Monthly Archives: July 2021

Jack Cranston, writing from Geneva

Editor’s Note: According to an exposé in The Atlantic earlier this year, the U.S. government “maintains a kill list of people whom it condemns to die in secret and kills with drones.” Yet drone killings, which include American citizens, mete out death to individuals who have never been charged, tried, or convicted.

Sound familiar?

This is part 3 of a three-part series from Jack Cranston’s archives which illuminated this practice in 2012.

Unfortunately, the United States’ actions have only escalated during the past decade. These killings began under President George W. Bush, exploded under President Barack Obama, and accelerated under President Trump.

According to Rolling Stone, reports estimate that Trump upped the pace of drone attacks by about four to five times the Obama rate, which itself was 10 times the rate of Bush. I am deeply saddened and disturbed watching mainstream America collectively sleepwalk while a nightmare unfolds in front of their very eyes.

In part 2 of this series, we examined the key points of a recently leaked U.S. Department of Justice memo detailing the protocol for dispatching drones to kill U.S. citizens.  Part 2 addressed the stunningly broad definition of an “associated force” that the U.S. Government established to justify drone-strike killings.

The Obama administration ignores the U.S. legal prohibition against assassinations and pursues extra-judicial and unconstitutional killings as long as they are conducted according to their interpretation of “law of war principles.” Citizens are sleepwalking because they blindly trust government officials to kill America’s enemies in a way that keeps American casualties at a minimum. 

What could be better than our infallible and completely honorable government leaders identifying enemies and efficiently dispatching drones to kill them?  It’s the new form of warfare without risk. After all, the U.S. Government has never been known to abuse its power, or so we would like to believe. “We the People” have revisionist memories. So, for a quick trip down memory lane, I’ve included a number of abuses of power that headlined several past administrations, including:

• President Roosevelt engaging FBI Director Hoover to turn the FBI into a secret police force, including “national security wiretaps,” intercepting mail and telegrams, and building countless files on suspected security risks
• President Johnson’s use of the FBI for domestic political spying
• Nixon and Kissinger bypassed the State Department and Congress by making a secret deal with China
• Nixon’s long list of abuses, including the White House Plumbers; directing the IRS to conduct punitive investigations of political enemies; the Watergate cover-up; and criminal conspiracy to obstruct justice.  As Nixon said to David Frost: “When the president does it, that means that it’s not illegal.”
• The CIA and its illegal covert domestic operation against anti-war protesters and other dissidents during the Nixon years
• The Carter Administration’s secret support of Osama bin Laden and the Taliban during the Soviet invasion of Afghanistan
• Reagan’s secret and illegal arms sales to Iran
• The George W. Bush Administration’s legacy of unconstitutional NSA interception and data mining of domestic communications; suspension of due process for “enemy combatants”; “extraordinary rendition”; and torture and indefinite detention of suspects without formal charges or due process

And that’s just the shortlist.

The U.S. has a constitution to prevent such abuses and is supposed to have impartial and independent judicial oversight.  The Constitution and the judiciary were designed to function as a check on unwarranted power.  And the Obama administration has the gall to claim that acting as judge, jury, and executioner is legal and constitutional.

The Administration’s actions ignore fundamental principles of a free society: the right to face one’s accuser, the right to a legal defense, and the right to avoid punishment unless proven guilty in a court of law. The U.S. Government is willfully ignoring due process, one of the crucial underpinnings of American liberty, and expects us to blindly trust government officials with life and death decisions: decisions involving the killing of U.S. citizens.

The simple accusation of being a “terrorist” is enough to warrant a death sentence.  No crucial step from accusation to the requirement to be proved guilty in a public court. A secret accusation of being a terrorist = proof of guilt = execution.  That’s a deceitful formula undermining the very core of what supposedly makes America “great.”

Well, that doesn’t sound so great to me.

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Jack Cranston is a partner of Sovereign X and resides in San Miguel de Allende.

Jack Cranston, writing from San Miguel de Allende

Editor’s Note: Cyprus has had one of the fastest-growing economies in the European Union during the past several years. However, it doesn’t seem that long ago when Europe looked on in despair as the island appeared on the brink of financial collapse.

In March 2013, Jack Cranston wrote about the “Cyprus Solution” as panic spread through the Cyprus financial system. Fast forward to March 2016, after a three-year, €10 million financial aid package, a raft of reforms, and austerity measures, the country exited as one of the more robust eurozone economies, albeit at the expense of those who had invested their hard-earned money in Cyprus banks.

The COVID-19 pandemic has interrupted Cyprus’s strong economic growth. To cushion the impact of the crisis, however, authorities seemingly learned from mistakes of the past, rapidly introducing a targeted set of fiscal and financial policy support measures that have helped limit loan defaults and job losses, enabling a rapid, albeit uneven, recovery.

Given how quickly we moved on from Cyprus being a unique “one-off” event to the Cyprus solution being the basis for a new model for rescuing collapsing banks, investors the world over need to realize that the world has changed.  The banking industry will never be the same, and bank customers now have to worry about ravenous governments inventing new justifications for confiscating their deposits.

The new mantra for rescuing troubled banks and bailing-out bankrupt countries is “deposit to equity conversion.”  This is where government authorities forcibly convert bank depositors’ funds into equity in a troubled bank, with no guarantee that the equity will have any value in the future.   From now on, a good rule of thumb will be when you deposit money in a bank, think of it as if you invested in the bank’s stock.  If you wouldn’t buy a bank’s stock, then you should be leery of depositing money in that bank. 

A potential safe harbor, at least for the near term, is that the confiscating authorities seem to respect the concept of deposit insurance.  Yesterday, in an incredibly revealing quote that lifted the curtain on the true plans of political authorities, Jeroen Dijsselbloem, the Dutch Finance Minister and President of the Eurogroup of eurozone finance ministers, in an interview with Reuters, said, “If there is a risk in a bank, our first question should be ‘Okay, what are you in the bank going to do about that? What can you do to recapitalize yourself?’ If the bank can’t do it, then we’ll talk to the shareholders and the bondholders, we’ll ask them to contribute in recapitalizing the bank, and if necessary, the uninsured deposit holders.”

In addition to this being the first admission that the Cyprus solution is the new model for dealing with failing banks, notice the reference to “uninsured deposit holders.”  Because of populist political pressure, the EU caved on taxing Cyprus deposits under €100,000, which was the threshold for Cypriot deposit insurance. Don’t count on this as your primary line of defense, but because it is evident that those with more than €100,000 on deposit don’t have sufficient political clout, holding more than that amount in a risky bank (undercapitalized) or in a potentially desperate jurisdiction is not advisable.

This leads to several takeaways from the Cyprus crisis that can serve as guidelines for what to do now.

• If you are a foreigner, especially one perceived to be taking advantage of “offshore” banking in a jurisdiction under the influence of bankrupt nation-states, your funds on deposit will now be a target.

• When selecting a bank, country risk has suddenly become a much greater concern.  If possible, you should consider stable countries with solid banking traditions such as Singapore, Hong Kong, Switzerland (as long as you are not hiding money), and Austria, as well as off-the-radar places such as Andorra and Norway.

• Although it is not as much to bank on as it used to be, a decent Plan A is that if you can’t open a bank account in a first-tier secure jurisdiction, then at least don’t hold deposits above the local deposit insurance limit.

• Holding assets in harder-to-confiscate forms is also a good idea. These include income-producing real estate (not in your home country) and precious metals.  Holdings of precious metals would ideally be in physical form (bullion coins and bars), with some in your physical possession, and some in offshore secure storage (not stored a bank!).

The downsides to holding assets in real estate and in precious metals are increased price volatility and illiquidity.  Real estate can be especially illiquid, and metals can be especially volatile.  So this presents a challenge for investors with a low-risk tolerance and who don’t want to hold the cash in a form, and in a place, where it could be easily confiscated.

That’s why we stick with the tried-and-true Permanent Portfolio approach developed by the late, great Harry Browne.  As a refresher, Browne recommended a simple 25% allocation of your core portfolio in the following asset classes: gold, cash, bonds, and stocks.  Even with the volatility of metals, and the risk that a particular asset class will produce no return, or even a loss, the balanced and non-correlated allocation of assets reduces overall portfolio volatility, and over time the portfolio has produced consistent and good returns.  The trick is to find the appropriate investments in each class. 

We prefer a mix of metals rather than just gold, being especially enamored of silver.  And for current income and risk reduction, you could hold a portion of your precious metals allocation in paper assets and then sell options against your holdings.  This is a good idea over the near term but be prepared to liquidate and convert the proceeds into physical metals if brokerage accounts come under attack.

Even better would be to use a separate entity that you control to hold those assets, or use a self-directed retirement plan, or a combination of both.  These add additional layers between your assets and the long arms of confiscating authorities.

Cash is not King these days, at the artificially low rates of interest manipulated by the Federal Reserve, but there are short-duration non-dollar fixed income investments that are almost as liquid as cash but generate better returns with less dollar risk. U.S. Treasury bonds are in the mother-of-all-bubbles so we would stay away from them, but there are many opportunities for reduced risk fixed-income investments that fit the bill.  And high-quality dividend stocks are a good bet for equity allocation. 

Now more than ever there is an urgent need to act.  It is quite clear that governments believe your private property is something to be confiscated to solve the problems that they created.  Get yourself and your assets out of harm’s way, or at least lay the foundation for a good escape plan.  Smart, international diversification is the key.

Jack Cranston is a partner of Sovereign X and resides in San Miguel de Allende.

Jack Cranston, writing from New York __________________________________________________________________________________________

Editor’s Note: According to an exposé in The Atlantic earlier this year, the U.S. government “maintains a kill list of people whom it condemns to die in secret and kills with drones.” Yet drone killings, which include American citizens, mete out death to individuals who have never been charged, tried, or convicted. Sound familiar? This is part 2 of a three-part series from Jack Cranston’s archives which illuminated this practice in 2012.

Unfortunately, the United States’ actions have only escalated during the past decade. These killings began under President George W. Bush, exploded under President Barack Obama, and accelerated under President Trump. According to Rolling Stone, reports estimate that Trump upped the pace of drone attacks by about four to five times the Obama rate, which itself was 10 times the rate of Bush. In a stunning development, NBC News published details of a confidential U.S. Department of Justice memo detailing the protocol for dispatching drones to kill U.S. citizens. Beyond its revolting subject matter, the memo is frightening because the justification is so broad for targeting an American to be killed by a drone attack.  The memo presents the case that only one of two conditions must be met:  1) the target must be a “senior operational leader” of Al-Qa’ida or 2) an “associated force.”We can leave it up to the CIA or military intelligence to classify someone as a “senior operational leader,” but what exactly is an “associated force?” According to the memo, anyone who “present[s] an ‘imminent’ threat of violent attack against the United States” qualifies for “a lawful killing in self-defense.” The assassination order “does not require the United States to have clear evidence that a specific attack on U.S. persons and interests will take place in the immediate future.” No requirement to have “clear evidence?” The Obama administration promotes the position that an American citizen can be assassinated if they were “recently” involved in threatening “activities.” What’s recent?  What’s the definition of threatening? What specific “interests” justify killing?” The definition of “associated force” is so broad that I could drive a super tanker through it. In the past, administration representatives such as John Brennan (White House Counterterrorism Adviser, current Director of the CIA, and progenitor of the drone assassination program) and Attorney General Eric Holder have misleadingly claimed that targeted killings are “consistent with the inherent right of (national) self-defense,” and can be justified when the target poses “an imminent threat of violent attack.” But the leaked memo, which goes by the ungainly title of “Lawfulness of a Lethal Operation Directed Against a U.S. Citizen Who Is a Senior Operational Leader of Al-Qa’ida or an Associated Force,” includes much broader definitions of self-defense and imminence. For example, the memo refers to a “broader concept of imminence” than any actual intelligence about a specific ongoing plot against the U.S. No need for “specific” or “actual” intelligence?  I’m beginning to doubt the intelligence of the people who dreamed-up this nightmare.  And Brennan has stated that the U.S. uses “a flexible understanding of ‘imminence’.”  Supertanker anyone? The memo goes on to state that a drone strike must be conducted according to “law of war principles.”  But here’s the rub: we’re not in a state of war.  Only the U.S. Congress can issue a formal declaration of war.  It’s a common misconception that the U.S. is engaged in a formal war on terrorism.  That’s just a catchphrase first used by President Bush after the 9/11 attacks. The U.S. is not even conducting a Congressionally approved “military engagement.”  The last one of those was “Operation Iraqi Freedom,” informally referred to as the Iraq War. And the U.S. is not even participating in a military engagement authorized by the United Nations Security Council.  The only one of those in the post-9/11 world is the 2011 military intervention in Libya. The Obama administration refers to its actions by the sanitized title of “Overseas Contingency Operation.”  It claims that the authority for its extra-judicial killings of American citizens is a law known as the 2001 Authorization for Use of Military Force (AUMF), now more than 11-years old.  The law was intended to authorize the President to use all “necessary and appropriate force” against anyone connected to the 9/11 attacks.  But it is now being used to cover the administration’s activities in what the White House press secretary has called a “new phase” of conflict with Al-Qa’ida. Obama, and Bush before him, claims the law as the legal basis of authority to kill “associated forces.”  But the original Congressional authorization was directed at those who planned and carried out the 9/11 attacks, or those who aided them, not any and all terrorists ad infinitum. And it’s not a formal declaration of war or a Congressionally-approved “military engagement.”  Once again, we have definitions wide enough for a supertanker.  Are all suspected terrorists and “associated forces” connected to Al-Qa’ida? And exactly what is “necessary and appropriate force?”  Does that mean war? The administration is hiding behind “war principles” to justify unconstitutional killing orders of Americans on American soil rather than have them classified as illegal assassinations.  Based on a series of executive orders, assassinations by the U.S. Government have been prohibited since the 1970s.  But the Obama administration claims that the prohibition doesn’t apply during wartime, even though war has not been formally declared. The circular logic makes me dizzy. In summary, you, as a U.S. citizen, could be targeted for assassination if you are considered to be an “associated force.”  No due process is involved.  The order to assassinate you does not require clear evidence.  It requires only that an administration official deems you to be an “imminent” threat, with the test of imminence being a “broader concept” or a “flexible understanding of imminence” rather than any actual intelligence regarding a specific plot against a vague concept of “interests.” And the administration claims that its unconstitutional killings are justified because of “wartime” conditions.  However, despite the fact that we are not formally at war, we are in a virtual and perpetual war that apparently will never end.  A war that works to the benefit of the administration so that it can expand its power owing to “emergency” conditions.  Thus, the exception to the assassination prohibition is permanently temporary. Get it? Remember when America was referred to as “the land of the free?” 

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Jack Cranston is a partner of Sovereign X and resides in San Miguel de Allende.

Jack Cranston, Writing From: San Miguel de Allende, Mexico

Editor’s Note: This is a post from Jack Cranston’s 2013 archives showing escalation of the U.S. federal government’s never-ending infringement on U.S. citizens’ rights— justified by national security—which began in earnest under the George W. Bush administration. This draconian control by propaganda, surveillance, disinformation, denial of truth, and the manipulation of the past has continued to grow to a point that, in 2021, it seems oh, too common—particularly the United States.

According to an analysis by the Associated Press, in 2012 the U.S. Government used “national security” as an excuse to censor or withhold more documents requested by the public than at any time in the history of the Obama administration. 

Ironically, the man elected as the “anti-Bush,” in many ways, outdid his predecessor.  According to the ACLU, “We’ve seen a meteoric rise in the number of claims to protect secret law, the government’s interpretations of laws or its understanding of its own authority. In some ways, the Obama administration is actually even more aggressive on secrecy than the Bush administration.”

This is an administration that, ironically, boasts about its commitment to transparency.  A memorandum entitled Transparency and Open Government is posted on the White House website.  In the memo, President Obama writes that “My administration is committed to creating an unprecedented level of openness in government.  We will work together to ensure the public trust and establish a system of transparency, public participation, and collaboration. Openness will strengthen our democracy and promote efficiency and effectiveness in government.”

What’s actually occurring is that the administration is committed to creating an unprecedented level of secrecy and opaqueness.  The Obama administration’s motto should be “Just trust us.”

As with many of the administration’s initiatives, their hollow commitment to openness generates blowback and distain. 

The administration is catching flack for appearing to be committed to ever increasing amounts of secrecy.  It keeps secret its legal justifications, policies and actions that result in gross violations of American’s liberties.  Examples include assassinations via drone strike and the power to detain American citizens indefinitely and secretly in clear violation of their Constitutional rights, and the interception and gathering of all citizens’ electronic communications. 

These new-found actions are unjust, unconstitutional, and, quiet frankly, un-American. As much as the administration’s spin-doctors within the White House, military, and homeland security do their best to justify these actions, history, commonsense, and our collective moral compass say it’s not okay.

These secret activities, and the administration’s recalcitrant attitude toward the public’s demand for more information and Constitutional accountability, undermine the public trust.  As opposed to Obama’s claims, the administration’s secrecy and attitude are weakening America’s democracy and making for a less effective government.

The administration’s actions fly in the face of Obama’s high sounding but ultimately false and misleading promise that he made in his first week in office.  He promised that public requests for information would be “administered with a clear presumption: In the face of doubt, openness prevails.”  In reality, the policy is “when in doubt, classify it as secret.”

“Catch-22” seems to be the administration’s new favorite game.  Embedding national security in all logical loops allows it to circumvent legal challenges.  You can’t successfully sue the NSA for intercepting your electronic communications because you’d need evidence that your specific communications were intercepted, and that information can’t be obtained because it is a national security secret.  U.S. judges can’t rule on the legality of certain actions when pertinent information, information critical to a ruling, is classified as “secret” and can be withheld on the grounds of “national security.”

U.S. federal judge Colleen McMahon of New York recently ruled against The New York Times and the ACLU in their effort to access documents regarding drone attacks. 

She referred to an “Alice in Wonderland” predicament: “I find myself stuck in a paradoxical situation in which I cannot solve a problem because of contradictory constraints and rules—a veritable Catch-22,” the judge wrote. “I can find no way around the thicket of laws and precedents that effectively allow the executive branch of our government to proclaim as perfectly lawful certain actions that seem on their face incompatible with our Constitution and laws, while keeping the reasons for their conclusion a secret.”

This is the new modus operandi of the federal government: grab even more power, justify it due to emergency national security conditions (owing to a never-ending war on terrorism), ignore the Constitution, and keep it all secret. 

It’s all right out of George Orwell’s playbook.

Don’t wait until the U.S. government puts more sections of the Constitution into the shredder.  Internationalizing your life is your best form of self-insurance. Unfortunately you can’t just flip a switch and have it all done instantaneously. It takes time to establish foreign bank accounts, domicile businesses in favorable jurisdictions, and acquire new legal residences and citizenships. Self-reliance, including a risk management plan based on internationalization, is your best course of action. Sovereign X can help.

Jack Cranston is a partner of Sovereign X and resides in San Miguel de Allende.

Jack Cranston, writing from Geneva

Editor’s Note: According to an exposé in The Atlantic earlier this year, the U.S. government “maintains a kill list of people whom it condemns to die in secret and kills with drones.” Yet drone killings, which include American citizens, mete out death to individuals who have never been charged, tried, or convicted.

Sound familiar? This is part 1 of a three-part series from Jack Cranston’s archives which illuminated this practice in 2012. Unfortunately, the United States’ actions have only escalated during the past decade. These killings began under President George W. Bush, exploded under President Barack Obama, and accelerated under President Trump. According to Rolling Stone, reports estimate that Trump upped the pace of drone attacks by about four to five times the Obama rate, which itself was 10 times the rate of Bush.

Step by bloody step the U.S. government is descending down to the level of despotic actions that the U.S. professes to abhor.  Actions, for which it feels it must shoulder the burden as the “world’s policeman,” to protect the good freedom-loving citizens of the world from the acts of numerous evildoers and so-called bad guys.

The U.S. government is now showing its true colors and is starting to routinely act like the evildoers it claims it has an obligation to fight.

Using a very matter-of-fact tone, the U.S. Attorney General recently discussed the U.S. government’s official policy on assassinations, including the recent assassination of a U.S. citizen.  I have to pause for a moment when I write that sentence as, until recently, I could never have conceived of a U.S. official casually and openly discussing the assassination of U.S. citizens. 

This shows how much we need to open our minds to the possibilities of government using its self-granted powers of force to encroach upon our liberties and personal rights in a way that heretofore would have been considered unimaginable. 

In the view (and actions) of the current administration, its lawyers don’t have to obtain a judge’s approval before a top government official orders an assassination.  Attorney General Holder was recently quoted as saying “’Due process’ and ‘judicial process’ are not one and the same, particularly when it comes to national security.” Holder went on to say that the assassination approval process has some limits, including that the use of force won’t kill “too many civilians or non-combatants.”

Too many? Too many!?! 

Admittedly, the U.S. is attempting to follow international standards for avoiding the killing of too many civilians. But regardless of international or domestic standards, this is another grave and slippery slope. How many is too many? One, two, eight, thirteen, one hundred? 

Where do they draw the line?  How many innocent lives justify the death of a single target?

Holder is also effectively asking us to place blind trust in the administration.  They are not publically releasing their internal legal memos developed for the self-justification of assassination and the suspension of due process. For an issue like this that so severely tests the basic tenets of the U.S. Constitution and the bedrock principles of individual liberty, it should be subject to a very public examination. Keeping this matter private, to be assessed, approved, and authorized behind the curtain, strongly resembles the despotic and arbitrary nature of the rulers of governments that the U.S. so haughtily holds itself to be above.

To date, and as far as we know, their intention is to limit the assassination of U.S. citizens to only those outside of the country.  But what’s so magical about an arbitrary line on a map? 

A border is just a man-made line drawn in the sand. The air doesn’t magically change when you cross a border.  Time doesn’t reverse and the laws of physics aren’t altered when you cross a border.  Now that the administration is openly and easily suspending due process, what’s to stop the U.S. from assassinating U.S. citizens within the United States based on a self-justified and non-public opinion that the target is an enemy of the state? 

And what’s to stop the definition of “enemy,” or “national security,” from growing to encompass any action or statement that could be construed as being critical of the government.?  Or sufficiently unpatriotic? Remember, it wasn’t that long ago that a President of the U.S. said, “either you are with us, or you are with the terrorists.” 

We could easily see the day when someone that the government claims is “against us,” for any number of reasons, has to suffer the consequence of a suspension of due process because of a so-called and self-declared national “emergency.”

What has separated the United States throughout much of its history from despotic, tyrannical, and uncivilized nations? The rule of law and the fairness of its application, respect for individual liberties, at least by design and public proclamation, and a well-respected process that must be followed before depriving someone of their natural rights.  Few if any nations can match the United States’ track record of respecting the freedoms of its citizens, as spelled out so eloquently in the Bill of Rights.

What separates despotic nations from the U.S. is their track record of widespread abuses of individual rights, and the arbitrary arrest, imprisonment, and frequent murder of people suspected of failing to follow the decrees of tyrannical rulers. Or based on proclaimed “evidence” that is never made public.

The U.S. government’s non-public and self-justified reasoning for suspending due process is starting to look eerily similar to the tyrannical abuses of other nations.

The continued erosion of the rights and liberties that the Founding Fathers fought for is all the more reason to follow our recommendations for internationalizing your life and living life on your terms.  Diversify your life by putting all of your precious eggs, such as where and how you spend your time, your assets, and your business interests, in multiple and safer baskets.

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Jack Cranston is a partner of Sovereign X and resides in San Miguel de Allende.