The FIRE (financial independence/ retire early) community is better off financially than most, but even they are hurting. I recently read in an FI forum some people complaining (justly) about price inflation.

One woman said her husband is considering going back to work part time in order to help pay for the higher prices they are experiencing. I’m sure this couple could have stayed retired for several more years, but the problem is that they would run out of money eventually.

If you are truly FI (financially independent), then you should ideally be able to live off of your investment assets/ savings forever without them being depleted.

If you have two million dollars in assets, and you are able to generate a 5% return above inflation every year, then you can live off of the $100,000 in interest/ income produced from your investments. Meanwhile, the principal balance won’t go down.

Underestimating Inflation, Overestimating Returns

I saw some people comment and generally agree with the woman. They agreed that price inflation was taking a bite out of them too. This could be the case for someone already retired or for someone trying to save for retirement. Some people have had to postpone their retirement due to the increased prices.

I was also proud of a few people who pointed out that the slightly lower inflation numbers coming in just meant that the rate of increase was decreasing, but prices are still increasing. There was also some debate about how much price inflation would be over the coming years.

I think the only thing to criticize the woman who originally commented is that her and her husband underestimated price inflation. They did not take that into enough consideration in their planning. But at least they are not now in denial. They clearly understand the situation and are talking about doing something about it.

But there were a few people critical of her. They said that she doesn’t understand the 4% rule. They said that inflation would be back down to a 2% average soon. But in all of their criticism, I felt like it was they who didn’t understand.

The problem is that this woman who originally posted was really pointing out a major flaw in the FI/ FIRE community. In general, many people tend to underestimate price inflation and its impacts, while overestimating returns from investments.

The 4% rule itself tends to mislead people into retirement.

Returns Above Inflation

Many in the FI community will say that, over the long run, you should be able to get at least an 8% average annual return. They tell you to just invest in broad-based index funds.

This in itself is flawed. I have to point out that if you invested in the Japanese stock market in 1989, you are still down to this day. I don’t think what happened in Japan will happen in the U.S., but it shows that a long-term downtrend is possible in stocks.

On top of this, many people believe that price inflation will run around 2% per year. This assumption has been blown out of the water in the last couple of years.

When people talk about returns, it isn’t always clear if they are talking nominal returns or real (inflation adjusted) returns. This makes a major difference.

We’re now in an environment where price inflation is currently running around 5% (according to government statistics), while the stock market is shaky at best. Last year, most people lost money in the stock market while prices continued to go higher.

This combination of higher price inflation and low or negative returns is absolutely devastating to a portfolio. Someone’s dream of retirement can be shattered in the matter of a couple of years.

And I think this is just the beginning. Don’t count on price inflation returning to 2% or less with stocks returning 8% or more per year. It is a fantasy, and I think some people are starting to wake up to it.

The nightmare is finally coming to an end. Perhaps it was the most authoritarian U.S. government action perpetrated on the American people this century.

The corrupt and evil Biden Administration has finally thrown in the towel on vaccine passports, at least for now. The White House announced on May 1, 2023 the following:

“Today, we are announcing that the Administration will end the COVID-19 vaccine requirements for Federal employees, Federal contractors, and international air travelers at the end of the day on May 11, the same day that the COVID-19 public health emergency ends.”

We can only wonder why Biden and his handlers finally threw in the towel. It’s not because the vaccines don’t stop you from getting COVID. It’s not because the vaccines don’t stop transmission. It’s not because the COVID vaccines have led to many thousands of deaths and disabilities. Even though all of those things are true, they were true and well-known a long while ago. So why now?

Maybe they figured the damage, destruction, and chaos they wanted to throw on society was already mostly done. Now they have to worry about the next election. They figured they could lightly take their boot off of the throat of the American people and give them a gasp of breath.

Even the authoritarian Trudeau let go of the vaccine passports for international travelers in 2022. Maybe international tourism means more to Canada.

Never Forget the Damage Done

These vaccine mandates caused massive chaos in 2021 up until now. Many millions of people took the jab because of these mandates. It is impossible to know anything close to the exact number.

So even if all of the taxpayer-funded propaganda didn’t get you, the mandates came for you next. You were told to get the shots or else you were not allowed to keep your job and feed your family.

There are so many Americans who were faced with a really bad choice. Some stood strong and fought the mandates, and some really did lose their job. Many people folded and took the shot because they weren’t in a financial position to say “no”. I do not blame these people. I feel for them. It was essentially forced on them.

Even if you were willing to get fired, it was a very scary situation in late 2021. The corrupt Biden people were trying to force everyone to get jabbed who worked for an employer with 100 or more employees. This would have accounted for approximately two-thirds of the whole American workforce.

So if you got fired from your job for not take the medical experiment in your arm, then your future job choices would be severely limited. Remember, it wasn’t known for a little while if the Supreme Court would strike down that mandate.

International Travelers

Aside from the employee mandates, let’s not forget the pain and suffering for those who live in a foreign country who are not U.S. citizens or residents. Not everyone coming to the U.S. is going to Disney World or playing in a major tennis tournament like Novak Djokovic.

Imagine someone who was born in Europe and is married to an American. This person was not allowed to travel to the U.S. to see relatives without being jabbed. Think of the people who couldn’t travel with their spouse to see a dying relative or to celebrate an event.

This isn’t a tiny number of people. There are over 7 billion people in this world who aren’t American. Some of them have relatives and friends in the U.S. Some of them have business to do in the U.S. Some of them just want to visit Disney World.

This all adds up to this travel mandate likely impacting many millions of people over the last couple of years.

Chaos and Destruction, For What?

All of this chaos, death, destruction, heartache, lost sleep, anxiety, and depression was caused for what?

It was to line the pockets of the pharmaceutical companies. It was to enhance the power of the ruling elite. It was to give a thrill to the creepy depopulationists like Bill Gates. It was to cause chaos and destruction to civilized society for the people who want to destroy civilized society.

Let’s be clear. These so-called vaccines did nothing to stop infection of COVID. They did nothing to stop transmission. They cause death and disease in at least a small fraction of those who get them, and we still don’t know the long-term consequences with things like cancer and auto-immune diseases down the road.

But even if you naively believe that the COVID vaccines are “safe and effective”, the mandates are highly immoral. They were also illegal.

Yet, nothing happens to Biden and company and all of the shills who pushed the shots. But trust me on this. There are many millions of people who won’t forget what happened. They are not going to forgive the evil criminals who tried to force these shots on all of society.

Now the mandates are over, at least for now. It’s just like all of the other corrupt and illegal things done by Biden and company. They declare student loans forgiven. They declare COVID vaccine mandates on the majority of the population. The Supreme Court strikes some of it down. “Oh well, they declared it unconstitutional. Back to the drawing board for our next illegal and immoral edict with no consequences.”

I will never forget the evil that has been perpetrated on the American people from lockdowns to vaccine mandates.

We Won

To end on an optimistic note, somehow our side has won, at least for now. The non-vaccinated suffered discrimination and humiliation like no major group has experienced in the last many decades of this country. Not only were our jobs threatened, but many places like stores and restaurants prohibited the non-vaccinated from entering.

Despite all of the government edicts and the mass propaganda campaign that even continues to this day, we somehow fought it back. The ruling elite wanted vaccine passports to be the new norm, yet we were able to defeat it.

This seemed far from inevitable in late 2021. But here we are. I’m sure they are already planning their next stunt.

The road of tyranny is not inevitable. If there are enough people paying attention who refuse to consent to the evil, the authoritarians can be defeated. We should use the example of vaccine passports as hope that we can achieve greater liberty.

The latest consumer price inflation (CPI) numbers came out. The CPI was up 0.4% in April 2023. The year-over-year now stands at 4.9%, which is the first time in well over a year that this number came in below 5%.

The more stable median CPI also came in at 0.4% in April. The year-over-year median CPI stands at 7%.

Perhaps this is good news that the rate of price inflation is coming down. While it could certainly be worse, it is important to acknowledge that the situation is bad for the average American.

The financial media can celebrate the “improvement” of an annual 4.9% reading, but prices are still going up 4.9% per year. It’s better than 9%, but things are still getting worse. They are just getting worse at a slower pace.

Prices are still 4.9% higher than they were last year, and that is on top of the higher prices that had already happened at that time.

When anyone says that inflation is improving, it doesn’t mean that prices are going down or that they stopped going up. They are just going up at a slower pace than before.

For anyone who shops at the grocery store, it is quite evident that prices continue to rise. The price of eggs or meat is not going back to 2020, or even 2022. At this point, I think most people would be happy if they just stopped going up.

No Relief for the Fed

While the American people continue to suffer, the Federal Reserve is still in the same predicament. The economy looks weak, and with the inverted yield curve, it could get a lot weaker. There is a banking crisis happening, despite any comments from Jerome Powell to the contrary.

It will be a lot more difficult for the Fed to step in and bail out banks and bail out the entire economy with easy money when price inflation is still running near 5%.

We should have no doubt that the Fed will not allow the banking system to fail, but I don’t think we should expect much in the way of bailouts beyond that. The Fed will protect the dollar over protecting the stock market.

The positive aspect of higher price inflation is that it does serve as some protection from the Fed going wild with another recession. The Fed is far less likely to engage in QE (or whatever term you want to use for creating money out of thin air) when price inflation is still elevated.

During the financial crisis of 2008/ 2009, the Fed went on a wild money creation spree, but we didn’t get significant price inflation. Even though the money creation and artificially low interest rates misallocated resources and made us poorer, the low price inflation let the Fed get away with it. The damage done was not as apparent.

In this scenario, the consequence of rising prices from the previous monetary inflation is in everybody’s face. The Fed doesn’t get a free lunch this time.

Expect a “Neutral” Fed Until It Can’t Be

There really is no such thing as a neutral Fed. Just its presence as a lender of last resort serves a function for the banks. It also supports the bond market. Bond investors are never really worried about an outright default from the U.S. government because the Fed can always create more money.

But in terms of any major changes coming from the Fed, I don’t think we will see any until there are more major banking problems.

With the rate of price inflation coming down, the Fed may or may not hike its target rate by 25 basis points one more time.

It will probably keep its pace, for now, of slowly draining its balance sheet (if you ignore the bailout of Silicon Valley Bank).

Overall, I don’t anticipate much action from the Fed until the economy starts blowing up. Even then, I think the Fed will only step in for the financial institutions.

The Fed isn’t going to bail out the stock market. The Fed will only bail out the bond market if there is a chance of default. It isn’t going to bail out housing unless it starts to significantly impact the banks.

I am still of the opinion that you should invest (or not invest) accordingly. There will be no bailouts for the stock market.

I recently had dinner with a bunch of old friends. I found out that one of them has become something of a prepper. I don’t actually know how much “prepping” he has done, but he was talking about an Armageddon-type scenario.

I have never known him to be political in the past. Maybe he still isn’t, but he is paying attention on the economic front.

I said I thought we would have a big recession and mentioned the inverted yield curve. He said something to the effect of, “Forget a recession; it will be a depression.”

I have written about prepping before. It is a good idea to prepare for events that may or may not happen. It is always a good idea to have some extra water, food, and cash on hand.

I think most people don’t fully realize how much trouble most Americans would be in if there was a complete breakdown of the division of labor. Even most people who identify as preppers go to the grocery store. If there was a complete breakdown in civilization and the trucks stopped delivering food to the grocery stores, I don’t think it would be an exaggeration to say that the majority of the population would be dead within 6 months.

The Good News, If History is Any Indication

The worst scenario any place can experience is war. You would not want to live in Ukraine or Yemen. You would not have wanted to live in Iraq or Afghanistan, and you probably still wouldn’t.

If there is no nuclear war or a major war on the soil of your country, then you are probably doing better than others around the world.

Barring a crazy scenario such as a meteor strike, then the biggest threat is your own government and the economy that you live under.

But even looking at some really bad situations in the past, life somehow went on for most people. Think about hyperinflation in Germany in the 1920s. Think about the more recent hyperinflation in Zimbabwe.

Maybe Zimbabwe isn’t the best example because it was already a poor country to begin with. But even in the worst hyperinflation scenarios, most people figured out a way to survive. It was a terrible experience, but they managed to live.

I don’t think we will have hyperinflation in the United States, but I can’t rule it out with complete certainty. But even in this situation, people find a way to barter or use other things as money.

As long as the government isn’t brutally authoritarian, some commerce is likely to continue.

Prepare Without Making Yourself Worse Off

If you want to be a prepper, I certainly have no objection. I would just recommend doing things that will make your life better even if the worst-case situation you envision doesn’t come to be.

If you store up extra food, then make sure it is something that you will eventually eat. Even if we just end up with 10% price inflation, then you will benefit from having bought your food earlier. But you don’t want to buy boxes and boxes of food only to see it wasted because something horrible didn’t happen.

When it comes to your finances, it should be the same way. You don’t want to have all of your wealth in gold, or cash, or guns, or real estate, or whatever you think is the best way to survive.

Ask yourself how things will turn out if we just have a deep recession, the government bails some people out and runs up more debt, and then life goes back to somewhat normal. Will your portfolio be higher or lower than when it started?

No matter what happens, almost all of the time the fundamentals are still the best path to follow. This means paying off debt and not taking on too much debt. It means having a diversified portfolio such as the permanent portfolio that will hold up in virtually any economic environment.

Conclusion

I think it is positive that many people are anticipating bad times ahead. It’s not because I want people to be pessimistic, but because I want them to be realistic.

It also means that more people are waking up to the threat that our own government poses. As long as government is somewhat held in check, then Americans can survive almost any situation. There will always be a marketplace where people voluntarily come together and trade.

The FOMC released its latest statement on monetary policy on Wednesday, May 3, 2023. The Fed hiked its target rate 25 basis points in the face of a heavily inverted yield curve and a banking crisis.

While the 25 basis point hike was widely expected by the markets, it is still somewhat surprising given the economic conditions. Sure, the CPI is still showing consumer prices rising at 5% annually. But it took the Fed long enough to realize price inflation was a problem before it actually stopped expanding its balance sheet just over a year ago.

In the course of just over a year, the Fed has hiked its target for the federal funds rate by 500 basis points (5%). It has gone from near zero to just over 5%.

The inverted yield curve that has been there for months appears to not bother Jerome Powell and other Fed officials. Maybe they really are worried about the dollar enough that they are willing to throw us into a recession.

A recession is baked into the cake anyway, but at this point in the boom/ bust cycle, it is still a bit surprising that the Fed is still hiking rates with most people realistically expecting a recession in the near future.

This Would be Funny if it Weren’t so Damaging

Jerome Powell held a press conference after the statement was released. The first point he addressed was the banking system.

He said, “the U.S. banking system is sound and resilient.” Just a couple of hours later, another regional bank announced it is exploring all options in order to stay afloat. In other words, it’s another major bank in default.

Powell’s comments came just a few days after First Republic went bankrupt and was taken over by JP Morgan Chase.

We are in the midst of a banking crisis and Powell is standing there saying that the system is sound and resilient. He might as well just stand there and repeat, “Don’t worry guys. I’ve got everything under control.”

When he says it is sound and resilient, maybe he is just displaying his own confidence in the Fed’s ability to create money out of thin air. Perhaps any system that is backed by the ability to create endless money is always sound and resilient.

My family budget would be quite resilient if I could just print money any time it was “needed”.

Even though this is serious business, it is still hilarious. You’d think Powell could have at least timed his comments a little better if he is going to try to gaslight everyone.

Who Pays?

With these somewhat major banks going belly up, who is paying for all of this? So far, it hasn’t been depositors. That was made clear with Silicon Valley Bank.

When these banks are acquired by the biggest of banks such as JP Morgan, you can bet that they aren’t just taking on a bunch of unnecessary risk. The Fed is probably taking on the bad assets from the bankrupt banks, or else they are giving some kind of guarantee to the big banks buying them out.

Ultimately, it is the average American who is paying for all of this. When Silicon Valley Bank had to be bailed out, the Fed’s balance sheet went from slowly declining to expanding by almost $400 billion in the matter of a few weeks.

So while the Fed is supposedly in tightening mode with higher interest rates, there is little doubt that the Fed will take care of one of its primary duties when called upon. That is to bail out the banking system.

Its other main job is to fund the deficits from Congress, but it hasn’t been doing that lately. It seems that this is a secondary job compared to bailing out the banks.

Anyway, we all pay in the form of a depreciating dollar.

The Financial Crisis is Here

Jerome Powell can say whatever he wants, but it doesn’t change the facts on the ground. The yield curve is heavily inverted while the Fed just hiked its target rate again.

This points to a hard recession coming up.

If that weren’t enough, now we have somewhat big banks (not the biggest banks) going under, largely because of the rising interest rates.

This almost seems like a perfect storm of disaster. This could make 2008 look like a picnic.

The crazy thing is that stocks were going up last week. In the face of an inverted yield curve, rising rates, and a banking crisis, apparently some investors are still bullish on stocks.

This Everything Bubble is going to implode hard. The warning signs are everywhere. The banking crisis is a symptom, but sometimes it is important to pay attention to symptoms and not ignore them.

I went to the grocery store over the weekend. I spent $254 and change on groceries. It was actually $334, but I took advantage of a deal where I could spend $80 and get $100 in gas cards.

As we left the checkout, the cashier told us we saved 90 something dollars. I kind of chuckled. We did try to take advantage of some “buy one get one” specials and some other discounts, but it didn’t seem like almost a hundred dollars in savings. It felt like I had just spent $254 on groceries.

We didn’t even get all of our meals for the entire week for the family. There were a few purchases that may be for things that we only have to buy once a month, but it was still a lot. I was just noticing the prices on items from meat to nuts to eggs to fruit to chips. Everything just seems absurdly expensive.

Not Much Wage Inflation

I can tell you from personal experience and anecdotal experience that wages are not keeping up with price inflation at the grocery store. And no matter how the government calculates the CPI, virtually everyone has to buy food from a store. Maybe there is a tiny fraction who grow their own food, but even here I find they still have to shop for certain items.

For someone making an exceptionally high income, the price increases at the grocery store are not a big deal. If you’re making $400,000 per year, an extra 50 bucks at the grocery store is barely felt.

But for most of America – and that includes many people making six figures – the higher prices are a major drain. Some people have to save less. Some people can barely save at all. Some people have to make major cuts in other expenses. Some people even have to take on debt just to buy necessities.

Struggles Before a Recession

During an economic boom, it is believed that most everyone is happy and living well. It is when the recession or depression hits when nearly everyone struggles.

But the struggling happens before the bust phase. The recession is especially hard for those who lose their employment. It is also hard because asset prices like housing and stocks are likely to go down.

But for most people, a recession is just hard because it is a realization that the supposed good times can’t keep rolling. It forces some fiscal discipline, which means belt tightening.

If you go on vacation and live it up for a week, everything seems great. But you know that life can’t continue because you have to keep earning money to pay for it. So reality eventually strikes and you leave your vacation to go back to work.

But the analogy fails a bit here because the hard times start before the recession hits. That’s where we are now.

American families are struggling greatly. Many don’t want to talk about it because of the fact that we aren’t in a recession, at least according to the official data and the official definition. People will make comments complaining about prices, but they won’t be really open about how much of a struggle it is.

The fact is that consumer prices are rising faster than wages. Food is one of those things going up in price faster than wages, and almost everyone buys food. So in that category, most people are falling behind.

And even if price inflation slows down to 2%, prices are still going up. They are just going up at a slower pace. It’s not like food prices are ever going to go back to what they were a few years ago.

We Need Relief

America – especially middle class America – needs a good hard recession. Sure, it will be painful. But you know what? Right now is quite painful.

At least with a recession, we can hope to repair some of the damage (the misallocations) and set the stage for some actual prosperity in the future.

Unfortunately, the Fed often steps in and creates more money to “cure” the problem while setting the stage for more trouble down the road.

But even if there is some Fed intervention, we still need a recession to clear out some of the malinvestment and to bring everyone back to reality.

With the heavily inverted yield curve, a recession is baked into the cake at this point. It’s just a question of how soon it will happen and how severe it will be.

Again, this will be painful for many people. It will be especially painful for people who lose their primary source of income. But if we don’t have a correction, the hard times will just keep going and keep getting harder.

The tight Fed policy of the late 1970s and early 1980s (after an era of loose money and high price inflation) brought about multiple recessions. But the 1980s ended up being pretty good, economically speaking. It was probably the last time there was a good cleansing of the malinvestment.

At this point, Americans should actually hope for a recession. It is going to happen anyway, and most people are already struggling. We might as well get the pain over with and have some hope of returning to some kind of genuine and sustainable prosperity.

We are barely into the spring of 2023, and the list of candidates or possible candidates for the 2024 presidential election keeps growing.

On the total establishment side, there is Joe Biden running for re-election, or some might say re-selection. On the Republican side, there are establishment hacks like Nikki Haley, and thankfully she has little chance of winning.

From a libertarian standpoint, there is a lot to be optimistic about, despite the dark times we are in. There are many candidates or possible candidates who are at least somewhat pro liberty. And while there are valid concerns about all them, we should feel good that we will hear some alternative viewpoints from the establishment narrative.

We have Robert Kennedy Jr. on the Democratic side. He is pro peace and wants to stop the merging of state and corporate power. For a Democrat, I don’t think you can get any better than him.

On the Republican Party side, we have Donald Trump, Vivek Ramaswamy, Larry Elder, and possibly Ron DeSantis. While none of them are great libertarians, they all offer some positive hope.

On the Libertarian Party side, we may get a Dave Smith nomination, which would be incredibly exciting. He is a consistent and principled libertarian who is able to articulate pro liberty views to an audience.

While we shouldn’t believe that a new president will save the country, it is encouraging that the American people may hear more than an echo for the next year and a half. If we ever hope to achieve anything close to a libertarian society, we have to spread our message far and wide.

Trump Attacks

Donald Trump’s rhetoric is anti establishment. Unfortunately, his actions from 2017 to 2021 did not match his rhetoric. He surrounded himself by horrible people. The few good people he had around him ended up being taken out by made up indictments.

Trump sometimes acts like a third-grader. He likes to call people names. He is famous for assigning unflattering nicknames to his opponents. Some see it as bullying. Maybe it is, but I’m not going to shed a tear for Lil’ Marco, Low-Energy Jeb, or Crooked Hillary.

Trump is now on the attack against DeSantis. He views him as a threat. As long as Trump doesn’t totally implode, DeSantis is probably the only person that can take the Republican nomination from Trump.

Even though DeSantis hasn’t announced he’s running yet, Trump is relentlessly attacking him. He probably wants to put him down before he ever becomes a threat. He probably wants to just keep DeSantis from ever entering the race. It may or may not work.

In a recent interview, Trump was criticizing DeSantis for his handling of COVID. He said that Florida actually did poorly in terms of COVID deaths. (Just recently, Trump was criticizing DeSantis for locking down Florida, so this really makes no sense from Trump’s point of view.)

First, this is an unfair statement because Florida has a disproportionately high percentage of older people. If you adjust for age, Florida was quite average in the United States. It was not piled with corpses from COVID, in spite of what the establishment media wants you to think.

And by saying this, was Trump advocating that Florida should have locked down harder and longer than it did?

Advice for DeSantis

I have major concerns about DeSantis as president, especially in terms of foreign policy. So I am not cheering for him to become president unless I see more promising signs that he will not adopt the typical establishment foreign policy.

I feel fortunate to have lived in Florida for the last three years. DeSantis did issue lockdown orders for April 2020, but he quickly relaxed them and opened up Florida while most states were still under partial lockdown. Perhaps the only state better than Florida in 2020 was South Dakota, which had no statewide lockdowns.

So DeSantis was one of the least bad governors when it came to COVID, which admittedly isn’t saying much. But it did take some courage or foresight to not fall in line with the lockdowns in the summer of 2020.

In fact, this was the issue where DeSantis really shined. He became quite popular because he lifted the lockdowns so early. DeSantis barely won his election for governor in 2018. In 2022, he got close to 60% of the vote.

DeSantis needs to lay off attacking the woke stuff. He needs to lay off of Disney. I don’t want DeSantis in a battle with Disney. He can leave that to consumers. If I don’t want anything to do with Disney, I don’t have to give them my business.

While I’m not rooting for DeSantis, if I had to give him advice, I would say he should talk about COVID whenever he can.

Going All In Against Trump’s Vulnerabilities

If DeSantis officially enters the presidential race, he is going to get hit hard by Trump. He might not know what hit him. If you think the attacks are bad now, just wait.

If DeSantis gets into the race, the only possible way he can survive is if he hits back hard at Trump.

If he is incapable of doing this, I would highly recommend that he stay out of the race and focus on being the best governor he can. He can reassess in 2027/ 2028.

If DeSantis wants to have any chance of beating Trump, he has to hit him where it hurts. The biggest stain on Trump’s presidency is COVID and his reaction to it.

Trump allowed Fauci to essentially rule over the country for most of 2020. Trump could have fired Fauci. He could have just sidelined him. He could have told everyone to ignore Fauci because he’s a liar.

But Trump didn’t do those things. Trump allowed Fauci to act as a dictator. He allowed Fauci to spread lies and misinformation.

DeSantis can throw Trump back. He can hit Trump like Trump’s never been hit before. In fact, maybe DeSantis should stoop to Trump’s level and give him a nickname. He can call Trump “Fauci’s secretary”.

After all, Trump just lined up and did what he was told by Fauci. What excuse will you have Donald Trump? You were President of the United States. You can’t claim you didn’t have the power to do anything.

Another possible nickname is “Lockdown Donald”. Just about the entire country was locked down under Donald Trump.

Another Jab

Of course, that’s just on the lockdowns. If you really want to get the knockout blow to Trump, hit him with the vaccines. It will be a jab on the jabs, if you will.

Trump has continued to brag about “Operation Warp Speed”. Thanks a lot Donald Trump. You gave us a deadly vaccine at taxpayer expense, and just in time for Joe Biden to take over and try to force it on the entire country.

How many people died because of these shots? How many people are disabled? And why didn’t they do anything at all to stop the spread as you promised?

And then Biden comes in and continues with the jab promotion. He forces millions of people to get it in order to retain their job, while some got fired. It caused total chaos with businesses and millions of people being compelled to take a medical injection they didn’t want.

It’s great that Trump says he wouldn’t have forced it on anyone, but how should we know? Maybe he would have. He certainly set us all up for it. How are those “vaccines” working out now, Mr. Trump?

Does DeSantis Have What it Takes?

DeSantis would have to show great courage to say all of this, but it is the only way he can beat Trump. Trump would look like a wounded animal crawling back to his hole. DeSantis could completely devastate Trump and send him off in the sunset.

Again, I’m not cheering for DeSantis because I have major concerns about him. And while Trump may be one of the few slight possibilities we have of taking on the establishment, I really get irritated when I hear Trump making up false things about COVID. Trump was a total coward on COVID, and he let the establishment take him down on that issue.

2020 was an absolutely terrible year for America and the world. 2021 was also terrible because of the vaccines that Trump was promoting.

So if Trump gets taken down by DeSantis over COVID issues, I will say that he deserved it. If DeSantis takes Trump head on with this issue, it will also give me a little more confidence that DeSantis may stand up to the establishment if he becomes president.

The U.S. Treasury market was already crazy. We have had a mostly inverted yield curve for all of 2023. This tells us that a recession is coming.

The fact that the Fed has been mostly tightening is more confirmation that a recession is ahead. The Fed has been slowly draining its balance sheet, although there was a brief reversal of that with the Silicon Valley Bank bankruptcy. The Fed has continued to raise its target federal funds rate, and may even do it one more time, in spite of the inverted yield curve.

If it wasn’t crazy enough, now the short-term yields are all out of whack. Last week, the one-month yield on Treasury bills fell hard while the three-month yield did not.

The one-month yield fell over 100 basis points in a timespan of less than 2 weeks. The three-month yield stayed around the same or actually rose slightly.

The week ending on 04/21/2023 showed a mostly inverted yield curve from 3 months out to 30 years out. Again, this yells recession ahead.

The curious thing is that on 04/21/2023, there was a spread of 178 basis points to close the day. The one-month stood at 3.36%, while the three-month stood at 5.14%. This is a crazy spread.

A Debt Default Coming?

There is some speculation out there on why this is happening. Of course, most people don’t notice it or don’t care to talk about it, including those who actually cover the financial markets.

Mish Shedlock has speculated that people and businesses are buying up one-month Treasury bills (which forces down yields) because they are worried about a debt default coming. There is, after all, more talk about the prospects of the Republicans in Congress playing tough on raising the debt ceiling for the government.

While I can’t discount this as a factor, it is hard to believe that players in the financial markets are actually worried about a debt default by the U.S. government. Even crazier, by staying away from three-month Treasury bills in favor of one-month bills, that is saying that the U.S. government will have some form of default on its obligations within the next three months.

I have little doubt that the Republicans in Congress will allow the debt ceiling to be raised. Sure, there will be much political theater, and maybe there will be some concessions to have the appearance of some fiscal sanity, but I highly doubt either party will allow for an outright default at this stage of the game.

Maybe some investors are just wrongly worried about such a scenario. If that’s the case, then it makes a good case for buying three-month Treasury bills at this point. You can get yourself a nominal annualized return above 5%.

The Inversion is Still the Real Deal

I can only speculate on why there is a big spread between short-term yields at this point. My guess is that it will correct itself soon enough.

The bigger point is to not take your eye off the ball. That is the highly inverted yield curve and the fact that the Fed is still mostly in tightening mode.

The recession coming is likely to be one for the ages. The Everything Bubble is likely to implode. The air is already slowly coming out of the housing bubble. That should speed up rapidly.

The stock market, which is far more liquid and responsive, is likely to be a wild ride. And the ride is going to be more down than up in the next year.

A lot will depend on how the Fed reacts when things get bad. They’ve already shown that they are willing to bail out banks. But I don’t think they will bail out stock investors just for the sake of that alone. This is especially true when consumer price inflation is still running at 5%.

My thoughts for now are that you should be largely out of the stock market except for the permanent portfolio portion and heavy speculations.

If you have some liquid funds that you don’t need right now, you can take advantage of the yield spread and invest in three-month Treasury bills – currently the highest yield on the curve. It won’t beat inflation after taxes, but it is a way to lose less.

Robert F. Kennedy Jr. has announced that he is seeking the Democratic Party nomination for president in the 2024 election. This is the latest political news that is disturbing to the establishment.

RFK, Jr. is the son of Robert F. Kennedy, who was the U.S. attorney general and a senator in the 1960s. Kennedy (the senior) was assassinated at the age of 42 in 1968, just as he was locking up the Democratic nomination for president that year.

RFK, Jr. is also the nephew of John F. Kennedy, who was the 65th president of the United States and assassinated in office in 1963.

While the Kennedy brothers apparently had their moral shortcomings, Ted Kennedy was the worst. The country was saved from Ted Kennedy ever being president due to his killing of a young woman in 1969 when he drove off a bridge and left Mary Jo Kopechne to die. He was more worried about his political career than saving the woman.

Despite JFK’s moral shortcomings, I have generally come to believe that he was a decent man, at least politically. Sure, he was no libertarian, and I think some libertarians give him too much credit in saying that he wanted to get rid of the Fed. But I do believe that JFK wanted peace in the world, and that is one of the main reasons that he was assassinated.

RFK (senior) was something of an enemy of Lyndon Johnson, who probably had a hand in JFK’s assassination. It is very possible that RFK was seeking some revenge and was going to expose the assassination of his brother. But then RFK was assassinated before getting the chance to become president.

The Best Kennedy

Robert F. Kennedy Jr. is now trying to carry on the legacy of his father and uncle. Like both of them, he is putting himself at great risk.

I have followed Kennedy for several years now. I was already quite aware of his work on vaccine safety before COVID-19 was ever a thing.

For this alone, Kennedy is in disfavor with the establishment. They label him as a conspiracy nut and an “anti-vaxxer”. The last part is probably true, but it doesn’t mean it’s wrong.

Kennedy is deeply suspicious of the deep state. He generally believes that the deep state killed his uncle, and possibly his father too.

Kennedy is generally a man of peace. He speaks against corporatism (state and corporate power merged). He, of course, was an outspoken critic of COVID lockdowns and forced vaccination.

There are areas where libertarians will disagree with RFK Jr. He speaks of democracy (as if it is a good thing) in a way that most libertarians wouldn’t. But a lot of his talk about democracy is really talk against censorship, which most libertarians would agree.

Kennedy will also talk about the environment from a leftist perspective. Most libertarians don’t think the national government (possibly the biggest polluter on earth) should have anything to do with the environment. But Kennedy isn’t obsessed with centralizing more power when talking about the issue.

There are probably economic issues too where libertarians might take exception. But I think most libertarians can live with the few areas of disagreement because Kennedy is so good on the really important issues of our day.

RFK Jr. is probably better than his father and uncle, politically speaking. He certainly doesn’t lack courage, and he is already accustomed to taking abuse by the establishment and its media.

Let Them Debate

RFK Jr. is basically the polar opposite of Joe Biden. Biden is a liar and a criminal, and he is bad on almost every issue. Kennedy is honest and courageous.

Therefore, RFK Jr. has very little chance at getting the Democratic nomination. The establishment media will throw all of their hit pieces at him, and the majority of the Democratic constituents will believe it, just as they obediently believed everything about COVID and vaccines.

Maybe I am too pessimistic on this front, but give me a reason I should have any hope in the Democratic Party after the last 3 years of lockdowns, forced vaccination, spending, war, and a war on the American people?

The big positive about Kennedy seeking the presidency is that he will bring up issues that would be barely touched otherwise. He will also help to expose the evils of the establishment.

If Joe Biden runs again, I can’t imagine he would debate Kennedy. I think they would shut Kennedy out of the debates if there even are debates. If Kennedy were miraculously able to debate Biden, he would tear him down. Biden would be fumbling over his words even more than usual.

Kennedy will also serve as an attack against Trump on his worst qualities. Trump, no matter what you think of him, was really bad on COVID. He supported lockdowns, and he allowed Fauci to run the country into the ground. And I’m sure Kennedy will have a few things to say about Operation Warp Speed.

Support the Conversation

Libertarians can choose for themselves whether or not to support Kennedy in his quest for the presidency. But support is a lot more than just voting for someone or saying you endorse them.

You don’t have to commit to voting for Kennedy while at the same time support his getting in the race. He will open up the conversation to things that need to be discussed. He will provide a viewpoint that may not otherwise be heard.

I am happy Kennedy has entered the race for these reasons. I want the media to attack him so that more people will pay attention to him. I want people finding his work on the internet.

Maybe Kennedy isn’t the best on economics, but he is honest and courageous. These are the most important qualities that libertarians should look for in a candidate. Kennedy also tends to focus on the issues where he is strongest. Let’s hope he is able to reach many people who have yet to hear his message.

If you watch the establishment media, you might think everything is wonderful with the economy. We just need to get rid of those MAGA Republicans and then we will be nearing paradise.

If you watch alternative media, then you might think that the sky is falling and that we only have a chance of survival if we happen to elect the right politician.

While I generally have an idea of what is being said by the establishment media, I certainly prefer to pay more attention to alternative media. There is a lot of variation when it comes to alternative media, but there is certainly a sector of it where they have to announce that the sky is always falling.

This doesn’t mean that the sky won’t fall. It doesn’t mean that we might not get some of these bad economic and political scenarios. I just think that sometimes it is overhyped, and I also believe that it is better to tell people what’s possible instead of telling them that something will happen.

The future is unpredictable for everyone. We have no idea how the billions of people on the planet will act each and every day, and we certainly can’t anticipate reactions to that.

Bad Advice for What Might Happen

I appreciate warnings of what could happen. I do not like it when I hear advice given based on a prediction. I especially don’t like it when that advice is dangerous if a particular scenario doesn’t play out.

For example, maybe someone is predicting hyperinflation. They tell you to pull all of your money out of the bank and to buy gold and other hard assets. Maybe they tell you to load up on guns and ammo and food.

The problem with this advice is that it will be harmful to anyone who listens if the scenario doesn’t play out and there isn’t hyperinflation.

This is more than paying an insurance premium. It is paying with your entire lifestyle.

You can hear similar advice for someone predicting a banking crisis. They tell you to take all of your money out of the bank and to hold it in cash or to buy gold.

It is possibly only good advice if the scenario actually happens. If the world goes on and functions basically the same as it has been, then it is terrible advice that could financially ruin people.

The More Things Change

I have been one who has been warning of a deep recession ahead. I have also warned of the possibility of higher consumer price inflation.

But I don’t completely change my advice in terms of investing and money management based on what might happen. There may be tweaks to make to better protect yourself, but you still have to stay the course.

Even during times of change and turmoil, most things tend to go on. There most likely won’t be a breakdown of the division of labor.

Even if there is a banking crisis, it probably won’t be that much greater than in 2008. That was a bad financial crisis, but life mostly went on. It may have been a tough period of time for some people, but most people still went to a job, paid their bills, and ate dinner and slept in a bed each night.

Even with radical political change, things will largely stay the same. It is hard to imagine things getting crazier than they were in 2020 and 2021 when people were essentially locked in their homes. Then, many people were forced to take a medical injection in order to keep their job.

People who have lived in a war, where their actual home was in a war zone, have had it the worst. Whenever anyone says that this is the worst period in American history, think about the so-called Civil War where many hundreds of thousands of people died at a time when the population was a fraction of what it is today.

Staying the Course

It is important to have your principles in life. You should also have your financial/ money principles, and you should let them guide you. Don’t let the media (establishment or alternative) guide you.

If you need to make a change based on the latest news, make sure to think it through.

I still recommend that at least part of your financial assets be in a permanent portfolio. It is designed for virtually any economic environment. It may not protect you from a civil war, but not much will.

I recommend having an FDIC-insured bank account. You need it to pay your bills anyway. Your money is most likely safe in there. The biggest threat is currency depreciation, but that’s why you also invest in gold and stocks.

I recommend staying out of most debt. Pay your credit cards off each month. Don’t have any debt other than a mortgage and possibly a car loan. Even these should be manageable.

You should have long-term goals of saving for retirement and paying off your mortgage if you have one. Don’t think you are being wise by taking out extra debt using your house (or anything else) and investing the money. It will likely backfire.

If you want to speculate, then save extra money to do so. You can have a speculation fund aside from your more conservative savings.

Conclusion

It is easy to get wrapped up in the latest headlines and think the world is crashing around you.

The best thing to ask yourself is if you are protected if a particular scenario does occur. If you are vulnerable, and there is a reasonable chance of this happening, then perhaps you should make a change.

But this doesn’t mean going all-in on one scenario. Chances are that it won’t happen.

In all likelihood, things will be largely the same in ten years as they are now. You will still have a bank account with U.S. dollars. They will be worth a bit less than they are now. Contract law will still mostly function. If you have a long-term mortgage, you will still be making the same payments on that mortgage as you are today unless you move or finish paying off the mortgage.

Compounding interest will still work for you over time. Maybe the interest will be less in real terms with higher price inflation, but it will still be there, and you can still benefit from it.

In sum, don’t make any radical changes unless they are thought through well.