Sometimes we don’t know whether really egregious acts of the state can be chalked up to evilness or just incompetence.  Oftentimes, it is a combination of both.

There is nothing like a natural disaster to expose the incompetence and evil of government.  We are witnessing this with the response to the devastation of Hurricane Helene.

It is actually striking how similar it is to Hurricane Katrina in 2005 that left much of New Orleans flooded.  There are certainly differences between the two storms and the reactions.  In 2005, Bush had already won reelection while Hurricane Helene happened right before a major election.  Still, the horrible responses to both events are similar, and it is obvious that nothing has improved over the last 19 years.

This isn’t just a federal government thing, although FEMA and the federal response is the biggest area of evil and incompetence.  But it is important to acknowledge that state and local governments can also hinder efforts to help victims by imposing bureaucratic red tape.

I saw a story of a man flying a helicopter.  He rescued a woman who was stranded and was going to go back for her husband.  The local bureaucrats told the helicopter pilot that he would be arrested if he went back to rescue the man because he hadn’t yet gone through the proper government channels.

If that wasn’t bad enough, there was some dumb woman who was trying to defend the decision.  I wish the person interviewing her had asked her the following:

“If you or one of your family members were stranded and your life was in imminent danger, would you tell someone not to attempt a rescue until they got it approved through the proper government channels?”

It is actually amazing that some people can be so dumb and evil at the same time.

Let Them Eat Cake

The response from Biden and Harris has also been dumb and evil.  You would think they might be smart enough to put on a good act.  Instead, Biden has seemed to just blow the whole thing off and say that people are doing well and that the government is responding accordingly.

Trump was politically wiser and visited Georgia shortly after the devastation.  He also promoted raising money for the people in need.

The establishment media is covering the effects of the storm more now, but it was surprising just how little they were covering it in the few days after.  It wasn’t just one town under water.  Most of the west coast of Florida running up the Gulf side had massive flooding with tens of thousands of houses ruined or sustaining significant damage.  Farther north, there was massive flooding from the rain and rising rivers.  The states most impacted were Florida, Georgia, North Carolina, Tennessee, and South Carolina.  It even went up to Kentucky and parts of Virginia.  As of this writing, there are still people who are stranded and in need of help and some who are missing.

Imagine your own situation with your house.  Imagine just a foot of water gets into your main living space.  All of your appliances are ruined.  Your furniture is ruined.  Your kitchen cabinets are ruined.  Your floors and drywall are ruined.  And any personal stuff that wasn’t up high is ruined.

Of course, the flooding in many areas was far worse than a foot high.  In places like western North Carolina, houses and buildings were underwater.

But Biden and Harris don’t even try hard to empathize.  Remember that Georgia was a very close state in 2020 that was contested by Trump.  Biden actually won the state according to the official results.  You would have to imagine that there are some mad residents there who aren’t happy with the federal government’s response (or non-response) at this time.

Where are the Resources?

It’s bad enough that the government at all levels takes almost half of our income.  If we had a lot more wealth at our own disposal, then we would have better houses less prone to flooding over time.  And with more wealth, when a disaster does strike, it would be much easier to deal with.

It is even worse when FEMA actively prohibits private parties from attempting to deliver food or rescue help.  So not only do they take our money, but then they use that money to actively get in the way of rescue efforts.  Again, this is reminiscent of Katrina.

Some have been pointing out the money that has gone to illegal immigrants instead of going to helping the hurricane victims.  There have been a lot of loose numbers thrown around.  In general, I think it is a valid point.  At the same time, I think the money going to illegal immigrants is almost a drop in the bucket compared to what is sent overseas and spent on the military-industrial complex.

There has been something around a couple of hundred billion dollars spent on Ukraine to perpetuate the war there.  All of that money could have been used at home.

From a libertarian standpoint, we should get to keep the money we earn, so this isn’t a plea to have greater government welfare at home.  But it is still valid to point out that resources sent overseas can’t be used at home, regardless of whether it goes through the government.

If hundreds of billions of dollars weren’t being spent on funding Ukraine, Israel, and all of these other overseas adventures, then that money could be used at home, which includes helping victims of hurricanes.

The debate between J.D. Vance and Tim Walz certainly had a different flavor from Trump vs. Harris.  The “moderators” were still fully in the tank for the Democratic candidate in spite of claims that they weren’t going to “fact check”.

There were a few somewhat tough questions thrown at Walz, which he should have been prepared for, but wasn’t.  He definitely looked bad answering (or not answering) the question about him not being in China during the events with Tiananmen Square.

When Vance was first announced as Trump’s running mate, the talking points went out to the corporate media to use the word “weird” to describe Vance.  In some ways, Vance is a little bit weird, or at least a little bit different.  But I find the word is much more appropriate for Walz.  His mannerisms are weird.  His hands look like they are going to fall off when he waves to a crowd.  Even his stories and the way he told them came off as a little weird during the debate.  He has more in common with Kamala Harris than I thought.

In full disclosure, I didn’t see the entire debate, and I watched it somewhat out of order.  Still, I will say that Walz came across as more likable than I thought he would be able to pull off.  While his mannerisms and expressions are a bit strange, he did come across as down to earth and someone who wants to get along with others.  It is probably all a show, but not all politicians are able to fake it.

With Vance, he set out to not come across as belligerent or bombastic.  He was calm even when he went on the attack.  He even remained calm when challenging the media in front of him.  He was obviously trying to portray something different from Trump.  Perhaps the strategy was to appeal to some women and maybe some more moderate-type voters who are on the fence but don’t like Trump’s brashness.

The debate was surprisingly cordial, and it didn’t go unnoticed.  Some people are saying that is how it should be done.  Some are suggesting the tickets should be flipped because these two acted like the grown-ups.

Many Republicans Don’t Want Cordial

While there was a strategy for Vance to appeal to so-called moderates and swing voters, this isn’t what the hardcore Trump people want to see.  Don’t get me wrong here.  The Trump supporters approve of Vance’s performance.  But if Trump had acted this way in 2015 when he started his run, he wouldn’t have gotten the support he did.

The reason is that Republicans are tired of getting walked all over.  They are tired of Bush, McCain, Romney, McConnell, and all of these establishment politicians who would always tell them what they wanted to hear. But they would be polite about it and say things in a moderated way.  Once in office, they would throw a few bones to the base and then roll them on everything else.

Trump was a fighter.  He was the bull dog that they wanted.  They wanted someone who wasn’t afraid to be bombastic and say things that weren’t normally said by politicians.  This is why they initially liked him and supported him.  They trust that Trump will fight on their behalf.

This is an important point to realize for now and in the future.  The Republican base doesn’t like Trump in spite of his brashness.  They like him because of it.  They want an advocate who will fight on their behalf.

While the debate by Vance was fine in the eyes of Trump supporters, they don’t want Trump to start acting like this because it will be seen as a sign of weakness and compromise with the establishment.

Issues and Positions

There was nothing terribly surprising by what either candidate said.  We all knew there were not going to be any major deviations from the top of the respective tickets.

It is interesting that there was not a discussion about the hurricane that had just gone through and devastated millions of people with flooding.  Even if the moderators don’t ask, you can still bring it up.  It seems like more of a missed opportunity for Vance by not contrasting the tens of billions of dollars being sent to Ukraine while people in America have lost their homes and are in major need of help.  I don’t think Trump would have missed this opportunity, although he probably would have expressed it clumsily.

Vance did do a good job of showing empathy for middle-class America and the struggles they face.  He seemed to return to this theme.  Unfortunately, he always brought this back to illegal immigration or tariffs.

The whole obsession with tariffs by Trump and Vance is stupid.  It is just another tax.  Higher tariffs increase the prices we pay for consumer goods.  Why don’t they address the real problem of regulation, government spending, and the Federal Reserve?  They will sometimes mention spending and regulation in generalities, but they have no plan to significantly improve anything.

It goes without saying that Harris and Walz will continue to promote policies that harm the economy.

On foreign policy, both tickets are bad.  Trump and Vance are slightly better because they are sometimes critical of sending more money to Ukraine.  They at least speak of negotiating a peace deal.  It is hard to say what will actually happen if Trump is elected.

I am not impressed with any of the candidates.  The best you can say for Trump and Vance is that they might do less damage than Harris and Walz.

Will the Debate Make a Difference?

Overall, I would say that Vance won the debate.  I don’t think expectations were that high for either one, and I think Vance probably exceeded expectations.  Some voters may not have been familiar with him at all other than what they had heard from the media.

The VP debate doesn’t usually mean much.  It is interesting that this is likely the last debate.  The presidential candidates usually debate three times before the general election.  In this case, it is one.  Trump did it twice because he got played debating Biden early on.  Biden’s horrific performance early on allowed the Democrats to dump him from the ticket before the convention.

As with everything, it is a question of things on the margin.  For 99% of people, this VP debate meant nothing.  It wasn’t going to change their mind.  I’d be surprised if there are 1,000 people in America who actually flip their vote because of this debate.

At this stage, almost nobody is going to flip their vote.  Someone voting for Harris isn’t going to change to voting for Trump.  Someone voting for Trump isn’t going to change to voting for Harris.

Where it matters is people who might not vote or might vote for a third-party candidate.  It is possible that Vance could have moved the needle a tiny bit.  But even a fraction of 1% of voters makes a big difference in this election.  As with the last election, it is going to come down to a handful of swing states.

There are election shenanigans in every major election.  If Trump wants to win, he needs a big enough margin that any cheating in the big cities won’t matter.

Trump has been playing his cards right lately by visiting Georgia after the hurricane while the Biden administration just seems to blow it off as if it is no big deal.  It is a very big deal to those living in Florida, Georgia, Tennessee, North Carolina, and South Carolina.

If Trump can survive any more attempts on his life, he is the favorite to win in November as of right now.  We don’t know what tricks are coming over the next four weeks.

Avril Haines is the Director of National Intelligence.  She is the person who informed Trump of threats to his life coming from Iran.

Haines is also a main player in promoting the idea that Russia was colluding with the Trump campaign to steal our elections.  To this day, she identifies Russia as the greatest foreign threat to our elections.

Haines was part of the CIA and the NSA under Obama.  She is associated with the evil agencies that libertarians should most distrust.

We are getting “information” from Haines and those in the deep state that there are threats from Iran to assassinate Donald Trump.

Brilliant Strategy?

It’s hard to say for sure that this is a lie.  There are certainly reasons that Iranian officials would have for wanting to kill Trump.  After all, Trump ordered the assassination of a top Iranian official when he was president.  It was one of the worst things that Trump did as president, and it risked leading to a war with Iran.

But the lying liars in U.S. intelligence are making this a story.  They probably have no actual evidence, just as was the case with the Russia hoax and almost every reason they give to go to war.  Even if there is some kind of threat to Trump from Iran, is there actually any significant risk of Iranians being able to carry it out?

But putting blame on Iran makes sense.  Many pro Trump people, who have become more skeptical of U.S. foreign adventurism, still buy into Iran being this big enemy of the United States.  If the U.S. government would stop sanctioning Iran, making threats, and funding their enemies, then Iran would have no reason to oppose the U.S. at all.

Some conservatives are getting suckered into this whole thing about Iran trying to kill Trump.  On the left, they will just repeat anything that is said by the establishment and the so-called intelligence agencies.  So, it seems a good majority of Americans will buy this claim that Iran is a major threat to Trump’s life.

This achieves many things for the deep state.  It unites people in opposing Iran.  It makes a convenient enemy for a possible future war or conflict.  It distracts us from the previous assassination attempts on Trump.  Most of all, if Trump actually is assassinated, it means that the deep state can blame Iran instead of itself.  Some Trump supporters may actually buy it, too.

Is Trump This Stupid?

The crazy thing is that Trump is actually repeating these claims about Iran trying to kill him.  It reminds me of when Bernie Sanders was running for president and the liars started saying that the Russians were attempting to help the Sanders campaign.

Instead of Sanders calling the whole thing ridiculous, he went along with it and talked tough about Russia not getting away with it if he is president.  That was so obviously out of the establishment playbook, just as this whole thing with Iran.

If the establishment can make up a narrative to downgrade a somewhat anti-establishment candidate, plus stir up war fever by making a foreign country out to be doing bad things, they are getting a two for one special.

Some will say that Trump is just playing along with the deep state, but why?  They have likely already tried to kill him.  Trump is putting his life at even greater risk by going along with this scam.

Does he not understand that by going along with this story that it gives an excuse for the deep state to assassinate him?  If Trump is killed, then they can just blame Iran, and even some Trump supporters will believe it.  The deep state can get rid of Trump and stir up conflict with Iran.  It’s a win-win for them.

If Trump has some kind of a deal with the deep state, it better have come after the attempt on his life in July.  Otherwise, he is being completely played.

The fact that Trump is actually going along with this supposed Iran threat really makes me doubt his capabilities or motivations for a second term.  He is either stupid, or he is making deals with the deep state.

Trump is risking his life even more now by going along with the same deep state actors that sold us the Russian collusion hoax.

The investment markets are playing tricks on the average investor.  Perhaps they are even tricking the professionals.  I’m afraid that some buy-and-hold investors are going to get a very difficult lesson in the coming years.

Some investors are too young to have ever experienced a true bear market in stocks.  Let’s take someone who is 30 years old (born in 1994).  When the 2008 financial crisis hit, this person was only around 14 years old.  When I was 14, I wasn’t paying any attention to financial markets or investments.  I was more concerned about what my friends were doing that afternoon and when my next basketball game was taking place.

Since 2008/ 2009, we haven’t had a bear market.  Maybe we technically had one in 2020, but the Federal Reserve was already at the start of creating trillions of dollars in new money before lockdowns ever began. The down market lasted about 2 months and stock indexes were hitting new highs before the year was over.

This was not a true bear market.  Maybe it fit the technical definition of one, but it was a false bear market experience.  It wasn’t a bear market where investments got absolutely hammered and there was negative sentiment that was widespread for a long period of time.

Even the 2008/ 2009 bear market turned around relatively quickly, but at least it was for a good solid six months.  Stocks hit their low in March 2009, but things were quite negative at that time.  Plus, the housing bust had a couple of more years to go before it bottomed out.

Even for those who are older, 2008 was a long time ago.  It was 16 years ago.  Americans tend to have a short memory.  They certainly have a short memory when it comes to politics.  There may be a few people out there who have the scars from 2008 if they lost their house in foreclosure or they were just about to retire with a big stock portfolio.  But for the vast majority, 2008 is a distant memory that didn’t greatly impact where they stand today.  And if it did, they probably didn’t take away a lesson to diversify out of the stock market.

Will the Next Downturn be so Kind?

We have had a few rough days on Wall Street more recently.  There was panic for a couple of days, and then stocks went back to just going up.  There has been more volatility, but the Dow and S&P are near all-time highs.

I follow the FIRE movement somewhat closely.  That stands for Financial Independence, Retire Early.  Many people in the FIRE movement advocate a buy-and-hold strategy in low-cost mutual funds or ETFs.  They say that stocks always go up in the long run.

The strategy of buy-and-hold index funds does not have to be a characteristic of FIRE or FI.  It just so happens that many of the leaders in the movement are advocates of this strategy.  You can still have the goal of FIRE or FI without using this investment strategy.

I have heard and seen comments from this community about the recent activity in the stock market.  I have seen similar comments repeated about staying the course.  I have seen people say that they waited out the little blips down and their portfolio is now up above where it was before.

But again, they are judging based on a tiny down move of around 5% or so over the course of a few days. This isn’t anything like seeing a 70% drop over the course of a couple of years.  These people are in a false sense of reality.  They think every time the market ticks down that it will just pop back up, and then they can share their wisdom on social media.

I’m afraid some of these people are going to be near suicidal if we ever have a hardcore bear market that lasts for several years.  Their entire basis for living seems to be on their wisdom and perseverance to hold index funds through the bad times and to watch how rich they will get later on.

I think most FIRE/ FI people will be better off if and when a major downturn happens, at least financial speaking.  They are smart not to have debt outside of a mortgage and they have money saved, even if it isn’t diversified.  Many Americans barely have any savings.  So even if stocks go down by 70%, you can still look at it that 30% of something is better than 30% of nothing.  It is the mental toll on these people that I worry about.

J.L. Collins and His Meditation

There is a video (or audio) of J.L. Collins helping people through a downturn in stocks.  Collins is one of the unofficial leaders of the FIRE community, and he certainly has a soothing voice.  He has this recording that is like a meditation session.  It is designed to calm you down when the storm hits and to ride out the storm without panic selling.

He reassures you that everything will be ok.  He tells you that this is just a temporary downturn and to stay the course.  In many ways, it is brilliant.

The only problem is, what if he’s wrong?  What if this isn’t temporary?  What if stocks don’t always go up?  What happens if it ends up like Japan where the stock market is lower today than it was at its peak in 1989?  Is 35 years considered temporary?

If we have a stock market crash of 70% that lasts several years, this is going to absolutely devastate the plans of many millions of people.  Even a crash of 50% will take a major mental toll on people.

Young Americans and Americans with a short memory have become accustomed to market rebounds for the last 16 years.  They think a drop of 10% is big, and they think it goes back up in a short period of time.  They have been correct up until now.  They will continue to be correct until they aren’t any more.

If you want to not lose sleep over your investments and also not live in a false reality, try something like the permanent portfolio.  There are no guarantees with anything, but it seems to be a lot safer than going all-in on stocks.

The Federal Open Market Committee (FOMC) released its latest monetary policy statement.  It was widely expected that the Federal Reserve would cut rates, but there was a question of how much.  I thought the Fed would cut by 25 basis points.

The Fed issued a 50 basis point cut to its targeted federal funds rate.  This will drive down short-term market interest rates.

Some are going to call this the Kamala rate cut.

The annual price inflation rate according to the government statistics is 2.5%.  The Fed’s statement said, “Inflation has made further progress toward the Committee’s 2 percent objective but remains somewhat elevated.”

The statement also reads, “The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run.”

A few years ago, the Fed was talking about averaging 2% inflation, but didn’t really specify a time period.  With the high price inflation we have seen over the last several years, it seems the Fed should be trying to get price inflation under 2% for several years to make up for what we have recently had.

Is the Economy Strong?

Yet, the Fed is cutting its target rate by 50 basis points (0.5% interest).  This does not seem consistent.  What seems logical is that we are right before an election, and a cut in rates would seem to benefit the incumbent party by boosting the stock market and economic activity, even if it may lead to higher prices in consumer goods down the road.

The reason I thought the Fed would only cut 25 basis points is because the Fed likes to be predictable.  In addition, a cut of 50 points could backfire, as it could end up signaling panic to the market.  Stocks zoomed higher after the Fed announcement, but the rally was short lived.  If anything, this could be a signal that the Fed officials think the economy is far weaker than what they are publicly saying.

This will also help de-invert the yield curve, which is what we are likely to see before we see a recession.  The 10-year yield is now higher than the 2-year yield, and the short-term yields are moving lower faster as compared to the long yields.  In other words, the yield curve is flattening out.

Still Deflation

There is an even bigger inconsistency with this whole thing.  The Fed is lowering rates, which indicates a looser monetary policy.  Yet, the Fed is still engaging in monetary deflation.

According to the Implementation Note, the Fed will continue to not roll over some maturing debt.  In total, it will continue to allow $60 billion per month to expire ($25 billion in Treasury securities and $35 billion in agency debt and mortgage-backed securities).

This is a total disconnect from how the Fed operated before the fall of 2008.  In the old days, the Fed would generally get lower interest rates by issuing new debt (i.e., expanding the money supply).

Now, the Fed controls the federal funds rate by changing the interest rate paid on reserve balances.  In other words, the Fed pays banks money to keep funds parked with the Fed.  This controls the overnight lending rate between banks, which is the federal funds rate.  This is what everyone is talking about when they talk about the Fed cutting “rates”.  It is really the federal funds rate, which again, is controlled by the Fed’s rate paid to banks for their reserves.

So, we have a conflicting policy of the Fed lowering rates while simultaneously deflating its balance sheet.  I’m not sure that this has ever been done before over any significant time period.

Of course, when the economic downturn comes, you can expect a reversal of the Fed’s monetary deflation. Not only will the deflation stop, but we are likely to see monetary inflation.  You can call it QE, accommodation, or whatever you want, but the Fed will eventually return to creating new money out of thin air.

The latest CPI report came out showing the price inflation numbers for August 2024.  The CPI was up 0.2% in August, and the year-over-year CPI now stands at 2.5%.  The year-over-year median CPI stands at 4.2%.

The 2.5% annual price inflation number is the best we have seen in several years.  But let’s realize that overall prices, according to the metrics used in the CPI calculation, are still 2.5% higher than this time last year.

Prices were already astronomically high last year, and we just added another 2.5% on top of that.  In other words, the average American is not seeing an improvement in overall living standards.

Since insurance (health, home, and car) takes up such a big chunk of the average American’s budget, the picture is probably even worse.  You can provide any statistic there is, but the real picture is when someone sits down to pay the bills each month and there is less money in the checking account than there was the previous month.

Gold Shines

The yellow metal is hitting new all-time highs in U.S. dollars, now crossing the $2,600 mark for the first time.  The mining stocks are not hitting new all-time highs for the most part, but they are still doing well with the rising price of gold.

Even though the rate of price inflation is supposedly going down, that has not seemed to impact the gold market in a negative way.

I still maintain that the gold price will likely drop in a recession, but that it won’t drop nearly as much as stocks and other assets.  It will also be quicker to recover when the Fed starts creating new money out of thin air again.

Silver has also risen, now surpassing $31 per ounce.  This is still well off the all-time high, which means the potential for silver is perhaps better than gold.  But it also has the potential to fall more in a recession.

A Fed Rate Cut?

Even though price inflation is still above the Fed’s supposed target of 2%, and even though gold is hitting new all-time highs, and even though stocks are still near all-time highs, the Fed is going to cut its target rate at the next meeting on September 18.

The big question now is whether it will cut 25 basis points or 50 basis points.  My guess is that it will be 25 basis points (a quarter of one percent) because they don’t want to give the impression that they think the economy is that weak.

The FOMC’s next meeting after September will start on the day after Election Day, and the policy statement will be released on November 7, two days after the election.  That is interesting timing.

Still, regardless of the election outcome, the Fed will still have two more opportunities this year to cut rates more after this September meeting.

Some will say that the Fed is cutting rates now for political reasons.  Of course, the Fed is always political in a sense.  But even if there were no election, I think the Fed would still be doing the same thing.  Even though asset prices are high, they see the inverted yield curve, and they see the slowdown in the economy coming.  All they know how to do with this problem is drop rates and create more money.  The creating of new money will come later.

The Election

It looks like the Democrats may get away with having an election without an economic meltdown.  It has already been a meltdown with middle-class America, but they can point to positive GDP and a booming stock market.

Things could change in the next 7 weeks, but we are running out of time.  It looks like the recession won’t become evident until after the voting happens.

It is still surprising that Donald Trump did not talk even more about the economy than he did at the debate.  Harris couldn’t answer the question about whether Americans are better off today than four years ago.

Trump went off on immigration, which is certainly important to some people, but he failed to show sufficient empathy towards those who are just struggling to pay their bills.  From his standpoint, that should have been his focus at the debate.  It should be the focus of his campaign.

And the answer is certainly not more tariffs.  That will just raise prices that much more.  The answer is to dramatically reduce government spending, but that tends to not be a winning message.

No matter who wins the election, the yield curve is still somewhat inverted, and there is no preventing the coming recession.  No matter what happens, there will be economic turmoil and there will be political turmoil.  That is to put it mildly.

The big debate finally happened between Donald Trump and Kamala Harris.  This was Trump’s second presidential debate this year.

You could say that this debate went better than the last one for the Democrats, but maybe the debate with Biden in June is exactly how they wanted it to go down.  Biden demonstrated to the world that he has dementia or some kind of severe cognitive issue.  This led the way for a replacement who might have a chance to beat Trump.

While Trump did make fun of Biden a few times, he missed the opportunity to ask Harris how long she has known that Biden has dementia.  He also missed the opportunity to ask who exactly is running the country right now, because it obviously isn’t Biden.

The “Moderators”

The debate was hosted by ABC.  The two so-called moderators of the debate were anything but moderators.  They were prepared to “fact check” Trump and did so frequently.

Trump made a point about some Democrats even supporting abortion after birth (infanticide).  He referred to the former governor of West Virginia, but I believe it was the former governor of Virginia (not West).  But this isn’t what they fact checked him on.  One of the “moderators” said that there are no state laws on the books allowing for abortion after birth.  But this wasn’t Trump’s point.  His point was that there are some who advocate it, and most Democrats won’t state whether they support a ban on late-term abortions.

I was surprised that Trump did not go after the media at all.  It was obviously his plan all along.  It might have been a good plan so that he didn’t come across as combative.  Still, it reaches a point of absurdity when the two “moderators” are obviously trying to argue with Trump on behalf of Harris.

I don’t think it would have been in poor taste for Trump to say to the “moderators” something like, “Would you like to come up here on stage and join Ms. Harris at the podium so that you can debate by her side?”

Even though the “moderators” were heavily biased, I don’t think it hurt Trump much, if at all.  If anything, it was so blatant that it just showed they were on her side.  Anyone who liked what they said were already against Trump anyway.

Cultural Issues

The cultural issues play into Kamala Harris’s hands, or at least they seemingly should.  When it came to abortion, I actually think Trump won that piece.  He didn’t really answer the question about whether he would sign a national ban on abortion, but he did rightly say that it would never happen.

Maybe this is my bias, but Trump got this issue almost completely correct.  He said that he and the Supreme Court finally overturned Roe v. Wade.  He said it tore our country apart for over 50 years, and now the issue is back with the states where it belongs.  I only wish Trump were so in favor of states’ rights when it comes to other issues.

Predictably, Harris brought up Trump’s remarks on Charlottesville.  They keep going with this lie that Trump referred to white supremacists as “very fine people”.  There were people in Charlottesville that day who aren’t leftists and aren’t white supremacists, but they want to pretend otherwise.

Harris also started fake crying talking about January 6^th and how it was the biggest threat to our democracy since the Civil War.  She laid it on a bit too thick on that one.  She tried to be so dramatic about it, but I just don’t think most people care about January 6^th other than those who want to say that Trump supported an insurrection.

Of course, there are those of us who care about January 6^th because of the weaponization of the “Justice” Department against those who don’t support the establishment.  Trump rightly pointed out that nobody died at the Capitol except for his supporters.  And despite what Harris said at the convention, it wasn’t an armed mob at the Capitol.  The only armed mob was the Capitol police who killed at least two people.

Trump was asked about saying that Kamala Harris used to not say that she was black.  He said she can call herself whatever she wants and that he doesn’t care.  I actually thought this was a decent response.  When it was Harris’s turn, she was salivating.  She was just eating the whole thing up.  She probably wishes the whole debate could have been on personal attacks and cultural issues, along with Trump talking about the election results from 2020.

Economic Issues

The debate started off with the economy.  Harris never answered the question on whether Americans are better off today than they were 4 years ago.  I thought she could have had a better answer prepared.  She probably should have at least acknowledged that many Americans are suffering with the high cost of living.

Trump was mostly a disaster on this, as he talked about imposing more tariffs.  He also talked about immigration ruining our country.  This was a theme of his for the night.  I think it is a bit of an over-exaggeration to blame our economic woes on illegal immigration.  It might be one factor, but government spending and regulation are the big culprits, along with the Federal Reserve.

Trump said that Harris was adopting many of his policies and that he was tempted to send her a Make America Great Again hat.

Harris said that she favored tax cuts for the middle class, including an expansion of the child tax credit.  Where has she been for the last 3 and a half years?  Why doesn’t she tell Biden to do it right now?  Trump pointed this out at a later time, but I thought he could have pointed this out even more.

In fact, I thought Trump should have hammered home more points on the economy.  That is the number one issue for most people.  They are struggling to pay for high insurance costs and high food prices at the grocery store.  Trump did not focus on this enough, even though his solutions aren’t really the right ones for the most part.

Foreign Policy

There wasn’t a lot of talk about foreign policy, but it did come up.  Harris tried to play both sides of the fence with Israel and Gaza.  The glaring contradiction, which Trump won’t point out, is that the Biden administration keeps funding Israel and sending weapons there that are used to bomb Gaza and kill innocent people.  How can Harris be against the loss of innocent life in Gaza when she and Biden are funding it and continue to do so?

Of course, Trump is also bad on the issue of Israel.  He says he will work out a peace negotiation, but he doesn’t say how.  He ridiculously claims that the October 7^th attacks in Israel never would have happened if he had been president at the time.

When Trump makes the claim that Putin wouldn’t have invaded Ukraine if he was president, this might be closer to the truth.  But it isn’t because Trump is feared and respected as he says.  It is because there is a possibility that Trump would not have ignored Putin’s concerns about Ukraine joining NATO and the U.S. putting missiles on the Russian border.

Both candidates are bad on foreign policy, but Trump seems to be less bad.  When asked whether he wants Ukraine to win, Trump correctly said that he wants people to stop dying.  I don’t know what a victory means for Ukraine if a quarter of the population ends up dead.  With a victory like that, I think I would rather “lose” and live under Russian rule.

On Ukraine, Trump is definitely better than Harris, but we can never know for sure what he will do in office.

Conclusion

I doubt that many minds were changed from the debate.  It wasn’t a complete disaster for either side, and neither side did great.

The debate wouldn’t cause a person to switch from one candidate to the other.  Maybe that is the case for a tiny fraction of one percent.  It matters for those who may or may not vote for the preferred candidate.

I am a libertarian who would never support Harris.  I disagree with Trump on many issues, but I see the possibility of at least a few good things happening if he is president.  I would consider voting for Trump for defensive purposes, but I may vote third party or write in a name.  The debate did not bring me any closer to a decision.

There is a small but still substantial percentage of people who supported Kennedy.  Kennedy has effectively endorsed Trump.  Now the Kennedy supporters are grappling with whether to vote for Trump as the lesser of two evils.  I’m not sure that Trump said anything in the debate to reach out and get some of these people.

I give the slight edge to Trump in the general election, but a lot can still happen.  No matter what happens, I maintain that it will not be good in the short run.

If Harris wins, then we get an authoritarian president with more war and more spending.  If Trump wins, we will get more spending and still some war but possibly not as much.  But we also get the reaction and hysteria if Trump wins.  Will we get another virus?  Will we get riots in the streets again?

The election will be interesting, but times won’t be fun in America no matter what, at least in the short term.

How do so many bad people get in positions of high power?  As Hayek said, the worst get on top.  That is very true in the United States, and it has been this way for a long time.

It isn’t just the president.  It is Congress.  It is the head of agencies.  It is the powerful people in the FBI, the CIA, the NSA, and even the military.  It is judges and prosecutors.  It is also top people in corporations, the media, and many people with influence.

The system has almost made it impossible for good and decent people to get into positions of power.  Part of it is always the fact that good people tend to not seek out positions of power, especially political power.  And when they do, they are excluded from the game because they won’t play along.

Still, the American people vote for some of these people.  Sometimes they aren’t given much of a choice, but it is still somewhat of a reflection of their character.  There are occasionally people like Ron Paul who come along and the large majority of people won’t support him because they are told so by others.  They just believe whatever their masters tell them, thinking that they are thinking for themselves.

By the way, this isn’t just Americans.  This happens everywhere, and often it is worse in other places.

Naïve or Evil?

I look at the people who are enthusiastically supporting Kamala Harris for president and wonder how it is possible.  To be sure, different people have their different reasons.  Many of her supporters just hate Trump and will vote for the person with the best chance to beat him in the election.  It is hard to imagine that so many people just love her policies, especially when her stance on many issues seems to be fluid.

This is one of those cases where there is no black and white.  It isn’t just a question of whether someone is evil or stupid.  They might be both.  They might be a little bit evil and naïve when it comes to politics.

The problem is that we can’t say that someone is just completely naïve and that is it, unless they are so naïve that they can’t recognize at all that they are supporting immoral things.  Every single person supporting Kamala Harris is acting immorally to some degree.  They are supporting her authoritarianism.  Even if they just want free tuition for college (or whatever she is promising today), it is still immoral.

I have never heard a Harris supporter or any Democrat justify voting for a Democrat just because they already pay a lot of taxes and want to get back a portion of the money that was stolen from them.  They don’t see it in these terms.  Maybe there is some Democrat somewhere who believes this, but I haven’t heard about them.

Democrats believe in the power of the state.  They believe it is just fine and dandy for the government to take your money to use it for “public goods”.  In fact, many of them wouldn’t even refer to it as “your money”.  They think it all belongs to the government and the government allows you to keep some of it.

To be sure, the Republicans aren’t much better.  At least there are some who have some understanding of the immorality of taking from some to give to others.  They don’t always apply it consistently, but there is some realization.  There are also more legitimate excuses for supporting someone like Trump over Harris because he is the lesser of two evils.  I have heard Republicans and libertarians (large and small “L”) who think the whole system is corrupt but that they support one candidate over the other because it might at least move us in the right direction.

The Ruling Elite Rely on Propaganda

Even though there is much immorality, I still believe that the majority of Americans are generally good people.  Outside of political realms, they wouldn’t dream of hurting another person on purpose other than in self-defense.  They wouldn’t rob their neighbor either, even if it was in the name of charity for others.

In a just system, most people are good people.  The ruling elite rely on the naïveté of the people for their own power.  This is why they use propaganda.

I can’t think of a single brutal dictator or elected official who came to power by announcing that they would rule with an iron fist over his people.  They might talk about ruling over a small minority of the population, but even here it is usually wrapped in propaganda.  Hitler didn’t come to power announcing that he would slaughter the Jews.  Stalin didn’t rise to the top by telling his people that he would starve them and ship any dissenters to concentration camps.

Some people rise to power by threatening other countries outside of their domain.  This is even happening now in the U.S. presidential race.  It seems that the two major parties always have some bogeyman like Iraq, Russia, China, etc.  But these are not the people voting for them.  The one exception, although he is no longer running, is Joe Biden talking about MAGA.

The point here is that no authoritarian is going to explicitly announce that he will act as an authoritarian towards his subjects.  He will want more of your tax money to help the poor.  He will want more war to spread democracy and freedom abroad.  He will want to confiscate guns for the safety of the children.  He will want to spy on you to keep you safe from terrorists.

They play on the goodness of people.

The ruling elite rely on the people to eat up their lies and propaganda.  They have to trick you into supporting them.  If they told you the whole truth, then most people wouldn’t support them because they would see it as evil.  They would also see it as being against their own interests.

The ruling elite generally hate your guts.  At best, they don’t care one way or another about you.  They care about their own power, their own wealth, and their own safety.

If only people understood that these authoritarians are not their friends.  Unfortunately, they just eat up whatever they are told by the media and then discount anyone who is actually trying to tell them the truth.

There should be fewer naïve people (politically speaking) in the world today because of alternative media. That probably is the case, but there are still way too many people who just believe whatever their media masters tell them.

We just need for these people to be a little open-minded and listen to those who are actually trying to tell them the truth.  It wouldn’t hurt if they learned a little economics too.

When Robert Kennedy Jr. picked Nicole Shanahan as his running mate, I didn’t know anything about her other than what I could immediately look up.  I knew that Kennedy offered Dave Smith his VP slot right after debating each other on Dave’s podcast about Israel.  Perhaps anything after that would be a disappointment.

My initial assessment of Nicole Shanahan was that she is a leftwing attorney who was married to one of the founders of Google.  This was probably a correct assessment at one time, but it wasn’t fair in 2024.  She definitely comes from the left, and she will admit that, but she is not like anything leftwing by today’s standards.

I was wrong on my initial assessment.  When someone is running for political office and I get something wrong about them, it is usually because I wasn’t harsh enough.  In this case, I can finally say I was wrong because I was too harsh and not generous enough.

To be sure, Nicole Shanahan isn’t a libertarian.  There are certainly elements of political leftism that come out at times, just as with Kennedy.  For example, they like to use the word “democracy” with a little too fondness.  And maybe they are just referring to democratic mechanisms within the rule of law.

Although libertarians don’t praise democracy, it is understandable why Kennedy and Shanahan are upset and using the word, considering the so-called Democrats have done everything possible to undermine their participation in the election.  They were rigging the whole primary process against Kennedy, which is why he changed to running as an Independent.  They certainly weren’t going to include him in any debates.  The so-called Democrats also did everything they could to keep him off of state ballots.  Now that Kennedy wants to drop his name from the swing states, the Democrats are trying to keep his name on there.  You couldn’t make this stuff up.

With that said, Nicole Shanahan has been really great for the most part when I have heard her in interviews.  It seems like she is learning on the job at times.  It’s probably not something a vice presidential candidate should be doing, but it is better than not being open minded and getting things wrong.

Libertarian Tendencies

RFK Jr. spoke in front of the Libertarian National Convention in May.  His speech was very libertarian.  I was quite surprised by the depth of it.  Even if he was pandering to his audience, most politicians wouldn’t have been capable of delivering such a speech.

RFK Jr. also gave a great speech when he announced the suspension of his campaign and his support for Trump in the swing states.  It wasn’t great because of his endorsement of Trump.  It was great when he talked about censorship, American health issues, and Ukraine.  He got it all correct.

I have disagreed vehemently with Kennedy when it comes to Israel.  He has been so good on issues of foreign policy and war, yet he seemed to completely revert to the establishment position with Israel.  If he had just taken a more neutral stance since October 7, 2023, I think his campaign would have done better, and a lot more libertarians would have supported him.

With that said, Kennedy must have seen something appealing about Nicole Shanahan, besides the fact that she has a lot of money.

I have learned a lot more about her, especially with her interviews with Ron Paul and Dave Smith.  These were more like conversations, as she wasn’t just giving scripted answers and was also learning from these two libertarian giants.

She has been great on health issues, which I fully expected from the beginning.  She understands that the government has vastly interfered with pharmaceuticals and agriculture to make us sicker.  There is nothing wrong with “big pharma” and “big agriculture” by itself.  The problem is that they are big because the government is helping them and, in the process, making us less healthy.

Beyond health issues, Shanahan has been great with Kennedy on issues of censorship.  She understands that the government is trying to shut up people who want to tell the truth or just want to express an alternative opinion.  She understands the problems with trying to censor misinformation, regardless of whether it is true or not.

Surprisingly, Shanahan has said some great things about the gold standard.  This is better than you would get from most Republicans.  I believe she has actually become somewhat of a fiscal conservative, even if she doesn’t want to completely tear down the welfare state.  You can tell that Ron Paul has had influence on her and that she is quite appreciative of it.

Like Kennedy, she has also been good on most foreign policy.  She understands the nature of the military-industrial complex and the war machine.  It was interesting that on her last podcast with Dave Smith, she even said some slightly encouraging comments on Israel that seemed to express that she didn’t back the mass slaughter of the Palestinians.  If only RFK Jr. had taken this stance from the beginning.

This only touches the surface of the things she has said.  Overall, she is an opponent of the establishment.  I was also completely wrong for criticizing her for likely being out of touch with the average American.  She said in her podcast interview that anyone with over $15 million is basically untouched by inflation, but it is really hurting everybody else.  She may have a lot of money, but she is showing empathy and understanding for those who don’t.  She understands that average Americans are struggling today.

Conclusion

I got this one completely wrong at the beginning.  Nicole Shanahan gets a high-grade mark for liberty in 2024.  She is more libertarian than some self-identified libertarians.  I am happy I was wrong on this one.  She is a great person to have on our side.  She has changed positions on political issues a lot from just 4 years ago.

I hope she continues to use her resources to spread the message of liberty.  I hope she continues to consult those who are already strong libertarians.  If she runs for president one day, I will consider supporting her.

The Federal Reserve is doing what it says according to the FOMC monetary policy statements.  Each time the Fed meets (about every 6 or 7 weeks), we hear about interest rates.  But the Fed also tells us what it is doing with its balance sheet.

The Fed continues to allow some of the maturing debt to mature and not be rolled over.  If the Fed buys a 2-year Treasury bill, it does so by creating money out of thin air.  That money essentially goes to the U.S. Treasury, but not directly.  It goes through a broker bank.

The Fed buys this debt, and the Treasury actually pays interest to the Fed on the debt, just the same as if any individual bought a U.S. Treasury bill.  Let’s say that the Fed bought a 2-year bill for $1 billion.  It would be paid interest, and at the end of 2 years, the debt would mature.  The Treasury would then owe $1 billion back to the Fed (plus whatever interest there was).  In most cases, the Fed would roll over this debt.  In other words, it would just use the proceeds to immediately buy another Treasury bill.

But the Fed’s policy of late has been to not roll over some of this debt.  The debt matures, and the money just evaporates as quickly as the Fed originally created it.  This is deflationary.

The Balance Sheet

You can get a good overall picture by looking at the Fed’s balance sheet.  In 2008, the Fed had about $900 million on its balance sheet.  That is chump change compared to now.  After the financial crisis hit in September 2008, it surged and more than doubled in a short period of time.

The balance sheet grew to over $4 trillion by 2014.  In 2018 and 2019, there was slight deflation, and the balance sheet briefly dipped under $4 trillion.  In 2019 (before COVID hysteria hit), the Fed was already starting to inflate again.  Then March 2020 hit, and the Fed went crazy again.

The balance sheet peaked at about $9.65 trillion in April 2022 (more than 10 times what it was in early 2008).  Since then, it has fallen to about $7.140 trillion.  In other words, it has fallen more in the last couple of years than what existed back in early 2008.

Even though virtually everyone in the financial community is expecting a Fed rate cut in September, the fact of the matter is that we are still in deflation mode.  The Fed is engaging in monetary deflation even though consumer prices continue to increase.

Massive Recession Ahead?

While people are saying that the Fed is going to cut rates to get ahead of a recession or to possibly prevent one, it doesn’t usually work this way.  There are many times where the Fed already began cutting rates and we ended up in a recession anyway.  Sometimes the recession had already started but it just wasn’t evident in the data yet.

It is obvious that America is in a recession now because middle-class America is struggling with increasing prices and lagging wages.  Maybe there isn’t a technical recession yet according to the data, but this doesn’t mean much to households just trying to pay their bills.

The fact that the stock market is booming also means nothing.  This primarily benefits people who already have significant assets.  Plus, even for someone who is middle income, the benefit of a rising 401k doesn’t do much good right now trying to pay the bills.

The yield curve remains mostly inverted, which it has been for all of 2023 and 2024.  This is an amazingly long time for an inversion.  When you couple the inverted yield curve with a deflating balance sheet, it sure does point to a massive recession ahead.  The big question is when it will finally happen.

Conclusion

It is interesting that the Fed has never really had a stable monetary policy since 2018.  The Fed continued to inflate in early 2022, even when consumer prices were starting to rise at a rate greater than the Fed’s supposed 2% target.  It then all of a sudden had to shift from monetary inflation to monetary deflation in 2022.

You have to wonder if the same thing will happen again.  As soon as the recession becomes evident, will the Fed shift immediately from monetary deflation and go back to monetary inflation?  This seems like a good possibility depending on how severe the recession appears to be.

This is why investing in gold and other hard assets is still a good long-term play, even if they do take a hit in a recession.  The only thing the Fed knows how to do to solve economic slowdowns is to create more money out of thin air.  Why would it stop now?

The only reason the Fed won’t return to massive monetary inflation is if they are losing control of the dollar and risking massive price inflation.  Either way, owners of hard assets will likely benefit in the long run.