Nvidia is the world’s largest company.  Based on its share price, it is worth more than $5 trillion.

There are currently about 14 companies valued over $1 trillion, but it is hard to count something like Berkshire Hathaway because it is more of a holding company that owns shares in other companies.  There are also a couple of companies outside the U.S. that are included on the list, which are chip/ technology companies.

Other notables are Apple, Microsoft, Alphabet, Amazon, and Meta.  Aside from Berkshire and Eli Lilly, they are primarily technology companies.  Perhaps Tesla and SpaceX are debatable, but they are selling their technology to a certain degree.

Apple was the first publicly-traded U.S. company to reach a trillion dollars in market cap.  That was in 2018.  Here we are 8 years later with about a dozen.  Again, Nvidia is over 5 times the amount that Apple reached in 2018.

Tech Bubble 2

It’s hard to believe that the tech bubble of the late 1990s is almost 30 years ago.  I had just started trading stocks and following the markets around this time.  It is almost hard to believe that we could have something of a repeat from what happened then.

Today, it is still technology.  In the 1990s, companies would stick a “dot com” at the end of their name, and that would instantly raise interest amongst investors.  There were some ridiculous valuations for companies that were not even making a profit.  Some of them were barely making any revenue.

(Perhaps one of my biggest financial mistakes of all time was selling shares of Amazon that I had bought around that time.)

When the tech bubble burst in the early 2000s, it meant some companies went bankrupt.  Aggressive investors lost quite a bit of money.  Yet, it was not the end of the internet.  In fact, it was barely the beginning.

The same will likely go for artificial intelligence (AI) and chipmakers today.  Many of these companies will go bankrupt.  Some of the big players will probably survive.  AI itself is not going to die.  The hype around it will fizzle, and reality will set in that you can’t get rich simply by investing in something that is in the AI space.

A company is only going to be profitable in the long run if it can produce products that are in demand in the marketplace.  The only exception to this rule is a company that makes its money through government contracts or government favors, although even here they usually have to produce something.

Will it Repeat?

There are a lot of similarities between now and the first tech bubble of the late 1990s.  I do have to acknowledge one significant difference.  We have a lot more monetary inflation now than we did then.

If you remember the late 1990s, it was the last time the federal government was anywhere close to not running a budget deficit.  There may have been some accounting tricks in counting the excess Social Security tax collections as a surplus when they were really supposed to be going to a trust fund.  Still, we were close to a balanced budget.  The Fed’s inflation was mild compared to today.

Now we are seeing $2 trillion deficits, and this isn’t during a recession.  The Fed already went crazy with monetary inflation in 2008/ 2009, and again in 2020.  In that sense, maybe some of these trillion-dollar valuations are somewhat justified.

Still, stock prices, and particularly big tech stock prices, have gone up much faster than consumer prices in general.

If there isn’t an immediate mass inflation ahead, then a reversion to the mean will likely mean a big drop in these tech giants, including the ones that are quite profitable.

When the tech bubble popped in 2000 to 2002, the Nasdaq fell almost 80% from its peak.  I am not saying it will be this bad this time.  If anything, the Fed would probably step in sooner and be more aggressive.

But imagine if the Nasdaq were to fall just 50% from where it is today.  That would be quite significant.  It would probably change the retirement plans of millions of people.  It might change their vacation plans too.

The latest CPI figures were released for September 2026.  The CPI showed an increase of 0.6% for the month of September.  The annual rate stands at 3.7%.

The median CPI came in lower at 0.2% for the month and an annual rate of 2.6%.

If you take out food and energy, the CPI was still up 0.3% for the month.  The year-over-year CPI less food and energy stands at 2.6%.  In other words, even if you take out the price you are paying at the gas pump, prices are still rising more than 2% per year.

This is the last CPI report to come out before the mid-term elections.  Don’t get me wrong.  I understand that voters aren’t sitting there waiting for a government report to determine how they are doing.  It’s not as if someone would vote for a Republican next month if the CPI had just come in a few points lower.

Still, it points to the overall picture that things are tough for the average American.  Even though wages have gone up in nominal terms, they are generally not keeping up with the cost of living.

Every person’s personal CPI is different.  Some people have to commute for an hour a day, while others work at home.  Some people have to buy health insurance and car insurance for the whole family.  If you have older teenagers, you understand.

This has to be the number one voting issue on people’s minds, especially for swing voters.  Voters who are passionate about cultural issues probably won’t be swayed one way or the other.  But someone who is middle of the road may decide to vote Democrat this time around because they rightly hold Republicans responsible for this round of price inflation.  There are also libertarians like me who will just not vote for either major party.

Inflation, War, and Tariffs

Milton Friedman once said that “inflation is always and everywhere a monetary phenomenon, in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output.”

Friedman was talking about price inflation.  The real definition of inflation is the actual increase in the supply of money.

Anyway, I believe I have quoted Friedman on this before, and I believe he was generally correct in what he said.  In order to have sustained price inflation over a long period of time, it has to be because of monetary inflation.

Still, I want to be clear that the government can still make our lives more expensive without monetary inflation.  The government can regulate, tax, restrict trade, and restrict competition.  This makes our lives more expensive than they otherwise would have been.

The problem for Trump and the Republicans is that their policies can be directly tied to the higher price inflation we have now.  It isn’t just a monetary phenomenon.

The two signature things Trump has done over the last year and a half is to constantly change and threaten to raise tariffs and starting the war against Iran.

Tariffs are taxes on imports, which make the products Americans import more expensive.  If the tariffs stay the same from here on, then they shouldn’t continue to raise prices  at some point because it will just be the new high prices.  It is like any other tax in that sense.

The war on Iran directly caused the price of oil to go much higher.  This, in turn, caused higher gas prices.  It happened almost immediately after the war started in late February 2026.  Trump can blame higher diesel prices on Ukrainian attacks against Russia (which Trump continues to fund), but it is quite obvious and correct to conclude that gas prices wouldn’t have gone anywhere near this high if Trump hadn’t started the war against Iran.

Sure, there are some people like me who are critical of the war first and foremost because it is immoral and killing people.  But this war is directly tied to higher gas prices for Americans, so it makes Americans pay more attention than they otherwise would have.  Even the Trump apologists understand that the higher gas prices are tied to the war.

This is why the Republicans are going to get destroyed in the upcoming elections.

The Fed’s Next Move

The next FOMC meeting is the last week of October.  It will be just a week before the election.  Who knows if this will play into their decision?

The Fed is still mildly inflating its balance sheet while simultaneously hiking its target interest rate.  We don’t know if we will see another small rate hike in October or December.  I don’t think any of the FOMC members care about hurting Donald Trump except in that they don’t want to experience his wrath.  Even Kevin Warsh, who was recently appointed Fed chair by Trump, probably wouldn’t care if the Democrats come into power and impeach Trump.

Trump continually calls for lower interest rates.  Trump is an economic ignoramus, as you can see from his tariffs.  The only reason the Fed is essentially forced to hike its target interest rate is because of the higher prices from Trump’s tariffs and his war against Iran.  But Trump is too much of an idiot to even see or understand this.

Sure, the Fed is also responsible for price inflation.  Typically, it is the main culprit.  But if you didn’t have the war and the tariff craziness, it is not hard to imagine that the Fed wouldn’t be hiking rates at this point.  If the CPI numbers showed price inflation going back to the Fed’s target of 2%, we certainly wouldn’t be seeing these rate hikes.

It is hard to say how much the Fed is driving yields and how much yields are driving the Fed.  But these higher interest rates, including higher long-term interest rates, are also trouble for Trump and company.  It raises the cost to borrow for Americans, and it also raises the amount of interest the government has to pay out on its massive debt load.

I don’t think Trump has much, if any, control over the Fed now, even with his threats.  The Fed will react to bond investors, inflation numbers, and the general consensus of the financial community.

If the economy gets worse, Trump will blame everybody but himself.  He will certainly blame the Fed.  But the man he just appointed as Fed chair voted with the others to hike rates at the last meeting.

Ken Paxton is running for U.S. Senate from the state of Texas.  Texas may turn blue (Democrat) in this election cycle because of the unpopularity of Republicans in power.

Paxton was in a private event for donors and lobbyists.  It was reported that he said that the Iran war and high gas prices are really dragging him and other Republicans down.  In reference to this problem, he is reported to have said, “I don’t make the decision.”

So what is Paxton doing about it?  He is coming out with a tax cut plan.

Paxton reportedly said that he can’t stop the war and that he has no control over gas prices.

Yes, if you are halfway up Donald Trump’s butt and can’t publicly criticize the emperor-in-chief, then it’s true that you can’t do anything about it.

If voters don’t like the Iran War and high gas prices (largely caused by the war against Iran), then you can take a position of opposing the war.  You could say that you will not support any funding for the war.

But no.  Ken Paxton, like most other politicians, just lives under the assumption that he can’t do anything about a war.  After all, if he criticized Trump, he might get attacked by Trump, and he wouldn’t want that.

Learning from Trump

Maybe Paxton just learned from the number one blame shifter.  When diesel prices hit an all-time high, Trump insistently shifted the blame.  No, it wasn’t the war that he started against Iran.  It was because Ukraine was hitting Russian energy plants that produce diesel.

Even though this is a load of garbage that Trump is trying to sell, let’s just pretend for the sake of argument that the high price of diesel is largely because of Ukrainian attacks against Russia.

Hey, Trump.  You are the moron who continues to send money and weapons to Ukraine.  Your administration also probably provides military intelligence.

If you want Ukraine to stop hitting Russian energy, then tell them to stop.  And if they don’t stop, then cut off all money and weapons.

Of course, all money and weapons should be cut off anyway, but you get the point.

Trump is shifting blame to something that he helped produce.

If I give the kids in my neighborhood some alcohol and they start going around and vandalizing property while drunk, should I complain about the kids to my other neighbors as I continue to hand alcohol to them?  Better yet, maybe I can blame the companies that sold the alcohol.

Conclusion

The Republicans deserve to lose good and hard.  The American people don’t deserve the Republicans or Democrats.  Well, at least a good portion of us don’t deserve it.

The Republicans need to be punished good and hard for following Trump over a cliff.  Trump thinks he is doing favors for these Republican politicians in red states who are on the verge of losing.  Trump is actually doing great damage to them just by standing by their side.

When the Republicans lose hard next month, I hope that the Republicans split hard away from Trump.  I don’t expect them to have any principles, but at least we can rid ourselves of Trump controlling the Republican Party and driving this country over a cliff with the Republican Party.

In his second term as president, Donald Trump has become unhinged and a total puppet of the war hawks.  His record as president in his first term was not great, but it was a lot better than now.  He had his share of war making in his first term, but at least he didn’t start any major new wars at that time.  That is a low standard to be sure, but it wasn’t true of several previous presidents before him.

Now the power has gone to his head in a bad way, and Trump responds to almost everything with threats and bluster.  Even when he was asked about the bond market, he responded that he always has the military as the ultimate intervention.

I knew Trump had his ego problems before 2025, but it has gotten to an absurd level.  He brags about kidnapping the president of Venezuela and stealing the oil there.  He has lost so badly to Iran that he seems to threaten to annihilate Iran almost every week now.

It scares me that it isn’t just bluster.  Trump, like many other politicians, can act like a wild animal when trapped in a corner.  He is completely unpredictable at this point.

In one breath, he says he doesn’t really care about the mid-term elections, or at least not enough to change anything with Iran.  In the next breath, he is offering a $5,000 bribe to every adult American to vote Republican.

If Trump won’t at least pretend to seek peace with Iran to calm oil and gas prices now, what is he going to be like post election?

The Worry for Iran

Iranian officials are likely worried about what Trump might do after the November elections.  They should be worried because he is nuts.  Trump is living up to the worst caricatures of himself as portrayed by the left.

Trump has already attacked Iran three times while Iran was in negotiations, or so they thought.  The first time was killing Soleimani in early January 2020.  The second time was the so-called 12-day war in June 2025.  The third time was February 2026 that started the fighting that is still ongoing.

Even if Iran gets Trump to make some kind of peace deal before the November elections, why should they trust it at all?  Fool me once, shame on you.  Fool me four times?

Either way, Trump doesn’t like that the U.S. is losing the war to Iran, if he is even aware enough to realize it.  It is a big hit to Trump’s ego that Iran won’t bow down to his commands.  Iran has effectively blocked the Strait of Hormuz, and Iran has damaged or destroyed most of the U.S. military bases in the Middle East.

The only option Trump has left to fully defeat Iran is to try to obliterate the place.  This means using nuclear weapons or something close to it.

It’s ironic that Trump keeps repeating that Iran can’t have a nuclear weapon, and that is the supposed reason for the war.  Yet, it is Trump who shouldn’t have access to a nuclear weapon as he continually threatens to annihilate 90 million people.

I am not saying that this is going to happen, but I am genuinely worried about what Trump does after the election.  I think that is the reason that Iran has been so measured and proportional in its responses to Trump’s attacks on Iran.

Lame Duck

The Democrats are going to win the House.  They will probably win the Senate.  It is unfortunate that they will probably win a bunch of local seats too.  We may see a handful of red states elect Democratic governors.

The Republicans in Congress deserve to lose.  The American people don’t deserve either of the two major parties.

The term lame duck has typically been used when referring to the final months of a president’s term in office after the election.  Biden was a lame duck in November 2024 through January 20, 2025.

It’s easy to say that Trump will be a lame duck over the next 2 years.  He can’t legally run for president again, and he will be stuck with a Democrat-controlled Congress, which was his own doing.

The problem is that the president has so much power now.  The president does many things without Congressional approval, including making wars and setting arbitrary tariffs.  Yes, Congress could technically not approve the spending for wars, but that just doesn’t happen because most of the people in Congress are not working on behalf of their constituents.

Perhaps the best-case scenario for the American people over the next 2 years is that Trump is bogged down with the conflict in Iran (without too much escalation) and with the Democrats investigating him for every stupid thing.

Trump deserves to be investigated.  He should be impeached for starting wars and bombing at least 7 countries over the last 2 years.  He really should be in prison.  But the Democrats will focus on more minor things because they don’t want to set a standard of impeaching a president for starting wars.

Two More Years as the Empire Declines

Let’s hope that Trump doesn’t try to use nuclear weapons.  Let’s hope that he doesn’t try to invade Cuba or any other countries.  Let’s hope he doesn’t give us too much socialism if and when the economy gets worse.

He is a pathetic man.  He betrayed his own “America First” message.  He is a war criminal.  His approval ratings are at a dismal 30%.  Still, how can 3 in 10 people still say that they approve of the job he is doing?

Trump is destroying the reputation of the U.S. military and the U.S. dollar.  He might be doing Americans a favor in the long run.  He isn’t playing 5-D chess though.  You don’t get to murder a bunch of little Iranian girls and say it was all part of the plan.

In a way, Trump is overseeing the crumbling of the U.S. empire.  It is much the same way that a communist takes his ideology to an extreme that results in a revolt against communism.

If the response we have seen by Iran forces the U.S. military to abandon the Middle East, the American people will be better off for it.  The world will certainly be better off.

The most significant story of the U.S. economy in September is the surging yields.  I don’t think saying “surging” is an exaggeration here.

If you look at the Treasury data for September 2026, the 10-year yield was at 4.79% at the beginning of the month.  It ended the month at 5.29%.  That is a full 50 basis points higher in 30 days.

The 2-year yield surged from 4.39% to 4.88%.

Even for the shorter-term rates, the 3-month yield went from 3.92% to 4.20%.

To be sure, the shorter-term rates are correlated with the Federal Reserve hiking its target rate.  But the longer-term yields are more a consequence of risk, debt, and inflation.

As these yields rise, it means that new debt issued by the Treasury (including rolling over maturing debt) will be at a higher rate.  Even if the national debt weren’t growing (which it certainly is), the interest payments would be going up.

Gold Slump

The price of gold, meanwhile, has gone down.  It is below $4,200 per ounce.  It is interesting that it seems to go down on days when the price of oil is up.  This doesn’t make a whole lot of sense.

I know the rationale behind it.  If oil goes up, then the price of energy goes up.  This means that the Fed might have to be tighter with its monetary policy, which isn’t good for gold.

I think this reasoning lacks foresight.  Even the Fed’s “tighter” monetary policy is not so tight.  Even as the Fed raises its target federal funds rate, it is still mildly expanding its balance sheet.  The Fed can continue to create new money out of thin air even as it temporarily hikes its target rate.

There are many things that can impact the price of gold.  It is a supply and demand issue, but it is intertwined with money.  The U.S. dollar index can impact the gold price on a day-to-day basis, but it doesn’t make much difference in the long run if all of the major central banks are inflating in unison.

Ultimately, the biggest determination of the gold price in terms of U.S. dollars is how many new dollars are created out of thin air.  This is the long-term view.  Is there really any sign that the Fed is about to stop its monetary inflation for any significant period of time?

Higher Yields and More Digital Money Printing

If these surging yields stay at these levels or go even higher, it spells trouble for the Fed.  The national debt is rising at ridiculous levels.  If Congress is adding $2 trillion annually to the debt now, wait until there is some kind of financial crisis or severe recession where tax collections go down.

And again, the higher yields also mean higher interest payments as new debt is issued and old debt is rolled over.  This just adds even more to the debt.  It is one big bad cycle.

There are only a few ways to deal with this problem.  The government could attempt to raise taxes directly, but even here it is unclear how much more they could collect without stifling economic growth even more and causing lower tax collections.  The Laffer Curve is a real thing, even if I disagree with people sometimes using it as an excuse to spend more.

We are basically left with 2 options now.  One option is for Congress to cut spending.  Yes, don’t make me laugh.  If things get bad enough, their hand might be forced.  But as of right now, there is no sign of that happening.  Congress continues to spend more and more.

The other option is to print more money.  Most of this would not be actual money printing.  It would be accounting entries on a computer.  The Treasury sells more debt, and the Fed creates new money and buys this debt.

This is inflation.  The inflation of the money supply is what ultimately drives the price of gold higher in the long run.  When you have more money chasing the same goods, the price tends to move higher.

In conclusion, the rising yields are actually bullish for gold in the long run, unless you think Congress is going to turn into a bunch of true fiscal conservatives over the coming months.  The rising yields are likely to lead to more monetary inflation, which will ultimately drive the price of gold to new highs, at least in nominal terms.

It is almost all but certain that the Democrats are going to destroy the Republicans in the upcoming midterm elections.  The Democrats are highly likely to take a majority in the House where the Republicans currently just barely hold power.  Even in the Senate, the Democrats are looking more and more likely to gain a majority there.

We should never underestimate the stupidity of the Democrats.  Trump and the Republicans are handing them a gift.  Democrats basically just need to shut up and not say anything too stupid or crazy.  But some people can’t help themselves.  They will find a way to defend wokeness to the extreme.  You can take the Democrat out of the room of woke people, but you still can’t take the wokeness out of the Democrat.

Still, the Trump and the Republicans have brought stupidity to a whole new level.  Trump is basically saying that he doesn’t care about the elections because Iran can’t have a nuclear weapon.  Aside from the fact that Trump’s war against Iran makes it more likely for Iran to get a nuclear weapon, it is extremely bad politics on Trump’s part.

Then, in the next breath, Trump is offering a massive bribe in the form of a $5,000 check to every adult American if the Republicans maintain control of Congress.  They will be coming right after your DOGE check and you tariff rebate check.  This desperate move by Trump just made him look that much more pathetic.

The establishment Republicans are going to blame all of the people who don’t go to vote who previously voted for Trump.  Yet, it is them and Trump who have caused this.  They didn’t have to start new wars and bomb 7 countries in one year.  They didn’t have to keep growing spending.  They didn’t have to do the bidding of the Israeli state.  They didn’t have to continually raise and lower tariffs.  They didn’t have to work to destroy anyone who dared criticize Trump’s policies.  Let’s remember that Trump campaigned harder against Thomas Massie than he has or is doing against any Democrat.

Lame Excuses

There are no excuses any more.  Ask any Trump defender why spending and the debt is going higher and higher under Trump.  They will come up with some lame excuse that Trump can’t control Congress.

Yet, this is the exact opposite of what Trump would make you believe.  And up to this point, Trump has had great control over what members of Congress do.  Trump destroyed Massie and MTG.  If he put in half as much effort to enact spending cuts, then it would force the hand of the Republicans in Congress.

The problem is that Trump doesn’t want spending cuts.  He wants spending increases.  That’s why he doesn’t bring the issue up.  And when he does bring it up, it is to spend more.  He wants a military budget of $1.5 trillion.

Trump has spent most of his time defending his stupid decisions on tariffs and war.  Even on immigration, Trump has been mostly terrible.  The best you can say is that illegal immigration is way down.  But let’s remember that the Trump administration, in March 2025, was focused on arresting and deporting legal immigrants who said anything critical of Israel.

For every issue that Trump has focused on, he has taken the wrong position.  He has taken the anti liberty position.

On foreign policy, it is worse than that.  His administration murders a hundred and some little kids in Iran and then Trump lies about it.

How many times has Trump threatened to destroy the Iranian civilization?  The threat alone qualifies Trump as a war criminal who should be locked up for the rest of his life.

In front of the United Nations, Trump just bragged about the U.S. getting Venezuelan oil.  He said, “To the victor belong the spoils.”

Does anyone really want to live in a civilization where this is the rule?  If a 300-pound man rapes a 120-pound woman, would Trump just say that “might makes right”.  To the victors go the spoils?  This is sick and deranged.

The Republicans Deserve to Lose

Just as the Democrats deserved to lose in 2022 and 2024, the Republicans deserve to lose in 2026.  This isn’t to say that the Democrats deserve to win.

When we get talk of Democratic socialism and more wokeness, you can blame Trump and the Republicans who supported his nonsense.  That is the reason we are getting the Democrats.

It is especially frustrating that Trump has turned into the worst caricature that the anti-Trump left has warned about.  Trump is making the left into truth tellers, at least to a certain degree.

To be sure, the Democrats lied about many things, including Russia gate, saying that Trump told people to drink bleach, saying that Trump called white supremacists very fine people, etc.  But instead of discrediting them, Trump has done everything in his power to live up to the evilness that the left warned about with Trump.

It is also frustrating because Trump still gets a few things right, yet he just discredits the position more because he supports it.  For example, Trump gets some things right on repealing some really bad environmental regulations.  He also got it somewhat right in at least appointing RFK Jr. to head the DHHS.  But if Trump says something common sense like how we should space out vaccines for young children, then nobody takes him seriously except for his hardcore supporters.

Trump lies about almost everything, so it is almost unfortunate at this point when he actually says something that is true and valid.

Trump Fatigue

The one good thing that will come out of a huge Democratic victory is that Trump will lose a lot of influence.  A lot of Republicans will start to turn on Trump.  Trump still has a lot of influence within the Republican Party, but that will wane with the coming defeat of the Republicans in the general election.

We can’t get rid of Trump soon enough.  He came onto the scene and seemed to offer an alternative to the Bush/ Cheney/ Romney establishment.  Now Trump has given us the same policies, and sometimes worse, while still trying to act like he is anti establishment.

We would all be better off at this point if Trump exits the scene as soon as possible.  I don’t even care if the Democrats impeach him over something stupid.  They won’t impeach him over the Iran war because that would implicate too many past and future presidents of both parties.

J.D. Vance should never be forgiven for how awful he has been in trying to defend the awful things that Trump has done.  Still, if Vance became president, maybe we could get some sense of sanity back.  At least he probably wouldn’t be continually changing tariffs, threatening other countries, and threatening to end an entire civilization.

When the Democrats win in November, consider that to be a total repudiation of what Trump has done over the last year and a half.

The Federal Open Market Committee (FOMC) released its latest statement on monetary policy.  By a unanimous vote, the committee decided to hike its target federal funds rate by 25 basis points (0.25%).

This means that Donald Trump’s recently appointed Fed chair, Kevin Warsh, was in agreement with the decision to raise its key interest rate.  This was widely expected going into the meeting, but it was still noteworthy.

Let’s remember that Trump would call that the previous Fed chair, Jerome Powell, all kinds of names, even though Trump was the one who originally appointed him.  Trump would call him “Too Late” Powell because, according to Trump, Powell was too late in lowering rates.

But hey, at least Powell was lowering rates at one point in the game.  All that Warsh has done during his short time as Fed chair is keep rates the same or hike them.  If Powell was too late, what does that make Warsh, who is moving in the opposite direction?

It seems too early for Trump to fully turn on Warsh, but then again, you never know with Trump.    He has already announced (demanded) that rates should be cut to 1% or less.  He doesn’t want to be “Too Late” Trump in criticizing anyone.  There are all sorts of nicknames we could hear.

Opposite Direction Warsh

Backwards Warsh

Too Tight Warsh

Wishy-Washy Warsh

Too Harsh Warsh

Maybe we’ll get something more straight out of first grade like Big Fat Loser Warsh.

Price Inflation and Monetary Policy

The main reason for the Fed hiking rates is because price inflation has remained stubbornly above the Fed’s 2% goal.  Of course, we shouldn’t want any price inflation.  Why would we want even 2%?  Most people would prefer it if their dollars could buy the same things next year in the same amount.

The CPI numbers had gotten closer to 2%, but then the war against Iran happened.  This has sent oil and gas prices much higher, which contributes to higher price inflation, at least in the short run.  It is notable though that this could ultimately lead to lower prices in other areas if consumers paying more for gasoline cut back in other areas.

It is understandable though to question the Fed’s rate hiking on the basis of higher gas prices caused by war.  This isn’t a monetary phenomenon.  It is a political problem.  It is a problem for consumers paying more for gas.  There is price inflation from previous monetary inflation, but that isn’t the main contributor of the spike in gas prices.

This is why it is ridiculous to have any central planners of the economy.  There are so many moving parts, and no one can come close to understanding them all.

If there are major shortages in gasoline, then we actually want to maintain higher gas prices.  Higher prices provide an incentive for consumers to consume less.  They also provide an incentive for producers to produce more so that they can make more profit.  The solution to high prices is high prices.  In this case, the solution also involves the U.S. leaving the Middle East.

The Economy and Politics

Even as the Fed lowers its target rate, it is still slightly inflating the money supply.  The Fed’s balance sheet is slowly expanding again.  In the past, there has typically been a strong correlation between a tighter money supply and tighter rates.  If the Fed were hiking rates, it was probably shrinking its balance sheet.  Since 2008, this is no longer true.  The Fed largely controls the federal funds rate by paying interest on bank reserves.

This means that even though the Fed hiked its target rate, it may still continue to expand its balance sheet (monetary inflation).

Either way, there is a lot of trouble hanging out there in the economy.  The 10-year yield just briefly hit the 5% mark.  There is great fear of a popping of the AI bubble.  Meanwhile, the average American continues to struggle because of incomes not keeping pace with prices, especially when it comes to necessities.

This war in Iran is deeply unpopular, as it should be.  And it is easily tied to the higher gas prices.  Americans are quite aware of the higher prices every time they have to stop at the gas station and fill their car.

The Republicans are going to pay dearly in the upcoming mid-term elections, as they should.  This isn’t an argument for Democrats.  It is simply recognizing that the Republicans have done a terrible job.  They have given us more spending, more war, and more broken promises.

Trump is already acting like a socialist with his promise of $5,000 checks, his tariffs, his public/ private profit sharing, and all of his other schemes.  Just imagine how socialist and dictatorial he will become if we sink into a major recession.

There could be some really rough times ahead, both politically and economically.  The good news is that a decent percentage of Americans are fed up with both major parties.

Donald Trump thinks so.  His desperation has reached an all-time high as his approval ratings reach all-time lows.

Trump thinks he is still popular because many of his preferred candidates won their primaries.  The problem is that these are Republican primaries.  He is still quite popular strictly within Republican circles.  But we are moving on to the general election.

The Republicans had some kind of convention for the mid-terms, as if anyone really cared other than a few die-hard Republicans.  Trump cared because he got to be in the spotlight yet another time.  But these Republican candidates are in a bad position.

If you are a Republican running in the general election, you don’t want Trump by your side at this point.  Trump’s overall approval rating is just above 30%.  It’s hard to believe it is even that high at this point.  But if a Republican candidate criticizes Trump or even says they don’t want his help campaigning, then they risk the wrath of Trump.  Ask MTG or Massie.

Peak Trump

I think we have passed peak Trump.  Trump has exerted an unbelievable amount of control over the Republican Party.  This is why there should be no excuse making for things like war or massive spending.  For example, Trump could easily make it a priority to get spending under control and force the hands of the Republicans in Congress.  But he doesn’t because he likes the big spending.

It is obvious that the Republicans are going to get destroyed in the mid-term elections.  The Democrats are heavily favored to gain a majority in the House.  There is a good chance they will also gain control of the Senate.

While giving the Democrats more power is a major problem, there will be something good that comes of it.  It will drastically reduce the influence of Trump.  It isn’t just because the Democrats may try to impeach Trump (probably over something stupid instead of starting an immoral and illegal war).

Trump will start to lose influence because there will be a realization, including among Republican politicians, that Trump just isn’t that popular any longer.

Shortly after Trump started his second term in January 2025, his approval rating was above 50%.  About 2 out of every 10 people who previously approved of Trump now disapprove of the job he is doing.  That is highly significant.

Buying Votes

At the lame Republican convention, Trump stated that if the Republicans maintain control over the House and Senate, then all adult Americans would receive a check for $5,000.  Of course, that check would not come from Donald Trump’s bank account.  It would come from the U.S. Treasury.  And the Treasury would only be able to get that money by issuing debt, which will be bought up by the Federal Reserve creating more money out of thin air.

This is a complete act of desperation from Trump.  It is more socialist that what we hear from many of the so-called democratic socialists.

There is also no reason to believe anything that Trump says these days.  I’m sure that $5,000 Trump check will come right after the tariff rebate check and the DOGE check.

It is unbelievable just how blatantly corrupt Trump has become.  It is typical in politics, but it is crazy just how open Trump is about it.

I remember even going back to when I was a teenager and young adult and seeing how politicians (Democrats in particular) would just openly try to buy votes.  I remember people like Dick Gephardt who would say that we need to tax the rich people more and use that money to give to poor people.  This was blatant enough for me.

It was Pedro:  “If you vote for me, all of your wildest dreams will come true.”

Now Trump is Pedro.  Vote for my side, and I will give you $5,000.

More Inflation

The government is already running an annual deficit in the neighborhood of $2 trillion.  This is especially absurd when you think that the stock market is near all-time highs and unemployment is relatively low.  We aren’t in any kind of official recession or financial crisis yet, but the deficits are still enormous.

If Trump actually kept this promise (bribe) and was able to get the Treasury to issue $5,000 checks to Americans, it would cost well in excess of $1 trillion.  It would be purely inflationary.

I mean, I would rather get a $5,000 check rather than have the government start another war or continue a war, but that isn’t the option being given.  Trump wants to continue all of his militarism and mass murder overseas while also going socialist at home.  Should I really be that scared of AOC at this point?

I don’t think anyone believes Trump at this point except for his devoted followers who consistently consume Fox News.

This is a desperate attempt by Trump, and it comes across as that.  It isn’t going to work on anyone, mostly because they don’t believe his empty promises.  Anyone who believes this promise would have voted Republican anyway.

Trump won’t have to break this promise because the Republicans are going to get destroyed in the mid-term elections, just as they deserve.

I recently took a trip with family and wanted to share my experience.  This is not a political piece, but I thought others might find my observations and experiences interesting.

We went to Iceland for one night.  We would have had a tight layover in Iceland, and Icelandair makes it easy to add a stay in Iceland with your flight.  We arrived in the morning (Iceland time) after not having much sleep on the plane.  Despite being tired, we rented a car and made the most of our time there.

We went into Reykjavik for lunch at Subway.  We were hungry and didn’t want to search for places to eat, so that is why we kept it safe for lunch.  After lunch we walked around for a few minutes.  Public restrooms are apparently not a common thing.  And restaurants typically won’t allow you to use their restrooms unless you are a customer.  We found this also to be common in Norway.

We drove the Golden Circle and saw a geyser, waterfalls, and a crater, among other things.  The scenery was absolutely beautiful.  We were fortunate to have a sunny day.

Gullfoss Falls was particularly impressive.  I have been to Niagara Falls before, and Gullfoss was at least comparable in size and beauty.  I had to look it up, and Niagara is bigger, but the falls in Iceland far exceeded my expectations.

Most people speak English in Iceland.  We talked to one man in Subway who spoke English to us.  He spoke Icelandic to the worker.  As if that wasn’t enough, he started speaking French to another group of people there.

My other comment about Iceland is that it is extremely expensive.  We found a place to stay for under $300 for the night.  It was tight, but it was clean and gave us a place to sleep.  It was more of a tiny apartment than a hotel, but it worked.  A typical hotel room will cost you in excess of $500 per night during the summer season.

The food is ridiculously expensive.  It didn’t get much better in Norway, but at least there were cheaper options in Norway.  We met or overheard several couples or families who were spending a week or more in Iceland.  I am not sure how I would feel about doing that.  It would be expensive, but the landscape is beautiful and it changes depending on the region.

Bergen, Norway

We spent six nights in Bergen, Norway, which is on the west coast of Norway.  It is the second biggest city in Norway.  While I haven’t seen Oslo, my guess is that Oslo has a bigger city feel.  Bergen can be busy when the cruise boats are docked, but it still has a quaint feel.

We were extremely lucky with the weather.  There was only one day where it rained most of the day.  We took a fjord cruise on that day, but the rain lightened up enough to get some good pictures.  The guide on the boat said that it rains 275 days out of the year in Bergen.  We had other days where it rained, but it was typically light and didn’t last long.  If you take a trip to Bergen, just know that you should expect rain.

We stayed in the heart of Bergen.  The fish market was only a few minutes walk.  We never needed a car there, which was nice.  There is a light rail train that goes from the airport into Bergen.  The last stop was walking distance to where we stayed.

We went to the top of Mount Floyen twice while we were there.  You can take a little train up the mountain, or you can hike.  We experienced both.

Our highlight day was taking a train into the mountains.  We took a two-hour train ride to Myrdal Station and then walked to a nearby zip line that we had booked.  It was about a mile walk.  We zip lined through the mountains, and it was absolutely gorgeous.  Then we rode bikes (provided as part of the zip line package) through the mountains.  It was mostly downhill.  We went about 18 kilometers until we arrived in the village of Flam.  The bike ride was wonderful because we could stop and take pictures and videos of the mountains and waterfalls.  We then took the Flam Railway back to Myrdal Station.

I would highly recommend doing this for anyone who is capable and up for an adventure.  If not, you can take the Flam Railway and see some of the great views.  But the benefit of biking is that you can stop and take your time.

The Culture

Most of the locals spoke some English.  I think they are used to a lot of tourists from Europe and North America.  You could typically find an English version of a menu.  Sometimes you have to click on the British flag on a kiosk.

Kiosks are quite common in the fast food restaurants.  We ate at both McDonald’s and Burger King because they were cheap (relatively speaking) and convenient options for lunch.  Both places offered an option of gluten-free buns.

We took the light rail one day to a mall where we had Burger King for lunch.  There was one worker back there getting all of the food ready.  He was quite fast and efficient.  I think there were only two people working there.  We ordered using a kiosk, so there was no cashier.

The workers at food places were generally young.  They all seemed to work hard.  They were helpful when asked.  The only business where the customer service wasn’t great on my trip was at the rental car place in Iceland.

The people in Norway are not generally overtly friendly.  We would pass by people hiking and most wouldn’t say a word when passing by.  There were several times I needed help like buying light rail tickets the first time and figuring out the dumpster for our garbage.  Whenever I asked someone for help, they were quite helpful when spoken to.  The workers in the restaurants and stores were typically quite friendly.  There was a juice/ smoothie place I went to multiple times.  One of the guys there remembered my name from two days before.

It is definitely a more homogenous society than what we know in the United States.  I am not saying that as good or bad, but you can see how things can function better with a centralized government.

They seemed to be very obsessed over not using plastic.  Instead of plastic utensils, you get these wooden utensils.  If you buy groceries, sometimes you have to pay extra for a plastic bag.  And when you get a bottle of water or some other drink, the cap stays attached at the top.  You can open it to take a drink, but the cap doesn’t completely come off.

In terms of food, fish is quite popular.  This makes sense since Bergen is on the water and they get fresh fish deliveries.  I also had a reindeer hot dog.  (It wasn’t Rudolph.  It was one of the reindeer that was picking on Rudolph.)  Aside from that, you can find American-type food like hamburgers and pizza.

Conclusion

I would recommend visiting Bergen, Norway.  Again, just expect some rain.  We had a good mix of activity while also enjoying some of the charm of the city.  Whatever you are planning to spend on food, double your budget.

I can’t say as much about Iceland because my time there was short.  It is quite expensive, but the scenery is unique and beautiful.

Six nights in Bergen was just the right amount of time for me.  We alternated our busy days with a more relaxing day.  I would recommend that strategy for most vacations.  You don’t have to constantly be on the go.

There has been a little turmoil in the bond market.  It isn’t just the U.S. bond market, as we have also seen trouble in Japan and even Europe.  But the U.S. bond market is the biggest player.

Yields have risen, although not dramatically.  There has definitely been some intervention on the part of the Treasury and the Fed, but we don’t fully know to what extent.  They are also admitting that there is intervention to come.

Maybe it’s not “admitting” so much as trying to build confidence in the system.  Just announcing  the future purchase of bonds helped to slightly lower interest rates, but it didn’t last long.

It reminds me of the oil market and Iran.  How many times did Trump announce that there was almost a deal or that the conflict would be over soon?  It would drive down the oil price until people realized that oil was still not getting through the Strait of Hormuz.

Speaking of military conflict, Trump was asked by a reporter about the bond market.  Trump said: “We have many types of intervention.  That’s one.  The ultimate intervention is our military.  And if we have to use that, we will.”

WHAT?

I heard the commentators on CNBC just mocking Trump over the comment.  Someone said that the bond traders are dispersed, so you can’t just drop a bomb on a group of people.

Sure, leftist commentators on television often make fun of Trump.  But in this case, it was actually correct to mock him.

Is Trump saying that he is going to use the military against people who sell bonds?  I suppose anything is possible in this second term.

Trump can’t blame Iran for the bond market.  But even if he tried, he has already bombed Iran.

Is Trump talking about China?  He is going to start a war with China because the Chinese central bank is lowering their holdings of U.S. Treasury securities?

Trump has absolutely no idea what he is talking about, and the only thing he knows at this point is how to make threats.

The people around him are a bit more sophisticated, but don’t take that to mean that they will do the right thing.  The U.S. government just surpassed $40 trillion in debt, and there is no slowing down at this point.  The only ultimate solution these people have is to create even more money out of thin air.

Gold and Stocks

This is probably why the price of gold is going up again.  No matter how you interpret this turmoil in the bond market, it almost has to be good for gold.

If there is going to be more bond buybacks, as said by Bessent, how are they going to get the money to do that?  They can only create the money out of thin air.

Is this trouble in the bond market the straw that will break the camel’s back?  Trump and the Congress can only point to themselves in the mirror.  Maybe this wouldn’t be happening if they didn’t spend so much money and rack up so much debt.

The digital money printing may be good for stocks, but it also spells trouble for the overall economy.  A recession obviously wouldn’t be good for stocks in the short run.

I have said that the Fed won’t engage in massive monetary inflation to bail out the stock market, but it will do it for a crisis that threatens the major banks or the bond market.

Well, we already have trouble in the bond market, and we haven’t even hit a recession yet (that we know of).

I have zero confidence in this administration to do the right thing.  They like to speak against the “democratic socialists” when virtually everything this administration does involves some kind of socialism or economic fascism.

If we get a hard recession, we could see the deficit balloon even more than it already has.  This is not sustainable.