American Consequences - October 2021

Meet Stansberry Research's newest finance star: Matt McCall. With a blue-collar chip on his shoulder, Matt says the coming 10 years will be the greatest decade EVER in financial history... And has the stocks to back it up.

The Biggest Federal Reserve Scandal

KIM ISKYAN IMF Rankings Gone Wrong

The Incredible Shrinking Dollar

DR. RON PAUL

TRISH REGAN

I D E A S T H A T M A T T E R E D I T E D B Y P . J . O ’ R O U R K E AMERICAN CONSEQUENCES

THE INEVITABLE OPTIMISM OF MATT McCALL The Best Decade Ever The

OCTOBER 2 0 2 1

INSIDE THIS ISSUE

M any may decry that the sepia-hued American dream as our grandparents knew it, one of boot-strapped gumption, unfettered meritocracy, and starry- eyed upward mobility, as an antiquated fairy tale as faded as the dusty gramophone in the attic. But in our cover story, managing editor Laura Greaver proves the dream isn’t dead yet. She profiles Stansberry Research’s newest star, finance expert Matt McCall, whose rise from the blue-collar outskirts of Philly to the upper echelons of the investment world should provide some hope for how you see the country (and stock market). Meanwhile, Editor in Chief P.J. O’Rourke extols the virtues of leaving real life for a while and shares his favorite quotes of all time, from Emily Dickinson to Voltaire. Then comes our three-pronged attack against the Kraken that is the Federal Reserve, our favorite financial foe... In my feature, I hold Jerome Powell to the fire for his gross negligence and denial surrounding inflation and ever-staggering price hikes that are hitting everything from your local diner to global supply chains.

Former congressman Dr. Ron Paul details how even before the pandemic, the Fed ramped up its reckless money printing. And now, with hemorrhaging costs squeezing the middle class, he urges that it’s time to audit and expose the central bank. And RealClearMarkets editor John Tamny notes the folly of the idea that the Fed controls the markets... If that were true, you’d be streaming shows on Blockbuster and tightly holding on to your AOL shares. Speaking of policies going south, Executive Editor Buck Sexton exposes the crisis at the border, noting how Biden’s fumbling of the immigration surge seems to know no bounds. Across the globe, Executive Editor Kim Iskyan uncovers the peculiar scandal involving the World Bank, IMF, China, and the Ease of Doing Business ranking system. And if you need a well-deserved laugh, staff writer Andrew Amundson takes down an embattled Big Tech CEO in the latest Dunce of the Month (hint: he hasn’t shot himself into space – yet ). Regards, Trish Regan Publisher, American Consequences

October 2021

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CONTENTS OCTOBER 2021 : ISSUE 53

## 64

Inside This Issue BY TRISH REGAN

38 Dunce of the Month: Mark Zuckerberg

Editor in Chief: P.J. O’Rourke Publisher: Trish Regan Managing Director: Jamison Miller Executive Editors: Kim Iskyan, Buck Sexton Managing Editor: Laura Greaver Creative Director: Erica Wood Contributing Editors: Andrew Amundson, Dr. Ron Paul, John Tamny Cover Photography: Mitro Hood Advertising: Paige Henson, Jill Peterson Editorial Feedback: feedback@americanconsequences.com Published by: AMERICAN CONSEQUENCES

BY ANDREWAMUNDSON

Out of Office BY P.J. O'ROURKE

42 The Incredible Shrinking Dollar BY TRISH REGAN

10 From Our Inbox

48 Has the IMF's Credibility Been Compromised? BY KIM ISKYAN

14 The Biggest Federal Reserve Scandal BY DR. RON PAUL

58 Borderline Breakdown BY BUCK SEXTON

18 The Inevitable Optimism of Matt McCall BY LAURA GREAVER 30 The Market Is Beyond The Fed's Reach BY JOHN TAMNY

64 Eat Their Words BY P.J. O'ROURKE

68 Featured Contributors

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American Consequences

LETTER FROM THE EDITOR

out of office. WHAT HAPPENS WHEN P.J. PLAYS HOOKY FROM THE WORLD

October 2021

From Editor in Chief P.J. O’Rourke

It began with a memorial service on the Eastern Shore of Maryland for my friend of more than 40 years, Winston Groom. He’s the fellow who wrote the novel Forrest Gump , and a lot of other wonderful stuff – eight novels and 15 works of non-fiction. Winston, as a young lieutenant, was a veteran of some of the worst fighting in Indochina. In 1978, he wrote what was then – and still is – the best novel about the Vietnam War, Better Times Than These . He was also a brilliant historian. History buffs, get off your buff and order some Groom histories. Maybe start with Kearny’s March , which is about the opening of the American West in the 1840s or Vicksburg, 1863 about the battle you think you know about until you read Winston’s account. Winston died of a heart attack a year ago, but the memorial service was delayed because of COVID. Maybe this was for the best... Winston’s sudden death had gone from blinding shock to clearly perceived grief for the loss of the man.

’d like to begin my monthly letter with an apology to Managing Editor Laura Greaver and Design Director Erica Wood (the two people who do most of the actual work at American Consequences ) for getting my copy in so damn late. Just as we were putting this issue together... I skipped school. I skipped without so much as a call to the attendance office saying – in an attempt at a high-pitched, female voice – “Hello, this is my mother... I mean Pat O’Rourke’s mother... He isn’t feeling so well today... Or tomorrow or the next day or the day after that...” I played hooky from life for a week. Or maybe more than a week... I wasn’t counting. With no laptop, no iPad, no smartphone, (or cable TV or landline, for that matter), I wasn’t sure what day it was. I didn’t even leave an “Away” notice on my e-mail. Had I done so, it would have read something like, “If this message is urgent, call... Oh, heck, I don’t know... 911 or something.”

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American Consequences

LETTER FROM THE EDITOR

The crying wasn’t over, but many of the tears were for the wonderful times we’d had with Winston. Not tears of joy, certainly, but tears from joy at least. The toasts and the testimonials were good, plentiful, and heartfelt. And there was something I noticed as I listened and raised my glass. Winston led a hard-working life, with 23 books and a career as a reporter for the old Washington Star before that. But none of the stories being told were about Winston’s thousands of hours hunched over a typewriter sipping cold coffee and shrouded in stale cigarette smoke. The stories were all about fun that was had – rugby matches, sails on the Chesapeake, quail hunts, staying up late and telling tall tales. The stories were all about playing hooky. “F**k it all,” I said, “How about you?” Her reply was less Anglo-Saxon and more printable but in concurrence on the key points. And it was playing hooky with Winston that I missed most, too. I missed when we’d go AWOL up to my place in New England to shoot ducks, or fly the coop out to Winston’s beach shack in the Hamptons before the place was overrun by Bezosillionaires, or take French leave at Elaine’s literary watering trough in New York where, when 4 a.m. closing time came, Elaine would pull the window shades and serve the drinks herself. Winston and I would emerge into the bright

of day, a bit “over-refreshed” perhaps, but knowing – even back then... It’s fine to leave behind a body of good work, but it’s the good fun they’ll be talking about over your body. My wife and I drove down to Maryland. The weather was splendid. (The weather in New England this summer and fall has been another word that begins with “s.”) The day after the memorial service, my wife found an Airbnb on the water. She said, “Do you have anything you absolutely have to do for the next week or so?” “F**k it all,” I said, “How about you?” Her reply was less Anglo-Saxon and more printable but in concurrence on the key points. For the first time in almost a quarter century, the kids didn’t need to be driven anywhere... picked up anywhere else... or otherwise provided with immediate parenting. Our middle daughter was off on her college semester abroad. Our adult (technically) daughter was home between changing jobs and therefore (theoretically) capable of supervising our remaining household high schooler and (for sure) bullying him into feeding the dogs and the chickens and taking out the garbage. She also made sure to keep him from getting into the gin bottle and refilling it to its original level with tap water. (Not that he’d ever do anything of the sort... That was my trick when I was 17. My parents didn’t drink gin, but they kept a bottle of Beefeater for guests, many of whom must have gone home saying, “Worst martini I’ve ever had!”)

October 2021

It was heaven. But it was humbling too, as I suspect real heaven will be. Should I by some chance make it there, I’ll see a lot of people who accomplished much more than I did... like my friend Winston, for one. It’s also humbling because my escape to temporary heaven where I got to do nothing resulted in... nothing. Life seemed to get along fine without me. Indeed, it seemed to get along a little too well, now that I think about it. Kind of the way school got along fine when I did play hooky. It’s also humbling because my escape to temporary heaven where I got to do nothing resulted in... nothing. Maybe a few people were mildly inconvenienced. I’ll know when I get up the courage to open the 174 unanswered e-mails in my inbox. But it’s not like the police were here when I got home with lights flashing on their squad car shouting through a bullhorn, “We’ve been getting all these 911 calls from the ‘Away’ message you left on your laptop!” I phoned a buddy last night and bragged, “I just took 10 or 11 days off from the whole world.” He said, “Maybe the whole world just took 10 or 11 days off from you.”

But I digress... My eldest daughter and young son would not be at the top of the list if my wife and I were recommending cleaning persons to hire. But, on the other hand, how could kids do more damage to the house than they’d already done over the past 24 years? Anyway, I believe our home insurance covers “acts of God,” which I consider kids to be. Because children, as much as we love them, are not something people would have thought up. If children were “acts of adulthood,” they’d be 30 when they were born, and we’d be the ones who took forever to mature. But I digress again... My wife and I played hooky. And what we did while playing hooky was what every busy person dreams of doing – nothing. We sat in the sun. We slept until whenever. We read at least a dozen books between us. We talked, although by mutual consent about nothing we were supposed to be doing at home or at work. If somebody felt like it, there was a walk (my wife) or a nap (me). We didn’t buy a newspaper or turn on a radio or have a television. We didn’t make the bed. We didn’t cook. Our meals were all takeaway except when we were using up the cute, in the little shore cafés. We had no other contact with the outside world. (Though I suspect a few surreptitious text messages from my wife to our kids to make sure they were eating something besides Cheese Whiz on potato chips – or, in the case of our daughter abroad, Camembert on macaroons.)

American Consequences

FROM OUR INBOX

The Big Tech companies are big spenders and have the money to pay lobbyists. I eagerly look forward to your daily emails because it gives me comfort to know that there is still some measure of sanity in this country. The freedom of assembly, freedom of speech, and freedomof religion are our most cherished rights as Americans. Thank you for your thoughtful commentary. – David S. Trish Regan Response: David, that’s a great compliment. From me and everyone at American Consequences , thank you. The world sure needs a little sanity. Re: Cyberattacks: The War We All Need to be Afraid of Very important and well written article by Kim Iskyan, whose work I have enjoyed reading for several years now. If we think the supply chain is messed up now... well, we ain’t seen nothin yet. As George Gilder argues, the whole password scheme, as opposed to something more robust that is actually built into the lower layers of the Internet, is problematic. But as long as that’s all we have, we might as well use it to best advantage. – Joe B. Kim Iskyan Response: Joe – yes, you make a good point. The scope for something cyber- bad to further gum up the works of the creaking supply chain is enormous. And it doesn’t have to be much at all. It sometimes feels like we’re living in a house of cards built on quicksand... and we have no conception of

Re: Facebook Fallout It’s about time that someone has the ability to speak out about Facebook, Google and Twitter. You have a platform that can help bring into focus the problems that these three monopolies have on America. I know Trish has had a problem with Facebook, and maybe a one at a time approach is best, but they are each equally damaging to people and need to be controlled. Congratulations to you for presenting this dialogue. It’s a big problem and it’s gone on for too long. – Joe K. Trish Regan Response: Joe, I appreciate your feedback. The Big Tech issue isn’t going away. We need lawmakers who are willing to address the issue head on – not with a political “what’s best for me and my party” mindset, but what’s best for the freedom of this nation. It’s a challenging issue. Ultimately, more consumer choice, more diversity, and more players may prove to be the best path. But it will take a while. I agree with you, Tricia – Facebook should be broken up. The problem, though, is that Facebook gives lots of money to the politicians that are the ones that can break it up. What we need are new candidates for office that make breaking up Facebook, Google, and Twitter part of their platform. – Luis A. Trish Regan Response: Luis, that’s correct. Too often, politicians are busy doing what’s good for them in a given moment with little concern for the consequences of their actions.

October 2021

P.J. O’Rourke Response: James, you’ve got my head so swollen it’s like a Halloween pumpkin and won’t fit between my keyboard and my laptop screen anymore. But a lot of the credit for the conversation should go to one of our newer editors, Andrew Amundson. He came up with excellent questions to get the interview started. And he edited my mumbling and pointless digressions into readable English prose. I loved reading this interview. Maybe it’s because I’m old too. – Luis A. P.J. O’Rourke Response: Luis, age and wisdom beat youth, innocence, and a sleeve of stupid tattoos. (Or let’s keep telling ourselves that!) Re: Democracy Is for Losers I just finished reading PJ’s essay on democracy, and I think it is absolutely brilliant in the clarity it brings to the democratic process in terms that I have never read elsewhere – or at least not so well expressed. The emphasis on losingwell as critical to a democracy is so relevant to our country now. – Sharon N.

just how shaky it all is. That’s one of the biggest things I learned when I was writing about cyberattacks. Thank you for your e-mail. Kim Iskyan stands out at American Consequences as a beacon of intelligence and clear unbiased objective writing. I cannot discern from his writing his political thoughts at all. Good work, Kim. – Richard L. Kim Iskyan Response: Richard, in a world of noisy political takes, I try to get my message across without alienating a broad swath of the (potential) readership... so your e-mail is a tremendous compliment. Thank you, and very much appreciated. Re: Bites From the Rotten Fruit of Knowledge: A Conversation with P.J. O’Rourke This is one of the best articles I’ve read in a long time. So much good stuff in one article. I can’t get enough of P.J.’s ideas, thoughts, advice, you name it. Keep up the great work and God bless. – James F.

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American Consequences

FROM OUR INBOX

Outstanding, I’m passing it along to friends and encouraging them all to read it and the rest of AC. Thanks. – Dave C. P.J. O’Rourke Response: You’re welcome, Dave. And we welcome your role as social-media influencer. We like to think that promoting AC is a big step up from touting some stinky thing some Kardashian has bottled up to sell as a perfume. Re: Corona Wars: Biden’s Authoritarian COVID-19 Battle Amazing article. I know the dangers of COVID-19, as my wife and I suffered terribly from it in July (as did more than one of our vaccinated friends) and my mother died of it in August. But the politization of it is disturbing. Perhaps the states (Florida in particular, my home) could issue COVID survivor cards to show that we aren’t dangerous anymore. – James H. Buck Sexton Reply: James, I’m very sorry to read of your mother’s passing. I appreciate you reaching out with your thoughts. I too had COVID, and therefore am more likely to be protected than a person who is “fully vaccinated,” which may not even be the phrase going forward as boosters are rolled out. The refusal of the Fauciite apparatus to grapple with natural immunity as part of their policy mandates is appalling, and shows a lack of respect for the science and data they profess to rely on.

P.J. O’Rourke Response: Thank you very much, Sharon. There have been a lot of hard- fought and close-call presidential elections in American history. But, with one exception (that led to the Civil War), the losers have lost gracefully. It’s not a matter of political party or even a matter of the candidates’ character. It’s a matter of patriotism. The supposedly wicked Richard Nixon did not contest his somewhat-fishy loss to JFK in 1960. And Al Gore had a reasonable case to continue denying George W. Bush’s victory. But that’s not how patriots behave.

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October 2021

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UNFILTERED. UNWAVERING. HARD HITTING. INFORMATIVE. Each week, the American Consequences podcast dives deep into fiscal and monetary policy, politics, and economics. You’ll get a view of the Fed, theWhite House, and theWorld like nowhere else. Subscribe to stay up-to-date on the biggest guests and the best analysis, all with the signature Trish Regan insight.

Past Guests include: STEVE FORBES JAIME ROGOZINSKI ANTHONY SCARAMUCCI

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American Consequences

THE BIGGEST FEDERAL RESERVE SCANDAL

October 2021

By Dr. Ron Paul

ollowing revelations that Federal Reserve officials made trades in financial assets while the Fed was taking extraordinary efforts to “stimulate” the economy, Federal Reserve Chairman Jerome Powell ordered a review of the Fed’s ethics rules. While these trades appear problematic, they pale in comparison to the biggest Fed scandal – the Fed’s impoverishment of ordinary Americans, enrichment of the elites, and facilitation of government debt and deficits. The depression induced by the coronavirus, though really caused by so-called public health actions the government took in response, was the official reason for the Fed’s increased asset purchases last year. However, the Fed actually started ramping up its money-printing activities in September of 2019, when it began pouring billions a day

into the repo markets, which banks use to make short-term loans to each other, in order to keep repo market interest rates low. The coronavirus was just a convenient excuse for the Fed to do more of what it was already doing... Now, the Fed is using the limited reopening as a scapegoat for rising prices. Of course, anyone who understands Austrian economics understands that rising prices are a symptom, not a cause, of inflation. Inflation is the very act of money creation by the Fed. Rising prices that diminish the average American’s standard of living are not the only result of the Fed’s manipulation of the money supply. The manipulation distorts economic signals, and produces booms, bubbles, and busts. "The coronavirus was just a convenient excuse for the Fed to do more of what it was already doing..."

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American Consequences

FEDERAL RESERVE SCANDAL

This is why, despite Chairman Powell’s recent suggestion that the Fed will soon begin “tapering” its purchases of Treasuries, the Fed is unlikely to significantly reduce its purchase of Treasuries or allow interest rates to significantly increase. Powell is also unlikely to upset President Biden and Biden’s congressional allies as long as progressives are urging the president not to reappoint Powell. Progressives want to replace Powell with connected elites who receive the Fed’s newly created money before the new money causes widespread price increases. Inflation has always benefited the well- connected elites who receive the Fed’s newly created money before the new money causes widespread price increases. The true motivation behind Fed policies was revealed by former Fed official Andrew Huszar in 2013. Huszar, writing for the Wall Street Journal , confirmed that quantitative easing kept stock prices high, instead of helping Americans struggling with the aftereffects of the 2008 melt down. Other beneficiaries of the Fed are big- spending politicians. The Federal Reserve’s purchase of federal debt instruments keeps the federal government’s debt-servicing costs manageable. Inflation has always benefited the well-

someone more committed to fighting climate change and systemic racism, two boogeymen routinely bought out as excuses for vast expansions in government spending and power. Another major scandal involving the Fed is Congress’ refusal to pass the Audit the Fed bill and let the American people know the truth about the Fed’s operations. Audit the Fed authorizes a Government Accountability Office audit of the Fed’s dealing with foreign governments and central banks, the Fed’s discount window operations, reserves of member banks, securities credit, interest on deposits, and open-market transactions. Audit the Fed would finally reveal the truth about the Fed’s operations. A limited audit authorized by the Dodd- Frank Act found that between 2007 and 2010, the Federal Reserve committed over $16 trillion dollars to foreign central banks and politically influential private companies. Imagine what a full audit would find... It is time to end the scandal of allowing a secretive central bank to have so much power over the economy and our liberty. It is time to audit, and end, the Fed. Copyright © 2021 by RonPaul Institute. Permission to reprint in whole or in part is gladly granted, provided full credit and a live link are given.

October 2021

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October 2021

The McCa

A blue-collar chip on his shoulder, he says the coming 10 years will be the greatest

decade EVER in financial history... And has the stocks to back it up The

Inevitable Optimism of Matt McCall

By Laura Greaver

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American Consequences

MattMcCall’s got something to prove...

A mile-a-minute talker oozing charisma and a magnetic personality, Matt is a passionate self-made entrepreneur, whose big-gains track record and penchant for teaching and helping investors just landed him with Stansberry Research. I recently sat down with Matt to find out what’s behind his insatiable drive... POVERTY BREEDS AMBITION Matt grew up poor in a very small town outside Philadelphia, next to Bethlehem, Pennsylvania. His whole family worked for Bethlehem Steel – Matt’s father, grandfather, and uncles. And for much of the 20th century, Bethlehem Steel was one of the world’s largest steel- producing and shipbuilding companies, a Dow 30 stock, a powerful symbol of American industrial-manufacturing leadership. Until it wasn’t... When Bethlehem Steel went bankrupt, it devastatingly rocked many families in Pennsylvania, and Matt’s was no exception. He remembers that after the company’s layoffs, they had to leave their nice house for a much smaller one “on the wrong side of the tracks in the city.” When Matt was 12 years old, his father left. And being the oldest of five kids, Matt had to

grow up quick... He worked any odd job he could find – at one point, making tartar sauce every day after school at the fish shop across the street from his house. The first glimmer of Matt’s entrepreneurial drive appeared when he was 15 and started his own lawn-care business. He created and posted flyers on everyone’s doors and car windshields in his neighborhood. “And when it snowed, it was the best,” he tells me. “Other kids might have been building snowmen or having snowball fights, but I was knocking on doors... ‘Five bucks, I’ll shovel your driveway.’” Matt says he’s always been motivated by money and wanting to prove himself. “Other kids had nice, expensive shoes, like Nikes and Adidas, but my mom couldn’t afford them. So I wore these cheap sneakers. They were called MacGregors, and I got made fun of for wearing them. I hated it. I knew I was better than them, even in my Dollar Store shoes. “I’ve always been told I’m not good enough, so I always have to prove them wrong. Probably why I’ve been hustling even since grade school... selling football cards, cutting lawns, you know, up to something,” he says with a smile. This Philly blue-collar chip on his shoulder still drives him today...

October 2021

“My biggest fear in life is being considered mediocre. 80% of the people I grew up with are still in the same town, living within a 10- mile radius of the house they were born in. I knew I had to get out to be successful.” BETTING ON HIS FUTURE Besides working, sports were also a kind of escape for Matt, who adamantly followed and played football through high school. He got a football scholarship to a small, local college but flunked out after the first year. He repeated this three more times at three other undergrad colleges – landing football scholarships but then failing out of school – until he blew out his shoulder and couldn’t play anymore. He finally landed at state school Kutztown University of Pennsylvania, where he planned on getting his degree and becoming a gym teacher. Still hustling, Matt had a bartending gig in the evenings, making fistfuls of cash on the regular. Coming home with $200 after a shift

“I’ve always been told I’mnot good enough, so I always have to prove them wrong. Probably why I’ve been hustling even since grade school...”

Top: Matt with his mother, father, and sister. Bottom: Matt visits the Bethlehem Steel site in Pennsylvania.

American Consequences

one night, a light bulb went off: “Holy shit, it would take me more than a week to make this kind of money as a gym teacher.” As Matt wrestled with the decision on whether to continue to pursue his college education or not, his grandmother passed away. She left Matt $10,000, but before Matt’s father would give him the check, he first begged him to do something “productive” with it. A self-proclaimed “degenerate gambler” at the time, Matt loved sports betting... It made sense – he was a football fanatic and was also always hungry for cash, and sports gambling seemed like the solution. Except when you lose... And we all know gambling is just that... a risky bet on an uncertain outcome. The house always wins . So Matt took his 10K inheritance and tried a new kind of gambling... He put it in the stock market. Matt fairly quickly doubled his money... and was hooked. Matt McCall the investor was born . WEARING THE STIFLING SUIT OF CORPORATE FINANCE Matt suddenly had a new purpose and passion for college, although he claims his first stock market win was beginner’s luck because he didn’t know hardly anything about investing at all... “My family, we’d read the sports pages cover to cover – I could tell you the stat of any player in

“That’s what’s so thrilling about investing – ideas and trends are everywhere. The key is finding them and buying in before it’s on the cover of Barron’s because, well, then you’re too late. And teaching people how to do this is my passion.”

October 2021

any league... But I didn’t know the first thing about the Dow Jones or the NYSE. We didn’t learn that stuff at home or in school.” But like so many times the odds were stacked against him, Matt switched his major to finance, busted his ass, and took many 21-credit semesters to graduate with a degree in finance from Kutztown University. He landed his first job at Charles Schwab as a stockbroker in Denver. Matt stayed there for a couple of years and managed to simultaneously get his MBA from the University of Colorado. But the finance world, at least as it played out at Charles Schwab, wasn’t all that Matt dreamed it would be... “Schwab kind of sucked... It just wasn’t fun, and it wasn’t for me. They were very corporate, and my interactions with clients were so scripted... I went into this line of work to help people, to teach people, but when clients would call and ask for my opinion or my help, I wasn’t free to speak my mind or tell them the raw truth – I had to stick to the script.” Matt started going out in the evenings with his then-boss, and the two of them became “investment junkies” – huddled at the bar, jotting notes on sticky cocktail napkins for various options strategies and how to play different market scenarios. FRASIER AND TUNA HELPER Eventually, he left Schwab and joined a startup called Wall Street Radio that had a

national radio show in various major cities around the country. Within a year, Matt worked his way up to president of the company. One fateful day, the radio host was sick, and Matt was asked to fill in. Even though he had never done a radio show and felt extremely anxious about speaking live on the air, Matt jumped in and helped... “By the end of that first show, I was like Frasier – my feet up on the desk, taking live calls, answering investment questions.” He then became co-host and spent the next couple of years traveling around the country doing shows and live conferences. “I loved connecting with people, engaging with them in real time about the stock market,” he says. In 2004, Matt decided it was time to begin his own venture and fulfill his entrepreneurial dream of starting and owning his own company. He founded Penn Financial Group, eventually growing it to a multimillion-dollar advisory firm that worked with individual investors to help them achieve their financial goals. But it wasn’t all gravy at first... “I lived in Denver at the time, and I didn’t leave the kitchen – which was my office. I was just writing free newsletters every day, trying to get my name and ideas out to the world. Trying to get people to give a 27-year-old no-name money for investing isn’t easy. I ate Tuna Helper every meal – 49 cents for the can of tuna, 99 cents for the box of Tuna Helper.”

American Consequences

THE KOOL-AID CAN BE TEMPTING So Matt moved to New York City to be closer to Wall Street. He began making TV appearances on CNBC, Bloomberg, and others. His first big TV break again came in the form of a chance opportunity... “I was a fan of the Fox News show Bulls & Bears – watched it regularly – when my PR guy called me and said there was a last-minute cancellation, so they could have me on as a guest host. I was scared to death, but this was my chance to be on TV with the guys I loved to watch – Tobin Smith, Meredith Whitney, and Jack Welch. “I was starstruck... For a nerdy Wall Street guy like me, this was big time. I remember the rest of them were in expensive, $3,000 suits, and here I was in my cheap suit from JC Penney, two sizes too big, tie a mess, hair all over the place... But I must have impressed them because they asked me to join their new morning show on Fox Business.” TV appearances became a big part of Matt’s life, and he admits he began to “drink the

“Having worked inmedia, I saw the sensationalism... The media is not there to educate you. They’re there to get your eyes or your clicks. Especially today, the media is evenmore bombastic. ”

October 2021

Kool-Aid” a bit, getting caught up in being a bit of a finance celebrity, having a driver... and an oversized ego. “Having worked in media, I saw the sensationalism... The media is not there to educate you. They’re there to get your eyes or your clicks. Especially today, the media is even more bombastic. There are more and more social outlets all competing for your eyes – and this is where the masses are getting their news from.” This is a big part of why Matt joined the Stansberry Research team... ANTI-WALL-STREET GUY Like many of our passioned investment writers at Stansberry Research, Matt left the corporate world of banking and media limelight for a freer, truer path to helping people. “Stansberry Research has done more to level the playing field for individual investors over the past 20 years than anyone. I wanted to be

able to talk to people directly – not through a media platform, not in a book, not at a conference.” One of the largest financial investment research companies in the entire world, Stansberry’s wide net appealed to Matt as a way to reach more people trying to learn about investing. “Investing is actually very simple... At the end of the day, do you think this is going to be a bigger company in five years or not?” Matt wants you to fire the adviser who only calls you once or twice a year... and “ditch those hedge-fund guys in fancy loafers who talk down to you.” He adds, “I’m the most anti-Wall-Street guy there is.” He tells me the toughest challenge to teaching people about investing is getting them to let go of the American get-rich-quick mentality... and to be in it for the long haul. “We all hear stories at the watercooler or the cocktail party – someone’s brother who got

Over the years, Matt has recommended hundreds of stocks that have more than doubled, and several dozen that have soared 1,000% or more. We're thrilled to announce that he's now joining Stansberry Research to exclusively focus on individual investors like you. And on October 20, Matt starts working for you... starting with a huge prediction none of our others analyst are talking about right now... as well as the name of a tiny company we’ve never covered before. Best of all, he’s sharing all this with you 100% free for all subscribers. CLICK HERE TO RESERVE YOUR SPOT.

American Consequences

rich off a new biotech stock. They don’t tell you about the other 10 that went to zero, of course. “It’s not tough to be a good investor... You put money away, you invest in good companies, and you let it go. You keep building out your portfolio. But, boy, is it hard when the market’s down 1,000 points, and you’re watching your money go down, and the news media is hyping it all up – that’s one of the hardest things.”

SPOTTING THE TRENDS So it’s easy to say investing is simple, just buy great companies ... But how do you know if a company is worthy or not? Matt tells me that is pretty simple, too... Just “use your eyes.” This is similar to legendary fund manager Peter Lynch’s famous advice to invest in what you know. Matt refers to Lynch as “one of the greatest investors ever.” In fact, he gave Lynch’s name when I asked who his investing inspiration was.

“People should literally walk the streets where they live for investing inspiration. Invest in what you’re familiar with. Now, just because you see a lot of people at a store doesn’t necessarily mean it’s a great investment... But it’s a good start.” Matt tells me about a time back in the 2000s when his then-wife was a buyer for Nordstrom clothing, specifically denim. One day, she told him about “these new jeans that had a unique stitched horseshoe design on the back pockets and a $200 to $300 price tag. And the kicker was that they couldn’t keep them in stock because they were so popular.” So Matt started researching the company, True Religion, and liked the fundamentals.

“To be successful in life, you can’t be on the bandwagon... You have to be the wolf, not the sheep.”

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“You shouldn’t bet on the horse – you bet on the jockey. And Elon Musk is a visionary... I remember thinking ‘whatever this guy invests in, wherever he goes, I’m along for the ride.’” It wasn’t just Musk’s contrarian zaniness that endeared Matt... Tesla’s business model was different. It sold cars directly to the consumer. Plus, Tesla made the first successful fully electric mass-market vehicle... And it also looked sexy. “Yes, there were hurdles... But you have an exceptional leader who’s incredibly brilliant. And a superior product. I knew Tesla would succeed.” Matt recommended Tesla in 2014 – a swim- against-the-current contrarian call... And Tesla just reported $1 billion in quarterly earnings and is now one of the largest companies in the world. (Matt’s up around 1,854% on his Tesla position.) BE THEWOLF Matt’s enthusiasm for helping investors and his future with Stansberry feels contagious. At the end of our meeting, he leaves me with some words of advice... “To be successful in life, you can’t be on the bandwagon... You have to be the wolf, not the sheep.” Matt’s working on a new book and his new product with Stansberry... It seems the sky’s the limit for Matt when he puts his mind to something. Just don’t ever call him mediocre...

At the time, the stock was super cheap – maybe 20 cents a share – and he gobbled them up. The denim trend really took off, and True Religion exploded... with celebrities wearing and endorsing the jeans. Between 2007 and 2012, the company’s revenues nearly tripled, reaching $490 million in 2013. True Religion was sold for $850 million the following year. (Matt saw huge gains on his stock as it ran to more than $20 per share.) “That’s what’s so thrilling about investing – ideas and trends are everywhere, ripe for the picking. The key is finding them and buying in before it’s on the cover of Barron’s because, well, then you’re too late. And teaching people how to do this, that’s my passion. I live for this.”

MUSK AND EVS... EMBRACE WHAT’S COMING

Matt says that people often fear the future more than anything... But that’s actually what excites him the most. And he thinks the coming decade will be the greatest ever in financial history. Since Matt doesn’t want to be known as mediocre, it makes sense that he’s a self- proclaimed “fanboy” of one of the most unique entrepreneur superstars there is – Elon Musk. When Tesla first emerged, people were very skeptical... They thought Musk was an eccentric nut, and many argued this country didn’t need or want another big car company. But Matt drew on his sports gambling days...

American Consequences

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October 2021

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THE MARKET IS BEYOND THE FED’S REACH

I t may come as a surprise to some, but in the mid-19th century, whaling was a major American industry. By major, we’re talking fifth largest in the U.S. According to Kevin Baker’s 2016 book America the Ingenious , this now-forgotten sector could claim annual revenues of $70 million while employing 70,000 people. In Baker’s words, “By the 1830s, it was whale oil that kept the lights burning and wheels turning in America.” Then crude oil was discovered in Titusville, Pennsylvania, in 1859. The days of whaling and whale oil were numbered... What was once economically consequential ceased to be.

Fast forward 100 years to the 1950s, and it was steel that symbolized immense U.S. economic strength. The Fortune 500 was first published in 1955, and a look at the early rankings would reveal names at and around the top, like U.S. Steel, Armco, Jones & Laughlin, and Kaiser. Let’s compare the endlessly changing team picture of U.S. commerce with that of the former Soviet Union... For help here, it’s useful to reference former Federal Reserve Chairman Alan Greenspan’s 2007 memoirs, Age of Turbulence . In it, he described a 1980s visit to the country that included spotting “a 1920s steam tractor, a clattering unwieldly

“The proportion between the real recompence of labour in different countries, it must be remembered, is naturally regulated, not by their actual wealth or poverty, but by their advancing, stationary, or declining condition.” Adam Smith, The Wealth of Nations

 CLICK HERE TO READ THE WEB VERSION

American Consequences

machine” that looked positively ancient relative to the equipment used in the U.S. Greenspan observed about the tractor: Like the 1957 Chevrolets on the streets of Havana, it embodied a key difference between a centrally planned society and a capitalist one: Here, there was no creative destruction, no impetus to build better tools. NOTHING IS SACRED In a capitalist system, there are no sacred cows... What no longer meets the needs of shareholders, customers, or both generally ceases to exist. In centrally planned societies, that which employs us is generally a forever concept – hence the economic desperation. Described more vividly, if readers are looking for evidence of economic retreat, they need only find the countries in which the lineup of top businesses remains the same year after year, decade after decade. It’s a near-certain sign of decline because growing country economies are magnets for copious investments that relentlessly fund the replacement of existing commercial giants. For example, while Circuit City was the top-performing U.S. stock in the 1980s, by the 2020s it had vanished. Blockbuster’s story is much of the same. In the ‘80s and ‘90s, “Blockbuster Nights” were so common that the home-video-rental leader continued trying to expand the business model into the 2000s. In 2005, the FTC actually disallowed Blockbuster’s planned acquisition of Movie Gallery on the belief that the combination UNTOUCHABLE

would be too powerful. Notable here is that a largely unknown company by the name of Netflix twice offered itself up for sale to Blockbuster (no antitrust opposition there!), only to be rebuffed both times. Readers know how this story ended... Considering the early part of the 21st century, when Blockbuster was still prominent, it’s fascinating to contemplate other corporations that were similarly well-positioned. General Electric (GE) was the most valuable company in the world, with a market cap of $585 billion. The company viewed as the next GE, and crowned as such on the cover of Barron’s, was Tyco. Enron was then seen as one of the best-managed companies in the world. The Internet increasingly factored into how we lived and worked, at which point Yahoo and AOL were the dominant players. So powerful was AOL that its merger with Time Warner was held up for a year based on the worry that such an influential combination would bring on “servitude” for customers with realistically nowhere else to turn... In a capitalist system, there are no sacred cows... What no longer meets the needs of shareholders, customers, or both generally ceases to exist. In centrally planned societies, that which employs us is generally a forever concept – hence the economic desperation.

October 2021

have already been laid out, but for now it’s useful to digress somewhat into the traditional arguments spread by the news media for the why behind modern market exuberance. Most notably, more than a few market watchers point to the various “quantitative easing” (“QE”) programs engineered by the Fed as the source of easy returns since 2009. It might sound compelling at first glance, but such a view ignores how the Bank of Japan has conducted somewhere north of 11 QE programs since the 1990s (really, who’s counting at this point?), but its Nikkei 225 is still well shy of all-time market highs reached in 1989. What has been written so far is hopefully a reminder that natural recessions and market corrections are signals of progress rather than scenarios we should fear. They’re very often indicators that good is being replaced with great . Moving to Europe, the ECB has, for the most part, mimicked the Fed’s QE machinations since 2009, but with vastly smaller results. Considering the world, while the S&P 500 Index has returned nearly 400% since bottoming in 2009, the MSCI All Country World Index can claim returns roughly a quarter of the S&P’s. Let’s allow common sense to enter the equation... The Fed was able to conduct its

What has been written so far is hopefully a reminder that natural recessions and market corrections are signals of progress rather than scenarios we should fear. They’re very often indicators that good is being replaced with great . This is why we should shudder every time politicians promise to “bring back” jobs, or to fiddle with market forces that are delivering near-term pain – whereby ailing companies are allowed to fail. More realistically, economies gain strength from weakness and decline simply because they’re a sign that a much better future is being rushed into the present by lightly regarded corporations and unknown entrepreneurs that will soon be prominent.

THE FUTILITY OF THE FED

This brings me to the stock market... Supposedly its buoyancy over the last 12 years has had an artificial quality to it. To believe pundits on the Wall Street Journal ’s editorial page, the opinion page of the New York Times , and even ferociously free-market centers of thought like the Mises Institute, the Fed has been the author of the bull market in U.S. shares. Left, Right, and Center claim that when it comes to the multiyear “bull,” the Fed can take credit. But this consensus across the ideological spectrum is incorrect... Better yet, the popular view that the Fed has engineered the multiyear rally enjoyed by investors is quite literally impossible . If the Fed could prop up the markets, then there would be scant markets to prop up. The clues to the previous assertion

American Consequences

no corresponding stock market rally. Better yet, the scenario imagined by the Fed-reverent would give the impression of a “great rotation” out of low-yielding bonds and into equities over the last 10 years. Except that the 10-year Treasury note yielded 3.26% in 2009 versus 1.55% in 2021. There’s just no story there.

Translated for those who need it, in order for a QE- deceived bull to express optimism in the stock market, a sober QE bear must be able to express an equal amount of pessimism. In markets, the passions of the bulls are leavened by the pessimism of the bears... by definition. you’re tongue-tied, it’s with good reason. Subsidization of government spending wouldn’t trick the markets, nor would the central bank doubling down on housing consumption. various QE programs by putting to work bank reserves held at the central bank. In particular, the Fed purchased Treasuries and mortgage bonds with an eye on pushing interest rates down at the long end, and with its mortgage security buys, the Fed was working to prop up the housing market. OK, but what about the subsidization of government spending or the propping up of housing consumption (the very consumption that ended in relentless tears in 2008)? Both would boost forward-looking markets... If Some say that the Fed, in pushing yields of bonds so low, engineered a rush into higher- yielding investment opportunities that could only be found in the stock market. It sounds intriguing at first glance, but a cursory second look at the yield curve in Japan over the decades shows lower rates across the curve, but

OPTIMISTIC BULLS AND SOBER BEARS

Still others will point to the Fed “printing” trillions of dollars that had to find a home, ending up in U.S. shares. Nice try, but there’s nothing to this, either... Indeed, if we ignore that the Fed isn’t “printing” money in the first place (it’s borrowing existing bank reserves held at the Fed), we can’t ignore that in any market there are always and everywhere buyers and sellers. Translated for those who need it, in order for a QE-deceived bull to express optimism in the stock market, a sober QE bear must be able to express an equal amount of pessimism. In markets, the passions of the bulls are leavened by the pessimism of the bears... by definition . Such central bank mysticism also ignores how equities are valued in the first place. Stock prices represent the market’s expectation of all the dollars any company will earn throughout its existence. Looked at through the prism of QE, what would the Fed’s bond buying have to do with equity prices? And for those who think QE represents currency devaluation, and that devaluation is good for stocks, please think again... When

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