The latest CPI numbers came out for February 2021. The CPI for last month came in at 0.4%.  The more stable median CPI came in at 0.2%.

While 0.4% is a bit higher than typical for the last decade or so, it does not correlate well with the unprecedented rise in the Federal Reserve’s balance sheet. That is now over $7.5 trillion.

The U.S. stock market is at or near all-time highs.  The Dow has been hitting new highs, while the Nasdaq has retreated a little from its recent peak just above 14,000.

The boom in stocks seems heavily reliant on the Fed’s easy money and low interest rate policy. But if monetary inflation is giving us a stock bubble, then why isn’t consumer price inflation also exploding upwards?

There is no question that much of the newly created money is being used to bid up asset prices. This includes stocks, real estate, and even crypto currencies.  This does not get accounted for much in the CPI numbers.  Real estate will factor in a little, as one would expect rents to also go up.

I believe the CPI numbers are likely understated, but they are useful for looking at trends. I don’t think consumer prices in general are going up 10% or more as some have claimed, but it is probably higher than 2%.

If this all seems unsustainable, that’s because it is.  I think we are going to see a massive fall in stock prices at some point, but it can take a long while for a bubble to finally pop.

I have heard some argue with me that stocks won’t dramatically fall because the Fed will always be there to back them up.  I can’t completely discount this argument, although I do point out that stocks fell hard for 6 months in 2008/ 2009 before starting to climb again.

At some point, it should be expected that something has to give.  If stocks are that reliant on monetary inflation, then monetary inflation has to continue in order to prop up stocks.  It will either lead to significantly rising consumer prices, or it won’t be enough to keep the stock bubble propped up.

Jerome Powell, chair of the Fed, said that we could see a pickup in price inflation this year. Stocks fell after he said this, although it didn’t last that long.  But Powell has also said numerous times that the Fed is going to remain accommodative.

If we get to a point where price inflation is increasing and the Fed is forced to slow down its monetary inflation, then this could crash stocks.  Even if Powell announced that the Fed would reduce its asset purchases from $120 billion per month to $100 billion per month, we would likely see a market frenzy.

Of course, it will take more than 2% price inflation for this to happen.  The Fed changed its inflation target from 2% to averaging 2%.  So if we go to 3%, then it will be ok with Powell because it will be averaging out to 2% since inflation was below 2% previously according to its metrics.

Which Comes First?

Here is the big question.  What comes first? Will we see a significant pickup in price inflation, which then forces the Fed to tighten?  After the Fed tightens, (or in expectation of it), we would likely see a recession or depression of some sort.

Or will we see a major stock market crash and weakening economy (according to GDP statistics) that will lead to the Fed creating even more ridiculous amounts of money? This will likely lead to higher price inflation down the road, although this could take longer to happen.

Let’s put this in some numbers.  Which is more likely to happen first, if at all?  Will we see the Nasdaq fall below the 10,000 mark, or will we see annual consumer price inflation hit 5%?

I really think it could go either way at this point.  Assuming the Fed stays on autopilot for now, I slightly lean towards the Nasdaq going below 10,000 first.

If this happens, it will only encourage the Fed to create even more money out of thin air, which could lead to even worse price inflation down the road.

The Fed has had it relatively easy since 2008.  The central bank, with the dollar still acting as the world’s reserve currency, has managed to create massive amounts of money out of thin air without getting massive price inflation.

It is still very harmful, as prices are higher than they otherwise would have been, and it has caused a major misallocation of resources.  But from the Fed’s point of view, they have gotten away with it so far.

There are limits to almost everything, and this is no exception.  Sure, the Fed can start printing up a trillion dollars a month, but we are going to see massive depreciation of the dollar.

It is important to prepare for these scenarios.  While I do believe there is going to be a crash in stocks, I have no idea when and for how long it will last.

There is much greater certainty that the Fed is going to continue with its reckless policies, and we are going to see our money buy less and less as time goes on.

Even though I tend to think we will see a major fall in stocks before we see high price inflation, I am still bullish on gold.

I recently watched the documentary House of Numbers.  I watched it many years ago and remembered the major points, but it was especially interesting to watch it over again now that a year has passed since the coronavirus hysteria began.

I was already not a fan of establishment medicine, which includes much of Western medicine, before 2020.  Much of this is because of my own personal experiences and having to do my own research on health issues due to the failures of establishment medical care.

I never believed what most politicians and the corporate media were saying about COVID-19 from the start because of my distrust.  It is all tied to my libertarianism and distrust of the power elite, along with my own health experiences.  Still, I also believe that having watched House of Numbersmany years ago contributed a little bit to also questioning the narrative on coronavirus.

House of Numbersquestions the whole narrative on HIV and AIDS.  When I re-watched it recently, I was expecting to see some similarities with coronavirus, but it surprised me just how many similarities there are.  Incidentally, even though I had this article planned, I saw an article by Jon Rappoport also comparing the two.

First, there are people who questioned (and still question) the existence of HIV, which is the virus that supposedly causes AIDS.  HIV was never properly isolated, but it was assumed by the medical community that it was everything we were told it is.

The SARS-CoV-2 virus (i.e., COVID-19) has never been properly isolated.  This was reported early on by Jon Rappoport, and he has continued to hammer home this point.

Anecdotally, I know people who tested positive for COVID-19.  Some of them had the same symptom of losing their taste and smell.  That is the only common characteristic other than just not feeling well.  So there is obviously a virus.  Whether it is the same virus that was happening in Wuhan in late 2019 and early 2020, I have no idea.

Still, if you have not properly isolated the virus and you are relying on computer programs to fill in the sequence, it does call into question everything else, especially the testing.

And that brings us to the second similarity between HIV and COVID-19.  The PCR and other testing was (and is) completely unreliable.  In House of Numbers, it is demonstrated what a joke the tests were and the many people who were told they had HIV who likely had nothing wrong with them.

The HIV test, in many cases, came with a questionnaire.  Your result of being positive or negative could actually depend on how you answered a question about your lifestyle.  It is somewhat amusing (but sad) that someone went to a testing place in Africa and was told that there were two different testing measurements.  If they both came back negative, then you were HIV negative.  If they both came back positive, then you were HIV positive. If one came back negative and the other positive, then a third test was used to decide.  The guy in the video asks why they don’t just use the third test then, if it is more reliable.  There was no logical answer because it is an illogical system of testing.

The testing with COVID-19 is also highly unreliable, if useful at all.  The tests are run at different labs that use different cycle thresholds (CTs).  The higher the CT, the more the material is magnified and the better chance of a positive result.  Even Dr. Fauci himself (if you want to call him a doctor) admitted last year that anything run above 35 cycles is unreliable and will spit out false positives.  Yet, the CDC has no problem recommending that tests be run up to 40 cycles.

Speaking of similarities, Fauci was a big pusher of the HIV narrative back in the 1980s.  He appears in a few clips in House of Numbers, as does Kary Mullis.  Mullis, now deceased, was the creator of the PCR test, but he stated that it has its limitations (and would likely be appalled today with its use in diagnosing coronavirus).

Another similarity between HIV and COVID-19 is the treatment, or the bad treatment. If you pay attention to the establishment media, they will continually tell you how bad coronavirus is and how deadly it is and how many people have died.  They will also tell you everything you need to do to avoid getting it (stay at home, social distance, wear a mask).  But they rarely offer advice on what to do if you test positive for COVID-19.  Don’t you find that a little bit odd?

With HIV, people were put on drugs that were actually weakening their immune system and causing them to die.  In other words, the drugs were doing what AIDS was supposed to do.  So when someone starts getting sick and weak from the drugs, they were just told that it is the AIDS progressing.

It hasn’t been quite the same with COVID-19, but I can’t help but draw some comparisons. First, the establishment did everything they could to demonize alternative treatments.  They would either say that they don’t work effectively (like zinc and other vitamins) or they would say that they are dangerous (like hydroxychloroquine).  And if you get really sick with COVID, then you should go to the hospital.

At the beginning of all of this, ventilators at hospitals were pushed hard.  Do you remember Cuomo in New York demanding 40,000 ventilators immediately?  Almost everyone put on a ventilator died.  I believe there were many people who went to hospitals in New York with anxiety attacks or other issues who were drugged up and thrown on ventilators.  If they hadn’t gone to the hospital, they would have survived.

Even to this day, hospitals are using ventilators for some COVID patients.  How did I know from the very beginning that this was a harmful treatment?  I have no medical background other than what I have read on my own.  I don’t know if the medical community is just ignorant or evil, but many people died (and continue to die) because of their fake treatments that only cause greater harm.

We’ll see if the so-called vaccines also end up being more deadly than the disease itself. They sure are being pushed hard.

One lesson to take away is that when Cuomo or some other hack politician is telling you something seemingly important, it is best to believe the opposite until you can verify one way or the other.

When I was a kid, I remember some of the hysteria over HIV.  Luckily, there were no lockdowns at that time.  I remember that if you got HIV, it was supposed to be a death sentence, which it typically was if you took the prescribed drugs. If you got HIV, you would develop AIDS and likely die in 5 years or less.

I remember when Magic Johnson announced he was HIV positive.  It was supposed to be a death sentence.  And here we are three decades later.  Magic Johnson is still alive, yet most people don’t question the HIV/ AIDS narrative that was sold to them back then.  Yet, there is no cure for HIV.  The cure was to stop giving patients deadly drugs.

With COVID, we were also told it was very deadly.  It wasn’t like HIV, but it was supposedly a 3 to 4 percent mortality rate coming out of Wuhan, China.  These were obviously bogus statistics from the start, as they were just measuring the death rate of people who were already severely ill.

And that leads to another similarity between HIV and COVID-19.  The people who die from these things are typically people who die.

With HIV, it was primarily people in Africa and other third-world nations who were severely malnourished.  They lived in unsanitary conditions.  They did not have proper food, and they didn’t have clean drinking water. It was easy to label someone as having AIDS.

The same goes for the gay community.  This is a generalization, but many gay people were living an unhealthy lifestyle.  They were taking drugs, including “poppers”, which is documented in House of Numbers.  So the people supposedly dying of AIDS were people who were dying.  They were people living an unhealthy lifestyle, to put it mildly.

The same goes for COVID.  The people who die are mostly elderly, or in really poor health, or both.  The majority of people supposedly dying of COVID (really, with a COVID diagnosis) are over 80 years of age.  Most of the rest are severely obese or have severe health issues of some kind.

You can always find someone who dies of an unknown cause, which can now easily be chalked up to COVID.  And out of a country of 325 million people, you will hear anecdotal stories about how a young healthy person died of COVID.  But these are rare, and there are always deaths occurring with an unknown cause, so it is convenient now to label it COVID.

Lastly, perhaps the biggest similarity is the acceptance of the narrative by the medical community and the population at large.  I remember the hysteria that started in the 1980s with HIV and AIDS.  The good news is that society didn’t shut down because of it.  Many people were fearful, but it was pretty clear that you were not likely to contract HIV if you didn’t sleep around and you didn’t do drugs.  So even believing the narrative was not that damaging to one’s life.

With COVID-19, the establishment narrative was largely accepted, and we all paid the price in the form of lockdowns and hysteria.

People who have not bought into the hysteria are generally better off than those who did because we don’t have to live in constant fear of contracting a virus.  Still, most everyone has suffered in some way due to lockdowns, mask mandates, and other restrictions, plus having to deal people who are irrationally hysterical.

We can only hope that with the internet and some experience that people will stop trusting the “medical community”, or at least those presented to us by the establishment and its corporate media who parrot the same lines.

It is time to stop blindly trusting the “experts”, who are really experts in getting funding and promoting propaganda.

We are almost at the one-year anniversary from when the U.S. government and state and local governments announced the start of “two weeks to flatten the curve”.

This meant that most of society would be shut down in order to stop the spread of a supposedly very deadly virus that is easily spread.

While this happened largely worldwide, it is disappointing that it happened in America, the supposed land of the free.  The American people never should have tolerated this.

I saw the phoniness of this whole thing from the start when it was announced that there was something like a 3 to 4 percent mortality rate coming out of China.  These were obviously phony statistics, yet the establishment and its media seemed to ignore this.  Most people just accepted this as fact.

The statistics were phony because they were based on counting the sickest people.  Even if everything else they were saying was true, and even if the testing was reliable, it is still a lie.  They were calculating the mortality rate by taking the number of deaths divided by the number of people who tested positive. The biggest problem with this is that the people being tested early on were the sickest people.  They were typically people going into the hospital.

But when it became obvious that these original phony projections were completely wrong, the American people had already accepted the vast increase in tyranny, mostly in the form of lockdowns.  So even if the mortality rate is 1% or 0.1% or 0.01%, we can’t be too cautious. After all, if preventing everyone from going to restaurants and concerts and sporting events means we can save a great grandmother somewhere (i.e., extend her life by a couple of months or a couple of years), then we should do it.  Of course, I don’t even necessarily buy this premise, but it is still absurd even if it were true.

The original excuse for lockdowns was two weeks to flatten the curve.  This was repeated endlessly at the time.  I’m sure your really smart friends explained to you how we don’t want to overwhelm the hospital system and that these measures were necessary to spread things out so as not to fill up all of the hospital beds at one time.

Of course, most hospitals never were overwhelmed.  In fact, back in March and April of 2020, most hospitals outside of the New York City area were mostly empty.  There still isn’t a shortage of beds in most places.  If anything, there have been shortages of healthcare workers because they have to stay home for two weeks when they get the sniffles or because they have to stay home for two weeks when one of their kids gets the sniffles.

There are many absurd things that have happened, and it is all based on propaganda.  The CDC changed the way it counts deaths back in March 2020.  To sum it up, if you test positive for COVID-19 and then you die, then you died because of COVID-19. This was a complete change in how deaths were determined before that with, say, the flu.

As a side note, there are people dying after getting vaccinated for COVID-19, but these are not considered deaths due to the vaccination.  They are coincidental.

So if you are 85 years old and get vaccinated and then die, it was just your time to go.  If you test positive for COVID and die, then you died because of COVID.  Got that?

There are many problems with all of the propaganda that has been put forth over the past year. The virus was never properly isolated, so we don’t even really know what we are dealing with.  The PCR tests are a complete disaster, as they put out false positives, which just inflate the already phony data.  Fauci himself said that tests run above 35 cycle thresholds (CT) are not accurate.  The number of cycles run mean how much the labs are magnifying the material. Yet, the CDC recommends labs run CTs up to 40, making the tests meaningless in many cases.  At the very least, there are a lot of false positives.

Even if the statistics were real, which they aren’t, we are constantly fed fear through the corporate media.  When have you ever seen a daily ticker of deaths due to heart disease or something else? And I don’t buy the argument that it is because heart disease isn’t contagious.  It is easily proven that most people who die of COVID (or really, with a COVID positive test) were elderly or had severe health issues to begin with.

The people who supposedly die of COVID are typically people who die.  They are old people, and they are people with severe health issues.

Ceding the Moral High Ground

Regardless of the lies and propaganda, the tyranny of lockdowns and other mandates never should have been tolerated.

If you are against the lockdowns, you may or may not be a libertarian.  But if you favor the lockdowns in any way, then you are not a libertarian.

It is nice to show charts on how outdoor dining doesn’t really cause the virus to spread. It is nice to show that states without lockdowns are faring just as well as states with heavy lockdowns. But in the end, it wouldn’t matter to me if it showed that lockdowns really do save lives.  I would still oppose them on libertarian grounds, and so should everyone else who cares about liberty.

In fact, if you have libertarian principles, then you never should have gone astray in the first place.  Maybe you thought the virus was really dangerous and that it was important to stay home, but it is never acceptable to permit the state to force you to stay at home or to shut down your business.

Let’s say that the virus had been properly isolated and was proven to be highly fatal.  Let’s say that the PCR tests are reliable. Let’s say that lockdowns and mask mandates do help prevent spreading.  It still doesn’t justify lockdowns or any other government interference.

This should be the starting point of every argument against this government tyranny.  It is an argument for property rights and freedom of association.

If there is a really deadly and contagious virus out there, then most people will take the level of caution they think is necessary.  You don’t need to force people at the point of a gun.  Some people will measure that the risk is worth it to continue operating their business or to do any number of other things.

I cringe when I hear a shutdown restaurant owner argue that dining is safe or that the virus can’t be traced to their establishment.  This is ceding the moral high ground to the lockdowners.  It doesn’t matter whether they are taking extra safety precautions or whether the virus is spreading at their restaurant.  It matters that it is their property and they should be able to use it how they want as long as they aren’t initiating force against others.

This is the time that all libertarians – true libertarians – need to argue forcefully and without shame for property rights and freedom of association.  We should never cede the moral high ground, as it is the other side that is employing violence against others.

Back in January, there was a debate between podcaster and comedian Dave Smith and Maine State Senator Eric Brakey.

The debate was whether people in the Ron Paul liberty movement should focus on the Republican Party (GOP) or the Libertarian Party (LP).  Brakey argued for using the Republican Party to advance a libertarian agenda, while Smith argued for using the LP.

Dave Smith, for the last couple of years, has been advocating a takeover of the Libertarian Party.  There is already a good faction in the Mises Caucus, which is the more radical wing of the LP. You could say it is the libertarian wing of the Libertarian Party.

Dave Smith, Tom Woods, Scott Horton, and much of the Mises Caucus promoted the candidacy of Jacob Hornberger in the last election.  He came somewhat close to winning the nomination, but it ended up being Jo Jorgensen.

While I was disappointed in the Jorgensen campaign and ended up not voting for her, I thought her candidacy was a move in the right direction after having Gary Johnson and Bill Weld in 2016.

Spike Cohen was the VP nominee in 2020.  While I disagreed with some of the messaging coming from Cohen, he is a more radical libertarian (in a good way) than what we’ve seen in quite a while. So again, it was a move in the right direction.

Brakey argued that libertarians should focus on taking over the GOP because it is a two-party system and that is where we can have the most impact.

He cited Ron Paul’s campaign (or campaigns) for president on the Republican ticket as the best educational endeavor for liberty.  I agree with this.  If you can copy Ron Paul, then I think someone should do it.  But who can copy him?  Who can become a principled congressman and then get on the debate stage in Republican primaries?  If someone can do it, then they should try to emulate him and use the Republican Party.

If you are running for local office, then I do generally think that running as a Republican is a better bet.  So on a local level, I agree with Brakey.  In terms of political strategy, I generally agree with Brakey.

However, Brakey also admits that it is easy to take over the LP.  He asks, “What’s step two?”

He actually answered his own question in the debate when he admitted that the LP presidential campaign can be used as educational outreach.

The answer to his question of what’s next is easy.  The answer is that you put up a Harry Browne like candidate for president and spread the message, which is essentially what Dave Smith argued.

Imagine if the LP had had a really strong candidate in 2020.  Imagine if someone like Harry Browne or Ron Paul had been the candidate.  Mary Ruwart ran for the nomination in 2008 on the heels of the Ron Paul presidential run.  If she had been the nominee then, I believe Ron Paul would have endorsed her and she would have received millions of votes that year.

If the LP had someone in the 2020 race who continually spoke against the lockdowns and in favor of small businesses, I think that person would have done significantly better. But even better than that, we would now likely have tens of thousands of business owners sympathetic to the libertarian message at the very least.  Some of them probably would have converted into radical libertarians if they had heard someone defending property rights and freedom of association as an argument against lockdowns.

Overall, the debate was good and polite.  There was no name calling.  Dave Smith and Eric Brakey respect each other and mostly agree with each other in terms of policy and philosophy.  Their difference is a matter of tactics.  One thinks people should focus on the GOP, while the other wants to focus on the LP.

Again, if you are running for local political office or trying to effect change locally, it is probably better to join with the Republicans.  If you want a widespread movement to spread the message about liberty, and assuming you can’t repeat what Ron Paul did, then I think it is better to join the LP.

It would only take a couple of hundred more radical libertarians at this point to join the LP and radically change the direction of the party and return something resembling the Harry Browne days.

The difference between now and 1996 and 2000 (when Harry Browne ran) is that the internet is now widespread and we are post Ron Paul Republican presidential campaigns.

Due to alternative media and the explosion of the libertarian movement from the Ron Paul campaigns, there are hundreds of thousands – or perhaps millions – of libertarians who didn’t exist back in the year 2000.

If we had a principled libertarian who is a good communicator at the top of the ticket of the LP, this person could have a significant impact.  The person wouldn’t win the presidency, but he or she could convert millions of more people towards libertarianism.  I also think a lot of Trump followers would be sympathetic to the message in the future, especially if nobody named Trump is running on the Republican ticket.

I follow inflation closely.  I follow the Federal Reserve’s monetary inflation by following its balance sheet.  The Fed’s balance sheet exploded from 2008 to 2014.  It has exploded again since March 2020, and it continues to go higher.

I also follow consumer price inflation data.  I think it is understated, but it is still useful for looking at trends.  It also tells us what the financial powers-that-be are thinking, particularly the Fed.  If the CPI starts rising consistently at 5% or more per annum, then this will be significant. So far, it has not done this.

After the Fed started so-called quantitative easing (QE) in the fall of 2008, we have not seen massive increases in consumer prices.  Stocks, which don’t get measured in the CPI, may be the one major exception. Real estate is also booming in many areas, but that is a more recent phenomenon.

One of the major reasons that prices did not explode with the Fed’s balance sheet is because much of the newly created money went into excess reserves at the banks.  The Fed’s base money was not largely used for fractional-reserve lending.

When banks lend out money with fractional reserves, it effectively puts more money out there in circulation.  If you deposit $10,000 into your bank checking account and the bank loans out $9,000 of it, then you still have access to your $10,000 while someone else is using $9,000 of it.

Excess reserve requirements were eliminated in March 2020, which got little attention.  While it hasn’t seemed to have had much impact yet, we don’t know what impacts it will have in the future.

I have not typically paid as much attention to the Fed’s charts on money stock.  There are charts for M1 and M2.  I haven’t always found them to be reliable or in any way predictive of what’s to come.  Still, I don’t think they are irrelevant.

I am not going to go into the details of what makes up M1 and M2.  When I go to the charts, they say they are discontinued.  I don’t know what they will look like in a couple of months and whether they will be updated.

When I recently saw a chart of M1, I was shocked.  I know what the Fed’s balance sheet looks like.  I have followed that very closely for the last year, so I know the unprecedented monetary inflation taking place.

Still, we haven’t seen prices rise a lot according to the CPI numbers.  I definitely pay more for chicken at the grocery store than I did a year ago.  However, it is not like I am paying double the amount for groceries. The rise in my food bill is nowhere near the rise in the Fed’s balance sheet.

When things just kind of hum along, it is easy to get complacent.  There was an unprecedented rise in the base money supply after 2008.  Many people warned of severe price inflation, but it never really happened, at least for most things.  Even if you think the CPI numbers are understated, they aren’t understated that much.  We certainly haven’t been experiencing anything close to 10% annual price inflation, as a few hysterics claim.  If we had actually had 10% per annum price increases since 2008, then prices would be three to four times higher than what they were then.  This is not the case.

But just because the last period of massive monetary inflation (2008 to 2014) did not result in massive price inflation, it doesn’t mean that we are immune to it now.

Again, I am cautious in how much importance I put on government charts, especially the money stock.  I know there are many factors at play, including the velocity of money (the demand for money).

Looking at the M1 chart though is scary.  It did not spike up after 2008.  The rate of increase may have picked up, but there was never a major spike.

In 2011, the M1 money stock crossed the $2 trillion mark.  It crossed the $4 trillion mark in 2020.  So it took almost 9 years to double.  Ironically, it crossed that $4 trillion mark right around February 2020 and again at the beginning of March 2020, so it makes an easy starting point from when the hysteria began.

In February 2021, the M1 money stock passed the $18 trillion mark.  It has slightly retreated from there as of this writing.  It actually looks like a hockey stick.

To sum up, it took almost 9 years to double from 2011 to 2020.  Over the last year, it has more than quadrupled.

This is worrisome, to put it mildly.  It should be really worrisome to anyone who is on a fixed income.

Buy gold before it is too late.

“How easy it is to make people believe a lie, and [how] hard it is to undo that work again.” ~Mark Twain

Imagine a real-life Superman.  He has special powers that are able to help people.  He is not all-powerful, but he is able to use his extra powers for good.

Unfortunately, the evil Lex Luthor has stolen some of Superman’s powers.  He has also stolen Superman’s identity and looks just like him.  He is claiming to be Superman and ready to help spread goodwill on earth.

So there are two Supermans.  They are both claiming to be the real one.  One of them is the real Superman and the other is a liar.

The real Superman says that the other guy is really Lex Luthor and that he will do great damage to society, especially if the people believe him and give him power.

Lex Luthor, pretending to be Superman, says that he is the real Superman and that the other guy is an imposter.

Lex Luthor tells the people that he cares deeply about them.  He tells them that he will take care of them and protect them from danger.  He says that they should trust him for their own good.  He also promises to deliver great benefits to the human race as long as they obey him and stay united.

The real Superman makes no such promises.  He says he will do his best to help society where it is possible, but that his powers are limited in what he can do.  But he warns of following Lex Luthor, who is imposing as Superman. He says it would be very dangerous to give him any more power and that he will use it to do great harm.

The problem is, the majority of people believe Lex Luthor.  They say that he must be the real Superman because the other guy is not willing to promise great benefits to society.  He is not promising to keep everyone safe either.

Plus, there are many experts testifying to the fact that the Superman offering protection and great benefits is the person who should be trusted.  If all of the experts and the journalists on television say that this person is the one who should be trusted, then surely we should trust him and obey him.  We must obey him or else we risk giving the other Superman and his followers an outlet.  They are too dangerous and must not be listened to under any circumstances.

Unfortunately, Lex Luthor bought off some of the experts and journalists.  Once they took a stand on Lex being the real Superman, then the other experts and journalists easily followed.  They didn’t want to appear to be outside the mainstream. They didn’t want to be accused of not uniting.  They didn’t want to lose their status of expertise.

The followers of the real Superman are trying to get others to listen to them, but they are being shut out.  They are trying to do anything to get others to listen, but it is hard when other people don’t want to listen to any of the evidence.  If only others would look deeper into some of the evidence and give it some thought, they might start to realize that they have been duped.  They might start to realize that the person they think is Superman is really a villain trying to take advantage of them.

But in order for others to listen, they have to have an open mind.  If they display any evidence of an open mind or willing to listen to the other side, then they could be accused on not uniting and siding with the enemy.  They risk going against the experts.  It takes a little bit of courage to listen to the other side and examine the evidence on your own.

What do the followers of the real Superman do?  They are greatly concerned about giving too much power to any one person, especially someone who will use it to do great harm.  They are trying to warn others that the other Superman is a villain, but most of them won’t listen.

Should they continue to interact with the followers of Lex Luthor, even if those people are denigrating them?  Many of the followers of Lex are seemingly good people otherwise.  They are also otherwise intelligent people who just happened to be getting suckered on this one important thing.

Unfortunately, the followers of Lex Luthor are only enslaving themselves.  They are making their own lives far worse in the long run by believing his lies.  The other side is trying to tell them that they are being lied to, but they won’t listen.  The Lex followers are also doing great damage to the people who don’t believe Lex because they are imposing their ways on all of society.

The followers of the real Superman propose that both sides leave each other alone.  Each side can believe what they want to believe, but not impose on the other side.  But the Lex followers see this as a ploy.  They see it as breaking unity, which their leader has told them is very important.

The experts under Lex have also warned of many great dangers in this world, including foreign aliens and viruses.  We must all cooperate together and listen to the experts in order to keep everyone safe. Therefore, there is no room for dissent.  In fact, for those who do dissent, they are also threats to everyone’s safety.  If you try to claim that the leader is an imposter, you are acting as a domestic terrorist and may be subject to discipline.

With so many people believing that Lex Luthor is the good guy and acting in their best interests, what can the followers of the real Superman do?  They can keep trying to convince their friends (or former friends) that they are being duped.  At what point do they treat their former friends as enemies because they are doing great harm?  At what point do they stop giving the benefit of the doubt?  Sure, these people are being suckered, but at what point do supposedly good intentions no longer matter?  At what point are they no longer your friends?  At what point do you start to interact mainly with people who will listen to you and not put you down?

There is no clean answer to these questions, but they are questions that many are starting to ask.

With student loan debt continuing to go up in the United States, there are strong calls for the government to “solve the problem”.  The only way the government can solve this problem for people in student loan debt is to pay for some of it or forgive it, which would be at the expense of others.

I have even heard some supposed libertarians say that the government should get rid of all student debt.  They look at it in a similar fashion to defaulting on the government debt.  The problem is that it is reversed.

In order for the government to pay interest on its debt, let alone paying back principal, it has to extract this money from others through taxation, inflation, or more debt. The government does have some assets it could conceivably sell, but that would not fulfill all the promises. Plus, that idea is not exactly out on the table right now.

If someone pays money for government debt, then repayment of that loan can only happen by taking money from others.  Therefore, from a libertarian perspective, it is not a valid contract. Person A can’t legally loan money to Person B, with Person B’s promise to pay back the loan by stealing money from Person C.  If Person A entered into this contract and Person B can’t pay back the loan, it isn’t right for Person C to have to pay who was no part of the contract.  Person A should be the one out of the money.

Student loan debt is not the same thing.  It is people borrowing from lenders, which are often backed by the federal government.  If people don’t pay back these loans, it is the American taxpayer that gets stiffed.  The government lent out the taxpayer’s money, so to speak, so the American taxpayer should try to recover as much as possible.

I am open to other opinions on this matter, but that is the way I see it now.  I don’t think a proper libertarian position would entail allowing these loans to be waived.

The proper libertarian position is that the federal government should get out of the education business entirely.  This includes not subsidizing or in any way backing student loans.  It should be up to a bank or other lender whether they want to enter into a contract to loan money for college.

You hear these horror stories about people graduating with $200,000 in debt.  It’s fine for someone who is about to be a heart surgeon, but it doesn’t work for a sociology major who ends up working at Starbucks. This just tells you that there isn’t a free market.  If the lender were not backed by the government, then you wouldn’t see six-figure loans to people who are getting degrees that are not likely to produce above-average incomes.

If You Have Student Debt

If you currently have student debt, it is tempting to not pay it down because the government might bail you out.

I don’t think there is anything morally wrong with accepting such a bailout, especially if you are paying taxes.  I wouldn’t tell anyone to not accept Social Security payments either.  If you are a libertarian though, then you shouldn’t be advocating it.

If you have a suspension of student loan debt where you don’t have to pay right now, and interest doesn’t accrue, then I would suggest putting money aside as if you are paying. When interest starts to accrue again, then you can take this money and pay down some of the principal balance.

The other day, Biden was asked about relieving up to $50,000 in student debt, and he shot down the idea.  So it doesn’t look like anything major will happen.  If there is anything passed, I think it will be something like $10,000 in forgiveness.

It will really irritate people who just finished paying off student debt.  The word “fair” is thrown around a lot in our unfair world. In this case, it is easy to see why some people would think it is unfair, and they would be right to think that.

Anyway, if any student loan forgiveness is going to happen, it will happen in the next 23 months. Really, if it doesn’t happen in the next year, then it probably won’t happen.

So if you are looking at paying off or paying down the balance on your student loan debt, you may want to hold off on paying it all off just in case there is some government relief.

As long as the government is subsidizing student loans, it is going to distort the market and misallocate resources.  College is far more expensive than it would be without this, and you wouldn’t be hearing as many horror stories of people deep in debt who can’t pay it.

I’ve heard people suggest that if the government is going to forgive all student loan debt, then attached to the same legislation should be something that prohibits the government from backing any future student loans.  But we know this isn’t going to happen.  The politicians who are likely to forgive student debt are not interested in getting the government out of the education business.

Again, if there is any forgiveness, I don’t think it will exceed $10,000.  The government is spending recklessly right now, so this would just be one more thing.  It is like spending in the sense that they would be reducing money coming into the government, but it should not be equated with taxes.

If interest rates start to rise and consumer price inflation becomes a worry, then all bets will be off the table.  The government isn’t going to give up this revenue stream of debt repayment, since it owns a majority of the student loan debt.

As I write this, the price of Bitcoin is approximately $50,000, meaning $50,000 per bitcoin. I have no idea where it goes from here, just like I knew nothing about where it would go years ago.

In March 2020 when stocks started to get rocked, the price of Bitcoin also went down.  I thought it might be the end of Bitcoin’s run.  But when the Fed stepped in with trillions of dollars, stocks came roaring back, and Bitcoin has done the same.

I have known about Bitcoin for a long time.  I wish I had bought some back when I could have easily bought several bitcoins for not a lot of money.  It was a speculation then, and it is a speculation now.

I basically thought back then that Bitcoin is a sham.  My opinion hasn’t changed much except I with I had taken part in the upside of the sham.

Don’t get me wrong here.  I don’t necessarily think there is anything dishonest going on with Bitcoin.  As long as it is voluntary, then I have no problem with people buying and selling and trading it.  The price is whatever the marketplace determines it is.  It has value because consumers demand it.

I am also sympathetic to Bitcoin because it is seen as competition for the dollar.  Even though Bitcoin and other crypto currencies are really fiat currencies, at least they provide some competition in a market that desperately needs competition.  It also helps that the crypto community tends to be somewhat familiar with the Federal Reserve and how it destroys our purchasing power.

Money

Bitcoin is not money. The Bitcoin advocates can say it is money, but it is not.  Sure, a few places accept it as a form of payment, and Tesla may be the newest big player in town.  But you can’t walk into Walmart or your local grocery store and pay with Bitcoin. They would look at you like you’re nuts.

Of course, you could try paying with gold or silver and most cashiers probably wouldn’t accept it. You might get the occasional smart one who would take your silver coin and pay the cash necessary into the register, assuming that the silver coin is worth more than the amount owed.

Sure, Walmart could decide to start accepting Bitcoin as a form of payment.  My guess is that it would charge a slight premium, and the Bitcoin price would fluctuate wildly based on the current exchange value. In other words, the products on the shelves wouldn’t have Bitcoin prices on them.  They would still be priced in dollars.  You would just be able to pay in Bitcoin based on the exchange rate.  It is also likely that Walmart and other retailers would convert bitcoins received back into dollars rather quickly.

For this same reason, gold and silver aren’t really money either, or at least not in our current world.  However, they have a history of being used as money for thousands of years.  Plus, gold is still stored by central banks even though the currencies aren’t officially backed by gold.  Having gold in the vault provides some artificial backing and a form of reserves.  Gold could easily return as a form of money, whether it is with physical gold (and silver) or electronic forms.

The Problems

One of the reasons given by Bitcoin advocates for widespread use of Bitcoin is that it provides privacy.  First, not everyone wants privacy.  If I make a payment with a credit card and something happens such as receiving a faulty product, I can challenge the charge with my credit card company.  In this case, I actually want a trail.

Second, as with everything, the government could outlaw Bitcoin at any time.  I’m not saying they could get away with it if sentiment is strong against it, but in emergency economic times, when people are willing to give up their liberty (see the last 12 months), then the government might be able to get away with it.  I know some will say that people can continue using Bitcoin, but it doesn’t work that way.  If the government decrees that you will get 10 years in prison if you are found trading with Bitcoin, then you can be assured that most people will stop.

Aside from those things and other flaws, there is one other major problem with Bitcoin, and it will be a problem forever.  It is something that was made up on a computer.

I understand that the blockchain technology can and will be useful.  But Bitcoin itself is really just a bunch of digits in outer space.  There is only value right now because people are giving it value.  Sure, you could say that about anything, but anything that has been used as a form of money in history had some kind of value to it before being used as money.  That is even true of most speculative bubbles.  Even tulip bulbs in the Tulip mania had some kind of value.

Gold has all of the qualities of a good form of money.  It is divisible.  It is portable.  It is durable.  It is limited in its quantity.  It has a high value content for a small amount.

There are many things throughout history that have been used as money, but they typically fell short in one or more areas.  Eggs and cigarettes are not durable.  A living cow is not divisible (to keep it living).  It is also rather burdensome to take your cow to the store to pay for some clothing.  Milk could be used as money, but it doesn’t retain its store of value, as it will go bad in a couple of weeks.  This is why salt has been used as money to some extent in the past, as it doesn’t go bad.  But try paying for a new car in today’s world with hundreds of pounds of salt.

No matter what it is, it always goes back to gold and, to a lesser extent, silver.  This is why they became the primary forms of money for thousands of years.  The only way that governments and central banks were able to issue fiat currencies was to first issue the currencies backed by silver or gold and then to remove that backing over time.

When you compare gold to Bitcoin, there is one really major difference, and it isn’t just that gold has a physical presence.  It is that gold has value outside of being used as money or speculation. It had value before it became money.  It is used in industry, and it is used aesthetically, particularly for jewelry.

This is why gold will likely continue to have value no matter what.  Bitcoin is nothing.  It is a novel idea that someone made up on a computer screen. There have been thousands of more cryptos made up on a computer screen.  They provide no material value or information except what the next person is willing to pay for it.  And Bitcoin is only more valuable right now because it was the first player.

It is pure speculation, and it will continue to be pure speculation.  I don’t know if its next stop will be below $10,000 or above $100,000.  Either way, it could happen in the matter of days.  It could happen in hours.

If you are feeling lucky, you can speculate on it.  You may make a lot of money (i.e., be able to convert it back into U.S. dollars).  You may lose your money.  It is just a question of how many more people are coming up behind you to try to do the same thing. It is also a question of whether you know when to take your greed off the table.  Or as Kenny Rogers said, know when to hold ‘em, know when to fold ‘em, know when to walk away, and know when to run.

I don’t think Bitcoin is going to survive in the long run.  I’ll place my bets on the metals that have been around for thousands of years.  When Bitcoin eventually crashes, it is going to be hard.  A lot of people are going to be left holding digital versions of cow manure.

“If something cannot go on forever, it will stop.”  ~Herbert Stein

We are in the midst of an unprecedented stock bubble.  After almost a full year of various lockdowns and business restrictions, along with multi-trillion dollar deficits and higher unemployment, stocks are booming.

The stock boom would be almost ridiculous during a time of prosperity.  Given what has happened in the last year, it is beyond ridiculous.

The young adults who have taken their stimulus checks and started a Robinhood account are going to learn a hard lesson about bear markets, at least for the many who do not cash out while the going is good.

The stock bubble is built on Federal Reserve inflation.  The Fed’s balance sheet continues to explode. By the time March gets here, it will have close to doubled.

There is a disconnect between price inflation and the Fed’s balance sheet.  Likewise, there is a disconnect between price inflation and stocks.

The latest CPI numbers show the CPI in January 2021 rose at 0.3% over the previous month, and it rose 1.4% year-over-year. The more stable median CPI rose 2.1% year-over-year.

Perhaps these numbers are understated.  But they aren’t so understated as to not recognize a disconnect.  Stocks are going to the moon.  Real estate, especially in the suburbs, is mostly going up fast.  Consumer prices on everyday goods are not going up fast.

In the short time it took the Nasdaq to go from 10,000 to 14,000, I can tell you that my grocery bill did not go up by 40%.

Uneven Inflation

When the Fed creates money out of thin air, prices tend to go up.  In some cases, especially in today’s technological world, some prices go down.  Given the Fed’s inflation, they go down less than they otherwise would have.

There are other factors, particularly the velocity of money.  If people are not spending a lot (i.e., not bidding up prices), then this will tend to push prices down, or at least keep them from going up as fast as they would have.

When there is monetary inflation, it takes time to go through the economy.  A good analogy I read once was comparing it to pouring pitchers of molasses into a bathtub.  I believe it was Richard Maybury who wrote this.  He said that there are cones of molasses in certain spots that are much higher.  It takes time for it to flatten out.

So it is with price inflation.  Prices don’t rise simultaneously.  Over time, it tends to even out.  Some periods take longer than others.

Right now, there is a giant glob of molasses that represents stocks and real estate.  If the Fed keeps pouring massive amounts of molasses in the bathtub, then maybe the stocks and real estate won’t go down.  But the most likely scenario is that the Fed won’t be able to pour enough in fast enough to stop it from sinking to other areas.

Therefore, depending on how fast the Fed can pour its molasses (create money out of thin air), either stocks and real estate are likely to come down, or other consumer prices, especially necessities like food, are likely to go up in price.

This is why we have to diversify.  We don’t know which way this is going to go in the short run or the long run.  Will we see stocks crash?  Will we see other prices spike higher?  Will we see both and then a reversal of one or the other?

At some point, something has to give.  We are either going to get significantly higher price inflation, or we are going to get a major crash in stocks.  It is amazing that things have gone on this long.

However, I will keep in mind what Keynes supposedly said.  The market can stay irrational longer than you can stay solvent.

The market is already irrational.  Is the Nasdaq going to double over the course of a year, in one of the worst economic years ever in modern times?

I remember the exuberance of 1999 and 2007.  I remember the downfalls in 2000 and 2008.  2020 and 2021 will be memorable too.

I don’t know when the crash will happen, but it is going to be swift and hard when it does. And if the Fed starts pouring buckets of molasses to stop the deflating stock bubble, then we are likely going to see massive price inflation at some point.

The reason there is no flu this winter is because everyone is wearing masks.  The reason that there are so many cases of COVID is because there are too many irresponsible people not wearing masks.

When someone dies after testing positive for COVID, it is a COVID death.  If someone dies after getting vaccinated, it is a coincidence because they were already old or sick.

When BLM and Antifa protesters burn buildings and loot stores, it is social justice.  When Trump supporters enter the Capitol building, it is insurrection and a coup attempt.

When the U.S. government overthrows a foreign leader, it is spreading democracy.  If a foreign leader is overthrown who was loyal to the U.S. government, then it is subverting democracy.

When Google, Facebook, and Twitter censor people for their political views, they are private companies and can do whatever they want.  When a baker refuses to bake a cake for a gay couple’s wedding, it is a public business that must not discriminate.

If you are a big corporation, then you are deemed essential.  If you are a small business, then you may be deemed non-essential and forced to shut down or obey other government orders, even when they aren’t laws.

If you question the integrity of the 2020 election, then you are a conspiracy theorist and possibly inciting insurrection.  If you question the integrity of the 2016 election citing anonymous sources and a dossier from a Clinton associate, then you are a patriotic American and a strong advocate of keeping Russia out of our elections.

If you support Trump in any way, or if you question certain government directives, then you may be a domestic terrorist.  If you dutifully obey all of the commands handed down by Biden and the establishment, then you support unity.

If Dr. Fauci says something, then you should listen to him because he is a doctor and an expert. If any doctor, including an epidemiologist, suggests something contrary to establishment opinion, then the person is a quack and must be censored.

If you go out to eat or do anything fun in public, you want to kill grandma.  If you attend a BLM rally, then you strive for social justice, and the virus cannot be spread.

If you repeat something you heard from the establishment media, then you have the right to free speech.  If you say something contrary to the establishment media, then you are dangerous and must be censored.