The BRICS countries are made up of Brazil, Russia, India, China, and South Africa. It is basically an economic partnership between countries.

At the most recent BRICS summit, it was announced that invitations were being extended to Argentina, Egypt, Iran, Ethiopia, Saudi Arabia, and the United Arab Emirates. Membership of these new countries would take effect on January 1, 2024.

Leading up to the meeting, there was talk from the gold bug community that the BRICS might announce a new BRICS currency backed or partially backed by gold.

As far as I know, this didn’t happen, and it didn’t surprise me one bit. While these countries are trying to become less reliant on the U.S. dollar, the representative leaders of these countries were not going to tie themselves down to such an extent.

The reason that so many libertarians like gold and favor something of a gold standard is because it restrains the power of government. It forces governments to pay for things through taxation instead of inflating a currency.

Unlike Joe Biden, the leaders of these countries probably actually want to have a somewhat prosperous economy for their respective countries. But they aren’t going to do so at the expense of their own power. So it is going to take more change before we get some kind of gold-backed currency.

Local Currencies

One thing that did come out of the summit was the BRICS encouraging the use of local currencies more often.

This has been an obvious solution for many years, so I’m not sure why now they are going in this direction. I guess nobody thought of it before?

The bullying and dictating coming from Washington DC finally got too much to handle. This was especially true for Russia, which has seen major sanctions coming from the U.S., along with a default on promises.

Why did the U.S. dollar have to be the middleman for so long? It has been considered the world’s reserve currency since the end of World War 2.

With today’s exchange markets, there is no reason that countries can’t do business using their own currencies. As long as the currency is easily convertible, then there shouldn’t be a problem.

The Petro Dollar

For some reason, oil producing countries have found it necessary to use the dollar when selling oil. It is probably because these countries feared the U.S. government. It is also because the U.S. has provided some backing for them, implicitly or explicitly.

If the U.S. didn’t support Saudi Arabia in return for using dollars, then the House of Saud may have fallen a while ago from its own population.

And this was probably the most interesting development coming out of the BRICS summit. It is no surprise that a country like Iran would join. But for Saudi Arabia to attend and get an invitation to join the economic alliance, that is another thing.

Saudi Arabia is the face of the Petro dollar. This country is a major oil producer. Will Saudi Arabia completely abandon the dollar and rely on China and Russia for some protection?

So while we are not getting any kind of a gold currency, we are getting farther away from the dollar as the reserve currency of the world.

Gold and the Dollar

Gold is still a good long-term play. Even if there is no gold-backed currency, it can still be used for international trade. It can still be used as reserves by countries to give an implicit backing to their currencies.

If you are an American and your income and expenses are in dollars, then gold will be your friend. As the dollar slowly loses its status as the world’s reserve currency, the dollar price of gold will go higher.

There won’t be any one replacement for the dollar. Countries will just trade using their own currencies instead of using dollars as the middleman. But gold holders will be the long-term beneficiaries.

The dollar has remained strong because the Federal Reserve has been the least bad of the major central banks lately. The Fed has actually maintained a relatively tight monetary policy over the last couple of years.

All of this could change quickly with a major recession or banking crisis. But for now, the Fed is the least bad, so the dollar has stayed somewhat strong in spite of the insane policies coming out of Washington DC.

The U.S. government is actually fighting against the Fed at this point. Jerome Powell and company are trying to save the dollar while the Biden administration is alienating major countries and doing its best to get other countries to reject using U.S. dollars.

The long-term trend is for countries to move away from dollars unless actually trading with the United States. This will hurt the U.S. government’s ability to run up debt at low interest rates. In the long run, this may be a positive development for the average American.

The first presidential debate for the 2023/ 2024 election season happened in Milwaukee on August 23, 2023. There were 8 candidates up on stage, which notably didn’t include Donald Trump.

There is a bit of controversy over whether Larry Elder should have been excluded from the debate. It seemed like the RNC may have purposely picked the polls that would exclude Elder.

Some libertarians really like Larry Elder, including Peter Schiff, who was encouraging people to donate at least a dollar to his campaign. Elder is decent on economic issues and has some good things to say on the culture wars, but I don’t think libertarians should be fooled that he would bring any great change to Washington DC. I don’t think Elder would take on the establishment/ deep state in any significant way.

I was surprised to learn just before the debate that one of the requirements by the RNC for being in the debate was to sign a loyalty pledge to support the eventual nominee.

This is a bunch of garbage coming from the Republican National Committee. It just encourages people to lie (which most of them do) and would exclude someone who is really honest.

If these had been the rules in the past, it would have excluded Ron Paul in 2007/2008 and again in 2011/2012. It also would have excluded Donald Trump in 2015/2016.

Are we really supposed to believe that Christ Christie and Mike Pence will support Trump when he is the nominee? Maybe they’ll say it at the beginning before giving you every reason that Trump is an awful human being.

And Asa Hutchinson said during the debate that he wouldn’t support Trump if Trump is in jail. So why was he allowed up there?

Fox News and Moderators

The debate was hosted and aired by Fox News. The moderators were Bret Baier and Martha MacCallum.

They appeared to be fairly neutral. I say this coming from a perspective of whether or not they showed bias. They did not seem to show particular favor or disfavor to any one candidate. On this, I give them a little bit of credit.

From a libertarian perspective, I thought most of the questioning was not that good. Of course, they never asked about the role of the Federal Reserve. They never asked about COVID vaccine mandates, let alone vaccine side effects. They don’t pin down the candidates and ask them what they would specifically cut out of the federal budget.

In fact, most of the candidates talked about the fiscal situation and the need to reduce deficits and get spending under control. But not one of them actually gave any specifics on what would be cut other than perhaps Ramaswamy saying later that he would not send any more money to Ukraine.

It is easy to say that you will cut spending or get it under control, but that is worthless without any specifics. It is especially worthless when most of them promote more war and empire overseas. So the lack of follow-up by the moderators allowed them to get away with this.

Here are the candidates. I will start with the worst and finish with the best or the least bad.

Asa Hutchinson

This guy is just horrible in every way. I didn’t realize he is such a creep until the debate. I just knew his name as being the former governor in Arkansas.

He looks a bit like Joe Biden. He looks like he has one foot in the grave. And just about everything he said on stage was wrong or evil. I can’t imagine why anyone would support this guy.

Mike Pence

Although Pence got the most talking time, he was horrible in just about everything he said. He sounds decent on economics, but it is meaningless because he offers no specifics. He would be a fiscal disaster just for the fact that he would continue wars and probably start new ones.

He preached about the Bible and said that he favors some kind of nationwide abortion ban. That last part is unconstitutional. He is horrible on Ukraine and anything else dealing with foreign policy.

It was interesting that he kept referring to the Trump/ Pence administration. He wants to run on Trump’s record even though Trump is in the race. It is a bit of an odd strategy, but he needs some kind of strategy because he is just so unlikable.

Chris Christie

Christie was predictably annoying and bloviating about everything. He talked a lot about his experience in government.

Aside from his fake talk about fiscal conservatism, he is bad on just about everything. He could probably be a good debater except that he is so wrong and annoying about it.

While Christie and Pence look different, their material up on stage is very similar. They just go about things in a different way. Their styles are different, but both of them are terrible people.

Tim Scott

Scott is another war hawk that you can lump in with Pence and Christie. He may be slightly less annoying, but he has a bigger political problem. He is completely dull and boring.

There is absolutely nothing that he said in the debate that stands out to me. All I can remember is that he is the person who would put you to sleep.

Nikki Haley

Haley actually started off quite strong when she was talking about economics and spending. If I didn’t know anything about her, I would have given her a good rating on that. Of course, as noted above, she didn’t actually offer anything specific.

Then she went downhill. She made a degrading comment about men. She likes to point out to everyone that she is a capable woman.

And when it comes to foreign policy, she might be the worst, although there is a lot of competition in this group of war hawks.

Doug Burgum

Who?

I didn’t know he was either, and I am quite familiar with North Dakota.

I do have to give credit to Burgum on one thing. He spoke in favor of the Constitution in more than just a platitude. On a specific question about abortion and Roe v. Wade, he said that the federal government should leave it to the states because of the 10th Amendment (as he pulled out a copy of the Constitution). He easily had the best answer on this question.

Unfortunately, he too is bad on foreign policy.

I have no idea why he is running.

He has no chance of winning.  Maybe he is hoping for a VP slot.  Or maybe he is doing the Joe Biden strategy of throwing his name in the ring and then getting elected a few decades later because the party can’t find anyone better to go out there.

Ron DeSantis

DeSantis wasn’t terrible, but he wasn’t great either.  He said some good things, but his timing is off, and his enthusiasm isn’t there.  He had some canned line at one point that may have sounded good, but it was at the wrong time for the wrong question.

When asked for a show of hands of anyone who would stop sending money to Ukraine, DeSantis couldn’t decide whether to raise his hand.  He blabbered on about how Europe needs to take more responsibility.  I understand that not everything is a yes or no question and that some things require nuance.  But this question should have been fairly clear.

DeSantis reminds me of Rand Paul in 2015 when he ran for president.  He is trying to please an anti-establishment faction while also trying to please an establishment faction.  It results in wishy-washy answers that just make you look weak.  You end up pleasing nobody.

DeSantis has almost no chance of getting the nomination in 2024 unless something happens to Trump.  DeSantis should drop out, lick his wounds, and try to save himself for the future by being the best governor he can in Florida.

Vivek Ramaswamy

Vivek was the clear winner on the debate stage.  He was confident and well-spoken.  He had some great lines.  I don’t know if he was expecting it, but he was the biggest target on the stage by far.  In fact, he was targeted more than Donald Trump.

I have had my criticisms of Vivek for playing to his audience.  When I hear him on a libertarian podcast, he doesn’t sound the same as he does when interviewed on Fox News.  He is bad on China and he has said he would bomb Mexican drug cartels in Mexico.

With that said, Vivek was mostly great on the debate stage.  He was the only one who challenged the notion of a climate change crisis and called it a hoax.  He was the only one who raised his hand (besides DeSantis putting a finger in the air) saying he would not send more money to Ukraine.

Christie, Pence, and Haley all attacked Vivek for his supposed lack of experience and his foreign policy views.  This played well for Vivek.  It distinguished him from the crowd.  He was by far the most unique and charismatic person on the stage.

He is setting himself up to be Trump’s running mate.  And if anything happens to Trump, Vivek may be the frontrunner for the nomination now.  I give him lots of credit for being someone different and getting most of the issues right.

Donald Trump

Perhaps the biggest winner of the night was Donald Trump, who didn’t attend the debate.  Instead, Tucker Carlson ran an interview with him at the same time.  I have since watched it.

I don’t know if Trump was trying to be funny, but I laughed out loud several times.  The interview itself was nothing special, but Trump, even with his bragging, just comes across as more sincere than all the rest of them.

So Trump and Vivek are the two winners of the night.  The good news for libertarians is that these are the two candidates on the Republican side who actually want to end the war in Ukraine and to stop sending U.S. taxpayer money there.  They also seem like the only two candidates who actually want the United States to be a better place.

Now we just need Kennedy to get some traction on the other side.

Price inflation has supposedly gone down to just over 3% annually. That is, the rate has gone down, but prices keep going up.

It is impossible to say exactly how much consumer prices are changing as a whole at any given time. The government uses some complicated formula to compute the CPI.

There are so many variables such as the quality and quantity of the products being consumed. There is a factor of substitutions. There is a variable of having different prices in different places. And perhaps most importantly, different people consume different products.

So you could have the price of eggs go up 10% while the price of milk stays the same. But that doesn’t make the eggs/ milk index at 5% because different quantities are consumed. Plus, some people eat eggs and don’t drink milk and vice versa.

Overall, I believe that the CPI is generally understated. I still use the metric because it is good for seeing the trend. It is also important because other people use the metric, including those who set monetary policy. They can say they use other inflation metrics, but you better believe that they are looking at the CPI numbers when they come out each month.

Insurance Costs

This is one reason I can say with some certainty that the CPI is understated and that middle class America is seeing a reduction in living standards (at least for those who aren’t accumulating debt or reducing savings).

It is acknowledged now that wages have not kept up with the cost of living over the last couple of years with high price inflation. But the picture is probably worse than is often portrayed.

I can speak anecdotally, but I know the numbers will back this up. For me, insurance costs have been going up significantly. That includes homeowners insurance and car insurance. I believe my medical insurance is going up next year.

My homeowners insurance has about tripled in the last few years. It was actually worse for a short period of time before I got a new roof. Now, I live in Florida, and it has been especially bad in Florida because of a combination of bad law and hurricanes. Still, I believe these rising premiums has been an issue in most places, even though Florida may be a little worse.

My car insurance has gone up almost 50% without any new claims. Plus, I have actually had reduced driving due to working remotely.

Let’s Do Some Math

Let’s do some simple math with a middle class American family. Let’s say the family makes $100,000 per year. They get a 3% raise in income from the previous year, so they now have an extra $3,000 before taxes. After you take out taxes, maybe it is $2,400.

The family owns a house, and the annual premium for their home insurance went from $1,200 to $2,200. Their car insurance for two cars went from $1,500 annually to $2,200. Their health insurance premiums went from $6,300 per year to $7,000 per year. That’s $1,000 plus $700 plus $700. That’s $2,400.

So in this hypothetical yet very realistic scenario, the family is paying $2,400 more this year for three different types of insurance combined. But the family is only making $2,400 more in income after taking out taxes.

But those are just three expenses. What about food and gasoline? What about clothes? What about the electric bill? What about the cost of car repairs and maintenance, let alone the cost of actually getting a new car?

This is a simple demonstration of how the middle class is getting destroyed.

The Middle Class Gets Hammered

If someone making $500,000 per year sees his total insurance costs go up by $5,000, it isn’t going to make a big different in the person’s life.

When a family is living on a tight budget already, an extra few thousand dollars just from insurance costs alone is brutal. When you just add in the food from the grocery store, it makes it really tough for the average family.

Of course, it may be even worse for someone who is poor and has a low income. Even with government welfare, it is still rough.

I just can’t imagine that the average middle class family is accepting this very well. Sure, they do what they have to do. They make a budget and find ways to cut. Maybe they find extra ways to make a few bucks here and there.

Politically, I have to imagine that something will change. There will be some who call for more socialism, but I think there is a general realization that calling for more socialism means calling for more government intervention. At this point, I would hope that most people understand that it is the government that is making us poorer, even if a lot of people can’t quite articulate how.

Something is going to change. Either we will just keep getting poorer, or the masses are going to revolt in some way. The big question is how they will revolt and what changes will come about.

Will we move towards greater liberty and greater prosperity, or will people allow the government to continue to grow its power and make us poorer? I don’t have the answer at this time.

There is no answer to this question. First, it would be a generalization to answer the question. Some people are more stupid than others.

Also, even if you generalize about people, there is still the question: Compared to what?

People generally aren’t stupid compared to bugs. If we are, then the bugs really have us fooled. Bugs don’t build civilizations, at least not compared to people. Then again, bugs can’t blow up the world with nuclear weapons, so they have that on us.

It is easy to blame stupid people for all of the problems in the world. If we are to believe Ettiene de la Boetie of the 16th century, then all governments and dictators rely on the consent of the governed. So if people would just stop consenting, then we wouldn’t live under tyranny.

But there are otherwise intelligent people who go along with what politicians, the media, or society in general tell them. This enables the evil people who seek power to rule over others.

The people who are supporting the tyranny may or may not be stupid, but they are suckers. They are too trusting of people who do not wish them well.

Thinking Others are Stupid

I am catching up on the last couple of seasons of Survivor. This show is over two decades old now. It is my guilty pleasure when it comes to television. I don’t watch much television, but I still enjoy the game of Survivor.

Being athletic is an aspect of the game in winning challenges. You also have to be tough enough to brave the outdoor elements. But the psychology of the game is perhaps the most important aspect.

The one area where I find some players are stupid is in thinking that other people are stupid. There was one scene where a man told a woman on his tribe that he thought everyone was going after him (to vote him out at the next tribal council). When she offered her help, he responded that she should just save herself.

He thought he did this great acting job, yet the woman knew he was completely full of it. The problem was that the guy thought the woman he was talking to was completely stupid or gullible.

I find this true in life sometimes. People are quick to underestimate the intelligence of other people. Of course, when you are into politics, it is easy to think this way. People really are stupid when it comes to politics because the media does such a good job of propagandizing.

Just don’t underestimate people by transferring this to other areas of life. Your aunt and uncle may be diehard Hillary Clinton supporters, but it doesn’t mean they don’t know how to change a lightbulb. It doesn’t mean that they can’t locate South Africa on a map. They may be quite intelligent in other areas of life.

Politics and the Brain

I find that politics really does turn people’s brains into mush. They can be perfectly rational about every other aspect of life, but as soon as it goes political in any way, all sense is out the window.

This is what happened with COVID too. It became political very quickly. Just the act of governments everywhere locking down makes it political. So by standing up for or against lockdowns, you are immediately taking a political position. This is why people lost all common sense.

It is why people were scared to go to the beach. It is why people wore a mask in a restaurant until they got to their seat. It is why there were cardboard cutouts in the football stands instead of real people cheering. So many people couldn’t think straight because it became a political issue, and it was an issue with continual propaganda coming from the establishment media.

It is even worse when the politics has to do with particular individuals. You don’t have to look any farther than Donald Trump for an example. It is hard to get anyone to take an objective look at something when it involves Trump.

While some people really are just stupid in general, I think the overall problem is more nuanced. The problem is more that people are too trusting and too naive. They don’t question things enough. They are too obedient.

Questioning Authority

As Michael Malice said, it is easier to train a smart dog. This was apparent during COVID. I saw fewer people wearing masks in Walmart than in Publix. If you went to a college campus, I’m sure they were everywhere, including outside.

My dog is quite smart compared to many other breeds. He understands a lot of words. When I tell him to sit, he sits. This is good for the dog owner. Maybe it is good for the dog because most dog owners have the dog’s best interest at heart.

It’s not good for people usually. It is typically good for children to listen to their parents when they are young because the parents are trying to protect them.

The problem, especially with politics, is that people are being obedient to others who are evil and seek to rule over them. Sometimes they even seek to do others harm.

If I had been onboard for being “vaccinated” against COVID, and I had some members of my extended family saying they weren’t going to get jabbed, I think I would have been curious enough to ask them why and to do some research to get alternative opinions.

It is amazing how many people obediently took the shots and just assumed they were “safe and effective” without doing any of their own research. They had to have known people who weren’t taking the shot or were having doubts, except for maybe some people who live in a bubble or have a very small circle of friends and family.

The whole problem is a lack of curiosity and too much obedience. So it’s not that we need smarter people. We just need people to use the brain they were given and to show a little curiosity. That would go a long way to breaking the establishment narratives.

I follow the FI (financial independence) or FIRE (financial independence/ retire early) community. It’s not that I necessarily want to retire early, but I do enjoy the talk about saving, investing, and earning more.

I think referring to it as FI instead of FIRE is better and overall more accurate. There is almost nobody who actually retires really early and stays retired.

There are some characteristics of the FI community that are appropriate. Some examples are having an emergency fund and not carrying credit card debt. Then there are others that I don’t disagree with but find somewhat strange, such as getting travel rewards from credit cards.

There is nothing wrong with getting travel rewards, and I myself have recently started with that, but I just don’t think it is a big pillar of FI. You can get cash back from using a credit card too. If you are going to travel, then maybe it is smart to use travel reward points, but it isn’t going to be a big difference between reaching FI and not reaching FI as far as I’m concerned.

There are many disagreements within the FI community that always make for a good discussion. For example, there is always the debate of whether to pay down a mortgage or to invest the money. There isn’t necessarily a right answer, but the discussion can be informative.

One thing that has seemed to become a pillar of FI, especially within the United States, is buying and holding low-cost cost stock index funds. This is not universal, but it seems to be a significant majority opinion now that it is best to follow someone like J. L. Collins (author of The Simple Path to Wealth) and count on the stock market always going up in the long run.

Do Stocks Always Have to Go Up?

If you look at modern history in the United States, there is no denying that the major stock market indexes have always gone up in the long run.

Of course, it all depends on the definition of the long run. For some people, they may think that is just five years. If that’s the case, then stocks haven’t always gone up in the long run.

But just because that has happened in the past, it doesn’t mean it has to happen in the future. I like to point to the example of Japan.

The Nikkei peaked in 1989. It is now 34 years later, and the index still has not reached the level it hit in 1989. If that isn’t the long run, I don’t know what is.

Japan is a first-world country. We aren’t talking about Bangladesh or Ethiopia. It’s not to say that what happened in Japan will happen in the U.S. It’s just that it’s possible.

If stocks in the U.S. fell by 50% and stayed down for 10 years, I think most American investors would not be prepared for this. I think some of them would be devastated, and it would significantly impact their future plans.

Overexuberance

I listen to many different podcasts and YouTube channels. Some I listen to more regularly than others.

Lately, I have detected a bit of bubble mania from some commentary I have heard. I also strongly detect it from comments I have read.

It is a mentality that stocks will go up. If they go down, you should just stay the course. In fact, you should just buy even more if they go down, say the bulls.

Some podcasters have stayed consistent, even if I don’t completely agree with their investing advice. For example, Brad from the ChooseFI podcast believes in buying and holding low-cost index funds. But he has been saying that for years, and he isn’t pushing it any harder today than he was then. So while I think investors should diversify far more than what he does, I don’t think he is wrapped up in the bubble mentality right now. I recommend that podcast for its other great content anyway.

I have heard others though, and they act like it is a given that real estate prices will just keep going up and stocks will keep going up. They don’t actually say this, and they may even say that there could be downturns, but their advice reflects that they think everything will just keep booming.

I have heard people get all excited because they have made so much money on their house. But these are people who haven’t actually sold their house. They just see the value on Zillow has gone up. So they are excited to buy more properties and do the same thing again.

This whole thing is a recipe for disaster. I really like the FI community overall, and I think there is great advice out there. I also believe that the FI community will be far better prepared if a hard recession comes only because they will tend to have savings and not carry some of the worst kinds of debt such as credit card debt.

Still, I think a major asset deflation will destroy a lot of plans for a lot of people. I am cringing when I hear people talk of using more leverage to buy more real estate. I am cringing when I hear people talk about putting all of their investments in stocks.

It is even worse when I see the influencers (for lack of a better word) who are encouraging this. When someone has “made money” on their house that they didn’t sell, I don’t think the right advice is necessarily to take on more debt and buy more houses, as if it can be easily replicated. That is especially true during this time when mortgage rates are high and housing prices have not come down much in most areas.

Using Caution

There is a point where using too much caution is detrimental. You can see this in extremes. Many of the self-made billionaires in this world are really rather reckless. They took major chances and it worked out for them. You don’t hear about all of the people who took big chances and didn’t become wealthy.

I think the FI community is generally a conservative bunch, financially speaking. They believe in saving money, and oftentimes this means living frugally.

So I don’t understand why some seem to be throwing caution to the wind. The only explanation I have is that it is part of the bubble mentality.

When the bubble pops, it is going to be a shock to a lot of people. The ones who were more cautious at the peak of the bubble will be better off than those who were more aggressive and thinking that the good times would never end.

The latest consumer price index (CPI) numbers were released for July 2023. The CPI was up 0.2% for July, and the year-over-year stands at 3.2%, which was slightly less than expected.

The median CPI came in at 6.1% year-over-year, but the median CPI in July was just 0.2%. The median CPI tends to be less volatile, but the rate of 0.2% for July is a big drop from where it had been in previous months.

https://www.clevelandfed.org/indicators-and-data/median-cpi

I was surprised to hear Rick Santelli and Steve Liesman on CNBC agree on something. More surprisingly, I agreed with their point. They said something to the effect that prices weren’t going down. The rate of increase was going down. But the prices of eggs and other things are still way higher than they were a few years ago.

With this latest CPI data, it does make it less likely that we will see another rate hike out of the Fed this year. It has surprised me that the Fed went as high as it did, especially in the face of a heavily inverted yield curve. Jerome Powell and company are more concerned about price inflation than a possible recession.

Of course, that may change quickly depending on the severity of the recession that is likely to hit at this point.

There’s Good News and Bad News

The good news is that the rate of price inflation is coming down. We probably won’t see any outright deflation with consumer prices, although you never know. The deflation will come in asset prices – particularly real estate and stocks.

This is relief that the American middle class really needs. It isn’t a good situation when prices at the grocery store are going up faster than your paycheck.

We actually need a recession/ correction to restore some sanity in our world. It isn’t sustainable to have consumer prices continually going up faster than wages. Something has to give at some point, unless we are destined for absolute poverty.

The bad news is that we need a recession to restore this sanity, and it is the recession that often feels the most painful. That is when unemployment tends to go up as resources are reallocated. It is a time when people see their wealth on paper vanish.

The recession is like someone stopping the party. It is easy to blame the person stopping the party, but the party was going to come to an end at some point anyway. The person stopping the party may have done some people a favor even if it didn’t seem so at the time. They wanted to keep partying and drinking, even though it wasn’t sustainable.

When the Party Stops

There is a high probability there will be a recession before the November 2024 elections. That is something that most political pundits are not taking into account.

You can already tell that the party is winding down now. More people are realizing that they can’t sustain their spending. They can’t keep running up more debt.

As soon as stocks crash and the recession hits (which are likely to somewhat coincide), people will change their behavior if they haven’t already.

Some investors will panic, and some will stay the course. But the common theme is that almost everyone will start living more frugally.

It is a lot less painful if you start making changes before the party stops. You can be the person at the party who starts drinking water while everyone else is still consuming alcohol.

If you start cutting back a little in preparation, it is less painful mentally when the recession hits. It makes for less of an adjustment.

I encourage people to pay off their debt anyway, even without a recession on the horizon. But it really is that much more important to get rid of debt before a recession hits. A low-interest mortgage, student loans, and a car loan may be ok, but even here it depends on the size. All credit card debt should be gone as soon as possible, but I would say this with or without a recession on the horizon.

Overall, I think those who are mentally prepared for a hard recession will handle it better. They won’t be surprised when it hits, and they are less likely to make bad choices when it is here.

While the Federal Reserve is political, I don’t view it as always siding with the Democrats. I don’t even see it as always siding with what is thought to be the establishment position. Sometimes there are different factions within the establishment that have different positions.

It is not easy to define the establishment, but it is largely made up of people who want to maintain the status quo because they benefit from maintaining the status quo. This could have to do with money or power or both. But there are often contradicting elements of maintaining the status quo for the elite.

The Biden crime family wants to maintain the status quo of staying out of prison, grifting money from Ukraine and wherever else, and holding on to some power. This is why Biden will go along with other establishment positions such as fighting a proxy war against Russia, forcing vaccines, and piling up more massive debt (just to name a few).

It is also clear that the media and Biden’s handlers can throw him under the bus at any time, so Joe Biden will mostly do what they tell him to do.

Jerome Powell and the other people at the Federal Reserve do not have the same goals as someone like Biden. They want to maintain the status quo of central banking and controlling money. I don’t think Powell really cares one way or another if Biden is impeached or in handcuffs. He probably doesn’t care about Trump either, especially after what Trump said about Powell after appointing him.

The Fed Isn’t Bothered by a Recession

It’s not that Powell and company want a recession. It is just that they are willing to accept a recession in order to keep the dollar as the number one currency in the world.

When the CPI recently dropped to 3% year-over-year, I thought the Fed was likely to pause and stay paused for a while. But the Fed hiked its target rate another 25 basis points, and it still may not be over. They are doing this in the face of a heavily inverted yield curve.

Fed officials obviously don’t care about Biden. They don’t have the same goals as Biden. If there is a recession in 2024 that leads to Biden’s defeat, then so be it. They care more about continuing to be the big dog in the future, even though the Biden administration is undermining that by isolating China and Russia from the U.S.

The Fed’s actions prior to this year set the course for higher price inflation and a massive misallocation of resources. The trouble is already baked into the cake. It is just a matter of how fast and deep the recession is that comes.

The Fed is not trying to delay this thing until after the 2024 election. If anything, they seem to be speeding it up.

Incompetence or Something Else?

I think people have a tendency to ascribe incompetence to politicians and government bureaucrats too much, when they should be ascribing evil.

Just about every single person the Biden administration appoints into any position of prominence is bad. It is just an assumption at this point. When there is a new CDC director (or name any position), you can be certain that the person is just terrible.

If Biden and his handlers were just a bunch of incompetent fools, then they might accidentally get something right every once in a while. But that doesn’t seem to happen.

In the case of the Fed, I really do think there is some incompetence at work. There is evil too, as they are knowingly centrally planning an economy. They know they are there to bail out the major banks if necessary.

But in the actions over the last few years, I really do have to ascribe some incompetence to the whole thing.

The Fed was expanding its balance sheet into the beginning of 2022. The Fed started raising the target federal funds rate almost immediately after its balance sheet reached its peak at almost $9 trillion.

If the Fed was competent and had any kind of foresight, wouldn’t there have at least been a brief period of time in there where it wasn’t doing anything?

It went straight from pushing hard on the accelerator to slamming on the brakes. There was never a time where it was coasting.

Looking Backwards

I bring this all up just to point out that the Fed is still hiking rates in the face of an inverted yield curve and a likely coming recession.

They didn’t care about price inflation at all in 2020, 2021, or the beginning of 2022. Then, all of a sudden, it was panic in the other direction. They are determined to get the rate of price inflation down, and I think they will be successful in the short run.

But it can turn on a dime and go back the other way. Earlier in 2023, when Silicon Valley Bank failed, the Fed expanded its balance sheet by a few hundred billion dollars in a short timeframe. In its quest to slowly drain the balance sheet, there was a blip upwards during this time.

Imagine what it will look like if a major bank were to fail.

The Fed is reacting to what happened in the past and not what will happen in the future. It’s not that they should know what will happen in the future, and it shouldn’t be left to any central planner to try.

But you would think the Fed would be able to see what is happening a little bit. Just as they missed the spike in consume price inflation that was coming in 2022, they are missing the major recession and the popping of the Everything Bubble that is coming.

When we hit some kind of financial crisis, the Fed will forget about price inflation again and start pumping new money in to bail out financial institutions and the bond market. It’s as if they can’t see it coming.

It’s a bad cycle that doesn’t stop, and it only seems to get more extreme each time.

The Biden team is trying to throw everything they have at Trump and his supporters. They have tried just about everything short of assassination at this point, at least that we know of.

The latest Trump indictment relates to Trump’s challenge of the 2020 election and the events of January 6, 2021. I was expecting the indictment to say that Trump is guilty of inciting violence – even though he did no such thing.

But the charges against Trump are really just that he openly challenged the election results and didn’t go quietly into the night.

These latest charges are not just a hit against Trump and an attempt to get him in prison. It is an attempt to criminalize speech that goes against the official narrative.

The Constitution and Federalism

The Biden team is trying every avenue to get Trump arrested and imprisoned. They are using state and local governments, and they are using the federal government with the Department of Justice (not well named).

We know there are many thousands of laws and regulations at the federal level. Most people are unaware that the U.S. Constitution only mentions three crimes at the federal level. They are piracy, treason, and counterfeiting. (You can investigate the Federal Reserve on the last one.)

Crimes of murder, kidnapping, fraud, theft and many other things are supposed to be left to the state and local level.

Of course, we are a long way from there at this point, but it is still an important reminder. If federalism were more alive and well, then a corrupt government department would be far more limited in its ability to prosecute people for political reasons.

A Ban on Free Speech

This sham indictment against Trump is targeting all Americans whether they know it or not. It means that you are no longer free to say what you want to say.

I don’t even care whether or not it’s true. If you aren’t threatening someone or encroaching on their property, then you should be able to say it.

There is always the issue of purposeful defamation, which libertarians can argue whether or not should be a crime. But that is not the issue at hand here.

Trump is being charged for questioning the election results and obstructing a political procedure. He didn’t obstruct anything by having a rally/ protest. He was not blocking any doors to prevent the people in Congress from entering the Capitol, nor did he instruct anyone else to do so.

Trump gave a speech that day. In the lead up to January 6th, he was questioning the election results. It doesn’t matter whether or not he was lying. It doesn’t matter whether he was right or wrong. What matters is that he should have the right to say it.

An Attempt to Stop People From Questioning the Narrative

This is similar to the sham lawsuits against Alex Jones for questioning a school shooting. He was found civilly liable for a ridiculous amount of money. It was an attempt to shut him up.

If you are not allowed to question the official establishment narrative of a story, then you live in a tyranny. It means the tyrants can do whatever they want and lie about. If anyone tries to question the actual events, then they are subject to being thrown in prison.

It is a convenient way of trying to shut people up who speak out against official narratives.

Does this mean we can be thrown in prison if we question whether the COVID jabs were safe and effective?

Does this mean anyone who questions whether voter fraud took place is subject to criminal charges?

Does this mean that if you question the official narrative of 9/11 or the JFK assassination that you risk being locked up for the rest of your life?

The latest charges against Trump are really charges against the American people, including those who don’t like Trump. It is an attempt to ban free speech. You can only speak if you say things that are pleasing to the authorities in charge. Otherwise, like Trump, you risk being tossed in the detention camp.