10 Things Trump Should Have Said in the Debate

Donald Trump and Hillary Clinton faced off in their first debate with each other.  While Trump did well in the eyes of some people, he really could have devastated Clinton.

It is easy to look back and think of things after the fact when you’ve had time to reflect, but Trump really needs to be prepared for some of these opportunities in the next debates.

Here are 10 things that he could have said, and probably should have said, in response to the questions from the moderator and the comments by Clinton.

  1. When Hillary Clinton was talking about Trump’s belief in trickle down economics, he should have responded, “You say I believe in trickle down economics. But it is you who thinks that people should hand over their money to government and that it will somehow trickle back down from the government to the people, instead of to the lobbyists. And you think my ideas are naïve?”
  2. When she brought up Trump calling women names near the end of the debate, he should have said, “At least I have never raped anyone. And my spouse has never raped anyone either.”
  3. When his tax returns were brought up, he should have said to Clinton, “Of course you can disclose your tax returns. Most of your money is filtered through the Clinton Foundation and kept well hidden.”
  4. Another response for the issue of his tax returns could have been: “You want to see my tax returns, yet you don’t care about auditing the Fed and seeing the books of the entity that controls the money supply for the world’s reserve currency.”
  5. When discussing the Iraq War, Trump should have said, “Not only did I not support the war, but I also did not support the foolish decision to invade Libya and then laugh about it as hundreds of thousands of lives were turned upside down.”
  6. When Clinton was talking about raising taxes on the wealthy, Trump should have responded, “You want to bring wealthy people down, while I want to create more wealth and wealthy people to go with it.”
  7. When talking about his temperament, Trump could have said, “Some people think I am brash, and perhaps sometimes I am, but that is only because I tell the truth. They just aren’t used to people running for political office who tell it as it is.”
  8. When Hillary Clinton linked the birther issue with race, Trump should have responded, “That is one of the problems we have today. Is that your way of trying to silence people? I am not allowed to say anything negative about Obama without you calling me a racist.”
  9. When Clinton said that too many African-American and Latino men are in prison for non-violent offenses, Trump should have responded, “Then stop helping to pass so many laws and regulations that land them there. What laws did you propose to repeal as a senator that would have helped keep non-violent people out of jail?”
  10. When Clinton was defending her stamina by saying she traveled to 112 different countries and spent 11 hours testifying in from a congressional committee, Trump should have responded, “You wouldn’t have needed to testify for 11 hours if you had been honest. And out of those 112 countries you visited, how many of those trips were a mission to solicit money for your foundation?”

While Trump’s debate performance was not terrible, let’s hope that he can come up with some better material at the next one to expose the liar and criminal that Hillary Clinton really is.

Libertarian Perspective of the Debate – September 26, 2016

I have suffered through another presidential debate.  This one was more like the Super Bowl.  In fact, the viewership compares only to that.

I will offer a libertarian perspective, but I also try to judge how a non-libertarian might judge the performance of the two candidates.

While there was certainly plenty of drama, it wasn’t as dramatic as what could have been.  We could have seen Hillary Clinton have a seizure or coughing fit on live television.

(By the way, I would not usually joke about someone’s ill health, but I view Clinton as vicious and evil.  Therefore, I have little sympathy.)

While Clinton held up on the debate stage, she looked rather shaky walking out there at the beginning.  I still believe she has some kind of a neurological disorder.

The debate started off with economics, which was just horrible to listen to.  Hillary Clinton’s answer is to hike taxes on the wealthy, to raise the minimum wage, to close the (non-existent) wage gap, and to spend more money.  She is the exact opposite of what a libertarian would want.

Donald Trump is bad on economics too.  He has been a successful businessman, but this doesn’t make him sound on economics.  I really don’t know if he doesn’t understand or he is just using rhetoric to appeal to voters.  When he talks about taxing imports, it makes me cringe.  Still, I think much of his rhetoric does appeal to middle America.

He is correct on jobs leaving the country.  But some of this should be done.  Some work is better done by non-Americans.  Trump needs to learn about comparative advantage in economics, among other thing.

Some companies send jobs overseas because of the tax and regulatory burdens in the U.S.  The answer isn’t to have import tariffs.  The answer is to dramatically reduce taxes and regulations.  To Trump’s credit, he did propose lowering the corporate tax rate from 35% to 15%.

Trump attacked Janet Yellen and the Federal Reserve, which was good to hear.  If he hadn’t said anything, you can be sure that the Fed would not have been brought up by Clinton or the moderator.

When they were talking about race relations, I found it rather hilarious that Clinton said that African-American and Latino males are going to jail for non-violent crimes.  Does this mean that she now favors getting rid of laws against tax evasion, all drugs, and prostitution?  It is a joke for someone who supports the federal drug war to make this statement.  Plus, other than actual crimes (murder, rape, theft, etc.), isn’t every crime a non-violent crime?  Every tax and regulation threatens to put people in jail if they don’t obey.

In terms of foreign policy, I think Trump could hit her much harder on the many disasters she has directly caused or contributed to in the Middle East.  It is unfortunate that Trump chose Pence has his running mate, as I believe it holds him back on this important issue.

In terms of style, I think the people who hate Trump will continue to do so.  The people who hate Clinton will continue to do so.  It will be interesting to see where the new polls come down, but I don’t think a lot is going to change.

Trump was aggressive.  Some will see this as toughness and a show of confidence and competence.  Others may see this as bullying.  I thought Trump made the mistake of interrupting too much at the beginning, but he got better as it went on.

Trump was more fun in the primaries when he was going against the entire Republican field and calling them names, but he was still a little entertaining in this debate nonetheless.

I understand that these are serious issues being discussed, but every major presidential candidate of the last several decades has been a complete disaster from a libertarian viewpoint.  So forgive me if I look for some entertainment within the disasters.

We’ll see what the next couple of months brings us.  There is still a lot that can happen.  There is Clinton’s health issues.  There is also the possibility that Wikileaks will release some damaging information.  And there is always the possibility of a major stock market crash or some other major financial or political event.

I am not voting for Donald Trump, but I am cheering against Hillary Clinton and everything she stands for.  With Hillary Clinton, we know it will mean more big government and war, although at least the Republican Congress will mostly oppose her.  Trump is a wildcard.  If he becomes president, I really don’t know what to expect.

Will We Have a Deflationary Depression?

I have been seeing more stories out there about the possibilities of some sort of deflationary depression, either in the United States or worldwide.  To be sure, it is not the so-called mainstream media saying this, but there is discussion out there on the web.  Even the United Nations recently had some grim things to say.

With the massive monetary inflation we have seen since 2008, along with the piling up of government debt, there is no question that we are going to see some rough waters ahead.

Western Europe is a mess.  The Italian banks are the latest story, but don’t for a minute believe that Italy is isolated in its problems.

Japan is a complete disaster waiting to happen.  The government debt-to-GDP ratio is around 250% now by some measures.  Meanwhile, the central bank there is creating money on an unprecedented scale.  In spite of all this, the economy is extremely weak.  They can’t even get an artificial boom out of their stimulus.

China is another story of massive debt.  The central government and central bank have misallocated resources on a massive scale.  The real estate bubble and its inevitable bust has not come to full fruition yet.

We know the problems in the U.S. are similar, although they don’t seem to be as bad as elsewhere.  While the Fed did major damage from 2008 to 2014 by quintupling the monetary base, the Fed has kept the monetary base steady for nearly two years now.  Still, the debt continues to grow, despite record tax receipts by the Treasury.

There is going to be some kind of a massive correction due to all of the malinvestment.  It will be mostly global too, because all of the major central banks have done damage.  I think the U.S. will fare better than China, Japan, and Western Europe, but that may not be saying much.

The place where I dissent from some of the stories out there is that I don’t think it will be a deflationary depression.

Prices for some assets will fall, especially where there is bubble activity.  I would expect U.S. stocks to fall quite a bit.  Real estate will likely fall too, but this will be more dependent on each area.  It won’t be like the housing collapse 8 years ago because the bubble has not been blown up as big.  Areas such as San Francisco, where there are major housing bubbles, will suffer.  All of Silicon Valley will probably suffer.

There may be a slight and temporary decline in consumer prices as measured by the CPI.  This will be a reflection of a higher demand for money.  It means that people will not be spending as much due to fear, and rightly so.

If there is deflation in prices, it won’t be a monetary phenomenon.  Much of the new money since 2008 went into bank reserves.  Perhaps there will be a reduction in lending, but it probably won’t be so dramatic that it will be hugely deflationary, which would be a reversal of the fractional reserve lending process.

If anything, if we hit a depression, we should expect the Fed to enact more monetary inflation.  This is unfortunate, as it does not allow a full liquidation of the malinvestment.  It does not allow resources to get fully redirected in accordance with consumer demand.

If there is any kind of price deflation with a depression, there should be no doubt that we will see massive quantitative easing.  It may top what we saw with QE3, where the Fed created about one trillion dollars out of thin air in 2013.

The Fed hasn’t even been able to raise its target rate in 2016 during a supposed recovery.  Does anyone think the Fed will just sit on its hands if we have some kind of a deflationary depression?

And we should not be fooled that the Fed is unable to produce positive price inflation.  This can always be done at some point.  Perhaps initially the fear will overwhelm the monetary inflation, but a determined Fed can reverse this.

Ben Bernanke himself said in a speech on deflation in 2002, prior to becoming Fed chair, that, “the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost.  By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services.  We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation.”

We should listen to Bernanke on this one occasion.  He is absolutely correct in his assertion.

If the Fed announced QE4 for $3 trillion annually, is there any doubt that we would see prices jump quickly, even in the midst of a depression?

In conclusion, I can envision some sort of depression, but I don’t think it will be a deflationary depression.  It won’t be like the 1930s, especially prior to the FDIC when banks were failing.

The Fed will not let the banking system implode.  It will not allow for sustained price deflation, even though we would be better off in the long run if it allowed the proper correction.

We could see a temporary period of consumer price deflation, but it will not likely last.  We should plan for a major correction, but we should also plan for the Fed’s reaction to the correction, which will be more of the same – mainly monetary inflation.

FOMC and BOJ – September 21, 2016

The Federal Open Market Committee (FOMC) has released its latest statement on monetary policy.  The Federal Reserve will not raise interest rates, or more accurately, will not target a higher range for the federal funds rate.

Since the fall of 2008, when the target rate was pushed to near zero (between zero and 0.25%), the Fed has only raised its overnight borrowing rate once.  This happened in December 2015, when the target rate range was raised by one-quarter of a percent (25 basis points).

At the beginning of the year, analysts, and the market in general, were predicting that the Fed would raise its target rate 4 times in 2016.  Now that we are in September with no rate hikes, we will see one at best.

If the Fed ends up hiking by a quarter of a percent in December, it will have taken about a year from the last one.  But we don’t even know if this will happen.  Every time the “next time” comes around, there is always an excuse on why it just isn’t time yet to hike rates.

The FOMC has another meeting at the beginning of November, but there is almost no possible way we will see any major announcement from that meeting.  This is right before the election and they aren’t going to send stocks into a tailspin just days before voting.

One thing that was a little different this time around is that there were 3 dissenting votes on the committee.  I think this is a way to signal that they might actually follow through next time.  Typically, the committee votes unanimously or with one dissenting vote.

Still, a lot can happen in just under three months.  It was around this time in 2008 that things fell apart.  We know there will be a new president coming and the markets don’t like uncertainty.  There are plenty of other problems out there too that could spark a downturn.

When the FOMC made its announcement, investors were generally happy.  Almost everything went up except the dollar.  The Nasdaq is hitting new all-time nominal highs.

Therefore, should we assume that markets are going to tank if and when the Fed does hike its target rate again?

Meanwhile, the Fed wasn’t the only major central bank in action.  The Bank of Japan (BOJ) made its own announcement.  This is interesting just from the standpoint that Japan is an absolute Keynesian mess.  Japanese officials are fulfilling Paul Krugman’s dream of massive government spending, massive debt, and massive monetary inflation.

Unfortunately for the Japanese, they are stuck in a weak economy that is only being made worse through all of the interventions.  So the BOJ decided to change things up a bit, or at least give that appearance.

The BOJ says it isn’t going to focus on monetary stimulus as much, and instead will target interest rates more.  The policy now is to target the 10-year yield at a zero percent rate.  Since the 10-year yield has been negative in Japan for the last several months, I’m not sure if we should be happy that this is an improvement, or depressed that things have come to this.

The BOJ has been engaged in monetary inflation that is unprecedented for a modern, supposedly first-world, nation.  It has been buying up assets (creating money) to the tune of 80 trillion yen per year, which is almost $800 billion.  In order to achieve its objective of targeting interest rates, we shouldn’t expect this massive monetary inflation to stop.

When you compare the BOJ and the Fed, the Fed is looking pretty good these days.  Sure, the Fed approximately quintupled (five times) the monetary base from 2008 to 2014, but at least it has stopped for now.

For the BOJ, it is almost as if there is some kind of a bet going on amongst the elite, or perhaps an experiment, to see just how far they can push this outrageousness.  I know consumer price inflation has been low in Japan (probably due to major fear), but this can turn on a dime.  If people see no end in sight to the monetary inflation, trust in the currency can turn quickly, especially when looking at the extent of the monetary inflation and the government debt.

There is going to be some kind of a major global correction.  It will be global because all of the world’s major central banks have made similar errors.

Luckily for Americans, the errors seem to be less damaging at this point when compared to Japan, China, and Europe.  Still, it doesn’t mean there won’t be pain here.

Investing in Money

The term “money” is generally defined as a medium of exchange. Sometimes you will see “store of wealth” added to the definition of money. One trait of money should be that it can be used as a store of wealth. But just because something is a good store of wealth doesn’t make it a good form of money.

In the United States, the U.S. dollar is the primary form of money. In fact, it is really the only money that is used.

Gold bugs often make the mistake of saying that gold is money, but this lacks accuracy. Gold has a long history of serving as money, and gold would likely still serve as money if not for the monopoly powers of the central government and central bank.

In a few countries, gold may serve as a secondary form of money. It has been used in Zimbabwe since the hyperinflation there, but so have dollars and euros.

In the U.S., the dollar is money because it is widely sought and widely accepted. You can walk into any store and use your dollars, whether in actual currency form or digital. You cannot walk into your local grocery store and pay with gold. They would look at you as if you were nuts. The same can be said for Bitcoin.

But just because the U.S. dollar reigns supreme right now, it doesn’t mean it will always be this way. It also doesn’t mean that it is the best investment.

When comparing the U.S. dollar with gold and Bitcoin, they all have their unique characteristics. You can invest accordingly.

Rosland Capital has put out a chart comparing these three assets based on 10 different traits. Partly based on this gold-backed IRA page, it shows how each asset rates according to each trait.

rosland_gold_traits_table_x2-1-1

It is actually gold that dominates the comparison. This is why the marketplace has favored gold as a form of money for thousands of years. It is only in very recent history that central banks and fiat currencies have dominated.

The most important trait where the U.S. dollar dominates is spendability, as mentioned above. This is why the dollar is money and why it is in such high demand.

In terms of investing, the dollar rates at the bottom when it comes to scarcity. There is no technical limit on the number of dollars (or digits) in circulation. The Federal Reserve could decide tomorrow to create another one trillion dollars out of thin air. This is why the dollar has lost over 95% of its value over the last one hundred years.

So while the dollar is still highly desired for its spendability and its liquidity, it has actually not served as a good store of value over time. And the only reason it has ever been highly desired is because it has essentially been forced on us by legal tender laws and other laws.

Bitcoin scores better than the dollar in several categories, but it is certainly not money. Sure, there may be a very small number of online stores that will accept Bitcoin, but it is not widely accepted. In fact, you can randomly ask people on the street, and many will not have even heard of the digital currency. Also, when bitcoins are spent on a purchase, they are often converted back into dollars.

As an advocate of liberty, I can certainly appreciate Bitcoin and the whole idea of digital currencies. Any competition for the central banks is a positive development. However, most people do not understand Bitcoin if they even know what it is. And Bitcoin does not have the history or reliability that gold does.

While gold does not rank high in a few categories, some of these would be solved with widespread use, coupled with today’s technology. For example, gold does not rate high in security, portability, and divisibility, but this could easily be resolved in the marketplace. It is not hard to imagine having credit and debit cards with gold payments. It is not hard to imagine a currency that is backed by gold. It is not hard to imagine mixing small amounts of gold with cheaper metals for lower value coins. There are any number of possibilities with today’s technology.

The one area where gold still loses out to the dollar is in actually using it as money (referred to as spendability in the chart). This is a result of the government and central bank taking over and controlling the money we use. The Fed has only been around for just over a hundred years. The last link the dollar had to gold was cut off 45 years ago. Since that time, inflation has been horrendous.

It may seem that the price of gold is quite volatile, and it is when pricing it in dollars or any other fiat currency. But this is more of a reflection of the volatility of the currencies. The price of gold jumps around due to announcements from the Fed and other central banks, or from speculation from investors trying to guess what the Fed will do next. And like any other asset class, gold is subject to booms and busts induced by the Fed’s monetary policies.

In conclusion, gold is not in high demand for it to serve as money. If it is in high demand at all, it is because it serves as a good store of wealth. It is an insurance policy against a depreciating currency.

Gold may yet again serve as money for our society as people realize that central banks have destroyed their currencies. Until that time, it is still smart to hold some gold and gold-related investments, as the destruction of the dollar and other currencies will not stop.

CPI Ticks Up in August

The latest consumer price index (CPI) numbers were released, showing a slight uptick in August.  The CPI was up 0.2% in August, and it is up 1.1% from last year.

However, the all-important median CPI, which does not get a lot of attention, came in at 2.6% from last year.  This was the second month in a row at 2.6%.

To be sure, these are not big changes.  But the government’s statistics here are indicating a slight uptick.  And it is the trend we are looking for, because we know the overall rates are inaccurate.

The Fed ended its last round of monetary inflation (QE3) in October 2014.  It has been almost two years of a relatively flat monetary base.  Yet, consumer prices continue to move upwards, even if slightly.  This means that some of the Fed’s huge monetary inflation from 2008 to 2014 is still leaking out.

We have seen the price of oil come crashing down in the last couple of years, but that is the only major asset bubble that has crashed.  I don’t count the precious metals in here (silver and gold in particular) because they moved down several years ago, when the Fed was still inflating rapidly.

Is it possible that not everything will come crashing down at once?  Maybe it is possible that we could have a major correction in stocks without seeing the whole economy implode.  I don’t think this is likely, but it is possible.

The Fed likes its position right now because the consequences of its previous monetary inflation are not evident.  There are severe consequences in the form of misallocated resources, but they are not apparent in significantly higher consumer prices.

I have no idea what the Fed will do in its upcoming meeting on Wednesday.  The market really has no idea either.  It is almost a 50/50 bet at this point, which is rare going into a meeting.

If I had to guess, I don’t think the Fed will raise its target rate.  Call it an insurance policy against a Donald Trump presidency.  But we really can’t be sure.  You will want to pay attention on Wednesday afternoon.

Free Edward Snowden

Edward Snowden is petitioning the Obama administration for a pardon.  While I don’t give it a high probability, it is certainly worth trying on his part.  He has a better chance with Obama exiting than with the other major candidates, one of whom will take over as president.

If Obama were to grant a pardon to Snowden, it would push Obama up in my eyes slightly.  It can’t undo his crimes in office, particularly when dealing with foreign policy.  It doesn’t undo his interventions in Syria, Libya, Iraq, Afghanistan, Ukraine, and elsewhere.  It can’t bring back the lost lives and the destruction.  But at least it would be one good thing.

I believe that Snowden is basically home sick.  It is good for him (probably life saving) that Putin has granted him asylum in Russia. But Snowden misses the U.S. and wants to come home, despite knowing the crimes of the U.S. government.  He just doesn’t want to end up in a jail cell or worse.

There is a new movie coming out on the Snowden story.  It was made by Oliver Stone.  Perhaps it will help spread more sympathy for Snowden.  At this point, American public opinion is important for his cause.  He needs for more Americans to view him as a hero and not as a traitor.

I have written before that I can determine with high accuracy someone’s political persuasion just by asking two questions.

  1. Do you believe that Snowden is a hero or a traitor?
  2. Do you favor Obamacare, or some kind of nationalized healthcare system?

Someone who believes Snowden is a hero and who also is against Obamacare and nationalized healthcare is typically libertarian, or at least leans that way.  It is easy to see how the political conservatives and liberals will answer.  I refer to “liberal” as it is commonly used today.

For someone who favors nationalized healthcare and thinks Snowden is a traitor, that person is an authoritarian all the way around.

Hillary Clinton said that Snowden should have sought whistleblower status and gone through the appropriate channels, instead of releasing the classified documents.  Of course, this is a joke.  The appropriate channels are the same people committing and concealing the crimes.

It should be James Clapper (who also lied to Congress) and other NSA officials facing jail time.  It should be Obama and those others who have enabled this spying who should be labeled the traitors.

The crimes that Edward Snowden and Bradley (now Chelsea) Manning exposed resulted in them being punished, yet the actual people who committed the crimes they exposed get nothing.

Manning is in jail for up to 35 years.  Manning released information to Wikileaks, including this video of U.S. military personnel killing people in Iraq from a helicopter, acting like it is some kind of a video game.  So Manning exposes the murderers, yet it is he who goes to jail and is tortured.

Americans really need to get their priorities straight here.  These people are exposing the crimes of the U.S. government that are being committed against the American people (and Iraqis and others).  They are exposing the truth, yet they are being punished by the people who are being embarrassed over these truths.

Snowden did not release data from the NSA for any other reason than to expose the criminality of the agency.  He was acting as a truth teller for the American people.  The American people should be thanking him and coming to his defense.  Yet, many people think he is somehow a traitor.

Snowden did not have to do this.  He could have quit his job and said nothing, or he could have kept doing his work at the NSA.  Those were his only two other options.  There is no other option of being a whistleblower and not getting in trouble.  If you believe that was an option, I am sorry to say that you are being very naive about the situation.

I hope that Snowden is allowed to walk free one day again in the U.S. I hope that public opinion shifts to his side.  I hope that Obama finally gets something right after nearly 8 years and issues a pardon for him.

Free Edward Snowden.

Do Stocks Always Go Up?

It is amazing that I still hear the phrase, “Stocks always go up in the long term”, or something to that effect.  I even hear it from people who are otherwise rather savvy when it comes to the subject of money.

I suppose you have to define “long term”, but I would still have to quibble with this even if we are talking about decades.

In the U.S., stocks have historically gone up over time.  There is no question about this.  But even throughout the last century, there were a couple of periods where there were long downturns.

If you had bought the S&P 500 index at the top in 1929, you would have had to wait until 1954 to get back to where it was, with a lot of roller coaster action in between.

If you had bought that same index in 1968, you would have had to wait until 1979 to get back to about the same level.  But this is in nominal terms.  The 1970s saw horrendous price inflation in the double digits.  On an inflation-adjusted scale, you would have waited until the early 1990s.

But this is just the past.  As the SEC says, past performance does not necessarily predict future results.

It gets worse if you look at Japan.  The Nikkei hit almost 39,000 in 1989.  Today it is around 16,000 to 17,000.  For anyone who says that you can buy and hold stocks because they go up in the long run, have them tell that to a Japanese investor who bought shares in 1989.  It is now 27 years later and his investment is worth less than half of what he paid for it. How long is he supposed to wait?  40 years?

And let’s remember, we aren’t talking about some third-world country.  In the 1980s, many Americans thought the Japanese were going to take over the world, at least economically speaking.

I have no issue with people buying stocks, but it should be done with some understanding and realistic expectations.  If some 22 year old out of college wants to put his first $5,000 saved into the stock market, it isn’t a big deal.  Even if he loses all of it, he can easily recover.  Of course, for a 22 year old, he might be better off investing in himself with a good trade or a side business.

For someone with a substantial net worth, especially for someone who is older, I don’t think it is wise to have a large percentage in stocks.  Anything over 50% is extremely risky in my view.

This is why I advocate a permanent portfolio, or at least something that somewhat resembles it.  This is a portfolio that really will likely go up in the long run.  There are no guarantees in life, but you should at least search for things that have high probabilities.

In conclusion, stocks don’t always go up.  In a true free market, stocks probably wouldn’t go up because we would have a more stable money supply.  Stocks in general go up in price primarily because of monetary inflation.

In a true free market, people would buy stocks primarily for the dividends.  Some would go up and some would go down based on the expectations of future dividends.

But we do not live in this world now.  It is highly distorted by government and central bank policies.  Most people buy stocks for capital gains.  Still, they don’t always go up.  Just ask the Japanese.

What is Aleppo?

Do you know about Aleppo?

It is a city in Syria that has been much of the face of the war and refugee crisis in Syria.

Gary Johnson appeared recently on “Morning Joe” on MSNBC.  Co-host Mike Barnicle asked Johnson, “What would you do if you were elected about Aleppo?”

Johnson responded, “About?”  After having it repeated, Johnson responded, “And what is Aleppo?”

Barnicle responded, “You’re kidding.”  He then explained that it is the epicenter of the refugee crisis in Syria.

After Johnson responded, he was pressed further on the fact that he was confused about the question.  Since then, some are saying that his lack of knowledge regarding this question disqualifies him from being president.

Now I have been a pretty harsh critic on Gary Johnson in this campaign cycle.  I wrote 10 reasons on why he is not a libertarian.  But this latest story is absolutely ridiculous.

It was meant as a “gotcha” question.  There is no reason the interviewer couldn’t have asked, “What would you do about the refugee crisis in Aleppo, Syria?”  This would have been a clear question.  And even if an interviewer assumes that the candidate will know what Aleppo is, he shouldn’t assume the listening audience knows.  This just shows a lack of clarity or a lack of character on the part of the MSNBC hosts.

Johnson’s response since then has been decent, although still not as strong as I think he could be.  He admits he was caught flat-footed and thought the co-host was using an acronym or something like that.

If I were Johnson, or working on his campaign staff, this is what I would say in response to this whole episode:

“The other day, I was asked about Aleppo and did not immediately understand what the interviewer was asking.  He was referring to a city in Syria.  Because I did not immediately recognize the name of the city in Syria, many people think this somehow disqualifies me from being president.

But knowing the name of a city which most Americans would not be able to locate on a map is not important to Americans or the people of Syria.  What is important is good judgement.

The only reason that there is war and a refugee crisis in Syria right now is because of the reckless policies of the U.S. government trying to interfere in the world.  The U.S. invaded and occupied Iraq, which led to a destabilization of the region.  Then the U.S. government tried to overthrow Assad in Syria and is still trying to do so to this day.  Hillary Clinton is directly responsible for these and other like policies of intervention, as are the Bush and Obama administrations, as well as many members of Congress.

Would you rather have a president who does not know the name of a city in Syria, or would you rather a president who uses corruption and poor judgement that results in the deaths of hundreds of thousands of people and the destruction of whole countries?

Would you rather have a president who uses sound judgement and promotes peace, or would your rather have a president that can memorize geography yet abuses power and shows little regard for human life?

These are the choices facing the American people.  Do you really think that most Americans care about knowing the name Aleppo?  They may care what is happening there, but only because the region has been destabilized by politicians using poor judgement and acting on behalf of their cronies instead of working on behalf of the American people.

If there are Americans out there who think that not knowing the name Aleppo disqualifies someone from being president, then that is their choice.  But the majority of Americans are more concerned about peace and prosperity than winning a quiz contest in world geography.  And if you are an American that supports peace and prosperity, then I am your choice.”

If Gary Johnson really wants to be a contender, he should not show weakness here.  He should attack all of those who have caused these problems in the first place.  If it weren’t for a massive interventionist U.S. foreign policy, there would likely be no crisis in Aleppo.

ECB Disappoints with Lack of Enthusiasm for Hyperinflation

The European Central Bank (ECB) announced on Thursday that it would leave its target rates unchanged, while also standing pat on its monetary inflation.

The ECB is purchasing assets of 80 billion euros (about $90 billion) per month, which is expected to last at least through March 2017.  The ECB is trying to top the Federal Reserve’s QE3, which ended in October 2014.  At the peak of QE3, the Fed was buying $85 billion per month in assets.

In terms of quantitative easing by major central banks, Japan may be the biggest winner of them all.  As the Fed finished up QE3, the Bank of Japan ramped up its monetary inflation, buying 80 trillion yen per year.  This currently equates to around $780 billion per year.  This is lower than the Fed’s $1 trillion in 2014, but consider that Japan’s GDP is about one-quarter that of the United States.

Despite the ECB’s continued program of asset purchases (digital money printing), investors were disappointed that the central bank isn’t being more aggressive.  In a world of negative interest rates and massive monetary inflation, investors still want more.

The ECB is going to continue on its path.  If the economic conditions in Europe don’t improve, we can be rather sure that the ECB will continue its program beyond March of 2017.  Why would they announce it now when they can just wait until later?  It will be easier to find excuses later to continue the monetary inflation.

It is similar to the Fed’s strategy of raising the federal funds rate.  Fed officials keep saying it is on the table, but there is always a new excuse when the next time arrives.

Even though the Fed isn’t raising its target rate, other than the one quarter percent last December, it still has the sanest policy of all of the major central banks.  The Fed has actually kept the monetary base relatively stable for nearly two years now.

The economies in Japan and most of Western Europe are already far weaker than that of the United States.  The U.S. economy has a bigger chance of weakening in the short run because of central bank policy.  The relatively tight policy could expose the malinvestments from the previous Fed stimulus.

On the other hand, Japan and Europe could fall much harder.  They have copied the Fed’s insane policy from 2008 to 2014.  But the ECB and Bank of Japan have stepped it up beyond what most of us would have thought was possible.

The massive monetary inflation is unsustainable.  It may not seem like it now, but this cannot go on forever without seeing some serious consequences.  We will either see a scenario of massive price inflation, or we will see a big depression.  It could even be a combination of both for a while.

Americans should hope that Japan and Europe implode first.  As more Americans learn that the Fed is part of the problem and not the solution, we can hope that public pressure will prevent us from going down a path similar to Japan.

The inflation and debt in the U.S. have been massive, but it is still nothing compared to Japan.

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