There is a bit of a battle going on in the libertarian community about Bitcoin.  The price of one Bitcoin recently hit $1,000, which is probably the reason it is being discussed to such an extent.  Gary North recently came out with a scathing article about Bitcoin, or at least against it being considered money.  There are also those who disagree with Gary North (see here and here).

If you search around the web, you can find many people taking positions for and against Bitcoin.  It is not surprising that it is a hot topic in libertarian circles because most libertarians and Austrian school followers are highly critical of government fiat money and would prefer an alternative.

I think it is important to point out that the biggest disagreements are about definitions (such as the definition of money) and about the future prospects of Bitcoin.  I haven’t read or heard any libertarian who says that Bitcoin should be illegal or that it is somehow fraudulent.

While I tend to side more with Gary North on this debate, I can’t fully support his initial arguments.  I disagree with the use of the term Ponzi scheme.  I don’t really consider Bitcoin to be a Ponzi scheme.  North defines Ponzi scheme in his article and it seems his definition differs from what most people would consider a Ponzi scheme.

Social Security is a Ponzi scheme.  It relies on future participants to keep the system afloat.  Bitcoin could technically keep being used if no new participants entered the market.  While it would not likely survive, it is still technically possible.  With Social Security, a true Ponzi scheme, the system would have to fail without future participants.  It will probably fail even with participants.  If Bitcoin is a Ponzi scheme, then so is a bad stock.  I just prefer not to describe Bitcoin with this term, especially since it implies fraud.

My one other quibble with North is his use of absolutes.  He is essentially guaranteeing that Bitcoin will fail.

While I think there is a high probability that Bitcoin will fail in the long run, I can’t say that it is impossible for it to one day be widely used as money.  As Austrian economics teaches us, human action is unpredictable.  We can guess what humans are likely to do and how they will likely react to certain situations.  But I can’t be certain of what millions of people are going to decide to do.

Bitcoins became popular in Cyprus when people’s bank accounts were being confiscated.  If the Federal Reserve were to make some ridiculous announcement about expanding QE and the U.S. dollar took a nosedive, who knows what people will turn to?  While I think gold and silver would be more likely to take hold, I can’t say for certain that people won’t turn to something like Bitcoin.

With that said, I am generally on the side of Gary North here in thinking that this is a massive bubble that is about to pop.  I have no problem with Bitcoin and people investing in it.  I am happy that people are trying to find alternatives to government fiat money.  At the same time, I am doubtful that Bitcoin will last.

Despite what some Bitcoin defenders say, it is not a widely used medium of exchange.  It is a medium of exchange with certain merchants and small markets.  But try walking into Walmart and paying with Bitcoins.  Try going to the grocery store and paying with Bitcoins.  Try to buy a house with Bitcoins.  Try to get your employer to pay you in Bitcoins.  Try to make a long-term contract denominated in Bitcoins.

Actually, the last point is probably the biggest.  Who would make a contract denominated in Bitcoins right now, unless the payment were immediate?  Could you imagine a car dealership selling a car for 20 Bitcoins and giving a loan?  If the Bitcoin market crashes, the car dealership could end up selling the car for 20 bucks.  As North points out, there is no stability right now, which makes it a bad prospect for money.

There is a reason everyone is talking about the “price” of Bitcoins.  It is all in terms of the U.S. dollar, which really is money.  Libertarians may not like the fact that the dollar is money, but it is in fact the most widely used medium of exchange.

In conclusion, I have nothing against Bitcoin and I can’t say that it is impossible that it will one day be widely used as money, but I have my strong doubts.  I think the more likely scenario is that it is in a major bubble right now.  It should be treated as an investment.  The price may go up a lot more before it crashes.  But bubble tops are hard to predict.  We don’t know how far they will go.  If you are going to use some U.S. dollars to buy Bitcoin, then you should consider it a speculation and you should realize that it is highly risky at this point.

What do Jesse Ventura, Rand Paul, and Hillary Clinton all have in common?

Answer: They are all potential candidates for the 2016 presidential election.  That is about the only thing that all 3 have in common.

I recently watched an interview with Jesse Ventura.  The interviewer was trying to nail down Jesse Ventura on whether he would run for the presidency in 2016.  Ventura could not be coaxed into saying he would run, but he also wouldn’t deny that he was considering it.  If he ran, he would definitely not run as a Republican or Democrat.  I don’t know if he would consider running on the Libertarian Party ticket (if he could even get the nomination), but I think the most likely scenario is that he would run as an independent or “no party affiliation”.

And there is a really good chance that Rand Paul and Hillary Clinton could run and possibly be the nominees of their parties.  Rand Paul has been positioning himself as the Tea Party conservative of his party.  He has taken watered-down positions of his dad, or sometimes worse.  He is trying to get the conservatives and he likely feels he needs to not take too strong of a peace stance.

Hillary Clinton has been planning her move into the White House since before she left it.  Her run for the Senator in New York was part of her stepping stone strategy.  Barack Obama derailed her plans a bit in 2008, but she is still determined to get back to the White House.

So what is a libertarian to do in 2016?  Let’s say that these three people are running in the general election.  Should a libertarian vote for any of them, and if so, which one?

I am not here to tell anyone how they should vote or if they should vote.  I just want to share my thoughts on the possibility and what I will consider.

First, I don’t think I need to talk about Hillary Clinton much.  I doubt there is one person on this earth who would vote for Hillary and still call themselves a libertarian.  There is probably an exception somewhere, but it isn’t worth the discussion.

Second, I am not directing this at people who refuse to vote.  I understand your position, but there is no point on discussing whether libertarians should even vote, at least for this discussion.  But I would like to point out that there are some people who refuse to vote who still supported Ron Paul’s candidacy just to spread the word of liberty, even if they didn’t actually cast a vote for him.  So these people may still be interested in this topic.

Third, I have no idea what will happen with the Libertarian Party or any other third party.  If the LP nominates a strong, principled candidate, this may alter the results.

So what about Ventura vs. Paul?  Who should a libertarian support, if either?  If it were Ron Paul, I think the choice would be easy.  But this is Rand Paul.

I have not been happy with many things Rand Paul has said and done.  He has not been as bad as the hardcore war hawks in the Republican Party establishment, but he does not have the peace tone of his father either.  He has supported big spending on the U.S. military and he has been only a light critic, if at all, on civil liberty invasions and U.S. wars and occupations.  I have no idea what a president Rand Paul would do, but I’m not convinced he would bring the troops home.

Rand Paul is somewhat good on economic issues, but even here, he is not nearly as strong as his father.  And, of course, if he continues to support the U.S. empire overseas, it is hard to be a fiscal conservative.

Jesse Ventura is a lot different.  He definitely has a libertarian streak when it comes to foreign policy and civil liberties.  But the things I like best about Ventura is that he is seemingly honest and he is not afraid to stand against the establishment.  This is a man who hosted a television show about conspiracy theories.  He will question the government on almost anything and he seems fearless at times.  I think Ventura would be excellent in being his own man and trying to take down the establishment, if he could survive.

There is a downside to Ventura.  He is ignorant when it comes to economics.  He doesn’t understand Austrian economics at all.  I am not saying he is comparable to Barack Obama in his understanding of economics.  He understands far more than Obama.  He probably understands far more than the average politician.  But libertarians should not fool themselves on this.  Jesse Ventura, even though he has a libertarian streak, is rather poor when it comes to free market economics.

As it stands right now, if Jesse Ventura and Rand Paul were both running in the general election, I think I would favor Ventura.  While his economics are poor at times, he is honest and he has a better chance of upsetting the establishment.  He has a better chance at exposing all of the government lies.

I do not trust Rand Paul at this point.  I am not saying he is bad.  I just don’t trust that he will stand up to the establishment.  He is trying too hard to fit in right now.  I could see him being like Reagan.  He would be good in much of his rhetoric, but we would still get more big government.

This is what made Ron Paul so unique as a candidate.  He is honest and he understands free market economics better than almost anyone.  He has both the character and the competency.

If there is a matchup between Ventura, Paul, and Clinton in 2016, it will be one for the record books.  I slightly favor Ventura right now, but I could easily decide to support the LP candidate or nobody at all.  It will depend on what the candidates are saying and how believable they are.  I would not be able to support Rand Paul unless he repudiated much of what he has said and done over the last couple of years.  I don’t know if his father would keep him straight, but I can’t depend on that happening.

Of course, the biggest fear would be Hillary winning with a plurality, much the way her husband did.  Hillary could get 40% of the vote and easily win with the other candidates getting around 30% each.

I hope Jesse Ventura does run.  If nothing else, he will call attention issues to the American people that they should be aware of.  And he would certainly make the debates interesting.

Happy Thanksgiving to all who celebrate.  I think it really is a great time to give thanks for what you have.  This should include the love of family and friends, as well as the goods and services we enjoy.

While it is easy to see all of the bad things going on in the world and to be pessimistic about the economy and the job market, we should also step back and realize how blessed most of us are.

If you are reading this blog, then you either have a computer or have access to a computer or some kind of electronic device.  The word “blog” as we know it today certainly didn’t exist 20 years ago.

I also like to think about food, particularly since Thanksgiving involves eating a big meal.  Most of us don’t have to go out and pick our own food or hunt for our meat, unless it is by choice.  We can just go to the grocery store and walk down the aisles and pick out what we like best.  Then we take out our credit card (or cash or food stamps or checkbook) and the food is all ours.  We can take it home and enjoy it under the roof of our shelter in a comfortable climate.

This is the miracle of property rights and the division of labor.

Whenever you get really stressed out over something like a job or being tight on money, you should just think about what you do have and the luxuries you do enjoy.

This doesn’t mean you should never complain, especially when it comes to the politicians stealing your money.  But for your own health and well being, it is important to take time every now and then to recognize the good things that you have.

Happy Thanksgiving!

I have been critical of virtually everything that Obama and his administration have done since the moment he took office.  He has been a disaster on all economic issues, on civil liberties, and on foreign policy.  I consider him a disaster on foreign policy because he has continued the wars in Iraq and Afghanistan (although to a lesser extent in Iraq) and he has also started new ones.  He has also used drone bombings in his arsenal to kill even more innocent civilians.

But while I consider Obama and his administration a disaster, I think he may be the lesser of disasters when it comes to foreign policy, at least in terms of the two major parties.

The latest foreign policy news is that Obama is welcoming a deal regarding Iran and its pursuit of uranium enrichment.  It would also lessen sanctions on Iran, which are really just sanctions against the innocent people living there.

I can’t imagine that George W. Bush would have ever been a part of such a thing.  I also can’t imagine John McCain or Mitt Romney doing it.  Maybe there is a chance with Romney, but McCain as president seems like it would have guaranteed a world war or nuclear war.

When Obama was running for president both times, I said that I thought it was better that Obama get elected over his main opponent.  While I consider Obama to be evil when it comes to foreign policy, he is actually less so than what his opponents were indicating they would do.

Obama has been terrible on fiscal policy, but at least most Americans recognize him as pro-big government.  So with a still struggling economy and Obamacare almost instantly turning into a major problem, at least Americans can blame Obama and his big government policies.  If Romney were president, some would be blaming his supposed free market policies for everything that is wrong.

In that sense, Obama has been really good for libertarians.  He is about as good as we could have hoped for in foreign policy from either of the two major parties.  It still is terrible, but probably the least bad.  In terms of economics, Romney and McCain would have both been bad, but at least with Obama we can correctly blame the problem of big government policies.

And if we are going to get big government policies, it is actually better to get them in terms of more welfare as opposed to more warfare.  While Obamacare is terrible and really probably will result in needless deaths, at least it isn’t killing anyone directly at the moment.  With war, death to innocent people is almost a guarantee.

I think this whole deal with Iran is a great step forward toward more peace in this world.  It is a small step, but at least it seems that it is a step in the right direction for once.

Despite what all the war hawks said and continue to say, the people of Iran are not evil.  Even those in power there are not as evil as what has been accused.  They are no more evil than most American politicians.  The former president, Ahmadinejad, was supposed to be a true nut case according to the Republican hacks.  He was supposed to be the next Hitler.  Yet, he stepped aside for the next president who was elected by the people.

So while this is a small step and it doesn’t excuse all of the other evil things done by Obama, I will say this one time that Obama may have done something right and just.

It is being reported that some U.S. banks are warning that they might have to start charging a fee to depositors.  This would include individuals and companies.  In other words, if you have a checking account, you will likely have to pay a monthly maintenance fee.

The reason for this warning is due to fear (by the bankers) that the Fed may stop paying interest on excess reserves.  The minutes from the Fed’s October meeting suggest that this is an option that the Fed might take to offset the effects of “tapering”.

In other words, the Fed is going to slow down its monetary inflation at some point in the future.  It will keep creating money out of thin air, but just at a slower pace.  So to prevent the economy from being harmed too much (in the eyes of a statist), the Fed will eliminate interest payments on excess reserves.  I suppose the theory is that this would then encourage banks to reduce their excess reserves.  This would mean more fractional reserve banking and would likely lead to higher price inflation as money multiplies through the system.

Interestingly, in a true free market environment, people likely would pay a fee for banks to hold their deposits.  If you wanted to avoid such a fee, you would likely have to agree with the bank that the bank can lend out your money.  Otherwise, it is a loss for the bank.  Why would the bank hold your money for you while not being able to lend it out?  If you didn’t pay a maintenance fee, the bank would be losing money on its service.

Of course, in a true free market environment, the banks would not be getting bailed out and would not have the FDIC and the Fed as backstops.  Banks would have to take far less risk.

I would be surprised if the Fed decides to eliminate the .25% interest it pays on excess reserves.  This has been done since 2008 and it has helped keep a lid on prices by encouraging banks not to lend as much.

I’m guessing if the Fed reduced this interest, then it would just be eliminated.  It is already small, so I’m not sure what the point would be of reducing it to something like .10%.

If the interest payment is eliminated, I’m still not sure how much of a difference it will make.  As one person said in the article, it is not as if banks will suddenly start lending, because there isn’t the demand for it.  It may not be that the banks don’t want to lend.  It may be that people and businesses don’t want to borrow or simply can’t borrow due to their own financial situation.

If the Fed does eliminate the interest payments on bank reserves, then we will likely see the maintenance fees on checking accounts become more common.  Most Americans will complain about it.  In some sense, they are right to be mad because the big banks are continually being subsidized and bailed out at the expense of the little guy.

But Americans shouldn’t worry so much about paying a small monthly fee for their checking account.  They should worry about the massive price inflation that could be unleashed if banks start lending more.  Paying a $5 monthly fee to the bank will be nothing compared to paying an extra $25 or $50 a week for groceries.

In conclusion, I’m not sure why the Fed would threaten to reduce or eliminate interest payments on bank reserves.  The Fed has been able to more than quadruple the monetary base in the last 5 years with minimal consumer price inflation.  The Fed has been able to have its cake and eat it too.  Why would they risk changing this scenario right now?

If the Fed does eliminate interest payments and it has the desired effect of more bank lending, then we should all be fearful for the massive price inflation that will likely follow.

I will occasionally tune in to the Suze Orman show on CNBC.  I paid attention to Suze Orman quite a while back and I have even read parts of one her books.  At the time, I was looking at buying a primary residence and she offers some good basic lessons and advice in at least one of her books.

I used to go to Yahoo! Finance for my market updates.  I could get a quick update in the middle of the day and then check it again after close.  It would show me the major stock market indexes of the U.S., the 10-year yield, the gold price, and the oil price.  It also showed me quotes of the last 10 stocks (or ETFs and mutual funds) that I had searched.

I didn’t really go to Yahoo! Finance for the articles, but I would occasionally click on something that caught my eye.  The site basically gave me what I was looking for.

Since it was working well for me, the company decided to revamp its site.  It changed quite a bit.  The 10-year yield doesn’t show up.  I’m guessing you can find it somewhere, but I’m not really in the mood for searching.  Sometimes, the U.S. markets don’t even show up unless I click away from Asia or Europe to find the U.S.

That is just on my computer.  It gets far worse on my smartphone.  Like so many websites, the site designers make the mobile site far different and far less user friendly.  I used to get the last 10 stock quotes.  These are nowhere to be found on my mobile device.  I scroll down and I just get an endless list of article headlines.  It is almost completely useless.

Why would a company do such thing?  It is absolutely foolish.

I have been back to the site a few times to see if it has been “fixed”.  If I find something I like better, I will probably not go back anymore.  At this point, it won’t be hard to find something better.

Even if Yahoo! Finance does revert back to its past form, it may be too late.  I might not check back to see.  I might even find something I like better than the Yahoo site in its previous form.  The longer the company waits to change back, the more visitors it will lose.

This is a good life lesson and a good business lesson.  The saying is, “if it ain’t broke, don’t fix it.”  It amazes me how many people ignore this simple advice.  Why would you change something that is already working?  Wouldn’t you at least do extensive marketing research first?  I guarantee you that Yahoo! Finance did not go out and survey 500 customers to see if they liked the new site better before launching it for everyone.  The customers are what count and Yahoo ignored them.

Ironically, it was just a few years ago that I used Yahoo as my search engine.  I had several days in a row where it was slow.  I would type in a search and the letters and words would have a delay from my typing.  I tried Google and did not have the same problem.  I went back to Yahoo for a few days and it was still giving me problems.  I have used Google for my searches ever since.

I was not very forgiving as a customer.  I assume most people are the same way.  You are not going to keep going back to a site that isn’t working for you if there is a perfectly good substitute that is working.

An important phrase is, “first, do no harm”, often attributed to the Hippocratic Oath for doctors.  This should have been Yahoo’s motto, but it ignored it.  It tried to make its finance website fancier and only made it less user friendly.

This reminds me of a struggling football team that fires the quarterback or head coach.  The problem though was really the wide receivers or offensive line.  By firing the wrong person, the team gets even worse.

If things are working well, why change them?  If they need improvement, it doesn’t mean that drastic changes necessarily have to be made.  Make a small change and see if people like it.  This is important in almost any business and is not exclusive to websites.

It has actually been quite amazing to see how much criticism has been thrown at Obamacare.  It is typical for Jay Leno and Saturday Night Live to make fun of such things.  These shows generally do not have a problem criticizing the left if it is worth a good laugh.  But to see the more serious (fraudulent) news programs go after Obamacare is a sight.

It is not that the so-called mainstream media is saying that the Republicans were right.  They certainly would not say that the libertarians were right either.  But they have been somewhat critical of a program that was almost universally supported by Democrats and almost universally opposed by Republicans and libertarians.

This is not a matter of the media changing its opinions.  It is a matter of Obamacare being a complete and utter failure.  It is so bad, that even the leftist media can no longer defend it.

Obama’s approval ratings are down, although some polls still show his approval around 40%.  My question is who these 40% are?  Are they paying any attention to what is going on around them?

Over 5 million Americans have received cancellation notices of their health insurance plans.  More are expected.  Meanwhile, those shopping for new plans are finding a lack of success with healthcare.gov.

But it isn’t just the website that is a failure.  That is just the beginning.  The premiums people will have to pay are huge.  And these are for plans that don’t even cover that much.  They are often high deductible plans where you have to pay the first several thousand dollars out of pocket.  Meanwhile, the premiums are still hundreds of dollars per month.  Most middle class American families simply don’t have the money to pay for all of this.

I believe that most government programs are a lose-lose proposition for most people.  It is usually a tiny fraction of people who gain at the expense of everyone else.  But with Obamacare, it is far more obvious.  Other than a few individuals and companies that benefit, most people are losing on Obamacare.  Even those getting subsidies for their so-called insurance will still find that it is more expensive.  And not only is almost everyone paying more, but the Medicaid program is being expanded.  I still wonder why Medicaid is so needed if Obamacare is supposed to take care of everyone.

I have a good mix of friends on Facebook and I remember some leftist friends who were touting Obamacare so much when it was being passed.  I think they are tongue-tied now.  They would like to pretend that they never advocated such a thing.  If anyone brings it up to them, they will find excuses or find others to blame.  They are just following their master, Obama.  Obama is trying to blame Republicans for the failure of Obamacare.  There are many things to blame Republicans for, but the failure of Obamacare is not one of them.

The 2014 elections are going to be a disaster for the Democrats.  I think they just want to hide in a hole and pretend that this elephant in the living room doesn’t exist.  But it will continue to be on the minds of all of the Americans who either don’t have insurance or will be paying huge premiums for it.

Obamacare’s official name is the Affordable Care Act.  Just like so many other government programs, this accomplishes almost the exact opposite of its stated purpose.

November 22, 2013 is the 50th anniversary of the assassination of John F. Kennedy.  After 50 years, there are probably more people today who believe that Oswald did not act alone, if at all, than at the time it happened.

I have my own libertarian thoughts on the event and what it means.

There are so many bizarre events that happened that day in Dallas and that have come to light since then, but it would take several books to cover them all.  There are a lot of connections that would simply be too improbable to think they are all coincidences.

My belief is that it was an inside job.  It was the establishment, although the establishment can often be hard to define.  Specifically, I think the elements of the CIA coordinated the assassination and the set up of Oswald, assuming Oswald wasn’t part of it.  I also think that two future presidents likely played a role in the planning of the event.

The first and most obvious is Lyndon Johnson.  He became president almost immediately after Kennedy was announced dead.  He was from Texas, which makes Dallas a convenient place for the assassination to have occurred.  Johnson was an enemy of Robert Kennedy, who was the attorney general at the time and supposedly investigating Johnson.  JFK and Johnson were not pals either.  Johnson was as corrupt and crooked as they come.  He was certainly part of the establishment.

Another future president that likely played a role was George H. W. Bush (the first President Bush).  He claimed he didn’t remember where he was when JFK was assassinated.  Yet Bush was flying back and forth to Dallas during this time.  This alone makes him a major suspect.

In addition, Bush had ties to the CIA, even before this event took place.  He was an insider and definitely part of the establishment.  Russ Baker devoted a good portion of his book Family of Secrets to this topic.

I have always found it crazy that Allen Dulles was part of the team to investigate the assassination.  Dulles was essentially fired from the CIA by Kennedy.  In a list of the most likely suspects, Dulles should have been number 2 after Johnson.  I am not saying they fired the shots, but they were calling the shots.

I like to use this example whenever anybody calls for some government investigation of itself.  Are we going to have Hillary Clinton investigate the death of Vince Foster?  Or let’s have NSA members investigate on whether there is any illegal spying.  It never ceases to amaze me how often I hear for people calling for government investigations to investigate itself.  They never have to worry about the findings.

I believe the CIA and insiders took out Kennedy because he was not playing ball as he was supposed to.  While Kennedy certainly had his shortcomings and he was certainly no libertarian, he may have actually had a rare streak of honesty in him that is not usually found in other politicians.  He was trying to calm down the cold war with Russia.  He did not want to go along with his advisors and escalate the situation in Vietnam.  And, of course, Kennedy wanted to tear up the CIA.

A lot of this is covered in James Douglass’ book called JFK and the Unspeakable: Why He Died and Why It Matters.  But really, the most important thing is the last part.  Why does it matter?  Many people today will say it is an interesting topic, but it really doesn’t have any relevance to us today.

But that is not the case at all.  It is very relevant to us.  If Kennedy was assassinated by the CIA with a somewhat successful cover up all this time (at least to the point of nobody ever being convicted for anything), then it is very relevant.  If Kennedy was taken out as an inside job because the insiders didn’t like his policies, then it is very relevant.  If Kennedy was trying to do what was right for the American people and was taken out for doing so, then it is very relevant.

On November 22, 1963, there was a coup d’etat in the United States of America.  Kennedy was the president and he was taken down for his policies.  If the establishment can get away with that, is there anything it can’t get away with?  And if this is true, how can we ever hope of getting a free country again?  If anyone honest ever reaches the highest office again, we can just be assured that he or she will be taken down.

I think this is the most important point to stress to people.  If the government insiders are controlling everything, then we have little hope for peace and freedom unless they are simply overwhelmed by a drastic turn in public opinion that reduces power and decentralizes power.  If insiders will take out anyone who tries to do the right thing for the American people, then why would anyone trust these same people to run their medical care system and their children’s education system?  Why would anyone trust them to catch terrorists or to keep us safe?

In conclusion, the assassination of Kennedy 50 years later is very relevant to us today.  People must be made aware that as long as they consent to being governed, they are not in control at all.  And the system is set up to take down anyone who tries to change the corruption and abuse of power.