September 2019 American Consequences

Would America This Is When the Fight for the Right
Want Greenland? Market Goes Haywire (or Left) to Party
I D E A S T H AT M AT T E R E D I T E D B Y P. J . O ’ R O U R K E
Professor Joel Litman
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CONTENTS
SEPTEMBER 2019 : ISSUE 28
LOST? CLICK
HERE
60 48 18
40 26 64
4 Inside This Issue 44 A Cyberattack Could Wreak

BY STEVEN LONGENECKER Destruction Comparable to
AMERICAN
a Nuclear Weapon CONSEQUENCES
6 Letter From the Editor BY JEREMY STRAUB
BY P.J. O'ROURKE Editor in Chief: P.J. O’Rourke
48 Coming Home
12 What Could Possibly Go Wrong? BY SALENA ZITO Editorial Director: Carli Flippen
Publisher: Steven Longenecker
14 From Our Inbox 52 This Is When the Market
Goes Haywire Executive Editor: Buck Sexton
18 Remembering the Miracle of 1989
BY PORTER STANSBERRY Assistant Managing Editors:
BY CARL BILDT
Chris Gaarde, Laura Greaver
60 Getting Unstuck
22 The Anatomy of the Creative Director: Erica Wood
BY SEAN PARNELL
Coming Recession
BY NOURIEL ROUBINI Contributing Editors:
64 Stupid News Carl Bildt, Bill Bonner, Doug Casey,
BY JOHN STOSSEL Dr. David Eifrig, Alice Lloyd, Sean Parnell,
26 The Hollowing Out of
Nouriel Roubini, Porter Stansberry,
American Liberty John Stossel, Jeremy Straub, Salena Zito
BY BILL BONNER 68 What Happens After the Next 9/11
BY DOUG CASEY Cartoon Director: Frank Stansberry
32 What Wall Street Won't Tell You General Manager: Jamison Miller
BY ALICE LLOYD 72 The Final Word
BY BUCK SEXTON Advertising: Ricky D'Andrea, Jill Peterson
40 Beware of One of the Deadliest Editorial feedback: feedback@
Places in the U.S. americanconsequences.com
BY DR. DAVID EIFRIG
American Consequences 3
INSIDE THIS ISSUE
T
his month we’re remembering 9/11, Analyst and author Porter Stansberry
the “Miracle of 1989,” and the costs of sounds the alarm on the coming global
what it means to be free in America. financial crisis...
We’re also pleased to announce editor Alice Afghanistan War veteran Sean Parnell
Lloyd’s feature interview with Wall Street shares an open letter to veterans struggling at
truth-teller, Joel Litman... a man whose home or abroad...
research is read by more than half of the
world’s money managers. Journalist John Stossel pokes at the
media’s obsession with “stupid news” and
It’s all in your latest issue of P.J. O’Rourke’s alarmist headlines...
American Consequences.
And executive editor Buck Sexton
Editor in Chief P.J. O’Rourke kicks things considers buying Greenland.
off with a humorous look at the current crop
of 2020 presidential hopefuls... We’ve uploaded a PDF suitable for printing
to our archive page.
Former Swedish Prime Minister Carl Bildt
remembers the Berlin Wall “Miracle of And tell us what you think at feedback@
1989”... americanconsequences.com.
Economist Nouriel Roubini breaks down Regards,

three existing economic conflicts that could Steven Longenecker
trigger a recession... Publisher, American Consequences
Finance and health analyst Dr. David Eifrig
warns us about one of the deadliest places in
“
the U.S. – a place you’ve probably been to
more than once... This isn’t a ‘Move to the
Publisher and author Bill Bonner wonders Left.’ This is a ‘Move Back
how independent we really are in 2019...
In With Mom.’
Political analyst Salena Zito examines the
lingering effects of 9/11 and the emotional
and physical cost of American freedom... Government as your
mother. Think that over
before you vote for it.
P.J. O'Rourke
4 September 2019
WAT
CH
IDEAS. IT LI
VE!
EDUCATION.
INSPIRATION.
The speakers
2019 Porter Stansberry Dennis Miller
STANSBERRY
Conference Nouriel Roubini Dr. Steve Sjuggerud
October 7-8, 2019
LIVE STREAM this

EXCLUSIVE 2 Day Event
Dr. David Eifrig Jim Grant
It’s too late to attend in person.
But you can still be “in the room” for over
40 presentations ... and great new ideas.
All from the comfort of your own home,
at a fraction of the cost.
Marc Cohodes Dave Lashmet
Click here for the live streaming details.
CLICK HERE FOR MORE
DETAILS AND FULL
ARIA RESORT & CASINO SPEAKER LINE
LAS VEGAS, NV
LETTER FROM THE EDITOR
ELECtION
FIGHT FOR THE
I
think we can safely assume that Vice Presidential candidate Bill Weld. Bill says
Donald Trump will be the Republican he’s become a Republican again.
candidate. (Never mind that the phrase
But Republicans blocked Weld’s nomination
“safely assume” should never be used
for U.S. Ambassador to Mexico in 1997,
next to the words “Donald Trump.”)
and I doubt they’re going to let him back
Trump does have three announced primary across the border now to be nominated for
opponents. One is Joe Walsh. Great musician! president.
Loved him in the Eagles! Got my vote!
Then there’s former Governor of South
Huh?... It’s not that Joe Walsh? It’s the former Carolina Mark Sanford. As governor, he was
one-term Illinois Republican congressman mostly notable for disappearing for several
and conservative radio talk show host? Oh. days in 2009 – claiming to have been hiking
Can he play a cover version of “Life’s Been the Appalachian Trail while actually in
Good To Me So Far”?
Argentina with his mistress... A spectacular
Another opponent is former Governor of divorce ensued. And, P.S., the South Carolina
Massachusetts and 2016 Libertarian Party GOP has canceled its 2020 primary.
6 September 2019
From Editor in Chief
P.J. O’Rourke
RIGHT TO PARTY
^ LEFT
OR
Besides nugatory Republican opposition,
Trump has the benefit of an economy that’s
idea that NOBODY can lose to Trump. And
Democrats are determined to find that nobody.
on fire... Let’s hope the sparks don’t fly in a
But we mustn’t forget that 2020 isn’t just a
way that fans the economic flames into what
happened in 2018 in Paradise, California.
presidential election year. The whole House of CLICK
Representatives and a third of the Senate are HERE
The other thing Trump has going for him is being elected too. TO READ
THE WEB
the people who hate him. And the most entertaining candidates on the VERSION
If Trump cured cancer, the headline on the stump are running for minor offices without
“
New York Times would be “Heart Disease Kills
More People.”
Trump should be thankful for that. Know-it- If Trump cured cancer, the headline
alls hate Trump... And Americans hate know- on the New York Times would be
it-alls. 'Heart Disease Kills
Meanwhile, the Democrats seem to have the More People.'
major opposition – the kind of politicians Ilhan Omar dresses to expresses her beliefs.
that, in normal times, no one would bother But I believe taxes are too high. If I dressed
mentioning. to express my beliefs – buck naked like Lady
Godiva – I’d hear some insensitive remarks too.
Specifically, no one would bother mentioning
the four young “progressive” congresswomen Speaking of which, President Trump is in a
known as “The Squad.” lot of trouble for his Tweet about The Squad:
“Why don’t they go back and help fix the
Maybe this is a reference to “The Mod Squad”
totally broken and crime infested places from
because they’re as silly as that 1960s TV show.
which they came?” Wait a minute, Donald.
(Not that any of them would know – none of
“Totally broken and crime infested?” They are
them had been born back then.)
in Congress.
There’s Ayanna Pressley from the
In fact, Trump wasn’t the first to cast shade
Massachusetts 7th Congressional District,
on the “Four Flibbertigibbets.” Nancy Pelosi
where you could elect a paper bag marked
called them out for being too far to the left.
“Democrat.” (Although you have to promise
to recycle the paper bag – Democrats are very And when Nancy Pelosi says you’re too far to
opposed to climate change.) the left – oh boy! You have veered out of the
passing lane, crossed the median strip, and are
Next, there’s Rashida Tlaib, who thinks the driving into oncoming traffic!
Gaza Strip is the ideal model for a national
government and who also represents the parts But that’s only what the Democratic JV Team
of Detroit where you wouldn’t send your is up to. What about the Varsity?
worst enemy on a daytime errand.
They’re all running for the 2020 Democratic
Plus there’s Alexandria Ocasio-Cortez, presidential nomination.
a woman who’s really accomplished
It’s a race for the Democratic nomination that
something... She made the “blonde joke”
seems to be based on The Seven Dwarfs in
obsolete. Disney’s Snow White.
Lastly, there’s Ilhan Omar, the one in a (With Hillary Clinton playing the wicked
gunnysack – did I just say that out loud? I am stepmother: “Mirror, Mirror, on the wall,
so sorry. It was such an insensitive remark. I’ll who’s the fairest of them all?” And the answer
“
try to be more “woke.” turned out to be Donald Trump, which was a
big surprise to everybody.)
Plus there’s Alexandria Ocasio-Cortez, a woman Trump is running against the seven (or is it
who’s really accomplished something.. 27?) dwarfs.
She made the “blonde joke” There’s Grumpy – Bernie Sanders.

obsolete. There’s Sleepy – Joe Biden.
8 September 2019
There’s Dopey – Elizabeth Warren. they want to make America more like Europe.
Great idea! Europe’s had a swell track record
And another Dopey – Kamala Harris.
for more than a hundred years now – ever
(Happy, Bashful, Sneezy, and Doc are polling since Archduke Ferdinand’s car got a flat in
in the low single-figures.) Sarajevo in 1914.
Joe Biden is the front-runner. But as far as Make America more like Europe? Where do
the progressive Democrats are concerned, you even go to get all the Nazis and Commies
he’s made the mistake of being an old, dead, and 90 million dead people that it would take
white, European male. (Which Kamala to make America more like Europe?
Harris kindly pointed out to him in their TV Running fourth in most polls is Kamala
debate.) Harris. Don’t count her out. She has serious
Okay, Biden’s not dead, but he’ll be pushing political chops.
80 with a short stick on Inauguration Day Of course Biden is polling ahead of Harris
2021. Not that Joe is too old to run for – he’s got a 36-year head start. Joe’s been
president – it’s just that his New Hampshire running for president since he was elected to
primary campaign headquarters are in the U.S. Senate in 1972... when Kamala was
Hanover, New Hampshire, at the Dartmouth-
“
eight years old...
Hitchcock Medical Center Memory Care unit.
After Biden, there’s Bernie Sanders and

Of course Biden is polling ahead of Harris –
Elizabeth Warren.
Bernie – the screwy-kablooey commander

he’s got a 36-year head start.
of the Vermont Congress. He’s got the
Millennials’ vote, though it’s certainly not This is what that “bussing” tiff between Harris
because of his youthful charm... Medicare for and Biden was all about. Naturally Joe didn’t
All – let’s see how 26-year-olds like wearing want Kamala “That Little Girl Was Me”
trifocals and Depends while hobbling around Harris to be bussed to school in the suburbs
in walkers. of Berkeley, California, where all the rich
Bernie is even older than Biden. Bernie is so liberal Democratic campaign donors live.
old that he’s a “Stone-Age Socialist.” Back Because, even when she was eight, Kamala
in the Stone Age, he was demanding “Free could work a room.
Stones for All.”
Harris has all the usual left-wing liberal
And Elizabeth Warren. She’s an expert in political positions that you can think of and
bankruptcy law – so she’s got a vision for some you probably can’t...
America’s future.
When she was California Attorney General,
Elizabeth Warren and Bernie Sanders claim she wanted a law against “habitual and
“
Andrew Yang.
He’s all about a Universal Basic Income. Voters
Assembly and later mayor of San Francisco.)
Then there are the rest of the Democratic

candidates...
want an allowance? Fine. Pete Buttigieg. Mayor of South Bend, Indiana

When Andrew Yang comes to my house, takes – a very important American city... until the
out the trash, mows the lawn, washes the car, Studebaker factory closed in 1963.
and sweeps the garage...
Cousin Beto O’Rourke. Sorry about him.
I’ll give him $20. Every big Irish family’s got one. Ask William
Bulger, former president of the Massachusetts
Senate and once the most powerful politician
chronic truancy” where parents got arrested if in the state, about his brother Whitey Bulger.
their kids skipped school. (My mom would
Andrew Yang. He’s all about a Universal Basic
still be in Leavenworth.)
Income. Voters want an allowance? Fine.
And she’s got all the usual left-wing liberal When Andrew Yang comes to my house, takes
self-contradictions. While Harris was District out the trash, mows the lawn, washes the car,
Attorney in San Francisco, the drug-dealer and sweeps the garage... I’ll give him $20.
conviction rate rose from 56% to 74%. Not (And a lift to the next Democratic candidate
that I’m saying she put her own voters in debate – where he’ll be ignored.)
jail – because left-wing liberals are in favor of And the list goes on... although some
voting rights for convicted felons. Democrats are already dropping out.
She wants a big tax on “the 1%,” although, I miss John Hickenlooper. Ha ha, the
according to the Washington Post, she and her Democrats just threw that one in there to see
lawyer husband had a 2018 income of $1.9 if we were paying attention. There’s no such
million. Not that I’m saying she’s shooting thing as somebody named Hickenlooper...
herself in the foot – because left-wing liberals
support strict gun control laws. Actually, he was governor of Colorado – the
first state to legalize marijuana. Coloradans
She’s also a political land shark. Between 2004 got high and started saying his name over and
and 2017, Harris went from being a low-level over again – “Hickenlooper-Hickenlooper-
hack checking civil code violations in City Hickenlooper” – and began giggling so hard
Hall to District Attorney of San Francisco that they elected him governor.
to Attorney General of California to U.S.
Other dropouts include Congressman from
Senator.
an-obscure-California-district Eric Swalwell,
(And this had nothing – I repeat, nothing – Governor of an-obscure-western-state Jay
to do with her dating political powerhouse Inslee, and current occupant of Hillary
Willie Brown, Speaker of the California Clinton’s obscure New York Senate seat
10 September 2019
Kirsten Gillibrand.
WHAT WE’RE READING
They dropped out because they failed to
Read This compiled by Laura Greaver
answer a crucial political question... “Who
the hell are you?” Has the Presidency Skipped Gen X?
Caught between Baby Boomers and
The remaining Democratic presidential
Millennials, Generation X may have missed its
hopefuls are engaged in a free-for-all. Literally. chance... As the in-between generation – old
Promising everything free for all of us. enough to have witnessed the Clinton era
as adults but young enough to learn from
The Democrats are vying to see who can its failures – Gen X Democrats could warn
promise the most free stuff – college tuition, against the hubris of the present...
student-loan forgiveness, Medicare-For-All, The Atlantic
Universal Basic Income – and throw in the
kitchen sink of subsidized housing for the The machine always wins: what drives
homeless who crowd the sidewalks of places our addiction to social media
where everybody votes Democratic like San We are swimming in writing... Our lives have
Francisco and Portland. become an “electronic text,” and social media
platforms have created a machine for us to
The Democrats say we can have a government write to. The bait is that we are interacting
that gives everything to everybody. with friends, colleagues, celebrities, but we
really aren’t... We write to the machine and it
And what that government will give us isn’t passes on the message for us after keeping a
limited to material things like pre-paid PhDs, record of the data.
$0 doctor bills, and a paycheck for doing The Guardian
nothing.
Government will also give us encouragement, Can We Survive Extreme Heat?

Extreme heat is the most direct, tangible, and
approval, validation, and self-importance. deadly consequence of our
Government will celebrate our identities and hellbent consumption
provide us with a good feeling about ourselves of fossil fuels. The
as people. real question is
not whether
This isn’t a “Move to the Left.” This is a superheated cities
“Move Back In With Mom.” are sustainable...
With enough
Government as your mother. Think that over money and
before you vote for it. engineering skill,
you can sustain life
Whether you’re 26 or 60... you’ll be living on Mars. The issue
in the basement. She’ll bug you about who is, sustainable for
you’re dating. And she won’t let you borrow whom?
Rolling Stone
the car.
WHAT COULD
POSSIBLY
GO WRONG?
Financial follies and disaster in the making
Hack the planet... Even tech giants like Amazon, Microsoft, and
Google have been breached... Companies that
In an April letter to shareholders, JPMorgan regularly assure us they’re on the leading edge
Chase CEO Jamie Dimon made a bold claim...
of privacy protection.
He singled out what he believed to be “the
Right here in Baltimore, we’ve only recently
biggest threat to the U.S. financial system.”
recovered from a security breach and
But the top executive of America’s largest ransomware attack that occurred in May...
financial institution wasn’t referring to any of an incident that affected the e-mail and
the things you might expect... like plunging voicemail of city officials, as well as parking
stock prices, record debt levels, or growing ticket databases and the systems used to pay
trade tensions between the U.S. and China. utility bills and taxes.
He was referring to something far more In lieu of paying a bitcoin ransom of roughly
insidious: a failure to defend American $75,000 to $100,000, the city chose to recover
electronic networks, online control systems, and restore the systems itself... at a cost of
and computers from relentless cyberattacks. about $18 million. And Baltimore isn’t alone.
In just the first six months of 2019, there The city is just one of at least 169 state
were 4.1 billion “compromised records” and local governments affected by security
in data breaches... including passwords, breaches and ransomware since 2013. And
usernames, private photos, credit-card data, while neither Baltimore nor the FBI have said
and even Social Security numbers. how the breach occurred, odds are good that
human error and even apathy played a role.
That’s more than a dozen pieces of important,
private information for every single American. Yes, apathy.
12 September 2019
Earlier this year, Google introduced an difficult to quickly access and analyze data.
optional Chrome browser extension that
Today, the most resilient systems possessing
shows a warning when you log into a website
the requisite speed are being built in the
using a leaked username or password. (The
cloud. JEDI won’t just give warfighters
technology behind the browser extension
is complicated, but Google worked with real-time data wherever they are... it’ll also
Stanford University cryptographers to vastly improve network speed and resiliency.
ensure that the login data is encrypted and It will likely become a model for other
anonymous.) federal agencies as they pursue their own
cybersecurity upgrades.
In just the first month of use, Google found
that about 26% of users continued to use Cyberattacks have plundered more than $1
their compromised passwords... including trillion in intellectual property from the U.S.
ones stolen from financial and government since 2015. And the risk of cyber sabotage is
accounts. And those users were 2.5 times more so high that the Defense Science Board – a
likely to reuse those same passwords elsewhere. committee of civilian experts appointed to
advise the U.S. Department of Defense on
To be fair, secure passwords can be some of scientific and technical matters – recommends
the hardest to remember. But not changing a
constructing a second, truly cybersecure
password that you know was leaked is asking
military as quickly as possible.
for trouble. Reusing it is begging for disaster.
Chances are good your personal information The Office of Management and Budget
has already been exposed in one breach or estimates some $3 billion of federal IT
another... and chances are even better that equipment will reach the end of its useful life
these breaches won’t stop any time soon. by 2020. In the meantime, more than 80% of
annual federal IT spending – approximately
A multibillion-dollar strategy... $64 billion – is used to keep these aging
systems up and running. (That’s almost as
Within the next year, the Pentagon will award
much as the U.S. Department of Education’s
a $10 billion contract to build its first-ever
entire 2018 budget!)
“war cloud”...
It’s commonly referred to as the Joint Enterprise The problem is, federal agency IT staffs
Defense Infrastructure contract (or “JEDI”). typically lack the technical expertise and
experience to properly vet modernization
The basic idea is to create a single cloud alternatives and implement selected upgrades.
capable of supporting real-time decision- So the Pentagon relies heavily on outside
making by warfighters anywhere in the world. contractors and vendors to do this work
Currently, the Pentagon operates more than for them... companies just like data-breach
500 cloud-computing platforms, which victims Amazon, Microsoft, and Google.
require thousands of servers and different
cloud providers. It’s a mess, and it makes it What could possibly go wrong?
FROM OUR INBOX
perfunctory?” Peter, you’ve summed up
Re: Our Newest Readers everything about us political commentators in
Weigh In just three words. But I enjoyed your erudite
Having lived under “real” socialism for letter anyway. And you’re not wrong about
half my life and having rejected it both greedy and mishandled capitalism. That said,
intellectually and in real terms, I find, the stagnation of the middle class and the
YOU WRITE, WE RESPOND
nonetheless, the section containing persistence of social inequality are crimes with
thoughts and comments on socialism in a lot of perpetrators – sort of like the plot
today’s issue of American Consequences for Agatha Christie’s Murder on the Orient
rather tendentious and perfunctory. I Express. Globalization, monetary policy, fiscal
appreciate that in the current heated
policy, the tech revolution, demographics,
debate between Republicans and
and entitlement demands from both
Democrats “socialism” serves as an easy
progressive liberals and conservative populists
prey to all conservative (and mostly
are all likely suspects. And I would warn
populist) criticism against the Democrats
against asking our political class (howsoever
but the argumentation, including in
your commendable edition, is far from
bipartisan) to solve this mystery. They are too
convincing.
power-hungry and too intent on increasing
their already enormous political might. You’re
It was (greedy and mishandled) capitalism obviously a well-read man so I’ll leave you
that dealt a heavy blow on the American with two quotes from Friedrich Hayek’s great
middle class – the pride of America and of work of political and economic philosophy,
all those who believe in free enterprise – not
The Road to Serfdom:
socialism. One of the perennial challenges
of our time is inequality, including social “That in a competitive society most things
inequality. Rather than recur to empty can be had at a price – though it is often
criticism towards Socialism (this is a different a cruelly high price we have to pay – is a
notion in the U.S. in comparison to Europe fact the importance of which can hardly be
for example), the U.S. political class could overrated. The alternative is not, however,
work on a bi-partisan basis to find a remedy complete freedom of choice, but orders and
to inequality, providing an example to the prohibitions which must be obeyed and, in
rest of the world and leading it into a new the last resort, the favor of the mighty.”
age of opportunity for all. Some of the ideas
of “classic” socialism could come handy in And...
this endeavor. – Peter P.
“Who will deny that a world in which the
P.J. O’Rourke comment: “Tendentious and wealthy are powerful is still a better world
14 Septemeber 2019
before Trump’s victory. Attorney General
than one in which only the already powerful William Barr also said as much during a
can acquire wealth?” Senate hearing in April: “I am not saying that
improper surveillance occurred.”
On tech and smartphones, I do not like what
they have done. It is supposed to be better, I am a Twitter user, but I don’t take
but it isn’t. It causes more problems. You get everything as facts just statements – I
poor reception, poor service, or no service. research the facts. I’ve found if you become
They are only interested in profit and not selective in whom you follow and who views
good customer service or products! – E.M. you there’s less stupidity in your feed. There
are too many trolls who are aggressive
P.J. O’Rourke comment: Yes, E.M., I agree. because they hide behind the anonymity of
But I would ask you to remember what posting, despite the cruelty of their words.
phone calls were like in the old days, when Plus, everyone wants that “15 minutes of
you had to drag nine miles of extension cord fame.” If you aren’t concerned about the
behind you if you needed to get in touch with number of “views” then you control the type
someone during your morning commute. of information received. – Maria Rose R.
Andrew Ferguson comment: I commend Maria

Re: How Twitter Destroyed Rose R. for her intelligent curating of her
Politics Twitter feed. If everyone was as restrained and
Trump’s tweet about the Obama mature as she is in her use of Twitter, Twitter
administration spying on his campaign was would not be the blight on civilization that it
spot on. Ferguson needs to catch up on has become.
the story. Characterizing Trump’s tweet as
wrong is, alas, “fake news.” – CPR Re: Crazy to buy Greenland?
Re: your twitter article. It was in fact true that After reading your opening paragraph, I
our President was being spied on, as has found it difficult to believe anything that
been proven by much of the congressional you supposedly state as fact. Greenland is
testimony. Our Attorney General also certainly not the largest island in the world.
confirmed it. Probably should correct that. – You should have clued in when you referred
Heather B. to Australia, four times the land mass of
Greenland. Such a simple error makes me
Andrew Ferguson comment: On March
wonder... – Laurent C.
4, President Donald Trump tweeted that
“President Obama had my ‘wires tapped’ Buck Sexton comment: Thank you for your
just before the victory.” This tweet is wrong fact check, Laurent. Unfortunately, your fact
in every particular. President Barack Obama check is wrong! Google “largest island in the
did not have Trump’s “wires tapped” just world” and see what pops up. Australia is
FROM OUR INBOX
what a penny would be worth if pennies were

indeed a larger land mass than Greenland, still made of copper. Meanwhile a nickel
but it is classified as a “continent.” It’s not (75% copper and 25% nickel) contains,
technically considered an island. So maybe go at current commodity market prices, more
back and give the rest of the piece a second than $0.05 worth of metal. And if we started
read? Enjoy! making quarters out of silver again, the silver
content would make them worth about
Since this idea came out of the blue with
no context it is assuredly a bad deal. A deal $3.30. So, with all due respect to Steve’s very
to secure mining/mineral rights would logical argument, it’s the worthless paper $1
probably be a good deal (using U.S. labor bill that we should probably get rid of. Joe R.,
and equipment, transport, etc.), but buying a below, makes somewhat the same argument.
welfare state when we have plenty (Puerto (BTW, Hal, you and I seem to frequent the
Rico, Guam, American Samoa, LA, Chicago, same racetrack.)
Detroit) is a no-brainer. – Ron V.
In part I agree with Steve in that we should
Buck Sexton comment: Well, I don’t think stop making pennies. I just don’t think it
you have to worry about the idea either way. goes far enough. We should stop production
Looks like the plan is DOA. Trump has of nickels and dimes also. While we are at
shifted his focus back to China, North Korea, it... stop producing all coins not made from
and whichever member of the “fake news” gold or silver. – Joe R.
crosses him. I may be able to get you a great P. J. O’Rourke comment: Joe, you’re on the
deal on a “Make Greenland Great” t-shirt, right track as far as this hard money guy
though. is concerned. But there are some practical
considerations. As we go to press, the spot
Re: Kill the Penny? price of gold is around $48.23 a gram. A
No! Stop minting nickels and change the gold coin the approximate size of a penny
valuation of the copper plated Lincolnoid (2.5 grams) would be worth a whopping
coin to 5 cents. Coin collectors will love/ $120.58. I see a problem making change at
hate whatever you do. Thomas Jefferson is Dollar General. Even silver, at $0.59 a gram,
still on the $2 bill, so his estate won’t sue would require an annoyingly tiny coin for
you. Print more $2 bills and send them to minor purchases.
me. I know a racetrack where I can turn
them into nickels. – Hal D. Steve, you missed a big point. A penny is
basically a subsidy of the zinc industry. A
P. J. O’Rourke comment on Steve Sjuggerud’s penny is coated in copper but is mainly zinc
behalf: Don’t worry, coin collectors love any inside. The reason they won’t kill the penny
change in coinage. But, Hal, let me put my is the lobbyists for the mining industry who
two cents in... Because that’s actually about insist on being subsidized. Go figure! –
16 Septemeber 2019
Your DIRECT LINE
to Wall Street
Faithful Reader
P. J. O’Rourke comment: As you, Faithful

Reader, no doubt agree, all recipients of Receive up-to-
corporate subsidies are pirates in neckties. the-minute news,
Let’s zinc their ship. market research, and
Steve has a great idea, but what do we do expert commentary
about the song “Pennies From Heaven?” – that typically costs
An Old-Timer $50,000 a year, CLICK TO SIGN UP
P. J. O’Rourke comment: I’m an old-timer and requires a net
myself, O-T. (Although not quite old enough worth of at least $1
to personally remember Bing Crosby singing million…100% FREE.
that 1936 hit.) But it’s a great tune...
Every time it rains, it rains pennies from heaven

Don’t ya know each cloud contains pennies from
heaven?
You’ll find your fortune fallin’ all over town
Be sure that your umbrella is upside down
But think about if that happened today. You’d

have an umbrella full of stuff that the gas “Practical. Insightful.
station vending machine won’t take. And,
even if the vending machine did take pennies,
Helpful. Educational.
it wouldn’t be enough to buy you a Coke. Can’t ask for much
more.” HHHHH
–GAMECOCKS44
Send us a message, question, or criticism at
feedback@americanconsequences.com.
CLICK TO LISTEN
P O D CAST
MORE REVIEWS:
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I’ve enjoyed every episode to date - HHHHH
Must listen if you invest in the U.S. - HHHHH
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Great Investing Show - HHHHH
REMEMBERING THE
MIRACLE OF 1989
Thirty years ago, a series of peaceful demonstrations in Eastern Europe set off a chain
of events that culminated in the collapse of the Soviet Union. Looking back, it is now
clear that Europe experienced a miracle in 1989: the story could have had a much
darker and bloodier ending.
18 September 2019
A ugust 2019 marks 30 years since
Europe – and human civilization
generally – began to undergo a
miraculous transformation that is
now etched in the world’s memory. By the
summer of 1989, the Soviet Union was
already in terminal decline. The only question
was whether communism would disintegrate
independence.
By Carl Bildt
Soviet Union, and soon began demanding full
On August 23, two million people formed

a human chain stretching 372 miles (600
kilometers) through Estonia, Latvia, and
Lithuania, calling for independence. The
timing of the so-called Baltic Way was no
accident. Exactly 50 years earlier, Hitler
peacefully, or amid an explosion of violence
and Stalin had entered into a secret non-
and devastation.
aggression pact, whereby Eastern Europe was
In the Soviet Union itself, Mikhail to be divided between Nazi Germany and the
Gorbachev’s policies of glasnost and perestroika Soviet Union. That paved the way for World
had opened the floodgates of change, but War II and immediately spelled the end of
Gorbachev still seemed to believe that the freedom and independence in the Baltics.
communist system could be salvaged through
But the central, potentially explosive arena in
reform. Meanwhile, on the periphery of the
1989 was the so-called German Democratic
Soviet empire, many feared that a potential
Republic (“GDR”) – that is, communist East
collapse of the system would bring Red Army
Germany. This was essentially a garrison state,
tanks back into streets and city squares.
built for the protection of five Soviet armies
Memories of Soviet crackdowns in Berlin in
– spanning 19 divisions and comprising
1953, Budapest in 1956, and Prague in 1968
500,000 soldiers – that had been stationed
remained vivid, as did the severe repression of
there ever since 1945. Although the Berlin
the Baltic states in the run-up to World War II.
Wall became a powerful symbol of Europe’s
Born in terror, the Soviet Union had been bifurcation after August 1961, it is worth
sustained by jackboots and secret police. remembering why it was needed in the first
Nobody knew if it could survive without place: to prevent the collapse of the GDR and
resorting to brute force once again. It was a thus, of the Soviet outer empire in Europe.
nervous time for Europe.
A few days before the human chain formed
But it was also a time of change. Efforts to in the Baltics, some 600-700 East German
suppress Poland’s independent trade union, citizens had held a peaceful demonstration
Solidarity (Solidarność), had failed. Forced to during which they crossed the barbed wire
compromise, the Polish communist regime near Sopron, a small Hungarian town on the
held semi-free elections in June 1989, in border with Austria. What became known
which Solidarity won all but one of the freely as the Pan-European Picnic was the largest
contested seats. Meanwhile, in the three Baltic escape from behind the Iron Curtain ever
republics (Estonia, Latvia, and Lithuania), since the building of the Berlin Wall. More
broad-based “people’s fronts” had already to the point, it had been carefully planned to
been calling for more autonomy from the test the reaction of the Soviet authorities.
REMEMBERING THE MIRACLE OF 1989
In the Kremlin, the Soviet leadership – or were plenty of communist leaders urging a
Gorbachev, at least – continued to believe that “Chinese solution” for the demonstrations of
the empire was safe and could be reformed. 1989. In fact, at the Soviet command post
The Baltic Way was tolerated, and the Pan- just south of Berlin (which had served as
European Picnic was simply ignored. But the command center for the German Army during
latent potential of those demonstrations soon World War II, and which had been seized from
became apparent. People began to flee the Hitler decades earlier), Red Army marshals
GDR by the thousands. Soon enough, the were awaiting orders to march in and save the
Hungarian authorities had no alternative but empire by whatever means necessary.
to open the border. Droves of East Germans
flooded into Czechoslovakia in search of a No one can know what would have happened
route to the West. On November 9, fumbling if more conservative forces within the
GDR leaders even opened the Berlin Wall Kremlin had prevailed. Most likely, there
itself. would have been widespread disorder and
violence across much of the region, which
would have put the West under substantial
Blood could have flowed pressure to intervene. Open war would have
through the streets of Europe been a distinct possibility. After all, large
once again, but it did not. empires throughout history have generally
gone out with a bang. If anything, the Soviet
The East German state would be gone in less experience was an exception.
than a year. Following democratic elections in
Thankfully, that order to the Red Army was
March 1990, East Germans decided to merge
never issued. Part of the reason was that
with the Federal Republic of Germany. With
Soviet leaders believed, mistakenly, that a
the GDR gone, the collapse of the Soviet
crackdown was unnecessary, and that the
empire was all but complete.
system would survive. But it was also because
Some think that the momentous change that democratic forces were starting to assert
began in 1989 was inevitable. They would themselves within Russia itself. The rising
do well to remember that in June of the same leader in Moscow was Boris Yeltsin, who
year, China’s elderly rulers had deployed held no attachment to the nostalgia of an
tanks to crush (literally) the peaceful freedom overextended and unsustainable empire.
movement in Tiananmen Square. And there
Thirty years ago, Europe experienced a truly
Carl Bildt was Sweden's foreign miraculous few months. Today, we should
minister from 2006 to 2014 and Prime honor not only those who fought for change,
Minister from 1991 to 1994, when he but also those who refused to send out the
negotiated Sweden's EU accession. tanks. Blood could have flowed through the
He is also Co-Chair of the European streets of Europe once again, but it did not.
Council on Foreign Relations.
© Project Syndicate
20 September 2019
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Unlike the 2008 global financial crisis, which was mostly a large negative aggregate
demand shock, the next recession is likely to be caused by permanent negative
supply shocks from the Sino-American trade and technology war. And trying to undo
the damage through never-ending monetary and fiscal stimulus will not be an option.
By Nouriel Roubini
22 September 2019
THE ANATOMY
OF THE COMING
RECESSION
T
here are three negative supply exports, and formally labeled China a
shocks that could trigger a global currency manipulator.
recession by 2020. All of them
The second concerns the slow-brewing
reflect political factors affecting
cold war between the U.S. and China over
international relations, two involve China,
technology. In a rivalry that has all the
and the United States is at the center of
hallmarks of a “Thucydides Trap,” China and
each. Moreover, none of them is amenable
America are vying for dominance over the
to the traditional tools of countercyclical
industries of the future: artificial intelligence
macroeconomic policy.
(AI), robotics, 5G, and so forth. The U.S. has
The first potential shock stems from the placed the Chinese telecom giant Huawei on
Sino-American trade and currency war, an “entity list” reserved for foreign companies
which escalated earlier this month when U.S. deemed to pose a national-security threat.
President Donald Trump’s administration And although Huawei has received temporary
threatened additional tariffs on Chinese exemptions allowing it to continue using
THE ANATOMY OF THE COMING RECESSION
U.S. components, the Trump administration This technology will soon be the standard
this week announced that it was adding an form of connectivity for most critical civilian
additional 46 Huawei affiliates to the list. and military infrastructure, not to mention
basic consumer goods that are connected
The third major risk concerns oil supplies.
through the emerging Internet of Things. The
Although oil prices have fallen in recent
weeks, and a recession triggered by a trade, presence of a 5G chip implies that anything
currency, and tech war would depress energy from a toaster to a coffee maker could become
demand and drive prices lower, America’s a listening device. This means that if Huawei
confrontation with Iran could have the is widely perceived as a national-security
opposite effect. Should that conflict escalate threat, so would thousands of Chinese
into a military conflict, global oil prices could consumer-goods exports.
spike and bring on a recession, as happened It is easy to imagine how today’s situation
during previous Middle East conflagrations in could lead to a full-scale implosion of the
1973, 1979, and 1990.
open global trading system. The question,
then, is whether monetary and fiscal
It is easy to imagine how today’s policymakers are prepared for a sustained –
situation could lead to a full-scale or even permanent – negative supply shock.
implosion of the open global
Following the stagflationary shocks of the
trading system.
1970s, monetary policymakers responded by
tightening monetary policy. Today, however,
All three of these potential shocks would have
major central banks such as the U.S. Federal
a stagflationary effect, increasing the price
Reserve are already pursuing monetary-
of imported consumer goods, intermediate
policy easing, because inflation and inflation
inputs, technological components, and
energy, while reducing output by disrupting expectations remain low. Any inflationary
global supply chains. Worse, the Sino- pressure from an oil shock will be perceived
American conflict is already fueling a broader by central banks as merely a price-level
process of deglobalization, because countries effect, rather than as a persistent increase in
and firms can no longer count on the long- inflation.
term stability of these integrated value chains. Over time, negative supply shocks also tend
As trade in goods, services, capital, labor, to become temporary negative demand
information, data, and technology becomes shocks that reduce both growth and
increasingly balkanized, global production
inflation by depressing consumption and
costs will rise across all industries.
capital expenditures. Indeed, under current
Moreover, the trade and currency war and the conditions, U.S. and global corporate capital
competition over technology will amplify one spending is severely depressed, owing to
another. Consider the case of Huawei, which uncertainties about the likelihood, severity,
is currently a global leader in 5G equipment. and persistence of the three potential shocks.
24 September 2019
In fact, with firms in the U.S., Europe, China, inflation expectations rising well above central
and other parts of Asia having reined in capital banks’ targets. In the 1970s, central banks
expenditures, the global tech, manufacturing, accommodated two major oil shocks. The
and industrial sector is already in a recession. result was persistently rising inflation and
The only reason why that hasn’t yet translated inflation expectations, unsustainable fiscal
into a global slump is that private consumption deficits, and public debt accumulation.
has remained strong. Should the price of
imported goods rise further as a result of any The world would be confronting
of these negative supply shocks, real (inflation- sustained negative supply shocks
adjusted) disposable household income
that would require a very different
growth would take a hit, as would consumer
confidence, likely tipping the global economy
kind of policy response over the
into a recession. medium term.
Given the potential for a negative aggregate Finally, there is an important difference
demand shock in the short run, central between the 2008 global financial crisis and
banks are right to ease policy rates. But fiscal the negative supply shocks that could hit the
policymakers should also be preparing a global economy today. Because the former
similar short-term response. A sharp decline was mostly a large negative aggregate demand
in growth and aggregate demand would call shock that depressed growth and inflation,
for countercyclical fiscal easing to prevent the it was appropriately met with monetary and
recession from becoming too severe. fiscal stimulus. But this time, the world would
In the medium term, though, the optimal be confronting sustained negative supply
response would not be to accommodate shocks that would require a very different
the negative supply shocks, but rather to kind of policy response over the medium
adjust to them without further easing. After term. Trying to undo the damage through
all, the negative supply shocks from a trade never-ending monetary and fiscal stimulus
and technology war would be more or will not be a sensible option.
less permanent, as would the reduction in © Project Syndicate
potential growth. The same applies to Brexit:
leaving the European Union will saddle the
United Kingdom with a permanent negative Nouriel Roubini, a professor at NYU’s
supply shock, and thus permanently lower Stern School of Business and CEO
of Roubini Macro Associates, was
potential growth.
Senior Economist for International
Such shocks cannot be reversed through Affairs in the White House’s Council of
monetary or fiscal policymaking. Although Economic Advisers during the Clinton
administration. He has worked for the
they can be managed in the short term,
International Monetary Fund, the U.S.
attempts to accommodate them permanently Federal Reserve, and the World Bank.
would eventually lead to both inflation and
The
Hollo
By Bill
Bonner
Out
Amer
Lib
26 September 2019
owing
of
rican
berty
How independent we really are, circa 2019...
American
AmericanConsequences
Consequences 27
27
When Europeans discovered America,
some thought it might be a kind of Eden.
Explorers recounted their tales of naked strength – or its most serious weakness.
savages, snakes, and low-hanging tropical
fruit. Maybe it was Eden, but gone to seed. After September 11, 2001, so many
Americans bought flags that the shops ran
Whatever it was, many thought they could short. Old Glory festooned nearly every
make a paradise out of it. Adventurers, porch and bridge. Patriotism swelled every
entrepreneurs, religious zealots of every heart.
stripe – all made their way to the New World
intent upon turning it into the Eden of their Europeans coming back to the Old Country
dreams. Five hundred years later, America is reported they had never seen anything
what they made of it – both a paradise, and a like it. A Frenchman takes his country for
complete mess. granted. He is born into it, just as he is born
into his religion.
But if Americans have a special gift, it is a
talent for ignoring irony and ambiguity and He may be proud of La Belle France the
going on with their special mission: getting way he is proud of French cheese. But he is
rich. not fool enough to claim credit for either
one. He just feels lucky to have them for his
Most Americans look at the country as if own.
it were an Enron financial statement. Sure,
many of the assets are fictitious and the Nation of Immigrants
liabilities are understated. But like Merrill
Lynch, we are all bullish on America. America, by contrast, is a nation of people
who chose to become Americans. Even the
Swelling Patriotism oldest family tree in the New World has
immigrants at its root.
“Proud to Be an American,” says one bumper
sticker. “One Nation – Indivisible,” says And where did its government, its courts, its
another. businesses, and its saloons come from?
America was, of course, founded on They were all invented by us. Having
the opposite principle – the chosen the country – and made it what it
idea that people were free to is – Americans feel more responsibility for
separate themselves from a what it has become than citizens of most
parent government whenever other nations.
they felt they had come of age. They take more pride in it, too.
American But no fraud, no matter how
Liberty stupendous, is so obvious as But what is it? What has it become? What
to be detected by the average makes America different from any other
American. That is America’s great nation? Why should we care more about it
28 September 2019
than about, say, Lithuania or Chad?
Most Americans, if pressed for an answer, debut of the republic, the Founding Fathers
would reply, “Because America is a free narrowly avoided declaring German the
country.” official language – at least that is the legend.
What else can be said of the place? A Frenchman has to speak French. A German
has to speak the language of the Vaterland.
Its landmass is as varied as the Earth itself. But an American can speak anything... and
Inhabiting the sands of Tucson as well as the often does.
steppes of Alaska, Americans could as well be
called a desert race as an Arctic one. Nor is there even a common history. The
average immigrant didn’t arrive until the early
Its religions are equally diverse – from 20th century. By then, America’s history was
mossbacked Episcopalians of the Virginia already three centuries old. The average family
Tidewater to the holy rollers of east Texas missed the whole thing.
and the Muslims of east Harlem. Nor does
blood itself give the country any mark of If Americans weren’t united by blood, history,
distinction. religion, or language – what else is left?
The individual American has more in Only an idea: that you could come to
common genetically with the people his America and be whatever you wanted to be.
people come from than with his fellow You might have been a bogtrotter in Ireland
Americans. In a DNA test, this writer is more or a baron in Silesia – in America, you were
likely to be mistaken for an IRA hit man than free to become whatever you could make of
a Baltimore drug dealer. yourself.
“Give me liberty or give me death!” said

No Common History Patrick Henry, raising the rhetorical stakes
America never was a nation in the usual sense and praying no one would call him on it. Yet
of the word. the average man at the time lived in near-
perfect freedom. There were few books and
Though there are plenty of exceptions – few laws on them. And there were fewer
especially among the made-up nations of people to enforce them.
former European colonies – nations are
usually composed of groups of people who
share common blood, a common culture, and If Americans weren’t united by
a common language. blood, history, religion, or language
Americans mostly speak English, but they – what else is left?
might just as well speak Spanish. And at the
Henry, if he wanted to do so, could have “Americans today,” wrote one of the founders
merely crossed the Blue Ridge west of of the libertarian movement, Rose Wilder
Charlottesville and never seen another Lane, in 1936, “are the most reckless and
government agent again. lawless of peoples.” But, she immediately
continued, “we are also the most imaginative,
Illusion of Self-Government the most temperamental, the most infinitely
varied.”
Thomas Jefferson complained, in the
Declaration of Independence, that Britain This was after the Lincoln administration had
had “erected a Multitude of new Offices, and annihilated the principle of self-government...
sent hither Swarms of Officers to harass our but before the Roosevelt team had finished its
People and eat out their Substance.” work.
Yet the swarms of officers King George III By the end of the 20th century, Americans
sent to America would have barely filled a were required to wear seatbelts. And they ate
mid-sized regional office of the IRS or city low-fat yogurt without a gun to their heads.
zoning department today. By the start of the 21st century, they were
submitting to strip searches at airports and
Liberty has been hollowed out demanding higher taxes to “protect freedom.”
in modern America. But it is still The recklessness seems to have been bred out
worshipped as though it were a of them. The variety, too. North, south, east,
religious relic. and west, people all wear the same clothes and
cherish the same ideas.
Liberty has been hollowed out in modern

Likewise, the Founding Fathers kvetched
America. But it is still worshipped as though
about taxation without representation. But
it were a religious relic.
history has shown that representation only
makes taxation worse.
Kings, emperors, and tyrants must keep Bill Bonner is the underground news
tax rates low; otherwise, the people rise in mogul and founder of The Agora
rebellion. It is democrats who eat publishing company. He’s written
out the substance of the people: the New York Times bestselling book
The illusion of self-government Empire of Debt and most recently
lets them get away with it. published Hormegeddon: How Too
Much of A Good Thing Leads to
Tax rates were, on average, only 3% Disaster. He is one of the great writers
American under the tyranny of King George and minds in America today and
Liberty III. Among the dubious blessings also publishes a free daily letter, Bill
of democracy are average tax rates Bonner’s Diary, which you can sign up
10 times as high. for here: bonnerandpartners.com.
30 September 2019
THE INSIDE STORY OF THE ICONOCLASTIC ACCOUNTANT
WHO KNOWS WHAT THE BALANCE SHEET HIDES.
WHAT
WALL
STREET
WON’T
TELL YOU
32 September 2019
By Alice Lloyd
Meet Joel Litman. He strikes

an imposing even otherworldly presence...
particularly if he’s recently flown in from his
firm’s office in Manila. There, he commands a
corps of number-crunchers, expertly trained
in tracking down the Platonic ideal of pure
valuation.
I’m accustomed to seeing finance gurus

in Dockers and Patagonia vests. So I was
surprised to hear that Joel always wears a
three-piece suit. When we meet on a late-
summer day in Baltimore, he’s paired said suit
with wingtips, a pared-down paisley tie, and
a Patek Philippe watch. The uniform rarely
varies, he tells me, even when he’s on-site in
the South Pacific.
It’s there, his home for half the year, where

he oversees his staff of about 100 eagle-eyed
accountants. Their work – correcting financial
statements line by line to account for the 130
worst flaws and inaccuracies built into the
standard rules by which accountants measure
value – is as technically tedious as it sounds.
But what it all amounts to is more thrilling: Some, like the rule that dictates how
a sort of hard-won secret knowledge that accountants evaluate research and
comes from not just knowing the rules of development costs, are philosophically
accounting... but knowing better. flawed: Are research and development costs
an investment in future profit, or a loss?
Knowing, in other words, what’s wrong with Often it’s the former, but not according to the
the rules that dictate how companies are accounting rules.
valued.
Because as Litman says, there’s plenty wrong. What it all amounts to

And knowing how it’s wrong is valuable. is more thrilling: a sort
Litman and his team give their clients a of hard-won secret
perspective on the market that ordinary knowledge that comes
analysts either don’t know or conceal from all from not just knowing the
but a select group of investors. And the locus rules of accounting... but
of this labor – as far as humanly possible from knowing better.
Wall Street – makes me feel like I’ve wandered
into a Joseph Conrad novel. Others, like the rule that dictates how
For one thing, you’d be hard-pressed to get accountants report pension costs, were altered
an American investment banker to build a for short-term political expediency: “The
painstakingly detailed database like the one pension accounting rule was developed with
his staff has developed over the last decade. Congressional pressure in the 1990s to save
the market from the appearance of loss in
Why not? “Because it’s boring!” Litman says.
a high-stakes year for recession recovery,”
“It’s profitable, especially in the long term,
Litman explains when I ask for the third or
but it’s not fun.”
fourth time how on earth it all got so very,
What Litman has built since his firm, Valens so convolutedly bad. “The rule was written to
Research, got its start in 2009 was made hide what would have looked like one bad
possible by hard work, yes. But also by the fact year but could have been explained away. And
that the rules of accounting misrepresent actual it set in place a quarter-century of confusion.”
values – more so than most investors realize. When you think about it, it almost makes
Frequent weekday readers of the Financial sense: Accountants are a put-upon people.
Times may already know this. (I’m an They do the math. They follow the rules.
infrequent weekend reader myself.) The Even when they know the rules are wrong,
they still follow the rules. I mean, they’re
standard system of rules that accountants
accountants.
use is often wrong. Litman’s ever-growing
database corrects 130 of the most egregiously But what if one day, an accountant took a
misleading errors baked into the rules system. look around at his rule-following colleagues,
34 September 2019
WHAT WALL STREET
WON’T TELL YOU
stood up from his desk piled with financial when I ask why he chose working with
statements that the rules of his trade had Litman over the Wall Street life favored
left him no choice but to mangle – and said, by some of his business school classmates.
“Enough is enough!” When I ask whether he ever regrets it, he
says life with Litman is more exciting: “You
Well, that’s basically what Litman did.
know you’ve got a little bit of an edge – and
After most of a decade on Wall Street, he’d you know you’ve earned it.”
developed an even greater distaste for the way
The calls they’re most proud of at Valens
capital markets are reported. He published
are contrarian analyses they were able to
a case study in the Harvard Business Review,
make with confidence because they knew
“Give My Regrets to Wall Street,” about a
company weighing whether to go public or what was wrong with the rules. And because
stay private. Its assessment of the downsides they’d done the tedious math. Facebook, for
of leaping into the wild (and, Litman instance, is a favorite...
emphasizes, meaningless) world of public When Facebook went public in 2012, the
valuations was uncomfortably honest. Two conventional outlook was “As reported, it
years later, he left to start Valens Research. looked like a terrible company,” Litman
recalls. “But the reported values were wrong:
Accountants are a put- They were pouring money into research and
upon people. They do the development, and paying employees with
math. They follow the rules. stock options” – both of which misleadingly
Even when they know the undermined Facebook’s reported value at
rules are wrong, they still the time, because of the peculiarities of
follow the rules. the accounting rules. And just as Valens
predicted, Facebook rebounded.
He recruited Rob Spivey, an old protégé from Their call on Planet Fitness, too: “A ton of
his days on Wall Street, and opened a small people said the stock was a short,” Litman grins.
office in Cambridge, Massachusetts, which “They said, ‘I don’t know what these Valens guys
is still their stateside home base. Even as a are saying, this doesn’t make any sense.’”
19-year-old intern at Credit Suisse, Spivey
stood out to Litman. His grasp of Wall And they were right, it didn’t make sense.
Street’s biases was surprisingly sophisticated: Planet Fitness looked like an absurdly bad call
Reporting real values to the public would because its strip-mall storefronts are leased.
never be a true priority at an investment The accounting rule for valuing leases – a
bank whose primary loyalty is to its clients’ rule which, Litman explains, was so flagrantly
earnings. “When it comes to reporting misleading that its reform finally took effect
values, the question for Wall Street is always this year – and the rule for deferred tax
going to be, ‘At what point do you become liability, which remains in place, grossly
biased toward your clients?’” Spivey says, exaggerated their losses. Based on Litman’s
read of the reported financials, he found, into the accounting rules was planted at
“Their expansion would actually cost a lot less the very beginning of Litman’s career. As a
than people thought. And the earnings that fledgling accountant, he (in his own words)
they generated ended up being a lot more “lucked into a job” working for the authors
than people thought.” The stock went up of the official guide to the generally accepted
several hundred percent. And best of all for accounting practices (“GAAP”).
Valens and its clients and friends, everyone
else had been looking the other way. It was In his early 20s, he developed an appreciation
an unloved company – its growth invisible for the rules’ circumstantial flaws – and an
absent an excruciatingly close read – and a unusually sophisticated sensitivity to the
radical idea. institutional biases that held the status quo in
place. He might have hardened into a cynic,
Making the case for these calls sounds almost but a teacherly temperament and innate
farcical the way Litman recounts it. He’s a interest in the deeper reasons why the world
kind of anti-Cassandra, saying, “It’s actually works the way it does kept him curious about
a great company: You’ve just got to look at what he might do differently. He recalls
Note 19 on page 78, then you’ve got to look running up to his bosses with questions about
at Note 25 on page 140 – and if you’re not the rules – “Why is a statement of cash flows
looking at that detailed level, you’re not going
not a statement of cash flows? There are a
to see the true numbers.”
bunch of non-cash items. Why?” – questions
The initial idea to right the wrongs baked for which there are no reasonable answers.
36 September 2019
WHAT WALL STREET
WON’T TELL YOU
He worked as a consultant and then led a strenuously cleaned-up accounting, rather
research team at the investment bank Credit than relying on publicly reported financials
Suisse – but he couldn’t forget what he’d alone. “The entire Wall Street establishment
learned working with the authors of the preaches as gospel an earnings number that’s
rulebook: that while the accounting rules regarded as nonsense by the top investors of
may produce the wrong numbers, the real the world,” Litman says, sounding a little
numbers are out there if you only take the like Thomas Paine: “Of the top 300 investors
trouble to look for them. on the planet, 180 read uniform accounting
research. Earnings aren’t the bottom line.”
Knowing wasn’t enough for Litman... He
wanted to spread the word. Valens’ uniform The morning we met, Litman had been
accounting database is essentially a list of lecturing, via Skype, a business school class
companies and their actual values, spanning at the African Leadership University based
the 10 years since Litman founded the in Mauritius. A volunteer engagement, the
firm. It’s set up to highlight the reported lecture went well into overtime when students
prices that are most meaningfully different got caught in a fever, yelling out companies
from their actual prices – the “oranges,” per – “Facebook!” “Tesla!” “Uber!” “Amazon!”
Litman’s favored idiom, among “apples.” – prompting Litman to recall whether they
Litman’s system labels the misleading were accurately valued. Correcting for what
reported values in orange. The real, corrected the rules misrepresent, Facebook and Amazon
values it casts in blue. are even stronger than they look, while Uber
and Tesla are just as weak, if not weaker, than
Corporate clients can consult the whole
reported.
color-coded, decade-deep database or go by
the reports and case studies Litman’s teams These students were no different, Litman
develop. And they’re in good company: Most observes, in enthusiasm or expertise – no
of the world’s top long-term investors follow different from the audiences he addresses
at the elite American schools where he
lectures throughout the year, or at a
recent rave-reviewed engagement at the
"It's actually a great Harvard Club. His lecture that day was an
company: You've just got extended parable about Bruce Lee’s combat
philosophy – seriously. “I love the whole
to look at Note 19 on page
Bruce Lee mentality,” he says. “The idea
78, then you've got to look of creating one uniform system of martial
at Note 25 on page 140 – arts, the best possible system. That’s what
and if you're not looking at uniform accounting is: Let’s create one set of
that detailed level, global accounting standards everybody can
you're not going to see the understand and get behind.”
true numbers." Elsewhere in sports metaphors, uniform
accounting fan Dave Daglio of BNY Mellon however, no one was really listening.
compares Litman’s uniform accounting to
Over the last decade, Valens’ research has
Oakland A’s general manager Billy Beane’s
found an eager audience. But it’s an audience
famous Moneyball theory. “Joel’s methods
limited to top investors and clients of the
ensure that liabilities, assets, or long-term
firm. With his next project – called Altimetry
investments like research and development are
– the idea is bigger. As Litman puts it, “Let’s
calculated correctly – and it provides a clear
get this in the hands of Americans!”
sense of what a company is doing, particularly
how company is doing versus itself and For long-term investors, choosing the right
versus peers,” he explains. “If you go to a companies is key. “He’s exposing me to data
baseball game and you watch a single game, about companies I never would have looked
you might think one hitter is particularly at before,” says Whitney George, president
talented because he went three for four, but of Sprott – a global asset-management firm,
it’s the long-term numbers that matter.” and a Valens Research client. George tells me
Understanding how he hits curveballs, he uses Litman’s database not just to monitor
fastballs, good hitters, and bad hitters – companies they own but also to screen for
collecting the data – lets you know which new investments he wouldn’t otherwise
player is actually the best. Litman does the notice. And with Altimetry, the extension of
same thing with companies: It’s Moneyball. similar opportunities to individual investors
is an appealing prospect. George – who,
If Litman is the Billy Beane (or the Bruce Lee) along with Dave Daglio, serves on a uniform
of accounting, we’re all potential students of accounting advisory council Litman founded
his craft. He’s now launching a new initiative – has already signed up for the new service.
that stands to greatly expand his reach: a
subscription service to give independent One unexpected upside of the new
investors access to his analysis and accounting venture, he tells me, is its creative demand:
database. It’s nothing if not a teaching tool. Composing a colorful case study for his
It’s the next step in Litman’s mission to mine
the true math from the rubble of the broken
accounting rules.
"There's an authenticity
Being an accountant, “I’m pretty conservative or an honesty and purity
in nature,” Litman admits: “It wasn’t until
about how he sees
several years into my accounting career that I
the world – and the way
first said, ‘None of this makes any sense.’” Even
so, the progression is clear. While working
he makes his money is
as a consultant, he felt he was able to make obviously publishing
more of a difference – showing clients what the information and
the financials really meant – but he wanted providing it, but he doesn't
to publish more widely. On Wall Street, feel slippery."
38 September 2019
WHAT WALL STREET
WON’T TELL YOU
new subscribers is, in many ways, a richer clients get just the numbers and facts. Taking
challenge than pulling together a hard-boiled such conventionally inaccessible, tedious, and
report for a corporate client. technical material as the alchemy of accurate
accounting and making it not just accessible,
He and Spivey strolled the Boston Common,
but interesting and exciting for a general
chomping on Philippine cigars, while they
audience, is the kind of impossible task only a
brainstormed a recent composition: “Florence
natural teacher would want to take on.
Nightingale Was a Data Scientist.” It tells
the story of the pioneering nurse and social “The teaching continues at every level,”
reformer’s often-overlooked impact on the Litman says of the path that’s led him here
field of biomedical recordkeeping – all as – and its goal, all along, to find the most
a means of introducing Valens’ study of efficient way to tell the truth about financial
CVS and Aetna’s new foray into large-scale statements. “If I could speak to a million
biomedical data collection. people at once about this stuff, I would.”
“He’s spending so much time and energy Of course, that’s kind of the whole idea:
on this because he has a passion for trying Subscribe, and you’ll be one of them.
to teach people how to really think about
value and companies and strategies of
American Consequences magazine
companies,” says Miles Everson, the CEO
is pleased to announce that we
of MBO Partners and, until recently, the
have partnered with Joel Litman
head of global advisory and consulting
to get access for our readers to his
at PricewaterhouseCoopers. “There’s an
new Wall Street “truth detecting”
authenticity or an honesty and purity about
system. On September 25, he is
how he sees the world – and the way he
featuring a free training session and
makes his money is obviously publishing
presentation – and you can join him.
the information and providing it, but he
But you have to RSVP to reserve
doesn’t feel slippery.” Everson argues that
your seat. Click here to learn more
Litman doesn’t actually try to sell you on the
about his work and how to get free
companies he’s choosing to highlight. Instead,
access to his system.
he’s just genuinely excited to tell you what he
knows.
Individual investors and institutions Alice Lloyd is a writer and reporter in

technically receive the same advice at the same Washington, D.C., covering culture,
time. The CVS-Aetna analysis, for instance, politics, and the weirdness in between.
Her work has been featured in the New
goes to elite Valens clients and retail investors
York Times, the Washington Post, the
who sign up for Altimetry. But Altimetry Boston Globe, and the Weekly Standard.
subscribers get an engaging story about a
historical heroine who harnessed the power of Joel Litman Photograpy By
biomedical engineering, whereas institutional Ben Struble.
BEWARE OF ONE
OF THE DEADLIEST
PLACES IN THE U.S.
40 September 2019
By Dr.
David Eifrig
Sometimes, doctors can be killers.

I’m not talking about homicide. I mean that the folks we trust with our lives
make lethal mistakes... And it happens more often than you might expect.
British researchers recently released a report But here’s the thing... That study took some
with a staggering finding: One in 20 patients liberties with how it got those numbers. It
are victims of preventable harm in medical used insurance billing codes to calculate the
care. And of those folks, about 12% suffer number of patients with adverse events, which
permanent disability or death. doesn’t account for whether the adverse event
The Brits aren’t the only ones with this directly caused the patient’s death.
problem, either. Here in the U.S., we face a
Earlier this year, the Journal of the American
similar issue.
Medical Association released a study spanning
In 2015, we wrote about a study that shocked over two decades – it showed that about 2.8%
us. Published in the Journal of Patient Safety, of all U.S. deaths were due to adverse effects
the paper claimed that as many as 440,000 of medical treatment. That’s about 78,000
Americans die annually from hospital errors, folks each year, not 440,000. That’s not as
injuries, accidents, and infections... That’s scary, but it’s still too high.
roughly one-sixth of all deaths that occur
in the U.S. each year. To help put that in perspective... In 2018,
THE GOOD NEWS...

IT GETS SAFER STARTING THIS MONTH
about 36,750 Americans died in motor But worse... the senior hospital staff doctors,
vehicle accidents, according to the National called “attendings,” who are supposed to
Highway Traffic Safety Administration. supervise the new kids, are taking summer
vacations. Most let the senior residents run
So even with the lower estimate from JAMA, the show.
you’re still more than twice as likely to
die from a medical error than from a car The good news is that the problem is
accident. temporary.
And we’re just wrapping up the worst time Once September hits, the new docs have a
of year for medical mistakes. That’s why I few months of experience under their belts.
wanted to review three of my top ways to stay And the attendings are back at work and
safe from medical errors... supervising again... And the hospital is as safe
as it gets.
1. AVOID THE HOSPITAL DURING You should absolutely

THE SUMMER
stay clear of any medical
Going to a “teaching hospital” in the months facility that is considered a
of June, July, and August is even more “teaching hospital”
dangerous than usual... during the summer.
If you or a loved one is considering any sort of
hospital visit for an elective or nonemergency 2. CHOOSE THE RIGHT
procedure, you should absolutely stay clear HOSPITAL
of any medical facility that is considered a
“teaching hospital” during the summer. Aside from avoiding a teaching hospital, you
should take the time to find the best hospital
Doctors in training, or so-called “residents,” for your upcoming procedure or surgery.
start training every year on July 1.
Now, this isn’t always an option if it’s an
So in June, the senior residents leaving for the emergency, but for most situations, you
real world are unconcerned about taking care should do your research.
of you... They are thinking about getting out
Look for clinics and hospitals that are in-
of there and finding a real job to pay down
network, or covered by your insurance policy,
their six-figure debt.
to avoid ludicrous bills. For example, the
The new doctors coming in on July 1 just news reported last month on a Montana
graduated from medical school. Most can’t yet couple that landed themselves with a half-
find their way out of a paper bag. million-dollar medical bill for dialysis... just
BEWARE OF ONE OF THE DEA

42 September 2019
because they went to an out-of-network informed decision is the best course for any
center. pre-planned medical visit.
Similarly, if you unexpectedly wind up going
to the hospital and doctors keep you overnight, 3. RESEARCH YOUR DOCTOR
insist they list you as “inpatient.” If you’re
The right doctor can mean the difference
outpatient, insurance won’t cover as much.
between life and death. Surgical
Choose the best hospital for your specialty. complications affect about 2% to 4% of most
We’ve recommended many times about going common surgeries.
to the best cancer care center for the type of
But according to Stanford University, the
cancer you have. You can find our original
worst 1% of surgeons are responsible for
article on this right here.
nearly a third of all malpractice claims.
For other problems, we recommend following
As I’ve advised before, ask your surgeon for a
the rankings from U.S. News & World
printout of his statistics. He should keep them
Report. It has an annual ranking of the best
on a computer. If not, run out of the office. In
hospitals nationwide as well as by region.
addition, check his status with the American
Ask your surgeon for Board of Medical Specialties. He should be up
to date on his exams and certified in surgery.
a printout of his statistics. He
You can find that right here.
should keep them on
a computer. You can also search by state for criminal
If not, run out of the office. convictions and malpractice claims against
your surgeon. Go here to get started.
It looks at data such as survival rates for
procedures, number of beds, staffing, and
medical errors and oversights. You can find its Dr. David Eifrig worked in arbitrage and
trading groups with major Wall Street
ratings based on area here.
investment banks, including Goldman
Medicare.gov also offers a hospital Sachs, Chase Manhattan, and Yamaichi
comparison tool. The breadth of data is larger in Japan. In 1995, Dr. Eifrig retired from
Wall Street, went to UNC-Chapel
and includes payments and value of care. Take
Hill medical school, and became an
a look at the closest hospitals to you, right ophthalmologist.
here. We recommend combining both this
tool along with the specialties through U.S. Today, he publishes a 100% free daily
e-letter on both health and wealth that
News & World Report. Some hospitals for
shows readers how to live a millionaire
Medicare may rank lower overall but have the lifestyle for far, far less. Click here to
best in a specialty, like cardiology. Making an learn more.
ADLIEST PLACES IN THE U.S. American Consequences 43

People around the world may be worried
about nuclear tensions rising, but I think
they’re missing the fact that a major
cyberattack could be just as damaging
– and hackers are already laying the
groundwork.
44 September 2019
A CYBERATTACK
COULD WREAK DESTRUCTION
COMPARABLE TO A
NUCLEAR WEAPON
With the U.S. and Russia pulling out of a MANY INTRUSIONS ALREADY
key nuclear weapons pact – and beginning
to develop new nuclear weapons – plus As someone who studies cybersecurity and
Iran tensions and North Korea again test- information warfare, I’m concerned that
a cyberattack with widespread impact, an By Jeremy
launching missiles, the global threat to
intrusion in one area that spreads to others or Straub
civilization is high. Some fear a new nuclear
a combination of lots of smaller attacks, could
arms race.
cause significant damage, including mass
That threat is serious – but another could be injury and death rivaling the death toll of a
as serious, and is less visible to the public. nuclear weapon.
So far, most of the well-known hacking Unlike a nuclear weapon, which would
incidents, even those with foreign government vaporize people within 100 feet and kill
backing, have done little more than steal data. almost everyone within a half-mile, the death
Unfortunately, there are signs that hackers toll from most cyberattacks would be slower.
have placed malicious software inside U.S. People might die from a lack of food, power
power and water systems, where it’s lying in or gas for heat, or from car crashes resulting
wait, ready to be triggered. The U.S. military from a corrupted traffic light system. This
has also reportedly penetrated the computers could happen over a wide area, resulting in
that control Russian electrical systems. mass injury and even deaths.
This might sound alarmist, but look at what inadvertent error, resulted in 50 deaths and
has been happening in recent years, in the evacuation of 120,000 and has left parts of
U.S. and around the world. the region uninhabitable for thousands of
years into the future.
In early 2016, hackers took control of a
U.S. treatment plant for drinking water, and
changed the chemical mixture used to purify MUTUAL ASSURED
the water. If changes had gone unnoticed, DESTRUCTION
this could have led to poisonings, an unusable
My concern is not intended to downplay the
water supply and a lack of water.
devastating and immediate effects of a nuclear
In 2016 and 2017, hackers shut down major attack. Rather, it’s to point out that some of
sections of the power grid in Ukraine. This the international protections against nuclear
attack was milder than it could have been, conflicts don’t exist for cyberattacks. For
as no equipment was destroyed during it, instance, the idea of “mutual assured destruction”
despite the ability to do so. Officials think suggests that no country should launch a
it was designed to send a message. In 2018, nuclear weapon at another nuclear-armed
unknown cybercriminals gained access nation: The launch would likely be detected,
throughout the United Kingdom’s electricity and the target nation would launch its own
system; in 2019 a similar incursion may have weapons in response, destroying both nations.
penetrated the U.S. grid.
Cyberattackers have fewer inhibitions. For
In August 2017, a Saudi Arabian one thing, it’s much easier to disguise the
petrochemical plant was hit by hackers source of a digital incursion than it is to hide
who tried to blow up equipment by taking where a missile blasted off from. Further,
control of the same types of electronics used cyberwarfare can start small, targeting even a
in industrial facilities of all kinds throughout single phone or laptop. Larger attacks might
the world. Just a few months later, hackers target businesses, such as banks or hotels, or a
shut down monitoring systems for oil and government agency. But those aren’t enough
gas pipelines across the U.S. This primarily to escalate a conflict to the nuclear scale.
caused logistical problems – but it showed
how an insecure contractor’s systems could
potentially lead to primary ones. NUCLEAR GRADE
CYBERATTACKS
The FBI has even warned that hackers are
targeting nuclear facilities. A compromised There are three basic scenarios for how a
nuclear facility could result in the discharge nuclear grade cyberattack might develop.
of radioactive material, chemicals, or even It could start modestly, with one country’s
possibly a reactor meltdown. A cyberattack intelligence service stealing, deleting or
could cause an event similar to the incident compromising another nation’s military data.
in Chernobyl. That explosion, caused by Successive rounds of retaliation could expand
46 September 2019
the scope of the attacks and the severity of the
Cyberattackers have fewer
damage to civilian life.
inhibitions. For one thing, it’s much
In another situation, a nation or a terrorist easier to disguise the source of a
organization could unleash a massively digital incursion than it is to hide
destructive cyberattack – targeting several where a missile blasted off from.
electricity utilities, water treatment facilities
or industrial plants at once, or in combination
with each other to compound the damage. companies had experienced some sort of
network intrusion in the previous year.
Perhaps the most concerning possibility,
though, is that it might happen by mistake. But all those systems can’t be protected
On several occasions, human and mechanical without skilled cybersecurity staffs to handle
errors very nearly destroyed the world during the work. At present, nearly a quarter of all
the Cold War; something analogous could cybersecurity jobs in the U.S. are vacant,
happen in the software and hardware of the with more positions opening up than there
digital realm. are people to fill them. One recruiter has
expressed concern that even some of the jobs
that are filled are held by people who aren’t
DEFENDING AGAINST DISASTER
qualified to do them. The solution is more
Just as there is no way to completely protect training and education to teach people the
against a nuclear attack, there are only ways to skills they need to do cybersecurity work, and
make devastating cyberattacks less likely. to keep existing workers up to date on the
latest threats and defense strategies.
The first is that governments, businesses and
regular people need to secure their systems to If the world is to hold off major cyberattacks
prevent outside intruders from finding their – including some with the potential to be as
way in, and then exploiting their connections damaging as a nuclear strike – it will be up to
and access to dive deeper. each person, each company, each government
agency to work on its own and together to
Critical systems – like those at public utilities,
secure the vital systems on which people’s
transportation companies, and firms that use
lives depend.
hazardous chemicals, need to be much more
secure. One analysis found that only about © The Conversation
one-fifth of companies that use computers to
control industrial machinery in the U.S. even
monitor their equipment to detect potential Jeremy Straub is an Assistant Professor
attacks – and that in 40% of the attacks they of Computer Science, North Dakota
did catch, the intruder had been accessing the State University, and the associate
system for more than a year. Another survey director of the NDSU Institute for Cyber
found that nearly three-quarters of energy Security Education and Research.
COMING
HOME
N
o matter where you lived in
America on the morning of
September 11, 2001, the story
often begins with a sapphire sky
filled with airy, white clouds that perfectly
contrasted against the expansive blue, a
picture-perfect backdrop shattered by the
deadliest attack on American soil in the
country’s history.
Nineteen men trained by al-Qaida boarded

four passenger aircrafts that morning, seeking
to carry out a devastating coordinated attack
aimed at symbols of American freedom:
the World Trade Center, the Capitol, and
48 September 2019
AMERICAN FREEDOM
IS PAID FOR A THOUSAND
DIFFERENT WAYS
By Salena Zito
the Pentagon. Three hit their target. Flight

93, the plane targeting the Capitol, crashed
in an isolated field in Somerset County,
Pennsylvania, thanks to brave passengers
who wrested control of the plane from the
hijackers. Almost 3,000 people lost their lives
that day, 400 of whom were New York City’s
first responders.
Taylor Cleveland and Victor Lewis are two

people whose lives were changed by the terror
attacks. They were separated by geography,
age, and life experience, but for them, 9/11
proved to be a common call of duty to serve
their country...
COMING HOME Ohioan Taylor Cleveland grew up surrounded “I figured that because I had the knee
by soldiers. problem still, they’d still turn me down,” he
recalls. “Well, they enlisted me before the
He says, “Even my priest growing up was a
medical portion, and they called the house
chaplain in World War II. I mean, everybody
and left a message on the machine that said,
around here served. It’s just expected that’s
‘Good news, you’re approved.’”
what you’re going to do.”
Lewis and Cleveland met in Buffalo, New
Unfortunately, he couldn’t follow in the
York, in 2003. Cleveland is 3rd Battalion,
footsteps of others. He had been a local high
25th Marines. Lewis, a Navy hospital
school football star and had wrecked his
corpsman, was attached to the Marine unit.
knee during a game, so the Marine Corps
The two became like brothers immediately.
turned him down. Instead, Cleveland turned
to community service, earned a degree in They deployed to Iraq in 2005. Cleveland
criminal justice, and then worked as an admits he had a hard time adjusting at first:
emergency medical technician, a firefighter, “I was friends with a fellow reservist by the
and then a beat cop before joining the name of Jeff Wiener who had joined the
department SWAT team. Marines right out of high school. Wiener’s got
But he knew he had to do something more this book, and it’s got a picture and a story of
after the 9/11 attacks. every person that was killed in 9/11, and I’m
like, ‘What are you doing, bro?’ He smiles at
me, and he’s like, ‘Man, I just read this whole
“That’s the last conversation I had book. I can tell you what, I read every single
with him. Having him say, ‘Man, I person that was in here that died on 9/11. I
know why I’m here,’ is the best gift know why I’m here.’”
I’ve been given.” Twenty minutes after that conversation,
Wiener was fatally shot in the head.
He says, “My grandfather joined the Navy Cleveland recalls, “That’s the last conversation
the day after Pearl Harbor in 1941. And I just I had with him. Having him say, ‘Man, I
knew after that there was no way they would know why I’m here,’ is the best gift I’ve been
keep me out of this war that was coming. given.”
There was no way that people were going
Lewis says he never got shot in Iraq. No
to go fight a war for me and that they were
mortar. No shrapnel.
going to put their lives on the line for me.
I could never live with myself as a man if I Cleveland practically spits out his beer as he
didn’t go and let somebody else go fight my says, “Dude, you were hit by a rocket!”
battles for me.”
Lewis is sheepish and uncomfortable telling
He signed up to join the Marine Reserves but the story. Deployed south of Haditha, just
had concerns about his knee injury. outside Haqlaniyah, the engagement turned
50 September 2019
deadly as a guy coming straight at Lewis fired It all came to a head one evening outside a bar
off a rocket-propelled grenade. when he was approached by two men and a
woman looking for trouble. They pummeled
He explains, “The blast throws me toward the
Lewis pretty badly, but he fought back with a
river. Trying to shake it off, I grab my weapon.
knife.
I’m trying to fire back. I’m crawling toward
the river. I go to stand up and fall back down. “People got hurt,” is all he says. The price?
Like, ‘What the f---?’ My leg’s all mangled.” Thirty months in prison.
He was medevaced to Al Asad Air Base and

then took a Black Hawk to Basra. From there, “I felt like I failed them, you know?
he was transported to Ramstein, Germany, Because nobody could take care
and finally, Bethesda, Maryland. He wanted a of my men like me,” Lewis says.
little Motrin and to go back to “his men,” but “They’re my boys. We hung out. We
they told him he was going home. partied. We kicked it. We shared
“I felt like I failed them, you know? Because everything. I wanted to go back.”
nobody could take care of my men like me,”
Lewis says. “They’re my boys. We hung
out. We partied. We kicked it. We shared But he turned his life around. He gets
everything. I wanted to go back.” treatment for his post-traumatic stress
disorder, has a job he loves at a contracting
That’s the hardest part of returning to civilian company, and takes care of his twin boys.
life. “I think about it all the time,” he says. “But He talks to Cleveland at least twice a week
you know ... you can replay it as many times as and is working toward his degree in electrical
you like in your mind. The result’s the same.” engineering.
Lewis is blunt about his routine after leaving Lewis earned a Bronze Star, and Cleveland a
the military: “hanging out, drinking, and Purple Heart. The lesson they want people
chasing women.” to remember is simple: American freedom is
paid for a thousand different ways.
He finally went back to work at the fire
department, but even working triple shifts © Creators Syndicate, Inc.
couldn’t fill the void left by having to do
something other than what he saw as his
Salena Zito is a CNN political analyst
purpose in life. and a staff reporter and columnist for
the Washington Examiner. She reaches
He sought help from the Department of
the Everyman and Everywoman
Veterans Affairs and got lost in the system. through shoe-leather journalism,
Lewis says, “I started snapping at people and traveling from Main Street to the
flipping out over nothing, but that’s not me. I beltway and all places in between.
was looking for help.”
THIS IS WHEN
THE MARKET
GOES HAYWIRE
On August 14, 2019, the Global Financial System Barometer (“GFSB”) –
the nominal yield of the U.S. government’s benchmark 10-year Treasury
bond minus inflation – broke through a critical monetary threshold...
52 September 2019
It was an extremely rare event. It’s related From this point (in early 2003) until 2011,
to the “inverted yield curve” that occurred gold soared from around $400 per ounce to
last month, but it is an even rarer and more almost $2,000 per ounce – a 400% increase
“acute” signal. And the GFSB, also referred to in a huge asset class. From 2002 until 2012,
By Porter
as the “real” 10-year yield, plays a significant gold moved higher each and every year.
Stansberry
role.
It’s easy for people to point backward on a
For sophisticated investors, this upcoming chart and say, “See, this is what it meant.” But
monetary inversion will unlock trillions and that’s not what’s happening here... We’re not
trillions of dollars in additional liquidity. The just looking backward. My team of analysts
chart below shows what I’m talking about... and I have been following this barometer for
decades, and we’ve used it – in real time – to
The descending (blue) line is the GFSB...
make our best and most valuable financial
arguably the single most important financial
decisions.
metric in the entire world.
This is extremely important.
The ascending (black) line is the price of gold.
Now, take a closer look back at the previous
As you can see, when the GFSB fell below
chart...
the 2% mark (on the left scale), it heralded
the beginnings of a true firestorm. One of If you look closely, you’ll notice that the
the most important impacts of this massive GFSB collapsed well past its “resistance” point
economic change was the first real bull market at 2% in early 2008. It happened just before
in gold since the late 1970s. investment banks began failing and the entire
GOLD VS. 10-YEAR 'REAL' YIELDS $2,000
$1,750
$1,500
Gold
Spot Price
$1,250
$1,000
$750
This barometer shows why
gold soared in 2010 and 2011... $500
and why it's poised to soar again now.
5.0% $250
4.0% 'Global Financial
System Barometer'
Percentage
3.0%
2.0%
1.0%
0.0%
-1.0%
1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019
HAYWIRE STOCK MARKETS
mortgage industry collapsed. capital investment, and increasing levels of
credit defaults (in auto loans and high-yield
Don’t pay any attention to the brief spike
bonds), I believe the downtrend we’re seeing
right in the middle of the crisis (in the fall of
in the GFSB could broach key “support” at
2008). That’s an aberration related to a brief
the 0% level... and go negative.
collapse in inflation expectations.
If that happens, the financial markets will be
What is important is that after dropping
suddenly turned upside down.
through the 2% threshold, the GFSB
continued to fall until late 2012... And I mean that almost literally... At the 0%
level, the markets will begin to go haywire, as
Gold rallied this entire time.
though the entire system has been inverted.
And then, suddenly, something changed...
If you’re an optimist, you’ll perceive this rare
What was it?
event – this massive monetary inversion – as
Europe’s financial system stopped bleeding. the final phase of the long-predicted “Melt
Bailouts of country after country were put Up.”
into effect. The world’s financial system
That’s one way to think of it.
stopped going down the toilet. The various
major deflationary holes were plugged. In the short term, this liquidity trigger
could propel the markets (for stocks,
The system began to reflate... It began to work
bonds, property prices, collectibles, etc.)
again. But it never made it back to the 1%
vastly higher. In fact, this is almost certain
line, much less the 2% level that ultimately
to occur... I’d expect at least another 30%
began this crisis.
increase in the S&P 500 Index and even
In 2015, gold seemed to bottom at less than bigger gains for growth stocks.
$1,100 per ounce.
But what this monetary inversion means to
Last month, gold broke out to a six-year high the global economy and to the U.S. dollar
of more than $1,400 per ounce. in the longer term is scary and probably puts
you at risk.
Meanwhile, the GFSB turned down again.
There is, as you might imagine, a tight and

meaningful correlation between the price of REMEMBER... A MELT UP
gold and this measure of the global financial HAS TWO SIDES
system’s stability and viability.
A Melt Up starts with a big run-up in debt,
More important, I believe this downtrend liquidity, and financial-asset prices. That’s the
we’re seeing in the GFSB will continue... part everyone seems to like.
Based on debt levels, declining levels of fixed And then there’s the hangover from these
54 September 2019
policies – unsustainable debt loads, defaults, inevitable – that we are about to enter one of
illiquidity, and ultimately horrendous losses to those periods. Whether it happens over the
purchasing power as the government further next few days or not, it’s coming.
devalues the U.S. dollar in response.
Most people will think this is a “new” crisis...
Many will perceive this coming monetary This is merely the next phase of the crisis that
inversion as an opportunity. And it’s true... began in 2008.
We are approaching the second-best And if you study the GFSB carefully, you’ll
opportunity I’ve ever seen to make huge gains understand exactly why.
in the world’s markets.
The flip side of this massive liquidity event,

WE ARE ENTERING
however, is stark... For most Americans,
what’s about to happen will destroy much
THE NEXT PHASE
of their liquid wealth. OF THE GLOBAL
No, it’s not fair. Not at all. It is a rigged game.
FINANCIAL CRISIS
If I could, I would put America on a diet of Explaining the bond market goes well beyond
sound money, sound banking, and balanced the scope of this essay. But at a basic level,
government budgets. But I can’t do anything everyone should be able to understand that
about it. what investors expect to earn by lending to
the U.S. government for 10 years depends –
We are approaching most of all – on inflation rates. If investors see
the second-best that inflation is going to increase, they will
opportunity I’ve ever seen demand higher interest rates on their loans to
to make huge gains in the the government.
world’s markets. The expected “real” return on these bonds
is the yield on 10-year bonds that provide
Hopefully, you’re skeptical that anything inflation-protected returns – the so-called
important is about to change. That’s exactly “TIPS” bonds (Treasury Inflation-Protected
how you should feel. It’s also true: Most of the Securities) that the Treasury also issues.
time, you can safely ignore macroeconomic
forces like the stuff I’m going to describe How we measure it isn’t important. What
today. Most of the time, you can simply sit matters is that when the global financial
back and let your dividends grow. system is functioning normally, investors
can make a profit from lending to the
But during rare periods – periods of acute
government.
stress in the world’s currency and bond markets
– you can make stupendous gains and avoid What should investors earn by lending to the
huge losses. And it seems likely – though not U.S. government?
As the largest and most powerful country in coupon like a bond, it does offer protection
the world, with the world’s leading reserve against credit defaults.
currency, you’d expect interest rates to be
Ironically, as interest rates fall at the
pretty low. The U.S. government is considered
beginning of these periods, investors tend
the world’s best credit risk... And these bonds
to bid up stock prices when falling bond
are widely considered to be a “risk free” asset.
payments make stocks look progressively
That means there’s zero chance of default.
more attractive. That happens up until
Even so, in a working financial system, corporations start to default on their debts.
investors have many choices. These Then, stock prices collapse.
government bonds compete for investors
That’s why a Melt Up happens just before a
who can also buy other bonds with higher meltdown.
yields. So even “risk free” bonds should pay
investors a real return after taking inflation Interest rates go lower... and lower... and
into account. lower. Stocks get more valuable (relatively), so
they go higher... and higher... and higher. But
After adjusting for inflation, the “real” rate of then, the economic weakness that has led to
interest on these bonds has been between 2% lower and lower interest rates suddenly causes
and 4%, depending on the economy’s strength... companies to default on their debts, starting a
When the economy is strong, investors can panic in the stock market.
choose from a lot of other faster-growing (and
higher-paying) options. So the government You get soaring stock
has to pay more, too. prices just before major
banking and financial
But what about when the economy isn’t
problems. And that’s what
working? What about when investors aren’t
able to trust banks or large corporations...
we’re seeing today, too.
or even foreign governments? What happens
when there’s no other safe place for capital? That’s why you get soaring stock prices just
before major banking and financial problems.
It’s during these times that you see the
And that’s what we’re seeing today, too.
inflation-adjusted yield on U.S. Treasury
bonds fall precipitously – during the so-called The 10-year U.S. Treasury bond is the global
“flight to safety.” paper-currency financial system’s “barometer.”
It’s during these periods that investors The yield on this bond sets the price on all
earn almost nothing by holding Treasury other risk assets. And when the barometer,
bonds. And it’s also during these periods or 10-year “real” yield, is steady or rising,
that investors are more and more likely to you’ll see “clear skies” ahead. But when the
buy gold... which, although it doesn’t pay a barometer turns sharply lower, and especially
56 September 2019
GOLD VS. ‘REAL RATES’ $1,550
$1,500
Spot Price
$1,450
$1,400
Gold $1,350
$1,300
Real Yields
1.0% About to Go Negative
10-Year
Real Yield
0.5%
TIPS Yield
0.0%
-0.5%
Feb Mar Apr May Jun Jul Aug
when it breaks through key thresholds, a now yields less than 1.6%. That’s perilously
hurricane is coming. close to the all-time low of 1.35% it reached
When you see “real” yields on the 10-year in mid-2016.
U.S. Treasury bond paying little and heading As a result of the decline in nominal yields,
for zero, you’ll find investors fleeing riskier
10-year “real” yields hit the critical zero
assets – like growth stocks – and buying
threshold on Wednesday, August 14. The
things to protect themselves against credit
default. above updated chart of the GFSB shows what
has happened with “real” Treasury yields.
In the last few months, U.S. Treasury bonds
have skyrocketed, causing their nominal The inversion is imminent. This is wildly
yields to plummet. The 10-year Treasury note bullish for gold.
Editor’s note: If you think that the problems exposed by the 2008-2009 financial
crisis have gone away, you’re mistaken.
U.S. mortgage debt just hit a record, eclipsing its 2008 peak... The government is
spending more than ever before, at $3.7 trillion so far this year... And more than
$16 trillion in debt around the world trades at a negative yield.
What could possibly go wrong in 2020? The answer is everything.
To learn more about these issues, please read The Battle for America: Why the
2020 Election Will Cause the Biggest Financial Crisis in U.S. History. Click here to
learn more.
I’ve predicted that gold would reach $2,500 So what should you do today? I would urge
per ounce. That call is already looking you to consider adding a significant amount of
prescient – gold has risen by about $100 in gold and gold-related stocks to your portfolio.
just a few months and is now trading around
You wouldn’t be buying these assets because
$1,500 an ounce as of mid-September.
you expect gold to be a good investment or
At that 0% level, there’s virtually no financial because you expect gold mining to become a
reason investors would want to hold the great business. Instead, you’d be buying these
dollar. And at that point, the entire world’s assets as a hedge against your other holdings
financial system begins to turn upside down. that are denominated in U.S. dollars.
If the dollar isn’t the base anymore, what is?
When big investors flee from the dollar, So what should you do
they flee into gold... today? I would urge you
to consider adding a
Gold, as you may know, recently broke out to
a six-year high. That’s not because we’ve seen
significant amount of gold
any change, whatsoever, in the supply and and gold-related stocks to
demand characteristics of the gold market. your portfolio.
Wise and knowledgeable investors can see If there’s a major capital flight away from the
that a return to crisis conditions is coming. dollar, gold will soar.
And they’re positioning themselves to weather
the storm in these alternatives to the paper- If we see “real” yields on the 10-year Treasurys
hold below zero, I expect gold will surge to
money financial system.
more than $2,500 an ounce very quickly... on
Will this new phase of the crisis be the end? its way to $10,000 an ounce. This kind of a
Will this be the “End of America” that we’ve move will send some small gold-exploration
been predicting will eventually occur, as companies up 10,000% or more. That’s
people all over the world flee the tyranny of why it’s a good idea to spread your gold
the U.S. financial system? investments around in a wide range.
We don’t know, of course. But it is long, long Now is the time to establish a major
overdue. position in gold and silver.
Porter Stansberry founded Stansberry Research in 1999 working on a borrowed

computer at his kitchen table. Since then, Porter has written and produced some
of the most important – and often controversial – work in the financial advisory
business. His most recent book, The Battle for America: Why the 2020 Election Will
Cause the Biggest Financial Crisis in U.S. History, can be found here.
58 September 2019
ADVERTORIAL
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GETTING U
Listen, from one post-9/11 military veteran to

CLICK HERE TO another – we need to talk.
READ THE WEB VERSION
Like me, you pulled a stint in Iraq or
Afghanistan back in the day. And you made
it back alive and intact, which is great. I’m
proud of you for your service, and you should
be, too.
60 September 2019
UNSTUCK AN OPEN LETTER
TO MY ANGRY
VETERAN FRIENDS
By Sean Parnell
But you’ve changed. that thick mountain man beard you’ve grown
and the amount of time you spend talking
You’ve turned hostile, cynical and resentful
toward the world around you. You spend way about guns and mixed martial arts.
too much time on the Internet, stewing in the Which is why I have to be honest: It’s time to
toxic corners of the social media world. You look
lose the victim attitude.
down on all the civilians who didn’t enlist and
thus, “don’t get it.” Let’s not even get started on I feel comfortable telling you this because
when I first came home from the war, I had in a sense of victimhood over their time in
that same attitude. service.
Beginning in 2006, I served 16 months in Trust me, I know what you’re going through.
Afghanistan, leading an Army platoon in I went through it, too.
combat operations against the Taliban along I saw my men wounded or killed in action
the Pakistan border. They were hard months, and I struggled with the fear that they had
marked by sacrifice, pain, and loss... but paid for decisions I had made (or had failed to
also by a deep sense of purpose and clear make). And I was wounded in combat myself,
direction. which ended my Army career far earlier than I
Upon returning home to Pennsylvania in anticipated.
2007, I missed that purpose and direction. I
felt alienated from family and friends who I
I made up my mind that
thought could never comprehend what I had I was not going to allow
gone through. I was suffused with simmering myself to succumb to
anger and I thought the world owed me negativity or a sense of
something for what I’d been through. entitlement. I got to work
But I soon came to realize that it was no way
In the years that followed, I saw members
to live.
of my platoon and other veterans I knew,
I made up my mind that I was not going fall by the wayside – succumbing to despair,
to allow myself to succumb to negativity addiction, and even suicide. I faced challenges
or a sense of entitlement. I got to work. I of my own, like a marriage that ended in
got married, started a family, wrote three divorce. I grew bitter as our nation’s political
books, and dedicated myself to advocating leaders of both parties gave up on the
on behalf of my fellow veterans. I wanted to Afghanistan mission and the American people
use the lessons I learned in military service to forgot – which I believed was a betrayal of our
contribute something more to the world. service and sacrifice.
But this is why it pains me to see some But I came to understand that brooding
over those fears, those disappointments, that
younger military veterans of my generation
bitterness – the negative aspects that many
– and I should emphasize “some” does not
service members confront in the aftermath of
mean “all” – who seem determined to wallow
GETTING
combat – was no way to build a life.
I looked around me and saw veterans who

chose differently... who were thriving in
their family lives, their careers and their
UNSTUCK
communities. Sure, they hit some rough
patches, but they worked hard to choose a
62 September 2019
more constructive path forward. reclaim that sense of purpose and direction
that you once had when you put on the
Those guys didn’t get stuck. They manned up
uniform every day.
and left the negative aspects of their military
experience in the past. But they held tightly The bottom line is that military service,
onto the positive aspects like leadership skills, especially combat, changes you. But it’s up to
pride in having served their country, and the you to determine what direction that change
deep sense of brotherhood that comes from will take you.
having served in combat. So make sure you choose to change for the
In short, they chose the path of growth. Note better.
the key word in that sentence: “chose.” (And seriously, trim back that beard.)
Growth isn’t just something that happens to you.
It’s something you have to strive toward... Sean Parnell spent 485 days fighting
along the Afghan-Pakistan border,
through the choices you make. It’s how
leading a platoon that became one
you respond to the inevitable challenges, of the fiercest and most effective
disappointments, and failures that life throws American fighting units in modern
your way. military history. A full 85% of his platoon
received Purple Hearts for wounds
A critical step for me toward the path to incurred in battle, and it remains one of
growth was recognizing that my service was the most decorated Army units since
voluntary. I chose to join the Army, and I’m 9/11.
proud of that. But that meant I had to accept Sean wrote about his experiences in
the reality that if my service was voluntary, his first book, Outlaw Platoon, which hit
then I had no right to be angry and no one the New York Times bestseller list. Also,
owed me anything. I chose to move beyond he has most recently written a fiction
the attitudes that held me back. This wasn’t series – his first novel, Man of War,
came out last year. And he released the
easy. It took time and lots of support from
second in the series, All Out War, this
family and friends. month.
You can do it, too. Choose how you’re going Renowned author Lee Child calls
to get unstuck. This will be more difficult for Sean’s books: “Fast, hard, and
some than others. (If you have a legitimate effortlessly authentic”... while bestselling
mental health issue or you’re struggling writer Brad Thor says: “Bristling with
intrigue, deceit, power, and treason –
with PTSD, get help.) But the first step is
once you pick this book up, you will
recognizing you’ve got a problem, right? NOT be able to put it down.”
Then take action. Take on a volunteer Click here to get your copy of Man of
opportunity in your community or church... War and All Out War.
or help out another veteran. Seek ways to
64 September 2019
By John Stossel
Stupid News
“Fake news!” shouts the president. His My selections:
supporters cheer. • Invention of the personal computer and
cellphone.
That drives my colleagues into a frenzy of
• Google and Facebook.
self-absorbed handwringing: “Threats to press
• The fall of the Soviet Union.
freedom... press persecution!”
• Pollution-control rules.
It’s silly. American reporters are hardly less • The women’s movement.
safe because of President Donald Trump’s • Changing attitudes about sex and gender.
hyperbole. • A drastic reduction in poverty around the
world.
(Trump is reckless when he uses the term in
other countries. Authoritarians in Russia, Only one of those giant changes (the fall of
China, the Philippines, Saudi Arabia, etc., the Soviet Union) led the news!
now cite “fake news” while they jail or kill
Instead, “big” headlines of my previous
reporters. He should shut up about “fake
reunion years (five-year periods when I might
news” when he’s overseas.)
show up for the celebration) were topics like:
But I smiled when I first heard him use the • Patty Hearst robbing a bank.
phrase, not because news stories are “fake” • Serial killer Ted Bundy.
– they typically aren’t (reporters who make • The accident at the Three Mile Island
things up are usually caught and fired) – but nuclear plant.
because so much of what people call “news” is • The “Band-Aid” concert for famine relief.
press releases and breathless exaggerations of • The Exxon Valdez oil spill.
isolated problems. • The O.J. Simpson trial.
• Columbine.
It’s stupid news.
• Michael Jackson’s death.
This spring, I attended my 50th college • Ebola.
reunion. Alumni officials asked me to join a • And this year: the Ethiopian Airlines plane
panel titled “Free Speech and Fake News.” crash.
It made me ask myself, “What were the (I chose those stories from “biggest stories of
biggest life-changing events in the 50 years the year!” reports in mainstream media like
since I graduated?” MSN and ABC News.)
Stupid News
Those events were worth covering, but why The “Band-Aid” concert meant well, but
do media mostly ignore more important journalists hardly covered the big cause of
events like the creation of cellphones and famine in Ethiopia. It wasn’t African drought;
Google or how millions have lifted themselves It was Marxist governments that were happy
out of poverty? to starve their enemies.
One reason is because they happen gradually. In 1989, the Berlin Wall coming down was
When Facebook was being invented, few too beautiful an image to ignore, but it would
reporters noticed. have been nice if journalists had spent time
analyzing how wrong they’d been to call
Another is because the big stories happen in
capitalism unjust and communism sustainable.
more than one place. We reporters are good
at covering plane crashes and murder. We can Instead, images of the Exxon Valdez oil spill
easily interview the official in charge. dominated the news that year, helping spark a
decade of exaggerated environmental fears.
Instead, images of the Exxon
In 1994, the Rwandan genocide did get news
Valdez oil spill dominated the news coverage, as it should have, but Americans
that year, helping spark a decade of heard much more about O.J. Simpson.
exaggerated environmental fears.
In 2004, coverage of the Iraq and Afghan
wars was plentiful, which was good. But now
But the biggest news, like changing attitudes
that the Afghanistan War is America’s longest
about gender, happens all over the place.
war, it gets very little coverage. It’s harder to
When I graduated, 60% of the world’s report on long-term political problems that
population lived in extreme poverty. Now, aren’t solved by U.S. military intervention.
fewer than 9% do. Globally, that’s probably
During my previous reunion in 2014, one of
the most life-changing event over the past 50
the biggest stories was hysteria about an Ebola
years – a great victory, made possible by freer
markets. virus outbreak. But only one American died
from Ebola that year.
But most reporters don’t like free markets,
and politicians rarely talk about change they My fellow Princeton panelists sneered at me
don’t control. when I said that. They said that thousands died
in Africa. That was true, but if that’s the measure
of a news story, why aren’t millions of deaths
John Stossel is an award-winning from malaria and diarrhea in Africa front-page
contrarian journalist and most news? Because “Ebola!” scares reporters and
recently the author of No They makes for better clickbait headlines.
Can't! Why Government Fails – But
Individuals Succeed. The news is stupid and shallow.
© Creators Syndicate, Inc.
66 September 2019
ADVERTORIAL
L” C L E A RS W A Y F O R N E W
FED “ R E B E
N D A R D ( $ 2 , 0 0 0 G O L D ? )
GOLD S TA
“The kind of
economic gr
income levels owth that in
occurs unde creases livin
r conditions g standards
Money is me o f across all
ant to serve m onetary and
across borde as a reliable fi n ancial stabil
rs and throu unit of accou ity.
g h ti n t a n d s to r e
might be bett m e. It’s entirely o f value
er assured b reasonable to
some other r y li n king the sup a s k whether th
eference poin ply of money is
or so moneta t as opposed to a n d c redit to gold
ry officials m relying on th or
eeting eight e judgment o
times a year f a dozen
to set intere
st rates.”
President Trump recently told the world he lays out the surprising details of what we may
intends to nominate Judy Shelton to the soon see here.
Federal Reserve Board.
Sincerely,
This is incredibly bullish for gold!
Chaka Ferguson
You see, Shelton is an advocate for gold and Managing Editor, Palm Beach Research Group
has suggested we should bring back the gold
standard. (For the first time since 1971 — when P.S. Even though he expects the price of gold
Richard Nixon sat in the Oval Office!) to shoot much higher… Mr. Tiwari does NOT
recommend risky gold mining stocks.
Gold has now topped $1,500 for the first time
since 2013. Where will it head to next? He’s found three opportunities that are
potentially much more lucrative — and safer.
Teeka Tiwari, the man who first predicted the Best of all… you can buy them from an ordinary
rise of a “new gold standard” 12 months ago, brokerage account. Full details are right here.
WHAT
HAPPENS
AFTER THE
NEXT 9/11
AND EXACTLY WHEN WE’LL
FALL OVER THE EDGE...
68 September 2019
Is a police state in the U.S. possible? Absolutely.
That’s because people are essentially the same When social conditions reach a certain
the world over, regardless of their culture, stage, these really bad guys come out from
religion, race, or what-have-you. A certain under their rocks and take advantage of the
percentage of them are sociopaths. situation. We’re seeing that right now in the
U.S., across the political spectrum, just as By Doug
There is a standard distribution of sociopaths we’ve seen in the past in hundreds of places Casey
across time and space. It’s a function of throughout history.
Pareto’s Law, better known as the 80-20 rule...
A major tipping point occurred 18 years ago,
It means 20% of the people do 80% of the on September 11, 2001, with the attacks
work. Another 20% are responsible for 80% in New York and Washington. They were
of the crime. 20% of the population always disastrous. But not nearly as disastrous as the
winds up with 80% of the wealth. And so government’s reaction to them.
forth, through all areas of human endeavor.
Among them was the creation of the
This observation can be represented by a bell-
Department of Homeland Security. Anybody
shaped curve – a “standard distribution” –
that speaks German knows that a reasonable
with a small minority at each extreme, but the
translation of Homeland Security is Geheime
large majority in the middle. The people who
Staatspolizei, which is usually abbreviated to
will take us to a police state are sociopaths – Gestapo. Anybody that goes through airline
criminal personalities who don’t respect the security these days should ask themselves,
liberty or property of others. And sociopaths “Where the hell did they find these people?
gravitate toward government, and eventually Didn’t they have jobs before they went to
come to control it. work for this moronic agency?” The answer
is that there are people out there who like
Sociopaths gravitate wearing costumes and are willing to boss,
toward government, herd, interrogate, and go through the dirty
and eventually come to laundry of their fellow citizens. They take
control it. their jobs seriously and you better not even
look at them sideways. There’s no reason to
My view is that 80% of human beings are believe it’s going to get better as they groove
basically decent, get-along, go-along types. into their jobs and their employer cements CLICK
itself into place. More likely, the trend will HERE
twenty percent are what you might call
accelerate. TO READ
potential trouble sources, that can go either
THE WEB
way. But then you take 20% of that 20% and Is America currently a police state? Well, VERSION
you’re dealing with the sociopaths. let’s see. You can still get in your car and go
Consequences
69
WHAT
HAPPENS
AFTER THE anywhere, although you
might be stopped by the
thoughtlessly accepted by Boobus americanus –
and anything is possible. Including a trip to a
NEXT 9/11 police and you might be

detained if your papers
CIA black site in some Third World hellhole.
This is something I thought was settled in
aren’t in order. Or if the officer thinks you’re Western Civilization with the Magna Carta
not properly respectful. Or you have “too and King John. But we’re going backwards in
much” cash. most areas of personal freedom. And America,
of all places, is leading the way – even while
Was there any particular day that Germany falling behind economically.
became a police state in the 1930s? I’m
not sure you can put your finger on any
It’s a case of the
one particular day, even after Hitler was
frog being put in a
legally and democratically elected. It was a
progression, with new laws, new regulations,
kettle of water where
new taxes every day, while more fear and the temperature is
hysteria were worked up among the populace. gradually raised to
Kristallnacht didn’t occur the day after the a boil. That’s what’s
National Socialists took power. occurring in the U.S.
It’s a case of the frog being put in a kettle I don’t know if I can put my finger on exactly
of water where the temperature is gradually when we’re going to go over the edge, but if
raised to a boil. That’s what’s occurring in the I was going to guess, I would think the real
U.S. After 9/11, in addition to Homeland catalyst is going to be the next 9/11-type
Security, we got the Patriot Act, with, among event. And I don’t doubt it’s going to happen.
other things, its suspension of habeas corpus. How are we any different than the Germans
That means that the government can lock in the 1930s? This was one of the most
anybody up for any reason and not even civilized, best-educated countries in Europe
have to tell them why. Accuse them of being and they fell into the abyss. I suppose we’re
an “enemy combatant” – a neologism that a bit different. Americans are addicted to
justifies anything, and is robotically and welfare, anti-depressant drugs, food, and
electronic devices. That should certainly give
us a better outcome...
Doug Casey is a true contrarian investor.
The founder of Casey Research and one There’s a joke I like to tell. Let me ask you
of the most successful natural resource this: Which is the gravest danger? Is it the
speculators in the world, Doug has also
ignorance, or is it the apathy of the average
recently begun publishing the High
Ground series of books – thrilling and American today?
provoking stories about speculation, Stumped? Here’s the answer: I don’t know and
morality, and libertarian ideas.
I don’t care.
70 September 2019
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fund manager Dr. Sjuggerud has investors could get swept up in what
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happened immediately before some
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world has ever seen.” must see this message before the start
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shocking video outlining the exact
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rest of your life.
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THE FINAL WORD
IS TRUMP’S IDEA TO
BUY GREENLAND
REALLY SO CRAZY?
72 MONTH 2019
September 2019
By Buck Sexton
ORIGINALLY IT SOUNDED LIKE A JOKE.

Recently, the media reported that President Greenland hasn’t seen this much interest since
Donald Trump had been speaking to a bunch of 10th century Vikings were blown
senior White House advisers about buying off course and became the first westerners to
Greenland, a frigid Danish protectorate and set foot on the island.
the largest island in the world.
Of course, much of the resulting media
This immediately spawned all manner of coverage had been to trash the president
humorous memes and other commentary for what we are told is an unthinkable
online. The leader of the free world – who proposition.
also happens to be a real estate magnate –
But why, exactly, should we think that
was thinking about a land deal involving a
purchasing Greenland is such an absurd idea?
country best known for its glaciers and sparse
population. After all, America has a long – and in
retrospect, wildly successful – history of
Turns out, Trump wasn’t kidding.
paying cash for vast tracts of land, including
To the shock of many, the president confirmed the Louisiana Purchase from France in 1803
his interest in acquiring the massive frozen to the great deal we got from Russia for the
island. He wanted to approach the subject Alaska Purchase in 1867.
with the Danish government, who provide
From an international law perspective,
national security and diplomatic protection to
Denmark could choose to sell Greenland,
the otherwise autonomous island.
and the U.S. could take its people as
Once this news broke, Danish Prime Minister permanent residents under the condition
Mette Frederiksen tersely told a newspaper, that Greenlanders held some form of
“Greenland is not for sale.” In response, Trump referendum and accepted the change. There’s
canceled a scheduled visit with Denmark’s no other legal or ethical roadblock to making
Queen Margrethe II. In case anyone was Greenland a U.S. protectorate, something
wondering if this was really the reason, here’s akin to Guam or Samoa (just a lot bigger and
what the President tweeted: colder).
Greenland’s entire population is around

56,000 – less than say, Schenectady, New
York. Its national economic output is under
$3 billion a year, and its single biggest
industry is fishing. Outside of its capital,
Nuuk, there is very little infrastructure of any
THE FINAL WORD
“ But why, exactly, should

we think that purchasing
Greenland is such an
absurd idea?
the decades ahead. Not since Viking explorer
Erik the Red named it “Greenland” to
encourage settlement has there been a better
time to establish claim to the island.
So could we get it at a good price?
Trump claims that it costs Denmark $700

million a year to support Greenland. Turns
kind, although America has an Air Force base
out it’s more like $740 million, as it can
on the northwest portion of the island.
only generate half of its annual budget. The
Given its harsh climate and lack of world’s largest island is a welfare case. Maybe
inhabitants, maybe a better question is, the Danes, who strain under the cost of their
“Would America want Greenland?” own government programs, would be happy
to offload some freeloaders. We won’t know if
The short answer – assuming a reasonable
we don’t ask.
price – is absolutely.
Will Donald Trump pull off his most daring
Greenland is a territory with many strategic
real estate transaction yet? One that could
benefits. It has abundant natural resources
arguably be the largest transfer of land for
like zinc, copper, gold, coal, and uranium. In
cash in the history of the modern world.
fact, an Australian mining company called
“Greenland Minerals” (with a large chunk of Probably not.
Chinese ownership) is already mining for rare
But even though Greenland is very unlikely
earth minerals there. Greenland could also
to become the 51st state, it has led to one of
be helpful for projecting U.S. interests in the
Trump’s greatest tweets of all time:
Arctic circle – an increasingly fierce realm of
competition between America and Russia,
among others.
Greenland is also likely to get much more

valuable over time. If the predictions about
a coming global fresh water crisis are correct
(estimates are that one-quarter of the world’s
population face running out of potable water)
having access to the second-largest source of
fresh water in the world – the Greenlandic ice
shelf – seems like a good idea.
Climate change also means that more of the

country will emerge from under glaciers in
74 September 2019
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THIS ISSUE’S FEATURED
CONTRIBUTORS
Bill Bonner is the underground news American Consequences is edited by
mogul and founder of The Agora P.J. O’Rourke, author of 19 books
publishing company. He’s written including Eat The Rich and How
the New York Times bestselling the Hell Did This Happen: The
book Empire of Debt and most Election of 2016. P.J. cut his
recently published Hormegeddon: teeth as an editor-in-chief of the
How Too Much of A Good Thing Leads to National Lampoon and a foreign affairs
correspondent for Rolling Stone. He’s
Disaster. He is one of the great writers
since written for The Weekly Standard…
and minds in America today and also
The Atlantic… and many other magazines.
publishes a free daily letter, Bill Bonner’s
P.J. is the H. L. Mencken fellow at the Cato
Diary, which you can sign up for here: Institute, a member of the editorial board
bonnerandpartners.com. of World Affairs and a regular panelist on
Doug Casey is a true contrarian investor. NPR’s Wait… Wait… Don’t Tell Me. He lives
The founder of Casey Research with his family in rural New England, as far
and one of the most successful away from the things he writes about as
natural resource speculators he can get.
in the world, Doug has also
Buck Sexton is host of the nationally
recently begun publishing
syndicated talk radio program,
the High Ground series of books
The Buck Sexton Show, heard
– thrilling and provoking stories about
more than 100 stations across
speculation, morality, and libertarian
the country. He’s also a former
ideas.
CIA and NYC police department
Dr. David Eifrig worked in arbitrage and intelligence officer.
trading groups with major Wall
Street investment banks, Porter Stansberry founded Stansberry
including Goldman Sachs, Research in 1999 working on
Chase Manhattan, and a borrowed computer at his
Yamaichi in Japan. In 1995, Dr. kitchen table. Since then, Porter
Eifrig retired from Wall Street, has written and produced some
went to UNC-Chapel Hill medical school, of the most important – and
and became an ophthalmologist. often controversial – work in the financial
advisory business. His most recent book,
Today, he publishes a 100% free daily The Battle for America: Why the 2020
e-letter on both health and wealth that Election Will Cause the Biggest Financial
shows readers how to live a millionaire Crisis in U.S. History, can be found here.
lifestyle for far, far less. Click here to learn
more.
76 September 2019
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Would America This Is When the Fight for the Right

Want Greenland? Market Goes Haywire (or Left) to Party

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NEXT 9/11 police and you might be

This Is Eerily Similar

ORIGINALLY IT SOUNDED LIKE A JOKE.

Greenland’s entire population is around

“ But why, exactly, should

So could we get it at a good price?

Trump claims that it costs Denmark $700

Greenland is also likely to get much more

Climate change also means that more of the

If you’re having trouble navigating your online issue of American Con-

Thumbnails. This shows a small image of each page of the issue.

4 Inside This Issue 44 A Cyberattack Could Wreak