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SOVEREIGN MAN

Eight simple truths you need to know about 2012

Date: January 3, 2012
Coyhaique, Northern Patagonia

Yesterday we discussed certain events that, in my view, are nearly mathematical certainties. Things like a restructuring of public pensions and Social Security in Europe and the US. Western governments blocking Internet and mobile networks. War. The US government being forced to issue debt in a foreign currency.

All of these events are underpinned by a simple premise:

1) Public and private debts included, most western nations are insolvent. Big time.

2) History shows that economic growth in such an environment is nearly impossible when such a large percentage of GDP must be allocated solely to interest. Most countries in this position either default or [hyper]inflate. Both have catastrophic consequences.

3) Continued political and monetary intervention in the economy is counterproductive. From ‘Cash for Clunkers’ to negative real interest rates, such intervention only serves to make the problems, and their impacts, much worse.

4) The combined ingredients of sovereign insolvency; a global financial system based on worthless paper currency; and consumptive, import-oriented, public entitlement economies have created conditions for an epic, long-term economic depression.

5) Deteriorating economic conditions drive social unrest. [In fact, there’s a great paper by two European economists which defines an explicit correlation between government budget cuts and things like rising crime rates, riots, and even attempted revolution.]

6) Faced with a marauding population that threatens their own survival, governments will stop at nothing to maintain the status quo: their power, our expense. Again, history shows that police states, boogeyman enemies, a total loss of privacy, capital controls, higher taxes, etc. will all become the norm.

7) None of these delay tactics can prevent human and financial capital from eventually migrating to where they are treated best. This will ultimately force a complete system reset by starving the beast.

8) This is not the first time this has happened, and it won’t be the last. This time is NOT different. Our modern society is not a unique and special snowflake that can ward off the consequences that have plagued empires for millennia.

Everything from the way I invest to how I allocate my time and plan for the future is based on this view. It’s why I’m in Chile, why we purchased a 1,000+ acre farm, and why we plan on sharing it with like-minded people.

I may be a bit early, but I’d much rather be early than thinking through these implications while I’m packing my bags. After all, things can ‘feel’ quite normal for a long time. Changes take place gradually, then faster and faster, until the decay looks like an upside-down hockey stick.

The Roman Empire, for example, began its spectacular decline shortly after Augustus became de facto emperor in 27 BC. He was followed by a long series of dismal failures– Tiberius, Caligula, Claudius, Nero, etc. But Rome muddled along for hundreds of years, wavering between growth and decay.

The changes were gradual. A little currency debasement here, a bit of excess spending there, and throw in plenty of assassinations and foreign wars for good measure.  Along the way, though, thinking people could see the writing on the wall… and many of Rome’s citizens set sail for greener pastures.

The gradual changes became more and more pronounced… and the more pronounced, the more people left. As Gibbon recounts in his seminal work, The History of the Decline and Fall of the Roman Empire, the city of Rome lost nearly 75% of its population in the Empire’s final 50-years in the 5th century.

History is full of other examples of once proud nations that, facing problems for decades (or even centuries), completely unwound in a matter of years. The Ottoman Empire. The Ming Dynasty. Feudal France. The Soviet Union.

Bottom line, when the real change comes, it comes very, very quickly.

Think about the pace of change these days. It’s quickening. Europe is a great case study for this– when concerns about Greece first surfaced, European leaders were able to contain the damage. There was disquiet, but it soon dissipated.

Fast forward to today. We can hardly go a single day without a major, market-rocking headline. And European politicians’ attempts to assuage the damage have a useful half life that can be measured in days… sometimes hours now.

Like the Ottomans, the Soviets, the Romans before them, Western civilization is entering the phase where its rate of decline will start looking like that upside-down hockey stick.

There is no crystal ball that can tell us exactly how/when it will all go down. It stands to reason that certain events (perhaps this year’s Presidential elections in the US, Russia, France, etc.) will be pivotal in the decline, but suffice it to say that time is not on our side given the pace of change.

Each of us has a finite amount of resources– time, energy, capital, etc. And I really want to encourage you to think clearly and deliberately about how you allocate those resources… e.g. you’re better off buying an ounce of gold than making a political campaign contribution.

2011 was a challenging year. 2012 will likely prove even more. But this isn’t anything to dread. It’s is an incredibly exciting time to be alive– change should be embraced, not feared.

Empires always run their course. Bubbles burst. But creative, thinking human beings always survive and thrive.

Our goal is simple: To help you achieve personal liberty and financial prosperity no matter what happens.

If you liked this post, please click the box below. You can watch a compelling video you’ll find very interesting.

Will you be prepared when everything we take for granted changes overnight?

Just think about this for a couple of minutes. What if the U.S. Dollar wasn’t the world’s reserve currency? Ponder that… what if…

Empires Rise, they peak, they decline, they collapse, this is the cycle of history.

This historical pattern has formed and is already underway in many parts of the world, including the United States.

Don’t be one of the millions of people who gets their savings, retirement, and investments wiped out.

Click the button below to watch the video.

About the author: Simon Black is an international investor, entrepreneur, permanent traveler, free man, and founder of Sovereign Man. His free daily e-letter and crash course is about using the experiences from his life and travels to help you achieve more freedom.

Comments on this entry are closed.

  • Joe

    It is an exciting time to be alive, and we need to embrace our journey with enthusiasm and hope or we miss the forest through the tree’s.

  • S. Ritual

    In certain ways, this time IS different. We have much more research, advanced computer models of society, more ways to influence/control thoughts, peak oil, Internet, etc

    These changes probably won’t prevent any problems, but problems can become even bigger this time. Firms and governments in the developed world now have a lot of information about each individual and cameras are everywhere. It seems that they aren’t creating many problems as of yet, but when the mindset changes of those in power we can get some really serious problems… 

  • http://twitter.com/whoisjohngalt11 whoisjohngalt2

    Thanx sometimes i feel like this is john connors voice coming over the Radio ( like in Christian Bale fighting the Skynet ) ;-)

  • Contrarianism

    Point #7 is particularly worrisome. As terrifying as U.S. financial insolvency is, the political risk that would
    likely accompany our economic collapse is even more frightening.

    When economies
    shrink and widespread deleveraging takes place, tax revenues fall
    precipitously. Bankrupt governments already on life-support become
    increasingly desperate and aggressive as they scavenge for revenue.
    Under the pretense that they must “save the economy” they will devise
    new and creative schemes for generating new tax revenues. Increased taxation, capital controls, and even seizure is all but assured at this point.

    Of course we should not expect immediate radical change;  what we will see is slow, measured and stealthy changes that have an accumulative effect on our liberties.

    Take for example the newly enacted National Defense Authorization Act…

    Now an American citizen can be picked up on American soil and held in indefinite detention in a prison abroad without access to due process for simply being suspected or accused of being an enemy of the state. The detainee provision in this bill just established marshal law in the U.S.

    With the stroke of a pen on New Years Eve while we were all out drinking and partying the Bill of Rights and U.S. Constitution was dismantled and we’ve hardly heard a peep or a grumble about it from anyone anywhere.

    Now with the Constitution in shambles what’s to stop some pissed off bureaucrat from declaring Simon Black (or anyone with a dissenting opinion) an “enemy combatant”? With the Bill of rights rendered inert whats to stop the state from confiscating your gold,  seizing your property, or taxing away all of your income?

    Our gravest danger is not a financial collapse or terrorist attack … the greatest danger we face is unchecked and unrestrained government power.

     –  Contrarian

    • Ed_B

      I agree.  In many ways, governments resemble large powerful predators.  They are well behaved when suitably chained and well fed.  Starve them, even a little, and they become very aggressive and dangerous.  I do not believe that there is much of anything they will not stoop to if governmental collapse is approaching.  

      What I cannot understand, however, is HTH ANY law can be passed that cancels the 4th and 6th amendments to the US constitution.  Such a “law” is unconstitutional on its face and immediate suit should be brought by as many states attorneys general as possible.  The NDAA cannot be allowed to stand in its current form.  It is nothing short of a declaration of war by the US government upon the American people.  We have not only the right but the duty to totally replace such a government.

    • Hell on Earth

      Well said.  We’re now passed the point of no return – the latest red flag being the Ron Paul loss in Iowa.  Democracy in the States is as broken as is the Constitution.  When change cannot be affected at the ballot box and the majority are as disaffected by the system to the degree we see today, there are only only two outcomes as I see it – a) mass enslavement (already here); or b) regime change.

      I’m going for b).

      There are many ways to hit back but I think that the only one that will work is a 10million wo/man march on Washington with the express and single objective which is “Arrest Obama and the Senate and the Congress for Treason.”

  • Garpas

    Hi Simon, I’m interested in your 1000 acres community and being a potential partner. Let me know the specifics.

  • http://twitter.com/MichaelPorfirio Michael Mason

    “Think about the pace of change these days. It’s quickening.”

    And sickening.

  • http://www.bzemic.com/impossibleInstinct/ steve ward

    (Cash for Clunkers) i never understood that so you collect good car’s for so-so car’s? 

  • Rob

    Why Chile, may I ask? That’s really my only question because I agree with everything you’ve written.

  • mdicarlo


    It’s why I’m in Chile, why we purchased a 1,000+ acre farm, and why we plan on sharing it with like-minded people.” Can you tell me more about the sharing idea?

  • mikeyhell

    Doom and gloomery is becoming mainstream now. And while I don’t think that the typical American or European would really understand any of your points, there are some troubling signs for contrarians. For example, central banks have been buying up lots of gold, presumably for some of the same reasons that all of us are. Given how wrong they are about everything always, I am now concerned that the doom and gloom worldview may have jumped the proverbial shark. So it would seem that the reasonable thing to do is to simultaneously plan for a crash *and* a boom, but this prospective twists my mind into knots, and frankly, makes life harder than it should be. Hard times indeed. 

    • borninmombasa

      Boom’s just don’t happen, they happen for a reason. you will be hard pressed to come up with any “reason” to expect a boom. Other than hope ,of course

  • wmb

    Running off to Chile won’t exclude you from the issues… they will come a knockin – this is a world wide thing.

  • Fred

    Following the Roman timeline, we’ve got a few hundred more reasonable years in the US.  I’m staying, though have moved to the country, away from cities.

  • Craig

    good article Simon!

  • Breck22

    I am with Monique. What’s this about a place in Chile AND you want to share it with like minds? For those of us with limited means (read: below average means) it is essential that we find a community for mutual support. Sweat equity and all that. I’d be very interested in such a community in Chile. Thanks.

  • Donna Sangsiri

    Sorry for being so late to comment – just read Mr. Simons article and all of your opinions. I’m sorry to say that the problem is not what our president and the congress has been doing these past weeks but the almost silent reaction from the citizens of these United States!!! I keep reading as many newspapers and tv news and I cannot believe how no-one is screaming about what they have done to us!! And what I find the most amazing is that the congress voted for this shit they just smeared all over us. It supposedly originated with a couple of our elected officials and Obama couldn’t believe how lucky he was. Mustl have thought there really was a God after all!! Can someone explain to me why none of the major news networks aren’t screaming about what’s happened? The only comment I’ve seen is made by Mr. Rush. Why is nobody protesting in the streets? Where are our college kids? The only candidate ( GOP) that is saying anything is Mr. Paul.

    Am I missing something? Maybe I don’t really understand what is happening to us.

  • Grant

    I eagerly read/seek articles/information like this, individuals/web sites focused on must see/know life changing world events are crucial to have and share with like minds. If you know the best up to the minute commentary at the coal face of ‘the crash’, please forward this to me at pplnrg@mail:disqus .com

    My favorites are: davidicke.com Alex Jones at infowars.com and for you Japanese and Americans (well.. the whole planet) Arnie Gunderson at fairewinds.com and of course Sov man to name a few
    See you on the other sideGrantx

  • honorsuperomnia

    I’m  like minded.  So is my young family.   I’m willing to work hard for a chance for my family to be safe and happy. Do you have any room for a chiropractor and a school teacher on your farm? 

  • http://theyenguy.wordpress.com/ theyenguy

    Our times are best understood through the lens of bible prophecy.

    The Sovereign Lord God, Psalm 2:4-5, is acting to bring forth a revived Roman Empire, that is a German led Europe.

    At the appointed time, He will open the curtains, and out onto the world’s stage will step the
    most credible leader. This Little Horn, or Little Authority, Daniel 7:25, will work
    behind the scenes in regional framework agreements to change our times
    and laws. Yes, the rule of law will be replaced by his word, will and
    way, Revelation 13:5-10. In the supranational New Europe, national sovereignty will be seen
    as a relic of a bygone era. The people will be amazed by this, and place
    their faith and trust in him; they will give their allegiance to his
    diktat, Revelation 13:3-4.

    The
    Banker regime of Neoliberalism came via the Free To Choose floating
    currency script of Milton Friedman; but these are now sinking, causing
    global disinvestment out of stocks and deleveraging out of commodities.
    The natural result of destructionism is the rise of despotism.

    The
    Beast regime of Neoauthoritarianism, Revelation 13:1-4, is rising in its place. It comes
    via the 1974 Club of Rome’s Clarion Club for regional global governance.
    This monster of statism and collectivism is rising from the profligate
    Mediterranean countries of Italy and Greece. The Beast’s seven heads are
    rising to occupy in all mankind’s institutions, and its ten horns are
    rising to govern in all of the world’s ten regions. The Beast system is coming like a terminator that can’t be bargained with.
    It can’t be reasoned with. It doesn’t feel pity, or remorse, or fear.
    And it absolutely will not stop, ever until mankind is totally dominated
    and subdued.

    Banks will be nationalized in 2012; perhaps better said banks will be regionalized as Bloomberg reports Too-Big-to-Fail Definition May Be Expanded.
    Global regulators may expand the definition of a too-big-to-fail
    financial firm, signing up domestic lenders, clearing houses and
    insurers to capital rules designed for the world’s biggest banks. The
    “framework should be in place for domestically systemically important
    banks by the end of the year,” Mark Carney, chairman of the Financial
    Stability Board, said yesterday after a meeting of the group in Basel,
    Switzerland. Deutsche Bank AG (DBK), BNP Paribas SA (BNP) and Goldman
    Sachs Group Inc. (GS) were among 29 banks subject to the so-called
    capital surcharge on globally systemic financial institutions drawn up
    by the FSB in November. Banks will have to boost reserves by 1 to 2.5
    percentage points above minimum levels agreed on by international
    regulators. The new banks will be known as government banks.

    In
    a bank insolvent and sovereign insolvent world, regional stakeholders
    will be appointed to Stakeholder Committees, that is regional public
    private partnerships, PPPs. Public private partnerships, such as
    Macquarie Infrastructure, MIC, will take the lead in managing the factors of production. Canadian Energy Income Companies, ENY, and Canadian Oil and Pipeline Companies such as Enbridge, ENB,
    will for all practical purposes, be regionalized, that is something
    akin to being nationalized. There will be New Credit for the New Europe,
    it will be Stakeholder Credit coming from the Stakeholder Committee, as
    it meets in working group conference. This Stakeholder Credit will
    complement regional global governance to provide funding for the
    operations of industry critical to the EU’s security and stability. As
    for the people, the residents of the New Europe, the prevailing concept
    will be, let them eat diktat.

  • http://theyenguy.wordpress.com/ theyenguy

    Our times are best understood through the lens of bible prophecy.

    The Sovereign Lord God, Psalm 2:4-5, is acting to bring forth a revived Roman Empire, that is a German led Europe.

    At the appointed time, He will open the curtains, and out onto the world’s stage will step the
    most credible leader. This Little Horn, or Little Authority, Daniel 7:25, will work
    behind the scenes in regional framework agreements to change our times
    and laws. Yes, the rule of law will be replaced by his word, will and
    way, Revelation 13:5-10. In the supranational New Europe, national sovereignty will be seen
    as a relic of a bygone era. The people will be amazed by this, and place
    their faith and trust in him; they will give their allegiance to his
    diktat, Revelation 13:3-4.

    The
    Banker regime of Neoliberalism came via the Free To Choose floating
    currency script of Milton Friedman; but these are now sinking, causing
    global disinvestment out of stocks and deleveraging out of commodities.
    The natural result of destructionism is the rise of despotism.

    The
    Beast regime of Neoauthoritarianism, Revelation 13:1-4, is rising in its place. It comes
    via the 1974 Club of Rome’s Clarion Club for regional global governance.
    This monster of statism and collectivism is rising from the profligate
    Mediterranean countries of Italy and Greece. The Beast’s seven heads are
    rising to occupy in all mankind’s institutions, and its ten horns are
    rising to govern in all of the world’s ten regions. The Beast system is coming like a terminator that can’t be bargained with.
    It can’t be reasoned with. It doesn’t feel pity, or remorse, or fear.
    And it absolutely will not stop, ever until mankind is totally dominated
    and subdued.

    Banks will be nationalized in 2012; perhaps better said banks will be regionalized as Bloomberg reports Too-Big-to-Fail Definition May Be Expanded.
    Global regulators may expand the definition of a too-big-to-fail
    financial firm, signing up domestic lenders, clearing houses and
    insurers to capital rules designed for the world’s biggest banks. The
    “framework should be in place for domestically systemically important
    banks by the end of the year,” Mark Carney, chairman of the Financial
    Stability Board, said yesterday after a meeting of the group in Basel,
    Switzerland. Deutsche Bank AG (DBK), BNP Paribas SA (BNP) and Goldman
    Sachs Group Inc. (GS) were among 29 banks subject to the so-called
    capital surcharge on globally systemic financial institutions drawn up
    by the FSB in November. Banks will have to boost reserves by 1 to 2.5
    percentage points above minimum levels agreed on by international
    regulators. The new banks will be known as government banks.

    In
    a bank insolvent and sovereign insolvent world, regional stakeholders
    will be appointed to Stakeholder Committees, that is regional public
    private partnerships, PPPs. Public private partnerships, such as
    Macquarie Infrastructure, MIC, will take the lead in managing the factors of production. Canadian Energy Income Companies, ENY, and Canadian Oil and Pipeline Companies such as Enbridge, ENB,
    will for all practical purposes, be regionalized, that is something
    akin to being nationalized. There will be New Credit for the New Europe,
    it will be Stakeholder Credit coming from the Stakeholder Committee, as
    it meets in working group conference. This Stakeholder Credit will
    complement regional global governance to provide funding for the
    operations of industry critical to the EU’s security and stability. As
    for the people, the residents of the New Europe, the prevailing concept
    will be, let them eat diktat.

  • http://www.facebook.com/people/Ghostbusters-Telephone/100000544628060 Ghostbusters Telephone

    Hi I would like to join the farm please,
    I like nature :)

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Predictions? Or near-certainties?

January 2, 2012 Coyhaique, Northern Patagonia New Year's predictions are always a fun exercise. We can bet each other over...

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