Alan Greenspan has died as the age of 100.  Greenspan was chair of the Federal Reserve from 1987 to 2006.  He gained attention early on in his career in libertarian circles because of his affiliation with Ayn Rand.

Greenspan wrote one of the best articles on gold, which was published in one of Rand’s books in the 1960s.

I have written multiple times about Greenspan.  In 2017, I drew parallels with Greenspan and Colin Powell, and not in a good way.  Perhaps this is a bit too harsh on Greenspan since Powell’s lies led to about a million deaths in Iraq.

Greenspan is more of a disappointment.  He knew and understood the problems with a central bank.  He understood the benefits of a gold standard as compared to fiat money.  But once he gained power as chair of the Fed, he spent much of his time defending the establishment.  Imagine if he had used his time as Fed chair to promote a return to sound money.

In 2021, I wrote about how Greenspan once said that the Fed could somewhat mimic a gold standard.  The key word was “could”.  Maybe for a year or two, this is true.  But whenever a supposed crisis hits, the Fed is there ready to create new money out of thin air.  With a gold standard, that is not possible.

Greenspan understood in the 1960s that a gold standard was a barrier to government.  The politicians couldn’t easily overspend and run massive deficits with a gold standard.

Conclusion

Alan Greenspan was not a particularly bad Fed chair.  Sure, he gave us the tech bubble of the 1990s, and he gave us the housing bubble of the 2000s, which popped after he left office.  But Greenspan was in there for a long time.  It probably wouldn’t have been much different if Reagan had appointed someone who was thought to be more conventional.

And that’s just the point.  Greenspan had this knowledge, but he didn’t use it for good once he gained significant power.  He was like many politicians except probably smarter.

There is a peace deal between the U.S. and Iran, sort of.  It is a “Memorandum of Understanding” (MoU).  You can read the text here.

The war hawks are not happy with this thing, and it is easy to understand why.  They are attacking the deal, but most are withholding really sharp criticism of Trump, who did their bidding for the last year or so.

The fact that the neoconservatives/ war hawks/ Israel firsters (they mostly overlap) are unhappy with this deal should give us a great deal of optimism.  Even if the war against Iran was a huge mistake, and even if the peace plan involves spending more taxpayer money, it is probably the least bad outcome at this point.

So, I hope this MoU sticks and it becomes something of a permanent peace plan.  I am not that optimistic because the Israeli state does not want peace, and Iran has already again closed the Strait of Hormuz because Israel is not withdrawing from Lebanon.

The fact that Israel was supposedly not involved in this peace plan says a lot.  It wouldn’t have happened if Israel had been involved.  The problem is that the agreement states that Israel will stand down, which includes in Lebanon.

Like any agreement, it is the consequences that matter.  What happens if Israel doesn’t abide?

If I were an Iranian official, I would want something in writing from the United States that the U.S. will stop sending any money or weapons to the state of Israel if Israel does not stand down.

The JCPOA with a Reconstruction Fund

The MoU is supposed to enforce that Iran will not get a nuclear weapon.  But Iran already agreed to that many years ago in the JCPOA, which included inspections.  The JCPOA was signed under Obama, which was one of the few good things that Obama did while in office.

Trump tore up the JCPOA in his first term.  But even after Iran was attacked in the summer of 2025, Iranian leadership was still agreeing to inspections to ensure they did not develop a nuclear weapon.

(It is the height of hypocrisy that the U.S. government demand that another nation not have a nuclear weapon, but Iran was still willing to go along with that to avoid a conflict.)

Now, Trump is bragging that he made sure that Iran won’t get a nuclear weapon.  This MoU looks a lot like a return to the JCPOA, except:

1. Iran may get to charge a “toll” for the passage of commercial vessels through the Strait of Hormuz after 60 days (Item #5).  Remember, prior to 2026, there never was a toll going through this waterway.
2. The U.S. will “remove its forces from the proximity of the Islamic Republic of Iran within 30 days after the final Deal.” (Item #4).  It’s hard to say what constitutes “proximity”.  Is this 5 miles, 100 miles, or 300 miles?
3. There is a “mutually agreed plan with at least USD 300 Billion, for the reconstruction and economic development of the Islamic Republic of Iran.” (Item #6).  That means Iran will get a minimum of $300 billion.  That is not $300 million.  That is 1,000 times that amount.  It’s not exactly clear who will be forking over this money, but it is hard to believe that some of this won’t be coming from U.S. taxpayers.
4. Iran will get back “frozen or restricted funds and assets” (Item #11).
5. The U.S. will terminate all sanctions against Iran (Item #7).

Unless this is one giant bluff by Trump, it is clear that Iran has Trump by the testicles.  It is so bad that Trump has to make Netanyahu and other Israeli officials steaming mad.

Maybe Iran should have demanded that Israel undergo nuclear inspections as part of this deal.

Somebody somewhere must have told Trump that Iran still has missiles and can still do damage.  And if the oil isn’t flowing, the price will continue to go higher, and we could be looking at something like a global depression.

So, after death and destruction, destroyed military bases, and higher oil prices, it has resulted in something resembling the JCPOA with a whole bunch of new benefits showered upon Iran.

The Frozen Assets

As mentioned above, part of this MoU says that Iran will get back funds and assets that had previously been frozen.  Of course, these assets never should have been frozen in the first place.  It was theft on the part of the U.S. government.

The war hawks are heavily criticizing this as giving money to Iran.  But this is Iran’s money.  They are just getting it back. (I’m not talking about the $300 billion for reconstruction.)

But there is an important point to be made here.  Republicans have been openly critical of Obama’s Iran deal because, they say, he gave them billions of dollars.  This was never truthful because the Obama deal simply allowed Iran to get some of their own money back.

More importantly, Mr. Donald Trump himself was critical of Obama and the JCPOA for supposedly handing over billions of dollars to Iran.

Hey Trump, at least when Obama did it, he didn’t start a war, get a bunch of military bases destroyed, and give control to Iran over the Strait of Hormuz.

Trump Critical of Israel

It’s hard to say how much of this is a show and how much of it is real.  JD Vance has been sending warning shots to Israeli leaders saying that Trump is the only leader in the world outside of Israel who even likes Israel. Therefore, Vance says, they should be nice to Trump.

Trump questioned the other day about the proportionality of Israel’s response to an attack.  He asked whether they really needed to blow up an entire apartment building in Lebanon and kill innocent people.

This is coming from a guy who, just a couple of months ago, threatened to destroy an entire civilization.  It doesn’t get any richer than that.

The War Hawks vs. Trump

After the war started against Iran, I predicted that the war hawks (who were previously never-Trumpers) would eventually turn on Trump.  They are now turning on him because of this deal with Iran.

Trump has JD Vance on clean-up duty, including with an appearance on Megyn Kelly’s show.  Vance is trying to get back some of the support from the America first crowd that didn’t like this war.

While people like Tucker Carlson and Megyn Kelly may praise Trump for making peace with Iran, I don’t think they are ever going back to supporting Trump the man.

Before Trump even went to war against Iran this year, he already had gone to war with the true America firsters.  He got rid of MTG and was on his way to getting rid of Thomas Massie.  He had already gone after Tucker Carlson.  Trump has attacked many people who previously supported him.  Does he really think he can get them back just by sending Vance out on the circuit?

You might see Trump hit an all-time low in approval for any president in history.  He has the hardcore MAGA who will support him no matter what.  But even here, he seems to be weakening.  What do they do when they turn on Fox News and hear about how their wonderful president capitulated to Iran?

On this peace deal with Iran, I support Trump/ Vance over the war hawks because I want peace.  But it doesn’t change the fact that Trump is a war criminal.  He can’t undo his previous crimes.  He didn’t have to choose this war.  He didn’t have to buddy up with the neocons while going hard against Massie.  He didn’t have to blatantly lie about blowing up a school in Iran with young girls.

I am hesitant to criticize this MoU because I want peace.  And this MoU is about the least bad option at this point.  At the same time, we shouldn’t forget that this was completely unnecessary.  Trump could have signed this exact same deal months ago without the killing and destruction.  In fact, he could have signed a much better deal that didn’t shower all of these extra things to Iran.

But Trump chose to side with the war hawks.  He listened to Lindsey Graham over Tucker Carlson.  Now the war hawks are against Trump again as soon as he lightened up on the war making.  Trump deserves everything bad and more that is happening to him.  I can’t not criticize him after this complete and utter disaster that he has given us.  At the same time, I pray for peace.

The FOMC released its latest statement on monetary policy.  This was the first meeting and statement issued with Kevin Warsh as the new Fed chair.  The Fed will maintain its target range for the federal funds rate at 3.5 to 3.75 percent.

There were a few notable things with this policy statement.  First, it was extremely short.  If you look at this FOMC statement compared to previous ones, it is quite brief.  There are about 6 meaningful sentences in the entire statement, and even “meaningful” is up for debate.

Also notable was the vote itself.  The statement was approved by a 12 – 0 vote.  Compare that to the previous statement in late April when there were 4 dissenting votes for various reasons.

The statement did acknowledge elevated inflation (price inflation).  It stated: “Inflation remains elevated relative to the Committee’s 2 percent goal, in part reflecting supply shocks that have driven price increases in certain sectors, including energy.  The Committee will deliver price stability.”

The first part is mostly correct, but we shouldn’t discount the fact that price inflation was above 2% even before the war against Iran started.  Whether or not the Committee will deliver price stability remains to be seen.  But given the Fed’s track record, it doesn’t look good.

They consider price stability to mean that your dollars are being devalued by 2% per year.  It isn’t the normal person’s definition meaning that prices don’t change much at all.

Warsh Independence?

The rate announcement was not surprising.  There is almost no way the Fed was going to lower rates with price inflation having spiked higher in the last couple of months.

Also, Kevin Warsh probably feels the need to demonstrate his independence, or at least an appearance of some independence.  He doesn’t want to be referred to as Trump’s puppet.

Aside from the economic pain ahead, it will be entertaining to watch how Trump handles these Fed decisions. If price inflation remains above 2% and the Fed doesn’t lower rates any time soon, you have to wonder if Trump will start attacking Warsh the way he attacked Powell.

Trump was highly critical of Jerome Powell for not lowering interest rates fast enough or aggressive enough.  Trump called him “Too Late Powell”, among other things.

Imagine if Powell had done what Trump claimed he wanted.  With the tariffs, the war, and the skyrocketing debt, you can just imagine where the CPI numbers would be now.  We might be looking at 6% or higher annual price inflation.  If anything, Powell was too dovish from a conventional standpoint and shouldn’t have been lowering rates as aggressively as he was when price inflation was still above the supposed 2% target.

We’ll see if Warsh is independent.  My best bet is that he will be somewhat independent from Trump, but he won’t be independent from the financial establishment.  In some ways, the Fed chair isn’t as powerful as one might think because the Fed chair is often just doing what the market expects.

The Balance Sheet

While most everyone focuses on “rates”, meaning the federal funds rate, the actual money supply does not get that much attention.

The Implementation Note with the FOMC statement indicates that the Fed will continue to engage in monetary inflation as needed (wanted).

If you look at the Fed’s balance sheet, they were in deflationary mode for about three years (2022 to 2025).  Since late 2025, the Fed is gradually starting to expand again.

The balance sheet is still vastly higher than it was at the start of 2020.  The Fed is now resuming its trajectory higher in a far less dramatic way.  This is not surprising given that the national debt will soon top $40 trillion.  It makes you wonder how the Fed can ever stop buying U.S. Treasury securities at this point.

Since 1913, the default mode has generally been inflation.  This is why the dollar has lost about 98% of its value during that time.  Ultimately, the only answer the Fed has to “fixing” the economy is to create more money out of thin air.  It will almost always try to kick the can down the road a little farther.

Best of luck to Kevin Warsh.  He won’t be in an enviable position if we see a recession coupled with continued price inflation above 2%.  He will also have to deal with the unpredictability of Donald Trump on top of it.  Imagine if Paul Volcker had had to deal with a president calling him a loser.

Prepare for more monetary inflation and price inflation.  It is the only political answer the Fed has to all of the political and economic problems.

The latest CPI numbers came out for May 2026, and it wasn’t a pretty picture.  The CPI went up 0.5% in the month of May.  It spiked higher to an annual price inflation rate of 4.2%.  This is more than double the Fed’s supposed target of 2%.

We can blame the war against Iran for some of this spike in higher prices.  We obviously feel it at the gas pump.  But before you fully blame the inflation problem on the war, consider that even the CPI less food and energy was up 0.2% for the month.  The CPI less food and energy now stands at an annual rate of 2.9%.

So, even taking out food and energy, we are still at 2.9%.  This is interesting, but there is no reason to take out food and energy when considering the hurt it is doing to the average American.

With this news, gold and stocks went down in price.  Both already had a rough week, so maybe it is just a continuation of that.  But the prospect that the Fed cannot lower its target rate – and might even have to consider raising it – does not bode well for asset prices.

Several years ago, the Fed announced that it wanted to average 2% over a period of time instead of just targeting 2%.  But they never specified over how much time, and this was said when consumer prices were supposedly going up less than 2%.  Now that price inflation is above 2% (and has been for several years), we don’t hear about this averaging any more.

When the Fed was lowering rates in 2024 and 2025, Powell kept saying that we were on target to get to the 2% inflation mark.  How’s that working out?

Good Luck, Warsh

Kevin Warsh just assumed the position of Fed chair on May 22, 2026.  He hasn’t been in there a month, and he already has a disaster on his lap.

It seems almost impossible at this stage that the Fed would lower its target interest rate.  But that is what Trump has been calling for.  It is what Trump was hounding Powell for.  Remember all of Trump’s insults and name calling towards Powell.  If anything, it seems Mr. “Too Late” Powell was too late in hiking rates.

While the economic conditions are devastating for the American people, and will continue to get worse for now, it will be hilarious to watch Trump become even more unhinged.

Trump reminds me more of Biden every single day, and it isn’t just because of the mental decline.  Like Biden, Trump thinks if he can just repeat something often enough, then it will just be assumed to be true.  Biden kept repeating “safe and effective”.  Biden would tell us that the economy was doing well.

Trump says we have beaten Iran.  Trump keeps saying that we are the hottest country and that the economy is doing great.  After the CPI numbers came out today, Trump said that inflation would fall like a rock as soon as the war is over.

Even assuming this were true, what if the war isn’t over for years?

What is Trump going to do when the economy is doing terrible and the Fed can’t feasibly lower rates because inflation is running high?  That is the situation we are in now except the economy could get far worse.

Will Trump start attacking Warsh just as he did with Powell?  Trump appointed Jerome Powell in his first term, but it didn’t stop him from attacking Powell when it became convenient.  If Trump immediately starts attacking Warsh, it won’t be a good look for Trump.  Of course, not much is a good look these days for Trump.

What if There is a Recession?

The stock market has still been hitting all-time highs recently, in spite of the war against Iran and the higher oil prices.  But there has also been a lot more volatility.  The American middle class is not doing nearly as well as the stock market, but even the stock market may not hold up much longer.  Some of this will depend on the actions from the Fed.

We seem to be getting closer to a 1970s type situation of stagflation.  What happens when the economy starts going into a recession but the Fed can’t easily lower rates because of price inflation?

Does the Fed just ignore it and allow the rate of price increases to potentially go even higher?  Does the Fed fight inflation (which it helped cause) and actually allow a deep recession?

This is also where the spending and debt burden become a major problem.  The Fed has returned to mild monetary inflation at this point.  Does Warsh and the Fed even have an option of being like Paul Volcker in the early 1980s and having a really tight monetary policy?  What would this do to the exploding debt and the interest payments?

This is why the American middle class is going to continue to struggle for the foreseeable future.  We need a drastic reduction of federal spending, which is nowhere in sight.  We need a drastic reduction in regulations.  We need a somewhat stable monetary policy to stop the continued price inflation.  Thomas Massie was fighting for these things, and the voters are kicking him out of office.

We certainly shouldn’t count on any politicians or Fed officials to make things better.  We can only hope that they won’t make things dramatically worse.

I once thought that, if only a libertarian could get a national audience to deliver a libertarian message, then we could really move the country into a libertarian direction.

Perhaps I was a bit naïve.  But I wasn’t completely wrong either.  Our country has shifted slightly in a libertarian direction.  Unfortunately, the policies coming out of Washington DC generally do not reflect the subtle change in public opinion.

My theory was put to the test.  It was shortly after I thought this that Ron Paul ran for president as a Republican in 2007.  He really did get a national audience because he was permitted in most of the debates.  His total talking time was generally just a few minutes in each debate because of the size of the field and a favoritism towards letting certain candidates talk more.  Still, he had a little time to deliver a libertarian message to a national audience.

One could argue that the majority of people didn’t watch the debates.  It could be argued that Ron Paul didn’t have the name recognition that some of the other candidates had.  But for anyone who cared to pay attention, the message was there.  In interviews, Ron Paul would often cite books, authors, and websites as a reference.  Where else on national television would you hear references to Austrian school economics?

From 2007/ 2008, we got the Ron Paul revolution.  It was a revolution of ideas.  He ran again in 2011/ 2012.  When you couple this with the growth of the internet and social media, there is no excuse for almost anyone to not be familiar with libertarianism.

Maybe the Libertarian Party hasn’t always been the best representative of the libertarian philosophy, but again, anyone who has any curiosity and does any research can become quite familiar with libertarianism.

Moving the Needle

The Ron Paul revolution made a difference.  There was definitely a small segment of the population who turned to libertarianism and never turned back.  It may be 2% of the population.  It may be closer to 5% of the population.

Even more, it moved the needle in public opinion in other ways without necessarily fully converting people to libertarianism.  Ron Paul’s campaigns called attention to the Federal Reserve.  He laid the groundwork for making it acceptable to be a Republican and oppose war.

In many ways, Ron Paul set the stage for Trump’s somewhat anti-war message in 2015/ 2016.  Trump was able to say on a debate stage that Bush lied us into war in Iraq.  This was during the Republican primaries.

There is now a certain faction on the political right who oppose Trump’s war in Iran.  While it is depressing to see how many right-wingers have just gone along with Trump and the Fox News talking points about Iran, it is at the same time encouraging that a portion of the right is still opposed to war.

The Depressing Parts

I know several people, including at least one closer friend, who were all-in for Ron Paul in 2007/ 2008.  Yet, I would no longer consider them to be libertarian in any significant way.  The crazy thing is that I see these people go in completely different directions.

I have seen several people who supported Ron Paul who are now total leftists.  And I don’t just mean libertarians who identify more with the left than the right.  I mean they are leftists without much libertarianism at all.

I also know people who supported Ron Paul who are Trump/ MAGA supporters.  And I don’t just mean they voted for Trump.  I mean that they still ardently support Trump, even after the war against Iran started.

This is depressing indeed.  Maybe it is a testament to Ron Paul on how he was able to bring people together.  In some ways, it shows that a lot of people are seeking honesty and someone who is real.  That’s the good news.

The bad news is that these people don’t really have libertarianism in them.  I, personally, don’t understand how someone could have been so supportive of Ron Paul and his message at one time and now completely abandon the philosophical principles that Ron Paul preaches, even to this day.

It just shows that there is something to the argument that only a small percentage of the human race is disposed to libertarianism.  I’m sure you know people who are libertarians who have siblings who do not share their political views.  We are all exposed to different and unique experiences in our lives, but there is no question that your genetic makeup plays a role in your politics.  Some people will never be libertarians no matter how much evidence and persuasion is involved.

Getting More Liberty

The other piece of good news is that we don’t need a large percentage of the population to adopt libertarianism to at least move in a more libertarian direction.

You can convince a majority of people that the U.S. government shouldn’t be going around starting unprovoked wars.  It doesn’t mean that people will generally favor an end to all government welfare.  It doesn’t mean that they will advocate for a total split between education and the state.

The reality is that most people will never be hardcore libertarians.  They just don’t have the genetic makeup for it.  But we don’t have anything close to hardcore libertarianism in the United States or anywhere else in the world with a significant population.

You don’t have to be a hardcore libertarian to recognize that our government shouldn’t be bombing Iran, kidnapping foreign leaders, locking us up for a virus, and spending $7 trillion per year.

We can have a decent and mostly civilized society without adopting hardcore libertarianism.  Imagine how much better most Americans’ lives would be if the U.S. government weren’t fighting wars, funding wars, and creating money out of thin air to pay for it.  Imagine if the U.S. government spent half the amount it does right now and we had zero inflation.  Our living standards could be enormously higher than what we have now.

This does not mean we should abandon a hardcore libertarian message.  In some ways, it is more important than ever.  We should sell the benefits of liberty, but we should also appeal to people’s morality.  We shouldn’t be wasting money on missiles to attack Iran, but more importantly, our government shouldn’t be murdering people in Iran in our name.

We can gain far greater liberty by selling a libertarian message.  We don’t need a majority of the population to become libertarian, as that is probably not possible.  But we need that libertarian message to move people in that direction, and I believe it has already happened to some degree.