Latest Articles

US government more threatening than Hitler to this Swiss Bank

January 31, 2012
Nassau, Bahamas

Wegelin & Co used to be Switzerland's oldest private bank. Founded in 1741, they managed to survive every threat across three centuries: revolution, financial disaster, and war... from being invaded by Napoleon to the Sonderbundskrieg civil war to Adolf Hitler.

Every threat except for one, that is: the United States Government.

I say that Wegelin "used to be" Switzerland's oldest private bank because they're now finished, courtesy[...] Click here to continue reading

Kazakhstan adds to its gold reserves. Very nice!

January 30, 2012
Nassau, Bahamas

Here's something unexpected. According to IMF data, the central bank of Kazakhstan recently purchased 3.1 metric tons of gold, increasing its reserves by 4.2%. In an even more stunning development, Mongolia's central bank purchased 1.2 metric tons, increasing its reserves by a whopping 52%.

To be fair, 4.3 metric tons of gold is not much. At current market value, it's around a quarter of a billion[...] Click here to continue reading

Do as I say, not as I do…

January 27, 2012
Manila, Philippines

[Editor's note: Tim Staermose is filling in today while Simon is at the farm in Chile.]

There is a delicious irony in the world of economic policy at the moment.
Back in 1997 and 1998 I had a ringside seat to the Asian financial crisis from my trading desk in Seoul. When everything collapsed, the policy prescriptions from the World Bank and IMF for Asia's sick economies was[...] Click here to continue reading

Guest Post: How money can buy you happiness

[Editor's Note: Simon's friend Craig Ballantyne is filling in today to talk about the importance of the internet in generating independent income]

In the late 1970's one of my best friends and his family escaped from Armenia, then under communist rule. In fact, his father bought their way to America via Italy, eventually settling in California (legally). In the decades since then, my friend has gone on to graduate high school, drop out of[...] Click here to continue reading

Action trumps hope

I woke up this morning to a flurry of emails-- "Did you watch the State of the Union address last night?" I did not. Rather, I was busy sharing a delightful meal at one of my favorite restaurants with some close friends; I didn't even know that the speech was going on yesterday.

When you break away from the confines of a single geography, the political theater becomes completely irrelevant. And State of the[...] Click here to continue reading

How to tell you’re living in the wrong country

January 24, 2012
Santiago, Chile

Yesterday, Kentucky senator Rand Paul was detained by the TSA in Nashville after refusing to be fondled by the airport agents.

Paul has been a vocal enemy of the TSA, blasting the agency last year after agents conducted an invasive search of a 6-year old girl despite her parents' objections. TSA Director John Pistole suggested that, because a young child in Afghanistan is capable of detonating a roadside[...] Click here to continue reading

Yet another reminder that democracy is an illusion

January 23, 2012
Santiago, Chile

With over 150 million registered users, the file sharing site is one of the most popular on the Internet. At least, it was.

The site has now been seized by the US government and its homepage converted to an FBI anti-piracy warning. Its founder, a high tech entrepreneur named Kim Dotcom (yes, he had it legally changed), was arrested in New Zealand after his[...] Click here to continue reading

How to conduct your own due diligence on a bank or broker

January 20, 2012
Santiago, Chile

Greetings once again. It's another beautiful, sunny day in Chile today, and I'm about off to our farm south of town to spend a wonderful weekend with good food and great friends. Before I sign off for the week, though, there are a few questions I wanted to address:

First, Louise asks, "Simon, that last edition of SMC really blew me away, I appreciate you serving up[...] Click here to continue reading

Destroying America, bill by bill

As you're probably aware, yesterday was the much ballyhooed blackout of several popular web sites in protest of new legislation that threatens the Internet as we know it.

The United States Congress has teed up two separate bills which give government agencies sweeping new powers to punish millions of innocent users, criminalize harmless activities, and effectively make entire web sites disappear at their sole discretion without any judicial oversight.

In a nutshell, these[...] Click here to continue reading

Guest Post: The final countdown…

[Editor's note: Simon's friend Tim Price is a delightfully witty fund manager in the UK, one of the few free-thinking individuals in all of institutional finance. His recent thoughts below on the euro debacle, gold, and hyperinflation are some of the best ever written on the topics.]

"Under the circumstances, discussions with Greece and the official sector are paused for reflection on the benefits of a voluntary approach." Debt talks "have not produced a constructive response."
- The Institute of[...] Click here to continue reading

Another reminder of how the US government destroys business

January 17, 2012
Santiago, Chile

One of the most phenomenal human beings I've ever met hails from Harare, Zimbabwe of all places. His name is Time. That's seriously his name. When you ask him about it, he shrugs, grins, and says, "My mom felt that she was in labor for way too long."

Time is a real Sovereign Man. He understands that his family comes first and foremost above all else, and growing up under the regime[...] Click here to continue reading

About those business opportunities…

January 16th, 2012

Manila, Philippines

[Editor's note: Tim Staermose is filling in for Simon today.]

Reaction to my article last week about the strong economic picture, and business opportunities I see all around me here on the ground in The Philippines was overwhelming.

Evidently there are some go-getters out there in this community who want to take action. Andthat's great to know.

So, today I thought I'd share[...] Click here to continue reading

It’s booming over here. What’s holding you back?

January 13, 2012
Manila, Philippines

[Editor's note: Tim Staermose is filling in today while Simon is down on the farm in Chile.]

Amid all the doom and gloom in the world economy as insolvent western nations slowly suffocate under a mountain of debt, it's easy to forget that there are places in the world that are still BOOMING.

I went out to dinner with a friend in Manila last night.[...] Click here to continue reading

Why 308,127,404 Americans are going to get hosed

January 11, 2012
Santiago, Chile

Last week, the US government's Financial Crimes Enforcement Network (FinCEN), an agency of the US Treasury Department, published its 2011 annual report. There are a few numbers that are pretty startling.

We've discussed before that FinCEN is the executive agency tasked with ensuring that every US banker is an unpaid government spy through Suspicious Activity Reports.

A Suspicious Activity Report, or SAR, includes details of any transaction that[...] Click here to continue reading

Another consequence of economic decline

January 10, 2012
Santiago, Chile

Nearly 10-years ago to the day, the government of Argentina collapsed. Beset by weighty deficit spending and a completely unrealistic currency peg to the US dollar, Argentina became the poster child for the golden rule of economics: 'that which is unsustainable will not be sustained.' It's reversion to the mean.

Within a matter of days, the country had burned through several presidents, the currency collapsed, inflation soared,[...] Click here to continue reading

What to do with your cash when the financial system is “broken”

[Editor’s note: Tim Staermose, Sovereign Man’s Chief Investment Strategist, is filling in for Simon today.]

January 9, 2012
Manila, Philippines

A few days ago, I read a that famed hedge fund manager John Paulson, who's best known for personally making over $5 billion from the sub-prime meltdown, lost more than HALF of his investors' money last year.  His Advantage Plus fund was down a whopping 52%!  That's not a misprint.

Paulson's thesis[...] Click here to continue reading

Is there a ‘best’ currency to hold right now?

January 6, 2012
Santiago, Chile

We recently received a great question from a reader, Chuck, who asked, "Simon, I'm going to HK in 10 days to open a bank account, and I know there are options to do this in several foreign currencies. What foreign currency would you recommend to hold over the longer term?"

I could never make a personal recommendation as I'm not a financial advisor, nor do I know the[...] Click here to continue reading

Three countries where you’ll want to have exposure

January 4, 2012
Seat 5F, Undisclosed location at 35,000 feet

Most of us have grown up steadily ingesting a hearty line of crap that has made its way into the social consciousness. Governments can't go bankrupt. Government bonds are safe. Banks are safe. Real estate always goes up. The US dollar is king.

Yet even the dullest bystander has begun to realize over the last few years that such platitudes are questionable,[...] Click here to continue reading

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[...] Click here to continue reading

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 the price of gold on December 31, 2012, or who will win the White House this year, or even make wild, black swan predictions.

It's like the Charades of thought experiments... good for laughs at a cocktail party, but ultimately meaningless. Serious personal and financial plans cannot be developed from mere conjecture-- it[...] Click here to continue reading