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…

Continue reading “America’s localist tradition…”

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.

Continue reading “The ESG Endgame”

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…

Continue reading “The Energy Renaissance”

Energy is the master economic resource.

We take it for granted… but nothing happens without energy. Everything we see in our modern world today – and everything we use on a daily basis – is only possible because of energy.

It’s a simple thing. But if we truly ponder this, it changes our perspective.

Last week we talked about building a robust asset portfolio for financial security. The concept is called asset allocation. The idea is to spread our savings across a range of asset classes in a strategic way.

As we discussed, a tactical stock portfolio is a key piece of the puzzle here. And this is where we can leverage energy as the master economic resource…

My philosophy when it comes to portfolio construction is this: I want a portion of my portfolio to have exposure to energy. And I want to own that energy in the most advantageous way I can. If we start there, all we need to do is figure out what form that energy should take.

Continue reading “The End of ESG”

Yesterday we examined the three weaknesses in the traditional retirement planning model.

In short, that approach pits us against the tax code… is vulnerable to inflation… and it forces us to choose between having assets or having income.

Today let’s talk about a more comprehensive approach – one that mitigates each of these weaknesses.

My philosophy is simple: Financial security first. Then financial independence.

I define financial security as the ability to weather any sudden change or emergency for an extended period of time in relative comfort.

It’s a simple concept. In mainstream circles, they would say it’s about “having money”.

That way if we were to lose our primary source of income or incur an unexpected large expense – we’re good. We have the resources we need to handle the issue without it disrupting our life.

But here’s the thing – we don’t want to have money. They are printing money by the trillions. It’s guaranteed to lose purchasing power year after year. Instead, we want to have assets.

Continue reading “Beyond Retirement”

The rules of money changed in 2022.

To illustrate this from a different angle, let’s assess how the “traditional” retirement planning model came to be…

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.

ERISA marked a monumental change in the US.

Prior to this legislation, it was common for employers to provide employees with a lifetime pension plan. Companies would invest in this plan on behalf of their employees. Then they would make lifetime payments to each employee after they retired.

As such, the burden of retirement planning fell to corporations.

This gave rise to the “three-legged stool” principle. It said that a sound retirement consisted of three things:

• Social Security benefits
• Corporate pension payments
• Personal savings

ERISA changed everything. It shifted the responsibility for retirement planning from employers to employees.

Continue reading “The Three Weaknesses in Retirement Planning”

When we left off yesterday, we were examining the idea that the Age of Paper Wealth had a devastating impact on traditional American society.

As a reminder, the US government cut the dollar’s final link to gold in 1971. This removed all restrictions on creating new dollars at will.

It took most governments about a decade to realize this… but they’ve been printing money in greater and greater quantities since 1982. This drove interest rates down to zero… and it propelled the US stock market to all-time highs.

I call this period from 1982 to 2022 the Age of Paper Wealth. It certainly seemed like a prosperous period in American history – and for some it was. But the combination of artificially low interest rates and printed money financialized the American economy.

That is to say – we emphasized financial markets, financial institutions, and financial activity to the detriment of hands-on knowledge, skilled labor, the middle class, and traditional American values.

Today, very few people seem to know how to do anything with their hands. Myself included. Finance is all I’ve known. But I am making an effort to get better about this.

And look at what’s happened to our dollar…

Continue reading “The state of the American middle class”

Last week we looked at the strange de-banking trend and the history of our money.

In our brief history lesson, we noted how the dollar was not only backed by precious metals for most of its history – it was in fact defined as a specific amount of silver and later gold.

But everything changed in 1971. That’s when President Nixon cut the dollar’s last link to gold.

This thrust the world on a purely fiat monetary system controlled entirely by governments and central banks. Fiat is the Latin word for “let it be done”.

This is what gave rise to the Age of Paper Wealth I highlighted in my book Beyond the Nest Egg. Because the fiat system removed all restrictions on printing money.

It took most governments about a decade to realize this. But once they did, they didn’t look back…

Continue reading “What happened to our money?”

Yesterday we talked about the nature of money… and we noted that we haven’t had sound money for quite some time now.

So today let’s look at a brief monetary history to see how that came to be. This is something that nearly every University in the western world has either ignored or swept under the rug to keep us ignorant – so let’s take a minute to briefly pull the curtain back today.

We’ll look at the history of money from an American perspective. But only because the dollar has served as the world’s reserve currency since 1944.

And we have to start with this – what is a “dollar”?

Continue reading “The History of Our Money”

Yesterday we talked about a strange case of someone getting de-banked… and I asked the question – what’s going on here? Is this a trend?

I suppose time will tell. But I can’t help but think that this is a signal we need to be paying attention to. And it’s a good opportunity to tune in to what’s happening in the world of money and finance.

So today, let’s talk about the nature of money.

Now, I know that may sound a little strange. We all use money every day. We’re familiar with it. But have we really thought about it?

Where does money come from? Why is it valuable?

The short answer is that money is a unit of account that serves as a medium of exchange. But this is an incomplete view.

In order to be viable over long periods of time, money must contain several definitive characteristics. Money must be:

• Portable
• Divisible
• Fungible
• Durable

Let’s examine each of these characteristics in more detail.

Continue reading “The Nature of Money”