Life is expensive.  A few months ago, one of the springs on my garage door broke on a Sunday.  We had one car inside and one car outside.  We would need both cars on Monday.  I quickly realized it wasn’t a do-it-yourself fix, especially since I needed my car on Monday.

Luckily, two guys were able to come out that afternoon and fix everything.  That is the good part.  They replaced both springs and also had to do some other fixes.  There were also a couple of minor things they recommended I do.  They also did a small fix with the sensors that they didn’t charge me any extra for.  When all was said and done, it was over $700.

That is a huge expense.  I still have the same garage door, and even the same motor.  It needed to be done, and I paid for it.  I don’t blame the business at all.  I looked at a review website and the company’s prices are competitive, or maybe even better than average.

It took the two guys probably a little over an hour.  I can’t imagine these two young guys are making any more than $30 per hour, and that might be generous.  Their time and gas for their vehicle couldn’t have been any more than $100 out of the more than $700 bill.

But if they are only getting a small fraction of the total amount I paid, then where is all of the money going?

It would be easy to say that the company is making a huge profit, but somehow I doubt it.  The company is obviously profitable, or else it wouldn’t be a business.  We need profitable companies in this world so that they are there to serve us.  But there are many garage door repair companies in my area.  In a relatively free market, it is unlikely that a whole bunch of companies competing against each other are making extraordinary profits.

Obviously there must be other costs.  There are the costs of the parts to fix the garage door, and I believe the replacement springs weren’t cheap.  Even here though, one has to wonder why there are so many things that seem so expensive now.  How much more are the springs because of tariffs, regulations, and other taxes?

Then consider the costs associated with the employees.  If they are making $30 per hour, the actual cost to the employer may be double that.  The employer is likely paying for benefits.  We all know how expensive health insurance is.  The employer has to pay the employer’s share of payroll taxes.  The employer has to pay for unemployment insurance.  The employer also has to buy his own insurance in case one of his employees gets injured or in case someone decides to sue the company.

Here in 2018, we are supposedly in a boom.  In some ways this is correct.  There is a stock market boom.  There is somewhat of a housing boom, at least in some areas.  There is an employment boom in the sense that unemployment is low.

I know that some will say that the unemployment rate is much higher than what the government’s statistics show.  This may be the case.  But most people looking for a job today can find a job.  It just may not be a desirable job, or it may not be a job that is not worth the pay, especially if you can collect welfare instead.

Some employers are actually struggling right now because it is hard to hire good help.  If you are an employer and have a good employee or good employees that you rely on, then I suggest you give them a significant raise to make sure they stay with you.

Some will say that the current boom is built on loose money, artificially low interest rates, and massive debt.  To some extent, I agree.  I think it is a mix.  We are obviously gaining in wealth and productivity in some areas, but there are certainly many misallocations as well, where the boom is artificial.

The problem I am pointing out here though is that this isn’t really a boom for consumers.  Again, life is expensive.  It is great that most people who want to be employed are employed.  The problem is that their paycheck isn’t carrying them very far.

The middle class continues to struggle, despite the good economic numbers.  Perhaps consumer price inflation is understated.  Regardless, there is a large segment of the population that doesn’t feel the boom as much as the numbers should indicate.  They have a job and their 401k balance has been going up, but then they are close to living paycheck to paycheck with little money in the bank.

This is similar to around 2006/ 2007 when housing and stocks were booming.  Yet, many people were struggling to keep up with their bills.  They probably felt embarrassed and ashamed to a certain extent.  They probably wondered how all of these other people could afford these nice houses, but the truth is that many other people weren’t affording the nice houses.  That is one of the main reasons why foreclosures exploded.

It may sound odd to hear this, but we actually need a recession.  In the long run, if the government and central bank do not do something too drastic in response, then a recession would actually be good for middle class America.  Sure, it would be especially difficult for those who lose their jobs.  It would be tough watching your 401k balance go down if you own stocks.  It would be tough to take a pay cut.

However, there is a major upside that is missed.  Unless the Fed resorts to massive inflation (which isn’t impossible, admittedly), then there should be a reduction in consumer prices.  Maybe it would only cost $500 for that garage door fix instead of $700.

There is a reason that a recession can also be referred to as a correction.  It is a correction in the allocation of scarce resources.  It is a correction in that it is redirecting resources to their proper use in accordance with consumer demand.  It stops the resources from being funneled into the unsustainable bubbles.

Life is expensive.  Unfortunately, in order to solve that, we are going to have to get a recession to cleanse out the malinvestment.  Then we need a drastic reduction in government spending and we need for the Fed to stop inflating the money supply every time the economy turns down.  Until then, look forward to a relatively expensive life, even if you are trying to be frugal.

On April 17, 2018, I wrote a post titled How We Know That China and Russia Do Not Want War.  In that post, I pointed out that China and Russia have economic interests that would be in contradiction to a conflict with the U.S. government.  Of course, it is obviously not in the interest of the politicians to get into a nuclear war too.

I stated that China was still the number one holder of U.S. government debt.  Then I stated the following:

“And while Russia’s holdings are small in comparison to China, even its holdings have stayed relatively stable.  Its holdings went up in early 2017 and then declined later in the year.  But year-over-year, its holdings are up slightly.  We’ll see in a couple of months if anything changed in March and April, but it is doubtful that it will be significant.

“If China and/ or Russia really wanted to make trouble for Washington DC, it would sell all of their Treasury holdings.  If Russia did it, it might not have that big of an impact.  But even the announcement of a sale of almost $100 billion of U.S. debt into the market would have its effects.  Interest rates would likely move up in response.”

Little did I know that just three months later and Russia would have sold off the vast majority of its holdings of U.S. Treasury bills.

The Treasury releases a report of major holders of Treasury securities each month.  In the latest report released on July 17, 2018, Russia was no longer listed.  It is now lumped in with “All Other”.

Meanwhile, China is still near $1.2 trillion in holdings with no signs of a decrease.  The only other country that is anywhere close is Japan.

As reported by RT News, the Russian central bank’s latest holdings totaled just $14.9 billion.

As I write this on the evening of July 23, 2018, long-term interest rates jumped higher earlier today with news of a possible change in course with Japan’s monetary policy.  Yet, this news of Russia from a week ago barely registered.  The news about Russia dumping its holdings was not widely reported, although there are some articles out there about it.  If this had happened in the pre-Internet era, we would be in the dark about it.

The selling off of almost $100 billion in U.S. Treasuries by Russia had virtually no impact.  The total holdings by foreign countries (meaning their central banks) actually went up in May 2018 (the latest figures) from the previous month.  So even though Russia dumped its holdings of U.S. government debt, other countries apparently picked up the slack, and some.

Say what you will about Putin, but he is smart.  He knows about the rhetoric coming out of the U.S. media and political figures that is into Russia bashing.  He understands the game that is being played, and he doesn’t want to take a chance of having more assets frozen or just getting outright stiffed on the U.S. Treasury holdings.

I’m sure Putin was in on this decision by the central bank.  I don’t think it was a move to poke at Washington DC.  It was a defensive move.

China is the elephant in the room when it comes to Treasury holdings.  The Chinese central bank really could move the market in a significant way.  The thing is, the Chinese officials are a bunch of mercantilists.  They think they have to hold U.S. Treasuries in order to hold down the value of their currency and subsidize their export industries.  The Chinese have continued to hold massive amounts of U.S. government debt, in spite of tariffs and tough talk by Trump.

Trump complains about the trade deficit, but he should be careful what he wishes for.  The Chinese could help the U.S. trade deficit by dumping a massive amount of U.S. debt.  Is that really what Trump (the low-interest rate guy) wants?

Unless things really get carried away with China, I don’t think the Chinese central bank is going to be doing a massive dump of U.S. Treasuries any time soon.  China and Russia are very different.  Putin may be a mercantilist to some extent (aren’t most politicians?), but he is more of a nationalist.  He isn’t foolish enough to attempt to subsidize exports by holding onto excessive U.S. government debt.

The Chinese “leaders” are foolish.  They are being pushed around by Trump.  Any new threat of tariffs, and the best the Chinese officials can do is to threaten a small amount of tariffs on U.S. goods in retaliation.  In other words, they will just shoot themselves in the collective feet.

The one major economic weapon that China has is its holdings of U.S. government debt.  They don’t even have to make threats with it. They can just send a signal over the next couple of months by selling off about $100 billion per month.

But again, they are mercantilists.  They are communists in name only, but they are still economically stupid.  They believe in a command economy, and I don’t expect any significant reductions in Treasury holdings by China in the near future.

While it isn’t surprising that the establishment media and the establishment in general continue to attack Donald Trump, it was surprising just how much vitriol was poured on with the Trump/ Putin meeting in Helsinki.  Here are some random thoughts regarding the meeting and Russian relations and the reactions.

1. While Donald Trump has been a divisive person, it is the establishment’s reaction to Trump that has been even more divisive.  When the media is calling Trump disgraceful, and worse, treasonous, for meeting with Putin, it is causing those who actually listen to the media to hate Trump more, while those who don’t trust the media back Trump more.
2. It is crazy how most of the people who criticized the Iraq War and the lies of weapons of mass destruction are all of a sudden giving Trump a hard time for not backing “his” intelligence agencies.  The intelligence agencies – especially the CIA, FBI, and NSA – lie.  Then they corroborate each other’s lies.  Even Michael Moore and much of the political left are going after Trump for not trusting the intelligence agencies.
3. The most disappointing thing for me personally is that many libertarians have bought into the lies of the intelligence agencies.  They somehow believe this nonsense about Russia hacking our elections, despite the fact that there has been absolutely no proof given.
4. I continue to hear this lie that Russia invaded Crimea.  Putin was asked about Russia’s annexation of Crimea in an interview with Chris Wallace on Fox News, and Putin corrected Wallace that it was not an annexation.  It was the U.S. government, and in particular the CIA, that helped overthrow the democratically-elected government of Ukraine (Putin did not say that part).  After that, the people of Crimea voted (extremely overwhelmingly) to join Russia, as the population there is mostly ethnic Russian.  All that Russia did was accept Crimea’s vote to join.  Even the great Judge Napolitano got this wrong, writing that Putin “has invaded Ukraine.”
5. No matter what Trump did or said at the meeting with Putin, there would have been heavy criticism.  Remember that Trump was already set to meet with Putin before the phony indictments were issued by Mueller just days before.
6. The establishment has pushed this narrative against Russia ever since Trump was elected.  They are trying to kill multiple birds with one stone.  It is an excuse on why Trump won and Hillary lost.  It focuses on the leak of the DNC data instead of what was actually in the leaked data.  And it continues to keep tensions high with Russia to help fund the war state and the military-industrial complex.
7. It is unbelievable that the political left and the entire establishment hate Donald Trump so much that they would rather take him down and risk war with Russia than have peace.
8. Even watching Fox News has been frustrating, as most of them buy into the whole thing about Russia hacking the elections and that Trump should have backed his intelligence agencies.  There are a few exceptions.  Tucker Carlson has been good.
9. While I was highly critical of Rand Paul, especially during his presidential campaign, he has correctly defended Trump’s meeting with Putin and how it was handled by Trump.  He has been a bright light in standing up to the lying media.
10. Trump has made many mistakes, but particularly in surrounding himself so much with the establishment.  He did his own thing in meeting with Putin, which is good, but then he seems to fall back in line with the establishment in most other ways.  While I don’t like Steve Bannon, it would be nice if Trump had somebody more independent and outside of the establishment that he could consult with.
11. Trump was right not to side with the intelligence agencies when he was meeting with Putin.  I believe they are lying on purpose in order to destroy Trump.  But then Trump doesn’t want to give the appearance that he doesn’t have control over his own administration and his agencies (which he doesn’t).  I would rather Trump come out and identify the deep state and tell the American people that the deep state is running independently of him and trying to destroy him.
12. Sometimes Trump seems really brilliant to me, and then other times he seems more like Inspector Gadget.  I wonder if there is anyone working behind the scenes who is constantly saving his butt without him knowing it.
13. The Russian central bank has sold off virtually all of its U.S. Treasury holdings.  This was a smart move by Putin and the Russian government.  You have to wonder if China will ever wake up and do the same.  More on this in a later post.
14. If the establishment is able to take down Trump in some manner, the backlash is going to be great, and I really don’t know what to expect.  I think the establishment is scared to take him down outright, either through assassination or impeachment or some other method.  There are a few who are saying he has committed treason and should be jailed or executed, but I think most of the establishment knows better.  They want to discredit him and take him down through popular opinion.  Otherwise, they risk a major backlash that might be worse (for them) than Trump himself.
15. And finally, I wish that Trump would hold a primetime speech to the American people that the media would be essentially forced to cover.  He should address the deep state and the lies of the intelligence agencies.  He should say that if he gets killed, then it was inside forces in the deep state.  He should say that Russia didn’t hack the DNC server as is being claimed and that if there is any proof to the contrary, that it should be presented.  There are a lot of people who don’t read Twitter and who listen to the mainstream media and the headlines on their news feed.  Trump needs to address the country as a whole and he could probably get his approval ratings above 50%.

For anyone looking for safety and stability with an investment portfolio, I advocate a permanent portfolio as described by Harry Browne in his book Fail-Safe Investing. Even if you are looking for something with more risk and reward, I still recommend a portion of your investments be put into a permanent portfolio, while allocating a certain portion for speculation.

Unfortunately, the permanent portfolio is too boring for most people, so they don’t listen to the advice.  And if you do tell someone about it who is outside of libertarian circles, they think it is crazy to have a 25% allocation towards gold.  Most financial advisors won’t recommend any more than 5% towards gold, if any at all.

Still, there are some who do follow the permanent portfolio, or at least a basic outline of it. I have been working on writing a report about the permanent portfolio and possible tweaks that can be made to fit each person’s situation.

With that said, I received the following question the other day via email.  I asked for permission to write a response via a blog post.  The background and question is as follows:

“You know how experts will say ‘don’t invest in stocks if you don’t have at least xxx years before you need the funds.’  Well I am contemplating a move to another state in 3-4 years and maybe a house purchase there. I have no idea the exact time (but it’s at least 3 years) nor how much of my savings it would use. In a situation such as that, what are your feelings on the PP for my savings as opposed to just treasury bills?  I have adjusted my PP a bit, upping the cash and lowering the gold.  So the daily volatility is very low.  So the only real risks I see is if stocks AND long term treasuries both crater in unison. Or of course if my ETFs go bust.  As an aside, I have adjusted my PP to 40% cash, 25% Stocks and LT Bonds and 10% Gold. All ETFs.”

My response:

The permanent portfolio is different as compared to stocks.  I don’t agree with advice from the so-called experts that people should invest the majority (or all) of their funds into stocks.  However, if someone does take the advice to invest heavily in stocks, then it is correct that you should only do so if it is for the long run.

Even here, what is the long run?  If someone had invested in the Japanese market at the top in 1989, they would still be down by almost half nearly three decades later. If someone had invested in U.S. stocks near the peak in 1929, they would have waited at least a couple of decades to recover.  When most advisors recommend staying out of stocks if you need the money in the short run, they aren’t talking decades.

The good thing with the permanent portfolio is that you are not vulnerable to these prolonged downturns, or at least not as compared to stocks.  There are no guarantees in life, so it is theoretically possible that the permanent portfolio could be down over the course of, say, 5 years.  But it is highly unlikely, and it hasn’t happened so far in the United States in modern times.

In fact, in the few years that the permanent portfolio has been down for a calendar year, it tended to give double-digit gains the following year.

Therefore, if you don’t need the money for at least 3 to 4 years, I would recommend just putting it all in the permanent portfolio. The chances are very slim that you would lose money over this timeframe.  And since you don’t know exactly how much you will need to move to another state, and how much you will need for a down payment on a house, then you have some wiggle room anyway.  If the portfolio were down by 10%, it doesn’t sound like it would be that devastating.

I agree that it is unlikely that both stocks and long-term bonds will perform really poorly over this time.  If we hit a recession and stocks tank, then I expect U.S. government bonds to do well.  And if we continue on this little boom (at least for those with assets), then stocks should hold up well.

Of course, nobody can predict the future with certainty. While higher price inflation and inflation expectations do not seem to be on the horizon, we know that things can change quickly.  An unexpected war or some major event could shift things quickly, and maybe gold will resume its bull market from where it left off back in 2011.

Since you may need some of this money, you should not buy physical gold coins for your gold portion, or at least not the majority of your gold position.  It is always a good idea to have a little bit of physical gold.  But if you are going to sell off part of your portfolio to use as a down payment on a house, then you want to have some of your gold in an ETF or something similar where the transaction costs are low. You don’t want to be buying and selling gold coins in a relatively short period of time because of transaction costs.

As you get closer to your move and have more certainty as to how much money you will need, then you can start shifting more money towards cash (or cash equivalents).  If you know you are moving within a year and will need the money, then that is the time to go even more conservative towards cash and out of the permanent portfolio.

One other consideration is to use the mutual fund PRPFX.  While this does not perfectly mimic the permanent portfolio setup, it is a pretty good alternative.

In conclusion, I believe the permanent portfolio is stable enough that you can keep your investments in it for a 3 to 4 year time window and be reasonably sure that it isn’t going to lose value in nominal terms.  Once you get within a year of needing the money, then it is appropriate to move towards a stronger cash position.

I have been paying closer attention to the yield curve than anything else at this point.  The policy of the Federal Reserve has been tight for several years now, at least in the fact that it hasn’t been creating new money and, more recently, rolling off a relatively small amount of maturing debt.

The stock market is obviously indicating a boom, but stock investors are unreliable in terms of predicting the future.  A stock boom can turn into a crash really quickly.  The only warning sign is an uptick in volatility, which we have seen this year.

Bond investors tend to be better forecasters as a collective.  And by far the most accurate predictor of a coming recession is an inverted yield curve.

Over the last year or so, short-term interest rates have come up after being near zero for many years.  Long-term rates have also risen, but to a lesser degree.  This has led to a flattening yield curve, but it is not yet inverted.

I tend to compare the 3-month yield against the 10-year yield, but other people will focus on different maturity lengths.

With that said, it is interesting to just take a look at the 5-year yield against the 10-year yield.  As of the close on July 13, 2018, the 5-year yield stood at 2.73%, while the 10-year yield stood at 2.83%.  This is a difference of just 0.10%.

This differential is almost nothing, yet the difference is a maturity length of five years.  You can lock in a rate for 10 years at 2.83%.  But for an annual return of 0.10% less (almost nothing), you only have to lock in for 5 years.  If someone buys a 10-year bond, then he is expecting the rate to be lower in 5 years than what it is now, or at least he is expecting most everyone else to expect this (if that makes sense).

This means that the overall market sentiment is that price inflation will remain relatively low.  With U.S. bonds, there is almost no chance of an actual default (not counting the partial default from possible inflation).  Therefore, the interest rate doesn’t vary between maturity lengths due to a default risk.

If bond investors are suggesting that interest rates will be lower in 5 years than what they are now, then this means we are likely to have a significant economic downturn between now and then.  And with this downturn, there are not big expectations for price inflation.

This doesn’t mean that bond investors (as a collective) are correct.  But at the same time, I tend to trust bond investors more than stock investors.

I will continue to watch the yield curve closely.  Once it is flat or inverted, it means you should prepare rapidly for a recession.

I recommend that you prepare for a recession anyway.  This means having backup plans for your source of income.  This means not being heavy in stocks.  This means having liquidity.

If you have a strong cash position with little or no debt entering into a recession, then you will be so much better off than most others.  Not only will you be able to meet your monthly obligations, but you can actually take advantage of discounts in asset prices for assets that are heavily sold off during the downturn.

In the meantime, take advantage of the higher short-term rates with your cash position.  You can find a financial institution that pays a decent rate, or you can consider opening a TreasuryDirect account.  You probably aren’t going to regret having too strong of a cash (or cash equivalents) position.

This was a question addressed in a recent discussion I saw on Facebook.  It was not a random discussion amongst friends, but a conversation in a group that specifically discusses topics on financial independence.

The original person asking the question was wondering what to do with some extra money.  Should he invest it or put it into an emergency fund?  His only major debt is a car loan with a low interest rate.  I think it was 2.9%, but it could have been 1.9%.

There were varying opinions on the matter, but a few people (including myself) suggested paying off the car loan early.  There were some who vehemently disagreed because of the low interest rate, including the original commenter asking the question.  When these discussions form, it goes from giving advice to the original commenter to having a general philosophical debate.

I want to address why it might be a good idea to pay off a car loan in such a situation, even with a low interest rate.  I personally did this years ago on my car, even though my rate was really low.

Several years ago, I wrote a report on the pros and cons of paying down your home mortgage.  It is still available on kindle, and it is still very relevant today.

One of the cons of paying down your mortgage is that you are locking up your money.  Unless you sell your house or refinance it, that money you put into the principal balance of the mortgage is unavailable.  Therefore, if you are going to consider paying down your mortgage, you definitely want to have a substantial emergency fund beforehand, at a minimum.  The one exception is if you could actually pay off your mortgage because at that point you would start reaping the gains of not having that payment every month.  But even in this situation, you would still probably want to have some money in reserves for emergencies.

In my personal case, I did not have near enough liquid funds to pay off my mortgage.  Therefore, I haven’t touched it.  But I did have enough to pay off the remaining balance on my car loan.  So even though the interest rate on my car loan was lower than the interest rate on my mortgage, I opted to pay off the car loan, given that I did not have any other immediate uses for the money except possibly conventional investing.

As soon as a I paid it off, I didn’t have the car payment each month.  This was an immediate benefit for cash flow.  It made sense.

That is why it often makes sense to attack a car loan, even at a low rate.  It is much more feasible for most people to pay off the car loan in its entirety, thus eliminating that monthly payment.

If you have an emergency fund of $20,000 and a car loan with $15,000 remaining, then it might make sense to pay off the loan, even though your emergency fund would shrink to $5,000, assuming you don’t have any other known big expenses on the horizon.  In this scenario, you can divert the money that you would have been paying monthly towards your car payment back into your emergency fund.  You should be able to replenish your emergency fund within a few years just with the car payment money.

This isn’t always a good idea for everyone, and you certainly have to take your own personal situation into account.  Someone with higher expenses due to a family may want to have more of a cushion, for example.

As far as investing goes, it is true that you may be able to get a much better return on your money than the interest rate on your car loan.  But maybe you won’t.  Unless you can find a U.S. government bond paying a higher rate than that (which you probably won’t), then you will have downside risk to your investment.

While 1.9% or 2.9% isn’t a high rate, it is very difficult to find a risk-free return higher than that.  And depending on your tax rate, you may have to earn close to a 4% return just to get that 2.9% after taxes.

It is obviously a personal choice based on your risk tolerance.  It is also an issue of opportunity costs.  But unless you feel confident (and that doesn’t always mean anything either) that you can get a significantly higher return than the interest rate on your loan, why not lock in the sure thing?

Politically speaking, I think 2007 was my favorite year ever.  I had been active in my local Libertarian Party since 2003.  We would have some fun events such as protesting taxes at the Post Office on tax day, or handing out flyers on July 4th.  Although many in the party were not as radical as me, at least they were in the same ballpark most of the time.  I could generally have an intelligent discussion with people.

Still, the number of libertarians was small.  And then came 2007 with the announcement by Ron Paul that he was running for president as a Republican.  I was excited when I heard this news, as I had been following him for several years at that point.  I was even more excited when I heard that he would be in the debates.

I correctly never had any high hopes of Ron Paul winning the presidency or even coming close to getting the nomination.  However, I thought that if several million people could hear his message at the debates, that we would surely at least get a few converts towards libertarianism.

I was shocked to say the least at just how fast the momentum picked up after the first couple of debates.  All of a sudden, there were Ron Paul meetup groups forming, and signs and bumper stickers were starting to appear.  I went to a meetup and eventually started participating at least weekly.

My wife and I had just had our first baby, so it was a busy time for me, but I was fortunate that I could go out one or two nights a week to gather with other Ron Paul supporters.  A local businessman in my area volunteered his office building to be used as something of a local Ron Paul headquarters.  I was again fortunate that it was less than a mile from where I lived.

Once or twice a week, I would go and meet up with about 20 other people.  The numbers varied and not all of the same people were always there.  It was also a quite diverse group of people with a wide range of ages and very different backgrounds.  We all had one thing in common, and that was our support for Ron Paul and his message.  We would sit around and make up flyers, stuff envelopes, make banners, and a host of other things.  I have no idea if any of it worked to get out the message, but it sure was fun sitting around and chatting with other people.

The thing that still gets me is where all of these people came from.  I had been active in the Libertarian Party for nearly 5 years and the crowds were never that big.  Most of the Ron Paul supporters I had never met in my life.

I don’t know if these were closet libertarians who came out after Ron Paul’s campaign got up and running, or if Ron Paul convinced them to be libertarian.  I have a feeling it was somewhere in between for most of them.  I think most of them probably already had libertarian leanings, at least on some issues, and Ron Paul was able to articulate what they never quite could.  They had just never heard the message presented that way before.

Before we knew it, there was a Ron Paul blimp up in the air, there were money bombs, he was easily winning all of the online (non-scientific) polls, and he was attracting crowds of thousands of people who would chant things such as “End the Fed”.  All along, I knew inside that his chances of winning were still very slim going up against the Republican establishment, but this was a great opportunity to reach more people than ever.  And overall, I think that goal was accomplished.

There are some libertarians today (some of whom became libertarians due to Ron Paul) who will talk about how horrible everything is today, and how the people in this country are a bunch of statists.  However, I don’t think they realize that the libertarian population today, almost regardless of how you define that term, is far greater today than perhaps ever before.  It is certainly far greater than at any time in the last 100 years.

The crazy thing is that Ron Paul created a lot of hardcore libertarians.  Some of his previous supporters might not even call themselves libertarian any more because they have chosen another label.  Some of them have gone from a-political to Ron Paul supporter, and back to a-poliitcal again, but for different reasons.

It is important to recognize just how much progress has been made over the last 15 years.  I like to give credit to people who laid the groundwork before that, whether you go back to Mises and Rothbard, or a little more recent like Harry Browne.  But it was Ron Paul’s presidential run in 2007/ 2008, coupled with the Internet, that really sparked this change.  There are many multiples the number of people who are libertarian now than in, say, 2006.

With that said, I think many libertarians just don’t feel as positive today as they did back then.  Whether we like it or not, a lot revolves around the presidential race every four years.  In 2016, libertarians didn’t have someone to rally around.  Some people liked Rand Paul, but he did not have the radical message that his father brought.  Some people liked Trump for taking on the establishment, but he is obviously not a libertarian.  And Gary Johnson just didn’t make the cut either, as he did not carry a principled libertarian message and did not articulate his positions all that well.  It also didn’t help that he picked Bill Weld as his running mate.

I believe Tom Woods has similar sentiments that libertarians just haven’t had someone or something to rally around since the last Ron Paul presidential campaign in 2012.

After the 2007/ 2008 campaign, I knew a lot of Ron Paul supporters who wanted to stay within the Republican Party and effect change within the party.  It is hard to say how effective it has been, but I believe some people got frustrated after a while and left.  And while I think people should promote liberty doing things they feel passionate about (as long as it isn’t counterproductive), I was hoping more Ron Paul people would join the Libertarian Party.

The Libertarian Party was the obvious choice to me.  It wouldn’t have taken that large of a percentage of Ron Paul supporters to join the party and tip the scales toward a more radical (principled) libertarian message.  If people had immediately joined in early 2008, we could have had Mary Ruwart as the presidential nominee instead of Bob Barr.  And even if they had been too late for that, then we could have had a Ron Paul type person as the nominee in 2012.

This would have been a sight to see if Mary Ruwart had been the LP nominee in 2008.  She would have continued on with Ron Paul’s message.  I think Ron Paul would have gladly endorsed her instead of what he did do, which was just to encourage people to vote for a third-party candidate before eventually announcing his support for Chuck Baldwin of the Constitution Party.

I still wonder what could have been, but I also wonder what still could be.  In other words, it isn’t too late for all of the people who were inspired by Ron Paul in 2007/ 2008 (or 2011/ 2012) to join the Libertarian Party and make a difference.  The party has good ballot access for a third party, and it wouldn’t take that significant number of people to essentially overtake the party with a more radical message.

With that, now comes the news that Tom Woods and Dave Smith are joining the Libertarian Party.  This was done after speaking at an event hosted by the Mises Caucus of the Libertarian Party.  The Mises Caucus is what you might call the libertarian wing of the Libertarian Party.

Tom Woods, with his podcast, his one of the most influential libertarians there is today.  Dave Smith, a comedian and television personality, is also a rising star in the libertarian community.  With these two joining the party and letting others know about it, I am hopeful that many more radical libertarians will join the LP and make a major difference.

We don’t have to have Bill Weld in 2020.  We don’t need him campaigning against Trump (there are plenty of others).  We don’t need him adding any confusion on what it means to be a libertarian.  Instead, imagine an actual libertarian running on the LP ticket in 2020 and sending out a message similar to that of Ron Paul.

In 2008, Ron Paul received over a million votes.  In 2012, he received over two million votes.  But that was within Republican primaries.  In many states, you have to actually be registered as a Republican to vote in the primaries.  We know there were some Ron Paul supporters who didn’t go to the trouble of becoming a Republican so that they could vote for Ron Paul.

Maybe the 2020 election can be a good test of approximately how many libertarians there are out there.  We just need to have a candidate in the general election who is actually spreading a libertarian message.  With Tom Woods and Dave Smith joining the party, I have some hope that this scenario is possible.

Many people within the LP today think that the main purpose of the LP is to win political office.  But I think that is the wrong strategy.  The main goal should be to move society in a more libertarian direction.  And in order to do that, we have to educate more people on the moral superiority of liberty and the benefits of liberty.

I believe the LP should run a presidential candidate, but it should be someone who will stick to libertarian principles and is able to articulate the message to others.  It can be a rallying point for libertarians, and it can help continue to spread the message of liberty that Ron Paul started in 2007, along with others before him.

There is a saying that it is better to be lucky than good.  If anything, it is the other way around, at least in the long term.  It is better to be good than lucky.

It amazes me to see how so many people in this world don’t realize that it is usually the good who get lucky.  It doesn’t matter if you are talking about sports, relationships, health, business, investing, overall success, or a number of other things.  When you do something and become good at it, luck tends to follow.

This isn’t to say that the good can’t get unlucky.  Accidents can happen.  Someone playing a sport can experience an injury.  Someone eating healthy can still get sick.  A successful entrepreneur can lose his business.

What is important though is that doing things right puts you in a position to get lucky.  Whereas someone doing things wrong will almost never get lucky.  And if they do get lucky, the luck won’t continue.

I was watching a tennis match the other day.  Someone hit a ball that touched the net but went over.  After winning the point, the person put his hand up while looking at his opponent as if to say, “Sorry about that.”  It has become common etiquette in tennis as if to acknowledge that you got lucky and it was unfortunate for your opponent.  When I thought about it though, even in this circumstance, it is only partial luck.  After all, to hit a good hard shot in tennis, you generally want to get the ball as close to the net as possible without having your ball stopped by the net.  So if you just barely skim the net, this could actually be considered a pretty good shot.  The game of tennis has a history of proper etiquette and I am not criticizing the kind gesture, but it was just another example of where you have to be good to get lucky.

I play a little amateur chess, so I understand the game of chess well enough to know that it is generally the good people who get lucky.  I have seen plenty of examples where one player blunders and the opponent doesn’t even recognize the blunder.  It has happened to me plenty of times.

I was surprised one time during a U.S. chess championship where Fabiano Caruana (who will compete for the world title in November 2018) was playing a game and went into what is called a confessional booth.  You can talk to the viewing public about your current match, but the other players can’t hear what you are saying.  Caruana briefly explained his position and said he thought he had a winning position as long as he hadn’t overlooked anything.  After his opponent eventually lost and was interviewed, he basically chalked up that portion of the game to luck.  The problem is that Caruana had explained that exact position to the camera at the time and why it was winning, even though his opponent thought it was a few lucky moves after that.

This is actually stunning to hear a grandmaster try to cite luck in a game when his opponent just clearly was better than him.  (I don’t know who it was, as I didn’t recognize the name at the time.)

If you think hard enough, you can come up with hundreds of examples in life where somebody gets lucky because they put themself in the right position to accept that luck.

Maybe you always need a little bit of luck to get through things and be successful.  But you have to lay the groundwork in order for that luck to even be possible.  If an entrepreneur sells 10 different kinds of products and one of them happens to take off and make him rich (while his other 9 products failed), are you going to say he got lucky?  Maybe he got lucky with that one, but he had to be in the game in the first place.  Most people will never be in the game in the first place.

If you are finding yourself saying “I just can’t catch a break” or “that guy just got lucky”, then you may need to reexamine your life and strategies.  It is possible that you have just had some bad breaks recently, but know that if you want luck to come your way, you have to make sure that you are doing things well to put yourself in the position to receive that luck.

I have written a similar post on this subject before, but I think it is important enough to emphasize that I wanted to write more on it.

Happy Fourth of July!  This is known as Independence Day.  It could also be called Secession Day.  The American colonists were seceding from the British Crown, and the British Crown wasn’t willing to let them go peacefully.  There are actually many similarities to the so-called Civil War waged by Lincoln, yet most Americans see the two wars completely differently.

There are many Americans who know almost nothing about American history.  You can see this with some of the “man on the street” interviews.  (Is that politically incorrect to say now?)

There are some Americans who don’t even know the entity that the Americans were declaring independence from.  I am not talking about whether it was Britain or England or the United Kingdom.  I am saying that some Americans would guess something like France.

However, sometimes I find more hope in the ignorant/ apathetic crowd than I do in those who actually know something significant.  I would rather talk to the person who knows little about the American Revolution and the so-called Civil War than talk to someone who knows quite a bit about each war yet thinks both Washington and Lincoln are heroes to be celebrated.  (I personally think George Washington had his good points and bad points, whereas Lincoln was almost all bad.)

There is no question that Americans, in general, are very ethnocentric.  They think the world revolves around the United States.  In some ways, they are correct.  The U.S. is by far the richest country in the world, and it is also the most powerful militarily.  But even though the U.S. government could blow up the planet a hundred times over, it can’t beat a bunch of people living in caves in Afghanistan, unless the military were to just literally blow up the entire country and kill everyone.

I do not agree with American exceptionalism as it is presented today.  The problem is that it is an attitude that America is the best, and therefore everyone else should conform.  This is how we get all of these immoral wars.  It is how we get politicians from Woodrow Wilson to George W. Bush saying we are going to bring democracy to the rest of the world.  It is highly immoral because it is using force in an attempt to achieve these goals.  It is taking advantage of a certain arrogance within the population who want to cheer on the American military.

With all of my criticism, there is a certain aspect of American exceptionalism that I do embrace.  While the U.S. government has been abusive to foreign countries all over the place, the American people, aside from the arrogance part described above, still have a certain individualist and free-spirit streak that just doesn’t exist to the same extent in other countries.

Sure, the U.S. has become more of a welfare state.  Sure, the U.S. government has troops stationed all over the planet.  Sure, the government has a major presence in many aspect of our lives.  But despite all that, there is still this pro liberty streak that is still somewhat unique to these United States.

Most Americans think it is ok to make money and be successful.  If you start a business and become wealthy, it is typically celebrated.  This is not the case in many other countries.

Religious liberty is highly respected, even from those who don’t wish to practice a formal religion.  This was one of the unique aspects of America in the 1700s.

Most Americans still embrace free speech.  Perhaps we have regressed a little in this aspect with political correctness, but still consider that Donald Trump was able to win the presidency.  The hardcore people who preach political correctness and try to shut down speech are very vocal, but they are also in a small minority.  Most Americans still believe in free speech, even if they don’t agree with what is being said.

Americans can homeschool their children without a lot of restrictions.  And to be sure, more and more Americans are practicing this right that they have by abandoning the government school system.

Americans can own personal firearms.  Some cities and states are more restrictive than others, but for the most part, despite attempts at more gun control, most Americans can own a gun.  And this is widely practiced in the United States far more than any other country.

These are just a few of the many things to celebrate, despite the other side of the coin of a police state, a spy state, a welfare state, and a warfare state.

There are likely more libertarians in the U.S. today than at any time in the last 100 years.  There may be more hardcore libertarians now than ever before.

If you are at a 4th of July party or family get-together and someone mentions celebrating our freedom, you don’t have to be that bitter libertarian who points out how we live in a police state with our freedoms shrinking by the day.  Instead, affirm some aspect of freedom that you are able to celebrate.  You can say, “I sure am glad that I can at least be an entrepreneur and homeschool my children if I so choose.”

They say that ignorance is bliss.  Many people will celebrate the 4th of July in this state.  They will celebrate their freedom by barbecuing and setting off fireworks.  But really, they really are practicing a version of their freedom and enjoying life to a certain extent.

I think you can avoid ignorance without also being miserable all the time too.  You can be aware of the many injustices and the many ways in which big government makes our lives significantly worse.  But at the same time, you can celebrate and practice the liberty that you do have.  It is ok to have some fun and celebrate the good things in life.

There has been some political commentary out there suggesting that Bill Weld should run for the presidential nomination of the Libertarian Party.  In particular, George Will recently wrote an article asking if Bill Weld can restore conservatism by running on the LP ticket.

Bill Weld is a former Republican governor of Massachusetts.  In 2016, he joined up with the Libertarian Party and became the nominee for vice president.  Gary Johnson, the presidential nominee, favored Weld as his running mate.

Although there are several reasons why Johnson is not a libertarian, he certainly has more libertarian leanings that Bill Weld.  The following are 10 reasons why Bill Weld is most assuredly not a libertarian. In fact, it is even hard to say he holds many positions that are libertarian leaning.

• Bill Weld is a member of the Council on Foreign Relations (CFR). This is the ultimate organization of the establishment.  It is hard to imagine any member of the CFR being a libertarian unless the person is acting as a secret spy for information.  If Bill Weld is acting in a covert way in any way, it is to infiltrate the Libertarian Party on the behalf of the CFR, not the other way around.

• Bill Weld supported the Iraq War that started in 2003. While this was quite a while ago, and he has since hinted that the war was probably a mistake, he has not made it a point to say that his views have changed in any significant way.  It is easy now to say that there was faulty intelligence and that it was probably a mistake, especially since the political winds have dramatically shifted since that time.  Unfortunately, Weld is still a hardcore interventionist, and there is little evidence to make us believe he would pursue a non-interventionist foreign policy.

• Bill Weld did not shrink the state government as governor of Massachusetts. As with many politicians, he talks about shrinking government but has few specific proposals to actually do so.  Despite preaching fiscal conservatism, the state budget grew under his watch as governor.

• Bill Weld did very little else in bringing liberty to Massachusetts. If he had any sort of libertarian leanings at the time, you would think there is something he could highlight that he accomplished as governor that actually resulted in a lasting change.

• Bill Weld does not call for the abolition of any federal departments. He obviously does not believe in the Constitution or decentralization in virtually any capacity if he can’t think of one federal department to abolish.

• Bill Weld is not in favor of ending the federal war on drugs or legalizing drugs, or he has certainly not made this clear if he is. He says he wants to legalize marijuana, but he apparently does not take this same position in regards to other drugs.  Weld was actually a federal prosecutor earlier in his career, which included many drug cases.

• Bill Weld is a proponent of more gun control by government, although he has had to somewhat soften his stance for the Libertarian Party.Weld also said that you should not be able to buy any gun if you are on the terror watch list.  These people whom he wants to deny the right to own a gun have not necessarily been convicted of any criminal offense.

• Bill Weld thinks highly of Angela Merkel, the German president. When his running mate Johnson was asked his favorite foreign leader, Johnson struggled to come up with an answer, so Weld answered Merkel on his behalf. While this is a difficult question to answer for any libertarian because there aren’t many foreign leaders promoting a message of liberty, it is hard to understand why any libertarian would cite Merkel as a leader to admire.  She has been a shill for the European Union and a massive welfare state.

• Bill Weld helped George W. Bush prepare for debates in 2004. He went on to support Mitt Romney in 2007 for president, but endorsed Barack Obama over John McCain in the general election. Weld endorsed Mitt Romney in the 2012 presidential election.  In 2016, Weld endorsed John Kasich in the Republican primary.  Unless Weld had a dramatic shift in his political views in a short timeframe in mid-2016, it is hard to believe he has any significant libertarian tendencies with all of those recent endorsements.

• Bill Weld is so anti-Trump that he was actually campaigning for Hillary Clinton in 2016 (see here and here). He said that, “I’m not sure anybody’s more qualified than Hillary Clinton to be president of the United States.”  He was sabotaging his own ticket (Johnson/ Weld) because he absolutely did not want to see Trump elected.  Again, you have to wonder if Weld was sent by the CFR/ establishment to infiltrate the Libertarian Party in an attempt to soften the LP message as well as to take down Trump.

There are many more reasons out there on why Bill Weld is not even close to being a libertarian. If Bill Weld becomes the presidential nominee for the Libertarian Party, then the party should just change its name to Another Establishment Party.