Kristi Noem is the governor of South Dakota.  She is governor to the only state in the U.S. that did not impose any lockdowns in 2020.

It is unclear how much of that is because of Kristi Noem.  There is a conservative legislature in South Dakota, and the residents are certainly more conservative than what is typical in the U.S.  Still, she deserves some credit for her restraint in not following all of the other governors who decided to become dictators and impose lockdowns and restrictions against people and private businesses.

While I think Noem deserves praise for not doing something, I understand that she is not a libertarian.  She gets high grades for her response (or lack of response) to COVID hysteria, but she is a little too conservative on other issues, especially when it comes to drugs, including marijuana.

I have no idea what her views are on foreign policy, even though that doesn’t really impact her role as governor.  If she has any plans on running for president, I probably wouldn’t support her unless it included a somewhat non-interventionist foreign policy.

I would say the same thing about Ron DeSantis.  He was bad on COVID to start, but then became heroic in his stand against the establishment.  I probably wouldn’t support him for president, but I am thankful that he has been governor of Florida, where I live.  I would much prefer that he stay as governor as long as there is any COVID hysteria still in existence, which there is plenty.

One issue where conservatives have acted more favorably towards DeSantis and less favorably towards Noem is on the issue of vaccine passports.  DeSantis has taken the position that no businesses should discriminate against customers who choose not to get vaccinated for COVID.  In other words, while employers can legally mandate vaccination for employees in some situations, they are not allowed to require customers to show proof of vaccination.

Kristi Noem has not taken this position.  She issued an executive order in April 2021 banning government entities in South Dakota from requiring vaccine passports.

However, when it comes to private businesses, she does not support legislation that would stop private businesses from imposing vaccine mandates, including vaccine passports.

Noem stated on Twitter, “Workers whose employees are mandating a vaccine for continued employment have the power to say no.  Our robust economy and job market gives them the option to find a new employer that values personal choice and responsibility, and doesn’t force mandates on their employees.”

Noem also posted a video on Twitter stating, “I don’t have the authority as governor to tell them [private business] what to do.”  She says that she didn’t overstep her authority with lockdowns, and she isn’t going to start now.

On this issue, Noem has taken the libertarian position of upholding private property rights.  She does not deem it within her authority, or the law’s authority, to tell private businesses what they can and can’t do.

It is understandable that conservatives and libertarians want courage from leaders who will stand up against the establishment.  The establishment has been pushing ridiculously hard for people to get vaccinated, and they are imposing mandates where they can get away with it.  Now we see major cities like New York telling certain private businesses that they aren’t allowed to permit entry to those who do not have proof of vaccination.

It is a natural inclination to want politicians in our corner to stand up and do the opposite.  But the opposite doesn’t mean telling businesses that they can’t have vaccine passports.  The opposite is not telling businesses what they can or can’t do.

Kristi Noem is correct on this issue, but unfortunately some conservatives see it as a sign of weakness.  This is not weakness.  It is being principled, which actually takes strength.

In the long run, you don’t gain liberty by having more laws and rules passed.  You gain liberty by repealing laws and rules, and by not imposing new ones.

The Nasdaq crossed the 15,000 mark for the first time ever this past week.  The S&P 500 also hit a new high above the 4,500 mark, and the Dow is close to its all-time high above 35,000.

I believe that we are in a massive bubble in stocks, but I want to focus particularly on the Nasdaq, which has seen unprecedented gains.  The only thing comparable is the tech bubble of the late 1990s, but I believe our current situation may be worse.

There is a lot going on in the news.  While the chaotic ending of the war in Afghanistan is getting the headlines, this has very little impact on the market or the economy.  Maybe the military-industrial complex will see a small decline in profitability with one war coming to a close, but they have plenty of other fish to feed off of.  This will likely continue until Congress is forced to cut spending.

The other major headline out there now is the so-called Delta variant of COVID-19.  I have seen some days where stocks have been down, and I have seen headlines saying that stocks are down with rising concerns of the Delta variant.  But stocks just happened to be down on a particular day.

It actually makes no sense that stocks would be down in the face of rising COVID concerns.  2020 ended up being ridiculously good for stock investors.  Who would have thought that you could force people in their homes, close essential businesses, and see major industries (think cruise lines and airlines) virtually shut down, yet see a booming stock market?

The main thing that the stock bulls want is easy money.  They want artificially low interest rates from the Federal Reserve, and they want more money created out of thin air.

The Fed is currently continuing to add about $120 billion per month to its balance sheet.  There is talk of tapering this, which means adding a little less each month.  There will still be monetary inflation, but just at a slower pace.

The Previous Bubble and the New One

Let’s go back to the last really major bubble in the Nasdaq.  We are going to skip the 2008/ 2009 financial crisis, which did see a big hit to stocks.  Since 2009, stocks have been on a consistent bull run, with a minor blip in March 2020 when the world closed down.  The world was still closed down when stocks started going back up with all of the Fed easy money.

Let’s revisit what happened in the late 1990s and early 2000s, specifically with the Nasdaq.

The Nasdaq first hit 1,000 in 1995.  It went crazy over the next 5 years and touched a high just above 5,000 in early 2000.  By late 2002, the index had gone back down to a low of about 1,200, a loss of over 75%.

From its low in 2002, it slowly began to rise again.  It went above 2,700 in late 2007.  With the financial crisis, it went back down below the 1,500 mark in early 2009.

Since that time, it has gone crazy, with a few blips down, including in March 2020.

The Nasdaq has now more than doubled from early April 2020.  This is absurd.  But it is even more absurd that early April 2020 was just a little blip down.

From early 2009 to August 2021, the Nasdaq has gone up 10-fold.  Read that again.  In just over 12 years, the Nasdaq index is up 10 times what it was.

There may be some justification, as we have seen the explosion of some individual giants like Google, Facebook, and Apple.  But it is hard to imagine that a few big stocks could justify a 10-fold increase in an index over a 12-year span.

Of course, the main justification is the Fed’s balance sheet, which has seen its share of absurd “gains”.  If you go back to August 2008 and then jump forward to August 2021, it has gone up almost 10-fold as well.

This is the Fed’s balance sheet, which is really the base money.  This is not factoring in excess reserves held by banks, the speed at which money is changing hands, and the many factors that go into price inflation.  But it is still interesting that there is some correlation between the Fed’s balance sheet and the stock market.

However, I don’t think this is going to completely hold.  I don’t think the Fed is going to reduce its balance sheet in any significant way unless we see really high price inflation.  But a tapering of its asset purchases, and the possibility that monetary inflation will temporarily stop, may be enough to crash this market.

A Painful Lesson

When the stock bubble crashes, it is going to be hard.  It is conceivable that the next crash will be even bigger than the crash in 2000 to 2002 in percentage terms.  A crash of 70% or more is not out of the question in my mind.

The big problem is that we have no idea when it is going to happen.  Maybe the bubble will get even bigger over the next couple of years before crashing.  There seems to be nothing stopping it now.

While long-term yields have come down in recent months, we are not close to an inverted yield curve as we saw in 2019, which is a predictor of recessions.  Because of what happened in 2020, it is unclear if we will need an inverted yield curve again before a major crash happens.

So while I can’t predict when this bubble will bust, I can say that we are at extreme risk levels right now.  When this thing blows up, it is going to be quite devastating to a lot of people.  The all-in stock investors who are banking on a comfortable retirement are going to see their dreams shattered in a matter of months.

And here is the really big issue.  Anyone can sell at almost any time.  It’s easy to say that someone who has all of their assets in the market can just sell some of them if they see the market going down.  But most people won’t do it on time.  They won’t know when the big one is finally hitting.

We have seen some big down days in stocks.  When they pull back 5 or 10 percent over a couple of weeks, they just immediately come roaring back to hit new highs again.  Most investors are not scared right now, but now is the time that they should be.

It has been impossible for the bulls to be wrong in this market.  Almost everything goes up, and there seems to be very little downside.  The temporary downturn in March 2020 is representative of this.  I saw some bull investors buying in March 2020 with the theory that stocks always go up in the long run.  In this case, they have been right so far, as they have seen extraordinary gains.

But there is a mentality now that any time there is a pullback in stocks, it is a great time to buy the dip.  They think any pullback is temporary.  Over the last 12 years, they have been right so far.  However, most bear markets are not temporary that last only a couple of months.

So if we see a major crash of, let’s say, 80% in the Nasdaq, there are going to be people who keep buying on the way down.  These people will be shattered.

There is going to be a reversion to the mean.  It is impossible to justify a 10-fold increase in an entire index over a 12-year period.  The only way this is sustainable is if we see something close to hyperinflation, which will then be a different set of worries.

We are in an everything bubble.  It is a speculative frenzy.  This includes stocks, real estate, cryptocurrencies, and NFTs.  People are throwing money around expecting 20% profits in the matter of months or less.  This thing is going to blow up.

While the Nasdaq isn’t going to zero, it is vulnerable to a major correction.  It is going to serve a painful lesson to the millions of people out there who think that this time is different.

I believe the issue of vaccine mandates is one of the most important issues of our time.  And if you can’t get this issue right, I have no use for you.

It has shocked me how many self-identified libertarians are promoting the COVID vaccines, while remaining mute (or worse) on the mandates being pushed or imposed by the state.

On a personal note, some of my old friends come from the local Libertarian Party, and they were never hardcore radical libertarians in the first place.  Maybe this just shows why it is so important that you have to be anti state in every way.  If you waver on the non-aggression principle, then you are prone to going astray when it counts the most.

When confronted (mostly on Facebook these days), some of them will say that they oppose forced vaccination by the state.  But that’s only because they were pressed on the issue.

Some of these people will constantly push some variant of “get the damn vaccine”, while they say nothing about many countries and some cities (most notably, New York City) within the United States making vaccines mandatory to participate in society.

This is rather odd for someone who calls himself a libertarian.

The dictatorial mayor of New York City has decreed that you must show proof of vaccination to dine in a restaurant, go to a movie theater, attend a comedy show, or participate in any of the other many cultural activities in the city.  As of right now, I think the unvaccinated are still allowed to pick up groceries so they can eat.  And this is happening in the largest city (by population) in the United States.

Meanwhile, the federal government is telling all military members they have to get the jab or face court martial.  Most federal workers will be required to get the jab.  Workers in nursing homes where they accept Medicare or Medicaid (which is most) will be required to get jabbed or lose their job.

Now that the FDA has granted full approval for the Pfizer shot, these mandates are flooding in.  Meanwhile, corporate America, under the thumb of Uncle Sam, is going full speed ahead with mandates.

The FDA had no problem for the longest time withholding possible life-saving drugs from the market for 5 or 10 years while testing and bureaucratic form filling was done.  But somehow, the FDA managed to grant full approval for the Pfizer jab in the matter of months.

I cannot stress enough the importance of this issue.  These are the times that try men’s souls.

Libertarian Infighting

Within the libertarian community (party or otherwise), I have heard about infighting for nearly two decades, and I’m sure it went on long before that.  I would hear some people say that we all share a common goal, and we shouldn’t get distracted by the little things.

While I agree with this sentiment to some degree, I disagree with the premise.  It never has been about the little things.  I didn’t not support Gary Johnson because he had a nuanced position on immigration, or because he prioritized one libertarian issue too much over another.  I didn’t support him because he was not against the state.  He supposedly wanted to tinker around the edges and make the government a bit smaller.

2020 and 2021 are really exposing all of the fake libertarians out there.  People were told to stay at home.  Businesses deemed non-essential were forced to shut down.  In many cases, you weren’t allowed by the state to take your kids to their daily activities.  And now we are faced with showing your papers in order to participate in society, and this may just be the start.

Hello, so-called libertarians – tyranny has arrived and you have nothing to say.

If you completely trust Bill Gates, Anthony Fauci, Joe Biden, the big drug companies, the CDC, and the FDA, and think the vaccines are wonderful, then go ahead.  But when you constantly preach for others to get vaccinated in order to get our freedom back, that is creepy, and it certainly isn’t libertarian.

“Just follow what the government tells you to do, and maybe you can have your freedom back.”

Let’s say that someone with a big platform starts saying something most people find stupid or hateful, but it is no way threatening violence of any kind.  There is discussion nationwide about banning this person from speaking in any way, or just throwing the person in jail for hate speech.  What would your reaction be?

I wouldn’t start spouting off on social media about how these things are hateful and should never be said.  Maybe I would say that as a disclaimer, but at that point I would be more concerned about the widespread call for throwing the person in jail for saying something that others don’t like.

I certainly wouldn’t suggest that people just shouldn’t talk this way and then we don’t have to worry about the state cracking down on free speech.  Yet, this is what some of my libertarian “friends” are saying now about vaccination.

I find it incredibly creepy, and demoralizing to some extent.

This is why I don’t buy the argument about how libertarians should stop the infighting.  As long as these people exist and they continue to call themselves libertarian, then I will fully oppose them and try to embarrass them at every possible point.  I will oppose them more than regular people who hold similar views but don’t call themselves libertarians.

I’m sorry, but we don’t share a common goal.  Maybe they want some drug legalization and lower marginal tax rates.  But they are statists.  When it counts, they side with the state.

It counts more than ever now.  There is this crazy push to inject everyone with a supposed medical treatment.  The state, at all levels, is a major force behind this push, which now includes many state-imposed mandates.  Whatever happened to “my body, my choice” that so many so-called progressives liked to say and some libertarians liked to repeat?

The good news in all of this is that I think the libertarian movement has more sympathy than ever before because of the COVID craziness.  If you are a business owner who was forced to shut down, you want some allies.  When you are someone who chooses not to get vaccinated and are shunned from society for it, you want to find others who are willing to stand up for your rights.

I think the libertarian infighting should continue until all of these fake libertarians who creepily support the hard push for vaccination are driven out of the libertarian movement.  These people are not libertarians, and they shouldn’t be misusing the name.  When it counted, they failed to oppose state aggression.

Biden, as president, is not to blame for the situation in Afghanistan.  Biden, as senator and vice president, is to blame.

Biden previously supported the war in Afghanistan and the many other wars in the region that were initiated by the United States.  He supported the continued funding of these wars, and he was never a vocal opponent of them.  Biden had always been a reliable part of the establishment.

Now that troops are being withdrawn from Afghanistan and the Taliban has quickly taken control over most of the country, Biden is getting some criticism from the establishment.  He is certainly getting a lot of criticism from the Republican establishment.  The war hawks are out for him right now.

Unfortunately, even the less hawkish conservatives are tending to go after Biden on this.  Trump and his followers are calling it a disaster, even though it was Trump who initiated the negotiations and drawdown.

I suppose there is an argument to be made that the U.S. should withdraw, but that Biden did not execute it well.  Maybe more people could have been evacuated first.  But even here, it is unclear.

Everyone knew there would be some chaos upon withdrawal.  It is inevitable.  The U.S. government has been occupying Afghanistan for almost 20 years.  It is the country’s longest war, even though it wasn’t technically a declared war by Congress.

Considering what has gone on there, the withdrawal actually could have been a lot worse.  There is still time for things to go really wrong in the days ahead.  Some violence was inevitable, but it is actually quite shocking that there hasn’t been more violence up to this point.

The Taliban doesn’t seem to be seeking revenge on everybody.  There may be a select few.  It seems that the Taliban is just getting people to surrender their firearms and their loyalty to the U.S., and they don’t seem to be harming these people.  They also seem to be allowing passage to the airport in Kabul.  Maybe they are just holding their end of the bargain until U.S. troops are completely gone.

We don’t know what has been done and negotiated behind the scenes.  But considering the almost 20-year war is coming to an abrupt end, it could be a lot worse.  There was no easy way to get out except to just leave.

I know the media is playing up stories about women’s rights and children walking to school.  I have no idea if little girls felt safe walking to school before October 2001.  I have no idea if they felt safe walking to school between October 2001 and now.  I have no idea if they will feel safe walking to school in the coming years.  I have no idea if they are going to school at all.

Maybe a few Afghanis who were loyal to the U.S. government will get to a better place.  They will likely be better off.  But some, at least the top dogs, may lose their life if they don’t get out.  It is hard to say.

There is little question that the U.S. war and occupation of Afghanistan harmed the country far more than it helped.  And it certainly harmed the U.S. with lost lives and trillions of dollars wasted.  I highly doubt that any terror attacks were stopped as a result of the U.S. bombing and occupying Afghanistan.

It is rather ironic that the U.S. spent 20 years there, and now they are leaving while the Taliban gains control of the firearms and equipment left behind.  The Taliban may be better armed now than they were in 2001, thanks to the U.S. taxpayer.

Let’s remember that the Taliban is not the same thing as Al-Qaeda.  After the attacks on September 11, 2001, the U.S. government blamed Al-Qaeda and Osama bin Laden almost right away.  The U.S. demanded that the Taliban hand over Osama bin Laden, who was in Afghanistan at the time.  The Taliban asked for evidence or some kind of assurance of a fair trial.  No evidence was presented.  Instead, the Bush administration just went to war.

Some people try to justify the war because Osama bin Laden was there.  They say that the Taliban was harboring him.  But the Taliban just wanted evidence before handing him over.  The fact that bin Laden was residing in Afghanistan when the attacks went down is meaningless.  All of the hijackers who committed the terror attacks on 9/11 were in the United States at the time (obviously).  Some of them were staying on legal visas.  Do we say that the U.S. government was harboring terrorists on 9/11?

In Biden’s speech, he referred to Afghanistan as the Graveyard of Empires.  It is really surprising that he used this term. By saying this, he was admitting defeat.  More importantly, he was admitting that the U.S. is an empire.

I have disagreed with just about everything of any significance that Joe Biden has said or done since becoming president.  This is the one thing I think he has gotten right so far.  It looks like he will finally end this tragic war and occupation.

Even a blind squirrel occasionally gets a nut.  People who favor peace should not be criticizing Biden on what is happening in Afghanistan right now.  We should be thankful that this war seems to be coming to an end, and we should encourage Biden to end the rest of the wars and occupations.

On August 15, 1971, Richard Nixon announced to the country that the international gold standard was completely dead.  He also announced wage and price controls and tariffs, but the price inflation problems had only just begun.

It is interesting that the announcement of wage and price controls, supposedly to control price inflation, came at the same time that Nixon was giving the green light to the Federal Reserve to create massive amounts of money out of thin air.

The Federal Reserve (the Fed), the nation’s central bank, was created in 1913.  Roosevelt outlawed the private ownership of most gold in 1933.  After the Bretton Woods agreement in 1944, gold was still redeemable for U.S. dollars by foreign governments.  So there was still some tie of the dollar to gold.

The Fed increased its money creation in the 1960s, and France, under Charles de Gaulle, started to demand gold in exchange for dollars.  In other words, de Gaulle called the U.S. government’s bluff.

If the U.S. had tried to keep its promises of tying gold to the U.S. dollar, then the government/ central bank would have eventually run out of gold.  So in order to stop this, Nixon just broke the deal.

Nixon is only to blame to the extent that he was part of the establishment and did nothing to oppose the system.  He just happened to be president when the Fed was rapidly expanding the monetary supply while losing gold.  What Nixon did was inevitable at that point.  Unless Congress had drastically cut spending and the Fed stopped printing, then there was no way for the U.S. to keep its promises of gold redeemability under the Bretton Woods agreement.

Once this last tie to gold was cut, it was a free-for-all for the Fed.  The Fed could print money (physically or digitally) without any restraints except for the prospect of hyperinflation.

The Fed did face runaway price inflation in the late 1970s.  Paul Volcker was put in as chair of the Fed to slam on the monetary brakes and retain the dollar as the world’s reserve currency.  The recession, or recessions, in the early 1980s was the last good cleanse of malinvestment that this country has seen.

Everything that happened in the 20^th century described above led to where we are right now.  This is how it is possible for the government to run trillion-dollar deficits on an annual basis.  This is how it is possible that the national debt exceeds the GDP.  This is how it is possible that the Federal Reserve’s balance sheet has grown almost 10-fold over the last 13 years to over $8 trillion.

For this disaster, we can thank Wilson, Roosevelt, Nixon, and all of the other presidents in between and since that enabled this recklessness.  We can thank all of the politicians and bureaucrats who supported this corrupt system.  We can thank all of the American people who blindly trusted their public officials to do the right thing.

The Fed is still limited by the constraints of hyperinflation.  That hasn’t changed.  Therefore, unless the Fed is willing to risk hyperinflation, we are going to see a reversion to the mean at some point.

This will mean massive bubbles that will pop.  It will mean massive bankruptcies and deleveraging.  It will mean a tough adjustment for those living in a fantasy world of artificial bubbles.

The good news is that Congress, at some point, will be forced to scale back.  It will mean a lot of broken promises for a lot of people.  It will mean some tough times.  But this is what happens when you allow power to be exploited with few limits.

While it hasn’t been pretty, things have managed to hold up for 50 years.  I don’t think this game can keep going for another 50 years.

The latest consumer price index (CPI) numbers were released for July 2021.  The CPI rose 0.5% for the month.  The year-over-year remained at 5.4%.

The median CPI went up 0.3% for the month, while the year-over-year median CPI rose slightly to 2.3%.

If you add up the increases over the last 6 months (0.4, 0.6, 0.8, 0.6, 0.9, 0.5), you get 3.8 percent.  If you compound it, it is just slightly higher than 3.8.  So just based on the last six months, annualized price inflation is running close to 8 percent.

The CPI number came in line with estimates, so there was not a dramatic impact on the markets one way or another.  Some of the analysts are celebrating because it finally did come in at the estimate, whereas in months past the actual inflation rate was exceeding expectations.

Now they can say that the rate of inflation is coming down.  But here’s the problem.  Prices are still going up, even if the rate of increase itself came down slightly.  Prices still increased another half a percent over one month.  If you were spending $1,000 per week in June, then you were spending $1,005 in July for the same things.

However, your weekly spending on the same lifestyle isn’t going back to $1,000 per week.  And it isn’t staying at $1,005.  It will keep going higher, even if the rate of price inflation decreases some more.

This is the trick when people talk about inflation, particularly in the financial media.  Even if price inflation is “transitory”, it doesn’t mean prices are going back down to where they were.  They will just continue to increase, except at a slower pace.

Of course, I don’t believe that higher price inflation necessarily is transitory, unless the Fed is going to seriously cut back on its monetary inflation.

It’s not clear how the Fed is going to scale back.  Congress just passed a giant infrastructure bill, and Biden just proposed trillions of dollars more in spending on expanded “free” stuff.  This is on top of the trillion-dollar deficits that are already happening.  If Congress is going to continue to wildly run up the debt, then who is going to buy the debt if not the Fed?

Let’s add to the equation that the market mania (stocks, cryptocurrencies, real estate) is all propped up from easy money and artificially low interest rates.  If the Fed pulls away the easy money, it will all come down like a house of cards.

The only reason that the Fed will significantly tighten is to avoid runaway inflation.  For that reason, seeing higher price inflation may be good in the long run because it will force the Fed’s hand, which in turn may force Congress to tighten up a little bit.

Think of the economy as a sick person.  The easy money keeps pumping pain relievers to make it feel good.  But the problem is that you don’t recognize the illness.  The sick person needs to show symptoms in order to treat the illness.  The price inflation is the beginning of showing symptoms, which are needed as a signal.

Of course, the Fed could ignore the symptoms and just up the dose of the pain relievers.  But this cannot go on forever, even if it seems today like it can.  As Mises said, you eventually end up with a crack-up boom, which really is hyperinflation.

The everything bubble is eventually going to pop, and it is going to pop hard.  If price inflation doesn’t get too out of control in the coming months, then the bubble may still have room to get a little bigger. 

If you said in 2019 that government was getting too close to authoritarianism, then you were labeled paranoid.  Then came lockdowns and stay-at-home orders in 2020.

If you said in 2020 that the coronavirus may have been manufactured by humans and leaked from a lab, then you were labeled a crackpot conspiracy theorist.  Now it seems quite probable that something like this did happen, and it was likely funded by Fauci.

When people were warning about vaccine passports in late 2020, you were a paranoid, crackpot, conspiracy theorist.  Now it is becoming a reality in many countries, along with the most populous city in the United States.

The mayor of New York City, Bill de Blasio, has decreed that there will be something like a caste system in the Big Apple.  If you are unvaccinated, you will not be permitted to dine in restaurants, to go to a comedy show or a play, or to partake in the many other cultural activities that New York has to offer.

At this point, it looks like you will be permitted (per de Blasio) to buy groceries and drugs at the drug store.  But hey, anything is subject to change.

Not that having an actual law would make this any better, but it is telling that the mayor can just snap his fingers and lay down tyranny like that.  After all, he is the elected dictator.

While New York City does have a reputation these days for being rather left politically, this will set a precedent for elsewhere.  It is incredibly important that people fight back, including those who are vaccinated.

Think of it as defending free speech.  You don’t have to like what someone else is saying in order to defend their right to say it.

If this edict is imposed and is not quickly overturned, I hope that New York City goes down hard.  It hurts me to say that because I grew up on Long Island, about an hour from the city.  Although I would typically go into the city only a few times per year, I have some great memories from there.

As Frank Sinatra sang, “If I can make it there, I’ll make it anywhere.”  Perhaps that’s truer now than ever for New Yorkers.

I think the people who are there should fight hard against this.  But if they can’t win, then they should jump ship.  The small businesses in New York have already been hit hard from last year with the lockdowns and the crazy (and ever-changing) restrictions.  If even 20% of the population there refuses to get vaccinated, then these small businesses and other venues are going to suffer.

The Nazi Analogy

I understand that the Nazi/ Hitler analogy is overplayed.  I understand that some people take offense to it, or at least pretend to take offense to it.  But if you aren’t going to learn from history, then you really do deserve to repeat it.

The unvaccinated in the United States are not being rounded up and sent to concentration camps.  The unvaccinated are not being murdered in a holocaust.  This is not my comparison right now.

I want to make the comparison so that we don’t end up in a situation where unvaccinated people are rounded up and sent to concentration camps.  Are you going to call me a crackpot conspiracy theorist for even suggesting this?  See the first three paragraphs at the top.

I am not making an analogy to Nazi Germany in 1940.  But I am making an analogy to Nazi Germany in the mid 1930s.

The Jews became second-class citizens.  In fact, it was even said that they were spreaders of disease.  Does that sound familiar?

It wasn’t just the government oppressing Jews.  It had to be sold to the rest of the population.  The people who became stooges for the government assisted in the demonization.

We do not want to go there in the United States of America.  Even if you are vaccinated, you don’t want to go there.  You will live under this tyranny too, even if you aren’t the direct target at this moment.

I am trying to make comparisons to mid 1930s Nazi Germany so that we don’t end up like 1940 to 1945 Nazi Germany down the road.

The state and its corporate media are working their propaganda hard.  They are trying their best to get everyone jabbed, or to blame the unvaccinated for the ills of society.

They may not actually want every single person to get vaccinated because then it would ruin their narrative.  Who would they blame for a spike in cases?  Who would they blame for the next pandemic, whether real or not?

Blaming the Underclass

The elite and their stooge followers now have their narrative that the spike in COVID cases is all the fault of the unvaccinated.  They don’t address that some of the most vaccinated countries (the U.S., the U.K., Israel) are the same countries experiencing a spike in what they call the delta variant.

It is also interesting that the CDC changed its mask guidelines, yet again, because vaccinated people can also spread the virus.

If you take the CDC at its word, and the vaccines truly do lessen the symptoms of COVID, then the logical conclusion is that it is the vaccinated people who are spreading the virus the most.

If you feel sick, then you are likely to stay at home and rest.  If you have a full virus load but don’t really feel sick, then you are out and about, spreading around the virus inadvertently.

So even if the vaccines “work” as advertised (which they don’t), you would need the entire population to be vaccinated in order to stop the spike in COVID cases.  But even this fails since many vaccinated people are testing positive for COVID with symptoms.

The argument being made is that if everyone would just sacrifice for society and do what they are supposed to do, then everything will work out.  Aside from this being incorrect, it is also incredibly naïve or dishonest.

It reminds me of the same arguments in favor of socialism.  If everyone would just do as they’re told, then there won’t be any issues and the system will work.

That shows an immediate flaw in the system because it is impossible that everyone will just go along and do as they are told.

When you use violence or the threat of violence, it has a tendency to create some resistance.  That’s true whether you are talking about a socialist economy or a vaccine mandate.

Discrimination

Considering that the political left likes to talk about discrimination, especially when there isn’t actually discrimination, it is interesting that most leftists are cheering on the discrimination when it is against a class of people they don’t like.  In this situation, they will defend private property rights for businesses that discriminate against the unvaccinated.

Of course, it is just supposed to be the redneck Trump voters who are too stupid to get vaccinated.  But the establishment is largely ignoring the fact that there is a comparatively high percentage of black people who refuse to get jabbed, for whatever reason.

Where is the left defending civil rights in New York City?  People who oppose the war on drugs correctly point out that it disproportionately hurts the black community.  What about in New York City, when a disproportionate number of black people are refused admittance into restaurants and comedy clubs?

Bill de Blasio is an evil tyrant.  He should be ridiculed at every moment possible.  He should be shunned from society.  Restaurants and movie theaters should refuse to serve him.  He has completely wrecked New York City, and the people there have permitted it.  He should go down in history as another Hitler who never quite gained total power.

I have heard some critics of vaccine passports correctly point out that if you give the government power over your medical decisions in this case, then the politicians will expand this power in the future, and we may be subject to even more tyrannical edicts down the line.While I certainly agree that it is concerning that governments may seize even more power in the future, I am concerned about now.  The tyranny is already here.  New York City is the trial balloon for the rest of the country.  T

Occasionally, I watch clips of Dave Ramsey.  I have been critical of him at times with his investment advice, along with his hatred of gold.  However, I think he is good on a lot of things, and I believe he has helped a lot of people.

If someone with little knowledge about money management went looking for good resources, I think Dave Ramsey is a decent place to start.

Ramsey is known for his 7 Baby Steps.  They are as follows:

1. Save $1,000 for your starter emergency fund.
2. Pay off all debt (except the house) using the debt snowball.
3. Save 3-6 months of expenses in a fully funded emergency fund.
4. Invest 15% of your household income in retirement.
5. Save for your children’s college fund.
6. Pay off your home early.
7. Build wealth and give.

The last step is rather general and vague.  Many people in the financial independence (FI) or FIRE community are somewhat critical of these steps, and the last one can really leave you hanging.

While many FI people got started with Ramsey’s baby steps, they say that it leaves a lot to be desired, or it is just too elementary.  A lot of people pursuing FI are already at or near Baby Step 7, possibly having skipped some steps, but they are still a long way off from achieving FI.

If you have achieved, or mostly achieved, the first 6 steps, then you are in pretty good shape, at least compared to most Americans or anyone else in the world.  If you are age 65 and just finishing step 6, then maybe you aren’t in good shape, but it depends how long you have been doing Baby Step 4.

Once you get to Baby Step 7, it isn’t really much of a “baby” step at that point.  It is a rather giant leap for many to get to where they want to be.

With evolving laws and possibly high inflation on the horizon, it is interesting to go through the seven steps to see if anything should be updated.

Baby Step 1

Starting right off the bat with Baby Step 1, I think $1,000 is too little.  I understand that this is really for people who are in debt.  You are supposed to accumulate $1,000 before tackling the debt pay off.  The amount is purposely set low to give a sense of desperation on how important it is to pay off debt fast.

So part of me really likes this, because I think having debt (especially credit card and other high-interest debt) is a terrible thing in most circumstances.  People should see this as an emergency that needs to be tackled immediately.

However, in today’s world of rising prices, I think $1,000 is simply too low for some people.  If you are 22 years old with no kids and living in your parents’ garage, then $1,000 is fine.  But if you are 30 years old with two kids and a house, then having $1,000 only is not wise.

If you are 30 with two kids (or any age) and you have $10,000 in the bank with $20,000 of credit card debt, I don’t know that I would recommend using $9,000 to immediately pay off some of the debt.

Life happens, and you don’t know what unexpected (or expected) expenses will pop up.  If you go down to $1,000, you better make sure that you can put $9,000 back on your credit card in case of an emergency.

What happens if your water heater breaks?  What if you have an unexpected medical bill?  What if your car needs an expensive repair?  If you can put all of this on a credit card, then maybe it’s fine.  But you do have to be responsible, especially when others are dependent on you.

Ramsey’s baby steps have been around a long time.  $1,000 isn’t what it used to be.  Inflation is resulting in our money buying less.  I think this amount needs to be a little higher, and it also depends on your personal situation.

Baby Step 2

I have little disagreement with Baby Step 2.  The only caveat is that you may not need to prioritize paying off really low-interest debt ahead of everything else.  Again, there are nuances.  But I don’t think the passing of 20 years changes anything for this step.  Even in a world of higher inflation, you should still pay off your debts.  You don’t know when things will change.

And as I frequently say, you don’t make money by paying interest.  You make money by earning interest.

Baby Step 3

With Baby Step 3, I don’t think any updating is needed.  If your expenses have gone up due to inflation, then the amount will go up.

Going back to Baby Step 1, maybe it should say “Save one-month of expenses for your starter emergency fund”, instead of a dollar amount.

Baby Step 4

With Baby Step 4, I don’t think it needs to be updated because of inflation.  But I wouldn’t necessarily recommend putting 15% into government-designated retirement funds like an IRA or 401k.  I think this locks up a lot of your money, and the government imposes rules on being able to withdraw it (if you can withdraw it at all right now).

I think you should contribute to a 401k up to an employer match.  I also think a Roth IRA can be a good idea, especially for younger people with lower incomes.  But it is probably a good idea to have some wealth sitting outside of retirement accounts, even if it is still intended for retirement.  You also never know if the government is going to change the rules regarding retirement accounts.

Baby Step 5

For Baby Step 5, I believe this needs to be updated.  I don’t think parents are obligated to pay for their children’s college education.

Aside from this, it is important to recognize how much our world is changing and continues to change.  With many of these colleges and universities, it is more about propagandizing these young adults than it is about preparing them with skills for the real world.

In today’s digital world, more and more companies aren’t just looking for college degrees.  They want skills that will make them more productive.  You don’t need a college degree any more to be successful.  Plus, some people decide that they would rather do contracting work or own their own business.

There is also a possibility that the government, in its quest for more socialism, ends up passing legislation to provide “free” college, or at least partially paid-for college.

If you want to save for your children’s college education, then just put the money aside in a non-retirement account, and you can always use it for something else.

Baby Step 6

For Baby Step 6, I have always been an advocate of paying off the mortgage on your primary residence under the right conditions.  Even in a world of inflation, I don’t think you can go wrong doing this.  If anything, this could be higher on the list for me.  It could be done in conjunction with contributing money towards retirement (Baby Step 4).

Baby Step 7

With Baby Step 7, I don’t disagree with it.  You are really building wealth with all of these steps.  It is so broad, it is hard to disagree with it.

If anything, I think steps could be added after this (or before).  For people pursing FI, they will focus on reducing their reoccurring expenses so that they can save more.  If they can keep those expenses down, it will also mean less savings are needed to achieve FI or retirement.

Overall, I think Ramsey’s baby steps are a good place to start.  There is a lot of nuance in there though, so they shouldn’t necessarily be rigidly followed unless you really need that discipline.

When it comes to money management, I think Dave Ramsey is a great place to start.  I still wouldn’t follow what he says when it comes to investing advice.

When we talk about price inflation, it is common to sympathize with consumers.  After all, we are all consumers (buyers of goods and services), unless you live a really secluded life somewhere.

When you go to the store or the gas station and see prices have gone up, it means less money in your pocket (or bank account).  It means that, ultimately, you will have less to spend on other things.  With so many people struggling to get by, it is right of us to sympathize with the average consumer.

However, consumers aren’t the only ones who have issues with price inflation, particularly higher rates of price inflation.  Companies and business owners have to deal with inflation, not only in determining what prices to charge, but also in planning for the future.

It is already a challenge to be a business owner.  You have to guess at what consumers want and are willing to pay, and then you have to execute in doing it.  You also have to deal with government taxes and regulations.  When you add inflation into the mix, it just makes making a consistent profit that much more difficult.  This is especially true for business owners who have significant input costs.

If you own a furniture store, you have to either build the furniture or buy the furniture from someone else before selling it.  Most people don’t build their own, but even here there are input costs, as you need the materials to build.  Whether you are ordering your goods from China or from across town, it adds a great deal of uncertainty not knowing what you are going to pay for your inventory next month.

Also, if costs start to increase significantly, you don’t know if it is temporary (or transitory in Fed speak) or if they will continue to go higher.  You have to decide how much you want to raise your selling prices, if at all.  Just because you, as a business owner, are experiencing higher costs, it doesn’t mean your customers will necessarily pay higher prices.

Even if you are a business owner without a lot of input costs, inflation can still cause havoc.  Think of a massage therapist.  There still might be some input costs, and the person may feel the need to raise prices as a consumer, just to keep up.  But again, there is no guarantee that people will be willing to pay more for a massage, even if the price is the same in real terms.  If they are paying more for gas and groceries, it might be the monthly massage that gets cut out of the budget.

Again, there is already a great deal of uncertainty about what your customers want and what they are willing to pay.  When you add rising prices to the mix, it really becomes something of a guessing game.

Retirees and Future Consumers

People who are already retired are in a difficult position with rising prices, especially if they live on a fixed income.  Even a fixed income that adjusts for inflation may not actually keep up with the higher cost of living.  The cost-of-living adjustments often understate the actual increase in price inflation, and the adjustments can often lag behind.

This is why it is important to have a well-diversified portfolio that is properly hedged for significant inflation.  While stocks can provide some hedge over the long term, there can be periods of high inflation where stocks do not necessarily perform well.

There is also another class of people who have to deal with the issue of inflation, and that is future retirees.  You could also count these people as consumers, but they are future consumers.  They are trying to figure out how much they will need to save and invest in order to retire with the living standard they desire.

It is already difficult to plan for retirement.  Just like being a business owner, it takes some amount of guessing.  You don’t know how much money you will be earning from now until retirement.  You don’t know what unexpected expenses you may incur.  Most of all, you have no idea how much of a return you will make on your investments.

Now add price inflation into the mix.  When you started planning for retirement at age 25 (hopefully), you thought maybe you would need a million dollars, plus any pensions and Social Security.  Now, 20 years later, a million dollars isn’t looking like it’s going to be enough because prices have increased so much.  Now you think it might be closer to 2 million dollars.

But in another 20 years when you are retired, what if you need 4 million dollars?  Or what if prices have gone up five-fold in that time and you need 10 million dollars?  Are your investments going to get you there?

Even in a world where price inflation is 2% (the Fed’s supposed target), that still means that prices will double approximately every 36 years (using the Rule of 72).

This illustrates just how much damage the Federal Reserve does.  When you give the government or central bank a legal monopoly over a fiat currency where money can continually be created, then it is going to mess with everyone.  Money makes up at least half of nearly every transaction in our world.

Protecting Against Inflation

Monetary inflation redistributes wealth, and it causes a massive misallocation of resources.  There are many different groups that get impacted, but nearly everyone suffers with a standard of living that is lower than what it should be.  It is doubly difficult for those trying to plan a retirement and for those who own and operate a business.

There isn’t a lot you can do, but you can at least try to protect the purchasing power of the wealth that you have already accumulated.  This is why I recommend the permanent portfolio, or something similar in nature.

I have heard criticisms of the portfolio from both sides.  Those who are terrified of inflation say you shouldn’t have 25% in bonds and 25% in stocks because these will just lose purchasing power.

There’s another side that says you are crazy if you put 25% in gold and gold-related investments.  This makes me think that the portfolio is just about right.

If we experience a period of really high price inflation, then gold will likely do much better than the inflation rate, thus making up for any losses in purchasing power from the bonds and cash.  I’ll also point out that with cash (really, cash equivalents like a money market fund), you will likely start to get a higher interest rate, even though it will lag behind the inflation rate.

On the flip side, having a lot more than 25% gold without bonds and cash can leave you vulnerable to recessions and market crashes.  We aren’t likely going to see decades where prices keep rising at an astronomical rate.  The artificial business cycle will likely play itself out, which will include periods of recession and disinflation.

The permanent portfolio is not perfect, but nothing is in this uncertain world.  It is the best thing I’ve found that will protect against all of the major economic environments, while also providing long-term growth.