The August 2023 CPI report came out showing that the CPI was up 0.6% in the last month.  The year-over-year CPI rose at 3.7%.

The less volatile median CPI came in at 0.3% for the month.  The year-over-year median fell from previous months and is now at “just” 5.7%.

Much of the increase in consumer prices last month is attributed to the price of gasoline.  So if you don’t drive much, then maybe you are doing better than others.

If you go to the grocery store, you are probably still noticing that some prices are going higher.  They are just not going up as fast as they were last year.  But the more modest increases now are on top of the already high prices from last year.

Another Rate Hike?

The FOMC has its next meeting on September 20, 2023.  Jerome Powell has said that another rate hike might be necessary to achieve the Fed’s goal of 2% inflation.

The market is betting that the Fed will not change its target rate at the September meeting.  So if any further rate increases come, it will have to happen near the end of 2023 or in 2024.

But there will come a certain point where the Fed won’t consider a rate hike.  The discussion will be whether to decrease its target rate.  Or perhaps the discussion will be how far to drop rates.

The Fed is in “fighting inflation” mode right now, but we know how quickly things can change.  Things did briefly change earlier this year when Silicon Valley Bank failed.

As soon as a major recession hits or a financial crisis hits (likely both), the Fed will all of a sudden shift course and no longer be too concerned with price inflation.  They will go back to monetary easing to save the major banks and to attempt to stop the economy from imploding.

We are in this position because of massive government spending and the Fed’s willingness to finance the deficits by creating money out of thin air.  There is going to be trouble ahead no matter what.  It is just a question of timing and how the Fed deals with the problem.

Not Too Hot, Not Too Cold

I think the Fed likes the consumer price inflation report.  They want price inflation to come down slowly towards their 2% target.  But they also don’t want it to happen too quickly because of what it signals.

If price inflation all of a sudden comes in very low, or even below zero, it will be a sign of reduced consumer demand.  It means that people are tight with their money and a recession is likely coming.

Zero price inflation would be better for most of us because a recession is coming anyway.  The yield curve is, amazingly, still inverted.  It has been all year long.  At least we could start benefitting from not paying higher prices than what we are already paying.

So maybe the Fed likes this Goldilocks scenario, but it isn’t going to last.  We are going to get a hard recession anyway.  So it would be better if we start the correction sooner rather than later, and it would be better to start paying prices for consumer goods that aren’t continually rising.

Stock investors seem to be immune to any financial news these days.  Stocks keep doing well for the bulls.  It is easy to get complacent during these times and think that everything will just keep on humming along.

The bond market is telling a different story, and it has been for all of 2023.  The higher short-term yields against lower long-term yields are telling us that this isn’t going to last.  I am still looking at a recession starting before the 2024 election.

Novak Djokovic won the 2023 U.S. Open. He has now won 24 major titles, the most ever for a man.

Djokovic was unable to play in the 2022 U.S. Open because of Joe Biden and the COVID tyrants. He was not allowed to enter the United States because he did not receive a so-called COVID vaccine.

Djokovic was always up front about not wanting to get jabbed. He didn’t try to pretend otherwise. With his money, I’m sure he could have found someone to give him a saline shot and give him a vaccine passport. He never went down that road.

He also was never political about it other than just saying that he didn’t want to take the jab. He wanted to be able to travel and play in tennis tournaments, but not at the expense of putting a foreign object in his body.

Djokovic was asked whether he was mad over missing last year. He graciously said that he wasn’t mad and was just focusing on the tournament this year.

Taking Care of Your Body

I watched some of the finals. The commentators were praising him when it was looking like he would win. They referenced his age and basically how he is in great shape for being 36 years old.

It is no coincidence that Djokovic takes great care of his body and also didn’t want to get the COVID jab. I have pointed out that the people not getting jabbed tend to be on different extremes. Some people aren’t really health conscious but don’t want to bother getting jabbed or just don’t want the government telling them to do it.

Then you have people who take their health very seriously (for various reasons) and just do not want to take an experimental jab.

Aaron Rodgers was not as upfront about not getting jabbed, but he was not afraid to talk about it once it was widely known. He is 39 years old and still playing at a high level in the NFL. He obviously takes care of his body well too.

When you combine curiosity with caring for your own health, it is a natural conclusion to not wanting to put a foreign substance in your body that the government is pushing so hard.

An Ambassador for the Non-Vaccinated and Anti-Tyrants

It seemed like the crowd in New York was generally cheering for Djokovic, or at least appreciating great tennis.

I really wanted Djokovic to win this one for several reasons. First, he was denied the ability to play last year, and he would have had a good chance of winning that one. I also wanted him to pull farther ahead of Rafael Nadal, who was not kind at first to Djokovic about the vaccination issue. But most importantly, it brought some attention to the issue.

At first, I was thinking that Djokovic was representing the non-vaccinated. He was a skeptic who stood firm against the pressures.

But then I thought some more about it and realized that Djokovic was really representing the anti-tyrants. It isn’t just a question of whether someone is vaccinated or not. It is a question of whether they believe in mandates or if they believe in medical freedom and individual rights.

Djokovic was the gracious person who stood firm against the mandates without speaking out politically. I am glad he took this route.

I’m sure some people wish he had taken up the cause of the non-vaccinated by speaking against Biden and his thugs. But the way Djokovic handled it was actually probably for the best.

He was gracious and didn’t show any anger. He stood his ground and led by example. He got the New York crowd on his side, which tends to not be a liberty loving bunch.

There are probably many more people now than a year ago who were vaccinated but don’t think there should be any government mandates for it.

There is something to be said for showing grace and persuasion without preaching. I think Novak Djokovic did a good job of representing the non-vaccinated and the anti-tyrants at the U.S. Open in 2023.

1. Some libertarians are very cynical about voting, and understandably so.  But then there are some libertarians who think it is just stupid to follow any of the presidential politics or to bother voting at all.  They say all the candidates are the same, and nothing would change anyway.  If you take this position, it means you think there would be no difference between RFK Jr. and Joe Biden.  It means you think that a Vivek Ramaswamy administration would be the same as a Nikki Haley or Mike Pence administration.
2. Even if you think voting is futile, it is still interesting to watch the presidential race because it is an indication of where public opinion lies.  The top three Republicans in the polls are Trump, DeSantis, and Ramaswamy.  Combined, they make up over 75% in most polls.  Everyone else is in single digits, with some barely showing a percentage point.  When it comes to foreign policy, these are the three least hawkish candidates, at least in rhetoric.  This is a great sign for the Republican Party.  The Republican Party of the Bush years is not coming back any time soon.  This is reason for great optimism.
3. Aside from being evil, Biden also has some form of dementia or something like it.  He is 80 years old, but he is an old 80.  It’s hard to imagine Trump acting like this when he turns 80 in a few years.  The Democrats know this is a problem, but so is Kamala Harris.  They need someone to run against Trump.  I didn’t think Biden would be the nominee in 2020, but I was wrong.  The establishment needed someone to defeat Trump, so they put up Biden while keeping him mostly hidden during the campaign.
4. The Democrats and the establishment in general have a problem with RFK Jr. in the race.  They cannot have a televised debate that includes RFK.  So even if they want to dump Biden off the ticket, they can’t do it now because it will open up a reason for debates.  They don’t want Gavin Newsom or someone else up there with RFK either.  If the Democratic establishment decides to dump Biden, they will wait until the last minute to make it public.  Then they don’t have to have any debates and can just crown the successor.  I believe that RFK is an even scarier prospect for the establishment than Trump.
5. One major factor in the 2024 election that is not much discussed is the economy.  Sure, you can hear about “Bidenomics” and unemployment and inflation, but there is not a lot of talk about how a deep recession would play into the race.  It is obviously hard to predict, but the yield curve has been highly inverted for most of 2023, which is a predictor of recession.  If the Everything Bubble pops before the 2024 election, this will have a big impact.  Biden is already disliked by a majority of people.  This will make it far worse for him and the Democrats.
6. The only hope of Biden legitimately beating Trump is because Trump is so disliked that people hold their nose and vote for Biden anyway.  But there comes a point where if Biden is really terrible too in people’s eyes, some of them might just not vote or vote for a third party.
7. The powers-that-be are trying to make it a crime just to question the authenticity of an election.  I believe there was fraud in 2020, just as there is fraud in every national election.  The biggest thing that makes me question the 2020 election is that the vote counting stopped in the big cities in the swing states all around the same time on election night.  By early the next morning, the vote counting resumed and Biden was being declared the likely winner.
8. One way to eliminate the power of election fraud is for an overwhelming victory.  If the election is close, fraud is much easier to implement.  If Trump overwhelmingly beats Biden or some other candidate in 2024, it makes it much harder to add or change enough votes to make a difference in the outcome.  If the margin is in the hundreds of thousands in the swing states, fraud becomes difficult to get away with.

My Picks

I don’t expect any president to tear down the deep state, but there is no question that a president could make a difference.  The president can at least try to take on the deep state at some level, which includes the military-industrial complex.  I don’t expect anything close to a balanced budget or fiscal sanity, but there is always hope that a president could scale back the U.S. empire overseas and stop fighting these terrible wars.

As it stands now, here is my preference list for the next president.

1. The Libertarian Party candidate (assuming it is someone from the Mises Caucus)
2. Robert Kennedy Jr.
3. Vivek Ramaswamy
4. Donald Trump
5. Ron DeSantis

Everyone else is absolutely terrible.  I have my doubts about everyone on my list too.  They all have major faults, and I can’t fully trust any of them.  I strongly disagree with Kennedy on some social and economic issues, but I think he is honest.  I will take an old-school Democrat who still supports a welfare state if he can scale back the warfare state.

Ironically, RFK could end up being the best one on economics only because he has the best chance of reducing military/ war spending.

We have no idea what we would get with Vivek.  He seems to have a different message sometimes for different crowds, which scares me a bit.  He is not a libertarian, but he is probably the most libertarian with his rhetoric, and there is hope that he is evolving (in a good way) on some issues.

We already saw four years of Trump, but there is always hope that he might be a little bit better next time.  Assuming he gets the Republican nomination, it will tell a lot who he picks as his running mate.

DeSantis has been a disappointment in the presidential race.  He looks very weak and unable to take bold positions that actually mean anything.  I don’t need a bold position on Disney being “woke”.  DeSantis would be unlikely to take on the foreign policy establishment, although he probably wouldn’t be as bad as the other war hawks in the race.  Anyway, I would rather DeSantis stay as my governor in Florida.

All of the other candidates are terrible.  Some of them talk a good game on economics, but it doesn’t matter.  They care more about fighting wars and maintaining the U.S. empire.  There won’t be any spending cuts coming from these people, so the economics doesn’t matter anyway.

Since 2008, the Federal Reserve has been paying banks interest on their reserves. This sets a floor on the overnight lending rate for banks.

In other words, the Fed pays banks interest on their reserves in order to control the federal funds rate. When you hear about the Fed raising rates or lowering rates or not changing rates, it is in reference to the federal funds rate.

Before 2008, the Fed controlled the federal funds rate essentially by increasing or decreasing its balance sheet. There was a direct correlation with the money supply.

While there is still a correlation between the two, the Fed is less dependent on the balance sheet for controlling interest rates. You can technically have a balance sheet that is increasing while the Fed is hiking rates. This might be difficult to sustain, but you can see how the Fed has more flexibility with its balance sheet now.

Bank Bailouts

The banking system of today in the United States does not resemble anything close to a free market system. Just the existence of the Fed and the FDIC make it so, but it goes far beyond that as well.

The Fed is still paying banks not to lend money. So anything a bank lends would logically be at a higher rate than what they can get for free from the Fed.

If there is any significant risk to a loan, a bank would have to demand a much higher interest rate. If you can automatically get 5% from the Fed, why would you lend to a risky borrower for only, say, 6%?

The interest paid by the Fed is a subsidy. You could say it is a bank bailout. The bailouts from 2008 never ended.

You can read the FOMC monetary policy statements. In the Implementation Note, it directs the Fed to pay a certain amount in interest to the banks. Whenever the Fed “raises rates”, it is really this rate that it is hiking.

Deficits Matter

With rates having gone up from near zero, it means the Fed is paying out a much greater amount these days to the banks as compared to a few years ago.

At the end of each fiscal year, the Fed remits money back to the Treasury if it made a “profit”.

I know, the Fed doesn’t actually produce any useful goods or services that it sells. It is only profitable in the sense that it has the power to create money out of thin air. When it creates money to buy up U.S. government bonds and mortgage-backed securities, it gets paid the interest on those securities.

After the Fed pays for its buildings and computers and workforce, along with any other expenses, it doesn’t get to keep the difference. It is sent back to the Treasury.

With the Fed currently paying higher interest rates to banks, it means less money is left over, or perhaps no money at all. This means that with the Fed paying banks more, it is indirectly causing the deficit to rise even faster than it otherwise would have.

It means that the national debt will just keep going up. And if the Fed is essentially forced to keep rates at a higher level compared to before, this will just help explode the national debt even more, as if a profligate Congress and president weren’t enough.

Why Would the Fed Policy Change?

I see no reason that the Fed would change its policy at this point. It is what they call a “monetary tool” they use to control the economy. They can more easily manipulate interest rates.

Congress doesn’t seem too concerned about spending trillions of dollars that it doesn’t have. So why should the Fed worry about tens of billions of dollars?

The Fed’s main reasons for existence are to support the major banks and to control the economy. Paying interest on bank reserves help both of those goals.

So the only way the Fed would change this policy is if the debt became so terrible that Congress were forced to tighten its belt and wanted the Fed to do the same.

We have found out the last couple of years that there are limits to the insanity. It has shown up as higher consumer price inflation, and it did force the Fed to increase interest rates and to stop expanding its balance sheet, at least for now.

Even though the Fed probably feels like it has more “monetary tools” to fight the next financial crisis, it doesn’t mean that there won’t be another financial crisis.

While there were some interesting moments from the first Republican presidential debate of the 2023/ 2024 election season, there was one notable topic that didn’t come up. The moderators did not ask a single question about vaccines or COVID vaccine mandates.

What’s worse is that none of the Republican contenders on stage addressed the topic. You get an opening and closing statement. And just because a question isn’t asked, it doesn’t mean you can’t address it.

To be sure, I think the most populist message to sell for Republicans is that of the average American family that is struggling. Wages are not keeping up with the cost of living, and a majority of people are feeling it in some form or another.

This is not all Joe Biden’s fault, but he and his administration have certainly contributed to the bad economy. There was already a bubble economy when he entered office in January 2021, but he has only made it worse.

And while previous Federal Reserve policy is largely to blame, along with high government spending, there has been a lot of chaos in the economy because of COVID lockdowns and mandates. That also includes vaccine mandates that forced many employers into a situation of mandating a medical procedure for their employees.

Some people got the jab because they simply didn’t want to lose their job. Some people didn’t get the jab and were fired from their job. Some people managed to escape with an exemption but still had to go through the pain of the process.

Never Forget

For those who didn’t get a COVID shot or got one because of feeling like you had no other good choice, you should never forget what the evil Biden did to you. It was also the evil Fauci and the supporting cast. It was also the evil establishment media that didn’t treat this like the revolting evil that it was.

These people lied, and they have blood on their hands. They kept saying it was “safe and effective”. Both parts of that are a lie, and they knew it too.

Biden said multiple times that if you get the shot, then you can’t die. This is both utterly stupid and vicious at the same time. Wouldn’t he have at least said that if you get the shot then you can’t die of COVID? It would still be a lie, but at least it wouldn’t sound completely non-sensical.

Biden and his handlers caused complete chaos and destruction in our economy, and they put millions of people through pain. People were compelled to take a jab they didn’t want with the threat of their job.

Biden should be in prison just for this act alone. Forget all of the bribery and money laundering stuff. Even if the so-called vaccines were safe and effective, Biden should still go to prison for implementing his mandates.

Just like his order to forgive student loans, the Supreme Court ruled the mandate for employers with 100 or more employees to be unconstitutional. But there are no consequences for evil Biden and his evil handlers who cause chaos and destruction. They just say, “Oh well, the courts struck that one down. What should we try next?”

An Issue That Matters

There were many millions of people who were impacted by these vaccine mandates. About 25 to 30 percent of the population didn’t get a COVID jab. And you know there is a significant minority that felt compelled to get it, whether or not it involved their job or going to college.

Just by looking at the number of people getting boosters, a significant majority of people don’t want more COVID shots. So certainly they would be against vaccine mandates.

So you can’t tell me that this isn’t a popular issue.

And for the people who were actually vaccine injured or have a loved one who was vaccine injured and know it, they are going to be incredibly passionate about this issue.

They probably feel forgotten, and the feeling may not be wrong. They want an advocate who is not just going to pledge “no mandates”, but someone who will also try to serve some justice for those who were harmed.

They would ideally like to see Fauci and Biden and pharmaceutical executives and others behind bars for their crimes, but at the very least they would like to be recognized. They would like acknowledgement that the vaccines weren’t safe and effective and some people continue to live (or not live) with the consequences to this day.

Where is DeSantis?

Back to the political aspect of this, why is no Republican talking about this? I have heard Trump (Mr. Operation Warp Speed) say he would never issue mandates. He has heard his supporters on this one and would generally prefer not to talk about it.

But where is Ron DeSantis? This should be his issue. Although he locked down Florida in April 2020, he became something of a hero to the anti COVID hysterics. He was fighting against vaccine mandates in Florida. The surgeon general of Florida, Joseph Ladapo, has said that probably nobody should be getting these vaccines.

With DeSantis losing badly to Trump in the polls, it is amazing that he isn’t talking about this issue. He brought up the COVID lockdowns briefly in the debate, but he didn’t touch on the vaccines or vaccine mandates. He is missing a big opportunity. He could be a voice for millions of people out there who do still remember what was done to them in 2021 and 2022.

These politicians lie or exaggerate all the time. Why are none of them taking up the cause of the vaccine injured and those who are simply against vaccine mandates? They are letting the media dictate what they talk about.

Although Vivek Ramaswamy has done a pretty good job of setting his own agenda, he did not bring up vaccine mandates either. Of course, all of the others on the debate stage are horrible and too busy worrying about sending off more money to Ukraine than worrying about what happened to Americans a couple of short years ago.

Let’s hope that Robert Kennedy Jr. does not run away from this issue. His enemies already like to smear him by calling him anti-vax. Since he has that reputation anyway, he can empathize with those who were forced to take the jab.

It is not a losing issue. There are a lot of people who haven’t forgotten what was done to them, and they want an advocate.

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.