I believe this is Tech Bubble 2.  The first tech bubble was in the late 1990s, which popped in the early 2000s.

To be sure, this tech bubble looks a bit different.  In January 2020, I asked whether we would see the Dow hit 30,000, and I also wondered whether the Nasdaq would hit 10,000.  Then the coronavirus fear struck, along with widespread government shutdowns.  That sent stocks on a quick nosedive in March.

But something strange happened in the midst of what is likely a severe recession.  The federal government sent out massive stimulus checks to nearly everyone, along with $600 per week unemployment bonuses for the tens of millions of newly unemployed Americans.  This meant that a majority of people on unemployment were making more money than they were working.

This was all done courtesy of the Federal Reserve, which allowed massive deficit spending. The Fed created about $3 trillion in new money in the matter of a few months.

So when it comes to judging the stock market, never underestimate the power of the Fed to juice things up.  I guess we also shouldn’t underestimate sending a bunch of young adults home to sit on the couch with thousands of new dollars deposited into their accounts. It makes it a lot easier – with regard to both time and money – to sit on the couch and buy a few shares of Tesla through the Robinhood app.

Now here we are, starting September 2020, and I am wondering if the Nasdaq will hit 12,000 soon. This is 20% above the mark that I set 7 months ago when there weren’t tens of millions of unemployed people and hundreds of thousands of businesses shut down.  It was before there was massive rioting in cities across the country.  It was before Manhattan was essentially abandoned.  It was before businesses had to worry about following new pages of regulations and wondering if they would be shut down again next week.

At the end of 2019 and beginning of 2020, I said that the theme for 2020 would be the massive stock market bubble.  I thought it was a bubble then, so you can just imagine what I think now. It is really beyond ridiculous.

There is so much money sloshing through our economy, it is hard to say when all of this will implode.  The Fed is basically promising inflation for a long time to come.

The broad market has done really well over the last several months, but the Nasdaq has been extraordinary.  Amazon actually makes a little bit of sense because people are staying home more and ordering more things online.  Even Apple makes a little bit of sense, although not too much.

Tesla is beyond ridiculous when it is worth more than many of the other major car companies combined.  Even though Tesla produces cars, it is still in the technology realm because people are betting on the company for its innovations.  They are banking on the car company to come up with the next great car battery that can run much longer or recharge much faster.

Overall, the stock market doesn’t make much sense right now other than the factors mentioned above. There are always individual stocks that do well though, even in a bear market.

Unsustainability

I just want to emphasize that there are limits as to what the Fed can do.  It has already surpassed what I thought was possible. It nearly quintupled its balance sheet from 2008 to 2014 without causing really high price inflation.  And now it is on the verge of doubling it again.

But there are limits. The ultimate limit is hyperinflation, and I don’t think the Fed wants to go there.

I also want to emphasize that monetary inflation doesn’t automatically mean higher stock prices. For the most part, this wasn’t the case in the 1970s.  When price inflation gets out of control, it really distorts the economy. It becomes harder to run a profitable business.  It isn’t good for business.

You could see a scenario where price inflation is going up 10% annually, while stocks are going up 5% annually on average.  This would mean that stocks are still going higher nominally, but stockholders are still losing money in real terms.

But the movements in the near future are not going to be gradual or smooth for the most part. We are going to see wild swings, and eventually we are going to see a major crash similar to what started in the year 2000.

The crazy thing is that the Nasdaq peaked just above the 5,000 mark in the first tech bubble.  We are now getting close to 12,000, which is more than double what the last bubble was.  So even if prices have doubled in the last 20 years, the Nasdaq is still in a bigger bubble now than it was then.

While there was a recession in 2001, it was nothing close to what we have now.  The debt and spending are magnitudes worse, and the wreckage from the government shutdowns is still looming and continuing.  On top of this, let’s remember that we still haven’t had a correction from the massive Fed intervention that has taken place since the 2008 financial crisis.

In conclusion, I am very bearish on this market.  I believe it is going to crash very hard one day, and it is going to hurt a lot of people really hard.  It is impossible to predict when that day will be.  Maybe it will come with the uncertainty of the presidential election.  Maybe it will come in early 2021.  Maybe it will somehow hold on for another couple of years, although I rather doubt it.

I had already predicted a major drop in 2020 based on the inverted yield curve that we saw last year.  But the government shutdowns and the Fed’s response in creating trillions of new dollars have changed all of that by giving another blast of stimulus to stock investors.

The economy is already ugly.  There is a disconnect with the stock market.  I don’t expect that disconnect to continue for a long time, and I don’t think the overall economy will be booming again any time soon.  Stocks will eventually be hit hard.

The chairman of the Federal Reserve, Jerome Powell, has spoken.  The Fed will take a different approach going forward with regard to inflation.

Powell’s definition of inflation is not increasing the money supply, which the Fed is doing often. Powell is talking about price inflation.  Even here, the Fed doesn’t use the commonly used CPI number.  It has its own metric that it uses called the PCE.

The Fed has had a goal of 2% inflation.  Again, this is in reference to price inflation and not the money supply.

It is ridiculous in the first place that this would be a goal.  It is devaluing the money that people hold by 2% per year.  When you compound this, it means that prices will double about every 36 years.  This is assuming that the Fed’s metric is accurate, which is not likely.

There is no reason that we need inflation.  In a free market economy with free money, we would most likely see mild price deflation over time.  You would have increased technology and production.  Instead, the Fed, as one of its mandates, tries to steal this benefit away from consumers.

Contrary to popular thinking, you don’t need an increasing money supply with increased production. Your money will simply buy more, and there is nothing wrong with this.  This is what has largely happened with electronics (computers, televisions, etc.) over the last few decades.  People still go out and buy these things.  They get the benefit of paying cheaper prices, or getting better products, or some combination of those two.

The FOMC Updates Its Goals Statement

With Powell’s speech, the FOMC officially updated its “statement on longer-run goals and monetary policy strategy”.

On price inflation, the statement reads as follows:

“On price stability, the FOMC adjusted its strategy for achieving its longer-run inflation goal of 2 percent by noting that it ‘seeks to achieve inflation that averages 2 percent over time.’  To this end, the revised statement states that ‘following periods when inflation has been running persistently below 2 percent, appropriate monetary policy will likely aim to achieve inflation moderately above 2 percent for some time.’”

I take this to mean that the Fed is actually a little worried about price inflation for the first time in a while.  This is essentially what the Fed is saying now:

“Don’t worry if we blow past our 2 percent inflation target, even with the more understated PCE metric that we use.  We can easily go up to 3 or 4 percent inflation without slamming on the brakes. We can keep interest rates low and keep the funds flowing to Congress to fund the massive debt, even when prices are rising substantially more than what they already have been.”

The Fed has created about $3 trillion out of thin air recently.  It is unprecedented, and it isn’t going to stop.  It will temporarily flatten like it has over the last couple of months.  But the general trend will still be up for its balance sheet because the federal government is going to continue to run multi-trillion dollar deficits every year.

So when the Fed’s official measure of price inflation goes above 2%, it will point to its new long-term goals and say there is nothing to worry about.  They will insist that they can keep interest rates near zero and keep expanding the balance sheet.

Unemployment Concerns for Low-Income People?

The other big part of the new goals statement is a bit puzzling.  I won’t quote it here because it is just confusing, but it is in regards to unemployment.

According to this CNBC article, “While the shift appears to be a matter of verbiage, Powell said it is significant.”

Powell said, “This change reflects our appreciation for the benefits of a strong labor market, particularly for many in low – and moderate – income communities.  This change may appear subtle, but it reflects our view that a robust job market can be sustained without causing an outbreak of inflation.”

So I guess the Fed will now show its “appreciation” for a strong labor market.  What does this even mean?  There hasn’t been much appreciation for these workers since March when tens of millions of them were forced out of their jobs. Stock investors aren’t showing much appreciation because they continue to send stocks to all-time highs while many of these tens of millions of people remain unemployed.  In fact, the stock market it basically saying that these people are irrelevant.

It’s also interesting that Powell and the Fed would be stressing the importance of paying attention to low-income workers.  While the majority of people forced out of work would probably fall into this category, I would think that it would be middle and upper income people who are in a much tougher position right now if they lost a job.

First, take someone who was making $10 per hour working at an ice cream shop.  Let’s say that person was forced out of work because a governor or mayor deemed the business to be non-essential.  Now that worker is sitting at home collecting unemployment.  Up through the end of July, he was probably collecting around $900 per week.  That would be the state unemployment plus the $600 weekly bonus coming from the federal government and financed by the Fed. This unemployed person is making more than double what he was making before.  And when his unemployment dries up, it probably won’t be that difficult finding another job that pays $10 per hour.

Now let’s take someone who was making $100,000 per year and supporting a family.  That person loses his job.  Maybe he collects half his salary in unemployment up until the end of July when the amount gets reduced.  This person has a mortgage payment, and he has to provide food, clothing, health insurance, and other basic needs for his family. Plus, it won’t be that easy finding another job with a comparable salary.

But Powell and company want to show their appreciation for the guy who was scooping ice cream for $10 per hour.  I’m not saying that we shouldn’t be sympathetic for anyone who loses their job, but the young person (probably living with his parents) scooping ice cream who loses his job is in a much less difficult situation.

Of course, the Fed’s idea of showing “appreciation” means more manipulation of interest rates and the money supply.  That is really all it can do.  In the long run, this tends to hurt poorer people and people on fixed income, as the value of their money depreciates over time.

The only thing I can conclude from this Fed announcement is that we will continue to see a lot more monetary inflation.  That is all it has at this point, and it is just making up an excuse in advance for when it starts to show up more in consumer prices.  This is why I remain bullish on gold.

There are some parallels between the Great Depression and now.  We are in tough economic times, but I don’t believe we have seen anywhere near the worst yet.

We are a much wealthier society than what was the case leading into the Great Depression. Obviously technology has helped us through a great deal.  Actually, I would argue that most of the government-imposed shutdowns never would have happened if not for our current technology.  Even 20 years ago, it wouldn’t have been possible to send tens of millions of people home to do their jobs.

It is also easy to take our high living standards for granted.  It was a bit of a shock in March and April to go to the store and see shelves cleared out.  I have only seen that before when a hurricane was about to hit.  In this case, it wasn’t just toilet paper.  Even meat and vegetables were largely gone off the shelves.

It showed how fragile our whole system is.  On the other hand, it also showed how resilient our system is if it is allowed to function.  When the market is relatively free, it is amazing how supply and demand can rearrange things quickly, and the seemingly right amount of products appear on the shelves.

As a follower of Austrian school economics, I believe that the central bank’s easy monetary policy of the 1920s set up America for the beginning of the Great Depression. A recession quickly became a depression due to increased involvement from government.  Both Hoover and Roosevelt were highly interventionist presidents when it came to the economy.  It was especially hard for the economy to recover when the government was trying to enact price controls and prevent wages from falling.  It also marked the beginning of a big welfare state.

One other factor that sometimes gets overlooked is the uncertainty, especially when it came to government policies.  Robert Higgs wrote extensively on what he called regime uncertainty and applied it to the Great Depression.  He said that the uncertainty of future government policies helped create an environment where investment and entrepreneurship were highly discouraged.

Regime uncertainty could prove to be highly detrimental to our economy now in the year 2020, and it could impact the economy for a long time to come.

The Next Flu?

I have asked rhetorically whether we will have to wear face masks forever because there is always some kind of flu virus out there.  I have questioned whether governors or mayors (or maybe future presidents) will just shut down the economy again any time a new virus or contagious disease gets some media attention.

If I am wondering these things, you have to think that many others are wondering the same thing. This would be especially true of investors and entrepreneurs.

There are still many businesses that are shut down due to government orders.  Most of these orders are not even really laws. They mostly came from governor and mayor orders without a legislature.  2020 has been a sight to see, and it’s not done yet.  It was amazing how a fearful populace so easily gave up their liberty.

For the brick and mortar businesses that are open, they are having to follow all of these ridiculous regulations.  They get to put up glass walls and stick lines and arrows all over their floors.  They get to play the mask police too.  Much of this is government imposed, but it is also imposed by public opinion.

If it were all voluntary, it would obviously be better.  But it is still harmful to businesses even if they are just responding to public fear.  They get angry comments that they should require masks.  They get angry comments that they shouldn’t require masks.  They get angry comments that they aren’t enforcing their mask policies good enough.  On top of it, the big businesses have lawyers telling them they better follow certain precautions for liability reasons.

How would you like to be a business owner right now who owns or leases a building that customers enter?  And what is to say that something similar won’t happen again next year or the year after that? Who is to say that we won’t still be hunkered down from the coronavirus this time next year?  I would never have guessed that this nonsense reaction would have lasted this long in the first place.

Many restaurants and other small businesses have closed.  They have closed for good.  Even if customer demand somewhat comes back for dining out, who would want to start up such a business to replace one of the restaurants that has already closed down permanently?

You are not secure in your property rights.  You can open up a nice new restaurant, and now you know the government can just shut it down at any time.

It isn’t hard to imagine hearing this now or in the future: “There is a new strain of the flu out there.  It may kill up to 100,000 Americans this year.  It’s time for small non-essential businesses to close down temporarily until we get a vaccine or get this thing under control.”

If this isn’t regime uncertainty, I don’t know what is.  And it is coming from all levels of government.  If the president doesn’t shut you down, the governor may. If the governor doesn’t shut you down, the mayor may do it.

This will be especially true in big cities.  I don’t see how New York is coming back from this any time soon.  It has been decimated.  Rent would have to be incredibly cheap for anyone to start a business there now.  Even with that, I don’t think the risk would be worth it.  On top of the threat of government shutdowns, you also have to deal with the potential threat of rioters without police protection. This is an added layer of uncertainty for the big cities.

Real Estate

Regime uncertainty also plays a factor in real estate.  Manhattan will obviously continue to be a disaster in every way, but we don’t even have to look at big cities.

I know there has actually been an increased demand for houses in many areas.  It is typically in the suburbs because people are trying to escape the big cities.  They are trying to escape the downtown areas.  This makes sense in terms of buying a house to live in.

I have to wonder though about the rental market.  Anyone who owns investment real estate has to be nervous.  It has been this way since March.  It is really devastating for a landlord to hear government officials effectively say that people don’t have to pay their rent.

They don’t exactly say it this way, but they say that they want a moratorium on evictions.  In other words, you don’t have to pay your rent and you won’t get kicked out any time soon.

Thankfully, the large majority of people are still paying their rent.  But you wouldn’t want to be a landlord stuck in a situation where you have someone renting who is not paying.  Depending on where you live, you may not be able to evict the person, even if they have the money to pay rent.  And if you can evict, you know that the courts are probably backed up in a lot of places.  How many months should a landlord have to go without getting paid any rent while the landlord still has to pay the mortgage and expenses of the property?

I have been an advocate in the past of investing in residential real estate for people who are in the right position financially.  I am rethinking this now.  I already would have said to avoid places like California or any other state that has a low regard for property rights.  This is especially true now.  But even in a more friendly state, I would be concerned now, especially when there are rules coming down from Washington DC.

Again, why am I going to buy residential real estate as an investment when the government can come along at any time and tell my renters that they essentially don’t have to pay? This has all of a sudden become far more risky for real estate investors.

Who would want to be a landlord in California?  The added regime uncertainty when it comes to property rights (or lack of) for real estate investors will further discourage the process.  It will end up reducing supplies and making rents more expensive, and it will add to the epidemic of homelessness.

If I were looking at buying rental real estate, I would be incredibly careful about where I’m buying.  Governments all over have shown that your property isn’t really your property.

And this is just for residential real estate.  I won’t even get into commercial real estate.  Maybe some of those high-rise buildings that sit mostly empty in downtowns across America can be converted into residential real estate.  But who would even want to make that investment at this point?

Investment

This all impacts investing in general too.  Many entrepreneurs rely on investors for capital.  It doesn’t just come from bank loans.

Who would want to be an investor in any brick and mortar business right now?

You might say that the stock market is booming, which is true right now.  But notice what is happening.  The investing is going towards big companies.  These are not start-up companies.  They are companies that are either deemed “essential” or they are tech companies.

It is still surprising how much of a boom there is in the stock market (as of right now) given the devastation that has taken place over the last 6 months.  I underestimated the power of massive unemployment checks and young people sitting at home with nothing to do. So they get on a trading app and use their extra money to seemingly make some easy money by pushing a few buttons on their phone.

It all reminds me of the tech bubble in the late 1990s.  But regardless of what happens with stocks, this isn’t new investment. It is people trading shares. There is a buyer and seller on each side of the equation, but the price at which the shares are being traded is higher than before.

This is largely gambling at this point.  It is hard to call it investing.  Seeing the prices of Amazon, Tesla, and Apple go higher is not a sign of American prosperity.  It is not a sign of investment.  If anything, it is a sign that people would rather digitally trade in and out of shares than use their money to start a business or buy investment real estate.  From this standpoint, the stock investing actually seems rational.

Conclusion

Regime uncertainty is going to have a major impact on our economy going forward.  If you are going to start a business, do it all online.  You don’t want to have a physical presence.  Otherwise, a governor or mayor could shut you down at any time.

The idea of property rights has been dealt a blow in 2020.  It is hard to get this back.  It will be especially hard this time, not knowing if and when the population will be so easily led into fear the next time a new virus appears.

I have no idea if we will see another Great Depression.  Regardless, our living standards will be greatly impacted.  The Federal Reserve’s monetary policy has done great harm and will continue to do great harm.  The federal government’s massive spending and regulations have done great harm and will continue to do great harm.

Now we also have to worry about the whims of governors and mayors who have been unofficially granted the power to shut down private businesses.  This is regime uncertainty not seen since the Great Depression, and it is coming from all levels of government.

When Jo Jorgensen won the Libertarian Party (LP) nomination for president, I was mildly optimistic, and maybe even a little excited.  I thought she was the best nominee since at least 2004 when Michael Badnarik ran, and I still believe this today.

My idea of “the best nominee” may be different from other people’s idea.  There is a reason that Gary Johnson was the nominee twice in a row.  Some Libertarians liked the prestige of having a former governor run on the ticket.

For me, I want someone who is going to advance the cause of liberty.  I think there is an almost zero chance of the LP nominee actually winning the election.  This has been true since the party’s existence beginning in the 1970s.

For this reason, there are some Libertarians who believe it is a waste of time to run a presidential candidate until there is a realistic chance of winning.  I disagree with this.

While the establishment media doesn’t pay much attention to third-party candidates, having a Libertarian Party presidential candidate does provide opportunities that otherwise wouldn’t exist.  The main opportunity is outreach.

The LP nominee always gets some attention.  Some of it is negative, and the attention that is given by the establishment outlets is a tiny fraction of what is given to the two big parties. But there is still attention nonetheless.

I became a radical libertarian because of Harry Browne.  My journey is a little different because I didn’t start following Harry Browne until after the 2000 election.  I was mildly familiar with him in 2000.  I think it is because I saw a story on him on Fox News. I just remember someone talking about an ad the Browne campaign had where there was a wrecking ball knocking down the IRS building, representing that Harry Browne wanted to eliminate the IRS and the income tax with it.

I believe the LP candidate should function similar to what Ron Paul did in 2007/ 2008, and again in 2011/ 2012.  You want to teach people the benefits of liberty, and you want to convert people towards libertarianism. That should be the number one goal.  This is also what Harry Browne did in 1996 and 2000.  Jo Jorgensen should know something about this since she was Browne’s running mate in 1996.

The only way to achieve greater liberty in society is by changing public opinion so that more people are sympathetic to the cause of liberty.  It isn’t a matter of getting the most votes, especially when you have no chance of winning.

I understand that some Libertarians care a lot about vote totals because of ballot access. While I don’t completely ignore this argument, I don’t think ballot access will do much good unless we actually have people who are willing to consider the libertarian message.

Of course, vote totals in themselves don’t do much, except they could send a message to others that there are people who are not in line with the status quo.

Even electing Libertarian Party candidates to major offices won’t do much unless the public is behind them.  I remember back in 2007 when some people would suggest that Ron Paul should not talk about foreign policy and should almost pretend to have a different stance than what he actually had.  Luckily for Ron Paul and us, he didn’t much take this advice, especially in the debates.

It doesn’t do much good in tricking someone to vote for a candidate because they are hiding their true views.  This is especially true for a Libertarian candidate.  If the LP presidential candidate moderates his or her views and then gets elected (which won’t happen anyway), what good does it do?  Is that person going to step into office and say, “Just kidding, I really am going to withdraw all troops from overseas tomorrow morning”?

For anyone who moderates their views in the campaign, I wouldn’t trust them to do what is right anyway if elected to office.  Most people go the other way.  Once they get into office, they favor bigger government than what they campaigned on.  They tend to enact the worst policies that were part of their campaign, and at best ignore the things that would have actually brought greater liberty.

Therefore, I believe it is important – vitally important – for the LP presidential candidate to be radical and firm in libertarian principles.

You can deliver your message in a way that resonates with people, but the message should always be about selling more liberty.

Jo’s Messaging

Unfortunately, I have been disappointed in some of the messaging coming from the Jo Jorgensen campaign.  I still believe she is a better candidate than Gary Johnson was, but she is falling well short for me.

I don’t expect a perfect candidate.  I don’t have to agree with every specific thing, and I don’t have to agree with the focus of every message.  But what Jo is doing, and perhaps more importantly, what she is missing, is bad for the libertarian movement.

Jo’s Twitter account has sent out messages pandering to Black Lives Matter, and it really does come across as pandering.  It is fine if she offers some solutions to issues raised, such as ending qualified immunity, ending civil asset forfeiture, and ending the federal war on drugs.  And to be sure, she has done some of this.  But her main message at times seems to be pandering to the political left.

She said, “It is not enough to be passively not racist, we must be actively anti-racist.”  What does this even mean?  And who will hear that message and decide to flip their vote to Jo Jorgensen?  I think that question answers itself.

When it was announced that Kamala Harris would be Biden’s running mate, Jo tweeted out, “I’m glad that Joe Biden has brought another woman into the race; the vice presidency shouldn’t be a boys’ club.  When I think about the millions of girls and young women across America, I think they deserve a voice this year when it comes to the top job in the country.”

Sure, Kamala Harris is an authoritarian, establishment, war hawk, but let’s cheer that she is a woman.  Who is Jo trying to appeal to in this?  Does she think that a bunch of women who are Democrats are all of a sudden going to switch their vote to Jo?  Again, the question answers itself.

I also saw a tweet from Jo’s account talking about abortion and a woman’s right to choose.  I know this is a contentious issue within the libertarian community, but I don’t know why she would send something like this.  Is she trying to turn away anyone who believes that abortion is murder?  As president, she would have no role in this issue anyway, except to push for overturning Roe vs. Wade on constitutional and decentralization grounds.

I have seen suggestions that Jo may not be running her own Twitter account.  If that is the case, then she should have fired whoever is running it a while ago.  She should be controlling the words that are sent out in her name.

For me, even worse than the bad messages are the missed opportunities.

I haven’t followed a lot of what she has said and done, but it is easy to get someone’s general message when you watch them a few times.  She is usually good on the big issues from a libertarian standpoint, but messaging matters.  The focus of your attention matters.

Jo is getting involved in the culture wars.  She is allowing the establishment media to dictate what she talks about instead of creating her own narrative.  It may be impossible to avoid talking about the culture wars, but why put so much focus on it without even really selling a message of liberty?

We still have wars raging on overseas.  If Black Lives Matter, do Foreign Lives Matter?  Do Foreign Black Lives Matter?  Unfortunately, to most Americans, foreign lives really don’t seem to matter.  There are probably at least a thousand times the number of foreigners who die at the hands of U.S. bombs and interventions than there are black Americans who die at the hands of police brutality.  Of course, Jo would never say this because it might upset the people she is trying to pander to. 

While I think war and interventions are always a major issue, there is another major issue that Jo is mostly ignoring at her own peril.  She has been handed an issue in the year 2020 that is a populist issue and one where she can easily sell libertarianism.

The issue is the American middle class.  There are 50 million people who have filed for some kind of unemployment this year.  There are tens of millions of more people who are struggling financially and are scared at what comes next in this crazy world.  There are hundreds of thousands of people who have had to shut down their businesses due to government.  We have seen the debt run up by several trillions of dollars in the matter of months.  We have seen the Federal Reserve balance sheet expand by nearly $3 trillion in the matter of months.  We are hearing about contact tracing and forced vaccination.

In terms of government shutdowns, it is largely due to governors and mayors.  Still, she can speak to it as a human being, and the federal government is largely responsible for pushing the propaganda that resulted in the fear and the subsequent shutdowns.

She should talk about the hundreds of thousands of small businesses that were forced to close that may never reopen again.  She should talk about the tens of millions of people who were forced out of their jobs.  She should talk about the anxiety and depression that largely get ignored in place of more virus fear propaganda.

She should speak boldly about libertarian solutions.  She should state that the answer to the economic problems is not more government spending and regulation.  The answer is less.  We need a dramatic reduction of spending from the federal level instead of having these resources consumed and misallocated by politicians and bureaucrats.

She should speak boldly about the damage being done by the Federal Reserve – the nation’s central bank.  She should point out that the monetary inflation will be very harmful and will only serve to enrich the already-wealthy people at the expense of the rest of the American people.

Jo should show empathy for the tens of millions of Americans who are really hurting right now, largely because of government policy.  This is a message that resonates.  It is a message that sells.  And when people are hurting, they are open to hearing a new message.

Instead, Jo is pandering to cultural leftists who won’t vote for her anyway.  If she focuses her message on the struggling American middle class, she may actually convert people towards libertarianism.  She may inadvertently get a few million more votes than she otherwise would have.

If she sold this message and ended up receiving five million votes in the general election, there would be no mistaking these votes as votes against the status quo and votes in favor of smaller government.

There is a real opportunity in 2020 for libertarians to sell a principled message of smaller government, while also exploiting a populist issue.  What normal American doesn’t want more prosperity at this point?

Unfortunately, Jo Jorgensen has largely failed up to this point in selling a strong libertarian message.  So far, it is just another election year of disappointment.

I don’t know whether or not I will vote for Jo at this point, and I am not trying to tell anyone else what to do.  It is still a vote against the establishment and the status quo. But it would be nice to vote for someone for more than a protest vote.  To paraphrase Jo: It is not enough to be passively not an advocate of the establishment; we must be actively anti-establishment.

Happy Birthday to Ron Paul. He turns 85 years today, August 20.

Ron Paul has done more for the cause of liberty than any person in modern times. Perhaps he has done more for liberty than anyone in all of history.

We would be in a lot worse shape today if it weren’t for Ron Paul. There are hundreds of thousands of people in the U.S. alone who are hardcore libertarians because they found Ron Paul. Most of those came from his two presidential runs as a Republican.

There are many great things about Ron Paul. He is a family man and a good man. Maybe he isn’t the best or most charismatic speaker when compared to other public figures, but this is part of what makes him genuine and believable. He has remained principled and continues to deliver his message for liberty.

Ron could have easily retired a long time ago and spent his days relaxing. But that is not Ron. He has a personal devotion to the cause of liberty, and it brings him joy in spreading his message to others.

He has particularly been a voice of sanity in 2020 with all that has happened. Despite his age and his son having a partially removed lung and testing positive for coronavirus, Ron has warned us from the beginning not to fall for the media hype and propaganda regarding the virus. Ron says that kids need to go outside and play football. I wish more people had listened to this doctor’s advice from the beginning.

Thank you, Ron Paul, for everything you have done and continue to do.

I follow the FIRE community.  That stands for Financial Independence, Retire Early.  I am more into following FI than FIRE actually.  If you had asked me when I was younger, I would have said that I wanted to retire early.  I wouldn’t say that now.

I want financial independence for the flexibility.  I want to be able to work on the things that I want to work on.  Maybe you could call that retirement, but I don’t think most would.  I like going to the beach, but I don’t want to do it all the time.  I still want to be productive.

I like following the FIRE movement because it is entertaining to me, and I get some good ideas.  You can learn different ways that people make more money, save more money, and are more efficient with their time and resources.

The one area where I tend to disagree with the typical FIRE person is when it comes to investing. A large portion of the FIRE community advocates investing most or all of your money in low-cost mutual funds. They will say that stocks historically always go up in the long run.

I have pointed out the example of stocks in Japan, which peaked in 1989.  Over 30 years later, they are still down by nearly 50% from the peak.  Nobody has given me a good explanation on why that can’t happen here, meaning the United States.

I don’t predict it will happen here, but it shows it’s possible.  And Japan is a first-world country, so it isn’t an unrealistic example.

To be sure, there are some FIRE people who are more in my camp.  I have seen gold mentioned as a possible hedge against inflation by a few people.  There may even be a few people who like the permanent portfolio concept.  But it is safe to say that a vocal majority favors mostly stocks for an investment portfolio.  They also tend to be more positive about retirement accounts.  I’ll say that most people should probably take an employer match for a 401k, but that’s it. Many FIRE people will say to max out a 401k.

Aside from the concept of investing mostly in stocks, it also bugs me when I hear people downplay the benefits of paying off a home mortgage.  There is the classic argument of whether to invest or pay down a mortgage.  And I get that there are good arguments for either one.  But I disagree with those who are adamant about not paying down a mortgage. And the only reason for this is because they assume that you should be able to get a greater rate of return from investing than the interest rate on your loan.

Dave Ramsey on Mortgages

I recently saw a clip of Dave Ramsey taking a call about the subject of paying off a mortgage. He talked about his baby steps. He talked about studying millionaires and how most millionaires pay off their mortgage and save for retirement.

He makes the profound point that you wouldn’t want to borrow money to invest.

To be sure, he says that you should save 15% of your income towards retirement before paying down your mortgage.  So that in itself may be a little contradictory about not borrowing to invest.  However, I understand the concept and the rationale. This is especially true for people who get an employer retirement contribution match.

I have written about Dave Ramsey before, and I have just about the same opinion of him today as I did 10 years ago.  I think he offers a lot of wisdom, but I believe he gets the investing side wrong.  I wrote about Dave Ramsey and Suze Orman back in 2011.

I follow the FIRE movement because I find it is more advanced and more detailed in discussing financial topics.  People get into things that Dave Ramsey just wouldn’t dive deep into.  But it is nice to go back to Dave Ramsey from time to time for some simple, but much-needed financial advice.

When I watched this short video of him talking about paying off a mortgage, it reminded me that many people in the FIRE community could stand to listen to some of this. While the FIRE people tend to be more advanced than Dave Ramsey listeners, I think some FIRE people get too advanced for their own good.  This is especially true when they think they should never pay off their mortgage because they can make such high returns investing in the stock market.

Anyway, I appreciated what I heard from Ramsey.  I agree with him that it is wise in most situations to pay down a mortgage if you are in a good position to do so.  I think more FIRE people should take this advice.

Dave Ramsey on Gold

After all of that, I remembered why I didn’t care for Dave Ramsey at times.  I saw a recent video of him talking about hyperinflation and gold.  He unequivocally says not to buy gold.

He says it is just a golden-colored rock.  He says it’s no different than a green piece of paper with a picture of a president on it.  This is completely wrong because the green pieces of paper we call dollars are essentially forced on us.  And let’s not forget they originated as certificates for gold.

Gold has been used as a form of money for thousands of years.  It was chosen in the open marketplace.  It also does have uses other than being money, which can’t really be said for dollars.  Gold has industrial uses, and it is used for jewelry.

The worst part of this gold segment is when he said that the price of gold doesn’t have to go up in hyperinflation.  He says the dollar isn’t tied to gold any more.

Isn’t that the point?

Ramsey says that gold goes up in price when there is a perceived shortage.  He talks about gold going up in “value”.  I find it hard to believe that somebody with Ramsey’s wisdom doesn’t understand that gold would go up in price with more money in circulation, all else being equal.

He uses the word “value”, but it’s not that gold necessarily goes up in value.  It is that it holds its value, unlike the dollar or any other fiat currency.

There is no question that gold goes up and down in price based on a lot of factors, including perceived shortages or perceived over supplies.  It also tends to go up with more money in circulation. This would be especially true in a hyperinflation situation where the demand for a fiat currency goes way down. People are spending their depreciating money quickly to convert it to hard assets before prices go even higher.

So, after all of these years, it is still frustrating that Dave Ramsey has such a bad grasp on economics and monetary policy.  Remember, in this video, he wasn’t saying that hyperinflation was out of the question.  He was saying that he doesn’t recommend gold under any circumstances.

The crazy thing is that we don’t even need hyperinflation to get a massive rise in the dollar price of gold.  I wouldn’t consider 15 to 20 percent annual price inflation to be hyperinflation, but I would imagine that gold would go a lot higher in such an environment.

In conclusion, as I stated almost a decade ago, listen to Dave Ramsey when it comes to managing money and debt, but ignore him when it comes to investing.  I would recommend the same strategy when dealing with a majority of people in the FIRE movement.

We finally learned this week that Kamala Harris has been chosen by Joe Biden to be his running mate.  Perhaps more accurately, the establishment has chosen Harris to be Biden’s running mate.  Maybe even more accurately, the establishment has chosen Harris to be president of the United States.

I wasn’t sure if Biden would actually be the Democratic nominee.  I guess they are going forward with him for now, gaffes, blunders, and all.

If Biden wins and takes office in January 2021, I think it is highly unlikely that he would finish a full four years in office.  He would be 78 years of age when taking office and 82 when finishing.  It would be hard to imagine that his cognitive decline would stop, especially with how rigorous the job is.

Even if Biden stayed about the same from where he is now, that may not be acceptable.  There are moments where Biden seems ok, but you never know when he will get off track and say something really stupid or start tripping over his words.  The establishment media can often provide cover-up for scandals, crimes, corruption, personal affairs, and a host of other things, but it is hard to disguise continued verbal gaffes, especially when that person is president of the United States.

Biden serves one purpose at this point.  In the eyes of the establishment, he has to defeat Trump in November. After that, they can discard him like an old rag.  Biden already did the establishment a major favor in defeating Bernie Sanders. They just need Biden to hold on for three more months and give them one more victory.  They are hoping he doesn’t say anything too outrageous during that time.  That is why his campaigning will be limited, at least when it comes to him speaking.

If Biden wins, Kamala Harris will likely become president.  She was soundly defeated in the Democratic primaries, but her path to the presidency looks clear now.  She is just hoping that Biden doesn’t do anything really stupid and that the anti-Trump vote is strong enough to provide victory in November.

A Winning Message?

Biden and Harris appeared together after the announcement had already been made and people were talking about the impacts.  In a joint press conference in which they didn’t take questions, Biden went on about how everyone should wear masks and that wearing masks for the next three months will save 40,000 American lives, according to the “models”.

Why three months, Joe? Why not until the end of the year? You could have at least said for the rest of the year to not make it so obvious.  He said this with the election being just over three months out.  In other words, let’s make life as miserable as possible for the next three months so that people will feel like any change (i.e., getting Trump out of office) will be good.

After Biden’s spiel about mask wearing, Harris steps up to the microphone and said that that is what real leadership looks like.  I guess she got over all of the allegations of sexual abuse and the racial bussing that she hammered Biden on in the primary debates.

Kamala Harris then goes on to talk more about mask wearing, and then about contact tracing and vaccines.  She is criticizing Trump for not giving us a timeline on when “we” will get vaccinated.  In other words, she wants Trump to lie. But if Trump did offer such words, I’m sure she would have criticized him for lying about it.

So is this the winning message that we will hear from Biden/ Harris over the next three months? Wear a mask, social distance, line up for a vaccine, and allow the government to trace your every move in case you come into contact with someone who may have had the virus.

I understand the anti-Trump message.  Most people aren’t voting for Biden/ Harris.  They are voting against Trump.  There are many people holding their noses in voting for Biden. The anti-Trump message unites a large segment of the country.  That in itself could be a winning message if enough people hate Trump at the beginning of November.

But what’s with the obsession over masks?  I know the political left tends to be more onboard with the mask wearing and obeying government orders to shut down and everything else.  But you have to imagine that there is a decent percentage of people who would not necessarily identify as conservative or libertarian who think the mask thing and the over-response to the virus is way overblown.  As I have said before, when they showed crowds of people packing the beaches for spring break, do you really think most of these people were Trump voters?

What will be the final slam-dunk message from Biden/ Harris?  Everyone should wear face shields?  Everyone should walk around in an astronaut suit?  All candidates have a marketing problem right now, but the Biden/ Harris message of major fear really seems to be the worst.  I mean, there are probably at least 30 million people who don’t have a job or have a job that is paying them less now.  There are tens of millions of people who are on pins and needles about their own job or their own business and worried that life will never be the same again.  There are major cities in flames.  But the Biden/ Harris message is to double-down and mask up.

I also have to think about Bernie Sanders, whom I haven’t heard much from.  Bernie never was the revolutionary that he was made out to be.  He did the same thing in 2020 as he did in 2016.  The establishment worked hard to deny him the nomination, so Bernie lines up and dutifully supports the Democratic nominee.

Still, as bad as Bernie is, I have to imagine that he would be selling a little different message right now if he were the nominee.  He would certainly be anti-Trump, and I’m sure he is enthusiastic about everyone wearing a mask.  However, if Bernie appeared with his new running mate, I’m pretty sure he wouldn’t have spent his time talking about masks, vaccines, and contact tracing, or at least his time on those things would have been minimal.

Bernie would have been talking about healthcare as a right.  He would have been talking about the need to raise wages (through legislation, of course) for lower and middle-income Americans.  He would have shown some empathy for the tens of millions of people struggling to pay their bills.  He would have at least tapped in somewhat to the real problems facing Americans, even if we disagree with his solutions.

Instead, we get the Biden/ Harris message of wear a mask and line up for vaccination.  Are they sure that is the message they want to sell for the next three months in order to beat Trump?

President Harris?

If Biden (i.e., the establishment) defeats Trump in November, I give it a much greater than 50% chance that Kamala Harris will be the president by the beginning of 2023.

Harris is an authoritarian to the bone.  If you think I’m criticizing her heavily now just because she is now Biden’s running mate, read some of my blog posts from the Democratic debates. I pointed out, several time, that she was the scariest candidate of them all, and that she is an authoritarian. She is bad on almost every issue.

I said: “Tulsi had some great moments in the debates.  She took down the worst person of them all – the authoritarian Kamala Harris.”

I said: “She [Harris] is still an authoritarian.  She is still unlikeable.  Luckily, I think others are not finding her likeable either.”

I said: “Kamala Harris is still the scariest of all the candidates.  She is an authoritarian leftist.”

I said: “Kamala Harris is still, I think, the scariest candidate.  She is very authoritarian.”  I also said” “Harris would be horrible in almost every aspect.”

I quote myself here only to show that I am not especially attacking Harris now just because she is now the VP candidate.  I would have been critical of any establishment pick, but I was very clear during the primary debates that I thought Harris was the worst of them all.

It’s funny, in a sick sort of way, that Biden delivered Harris as the black female candidate. I have my many criticisms of the Black Lives Matter (BLM) movement, but there are areas where I find common ground with some people.  I do believe that police brutality is an issue, even if it may not be the most important issue in my eyes.  I believe that we need prison reform.  I believe that the war on drugs should be ended and that people should not be locked in a cage for drugs.

Yet, Kamala Harris has been horrible on all of these issues.  Before becoming a senator, she was a prosecutor and attorney general in California.  She has a record of locking people up for non-violent crimes.  She has a record of enforcing a police state.

I have heard a few hardcore leftists criticize Harris since becoming Biden’s running mate. Unfortunately, most leftists ignore her record and just cheer on the fact that she is a black woman.  If she is a friend to the black community, I hate to see what an enemy looks like.

Harris is just bad in every way, especially to a libertarian.  She favors a police state at home.  She favors more government spending, more taxation, more cronyism, and more government control.  She is also a major war hawk.  She is like Hillary Clinton without quite as much personal baggage.

My only hope is that if Harris does become president, there will be sufficient resistance to her authoritarian plans.  I have seen the American people roll over easily in 2020.  If we have an all-out authoritarian who is not shy about her intentions in the presidency, then maybe it will wake some people up. That’s my hope anyway.

Donald Trump has issued a series of executive orders to provide “relief” because Congress can’t agree on legislation.  So Trump has done what previous presidents have done for a long time. He made dictates (executive orders) with no Congressional authorization.  It is unconstitutional.

Some might say that Trump’s orders are more blatant than ever before.  He is essentially changing the tax code without Congressional permission, and he is also spending money that has not been approved.

Trump’s executive orders bring back the federal government’s supplemental unemployment benefits ($400 extra per week instead of $600 extra per week).  They will extend a prohibition on evictions (sort of) and will defer student loan payments.  Most interesting is the order to suspend the payroll tax from September 1 through the end of the year.  It is this last item in which this article will address.

To be sure, Trump’s orders are quite authoritarian and perhaps unprecedented, but more in terms of taxation and budgeting.  I can easily think of worse things that presidents have done.

Just going back to Obama, he started major wars without any Congressional authorization, let alone an actual declaration of war.  The two major ones that stand out to me are Libya and Syria.  Obama didn’t exactly use an executive order.  He just commanded a start to these wars. In fact, Congress had previously refused to authorize a war in Syria, so Obama just waited a little while and then did it anyway.  This is far worse than anything Trump has done.

I want to focus on the payroll tax cut, if that is what you call it.  To quote this article, “The order defers the employee’s obligation to pay a 6.2% Social Security tax per paycheck.  It applies to people who ‘generally’ make less than $4,000 every two weeks, which works out to an annual salary of $104,000.”

This is interesting first because the Social Security payroll tax is highly regressive. It hits every W-2 worker. It hits self-employed people and contractors worse when they have to pay double because they are also considered the employer.  But the Social Security payroll tax, unlike the Medicare tax, is capped.  In 2020, the cap is $137,700.  Anything you make beyond that is not subject to the payroll tax.

This is also an interesting political move by Trump.  This tax hits most workers, and he knows it.  Since this is an executive order, Trump couldn’t get away with just reducing the tax.  Instead, he is instructing the Treasury not to collect it.  Right now, it is technically a deferment, which means it will all have to be paid at the end of the year by employees.

But who is going to want to do that?  Who wants to have to budget for that?  And it’s not like you can stick it in a high-interest savings account in the meantime.

This will be like property taxes that you don’t escrow.  This is what I do, but I know most people use escrow.  The mortgage company estimates your property taxes and you pay the monthly amount with your regular payment each month.  You may owe a little or receive a small refund once property taxes are due each year, but even here the mortgage company will often just make a small adjustment to your escrow payments each month.  I don’t escrow, so I have to write a big check once a year to my local tax collector.

If you make $1,000 per week ($52,000 per year), then you would currently pay (have deducted) $62 per week for the Social Security payroll tax.  If Trump’s order goes from September 1 to December 31, that will be about 17 weeks.  That would total $1,054.  It’s amazing how much we pay.

How do you think most Americans will feel having to write a check for over a thousand dollars after the year is over for this 4-month timeframe?  Sure, they will be getting an extra $62 per week in their paycheck, but do you think everyone is going to set this aside and budget for this?

This brings in to question whether employers will actually reduce the payroll tax when processing checks (direct deposits) for their employees since it is uncertain if the tax cut might just be a deferment.

Trump says he wants to eventually make this permanent.  I don’t know if this would mean just making it permanent for this 4-month time period (not a deferment), or if it would mean forever getting rid of the tax.

Trump said that if he is re-elected in November, then he will make it permanent.  In other words, if you vote for the other person, then you may have to make a big payment after the year is over.  I don’t know if this is politically smart, or if he is overplaying his hand.

Less Taxation, More Spending

The long-term implications with this order deal with something I have discussed several times before.  As the spending continues to increase, which has been especially dramatic this year, the direct taxation seems to be going down.

The payroll tax is a significant portion of tax collections for the Treasury.  If the employee portion of the payroll tax is eliminated, this will likely reduce tax collections significantly.  And since spending isn’t going down, the annual deficit will continue to increase.

We are already at a point in 2020 where the federal government is funding over half of its expenditures through debt instead of tax collections.  A permanent elimination of the employee payroll tax for Social Security will further this.

At this point, I ask why the federal government doesn’t just eliminate all taxes and fund the entire budget through debt, most of which is bought up by the Federal Reserve, at least at this point.

This used to be a rhetorical question, but it doesn’t seem all that rhetorical any longer.  It is becoming closer to reality.

There is a part of me that favors this.  I don’t want to see hyperinflation, but I do want to see the Fed and the government pay the price for their inflationary policies.  Up until now, it seems they have largely gotten away with just issuing trillions of dollars in new debt with no noticeable consequences.

Now, I know that our living standards are far lower than they should be because of this.  I know the government has served to misallocate resources on a large scale.  I know that many people and businesses were already in trouble before 2020 due to a lack of savings.  But up until this point, we haven’t see rampantly high consumer price inflation.

If the federal budget is completely financed with new debt, I believe the breaking point will be reached much faster.  Private investors and foreign central banks can only buy so much.  It would leave the Fed to buy up most of the new debt, which would be many trillions of dollars per year.

I doubt the Fed could get away with this for more than a few years.  If the Fed has to continually create $5 trillion or more per year to help finance the federal budget, it would be hard to imagine that we wouldn’t see high price inflation.

Eventually, the Fed would be forced to scale back or face massive price inflation.  As bad and as stupid as the Fed is, I don’t think the Fed members want to risk hyperinflation.  So Congress would be forced to cut back its spending dramatically or raise taxes.  Maybe we would see a combination of both.  But at least it would put a cap on the reckless spending coming out of Washington DC.

This is why I tend to favor this approach of the Fed financing everything.  I think financing the budget with debt and inflation is a disastrous policy, but it’s happening anyway.  The government is experiencing virtually no limits on what it can do.  By eliminating more direct tax collections, it will speed up the time to the day of reckoning where Congress is finally forced to scale back significantly.

I have said for several years that Trump does things that tend to expose the establishment, even if inadvertently.  Maybe this is another one of those things.

I have been surprised and disheartened by the events of 2020.  My outlook for liberty in the long term has generally been positive, but I have to admit that my positive outlook has been shaken a bit in 2020.

I try not to write a lot of sensationalist headlines.  I actually believe that my blog might be more popular if I used more clickbait headlines and outlandish predictions.  I could say that gold is going to $20,000 per ounce by next year or that the New World Order is right around the corner or that hyperinflation will wipe us all out in the next few years.  I don’t write things that I don’t believe, and I am cautious in my predictions.

The reality is that, even when major world events happen, things tend to not change much for most people.  The significant changes we do see are so gradual that we barely notice them.  It is easy to forget that smartphones didn’t exist 20 years ago.

When a new war breaks out, things certainly change for those in the war region.  I am quite sensitive to that.  But for most Americans and people in other first-world countries, things don’t change that much.  If you didn’t lose your job in 2008/ 2009, then the financial crisis/ recession probably had very little long-term impact on you.

With that said, I don’t know that I can say the same thing in 2020.  Things really are different, and significantly so.  I don’t think it is the craziest time in American history.  I believe that event would go to the so-called Civil War.  That was pure devastation, with hundreds of thousands of people dead when the population was a small fraction of today’s United States.

But 2020 has brought major changes to our lives.  For most of us, it isn’t from the coronavirus.  It is from fear of the coronavirus and the general population allowing governments at all levels to react in tyrannical fashion.

I have to say that I am actually worried about our future.  I don’t think life on the planet is going to end, but I do worry about the kind of world that my children will have to grow up in.

First, there are the draconian measures being put on virtually everyone, from businesses being forced to shut down or operate with major restrictions to requiring face masks.  I have already wondered whether we will wear face masks forever.

I don’t want to live in a world where people are walking around wearing face masks all the time. I don’t want to live in a world where it is inappropriate to shake someone’s hand.  I don’t want to live in a world where you can’t attend live concerts or sporting events.  I don’t want my children growing up in such a world.

But now I also have to worry about the economic conditions that are being brought on by the highly disproportionate reactions to a virus.

Extreme Poverty and Economic Decline

I still feel fortunate to live in a first-world country.  I can still go to the grocery store and find most things I am looking for.

I think about people in third-world countries and how devastated they must be.  These are places that were already poor, and I’m sure many people have been brought to the edge of starvation.  Some places like India have brought totalitarian lockdown measures.  This is in a place where most people cannot afford to miss a few days of work, let alone longer.

I think of a place like the Bahamas that relies on tourism.  Think of the workers who previously worked at resorts.  I have no idea how many resorts are still open there.  People who are unemployed aren’t getting $600 weekly checks like Americans were getting from the federal government (on top of state unemployment benefits).  Most countries don’t have the same level of wealth as the U.S.  They can’t just redistribute wealth for a few months and expect everything will be fine.

We don’t hear many stories about third-world countries.  We barely hear many stories about the major hardships within the U.S. The establishment media is too busy selling the coronavirus fear narrative.  They don’t want to acknowledge the devastation that has happened due to the policies of the authoritarian politicians.

The media will keep a ticker going of the number of (highly overinflated) coronavirus deaths, but we aren’t going to get a ticker about the number of suicides, or the number of businesses filing for bankruptcy, or the number of people living with fear and depression due to the propaganda.

While the United States is a relatively wealthy country, there are limits.  You can’t just have bad policy and not have consequences.

This year, we have seen a dramatic rise in the Federal Reserve’s balance sheet.  We have seen trillions of dollars of new debt piled on to the massive debt that had already accumulated. We saw Congress rush through legislation of over $2 trillion that included so-called stimulus checks, expanded unemployment, and business bailouts.  Now Congress is debating another bill. 

The Democrats want to continue the extra $600 per week, thus paying a majority of people more than they were making at their job.  The Republicans do not want this much, but they already sold out the principle several months ago when they agreed to it in the first place.

The Democrats also want a bailout for state governments, because obviously (to them) fiscally responsible states should have to bail out places like California, Illinois, and New York so that they can keep paying massive welfare benefits and six-figure pensions.

There seems to be no end to this madness.  I am not surprised that gold has surged past $2,000 per ounce.  My only surprise is that it took this long.

I really am worried about our future.  The federal government is confiscating resources on a scale that most of us have never seen.  It is probably more than what happened in World War 2, but at least there was a definitive end to that war.

I don’t even know what to tell people at this point.  The best you can do is to try to prepare mentally, physically, and financially.  I still recommend the permanent portfolio, but even here I have my concerns.

If you are already set up well financially, I recommend that any additional savings should go toward gold and debt repayment (half and half seems like a good percentage).  If you don’t have any debt (including mortgage), then save the money.  The gold portion will help protect against the depreciation of the currency.

I will warn you though that this doesn’t make you immune either.  Everyone is vulnerable today.  Gold is good as long as things keep functioning.  It won’t do you much good if food stops getting delivered to the grocery stores.

I don’t think it is going to come to that.  I think the more likely scenario is that we have a severe depression, but life will continue for most people.  It will just be a harder life.  It will be unnecessarily harder because people are acting like fools today and allowing governments to spend recklessly and impose major restrictions that violate private property rights.

I am worried about our world ahead.  It is not all bad news, but I am preparing for really rough times ahead.

Presidential elections are generally overrated.  The federal government has vast powers over our lives, but it is questionable just how much the president plays into this.  As long as there isn’t a hardcore libertarian president, it seems that not much will change.

The wars overseas continue.  The so-called entitlement programs continue.  The massive spending continues.  The deficit spending continues and is getting worse.  The unfunded liabilities keep going higher.  To top it off, we live in an administrative state where alphabet agencies with little oversight write the regulations that we are required to follow.

The best I can say for Trump is that he hasn’t started any new major wars, although you never know what tomorrow may bring.  Trump has also helped expose the deep state for what it is (sometimes inadvertently) for those who care to pay attention.  Aside from this, Trump has been mostly a mess.  He does provide some entertainment value, but that can only make up for so much.

I have already made a case for not wanting Trump to be re-elected.  If I thought that the mask mandates and lockdowns would end soon after Trump losing the election, then I want him to lose.  Maybe the establishment would loosen its grip and stop punishing the gullible American people for Trump being in office.

With everything that has happened in 2020 so far, presidential politics has largely taken a back seat since March.  Now we await Joe Biden’s choice for running mate.  It is perhaps the most important vice presidential pick ever.  If Biden makes it to Election Day and actually wins, then I don’t know if he will take office.  I put the odds of him actually being president for a full 4-year term very low.

All three presidential candidates have a major marketing problem.  I refer to Donald Trump, Joe Biden, and Jo Jorgensen.  These are the three I am following.  They are the three that will get the most votes, assuming that Biden is the nominee.  There will be other third-party candidates, but I don’t think they carry much weight.

Joe Biden

I will start with the easy one.  Biden’s whole personality is a marketing problem.  His cognitive abilities (or lack of) are a major marketing problem.  He can barely put together a coherent sentence.  Bernie Sanders, who is slightly older than Joe Biden, is far more charismatic, energetic, and coherent.

This is why Joe Biden has been locked up in his house.  The less he says, the better it is for his campaign.

Even when he puts out a YouTube video, he is tripping over his words.  These are not recorded live.  Does his mean his advisors don’t want to tell him to re-record some of these segments?  Worse, does it mean that Biden is recording several takes and the bad ones we see are the least bad of the bunch?

Now we’re hearing that Biden might try to avoid debating Trump.  If they use the coronavirus as an excuse, I don’t think that will play well with the American people.  You can easily have a debate and distance the candidates and the moderators.  Obviously, the Biden campaign would prefer not to have debates because it means fewer opportunities for Biden to mess up and stick his foot in his mouth.

Maybe it doesn’t matter though.  The people voting for Biden know he’s incoherent.  They aren’t really voting for Biden.  They are voting against Trump.

Donald Trump

The establishment has been throwing everything at Trump for over 4 years now.  For half the country, not much stuck.  The other half hates him or doesn’t really care about him.  The establishment finally nailed him in 2020 with the coronavirus.  They were able to decimate the American economy, which took away Trump’s number one issue to run on.

Trump hasn’t been the same since.  He also doesn’t have rallies now with tens of thousands of people.  This has taken away some of his spunk.

Trump sometimes has some decent things to say on the coronavirus and the lockdowns.  But he waffles a lot.  He tries to play both sides.  I don’t think that will work.

Trump hasn’t had a primetime speech to the nation in quite a while.  I believe the last time was in March when the hysteria had just taken hold.  I don’t understand why he doesn’t call a primetime speech that the media is essentially forced to cover.  He could bring out a lot of statistics showing the absurdity of shutting down the American economy because of a bad flu season.

He should have had primetime speeches explaining the Russia hoax when that happened.  He should have explained that it originated from a dossier that was linked to the Clinton campaign.  He should have explained that the FBI never actually verified that Russia stole emails from the DNC and that the story just came from a company contracting with the DNC.

He should have done the same with Ukraine.  In fact, he should be running commercials showing Joe Biden bragging about threatening to withhold foreign aid to Ukraine in order to get the prosecutor fired who was investigating the company his son worked for.

But Trump doesn’t do any of that.  Instead, he is too busy trying to blame China for his problems and banning the popular Tik Tok app. Yeah Donald, that’ll get you some votes.  Try to shut down a private company just because it is a Chinese company.  That should be popular with the young people who actually use the app.

It is amazing how politically stupid he is these days.  Maybe he’ll figure things out in the next few months.  Maybe he’ll turn it around like he did after his first debate with Hillary in 2016.  He needs to throw punches.

Unfortunately, some of those punches need to be thrown at his own cabinet members.  They also need to be thrown more at people like Fauci, the chief propagandist of the coronavirus.

When he throws punches at Biden, it shouldn’t come across as low blows.  He has many legitimate things in which to attack Biden. Trump doesn’t need to point out his cognitive problems.  People can figure that out on their own.  He does need to point out Biden’s involvement with Ukraine and getting that prosecutor fired.  He needs to point to his long record of big government.

Trump has been thrown off his game with the coronavirus.  I don’t know how much of this was planned by the powers-that-be, but they finally got something to work against him.  If Trump doesn’t come back swinging soon, he will be defeated, even by an incoherent Biden.

Jo Jorgensen

She has no chance of winning this race, but I still like to follow the Libertarian Party candidate. I think she is the best candidate the party has had since 2004, but that isn’t saying much.

I wanted her to run a campaign something along the lines of Ron Paul in 2007/ 2008 and again in 2011/ 2012.  She does sometimes have some good things to say.

Unfortunately, Jo has gone astray too.  She is allowing the establishment media to dictate what is important. That’s why she is trying to reach out to Black Lives Matter.

Now, I think there is nothing wrong with reaching out to people with different viewpoints, but it is coming across as pandering to me.  And I highly doubt it will do any good.

By pandering to Black Lives Matter, she is just turning off libertarians like me.  And while there aren’t a ton of hardcore libertarians, there are probably a few hundred thousand of them.  It is a lot more than any votes she will get from Black Lives Matter.

I would be surprised if she gets a couple of dozen people who identify as BLM to actually vote for her.  I am not counting people who already call themselves libertarians or Libertarians who may be sympathetic to BLM.

I think it would have been fine to state that libertarians have been advocating for the elimination of qualified immunity for police and an end to the federal war on drugs for a long time.  There are things where libertarians can agree with BLM.

At the same time, let’s acknowledge that most of the BLM people are not friends to liberty, and I don’t see many changing their minds just because Jo is pandering to them. A lot of them are self-identified socialists.  They have little respect for private property, which is why most of them will not repudiate the property destruction that has gone on with the protesting.  Most of these people either want a free handout in the name of reparations, or they want to be part of this “hip” movement where white people can relieve some of their collective guilt.

Overall, it is just a bad idea.  She is pandering, and it is to a very small minority of people who have loud voices.  Those loud voices are amplified by the establishment media, but police brutality towards black people isn’t the number one issue on the mind of most Americans.  It shouldn’t be the number one issue for most black people either.  You could magically end all police brutality tomorrow, and it wouldn’t solve most of the problems for black people.

Jo should learn the 80/20 Pareto principle.  Why is she spending time concerning herself with an issue where it isn’t that important to the vast majority of people?  And to the people who hold it as a top issue, they are highly unlikely to ever support Jo for president.

Meanwhile, she is mostly ignoring the tens of millions of middle class Americans, including many black people, who are getting completely screwed over by their government. There are tens of millions of people who have been forced into unemployment and the federal government and central bank think they can just solve it all by creating money out of thin air and handing it out.

She should be continually pointing out that the American middle class is getting screwed over by the elitists.  The answer is to vastly reduce the size and scope of government power.  We need less government in every area of our lives.

In fact, this is the message that all of the candidates should be selling.  They may not favor reducing government, but they should all be empathizing with the American middle class.  Joe Biden is too busy pandering to the so-called progressives.  Trump is too busy blaming China for everything.  And Jo Jorgensen is too busy attending BLM rallies.

They all have a major marketing problem.  Trump got the Republican nomination in 2016 largely because he tapped into this. Maybe he will figure out that he has to do it again.  He won the election because of states like Pennsylvania, Michigan, and Wisconsin.  He appealed to the working middle class.

It is painful to watch the Libertarian candidate throw away this opportunity by pandering to a bunch of self-identified socialists.  We need all of the libertarians we can get at this point, and I don’t think she’s converting a lot of people right now.

Conclusion

Regardless of who wins, at least half the country will be mad.  The establishment will cheer if Trump loses, but the 60 million people who vote for him are not going away.  If Trump wins, then the establishment and its propaganda are not going away, and I fear they’ll make us pay dearly for the next four years by selling viruses to the American people.