Nick Giambruno – The Burning Platform

Trump Could Go Down as the Worst President… But It Will NOT Be His Fault

History books remember Herbert Hoover as one of the worst American presidents.

Hoover, a Republican, was a rich and successful businessman with investments all over the world. He was also somewhat of an outsider, having never held elected office until he was inaugurated in March 1929.

Today, people associate him with massive infrastructure projects like the Hoover Dam, as well as the Mexican repatriation program, which deported over 500,000 illegal Mexican immigrants.

Hoover also placed tariffs on foreign products entering the US and established other protectionist trade policies.

Of course, when people think of Hoover, they mostly think of the Great Depression.

Throughout the 1920s, the Federal Reserve’s easy money policies helped create an enormous stock market bubble.

In August of 1929, the Fed raised interest rates and effectively ended the easy credit.

Only a few months later, the bubble burst on Black Tuesday in October 1929, barely seven months after Hoover took office. The Dow lost over 12% that day. It was the most devastating stock market crash in the US up to that point. It also signaled the beginning of the Great Depression.

This happened on Hoover’s watch. And because of that, people pinned the blame squarely on him, regardless of where the fault lied.

Hoover was an easy target. The Democratic National Committee’s publicity chief coined the term “Hooverville” for the countless shantytowns that sprung up across the country.

Hooverville outside of Seattle

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The More Corrupt the State, the More Numerous the Laws

By Nick Giambruno

Today, I’m going to share one of the most important things I’ve learned traveling around the world: There’s a crucial difference between committing a real crime and breaking the law.

I’ve seen it firsthand in the Middle East as well as many other places.

The difference is huge and few people understand it.

While laws vary dramatically across countries, almost every country in the world universally considers real crimes immoral. A real crime involves harm or the threat of harm to person or property. Think murder, theft, or arson.

Virtually every government prohibits real crimes. Most also prohibit a lot of other things…

When someone breaks the law, it’s often not a real crime at all. He may have merely violated a particular government’s law without threatening or harming anyone or anything.

Keep in mind that the idea of a victimless crime is an oxymoron. If there is no victim, there is no real crime.

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Whoever Does Not Respect the Penny is Not Worthy of the Dollar

By Nick Giambruno

This definitive sign of a currency collapse is easy to see…

When paper money literally becomes trash.

Maybe you’ve seen images depicting hyperinflation in Germany after World War I. The German government had printed so much money that it became worthless. Technically, German merchants still accepted the currency, but it was impractical to use. It would have required wheelbarrows full of paper money just to buy a loaf of bread.

At the time, no one would bother to pick up money off the ground. It wasn’t worth any more than the other crumpled pieces of paper on the street.

Today, there’s a similar situation in the U.S. When was the last time you saw someone make the effort to pick up a penny off the street? A nickel? A dime?

Walking around New York City recently, I saw pennies, nickels, and dimes just sitting there on busy sidewalks. This happened at least five times in one day. Even homeless people wouldn’t bother to bend over and pick up anything less than a quarter.

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Capital Controls are Coming

Capital Controls Are Coming

By Nick Giambruno

The carnage always comes by surprise, often on an otherwise ordinary Saturday morning…

The government declares a surprise bank holiday. It shuts all the banks. It imposes capital controls to stop citizens from taking their money out of the country. Cash-sniffing dogs, which make drug-sniffing dogs look friendly, show up at airports.

At that point, the government is free to help itself to as much of the country’s wealth as it wants. It’s an all-you-can-steal buffet.

This story has recently played out in Greece, Cyprus, Argentina, and Iceland. And those are only a few recent examples. It’s happened in scores of other countries throughout history. And I think it’s inevitable in the U.S.

I believe the U.S. dollar will lose its role as the world’s premier reserve currency. When that happens, capital controls are sure to follow.

This is why it’s crucial to your financial future to understand what capital controls are, how they are used, and what you can do to protect yourself.

Why Governments Impose Capital Controls

Think of the government as a thief trying to steal your wallet as you (understandably) try to run away. With capital controls, the thief is trying to block all the exits so you can’t reach safe ground.

A government only uses capital controls when it’s desperate…when it can no longer borrow, inflate the currency, tax, or steal money in one of the “normal” ways.

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The U.S. Wants to Seize Your Passport…Here’s What You Can Do About It

By Nick Giambruno

Alexander Solzhenitsyn was a talented Russian writer and outspoken critic of the Soviet Union’s totalitarianism. He helped raise global awareness of the Gulag forced labor camp system.

For his efforts, the Soviet government stripped him of his citizenship in 1974. It did the same – and worse – to many other people it considered internal enemies.

The Nazi government revoked German citizenship from people it deemed undesirable, like the Jews.

After Castro came to power in Cuba, his government made Cuban citizens apply for exit visas before leaving the island. It did not grant them easily.

In recent years, many of the Persian Gulf monarchies – not exactly bastions of individual liberty – have passed laws making it easier to revoke the citizenship of anyone working “against the interests” of the state or of anyone who has who failed “the duty of loyalty.”

In recent years, these Arab monarchies have used these laws to strip hundreds of people of their citizenship. Most of these people were advocates of political reform. Some even lost their citizenship because of mere social media postings.

All of these Arab monarchies are close allies of the U.S. government. Keep that in mind next time you hear a pundit or politician advocating U.S. military intervention ostensibly for the sake of protecting human rights or promoting democracy. But that’s a story for another day.

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How to Profit from the End of the Longest Running War in the Americas

By Nick Giambruno

Drug cartels. Kidnappings. Assassinations. A war for billions in cocaine profits. Leftist guerrillas looking for a piece of the action.

If you’ve seen a movie with this stuff in it, there’s a good chance it was set in Colombia.

Popular culture has depicted Colombia this way for decades. The media has pounded this image into the public’s consciousness. So it’s no surprise most people think of the country as a scary, dangerous place.

There were plenty of facts to support this image 30 years ago…but not today. Today, a violent Colombia is just a Hollywood fiction.

The real Colombia has one of the fastest growing economies in Latin America. Some remote areas are still no man’s land. But the drug wars and civil conflict that started in the 1960s and tormented much of the country have wound down. I’d feel much safer walking down a street in Medellín tonight than I would in many parts of New York City, Chicago, or Washington, D.C. Plus, unlike most Latin American countries, Colombia welcomes and respects foreign investment.

It’s clear to anyone who has been there recently that Colombia has turned a page to a better future. The country has immense charm and plenty of opportunity for investors. That was certainly my impression after visiting earlier this year.

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The World’s First Cashless Society Is Here – A Totalitarian’s Dream Come True

By Nick Giambruno

Central planners around the world are waging a War on Cash. In just the last few years:

Italy made cash transactions over €1,000 illegal;
Switzerland proposed banning cash payments in excess of 100,000 francs;
Russia banned cash transactions over $10,000;
Spain banned cash transactions over €2,500;
Mexico made cash payments of more than 200,000 pesos illegal;
Uruguay banned cash transactions over $5,000; and
France made cash transactions over €1,000 illegal, down from the previous limit of €3,000.

The War on Cash is a favorite pet project of the economic central planners. They want to eliminate hand-to-hand currency so that governments can document, control, and tax everything.

This is why they’re lowering the threshold for mandatory reporting of cash transactions and, in some instances, simply making it illegal to pay cash.

In the U.S., central planners ratchet up the War on Cash every time the government declares a made-up war on something else…a war on crime, a war on drugs, a war on poverty, a war on terror…

They all end with more government intrusion into your financial affairs.

Thanks to these made-up wars, the U.S. government is imposing an increasing number of regulations on cash transactions. Try withdrawing more than $10,000 in cash from your bank. They’ll treat you like a criminal or terrorist.

The Federal Reserve is at the center of the War on Cash. Its weapons are inflation and control over the currency denominations.

Take the $100 note, for example. It’s the largest bill in circulation today. This was not always the case. At one point, the U.S. had $500, $1,000, $5,000, and even $10,000 notes. But the government eliminated these large notes in 1969 under the pretext of fighting the War on Some Drugs.

Since then, the $100 note has been the largest. But it has far less purchasing power than it did in 1969. Decades of rampant money printing have inflated the dollar. Today, a $100 note buys less than a $20 note did in 1969.

Even though the Federal Reserve has devalued the dollar over 80% since 1969, it still refuses to issue notes larger than $100. This makes it inconvenient to use cash for large transactions, which forces people to use electronic payment methods.

This, of course, is what the U.S. government wants.

It’s exactly like Ron Paul said: “The cashless society is the IRS’s dream: total knowledge of, and control over, the finances of every single American.”

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Another Government Ponzi Scheme Starts to Crack – Do You Depend on It?

By Nick Giambruno

Government employees get to do a lot of things that would land an ordinary citizen in prison.

For example, it’s legal for them to threaten and commit offensive, rather than defensive, violence. They can take property from others without their consent. They spy on anyone’s email and bank accounts whenever they please. They go into trillions of dollars in debt and then stick the unborn with the bill. They counterfeit the currency. They lie with misleading statistics and use accounting wizardry no business could get away. And this just scratches the surface…

The U.S. government also gets to run a special type of Ponzi scheme.

According to the Merriam-Webster dictionary a Ponzi scheme is:

[A]n investment swindle in which some early investors are paid off with money put up by later ones in order to encourage more and bigger risks.

In the private sector, people who run Ponzi schemes are rightly punished for their fraud. But when the government runs a Ponzi scheme, something very different happens.

It’s no secret that the Social Security system is effectively one giant Ponzi scheme.

Actually, I think it’s worse. That’s because the government uses force and the threat of force to coerce people into it. People don’t have the option to opt out. They either pay the tax for Social Security or someone with a gun will show up sooner or later. I imagine Bernie Madoff’s firm would have lasted a lot longer had he been able to operate this way.

This whole practice is particularly egregious for young people. They have no chance at collecting the future benefits the government has promised to them. But they’re hardly the only people that are going to be disappointed in the system, which will eventually break down.

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The Real Reason for the Refugee Crisis You Won’t Hear About in the Media

By Nick Giambruno

There’s a meme going around that the refugee crisis in Europe (the largest since World War II) is part of a secret plot to subvert the West.

I completely understand why the locals in any country wouldn’t be happy about waves of foreigners pouring in. Especially if they’re poor, unskilled, and not likely to assimilate.

It leads to huge problems. Infrastructure gets strained. More people are sucking at the teat of the welfare system. The unwelcome newcomers compete for bottom-of-the-ladder jobs. Things easily turn nasty and then turn violent.

But the idea that the refugee crisis in Europe is part of a hidden agenda – rather than a predictable outcome – strikes me as strange. And it’s a notion that conveniently deflects blame away from the people and factors that deserve it.

Interventions Destabilize the Middle East

The civil war in Syria has turned the country into a refugee-maker.

Syria’s neighbors have reached their physical limit on their ability to absorb refugees.

That’s one of the reasons so many are heading to the West.

Lebanon has received over 1 million Syrian refugees. That’s an enormous number for a country with a population of only 4 million – a 25% increase. Jordan and Turkey also have millions of Syrian refugees. They’re saturated.

The number of refugees heading to the West, by contrast, is in the hundreds of thousands. So far.

But it’s not just Syria that’s sending refugees. Many more come from Iraq and Afghanistan, two other countries shattered by bungled Western military interventions.

Then there are the refugees from Libya. A country the media and political establishment would rather forget because it represents another disastrous military decision.

Actually, it’s not just Libyan refugees. It’s refugees from all of Africa who are using Libya as a transit point to reach Europe.

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It Was the First Time the CIA Overthrew a Government…

By Nick Giambruno

62 years later, the aftermath is still troubling global politics.

Operation Ajax was a pivotal moment in US and world history. It was the first time the CIA overthrew a government.

Yet even today the US government would rather not talk about it. That’s why it remains an unknown story for many Americans.

The year was 1953. The objective was to oust Mohammad Mossadegh, the elected leader of the Majlis, Iran’s parliament.

Mossadegh was not a communist or a radical Islamist. He didn’t follow any objectionable ideology. Instead, he was a secular nationalist. But he was inconvenient.

Like many Iranians, he was proud of his Persian heritage. (Until 1935, Iran was still known as Persia.) Persia once was an imperial civilization, like Rome. Twentieth-century nationalists channeled that glorious past, and they were keen on independence.

So it’s no surprise Mossadegh was earnest about ridding the country’s politics of foreign influence.

At the time, Great Britain was the most active outside power in Iran.

For decades the British had enjoyed a sweetheart oil deal struck with a former, corrupt Iranian leader. It allowed them to control Iran’s petroleum industry and, by extension, the country’s entire economy.

To nationalists like Mossadegh, this was intolerable and infuriating. It would be like China getting a sweetheart deal from President Obama for control of the US auto industry. No red-blooded American would stand for such a thing.

It was the early 1950s. The smoke from World War II, a war that killed over 60 million people, still lingered. The horrors were fresh in everyone’s mind. Access to oil had been a decisive factor in that war. Had Hitler succeeded in securing his supply in 1942, the world might look very different today.

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10 Reasons Why You Need an Offshore Bank Account

By Nick Giambruno

You may have wondered: “What’s the difference between having a bank account at Bank of America and having an offshore bank account?”

The truth is, there’s possibly all the difference in the world.

Here are the top 10 reasons why you need an offshore bank account.

Reason #1: Dilute Your Political Risk

Doug Casey has said over and over that the biggest risk you face today is not market or financial risk—as big as those risks are—but rather the risk from your own government.

There’s no doubt this kind of risk is rising in most parts of the West. Governments are hopelessly sinking deeper into insolvency. They’re turning to the same desperate measures they always have throughout history, and it’s a big threat to your savings.

It’s only prudent to expect more bail-ins (as we’ve seen in Cyprus), bank deposit taxes (as we’ve seen in Spain), retirement savings nationalizations (as we’ve seen in Poland, Hungary, Portugal, and Argentina), and capital controls (as we’ve seen in Cyprus and Iceland), among other destructive actions. And these are just a few recent examples.

If you think these kinds of things can’t happen in your country, think again.

According to Judge Andrew Napolitano: “People who have more than $100,000 in the bank are targets for any government that’s looking for money to shore up its own inability to manage its finances.”

A big part of any strategy to reduce your political risk is to place some of your savings outside the immediate reach of the thieving bureaucrats in your home country. Obtaining an offshore bank account is a convenient way to do just that.

That way your savings cannot be easily confiscated, frozen, or devalued at the drop of a hat or with a couple of taps on the keyboard. In the event capital controls are imposed, an offshore bank account will help ensure that you have access to your money when you need it the most.

In short, your savings in an offshore bank will largely be safe from any madness in your home country.

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Akin to Porcupines Mating

By Nick Giambruno

That was how the slow and careful rapprochement between Russia and China has been described by Eric Margolis, one of my favorite geopolitical writers.

US shenanigans in Eastern Europe and the East China Sea—fomenting so-called colored revolutions in Ukraine and Georgia (both on Russia’s periphery) and egging on China’s neighbors to make aggressive territorial claims—have pushed the Russian bear and Chinese dragon together. In May, the two uneasy neighbors reached a de facto alliance represented by a 20-year, $400 billion deal for Russia to supply China with natural gas.

A Russia/China alliance shifts the Earth’s geopolitical axis. Historians may look back at the energy deal as the moment the post-Cold War era and the US’s singular position came to an end. The Russia/China team is now a consequential economic and military counterweight to the US. It will operate as an attractant for every country and every faction that for any reason resents the US’s giant footprint in world affairs.

For example… Russia is making strides in assembling a massive new trading bloc known as the Eurasian Union. When it opens for business on January 1 of next year, Russia, Belarus, and Kazakhstan will be a barrier-free market with 170 million people and a GDP of $2.7 trillion. Armenia, Kyrgyzstan, Tajikistan, and Uzbekistan likely will join in the near future, which would expand the Eurasian Union to 217 million people and a GDP of $2.8 trillion.

In the military and security realm, there’s the Shanghai Cooperation Organization (SCO), an intergovernmental security organization shared by China, Kazakhstan, Kyrgyzstan, Russia, Tajikistan, and Uzbekistan. India, Iran, Mongolia, and Pakistan will join in the near future.

The two organizations add up to exactly what Zbigniew Brzezinski and other American geostrategists feared the most—the emergence of a power bloc in Eurasia that could stand up to the West.

And it’s certainly not for lack of trying that the US failed in preventing this. It was just outplayed and outmaneuvered at every turn by Vladimir Putin.

Love him or love to hate him, Putin is one smart, tough, ruthless SOB. He’s not the kind of opponent I would want to have. The point of all this should be that regardless of Russia’s troubles at the moment, the country is not going to blow away.

Brzezinski’s concern about an emerging Eurasian power is one of the reasons the US has tried to knock Ukraine out of the Russian orbit. Absorbing Ukraine into NATO would further the goal of isolating Russia, and that is exactly what the US attempted to do—however clumsily.

We’re not referees charged with deciding which political players are good guys and which are bad guys. As potential crisis investors, what we want to know about Russia is its staying power, which we rate as high. The portrait of Putin as a Hitler or a crazy man leading his country toward disaster—the picture you get from the mainstream media and from many politicians—is suitable only for propaganda posters.

As things stand now, the effort appears to have backfired on the US. Putin likely will walk away with de facto control of all the militarily and economically strategic parts of eastern Ukraine, while the US/NATO will end up with the bankrupt western parts—like a Greece on steroids. It seems Russia will emerge from the Ukraine crisis stronger.

In the end, Russia’s economic and geopolitical cooperation with China and other non-Western Eurasian powers means that whatever happens in the West, it has real and arguably more attractive alternatives.

This is exactly why the current negative sentiment and cheap valuations of Russian stocks makes them an excellent speculation. This is just what Doug Casey and I are looking for in Crisis Speculator.

Baron Rothschild may have been an unsavory character in many ways, but he was absolutely correct when he stated that, “The time to buy is when blood is in the streets.”

This statement perfectly captures the essence of speculating in crisis markets.

Huge investment returns have been made throughout history where astute investors took advantage of the semi-hidden opportunities wrapped in an outward cloak of apparent danger in crisis markets.

Doug and I aren’t just blindly running toward disasters. We’re looking for hated markets with cheap valuations that, critically, have an identifiable catalyst. Russia fits the bill perfectly, and that leads us to our latest investment recommendation in Crisis Speculator. It’s a solid Russian company selling at a steep discount and is easily accessible to US investors (and no, it’s not Gazprom).

We believe it will be a profitable financial adventure. If you want to join the party, be sure to check out Crisis Speculator.

The article was originally published at internationalman.com.