Joe Withrow, Author at Zenconomics

The American story they don’t teach in school

Americans of all ages, all conditions, and all dispositions constantly form associations… The Americans make associations to give entertainment, to found seminaries, to build inns, to construct churches, to diffuse books… Wherever at the end of some new undertaking you see the government in France, or a man of rank in England, in the United States you will be sure to find an association.

I love this quote by Alexis de Tocqueville. It speaks to the principles of private association and mutuality that were so prevalent in 19th century America.

We’ve been talking all week about the historical influences that underpin our new investment membership The Phoenician League. And today we’ll wrap up our discussion by assessing the mindset that was core to the American experiment.

19th century America featured a robust network of mutual aid societies. This is a topic that I’ve only learned about through independent study. My public school textbooks failed to mention anything about it.

What’s forgotten is that mutual aid societies were the backbone of American society before the Welfare State. They provided safety nets just as the Welfare State does today… but these networks were so much more than that.

What the Hanseatic League got right…

“The Hanseatic League’s influence extended from commercial activities to cultural exchanges and diplomatic relations.” -Unknown

Yesterday we talked about what we can learn from the ancient Phoenician commercial civilization. Today we’re turning our attention to the Hanseatic League.

The Hanseatic League was an alliance of self-governing city-states that lined northern Europe during the Middle Ages. The League was most prevalent in the 13^th, 14^th, and 15^th centuries.

This alliance of city-states created their own free trade routes throughout northern Europe. These trade routes connected London and Belgium to the west with Germany and Poland to the east and Scandinavia to the north.

The independent cities along these routes became key centers of commerce and cultural exchange throughout Europe.

And the cultural exchange element was key.

As we discussed yesterday, old trade routes weren’t just about transporting goods. They also enabled the free-flow of knowledge and ideas. This cultural exchange is what truly shapes the world.

The Hanseatic League also developed a new code of law for its participating city-states. They called it the Lex Mercatoria. That means “Law Merchant” in Latin.

What the Ancient Phoenicians Can Teach Us About Building Investment Networks

“Behold the Phoenicians, whose ships dance across the waves, carrying treasures from distant lands to our shores.”

This quote comes from an unknown contemporary back in antiquity. We may not know the name or the context, but I think it gives us a feel for how the ancient Phoenicians were seen in their day.

The Phoenician civilization existed for several centuries around the year 1200 BC. Their homeland was in the eastern Mediterranean region – roughly where Lebanon is today.

The Phoenicians played a key role in shaping the world back in biblical times. In fact, the people who hailed from this civilization were referred to as the Canaanites in the Bible itself.

What set the Phoenicians apart was that they were a commercial civilization. They were traders and merchants. That was incredibly rare during this period in history.

At the time, most other civilizations established war-based cultures. They lived in a zero-sum world where the only way to get ahead was to conquer your neighbor and take his stuff.

On dairy farms and history…

“Dairy farms served as pillars of stability and self-sufficiency during a time of economic uncertainty. And in rural America, dairy farms were often the heart of the community, providing jobs and a sense of pride” -Unknown

I spent all day Saturday at the historic Homestead Dairy Barn in Warm Springs, VA. It was a family reunion of sorts.

Today the old dairy farm serves as a vacation rental business.

There are several idyllic houses available for rent across the property. There’s a market serving lunch and refreshments. There’s a heated outdoor pool. And in the middle of it all is a large clubhouse with plenty of space for events. That’s where we congregated.

Here’s a snapshot of the old Dairy Barn in all its glory:

What a hidden gem.

Obviously a lot of the facilities have been modernized. But each of these structures was an integral part of a functioning dairy farm at one time.

My favorite ways to own energy

How you choose to own energy is the whole thing of what investing is about…

That’s what Tom Dyson said to our investment membership on our monthly call last week. This perspective struck me as so insightful that we’ve been talking about it all week in these pages – from several different angles.

Today I want to wrap up our discussion by sharing with you my absolute favorite ways to own energy. They may not be what you expect…

I’m a big proponent of what I call “home resiliency”. It’s the idea that we should make our homes as self-sufficient as possible. I see this as a key principle underlying Thomas Jefferson’s vision for America.

And a key part of home resiliency is backup energy.

We take it for granted that we can flip a switch and lights will come on in the house. We think nothing of the fact that we can adjust a thermostat and the house will heat or cool itself to our liking. And we certainly don’t think twice about turning a dial so the oven warms up to cook our food.

But for nearly all of human history our ancestors lived without these luxuries. They would be in awe of the conveniences we enjoy.

At the same time, these comforts disappear the second something happens to our power grid. Then what?

What the push for carbon-free energy is all about…

We’ve been talking all week about energy. Energy is the master economic resource.

And when it comes to investing, we have two choices. We can own energy. Or we can own currency. That’s it.

The thing is – we can own energy in many different forms. And, as we discussed yesterday, we can also generate passive income by owning energy.

Today let’s take a step back and take an even more holistic view.

If the historians are to be trusted, homo sapiens – humans – have been around for about 300,000 years now. However, the first written records we have from a human civilization date back to about 4,000 BC. That’s just over 6,000 years ago.

We call that first civilization the Sumerians. And the records indicate that they formed city-states around fertile agriculture land in modern-day Iraq and Kuwait.

My understanding is that most humans lived as hunter-gatherers prior to the Sumerians. I’m sure that’s an oversimplification… and I haven’t spent much time on it. But this seems to be widely believed.

Three ways to generate passive income by owning energy

Energy is the master economic resource.

That’s what Tom Dyson shared with our investment membership on our monthly call last week. The idea struck me as quite insightful. And it’s obvious if we stop and think about it… most of us just don’t.

The key is – nothing happens in our world without energy. That’s true on all levels.

We all need to consume food to produce the energy required for life. Same goes for animals. Then we need energy to power our homes, our businesses, and anything else that happens in the modern world.

Energy drives everything.

So, Tom’s view is that we have two choices. We can own energy… or we can own currency. And if we understand that the purchasing power of the world’s currencies is always falling, owning energy is the smart choice.

But that doesn’t mean we should only buy energy stocks and call it a day. Publicly traded companies are exposed to many different forces. They aren’t always a direct play on productive energy.

Plus, many of us like to invest for passive income. So let’s talk about three ways we can generate passive income by owning energy…

You’ve got two choices when it comes to money…

You’ve got two choices. You can own currency. Or you can own energy… and I don’t trust the currency.

So, I choose to own energy. But how you choose to own that energy is the whole thing of what investing is about.

This is what Tom Dyson said to us in The Phoenician League’s members’ only call last week… and I find this perspective to be brilliant.

Dyson is a legend in the financial newsletter space. He’s largely considered an investment whiz throughout the industry. And Tom went on to share his holistic view with us last week.

Tom pointed out that energy is the master economic resource. Nothing happens without energy.

In that sense energy equals prosperity. Energy is what lifted hundreds of millions of people from the shackles of poverty and subsistence living.

So Tom’s investment philosophy is that all he wants to do is own energy. But that doesn’t necessarily mean energy companies.

How we got here and where we’re going…

We’ve been talking about what’s been happening on the macroeconomic stage all week. Today, let’s take a step back and assess how we got here… and where this is all headed.

For the last thirty years the Federal Reserve (the Fed) has consistently pumped cheap money into the financial system. That’s driven everything.

In total, the Fed has created at least $8 trillion from nothing. That’s what we can verify. And there’s a good chance the Fed engineered even more new dollars through back-channels.

This onslaught of money created from nothing drove interest rates down to near-zero.

Then the commercial banks pyramided credit on top of these trillions of dollars by roughly ten-to-one. In other words, for every new dollar created, the banks could lend out ten dollars out against it. That means the banks created trillions of dollars from nothing as well.

This dynamic created a massive financial bubble in the U.S. and many developed countries around the world.

The Macro View – A Financial War is Raging

There is a financial war raging right now… just beneath the surface.

This war pits the globalist power structure against the Federal Reserve (the Fed) and the New York banking interests. These two factions are driving the macroeconomic picture right now.

We’ve been talking about this topic all week. But this is something that’s been on my radar for about a year now. The thesis just keeps getting stronger…

Last month JP Morgan CEO Jamie Dimon put out his annual letter to shareholders. Dimon appears to be the mouthpiece for the New York banking faction right now. And check out what we wrote:

“Lest anyone think that I’ve become a little soft, rest assured your CEO is a red-blooded, patriotic, free-enterprise and free-market capitalist (properly regulated, of course) and finds nothing inconsistent with the multifaceted ways we use our capabilities to lift up our communities.”

When’s the last time we’ve heard somebody with a big platform talk about free enterprise and claim to be a free-market capitalist? These have become dirty words in globalist circles.

And where’s the talk about fighting inequality and climate change? Those are two key talking points in the globalist narrative.