Joe Withrow's Blog, page 4

On Jerome Powell, rate cuts, and a show worth watching…

“The danger of moving too soon is that the job’s not quite done”, Federal Reserve (Fed) Chairman Jerome Powell told 60-Minutes last month. He then advised that the Fed would not cut interest rates in March.

Powell followed that up with testimony before Congress last week. He reiterated his position that it’s too soon to talk about cutting rates… and he refused to commit to a timetable for doing so.

This matches up with what I suggested in these pages back in December – the market’s expectations of aggressive rate cuts in 2024 were misguided.

It all stemmed from a misunderstanding around the Federal Open Market Committee’s (FOMC’s) Q4 2023 “dot plot” – which showed that FOMC members projected three rate cuts this year with the first in March.

The FOMC is composed of 12 members. It includes the Fed Chair, the Board of Governors, President of the New York Fed, and four of the other regional Fed presidents.

The FOMC is technically the Fed’s inner sanctum. It meets eight times a year to discuss monetary policy.

And the dot plot is a chart that summarizes the FOMC’s collective expectations for interest rates over time. The market sees it as representative of the Fed’s insider discussions. But that’s not necessarily the case…

Each dot on the chart represents an individual FOMC member’s projection for the Federal Funds Rate over time looking forward. That’s all it is.

Each member gets to contribute their own dot. That includes the Fed Chair. Powell gets one dot – same as the other members.

To analyze the dot plot’s projections, we need to know who is sitting in on those FOMC meetings and placing their dots. And it turns out that four doves favoring rate cuts had just been placed on the FOMC ahead of last quarter’s plot. They replaced four sitting members – two of whom were hawks who favored rate hikes and two were moderates.

So the final dot plot that published was not at all representative of the Fed’s internal discussions. It was the four new members projecting their own bias onto the graph.

And here’s the thing – the dot plot has no bearing on monetary policy.

That’s all Jerome Powell… and he’s been very clear on his position. Rates will stay “higher for longer”.

It’s just that people don’t want to take Powell at his word. Many analysts are trying to project their own thoughts onto the matter instead.

For example, Vice Chair of Evercore ISI Krishna Guha had this to say after Powell’s testimony last week: “We think by June it will be clear that inflation is converging durably on 2% and the Fed can start cutting then.”

This matches the market’s expectations as well. Currently the market is pricing in rate cuts to begin in June.

But the Fed Chair hasn’t said one word about his timeline. In fact, Powell said he’s still not convinced it’s prudent to begin cutting rates.

So everything continues to match up with the thesis I’ve presented in these pages and in my book Beyond the Nest Egg.

I believe Powell is intent on maintaining a policy of normalized interest rates. And he’s doing so because he knows that we will destroy our economy, our financial system, and indeed our society if we continue down the path of cheap money with zero-bound rates.

To be clear, that doesn’t mean the Fed won’t cut rates this year. It likely will.

But those rate cuts will come later in the year. And they will be relatively small. Powell didn’t raise rates at the fastest pace in history just to chop them right back down to where they were.

If I’m right about this, things are about to get very interesting on Capitol Hill.

The data shows that 31% of the US government’s outstanding debt is maturing by the end of this year. That’s nearly $7.6 trillion worth of bonds coming due.

Obviously the Treasury can’t afford to pay that debt back. It’s going to run a deficit of nearly $2 trillion this year.

So the only way they’ll be able to satisfy the maturing debt is to roll it over into new bonds. The Treasury will have to issue new bonds to pay off the old ones.

But there’s a big problem here.

The average interest rate across all outstanding Treasury bonds is around 3.8%. And some of the bonds maturing may carry a rate substantially lower than that.

Yet current Treasuries yield between 4.14% and 5.75%, depending on the duration.

So if the Fed doesn’t proceed with large rate cuts, the Treasury will have to issue new debt at materially higher interest rates. And that means the US government’s annual interest expense will increase dramatically.

As the interest expense rises, it will necessarily eat into other areas of federal spending. And then Congress could be forced to actually reduce spending for the first time in over a century.

Of course our entire political system is set up to fight vehemently against any proposed spending cuts. And they’ve got away with it because the Fed has been willing to monetize government debt.

But what if Jerome Powell is serious about this fiscal responsibility thing? And what if his Fed refuses to buy Treasuries to support excessive spending in Washington?

That would be a show worth watching…

-Joe Withrow

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True Financial Security

We’re talking rugged independence and personal sovereignty this week. And when we left off yesterday, we talked about what not to do if we want to maintain full control over our money and investments.

Today we’re going to talk about a better approach. And it starts with this – the entire idea of “retirement planning” is flawed.

As we discussed yesterday, the traditional retirement planning model is all about keeping us locked into investment accounts (401(k)s/IRAs) in which we provide all the money and take all the risks – yet we have no control.

Even worse, these accounts force a range of arbitrary requirements and restrictions upon us… and the rules could change at any time. We have no input whatsoever. Yet, we will be penalized if we do not comply with the rules as they are written.

Why would we agree to such a one-sided arrangement? And for that matter – what’s the goal here?

A basic rule of success in any endeavor is to figure out exactly what outcome you want before committing to any course of action. “Begin with the end in mind”, as famed author Stephen Covey put it.

It’s all about clarity of purpose. Once we have it, we simply need to do the things that will bring our desired end to fruition.

With that principle established I have to ask – what do most people who follow the traditional retirement planning model really want?

Some might say they want a “comfortable retirement”. But I don’t think that’s it.

I would submit to you that it’s really about financial security.

That’s why we save and invest a portion of our income. Because we want to be able to take care of ourselves and our families no matter what. We don’t want to be powerless if we were to face an emergency or lose our job.

If that’s the case, why would we lock our money away in retirement account jail where we can’t touch it?

I’m a strong advocate of not putting money in jail. I suggest that we put it to work for us instead. Here’s my approach to doing so…

For true financial security, we need to build a portfolio comprised of several distinct assets. They are:

Cash (strategically warehoused so it earns a yield)Gold (in self-custody)Bitcoin (in self-custody)A tactical stock portfolio (outside of retirement accounts)Alternative investments (including the items we need for home resiliency).

Each asset class serves a different purpose for us. But collectively they mitigate the major risks we may face.

If we are strategic in building our asset portfolio, it will grow in value over time –  regardless of what happens with the economy, inflation, interest rates, or the stock market.

And here’s the key – we always have access to our money with this approach.

For starters, we have a warehouse of cash always available to us should we need it. But this cash isn’t dead money. In today’s climate it should be earning between 4 and 5 percent for us.

Then if we have an emergency and need access to additional cash, we can convert our other assets back into dollars immediately. And we don’t need to take out any loans or pay any penalties to do so.

The only thing we don’t get with this approach is tax deferral. 401(k)s and IRAs allow investors to defer their capital gains taxes until they retire and start taking withdrawals.

But here’s the thing – there are other ways to create tax advantages for ourselves. And we can do so while also creating streams of monthly income. But that’s a topic for another today.

For a step-by-step guide to this approach to financial security – including exactly how to build out your asset portfolio – see our Finance for Freedom Masterclass right here: https://financeforfreedomcourse.com/mastermind

-Joe Withrow

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On financial sovereignty and investment partnerships…

We’re talking rugged independence this week – thus far with an eye on reclaiming digital sovereignty. Today let’s add money and finance to the picture.

As we discussed last month, most of us have been encouraged to go about personal finance the same way.

We’re told to save for retirement by funneling our money into qualified retirement accounts. Then we can choose our investments from a range of various kinds of funds.

Modern retirement planning has its roots in the Employee Retirement Income Security Act (ERISA) of 1974. That legislation created the Individual Retirement Account (IRA). Then supplemental legislation created the 401(k) and the SEP IRA for self-employed individuals in 1978.

This thrust millions of people into the stock market for the very first time. And seeing this for the opportunity it was, Wall Street built an entire industry around herding money into cookie-cutter investment funds. Retirement, Inc. was born.

Fast forward to today and there are over 15,000 different investment funds out there to choose from. And every single one of these funds comes with its own fee structure. These fees ensure that the fund managers get paid no matter how their investments perform.

The problem is, this approach is riddled with weaknesses. And it requires us to give up nearly all control over our money. In several ways…

For starters, we have no say in what investments go into the funds we buy. Fund managers are free to buy and sell whatever they want, when they want.

This is the case regardless of whether we’re talking about a mutual fund, index fund, or an exchange-traded fund (ETF). If the fund is actively managed, the fund managers have free reign.

That leads to a perverse incentive where the fund manager may be tempted to make investment moves for optics, rather than for performance. By that I mean they may decide to buy or sell certain stocks because it makes them look good to their bosses or their marketing people.

But the bigger issue is with the nature of qualified retirement accounts. To illustrate, I’d like to make a hypothetical proposition to you…

How about we enter into an investment partnership together?

Your job is to provide 100% of the money that we’re going to invest. My job is to make all the decisions around what we invest in.

Per our contract, you must leave your money with me for a fixed period of time – no matter what. This time period will depend on how old you are when we enter into our agreement. It could be as high as 30 years or more.

But don’t worry – I’m going to do my best to make your money grow. All you have to do is pay me a small fee every year for my efforts. I do require that you pay me this fee regardless of my investment performance.

At the same time, I also require that you take all the risk. I cannot be held liable if my investments lose money for you.

That said, if you change your mind and want to get your money back before our agreed-upon time period is up, I will require that you pay me a penalty. You will have to pay me 10% of the money in your account. Then I will give you the other 90% back.

Oh, and one more thing…

Per our deal, I will require that you start making minimum withdrawals from the investment account once you reach a certain age. If you don’t do this, I will assess a 50% penalty on the money you were supposed to take out.

And just so you know, I reserve the right to change these rules later without your input or consent. I don’t have plans to change anything right now though…

So what do you say? Are you in? Do we have a deal?

I imagine if I were to propose such a partnership to you, you would tell me to kick rocks instantly. You might not even let me get through the entire proposal… because it’s so grossly one-sided.

Well guess what? What I described is how qualified retirement accounts works.

When you contribute to a 401(k) or an Individual Retirement Account (IRA), you’re making the exact deal outlined above. Yet so many people enter into this arrangement and think nothing of it.

If we want to be in control of our money – if we want financial sovereignty… I can’t think of a worse approach. Tomorrow we’ll talk about a better way.

-Joe Withrow

P.S. To get a jump on building financial sovereignty, check out our Finance for Freedom Masterclass. You can find it at: https://financeforfreedomcourse.com/mastermind

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Digital Sovereignty in the Modern Age

Cloud computing has been a hot topic over the past decade or so.

Corporate giants Amazon, Google, and Microsoft each built out massive cloud computing businesses. And today they fight with each other tooth and nail for cloud market share.

The buzz around “the cloud” took a backseat to artificial intelligence (AI) this past year. That’s thanks to generative AI like ChatGPT. Still, chances are that most of us utilize the cloud in some capacity every day.

If we store files using services like Google Drive, Microsoft OneDrive, and Dropbox then we’re using the cloud.

If we have Apple’s iCloud or Google Photos automatically store the pictures we take with our smart phone, we’re using the cloud.

If we use home security services that allow us to view videos and photos taken by our security cameras via a smart phone app, we’re also using the cloud.

I’d wager that most of us are using the cloud in at least one of these ways. And these are just the three areas on my radar today. There are all kinds of other applications.

That being the case, I think there’s an important question we should ask. What is the cloud?

And the answer is that the cloud is not at all like what it sounds…

The cloud is nothing more than one of millions of computers running in massive industrial data centers.

There are over 5,300 data centers in the US today. The average data center size is roughly 100,000 square feet. And each of them – along with the computers inside of them – are owned by various corporations.

Here’s a snapshot of one of the data centers Microsoft uses for its Azure cloud offering:

I don’t know about you, but nothing about this screams “cloud” to me. What a misleading term.

We talked yesterday about how our smart phones secretly harvest our data and send it back to Apple and Google. I know plenty of people don’t care too much about this. But I do. To me this is a violation of privacy and digital sovereignty.

Well, many of us are also handing over even more sensitive data to faceless corporations voluntarily… via the cloud.

To be fair we’re doing this because we value the service and convenience provided to us.

The reason I mentioned those three examples above – file storage, automatic photo storage, and home security monitoring – is because I have been doing them myself.

They are good services. And quite convenient. So I didn’t think much about what was happening to my data.

But guess what?

There’s no reason why we should trust our data to corporations powering “the cloud”. Given that the average cost of memory storage has decreased nearly 88% since 2009, it’s feasible for each of us to set up our own cloud network at home.

We do this by running our own server on our home network. We can find high quality server hardware with 2 TB of storage for as little as $349 right now. That’s it.

And these servers come with open source software installed. The software makes it easy for us to set up our own cloud computing system.

For example, we can save all our computer files on our own server. Then we can access those files remotely from any computer or laptop.

Such a system is like our personal Dropbox… except our data never leaves our own network.

We can also ditch iCloud and Google Photos and store the pictures we take with our smart phones on our home server. That way nobody else has access to our personal family photos.

Then we can direct our home security system to upload footage to our server, opposed to the corporate cloud. That way we can keep tabs on everything without putting any sensitive data at risk.

And that’s just the start of what’s possible…

We talked last week about how Bitcoin can power America’s localist renaissance forward. Well, we could run a Bitcoin node on our home server and then connect our phone’s Bitcoin wallet to it.

This would allow us to verify our transactions directly on our own node. That can make our transactions faster and cheaper.

And at the same time running a node strengthens the Bitcoin network’s security. And it gives us a voice when it comes to governance and upgrade proposals.

Put it all together and we can reclaim control over our data and our privacy – which also enhances our security. That’s the recipe to digital sovereignty in the modern age.

-Joe Withrow

P.S. Setting up a home server is much easier than it may sound. Do-it-yourself (DIY) enthusiasts can turn pretty much any computer into a home server. But for those who prefer an out-of-the-box solution, check out Start9 right here: https://start9.com/.

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Rugged Independence and Digital Sovereignty

Last week we talked about the budding localist renaissance in America.

This week let’s talk about rugged independence at the individual level. And given that we’re living fully in the Information Age now, we have to start with digital sovereignty.

It all starts with our smart phone.

If we stop to think about it – the smart phone is possibly the most amazing device ever created. Its functionality is almost endless.

In fact, actual phone calls are probably their least-used feature. I would wager that most of us use other applications on our phone far more often than we use it to make calls.

I love that the smart phone allows us to access the accumulated store of human knowledge on demand. And from most anywhere in the world.

But there is a dark side…

Every smart phone needs an operating system to make it work. For iPhones, the operating system is Apple iOS. For most other phones, the operating system is Google’s Android.

99% of the world’s smart phones run one of these two operating systems. But did you know that these systems send data back to Apple and Google every four and a half minutes, on average?

So every phone running iOS or Android reports back to headquarters around 13 times an hour. Studies show that the iPhone only sends 52 kilobytes (KB) of data back to Apple every twelve hours. Meanwhile, Android phones send roughly 1 megabyte (MB) worth of data back to Google in that same time frame.

All this data is linked to each phone’s unique identifying information as well as its IP address and its geolocation. That means this data ties back to each of us. And our phones send it all back to Apple and Google regardless of what privacy settings we’ve chosen.

By the way, we’re just talking about data collected by the operating system here.

Most of the apps we download also come with trackers attached. And those trackers collect even more data on our preferences, habits, and activities.

And then there are the wireless carriers…

Most phones today use the Global System for Mobile Communications (GSM). This system allows us to carry our cell service information on Subscriber Identity Module (SIM) cards. These SIM cards are what allow us to transfer our phone number every time we get a new phone.

This system requires our phones to reveal our identity to the cellular network we use. That’s how the network knows to route calls to the right person’s phone.

Here’s the thing so many don’t think about… this system also provides wireless carriers with the data we create on their network. That’s our phone calls and our Short Message Service (SMS) text messages.

A study conducted in 2011 shows that wireless carriers:

Store our call detail records for 2-7 years, and possibly indefinitely.Store our cell phone tower usage data for at least one year, and possibly indefinitely.Store our text message data for 1-7 years.Keep our IP sessions for up to one year on a rolling basis.

Put it all together and our smart phones broadcast a mountain of information about us.

That information is stored in centralized databases. And we have no control over what happens to it from there.

Fortunately, there’s an elegant answer for those who would like to reclaim digital sovereignty. We can ditch the Big Tech operating systems for an open source alternative.

Believe it or not, there are quite a few alternatives available. I’ve tested a few of them, and I’ve found GrapheneOS to be the best. It’s very easy to use – it works just like our iPhones and Androids.

The difference is, GrapheneOS does not call back home with our data like iOS and Android do. Indeed, it doesn’t even have a home to call back to.

What’s more, Graphene allows us to access open source app stores. And it turns out there are open source alternatives to virtually every app we use. Most of these do not track and harvest our data like their cousins in Apple’s App Store and the Google Play store.

Whether it’s the weather app, the navigational app, the voice memo app… even the calculator app – they each come with trackers attached in iOS and Android systems. But we can find non-tracking alternatives for all of them on Graphene.

We know this because the open source app stores list every third-party tracker attached to each app available. That allows us to compare open source apps with their mainstream alternatives.

For example, popular navigation app Waze comes with three trackers. They are Google CrashLytics, Google AdMob, and Google Firebase Analytics. Meanwhile, the open source alternative OsmAnd+ comes with no trackers.

Let’s look at an even more egregious example…

The popular Weather Channel app comes with 14 trackers. Fourteen! Yet the open source alternative Breezy Weather doesn’t have any trackers attached to it.

So switching to GrapheneOS affords us full control over our data. We can use apps that do not track us. That allows us to reclaim privacy and digital sovereignty.

And we can do this without having to give up any functionality we currently enjoy. There are better alternatives for everything.

Shoot – there’s even an open source alternative to YouTube. It’s called New Pipe. And it allows users to view and download any video that’s been uploaded to YouTube.

Of course this still leaves us with the wireless carriers and the data we provide them by using their towers…

The simple answer here is to use our home Wi-Fi network whenever possible. Then we can use apps like Signal and Jitsi Meet to make phone calls and send text messages. Doing so keeps our data off of the carrier’s network.

But what about when we’re traveling and Wi-Fi isn’t available? There’s a solution worth considering here also.

We know that AT&T, Verizon, and T-Mobile are the big wireless carriers here in the US. They are the companies who build and manage our wireless networks.

Well, it turns out that there are also private mobile service providers who license access to the big carriers’ networks. These are small companies that sell cellular service plans – just like the big guys. But the best of them implement much stronger security measures. Efani stands out here.

If we move our cell service to a company like Efani, nothing changes with regard to our cell coverage. Because we’re still connecting to the same towers as before.

That means the carriers still get the data we produce over their network. They still see the calls we make and the SMS text messages we send.

The difference is, they can’t automatically tie this data back to us. Because we don’t have an account with them anymore. 

For all they know, someone else could be using our old number. Or we can get a new number after switching to Efani to add another layer between us and the carriers.

Now, I don’t mean to imply that we can use the cellular networks anonymously. We can’t. Because our cellular data is still linked to us within Efani’s system.

But Efani uses strong security protocols to safeguard customer data. This provides for a much greater degree of privacy. Not perfect privacy. But much better than what we had before.

So to sum up, it’s not hard to reclaim our digital sovereignty today.

We just have to opt out of Big Tech systems. And we can do that by switching to a phone running GrapheneOS and by moving our cellular service to a company like Efani.

Tomorrow we’ll look at how we can harden our privacy and security even more utilizing our home network.

-Joe Withrow

P.S. If you would like to learn more about GrapheneOS, the folks at Above Phone make everything turn-key. You can get more information at: https://abovephone.com/.

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What we can learn from Paul Revere today…

Listen, my children, and you shall hear of the midnight ride of Paul Revere… One if by land, and two if by sea, and on the opposite shore I will be…

We’re all familiar with that old poem about Paul Revere, aren’t we?

I remember it being part of the grade school social studies curriculum. We learned about how Revere rode around to warn the colonists near Boston of a pending attack from the British military.

That’s all I knew about Paul Revere. Until recently.

I spent some time researching the apprenticeship model in colonial America this month. And it turns out that Revere was one of the most successful businessmen in Boston.

Paul Revere’s father Apollos Rivoire emigrated to America from France in 1715. He was thirteen years old.

We don’t know much about his early life in the colonies. But Rivoire went on to open at silversmith shop in Boston. He produced fine silverware and glassware, metal surgical tools, and ornate decorations made of gold and silver. And of course he would take customized jobs on a commission basis as well.

Rivoire then took in his son Paul as an apprentice in 1748. Paul was just fourteen years old at the time… but he flourished.

Paul mastered the silversmith craft and took on an ownership stake in the business. It became known in Boston as Revere and Son.

From there Paul expanded the business. He produced various household goods, jewelry, and all manner of tools for clockmakers and tinkers.

He also began dabbling in printmaking. Then he went on to open a bell foundry and America’s first copper rolling mill. The mill produced thin sheets of copper that would mold into industrial products.

Here’s an advertisement Paul put out on behalf of Revere and Son in 1787:

Clearly Revere wasn’t just a master craftsman. He had a knack for the commercial side of things as well.

And it all started with his apprenticeship at age 14. He learned both practical skills and common business sense.

We’ve been talking about America’s budding localist renaissance this week. I can’t help but think about the apprenticeship model as I look out at our world today.

For starters, we’ve extended childhood from the age of 13 or 14 – as it was in colonial America – to 18 years old. We call that interim period the teenage years. And we accept that teenagers are reckless, irresponsible, and often not very considerate of others.

But I have to ask – why is it that Paul Revere was responsible and productive at age 14 when today we expect very little from young people until they are well into their twenties? Is it possible that we’ve extended childhood artificially by exerting dominion over our kids until at least age 18?

It’s an interesting question.

And then, for going on three generations now, we have shipped our children off to public colleges and universities once they do turn 18. This outsourced the role of preparing our kids for the real world to college professors.

Of course, we did this because we wanted our children to get “good jobs”. And for a while it was a good deal. College graduates could integrate into corporate America and enjoy good salaries. Meanwhile, their friends with high school diplomas had to work in the factories for lower pay.

But as I look around at the state of life in America today – it’s very clear to me that the college model is broken. It just doesn’t pass a cost-benefit analysis anymore.

I’m thinking majors like sociology, philosophy, community-organizing, and fine arts here. Are those degrees worth the $100,000+ they cost to get? What are the career opportunities?

Then the worst of our public universities fill students’ heads with destructive and hateful ideas and ideologies. I’m horrified and disgusted by some of the stories I read coming from college campuses.

At the same time, I look around and see a wealth of opportunities in the middle America that we largely abandoned…

In my corner of the world, Baby Boomers own most of the local businesses. I’m talking about those old-world businesses that still require person-to-person interaction. HVAC companies… plumbing… electricians… masonry… local tax preparation… local event coordinators… even local restaurants…

The people who own these businesses in my area would love to start thinking about an exit strategy. They would love to sell the business or transition it over to new management. But there’s a problem. They can’t find anyone in the younger demographic interested and qualified to take over the business.

It’s anecdotal, but I’m very confident this dynamic exists in small towns throughout this land.

And I believe it’s because our society has de-valued this kind of work. In talking with business owners, they all say the same thing – that it’s almost impossible to find good help.

Yet, most of these businesses do hundreds of thousands of dollars in revenue with minimal staffing requirements. Some of them do well into the millions in annual revenue. And that’s in small towns where the cost of living is much lower than the national average.

I can’t help but think that this sets the stage for a modern version of the apprenticeship model to make a comeback.

Modern apprenticing would provide young people with practical skills and common business sense. Just like the colonial version did. Except instead of working for free, modern apprentices would likely command a high salary right from the start.

Then after a few years they could be in a position to buy the business outright. Or perhaps they could help scale operations in exchange for an ownership stake or commissions on revenue generated.

This would enable enterprising young people to carve out a very profitable niche for themselves… just like Paul Revere did 270 years ago.

At the same time, the revival of interest in these local businesses could lead to a renaissance for small town USA. I see that as critical given how corrupt our major cities have become.

Who knows… maybe Thomas Jefferson’s vision for America will make a comeback.

-Joe Withrow

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The Localist Renaissance

Wait… my amount has doubled! Why did it go up so much??

My hairdresser was very surprised when she opened her Bitcoin wallet to receive my payment yesterday. In dollar terms, her wallet balance had nearly doubled since my last visit.

I’ve been paying for my haircuts with Bitcoin for a few years now. My hairdresser treats her Bitcoin wallet as a savings account – so she only checks it when I come in for another cut.

This is the first time she’s noticed a material jump in dollar value though. That’s largely because she’s built her balance up to the point where a Bitcoin price surge can move the needle.

Naturally, she wanted to know what happened. Why did this internet money thing that only one crazy guy seems to talk about skyrocket in dollar value?

My answer: Because they are printing trillions of dollars every year now… and Bitcoin is money that can’t be printed.

Bitcoin’s value proposition runs much deeper than that, of course. But I’ve found that the simple answer is often the best answer in short conversations. It’s the one that will stick.

We talked on Monday about America’s proud localist tradition. We’ve always maintained a spirit of self-reliance and rugged independence in this country.

That spirit may have dulled over the past 100 years or so… but it’s starting to reawaken. The seeds of a localist renaissance have already been sowed.

And I’m convinced that Bitcoin has a big role to play in the coming revival. Because it enables us to transact with one another any time for any reason with money that will not lose purchasing power over time.

That last part is the key.

We’ve all had to grapple with the largest bout of consumer price inflation since the 1970s. I don’t know about you, but I’ve found that the price tag for my family’s trips to the grocery store has roughly doubled over the last few years.

But that’s not because something changed with the groceries. It’s because something changed with the dollar we use to buy them.

Namely, our dollar fell in value. Each dollar now buys considerably less than it used to – because those in power printed over $5 trillion since 2020 alone. That’s new money that didn’t exist before.

The truly sinister thing about this is that it makes it hard to save money. This both hollows out the middle class and makes it very difficult for small businesses to plan ahead.

And that’s where Bitcoin comes in.

My hairdresser now saves a portion of her income in Bitcoin. And we both happen to buy our beef from the same local farmer. What if we started buying that beef with Bitcoin?

Then the farmer could save a portion of his income in Bitcoin… and suddenly we have a tiny but resilient circular economy at the local level. We could buy goods and services from one another using Bitcoin – and that would make us immune to inflation.

From there suppose we get the chicken and pig farmers on board. And then the local cidery… and then our local contractors and tradespeople… and so on.

We could create an independent local economy where people can purchase most of the goods and services they need and want using money that will grow in purchasing power over time.

And given that many of us would use this same money (Bitcoin) as a savings vehicle, our local economy would become more prosperous as the dollar price of Bitcoin increased. We would almost certainly see real estate deals and car sales happening in Bitcoin at that point.

Suddenly the local economy would be about as independent and inflation-resistant as it could possibly be.

But here’s the thing – it wouldn’t be isolated. Because the Bitcoin network is global. And bitcoins are completely fungible. As such, it’s now possible to buy most anything online using Bitcoin or a bitcoin-funded debit card.

So ultimately Bitcoin is a tool that could enable a localist renaissance perhaps more resilient than anything we’ve ever seen before in history. Talk about a practical use case…

What do you think? Does this sound too far-fetched? Too naïve?

Let me know – you can reply directly to this email.

-Joe Withrow

P.S. Bitcoin just shot past the $60,000 mark this morning, and it’s almost certainly on its way to new all-time highs.

For more on how Bitcoin integrates into a comprehensive financial plan, check out our Finance for Freedom program right here: https://membership.phoenicianleague.com/courses/finance-for-freedom

The post The Localist Renaissance appeared first on Zenconomics.

America’s localist tradition…

Americans of all ages, all conditions, all minds constantly unite. Not only do they have commercial and industrial associations in which all take part, but they also have a thousand other kinds: religious, moral, grave, futile, very general and very particular, immense and very small.

Americans use associations to give entertainment, to found seminaries, to build inns, to raise churches, to distribute books, to send missionaries to the antipodes. In this manner they create hospitals, prisons, schools.

Finally, if it is a question of bringing to light a truth or developing a sentiment with the support of a great example, they associate. Everywhere that, at the head of a new undertaking, you see the government in France, or a man of rank in England, in the United States you will be sure to find an association.

That’s French ambassador Alexis de Tocqueville writing in the 1830s.

The French government commissioned de Tocqueville to travel to the United States. His job was to study American society and politics. And what he found amazed him…

De Tocqueville discovered a long history of localism in America.

Americans worked together to manage their society and take on important projects. They did this through private associations at the local level.

And everything was self-funded.

The government did not levy taxes to fund the projects de Tocqueville observed. That means nobody was forced to pay for anything against their will.

Instead, those who found the projects useful and necessary came together to complete them. Everything centered around community at the local level.

We talked last week about how the Environmental, Social, and Governance (ESG) push is a pillar of the globalist agenda. It’s all about shifting power and control to institutions aligned with the globalist faction – which appears to be rooted in the old-world European power centers.

But as we discussed, ESG hit a brick wall here in the US. And I think that’s in no small part due to our proud localist tradition in this country.

I’ve done a little bit of research on America’s mutual aid networks of the 19th and early 20th centuries. A great resource for this is David Beito’s From Mutual Aid to the Welfare State: Fraternal Societies and Social Services.

I don’t think many of us realize just how robust and self-reliant Americans were back then. The mutual aid networks were incredibly comprehensive. These networks:

Facilitated skills-training and jobs-training programs.Matched members up with career and investment opportunities.Shared ideas and boots-on-the-ground intelligence with members regarding happenings in the economy and the community.Provided educational resources and mentorship programs at the local level.Pooled capital to build or repair physical infrastructure.Organized health cost-sharing networks that made access to quality medical care cheap and accessible.Maintained efficient emergency response systems.

A few of these old mutual aid societies are still around today. The Moose Lodge and the Order of Elks are two examples.

The thing is – these associations are now just watered down versions of their former selves. They do very little to enhance the local community’s resilience.

That’s because the Welfare State crowded out their funding by raising taxes on everybody. This created the administrative state. And it went on to create regulations that made certain mutual aid services illegal.

Still, they were never able to crush the American spirit. I think that’s why they work so hard to perpetuate the narrative that this country has become a clown show.

But from my perspective, there are still plenty of strong communities out there. And I think people are feeling the need to band together with those of like mind more than they have in over a century.

This sets the stage for a localist renaissance in this country. That prospect is what keeps the globalists at the World Economic Forum (WEF) up at night.

The key is, we must build financial security at the household level. That’s how we can power the localist renaissance forward.

And that means we have to avoid the hidden tax they’re set to unleash on us. More on that story – and the solution – right here.

-Joe Withrow

The post America’s localist tradition… appeared first on Zenconomics.

The ESG Endgame

What we’re experiencing is the deindustrialization of the European economy and we’re concerned…

That’s what one of oil and gas giant Exxon’s top executives told the Financial Times in an interview published this week. It followed Exxon’s announcement that it will pull billions of dollars of investment out of Europe if the regulations around “climate change” don’t improve.

We’re talking energy this week. And when we left off yesterday we asked the question – why doesn’t the Environmental, Social, and Governance (ESG) movement embrace clean energy technology like nuclear fission?

After all, nuclear is the most dense form of energy available to us today. Yet it produces little to no pollution. The emissions we see coming out of nuclear reactors are mostly steam.

Well, Exxon’s executive said the quiet part out loud.

The religion of ESG is not really about protecting the environment. It’s about deindustrialization.

That is to say, the proponents of ESG want to reduce energy production, industrial capacity, manufacturing activity, and travel. This would deprive us of many modern comforts and reduce everybody’s quality of life considerably.

That said, we need to be a little more specific when pointing fingers here.

I have no doubt that there are plenty of people out there who truly believe the ESG fear mongering. They’ve bought into the climate alarmism. So they think we’re destroying the planet and on the cusp of a catastrophe. As such, those folks see themselves as noble for supporting deindustrialization.

But it’s the people at the top of ESG’s political power structure who create the propaganda. And I’m quite sure they know better.

The fact is, the majority of all greenhouse gas is water vapor. Estimates show that water vapor makes up anywhere from 80 to 95 percent of the total greenhouse gas mass in the atmosphere.

At the same time, carbon dioxide constitutes only about 0.04% of the Earth’s atmosphere. It’s miniscule.

And get this – even if we stopped emitting carbon dioxide entirely, it would take hundreds, maybe thousands of years for atmospheric carbon to return to pre-industrial levels.

By the way, I’m not quoting some guy’s blog here. That stat comes from both NASA and London’s Royal Society.

So even if the ESG movement managed to completely eliminate all carbon emissions… it wouldn’t matter. At least several generations of people would be dead long before it would have a material impact on the climate.

Except those future generations almost certainly wouldn’t come to be in this scenario – because eliminating carbon emissions would take us back to a world where we all had to be subsistence farmers. And almost nobody knows how to farm anymore.

The people at the top of the ESG power structure know this. Otherwise they wouldn’t fly around to climate change conferences on their private jets. Their carbon footprints are far bigger than any of ours will ever be. So what’s the real goal?

It’s all about power and control.

ESG and climate alarmism are key elements of the globalist “Great Reset” agenda.

The globalist faction appears to be rooted in old-world European power centers. The World Economic Forum (WEF) is one of its prominent mouthpieces. As is the United Nations (UN) – among numerous others.

In 2020, the WEF went public with the Great Reset. It’s a not-so-subtle plan to scrap whatever’s left of modern capitalism in order to consolidate power within globalist institutions… and then use that power to completely re-organize society.

They call their system stakeholder capitalism. It’s supposed to sound like a friendlier version of capitalism. But is it?

If we want to assess stakeholder capitalism, the most obvious place to start is this: Who are the stakeholders?

Well, it’s them. In their vision, their globalist organizations control everything.

In fact, these people were arrogant enough to make a commercial that pitches the slogan, “You’ll own nothing and be happy”. That’s what they think of everyone not in their circle.

The WEF outlined five pillars for their Great Reset. They are:

JusticeSustainabilityDigitalizationNew Social ContractShift in Capitalism

Let’s break these down…

When they talk about justice, they say we need to reduce inequalities and promote social inclusion. What they mean is that we need to get rid of competition and merit-based economic mobility.

When they say sustainability, it’s all about replacing traditional energy production with what they call “green energy”. This is the ESG push for solar and wind power.

Of course, it isn’t economical. Solar and wind cannot generate enough baseload power to run our economy. We’ve talked about that all week.

And this is why they need to eliminate competition with that first pillar. Their green energy revolution simply will not happen within the current system.

The Great Reset’s next pillar is digitalization. This is about central bank digital currencies (CBDCs) and 15-minute smart cities.

At the individual level, CBDCs would be used as a mechanism for manipulation and control. That’s because the CBDC could be programmed to only work for “acceptable” purchases.

For example, if we went to buy something the globalists don’t like – perhaps a firearm or even red meat – we could find that our CBDC wallet would deny the transaction. Obviously this lends itself to a wide range of potential abuses.

On the societal level, CBDCs are a direct attack on the competitive commercial banking system. In this way they are another globalist tool for eliminating competition, per their first plank.

As for smart cities – they are all about herding people into small living areas where they can be subjected to total surveillance at all times.

The fourth pillar is “new social contract”.

They say this is about fostering social inclusion and reducing inequality between countries. Really, it’s about eliminating national sovereignty in everything but name. That’s the globalist fantasy.

And the last pillar is “shift in capitalism”.

This is about replacing the current economic system with their model… which isn’t capitalism at all. It strikes me as a modern version of feudalism. It’s a system where the peasants can be kept subservient to their overlords.

I know this sounds like a giant conspiracy theory. But the WEF has talked openly about all of it. 

And they even set a timeline for implementation. It’s 2030. They want to get it all done within this decade.

Fortunately, we’re seeing signs that people are waking up to this attack on our way of life. Just to name a few:

Exxon and traditional energy giants are beginning to push back on ESG – as we saw in the comments above.The Federal Reserve (the Fed) and the New York banks appear to recognize that retail CBDCs are a threat to the entire banking system.European farmers are protesting against ESG-related regulatory restrictions designed to reduce their food production.American truckers are threatening to stop shipments to New York and other cities who push the globalist agenda.There’s a renewed interest in localism and intentional communities spreading across the US and Europe right now. I even came across a venture capital (VC) firm raising money to build new communities around small agricultural towns in Tennessee and Kentucky – as a haven for people who want to flee the big cities being ravaged by bad policy.

This sets us up for an interesting year. With all this pushback, I get the sense that the globalist faction will try to accelerate their plans in the coming months as many countries enter a big election cycle.

Buckle up…

-Joe Withrow

P.S. The rejection of ESG brings with it some fantastic investment opportunities. For more information on the big picture and what to do about it, just go here.

The post The ESG Endgame appeared first on Zenconomics.

The Energy Renaissance

Yesterday we talked about the inevitable end of the Environmental, Social, and Governance (ESG) movement. It’s now upon us.

And there’s a tremendous opportunity here. 

As we discussed, nearly $2.2 trillion poured into the development of renewable energy over the last eight years. Solar and wind power were the major beneficiaries.

The problem is, these energy sources will never be able to power our electric grid. Because they are intermittent. They only produce power when the sun is shining and the wind is blowing. 

So we are going to see an avalanche of investment shift back into traditional energy production in the years to come. And it’s already happening…

Both Uranium Energy Corp. and Ur-Energy recently resumed commercial operations. 

These are two uranium miners who had paused activity specifically because the political climate had demonized nuclear energy – prompting the world to decommission over 100 nuclear reactors since 2016.

That drove uranium prices down to a low of $18 per pound ($18/lb) in 2016. And the spot price languished between $18 and $30/lb for the next four years.

At those price levels, it just wasn’t economical for companies like Uranium Energy and Ur-Energy to operate. They would lose money.

But the spot price of uranium just surpassed $100 per pound in January. Uranium hasn’t been this expensive since 2007. 

This signals a strong rising demand for nuclear power production… which is why these two companies just went back to work. 

And the latest report from the World Nuclear Organization suggests that this trend will continue…

Per the report, 60 nuclear reactors are currently under construction around the world. It will take years for these reactors to come online. And when they do, each of them will need uranium fuel to produce power.

This dynamic prompted Sprott Asset Management CEO John Ciampaglia to upgrade his forecast for the uranium spot price to $160 per pound by the end of 2024. And he suggested that the price will remain at elevated levels for “a very long period of time”. That’s because of how long it takes to get new nuclear reactors up and running.

If Ciampaglia is right about this, uranium still has roughly 60% upside ahead of it. And the top uranium mining stocks could stand to do even better from an investment perspective.

We maintain a core equity portfolio within our investment membership The Phoenician League. Our uranium position has more than doubled in value for us thanks to this trend. And it certainly looks like it will continue to perform well for us.

This speaks to how a tactical stock portfolio can help us build financial security. We just have to leverage the big trends in our favor.

Looking at the bigger picture – a shift back to nuclear power is very good for the world. 

Nuclear is the most dense form of energy available to us today. And nuclear reactors emit mostly steam. They produce little to no pollution. 

Of course, this begs the question – why didn’t the ESG movement embrace nuclear power? After all, nuclear reactors do not emit any carbon.

We’ll explore that question tomorrow.

-Joe Withrow

P.S. We just released a comprehensive new report that could transform your investment portfolio. We’re calling it Navigator’s Guide to the Equity Markets. 

The report is a 23-page journey into the heart of the investment world. It reveals key strategies used by professional investors to construct a robust portfolio and tactically navigate the stock market. 

This guide represents the culmination of decades of accumulated investment wisdom and experience. 

But here’s the catch – it’s exclusive. We’re only providing access to members of The Phoenician League and those going through our Finance for Freedom masterclass program.

The Phoenician League isn’t accepting new members right now, but the doors to our masterclass are still open. You can learn more about the program and get access to our new guide right here: https://financeforfreedomcourse.com/mastermind

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