Author: jwithrow

The man took a deep breath as he stepped into Chase National Bank on a foggy Manhattan morning. He knew he was in for a battle… and a small fortune was on the line.

It was September 16, 1933, and Frederick Barber Campbell arrived at the bank bearing his receipts. They designated him as the owner of twenty-seven bars of gold bullion, each one marked and numbered – and sitting in a vault beneath Wall Street.

The contract was explicit. It stated that Campbell was the owner of those exact bars of gold, and that he could take possession of them upon request at any time.

Campbell’s bars were worth roughly $135,000 at the official exchange rate. Today, they would be worth $28.7 million.

“Good morning sir,” Campbell greeted the teller as he approached the counter. “I’m here for my bullion – here are the receipts.” He sized up the young man as he pushed his gold receipts across the counter.

He could see that the teller was immediately distraught. “Sir, I’ll have to go get the manager. Please wait just a minute,” the teller replied.

Campbell had done business at Chase National Bank for thirty years. He knew the staff, and they knew him. The bank considered him to be an important customer. But Campbell also knew that everything was suddenly different… and America was at a crossroads.

The teller quickly returned with an older, gray-haired gentleman who immediately explained the situation. “Sir, I’m sorry but we can’t release the gold…”

“I have the receipts right here,” Campbell cut him off immediately. “This is a legally binding contract that says I own those specific gold bars, and that I may take possession of them at any time upon returning the receipts. I’ve already paid a hefty storage fee for the service.”

The manager winced as he chose his next words. “I know that, sir. But the gold is no longer yours to take. It isn’t ours, either. The President issued an order – we have to turn over all our gold to the US Treasury.”

“That’s ridiculous,” Campbell countered. “Just because the President writes something on a piece of paper doesn’t mean he can do whatever he wants. This is clearly unconstitutional and you know it.”

The manager shook his head, visibly sympathetic. “Sir, I’m sorry but the only thing we’re authorized to do is credit you with dollars at the exchange rate of $20.67 per ounce of gold. We will credit your account.”

“Dollars? Gold is what makes dollars have value. If you take away the gold, what good are dollars?” Campbell was incensed. He knew this wasn’t the bank manager’s fault. But his 27 bars of gold represented his life savings.

The manager offered another apology and said there was nothing else he could do. Campbell stormed out of the bank in disgust… but he didn’t let it go.

Continue reading “Executive Order 6102: The Man Who Sued to Get His Gold Back”

The cable came in from London, and Benjamin Strong already knew what it would say before he read it.

The year was 1924 and Strong had quickly become the most powerful banker in America. But it wasn’t J.P. Morgan’s kind of power, where everything hinged on a private fortune.

No, Strong’s power was something newer. And something far greater.

Benjamin Strong had been tapped to run the Federal Reserve Bank of New York when it opened its doors in November of 1914. The public didn’t realize it yet because of how the Federal Reserve (the Fed) had been packaged and sold as a populist reformer’s institution… but Strong now sat at the one lever in the entire American financial system that could make money cheap or scarce across the whole country.

On the surface, it didn’t look like that was the case. Per the original structure, the public was led to believe that the Fed’s board of governors down in Washington would call the shots. But by 1924, everyone plugged into the American engine of high finance knew that the true lever of power resided in New York.

The man on the other end of the cable was Montagu Norman, Governor of the Bank of England. Strong had been expecting his telegram.

Continue reading “A Little Coup de Whisky and the Fed’s Immediate Betrayal”

Friends,

When we last spoke, I left you with a question…

If the conventional financial playbook is broken — and if “retirement planning” was never a strategy, but rather a lucky passenger riding a four-decade tailwind that’s now gone… well, where does that leave us? 

Let’s explore that question more together today.

Have you ever noticed that certain institutions seem to endure no matter what the economy does? 

We’re talking about the institutions that survive the same crashes that wipe out so many others around them. They’re still standing after wars, currency crises, depressions, and decades of inflation. 

Meanwhile, we read about bank failures every few years… and we watch fortunes that took a generation to build evaporate in a single downturn.

So it begs the question – what separates the enterprises and families that last centuries from the ones that don’t?

After being immersed in the finance space for two decades, I’ve come to the conclusion that it isn’t luck. And it isn’t picking the right stocks at the right moments, either. 

Here’s the secret you’ll never hear on CNBC: the world’s most time-tested financial model is actually quite simple. It rests on three basic planks.

Continue reading “What the oldest fortunes all have in common”

Friends,

Let’s talk about the conventional retirement planning model. And let’s suppose it’s the only paradigm somebody knows.

It calls for 30+ years of discipline. That’s 30+ years of doing exactly what the financial planner told you to do — max out the 401(k)… hold the index funds… and wait. 

Let’s suppose you went that route and you had socked away $1 million in your retirement accounts by 2020. You were a millionaire. Do you know what that same one million dollars buys today?

Roughly $680,000 worth of the same goods and services that it could purchase six years ago.

Your account balance didn’t fall. But $320,000 in purchasing power disappeared. Silently. Without a single line item on your statement to explain it.

That’s the insidious nature of inflation – the invisible tax. And it’s the most consequential concept in personal finance that the mainstream financial industry will never show you on a slide.

And that’s because explaining inflation honestly would require admitting something the industry cannot afford to admit — that the conventional financial playbook was never actually a strategy. It was a lucky passenger riding a four-decade tailwind of falling interest rates.

Here’s what I mean…

Continue reading “The Invisible Tax: Why $1 Million Isn’t What It Used to Be”

Friends – I hope the summer is treating you well. 

It’s been a warm one up here in the mountains of Virginia, but I’ve quite enjoyed it. We have spent quite a bit of time down at the river. Here’s a shot of our little access point:

It’s funny – summer doesn’t quite feel as special to the Withrow kids, who have been homeschooled from Day One. 

I’ve explained to them how, to me, summer represented my only childhood experience of pure freedom. It was a temporary reprieve from the government school that insisted upon regimenting and surveilling every aspect of my life from early September through early June… 

But it just doesn’t register with them. They cannot imagine a world in which they did not have nearly complete agency in their own life and their own decisions.

I’m thankful for that. And I’m forever grateful for those brave homeschool pioneers who blazed the path forward for us here in the United States – back when homeschooling was much more of a dicey proposition.

And speaking of American history, we’re going to take a short break from our American System essay series for the next two weeks or so. We’ll resume – and hopefully complete – the series shortly thereafter. 

But in the interim, I want to take some time to shine the light on the world of personal finance and investing… which was originally my impetus for embarking on the American System series in the first place. I’m fascinated by the history of it all, but my ultimate responsibility lies in the investment world.

To that end, we’re going to get back on the investment beat for the next few weeks. And it will culminate with our next Phoenician League strategy session on July 22^nd. There, we’ll take what we’ve learned on the macroeconomic front and put it all together from a self-directed investment standpoint. 

Specifically, I’m going to walk you through the complete investment framework that I’ve spent the last decade building — the one I use to manage my own money in this new financial era that we are entering.

It’s a system built on five pillars. And the key is that they work together, as one architecture, rather than the piecemeal, one-off approach most people end up with.

We’ll get into how to build a foundation in hard money that can’t be inflated away… how to generate monthly cash flow from actual assets, not paper promises… how to think about owning stocks intentionally instead of just parking money in funds and hoping for the best… and how to keep more of what you build through smart tax and protection structures.

And I’ll show you exactly how to implement all of it — including who can actually help you get each piece in place. Because in my experience, the investment framework isn’t the hard part. The hard part is knowing who to trust… and that’s a gap I’ve spent years closing.

The session will be free and open to everyone. If you’d like to join us, you can get more information at: https://phoenicianleague.com/session

See you there!

-Joe Withrow

It was six o’clock in the evening on December 23, 1913 — just two days before Christmas. You could hear a pin drop in the Capitol Building.

Just an hour earlier, the United States Senate had cast one of the most consequential votes in American history. And then, in unison, the senators rushed out the doors and down to Union Station to catch their trains home.

Now the corridors were empty. The usual scuttlebutt of American politics was put on pause for the holiday season.

But a small group of men did not head for the train station. Instead, they made their way to the White House. There, President Woodrow Wilson sat waiting with their final bill in front of him and a small collection of gold pens laid out on the desk.

The bill was called the Glass-Owen Act, formally known as the Federal Reserve Act. With a few strokes of those gold pens, President Wilson signed the Federal Reserve System into existence.

When he finished, Wilson handed one of the pens to Carter Glass, the Virginia congressman whose name was on the bill. He handed another to Senator Robert Owen of Oklahoma, the bill’s Senate sponsor.

These were the “reformers” — the men who had spent the better part of a year, by their own account, writing legislation to break Wall Street’s grip on the American economy. They stood there beaming, holding up their gold pens. They seemed certain that they had just delivered a great victory for the common man.

Continue reading “The Year America Was Captured”

The train left Hoboken after dark… and no one seemed to notice that a private railcar had been coupled to the rear of it.

Anyone observing wouldn’t have thought much of it anyway. Six men boarded that private car, but each separately and through different doors. To any keen observers, it would have appeared to be a random group of travelers.

But nothing about it was random. The men who boarded that private railcar had been given their instructions in advance.

They were to arrive separately at their own designated time. And they were to address one another by a fictitious first name only. There would be no mention of titles or surnames. And if anyone were to ask, they were to state that they were going duck hunting and leave it at that.

By the time the railcar reached the coast of Georgia, those six men felt confident that they had avoided detection. Stepping off the railcar, a launch carried them across the narrow sound to a private island.

“Leave the guns in the case,” the man who organized the excursion said as they stepped onto the dock. “We won’t be needing them today.”

The year was 1910, and those six men had not come to hunt ducks. They had much bigger ambitions in mind.

Continue reading “Jekyll Island and the Capture of America”

“What suggestions have you to make, Mr. Morgan?”

President Grover Cleveland asked the question with something of a resigned sigh as he engaged his guest across a table in the White House.

The man he was speaking to had not been invited. He held no office. He had never been elected to anything. Instead, the man was a private banker from New York, and he had arrived in Washington the day before without an appointment.

When John Pierpont Morgan first reached the White House, President Cleveland had refused to see him. But Morgan wouldn’t take no for an answer.

“I have come down to see the president,” Morgan had told the staffers bluntly. “And I am going to stay here until I see him.”

So Morgan had sat patiently in a corner room inside the White House, alongside his partner and his lawyer. Contemporary reports suggest that he said very little, but that he rolled an unlit cigar between his fingers reflexively.

Every so often a fresh report would arrive from New York, and each one was worse than the last. The US government’s gold reserves were being drained. Wall Street was placing bets as to the exact day the United States Treasury would default.

Given the urgency of the situation, and Morgan’s considerable power and connections, President Cleveland agreed to hear him out.

The date was February 5, 1895. And the meeting between President Cleveland and J.P. Morgan would reveal exactly who had come to hold power over the American financial system.

Continue reading “How a Private Banker Became America’s Central Bank”

“Sir, we can’t coin that.”

The miner was confused. He had walked into the US Mint with sacks of silver a dozen times before and it had never been a problem.

“It’s good silver,” the miner replied politely. “You can weigh it yourself.”

The clerk offered a slight, somewhat confused smile. He appeared to be truly sympathetic.

“Sir, I don’t doubt that it’s good silver. But I’m not allowed to make it into dollars anymore. The law changed.”

The miner was shocked.

The sack of silver on the counter represented months of his labor. He had pulled the ore out of a Nevada mountain himself. Then he had it smelted down, and he made the long trip to the US Mint – just as he always had. And just as his father had done before him. It was a business as old as the country itself.

The miner couldn’t contain his frustration.

“Changed how!? Silver’s been money my whole life. We have made this transaction countless times.”

The clerk could only shrug and offer his sympathies. He explained that he didn’t entirely understand it either. Apparently Congress had passed a new law and the President had signed it, and it said that the silver dollar was no longer to be struck.

The clerk admitted that he didn’t know anything more than that. He was simply told that he could not accept silver bullion any longer.

“You can take it home,” the clerk offered timidly. “Or you can sell it as metal. But it doesn’t come out of here as money. Not anymore.”

The miner couldn’t do anything but shake his head. He grabbed his sack of silver and stomped out… never to return.

The miner’s name was lost to history. But his interaction, and scores of others, were recorded by the US Mint in those days.

He was one of thousands of men working the great silver lodes of the American West — the Comstock in Nevada most famous among them. The miners would risk it all to pull silver ore out of the mountains in the belief that what they mined would be converted into money.

And for the entire history of the republic up to that moment, it was. Silver was money. You could take your silver to the mint, hand it over, and walk out with silver dollars. That was the law. It had been the law since Alexander Hamilton wrote it into being in 1792.

But that had quietly changed.

Continue reading “The Crime of ’73: The Fracturing of the American System”

The doors of the library were locked from the inside. No one was allowed to leave.

It was the first week of November, 1907. Outside, a crisp autumn breeze brushed through the streets of Manhattan… and a silent fear permeated the air. The financial system was coming apart, and New Yorkers could “feel” it more acutely than most.

Perhaps absurdly, the trouble had started with a failed scheme to corner the stock of a copper company. It was a bet so bad that it took down an entire brokerage and triggered bank runs throughout the Big Apple.

Now the contagion was spreading through the whole of the New York financial system. Depositors stood in lines that wrapped around city blocks, weathering the sharp autumn air to pull their savings out of trust companies that might not last the afternoon.

At the same time, the stock market was crashing. And there was genuine panic that the entire financial system would lock up.

That is, until a seventy-year-old banker named J.P. Morgan decided it was in his best interest to act.

So it was that a group of bankers sat in J.P. Morgan’s private library on Madison Avenue that crisp November day. Renaissance paintings adorned the walls and the world’s finest collection of medieval manuscripts rested on the shelves.

Morgan moved between rooms as the long night wore on—trust company presidents gathered in the West Room, other bankers in the East. He made it clear that no man would leave until a plan was in place to rescue the American financial system.

Continue reading “The Panic of 1907: How a Copper Scheme Gave Foreign Bankers Their Opening”