Why a desperate America may soon annex its 51st state

What else are the “Experts” ignoring?

Silicon Valley Bank’s collapse proves the US is in obvious decline

Yikes. The Fed has still learned nothing about inflation

Lessons from One of History’s Biggest Scumbags

Imagine if Elon wanted Tesla stock to lose 2% every year…

Biden is a liar, and these financial documents prove it.

Why it makes so much sense to diversify internationally

Proof of Time: a different way to think about gold

So you’re telling me there’s a chance…

James Hickman, a natural and entertaining teacher, combines data — he was a West Point math major — history, and international entrepreneurial and investment expertise to bring you a unique, easy-to-understand take on where the macro-trend hockey puck could go. Read more at www.sovereignman.com

I’ve been listening to Simon when the podcast was new and Im only sad that they don’t post in a regular basis. Only great information and important topics are covered, a podcast for the man/woman of the 21st century.

Recommended podcast for entrepreneurs and investors alike.

New to the show. LOVE what you’re doing 5 stars!

James Hickman, a natural and entertaining teacher, combines data — he was a West Point math major — history, and international entrepreneurial and investment expertise to bring you a unique, easy-to-understand take on where the macro-trend hockey puck could go. Read more at <a href="http://www.sovereignman.com" rel="nofollow" target="_blank">www.sovereignman.com</a>

Sovereign Man

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

[Editor’s note: We have made this content available as an audio and video podcast, but I encourage you to watch the video with the slides.] <center> <a href="https://www.youtube.com/watch?v=wsYe8_FFkoA" rel="nofollow" target="_blank">https://www.youtube.com/watch?v=wsYe8_FFkoA</a> </center> In the video I mention a preview issue of our 4th Pillar Investment Service. <a href="https://s3.amazonaws.com/sm-cdn/reports/previews/SM_Preview_4th_Pillar_67.pdf" rel="nofollow" target="_blank">Click here to download it</a>. For most of the past week, we’ve been spending a lot of time talking about <a href="https://www.sovereignman.com/trends/the-us-dollar-is-now-overvalued-against-almost-every-currency-in-the-world-20704/" rel="nofollow" target="_blank">trading overvalued paper currency for high quality, undervalued businesses</a>. Right now, this is an absolute no-brainer to consider. If you’re holding US dollars, it’s critical to understand that the President of the United States, as well as key members of the Federal Reserve, ALL want the US dollar to get weaker. This means you have an opportunity right now to trade overvalued US dollars, which will likely get weaker, for high quality, undervalued businesses, which will likely get stronger. This is easier said than done, of course. Problem #1 is finding a great business. Problem #2 is making sure that you don’t pay out the nose for it. Netflix, for example, may be a very nice business with a lot of growth potential… and even more investor hype. But if you’re going to buy shares, be prepared to pay dearly for them. It will take several decades for Netflix to generate enough cashflow to recoup your investment. Successful investors never overpay. Instead, they patiently seek out great businesses whose shares they can acquire for bargain, discount prices. This is not rocket science. Successful, rational investing is a skill, and one that can be learned. Last week I promised to explain how my team finds and analyzes these types of deals to ensure that we can generate strong returns while taking minimal risk. I ended up recording a full presentation about it. Even if you’re already an experienced investor, I’d encourage you to watch this presentation, or listen to the accompanying audio. The presentation explains, for example, why conventional valuation metrics are deeply flawed. Most people are probably familiar with the famous “P/E” ratio. I’ll show you why P/E ratios are worthless… and teach you about a FAR better metric to look at… one that few people have ever heard about. Once you understand it, you’ll never look at investments the same way ever again. <center> <a href="https://www.youtube.com/watch?v=wsYe8_FFkoA" rel="nofollow" target="_blank">https://www.youtube.com/watch?v=wsYe8_FFkoA</a> </center> In the video I mention a preview issue of our 4th Pillar Investment Service. <a href="https://s3.amazonaws.com/sm-cdn/reports/previews/SM_Preview_4th_Pillar_67.pdf" rel="nofollow" target="_blank">Click here to download it</a>.

073: How to identify the most compelling investments on the planet

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

Yesterday I recorded <a href="http://traffic.libsyn.com/sovman/podcast-tax.mp3" rel="nofollow" target="_blank">a new podcast</a> with my US-based tax attorney to talk about the Trump administration’s new tax plan… or as I like to call it, the plan to have a plan. Clearly they’re trying to do something positive and significant. But to say that their strategy is light on details at just a single page would be a massive understatement. Rather than rehash and recap what has already been covered in the media, my attorney and I dove into some of the more important issues: what’s NOT in the plan, what are the major details to sort out, and what’s SAFE? Personally, I’m extremely skeptical of major tax reform… though I’d be happy to be proven wrong. As I’ve written a number of times, the last time the tax code was updated was 1986. Tech-savvy consumers were still using 5 ¼ inch floppy disks. Many of our readers hadn’t even been born yet. The 1986 tax code was perfectly reasonable for an industrialized economy dominated by large companies like General Motors. Today, technology makes it possible for companies to generate income across the world through products and services that are entirely digital. Yet today’s companies are still forced to use the same hopelessly outdated tax code. It’s such an embarrassing anachronism, it would be like the US government using those 1980s era 5 ¼ inch floppy disks to run its nuclear program. <a href="https://www.youtube.com/watch?v=HkTHg9Px2Vw" rel="nofollow" target="_blank">Oh wait…</a> The reason I’m skeptical, though, is that each and every line item in the tax code has a certain group of beneficiaries that’s willing to fight tooth and nail to keep it. There are people who benefit from all the deductions that the administration wants to eliminate. There are even people who will fight to keep the widely-hated Alternative Minimum Tax and Estate Tax. And the larger problem, of course, is that millions of taxpayers and businesses have made plans and structured their affairs in a way to conform to the current tax code. Pulling the tablecloth out from underneath them and suddenly changing the rules could end up causing some serious blowback. So it’s enormously difficult to please a firm majority. And even if they manage to pull this off, they’ll still be accused of not being ‘revenue neutral.’ This is the part I find to be completely absurd. The tax code is going to affect hundreds of millions of people and businesses in the largest, most complex economy in the world. Economist cannot possibly predict with any accuracy how a radical overhaul of the tax code is going to impact the US government’s tax revenue ten years from now. Nevertheless, this is going to be one of the primary arguments against the plan. One of the points my attorney and I discussed is what will remain safe, i.e. what they’re NOT going to touch. Retirement accounts are CLEARLY in that category. If you have an IRA or 401(k), that’s not going to be touched. It would be politically disastrous for everyone. This means that establishing a robust retirement structure like a self-directed SEP IRA, or a solo(k), is still a fantastic option, regardless of what they do with the rest of the code. With a self-directed SEP IRA, for example, you create a new retirement plan with a contribution limit that increases from $5,500 to as much as $54,000 per year. That’s almost 10-fold. Plus the contributions are tax-deductible, meaning you can aggressively (and LEGALLY) reduce the amount of income tax that you owe. Meanwhile, the idea of a self-directed IRA structure is that your retirement plan owns precisely ONE asset: an LLC. (You’ll need to find an IRA custodian that accepts self-directed structures, like IRA Services.) You (or your spouse, parent, financial advisor, etc.) become the MANAGER of the LLC, which essentially gives you far greater discretion in how your retirement funds are invested. Rather than be stuck in an overpriced stock market, for example, your self-directed IRA plan can own income-producing real estate, farmland, private businesses, cryptocurrency, <a href="https://www.sovereignman.com/investing/how-to-earn-a-safe-10-return-with-minimal-risk-21140/" rel="nofollow" target="_blank">secured debt</a>, etc. Under the current tax code there are a number of restrictions that are known as “prohibited transactions”. Those are probably here to stay. You cannot use your IRA funds, for example, to invest in your own business, pay yourself any fees or compensation, buy/sell property that you personally own, or that is owned by immediate family members. That’s why it makes sense to talk this over with a professional. But the benefits are absolutely worth having that discussion. For now, I invite you to listen in to our conversation about the tax code, i.e. the plan to have a plan. It’s <a href="http://traffic.libsyn.com/sovman/podcast-tax.mp3" rel="nofollow" target="_blank">available here</a>.

076: Despite the new ‘plan’, this is -still- a no-brainer tax strategy

Insider

In today’s podcast, I chatted with Silver Bullion’s founder Gregor Gregersen. Silver Bullion is a precious metals storage company based in Singapore. While here in Singapore, Gregor and I discussed why the gold versus Bitcoin debate is misguided. It’s not an either-or proposition. Instead, with systemic risks in the financial system, the case for holding both precious metals and cryptocurrency makes sense. And Silver Bullion offers solutions for both asset classes. [Full disclosure: I’m a director of Silver Bullion.] Gregor’s a software engineer with experience in finance. He recently published a 35-page white paper on an exciting way to hold encrypted, secure Bitcoin in cold storage for decades. And with software Gregor developed himself, you can now store gold at their facility, borrow money with your gold as collateral and buy Bitcoin. You also don’t want to miss Gregor’s opinion on why cryptocurrency and gold will survive the next financial crisis.

In today’s podcast, I chatted with Silver Bullion’s founder Gregor Gregersen. Silver Bullion is a precious metals storage company based in Singapore. While here in Singapore, Gregor and I discussed why the gold versus Bitcoin debate is misguided. It’s not an either-or proposition. Instead, with systemic risks in the financial system, the case for holding both precious metals and cryptocurrency makes sense. And Silver Bullion offers solutions for both asset classes. [Full disclosure: I’m a director of Silver Bullion.] Gregor’s a software engineer with experience in finance. He recently published a 35-page white paper on an exciting way to hold encrypted, secure Bitcoin in cold storage for decades. And with software Gregor developed himself, you can now store gold at their facility, borrow money with your gold as collateral and buy Bitcoin. You also don’t want to miss Gregor’s opinion on why cryptocurrency and gold will survive the next financial crisis.

083: An insider’s view on the gold versus cryptocurrency debate

Wells Fargo stole the headlines yet again today for defrauding its clients. The bank was fined $1 billion today for selling over 500,000 clients auto insurance they didn’t need (which in some cases caused the owners to default on their car loans and get their cars repossessed) and for charging erroneous fees to mortgage borrowers. If you still bank with Wells Fargo, maybe this will finally serve as a wakeup call to take your money elsewhere. But this is just the latest in a long string of fraudulent bank behavior… Wells Fargo also opened millions of fraudulent accounts for their customers without their permission – in some cases moving money from existing accounts (without the customers’ knowledge) to fund the new accounts. And of course there was the entire mortgage fiasco, where banks would recklessly lend depositor funds to unemployed people to buy homes they couldn’t afford… which ultimately led to the collapse of the financial system (which was then bailed out by taxpayers). And there’s interest-rate fixing scandals, rogue traders losing billions of dollars, commodity price manipulation, forex fraud… the list goes on and on. These banks willfully and repeatedly abuse the trust placed with them by the public. Yet people continue to allow this to happen… all while making .05% interest! In today’s podcast, I explain a few steps you can take to get your money out of the banking system and achieve much higher yields – with less risk than keeping your money with a bank. Sovereign Man readers know I get fired about with these banking abuses. That’s one of the reasons I started my own bank. And I’ve got a few choice rants in today’s podcast. Again, you no longer have to participate in this system. There are plenty of alternatives today. Tune in to today’s podcast here.

Wells Fargo stole the headlines yet again today for defrauding its clients. The bank was fined $1 billion today for selling over 500,000 clients auto insurance they didn’t need (which in some cases caused the owners to default on their car loans and get their cars repossessed) and for charging erroneous fees to mortgage borrowers. If you still bank with Wells Fargo, maybe this will finally serve as a wakeup call to take your money elsewhere. But this is just the latest in a long string of fraudulent bank behavior… Wells Fargo also opened millions of fraudulent accounts for their customers without their permission – in some cases moving money from existing accounts (without the customers’ knowledge) to fund the new accounts. And of course there was the entire mortgage fiasco, where banks would recklessly lend depositor funds to unemployed people to buy homes they couldn’t afford… which ultimately led to the collapse of the financial system (which was then bailed out by taxpayers). And there’s interest-rate fixing scandals, rogue traders losing billions of dollars, commodity price manipulation, forex fraud… the list goes on and on. These banks willfully and repeatedly abuse the trust placed with them by the public. Yet people continue to allow this to happen… all while making .05% interest! In today’s podcast, I explain a few steps you can take to get your money out of the banking system and achieve much higher yields – with less risk than keeping your money with a bank. Sovereign Man readers know I get fired about with these banking abuses. That’s one of the reasons I started my own bank. And I’ve got a few choice rants in today’s podcast. Again, you no longer have to participate in this system. There are plenty of alternatives today. Tune in to today’s podcast here.

092: Why on earth are you still letting big banks screw you?

Welcome to another edition of the Sovereign Man podcast. As we enter 2019, you’ll start to see more podcasts from us. And you also might notice a few changes. We’ve upped the production value of our chats with Simon. And we’ll continue to improve both the production and the content of our podcasts. And we’d love to hear your feedback on our efforts. In today’s podcast, Simon gives us an update from on the ground in Puerto Rico… and explains why you should absolutely consider moving to Puerto Rico if you have a business, earn investment income or want to freelance and significantly lower your tax bill. Plus, Simon shares some specifics on how to get started taking advantage of Puerto Rico’s tax incentives (and who can benefit from Act 20 and Act 22). It’s an outrageous deal to be able to live in paradise and pay essentially zero tax. So if you have any interest in Puerto Rico… and you could potentially benefit from moving yourself or your business there, please do not miss this discussion. And make sure to subscribe to our podcast on iTunes or Google Play. Here’s what you’ll hear about in today’s episode: Intro – Simon talks about how amazing life is in Puerto Rico, something which surprised him. (He’s not a beach guy.) About 3:00 in — Why moving to Puerto Rico is like moving to Florida… with major financial benefits 5:45 — What Simon gave up to move to Puerto Rico, and why it reminds him of South Park 8 minutes — Why Simon sees voting with your wallet as much more powerful than voting at the booth 10:00 — The big difference between living in a high-tax state like California and living in PR, and how the tax incentives work 18:15 — details about Act 22, including whether it works for crypto people, investments in US companies, etc. 27:27 — details about Act 20, what constitutes a “qualifying” business 31 — Can an employee on salary do this? 32:54 — Are you still paying self-employment, FICA, etc.? How do the taxes work? 36 — How does the IRS consider you a resident of PR? What do you need to do? 36:30 — Do you create an LLC or a corporation? 38:30 — How is the rise of socialism going to affect programs like these? Will these incentives last? 47:50 — Do you need to be wealthy to reap these advantages? What is the income threshold or net worth threshold to make moving to PR a good idea? (Plus, Simon’s decision not to use “rule of thumb” ever again.) 50 — The power of compound-compound (double compound) interest, and whether Einstein said that thing about it. 54: Why Simon is no longer skeptical about the PR tax incentives 57: Why the requirements for Act 20 are better than they’ve ever been (and why you should lock them in… now) 1:09: How expensive is it to live in PR? Are there “middle class” options? Plus, what life is like there 1:11: Drawbacks to living in PR 1:12 Opportunities in PR 1:20: Summing it all up — and Simon’s advice on first steps We hope you enjoy today’s podcast and learn a lot about expanding your freedom and opportunities. And make sure to subscribe to our podcast on iTunes or Google Play.

Welcome to another edition of the Sovereign Man podcast. As we enter 2019, you’ll start to see more podcasts from us. And you also might notice a few changes. We’ve upped the production value of our chats with Simon. And we’ll continue to improve both the production and the content of our podcasts. And we’d love to hear your feedback on our efforts. In today’s podcast, Simon gives us an update from on the ground in Puerto Rico… and explains why you should absolutely consider moving to Puerto Rico if you have a business, earn investment income or want to freelance and significantly lower your tax bill. Plus, Simon shares some specifics on how to get started taking advantage of Puerto Rico’s tax incentives (and who can benefit from Act 20 and Act 22). It’s an outrageous deal to be able to live in paradise and pay essentially zero tax. So if you have any interest in Puerto Rico… and you could potentially benefit from moving yourself or your business there, please do not miss this discussion. And make sure to subscribe to our podcast <a href="https://itunes.apple.com/us/podcast/sovereign-man/id842764173" rel="noopener nofollow" target="_blank">on iTunes</a> or <a href="https://playmusic.app.goo.gl/?ibi=com.google.PlayMusic&amp;isi=691797987&amp;ius=googleplaymusic&amp;apn=com.google.android.music&amp;link=https://play.google.com/music/m/Iqpdy77wnpzkq2hwlil6j5eytr4?t%3DSovereign_Man%26pcampaignid%3DMKT-na-all-co-pr-mu-pod-16" rel="noopener nofollow" target="_blank">Google Play</a>. Here’s what you’ll hear about in today’s episode: Intro – Simon talks about how amazing life is in Puerto Rico, something which surprised him. (He’s not a beach guy.) About 3:00 in — Why moving to Puerto Rico is like moving to Florida… with major financial benefits 5:45 — What Simon gave up to move to Puerto Rico, and why it reminds him of South Park 8 minutes — Why Simon sees voting with your wallet as much more powerful than voting at the booth 10:00 — The big difference between living in a high-tax state like California and living in PR, and how the tax incentives work 18:15 — details about Act 22, including whether it works for crypto people, investments in US companies, etc. 27:27 — details about Act 20, what constitutes a “qualifying” business 31 — Can an employee on salary do this? 32:54 — Are you still paying self-employment, FICA, etc.? How do the taxes work? 36 — How does the IRS consider you a resident of PR? What do you need to do? 36:30 — Do you create an LLC or a corporation? 38:30 — How is the rise of socialism going to affect programs like these? Will these incentives last? 47:50 — Do you need to be wealthy to reap these advantages? What is the income threshold or net worth threshold to make moving to PR a good idea? (Plus, Simon’s decision not to use “rule of thumb” ever again.) 50 — The power of compound-compound (double compound) interest, and whether Einstein said that thing about it. 54: Why Simon is no longer skeptical about the PR tax incentives 57: Why the requirements for Act 20 are better than they’ve ever been (and why you should lock them in… now) 1:09: How expensive is it to live in PR? Are there “middle class” options? Plus, what life is like there 1:11: Drawbacks to living in PR 1:12 Opportunities in PR 1:20: Summing it all up — and Simon’s advice on first steps We hope you enjoy today’s podcast and learn a lot about expanding your freedom and opportunities. And make sure to subscribe to our podcast <a href="https://itunes.apple.com/us/podcast/sovereign-man/id842764173" rel="noopener nofollow" target="_blank">on iTunes</a> or <a href="https://playmusic.app.goo.gl/?ibi=com.google.PlayMusic&amp;isi=691797987&amp;ius=googleplaymusic&amp;apn=com.google.android.music&amp;link=https://play.google.com/music/m/Iqpdy77wnpzkq2hwlil6j5eytr4?t%3DSovereign_Man%26pcampaignid%3DMKT-na-all-co-pr-mu-pod-16" rel="noopener nofollow" target="_blank">Google Play</a>.

100: Why you should absolutely consider Puerto Rico NOW

On Monday, I shared a recording from aboard the Investor Summit at Sea, hosted by my friends, the Real Estate Guys. This is one of the only conferences I attend each year as a speaker. And that’s because I get so much value from the other speakers and attendees – guys like Chris Martenson, Adam Taggart, Robert Kiyosaki, Peter Schiff and G. Edward Griffin. Yesterday, I was on a panel with Peter Schiff, Chris Martenson and Adam Taggart. And I recorded the discussion for Sovereign Man readers who couldn’t be there in person. This panel largely centered around agriculture. As you probably know, I’ve got some experience in the industry… I took thousands of acres of bare, central Chilean land and transformed it into farmland that will soon yield one of the world’s largest blueberry and walnut crops. But, our discussion didn’t center on my personal experiences with agriculture. Instead, we dug into agriculture’s global supply and demand fundamentals. 200,000 people a day are coming into the world each day. And they all require food. Also, the number of calories being consumed per capita worldwide is increasing. On top of that, as developing countries like China and India get richer, the quality of the calories they consume changes – from beans, rice and veggies to more meat (which requires far more resources to produce). And while demand for food is soaring, arable farmland is on the decline. This is one of the most important problems of our day. And it’s not an easily solvable one. We also touch on geopolitical risks like water rights and the economics – and risks – of farmland investments in developing countries (another topic I know well). A lot of folks say we won’t have a global food shortage because we can just start farming in Africa. But I’m sorry to say that’s not the solution. It takes a tremendous amount of logistics to produce and transport food. And Africa just doesn’t have it. In today’s difficult financial and economic climate, there’s a lot to focus on… and to be wary of. Agriculture’s growing global supply and demand imbalance is one of the trends that certainly has my attention. But even with favorable fundamentals, just like with other asset classes, you can make some major mistakes when investing in this space. I also closed out the panel by asking everyone what they’re doing with their own money. You’ll want to hear what these smart guys have to say. Tune in right here…

<a href="https://www.sovereignman.com/trends/cant-miss-podcast-recorded-live-from-the-2018-investor-summit-at-sea-23273/" rel="noopener nofollow" target="_blank">On Monday, I shared a recording</a> from aboard the Investor Summit at Sea, hosted by my friends, the Real Estate Guys. This is one of the only conferences I attend each year as a speaker. And that’s because I get so much value from the other speakers and attendees – guys like Chris Martenson, Adam Taggart, Robert Kiyosaki, Peter Schiff and G. Edward Griffin. Yesterday, I was on a panel with Peter Schiff, Chris Martenson and Adam Taggart. And I recorded the discussion for Sovereign Man readers who couldn’t be there in person. This panel largely centered around agriculture. As you probably know, I’ve got some experience in the industry… I took thousands of acres of bare, central Chilean land and transformed it into farmland that will soon yield one of the world’s largest blueberry and walnut crops. But, our discussion didn’t center on my personal experiences with agriculture. Instead, we dug into agriculture’s global supply and demand fundamentals. 200,000 people a day are coming into the world each day. And they all require food. Also, the number of calories being consumed per capita worldwide is increasing. On top of that, as developing countries like China and India get richer, the quality of the calories they consume changes – from beans, rice and veggies to more meat (which requires far more resources to produce). And while demand for food is soaring, arable farmland is on the decline. This is one of the most important problems of our day. And it’s not an easily solvable one. We also touch on geopolitical risks like water rights and the economics – and risks – of farmland investments in developing countries (another topic I know well). A lot of folks say we won’t have a global food shortage because we can just start farming in Africa. But I’m sorry to say that’s not the solution. It takes a tremendous amount of logistics to produce and transport food. And Africa just doesn’t have it. In today’s difficult financial and economic climate, there’s a lot to focus on… and to be wary of. Agriculture’s growing global supply and demand imbalance is one of the trends that certainly has my attention. But even with favorable fundamentals, just like with other asset classes, you can make some major mistakes when investing in this space. I also closed out the panel by asking everyone what they’re doing with their own money. You’ll want to hear what these smart guys have to say. Tune in right here…

091: One of the most important issues of our time

In today’s podcast, I talk with our Chief Investment Strategist, Tim Staermose, about the global economy. We’re in the midst of one of the longest economic expansions in history. Most assets are trading at all-time highs. Meanwhile, debt is also at all-time highs. But we don’t have a crystal ball… this boom could easily continue for longer than anyone expects. However, Tim notes the US economy largely runs on cheap money and cheap oil. And right now, both interest rates and oil prices are on the rise. Most people aren’t talking about it, but oil prices have jumped 50% in the past seven months. And that means, sooner or later, people will be spending more money at the pump and more money on debt payments – which leaves less money for everything else. But if you look hard enough, you can still find value in today’s market. In this podcast, Tim shares the one sector where he’s personally investing. You can tune in here.

In today’s podcast, I talk with our Chief Investment Strategist, Tim Staermose, about the global economy. We’re in the midst of one of the longest economic expansions in history. Most assets are trading at all-time highs. Meanwhile, debt is also at all-time highs. But we don’t have a crystal ball… this boom could easily continue for longer than anyone expects. However, Tim notes the US economy largely runs on cheap money and cheap oil. And right now, both interest rates and oil prices are on the rise. Most people aren’t talking about it, but oil prices have jumped 50% in the past seven months. And that means, sooner or later, people will be spending more money at the pump and more money on debt payments – which leaves less money for everything else. But if you look hard enough, you can still find value in today’s market. In this podcast, Tim shares the one sector where he’s personally investing. You can tune in here.

086: The only sector that offers value today

In today’s podcast, we discuss the recent crypto meltdown (led by Ripple) and how it plays into our recent theme of avoiding huge mistakes.  Here’s the thing about big mistakes… they’re usually obvious and avoidable.  Like when the Social Security Board of Trustees told the world in its 2017 report that the “Trust Fund reserves will be depleted by 2035”… and that an “immediate and permanent reduction” in benefits to all current and future Social Security recipients is a reality.  The government is telling you Social Security is running out of money. What are you doing about it?  Likewise this morning, when Bloomberg reported China (the world’s largest foreign holder of US Treasurys) is considering slowing or halting purchases of US government debt.  This would have potentially catastrophic financial implications… and it’s been a worry for a long time.  But most people simply ignore the possibility.  You can tune in here to learn about some of the big problems that are coming down the pipe and some simple steps you can take to prepare for them. 

In today’s podcast, we discuss the recent crypto meltdown (led by Ripple) and how it plays into our recent theme of avoiding huge mistakes. Here’s the thing about big mistakes… they’re usually obvious and avoidable. Like when the Social Security Board of Trustees told the world in its 2017 report that the “Trust Fund reserves will be depleted by 2035”… and that an “immediate and permanent reduction” in benefits to all current and future Social Security recipients is a reality. The government is telling you Social Security is running out of money. What are you doing about it? Likewise this morning, when Bloomberg reported China (the world’s largest foreign holder of US Treasurys) is considering slowing or halting purchases of US government debt. This would have potentially catastrophic financial implications… and it’s been a worry for a long time. But most people simply ignore the possibility. You can tune in here to learn about some of the big problems that are coming down the pipe and some simple steps you can take to prepare for them.

85: Don’t ignore looming catastrophes… take action

It started in 1921. World War I was over. The Treaty of Versailles had been signed two years before. And Germany, the biggest loser from the war, had been stuck with both the blame and the bill. Germany’s war debt– which it owed not only for its own war-related expenses, but also for reparations to the victors– was devastating. They didn’t have the money, so they started printing it. Not surprisingly, the German mark began to sink. It started slowly at first, but by 1921 hyperinflation had taken hold until prices soared by thousands of percent. One of my favorite stories from this period, was of the elderly man who went to the police to report a robbery. Thieves had stolen a wheelbarrow of money. It was common at the time to use wheelbarrows to transport the huge sums of cash that were required to buy even the most simple things like bread and milk. When the police asked him how much was in the wheelbarrow, the man corrected them saying that the thieves had only stolen the wheelbarrow, and had left the cash behind. Undoubtedly the entire society was upturned by this hyperinflation. But as history shows, in any situation, there are always winners and losers. Pensioners and people who responsibly saved their money were wiped out; whereas people who had borrowed to invest in real assets did extremely well. Owners of residential real estate suffered under government imposed rent controls, whereas owners of farmland thrived. For people who saw the decline of the mark coming and bet against it, generational fortunes were made in a matter of years. In the case of Germany in the 1920s, few people probably expected that hyperinflation would ensue. Even the president of their central bank, Dr. Rudolf Havenstein, firmly believed that there was zero connection between price levels and the amount of money he printed. Yet it happened, and those who saw the warning signs and took steps to reduce their risk did very well. Today there is no shortage of risk in the financial system either. Negative interest rates are becoming more and more common in developed nations and they’re on their way to America as well. Every time there’s a recession, the government cuts interest rates by easily half a percent to a percent. So with interest rates already at zero, when the next recession comes (and it absolutely will), you can expect interest rates to go negative. Meanwhile, Western banking systems are highly illiquid, meaning that they have very low cash equivalents as a percentage of customer deposits. This isn’t some wild conspiracy theory. You can see it for yourself in the financial statements banks publish every quarter. Solvency in many Western banking systems is also highly questionable, with many loaded up on the debts of their bankrupt governments. Banks also play clever accounting games to hide the true nature of their capital inadequacy. We live in a world where questionably solvent, highly illiquid banks are backed by under capitalized insurance funds like the FDIC, which in turn are backed by insolvent governments and borderline insolvent central banks. This is hardly a risk-free proposition. Yet your reward for taking the risk of holding your money in a precarious banking system is a rate of return that is substantially lower than the official rate of inflation. And in many cases, it’s even negative. Rates are already negative in Europe, and again, it’s coming to the US. Either way, you’re guaranteed to lose money. Risk is a funny thing. The reason why it’s so frequently misdiagnosed is because there’s often a huge discrepancy between the actual risk and the perceived risk. You can see that very clearly with banking. People perceive the risk in their banking system to be zero. And while I’m not suggesting that there is some imminent collapse, the data clearly indicate that the actual risk is significant. Given the meager and even negative interest rates, the risk-reward ratio just doesn’t add up. To address different types of risk in the system, I see four main solutions: One is to hold physical cash, enabling you to effectively be your own private banker and giving you an excellent short-term hedge against risks in your domestic banking system. However, this comes with additional physical security risks and potential political risks such as civil asset forfeiture or cash bans. Another option is to establish a foreign bank account in a jurisdiction where banks are liquid, well-capitalized, and backed by a government with minimal debt. It’s hard to imagine you’d be worse off for having a portion of your savings in a safe, stable, debt-free jurisdiction. Then there’s gold and silver, which are excellent long-term hedges, not only against risks in the banking system, but the monetary system at large. Last but not least, it is 2015, and I would be negligent if I didn’t mention cryptocurrency as a viable option to hedge risk in both the banking and financial system. Today’s podcast goes into comprehensive detail about these risks and their solutions. I invite you to listen in here.

It started in 1921. World War I was over. The Treaty of Versailles had been signed two years before. And Germany, the biggest loser from the war, had been stuck with both the blame and the bill. Germany’s war debt– which it owed not only for its own war-related expenses, but also for reparations to the victors– was devastating. They didn’t have the money, so they started printing it. Not surprisingly, the German mark began to sink. It started slowly at first, but by 1921 hyperinflation had taken hold until prices soared by thousands of percent. One of my favorite stories from this period, was of the elderly man who went to the police to report a robbery. Thieves had stolen a wheelbarrow of money. It was common at the time to use wheelbarrows to transport the huge sums of cash that were required to buy even the most simple things like bread and milk. When the police asked him how much was in the wheelbarrow, the man corrected them saying that the thieves had only stolen the wheelbarrow, and had left the cash behind. Undoubtedly the entire society was upturned by this hyperinflation. But as history shows, in any situation, there are always winners and losers. Pensioners and people who responsibly saved their money were wiped out; whereas people who had borrowed to invest in real assets did extremely well. Owners of residential real estate suffered under government imposed rent controls, whereas owners of farmland thrived. For people who saw the decline of the mark coming and bet against it, generational fortunes were made in a matter of years. In the case of Germany in the 1920s, few people probably expected that hyperinflation would ensue. Even the president of their central bank, Dr. Rudolf Havenstein, firmly believed that there was zero connection between price levels and the amount of money he printed. Yet it happened, and those who saw the warning signs and took steps to reduce their risk did very well. Today there is no shortage of risk in the financial system either. Negative interest rates are becoming more and more common in developed nations and they’re on their way to America as well. Every time there’s a recession, the government cuts interest rates by easily half a percent to a percent. So with interest rates already at zero, when the next recession comes (and it absolutely will), you can expect interest rates to go negative. Meanwhile, Western banking systems are highly illiquid, meaning that they have very low cash equivalents as a percentage of customer deposits. This isn’t some wild conspiracy theory. You can see it for yourself in the financial statements banks publish every quarter. Solvency in many Western banking systems is also highly questionable, with many loaded up on the debts of their bankrupt governments. Banks also play clever accounting games to hide the true nature of their capital inadequacy. We live in a world where questionably solvent, highly illiquid banks are backed by under capitalized insurance funds like the FDIC, which in turn are backed by insolvent governments and borderline insolvent central banks. This is hardly a risk-free proposition. Yet your reward for taking the risk of holding your money in a precarious banking system is a rate of return that is substantially lower than the official rate of inflation. And in many cases, it’s even negative. Rates are already negative in Europe, and again, it’s coming to the US. Either way, you’re guaranteed to lose money. Risk is a funny thing. The reason why it’s so frequently misdiagnosed is because there’s often a huge discrepancy between the actual risk and the perceived risk. You can see that very clearly with banking. People perceive the risk in their banking system to be zero. And while I’m not suggesting that there is some imminent collapse, the data clearly indicate that the actual risk is significant. Given the meager and even negative interest rates, the risk-reward ratio just doesn’t add up. To address different types of risk in the system, I see four main solutions: One is to hold physical cash, enabling you to effectively be your own private banker and giving you an excellent short-term hedge against risks in your domestic banking system. However, this comes with additional physical security risks and potential political risks such as civil asset forfeiture or cash bans. Another option is to establish a foreign bank account in a jurisdiction where banks are liquid, well-capitalized, and backed by a government with minimal debt. It’s hard to imagine you’d be worse off for having a portion of your savings in a safe, stable, debt-free jurisdiction. Then there’s gold and silver, which are excellent long-term hedges, not only against risks in the banking system, but the monetary system at large. Last but not least, it is 2015, and I would be negligent if I didn’t mention cryptocurrency as a viable option to hedge risk in both the banking and financial system. Today’s podcast goes into comprehensive detail about these risks and their solutions. I invite you to listen in here.

057: Here’s how to hedge the massive risks in the banking system

Last week, Paolo Savona, an Italian man no one outside the country had ever heard of, was denied the position of finance minister. Italy’s President denied his appointment because Savona is anti-euro. The President believes Italy should remain part of the euro. I wrote a Notes about the entire situation last week. But the point I discuss in today’s podcast is that this situation should not have been a major deal… but it wreaked havoc across global markets. Even some of the world’s safest assets sold off. So if this turmoil in Italy can cause such chaos, what will happen when there’s a MAJOR crisis? How should you prepare? The event that will end this 10-year bull market will catch almost everybody by surprise. That’s the nature of the beast. So you must take time now, while you’re still thinking clearly, to come up with a game plan of how you’ll handle the next downturn. Because when the event comes, and stocks crater, it will already be too late… emotions will take over. On the podcast, I discuss the types of questions you should be asking yourself and the decisions you should be making today. I also share some of my experiences from my recent travels to Australia, the Philippines and Bangkok. You can tune in here.

Last week, Paolo Savona, an Italian man no one outside the country had ever heard of, was denied the position of finance minister. Italy’s President denied his appointment because Savona is anti-euro. The President believes Italy should remain part of the euro. I wrote a Notes about the entire situation last week. But the point I discuss in today’s podcast is that this situation should not have been a major deal… but it wreaked havoc across global markets. Even some of the world’s safest assets sold off. So if this turmoil in Italy can cause such chaos, what will happen when there’s a MAJOR crisis? How should you prepare? The event that will end this 10-year bull market will catch almost everybody by surprise. That’s the nature of the beast. So you must take time now, while you’re still thinking clearly, to come up with a game plan of how you’ll handle the next downturn. Because when the event comes, and stocks crater, it will already be too late… emotions will take over. On the podcast, I discuss the types of questions you should be asking yourself and the decisions you should be making today. I also share some of my experiences from my recent travels to Australia, the Philippines and Bangkok. You can tune in here.

095: Nobody knows where the next crisis will erupt… here’s how to prepare

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

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

070: There’s no reason I should be alive right now

First it was Pets.com, and all the unbelievably stupid Internet businesses in the 1990s. Investors were so eager to buy dot-com stocks, all you had to do was put an “e” in front of your business or product and you’d immediately be worth millions. It didn’t matter that most of these companies didn’t make any money. Investors kept buying. Later on after the dot-com bubble burst, another big craze developed in junior mining stocks– shares of small exploration companies looking for big mineral deposits. The epicenter of the junior mining industry is in Vancouver, Canada, and the stock exchange there (TSX-V) throttled to record highs. Shares of companies with literally no profits, no revenue, and no assets were worth tens of millions of dollars. Then that bubble burst.  A few years later, a new hot craze developed– in cannabis companies. The market has been flooded with companies (many of them curiously based in Canada’s poor climate and high cost structure) with plans to grow medicinal marijuana.  Their stock prices have soared, with valuations in some cases exceeding $1 billion. Every time the bubble bursts with these big trends, most of the companies get wiped out.  Only a handful survive– primarily the ones who focused on building long-term, sustainable businesses instead of chasing a quick buck. From the ashes of the dot-com bubble, companies like Amazon, Godaddy, eBay, etc. emerged in-tact and are still successful today. Similarly, while many junior mining companies went completely bust, a handful are still operating and quite profitable. And there will be a few extremely successful cannabis companies over the next several years who step over the remains of their innumerable, defunct competitors. Clearly today’s big craze is crypto and blockchain.  Like the dot-com bubble in the 90s, you could add the concept of blockchain to just about anything and have a ‘business’ worth millions, no matter how idiotic the original idea. (Someone will soon pitch me an idea for an app to publish grocery lists into the blockchain. It’s absurd.) And like all the other big investment fads in the past, most of the companies in this space won’t exist a few years from now. There are lot of reasons for that, starting with the fact that building a business is hard.  I’ve done it successfully a few times. And unsuccessfully more times that I care to remember: it’s incredibly difficult, so the odds are against most of these companies anyhow. But more importantly, these big investment fads always attract people looking to make a quick buck. And that doesn’t work in the long-run. Case in point: earlier this week a company called HIVE Blockchain Technologies went public.  It’s stock price is already up over 3x… since MONDAY, from an opening of 62 cents to $1.89. Just prior to that, the company closed a private placement at 30 cents… and a few months ago the company was selling shares between 1 and 3 cents. In other words, a handful of speculators made more than 600x their money in just a few months with a company that has ZERO revenue, simply because ‘Blockchain’ is so popular right now. This has become the norm in the world of crypto and blockchain.  ICOs, another hot crypto fad, have been racking up huge returns of their own. ‘Tokens’ issued by crypto startups that have no profit or revenue are seeing similar gains of 2x to 10x or more in a very short period of time. In the case of HIVE, the company is in the business of mining cryptocurrency.  And based on its current stock price, HIVE is worth close to $400 million.  Yet its own financial statements report that they have not generated a penny in revenue. What’s more, the company’s “illustrative results” show that they -could- make around $7 million per year.  So investors are already paying 57x that amount before the company even gets started.  Even more curious, HIVE’s only real asset is its client relationship with a company called Genesis, one of the largest crypto mining companies in the world (and also a major shareholder in HIVE). Genesis has more than a million customers who pay an up-front, flat-fee to have the company mine cryptocurrency on their behalf. HIVE is now essentially a customer of Genesis. So investors are essentially buying shares of HIVE at a price that’s 57x what the company says it -could- be making (but isn’t) by having Genesis mine cryptocurrency for them. Seems like investors could save themselves the trouble (and forgo the 57x share price markup) by simply becoming direct customers of Genesis themselves. Who knows… maybe HIVE is the real deal. Maybe it’s the rare eBay or Amazon that emerges from the bubble in-tact and successful.  But this is a pretty clear example of the irrationality that ensues every single time there’s some white-hot investment fad. After a hiatus of many, many, many moons, I blew the dust off my microphone and recorded a new podcast about this topic. It wasn’t so much a podcast as a heated rant against this ridiculous bubble… and a clear explanation of precisely WHY so many crypto assets are generating unbelievable returns.  You can download it here.

First it was <a href="http://Pets.com" rel="nofollow" target="_blank">Pets.com</a>, and all the unbelievably stupid Internet businesses in the 1990s. Investors were so eager to buy dot-com stocks, all you had to do was put an “e” in front of your business or product and you’d immediately be worth millions. It didn’t matter that most of these companies didn’t make any money. Investors kept buying. Later on after the dot-com bubble burst, another big craze developed in junior mining stocks– shares of small exploration companies looking for big mineral deposits. The epicenter of the junior mining industry is in Vancouver, Canada, and the stock exchange there (TSX-V) throttled to record highs. Shares of companies with literally no profits, no revenue, and no assets were worth tens of millions of dollars. Then that bubble burst. A few years later, a new hot craze developed– in cannabis companies. The market has been flooded with companies (many of them curiously based in Canada’s poor climate and high cost structure) with plans to grow medicinal marijuana. Their stock prices have soared, with valuations in some cases exceeding $1 billion. Every time the bubble bursts with these big trends, most of the companies get wiped out. Only a handful survive– primarily the ones who focused on building long-term, sustainable businesses instead of chasing a quick buck. From the ashes of the dot-com bubble, companies like Amazon, Godaddy, eBay, etc. emerged in-tact and are still successful today. Similarly, while many junior mining companies went completely bust, a handful are still operating and quite profitable. And there will be a few extremely successful cannabis companies over the next several years who step over the remains of their innumerable, defunct competitors. Clearly today’s big craze is crypto and blockchain. Like the dot-com bubble in the 90s, you could add the concept of blockchain to just about anything and have a ‘business’ worth millions, no matter how idiotic the original idea. (Someone will soon pitch me an idea for an app to publish grocery lists into the blockchain. It’s absurd.) And like all the other big investment fads in the past, most of the companies in this space won’t exist a few years from now. There are lot of reasons for that, starting with the fact that building a business is hard. I’ve done it successfully a few times. And unsuccessfully more times that I care to remember: it’s incredibly difficult, so the odds are against most of these companies anyhow. But more importantly, these big investment fads always attract people looking to make a quick buck. And that doesn’t work in the long-run. Case in point: earlier this week a company called HIVE Blockchain Technologies went public. It’s stock price is already up over 3x… since MONDAY, from an opening of 62 cents to $1.89. Just prior to that, the company closed a private placement at 30 cents… and a few months ago the company was selling shares between 1 and 3 cents. In other words, a handful of speculators made more than 600x their money in just a few months with a company that has ZERO revenue, simply because ‘Blockchain’ is so popular right now. This has become the norm in the world of crypto and blockchain. ICOs, another hot crypto fad, have been racking up huge returns of their own. ‘Tokens’ issued by crypto startups that have no profit or revenue are seeing similar gains of 2x to 10x or more in a very short period of time. In the case of HIVE, the company is in the business of mining cryptocurrency. And based on its current stock price, HIVE is worth close to $400 million. Yet its own financial statements report that they have not generated a penny in revenue. What’s more, the company’s “illustrative results” show that they -could- make around $7 million per year. So investors are already paying 57x that amount before the company even gets started. Even more curious, HIVE’s only real asset is its client relationship with a company called Genesis, one of the largest crypto mining companies in the world (and also a major shareholder in HIVE). Genesis has more than a million customers who pay an up-front, flat-fee to have the company mine cryptocurrency on their behalf. HIVE is now essentially a customer of Genesis. So investors are essentially buying shares of HIVE at a price that’s 57x what the company says it -could- be making (but isn’t) by having Genesis mine cryptocurrency for them. Seems like investors could save themselves the trouble (and forgo the 57x share price markup) by simply becoming direct customers of Genesis themselves. Who knows… maybe HIVE is the real deal. Maybe it’s the rare eBay or Amazon that emerges from the bubble in-tact and successful. But this is a pretty clear example of the irrationality that ensues every single time there’s some white-hot investment fad. After a hiatus of many, many, many moons, I blew the dust off my microphone and recorded a new podcast about this topic. It wasn’t so much a podcast as a heated rant against this ridiculous bubble… and a clear explanation of precisely WHY so many crypto assets are generating unbelievable returns. You can <a href="http://traffic.libsyn.com/sovman/Podcast77.m4a" rel="nofollow" target="_blank">download it here</a>.

077: The reason why ICOs have been going through the roof…

This week I’ve been down in Southern Chile with the Board of Directors of our agricultural company. It’s summertime right now, and the weather is absolutely gorgeous. Last night, after a long day visiting one of the farms I had a chance to sit down with Tim Price to share a bottle of our very own Sovereign Valley wine and record a podcast. It’s been about two months now since the last episode, so I invite you to listen to our comeback with the Podcast Awakens. Over the course of a few glasses we dive into discussion about oil prices, financial markets, and an entire investment class that most people haven’t even heard of. One that’s likely to do VERY well this year. We invite you to clink glasses with us and listen in as we share the best kept secret in finance.

This week I’ve been down in Southern Chile with the Board of Directors of our agricultural company. It’s summertime right now, and the weather is absolutely gorgeous. Last night, after a long day visiting one of the farms I had a chance to sit down with Tim Price to share a bottle of our very own Sovereign Valley wine and record a podcast. It’s been about two months now since the last episode, so I invite you to listen to our comeback with the Podcast Awakens. Over the course of a few glasses we dive into discussion about oil prices, financial markets, and an entire investment class that most people haven’t even heard of. One that’s likely to do VERY well this year. We invite you to clink glasses with us and listen in as we share the best kept secret in finance.

058: The best kept secret in finance (with Tim Price)

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

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

062: This is how World War III starts—it will be financial

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

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

069: Tim Price on the Brexit investment opportunities

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