We are in the Everything Bubble.  Every major asset is in a potential bubble.  This includes stocks, bonds, and real estate.  It might also include crypto currencies.

The yield curve was inverted in 2023 and much of 2024.  It is still relatively flat, but it is somewhat normalizing, where longer-term rates are above shorter-term rates.

The yield curve has been an accurate predictor of recessions.  When it normalizes, the recession hits.  The exception was 2020 where the slowdown in the economy was covered by trillions of new dollars created by the Fed in a very short period of time because of government lockdowns.

A recession is looking highly likely in 2025.  Couple this with stocks hitting new all-time highs recently and it is a recipe for a major crash.

If we do get a deep recession soon, stocks will get punished hard.  Real estate prices will likely plummet.  They have already started to soften.

Bonds are more uncertain.  If people do not see inflation as a big threat, then investors will seek safety in bonds.  This should lower rates and raise the price of bonds.  In the short run, bonds may do ok for investors.

The Bitcoin Bubble

I have long thought that crypto currencies – and Bitcoin in particular – are tied to the Everything Bubble.

It is possible that Bitcoin could hold up while most other cryptos find their true value somewhere near zero.

I used to think that Bitcoin would go down close to zero one day, but I’m not convinced that will happen any time soon.  There are diehard Bitcoin enthusiasts who would sell their first-born child to get their hands on more Bitcoin.  They think it is the answer to all of our problems in life.

“Bitcoin will fix that.”  Well, it hasn’t yet.

There are hardcore people who will insist that Bitcoin is the new digital gold and that it will fix just about anything wrong with our economy.  Some will believe this until the day they die.  For this reason, Bitcoin will never go to zero in my lifetime.

Of course, even a $100 trillion bill in the old Zimbabwe currency will fetch a few dollars on Ebay just as a novelty.

Anyway, the bigger question is what will happen to Bitcoin (in terms of dollars) if and when the crash happens in the economy.

Perhaps the last week has given us a little taste.  It has been far from a perfect correlation, but it seems that Bitcoin has generally gone down with stocks.  This is especially the case with the Nasdaq.

As I write this, Bitcoin is below $85,000.  It was over $100,000 not that long ago.  That is quite a plunge in such a short period of time.

The main point here is that it is quite possible that the Bitcoin bubble could burst in a major way in tandem with a severe recession.

I don’t know if that means it will go down to $50,000, or $10,000, or $5,000.  But I wouldn’t discount any of these numbers.

Is Gold Part of the Bubble?

I’m not sure that gold is part of the Everything Bubble.  So maybe I should call it the Most Everything Bubble.  This was certainly true up through 2023, but gold has gone up in price (in terms of dollars) a lot since then.

If it is part of the bubble, it is the latecomer in the game.  Plus, I can think of very good reasons that gold would be going higher right now, including foreign central bank buying in order to get away from the U.S. dollar.

It will also be interesting to see if Trump and Musk are able to open up Fort Knox and look inside.  Will all of the gold be there?  And if not, what will that do to the price of gold?  If anything, I would think it would send it higher.

The most likely scenario with gold is that it performs in a similar fashion to what happened in the 2008 financial crisis.  Since it is an asset, it will probably go down in price initially in a recession.  People desperate for cash will sell anything, including gold.

When gold went down in late 2008, it wasn’t as bad as the fall in stocks, and it was also relatively short-lived.  The price recovered quickly.

With all of the mess going on in the world and with the debt continuing to increase, I will take my chances with some gold in my portfolio.  It would be a bigger risk to not have some.

If the price of gold goes down in a recession, we can be confident that the Fed will start running its digital printing press again in short order.  This will be bullish for gold in the longer run.

Overall, I have been pleasantly surprised by the things Trump has done in his first month in office.  I have my major criticisms such as his desire for higher tariffs and some of his disturbing comments about taking over Gaza.

I also don’t completely agree with the methods of trying to downsize the federal government, but I’m also not sure how else it could be done.

I understand the reasoning behind ordering federal employees back to the office.  There is a perception that there are all of these government employees sitting at home collecting a paycheck.  And while that might be true for some, it isn’t true for all.  Plus, having to provide office space just increases expenses for the taxpayers.

I am also not sure about firing all federal government employees who are on probation.  This can just mean that they were recently hired for their position and haven’t had a review.  It is costly to hire and train new people, and we also don’t know that the new person is any worse than someone who has been there for 30 years.  In fact, the government employee who has been there for 30 years might be more bureaucratic than the new person in some cases.

If we are talking about getting rid of IRS workers, I’m all for it.  Of course, even there, you need someone to process the tax refunds this season.

I don’t want to wait twice as long at the passport office because they are understaffed.  If you are getting rid of a passport requirement to travel, that’s fine, but I don’t think that proposal is on the table.

So, in some ways, I think this attempt to downsize the federal government is chaotic.  Of course, not doing anything and allowing it to stay the course is more chaotic.

Some Sympathy

Now that some federal workers are being laid off, we get to hear sob stories from the establishment media. For example, we might hear about a single mom who found out on Valentine’s Day that she lost her job and will have trouble paying her bills soon.  Of course, there are many people who get laid off every day from jobs that aren’t government jobs and we aren’t usually treated to the sad stories on television.

The thing that really irritates me is that the people who are calling attention to these stories now mostly didn’t have a word to say when people were getting fired for not getting a shot in their arm in 2021 and 2022.  There were tens of thousands of people who were good and productive workers, yet they got fired because of vaccine mandates for “vaccines” that didn’t even stop transmission of what it was supposed to prevent.

Just remember that every time someone is shedding a tear for other people who were laid off because of DOGE.  Did that same person shed a tear for all of the people fired for disobeying the Biden handlers’ mandates?

With that said, I don’t think we should be insensitive to people being laid off now.  Most people who work in government are not part of the ruling elite.  They found a job, probably with good benefits, and they probably do what they are supposed to do.  We shouldn’t cheer on the fact that they lost their job.  We should only cheer on that the taxpayer will save money by the government not doing things that it shouldn’t have been doing in the first place.

Can We Accept a Win?

Even though I have my criticisms of Trump and Musk, can any libertarian possibly imagine a better first month from any administration?

I can’t even imagine a libertarian getting in office and doing this much in such a short time frame.

There are some self-identified libertarians who are critical of Trump and Musk and saying that they should go through the proper channels with Congress.

Maybe that is the preferred method, but we all know what would happen.  Let’s say they tell Congress, “Please pass some legislation to allow us to look into the money that is being spent by USAID and other organizations.”  Maybe they’ll get around to it someday after you’re gone.

Many of the executive orders coming from Trump are undoing things that were already put in place by the executive branch.  Some of it is repealing stuff that is blatantly unconstitutional.

Congress has to pass legislation to fund all of these alphabet agencies, but they are really under the executive branch.  It is kind of a joke for anyone to suggest that we need legislation in order to look at where money is being spent.  That’s our money.

Ron Paul tried for many years to get an audit of the Fed.  Now, Elon Musk and company are talking about just doing it, along with checking to see if there is gold stored at Fort Knox.  Why would anyone complain about this other than because they just hate Trump or they have something to hide?

What Would You Do?

You can’t beat something with nothing.  If you are supposed to be on the side of liberty and you are criticizing Trump and Musk for all of this exposure of corrupt government spending, then what would you do?

If you were given the keys to the White House, what would you do?  Would you beg Congress to please audit some of these agencies?  Would you beg Congress to please start cutting the funding in the next fiscal year?

This is a serious question.  Our tax money is not just being wasted but used against us.  Our money is being used to degrade our culture, to punish people not obedient to the system, and to propagandize us.

I seriously doubt that anyone could have done a better job than Elon Musk and his team have done in the last month in exposing the highly corrupt spending.  Again, this is all of our money that was taken from us.

If you want to send your money to media companies overseas, be my guest.  If you want to fund diversity programs and transgender comic books in foreign countries (or at home), go for it.  But don’t take other people’s money by force to do it.

If Rand Paul had become president on January 20, 2025, would we be any farther ahead than we are right now?  Maybe we wouldn’t have the tariff nonsense, but it is hard to believe that anyone would have uncovered as much as what has been uncovered in the first month.

This is a sincere question if you are highly critical of Trump and Musk.  What would you do?  I don’t want to hear that you would go through Congress because you might as well say that you would do nothing.

Some people just never want to accept a win.  One year ago, could anyone have realistically expected this much government waste and corruption to be uncovered in such a short period of time?

While it is valuable information to know your financial net worth, you also have to be careful with relying on this information when determining financial independence.  Even aside from financial independence, you can’t rely on your net worth to determine your retirement plans.

One of the primary reasons is that you have to take into account your cost of living or your expected cost of living.  You could have a net worth of $3 million at the age of 55, but you can’t retire on this if you are expecting to spend $300,000 per year in retirement.

If you have a net worth of $3 million per year and only plan to spend $50,000 per year in retirement, this is a whole different ballgame.  If you diversify your investments and nothing crazy happens (like hyperinflation), then your money should last.

Your Home

There is debate about whether to include your house in your net worth.  For your net worth, I think it is appropriate.  After all, if you own a $500,000 house with only $100,000 left on a mortgage, you are far better off than someone who owns a $500,000 house with a $400,000 mortgage.

However, you do have to be careful counting your house when it comes to financial independence or retirement.

Let’s say that Person A rents an apartment but has a net worth of $2 million that is in investments.

Person B has a house valued at $2 million and has paid it off completely, but has no investments and almost nothing in the bank.

They both have a net worth of $2 million.  Yet, they are in very different situations.  Person A, depending on his expenses, might be close to retiring.

Person B might be close to retiring if he is planning to sell his house next month in order to rent or to buy something like a $200,000 house.

However, if Person B has no intention of moving any time soon, then the $2 million net worth means almost nothing in terms of being financially independent.  It’s the same situation as someone who owns a $300,000 house free and clear with no other assets.  If anything, the $2 million house is a bigger liability because of higher property taxes and maintenance costs.

Person B’s one advantage is that he doesn’t pay rent and doesn’t have a mortgage payment.  That’s the only advantage, unless he plans to sell his house and downsize.

Other Factors

There is a lot of messiness with calculating net worth and financial independence.  One big factor is taxes.

If someone has $1 million in a 401k plan, that will be taxable when it is taken out.  Meanwhile, someone else might have $1 million in a Roth IRA, which isn’t taxable upon withdrawal.

Both people have a million dollars, but one person’s million dollars is more valuable than the other’s because it isn’t subject to taxation.

I don’t even know how to fully account for this unless you want to get deep into the numbers and tax brackets.  But it is at least something that should be considered.  If you have a lot of money in a Roth IRA, you won’t need as much of it as you would need in an account that will be taxed.

The 4% Rule

In the financial independence community, people often reference the 4% rule.  This means that you should be able to live on 4% of your financial assets.  Another way to say this is that you need 25 times your annual expenses.

If you are planning to spend $100,000 per year in retirement, then you need $2.5 million to be financial independent and not have to generate additional income.

I am not that confident in this rule.  I think it is assuming stock market returns that we have seen more recently without considering that returns may be far less in the future.  Just a reversion to the mean will mean far lower returns in the coming years as compared to what we have seen over the last 15 years.

Another problem with the 4% rule is that it doesn’t seem to account for age.  If you spend $100,000 per year and have $2.5 million, it will likely be enough for you if you are already 80 years of age.

If you are 40 years old and plan to retire forever on this money, I doubt it will be enough unless you can generate really good and consistent returns.

One last problem with the 4% rule is inflation.  This is especially true for the younger person.  What if we have a period of high price inflation?  That $100,000 per year in expenses could go up to $150,000 per year in less than a decade.  If your $2.5 million didn’t grow to $3.75 million over that same time, then you are now living on more than 4%.  You can see the problem.

All it takes is a bad bear market and a few years of high price inflation to throw everything off.

This is why the 4% rule should only be a guide.  There is no guarantee of what will last in retirement.  You should at least be aware of the dangers of depending on the 4% rule.

Conclusion

Beware of anyone trying to make financial planning and retirement planning sound easy.  Also be careful of assuming high investment returns.

We often hear that the U.S. stock market generates 8% annual returns.  But these are not consistent returns.  They don’t account for inflation and taxes.  And most of all, there is no guarantee that they will continue.

When looking at financial independence and/ or retirement, your expenses matter a lot.  A paid-off house shouldn’t be counted in your column of financial assets unless you are planning to sell it.  The benefit is that you can lower your expense side if you don’t have rent or a mortgage payment.

Lastly, the thing that matters most is that you save.  Do something!  If you save money and buy investments that don’t do particularly well, you will still be far ahead of someone who doesn’t save at all.

The latest consumer price index (CPI) numbers came out for January 2025.  The numbers came in a little hotter than expected.

The CPI rose 0.5% in January, and the year-over-year rose to 3%.  It seems to be getting farther away from the Fed’s 2% target now.

The median CPI, which tends to be less volatile, was up 0.3% in January.  It now stands at an annual rate of 3.6%.

Yields on bonds went up on the news.  Stocks went down, but partially recovered during the day.  The Nasdaq actually finished slightly higher on the day.  Gold went down on the news but also recovered through the day.

My Experience at the Grocery Store

I went to the grocery store over the weekend before this latest CPI report came out.  I noticed some higher prices.  The price of some dark chocolate bars had seemed to have gone up.  The price of macadamia nuts and some other nuts was higher than what I had previously paid recently.

The eggs were the biggest shock.  Most of the shelves were empty.  Of the egg cartons that were there, there weren’t many choices.  I could get the “cheap” store version.  A dozen was just under $5, which is more than what organic cost for me five years ago.

There were also some expensive organic eggs that were more than $10 for a dozen.  Those were my only choices.  There are usually less expensive organic eggs that I buy.  Maybe a new shipment of eggs was coming the next day.  Still, it was noticeable.

When I compare prices to what they were five years ago, most things are quite a bit more expensive.  From my standpoint, given what I tend to buy, I think prices have gone up at a greater pace than what the price inflation numbers show.

Trouble for Trump

With the higher inflation data, this means that the Fed is less likely to lower its target interest rate.  It is more likely to continue its deflation of the balance sheet for a little while longer.

The yield curve was inverted for all of 2023 and most of 2024.  It is finally normalizing as longer-term yields are now above shorter-term yields, in general.

What will get the blame when the recession hits?  Will it be the tariffs?  Will it be the focus on spending cuts?

The tariffs are bad and hurt the economy and can contribute to higher prices.  Government spending cuts are good for the economy, at least in the long run, as resources are put to more productive uses.

The one thing that won’t get a lot of attention is the Austrian Business Cycle theory.  This is the main factor.  The Fed engaged in monetary inflation and artificially low interest rates during prior periods.  This misallocated resources and led to an artificial boom in the economy.  Now it has to be corrected.

If Elon Musk stays at it and spending actually goes down, then we will be better off if the recession hits sooner rather than later.  In three years or so, maybe we will have a real recovery with a reduced presence of government.

It is more important than ever to promote libertarianism and give proper explanations for what is happening in the economy.  The massive federal spending and the Fed’s willingness to monetize the debt in prior years is to blame for what is to come.

Donald Trump has a lot of issues, and this country will continue to have a lot of major issues.  But for any libertarian – or anybody at all – to say that Trump is just another part of the ruling elite is to not acknowledge the situation.

There are some people who just can’t find any good no matter what.  The Berlin Wall comes down and the Soviet Union collapses, but there are still people there assuring us that communism is actually winning and gaining ground.

Trump has a lot of faults, and many of them are indefensible.  It makes it much harder to defend him against his leftist enemies who like to call him a dictator when Trump makes threats to other countries.

Trump has made some disturbing comments about Gaza.  He doesn’t understand the situation in Ukraine well enough.  His threats over the Panama Canal are unacceptable.  His use of tariffs to blackmail other countries is immoral and harmful to us.

I also have a concern that there won’t be enough permanent changes coming from this administration on the good things.  If Trump uses executive orders to “fix” a lot of things, then they could just as easily be overturned by the next group that gets in there.

With that said, what Trump has done so far is absolutely incredible.  It is actually an embarrassment to the first Trump term and to every other administration of this century and probably long before that.

DOGE Shines a Light

In less than 3 weeks, Elon Musk and his DOGE team have uncovered more than every government agency has uncovered in the last 25 years.  It is actually shocking how much has been uncovered in such a short period of time just by actually investigating some things.

This is a little similar to what happened when Musk bought Twitter and exposed the government trying to “persuade” companies to censor content.  It wasn’t shocking that it was happening, and many of us knew it was happening, but we finally got the proof and the details of it.

With the exposure of USAID, it isn’t shocking that this stuff was happening.  It is just shocking that we are getting to see all of these details.

We know that the U.S. taxpayer through USAID was spending $1.5 million for promoting diversity in Serbia, $70,000 for a DEI musical in Ireland, $47,000 for a transgender opera in Colombia, and $32,000 for a transgender comic book in Peru.

These aren’t big amounts by federal government standards, but they are quite symbolic of what is going on.  The U.S. taxpayer has also been forced to pay many foreign media companies to spread the propaganda of the U.S. government.

And that’s just the point.  As Clint Russell pointed out, it isn’t just that this money is “wasted”.  It is money spent by the government to actively sabotage us – the American people – while enhancing the power of the ruling elite.

https://twitter.com/elonmusk/status/1887538325126262835?mx=2

Where Has This Been?

This just shows how evil, or at the very least, unconcerned, every prior administration has been for the last several decades.  While transgender comic books may be somewhat new, you know this has to go back many decades before the turn of the century and in agencies throughout the government.

How does Elon Musk come in and uncover more in 3 weeks than everything we’ve seen coming out of the government for the last several decades?  It is because he actually cared to do so and Trump let him do it.

Maybe it was the bullet to Trump’s head and all of the prosecutions.  But Trump 2025 is a different animal than before.

If Trump had officially won the 2020 election and continued in office in 2021, I don’t think this would have happened.  Maybe we had to suffer through Joe Biden for four years to get anything good and decent.  In saying that, I don’t mean to downplay the suffering and death that happened over Biden’s time in office.

If Elon Musk has been able to uncover this much in less than 3 weeks, what else are we going to see over the coming weeks and months?  Maybe the revelations will slow down, but it is nice to know that there are people in a position of power who are actually trying to uncover the truth.

Chaos

This has been a time of chaos.  We can still be sympathetic to government employees who might lose their job, as long as they aren’t the ones who were actively trying to destroy us.

At some point, things probably need to calm down a little.  I think there have been mistakes made such as forcing government workers back into an office and offering a blanket severance to anyone who quits.  Some of these actions could cause more spending.  If you get all of the people who issue the Social Security checks/ deposits to quit, I’m pretty sure Trump is going to have to refill those positions.

I know some libertarians might like that kind of chaos, but I don’t think we should wish for chaos.  We know that Social Security isn’t going away or even getting phased out under Trump.  We need some continuity and order given the realities.

It is also important to realize that some chaos is necessary.  When you have this monstrosity of a federal government doing all of these things and spending nearly $7 trillion per year, it isn’t going to be a pretty sight when things start to come undone.

Look at it this way.  There is going to be chaos no matter what.  If Trump 2025 did nothing new and allowed the federal budget and the debt to grow like crazy, we would eventually be hit with some kind of default or major dollar crisis.  Maybe we will get that anyway.  But at least this is a more controlled path to that.

I am not against giving severance pay to government employees in order to make it less chaotic and make some of them go away in a quieter fashion.  If we can eliminate many government jobs that aren’t necessary and are outright harmful, then we will be better off in the long run.

Supposedly, DOGE is going to be digging into the military next.  I hope they do not hold back.  We are paying for people to be stationed all over this country and all over the world, and most of it is not necessary to the defense of our country.  Some of it is obviously quite harmful.  There are literally hundreds of billions of dollars in waste per year to be found here.

For libertarians, we should celebrate these wins.  Trump is no Ron Paul, but who is?  Some of these actions would have been unthinkable a short time ago.  It is still stunning just how much has been done in the first 3 weeks of this administration.

The Senate saved the more “controversial” Trump cabinet picks for the end.  They are controversial because they sometimes tell uncomfortable truths to the establishment.  This included Robert Kennedy Jr., Kash Patel, and Tulsi Gabbard.

There was some controversy with Pete Hegseth too, which required a tiebreaking vote from J.D. Vance.  The controversy wasn’t really with Hegseth’s personal life.  It wasn’t even so much that he wants to “de-wokify” the military.  The controversy is that sometimes he just isn’t pro war enough.

I didn’t watch a lot of Gabbard or Patel, but I did watch a substantial amount of the questioning for Kennedy.  The senators, particularly those who are generously funded by big pharma, had the knives out for Kennedy.

The Democrat senators in particular showed just how awful they are as people.  They would comment or ask about five or six different things during their allotted time.  When Kennedy went to respond, they would cut him off or tell him to answer “yes” or “no” without allowing for any explanation.  It was a truly pathetic display of what happens in Congress.

I believe one of the questions was something like, “So, why Mr. Kennedy did you sell out?”  They should have just asked him when he stopped beating his wife.

Vaccine Obsession

The topic that perhaps got the most attention was vaccines.  The big pharma senators made it a habit to blame Kennedy for the death of any child in recent times that was attributed to the measles, polio, or any other illness that has a vaccine assigned to it.

The propaganda machine has made it so that any time someone brings up Kennedy, he is automatically associated with the issue of vaccines.  Kennedy has made it clear over the years that no vaccine is 100% safe or effective and that there should be more studies done to determine the risks and benefits.

They would certainly accuse Kennedy of being obsessed with vaccines, but I find it is actually the establishment people who are obsessed with vaccines.  Look at what Joe Biden and company did in 2021 and beyond.  They were so obsessed with vaccines that Biden stated several times that you can’t get COVID and you can’t die if you got vaccinated.

They were so obsessed with vaccines that they tried to mandate them for about 100 million people.  And if someone didn’t follow the mandate, then they were not permitted to work at their job.  In other words, get the jab or lose the ability to pay for food and shelter for your family.  Who is obsessed with vaccines here?

The blowhard senators questioning Kennedy from the left really liked to bring up the measles and imply that it is this horrible and deadly disease for children.  Of course, anything can technically be deadly to children, including the flu.  But the vast majority of children who had measles in the past just stayed home from school for a couple of days and quickly recovered.

As Marcia said in the Brady Bunch, “If you have to get sick, sure can’t beat the measles.”  There didn’t seem to be any controversy with this episode at the time.

Political Frustration

Kennedy certainly looked upset at times, but he was way too polite for my tastes.  I have read other people in comment sections saying the same thing.

Several times, Kennedy repeated that he is pro vaccine.  He repeated that he favors the childhood vaccination schedule.

Perhaps the Trump team recommended he say this so as not to upset any of the establishment Republicans who might vote against him.  This is why I wouldn’t make a very good appointee.  I would never get confirmed because of my responses to these ridiculous questions.

At the very least, I think Kennedy should have gone off on the so-called COVID vaccines.  Every time these horrible people brought up vaccines, Kennedy could have just gone off on the “experts” who said that COVID vaccines were effective in stopping COVID and preventing transmission.  I don’t think he would have lost support from anyone saying that.  There would have been quite a few people cheering at home.

Even the people who don’t feel strongly about the issue one way or another would have shaken their head in agreement with that.  Almost everyone knows people who were “vaccinated” yet got COVID anyway.

Abortion and Other Issues

When the horrible senators weren’t making up stuff about vaccines, they were questioning Kennedy on abortion and trying to play his views against Trump.  I don’t think this was effective.

They were also trying other “gotcha” questions and to call into question Kennedy’s competence.  Again, I would have had a different response than Kennedy.  I would have made fun of the people who were previously in the position of heading up the DHHS.  What have they given us?  More chronic disease?

The left also tried to use Kennedy’s voice impediment against him.  They would claim that he got flustered several times.  Maybe he was getting flustered by the stupidity and obnoxiousness of the questions.

They also used Kennedy’s own sister against him because of her unkind remarks.  To me, this is more of a reflection on her than him.

If I had a sibling who was a diehard statist who was up for a position like this, I really don’t think I would make it a point to publicly attack the person personally.  I might state that I don’t agree with their views.  I would certainly speak up for what I believe in.  But I don’t think I would personally attack a close family member in such a situation.

MAHA

I really do hope that Kennedy has a chance to “Make America Healthy Again”.  Or at least I want him to make America healthier than it has been.

Kennedy does not even need to implement any significant changes.  If he does, it needs to be in repealing regulations.  But the place where Kennedy will be most effective is just calling attention to issues.

You can recommend that fluoride not be added to water without forcing any local governments to do it.  You can recommend that childhood vaccines be more spread out so as not overburden a child’s immune system.  You can recommend that the food industry use less high fructose corn syrup, less processed foods, and less vegetable oils without mandating anything.  This has an impact and can spread.

Kennedy made this an issue for Trump.  They formed an alliance, which is just fine.  If it weren’t for Kennedy, this wouldn’t have been on Trump’s radar.  If it hadn’t been for Kennedy, who knows if Trump would have won the election.

If Kennedy doesn’t get confirmed, Trump should double down.  There should be a strong political campaign against every Republican who votes against his confirmation.

If Kennedy doesn’t get confirmed, Trump should pick someone who is even more radical than Kennedy.  Get someone who will not be polite in front of these awful senators.  Get someone with the views of Kennedy who has the brashness of Trump.  Keep doing it over and over again.  They might eventually be wishing they had just quietly confirmed Kennedy.

The latest FOMC statement was released with a unanimous vote to maintain the federal funds rate between 4.25% and 4.5%.  Jerome Powell and the Fed are apparently still a little concerned about price inflation while still assuring us that the economy is strong.

Powell is obviously not listening to Donald Trump, who is a low interest rate guy, now that he is president again.  I am not saying that Powell and company are purposely going against Trump, but they aren’t really following his wishes either.

The Fed is actually engaging in the correct policy right now, if such a thing is possible in the world of central planning.  Interest rates and the money supply should be determined by the market, but given that we have a central bank, I believe it is better for us if they don’t engage in a loose monetary policy.

The problem is everything the Fed did before 2022.  The Fed massively inflated from 2008 to 2014 while keeping short-term interest rates near zero.  It started inflating again in 2019 and really went crazy in 2020 and 2021.  We finally started feeling the impacts with rising prices.  Next, we are going to experience the reallocation of resources, which is the recession phase.

The Fed will also maintain its current policy of reducing its balance sheet (i.e., deflation).  The balance sheet is still near $7 trillion, but a reduction of $60 billion per month is nothing to laugh at.  If the Fed maintains this policy and doesn’t go back to monetary inflation, the recession will be here soon enough.

The Yield Curve

It is amazing how little coverage has been given to the yield curve.  It was inverted for all of 2023 and most of 2024.  It is still quite flat, but it has normalized, meaning that long-term rates are once again higher than short-term rates.  This means that the recession should hit within 12 months, but probably less.

Maybe this time really is different.  Almost every financial media personality has a reason why this time is different, if they address the issue at all.  There are always things that are different, but are you willing to bet against a recession?  The inverted yield curve has been a rather accurate predictor of recessions in the past.

When the recession hits, if Trump wants to blame someone, he should blame Trump of 2020 for being suckered on all of the COVID hysteria and going along with the lockdowns and massive bailouts.  All of the money that went to people that weren’t allowed to work and to businesses that weren’t allowed to operate had to come from somewhere.  It came from the digital printing presses.  That gave us the price inflation in 2022 and 2023.  It helped give us Trump’s re-election.  Now it will give us the recession.

The Presidential Blame Game

The president tends to get too much credit for a good economy and too much blame for a bad economy. Congress has to approve the spending, and the Federal Reserve is responsible for creating the money out of thin air and manipulating interest rates.

It will be interesting how Trump will react if and when a recession hits on his watch.  I’m sure he will try to deflect the blame, and some of it will be legitimate.

I think any Trump tariffs should get blamed at least a little bit, but I also think we are getting a recession with or without additional tariffs.

The bad part is that Trump has actually done some good things in the short time he has been back in office.  It looks like he is making a genuine effort to cut back regulations and actually reduce government spending.  This is an almost winless war in Washington DC, as any spending cuts are going to be met with hard resistance.

Still, we need drastic spending cuts for the sake of our living standards.  I just fear that a recession will coincide with an attempt to cut spending, and the spending cuts will get the blame.  This would be the exact wrong lesson.

All we can do is tell the truth and try to get it out there.  Libertarians should explain the causes of recessions and how a turn to free markets will improve our lives.  We should criticize Trump when he does something bad, and we should praise Trump when he does something good.

The truth is slowly getting out there.  Libertarians are influencing the way things are going.  Even if a recession hits, I don’t think most people are going to say that we should return to the Joe Biden economy.

When the recession hits, we need to continue to teach, to write articles, and to spread our message to those who are willing to listen.  Some of those people may get to people close to Trump.

While there may be tough economic times ahead, there is good reason to have hope that we are at peak government right now and that the beast will finally be rolled back.

It has only been five days since Trump was inaugurated, but a lot has happened.  There have been so many executive orders, pardons, commutations, and other actions that I can’t comment on all of them here.  But I will hit on some of the major things I have seen.

Freeing the J6 Prisoners

A+

Trump commuted the sentences of a handful of people involved in the events of January 6, 2021.  He pardoned all the rest.  This was a very important thing for Trump to do for several reasons.  It obviously set free some 1,500 people, most of whom never should have been in jail for even one day.  It can’t erase the trauma these people went through for the past 4 years, but at least it corrects it going forward.

This was also important symbolically for Trump.  It shows that maybe he will be bolder in his second term in defying the deep state.  It also calls attention to the crimes of the establishment.  This isn’t an issue that Trump supporters should shy away from.  The only people who were murdered on January 6, 2021 were Trump supporters who were murdered by Capitol police.

Most people there that day did not go into the Capitol building.  Of the small percentage who did, most of them did not do anything other than taking a walk through open doors.  At most, they should have been hit with a trespassing fine.  It is encouraging that Trump took this action on day one.

Pardoning Ross Ulbricht

A+

Trump didn’t exactly pardon Ross on day one, but it was his first full day in office.  Trump went beyond commuting the ridiculous life sentence without parole.  Trump actually issued a full pardon.  He also called Ross Ulbricht’s mother, who has worked tirelessly over the last decade to free her son.  Trump also mentioned the “scum” who did this to Ross.  Perhaps Trump’s persecution over the last several years has made him more understanding that there is a lot of injustice out there.

This was a big win for Ross and his mother, but it is also a big win for the Libertarian Party and the libertarian movement.  Angela McCardle, who chairs the Libertarian Party, deserves a lot of credit for getting Trump to the LP convention and presenting this as an issue to Trump.  This whole thing shows that libertarians do have a significant impact and can influence change, even if they don’t win any major elections.

Forcing Workers to Return to the Office

D-

Many libertarians will disagree with this.  There is this image that there are a bunch of government workers sitting at home doing nothing.  Perhaps this is true for some people.  But there are also people who are doing what they are supposed to be doing at home.

There is also a libertarian argument that we are better off with government workers doing nothing.  In the case of the IRS, the Pentagon, and many regulatory agencies, this may be the case.  I would rather someone sit at home and get paid taxpayer money to do nothing than to create more havoc for businesses and individuals in the marketplace.

Overall, I don’t think forcing workers back to an office is a good general policy.  Maybe some people will quit because they don’t want to go back to an office.  But that shouldn’t be the way to get rid of people.  If anything, it might just force out some of the good people.

The way to handle this is to look at every department and every job to see if it is something that the government should be doing and whether the people in those positions are doing what they are supposed to do.  We don’t need to go into chaos mode by just making life more miserable for government workers.

This whole policy, which came about from Elon Musk, is contradictory to DOGE and Musk’s goal of significantly reducing spending.  Now the government has to provide office space for hundreds of thousands of people.  That is a major expense.  It will significantly increase costs to taxpayers.  And if there are government buildings sitting empty, then they should be sold and the proceeds should go to paying down the debt (or making the deficit less big).

One final point is that the government roads in every major American city are a disaster.  There is major traffic congestion during rush hour almost everywhere.  There is no market mechanism to allocate the resources (the roads).  Sending hundreds of thousands of people back to the office will make traffic that much worse, especially in Washington DC.

Temporarily Suspending the TikTok Ban

C+

This whole ban on TikTok is an egregious act against free speech and property rights.  The whole thing should be overturned.  Trump should propose legislation to completely overturn the previous legislation.  If he did this, a lot of Republicans would suddenly change their position.

The ban has almost nothing to do with the Chinese (not the Chinese government) partially owning TikTok.  It only matters in the sense that the U.S. government can’t control it and censor the content.  There are too many videos on TikTok that go against the official establishment narrative.

Trump has temporarily suspended the ban, but he should do far more.  We’ll have to see what ultimately happens and the position that Trump takes, but right now his rhetoric is all over the place.  He is better than the clown show that just left, of course, but he could do better here.

Other Items

Trump gets high marks for withdrawing from the WHO, the Paris Agreement (climate change stuff), and getting rid of some electric vehicle mandates.  Trump has also issued an order to release the remaining files in the assassinations of JFK, RFK, and MLK Jr.

Trump is also ordering an end to vaccine mandates and reinstatement (with backpay) given to those in the military who were discharged for not getting the COVID shots.

To be clear, executive orders shouldn’t really be a thing, as we are not supposed to live in a dictatorship or anything close to it.  However, many of these executive orders are simply repealing previous executive orders or refusing to enforce things that are not really derived from legislation.  And, of course, almost all of the legislation that is in question is unconstitutional in the first place.

On the foreign policy front, it is too early to say much.  It is good that Trump’s team was seemingly responsible for getting some kind of ceasefire deal in Israel/ Gaza.  Despite Trump’s bad rhetoric at times, it does seem he is more interested in peace than the criminals who just left the executive branch.

The Elephant in the Room

With all of the pardons and executive orders, the elephant in the room is the economy, and in particular, government spending.  There have been some actions from Trump that reduce the regulatory burden and some actions that might reduce spending in a very tiny way.  But the overall budget is a monstrosity that has to be dealt with at some point.

Some of Trump’s rhetoric has been good.  He has talked about getting rid of the Department of Education and getting rid of FEMA and allowing the states to do these functions.  Just the fact that Trump is talking about these things is a big positive.

In terms of overall spending though, we are looking at something like a 2 trillion-dollar deficit in this fiscal year even if there isn’t a recession.  The military, Social Security, Medicare, Medicaid, and interest on the debt make up about 80% of the total budget.  You won’t be able to get anywhere close to a balance budget without addressing some of these big things.

The economy is likely to be the big problem for Trump, as a recession looks likely.  Trump, so far, is doing a good job of fighting back against the establishment.  If the economy takes a turn for the worse, it will be interesting to see who remains supportive of Trump.  Trump really needs to avoid enacting higher tariffs, as this will just make the economy worse and give more reason to blame Trump for a bad economy.

Aside from the economy, I give Trump an overall rating of A- after just five days.  We can be sure there will be some bad things to come, but it is a good start so far.

Donald Trump has been inaugurated as president of the United States.  I am optimistic about some aspects of his presidency, and I am quite worried about other aspects.

I am optimistic about getting RFK Jr. in a position where he can have at least some influence on truly making America healthier.  Even if he just recommends not drinking fluoridated water, limiting processed foods, and getting enough Vitamin D, that will be a big improvement without any legislation or executive orders.

I am mildly optimistic that the weaponization of the “Justice” Department will be curtailed.  I don’t expect permanent changes, but I do think there will be more attention given to the evils of this department and the spy agencies.  I know Tulsi Gabbard has backtracked on going against surveillance, but I do think there is hope that she is just trying to get confirmed so that she can ultimately make a difference.

I am also somewhat optimistic that Trump will get some kind of peace negotiation with Russia and Ukraine.  I don’t expect a drastic change in foreign policy, but it might at least be good enough that the biggest atrocities come to an end.

I am worried about Trump’s talk of taking back the Panama Canal, buying Greenland, and making Canada the 51^st state.  I don’t even know that any of it will happen.  I think he is just trolling about Canada.  Still, this was not something he talked about on the campaign trail, so it makes him look really bad that he is pursuing these ideas.  It also makes it much more difficult to defend him against the left when they say he wants to be dictator and take over the world.

One thing Trump did talk about in his campaign was tariffs, and he is stilling talking about them.  I am worried this will just make prices higher.  When recession hits on Trump’s watch, he will get the blame because of his stupid tariffs.  He should be getting the blame for the massive spending in 2020 with the COVID hysteria.

With all that said, the biggest reason to cheer for Trump getting into office is the leaving Biden administration.

The Biden Legacy

Joe Biden likely has some kind of dementia.  But he is still with it enough to continue to pursue his evil policies of chaos and destruction.  He is responsible even if his handlers were putting things on his desk to sign and writing speeches for him to say.

The list of horrible things over the last four years is long.  Four years ago, I never could have imagined just how bad Biden would be.

He helped provoke the war in Ukraine, starting when he was vice president.  He could have prevented the war in 2021 just by talking with Putin and giving some assurances to Russia.  Biden continued to support and fund the evil Zelensky to perpetuate the war all the way to the end of Biden’s presidency.

Biden weaponized the “Justice” Department not just against Trump, but against Trump supporters.  He helped in the parade of lies surrounding January 6^th, 2021 by making it sound like police officers died at the hand of protesters when it was just the opposite.  There were multiple people who died that day because of the Capitol police.  The Trump supporters were duped into going into the Capitol that day.  At most, most of them should have been charged with trespassing and slapped with a fine.  Instead, hundreds of people remain in jail based on lies.  This was all from Biden and his handlers.

Biden gave us more COVID hysteria with mask mandates and vaccine mandates.  His illegal and immoral executive orders tried to force about 100 million Americans to get jabbed.  If they did not comply, they risked losing their job and not being able to support their families.  And all of it was based on Biden’s continued lies about how if you get vaccinated then you can’t get COVID, you can’t die, you can spread it, etc.

Biden signed the Tik Tok ban into law, which capped his war against free speech.  His administration ordered social media companies to censor information on the basis of fact checking.  It had nothing to do with fact checking.  It had to do with censoring anything that went against the official narrative.

Biden arbitrarily ordered the forgiveness of student loans, even though he had no authority to do so.  Even after it was struck down in court, he still kept trying to do it in slightly different ways.

Biden declared war against MAGA.  He didn’t just go after Trump.  He gave a speech with a red, ominous background talking about the dangers of MAGA.  This must have been the first time ever that a sitting president declared war against tens of millions of people who supported his opponent.

Maybe Biden will be remembered as a bumbling fool.  But in spite of his incompetence at times, we shouldn’t think his presidency was one of incompetence.  It was one of pure evil.  He purposely lied on a continuous basis about anything of significance, and his policies were put in place to stoke fear, chaos, and destruction.  He should be left to rot in a jail cell for the rest of his days, but for now we’ll have to settle for him leaving the scene in Washington DC.

We don’t know what Trump will bring and what chaos the establishment will bring against him.  Whatever you might say about Trump, I don’t think he hates America and human civilization the way Biden does.

There are hardcore Donald Trump fans, and there are hardcore Donald Trump haters.  There are people who are neither, and probably more than what is portrayed.  For many people, including me, there are things to like about Trump and things to not like about Trump.

I feel like this is a continuation of the first Trump term.  Every time he does something good and I praise him, he goes ahead and does something or says something bad.  And whenever I am really down on him and ready to lump him in with all of the other criminal politicians, he does something good.

Trump’s Empire

I have been really down on Trump for the last few weeks.  Out of nowhere, he starts talking about buying or annexing Greenland, Canada, and the Panama Canal.  I don’t think he’s serious about Canada, but I don’t think it is a joking matter.

Trump likes to troll people, and it can oftentimes be funny, especially when the person on the receiving end deserves it.  Trump was trolling Trudeau, which is fine.  The problem is, you don’t need to insult the entire population of Canada while doing it.

It would be foolish for anyone who wants smaller government to want to acquire Canada.  Do you want to adopt their socialist healthcare system too?  How many electoral votes do you want to hand over to a population that heavily leans left?

Regardless of strategy, all of this talk about taking over other countries is just plain wrong.  It is bullying, even if you are joking about it.

I defend Trump against so many false allegations coming from the left.  Yet, it is hard to defend Trump now when leftists are saying, “See, I told you he wants to be a dictator and take over the world.”

I have been on the verge of asking for a refund.  Even though I strongly disagree with Trump on tariffs and don’t fully agree with him on immigration and foreign policy, I generally thought he was much better than the alternative.  If he enacts higher tariffs, it will be bad, but I can’t complain that I didn’t know he would do it.

On the issues of Greenland, Canada, and the Panama Canal, he didn’t talk about this stuff in his 2024 campaign.  Before Trump even becomes president again, I have been on the verge of completely disavowing him and saying that I regret my vote.

Just When I Think You Couldn’t Possibly Be Any Dumber

You go and do something like this…..and totally redeem yourself.

Except, unlike Dumb and Dumber, Trump actually did redeem himself.

Before Trump has even taken office, it looks like he might have brokered a ceasefire deal in Israel and Gaza.

Maybe it isn’t accurate to say he brokered a deal.  Trump’s envoy was probably given instructions to tell Netanyahu to accept the ceasefire deal or else he would regret it.

You see, Biden has been saying for a year about how the Israeli state needs to cool things down and be more responsible.  Without the political correctness, this means that they should stop killing so many people in Gaza.  But it’s a joke because the Biden administration has been sending weapons and money to Israel to do this.  If you want him to stop the killing, then stop sending him the weapons and money to do it.

On the other hand, Trump will talk about Israel being our greatest ally and how Hamas better release the hostages or else there will be hell to pay as soon as he becomes president.  Yet, I have a feeling that behind closed doors, Trump’s people were telling Netanyahu to agree to the ceasefire.  Biden could have done this all along.

The reason I have this feeling is because Netanyahu could have agreed to stop the fighting and get a return of the hostages a long time ago.  But he didn’t because he knew the money and weapons would keep flowing from the U.S. government.  The only explanation for his sudden change in heart is because Trump’s people told him what to do.

I have no idea if the ceasefire will stick or what will happen.  But the mass killing of innocent people in Gaza needs to stop.  If Trump pulls this off, it will be a great victory for innocent life.

I don’t want to start praising Trump too much though or else he will do something really stupid next.