars, more houses, more software, more oil… more actual stuff.

But we just established that the economy will require 7% growth in order to fix the debt challenge.

So where, exactly, is the other 4% supposed to come from?

It comes from inflation. In short the economy produces 3% more stuff, but the stuff costs 4% more. In total that gets you to more or less 7% GDP growth, while the debt increases by 6.7%.

And with that, you have a tiny improvement to America’s dismal debt-to-GDP ratio.

This is already the path that they’re on; in the last year, America’s total (i.e. nominal) GDP growth was 6.5%. Of that, only 2% was real growth, i.e. the production of more goods and services.

The rest, about 4.5%, was from rising prices.

So “growing our way out” is really just a polite way of saying inflation. And the government is effectively telegraphing a 4% inflation target. As it happens, that’s about where inflation already is right now.

In other words, the plan is to make everything else more expensive faster than the debt grows, and to call that a fix.

Four percent a year doesn’t sound like much. But it compounds, and at that rate a dollar loses about a third of its purchasing power in ten years.

The solution is to own the stuff they can’t conjure out of thin air.

A government can print money by the trillion, but it can’t print an ounce of gold or a barrel of oil, or anything else that’s real or critical to the economy.

That’s why real assets tend to hold their value when the currency is losing value… and why the businesses that produce those assets— gold miners, energy companies, copper producers, chip makers, etc.— often do spectacularly well.

P.S. Real assets are the whole premise of Schiff Sovereign’s investment research newsletter, Strategic Assets: profitable, well-run 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 we featured last year, and a gold producer has gone up 5x yet still trades cheaper against its earnings than the day we wrote it up. Two oil tanker owners we covered when nobody wanted them are up more than 150% and 110%.

The subscription comes with a 30-day money-back guarantee. You can learn more about Strategic Assets here.

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At a time in my life which now seems centuries ago, I was once a young lieutenant, barely a year out of West Point, and I had recently been assigned to lead an electronic warfare platoon.

Whenever my unit wasn’t deployed or in the field, most of my duty days were spent in a top-secret facility called a SCIF— the kind of place that was guarded by military police and didn’t have any windows.

But every Tuesday morning at 9 a.m. sharp, my unit would formally assemble at the brigade motor pool to conduct routine PMCS checks— Army-speak for vehicle maintenance.

September 11, 2001, started like any other Tuesday morning.

Being on time in the Army is considered late, so naturally we all showed up to the motor pool around 10 minutes early.  And the regular business after the formation only lasted about 5 minutes.

But in that brief 15-minute window, from the time we were milling around the motor pool to the time I was going back to the SCIF, the entire world changed.

I was about to walk into the building when one of my sergeants approached me and said, “Sir, I don’t know if you heard, but terrorists just flew planes into the World Trade Center.”

My reaction was disbelief. This dude is crazy. But the look on his face suggested he was serious.

I mumbled some meekish “whaaaaat” sort of reaction and exhaled a pfff of confusion, but then walked inside where the military police at the desk were refreshing CNN.com. I saw the screen. Images of carnage in New York. It was real.

After handing over my little Nokia bar phone, I was buzzed in and walked down one of the halls where someone had set up a TV— an old-school cathode ray tube mounted on a big rolling cart, just like the ones my teachers used back in middle school.

NBC was on. The chipper, perma-smile morning crew was still trying to anchor the horrific news coverage and doing their best to make sense of what was happening. Then legendary news veteran Tom Brokaw took over and brought those of us in the room— and the rest of America— up to speed.

Everyone over the age of 35 or so has their own version of this ‘where was I’ story about 9/11.

They’re called ‘flashbulb memories,’ and they’re forever emblazoned in our brains. It made me realize that my dad wasn’t kidding around when he once went into vivid detail about the moment he heard that JFK had been shot.

We’ve experienced a few others over the past 25 years.

Many of us remember where we were when we heard about the 2008 Global Financial Crisis. I certainly do— my best friend called me and told me to turn on CNBC. It was Sunday September 14, 2008… and they were broadcasting live footage of Lehman Brothers employees filing into their office with cardboard boxes to clean out their desks.

The global financial system nearly collapsed the following day.

Similarly, many of us remember where we were when we first realized that COVID was real.

All of these flashbulb events over the past quarter century— with today being the 25th anniversary of 9/11— are reminders that the world can change in an instant.

Even if you’re too young to remember 9/11, you probably at least remember the pandemic. Everything changed, practically overnight.

To be frank, there will be others. We may see a day similar to the September 2008 financial crisis, when Americans tune in to see the bond market collapsing and Treasury yields surging… because foreigners are dumping their US government bonds all at once.

The irony is that a large part of America’s $40 trillion national debt… and hence the challenges with deficits, inflation, etc… is in large part due to the seismic shift after 9/11.

Before 9/11, America was in solid shape. The federal government was running a small budget surplus. And while the economy was slowing a bit and working off its hangover from the excesses of the tech boom in the 1990s, life was good.

But America went to war less than four weeks later on October 7, 2001. It lasted for twenty years and cost trillions upon trillions of dollars. Spending surged. The bureaucracy expanded. The surveillance state exploded.

And it all kicked off a borrowing spree that continues to this day. With the national debt now in excess of $40 trillion, more than 125% of GDP, America’s standing is waning rapidly.

Yes, there’s plenty of good news today and cause for optimism.

But the reality is that foreign ownership of US government bonds is falling. Even allies are starting to diversify. And it’s not hard to understand why: the US debt situation is a complete disaster.

So if this trend continues, we could absolutely experience another flashbulb-type event, where the whole world witnesses, in real time, the loss of America’s primacy.

The reaction will be similar to what most of us experienced on 9/11: total disbelief.

To be clear, nobody dies when yields spike, and a bond market crash is nothing like watching the towers fall. But the disbelief will be identical, because almost no one thinks it can happen here. It’s not supposed to happen here.

But it can. It just might. And if it does, just like the other flashbulb events—  9/11, the 2008 financial crisis, and the pandemic— the world could change dramatically in just 15 minutes.

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In July, the Canadian uranium miner Cameco stopped producing at its mine in northern Saskatchewan (known as ‘Cigar Lake’) for two weeks.

Cigar Lake itself was fine, nothing was wrong with the mine. The problem was their sulfuric acid plant— a crucial ingredient in processing uranium ore— broke down.

Normally they would have just bought sulfuric acid from somewhere else while they fixed their company-owned acid plant. But this year that’s not so easy.

About half the world’s seaborne sulfur moves through the Strait of Hormuz, and since the war with Iran began, those shipments have almost completely stopped. China, the world’s largest exporter of sulfuric acid, restricted its own exports in May to make sure they had enough.

So a simple mechanical problem at an acid plant caused a two-week shutdown of the world’s largest uranium mine.

Two weeks is a really long time for a huge mine like Cigar Lake to have an unscheduled shutdown; that’s because uranium is already in critical supply— there simply isn’t enough uranium being produced right now to keep up with demand.

The math is easy: miners produced roughly 155 million pounds of uranium in year. Reactors burn about 185 million pounds. So there’s already a significant deficit.

For the past several years, the deficit between uranium production versus reactor demand was covered by stockpiles that had been building up over decades. So the nuclear industry effectively burned through its uranium ‘savings’.

But those stockpiles of uranium are now basically depleted… which means that nuclear power companies will need to rely on uranium production in order to meet their needs.

This is a problem… and one that we can quantify.

Because uranium is literally THE most important resource for a nuclear reactor, the reactor companies tend to line up their uranium supply needs years and years in advance through forward contracts and term agreements.

There’s no black magic here— it’s a pretty predictable quantity. A 2GW nuclear plant, for example, already knows exactly how much electrical capacity they have, so they know how much fuel they need to serve their customers… hence they can forecast their future uranium needs.

For this year at least, US nuclear power companies have more or less the amount of uranium that they anticipate needing. But next year they’ll be in a deficit… and one that grows each year.

By 2030, US nuclear power companies will be short 40% of their anticipated uranium needs. By 2033, they’ll be short 91%. Basically all of it.

Big deal, right? Existing uranium producers can simply mine more.

But that’s not really happening… at least, not at current prices.

Kazatomprom (based in Kazakhstan) is the largest uranium miner in the world. And their management is deliberately pulling back on production right now.

The company believes that it’s simply not worth mining and selling uranium at the current price. Why bother producing at your full potential now when they KNOW the price is going to rise in the future, hence they make a LOT more money in the future if they mine less now.

OK well, the big shortage in the 2030s is still a few years away. So the industry has time to start more mines and bring new uranium production online.

Well, that’s easier said than done.

A company called NexGen Energy discovered a major uranium deposit in Saskatchewan back in 2014. They finally got their construction license this March, started building in August, and expect their first ore in 2030.

In other words, SIXTEEN years from discovery to production— and that’s about average for the industry.

You can’t just turn on uranium production like a light switch; it takes years and years to make most things happen in business, and uranium mining is no different.

This is common across many real assets— there has been years of underinvestment. Very few new uranium mines. Very little oil & gas exploration. Not enough new shipyards, refineries, smelters, etc.

It takes several years… plus a lot of risk capital… to discover a new resource deposit and bring a mine to life. Years.

Demand can grow much more quickly. Just look at the increase in electricity demand (thanks in large part to data centers). When electricity demand surges, but the supply of the fuel required to generate electricity is stagnant, the end result is higher prices.

And not just higher electricity prices— higher prices for the fuel as well, i.e. higher natural gas prices, higher uranium prices, and even higher coal prices.

(Coal is especially interesting— it was basically chased out of town. NO ONE wanted to invest in a new coal mine thanks to Greta Thunberg. Yet the International Energy Agency now expects coal-fired power generation to rise this year to make up for energy imbalances. Stagnant supply meets rising demand.)

That’s tough news for anyone with an electricity bill. But you can also be on the other side of it and make money from this trend.

When supply and demand is so fundamentally unbalanced, the companies that produce these scarce resources tend to perform extremely well.

This is the primary investment ethos for our investment research newsletter, Strategic Assets.

We look for the most critical resources that the economy runs on; we find sectors where there has been chronic underinvestment and focus on undervalued yet successful companies with great management and balance sheets.

Energy has been good to us. Two oil tanker owners we featured when nobody wanted them are up more than 150% and 110%.

A small South American oil producer we featured last month has no debt and sells every barrel at the wellhead to one of the largest oil companies on earth— so shipping is someone else’s problem. A typical new well takes years to pay for itself. This company’s fastest did it in 37 days.

Learn more about Strategic Assets here.

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It’s so simple, how could no one have thought of this before?

The man currently polling in second place to become the next President of France has put forward an ingenious solution to tackling France’s national debt, currently standing at around 117% of the country’s GDP.

Jean-Luc Mélenchon says, “All we have to do is take the 18% held by the Bank of France and chuck it in the fire.”

This is the guy who has a real shot at running the second-largest economy in the eurozone, and he’s telling voters that roughly €636 billion of what their government owes can simply be erased.

And the voters like the sound of it. Of course they do, who doesn’t love getting something for nothing?

Quick economics lesson for the brilliant man who wants to lead France: the Bank of France bought those bonds with euros it created for the purpose… the European Central Bank’s own explainer says buying bonds “creates money in the banking system.”

Normally those euros come back out of circulation as the debt gets repaid. Mélenchon’s plan skips that part: the government ‘throws the debt in the fire’ and doesn’t pay it back. So the central bank eats the loss… meaning that the €636 billion conjured out of nothing stays in the system.

This creates inflation, plain and simple.

Goods and services cannot be created out of nothing. Euros can. So when there’s suddenly more money in the system relative to the same amount of goods and services, the end result is inflation.

The other obvious implications is that France would still owe the rest of its debt… and those lenders will have seen that France is willing to default. I wonder what that would do to French bond yields?

Or maybe they’ll rest easy with Mélenchon’s assurance that “I’m not going after private creditors, not at this step in any case.”

Why do French voters even care about the national debt? Because they’ve been feeling the consequences of idiotic fiscal policy for years.

Interest alone costs the French government more than its entire defense budget. There’s no taxing their way out, either: the French are already the second-most-taxed people in the developed world, at about 44% of GDP.

So every fix takes some benefit away from taxpayers. Last year’s plan canceled two public holidays, froze pensions, and cut civil-service jobs… and the prime minister who proposed the solutions was thrown out.

The plan before that raised the retirement age from 62 to 64 brought the biggest protests France had seen in decades; that plan has now been suspended to keep the current government alive.

Meanwhile, growth was less than 1% last year, and unemployment is at its highest since 2020.

And here comes Mélenchon with a plan that costs nobody anything: delete a portion of the debt and go back to spending as if everything is OK.

However dumb the solution, at least the French are talking about the problem.

The US government crossed $40 trillion in debt last month. That’s roughly 123% of GDP, worse than France.

America gets away with it, for now, because the dollar is still the world’s reserve currency. 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. Foreign holdings of Treasuries fell by $72 billion in June alone, China’s are at their lowest since 2008, and so far this year foreigners have bought just 7% of the new debt the US government issued.

The reasons aren’t a mystery: a dysfunctional government that can’t even pass a budget or eliminate fraud from its spending, while increasingly weaponizing access to the US dollar system.

When the foreign buyers stop showing up, America finds itself with France’s problem. Automatic cuts to Social Security are only six years away. Interest on the debt is already larger than the defense budget.

Extreme government spending is already pushing inflation higher… and socialists are everywhere now promising to spend even more.

These people genuinely believe that money is something you can conjure out of thin air with no consequence.

But whether they cancel the debt, or simply continue to ignore it, the consequence ultimately comes back to inflation.

That’s because conjuring money out of thin air, or borrowing from future generations to spend today, doesn’t produce one more barrel of oil, one more bushel of wheat, or one more pound of copper. It just produces more euros and dollars.

America has been here before.

Through the 1970s the US government ran deficits for Vietnam AND a historic expansion of welfare spending… then cut the dollar’s last link to gold in 1971. They created new money to cover the difference.

Consumer prices doubled over the decade, and the Dow finished 1979 where it started 1970, which after inflation was a loss of about half in real terms.

Meanwhile, gold went from $35 an ounce to $850. And oil went from about $3.40 a barrel to nearly $30. The world’s most important (and scarce) resources not only held their value, but they dominated. And the companies that produced them did far better.

Over roughly the same stretch, Barron’s index of gold mining stocks rose more than 1,200% while the S&P 500 managed 43%.

The new money has to go somewhere, and it flows into whatever the government cannot create more of.

Today, a lot of the companies that produce those real assets like metals, energy, food, and the ships that carry them, are still cheap.

We find them for subscribers of our investment research newsletter, Strategic Assets.

Gold and silver moved first, as central banks started diversifying out of the dollar. A small silver producer we featured in April 2025 rose more than 10x in ten months. A gold producer has gone up 5x, yet it’s earning money so fast that the stock is cheaper against its earnings today than the day we wrote it up. It pays a dividend, too.

Now the rest is showing life. A zinc producer we featured is up more than 150% in under a year. A tin miner is up more than 230% and trading at all-time highs. Two oil tanker owners we bought when nobody wanted them are up more than 150% and 110%, and one just reported the best quarter in its history.

Learn more about Strategic Assets here.

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Sweden’s far left political faction is heading into its election next week promising to roll out a destructive idea that already failed once before in their country.

The Left Party (the former communists) wants a wealth tax on billionaires… it’s Bernie Sanders’ dream come true. They’ve also floated a new property tax on expensive homes, plus an exit tax on any billionaire who tries to leave.

Then there’s the Green Party, which has its own ideas about how the top 1% should contribute more. They back the billionaire wealth tax too… but they differ with the communists on how it should be spent (climate change versus redistribution).

Obviously it’s not a done deal yet— the Greens and the Communists still have to win… and then hammer out the details. But Sweden’s wealthiest citizens aren’t waiting around to find out what happens next.

Bloomberg reports that Swedish tax lawyers are already busy; clients are setting up foreign structures, rewriting their succession plans, and asking whether their companies should keep their headquarters in Sweden at all.

Klas Tikkanen, a senior executive at the private equity firm Nordic Capital, told Bloomberg: “I think it could turn into a real exodus, especially if they announce an exit tax.”

Notice the word “if.” Nothing has passed, and nobody has even voted yet. The mere threat is a tangible enough risk that anyone in the cross hairs is planning to move.

It’s not hard to understand why; wealthy people are, by far, the most mobile social class… and there are lots of nice places in the world that don’t come with six harsh months of winter.

It’s interesting that this experiment has already run twice, and both times the rich people left.

Norway’s center-left government raised the wealth tax in 2022, and for business owners the bill roughly doubled in a single year, by one estimate.

By the end of 2022, more wealthy Norwegians had left the country than in the previous thirteen years combined. Kjell Inge Røkke, who had been Norway’s richest man, paid about $20 million in tax in 2021 and moved to Lugano the next year.

But even Sweden itself already ran this wealth tax experiment once. And it was an abject failure.

Sweden introduced a wealth tax in 1911 and kept it for the next 96 years. By the end it was taking 1.5% a year on net worth above roughly $200,000 for a single person— not exactly billionaire territory. Roughly 280,000 Swedes were paying it.

People were leaving in droves to avoid paying the oppressive levy.

Ingvar Kamprad, the founder of IKEA, left Sweden in 1973 and eventually settled in Switzerland. He had plenty of companionship: by the 2000s the Swedish tax authority estimated that some $70 billion had been parked abroad for tax reasons.

When H&M’s main owner, Stefan Persson, threatened to leave in the 1990s, the Social Democrats simply exempted him— from 1997, controlling owners of listed companies paid no wealth tax on their shares.

As always, a tax that was originally meant for ‘the wealthy’ increasingly fell on middle class homeowners whose assessed values kept rising.

And what did the tax collect for all that trouble? By the end it was bringing in about $800 million a year, around 0.3% of Sweden’s tax revenue— a rounding error.

So in 2007, Sweden gave up on taxing wealth entirely, i.e. even one of the most socialist nations on earth had figured out that a wealth tax doesn’t work.

Less than twenty years later, the Communists have completely forgotten this lesson and think that they can do it better.

It’s amazing when you think about it— Sweden’s nearly century-long wealth tax experiment failed miserably…. but the Communists are apparently so smart that their wealth tax will be successful.

The arrogance is extraordinary. But all too common.

Across the pond in the Land of the Free, America’s communists think that their wealth tax ideas are also brilliant and original.

California voters will decide in November on a supposedly “one-time” 5% wealth tax on billionaires. Yet even Emmanuel Saez, the Berkeley economist who co-wrote the proposal, acknowledges that it’s not really a one-time tax: “I’m not there to pretend that it’s one, once, and never again.”

Meanwhile New York’s state legislature has a bill to tax billionaires’ unrealized gains… every year.

And Senator Elizabeth Warren isn’t satisfied with billionaires; her ultra-millionaire tax proposal bundles a wealth tax on centimillionaires, plus an additional 40% exit tax on anyone who renounces US citizenship.

When the place you live starts treating productive people and their money as enemies to punish, rather than partners to welcome, the rational move is to think about your own Plan B.

Notice that wealthy Swedes haven’t actually left. But they are making plans, setting up the structures etc., now, while they still can. This way, if the tax passes, they already have somewhere to go. If they are lucky, most of them will never use it.

That’s the entire logic of a Plan B.

You don’t have to go anywhere. The point is to make sure you have an option in case you ever need to use it.

P.S. The hardest part is knowing where to start.

That’s what our Plan B Confidential service is for— actionable research on second residencies, foreign banking, and legal tax strategies, drawn from sixteen years of boots-on-the-ground work and a network of trusted providers around the world.

Plus a Rolodex of vetted service providers when you decide to take action.

Click here to learn more about Schiff Sovereign’s Plan B Confidential.

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It’s been another busy week for the Inspired Idiots. Here are a few of the most absurd stories from the last several days in case you missed them.

New York’s top socialist has a fake union card and a townhouse from Dad

Gustavo Gordillo tells a great story.

He’s the son of Peruvian immigrants who “had nothing”. He worked fast food and cleaned houses. He rose up to become a unionized electrician, renting a modest apartment and fighting for every New Yorker squeezed by landlords and capitalist pigs.

And today he’s co-chair of the New York City chapter of the Democratic Socialists of America.

Then the New York Post started pulling records.

It turns out his grandfather came to America in 1958 to practice medicine and became president of the Ohio Psychiatric Association. That’s pretty accomplished for a family that “had nothing”.

It’s true that Gordillo joined the electricians’ union as an apprentice in April 2024. But he quickly stopped showing up for work and was thrown of the union for “prolonged absence.”

A union source told the Post that Gordillo took the slot “just for show.”

And it turns out his ‘modest apartment’ that he rents to burnish his working class street cred is also for show; Gordillo doesn’t actually live there, he actually lives in a posh townhome that his parents spent millions renovating with nonunion labor.

Last week, Gordillo’s fellow comrades on the New York City DSA’s leadership committee voted him into one of their top jobs— coordinating their socialist agenda with Mayor Mamdani’s office.

It’s such a joke… everything these people do is a con.

It’s the same con when the Chicago’s teachers union boss said school choice was for “racists,” then put her son in a private Catholic high school.

Or people like Barack Obama who spent years warning that rising seas would make homes uninhabitable, then bought a waterfront estate on Martha’s Vineyard.

They’re all frauds.

The EU has found €10 trillion of “idle” money. Guess where?

Ursula von der Leyen is the unelected President of the European Commission, i.e. the de facto head of the European Union. Last week she gave a speech to French business leaders in Paris and announced an amazing discovery: Europe has €10 trillion just lying around!

So where is it? It’s in regular people’s bank accounts. It’s their savings.

“Unfortunately, these savings are lazy,” she said. The EU’s official translation quickly changed it to “sitting idle.” She talks about other people’s money as if it were hers to spend and says she and her unelected members need to “put these savings to work.”

Her plan, called the Savings and Investments Union, would rewrite the rules for banks and insurers, essentially forcing banks to make certain investments that the European Commission wants… and doing it all with funds that regular, everyday Europeans are trying to save.

Hooray Democracy!

Some of these investments would go towards bankrupt governments. Others would go towards European companies that are deemed ‘too risky’ to private capital. Great. So when investors aren’t willing to back a company, the answer is to force banks to do it with their customers’ savings?

What could possibly go wrong??

Well, Germany serves as the perfect answer. It shut down its nuclear reactors, which had supplied a third of its electricity, and bet the grid on solar panels in a country where the sun barely shines.

German electricity now costs about 2.5 times what it does in the US, and the factories are leaving.

Von der Leyen herself admitted in March that abandoning nuclear was “a strategic mistake”— one she personally voted for, and one she has done nothing to reverse.

But this is how these people think: your savings are Europe’s resource, more dairy cows to be milked through the banking system.

Birmingham is going to the High Court to get the Union Jack off its lampposts

Birmingham is England’s second-largest city, and its local council has spent the past year pulling the country’s own flags— the British Union Jack and England’s St George’s Cross— off lampposts.

People kept putting them back up. So on Aug 26 the council, now run by a Liberal Democrat and Green coalition, asked the High Court for an injunction against “unauthorised attachments on the highway, including flags,” naming seven of the flag-hangers and “persons unknown.”

Breaching a High Court injunction is contempt of court— up to two years in prison or an unlimited fine, and the council’s draft order adds, in capital letters, that “YOUR ASSETS MAY BE SEIZED.”

Bear in mind, hanging something on a lamppost is otherwise a £2,500 fine. The council went to the High Court to turn that into a prison sentence, and its stated reasons are “public safety” and “community cohesion.”

Meanwhile, Palestinian flags have hung from Birmingham lampposts since the Gaza war started in 2023, and as far as we can tell nobody went to court over them.

And twelve days before it went to court, the council lit up the Library of Birmingham in green and white for Pakistan’s independence day.

My guess is that the council won’t sue anyone putting up a Pride flag. And judging by what gets waved at the city’s protests, you could probably get away with an Islamic State flag.

But the British flag in Britain, and the English flag in England, are now a safety hazard and grounds for contempt of court.

So what “community” is the council so keen to keep cohesive?

Britain let in nearly a million net migrants a year at the peak and housed a great many of them at taxpayer expense. Taxes are now at their highest since the 1940s, and the wealthiest and most mobile taxpayers have been leaving in droves.

What stays behind are all those “doctors and lawyers” arriving by dinghy from Africa and the Middle East… like the Afghan who crossed the Channel from Calais in 2022, won asylum by saying Afghanistan was too dangerous to go back to. He then spent eight weeks on vacation there in 2024, posting videos from a national park.

It really is pathetic. And governments like these are exactly why we keep telling readers to have a Plan B.

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In 1845, the French economist Frédéric Bastiat petitioned parliament on behalf of the nation’s candlestick makers. They were being ruined, he wrote, by an unscrupulous rival that was flooding the market with light at a price no honest candlestick maker could match.

This light-producing rival, of course, was the sun.

And Bastiat satirically demanded “a law requiring the closing of all windows, dormers, skylights, inside and outside shutters, curtains… in short, all openings, holes, chinks and fissures” to ensure that no sunlight could enter French homes.

Think of the jobs this would create. “If more tallow [curtains] be consumed, there will arise a necessity for an increase of cattle and sheep,” the petition argued. “Thousands of vessels would soon be employed in the whale fisheries [for oil].”

Bastiat, one of history’s most famous proponents of free markets, was obviously joking. He wrote the petition to mock the tariff wall that sheltered France’s industries from cheap foreign goods— block the cheaper competitor, protect the domestic producer, count the jobs saved.

No one counted the cost of protectionism: everyone else paying more for everything, and the whole country became poorer.

Yet decade after decade since, every new innovation has been met with exactly this kind of uproar. And nobody is joking.

It wasn’t so long ago that taxi drivers were up in arms over Uber undercutting their prices. In June 2015, nearly 3,000 of them shut down parts of Paris, burning tires and blocking airport roads, because Uber’s cheap service didn’t require the professional taxi license that could cost $270,000.

The French government caved within a day, ordering police to seize the unlicensed Uber drivers’ cars.

Now the wheel has turned. Waymo’s robotaxis launched in Atlanta in June 2025, bookable through the Uber app of all places. And Uber drivers say the competition is cutting their pay.

Naturally the Atlanta Rideshare Drivers Union wants the city to slap a $0.50 to $1.00 fee on every robotaxi ride, paid into a “driver transition fund,” plus a ban on robo pickups at the Atlanta airport.

If only they could tax the sun for the candlestick makers.

The federal government runs the same play, just bigger.

In January 2025, the Commerce Department finalized its ‘Connected Vehicle Rule’, which bans cars with Chinese-linked software from the US market, starting with the 2027 model year.

The stated reason is national security: keeping foreign adversaries out of the cameras, microphones, and GPS units on American streets.

That’s a real concern, to be fair. But then came the carve-outs.

Volvo, majority-owned by China’s Geely, got authorization in May to keep selling. Ford, after talks with the department, decided its China-built Lincoln Nautilus doesn’t need an exemption at all.

But Polestar— owned by the same Chinese parent as Volvo— was shut out and is leaving the US market.

The Commerce Department doesn’t publish these decisions or its reasoning, so nobody outside the building knows why one Geely brand got a green light and the other got kicked out of America.

Let’s be honest: if these Chinese cars were really a security threat, there would be no carve-outs to negotiate. There would be a flat ban. No exceptions.

The real threat of cheap Chinese cars is to the profits of American automakers; Chinese cars are very inexpensive— like a decent quality mid-size SUV for around $20k. So many US buyers would start driving Chinese that the American automakers would either have to adapt and compete… or suffer catastrophic losses.

The end result of these bans is less competition, meaning Americans end up paying more for their vehicles.

Just add this to the long list of things which governments, from city councils to federal regulators, make more expensive.

Yesterday we wrote about how federal influence over local building codes adds $132,000 to the average new home.

Today it’s how they’re making buying a car and taking a quick trip more expensive.

Ask California how it’s doing on that nonexistent high-speed rail… $15 billion and 18 years in, without a mile of track. Or ask Europeans, where climate fuel mandates are already tacking surcharges onto every plane ticket.

The receipts are everywhere: everything the government touches becomes more expensive.

College tuition is up about 1,200% since 1980— the surge began as soon as the federal government made itself the nation’s student lender.

Since Obamacare passed, the average family health insurance premium has nearly doubled.

Even junk food became more expensive due to government  food subsidies; in fact the moment 18 states pulled soda and snacks off the food stamp list, PepsiCo cut prices on Doritos and Lay’s by up to 15%.

Housing, transportation, food, healthcare, education— all swamped by government interference, all quickly became less affordable.

And underneath all of it, bringing the whole pot to a boil, is the inflation that politicians and regulators caused with their own spending.

Yet who do they blame? Greedy corporations.

Inflation has nothing to do with greed. It has everything to do with incompetence and irresponsibility.

Bastiat’s joke was that nobody would ever actually file the candlestick makers’ petition. Yet 181 years later, what started as satire is taking place every single day.

A political class that treats cheaper goods and services as a threat is deliberately choosing to make the country poorer.

P.S. A government that treats cheaper as a threat isn’t going to start choosing growth anytime soon. That’s exactly why we publish Plan B Confidential— our flagship research on legal, practical ways to diversify your savings, your income, and even your residency beyond any single government’s bad decisions. Click here to learn more.

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Somewhere in America there’s a local ordinance that tells you which way your garage has to face.

Another one dictates what your fence can be made of, and a third sets how many square feet of window your house needs. A few spell out the dimensions of particular features down to a quarter of an inch.

The National Association of Home Builders, the trade group for the companies that build American homes, has been adding up what rules like these cost since 2011.

Its reasoning is simple: the country is short about 1.2 million homes, and rising regulatory costs are one of the things keeping builders from closing that gap. So anyone writing new rules ought to know what the existing ones already cost.

Government regulation now adds about $132,000 to the price of a new home.

That’s just over a quarter of the roughly $500,000 the average new house sold for in January.

Builders said that ten years of changes to the building code added about $40,000 to the cost of a house. That’s the cost to buy the extra materials and labor each new edition of the code demands… whether or not the buyer wanted them.

Some of those rules are reasonable— hurricane-rated windows on a house within a mile of the shore, or shock-proof breakers on the circuits that run the stove and the dryer.

But those same code changes also decided that a hot-water pipe can’t run more than 100 feet, that the outlet on a kitchen island has to pop up out of the countertop, and that an ordinary draft-vented furnace needs its own sealed, insulated room with an outside air vent.

None of those is a matter of life or death; even the furnace is an energy-efficiency rule, and the homeowner doesn’t get to decide whether the upfront cost is worth the long term savings.

Codes get adopted locally, but the model codes that cities and counties copy are drafted with help from the Energy Department, FEMA, and the EPA.

The study notes, almost in passing, that “DOE also has a budget to persuade state and local governments to adopt more stringent codes.”

In other words, a federal agency spends tax money persuading your county to make your house more expensive.

Just the energy part of the code adds between $9,600 and $21,400 to a home built to the 2021 version, and NAHB estimates it can take the buyer up to 90 years to recoup that money in lower utility bills. So maybe your grandkids will thank you, assuming the house is still standing.

This cost was made a federal requirement— a condition of every FHA and USDA loan on a new house— until a judge ruled in March that it violated the government’s own affordable-housing law. But it still stands as the building code in roughly a dozen states.

Then come the fees. Permits, inspections, impact charges, and utility hookups add about $20,000 per house after the builder buys the lot.

Like any medieval lord, the local government also takes its tribute in land. More than 85% of developers have to hand part of their parcel to the town for a park or keep it as open space, at a cost of about $13,600 per home. Of course that cost is passed on to the buyer.

Regulation also costs time, and the study only quantifies about half that cost. More than 90% of developers report delays averaging about seven months, and more than a year passes between the zoning application and the first day of work on the site.

The study puts the delay itself at about $4,000 a house. It doesn’t count the opportunity cost, or how delaying new housing supply raises the costs of everything else on the market.

And it’s quickly getting worse. Five years ago the same study put the total regulatory cost per home at about $94,000. It’s up more than 40% since then— and it has doubled since 2011.

Disposable income in the US rose 18% over the same five years. So the cost of obeying the rules is growing twice as fast as anyone’s ability to pay it.

Notice that these costs have nothing to do with greedy builders or Wall Street landlords.

Many builders have been cutting prices every month for well over a year, and new homes still aren’t selling. They’re sitting unsold— in a country that’s short 1.2 million homes— because a builder can only cut so far before he’s selling at a loss.

Ironically, on top of the federal government pushing a rule that violated its own affordable-housing law, NAHB suspects some of the rules have less to do with safety or efficiency and more to do with “aesthetics, or possibly even, in some cases, a desire to price less affluent residents out of particular neighborhoods.”

Yet the same city councils that pass them will tell you affordable housing is their top priority.

And homebuilding is just the one industry that bothered to add up the cost of insane government regulation.

The same thing happens anywhere the government writes the rule book.

Want to build a power line, a pipeline, or a mine? The White House’s own environmental council found that the average federal environmental review takes four and a half years before anyone breaks ground.

The National Association of Manufacturers puts the cost of complying with federal rules at about $3 trillion a year, roughly 11% of GDP.

All of this strangling regulation is a big part of why the economy can’t grow faster, and right now the US needs growth badly.

The national debt just crossed $40 trillion, and Congress refuses to cut a cent, even when the spending is obvious fraud.

That leaves two ways out. Either the economy grows faster than the debt, which means the country builds more, makes more, and starts more businesses than it does now… or the government prints the difference.

Without a regulation-destroying bonanza, it’s obvious which one happens. If the government can’t rein in the rules, it can’t rein in the debt. And if it can’t rein in the debt, it can’t rein in inflation, because printing the money is the only option left.

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Hardly a week goes by without another data center announcement, and the projects have gotten so big that they’re now measured in gigawatts.

A gigawatt is a billion watts of electricity. Running around the clock, one gigawatt is enough to supply about 800,000 average American homes— and a single large data center is now built at that scale.

The data center that Meta is building near El Paso is designed for a full gigawatt and comes online in 2028.

Plus Meta just announced plans to grow its campus in Louisiana to 5GW. And OpenAI’s Stargate program, spread across sites in several states, is planned for 10GW.

These projects are also spectacularly expensive, and even the richest companies on earth have stopped paying for them out of pocket.

Earlier this month Google borrowed $25 billion from the bond market. It was the company’s third major bond sale this year, which brings its 2026 borrowing to more than $70 billion.

Google needs the money because its capital expenditures budget this year is about $200 billion, and in Q2 they spent more cash than they brought in for the first time in more than two decades.

Meta is doing the same thing. In late July, a BlackRock-led group raised $12.5 billion of debt for that El Paso site, where Meta will be the sole tenant for twenty years.

The group had to pay about 7.5% to get the deal done, one of the highest yields on any blue-chip data center bond to date. That comes on top of the $25 billion in bonds that Meta sold in May, and another $30 billion borrowed for the Louisiana campus.

And that’s just two borrowers. The total borrowings right now related to AI and data centers is truly staggering.

But it’s not just tech spending that’s driving the bond market. Let’s not forget about the US federal government, which is on track for a $2.1 trillion deficit this fiscal year.

That’s just the NEW amount of debt they have to borrow this year just to keep the lights on and pay all the Somalis.

The White House is asking Congress for a $1.5 trillion Pentagon budget next year, more than 40% above this year’s and the largest defense request (as a percentage of GDP) since World War II.

So between tech spending and the federal deficit, that’s already several trillion dollars in capital that needs to be borrowed from the bond market… THIS YEAR.

Here’s the problem: America’s “net private savings”, i.e. the sum of ALL undistributed corporate profits, plus total household net income, is only about $2.2 trillion.

In short, the federal government already requires nearly ALL of the net private savings from literally every household and every company across America… just to make ends meet.

Meanwhile the biggest foreign lenders are backing away.

Japan, the UK, and China— the three largest foreign lenders to the US government— all cut their Treasury holdings in June. China now has their lowest Treasury holdings since 2008, down more than 13% from last year.

In short, foreigners are not coming to the rescue. So there is very little capital left over to lend for data centers and AI expansion.

And that says nothing about the tens of millions of other borrowers— small businesses, home buyers, etc. who need to borrow money.

This is why interest rates are rising— it’s simple supply and demand: demand for capital is at an all-time high. Yet supply of capital (at the moment) is fixed. And when the supply/demand fundamentals of capital get out of whack, interest rates rise.

Families who need to buy a home now are standing in the same line as Google, Meta, and the Treasury Department, competing for the same money.

That’s why the average 30-year mortgage rate is 6.7%, and will likely go MUCH higher from here…

… unless the Fed starts printing money again.

Technically the Fed doesn’t physically ‘print’ anything, it’s all electronic. And they don’t call it ‘money printing’, because that would be too embarrassing. They refer to it as ‘quantitative easing’. But it has the same effect— increasing the supply of capital to meet the demand, thus causing interest rates to fall.

Mortgage rates fall. Treasury yields fall. Everyone is able to borrow for less.

Which sounds great… except that conjuring money out of thin air invariably triggers more inflation. So if you can borrow more cheaply but have to pay more for everything, are you really any better off?

It’s obvious the White House wants the Fed to cut rates… which means firing up a fresh round of Quantitative Easing. And Congress certainly won’t mind being able to borrow more.

Pretty much all politicians, regardless of party affiliation, want lower interest rates. Given the choice between high mortgage rates and higher inflation, politicians will pick higher inflation every time.

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

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In November 2008, California voters approved a ballot measure to build a bullet train from San Francisco to Los Angeles.

It was supposed to be fast enough to make the journey in under three hours. And passengers could hop on by 2020, for a total cost of $33 billion.

Eighteen years later, there is nothing to ride.

Emblematic of the progress so far is a field outside Fresno, where lonely viaducts poke into the sky with no rail connecting them. The locals call it their own Stonehenge.

And the state’s 2026 revised business plan now says it will cost $126 billion to complete… by 2040. Eighteen years into a 12-year project, they’re now saying they need another $93 billion and 14 more years.

Why is the price nearly four times higher than the original estimate?

Well, let’s try to answer that by tracking where the $15 billion already spent has gone.

The California High-Speed Rail Authority’s own business plan shows that about $9.1 billion went to three construction contracts covering 119 miles of the project. Those contracts are for the civil work only, meaning dirt, pipes, power lines, and concrete.

For that, California got about 80 miles of finished roadbed, i.e. the raised, graded earth that the track will eventually sit on, plus various bridges and overpasses.

In case you’re not keeping score, that works out to $77 million per mile… but that doesn’t include the actual train tracks.

No, California plans on building the rail, the electric wire, and the signals with an additional $3.5 billion contract— which was just awarded in June (i.e. 18 years in to a 14-year project).

And $3.5 billion of rail only encompasses a very small portion of the total distance they need to build.

For a rough comparison, Brightline— a private company in Florida— finished a Miami to Orlando line in 2023, with 235 miles of track, stations, and trains, for about $6 billion, or $25 million a mile.

So California’s is three times what Florida’s cost WITHOUT including the cost of the rail, the trains, and the stations.

Extraordinary. Where did all this money go?

They claim that $1.57 billion went to buying property— the narrow strip of land under the 119 miles (i.e. less than a third of the project).

But if you look at real estate prices in the area (Central Valley farmland went for about $12,000 an acre when the buying started), the actual land value was worth maybe $35 million at the time.

In other words, the state OVERPAID what the land was worth by 30x. I’m sure absolutely zero politicians or their families profited from that overpayment.

The next $3.6 billion went to studies, i.e. environmental reviews, and something the state calls “program-wide support”. That’s the second-biggest item on the bill.

The Authority started in 2008 with ten employees and hired a consulting firm to run the project. By 2018 the state had grown its own staff to about 190, with the consulting firm employing 485 people on the job.

This outside firm is generating hundreds of millions of dollars per year to do nothing.

When the state auditor went looking for what all those people had produced, 145 of the 184 deliverables were missing.

Not deliverables like rails and bridges. We’re talking about reports. The consultants couldn’t even manage that.

Governor Gavin Newsom’s reaction was to promise a purge. Yet the same firm still runs the project. And every slip in the schedule means the firm gets paid more. In fact this year’s plan added another $145 million for consultants.

In July the project’s own Inspector General wrote that the Authority “has obscured basic facts about the project” and made oversight harder for the legislature.

For example, in January, the Authority agreed to pay one of its contractors $537 million to settle nearly 600 claims for extra costs.

What claims? Were the claims real? Nobody knows, because nobody has audited it. The Inspector General, whose job that is, says his office is half-staffed. Maybe he should hire an outside consulting firm.

How could anyone look at all this and not see the same kind of fraud the Somalis are running in Minneapolis?

You take tax dollars and funnel them through layers of government employees, consultants, contractors, and unions, all of them tied to the political establishment. In return, those people spend a slice of their ill-gotten gains keeping the politicians who make it possible in office.

California’s version may be ‘legal’ graft. But that hardly makes it different. It might be worse, since at least in Minneapolis the people on the take can be prosecuted.

Who’s to say the contractor didn’t earn an extra $537 million? Who’s to say the consultants’ reports weren’t worth every dollar of the $3.6 billion?

And when someone tries to get to the bottom of it, they make asking questions illegal.

Nick Shirley, the YouTuber whose video of empty tax-funded Minneapolis day cares went viral last Christmas, walked into a Los Angeles immigrant-services nonprofit this summer and asked where the $80 million in government money it has taken over the last four years went.

But they were ready to silence him, because two months after the Minneapolis video, that same nonprofit had co-sponsored a bill letting its staff sue anyone who posts videos of them online. Newsom signed it into law on Saturday.

Starting in October 2027, anyone who works at, volunteers at, or gets help from an immigration nonprofit can sue whoever posts their picture online, for at least $4,000 plus attorney’s fees.

And these are the same people who mock anyone who suggests an election might not be secure.

Why wouldn’t you trust them to count the mail-in ballots at 3 a.m.?

Nobody should bet a family’s future on these people getting better. The tax-funded gravy train isn’t slowing down if they have anything to do with it.

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

PS- Schiff Sovereign Premium is our guide to building that Plan B: legally cutting your tax bill, gold and precious metals strategies, research on undervalued real asset businesses, and diversification moves that keep your money and your freedom of movement out of any one government’s reach.

It’s just $9 a month. You can learn more here.

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Several days ago, just as America’s national debt topped $40 trillion for the first time, China’s official propaganda outlets took the opportunity to mock the United States over this ominous milestone.

Xinhua is the Chinese government’s official news agency, and they published a scathing commentary comparing the US national debt to Frankenstein and his monster. They noted both were “destroyed by the forces they had set in motion,” and that America “risks a similar end.”

Another Xinhua social media account mocked the US government for borrowing new debt to pay back old debt, joking, “sounds like a perfect plan.”

And a different Xinhua piece warned that US Treasuries were transforming from a rock-solid “risk-free” safe haven asset into a source of volatility.

Xinhua’s comments are not wrong. $40 trillion an insane amount of debt, and if you include state and local debt across the United States— New York, California, Chicago, etc., the total gross debt grows to $44 trillion.

The worst part is that few politicians are serious about cutting the debt, or even slowing down the borrowing. Congress can’t even cut hundreds of billions of dollars’ worth of obvious fraud.

But the criticism is pretty rich coming from the Chinese Communist Party.

America’s federal debt is roughly 125% of GDP. Even including state and local debt it’s 135% of GDP.

But China’s is 107% of GDP— so it’s not like the CCP is some paragon of spending restraint! And that 107% number is just what they publicly acknowledge.

Here’s one example of an accounting trick China uses to keep its full debt off the books.

For decades, Chinese cities weren’t allowed to borrow directly. So as an alternative they set up government-owned companies to do the borrowing for them.

These government-owned companies built the subways, the industrial parks, and the apartment towers, but the debt sat on the companies’ books instead of the government’s.

In November 2024 China’s government finally admitted to trillions of dollars worth of this hidden debt. And they announced a five-year plan to move it onto their official balance sheet.

America’s debt has been growing steadily: a horribly grotesque, absurdly wasteful $2 trillion per year since 2020. But China’s debt takes a quantum leap every time the CCP tells a little more truth.

And by the IMF’s count, China’s real government debt comes to 135% of GDP this year… dead even with America’s.

But Chinese debt pulls way ahead of the US when you factor in actual private debt held by companies and citizens.

Chinese corporate debt, for example, sits at 143% of GDP. US company debt is about HALF of that level. And let’s not forget that the biggest Chinese borrowers are state-owned enterprises where the politicians are ultimately in charge. So I’m suuuuure those company audits are totally above board…

The real question is HOW is this money going to be paid back. And by WHOM?

In January, China’s statistics bureau reported that just 7.9 million babies were born in 2025, down from 9.5 million the year before… and the fewest in modern China’s history. China’s fertility rate is 0.96, not even half of what it takes to keep a population steady. And China’s population shrank for the fourth year in a row.

America’s debt will land on the next generation, which is bad. But at least America HAS a next generation.

Decades of the idiotic one-child policy left China with families with (hopefully) one worker supporting two parents and four grandparents. That same worker will now inherit his share of China’s debt at 135%+ of GDP.

America’s fiscal challenges are immense. But they can be solved with common sense solutions— eliminating obvious fraud, making government more efficient, scaling back regulations that hamstring small business growth, reforming the immigration system, reforming Social Security.

China, on the other hand, needs a time machine to solve its problems. And since no such time machine exists, they just cook the books.

Seriously. A shrinking population is deadly for a nation’s economy. China can’t go back in time to reverse its one-child policy. And they can’t fix it with immigration either— because few people want to move to China!

This is why so many Chinese companies are developing robotics— it’s an absolute necessity there. But even this comes with a major social cost, i.e. higher unemployment.

And China cooks the books on those numbers as well.

When youth unemployment hit 21.3% in June 2023, the bureau suddenly decided that its methods of calculating unemployment needed immediate changes.

Plus any criticism or complaining leads to imprisonment… or worse.

In October 2020, Jack Ma, Alibaba’s founder and then the richest man in China, gave a speech in Shanghai saying China’s banks ran on a “pawnshop mentality” and its regulators were out of date.

Two weeks later the Chinese government killed his payments company’s stock listing, which would have been the biggest in history, and Ma disappeared for three months.

This method of control is why no one can really trust anything from the Chinese government.

That includes their attitude that they will some day rule the world.

When President Trump visited Beijing earlier this year, Xi Jinping asked whether China and the United States could “overcome the so-called Thucydides Trap,” the theory that a rising power and the one it threatens end up at war.

China’s government has spent years telling anyone who’ll listen that America is finished and China’s time has come.

America does have challenges. And there is still some time left to get its house in order to avoid serious consequences.

But China is not its replacement.

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King Hammurabi of Babylon had a simple rule for home builders: if the house you built collapsed and killed its owner, you were put to death.

That was law #229, carved in stone almost 4,000 years ago. And some version of this rule has existed for most of human history. Even to this day, it’s a tradition among architects to spend the night under a bridge they designed to prove that it’s safe.

Bottom line, people who built things were often expected to eat their own cooking and suffer the successes and consequences of their work.

The United States Congress has spent decades perfecting the opposite arrangement.

Start with the salary. Members of Congress earn $174,000 a year, more than double what the median American household makes. Yet Congress would like you to know how painful that is.

Senator Tommy Tuberville calls the job a “sacrifice.” Representative Pramila Jayapal complains that “most of us get paid less than our chiefs [of staff] at this point.”

Current and former members are suing the government, demanding retroactive cost-of-living raises, with claims as high as $420,000 apiece.

Bear in mind, again, that Congressmen already make $174,000 per year. Yet the House of Representatives averages just 150 days in session per year. And last year’s legislative calendar scheduled just 137 days.

Most Americans work at least 250 days a year. So, adjusting for actual days worked, Congressmen are actually earning nearly $300,000 based on a normal work year. So the pay gap between everyday Americans and their Congressional representatives is even greater than at first glance.

And just how do they fill their 150ish work days? The Democratic Congressional Campaign Committee once handed its incoming freshmen a model schedule:

Four hours of the day went to fundraising calls. Another hour to something called “strategic outreach”, i.e. being aligned with the party bosses. The actual job of representing constituents gets, maybe, 3-4 hours per day.

By the party’s own math, half of a congressman’s day goes to keeping the job rather than doing it.

This is insane. A welder doesn’t get to spend half of his day persuading people to let him keep his job; rather, if he doesn’t want to get fired, he simply has to do a good job. Pretty simple.

But members of Congress can’t run on their records, because their record is the insane world that we all live in.

So they spend their days telling lies to donors in order to raise enough money to tell more lies in TV commercials and email blasts. Anywhere else, this cascade of lies would be considered criminal fraud. In politics it’s just campaigning.

And in a few weeks, those campaign pitches will even receive a special pass around Gmail’s inbox filter: starting September 8, 2026, Google will let verified political committees bypass it entirely, just in time for the midterms. Your inbox has rules; their fundraising has an exemption.

But the exemptions don’t stop there.

Thanks to Congress, Americans are required by law to have some overpriced health insurance plan. But politicians have a special plan, with taxpayers footing the vast majority of the premium… plus coverage for life once a member qualifies for retirement after serving just FIVE years in Congress.

So the same people who built the most unaffordable healthcare system in the world exempted themselves from ever feeling the pain.

Pensions repeat the pattern: members elected before 2013 earn a pension that accrues nearly twice as fast as a regular federal worker’s, collectible as early as 50. They let Social Security drift toward insolvency for you. For themselves, they built a backup.

Then there’s the stock trading. A corporate executive who trades on confidential information goes to prison. Congress never bothered to apply those rules to itself until the 2012 STOCK Act.

That might explain how former House Speaker Nancy Pelosi went from a roughly $3 million net worth when she entered Congress in 1987 to an estimated $280 million today. It’s all apparently due to her husband’s extreme investment prowess.

But she’s far from the only one. Must all be a wild coincidence.

Even after the 2012 STOCK Act which required politicians to disclose their stock trades, nothing changed. Seventy-eight members broke that law in a single term— yet in the fourteen years since the STOCK Act, not a single one has been prosecuted for insider trading.

Even Speaker Mike Johnson says, “Look, at least let them, like, engage in some stock trading, so that they can continue to, you know, take care of their family.”

Imagine the private-sector version: if JP Morgan announced a new campus in Texas and its CEO, Jamie Dimon, bought up the surrounding land to sell to his own company, he’d be indicted before the concrete cured.

Congress runs that trade every day, on information you’ll never see, and calls it “taking care of their family”.

Then you’ve got their housing perks.

Representatives can bill taxpayers for their living costs in Washington DC— up to $276 a night for lodging, plus a $92 meal allowance.

What’s interesting is that this is a recent adjustment going back to just 2023. Congressmen were ‘suffering’ the worst inflation in four decades. Rather than acknowledge that they themselves were instrumental in creating that inflation, they cooked up a bailout for themselves so that they wouldn’t have to pay sky-high prices.

In short, you pay higher living costs. Congressmen bill you for theirs.

Congressmen also routinely get sweetheart deals from banks and mortgage brokers; during the 2008 financial crisis, for example, America’s largest housing lender at the time ran a VIP program that waived fees and cut prices on home loans for politicians and key staffers.

Everyone else pays the going rate— 6% to 7% today. Politicians get special terms, and I’m sure there are no strings attached.

An organization that never feels its own failures has no reason to fix them. The debt, the inflation, and the fraud keep compounding no matter who wins.

Hammurabi figured out the fix 4,000 years ago: make the builder liable for his own construction. Congress has spent decades making sure the roof always comes down on somebody else.

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On June 7, 1939, US President Franklin Roosevelt signed a new law authorizing $100 million (a lot of money back then) to buy rubber, tin, tungsten, etc., and put it all in storage.

The United States was still at peace at the time. World War II had not yet broken out, and global trade was still relatively seamless.

But anyone reading a newspaper could see what was coming. Hitler had annexed Austria the year before and swallowed the rest of Czechoslovakia that March. Japan had been at war in China for two years.

Every commodity on Roosevelt’s list had one thing in common: America produced next to none of it. Nearly all of the rubber used by US companies, for example, came from British Malaya and the Dutch East Indies. A lot of tin came from Malaya as well.

Congress and Roosevelt were being appropriately cautious. And within a short time they had stockpiled hundreds of thousands of tons of these strategic assets.

Then came the War. Then Pearl Harbor. And then full-blown economic chaos.

By March 1942, for example, Japanese troops had overrun Malaya and the Dutch East Indies… meaning that about 90% of America’s rubber supply vanished overnight. Fortunately, their foresight to build stockpiles cushioned the blow.

This critical lesson in self-sufficiency is easily forgotten. As long as global peace and cooperation feel permanent, governments never think about resource scarcity. They assume they will always be able to trade for what they need… so why waste money stockpiling?

But global peace and cooperation can quickly turn to conflict and tension, and that is the environment we are in today.

The last major global conflict was World War II. Before it was over, 730 delegates from 44 nations literally sat down at a conference and hammered out a new framework for economic cooperation that made the US dollar the world’s undisputed reserve currency.

As a result, every country on earth has parked its savings in US government bonds for the past eight decades.

It hasn’t always been easy. The US formally ended the convertibility between the dollar and gold in the 1970s, and there was some thought to creating a new financial system. But the dollar managed to survive as king.

The dollar’s status has also been at risk throughout this century, between the skyrocketing US national debt and heavy-handed legislation (like FATCA) that the US government forced on the rest of the world.

But, still, the dollar survived. And foreign countries kept buying dollars and Treasury bonds.

But everyone has a breaking point, including foreign countries.

The US government’s response to freeze Russian assets in 2022 was the start. Then came last year’s so-called “Liberation Day”, when decades of trade policy were upended, overnight. Then came the Iran war. And now a $40 trillion national debt with no end in sight.

This has all been enough for foreign governments and central banks to finally reverse course; at first they slowed their purchases of US Treasury bonds. Now they’re actually selling… and diversifying away from the dollar.

The immediate beneficiary has been gold. And we’ve written about this— gold is the most logical asset for central bank diversification because it is already a traditional reserve asset… plus the gold market is very large and liquid.

We believe this trend will continue; gold prices will rise as a result, and quality mining companies should prosper.

But there’s a second element to this diversification story.

After Iran closed the Strait of Hormuz— which carried a fifth of the world’s oil and a host of other critical resources— every government on the planet re-learned the same lesson of World War II: trade and cooperation can vanish in an instant.

And now the entire globe feels a sense of urgency to prepare for the next conflict.

Will China invade Taiwan? Will the US and China go to war? Will Russia and NATO come to blows? Nobody knows, and no government wants to be caught flat-footed, unable to import the critical resources that their economies need to function.

In Roosevelt’s era it was things like rubber and tin.

Today, these critical resources (what we refer to as ‘real assets’) start with energy— oil, natural gas, even coal… plus uranium for some countries.

Now, not every commodity is a real asset. Sugar is a commodity… but the world would be just fine without it. No government is going to stockpile orange juice, lumber, or wool. Or even rubber anymore.

But cut off a country’s oil supply and it reverts to the Dark Ages.

That’s why countries are now stockpiling the strategic assets that are the vital inputs to their economies: copper, rare earths, and even the IP and hardware that power AI.

China is the clearest example. In 2025 alone it added more than a million barrels a day to an oil stockpile and now holds roughly 1.4 billion barrels— the world’s largest reserve.

When Hormuz closed and the US and 31 other countries released 400 million barrels from their emergency reserves, China barely touched its pile and by July was adding to it again.

Its nuclear-fuel imports hit a record last year too, far beyond what its reactors burn; the excess went into stockpiles. And this summer Beijing put a new $9 billion state company in charge of buying mines around the world.

Saudi Arabia, on the other hand, produces plenty of oil, so they don’t need to stockpile it. But they are building nearly two gigawatts of data centers at home rather than risk being cut off from computing power.

A government that sells a Treasury still has to put the money somewhere, and the sensible places are the assets that the US government cannot freeze… and that no central bank can print. That is why the long-term direction of gold is still up.

But it’s also why energy, industrial metals, productive technology, and other vital resources— plus the companies which produce them— have a bright future.

This is the thesis behind Schiff Sovereign’s investment research newsletter, Strategic Assets. A world that no longer trusts the US government moves into gold, and a world that can no longer count on trade cooperation secures its own stockpiles.

We provide research on companies that mine, pump, and build what governments are stockpiling.

Subscribers who acted on our research locked in more than 10x on a small silver producer and more than 6x on a gold and silver producer, both in under a year.

A tin producer featured last summer is up more than 3x, a zinc producer more than 2.5x, and a tanker company about 2.5x. Across the companies we have closed out, winners and losers together, the average return is 172%.

We cordially invite you to learn more about Strategic Assets by clicking here.

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