Issue #79, Volume #2
Why America Is Headed For A Default And A Civil War
This is Porter’s Daily Journal, a free e-letter from Porter & Co. that provides unfiltered insights on markets, the economy, and life to help readers become better investors. It includes weekday editions and two weekend editions… and is free to all subscribers.
| Keep repeating the lie and people will believe it… Actual inflation is three times higher than the government’s official rate… The corruption of the monetary system leads to the corruption of society… Consider moving to a place that’s filled with conservative people… An all-out war to get rid of Chair Powell… |
Joseph Goebbels gets a bad rap.
The man was a genius.
One People. One Reich. One Fuhrer.”
Pretty darn catchy. Almost as good as:
Make America Great Again.”
Goebbels’ Ministry of Public Enlightenment (yep, that’s what it was called) produced lots of great movies too. His 1935 film Triumph Of The Will should have won an Oscar. It’s an all-time classic. Goebbels invented new ways of filming (moving cameras, aerial photography, long-focus lenses) and music to inspire the German people into an orgy of violence.
Most Americans, of course, have no idea that Triumph Of The Will was such a ground-breaking film that we blatantly ripped it off in our own propaganda film, Why We Fight.
I know what you’re thinking. That was a long, long time ago. In the modern world, the government would never try to manipulate us like that…
And you’re right. Using intense music, dynamically moving cameras and themes to inspire violence against our enemies wouldn’t work anymore. I’m sure it’s a complete coincidence that the latest Top Gun movie – you know, the one that’s about ultra-brave, all-American pilots dropping a bomb into a tiny target hidden in the mountains of Iran – uses the exact same cinematic formula.
Also, it’s a complete coincidence that Top Gun: Maverick was filmed exactly six years before our recent B-2 bombing mission in Iran. Triumph Of The Will was released six years before Hitler’s invasion of Russia in June 1941.
Goebbels is best known for “the big lie.”
Adolf Hitler coined the phrase and described it fully in his book, Mein Kampf, but Goebbels brought the idea to life. What the Nazis realized is: people will believe anything. Thus, all you must do is keep repeating the lie, no matter how ridiculous, and most people will believe it.
A lie becomes the truth.
What’s the biggest lie in America today?
Consider this…
The Chapwood Index, compiled twice a year, tracks the actual cost of the top 150 items that Americans buy every day – in the 50 largest U.S. cities. Every item in the index is listed on the Chapwood Index website: a glass of beer, health insurance, yoga class, filet at a steakhouse, tampons, movie ticket, shaving cream, cereal, shrimp, bottled water, shampoo, car tires, can of beans, dog food, etc.
This is a real-world test of what the government keeps telling us about our money, the U.S. dollar.
In 2024, the government told us that inflation for “All Urban Consumers” (CPI-U) was 2.9%. That measure of inflation, by the way, is how benefits for Social Security recipients are automatically adjusted each year.
Meanwhile, the Chapwood Index reveals that the lowest actual inflation rate of any major city in the U.S. was 8.8%, in Omaha, Nebraska. That is almost three times more than the government’s official inflation rate. And if you look across any of the largest cities, you’ll find price increases in excess of 10%. This is an ongoing hyperinflation that no one is talking about. No one in the media will report about this.
The actual inflation rate in Baltimore, near where I live, for example, has been:
(Note: because of the COVID disruption, the Chapwood Index wasn’t compiled in 2020 or 2021. But, as you know, that didn’t stop inflation from occurring. It continued at rates higher than these.)
As a result, someone living in Baltimore and earning an above-average professional salary has seen their purchasing power drop from $150,000 seven years ago to only $53,260 today.
The real value of your wages has fallen 65%.
The government is running huge deficits and monetizing the debt, which is causing our standard of living to massively decline. It’s also causing havoc in our society in a way most people will never understand.
The big lie, of course, is that President Donald Trump will do anything to stop this. He won’t. His budget, just like every other U.S. president’s budget since 2000, contains huge levels of deficit spending that can’t be financed by any honest means. The printing will continue. And so will the destruction of our civil society.
And it’s about to get a lot worse…
You don’t have to have a PhD in history to see this pattern.
When you look at Weimar Germany, post-World War II Britain, or even Rome’s third-century crisis, you will see the same pattern. Monetary corruption through printing, bond manipulation, and debasement distorts price signals. Massive government spending misallocates resources. And the combination of corrupt price signals and the government’s enormous inefficiencies impoverish its citizens.
Rather than rewarding citizens for thrift and industry, the corruption of the monetary system leads to the corruption of society, rewarding people for debasing themselves. You see massive increases in prostitution. Huge increases in speculation. And, over time, this leads to desperation. That’s when there’s always soaring violence, wars, and, finally, a collapse.
America today? We’ve got all of these things happening.
OnlyFans – a live, on-demand porn site – generated $10 billion in 2024 with 4.1 million “creators.” That’s about 1-in-10 women under the age of 30. Most of these “creators” are college-educated. They’ve been driven by economic pressure into sex work.
Online gambling, now legal in 38 states, is the source of speculation for most young men, with 60% to 80% of high schoolers gambling yearly. And witness the rise of Robinhood Markets and Coinbase: platforms designed for speculation, not investing.
America hasn’t merely lost its AAA credit rating – which it has. It is spiraling into a debt and inflationary collapse.
Median home prices ($400,000) consume 50% of median household income ($74,580), and real after-tax income has been falling, dramatically, against rising real-world costs. The U.S. economy is being crushed by the weight of the government’s spending (40% of GDP) and its ever-increasing debts.
All of the weirdness that’s emerged over the last 10 years – the trans nonsense, the purple hair, the vocal fry, the climate extremism, the DEI indoctrination – are symptoms of a society whose basic social contract has been broken.
Everyone is working. And everyone keeps getting poorer. And no one understands why.
What comes next?
War. Civil war.
It’s obvious. And it’s inevitable.
Watch what happens as the radical left begins to attack federal officers, and states like California, Illinois, Oregon, and Massachusetts actively support the perpetrators. These are the early stages of a civil war.
We are in the midst of a currency collapse. And most people will not realize what’s happening until it is far, far too late.
An outright default is coming.
And, most likely, a civil war.
How to protect yourself? A permanent portfolio allocation helps… such as Porter’s Permanent Portfolio that we created a year ago. It contains assets that appreciate during periods of inflation – like Bitcoin, P&C insurance companies, gold, and high-quality businesses like Caterpillar (CAT), Coke (KO), and Deere & Co. (DE).
But you should also consider moving to a place that’s filled with conservative people who value their freedoms.
The violence in liberal cities is going to get vastly worse. And soon, these cities will be completely unlivable.
Today’s Poll… A U.S. Civil War?
Congress To Feature Trump On $100 Bill?
A shocking new plan was just introduced in Washington – to celebrate Trump’s new “golden age” by placing him on the $100 bill.
As you’ll see, it has little to do with the new crypto reserve…
Or Trump’s ambitious plan for artificial intelligence…
Former presidential advisor Jim Rickards says, “Trump’s crowning achievement will be much, much bigger.”
In the months ahead, he predicts, the government will release a massive multi-trillion-dollar asset which it has held back for more than a century. And this will give ordinary investors a chance to strike it rich.
Click here to see the full details.
Three Things To Know Before We Go…
1. An asset boom at the dollar’s expense. The S&P 500, Bitcoin, and gold are all at all-time highs, with silver up 32% year-to-date and at a 14-year high. Bitcoin topped $118,000, up 26% for the year. Meanwhile, the mighty dollar is down 10%, the worst start to a year since 1973 as fears of ballooning U.S. federal deficits cause investors to lose confidence in the greenback. Investors are turning to hard assets like gold, silver, and Bitcoin as hedges against a weakening dollar and mounting U.S. debt.
2. The pressure is mounting on Powell. President Donald Trump appears determined to replace Federal Reserve Chair Jerome Powell… one way or another. After weeks of publicly criticizing Powell for being “too late,” “a disgrace,” and “a real dummy” for not cutting interest rates, the Trump administration is now accusing Powell of “grossly mismanaging” the Fed. In a formal letter and X post yesterday, White House Office of Management and Budget Director Russ Vought slammed Powell’s Fed for spending a massive $2.5 billion on the renovation of its Washington, D.C., headquarters – roughly $700 million over budget so far.
3. Trade war reignites volatility. Stocks opened lower this morning after President Donald Trump announced raising the tariff rate on Canadian imports to 35%, from 25%. On Wednesday, Trump upsized Brazil’s 10% tariff rate to 50%… Members of The Trading Club capitalized on the volatility caused by the boosted Brazil tariff rate with an options trade on a world-class industrial firm whose shares dropped 15% this week.
We built The Trading Club to exploit these kinds of volatile market conditions. We draw upon the research from our team of analysts to identify the world’s best businesses, and then wait for the market to provide a trading opportunity that dramatically shifts the odds in our favor. Subscribers get access to every trade we place in a live $100,000 portfolio before we place it, providing full transparency every step along the way.
The current portfolio contains 10 winning positions, including a triple-digit return.
If you want to get in on the next series of trades we have planned later this month, click here to join the waitlist.
And One More Thing… Sign Of The Top
Investors reach for maximum leverage. There is now $135 billion invested into leveraged exchange traded funds (“ETFs”), the highest amount on record. Meanwhile, margin debt held at U.S. brokerages is up to $920 billion, or just 2% shy of the previous record of $935 billion reached in October 2021. What could possibly go wrong?
Tell me what you think: [email protected]
Good investing,
Porter Stansberry
Stevenson, Maryland
Please note: The investments in our “Porter & Co. Top Positions” should not be considered current recommendations. These positions are the best performers across our publications – and the securities listed may (or may not) be above the current buy-up-to price. To learn more, visit the current portfolio page of the relevant service, here. To gain access or to learn more about our current portfolios, call Lance James, our Director of Customer Care, at 888-610-8895 or internationally at +1 443-815-4447.