The FOMC released its latest statement on monetary policy.  As expected, the Fed lowered its target rate by 25 basis points (0.25%).  The federal funds rate is now in a range of 3.75% and 4.00%.  The Fed will meet just one more time in 2025, but it is unclear if the Fed will cut again for its last meeting of 2025.

Jerome Powell pointed out that they have limited data because of the government shutdown.  The limited data gives the Fed an excuse to remain undecided on future rate cuts.  They probably really do want to see if price inflation continues to run high.  They also don’t know if and when this bubble is going to implode.

The CPI is still running at 3% (above the Fed’s supposed target of 2%), yet they are cutting rates anyway.  While the rate cut gets most of the attention, this isn’t what I believe was the biggest news.

The FOMC announced that it will stop its balance sheet runoff starting December 1, 2025.  In other words, we have one more month of approximately $40 billion coming off the balance sheet.

A Stable Money Supply?

The Fed has been slowly deflating its peak in 2022.  That was the same year that price inflation spiked higher.

Let’s recall that the balance sheet was just over $4 trillion when Covid hysteria hit in late February/ March of 2020.  It skyrocketed from there reaching a peak just short of $9 trillion in 2022.

Once the Fed finishes its quantitative tightening at the end of November, the balance sheet should stand at approximately $6.5 trillion.

So, we went from just over $4 trillion to almost $9 trillion in two years.  Now we are back to about $6.5 trillion another 3 and a half years later.  That is quite a ride.

But it is still over 50% higher from where it was at the beginning of 2020.  You can see why we have had the consumer price inflation that we’ve had.  You can also see why we’ve had the asset bubble we’ve had, which continues to this day.

Now that the Fed is going to a neutral monetary policy in terms of the base money, you have to wonder when quantitative easing (digital money printing) will be coming.  At this point, it should just take a big bank failure or a stock market crash to get the printing presses going again.

The Everything Bubble and Austrian Economics

When writing about the business cycle, Ludwig von Mises pointed out that you don’t necessarily need monetary deflation to bring on a crash.  If there has been an artificial boom, that boom will eventually come to an end.  Just a slowdown in a loose money policy can bring on the crash.  At some point the correction will happen.

Mises said that the only way to avoid the correction was to continually increase the rate of the growth of the money supply, which would eventually lead to a crack-up boom, which is really just hyperinflation.

Hyperinflation brings on its own correction, but it completely destroys the money.  Almost nobody should want hyperinflation.  Even government officials and central bankers don’t want hyperinflation because it could destroy their own wealth and power.

Even though this boom has lasted a long time, it doesn’t mean it can keep going forever.  We almost got a big recession in 2020, but the government handed out trillions of dollars to people with the help of the Fed.  This delayed the inevitable pain.  Now we have an even bigger bubble than what existed in early 2020.

The Fed is stopping its mild monetary deflation, but the damage is already done.  The damage was the massive monetary inflation and massive government spending over many years.

Yield Curve

With the Fed lowering shorter-term interest rates, the yield curve is normalizing.  It was inverted for 2023 and much of 2024.  Now that it is normalizing where short-term rates are lower than long-term rates, we are ready for a recession.

With stock indexes, gold, and Bitcoin all hitting new all-time highs, all the signs point to a massive recession ahead.  The Fed cutting rates by 25 basis points isn’t going to stop any of this.

The big question is what the Fed will do if and when a recession hits.  What if price inflation is still running at 3% per year?  You would think that a recession would bring this down, but that isn’t clear at this point.

Will the Fed just try to reinflate the bubble?  And what will happen to bonds?  What will happen to the dollar?  What insane things would Donald Trump try to do?

There are a lot of questions hanging out there.  The Fed is stopping its monetary deflation for a reason.  The CPI is still running high, but they are scared of something else.  Perhaps Americans should be more scared. Investors should be really scared.

Even with the government being shut down (sort of), we still got a release of the latest CPI numbers.  The market cheered because the numbers were a little better than expected.

The problem is that our expectations have become too low.  After the horrible price inflation of 2022, we are happy when it is “just” 3%.  Of course, that 3% is on top of the already-higher prices from the last 5 years.

The CPI showed a rise of 0.3% in September 2025.  The year-over-year has gone back up to 3%.

The median CPI is up 3.5% from a year ago.

What happened to the Fed’s target of 2%, let alone the target of an average of 2% over time?

In the face of price inflation at 3%, the Fed is actually lowering interest rates.  This doesn’t make much sense at all unless you consider that the Fed may not really care too much about getting price inflation down to 2%.

These are bad numbers on their own.  It doesn’t really matter if they beat expectations.  The expectations were bad.  Perhaps the positive is that we can say that people aren’t expecting much out of the Fed in the way of positive things.

Investors like the news because they see the Fed continuing with its rate cuts.  This is all that seems to matter to the general financial media and investors.

My Experience

I went to the grocery store yesterday.  My experience was much higher price inflation.

There are dark chocolate bars that I like (2 different brands).  They used to be $2.99 or $3.19.  I believe it was just earlier this year that they went up to $3.99.  Yesterday, they were something like $5.69.  Both brands had gone up.

To go up over 40% from last weekend is outrageous.  Maybe I will see the occasional sale, but this is the new standard.  I probably won’t be buying much here, as I can find cheaper brands at Walmart or Costco.

The price of the eggs I buy did not go up from last week.  They are already much higher than they were a couple of years ago.

Sometimes I buy coconut water.  I look for sales.  The price for a 1-liter bottle went above $6.  It was over $5 before.  It is not as dramatic as the chocolate bars, but still higher from the weekend before.

I have talked about other food items previously.  The price of the organic peanut butter that I buy has gone up over 50% in the last couple of years.

We have a good water filter we use, but we still occasionally buy individual bottles of water in a pack of 24.  Have you seen the price?  All of the brands have gone up in price as compared to a couple of years ago.

The prices I’m seeing at the grocery store are going up a lot faster than 3% per year.  When one product jumps 40% from last week, it tells me something is going on.

Tariffs and Monetary Inflation

Perhaps we are finally seeing the impact of the increased tariffs and the insane swings in what to expect future tariffs to be.  The chocolate bars I looked at are probably not imported, but I can’t say for sure.  It is also possible that certain ingredients are imported.  There were already high tariffs on sugar imports before Trump, but that doesn’t explain the hike in the price.

Sometimes the packaging can get more expensive too.  This can be because of tariffs or from general monetary inflation, or both.  Another thing I noticed at the grocery store is that the plastic bags for my groceries just seemed to be cheaper and lower quality.

Unlike leftists and even many non-leftists, I am not blaming the grocery store for being greedy.  I have no doubt that the store is experiencing higher costs and is just passing them on to the consumer.

My wife actually said to the cashier that we noticed that some prices had gone up.  She acknowledged it and said she’s been seeing it too.

We are still getting the effects of the monetary inflation that was rampant in 2020 and 2021.  Even though the Fed has been slowly deflating its balance sheet, it is still far higher than it was 5 years ago.

When you add additional tariffs on top of this, it will be hard to tell how much of the price inflation is a result of the taxes on imports versus general monetary policy.

There are so many working parts in the economy, it is really hard to say how this will play out.  There will be winners and losers, although more losers overall.  The average American will see a relative decline in living standards.

In my case, I can’t justify paying over $5 for a single chocolate bar.  I will either eat less of it or find a cheaper brand.  And that’s just the cheap stuff.  I could easily choose to just buy the chocolate at the higher price.  When you start talking about insurance, there oftentimes isn’t as much choice.  You can’t just not buy car insurance because you don’t like the higher price.

Consumer demand will shift based on the new realities.  Sometimes a business can’t pass along higher costs because consumers will choose not to buy.  Less of certain things will be sold.  People find cheaper substitutes.

The government and central bank continually make us poorer than we otherwise would be.  Price inflation is not dead.  If anything, it is going higher.  We’ll see if my experience at the grocery store shows up in the October CPI numbers.

There is something very insincere about these “No Kings” rallies/ protests.  One of the problems is that most of the people who are protesting are really just protesting Trump.

To be sure, there is a lot to protest about Trump.  There are some valid points they make against Trump.  The problem is that many of these same people will cheer on authoritarianism from other politicians.

And this isn’t “what aboutism” because it isn’t a defense of Trump.  If the majority of people protesting “No Kings” were consistent in protesting against government authoritarianism, then we would have a much more libertarian society.  But they just criticize Trump and other Republicans.  They also oppose Trump on the occasion when he promotes less government interference.

Kings vs. Democracy

You don’t have to read Hans-Hermann Hoppe to understand that having a right to vote doesn’t give you freedom.  A country run by a king is not necessarily more authoritarian than a country that votes for its leaders.

I would take a benevolent king who collects a total of 5% in taxes and doesn’t start any wars over the horrible government we live under in the United States today.

Of course, Trump isn’t a king.  He was elected.  The problem is that he is largely authoritarian even with the supposed checks from other branches of the government.

The states should also be able to nullify many of his actions, but unfortunately the central government has become far more powerful, and there isn’t much of a federalist system left.  The “No Kings” people oppose things like states’ rights though.

The problem certainly didn’t start with Trump.  Trump has amplified certain things and made them worse.  He has also slightly improved things in some areas.  Trump is just continuing in a long line of presidents who have had way too much power.

As Harry Browne liked to say, the problem isn’t the abuse of power.  The problem is the power to abuse.

Both Republicans and Democrats will scream at the opposition party when the opposition party holds power. As soon as they regain power, then they do their own form of abuse to get back at the other side.  The cycle just seems to get worse and worse.

The Previous King(s)

There are some genuine people at the No Kings protests who do oppose authoritarianism.  They are a minority.  The majority of people are just protesting Trump and anything he does.  They are the same people who repeated lies about how Trump colluded with Putin to steal the 2016 election.

The really rich part is that these same people fully supported the authoritarianism of Biden and Biden’s handlers.

Biden (or his handlers) issued an executive order that tried to force about 100 million Americans to take an unsafe and ineffective jab in their arm.  If you refused, then you were not allowed to keep your job that allows you to make money to feed yourself and your family.

In terms of domestic policy, it doesn’t get any more authoritarian that that.  Luckily, the Supreme Court struck down the worst parts of the illegal and immoral orders.

It would be interesting to take a poll of the “No King” protesters to see how many of them opposed the vaccine mandates 4 years ago.

And let’s not forget all of the other horrible things Biden did or tried to do.  He just arbitrarily tried to forgive student loan debt.  He continued to push his other Covid restrictions.  He weaponized the “Justice” Department against people who opposed him.  And, like Trump, he helped finance foreign wars.

Honest Opposition

We need honest opposition.  We need more consistent opposition.  There should be protests against Trump for killing people in boats off the shores of Venezuela.  There should be protests against the wars and war financing.  There should be protests against turning cities into police states in the name of deporting illegal immigrants.

It just rings hollow at this point coming from people who continually lied and made stuff up about Trump.  There is plenty to criticize Trump about without having to make stuff up.  These people also supported many of the same things from Biden.

The leftist protesters are a bit like the boy who cried wolf.  They screamed and hollered about Trump for every little thing for 10 years.  Now that Trump is becoming more unhinged, their screams are not getting attention because they’ve been screaming for the last 10 years about Hitler.  Now that the wolf has come, other people are ignoring them.

Of course, Trump has governed the last 6 months or so as if he is trying his best to prove his worst enemies correct.  He really is acting like a dictator in many ways.  Now the leftists get to say, “See, we were right.”

They were right in the general assessment that Trump is bad, but they were wrong in almost every other respect.  Just as many on the political right will cheer on tyranny when it is imposed from their side, the left will go back to cheering on tyranny as soon as Trump leaves office.

Libertarianism, anyone?

Something has to give with this economy.  There is simply too much craziness for this to continue.

The stock market is still booming as if the economy is just wonderful.  Gold has surpassed the $4,000 mark after just surpassing $3,000 earlier in the year.  Silver is at new all-time highs, surpassing the $50 mark.

Not only did gold and silver touch new milestones, but they blew past them.  Two days of gains in these metals can make for a good annual gain in a typical investment.  It isn’t normal for an asset to go up 5 to 10 percent in just a few days.

Perhaps gold and silver are just catching up with the rest of the Everything Bubble.  Stocks and Bitcoin have been in bull markets for many years with small periods of pullbacks.

Even with the insane national debt and the insane monetary policy of the last two decades, it is still surprising to see the price of gold go up this far and this fast.  Even if you are an investor in gold, it is still a bit jarring.

Now there is talk of $10,000 gold.  I’m not sure I want to see $10,000 gold any time soon.  It means something else is really off.  We really don’t want to see the dollar depreciate this much.

The Tariff Economy

Trump has become unhinged in his second term as president.  He has always been bombastic and all over the place with his rhetoric.  But he has taken it to a new level.  It isn’t just Trump mouthing off.  It is having real-world consequences.  In addition to his insane foreign policy, he thinks he is playing some kind of game (maybe a different version of Monopoly) where he can just bully other people to “negotiate” with him.

Trump has threatened to impose a 100% new tariff on all Chinese products.  This would be an additional tariff on top of the already-existing tariffs.

There are about 1.4 billion people in China.  The Chinese produce a wide variety of products that are exported throughout the world.

Trump is essentially sanctioning the entire country of China and the 1.4 billion people who live there.  If this 100% tariff goes through, Trump is effectively blocking trade with China.  It isn’t much different than the blockade with Russia.

There are already tariffs on Chinese imports.  If you add a 100% tariff, it means the price will be more than double what it should be.  It would not be worth it to Chinese producers and American consumers to have much, if any, trade at all.  At some point, it becomes more of a sanction than a tax.

If the government were to put a 100% additional tax on cookies at the grocery store, most people would stop eating cookies or they would make their own.  A few people might still buy cookies because they really like them and don’t care much about paying double the price.  But you can imagine that a great percentage of people would find something else for dessert.

Unpredictability

Some people talk about Trump as TACO (Trump Always Chickens Out).  Why don’t people use this against Trump in his funding of wars?  Trump always chickens out and continues to fund foreign conflicts.

But Trump doesn’t always chicken out when it comes to tariffs.  While he has backed off on the percentage many times, there are still additional tariffs in effect that weren’t there before.

Even if Trump does “chicken out” on these 100% tariffs on China, it is hard to estimate just how much of an impact this has on business.  This goes for small and big businesses.

Even if your primary product is made in America, manufacturers rely on certain materials and parts that are imported from other countries.

Just imagine you have a business that sells a product that costs $100 to produce.  One-fifth of the cost of that product is from materials imported from China.  That $20 portion may now rise to $40 with Trump’s new tariff.  So, the cost of that product is now $120 instead of $100.

Will consumers pay a significantly higher price so that your business can still make a profit?  Will you order the materials and then see the tariff go back down?  Should you order a huge supply of materials in anticipation of the tariff coming soon?  What if you order too much and they don’t sell?  What if you don’t order enough and will have to quickly raise your prices?  What if Trump wakes up grumpy tomorrow morning and decides it will be a 200% tariff?

The uncertainty here is enormous.  This is happening for thousands of businesses across the country.  It impacts homebuilders.  It impacts sellers of electronics, toys, furniture, and a lot of other things that are a big part of our lives.

Even if everything else in the economy were solid, this alone creates massive havoc and uncertainty.  It is very bad for business.

The Yield Curve

Let’s not forget that the yield curve was inverted for 2023 and most of 2024.  It is slowly normalizing.  The 10-year yield is hovering around 4%, along with the 3-month yield.  The short-term yields should continue to decline with the Fed in interest rate cutting mode.

The inverted yield curve is a warning indicator for a recession.  The recession typically comes after the yield curve has somewhat normalized (gone back to not being inverted).  We are reaching that point now.

This alone should be a major warning sign that a recession is on the horizon.  Add to this the tariffs.  Add to this the massive market bubble where assets keep going higher to insane prices.

This whole economy could blow at any moment.  So far, things have held together in spite of Trump’s tariffs and his tariff threats.  That doesn’t mean things will continue to hold together.

The government has been “shut down” for over a week and a half, and I haven’t commented on it in writing up until now.  That’s because I don’t think it will be that significant in the long run.

The first thing to point out, that people generally know, is that the government isn’t truly shut down.  You still have to pay your taxes.  The military is still funding wars, fighting wars, and operating military bases all over the world.  The Social Security checks (direct deposits) keep coming in.  Medicare and Medicaid keep operating for patients.  We are still subject to all of the government regulations out there.

Most unfortunately, the Congress and president are still active, including an announcement from our economic czar that he wants to impose 100% tariffs on China because he doesn’t like how they’re acting.

Impacts

This isn’t to say that the government shutdown doesn’t have its impacts on people.  There are many government employees who aren’t reporting for work and who won’t be receiving a paycheck.

Even though I don’t think most jobs done by government employees should exist, it doesn’t mean we can’t have sympathy for some of these people.  There are also disruptions for people who just need to deal with the bureaucratic machine.

This shutdown might be hard for government employees who live paycheck to paycheck.  They will still need to pay their rent or mortgage and other bills even when they miss a paycheck.  This is one reason why it is good to not live paycheck to paycheck.

On the other hand, the government employees who are currently not working know that they will receive backpay when the government officially reopens.  Even though the paycheck will be delayed, they will be getting what is essentially a paid vacation.

Here’s a note to people on Facebook and other social media.  It isn’t necessarily a good look to advertise your glee over a government shutdown because you get a paid vacation from your job.  Then again, I suppose it does help the cause of liberty by making people realize that there are too many government jobs out there that we don’t need.

Politics

It is important to realize that the government is shut down because of politics.  Both sides (Democrats and Republicans) see it as potentially advantageous, politically speaking.

If public opinion starts shifting in favor of one side, expect the other side to find a resolution.

The Republicans are generally blaming the Democrats because the Democrats want to make subsidies permanent for the Affordable Care Act (i.e., Obamacare).

The problem for the Republicans is that they hold the presidency and a majority in both houses of Congress.  Even though they essentially need 60 votes in the Senate for a continuing resolution, most people don’t follow it that closely.

My guess is that the Republicans will capitulate because they will get more of the blame.  If you are a very casual observer of politics, you can see that the Republicans hold the presidency and a majority in Congress, so they would be more to blame for the government shutdown.  Of course, if you like the shutdown, then maybe you would praise the Republicans for it.

Most people don’t care that much.  The ones who care the most are the ones who are the most directly impacted.  At some point, the people most impacted will have the loudest voices and the most influence.

Trump has threatened to start permanently laying off employees if the shutdown continues.  I don’t think these will be mass layoffs.  He will be going after very specific agencies that he sees as working against him.

Trump is probably not wrong in this respect.  There are government employees who are actively working against him.  They are also actively working against the American people.  But let’s face it.  This will be tinkering around the edges.

We know how these things typically work out.  Trump will try to fire a few thousand people out of millions, and these people will take it to court.  There is a good chance that the courts will rule that the government shutdown was not a legitimate reason for firing these people.

Conclusion

It is hard to say how long the government shutdown will last, be we can say with a lot more certainty that there won’t be any major permanent changes that come from this.  Most government employees will eventually return to work and get their pay.

Trump has done a lot of bad things that go against the cause of liberty.  He has done a few good things too.  The problem is that most of the good things will just simply be undone by the next Democratic president, or maybe any president.Meanwhile, even with the so-called shutdown, government spending will continue to grow, and the debt will continue to grow.

As I write this, gold is trading at around $3,900 per ounce.  It had just broken through the $3,000 mark for the first time ever on March 14, 2025.  It was already on a run when it topped $3,000.  It has now gone up about 30% in the last 7 months.

Gold has joined the Everything Bubble with stocks and crypto.  There was been a party with assets for a while that didn’t include gold.  Now gold and silver have gotten into the action, while Bitcoin and U.S. stock indexes continue to touch new highs.

The other thing that has joined the party is gold mining stocks.  The gold stocks did just about nothing for many years, and they looked quite pathetic compared to the overall stock market.  Now the gold miners are finally having their day in the sun.

Just as an example, GDX – the VanEck Gold Miners ETF – is up an astounding 117% year-to-date.  Some of the individual companies that are big players have been extraordinary.  Newmont Corporation (NEM) is up about 125% year-to-date.

Anyone who had been patient with the gold miners and held on has been rewarded in 2025.

Dollar Profits

You could say that the dollar gains in gold and gold stocks is really just a loss in the dollar.  It is the continually depreciating dollar that gives these types of returns.

Whether we like it or not, we live in a world of fiat currency.  For Americans, the dollar is money.  That is what you use to buy food at the grocery store and to pay your bills.

Even if the “profits” this year from gold are really just a representation of a falling dollar, we are still dealing with dollars in everyday life.  That is the measurement we use.  Most people don’t say that the price of a house (or anything else) changed value based of the number of ounces of gold it takes to buy.  A house is priced in dollars, and the transaction and contract are made in terms of dollars.

So, whether you want to consider the dollar-price gain in gold as profits or just retaining value, the question arises of whether you should sell any of it at this point.

If you absolutely knew that the price of gold or gold stocks would fall by 25% in the next 6 months, then it would make sense to sell right now and buy it back after it falls.  After all, you could have more gold and shares of gold stocks if you did this.

Of course, you don’t know what the future holds, but I present it this as a thought experiment.  I am trying to stop the people who reflexively respond, “Gold is money, so you should never sell it for dollars.”

Taking Profits

I recently listened to an interview with David Gardner, one of the founders of the Motley Fool, which is a company that gives investment advice.  He talked about his thought process in buying (and holding) stocks.

One of the big takeaways for me is that you really should hold things for the long term if you bought it as a long-term play.  Personally, my biggest investing mistakes in my life happened when I sold something for a gain.  It wasn’t from the losers that I bought.

I owned stock in both Amazon and Apple a long time ago.  I even rode Amazon through the tech crash in the early 2000s.  I made some modest gains from both stocks at different times.  I sold and took profits.  I should have held, even though I obviously had no way of knowing at the time.

I try not to play the “what if” game too much.  It is easy to do in life.  If I had held, I probably would have turned something like $1,000 into $100,000, or maybe more.  I had bought shares in these two companies because I liked them and saw potential.  So why did I sell?

At the same time, I don’t want to give the impression that you should never sell.  There are plenty of stories out there where people should have taken money off the table and didn’t.  These stories are even more painful.  Imagine having a million dollars in a stock and then watching it go to zero.  It’s fine if you are Warren Buffett, but most people aren’t.

If someone had bought Bitcoin when it was less than $1,000 per bitcoin, they have obviously done quite well.  If they sell it all now, they are missing the chance of Bitcoin going to $1,000,000.  But they are also risking these impressive gains if they don’t sell.

My advice is to look at it in context to your whole portfolio.  If you are worth $5 million and you have one bitcoin worth about $120,000, then you can afford to let it ride.

If you have 8 bitcoins worth almost a million dollars, and that is the large majority of your net worth, then it would be foolish not to sell some of it.  You could easily go from a million dollars to near zero in a short amount of time.

My overall recommendation is to sell some and let some ride (if you still think it is a solid investment).  We aren’t talking about owning a big house.  Things like Bitcoin, stocks, and even gold to a certain extent, are divisible.  If you own 100 shares of a stock that has done very well, you can sell half.  Take some profits while letting some of it ride for the potential of even bigger gains.

Balancing a Portfolio

If you invest in gold as part of a well-diversified portfolio (such as the permanent portfolio), then the answer here is to keep your portfolio balanced.  If you want gold to make up 20% of your overall portfolio, and it is now worth 25%, then sell enough to bring it back down to 20%.

If you have speculated in gold mining stocks, you have made some big paper gains in the last year in terms of dollars.  This isn’t an all or nothing game.  I don’t recommend selling it all because gold mining stocks might continue to go multiples higher of where they are now.

I also don’t recommend holding everything and not taking any profits.

Personally, I have some gold funds in a retirement account.  Because of the recent run, they make up a larger percentage of my account now than they did a year ago.  I am thinking about selling a small percentage.  It may be something like 10%.  The gold funds would still make up a larger percentage of my retirement account than this time last year, but at least I would be taking a little off the table.

There is no right answer here, but I think it is best to stick to a strategy.  If you have something like a permanent portfolio, you should rebalance, which will probably mean selling some gold.  If you own PRPFX, this should be happening for you by the fund manager.

If you have speculated in gold or gold stocks, there should be a deliberate strategy to take some profits while also allowing room for a big homerun.

Regardless of whether it is gold, stocks, Bitcoin, or some other tradeable asset, this is not an all or nothing game.  You can sell 10%.  You can sell half.  If you bought in for the fundamentals of the asset for the long term, then don’t sell it all until you hit a certain target.  You will never be a really successful investor if you are not willing to let the good things run.

Donald Trump is a hard person to read at times.  I am not one who typically says that Trump is playing 4-D chess.  When he does something moronic, he is usually just being a moron.  We don’t have to go looking for a deeper explanation.

A post on Truth Social about Ukraine really brings up a question of whether Trump is insane or playing 4-D chess.  Maybe it is both.  Maybe it is that Trump is insane and thinks that he is playing 4-D chess.

Trump says in his post that Ukraine “is in a position to fight and WIN all of Ukraine back in its original form.”  He goes on to say that Russia has been fighting aimlessly and that it makes them look like a paper tiger.

https://truthsocial.com/@realDonaldTrump/posts/115255130298104593

Trump concludes that, “We will continue to supply weapons to NATO for NATO to do what they want with them.”  When Trump uses the word “we” like so many other politicians, he means the taxpayers.

The comments made by Trump are so incredibly out of touch with reality, it makes it seem as if he is trolling.

The Only Way to Oppose the War Hawks?

Perhaps Trump is in over his head.  He has surrounded himself with war hawks.  He hasn’t made any significant progress on ending the war in Ukraine because he keeps funding Ukraine.  It is the same way that the mass murder in Gaza continues because Trump and Congress keep funding the Israeli state.

Maybe Trump is tired of fighting the war hawks and figures he sees no way to beat them.  Therefore, he just makes outrageous comments by essentially doubling down what the war hawks say.

This would be like Ron Paul saying, “After studying the issue more, I believe the Federal Reserve can do a great job of centrally planning the economy.  The Fed should drop interest rates to zero and start up the digital printing presses again.  More monetary inflation won’t lead to higher prices or misallocations.  The Fed is in a great position to give us a booming economy.”

Of course, Ron Paul tells the truth, so he wouldn’t say this.  But this is the vibe you get from reading Trump’s post about Ukraine.  He is being so ridiculous by saying that Ukraine can gain back all of its territory when the Ukrainian government is losing the war to Russia.  It is as if Trump is saying, “Yeah, go ahead with your plan of keeping the war going.  We’ll see how that turns out.”

Why Doesn’t Trump Just Tell the Truth?

Trump’s social media platform is called Truth Social, but he doesn’t seem to be very truthful these days.  Either Trump is delusional and lying or he is purposely lying.

If this is a trolling post, why doesn’t Trump just come right out and say that Ukraine has no hope of winning the war?  Why doesn’t he cut off funding?  Why doesn’t he say, as he has kind of said in the past, that Ukraine isn’t in a position to negotiate right now?

If Trump isn’t completely delusional and this is a sarcastic post, then it means that Trump is really scared of the neocons.

This has seemed evident when it comes to Israel.  Trump is Netanyahu’s little b**ch.  He does whatever Netanyahu orders him to do.  Trump is completely controlled in this sense.

But apparently Trump is just controlled on foreign policy overall.  If he can’t stand up to the war hawks and call out this charade in Ukraine, then he is useless at best.

Trump has said some good things in the past on Ukraine, but he continues to fund the conflict.  He also fails to ever mention the U.S. government’s role in sparking the conflict.

We seem to always get back to the question of whether Trump is just stupid or evil.  Maybe the deep state is making threats against him and his family.  Trump is allowed to speak in opposing climate change and some cultural issues, but he dares not speak against the U.S. empire.

If Trump isn’t stupid, he is a total coward because he won’t stand up to the deep state.  If he is being threatened, then maybe he should just resign.

If Trump thinks he is playing 4-D chess on the Ukraine issue, he is losing badly at it.  Maybe he should try just telling the truth on Truth Social.  He is either a coward or a fool.  He’s probably both in this case.

It is almost never good to judge a situation or institute a policy based on the actions of one person, unless the actions are representative of a larger group.

When violence is committed by one individual, we should certainly never portray that on an entire group of people.  For example, when a Bernie Sanders supporter tried to kill members of Congress at a baseball game, it wasn’t appropriate to label all Bernie Sanders supporters as murderers or nutcases.

The fact that Charlie Kirk was assassinated, seemingly by a lone person, does not tell us anything by itself.  It is a tragic event where one person took the life of another.

The loss of Charlie Kirk is significant in many ways, but perhaps the biggest story is the reaction to it.  I experienced it in my own world.  I saw more than one of my Facebook “friends” saying things that I found disturbing.

I try to put myself in the position of others.  What if Joe Biden had died while he was president at the height of the evil vaccine mandates?  I certainly wouldn’t have shed a tear over it, but I also don’t think I would have taken to Facebook and celebrated the moment.

It is almost never a good idea to celebrate and act gleeful over the death of another human being.  Even if the person is evil, you should be careful about celebrating too much.  You may turn into what you claim to hate.

Of course, Charlie Kirk wasn’t even a politician.  So even if he had views that someone found repugnant, it’s not like he had the power to force them on anyone.

Conspiracy Theories

There are certainly bizarre things about this story, but I can’t claim to know that it was anything more than the single person who has been accused.

There are theories out there that it could have been the Israeli government or U.S. intelligence behind the assassination.  Netanyahu had a somewhat bizarre response when asked about the allegations, but this doesn’t mean he had anything to do with it.

If we ever get any kind of solid evidence that the Israeli state was behind the killing of Charlie Kirk, it might open the eyes of a lot conservatives out there.  Personally, it would do nothing to change my views because I already believe that the Israeli state (with U.S. government weapons and funding) has intentionally killed tens of thousands of innocent people in Gaza over the last 2 years, so it would be no surprise if they killed one person in America.

Several people have stated that Charlie Kirk had been offered a large amount of money for his organization to tow the pro-Israel narrative.  He was also supposedly threatened by the pro-Israel lobby at a meeting in the Hamptons.

We can’t be certain that all of this is true and accurate, but at the very least it seems that Kirk’s views on Israel had evolved.  At a summer event hosted by his organization (TPUSA), he had Tucker Carlson there, who has become less shy in criticizing the Israeli state.  Kirk also had Dave Smith there to debate the topic of Israel, who has been a harsh critic of the actions of the Israeli state over the last 2 years.

Just the fact that Charlie Kirk had Dave Smith speaking at his event is a big sign of Kirk’s change in attitude, or at least his open-mindedness on the topic.

In a recent episode of his show, Dave actually read some text messages from Charlie Kirk.  One interesting thing is that Charlie Kirk saw the debate on Joe Rogan’s show between Douglas Murray and Dave Smith.  Kirk said that even though he comes more from the pro-Israel side, he didn’t really disagree with much of what Dave had to say.

In other words, Charlie Kirk was no Ben Shapiro.

And speaking of Ben Shapiro, it is creepy the way he tries to use Kirk’s death and pretend that Kirk would have wanted us all to unconditionally support Israel.

Cancel Culture

I have never been completely comfortable with the term cancel culture, and it has become clearer why.  I have never thought that a person should never be fired from a job for saying something.

There is certainly nuance here.  We have seen some ridiculous stories about people getting fired from their job over a dumb and harmless comment.  Sometimes the comments are even accurate but they are seen as politically incorrect.

On the other hand, it would be crazy to take a position that someone should never be fired for what they say or write in public.  If you are celebrating violence, you can see where a company might not want to associate with that.  That is especially true if the person is doing it while representing the company in some way.

Jimmy Kimmel

When Jimmy Kimmel said that MAGA people are distraught over one of their own murdering Charlie Kirk, Kimmel said it on his show on ABC.  It is not surprising that ABC did not want to defend this inaccurate and obnoxious comment, especially when Kimmel already had low ratings.

I actually thought it was far worse what Kimmel said a few years back when he said that the non-vaccinated people should be denied entry into hospitals and left to die.  This wasn’t a joke, and it wasn’t funny.  Kimmel was a salesman for the evil establishment.  Kimmel and Colbert were both shills for the vaccine regime.

ABC has suspended Kimmel.  Maybe he has been fired, but we don’t know for sure if it is permanent.

Of course, the idiotic Trump administration has to ruin this great victory by making threats of investigation against ABC.  This just provided cover for ABC to get rid of Kimmel, and it gave the left an excuse to holler about Trump.

To be clear, it is absolutely wrong for the government to threaten a company with investigation or to threaten pulling their license if the company doesn’t fire someone because of something they said.  It was just as wrong when the Biden people were threatening social media companies if they didn’t censor people who were critical (giving accurate information) about COVID lockdowns and vaccines.

Kimmel’s ratings were already in the toilet.  ABC could easily let him go after the Trump team made threats.  It would have been a harder decision if the Trump team had kept their mouths shut and let it play out from public pressure.

Other Lessons

It seems that this has brought out the true colors in many people.

Pam Bondi has now fully exposed herself as an opponent of liberty and free speech.

Parts of the hardcore left have shown themselves as supporting violence.

There are good parts too.  I have seen some on the left who have been respectful and have even had some genuine praise for some of the things Charlie Kirk stood for.

Another positive thing is that we, so far, have seen little violence in response to what happened.  Unlike 2020, there haven’t been riots in the streets.

There are certainly cultural issues where I had disagreements with Charlie Kirk.  There are some things he said that I wouldn’t have said or I would have said differently.  But he also had some really good things to say.  His biggest thing was that he stood for free speech and open debate.

Even though almost everyone knows of him now, most people who don’t pay attention to politics didn’t know much about Charlie Kirk, if anything at all.  Some have now heard the more controversial things he had to say, but some have also seen him from when he was engaging in open dialogue with those who disagree with him.

Charlie Kirk was working through some issues in his own mind on foreign policy, but he was generally on the better side of MAGA (the less interventionist side).

If there is one thing we should take away from Charlie Kirk, it is that we should strive to have an open dialogue with those who disagree with us, as long as they are willing to do so civilly.

The Federal Open Market Committee (FOMC) released its latest monetary policy statement.  The decision was to lower the federal funds rate by 25 basis points, which is the same as 0.25%.  There was one dissenting vote by Stephen Miran, who wanted to lower the target range by 50 basis points.  Miran was just put on the Fed Board by Trump, so it is no surprise that he is trying to give Trump what he wants.

This cut was widely expected by the market.  The Fed is now signaling that we should expect two more rate cuts by the end of the year.  Since there are only two meetings left in 2025, this likely means 25 basis points will be cut at each meeting (late October and December).

If this holds, the Fed will have a target range of 3.5% to 3.75% by the end of the year.  Meanwhile, the CPI numbers are still near 3%.  Why is the Fed in a stage of lowering rates if price inflation is still running higher than the Fed’s stated target?

Monetary Deflation

While the rate cut gets all of the news, the Fed will continue its policy of reducing its balance sheet holdings.  The Implementation Note states that the Fed will continue to allow $40 billion of debt to expire each month without rolling it over.  That is $5 billion in Treasury securities and $35 billion in mortgage-backed securities.

There is no way that Donald Trump understands this at all.  He watches Fox News and perhaps a little CNBC, and we can be rather certain that his advisors aren’t explaining to him that the Fed is deflating its balance sheet.  He might not even know what this means.  Trump just sees the headline news that interest rates are going lower.

To be sure, the Fed’s balance sheet reflects the base money supply.  It still matters what commercial banks do with the money that is out there (whether they loan it out or keep it on reserve).

So, while one hand of the Fed shows lower rates (a looser monetary policy), the other hand shows monetary deflation (a tighter monetary policy).

As a side note, the banks are getting paid to keep money on reserve.  That is how the Fed is controlling the federal funds rate.  We see headlines that the Fed cut 25 basis points.  Maybe someone should run a headline saying that commercial banks will be paid 0.25% less than before for parking money at the Fed.

Will This Stop a Recession?

The Fed isn’t just lowering rates to please Trump.  The Fed members probably see trouble in the economy.  Otherwise, why would they be lowering rates while price inflation is still above their target?

If you think the Fed’s easing of interest rates is going to stop a recession from coming, you should look at the past.  It has been very common for the Federal Reserve to already be in easing mode when a recession becomes evident.

The yield curve was mostly inverted in 2023 and 2024.  It has somewhat normalized.  With this rate cut, the 3-month yield is finally below the 10-year yield.

While an inverted yield curve is a good recession predictor, there is typically a delay.  The recession doesn’t actually show up until the yields have normalized – meaning that longer-term yields are higher than the shorter-term yields.  This normalization often comes because shorter-term yields are being controlled by the Fed (i.e., being lowered by the Fed).

The process right now is actually typical of what precedes a recession.  Perhaps one difference is that price inflation is still rather high.  I would also argue that the asset bubble is far bigger than what we have seen in the past.

The Fed has control of the short-term interest rates right now.  It is not likely to stop a recession from happening just by cutting 25 basis points at each meeting.  Unless the Fed starts massively inflating like it did in 2020, it isn’t going to prevent a recession.

We haven’t even seen the Fed stop its policy of monetary deflation.  Trump may not know this or understand this, but that doesn’t mean we can’t.  The continued monetary deflation and the small rate cuts from the Fed are indicating a recession ahead.  Investors in general don’t see this.  The bond market tends to be wiser on these matters.

The latest CPI numbers were released for August 2025.  The CPI was up 0.4% for the month.  The year-over-year now stands at 2.9%.

The median CPI, which tends to be less volatile, was up 0.3% on the month and stayed at 3.6% annually.

Forecasts had predicted a monthly rise of 0.3% and an annual rise of 2.9% for the CPI.  This means that it was a rounding difference, but the actual numbers came in slightly higher than expected.

To offset this little bit of bad news was more bad news.  The number of unemployment filings came in higher than expected.

Therefore, the bad news of slightly higher price inflation was offset by the bad news of higher unemployment.  The first piece of bad news indicates that the Fed can’t be as loose with its monetary policy.  The second piece of bad news says, “Don’t worry about the first piece.  The higher unemployment gives us a green light to lower rates at the next Fed meeting.”

In other words, the bad news that favors lower rates typically wins out.

Investors Love Everything in Bubble Mania

Higher price inflation?  Who cares?  Buy more stocks and mutual funds.

Higher unemployment?  Who cares?  If anything, this just gives the Fed more incentive to lower rates.  Buy more stocks and mutual funds.

It doesn’t matter what the news is these days.  Even tariffs don’t seem to bother investors any longer. No matter what it is, the market just keeps marching higher.

The Dow closed above 46,000 for the first time ever.  The Nasdaq closed above 22,000 for the first time ever.

This is bubble mania.  No matter what the news is, it is twisted into a good reason to buy more equities.

When the markets hit new highs, it means that the economy is strong.  And since the economy is strong, you should buy more stocks.

Does this all make sense?  It only makes sense in the context of bubble mania.

We don’t know when the bubble mania will end, but we know that manias always come to an end.  They end when the irrationality can’t get any more irrational.  They also end when people don’t have any more money to speculate because they are using it for necessities.

The bubble mania will end slowly and then all of a sudden.  Then there will be a mania in the rush for the exit door.  You don’t want to sell when everyone else is trying to sell.