It can be frustrating to be a libertarian.  It might be a little less frustrating than it was a few years ago, because more people have been exposed to libertarianism, particularly through Ron Paul and the internet.  However, there are still a lot of misconceptions out there.  The essence of libertarianism is that you don’t believe in the initiation of force for political or social change (just as the Libertarian Party’s pledge says).  You can hold this view regardless of your personality and characteristics.

Many libertarians find themselves in debates with others, particularly because they are so passionate about their views.  It is hard to “convert” someone.  Libertarians who are well-versed on all of the major issues have trouble convincing others.  Imagine how hard that makes it for libertarians who are not as knowledgeable.

You will probably not win someone over by debating them.  Debates tend to drive people the other way.  They become more stubborn in their position.  They do not want to be wrong, just as you don’t want to be wrong.  With that said, there are legitimate reasons to engage others in (hopefully friendly) debates.

If you have an audience, a debate with someone can be useful in swaying the observers.  They may not be that opinionated one way or the other.  If you lay out good reasons for your philosophy, it might help the people listening move closer to your point of view.

Another reason to debate someone is to sharpen your own skills.  The other person may have some arguments that you have never heard before.  They may challenge you on some of your beliefs.  They may try to point out inconsistencies.  This is good for your own knowledge.  It can help sharpen your own ideas, even if you have to think about it later, after the debate.

Of course, one last reason to debate someone is just for your own satisfaction of “winning the argument” and getting some jabs in at the other person.  If you are doing this though, you are highly unlikely to change the other person’s mind.

The hardest thing for a libertarian to do is to convince close friends and family members, particularly the latter.  Family members know you well.  They know your faults.  They probably do not think you are a genius and you probably aren’t.  They will have trouble seeing the merits and consistency of your libertarian philosophy, especially if they are already far away from it.  If you want to engage in a little friendly debate with family members, make it minimal.  Just try to explain your point of view without attacking theirs.  You will probably not change any minds.  You can lead the horse to water, but you can’t force it to drink.

If you are going to discuss libertarianism with others, it is actually best to do it with others who are already sympathetic to your ideas.  Your goal is to strengthen their understanding.  You are not going to change a statist into a libertarian overnight.  You can help someone who is quasi-libertarian become slightly more libertarian and slightly more skeptical of the state.  There are usually no home runs.  You have to advance one base at a time, and even this can be difficult.

If you really want to help the cause of liberty, make sure that you are virtually an expert yourself.  I see so many people trying to change the world, when they need to change themselves first.  They are putting the cart before the horse.  If there are libertarians who have been studying the subject for 20 years and speaking in front of audiences who can’t convince others, why would you think you can if you have just been reading a couple of articles a day for the last 6 months?

Be sure that you have a great grasp of the issues and that you are consistent in your philosophy.  Then you can talk to others and convey the right information.  There is nothing I hate to hear more than listening to someone trying to convince another person of libertarianism and conveying the message in a poor way.

1)When people say “the world” (me included), do they really mean the planet or the earth.  If the world means the universe, then this is a completely different thing.  If I say that there are 7 billion people in the world, then “world” must be planet.  It can’t mean the universe in that sentence because there could be more people in a galaxy far, far away.

2)Why would anyone ever predict an end to the world?  If they are wrong, then they just look like fools.  If they are right, then there will be nobody around to give them credit for it anyway.

3)Did some people actually think the earth was flat several hundreds of years ago?  When they looked all around them, did they think they were right in the center?  Why wouldn’t you just start walking and realize that you were not getting any closer to the edge?  And if there were an edge, like a big cliff, wouldn’t you be curious and want to see it?

4)If there is less than one ounce of gold for every person on earth and many central banks hold gold, then that doesn’t leave very much for everyone else.  Imagine if a large portion of Americans actually started buying gold as an investment.

5)Is popularity a self-fulfilling prophecy?  I sometimes listen to Sean Hannity on the radio in the car.  I can’t really stand him most of the time, yet I still listen.  Part of me wants to hear the latest political news.  But part of me just wants to hear what he is saying so that I know what a lot of other people are hearing. What if those other people are listening for the same reason?  We are making him popular for no good reason.

6)Judge Napolitano’s show has been cancelled on Fox Business.  While he is a libertarian in most respects, his show wasn’t completely libertarian.  He had on a lot of guests who were not libertarian.  Do you think a true libertarian show could thrive on television?  It is hard to say because it has never been tried.  None of the main networks will allow it to happen.  I’d like to see a show by Tom Woods and Robert Murphy.

7)If technology is growing exponentially, and so fast that computers are becoming smarter than humans, then when are computers going to start telling humans to support libertarianism?

Super Tuesday was a little bit of a disappointment for Ron Paul supporters.  Even the campaign is admitting frustration and saying that he is highly unlikely to win the Republican nomination.  The most they can hope for is some attention at the convention.  Of course, aside from politics, Ron Paul can keep expressing the message of liberty and changing hearts and minds.  Here are my thoughts on what the campaign should do going forward.

Most Americans are good and decent people.  They will understand this message.  They will see those innocent faces the next time some politician suggests that we need to start bombing Iran.

The markets continue to be a roller coaster, although not as much as we have seen in the past and not as much as we are likely to see in the future.  Yesterday, the stock market was down significantly.  Today, it rebounded.

There were actually a lot of things that went down yesterday.  Aside from the stock market, gold, silver, and oil were all down.  The U.S. dollar was up.  This was attributed to news that there are still problems in Greece.  No kidding.  I have already written on this topic several times, saying that a full Greek default is inevitable, along with a departure from the European Union.

Tuesday was a good test on the Greece news.  While it hasn’t seemed to affect the U.S. economy much, the latest news indicated that more announcements of major problems in Greece may lead to a strengthening dollar.  This means that the stock market and precious metals are likely to go down.

The U.S. economy is quite unpredictable at this point.  We may be in a mini-boom cycle, courtesy of the Fed.  This mini-boom is not a good thing because it is not based on real savings.  It is because of a loose monetary policy from the Fed.

However, there are a lot of variables out there that could drive velocity down further and cause another deep recession.  There is Iran and Syria.  There is the price of gasoline.  There is Greece, as was just discussed.  There is also the rest of Europe.  Any big event could easily cause a sharp downturn in the U.S. economy.  The downturn is inevitable because of all of the previous malinvestment, but a big event might speed up the downturn.

I continue to recommend that you put the majority of your investments in a setup like the permanent portfolio as described by Harry Browne in his little book Fail Safe Investing.  For your speculation money (if you want to speculate), I recommend that you buy gold related investments and a much smaller position in shorting the stock market.  Of course, aside from this, I am also a fan of investment real estate (single family homes) if you live in the right area and it is something you have the means and will to do.

Expect a continuing roller coaster ride with the U.S. economy and invest accordingly.

As I write this, Super Tuesday is not done yet.  But here are some preliminary thoughts on the results so far and what they mean going forward.

The big story is that Mitt Romney has not clinched the nomination.  I know he wasn’t going to formally clinch anything from Super Tuesday, but it could have put him at 99% or better of winning the nomination.  While Romney didn’t do horrible, he didn’t do exceptionally well either.  He won the states he was supposed to win.  Gingrich won Georgia.  Rick Santorum has won several states.

The big contest was Ohio because it is a swing state in the general election and it was close in the polls.  While it is still too close to call as I write this, Romney did not get a convincing win there.

So while Romney is still the front runner, it is mostly by default.  He has the establishment backing and he has the money.  He comes across too polished though.  Conservatives understand that he says what people want to hear and he doesn’t have strong principles.  For some reason, many conservatives can’t see through Santorum and Gingrich, even though I think they are bigger fakes than Romney.

While I dislike Romney slightly less than the other two, I am happy that he is still not able to become the clear winner.  It drags things out longer.  It gives Ron Paul more of a chance to deliver his message.

Speaking of Ron Paul, it looks like he will fall short of a win in North Dakota or Idaho.  We will have to see if he can pull something out in Alaska where the voting ends at midnight eastern time.

It is interesting to note that Paul received 41% of the vote in Virginia where only he and Romney were on the ballot.

I will put in my humble two cents in a couple of days on what the Ron Paul campaign should do next.  They have to realize that his chances of winning the Republican nomination are quite slim at this point.  This is not a criticism of Ron Paul or his campaign.  I think it is remarkable how much progress has been made in spreading the message of liberty.

Frank Shostak of the Mises Institute has written a wonderful article.  He says that the economic problems are not really about the debt.  He says that the problem is monetary inflation.  As he concludes in his article, “the threat to the US economy is not the high level of debt as such but loose fiscal and monetary policies that undermine the pool of real funding.”

I recommend that you read the whole article if you haven’t already.  He has a very clear understanding of economics.

I don’t think the U.S. debt is irrelevant.  There are consequences that will be felt from the high debt.  As I have written before, it isn’t that our grandchildren will have to pay it.  Government debt hurts us right here and right now.  It takes away from savings and investment and diverts resources into ways that the market wouldn’t have.  In other words, it misallocates resources.  The only reason the high debt hurts our grandchildren is because there is less capital investment taking place.  Our grandchildren won’t have as much wealth as a result.

The other important thing to point out about the debt as it relates to Shostak’s article is that the debt is one of the causes of monetary inflation, and spending is a cause of the debt.  If the government didn’t spend so much money, then there wouldn’t be a high national debt.  If the debt weren’t so high, then the Federal Reserve would not have to create money out of thin air to monetize the debt.  The Fed and the government work hand-in-hand.  The Fed and its money creation is what allows the government to run such massive deficits.

One other important thing to note is that government spending also diverts funds and misallocates resources.  So whether it is the Fed’s loose monetary policy or the government’s profligate spending, it is diverting precious resources away from their ideal use as determined by the market.  It is misallocating resources and hurting savings and investment.  And as Shostak emphasizes in most of what he writes, savings and investment, or the pool of real funding, is what grows an economy.

In conclusion, the Fed’s money creation and the government’s spending make us worse off.  They lower  our standard of living in comparison to what it would be without their interference.  That is why we should do everything we can to reduce the power of the Fed and reduce government spending.

There was an article posted on LewRockwell.com by Allan Stevo.  Actually, it is an excerpt out of a new book called How to Win America for Ron Paul and the Cause of Freedom in 2012.  The author is obviously a huge Ron Paul supporter and is a big supporter of liberty.  From that, I don’t want to step on his toes and make an enemy out of someone who shares a similar philosophical outlook.  However, I do respectfully disagree with much of what he has said.

Stevo starts out (in this excerpt) by trying to motivate Ron Paul supporters.  He does it in an over-the-top way.  He says, “Working half-heartedly or ineffectively in these times that so matter is simply not enough, because victory is so close for a candidate who is so threatening to the forces that oppose freedom.”

The author goes on to say that “Simply sharing links of Facebook and getting into online debates will do little to make Ron Paul president”.  He is saying that Ron Paul supporters need to branch outside of the internet to be effective.  Perhaps he is partially correct here.

Then he really goes over-the-top.  He says that if you are staying online or just waving signs, then those actions are entirely ineffective in winning a campaign.  He says, “Do them and you are just as bad as any neo-con – because you have a chance to effectively fight for liberty, yet you do nothing.”  A few sentences later, Stevo writes, “In fact, I’d say you’re even worse than a neo-con, because a neo-con doesn’t get it.”

First, this is completely insulting.  I understand he is trying to motivate people, but you don’t do it by throwing insults.  They are ridiculous insults too.  If someone is open-minded enough to come around to Ron Paul’s viewpoints, you are going to say he is the villain just because he doesn’t do everything you say he should do in campaigning?  This is absurdity.

Later in this excerpt, the author does some math.  He says that now 2 or 3 voters out of 20 trust Ron Paul.  Then he gets back to his attempts at motivation by barking orders at his fellow supporters.  He says, “If you are reading this right now, you need to personally deliver 10 votes for Ron Paul on election day.  You need to personally bring in 10 voters who otherwise wouldn’t have voted for Ron Paul.”

And what if I don’t bring in 10 voters?  Am I a villain?  Are you going to steal Christmas from me?

The author makes it sound like it is quite feasible as long as you put in the time and effort.  But does he understand how hard it is to convince someone to vote for someone, particularly someone like Ron Paul who is completely different than the typical candidate?  If someone is familiar with Ron Paul and understands a little bit of his philosophy, what makes Stevo thinks that someone’s mind can be changed so easily?  If the person is on the margin and already leans libertarian, perhaps it can be done.  But most people are not there yet.  And when they get there, it will be because of their own internal motivations.

As I’ve said before, you can lead a horse to water, but you can’t force it to drink.  If someone is familiar with Ron Paul and his message and has access to all of the material on the internet that is out there, how much more can I do?  Am I going to call the person every day?  That will just be annoying and turn the person off.

If it were easy to bring 10 new voters for Ron Paul, then a lot of people would be doing it.  But it is very difficult.  It is naive to think that someone can just talk to people and bring them over to the libertarian side in the matter of weeks or days.  The people who are having online debates (who Stevo criticizes) are trying to do this very thing.

Here is the big thing with this excerpt and probably his new book.  Stevo’s main goal is to win the presidency for Ron Paul.  That is actually not my main goal.  It is putting the cart before the horse.  You have to educate people on the benefits of liberty.  You have to persuade people that liberty is moral and that it leads to the most peace and prosperity for everyone.  You cannot skip this step.

Ron Paul could become president tomorrow, but if it was not the result of a change in the hearts and minds of the American people, then it would almost be pointless.  For long-term change in favor of liberty, there has to be a change in the mindset of Americans.  People have to stop believing that government is necessary to run their lives.  Only then can we have smaller government and more freedom.

I believe it is necessary to review the adjusted monetary base on occasion.  The money supply is a major factor in determining what happens in the economy and, therefore, your investments.  While it shouldn’t be this way, that is the reality that we live in.

The money supply measure that the Federal Reserve controls is the adjusted monetary base.  You can view the latest short-term chart here:
http://research.stlouisfed.org/publications/usfd/page3.pdf

You can also view a longer-term picture here:
http://research.stlouisfed.org/fred2/series/BASE

You can see the large spike that took place in the fall of 2008.

Since QE2 ended last June, the monetary base has been pretty flat.  The Fed has not been doing much for the last 8 months.  However, in the last few weeks, you can see on the short-term chart that it has gone up and has even surpassed the mark from last June/ July.

We will have to see if this trend holds.  The Fed has not announced any official QE3 (yet).

Another interesting chart to look at is the excess reserves held by commercial banks.  The chart is here:
http://research.stlouisfed.org/fred2/series/EXCRESNS

It has basically copied the monetary base since late 2008.  So while the Fed has more than tripled the money supply, most of this new money has gone into excess reserves with the banks.  This has kept the federal funds rate near zero because banks have no need to borrow overnight money.  Since the excess reserves are so high, most banks do not fall below the minimum reserve requirement that would require them to borrow.

The huge excess reserves has also helped keep a lid on price inflation.

The most important thing to remember is that all of this monetary inflation is not without a big price.  While we haven’t seen huge price inflation to this point, it doesn’t mean that there isn’t severe damage being done.  All of that monetary inflation causes more misallocations.  Resources are not being put to their best use because of the distortion.  This is hurting savings and investment and it is the main reason for the struggling economy.

Until the Fed stops the monetary inflation and allows a severe correction to occur, the economy will continue to be damaged and will continue to struggle.  My best guess is that the Fed will not stop the monetary inflation until we see higher price inflation.

Ben Bernanke spoke today and markets reacted.  As this article notes, “Bernanke’s comments suggest that the Fed has made no decisions about another round of quantitative easing – sure to be nicknamed QE3.”  The price of gold tumbled.  The gold ETF (symbol: GLD) fell $9.20, which translates to about a $92 decline in the metal.  Gold is now around $1,700 per ounce after several weeks of steady gains.

The most amazing thing about this is how sensitive the price of gold is (in terms of the dollar) when Bernanke speaks.  It just shows the power of one person (or one committee).  There is no reason it should be this way.

This also shows that the price of gold in terms of dollars is not only a reflection of past monetary policy, but also a reflection of expectations for future monetary policy.

This is where gold is really different from consumer prices.  Consumer prices such as food and clothing are more likely to rise because of past increases in the money supply.  Gold on the other hand is more likely to rise because of expectations of a coming increase in the money supply.  It is not to say that food and clothing do not take the future into account, but just that it does not seem to be as great of a factor as it is for gold.

These roller coaster rides in the price of gold will likely continue.  I still think that as long as the economy does not drop off a cliff, then the gold price will likely go higher.

The federal government is in major trouble.  The debt-to-GDP ratio is now over the 100% mark.  The yearly deficits are over one trillion dollars and it is only going to get worse with the unfunded liabilities of Medicare and Social Security.  The government is going to try to default through inflation first.

I just don’t see the Fed saying “no” to the government right now.  If the U.S. government needs someone to buy its debt, then the Fed will buy.  If the Fed doesn’t buy, then interest rates will rise and the government will be forced to severely cut spending.  That is why the Fed will say “yes”.

There will eventually come a time when the Fed says “no”.  It will be when the dollar is threatened.  It will be when we see double digit price inflation as we did in the 1970’s.  At that point, I expect the Fed to stop buying U.S. government debt for a while.  That is when you will see a severe cut in spending.  That is when you will see a depression.  That is when you want to sell some of your gold investments and take your profits.

It looks like Mitt Romney will win Arizona and Michigan.  Just a couple of weeks ago, Santorum had taken a lead in the national polls and had a substantial lead in the polls for Michigan.

Romney can thank Ron Paul for his victory in Michigan.  The last debate, that took place in Arizona, may have been a game changer for Rick Santorum.  Ron Paul took him to school.  He pointed out many of his inconsistencies and exposed Santorum as a hypocrite.  He pointed out that Santorum campaigns like he wants smaller government, but his actions as a senator were completely different.

While there are still headlines to be made, I think Mitt Romney is the heavy favorite to win the nomination at this point.  It is hard to believe that the Republicans will put, as their nominee, the founder of Obamacare.  Romneycare was instituted in Massachusetts and is very similar to Obamacare.  While Romneycare may be constitutional, it still does not make it good policy.

The one issue that the entire Republican Party agrees on is that Obamacare is a bad thing.  So the party nominee will be the unofficial founder of Obamacare.  Makes sense to me.

Romney is really going to get the nomination out of default.  He has the money and backing to win it and the other candidates all have their major flaws.  Of course, Ron Paul doesn’t, but the majority of the country isn’t quite ready for him yet.

Rick Perry should have stayed in the race.  Conservatives are hungry for someone decent who matches their views.  Perry was horrible in the debates, but he should have stuck it out.  He actually could have come back and challenged Romney.

As for Ron Paul and his libertarian message, he will have over 100,000 votes coming out of Michigan.  If he stays in the race (which I expect him to), then he will likely amass a couple of million votes when it is all over.  While not all of the people who vote for him are hard-core, he definitely has the most loyal and passionate following.  This was shown by about 4,000 people attending a Ron Paul event in Michigan.

I think it is fairly safe to say now that there are about one million Americans who would consider themselves solid libertarians and several million more who lean libertarian.  To put this in perspective, no Libertarian Party presidential candidate has ever received a million votes in one election.

Although the percentage of libertarians still seems small, we don’t need a majority to gain liberty.  We need a tireless minority.  We need a solid 10%.  We are getting closer and closer.  I really believe that there is good reason to be optimistic for the long-term future.  More Americans are waking up and embracing the idea of liberty.  I think the libertarian revolution is really rolling now and I expect it to continue.