The biggest transformation story in the world

I’ve written before a number of times about the long laundry list of reasons why I base myself and most of my business operations in Chile.

I could go on forever about this, but in short the country presents an exceptional mix of business, investment, and lifestyle opportunities that are extremely difficult to find just about anywhere else in the world.

But people ask me a lot-- if not Chile, where else?

[...] Click here to continue reading

Boy was I wrong about this place…

In 1927, US Supreme Court Justice Oliver Wendell Holmes famously wrote that “taxes are what we pay for civilized society.”

This quote is enshrined at the Internal Revenue Service, and it’s a rallying cry for people who constantly argue for higher taxes.

Almost everyone completely misunderstands what he meant.

First of all, tax rates in the United States were about 3.5% back in 1927, just a tiny fraction of what they are[...] Click here to continue reading

Fed president says US banks have “half the equity they need”

In a scathing editorial published in the Wall Street Journal today, the president of the Federal Reserve Bank of Minneapolis, Neel Kashkari, blasted US banks, saying that they still lacked sufficient capital to withstand a major crisis.

Kashkari makes a great analogy.

When you’re applying for a mortgage or business loan, sensible banks are supposed to demand a 20% down payment from their borrowers.

If you want to buy a $500,000 home,[...] Click here to continue reading

World’s 2nd largest stockpile of gold leaves the United States

About 20 years ago when I was still a cadet at West Point, my economics professor organized a class trip to the Federal Reserve Bank of New York.

The part of the trip that I remember most was touring the Fed’s high security vault, 80 feet below street level beneath the bank’s main office building downtown.

This vault houses the largest known depository of gold in the world.

None of that gold,[...] Click here to continue reading

Yes, money does grow on trees

If you’ve been a reader of this letter for any length of time, you may have noticed that I try to spend my weekends and free time at our farms in Chile.

I’m still on the road at least 6 months out of the year and travel to 30-40 different countries annually.

But when I’m not traveling or I’m not needed at our offices in Santiago, I go out of my way to[...] Click here to continue reading

World’s largest hedge fund manager predicts bleak future for markets

There are lots of famous investors and hedge fund managers who are legendary stock-pickers.

Warren Buffet is a great example.

Others are hard-core quantitative analysts who build complex trading algorithms.

Ray Dalio, the billionaire founder of Bridgewater Associates, is neither.

He’s a macro investor whose fortune was built on an uncanny ability to spot big macro trends.

He predicted in 2007, for example, that the US housing bubble would burst,[...] Click here to continue reading

More unbelievable facts from the US government’s own financial reports

Yesterday I told you that the US government had recently released its annual financial report to the public.

And the numbers are pretty gruesome.

For example, the government’s “net loss” in fiscal year 2016 more than doubled, from MINUS $467 billion to MINUS $1 trillion.

It’s astonishing that anyone could manage to lose so much money, let alone in a year where devoid of major wars, recessions, financial crises, or infrastructure projects.
[...] Click here to continue reading

US government’s 2016 net loss “more than doubled” to NEGATIVE $1 trillion

Every year around this time the US federal government releases an annual financial report to the public.

It would be hilarious if the numbers weren’t actually true.

Just like Apple or Exxon, the government’s annual report contains several important financial statements and detailed commentary about their finances and operations.

But unlike Apple, Exxon, the government can’t manage to turn a profit. Ever.

According to this year’s report, the government’s net loss[...] Click here to continue reading

Meanwhile, over in Zimbabwe. . .

On April 12, 2009, the government of Zimbabwe officially abandoned its currency.

You probably remember the stories; starting in the early 2000s, the Zimbabwe central bank began printing massive quantities of money in order for the government to make ends meet.

This resulted in one of the worst episodes of hyperinflation in modern history.

Zimbabwe’s rate of inflation in 2001 was more than 100%. Prices basically doubled.

But that was nothing.
[...] Click here to continue reading

See if you can flip this switch in your thinking

I’ve always been a big believer in entrepreneurship.

But not in the sense that most people think of that word.

My dictionary defines “entrepreneur” as “a person who organizes and operates a business, taking on greater than normal financial risks in order to do so.”

I think this definition is totally wrong.

Entrepreneurship doesn’t have anything to do with owning or starting a business, let alone taking on great risk.

[...] Click here to continue reading

This ancient city would still be among the wealthiest in the world today

In the year 440 BC, more than two decades into the reign of Pericles, an audit of treasury in Athens showed a massive surplus of more than 9700 “talents”.

A talent was a common unit of measurement in the ancient world, especially for gold and silver.

And, based on today’s precious metals prices and the traditional gold/silver ratio (14:1) used by the ancient Greeks, 9700 talents is equivalent to about $700 million today.
[...] Click here to continue reading

Not that there’s any inflation, but . . .

The numbers are pretty startling.

Nearly 7 in 10 Americans have less than $1,000 in savings.

1 out of every 3 Americans has nothing set aside for retirement.

And, according to Federal Reserve data, the median working-age couple has saved just $5,000 for retirement.

How is this even possible?

How could it be that the citizens of the wealthiest country to have ever existed in the history of the world[...] Click here to continue reading

The -other- “ban” that was quietly announced last week

Most of the world is in an uproar right now over the travel ban that Donald Trump hastily imposed late last week on citizens of seven predominantly Muslim countries.

But there was another ban that was quietly proposed last week, and this one has far wider implications: a ban on cash.

The European Union’s primary executive authority, known as the European Commission, issued a “Road Map” last week to initiate continent-wide legislation against[...] Click here to continue reading

Nobel Prize winner says US should “get rid of currency”

In the mid-1800s at a time when the United Kingdom was still the dominant superpower in the world, an English scientist named Francis Galton wrote a series of papers arguing for the selective breeding of human beings.

Galton’s ideas became known as eugenics.

The concept was that genius and talent were hereditary traits passed from generation to generation, and that, to ensure the growth of our species, the best and brightest should be[...] Click here to continue reading

This data proves US stocks aren’t as healthy as we’ve been told

[Editor’s note: Tim Price, London-based wealth manager and co-manager of the VT Price Value Portfolio, is filling in for Simon today.]

Here’s some food for thought.

There’s been so much discussion over the past few years, and 2016 in particular, about the roaring US economy and stellar performance of US companies.

As an example, we are constantly told about the cash piles that US companies have hoarded around the world.

This[...] Click here to continue reading

Two more major problems for Social Security & Medicare

Not too long ago my step-dad had to spend a few days in intensive care. Pretty scary stuff.

He had just about every nasty symptom imaginable, from constant vomiting to dizziness to ultra-high fever, but the doctors couldn’t figure out why.

Fortunately his condition improved enough that he was released from the hospital, and now he’s on the mend.

Now, my step-dad is a Medicare patient. But he just found out that[...] Click here to continue reading

Land of the Free: Michigan man issued parking ticket in his own driveway

The state of Michigan is not exactly known for its balmy weather this time of year.

And residents reasonably do what they have to do to cope with often extreme winter temperatures.

Last Thursday a man named Taylor Trupiano of Roseville, Michigan did what a lot of people do in cold climates.

He walked out of his house, started his car, turned on the heat, and went back inside for a few[...] Click here to continue reading

How two people from New York started over in Chile

Yesterday on the drive back to Santiago from one of our blueberry farms, I stopped to visit some friends who lived in the area.

About a year ago they bought some land in Chile’s incredibly fertile 7th region, which boasts a rare Mediterranean climate.

It never gets too hot, and it never gets too cold. Plus, the rich, volcanic soil is packed with powerful nutrients.

As long as you’re in the[...] Click here to continue reading

Here’s a unique sign of inflation

I remember the first time I ever saw a $100 bill.

It was back in the early 80s, I must have only been 5 or 6 years old.

My parents took my sister and I to a fancy restaurant, and I distinctly remember a man dressed in a dark business suit a few tables over paying his bill with a crisp $100 note.

He pulled it out of his wallet, slid[...] Click here to continue reading

Wow. 60 Minutes was totally wrong about second passports

Steve Kroft has a problem with second passports.

Specifically, the reporter and his team of producers slammed “citizenship by investment” programs in an editorial piece that aired on 60 Minutes this past Sunday night.

As we’ve discussed before, many countries around the world, including Malta, Dominica, St. Kitts, and Antigua, have Citizenship-by-Investment (CIP) programs.

The programs differ between countries, but they all provide an opportunity for foreigners to receive citizenship in exchange[...] Click here to continue reading

US national debt soars by $100 billion. . . in just 8 hours

According to the latest statement issued yesterday afternoon by the Department of Treasury, the US national debt has reached $19,976,826,951,047.80.

That’s $19.976 trillion, as of the close of business on Friday December 30, 2016.

(The government is typically a day or two behind when it sends out these reports.)



That number itself is obviously remarkable, just shy of $20 trillion.

But what’s even more astounding is that, according to[...] Click here to continue reading

The coming crackdown on Free Speech

It’s amazing what can happen in a week.

Before this publication went on hiatus last week, one of the last letters I wrote to you in 2016 was about the National Defense Authorization Act and its treasure trove of freedom-killing provisions.

Section 1287, for example, creates a new agency called the “Global Engagement Center”, aka Ministry of Truth.

It has one purpose: to combat fake news.

The Global Engagement Center will[...] Click here to continue reading

A great story from when America was still the Land of Opportunity

Last week during a long overdue vacation, a close friend of mine recommended reading the autobiography of Rich DeVos called Simply Rich.

DeVos is a billionaire entrepreneur who started countless ventures during his nine decades on this earth.

Back in the 1946, for example, DeVos started an airline... virtually overnight.

He just bought an airplane and started flying people around. No rules. No regulations.

They didn’t even have an[...] Click here to continue reading

Italy proves that banks are not the risk-free fantasy we’re told to believe

In the late 1400s, the city-states of Italy were among most dominant powers in the world.

Most of the city-states had abandoned the feudal system that persisted across Europe.

So Italy was one of the only places on the continent where anyone, including foreigners, could work hard, take risks, and become wealthy.

People could start businesses and own private property-- revolutionary concepts in the 1400s.

Italy was truly the America of[...] Click here to continue reading

Three ridiculous ways Congress plans to Keep America Safe Again

Around the time of Passover in 67 AD, the Jews of Judea were in the midst of a major rebellion against the occupying Roman Empire.

Riots and violence were commonplace, and an organized rebel force of more than 25,000 men fought regularly against the imperial legions.

But a small group of zealots decided that conventional warfare wasn’t good enough.

So they went to the nearby town of Ein Gedi in[...] Click here to continue reading

How is Martin Sheen any different than Vladimir Putin?

One of the quirks about being an expat in a faraway land is that, whenever something unusual happens in your home country, your local friends look to YOU for answers.

You become, by default, the de facto expert of your home country’s nuances.

Case in point: this weekend we had an intercompany Christmas party down here at the farm for two of the businesses that I run.

(Sadly there may be some[...] Click here to continue reading

Here’s one surprising deal that the government actually got right

On January 17, 1917, as the Great War raged in Europe, the government of the United States signed a deal to purchase the Virgin Islands from Denmark.

The agreement transferred Denmark’s territories in the West Indies, “including the islands of Saint Thomas, Saint John and Saint Croix together with the adjacent islands and rocks.”

Good thing they picked up those rocks!

The US government paid “a sum of twenty-five million[...] Click here to continue reading

Former intelligence officer on the bogus Russian hack

If there’s one thing that’s certain in the intelligence business, it’s that there’s rarely any certainty.

That’s pretty much the first thing they teach you at spy school.

Back in the early days of my intelligence career, I had one instructor who explained it in a way that I’ll never forget.

“If you present your analysis as if it’s fact, instead of conjecture, the person who’s relying on your intelligence could end[...] Click here to continue reading

Three signs the American Dream is fading

One of the best books I’ve ever read is the autobiography of Charlie Chaplin.

That’s probably not what you were expecting. But it’s true.

Chaplin’s book is a remarkable story of his impoverished childhood in England, subsequent migration to America, and rise to wealth and worldwide stardom.

Chaplin lived the textbook American Dream.

He came from nothing, took huge risks, and leveraged his tremendous talent, hard work, and pioneering spirit to[...] Click here to continue reading

Here’s what happens when a currency completely breaks down

In Venezuela, hyperinflation has become so pitiful that shopkeepers are no longer bothering to actually count money.

Instead, they’re weighing it...

... as in literally pulling out a scale and weighing giant stacks of money. Do you want to buy a bottle of Coca Cola? That’ll be 1 kilo of currency please.

One shopkeeper interviewed by the Guardian newspaper said he’s piling up bricks of cash so quickly he feels[...] Click here to continue reading

The biggest gold heist of all time

In 524 BC, a group of pirates set sail for Sifnos, an ancient Greek island famed for its vast gold and silver mines.

The mines of Sifnos were unparalleled in the ancient world.

They produced so much gold and silver that the local government at Sifnos could erect countless monuments, invest in new public works, and still easily have a substantial balance remaining at the end of each year to distribute to the[...] Click here to continue reading

Here’s a completely different idea about Sunday’s “apocalypse”

The latest apocalypse du jour, following in the footsteps of Brexit and the Donald Trump election, is Italy’s Constitutional referendum that takes place this weekend.

Global financial media is in a panic about this, suggesting that a “NO” vote will lead to total chaos in Europe.

The referendum itself isn’t particularly revolutionary; Italians are voting whether or not to change the Constitution and reform their government.

Right now Italy’s legislative system is[...] Click here to continue reading

An interesting perspective on the War on Cash

It’s happening faster than we could have ever imagined.

Every time we turn around, it seems, there’s another major assault in the War on Cash.

India is the most notable recent example-- the embarrassing debacle a few weeks ago in which the government, overnight, “demonetized” its two largest denominations of cash, leaving an entire nation in chaos.

But there have been so many smaller examples.

In the US city of New[...] Click here to continue reading

Here’s what happened when ancient Romans tried to drain the swamp

In late January of the year 98 AD, after decades of turmoil, instability, inflation, and war, Romans welcomed a prominent solider named Trajan as their new Emperor.

Prior to Trajan, Romans had suffered immeasurably, from the madness of Nero to the ruthless autocracy of Domitian, to the chaos of 68-69 AD when, in the span of twelve months, Rome saw four separate emperors.

Trajan was welcome relief and was generally considered by his[...] Click here to continue reading

This guy got destroyed by the system

My friend Richard got destroyed by the system.

As a financial advisor in Sacramento, California, he spent years building a thriving firm and has even landed a few celebrity clients.

Richard did well for himself. Successful. Married. Wonderful kids. Financially secure.

But back in 2008 things started to turn sour.

His wife left him and took the kids, along with half of everything else.

The divorce forced the liquidation of[...] Click here to continue reading