Podcast
Schiff Sovereign
Hosted by Unknown Author · EN
Wealth. Freedom. Power.
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Flashback: Why a desperate America may soon annex its 51st state
Dec 22Tap to summarizeToday we’re continuing our look back at past articles that foresaw today’s headlines years in advance. Last week, we highlighted three early pieces tracing the decline of US credibility—its unsustainable debt path, the erosion of reserve currency privilege, and the rising global demand for real assets like gold. Today we look back at this podcast I recorded on March 31, 2023. I laid out a theory that Venezuela—sitting on the world’s largest oil reserves—might one day be absorbed into the US sphere of influence, not through war, but through corporate proxies. Drawing parallels to the East India Company and the US-backed creation of Panama, the idea was that a private entity could step in amid Venezuela’s chaos, secure its oil, and quietly serve American strategic interests. Now, with tensions escalating, the threat of an invasion could be the method of securing this kind of control. Maduro has discussed terms for stepping down, and recently US authorities seized a Venezuelan oil tanker. And Venezuela’s opposition leader, María Corina Machado, is now openly pitching the country’s energy sector as “a $1.7 trillion opportunity,” promising, “We will open all [oil], upstream, midstream, downstream, to all companies.” It felt like the right time to revisit this episode. ___________________________________________________________________________ At the center of Sovereign Man’s core ethos is the indisputable view that the United States is in decline. I take absolutely zero pleasure in writing that statement. But it’s incredibly difficult, if not impossible, to objectively appraise the bountiful evidence at hand and not reach the same conclusion. Consider the following: US government finances are appallingly bad. The national debt exceeds 100% of GDP, annual deficits run into the trillions of dollars with no end in sight, and major trust funds for Social Security and Medicare will soon run out of money. Political incompetence is mind-blowing; politicians fail to be able to even identify problems, let alone understand them, let alone reach compromises to solve them. Ditto for central bank incompetence. These people simply cannot understand how, by keeping interest rates at zero for nearly a decade and conjuring trillions of dollars out of thin air, they engineered record high inflation. And they also fail to understand how their actions to ‘fix’ inflation are causing widespread havoc in the economy and financial system. Social divisions across the country are extreme. Censorship and cancel culture prevail, and corporations now wag their fingers at their own customers to “be better”. The education system is in pitiful shape, with many politicians and school board officials turning classrooms into activist training camps. The population is terribly unhealthy. Obesity and drug addiction are epidemics. Plus there’s an obvious mental health crisis that drives far too many people to commit horrific acts of violence on innocent people, including children. National security is in decline. Military readiness is down, yet top officials seem more concerned about diversity and inclusion rather than the ability to prevail in war. The rule of law has been perverted, including for political purposes and self-aggrandizement. We just saw another example of this yesterday. Even the national fertility rate continues plummeting– an indication of the rising cost of living and social apathy. The Wall Street Journal recently published a series of polls indicating that most Americans doubt their children will have a better future; pessimism is strong. They also found that certain values which once defined American culture, including a sense of community, hard work, and civility, are no longer important to the majority of people. This is all happening at a time when adversaries are circling. And that includes China. Now, usually whenever I bring up China, there are always people who are quick to assert that China cannot possibly replace the US as the dominant superpower because they have just as many problems. And it’s true that China has a ton of problems. They have their own debt issues, financial system chaos, and economic problems. They have social challenges, a major demographic crisis, and even a serious issue with childhood obesity. But no civilization or empire throughout history has ever been problem-free. Ancient Rome, even during its early republic days, had enormous problems. They had to deal with constant revolts, civil war, the genocidal dictatorship of Sulla, famine, war, plague, and more. Yet there’s an enormous difference between taking on challenges while you’re on the rise… versus succumbing to them while on the way down. Rome was able to deal with its challenges and continue its rise to become the dominant superpower. China may be able to do the same. The US finds itself in a precarious position where they have a mountain of compounding problems… and no ability to even slow them down, let alone solve them. I’ve written before about what I call the “Four Forces of Decline”, which I define as 1) Forces of History– the inevitable, cyclical nature in the rise and fall of Empire. No empire, no civilization in human history has ever retained the top spot forever, and most tend to experience similar challenges on the way down. 2) Forces of Society– the vicious way in which a society eats itself from within, vanquishing the ability and inclination to solve complex problems. 3) Forces of Economy– the debilitating toll that enormous debts, deficits, and currency inflation take on a nation and its people. 4) Forces of Energy– when energy is cheap and abundant, prosperity reigns. When energy is expensive, prosperity wanes. The relationship couldn’t be more clear. Today’s podcast puts all of these together, with a particular focus on #4, Forces of Energy. Part of being the dominant superpower in our modern world means having access to abundant energy. Yet the US government has spent the last few years trying to destroy its energy (oil and gas) industry. They’ve been pretty successful. The President of the United States hardly misses an opportunity to bash oil companies. Politicians pass new rules and taxes to punish them. The media beats up on them. Investors have pulled funding for them. So it shouldn’t be a surprise that US oil production, while not in terminal decline, is failing to keep up with growing demand. Shale oil is especially problematic given that most of the highest quality “tier 1” sites have already been drilled. Many are already in decline. This is a big deal. Shale oil is the reason why the US achieved near energy independence. With shale in decline, the US will be forced to import a LOT more energy (which, again, is critical for prosperity) from places where they have an increasingly adversarial relationship. Russian oil is obviously off the table. So is Iranian oil. Saudi Arabia is rapidly becoming cozy with China; in fact the Saudis are now publicly considering to sell their oil in Chinese currency, the renminbi. This is an enormous threat to the US. Saudi Arabia has been selling oil in dollars for decades; they’ve even had their currency, the riyal, pegged to the US dollar since 1986. This concept of selling oil in US dollars is known as the petrodollar, and it’s one of the key reasons why the US dollar is the global reserve currency. Anyone who wants to buy oil needs to own US dollars. And that pretty much includes every country on the planet. So foreigners are forced to stockpile dollars, and by extension, US government bonds… simply because they need dollars to buy oil. As a result the US government is able to get away with the fiscal equivalent of murder. They can run multi-trillion dollar deficits every year. They can wage expensive wars in foreign lands. They can go into debt to pay people to stay home and NOT work… … and they’ve always had a bunch of suckers overseas– foreigners who have no choice but to buy US government bonds, simply because oil is priced in US dollars. But what if Saudi Arabia started selling oil in renminbi? Most likely a LOT of foreigners would dump at least some of their dollars a...
Transcribe →2025: The Year America’s Debt Crisis Got Real
Dec 10Tap to summarizeRonald Reagan once famously said he didn’t leave the Democratic Party—it left him. That was back in the early 1960s, when the America he knew was beginning to transform. Fiscal responsibility, which had been a cultural and political norm through the post-war 1950s, gave way to the reckless spending of US President Lyndon Johnson’s welfare programs (dubbed “the Great Society”) coupled with the Vietnam War. Reagan was just an actor. But he decided to go into politics to address this spending and debt problem. As governor of California and later as President, Reagan made it his mission to rein in spending and cut government down to size. At the time, America’s debt-to-GDP ratio was much lower than today’s astronomical levels. But interest rates were sky-high, which made the cost of servicing that debt a real issue. More concerning was the trajectory. Reagan knew that without deliberate effort to reduce spending, the deficit would eventually spiral into a crisis. Reagan’s ethos carried through the next two decades. Even Bill Clinton picked up the baton and eventually presided over multiple years of balanced budgets. But all that changed with the “War on Terror” in the early 2000s. The military spending blowout, combined with the 2008 global financial crisis and big bank bailouts sent the national debt on a vertical trajectory. It blew past $10 trillion, then $15 trillion, then $20 trillion with nary a concern. The political and media establishment dismissed it. “Debt doesn’t matter,” they said. “We’re the superpower. We’re America.” Yet the veneer of strength and credibility eroded, withering away bit-by-bit as deficits ballooned and the national debt climbed relentlessly. Then COVID happened. And whatever was left of fiscal sanity died quicker than nursing home patients under Cuomo’s Emmy-award-winning leadership. Under the influence of Lord Protector Fauci, Congress was convinced that the only way out of the pandemic was to spend trillions of dollars. The nation debt shot up $7.5 trillion in three years. But even when the pandemic was over, the spending binge never stopped. The national debt is now north of $38 trillion, and interest costs exceed $1.2 trillion per year— nearly a quarter of all federal tax revenue. The other three quarters of tax revenue is consumed entirely by mandatory entitlement programs like Social Security and welfare. This means that everything else— from the military, to roads, to the bureaucracy in DC— is paid for with borrowed money. And let’s not forget: a significant chunk of this debt is owed to foreign nations. Here’s the key part that makes 2025 stand out: foreign governments and central banks are starting to back away from US government bonds. For decades, the US had a captive audience. Foreigners needed to hold dollars to participate in the global economy. And US Treasuries were the most liquid, “risk-free” assets on Earth. But this year that illusion finally broke. The signs were already there at the start of the year. The Biden administration’s overuse of sanctions made it clear: if a foreign country crosses Washington, that nation’s assets can be frozen and its economy sanctioned. US government bonds no longer looked like a safe harbor. And in 2025, foreign countries began diversifying aggressively. The clearest sign of this trend has been this year’s astronomical rise in the price of gold. Central banks and foreign governments are dumping dollars and buying gold to prepare for a post-dollar world. And the chaos that 2025 brought only strengthened this resolve. “Liberation Day” tariffs rocked global trade. Then came the government shutdown. And perhaps the most symbolic moment of the year: the DC establishment ran Elon Musk out of town—the one guy actually trying to reduce the deficit by identifying low hanging fraud and waste to cut. That’s why 2025 will go down as the year the debt crisis got real. It was a golden opportunity to turn the tide. They didn’t even have to eliminate the deficit— just shrink it enough so that the economy could grow faster than the national debt. But that didn’t happen. Meanwhile, the Federal Reserve capitulated and continued to lower interest rates even as inflation ticked back up. They signaled an early end to quantitative tightening, and then set the table for more money printing. Ten years from now, when people wonder what happened to the US dollar, they’ll be able to draw a straight line to the events that transpired this year. Not just because of one event, but because of the cascade of decisions—economic, political, cultural—that revealed, once and for all, the unseriousness of the United States Congress and the recklessness of its monetary path. We talk more about this in today’s podcast. And we also discuss two other major events of 2025 which we identified as the most consequential— trends that will unfold in the future that we can directly link in a straight line to something that happened in 2025. You can listen here. You can also access the podcast transcript here. Source
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