America is and has always been an extraordinary idea.
It espouses the values of liberty, economic freedom, self-reliance, and independence.
What’s not to love about that?
It’s an idea that resonates within each of us, speaks to our inner humanity and our desire to prosper.
The United States is not the first country to be founded on these ideas, and it won’t be the last.
Yet history shows that nearly every tribe, kingdom, empire, and nation throughout history that embraced individual liberty eventually screwed it up.
To quote John Adams, “those passions are the same in all men and under all forms of [government], and when unchecked, produce the same effects of fraud, violence, and cruelty.”
Adams was essentially warning us that a representative democracy is not immune to the ambitions of men who lust for power.
And as he wrote in a letter to John Taylor in 1814, “Democracy never lasts long. It soon wastes, exhausts, and murders itself.”
Adams’ premonition has become reality in the Land of the Free.
The United States departed long ago from the original ideals of America.
Every day the federal government creates hundreds of pages of new regulations governing everything from how to raise your child to what you can/cannot put in your own body.
Just today there were another 439 pages of rules and proposals published.
They have created a financial system that destroys the incentive to save and encourages debt and consumption.
This is the exact opposite of what is required for prosperity.
The federal government, of course, is so far in debt that they must borrow money just to pay interest on the money they’ve already borrowed.
Dictatorial control of the money supply has been awarded to unelected bureaucrats who give away free money to the banking establishment at the expense of the middle class.
It’s clear that more and more people are noticing this massive shift away from the ideals of America.
And yet we’re told to voice our dissatisfaction in the voting booth. That’s how we’re taught to “fight” for the system.
But even the electoral system is a total scam; superdelegates and faithless electors have the power to ignore the will of the people and choose whichever candidate they prefer.
This makes voting a demeaning exercise in futility; it’s nothing more than a charade to pretend that you have power, when you in fact have almost none.
Real power isn’t about casting a vote. It’s ensuring that, no matter what happens next, you’re in a position of strength.
It’s clear that decades of unsustainable spending are rapidly catching up.
We talk about this regularly in this letter; I published an article last week showing the ominous similarities between today and just before the crisis in 2008.
They have completely broken the financial system, and governments and central banks have no ability to stop it.
While it’s impossible to predict precisely when, one day there will be severe consequences to all of this economic narcissism.
Going in to the 2008 financial crisis, the size of the subprime market (what essentially caused the meltdown) was $1.3 trillion.
Today the amount of bonds issued by bankrupt governments yielding NEGATIVE interest rates is over five times that size.
The 2016 financial bubble is MUCH bigger than in 2008.
This means the last financial crisis was just a warm up. And with whatever comes next, whenever that may be, a lot of people will get hurt.
Your best offense is to make sure that you’re not a victim. This is rule #1.
Only by protecting yourself from the obvious risks in this system that is underpinned by debt and coercion can you ensure that you will be in a position of strength no matter what happens next.
These steps are mostly common sense. As I wrote yesterday, if your country is bankrupt, don’t hold all of your assets there.
If your banking system is precariously illiquid, don’t hold all of your savings there. Consider holding physical cash. Gold. Or moving money to a strong, liquid bank overseas.
All of these steps make sense no matter what happens or doesn’t happen next.
You’ll never find yourself complaining that your new foreign bank is too safe, conservative, and well-capitalized.
But should the worst happen and your country follows every single example from history that has preceded it, your position of strength will ensure that you’re not a victim.