After many, many years, there are actual libertarians now running the Libertarian Party.  It looks like we are no longer stuck with the LINOs (Libertarians In Name Only).

The Libertarian National Convention took place in Reno over the last weekend in May 2022.  The Mises Caucus endorsed candidates for the Libertarian National Committee swept.

Angela McArdle is now the chair of the party.  Joshua Smith is vice chair.  Caryn Ann Harlos is back as secretary.  I am familiar with all three of them.  Todd Hagopian is the treasurer.  I am not familiar with him, but he is a member of the Mises Caucus.

The Mises Caucus is made up of the hardcore libertarians.  They are the libertarian wing of the Libertarian Party.  I think Mises was the right name to choose.  Mises was radical in his support for free market economics.  But it is inclusive for the radicals.  If it had been, say, the Rothbard Caucus, I think it would have been too exclusionary to those who do not consider themselves to be anarcho-capitalists.

A Ron Paul Caucus or a Harry Browne Caucus probably would have worked as well, but Mises was a good choice for a name overall.

Back around 2017, Michael Heise set out to “take over” the Libertarian Party.  Perhaps it is better to say “take back”.  The Libertarian Party, particularly from 2008 to 2020, was not the Libertarian Party of Harry Browne.  You could see this with the presidential nominees.  You could really see it with the vice presidential nominee in 2016 with Bill Weld, as he seemed to be out there campaigning on behalf of Hillary Clinton.

In 2020, I think Jo Jorgensen was a step back in the right direction.  Her campaign was terrible, and she had some bad people who must have been advising her.  But she did seem a little bit more principled than Gary Johnson and Bill Weld.

Jo Jorgensen and the Libertarian National Committee were a major letdown in 2020.  It’s not that I had great expectations.  But when most of the country is locked down and businesses deemed non-essential are forced to shut down, you’d think that the Libertarian Party might have something significant to say about it.  Instead, they seemed to care more about supporting Black Lives Matter and telling everyone how anti racist they are as cities were up in flames.

When Michael Heise started the movement for actual libertarians to gain control of the LP, it seemed like a long shot at the time.  But there aren’t that many active members of the LP who actually go to the convention and vote.  You really just need about a thousand radicals to be active.

Many notable names in the libertarian movement such as Dave Smith, Tom Woods, and Scott Horton encouraged their supporters to help take over the Libertarian Party and turn it libertarian again.

The Biggest Change is Yet to Come

In 2008, when the Ron Paul campaign was winding down, I told a few people that I thought Ron Paul supporters should join the Libertarian Party.  There were hundreds of thousands of people who enthusiastically (to say the least) supported Dr. Paul.  It would have just taken a few thousand hardcore Ron Paul supporters to direct the LP into a good direction.

Unfortunately, in 2008, Bob Barr got the nomination over Mary Ruwart.  This was a major turning point for the party, as they sought notoriety over principle.  If Mary Ruwart had been the nominee, I think Ron Paul would have endorsed her, and she probably would have received a few million votes.

We haven’t yet had a hardcore libertarian in the general presidential election backed by Ron Paul since his 2008 campaign.  Harry Browne was a great candidate in 1996 and 2000, but the internet had just begun and not a lot of people were familiar with him or the LP.  The 2007/ 2008 Ron Paul campaign brought out hundreds of thousands of libertarians, many of whom were politically inactive before that time.

In 2024, we may finally get to test how strong the libertarian appetite is by running an actual libertarian in the general election.

Comedian and podcaster, Dave Smith, has said he will run in 2024 on the Libertarian Party ticket as long as there is nobody he sees as more effective.  With what happened in Reno, I think Dave is likely to get the nomination if he wants it.

Dave is friends with Joe Rogan and some other high-profile podcasters.  When you couple this with the anti establishment sentiment that is out there, it could really shake things up.

I doubt that Dave has a good chance to win, but I could see him gaining traction and garnering Ross Perot type numbers.

In this respect, I hope Donald Trump doesn’t run.  I can say the same for Ron DeSantis.  If Trump or DeSantis is the Republican nominee, I think you will get a sizeable majority who will vote Republican or Democrat regardless.  They will either want Trump in, or they will want him not to win.

If it is Trump vs. Biden or some other establishment Democrat, then I think Dave will still do well, but I don’t think he will get near 20% of the popular vote.

If it isn’t Trump or DeSantis, I could see many conservative voters swinging to Dave Smith if they are skeptical about the Republican nominee being another shill for the establishment.

Either way, I think the important thing is that Dave will use the platform to spread the message of liberty.  This could have a massive impact on the world and our future.  I don’t want to oversell it, but I don’t want to undersell it either.

If 30 million people hear Dave’s basic pro liberty message and turn into hardcore libertarians, it will change the country for a long time to come.  It’s not that it will turn us into a libertarian society overnight, but it will have great impacts on the course of history.  Other countries will see it too, and some will follow it.

The last weekend of May 2022 is a major turning point, and almost nobody knows anything about it.  With everything bad that seems to be going on, there is reason for optimism.

The Federal Reserve (the Fed) controls two main things – the balance sheet and the interest paid by banks on overnight loans.

The balance sheet is the base money supply.  It essentially represents the number of dollars the Fed has created because it creates money out of thin air to purchase the assets.

There are many other factors that impact price inflation.  There is the supply side of money, and there is the demand side of money.  Even with regard to the supply of money, bank loans impact the overall dollars in circulation, as fractional-reserve lending essentially creates new money available.

The interest rate banks charge each other on overnight loans is called the federal funds rate.  The Fed used to control this rate directly by increasing or decreasing the base money supply.

Since the financial crisis of 2008, the Fed has mostly controlled the federal funds rate by paying interest to commercial banks on reserves.

When the financial media talk about the Fed raising (or lowering) rates, they are referring to the federal funds rate.  Before 2008, if the Fed wanted to raise rates, it would mean they would likely have to sell off assets on its balance sheet, or at least stop rolling over some maturing debt which accomplishes the same thing.

Now the Fed can just “raise rates” without even touching the money supply, at least on a short-term basis.

The financial media and investors seem to be more obsessed with “rates”.  The Fed controls this one rate, which certainly does have an impact on overall short-term rates.  The impacts on longer-term rates are less direct.

And while interest rates are a major component of monetary policy, it seems that the financial media and investors should be even more concerned about the money supply.  This is especially true now when high price inflation is a big concern.

For some reason, the Fed’s balance sheet gets far less attention than it should.

An Easy Doubling, Not So Easy to Unwind

The Fed’s balance sheet more than doubled in a two-year span.  It fell below the $4 trillion mark in 2019, but was just above that mark in early 2020.  It had already eased policy because of the overnight repo rate having spiked in September 2019.  There was also an inverted yield curve in 2019, which indicated a recession ahead.  The Fed was already shifting away from its mild tightening mode before COVID hysteria hit in March 2020.

But after February 2020, the Fed went into full gear running the digital printing presses.  The balance sheet more than doubled and fell just short of hitting the $9 trillion mark.

In the last couple of months, it has gone down slightly (relatively speaking).  As of right now, it stands just above the $8.9 trillion mark.  Remember it was just below $4 trillion during a part of 2019.

The curious thing is why the Fed waited so long not just to reduce its balance sheet, but just to stop growing it.  If we are to take the words seriously of the FOMC, the Fed should start reducing its asset holdings in a few days.  The Implementation Note in the last FOMC statement says it will stop rolling over $30 billion in Treasury securities and $17.5 billion in mortgage-backed securities starting in June.

The Fed is doing a balancing act.  The Fed officials want to get the roaring price inflation down, but they don’t want to completely crash the financial markets and the whole economy.

When price inflation was first becoming noticeable, the Fed chairman insisted that it was “transitory”.  It was very clear by late 2021 that it was not transitory.

Why did the Fed wait so long to change its policies?  The Fed continued to add to its balance sheet (i.e., create monetary inflation) even into the beginning of 2022.  It could have at least just stopped that sometime in 2021.

I’m not sure if there is something that everyone is missing or if the Fed officials are just that stupid.  Maybe they thought the economy was so fragile still that they couldn’t just abruptly stop all monetary inflation at once.

But if the economy is that fragile, then how will it handle a reduction in the balance sheet now?  What has changed from, say, 6 months ago, other than price inflation being even higher than it was then?

I don’t have good answers to these questions, but I think it is important to ask the questions.  Maybe the Fed officials really did believe their own words and thought price inflation would just be temporary and that they wouldn’t have to do much to address the problem.

The Fed got away with massive monetary inflation from 2008 to 2014.  It caused a lot of misallocations in the economy, but we never saw high consumer price inflation from it.

The Fed in 2022 is in a more difficult position.  High consumer price inflation is a major problem.  But in order to address it, it means reducing its balance sheet and possibly popping the Everything Bubble.  To tame consumer prices, we may get major asset price deflation in the things that have blown up for a decade or more.

We should start to see the Fed’s balance sheet decline.  It may or may not tame consumer price inflation, but it is a near certainty that it will expose some of the malinvestments in the economy.  There is good reason to fear a hard recession in the somewhat near future.

The good news about a recession is that it may actually get price inflation under control, which will be good for American consumers who are struggling right now.

Christine Lagarde, the president of the European Central Bank, said that Bitcoin and other cryptocurrencies are worth nothing.  She said, “It is based on nothing.”  She said, “There is no underlying asset to act as an anchor of safety.”

My question:  How does this make it any different from any other fiat currency?

I’m surprised she didn’t slip up like Bush, who accidentally (or not) referred to the unjustified and brutal invasion of “Iraq” instead of “Ukraine”.

Lagarde could have easily replaced her statement with “the U.S. dollar” or “the euro” instead of “Bitcoin”.

I have been a critic of Bitcoin, even though I sympathize with many of the people who promote it.  I don’t think it is a form of money, and I don’t think it will ever be a true form of money.  Still, I like the idea of competing forms of money.

Unfortunately, Bitcoin is somewhat associated with the libertarian movement for this reason.  The biggest proponents of Bitcoin tend to be critics of the Federal Reserve.  They are right to be critical of the Federal Reserve.

I half jokingly say that Bitcoin has been pumped up by quasi libertarian tech nerds who have nothing better to do in their life.  They thrive on everything Bitcoin and blockchain.  Their whole life revolves around this.  If Bitcoin crashes and goes to nothing or close to nothing, I don’t know what these people will do.  I think some of them will need major therapy, although they won’t be able to afford it because they dumped all of their money into Bitcoin.

What’s more unfortunate is that many good libertarians have hopped on the Bitcoin bandwagon.  They don’t spend every waking hour promoting it, but they generally favor it as an investment and as a prospect for future money.

The investing side – which is really just gambling – is one thing.  I think it is ok to buy Bitcoin in this bubble economy with the hopes of making a profit (in U.S. dollars).  But it should be clear that it is a gamble.  If you are putting money (U.S. dollars) into Bitcoin, you should be prepared to lose it all.

When really good libertarians promote Bitcoin as a future money, I really get annoyed.  I think they are making a critical mistake, and the critics of libertarianism will use it against all of us in the future.  That’s why it is important for Peter Schiff and other Bitcoin critics to go on record as saying that Bitcoin is not our future.

I have no problem with the idea of the blockchain and its many possible future uses to help human beings.  But Bitcoin is not the blockchain.  The hardcore Bitcoin proponents will come back at Lagarde and say that Bitcoin is anchored by the technology of the blockchain.  But this is flat out wrong.

You can’t take your bitcoins and trade them in for “the blockchain”.  The blockchain is just a technology that Bitcoin uses.  Bitcoin isn’t backed by the blockchain the way the dollar was once backed by gold.  And it isn’t like a share of stock where you actually own a small piece of the company and can share in the profits.

So Christine Lagarde was correct when she said there is no underlying asset for Bitcoin.  I’m just not sure if the irony was lost on her regarding fiat currencies.

I have to criticize Bitcoin for two reasons.  I don’t want to pick a fight with people who are generally in the same camp with me, but I feel compelled to do it.

First, I want it to be clear for people buying Bitcoin that it is a pure speculative play.  It doesn’t offer much diversification for your portfolio, especially these days if you are invested in tech stocks.  There is nothing close to a guarantee that it will make you money (i.e., U.S. dollars) in the distant future.  It is a gamble.  It may or may not pay off.  It depends how far down the line the suckers with money go.

The second reason I criticize Bitcoin is because I want libertarian voices who are warning against it.  I don’t want the downfall of Bitcoin to be a major black eye on the libertarian movement.

I think there will always be critics of libertarianism who try to use anything they can against libertarians.  But some of the criticisms fall flat.  With this, a lot of people will agree that Bitcoin was a bad call if it goes down to something near zero.  Even if the price goes down below $10,000 and stays there for a while, it will be used against libertarians.

In terms of libertarianism, the only thing to say about Bitcoin is that people should be free to buy or sell whatever they want as long as they aren’t aggressing against others.  There should be a free market in money.  There should be no capital gains taxes on Bitcoin or gold or anything else.

It is ok to make predictions, but it should be done independently of political philosophy and with the acknowledgement of uncertainty.

After the Fed created trillions of dollars out of thin air in 2008 and 2009, many libertarians were predicting runaway price inflation.  I think that is ok, except it should be made clear that it isn’t a libertarian theory.  There are many factors involved with regard to price inflation.  The base money supply is one of several factors.

From a libertarian standpoint, using this example, it should be made clear that the massive increase in the Fed’s balance sheet was bad regardless of whether high price inflation followed.  The newly created money favors some at the expense of others, and it greatly misallocates resources which makes almost everyone less well off.

So if you are a libertarian and a Bitcoin proponent, please separate the two.  Bitcoin could easily go to near zero, and we don’t want libertarianism to get a bad name if it does.

According to the government’s own statistics, price inflation is running above 8% annually.  Meanwhile, most Americans aren’t getting a salary increase of anywhere near that much unless they are changing jobs or getting promoted.

Jerome Powell and the Federal Reserve wanted to see higher price inflation a few years ago.  When it went well above their two-percent target, they assured us that it was only “transitory”.  Now that it isn’t transitory, they assure us that they will fight inflation and bring it back down.

Of course, in trying to bring it back down, they will likely cause a recession, and they may pop the mother of all bubbles.  It can also be called the Everything Bubble because almost every asset category seems to be in a bubble.  Gold and silver may be the exception.

Let’s say that the Fed is able to bring the inflation rate back down, regardless of the impacts on the economy and the financial markets.  When the Fed and the financial media talk about bringing inflation down, they mean bringing down the rate of inflation.  And they likely don’t even mean bringing the rate down to zero.  They just want to get it back to 2%, or somewhere around there.

And to be sure, we would be much better off if we quickly return to a state of 2% annual price inflation.  But let’s be clear that this is just bringing the rate down.  It isn’t bringing the price level down.

If a particular consumer product cost $100 last year and now it costs $108 this year, that is an increase of 8% for that product.  When the Fed talks about bringing down price inflation, they aren’t saying that this particular product is going back to $100 as previously seen.  In fact, they aren’t even saying that it will stay at $108 next year.

Instead, we may get a 2% price inflation rate (if they are successful in bringing down the price inflation rate).  So the product you are now paying $108 for will cost somewhere between $110 and $111 next year.  This is what they mean when they refer to bringing down inflation.

Think about this in context of things you routinely buy.  Maybe that $108 today represents your weekly grocery bill.  If you have a family, it is probably quite a bit more than that.

You aren’t going back to your $100 per week grocery bill unless you cut something out.  You are now at the $108 level, and it is constantly going higher.  It is just a question of how much higher and how fast.

Do you think your job will give you a raise of 8% next year to make up for the inflation of last year?  In most cases, that won’t happen.  And even if it does, you are still behind.

There is almost never price deflation.  The Fed won’t really allow it to happen.  It hasn’t happened since the Great Depression.  There may have been one year in the 1950s where there was a very tiny decline in overall prices.  The norm is for prices to go higher.

Remember this when people say that inflation is declining, or that they are bringing down inflation.  The overall price level isn’t declining.  The rate of increase may be declining.

This is a generalization.  If the Everything Bubble pops (and there are signs that it may be starting, especially with stocks), then there will be asset price deflation.  Stocks and housing prices are likely to go down.  Some commodities may go down in price as well.

It is unlikely that the overall price level for consumer products will go down.  If it does, it will be very temporary, as the Fed will resort to more monetary inflation.

As Ben Bernanke once said, the Fed can always raise the price level, even just by credibly threatening to increase U.S. dollars in circulation.  He was very right on this point.  Unfortunately, the Fed has really seemed determined to create higher price inflation, especially over the last couple of years.

They got what they wished for, but they may be regretting it now.  For the first time in a while, the Fed is in a really tough position of choosing between saving the dollar and propping up the economy.

They will try to maintain a balance, but I think they will always choose to save the dollar.  They don’t want hyperinflation.  The giant bubble (the misallocation of resources) will eventually pop.

With the leak of a draft decision by the Supreme Court, the topic of Roe v. Wade and abortion has once again become one of the top social/ cultural issues in the headlines.

The leaking of the draft decision is a story itself.  It is hard to say what, if any, political effects it will have, especially with regard to the November elections.

The issue of abortion is one that divides libertarians.  I, myself, have a nuanced view of the subject.  There are moral and legal aspects to consider.  There is also the aspect of unintended consequences when involving the state.

Many people, especially on the left, are saying that abortion will be illegal if Roe v. Wade does in fact get overturned by the Supreme Court.  This is incorrect.  Roe v. Wade is a previous decision from 1973.  It is not a law.

If Roe v. Wade is struck down, then abortion won’t be made illegal or legal by the federal government.  The issue will be left up to the states to decide.  Most likely, not more than a few states would actually ban abortion without exceptions.  And some states, like California, would have it fully legalized, probably up until the birth of the baby.

My guess is that most states would be somewhere in between.  It would probably be legal for the first few months with more restrictions as the term of the pregnancy goes on.

The Moral Issue

Generally speaking, those who oppose abortion (pro life) do so because they believe that a fetus is a viable human being and that aborting it is the equivalent of murder.

The other side believes it is a woman’s right to choose (pro choice).  It is funny that most people who call themselves pro choice did not feel the same way when vaccine mandates were being pushed in 2021 (and still today).  It is “my body my choice”, unless there is a virus and we tell you it’s necessary to take the government-sponsored vaccine.

While both sides of the political aisle demagogue the issue and often use it for fundraising purposes, there are genuine arguments to be made on both sides depending on how you view the issue.  It really depends on whether you think a fetus should count as a human being.

My personal thought is that I have no idea.  It obviously seems more morally wrong to abort a fetus that is 8 months old and could easily survive outside the womb than to have an abortion two weeks after getting pregnant.

I have no idea if it is the equivalent of committing murder to have an abortion at 4 weeks.  This is why I tend to err on the side of safety and oppose abortion.

But just because I am against abortion, it doesn’t automatically settle the other questions.

Government Unintended Consequences

It is a crime to commit murder.  It is widely accepted as wrong.  It is widely accepted that murdering someone, other than in self defense, should be illegal.

With abortion, it is not widely accepted that it is murder.  Therefore, it is not widely accepted that it should be illegal.  It is largely split.  Perhaps a slight majority believes that abortion should not be illegal.

So if you make it illegal, there will be unintended consequences.  A government war on abortion could end up turning out to be like the government war on drugs.  You might be seeing shootouts in back alleys over abortions.

If abortion is illegal, what will the punishment be?  Will the doctor go to jail?  Will the would-be mother go to jail?  Will the jail term be as long as if you killed someone else?  How will this be enforced?

You can start to see some of the problems here.  But if it were widely accepted as morally wrong and a crime, then a lot of those problems would go away.

As Harry Browne said, if the government declares a war on abortion, within 5 years men will be having abortions.  (This was a comment before transgenderism really took off.)  In other words, the opposite would happen of the intended effect.

When the government declares war on poverty, we get more poverty.  If the government were to declare a war on abortion, we might end up with more abortions.

Federalism

From a constitutional standpoint, Roe v. Wade should be overturned.  It was a bad decision from day one.  There is nothing in the Constitution granting this authority to the federal government.  Just like the crime of murder should (and generally is) left up to the states, so it goes for abortion.

It is outside of the jurisdiction of the federal government to determine whether abortion should or shouldn’t be illegal.  The Supreme Court and the federal government in general has no more business telling a state like Florida what its abortion laws should be any more than it does telling China what to do.

From a decentralist perspective, Roe v. Wade should be overturned.  We don’t want 9 judges dictating the policy for 330 million Americans.

It’s funny that some on the left are saying that 5 judges shouldn’t be able to tell a woman what to do with her body.  But those judges should never have had a say in the first place.  It was never up to them to decide in the first place.  By overturning Roe v. Wade, they are effectively saying that it is none of their business.

If you are a libertarian and you don’t pay homage to the Constitution, you should still favor the decentralization of this issue.  It is removing power from the centralized government and dividing up to 50 smaller states.  That should be preferable.

Our system of federalism is supposed to work this way.  As discussed above, there are a lot of nuances with this issue.  We shouldn’t have a one-size-fits-all policy for the entire United States.

Each state is supposed to be like a little laboratory.  Maybe Alabama will completely ban abortion.  Maybe California will make it fully legal up until birth.  We will see what the results are.  We will see if there are more or less abortions in each state.

Maybe some states will determine a cutoff when a fetus is viable outside of the womb and make it illegal after that date.  Maybe some states will have stricter punishments than others.

Until it happens, we don’t fully know the consequences.  Federalism – i.e., letting states decide – will at least let us discover what is working and what is not.  It will also bring about far more harmony, as those on different sides of the political aisle don’t have to constantly go to battle.  If they do battle, it will be within the states.

It will make presidential elections a little less consequential, which is really what we should want.

Now we just have to do the same for things like education, healthcare, drugs, and retirement systems.  That would really decrease the stakes for presidential elections.

It would really be great to get to a point where presidential elections don’t mean much because most powers reside with the states or the people, as stated by the 10^th Amendment.

The U.S. House of Representatives has approved $40 billion in aid and weapons for Ukraine.  The spending bill passed by a vote of 368 to 57.  I would suggest looking up your “representative” to see how they voted.

All of the “no” votes came from Republicans.  I don’t know if this is the Ron Paul effect or the Donald Trump effect or some combination of things, but a decent segment of the Republican Party has turned towards being less interventionist in terms of foreign policy.

Unfortunately, it has gone the other way with the Democrats.  It is especially disappointing to see someone like Barbara Lee – the only dissenting vote in approving the use of force in Afghanistan in 2001 – support this spending bill that funds the military industrial complex and will likely serve to only prolong the war in Ukraine.

Even if the U.S. government hadn’t helped fund and plan the coup in Ukraine in 2014, and even if the Ukrainian-backed militias hadn’t been slaughtering innocent ethnic Russians in eastern Ukraine over the last 8 years, and even if the U.S. wasn’t entertaining the idea of admitting Ukraine into NATO and placing missiles on Russia’s doorstep, it still wouldn’t be an excuse to intervene in the matter in Ukraine.

Again, it will only serve to prolong the conflict there.  If anything, it will lead to more deaths, especially on the Ukrainian side.

If anyone in the United States or anywhere else wants to voluntarily donate their time or money to the cause of helping Ukrainians, they should be free to do so.  But we should not be forced through taxation and inflation to fund this.

Thomas Massie tweeted: “Counting last night’s rushed vote, Congress has now spent more money on Ukraine in six months than we spend on all US roads and bridges in a year.”

Donald Trump Jr. tweeted: “You can’t find baby formula in the United States right now but Congress is voting today to send $40 billion to Ukraine.  Let’s put America First for a change.”

Marjorie Taylor Greene, who is heavily demonized by the establishment, pointed out something similar in her Twitter feed.  She was arguing with another Republican in the House, Dan Crenshaw.  The establishment won’t directly admit this, but they especially despise Greene because she goes against the establishment narrative, and she isn’t a war hawk.

The establishment media is calling this Ukraine spending a bipartisan effort.  On this, they are mostly correct.  As I like to say, whenever you hear that something is bipartisan, hold on to your wallet.

So while gas prices are hitting all-time highs and inflation is vastly outpacing wages, the American taxpayer is being forced to send funds to Ukraine and the military-industrial complex.

The establishment media, of course, supports this.  They are shills for the regime.  There are a few exceptions on Fox News like Tucker Carlson and Laura Ingraham, but almost everybody else talks as though there could be no legitimate reason to oppose this spending on Ukraine.

This is actually a winning issue for Republicans who are willing to stand against the war hawks.  Most Americans don’t want to see people getting killed in Ukraine, but it also isn’t on their priority list of issues and they intuitively understand that more government spending won’t help anyway.  Most Americans are dealing with problems at home.  They want less crime, better schools, and a less expensive life.

Libertarians should also capitalize on these issues.  You can take an anti war stance and an anti government spending stance while also being somewhat of a populist.  Most Americans would rather see lower gas and food prices than see their money thrown into an endless pit in a far-off land.

The latest CPI numbers were released showing the year-over-year price inflation for April 2022 was 8.3%.  This was a slight decrease from 8.5% from March, but it was higher than expected.

The CPI for the month of April was up 0.3%.  If you strip out food and energy, it was up 0.6% for the month.

The median CPI, which tends to be less volatile, went up 0.5% for the month.  The year-over-year median CPI stands at 5.2%, which is up from 4.9% in March.

So the numbers are all over the place, but there is no question that the higher price inflation is taking a toll on American families.

Stock investors seemed to shrug off the news at first.  The report was released on Wednesday morning at 8:30 AM.  Stocks were up in the morning trading, but reversed in the afternoon.

The Nasdaq closed down over 3%, while Bitcoin fell below the $30,000 mark.

The stock bubble was built on easy money and low interest rates courtesy of the Federal Reserve.  Now the Fed is essentially forced to deal with the inflation problem that it created by hiking its target rate.  If it stays on track, the Fed is supposed to start reducing its balance sheet in June.  This is not positive news for the stock bulls.

It’s important to remember that a major downturn in stocks doesn’t have to coincide exactly with a recession.  In 2008, stocks tumbled the worst when the financial crisis became apparent in September 2008.  It was later determined that the recession actually started in late 2007.

The peak of the Nasdaq during the original tech bubble was in March 2000.  The recession officially hit in 2001.  The Nasdaq bottomed out in 2002.  While there were some big down days, it was a roller coaster.  The bear market lasted for nearly three years.

In context with today, the lesson is that the Nasdaq started falling before the recession hit in 2001.  We could be experiencing something similar today.

Also for context, the Nasdaq hit just over 5,000 at the peak of the original tech bubble.  It fell to below 1,200 over the course of about 2 and a half years.  It was about a 78% drop.

The Nasdaq now stands just above 11,300.  It had been over 16,000 at one point in late 2021.

While the bubble seems to be popping, this could just be the start of it.  The Nasdaq could easily fall by another 50% or more.  This will probably be the case because the Fed cannot easily revert to more money creation this time.

It technically can go back to easy money and lower interest rates, but then they risk losing the dollar.  They risk turning us into a third-world banana republic, which sometimes seems to be the goal of the Biden administration.

I really don’t think Fed officials want hyperinflation.  They would be destroying themselves and their own power.  They would also be destroying their pensions.

I think it is smart to plan for a long bear market.  If the Fed reverses course at some point, we can reconsider.

I read a heartbreaking story about a young lady who was injected with the Pfizer COVID “vaccine”.  It was a requirement for her to attend Union College in New York, which unfortunately is the case for many colleges and universities across the country.

After getting the second shot, she got sick and ended up in the emergency room.  She experienced nausea, shortness of breath, chest pains and vomiting, according to the article, and continues to suffer to some extent to this day.

Hopefully the young lady, Ms. Puentes, will recover and be able to move on with her life.  It isn’t as tragic as some of the vaccine stories have gone.

But the story doesn’t end here either.  Her college later required a booster shot – the one that apparently actually makes you more likely to contract COVID.  Even though her doctor said a booster shot would be ill-advised, her attempts at getting exempted were fruitless.  The college ended up dropping her classes and telling her to move out.

She was actually told by a school nurse to get the Moderna shot if Pfizer isn’t working for you.

Part of the school’s response said, “The vaccine is not associated with gastritis, which is the diagnosis you received in the ER two weeks after vaccination.  Two episodes of streptococcal sore throat in 7 months is not an indication of a weakened immune system.  There is no evidence in the literature that vaccination for Covid19 weakens the immune system.”

So first they say there isn’t an indication of a weakened immune system and then say that isn’t an effect of the vaccine.  Why did they comment in the first place on whether there is an indication of a weakened immune system because they wouldn’t have accepted that anyway?

And to say there is “no evidence in the literature” is meaningless except as an excuse.  What literature?  There is a lot of literature in the Vaccine Adverse Event Reporting System (VAERS), which lists well over 1 million reported adverse events, including over 27,000 deaths from COVID vaccines.

Are they talking about the literature specifically published by Pfizer?  Pfizer has kept most of its documents hidden.  Now that it has been forced to start releasing some of them, it isn’t looking good, especially in terms of adverse events, including deaths.  (And of course, the “vaccines” aren’t effective as was originally said and is still falsely repeated.  If anything, there is negative efficacy now.)

Let Lawsuits Fly

I am not one who is big on lawsuits, but I am surprised that I haven’t heard about more lawsuits.  At the very least, she should be suing her school to recover time and money wasted on attending college.

Beyond this, she could easily sue her college for medical damages and pain and suffering.  It isn’t clear if she got jabbed solely for the reason of attending school.  But if it was their requirement, make them pay.  The administrators at the school are part of the fraud.  They are part of the massive criminal cartel that exists in this country.

All of these vaccine pushers who have compelled people to get jabbed need to pay a steep price.  At the very least, they need to be removed out of any position of power or decision making.

I know based on the Open VAERS data that there have been many thousands of deaths just in the United States alone.  The people who reported these deaths believe that the vaccine caused the death.

Start making governments, politicians, corporate executives, school administrators, and everyone else forcing these on the public to defend it in court.  Let’s see some lengthy trials digging into the evidence that these vaccines are causing excess deaths.

If we see a few successful lawsuits, that alone could change the whole narrative.  The cowards in corporate America will fold really fast then.  The vaccine requirements will all of a sudden become optional.

Meanwhile, the executives at the vaccine companies and the politicians and bureaucrats (starting with Biden and Fauci) should be held criminally liable for the massive fraud and death that they have perpetrated on the American people.

Joe Biden said that if you get vaccinated that you are protected from COVID.  He said that if you get vaccinated, then you can’t die.  Even if we give him the benefit of the doubt and say that he meant you can’t die of COVID if you get vaccinated, he was still purposely lying.  Those two statements alone are a basis for impeaching him.

This isn’t negligence.  Some of the people pushing the vaccines are just stupid.  But don’t blame stupidity at the top.  They know exactly what they are doing.  Otherwise, why would they have pushed so hard?  Why would they have threatened people’s livelihood to get them jabbed?

Even if someone does claim ignorance, there is no excuse.  If they were ignorant on the subject, then they should have kept their mouth closed.  If you are ignorant about something, then you don’t go around preaching about it, which is what we have gotten non-stop since the beginning of 2021.

These so-called vaccines are a crime against humanity.  The criminals who pushed them and tried to force them on the public should be held liable for their actions.  At the very least, they must be held to account so that this never happens again.

The FOMC released its latest statement on monetary policy.  As expected, the Fed is hiking its target for the federal funds rate by 50 basis points, or 0.50%.  This is the biggest rate hike the Fed has done since the year 2000.

The federal funds rate will now be in a range of 0.75% to 1.00%.  This will likely have an impact on short-term rates and should lead to a flattening of the yield curve.

In his press conference, Jerome Powell said that a 75 basis point increase is not something that the committee is “actively considering.”  The stock market bulls liked the sound of this, and stocks exploded higher on this news.

I’ve long said that there is a problem when one person from the government/ central bank can speak words that wildly drive stock prices higher or lower.  In an economy of 330 million people, and more if you include the globe, does is make sense that one person or one committee has this much power to control a massive economy?

Perhaps the bigger news coming from the Fed, that receives far less attention than the rate hikes, is that the Fed will start to reduce its bloated balance sheet.  It nearly peaked at $9 trillion.  It helps to remember that it was around $4.2 trillion in March 2020.  It was under $1 trillion before September 2008.

In the Implementation Note, it says that the Fed will start to reduce its balance sheet in June by $47.5 billion per month.  This will mean selling off (or not rolling over maturing debt) $30 billion per month in Treasury securities and $17.5 billion in mortgage securities.

According to its “Plans for Reducing the Size of the Federal Reserve’s Balance Sheet”, these sell-off amounts will double after three months.  This means that in September 2022, the Fed will be reducing its balance sheet by $95 billion per month, if it sticks with the plan.

That is a big “if”.  The stock market liked the news that the Fed isn’t actively considering a hike of 75 basis points at one time in the near future.  That bullish sentiment will wear off quickly.

The Everything Bubble is built on loose money and low interest rates from the Fed.  Now that is being taken away to combat the price inflation, which is a consequence of its previous policies.

The market has already been extremely rocky this year.  Interest rates for mortgages have already gone up.  You can read all of the statistics there are, but the fact is that most of middle class America is hurting.  They are getting 8.5% (or more) price hikes with many things they buy, but they aren’t seeing an 8.5% increase in wages.

The pain is already here, and it will get worse at some time.  It is a consequence of the Fed’s previous policies.  They can try to blame Russia or whomever, but it was the easy money and loose interest rates that gave us the unsustainable boom.

The bust is unavoidable at this point.  The Fed can try to delay it as it has in the past, but that will only make it worse down the line.  The severe misallocations will be exposed.  The correction will happen at some point.  Even if the Fed doesn’t allow a “correction”, there will be severe consequences.

We should expect to see short-term rates go higher in the coming months.  The yield curve is likely to flatten more.  If we get an inverted yield curve, then it will really be time to take cover.

I recently saw a headline on CNBC television: “Bitcoin trades in lockstep with Nasdaq”.

There is also a video from a couple of weeks ago that says, “Bitcoin has been trading like an exaggerated Nasdaq”.

My friend recently noticed the same thing and asked why.

So why is Bitcoin trading somewhat in tandem with the Nasdaq?

It is far from being a perfect correlation, and Bitcoin tends to still be more volatile even with the Nasdaq’s volatility having increased.  Still, I would say that Bitcoin seems as correlated to the Nasdaq, or possibly more, than the Dow or S&P 500 right now.

We are told that Bitcoin is our future money.  We are told about all of the technological advantages of cryptocurrencies and the blockchain, even though these are two entirely different things.

Nasdaq is a market index made up largely of tech companies.  It might make sense that a few individual tech companies would trade somewhat in tandem with Bitcoin, especially if they are invested in Bitcoin or if their products are related to cryptocurrencies.

But the Nasdaq is made up of the heavy hitters like Amazon, Apple, Microsoft, Alphabet (Google), and Tesla.  It doesn’t seem to make much sense that these stocks would largely be trading with a strong correlation to Bitcoin.

I can only think of one explanation.

The Nasdaq and Bitcoin are largely the face of the Everything Bubble.

That’s right.  They are both highly speculative investments right now.  It is hard to even use the word “investments” in this context.

We are finishing up an era of highly loose money.  Price inflation is now roaring, and people who actually have money are trying to find a place to get a good return.  It sure isn’t going to happen in bonds right now.

Some people buy a house, while some people go the more liquid yet perhaps more speculative route and buy Bitcoin and/or tech stocks.

We are in an Everything Bubble.  About the only thing not in a bubble are precious metals.

The Nasdaq and Bitcoin are the big faces of stocks and cryptocurrencies.  They are the big plays.  They are highly speculative.  People take on the high risk for a potentially high reward.

This correlation will eventually be broken once the bubble pops.  Both the Nasdaq and Bitcoin have been hit hard lately.  They are both well off of their respective highs.

My prediction is that eventually Bitcoin will keep going down and the Nasdaq will bottom out.

The reason is that the Nasdaq is made up of companies that have value.  They may be highly overvalued right now, but many of them will still be profitable even after the bubble pops.

I can’t say the same for Bitcoin.  It derives its value because a bunch of semi-libertarian tech nerds declared it to be the future of money.  It caught on when some people started making money (i.e., dollar profits).  It is essentially a roulette table now.  It is just pure gambling at this point.  It may pay off for some, while others lose their shirts.

Bitcoin and the Nasdaq should fall together as the bubble pops.  They will both have periods where they start to rise again and draw some last-minute suckers into the game.  When all of the smoke clears, the Nasdaq may be a good investment again.  Bitcoin is not likely to ever become a significant form of money in society.  Calling it money is just an excuse for the speculators to speculate.