This week has shifted my mind.  I am a big advocate of the permanent portfolio as described by Harry Browne.  My mind has not changed on that.  We live in an uncertain world, especially now, and we should invest our money in a way that hedges against that uncertainty.  As Richard Maybury says, the permanent portfolio is not perfect, but it is the best strategy I know of.

With that said, my opinion shifted this week as to what the near-term future holds.  In the last couple of months, I saw more signs that the U.S. economy was heading back into recession.  It’s hard to say that we ever came out of a recession, since the government never allowed the necessary correction to take place.  However, it looked as though the second wave was coming with more bad news.

I still think there is major trouble ahead in the economy, but I see it potentially playing out in a different way in the short term.  Last Thursday, the European bigwigs announced that they had a plan to deal with Greece.  They said it would involve a 50% haircut to bondholders.  I wrote about it here.

But what I saw as big news was what happened with the stock market.  The Dow was up over 400 points at one time during that day.  It finished up over 300 points and is now above the 12,000 mark.  Meanwhile, gold has come back to life and is now above $1,700 per ounce.

This is the story that began to change my mind.  It is like stock buyers were looking for an excuse to buy.  Investors do not like the small returns in the bond market.  These returns will not even keep up with price inflation.

We have to remember that the Fed has tripled the money supply in the last 3 years.  While the commercial banks have kept most of this new money as excess reserves with the Fed, it still has its repercussions.  I am wondering if this new money is finding its way into the stock market.  I never would have expected the next bubble to show up in the stock market, but I can’t be absolutely sure at this point.  I still think there is a greater likelihood of seeing a bubble in the gold price or in gold stocks.

If there is new money finding its way through the economy, this might delay the effects of the next recession.  We may start to see rising prices come sooner that I thought.  If this new money holds off another recession for now and we start to see a mini-boom, then we could see higher stock prices as well as higher gold prices.

I previously said that I recommend the majority of your money be put into a setup like the permanent portfolio.  That has not changed.  I also said that a speculation strategy could be to take a small portion of your additional investment money and split it between shorting stocks and buying gold/ gold related investments.  I figured that either stocks would go down or gold would go up.  I now see a greater probability that both could go up together.

If you have any short positions in stocks, I would sell some of them if we see a brief pullback in stocks this week.  I would be a little heavier in cash and gold right now rather than having a strong short position in stocks.  I am still not betting that stocks will continue to go up (although there is that exposure in the permanent portfolio), but I am not betting as much that they will go down either.  I am less bearish on the stock market and I see a greater chance that we will see price inflation show its ugly head soon.  If that is the case, gold and gold stocks will do well.

The European Union has supposedly reached a deal on Greek government bonds.  The announcement sent stocks soaring in the United States.  The “leaders” of France and Germany, along with the rich bankers, have reached this deal and come to the rescue again.  I’m guessing the rich bankers agreed to this deal because a 50% haircut looked better than a 100% haircut.

This will be done at the expense of German taxpayers.  It will eventually be at the expense of anyone who holds euros.  It looks like even China will be getting involved.  The stupidity of the Chinese government astounds me.  I guess it isn’t good enough that they keep buying U.S. government debt.  They figured they would find another place even more insolvent and buy there too.  Of course, we also don’t know if the Federal Reserve is playing any role, although there is a lot of speculation on the internet that QE2’s main purpose earlier this year was to capitalize the European banks.

This whole so-called agreement just kicks the can down the road.  Not only that, but it ultimately makes the problem worse as it takes more money out of the hands of productive individuals and it throws it away for more Greek spending.  It is a giant misallocation of resources.

This agreement to cut the Greek bond values by 50% will not solve anything in the long run.  The interest on debt is only one expenditure of the Greek government.  The problem is that the government there has created a massive welfare state and has made promises that cannot ultimately be delivered.

Imagine an individual with $50,000 in credit card debt.  You bail him out and pay off half of his debt for him, which reduces it to $25,000.  That would be fine if the individual were working to pay off the rest of the debt.  But what if the individual kept spending more than he takes in every month.  Paying off half of his credit card debt would ease the burden on him temporarily by reducing his credit card payments.  But if he is still running a deficit, even without paying any interest on debt, then he will end up being back where he was before.  The individual will end up back in debt with $50,000 in credit card balances.  Meanwhile, you will have wasted $25,000 with your original bailout.

Greece has a spending problem.  To be more specific, the Greek government has a spending problem.  It has made big promises that cannot be fulfilled.  There are a high percentage of Greek citizens who are living off the government dole.  They work for the government.  They retire early with big government pensions.  Their game is coming to an end.  They are going to get one last bailout, coming mostly from Germany.  They will keep asking for the impossible.  The government there has created a massive welfare state and a welfare mentality.

While I don’t have any specific numbers, I have heard that some rich people are getting out of Greece.  This would make sense.  There is no future there.  The parasites will keep trying to suck blood out of their hosts until there is none left.  I would recommend for anyone living in Greece to get out.  There is no future there, unless there is a dramatic turnaround in the mentality of the general population.

The U.S. is in trouble too, along with a whole bunch of other places.  The one good thing about the U.S. is that the welfare mentality is not as strong.  There is a welfare/ warfare state in the U.S.  In Greece, it is just a welfare state.  The U.S. can cut its warfare state.  The welfare state is not as far advanced, even with Social Security and Medicare.

It’s possible there will be another bailout of Greece down the road.  I think it would involve money creation by the European Central Bank.  But there is a limit to all of this.  Eventually, I think they will let Greece go.  The citizens of Germany and other countries will revolt.  Greece will probably drop out of the EU.  Perhaps the whole European Union will break apart.

The Greek welfare recipients can keep asking for a free lunch, but the laws of economics will eventually end it.  The German taxpayers will get tired of buying lunch for others.  And the Chinese will run out of money when their own problems become more obvious.

Ron Paul has released his proposed plan to cut $1 trillion from the federal budget in the first year, if he were to win the presidency.  His plan claims to balance the budget within 3 years.

There are a lot of cuts in Paul’s proposed budget, including ending the wars and mostly eliminating 5 departments.  One thing that Paul’s plan does not change is so-called entitlement spending.  It does not address Social Security and Medicare, in the sense that it keeps the status quo with these programs.

For any senior citizen who cares deeply about receiving his Social Security checks, Ron Paul should be his man.  While Ron Paul has said that these entitlement programs are unconstitutional and should never have been started, he has also explicitly said that he does not plan to eliminate them and pull the rug out from senior citizens who have been promised these benefits.

Ron Paul is the only major candidate (if you don’t count Gary Johnson) who has proposed significant spending cuts that are specific.  He is the only one (besides Gary Johnson) who comes anywhere close to a balanced budget.  Because of this, he is the only one who could actually save Social Security in a sense.  If we get any of the other candidates, then not much will change and the fiscal situation of the U.S. government will continue over a cliff.  Senior citizens will eventually be devastated when there is no money to pay out Social Security.

Of course, the Fed can always create new money out of thin air so that the Social Security checks can keep going out.  But then there will be more tampering with the CPI figures so that the checks do not reflect the actual inflation.  If the government uses the Fed to create new money to pay for Social Security, then this will be a hidden default.  The Social Security checks will be worth less in real terms.  That is already what is happening now.  So, in a sense, Ron Paul is really the only one who will save senior citizens from having a big and sudden downgrade in their standard of living.

Ron Paul has been questioned about so-called entitlement spending.  He says that he favors reform, but that his near-term spending plan does not address that.  He says that he would like to give the option to anyone under the age of 25 to opt out.  He acknowledges that he gets objections from people who are over 25 who say they would like to opt out.

I have a great deal of admiration for Ron Paul and support him.  But there is a “but” on this one.  I don’t agree with him on this opting out for those under 25.  Just as he acknowledged, why not let those over 25 opt out?  Fiscally speaking, it actually makes more sense to do this.

If Paul’s plan is to make good on the promises made to those who are currently retired or soon to be of retirement age, then money has to come from somewhere to pay those people.  The Social Security trust fund is made up of IOUs.  There is no actual money in there.  If you let people who are under 25 opt out, then that will be less money collected to pay for the current recipients.  Those under 25 will still be paying for current recipients, although maybe not as much.  There would be more dipping into the general fund, which would spread it around to everyone.  Those over 25 and working would actually be getting taxed more to pay current recipients.

If you let those under 25 opt out, you don’t get the financial benefit until over 40 years from now when they don’t get to collect anything.  Meanwhile, tax collections will be less as people opt out.  Wouldn’t it be better to let someone opt out who is 50 years old?  That person has already paid into the system for about 30 years and he might be willing to give up all of his so-called benefits if he doesn’t have to pay that payroll tax anymore.  You’d be surprised at how many people would take that deal.  If I were 50, I’d rather keep my money now than get some promise for 15 or 20 years in the future.

I am all for letting people opt out of Social Security, but it should be offered to everyone.  But that does not help solve the fiscal mess that we are in now.  The money paid to current recipients still has to come from somewhere.

There is no easy way out of this.  The best plan I know of is what was presented by Harry Browne when he was running for president.  He said we should sell off government assets and pay off the Social Security recipients.  The federal government owns a lot of land (some with oil) and a lot of buildings.  I think the federal government needs to go through a bankruptcy much the same way a corporation would.  Let’s sell off all of the good assets and pay the creditors what we can.  In this case, let’s not reorganize this bankrupt entity.  Let’s keep it out of business for good.

Rick Perry has come out with his own tax plan proposal.  He wants to have a 20% flat income tax with deductions.  Deductions would include $12,500 for each individual in the family.  That would mean that a family of four would pay no income tax on the first $50,000 of earnings.

Perry has also said that you can stick with the current tax plan in place and pay taxes that way if it is more beneficial to you.  As a libertarian, I like choice.  I would rather the choices be much better, but I suppose that two choices are better than one.  Without knowing the details, because you would have a choice of the current tax system and his flat tax proposal, I would vote “yes” on this plan if I were in Congress, although not with a lot of excitement.

Now let’s get to Rick Perry’s plan to drastically cut spending.  Oh wait, there is none?  Like so many politicians, he wants to balance the budget in about 10 years.  Except Perry wants to do it by 2020, which would make it 9 years.  I guess that might make him 10% better than the average politician.  Or maybe he is lying 10% more than the average politician, if that is possible.

That is the problem here.  We can shuffle around the tax code all day long here with a 20% flat tax or some 9-9-9 plan that raises taxes on the middle class.  But our situation will not be vastly improved until something is done about spending.

The federal government is spending nearly $4 trillion per year.  About 40% of this spending is from borrowed money, whether it is from the Fed, China, Japan, or individual investors.

If we are going to have a healthy economy that has sustainable growth, the government has to drastically cut spending.  Aside from Gary Johnson who is polling at 1% or less, Ron Paul is the only Republican presidential candidate who has a plan to cut spending significantly.  He is proposing a cut of $1 trillion in the first year.

As long as the government keeps spending nearly $4 trillion a year, it won’t matter much what the tax code looks like.  If the government were to cut spending to less than $2.5 trillion to equal tax collections, the economy would benefit quite significantly.  That would mean that the government would not have to borrow any further money (not counting debt rollovers).  That would mean an additional $1.5 trillion in the free market economy.  That would mean a great deal for businesses and individuals trying to save and invest.

It is easy for these candidates to propose tax plans.  I could propose a plan to eliminate all taxes and we could just borrow $4 trillion a year.  The hard part is to identify real spending cuts.  These candidates are trying to play both sides.  They don’t want to upset anyone with real proposed spending cuts.  I have heard Michele Bachmann say in the past that she would like to get rid of the Department of Education.  That is a small start, but it isn’t all that significant with the overall budget.  Plus, I’m not really sure if she means it.

Except for Ron Paul, none of the major candidates can get anywhere close to a balanced budget.  So they will keep proposing their tax plans that take your money out of a different pocket.

It is not the way the government is taxing me that disturbs me.  It is how much they are taking and how much they are spending.

I am a huge advocate of investing in the permanent portfolio plan as outlined by Harry Browne in his small book called Fail Safe Investing.  While I would encourage people to pick up a copy of the book if you haven’t read it, I’ll give a quick summary of the portfolio.

The permanent portfolio is an investment strategy where you allocate your funds as follows:
25% in stocks
25% in long-term government bonds
25% in gold
25% in cash or cash equivalents

The allocation does not have to be exactly 25% each, but it should stay fairly close.  If one of the investments goes up or down quite a bit and starts to get away from the 25% target, then the portfolio should be rebalanced.  For instance, if stocks go up quite a bit and the stock portion of your permanent portfolio is now 35%, you should sell some off to get back to the 25% allocation.  The 10% you have from selling off the stocks should be used to buy the other assets that fell below 25%.

This strategy is designed to perform well (or at least not too badly) in any economic environment.  During a time of prosperity, stocks should do well.  During an inflationary environment, gold should do well (and perhaps stocks to a lesser extent).  During deflation, bonds should do well (along with cash).  In a recession, it is possible that nothing does well except for cash.  However, recessions are usually short-lived and will turn into inflation, deflation, or prosperity.

I recommend putting at least half of your investment money into a setup like the permanent portfolio.  It really should be much more than half unless you are a big risk taker.  While the permanent portfolio is far from perfect, I really don’t know of any other buy and hold strategy that is as safe.  Even holding cash is not safe because of the risk of inflation and a depreciating currency.

There is an alternative to setting up your own permanent portfolio.  There is a mutual fund that somewhat mimics it.  The symbol is PRPFX.

I still prefer Harry Browne’s permanent portfolio to PRPFX.  The mutual fund takes some extra chances, in my view unnecessarily.  There is a small portion in silver, which is more volatile than gold.  The fund also invests in individual stocks.  Even though the stocks make up a very small percentage, I think it should just buy a broad market index fund and stop picking stocks.

The other thing I don’t like about PRPFX is that it invests approximately 10% in Swiss francs.  This makes no sense for someone not living in Switzerland.  The Swiss franc has been thought of as a strong currency, but to me it is playing unnecessary games.

The permanent portfolio invests in 25% gold to protect against a falling dollar.  If you are an American, living in the U.S., then this 25% gold allocation is there to protect you against dollar devaluation.  You don’t need another currency, particularly a fiat currency.

In early September of this year, the Swiss central bank announced a cap on their currency in relation to the euro.  It has essentially pegged the franc to the euro.  On that day, the Swiss franc fell almost 10%.  That means that PRPFX would have lost 1% on that day alone, just from the Swiss franc portion of its holdings.

I still think that PRPFX is the best mutual fund you can buy for safety and growth.  If you can set up your own permanent portfolio, do it.  However, some people have limitations.  If you have a 401k, you may be able to get a brokerage link account that allows you to invest in mutual funds.  If you can do this, I would suggest you use it and put most of your money in PRPFX.  While I have my criticisms of the fund, it beats the alternatives in most cases.

I attended a seminar today called Nullify Now.  There were a lot of great speakers.  The last two and most notable speakers were Jack Hunter (the Southern Avenger) and Tom Woods.  They are both relatively young and very accomplished.

One thing that stood out to me was their incredible ability to speak, along with some of the other speakers.  Like so many things in life, I think the ability to speak in front of a crowd is a combination of natural talent, training, and practicing.  It helps that both Hunter and Woods are brilliant and well-versed in what they speak about.

There were many different issues discussed, but the main theme of the day was state nullification.  The tenth amendment (part of the Bill of Rights) states that those powers not specifically delegated to the federal government in the Constitution are to be left to the states or the people.  Instead of relying on the Supreme Court and other courts which are a part of the federal government (why would they rule against themselves?), state nullification consists of the states telling the federal government that their law is unconstitutional and thus null and void.  This could be for anything from Obamacare to medical marijuana.

There was a significant crowd there and it was made up of mostly libertarians and conservatives with libertarian leanings.  While there were certainly some radical libertarians in the crowd, I would say overall that the speakers tended to be more radical than many in their audience.  However, most of them were still well received.

One of the things that Tom Woods brought up was about preaching to the choir.  He noted that preaching to the choir is important.  There were a lot of people in that room that needed to hear the message.  If we can get all of the people who call themselves libertarians or claim to have libertarian leanings to actually educate themselves enough to be highly principled libertarians, then the government would be at least half the size as it is now.  These are all people who talk to friends and families about politics.  They tend to be on the right track, but they don’t have the complete package and they don’t always have the most principled answers.

While there was a lot of pessimism in the room (one-world government, collapse of the dollar, etc.), I have reason to be optimistic.  Just the fact that there were well over 100 people attending an all-day seminar on a Saturday about state nullification is enough to be optimistic.

While I think America would be many times better off if the federal government followed the Constitution, I am not one who goes around boasting about the Constitution.  I am more of an Articles of Confederation guy, but that is a topic for another day.  With that said, I like the idea of state nullification. I like decentralization.  We need to use different tactics to gain liberty and reduce government, and state nullification is one of those methods.

If you ever get the chance to see Tom Woods or Jack Hunter speak, don’t miss it.

I have previously written about the benefits of buying a house right now, if you are in the right situation.  One of the reasons I give is that you can take a fixed rate loan for 30 years and pay it back with depreciating money.  Your last payment in 30 years might be the equivalent of a nice dinner (if we are lucky).

With that said, I don’t want anyone to take that as a green light to run up debt.  First, the future is very uncertain and, while I am predicting that we will see some high price inflation (10% or more), this is no guarantee.  It is impossible to predict exactly how the Fed will operate and how the politicians in DC will operate.  It is also impossible to predict how over 300 million Americans will act.

Even if we do get somewhat significant price inflation, this does not justify running up debt, particularly if it doesn’t involve a house or a reasonable investment/ business.

Student loan debt and credit card debt are the worst.  You can not clear away student loan debt with bankruptcy.  Some might consider this an investment, but that is a big leap of faith right now, especially with college graduates having difficulty finding good jobs.

Credit card debt is horrible debt to have, unless you got there because of an emergency situation.  Sometimes you can get low teaser rates, but the rates end up being high.  If we end up with 10% price inflation and you have credit card debt with an interest rate of 18%, tell me how that is beneficial.

Cars are a little tougher.  Most people need a car, particularly to get to work.  Unless you live somewhere like Manhattan, then a car is probably a necessity.  In this case, it is obviously important to have one, even if it means taking out a loan.  However, if you have to take out a loan, it should be based on need and not want.  You don’t need a $40,000 Acura to get to your job.

Debt is usually a horrible burden on people.  It does not give you financial freedom.  Instead, it puts you in financial handcuffs.  Even if we end up getting high price inflation, it is unlikely to end up in hyperinflation.  This means there will eventually be a severe correction.  This will mean deleveraging.  It means that anyone with a big debt burden will be in trouble.

Even as far as houses go, whether it is your primary residence or an investment property, it should be a goal to pay it off.  You can take advantage of the low interest rates now, but it doesn’t mean you should always have a loan.

Stay out of as much debt as possible.  You will be happier for it.

Both the price of gold and stocks have been trading in a fairly narrow range lately.  Gold has been in the $1,600  to $1,700 range since its big fall from the all-time highs above $1,900.  Meanwhile, just as it looks like stocks are headed way up or way down, they reverse and go the other way.

The Dow has been between 10,000 and 12,000 for a while now.  But the remarkable thing is that this range has been maintained with huge volatility.  That is a big range for sure, but it isn’t when you consider that a 300 or 400 point move in one day is not really considered big news anymore because it is happening so frequently.

The other interesting thing right now is the relationship between gold and stocks.  They seem to be somewhat correlated right now.  We have seen this in the past, but then the correlation broke off for a while.  The correlation will probably break again, but it is hard to say if it will be in weeks or in months.

The biggest threat to the gold price right now is the fear of another recession.  I am still bullish on gold in the longer term because of the economic mess that DC has created, but the near term is very hard to predict at this time.

I am in safety mode and I suggest the same to everyone else.  You should have at least half, but probably most, of your investments in a setup like the permanent portfolio as described by Harry Browne.  For speculation, I would add a little bit in the way of gold related investments and a very small short position in stocks.  Also, it wouldn’t hurt to increase your cash position slightly above the recommended 25%.

Again, we should be in safety mode.  We just need to protect the money we have right now and wait for the opportunities.  If you feel your position in gold and gold related investments is low right now, this is a good time to buy.  The price may go lower, but why wait?  You would be better off buying now in the $1,600 range than you would have been buying a month ago above $1,900.

The Republican debate in Las Vegas just wrapped up.  It was held at the Venetian hotel.  As a side note, for anyone visiting Vegas, the Venetian is a great place to stay.

This debate was hosted by CNN.  The moderator was Anderson Cooper.  I never thought I’d say this, but watching CNN was great compared to the disaster that Bloomberg did last week.  At least Cooper made an attempt to be somewhat fair with the time and he did not show his bias like the questioners at the last debate.

The audience seemed to favor Mitt Romney and disliked Rick Perry.  I don’t know if this was rigged at all, but it almost seemed that way.  When the two were battling it out and talking over each other, the crowd clearly favored Romney and even booed Perry a few times.

The issue of illegal immigration came up and there is this strong opinion by most of the candidates that illegal immigration is such a horrible thing.  They characterize these people as criminals (as if every law is just), when a lot of these immigrants are just trying to find work and provide for their families.

Perry attacked Romney for hiring illegal immigrants.  This is absolutely ridiculous.  Romney paid a lawn service company to work on his lawn and that company had illegal immigrants.  Does this mean we are now responsible for knowing who the employees are for every company we do business with, according to Perry?  If I go and buy an iPod at Best Buy, do I have to make sure the person selling it to me is here legally?  If we find out that Perry did business with a firm that hired a child molester, then I guess we can say that Perry hires child molesters.

There was one funny thing in that exchange though.  Romney had a slip of the tongue where he accidentally told the truth.  He said he went to the lawn company and said they can’t have illegal immigrants because he was planning on running for political office.  So, in other words, he was taking what he saw as the morally correct stand because he was running for political office.  If he hadn’t been running for office, I guess he wouldn’t have cared.

I enjoyed Rick Santorum again tonight.  He is horrendous on foreign policy, civil liberties, social issues, and even some economic issues.  However, he attacked some of the other candidates right where it hurt. He attacked Romney for Romneycare.  He attacked Romney, Cain, and Perry for the bank bailouts.  He was effective in taking them down a notch.

Michele Bachmann was ok in some areas and weak in others.  Hey Michele, most people don’t really care about you wanting to make English the official language.  I am getting along just fine with others in my communications without a government law.  I wonder if anybody out there thinks, “oh, if Michele Bachmann would only make English the official language in this country, then maybe more people would read my blog.”

Perhaps I am biased here, but I thought Ron Paul did an excellent job tonight.  He was quite effective on all of the questions and he is starting to hammer away on the fact that the other candidates do not have specific plans to significantly cut the federal budget.  Romney made an attempt to offer a few specifics.  I only wish that Paul had said that even if Romney’s proposed cuts were enacted, it would not amount to much.

Overall, I think Rick Perry was the big loser tonight.  I am still not counting him out because he has a lot of money.  I think one of his problems is that he reminds people of George W. Bush with his Texas accent and his mannerisms.

Ron Paul keeps chipping away with his pro-liberty message.  He isn’t going to have a dramatic rise in the polls like Cain did.  But he will gain a few more converts each day.  We will see if he can get his national poll numbers up to about 15% in the next few weeks.  Paul has a lot of money and there may be a lot more coming on October 19 (hours away as I write this) as there is a big money bomb happening.

I usually wouldn’t spend half as much time focusing on the presidential election, but having a candidate like Ron Paul makes it far more interesting for libertarians to watch.

A few months ago, I was predicting that the Republican nomination was down to 4 players: Romney, Perry, Bachmann, and Paul.  With that said, I must have sensed that Herman Cain still had some hope because I was attacking him before he became the talk of the town.  I have also attacked his 9-9-9 plan more recently.

While Cain’s chances have certainly improved, I still don’t see a high probability of Cain being the Republican nominee, despite his current status as a front runner.

Ever since Michele Bachmann barely beat out Ron Paul in the Iowa straw poll, she has taken a beating in the polls.  She is in the single digits in most national polls now.  She is down, but I am not counting her out yet.  She seems to be a bit better than most of the other candidates on economics, but she still does not offer much in the way of specifics.  My biggest fear about Bachmann is that she turns out to be like Reagan where she speaks libertarian rhetoric on economic issues, but her policies don’t reflect it.

Newt Gingrich has had a bump in the polls.  He is certainly a good performer in the debates and a lot of conservatives like him, even though they should know better after his record as Speaker of the House.  I still think it is highly unlikely that Gingrich will get the nomination because most people, even Republicans, sense that he could not beat Obama in the general election.  I think this is one thing where most everyone is right in that he wouldn’t beat Obama.

I don’t see Huntsman, Santorum, or Gary Johnson being major players at this point.

That leaves us with Romney, Perry, and Paul.  Romney is the establishment’s choice.  He is pro big government across the board, but he will say what he needs to in order to appease the conservative base, or at least not anger them too much.  Romney is the founder of Obamacare.  If there is one thing that virtually all Republicans agree on, it is their hatred of Obamacare.  And yet the nominee for the party is going to be the inventor of Obamacare?

I am not saying that Romney can’t get the nomination.  He is not being attacked by Sean Hannity or any of the other popular conservatives with big influence.  These people might be afraid to attack him in case he does get the nomination.  Another good possibility is that they really don’t mind his message too much.  Regardless, most Tea Party people are not Romney supporters.  They see this as a fight for the Republican Party and a Romney nomination would mean a loss for the Tea Party.

A lot of people are starting to write off Rick Perry.  I am not.  The fundraising numbers are coming out for the third quarter and Romney and Perry have the biggest numbers by far.  Ron Paul is in a distant third.  While Romney is the choice of the establishment, Perry is probably the next choice (not counting Herman Cain).  Perry has some big backers and I would not be surprised to see him make another surge in the polls.  Regardless, don’t count him out.  I actually would put him as the favorite to win the nomination right now, despite his poor showings in the last month.

If there is one thing to say about Ron Paul, it is that he does not lose many supporters.  His support stays steady.  Nationally, he is polling in the low double digits.  It varies from poll to poll, but I would put him at about 12% right now.  Remember that you don’t have to win over a majority.

I still put Paul’s chances fairly low at getting the nomination, only because the Republicans are too in love with war.  Paul has definitely changed some minds on this issue and others, but it is hard to say if it is enough at this point.  The educational outreach from his campaign has been phenomenal and it will make a major difference in years to come.

I think the only way for Ron Paul to get the Republican nomination is for a major event to happen in the near future.  If there is another major economic crisis (which isn’t far fetched at this point), then perhaps we could see a change in the tides.  Again, the good news is that he will continue to have a solid 10% that will back him no matter what.  This means he can really only go up in the polls.

There are more debates coming and the primaries are moving up.  There should be a lot of action in the next few months.  Libertarians should enjoy the moment, regardless of the outcome.  Did you ever think you would hear Austrian economics mentioned so much on national television?