The second Republican debate for this political season is just wrapping up.  I could say it is the second debate, as there has been no Democratic debate.  I am not including the Republican debates with the second-tier candidates.

Below is my analysis of the candidates and their performance.  This is from a libertarian point of view and from a general point of view of how I think others will perceive the candidates.

Donald Trump: He had a lot of time on stage.  A lot of the discussion was on his personal remarks, his business practices, his temperament, etc.  In other words, there was not a lot about his actual positions, although he did touch on those.  This is what the audience wants to see though.  They want drama television.  Overall, I don’t think Trump was hurt any in the debate.  Most of his positions are terrible from a libertarian perspective, but people like the fact that he speaks his mind.  It is encouraging that he proudly points out the fact that he opposed the Iraq War.  This would have been a non-winning position in previous Republican races.

Jeb Bush: He continues to have to defend his brother’s actions.  He says he is his own man.  The problem is that he doesn’t repudiate anything his brother did.  The CNN moderators pointed out that his foreign policy advisors come from his brother’s and father’s administrations.  Bush said that his brother kept everyone safe.  I wish someone had pointed out that the hundreds of thousands Iraqis that died at the hands of the war were not kept safe.  And the thousands of U.S. soldiers who died were not kept safe.

Scott Walker: Does anyone even remember anything this guy said?  Do you remember Tim Pawlenty?

Ted Cruz: He sounds like a robot alien from Mars.  I’m sure some hardcore conservatives will like him.  His economic/ domestic positions are decent, at least relative to the rest of the field.  On foreign policy, he is as bad as they get, if you don’t include Lindsey Graham.  Cruz is so pro war, no libertarian should consider supporting him at all.

Marco Rubio: He was about the same as the first debate.  He is a good talker.  I don’t expect him to move dramatically up or down in the polls.

Chris Christie: He played a different strategy of trying to get along with everyone.  I do agree with him that entitlement spending is the major economic issue that is being largely ignored.  Aside from that, he is probably the most liberal (in the modern sense) Republican of the 11 candidates.  I am not counting the other 4 that were in the warm-up debate.

Mike Huckabee: He was also about the same as in the first debate.  He will get some support from social conservatives, but I don’t think he will be the nominee.

Rand Paul: He came out with a much more libertarian message.  When he isn’t fighting with Trump, he actually can sound intelligent and reasonable.  Don’t get me wrong here; he still didn’t sound anywhere near as libertarian as his father.  But if Rand Paul had come out early on in his campaign the way he did in that second debate, then he would actually be a significant presence.  His poll numbers would be far higher.  Unfortunately for him, I think it is too little, too late.  He spoke up when Trump said he was the only one against the Iraq War.  Paul finally said that he was against it too.  Why didn’t he do that in the first debate?  Paul sounded really intelligent when talking about states’ rights and the 14th Amendment.  But hardcore libertarians don’t trust him and will suspect he is just changing his message for political reasons, which is probably the case.  It’s too bad he didn’t come out with a more libertarian message in the beginning of his campaign.

Carly Fiorina:  I can understand why she was so popular from her first debate.  She is a decent debater.  From a libertarian perspective, I had no idea she is such a war hawk.  In response to dealing with Russia, she said she would not talk to Putin, she would ramp up military exercises in the region, she would send more troops to Germany, and she would arm the Kurds.  Maybe she gives some competition to Cruz as the most hawkish candidate.

Ben Carson: I am not sure what the polls will show after this debate.  He had his good moments and his bad ones.  I don’t agree with him that there is no link between vaccines and autism.  From a political perspective, the government should stay out of the business of vaccinating people.  This is a very divisive issue though, and he may lose a few supporters for his position which is in line with the medical establishment.  His stance on the minimum wage was terrible.  In terms of foreign policy, it was nice to hear a less pro-war stance.  Again, it is a bit encouraging that more candidates are taking a less hawkish stance.

John Kasich: I don’t think there will be a big change in his numbers, but again I am encouraged that he is taking a less pro-war stance.  He went up slightly on my own scale for this.  Overall, his positions are terrible, but it is nice that candidates can take a softer stance on foreign intervention and not feel shunned by the Republican electorate.

Lastly, I didn’t love the job that CNN did.  There were a lot of questions that weren’t asked that could have been quite relevant.  There were too many personal things, but they may just be giving the audience what they want.  I would like to see some questions on the Federal Reserve and on the unfunded liabilities.  With that said, I thought CNN did a better job than Fox News, especially in terms of staying more objective.  At least it wasn’t as blatant as Fox News, where the anchors tried an attack job on Donald Trump that failed miserably.

There was a recent article by Charles Hugh Smith (also linked on Lew Rockwell’s site) explaining why the Fed would be insane to raise rates.

This is one of those situations that I have to criticize someone who generally seems to be on the pro-liberty side.  I have read Smith before and he often has some interesting insights.  But on this recent article, I dissent on virtually everything.

This isn’t a situation of criticizing an author on economic policy such as Paul Craig Roberts or Pat Buchanan.  I typically don’t agree with them on economic matters, but I like their writings on other issues such as foreign policy or civil liberties.

Smith typically focuses strictly on economic issues, so it is interesting that I find so many points of contention in his latest piece.

I dissent immediately just on the title.  I don’t think it would be insane for the Fed to raise rates.  I’m not sure that it matters much at all, except that the Fed will be paying a higher rate on bank reserves.

What is insane is the Fed’s policies over the last 7 years.  It approximately quintupled the adjusted monetary base over this period and has served to greatly misallocate resources, thus setting us up for another bust.

Smith says that the strong U.S. dollar is the core driver of the global recession.  But this is just ridiculous.  There may be a correlation, but the strong dollar isn’t the cause.

If there is a global recession, it is because all of the major central banks of the world have been engaging in massive monetary inflation.  This has severely misallocated resources, run up debt, and allowed governments to spend recklessly.  It also discourages saving and investment, which growth and productivity are ultimately built upon.

The only reason the U.S. dollar is strong is because it is the least bad of the major currencies right now.  All of the other major central banks are destroying their currencies at a greater pace than what the Fed is doing to the dollar.

Smith says that as the dollar gets stronger, capital will flee emerging markets and China.  But why is now any different than in the past?  If China wants to attract capital investment, then the bureaucrats there should open up the markets, stop the central bank money printing, and stop rigging the markets.

To blame China’s problems on the U.S. dollar is rather silly.  A homeless man can blame the weather for getting all wet, but someone sitting in a house isn’t going to help him by suggesting to change the weather patterns.

It is amazing how so many people will blame China for our problems and then some people will blame the U.S. for China’s problems.  I think everyone needs to take a look in the mirror here.

I blame the Fed for a lot of things, but most of China’s problems are a direct result of Chinese government and central bank policies.

People can talk about “exporting inflation” and “currency manipulation” all they want.  But the strength of a currency is a direct result of the central bank’s policy for that currency.  The supply of money and the demand for it by the people (which is largely dictated by supply expectations) determine how strong a currency is.  If a country has high price inflation, it can’t blame another central bank or another country for this problem, barring an actual war.

Smith thinks the Fed is insane to raise rates because it will deepen the global recession.  Sorry, but the insane policies were already enacted years ago.  The Fed has actually been less insane over the last year with its tighter monetary policy.  This has more to do with monetary inflation than it does interest rates.

I encourage people to read diverse opinions on different matters.  But it is important to recognize when someone’s arguments are way off base.

As someone who spends quite a bit of time reading and listening to other libertarians, I find that the majority are pessimistic.  While libertarians correctly identify the state as the main problem, it is amazing how much libertarians underestimate the power of the free market.

Libertarians also underestimate a natural tendency for people to want liberty.  It is part of human nature, and it is big government that is attempting to defy human nature.

Many libertarians also believe that we are continually losing our freedom every day.  They just see government getting bigger and more authoritarian, particularly in the United States.

To a certain extent, this is true.  When it comes to certain sectors, the government is more heavily involved than ever before.  Healthcare immediately comes to mind, and it shows in the dramatically rising costs.

While the state of education is bad, are we worse off than we were 30 years ago?  Some public (government) schools are worse off, but we also have more choices.  Homeschooling is much easier today than it was then, and even private schools tend to be more available, although they are admittedly expensive.

It is easy to fail to recognize the changes that are constantly taking place right under our noses.  Uber (and now Lyft too) are destroying the taxicab monopoly in regions all across the country.

Email, cell phones, and social media are making the Post Office more obsolete by the day.

If you look at unions, they have actually been shrinking over the last several decades.

It is so hard to compare today’s world with the world of 100 years ago or 200 years ago.  It is hard to differentiate between liberty and freedom.  Liberty has shrunk in the sense that the federal government is more overbearing.  But freedom has increased in the sense that you have more choices today than ever before.

Someone living 100 years ago would have had more in common with someone from 2,000 years ago than they would have in common with someone today.  This gives a good perspective on how much technology and production have increased.

Computers, cell phones, the internet, and everything related to electronics have certainly exploded over the last 2 decades.  But if you compare today to 100 years ago, you have to talk about cars, airplanes, electricity, refrigerators, microwave ovens, air conditioning, etc.

Despite the presence of big government and the high cost of some basic needs, we are so much better off today than ever before, it is not even really comparable.

In terms of liberty, you must also consider things that we take for granted today.  Even though the U.S. continues to stir up wars overseas, Americans get to live in relative peace.  There is no draft.  There are no world wars.  War has been the norm for thousands of years.

19th century America was relatively free, especially in terms of the federal government.  Of course, there was slavery, which was the complete opposite of liberty.  There was also the so-called Civil War that resulted in well over half a million Americans dying in an area that wasn’t that populated at the time.

If you compare virtually anywhere prior to the 18th century to today, we are vastly freer in almost every sense.  We really do have freedom of speech and freedom of religion compared to those days.

After 1913, the U.S. got a federal income tax, the Federal Reserve, and the direct election of senators.  World War I quickly followed this.  Then we had alcohol prohibition, which overlapped with the Great Depression, which overlapped with World War II.

In terms of liberty, I think the only period that could be comparable to today would be the period in the United States between the end of the Civil War and prior to World War I.  Even there, we had the Spanish-American War in 1898.  Maybe you could just try around 1880 as the most libertarian time in history.

In comparing it to today, it is really comparing apples and oranges.  The federal government was unquestionably smaller at that time, but it was far from perfect.

Still, even if you make the argument that there was more liberty in 1880 than today, does it really matter that much?  Almost nobody would actually choose to go back to that time.  By today’s standards, it was a miserable time.

I write all of this just to offer some perspective, especially for libertarians.  We actually have it pretty good right now.

When Rand Paul first entered into politics, I was told that he was more politically savvy than his father, Ron Paul.  I was told that he had his father’s libertarian streak, but that he knew how to tone his message down in order to appeal to a wider audience.

Rand Paul, in his first major foray into politics, succeeded by winning a Senate seat.  Perhaps his supporters were correct.

When Rand Paul was campaigning for his Senate seat, I immediately detected his far less radical message than his father.  I was told this was a good thing.  I was told that he is really a libertarian and that he just needs to say some of those “mainstream” things in order to get elected.  Once in office, he would be like his dad.

Since being in office, Rand Paul has not been like his father.  He is probably one of the best senators out of the 100, but that isn’t really saying much.

Now that he is running for president, I am told that Rand Paul has had to take certain positions in the Senate in order to position himself as electable in the presidential race.  Once in office, he will be more like his dad.

I suppose if Rand gets elected president, then I will be told throughout his first term that he has to take certain positions in order to get elected to a second term.  Once he gets into a second term, then he will be more like his dad.

For the last 6 years, I have been told by libertarian-leaning conservatives, and even some libertarians, that Rand Paul cannot be too much like his father.  If Rand is like Ron, then he won’t be successful.

Let’s take a moment to reflect on what would have happened if Rand had been like Ron.  What if Rand had been delivering the same radical message as his father?  We don’t even have to go back over the last 6 years.  Let’s just consider if Rand’s presidential campaign had been similar to his father’s campaigns from 2007/2008 and 2011/2012.

1. If Rand had been more like Ron, there would be hundreds of thousands of young adults today converted to a more radical libertarian message because they were too young to comprehend or take an interest in Ron’s message 4 or 8 years ago.
2. If Rand had been more like Ron, there would be college students today taking their summers and holiday breaks to campaign for Rand.
3. If Rand had been more like Ron, we would be seeing “money bombs” in which Rand’s campaign could be raising millions of dollars over a one-day period.
4. If Rand had been more like Ron, we would be seeing blimps flying overhead with his name on them.
5. If Rand had been more like Ron, there would be people taking leaves of absence from work to campaign for him.
6. If Rand had been more like Ron, there would be signs and bumper stickers all over the place with Rand’s name on them.
7. If Rand had been more like Ron, the post-debate polls taken online would have been overwhelmed with Rand supporters.
8. If Rand had been more like Ron, we would be hearing true opposition to foreign interventionism, the drug war, the Federal Reserve, and other issues where we currently do not hear a libertarian message.
9. If Rand had been more like Ron, he would be much higher in the polls.
10. If Rand had been more like Ron, he would actually have a decent chance of winning in Iowa.

What worked for Rand in running for his Senate seat has not worked in running for the presidency.  Libertarians are worse off for Rand Paul not being a libertarian.  But we don’t have to worry about him winning the presidency and being misrepresented as a libertarian.  That’s because he is not going to be elected.

He has miscalculated politically, and I still don’t think he understands.  He thought he could play both sides of the fence.  Instead, he has managed to turn off both sides of the fence.

He wasn’t elected Senator by hiding from his father’s name.  If his name were Rand Smith, he would never have been elected to the Senate.  In terms of his presidential run, his name may as well be Rand Smith.

There was a recent article published on SchiffGold and reproduced on LewRockwell.com.  It asks the question if Americans could someday be using dollars as napkins?

The story is really about Venezuela.  The currency there is in hyperinflation.  Different people have different definitions of hyperinflation, but when estimates of the inflation rate range from 400% annually to over 800% annually, then most people will agree that is hyperinflation.

Venezuela is a great example of the “paradise” that the socialists seek.  The people chose Hugo Chavez to rule over them and his successor continues on with the same authoritarian policies.

The government will do everything in the name of helping the poor.  Meanwhile there are a greater percentage of poor people suffering in Venezuela than anywhere else in South America.  You can read stories about massive shortages of food, toilet paper, and other basic necessities.  This is the socialist paradise that Bernie Sanders wants to impose on us.

The government policies have been horrific in virtually every aspect, but the hyperinflation is probably the worst aspect.  When you can’t trade with a reliable currency, it leads to complete market chaos.  The whole pricing system is corrupt, if you can even call it a pricing system.  Until the hyperinflation stops or the currency is abandoned, the massive shortages will continue.

The article linked to above shows a picture of someone using a 2 bolivar note as a napkin to hold food.  It points out that the 2 bolivar note is somewhere around the equivalent of one-third of a U.S. cent.  This may be cheaper than using a napkin.  Unfortunately, paper money does not typically have a good texture for being used as toilet paper.  Toilet paper in Venezuela is more valuable at this point.

As to the question of whether the U.S. dollar will ultimately be used as a napkin, I still believe this is not going to happen.  Hyperinflation is not an impossible scenario in the U.S., but it is not a likely one.

This would mean a total loss of control of the currency by the Federal Reserve.  The Fed members would be destroying their own power and their own pensions.

We could certainly see double-digit price inflation as was seen in the 1970s, but it would be hard to imagine the Fed letting it go beyond that without calling in the likes of a Paul Volcker.

We also have to realize that the central bank’s actions are at least somewhat of a reflection of popular opinion.  If the public has little opinion, then they will try to get away with as much as they can.  I said above that the Venezuelans “chose” Hugo Chavez to rule over them.  This isn’t true of every individual in Venezuela, but it is true as a collective.  In order for a thug to rule as he did, there has to at least be tacit consent among a majority of the population.

It may not always feel this way, but there is a more independent and liberty-oriented streak in the hearts of the American people.  Just imagine if price inflation reaches 10% by the government’s own statistics.  What will happen?

My guess is that it won’t be like the 1970s.  There will be a strong minority who understand that the problem is central banking.  They will be posting articles and YouTube videos on Facebook.  They could do that now, but a lot of their friends probably ignore it.  If prices are going up at a significant pace and the American middle class is really feeling it, then some will start to pay attention.

I would say that 5 to 10 percent of the adult population in the U.S. have a decent understanding of the central bank.  They at least understand that the Fed is the primary culprit in rising prices.  If a good percentage of these people take to social media to tell their friends and relatives, I believe that a majority of Americans will come to at least a basic understanding that the central bank is the problem.

For this reason, I don’t think we will be using U.S. dollars as napkins.  They don’t soak up grease very well anyway.

The big story in the news today was the Kentucky clerk who is refusing to issue marriage licenses.  This comes after a Supreme Court decision that permits marriage licenses for gay couples.

This all reached an apex today when it was reported that the clerk – Kim Davis – was arrested after being found in contempt of court.  There is so much wrong with this, it is hard to know where to begin.

My immediate reaction was surprise.  I know the state does some crazy things, but are they really sending someone to jail for refusing to issue marriage licenses?  In the real world outside of government, you don’t go to jail for not doing your job.  Usually your boss will tell you to do your job or they will find someone else to do it.  In most cases, if you still refuse, you will be fired.

This is the stark contrast between the force of government and the voluntary society.  In the free marketplace, this situation would be handled peacefully.  Nobody would be sent to jail.  If someone refused to do their job, they would likely be fired and not allowed on the property any more.  They would receive their last paycheck.

With this outrage, I get to hear all of the ignorant comments from both sides of the debate.  I generally try to be optimistic for the future of liberty, but I have to admit it is a little harder to be optimistic on days like today.

I have heard both sides citing the First Amendment to the Constitution.  I actually heard some ignorant fool saying that she is violating the 1st Amendment by not issuing the licenses because she is denying people their rights.

Let’s all read the 1st Amendment together.  In fact, you really only need to read the first five words: “Congress shall make no law…”

In case you need a translation, it means that Congress shall make no law.  How can somebody not in Congress not doing something be a violation of the 1st Amendment?  She is in violation of not doing her job, but there is quite a difference.

I don’t really sympathize with this woman either.  I know everyone has issues they are passionate about, but get a life.  The woman is working for the government, so what does she expect?  And for all of those defending her in the name of religious freedom, it must be difficult knowing that the woman was reportedly divorced four times.  I think someone should have refused to issue her a marriage license at some point along the way.

Of course, when it comes down to it, the government shouldn’t be licensing marriage.  As a libertarian, I have to remind people that this shouldn’t even be a debate.  It should be settled between private parties.  This may or may not include a church, but it shouldn’t involve the state.

I wish gay couples would just get married without the government-approved license.  Just avoid the gatekeepers.

I am sympathetic to the fact that gay couples are not treated equally in terms of filing taxes and health benefits.  As usual, this is all a problem created by the state.  There should be no income tax, so that would solve that problem.

In terms of health benefits, it is only tied to employers because of government taxes and regulations that originally put us on that path. This would also become a non-issue if the income tax were eliminated and health regulations repealed.

In terms of marriage, if there is to be any involvement, it should just be the state recognizing what is basically a contract.  This would be useful in cases of divorce and a few other circumstances such as granting access to records.

Regardless though, this should be decentralized to at least the state level.  Washington DC should have nothing to do with this issue.  After all of the ignorant fools get done reading what the 1st Amendment actually says, maybe they can move on to the 10th Amendment.

I hope this latest case of Kim Davis being sent to jail at least illustrates for some Americans the brutality of the state and how it handles situations.  We must always push for voluntary solutions that do not involve the use of force.

There was a piece published on LewRockwell.com by Paul Craig Roberts regarding the “dying institutions of Western civilization”.

Paul Craig Roberts has been a great opponent of the surveillance state and the U.S. empire.  Considering he once worked for the Reagan administration, it is quite amazing how outspoken he is against U.S. government intervention.  We could probably say the same about David Stockman.

While Paul Craig Roberts is frequently read by libertarians, I do feel the need to warn libertarians that his economics are not sound.  In his most recent article, there is one particular part I want to address.

Roberts writes a section called “A Robot Will Take Your Job”.  He first attacks the notion of moving jobs overseas as being beneficial.  I don’t know what government schemes Roberts advocates to prevent this from happening, but it would be nice to know his “solution”.

Some jobs do get shifted out of the country due to government policies of regulation and taxation.  The answer to this of course is to dramatically reduce government regulation and taxation, including corporate taxes.  But these jobs going overseas is a result of big government, not because of a lack of government.  Unfortunately, I don’t think this is what Roberts has in mind.

A lot of jobs going overseas would still happen in a relatively free market though.  It makes sense in many circumstances for a company to hire people out of the country if the job can be done more efficiently or at a reduced cost.  But this is beneficial for most people, especially consumers, which is really everyone.

Roberts then specifically addresses the “problem” of having robots perform labor.  Roberts states:

“The unaddressed problem is: what happens to consumer demand, on which the economy depends, when humans are replaced by robots? Robots don’t need a paycheck in order to purchase food, clothes, shoes, entertainment, health care, go on vacations, or to make car, utility, credit card, rent or mortgage payments. The consumer economy has suffered from incomes lost to jobs offshoring. If robots replace yet more Americans, where does the income come from to purchase the products of the robots’ work? Any one firm’s owners and managers can benefit from lowering costs by replacing a human workforce with robots, but all firms cannot. If all firms replace their work forces with robots, the rate of unemployment becomes astronomical, and consumer demand collapses pulling down the economy.”

He is essentially answering his own question, yet he doesn’t even realize it.  This is a complete lack of understanding of free market economics.

In a free market, you would never get to the point of consumers not being able to afford the products being made by robots.  Some products may go out of fashion, as has always happened in modern history.  But companies aren’t going to continually make products and sell them for a price that most consumers can’t afford.

This is why we have prices.  Prices basically regulate the whole process and ensure clearance.  If a product isn’t selling, then the price will fall, or else the product will stop being sold.  Companies are only going to use robots if it is more cost-effective to use them.  Overall, this should mean reduced consumer prices, all else being equal.

There is another major fallacy that Roberts is falling for.  He is assuming a limited number of jobs in this world.  But just because robots replace people in some jobs, it doesn’t mean there aren’t other things to do.  We live in a world of scarcity where people continually demand goods and services.  If they were all available without requiring any work, then jobs wouldn’t be needed because everyone could just consume everything for free.

Human beings are quite versatile.  People can work in many different areas.  They can learn new skills.  If robots start doing the work of fast food restaurant workers, then these workers can do something else.

Again, prices – in this case wages – regulate everything.  I use the term “regulate” in a good way here.  There is very little unemployment in a true free market because someone is almost always willing to hire at some wage.  It may not be the wage that some workers want, but there is a clearing price at some level.

I would be willing to hire a personal assistant for $10 per day.  This sounds ridiculous, but it is true, as long as I can find someone who is honest and somewhat capable.  But probably nobody will work for that wage unless they deemed some other value in working for me, such as learning new skills.

The key is that there are richer people out there who have more of a need for a personal assistant who would be willing to pay a lot more than $10 per day to someone.  In a free society, there is always work to be done.

Will robots take jobs away?  In a sense, yes.  They will replace workers in particular jobs, but there will still be plenty of work to do.  Meanwhile, the presence of robots will make goods and services less expensive for consumers, which is beneficial to everyone.

If you have a job that could potentially be taken over by a robot, it is a good idea to have a backup plan.  You should seek other marketable skills.  But this isn’t just good advice because of robots.  This is good advice for anyone at any time.  You could be vulnerable in your job for any number of reasons.

Don’t worry about robots.  In the long run, they will make our lives better.  You should worry about your own marketable skills though.

The presidential race is now in full swing, even though the actual general election is still well over a year away.  But the primaries are not that far away.

While I generally think presidential elections are overrated, I still find them interesting to watch.  I say they are overrated in the fact that the next president will generally continue the establishment policies of the previous one.  The president is somewhat of a figurehead and cannot stray too far from the establishment opinion.

The previous two presidential elections were extremely interesting for me because of the presence of Ron Paul.  He was giving a real libertarian message that many people had never heard before.

This election cycle is less interesting in that respect, but it is interesting that the less establishment candidates are doing so well.  It shows that public opinion really is fed up.  Between Donald Trump, Ben Carson, and Carly Fiorina – the Republicans who have never held political office – they are getting support from well over half of Republican voters right now.

Most of the focus has been on the Republican candidates.  Some of this has to do with Donald Trump, but it is also because there are about 17 major candidates.  Plus, there has already been a debate.

The race for the Democratic nomination has received less attention.  Some think it is a foregone conclusion that Hillary Clinton will get the nomination.  But as I have pointed out before, for some reason the establishment is nervous about Clinton.  Perhaps they fear that something worse will come out than just some hidden emails.

I am not downplaying the email scandal.  It reminds me of what the people are frequently told by proponents of spying: If you aren’t doing anything wrong, you should have nothing to worry about.  Of course, this is not at all true, but it is probably true that Hillary Clinton has things to hide.

It is just hard for me to take the email scandal seriously because I believe Hillary Clinton is a major criminal who should be locked up for life.  It is truly unbelievable how many people close to the Clintons either ended up dead or in jail.

But if the establishment wants to use an email scandal as their excuse to eliminate Hillary Clinton from the race, that is fine by me.

The socialist Bernie Sanders will probably not be the nominee.  The American people will not elect a self-avowed socialist.  They will put up with Keynesianism, fascism, corporatism, mercantilism, and a bunch of other things, but not outright socialism.

I think another candidate will emerge to challenge Clinton.  I don’t really see it being Joe Biden.  I wouldn’t be surprised if he throws his hat in the ring, but I doubt he would win the nomination.

Why?  As just one example, after he was creepily touching the wife of the new U.S. Defense Secretary, Jimmy Fallon had a field day with this for many days afterwards.

That leaves three other people to challenge Clinton: Lincoln Chafee, Martin O’Malley, and Jim Webb.

I just don’t think Chafee has any chance, which leaves O’Malley and Webb.  At this point, I believe that one of those two will end up seriously challenging Hillary Clinton for the nomination.  And if the email scandal gets out of hand, then one of them could end up getting it easily.

I can’t completely write off Sanders as the nominee, but I think most Democrats know he won’t win in a general election.  Remember Howard Dean.

It is too hard to say how everything will play out in the end.  There are too many variables.  At this point though, I would give a slight edge to the Republican Party.  With the way the economy is shaping up, it is going to be tough times for whoever takes office in January 2017.

The last 7 years have been quite unique in terms of the U.S. economy. It is almost like a new experiment, but unfortunately it isn’t going to end well.  Our optimism should lie in the fact that hopefully most people will recognize the failure of the experiment.

Since the fall of 2008, the Fed has quintupled the adjusted monetary base.  This alone is unprecedented for the modern-day United States.

But the massive monetary inflation has not translated into massive price inflation.  Part of it is due to the continued fear by Americans who are a little less anxious to spend money than in the past.  But the main reason is that banks have not lent out most of the new money.  It has piled up in excess reserves.

Due to the huge excess reserves, the federal funds rate has been virtually meaningless.  This is the overnight lending rate for banks.  When we hear about the Fed possibly raising interest rates, this is the rate that people are referring to.  It has been targeted between zero and a quarter percent since late 2008.

Since the banks have massive piles of excess reserves, there is little need for overnight borrowing.  Therefore, the rate stays low.

Historically, the federal funds rate was important because it dictated the Fed’s monetary policy.  To lower the rate, the Fed would generally have to buy U.S. Treasuries.  This would create money out of thin air.  To raise rates, the Fed would typically have to contract the money supply.

With the huge excess reserves, this no longer holds true.  The Fed can inflate or deflate the money supply and it isn’t going to have much effect on the federal funds rate, unless it massively deflated, which we know isn’t going to happen.  The only way for the Fed to realistically increase its key rate is by paying a higher interest rate on bank reserves.

Now that U.S. stocks are in turmoil, many analysts are questioning whether the Fed will raise rates in September, or even this year at all.  But there are some who think the Fed may go ahead with their plan so that they don’t look weak and indecisive.  It may look worse for the economy if the Fed doesn’t follow through.

Meanwhile, I have already seen a few calls for more quantitative easing (QE).  This simply means more monetary inflation.  It means increasing the money supply.

So while there are still some people saying the Fed could still raise rates, there are a few who are already calling for more digital money printing.  How do you reconcile these opposing views?

In the past, this would have been completely contradictory.  Higher rates meant a tighter monetary policy.  Lower rates meant a looser monetary policy.  But that is no longer the case today.

So I am asking the question that I have yet to see asked:  Is it possible that the Fed may raise the federal funds rate and start another round of quantitative easing at the same time?

With the huge excess reserves, this is quite doable.  The Fed could pay banks a slightly higher rate on reserves, thus increasing the overnight lending rate.  Meanwhile, it can resume its program of monetary inflation by buying more U.S. government debt or by bailing out the banks even more through purchases of mortgage-backed securities.

We could actually see a double bank bailout with barely anyone recognizing that it is happening.  The Fed can pay more to banks to keep excess reserves sitting with the Fed that they would have kept there anyway.  And the Fed can buy bad assets from the banks and relieve them of their bad loans.

While I think the economy is in trouble, simply because the Austrian Business Cycle Theory is playing itself out, at least we won’t see the same banking problems as we did in 2008.  How could we?

The Fed has been bailing out the banks for the last 7 years.  First it was direct, and nearly everyone was mad.  Then the Fed got smart about it and bailed out the banks through interest payments on reserves and by buying their bad assets.  The banks have to be far sounder today than they were 7 years ago.

I don’t think we are done seeing these crazy and unprecedented moves in monetary policy.  Let’s see if it is possible for the Fed to raise rates and create monetary inflation at the same time.

Stocks have been plummeting.  Last week was brutal for stock investors and the damage has continued.  I saw some talk about a “turnaround Tuesday”.  And it looked for a while like the markets were turning around.

The Dow was up over 400 points at one time during the day.  But the people calling for a turnaround Tuesday got a bigger turnaround than they anticipated.  In the last hour of trading, all gains were wiped out, plus some.  The Dow ended up down over 200 points.

If the market had opened down 200 points and it finished that way at the end of the day, then it probably wouldn’t have seemed so bad.  But this was another 600 point swing in one day.

I don’t believe this is just a brief correction.  I wrote recently about how this is just a bubble bursting, as we should expect based on the Austrian Business Cycle Theory.

Many people, including some presidential candidates, are blaming China for the problem.  But if U.S. markets are reacting this dramatically because of China, then U.S. investors better watch out because things are going to get a whole lot worse in China too.

Of course, China is not to blame for the underlying problems.  China and the U.S. are similar.  They have both experienced artificial booms due to bad government policies and loose monetary policies from their respective central banks.  The problems in China are just worse and more magnified.

It is also interesting that most of the major world players are currently in a state of loose monetary policy.  The one exception is the United States.  The Fed ended QE3 back in October 2014.  It has been almost 10 months.

Since the stock market bubble was blown up as a result of the Fed’s easy money policies since late 2008, it should not be a surprise that the bubble is deflating.  This is what happens when the easy money dries up.

It should be more concerning for China, Japan, and much of Western Europe.  These places still have easy money flowing and yet still face recessionary conditions with falling markets.

For example, the Bank of Japan has been creating new money out of thin air on an unprecedented scale.  The debt keeps growing to huge levels there as well.  Yet the economy is basically in a recession, even with the easy money.  How bad will it get when the new money entering the economy slows down or stops?

Some U.S. investors are saying this is a healthy correction.  I say it is healthy only in the sense that it is revealing the prior malinvestment.  But I don’t take this as a signal to buy.

I advocate a permanent portfolio, but beyond this, I would be mostly out of stocks.  If I had to speculate right now, I would be betting on lower markets.

This isn’t to say it will be a free fall.  We will probably see some “up” days soon.  There might be some really big “up” days.  But the volatility will remain and overall we should be very bearish on stocks right now.

There is talk of the Fed delaying a rate hike in September, but the rate hike is mostly meaningless anyway.  I have already read predictions of a new round of quantitative easing (money creation).  This is what we really have to watch out for.

If the Fed does come up with any kind of new money creation scheme with any significance, then this could change the whole investing game quickly.  If it is significant enough, we will be watching gold closely.

Stay tuned for more roller coaster rides.