I struggled through watching another round between dumb and dumber, although I’m still not sure which is which.  It was over an hour and a half and it was filled with typical political slogans and a lack of insightful questions.  I’m sure the questions were screened.

I was surprised by how little time was spent on foreign policy.  Overall, I thought Obama came out ahead in the little time they did spend on foreign policy, although Obama avoided answering the question directly about the security in Libya.

For most of the domestic issues, Obama’s answer was to tax the rich.  He puts it in a more politically correct way.  He says he is asking those at the top to contribute a little more.  In reality, he is not asking anything and it has nothing to do with a contribution.  When the government sticks a gun at your head, there is no asking or contributing.

Mr. free market Romney (note the sarcasm) repeated several times that he was going to crack down on China for “cheating”.  In this debate, he finally came out and said what the punishment will be.  He mentioned the word “tariff”, which is a tax on imports.  In other words, he wants to make consumer goods coming from China more expensive for Americans.  He wants the average American to spend more and get less.  It could almost be an anti Walmart slogan.

Of course, there was still no discussion about the Federal Reserve.  One man asked about the high cost of living.  Both candidates were talking about energy and high gas prices and both were talking about helping the middle class.  And there is the elephant in the living room, the Federal Reserve, not even worth a mention.  Does it ever occur to anyone that a tripling of the adjusted monetary base over the last 4 years might have something to do with higher prices?  No, if you are a debate moderator or a candidate, let’s just pretend that topic doesn’t exist.

There was one good question in the debate and it didn’t come from the audience or the debate moderator.  It came from Obama.  He wondered how Romney was going to work towards a balanced budget when the only specific cuts he had mentioned were NPR and Planned Parenthood.  He said the math didn’t add up.

Obama had a great point there, but unfortunately, nobody followed up.  Romney didn’t have a response, or at least one that actually answered the question.

NPR and Planned Parenthood both make up a small fraction of a percent of the total federal budget.  It is like trying to drain a swimming pool with an eye dropper.  To this point, Romney still has not made any specific proposals for any significant cuts, unless you count Obamacare.  There is no possible way that Romney and/or Congress can balance the budget without drastically cutting spending, including spending on so-called entitlements and spending on military.  For this reason, part of me wants to see Romney win, just so I can laugh in the face of all of the conservatives who are supporting him.  Trillion dollar deficits will continue under a Romney presidency, unless we hit massive price inflation quickly and Congress is forced to make drastic cuts.

Overall, it was more political slogans.  No libertarian in his right mind should ever consider voting for either candidate.  It is impossible to say which one is worse, but there is no doubt that they are both bad for the cause of liberty.

Last week, I wrote a somewhat critical review of an article by Richard Russell.  For today’s post, I am going to comment on what Russell said near the beginning of his article on selling your gold.

In his piece, Russell wrote this:

“Let’s be honest.  What would we do with our gold if it rallied to 1800 — and then above 2,000?  Actually, I wouldn’t do anything with my physical gold, any more than I’d do something with my house if the real estate market got hot and my house was suddenly worth more.

“What would I sell my gold for?  Sell it for dollars, for euros, or for renminbi?  Or trade it for a Ferrari? No thanks, if you have physical gold, don’t touch it, sit on it, and save it for a rainy day.  When the economy starts raining, and the dollar collapses, you’ll be glad you have something of value.  ‘Patience, patience’ is the right stance.”

Russell is saying not to sell your gold.  I’m not sure if this means forever or if he just means in what he sees as the next big run-up.

I know there are a lot of hard money people out there who would have similar sentiments.  There are even some who think you should have nearly all of your investments in gold or some kind of precious metal.

I do not agree with this strategy.  I understand that a lot of hard money guys and even some libertarians believe that gold is the one true money.  While they might be correct if we lived in a world with a free market, that is simply not the reality.  If you live in the U.S., then the American dollar is your money, whether you like it or not.  Gold certainly has the great characteristics that money should have and it has a great history of being used as money, but that is not the current state of our society.

If you doubt what I say, go to your nearest gas station or grocery store and try paying in gold.  I can just imagine someone going through the checkout line at a Walmart and handing the cashier gold or silver coins to pay.  They would be calling their manager rather quickly.

So the problem here is that you buy stuff with dollars (or whatever fiat currency you use if you live in another country).  You don’t buy things with gold.  You have to convert your gold into dollars and then buy your gas, groceries, etc.  And while the price of gold (in terms of dollars) has gone up over the last 12 years, there is no guarantee that it will continue to do so.  And even if it does trend up, there will be swings in the price.  Much of these swings are due to the instability of the dollar, but regardless, prices vary from day to day.

While I agree with Russell that I think the gold price will likely go higher over the next several years, I am not against taking some “dollar profits” along the way.  Just as bubbles happen in stocks or real estate, the same thing can happen with your gold holdings, whether it is physical gold, ETFs, certificates, or stocks.  If you never sell your gold, then you will never make any dollar profits (which you use to buy things).  And you will never sell near the top and instead will be stuck with the option of selling after the bubble has already burst.

Think about the 1970’s and early 1980’s.  Gold went on a huge run and was briefly above $800 per ounce.  But it quickly took a nose dive and settled around $300 per ounce.  It was no higher about 20 years later.

This was a time when there was a gold bubble.  The price had risen substantially and much of it was due to legitimate concerns.  But for people who had a substantial piece of their net worth in gold investments in 1980, it was the ones who sold at least some of their holdings, prior to the collapse in price, who made out well.

I don’t think we are in a gold bubble yet, but I do think it will happen again.  Once the mania hits, you can find every reason in the world why it will keep on going up.  That is why it is good to think through it in your head now.  You should be disciplined and realize that gold won’t go up in a straight line.  It also won’t go up forever, unless there is hyperinflation.  So if you think as I do that there won’t be hyperinflation, then you should sell small amounts of your gold investments as the price rises.

This is not an all-or-nothing deal.  Let’s say you have a net worth of $100,000 and you have $20,000 in gold and gold related investments.  If the price of gold doubles while the rest of your investments stay the same, then your percentage of gold investments will have gone from 20% to 33%.  So at that point, why not take a little off the table?  Sell off $10,000 in gold investments and spread around the “profit” to your other investments, including cash equivalents.

In conclusion, I don’t think you should never sell your gold.  I also don’t think you should ever sell all of your gold, unless you are starving.  Investing shouldn’t be an all-or-nothing scenario.  If we enter into a gold bubble as I believe we will, then it will be a good idea to sell a small percentage of your gold investments as the price continues up.  If you don’t think you own enough now, then don’t wait.  I recommend a minimum of 20% in your portfolio.

“2 Debates and No Mention of the Fed: How Is that Possible?”

That was the headline that I read yesterday on Yahoo Finance.  In my analysis of the first presidential debate and the vice presidential debate, I noted this point.  The Federal Reserve was not mentioned once either by the moderator or by any of the candidates.

This is not a coincidence.  What Ron Paul has worked so hard on to bring to the forefront, the establishment is attempting to hide.

There has been some talk of the huge debt and deficits (although neither Romney or Obama have any plan to solve it) and yet the Fed isn’t mentioned.  If the central bank didn’t exist, then there is no way that a huge national debt could exist.  It would still be possible for the government to borrow money, but interest rates and buying would be dictated by the market.  Without a central bank to create new money out of thin air to buy government debt, the amount of debt would be somewhat limited.

We can see this by looking at state and local governments.  They have, for the most part, been forced to tighten their belts.  If they continue to spend money they don’t have, then interest rates will eventually go up.  Eventually, these governments have to either find more money, cut spending significantly, or else file for bankruptcy.  They can’t rely on a printing press.

The U.S. government is different, not because of its size, but because of the central bank.  The Federal Reserve can keep the game going much longer through the use of monetary inflation.  It simply monetizes government debt, keeping interest rates artificially low and bond prices up.

Without the Fed, there probably would not have been a war in Iraq.  There may or may not have been a war in Afghanistan, but it probably wouldn’t have been an ongoing occupation.  Without the Fed, there wouldn’t have been a big housing bubble.  There wouldn’t be a lot of the welfare programs that currently exist.  We probably wouldn’t have Obamacare.

The Fed is what allows Congress to spend recklessly.  It is the main cause of the boom and bust cycles that we have.  It is partially responsible for the high unemployment.  It is almost completely responsible for overall higher prices.

Aside from the fact that Congress could end the Fed’s monopoly over money, the Fed is, at least in some ways, more powerful than either Congress or the president when it comes to controlling the economy.  Yet, with all of the talk about the economy, there has not been one mention of the Fed in these debates so far.

This is why the internet is so important.  We can see issues discussed that get little play by the establishment media.

Remember, when they get you asking the wrong question, they don’t have to worry about the answer.  This is why we have heard nothing about the Fed so far.  But the good news is that we can find the right questions through other media sources now.  We don’t have to get all of our news from television and newspapers.  In fact, I would recommend that you get as little as possible from these sources.

After just watching the vice presidential debate between Joe Biden and Paul Ryan, I want to give my initial thoughts on what I saw, from a libertarian perspective.  I will leave it up to the media pundits and the opinion polls on who “won”.

From a libertarian standpoint, I think it is safe to say that Biden sounded better on foreign policy and Ryan sounded better on domestic policy and economics.  I am saying that just about their general statements and not about their actual records.

While Ryan was probably not as hawkish as we have seen candidates in Republican primary debates, he definitely came across as more pro war.  Biden came across as the peace candidate, which is rather ironic considering that there were reports earlier in the day that U.S. troops are now in Turkey near the Syrian border.

While Obama has been horrible on foreign policy, it is scary to think that a Republican president, particularly someone like John McCain, could have been much worse.  While Obama has continued Bush’s wars (Iraq is not really over) and started new ones, he was at least sensible enough not to start any new major occupations like Bush did in Afghanistan and Iraq.

So with respect to this debate, Biden came across as the peace candidate, even though the record of the Obama administration is anything but peaceful.

As far as the economy, Ryan’s rhetoric is more likely to appeal to free market thinkers.  Unfortunately, Ryan’s words are only that.  In fact, there was one point in the debate where Biden actually mentioned that it was Ryan who supported two wars and a Medicare prescription drug benefit while running up the country’s credit card.

This leads me to my last major observation.  The moderator of this debate was horrendous.  The questions were basically softballs.  It took Biden to hint at the fact that Ryan had little in the way of specifics in cutting spending.  Why was there not one question asking Ryan what programs he would specifically cut from the budget?  All we got from Ryan is that he will work with Democrats on coming up with a plan.  This is an absolute joke that we hear in every campaign and it never becomes reality in Washington DC.  The only bipartisan plans are the ones to screw the American people and take away liberty.

It is unfortunate, and probably a ploy by the establishment, that Paul Ryan is sometimes referred to as a free market guy and a disciple of Ayn Rand.  As I’ve written before, his record is one of big government.  And judging by his debate performance, while he likes to talk about lower taxes and less spending, he has no specifics on what can be cut.  (And of course he didn’t mention the Federal Reserve at all.)

The military, Medicare, and Social Security make up the majority of the federal budget.  If every other program were cut to zero, this still wouldn’t be enough to balance the budget.  Yet, Ryan says we can’t cut the military at all and he says that no current retirees will be affected by his plans to revise Medicare.  In other words, huge deficits will continue under a Romney/ Ryan administration.

In all, I was a little disappointed by the debate.  I expected empty rhetoric out of both candidates and we got it.  But I expected some better entertainment out of Biden.  I guess his handlers made sure he didn’t say anything too foolish.

If you detected any major differences in what was said, please don’t be fooled.  In substance, they are basically the same, just as Romney and Obama are basically the same.  They all stand for the status quo of bigger government.

Lew Rockwell recently linked to an article by Richard Russell.  While I certainly agree with some of what he wrote, I have some specific criticisms that I will point out.  I am not being critical just for the sake of doing so.  A lot of libertarians read these articles and some of the less experienced ones may take everything to be true.  So I just want to give another viewpoint on some of the issues discussed in this piece.

Russell wrote, “Suppose we decided to stabilize our growing debts through spending cuts alone?  We’d have to cut all government spending by 31%.”  He goes on, “But suppose we decided to stabilize our growing debts through taxes alone.  We’d have to raise taxes by an impossible 46%.”

Then he wrote, “Both of these ‘solutions’ would wreck the nation.  Therefore, neither one will be on the table.  But a combination of both will probably be tried.”

I agree with him that raising taxes by a huge percentage would essentially “wreck the nation”.  But he is absolutely wrong on cutting spending.  In fact, as I have written about so many times before, massive government spending cuts are exactly what the U.S. economy needs.

The federal government alone is spending close to $4 trillion per year.  It is about one quarter of the national income as measured by GDP.  While not all of this government spending is completely wasteful, it is all a giant misallocation of resources.  It hinders future wealth creation.  It makes our living standards far lower than they should be.  Cutting government spending is a major answer to solving the economic troubles.

Russell then discusses the biggest debt problem, which is government health care.  He says, “By the year 2050, health programs will chew up about 14% of the US’s entire gross national product.  Cutting back substantially on Medicare is politically impossible.”  He then goes on to say that the answer is “for the Federal Reserve to turn to printing us out of trouble.”  While I understand that he is not advocating this “solution”, he is missing a major point.

If the government simply tries to solve the Medicare unfunded liabilities through monetary inflation, it will not fix the problem.  It will be like a dog chasing its tail.  If there is massive inflation, then medical costs will skyrocket too.  The resources simply won’t be there to keep all of the promises that were previously made.  So don’t think that Congress can solve all of its problems through the use of monetary inflation.  The government will eventually be forced to cut spending on medical care, regardless of the Fed.

Russell then goes on to talk about the U.S. dollar.  He stated, “As the dollar declines in purchasing power, it will begin to lose its international reserve status.  Foreigners will begin to avoid the US dollar. At around that time I believe the dollar will face growing competition from the Chinese yuan.  To make matters more difficult, I believe the yuan will ultimately be partly backed by gold.  This will be part of China’s plan to take over leadership of the world.”

This is utter nonsense.  While it is possible that the yuan could one day be the reserve currency (almost anything is possible), it is highly unlikely any time soon.  Perhaps the U.S. dollar will begin to lose it international reserve status, but why would he think the yuan will take its place?  The Chinese yuan isn’t even a freely floating currency.  There basically is no currency exchange market in China the way there is in the U.S. or Europe.  The average guy in China can’t go to a broker and buy foreign currencies with his yuan.  This in itself makes it virtually impossible to be considered as an international reserve currency.

I think it is important to be clear in your thinking and writing.  While this article made some interesting points, there were also a lot of inaccuracies and myths perpetrated.

In a future post, I will discuss the notion of not selling gold, even in a bull market.

With Bernanke and the FOMC announcing QE3, we will see much more monetary inflation in the next year.  Quantitative easing is money creation.  It is as simple as that.  There are many negative consequences that occur because of monetary inflation, which include the boom/ bust cycle, rising prices, and the misallocation of resources.  Another characteristic of monetary inflation is that it is a redistribution of wealth.

Obama and the Democrats like to talk a good game about helping the poor, but their words are meaningless, except in pandering to ignorant people.  If they really cared so much about helping the poor, then they would be opposed to continued monetary inflation.  They should really be opposed to the whole idea of the Federal Reserve and a central bank.

QE3 will primarily benefit the big banks.  Is this what those caring Democratic politicians in DC support?  In other words, the Fed’s policies will actually redistribute wealth from the poor and middle class to the rich.

While those who are wealthy and more connected will generally benefit from QE3 at the expense of the lower and middle classes, it doesn’t mean we all have to take it on the chin.  With QE3, almost everyone will be worse off because of the misallocation of resources.  But some will lose more than others.

If you don’t want to be one of the bigger losers with QE3, then I have two main suggestions for you.  First, you need to be out of dollar-denominated assets.  In other words, if you have a whole bunch of money sitting in a checking account, savings account, money market fund, etc., then your money will continually lose purchasing power.  It will not earn enough interest to offset price inflation.  Real interest rates (inflation adjusted) are actually negative right now.  The same goes for government bonds and treasuries.  Any investment that repays you in dollars will be a loser.

Just to be clear, I think it is important to maintain something of a cash position (or equivalent), but it should not make up a big percentage of your overall net worth.

My second suggestion, which is really similar to the first, is to take advantage of the cheap money.  Monetary inflation redistributes wealth from creditors to debtors.  This is a hard one though, because I don’t recommend being in debt, unless it is for something like a house or car.  I am against credit card debt, except for cases of emergency.  Even student loan debt can be quite burdensome, as we hear many horror stories of college graduates who can’t find jobs and owe tens of thousands of dollars or more.

I do recommend taking advantage of the low mortgage rates.  If you can refinance your home loan to a fixed-rate mortgage and lower your rate significantly, then you should do so.  You will be paying back the loan in depreciating money.

Of course, if you have the means to do so, you can also take advantage of low rates by buying investment real estate.  Since the popping of the bubble, this is actually a fairly sound strategy in most areas of the United States.

In conclusion, we will all be worse off from QE3, but some will be more worse off than others.  Try to protect yourself in any way you can.  I recommend hard assets and a low fixed-rate mortgage.

One thing that is not all that well understood, even amongst some libertarians, is that price inflation is not spread evenly, at least in the short term.  In other words, price inflation that takes place because of monetary inflation, is not uniform.  Some prices will rise faster than others.  This should be evident by looking at the previous housing bubble.

I believe it was Richard Maybury who used an analogy of filling a bathtub with thick molasses.  When you pour it in, there will be lumps in the bathtub.  These are the bubbles.  Eventually the bubbles will deflate and spread out.  If you keep pouring the molasses, then there will always be bubble areas that are higher.  The same is true of price inflation.

While I believe the main reason for QE3 was to bail out the banks, there will of course be unintended (or maybe intended) consequences.  There will be price inflation.  However, it will not be uniform.

One thing that drives me nuts is when I (or someone else) am trying to explain why monetary inflation is bad.  I explain that it causes prices to rise.  But some people respond that it doesn’t matter because our wages increase too.

Can anyone seriously believe this now?  It is true that wages will eventually rise, assuming that there is not a decrease in productivity.  But wages lag behind.  Wages in certain industries might rise early on.  For example, wages in construction might rise in a housing bubble.  But average wages tend to be one of the last things that rises with overall inflation.  By the time you get a raise, you will have already been paying higher prices at the store for many months (or more).

So what will QE3 (third round of money creation by the Federal Reserve) bring us?  Where will the higher prices show up?  It is important to remember that it is not just basic consumer goods.  Asset prices can and will go up too.

Not surprisingly, the stock market has been up since Bernanke and the FOMC announced QE3.  Gold has been up too.  Oil was up and has since been on a roller coaster ride.

It is impossible to know where the next hot spots will be as a result of this new round of money creation.  It is easy to say hard assets, but almost everything is a hard asset.  Even stock shares are claims of ownership to a company, most of which have hard assets.  Paintings are hard assets.  Water is a hard asset.

While it is impossible to know how millions of people will react with their money and their actions, we can take a few guesses as to where this new money will flow first.  Since the Fed is buying mortgage debt, it is likely we will continue to see mortgage rates drop, or at least hold low.  So even with the excess inventory remaining from the popped housing bubble, it would not surprise me to see housing prices go up.  I doubt we will see another massive bubble because a lot of Americans are still suffering from the pain of the recent housing collapse.  But I wouldn’t be surprised to see housing prices go up while the mortgage rates stay low.

Not surprisingly, I also see precious metals continuing to do well in this environment.  Gold and silver are classic inflation hedges.  People buy them as a bet against the dollar.  I expect to see new highs in gold and silver in the fairly near future.

If you are looking for an investment with a higher risk/ reward, then gold mining stocks may be the place to look.  Mining stocks have taken a huge beating in the last year, even with the metal price holding fairly steady.  If we see a bubble in gold and silver, we are really going to see a bubble in mining stocks.  Most of these are highly leveraged and there is a potential for huge profits.  By the same token, don’t get caught with these things if and when the bubble ever bursts.  Like any investment with a potential for huge rewards, you should also expect high volatility.

In conclusion, QE3 will lead to more malinvestment and more bubble activity.  It is important to look for potential signals of what could be the next bubble.  While QE3 will make most people poorer, there will be some opportunity for large gains.

One of the biggest challenges for libertarians is convincing others of their viewpoints.  It is especially hard persuading family members, because they already know your flaws and do not necessarily think you are any smarter when it comes to politics.  Regardless of whether it is a family member, a friend, a co-worker, or just someone you happened to sit next to on a plane, it can be quite difficult to get someone to be open-minded about libertarianism.  There are a lot of people stuck in the Republican/ Democrat paradigm.  It seems to make people not think clearly.

One approach I have found that actually opens up some people’s minds is to talk about investing.  Every individual is different, so no one approach will work the same.  But I’ve found that talking about investments gets some people to think differently.

I am a big advocate of the permanent portfolio, as discussed in Harry Browne’s book Fail-Safe Investing.  If someone asks me for investment advice, I often refer them to the permanent portfolio, or at least the mutual fund (PRPFX).  If someone looks at the performance of PRPFX, they can see that it has been a good and consistent performer.  It is an opportunity to explain to people why diversification is so important.  You can explain that it doesn’t just mean diversifying in different stocks.  It also means diversifying so that you are hedged against a weak dollar and high price inflation.

It is fairly easy to explain to someone that the overall general price level goes up over time because money is created out of thin air by the Federal Reserve.  It is easy to explain that gold and silver (but gold in particular) are good hedges against inflation.  Therefore, it makes sense to have them as part of a portfolio.

It is important to remember that it is rare that someone is converted into a libertarian based on one conversation.  Even if you did supposedly convert someone in one conversation, does the person really understand libertarianism?  Hardcore libertarians understand that it is an ongoing learning process.  They also understand that you probably would not have a full grasp on the subject after one conversation.  It takes most people many books and articles and YouTube videos, etc. before they are converted and have a good understanding.

So, most of the time, the best you can hope for is to move a person one step closer to your ideology.  But the first step may just be a matter of opening up the person’s mind.

There are a lot of people who are frustrated with their own government and they are also frustrated with investing.  The stock market has been a roller coaster ride and it has barely provided any return in the last 12 years (if you bought and held), while most prices have continued to go up.  People are looking for explanations, other than the same old Keynesian lines.  They are also looking for sound investment strategies.

So why not help a friend and let him know about the permanent portfolio?  Why not tell your friend about the importance of gold?  You are appealing to their self interest.  You are helping them out.  And you may be opening up their mind to more libertarian ideas.

The one thing I would caution against is being too aggressive.  It is important to talk to people when they are ready.  It is probably not a good idea to offer unsolicited advice.  People around you can know that you are interested in investments and interested in libertarianism.  It doesn’t mean you have to sell them.  Some people become ready in their own time and will come to you for advice.  Some people will never be ready.

For those people who are looking for answers, it is important for libertarians to be there for them.  I have found that a good way to open minds is by talking about investments and avoiding the subject of politics, at least directly.  It may work for you too.

I suffered through some of what people call a debate.  It is only somewhat of a debate because a lot of the lines are rehearsed.  In addition, it is hard for two people to debate when their positions are so similar.  It seemed like they were struggling half the time just to distinguish themselves from each other.

Of course, the one issue that Obama is most vulnerable on is Obamacare.  Yet, Romney can say “repeal and replace” all he wants, but he has no credibility on the issue.  There are two people in the history of America to have signed legislation into law mandating that individuals buy health insurance or else face a strong penalty.  It just so happens that those two individuals are the two main candidates for president this year.

I was happy to see Obama embrace the term Obamacare.  My leftist friends hate it when I and others refer to it as Obamacare.  But now I feel fully justified in using the term, since Obama himself is willing to accept it.

While Romney may have come out as a winner to the pundits and the so-called swing voters, it was no win for libertarians.  He assured people that he was not going to cut taxes without also eliminating deductions (raising taxes).  He assured people that he would not cut taxes for the rich.  He assured people that he did not have a tax cut plan for $5 trillion.  (I’m guessing that $5 trillion that Obama kept talking about was over a 10 year period.)

When Romney was asked about tackling the deficit problem, Romney said, “I will eliminate all programs by this test, if they don’t pass it: Is the program so critical it’s worth borrowing money from China to pay for it?  And if not, I’ll get rid of it.  Obamacare’s on my list.”

So Romney’s test is if the program is so critical that it’s worth borrowing money from China.  There is absolutely no mention of the Constitution here.  So it’s not whether it is actually constitutional, it is just whether it is worth borrowing money from China.

So with that question, Romney could only come up with two specifics: Obamacare and PBS.  The rest of his suggestions were all generalities that could have been said by anyone.  Every presidential election, we hear the candidates talk about making government more efficient, blah, blah, blah.

By the way, PBS does receive some government funding and he is right to say that it should be eliminated.  But in the big picture, it is like taking a drop from a swimming pool.  It is a tiny fraction of a percent of the total federal budget.  Notice he didn’t talk about getting rid of the Department of Education or any other departments.  Obamacare is all he can come up with and even that he wants to replace it with something else, perhaps Romneycare.

One of the noteworthy things about this debate to libertarians is the things that weren’t said.  The word “Constitution” was said only once in the entire debate (including the moderator).  Romney mentioned it once.  I guess they don’t even try to pay lip service to it anymore.

Doing a search of the transcript, there was no mention of the Federal Reserve by anyone.  It is amazing what happens when Ron Paul is missing from a debate.  This is one of the most significant topics and the entity that has a much greater control over the economy than the president does.  Yet it wasn’t mentioned once.

For all of the rambling of Obama and the Democrats about how they want to help the poor and “invest” in things like education (yada, yada, yada), you would think they could mention the Fed at least once.  When the Fed creates money out of thin air and prices go up at the gas pump and the grocery store, who do you think that hurts the most?  The Fed is there to help the big banks and to fund the government’s deficits.  Meanwhile, it disproportionately hurts the lower and middle classes.

Perhaps this debate could shift things enough to make things interesting on the day of the election.  But no matter who wins, it probably won’t matter much.  Both candidates are central planners and want to continue to run the lives of other people.  They both want to rule.  There is no real choice between these two candidates.

Being one who looks at money and financial websites, I will often come across articles discussing retirement.  I will see headlines such as “How Much Do You Need to Retire”, or “When Can You Retire”, or “Will You Have Enough For Retirement”.  There are also retirement calculators.

It is a popular subject and not surprisingly, considering most people would like to retire at some point in their lives.  They want to know when they can free themselves from the daily grind.

The problem is that it is very difficult to estimate a good retirement number.  You don’t know what kind of unexpected expenses you may have, including medical.  You don’t know what the economy will be like and what kind of a return you can get on your investments.  One of the biggest things is that you don’t know how long you will live.

Aside from your life expectancy, by far the biggest variable and perhaps the most underestimated factor is price inflation.  You don’t know what your cost of living is going to look like years down the road.  If we have annual price inflation of 10%, then prices will double approximately every 7 years.

The Federal Reserve and the fiat money system makes it extremely difficult to plan for retirement.  It has been bad enough in the past, but now we are looking at $16 trillion in government debt (and growing) and perhaps $200 trillion in unfunded liabilities (and growing).  There are many good reasons to expect substantially higher price inflation in the future.  Meanwhile, your bank savings account right now is probably yielding .1% per year, if you are lucky.

Of course, this is just another reason that we should strive to allow competing forms of money by repealing the legal tender laws.  It will either keep the Fed somewhat honest or else it will put it out of business.

Since getting rid of the Fed isn’t a reality at least yet, you are probably still trying to find a good way to calculate your retirement needs.  While it is difficult to do, I think using real estate as a marker is actually a decent way to do it.  I have written about this before.  Owning houses (or condos) that are paid off will generate income.  The best thing is that rents will tend to keep up with price inflation and are a pretty good marker.

So while it is impossible to accurately calculate your retirement needs because of variables like life expectancy and inflation, you can at least get a decent estimate by using real estate as a marker.