Happy July 4th, otherwise known as Independence Day. We could also call it Secession Day, since that is what the American colonists did. The ironic thing is that the colonists of 1776 under King George III were, in many ways, more free than Americans of 2010. Certainly there are many differences that are hard to compare, but when it comes to economic matters, there should be little question that the colonists were far more free. Today, government at all levels take about half of our income.

We are certainly much better off than the colonists because of the great gains that have been made. There was more progress in the 1800’s than any other century in the history of the earth. The 1900’s had many great advances too, but most of it was because of the previous capital investment and progress made in the 19th century.

Today, we get to enjoy cell phones and the internet. We get to enjoy flat screen televisions and kindles. We are the richest people ever. Unfortunately, this generation of Americans may be the first generation to live worse than their parents (if you don’t count the 1930’s and early 40’s). Although we enjoy great technology, our basic needs are as expensive now as they were decades ago. Incomes have gone up slowly while the costs of food, shelter, healthcare, and education have risen substantially.

This is what happens when the government takes half of our money. We have a lot of great technology and great wealth created from previous generations, but we are starting to go backwards in some aspects. We must free ourselves from all of the oppressive taxation and regulation as well as the horrible Federal Reserve.

If we ever have American 19th century economic freedom combined with today’s technologies, the results will be unbelievable. We will have things that we can’t imagine. Let us remember on July 4 that although we are blessed to be living in these times, times could be much better if we shake off the government.

The price of gold (in terms of U.S. dollars) went down about 40 dollars today. That is a big move and many, even in the mainstream, are talking about a double-dip recession. It’s hard to call it a double-dip for me, since I’m not sure we ever came out of the first one, but regardless, it looks like the economy is continuing to head down.

The price of gold has been up as of late, but it is hard to blame inflation fears as the primary reason. If that were the case, interest rates on longer term bonds would be showing some sign of going up instead of down. There is a lot of fear in the world and gold is being used as a crisis hedge. But the point of all of this is that the gold price may take a hit in the near-term. If the stock market tanks and people get really scared, U.S. dollars will be in high demand. Gold will go down. However, it seems that foreign central banks are putting a floor on the price of gold. If gold goes down enough, don’t be surprised if the Chinese central bank makes a big purchase.

Looking a little further out, I don’t see how gold cannot go up. Nothing is ever a sure thing, but if gold takes a hit in the near-term, it will create a great buying opportunity. There is massive government debt with no end in sight and the government and Fed will continue to make things worse if we hit another major downturn. The Fed will print more money (figuratively speaking) and we may see another massive “stimulus” package come out of the government. The Fed could also take measures to force the banks to lend their excess reserves. If this happens, prepare for massive inflation (at least double digit price increases).

To sum up, don’t be surprised if the price of gold goes down in the near-term with the stock market and the rest of the economy. But it probably won’t take long for it to go back up. If the Federal Reserve continues with its destructive policies, look for the gold price to skyrocket, along with your grocery bills.