Inside today’s Daily Journal…

Something is about to break.

And even if you think you’re ready for it, you’re not. Before the end of this decade, the U.S. federal government and the entire banking system will face its biggest crisis since 1933.

The size and scope of Americans’ dependency on the government – which has grown consistently, year after year, since President Lyndon Johnson’s “Great Society” programs – has overwhelmed the government’s ability to fund these programs with taxes.

Again and again over the last 15 years, the government has funded itself, in ever growing amounts, by printing money to buy its own bonds.

This ongoing, insidious inflation has destroyed the middle class and left most Americans trapped in an economy where prices continue to rise much faster than wages. As a result, most people under 40 no longer believe in the American dream and see collectivism and socialism as the only viable path forward. That’s the thing about corrupting the money. It doesn’t only harm the economy. It corrupts the entire society.

America’s social fabric isn’t going to be destroyed. It already has been destroyed.

OnlyFans, a social media platform that facilitates prostitution, has exploded from a start-up in 2016 to a $7.2 billion revenue behemoth. And, since COVID, revenue is up 2,570% with 1-in-10 women under age 30 having active accounts. Americans spend more on OnlyFans than they do on the #1 selling newspaper and #1 AI platform… combined.

Gambling? Sports betting – once a fringe, illicit activity in most communities – has ballooned to $200 billion in annual wagers, generating $17.6 billion in bookmaker wins and $3 billion in taxes.

But what happens to young men when both porn and gambling are available, privately, on their cell phones?

Nothing good.

Marijuana dependency?

Daily or near-daily marijuana use has grown from less than 1 million Americans in 2008 to over 20 million today, a 2,000% increase. And most of these daily users are men.

This is only the beginning. Imagine what will happen to our society by 2030 when the Social Security Trust Funds are fully depleted, and college-educated young men can’t get a job because of artificial intelligence (“AI”) – unless it’s in nursing. (See the data point #2 below, in the “3 Things To Know…,” about where all of the job growth is in America today.)

President Donald Trump promised to reduce wasteful spending and, by doing so, restore some fiscal discipline. And he’s tried: 10% of the federal workforce has been cut. He promised that U.S. foreign trading partners would pay tariffs to boost revenue. And through more economic growth, the federal deficit could be controlled.

But it isn’t working.

In this fiscal year, government revenue is way up (+12%), but spending continues to grow, most importantly spending on Social Security, Medicare, and Medicaid – up 9%. Interest on the debt is up 13%. Veterans affairs (mostly healthcare) is up 12%. Overall, spending is up 2% so far this fiscal year. Nothing stops this train. We’re heading for a $1.7 trillion deficit this year. Outside of COVID, wars, and the Global Financial Crisis, America has never seen deficits on this scale before. And yet, for the last three years in a row (2023, 2024, 2025), and now, for the fourth, we’ll see federal deficits in excess of 5% of GDP.

Just in these last four years (including 2026), the federal government will have grown total debt by 25% ($10 trillion).

This is the doom loop. What’s driving these deficits isn’t a bad economy, a banking crisis, or a war. What’s driving these deficits are failed policies that are not affordable and the lack of any accountability to the public by our government.

The government’s solution? More money printing.

The Fed is now printing up $40 billion a month to purchase U.S. Treasury bills under the euphemism of “reserve management purchases.” The actual reason is far more urgent. With $9 trillion in maturing Treasuries needing rollover in 2026 alone, the fiscal demands are crushing. Interest on the nearly $40 trillion in debt will be well over $1 trillion this year.

Even the people who have benefitted the most from the financialization of America, like BlackRock CEO Larry Fink, are warning that the printing is going to get out of control. In his annual shareholder letter this year, he wrote:

Again, that’s not something that might happen in another 10 years. What Larry Fink didn’t dare admit is that’s already happening as central banks around the world continue to dump Treasury bonds and craft new trade agreements outside of the dollar-based, global financial system.

The most notable such agreement, the Brazil-China trade deal, is a clear threat to America’s global financial hegemony. By bypassing the U.S. dollar completely, the deal promotes the use of the Chinese yuan in international settlements, as seen in similar pacts with countries like Russia and Saudi Arabia. Today, more than 40% of Brazil’s bilateral trade is settled in yuan, up from near-zero four years ago. Brazilian exporters, especially in sectors like agriculture and commodities, have increasingly adopted yuan for transactions, reducing currency conversion costs and exposure to the dollar.

Secretary of State Marco Rubio is now publicly warning that the dollar is under dire risk of being replaced as the primary means of settling global trade.

It is stunning that every American isn’t aware of these risks and that every American isn’t doing whatever it takes to limit our government’s ability to print and borrow. The facts are obvious and indisputable: we cannot afford the promises the U.S. government has made. They must be reformed, or they will destroy us all. Former British Prime Minister Margaret Thatcher’s warning is the perfect summation: socialism only works until you run out of other people’s money.

I suspect that we are entering the final phases of what will be the largest “blow off top” of all time in the financial markets, as the government will continue to produce prodigious amounts of new credit, while printing money to pay for it. This will, in the short term, reward speculators who flee the dollar into financial assets. But, in the end, it will cause an enormous collapse that will dwarf even the Great Depression.

My advice? Enjoy it while it lasts. And make sure you continue to buy gold.

Tell me what you think: [email protected]

Good investing,

Porter Stansberry
Stevenson, Maryland

1. A big change in market leadership. Recent market-leading sectors – most notably Information Technology and Communication Services – are underperforming, and lagging sectors – such as Energy and Materials – are now leading the way. This shift is happening as the AI boom disrupts the digital economy, while ramping up demand for resources, hardware, and other tangible goods.

2. Mixed signals: 130,000 jobs added or did layoffs surge? According to the Bureau of Labor Statistics (“BLS”), the U.S. added 130,000 jobs in January, but 95% of those gains were siloed in healthcare and social assistance. Private-sector data, on the other hand, show that the labor market cooled: employers announced 107,338 job cuts, while small businesses and manufacturing shed a combined 38,000 positions. Maybe the new BLS head just wants to keep his job. (Vote in the poll below.)

3. Google to build a data center on Texas Pacific’s land. Alphabet (GOOGL) and Bolt Data & Energy are discussing plans to construct a data center on Texas Pacific Land’s (TPL) vast acreage – also accessing water there for critically needed cooling. Cheap energy and a business-friendly regulatory environment are transforming West Texas into a “data center alley.” Shares of Texas Pacific – the largest landholder in the region – rallied to a 52-week high above $400, and are now up nearly 34% since being added to the Complete Investor portfolio.

Construction and mining-equipment maker Caterpillar (CAT) continues its impressive, upward run, hitting an all-time high of $775 today – now having jumped 105% since joining Porter’s Permanent Portfolio in 2024.

Paid-up Subscriber Mike H. Writes:

Porter Comment: Hi Mike —

Sorry to disappoint. I don’t know how I missed your earlier email.

I read all of my mail and always reply when people ask me things that I’m allowed to reply to (I can’t reply to questions like: should I buy xyz or what should I do about my personal financial situation, etc).

To answer this question, I would refer you to the numerous articles I’ve written since 2007 about The Hershey Company (HSY) and, most particularly, the things we at Porter & Co. have written about it recently. I say this because I’d hoped answering this question would be easy for anyone familiar with my work. I’ve said, consistently, that Hershey is one of the best companies in the United States and, at the right price, one of the best long-term investments you can possibly make. And I’ve explained why many times.

Let me repeat some of that for you here.

While two years may seem like a long time to invest, Hershey has been traded on the New York Stock Exchange since 1927 – almost 100 years. For a variety of reasons, I believe it will be traded for another 100 years, at least.

While you may not have 100 years to wait, if you take just a slightly longer time frame than two years (say the last decade), you’ll discover that Hershey has returned about $11 billion worth of capital to its shareholders via cash dividends ($7.5 billion) and share buybacks ($3.4 billion). Now, I would agree that buybacks can be risky, but I’ve seen that Hershey management is rational: they buy more when the stock is cheap, including $500 million last year.

When you look at these returns on capital, you’ll notice something that’s pretty amazing: the cash distributions always go up. And not by a little – but by a lot. Even in “bad” years. In 2020 and 2021, when COVID destroyed many companies, Hershey increased its cash dividend from $610 million in 2019 to $775 million in 2022 (+27%). Hershey has increased its dividend each year for 55 years.

And that’s why, in my view, owning Hershey is far more like owning a bond (fixed income) than a typical stock. But it’s a bond that has ever-increasing payouts – and even more interestingly – constantly decreasing amounts of float.

All of this is a way of saying that, while share price is important in the short term, over the long term, what matters more is a company’s earnings power. I believe that consistently predicting short-term moves in share price is virtually impossible. But understanding how great businesses work to produce lasting wealth is very possible.

With Hershey, its earnings power will continue to generate rising dividends and provide capital to buy back more and more stock. Want to know how that plays out over time?

I first recommended Hershey in 2007.

I wrote – back then – it would be my best recommendation of all time.

In 2007, it had 228 million shares outstanding and a total market cap of around $9 billion.

Since then, its dividend payout has grown 5x – from $201 million to $1.1 billion.

And, remember, these payouts are going to fewer and fewer shareholders, thanks to buybacks. There has been a 12% decline in shares outstanding since 2007.

Over the last 18 years, Hershey has spent around $10 billion on cash dividends and around $5 billion on buybacks, for a total capital return of $15 billion.

Investors who bought in 2007 have been repaid directly for more than their initial investment (1.6x), and they own more of the company today (about 12% more) than they did in 2007 too!

The net of all of this is, despite Hershey’s currently depressed share price, is a 623% total return since 2007.

That’s a 10.3% annualized rate. That beats the S&P 500 over the same period by about 500 basis points a year – despite having about half the S&P 500’s volatility.

If you can find a better investment, please let me know about it!

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 our Customer Care team at 888-610-8895 or internationally at +1 443-815-4447.