When Jo Jorgensen won the Libertarian Party (LP) nomination for president, I was mildly optimistic, and maybe even a little excited.  I thought she was the best nominee since at least 2004 when Michael Badnarik ran, and I still believe this today.

My idea of “the best nominee” may be different from other people’s idea.  There is a reason that Gary Johnson was the nominee twice in a row.  Some Libertarians liked the prestige of having a former governor run on the ticket.

For me, I want someone who is going to advance the cause of liberty.  I think there is an almost zero chance of the LP nominee actually winning the election.  This has been true since the party’s existence beginning in the 1970s.

For this reason, there are some Libertarians who believe it is a waste of time to run a presidential candidate until there is a realistic chance of winning.  I disagree with this.

While the establishment media doesn’t pay much attention to third-party candidates, having a Libertarian Party presidential candidate does provide opportunities that otherwise wouldn’t exist.  The main opportunity is outreach.

The LP nominee always gets some attention.  Some of it is negative, and the attention that is given by the establishment outlets is a tiny fraction of what is given to the two big parties. But there is still attention nonetheless.

I became a radical libertarian because of Harry Browne.  My journey is a little different because I didn’t start following Harry Browne until after the 2000 election.  I was mildly familiar with him in 2000.  I think it is because I saw a story on him on Fox News. I just remember someone talking about an ad the Browne campaign had where there was a wrecking ball knocking down the IRS building, representing that Harry Browne wanted to eliminate the IRS and the income tax with it.

I believe the LP candidate should function similar to what Ron Paul did in 2007/ 2008, and again in 2011/ 2012.  You want to teach people the benefits of liberty, and you want to convert people towards libertarianism. That should be the number one goal.  This is also what Harry Browne did in 1996 and 2000.  Jo Jorgensen should know something about this since she was Browne’s running mate in 1996.

The only way to achieve greater liberty in society is by changing public opinion so that more people are sympathetic to the cause of liberty.  It isn’t a matter of getting the most votes, especially when you have no chance of winning.

I understand that some Libertarians care a lot about vote totals because of ballot access. While I don’t completely ignore this argument, I don’t think ballot access will do much good unless we actually have people who are willing to consider the libertarian message.

Of course, vote totals in themselves don’t do much, except they could send a message to others that there are people who are not in line with the status quo.

Even electing Libertarian Party candidates to major offices won’t do much unless the public is behind them.  I remember back in 2007 when some people would suggest that Ron Paul should not talk about foreign policy and should almost pretend to have a different stance than what he actually had.  Luckily for Ron Paul and us, he didn’t much take this advice, especially in the debates.

It doesn’t do much good in tricking someone to vote for a candidate because they are hiding their true views.  This is especially true for a Libertarian candidate.  If the LP presidential candidate moderates his or her views and then gets elected (which won’t happen anyway), what good does it do?  Is that person going to step into office and say, “Just kidding, I really am going to withdraw all troops from overseas tomorrow morning”?

For anyone who moderates their views in the campaign, I wouldn’t trust them to do what is right anyway if elected to office.  Most people go the other way.  Once they get into office, they favor bigger government than what they campaigned on.  They tend to enact the worst policies that were part of their campaign, and at best ignore the things that would have actually brought greater liberty.

Therefore, I believe it is important – vitally important – for the LP presidential candidate to be radical and firm in libertarian principles.

You can deliver your message in a way that resonates with people, but the message should always be about selling more liberty.

Jo’s Messaging

Unfortunately, I have been disappointed in some of the messaging coming from the Jo Jorgensen campaign.  I still believe she is a better candidate than Gary Johnson was, but she is falling well short for me.

I don’t expect a perfect candidate.  I don’t have to agree with every specific thing, and I don’t have to agree with the focus of every message.  But what Jo is doing, and perhaps more importantly, what she is missing, is bad for the libertarian movement.

Jo’s Twitter account has sent out messages pandering to Black Lives Matter, and it really does come across as pandering.  It is fine if she offers some solutions to issues raised, such as ending qualified immunity, ending civil asset forfeiture, and ending the federal war on drugs.  And to be sure, she has done some of this.  But her main message at times seems to be pandering to the political left.

She said, “It is not enough to be passively not racist, we must be actively anti-racist.”  What does this even mean?  And who will hear that message and decide to flip their vote to Jo Jorgensen?  I think that question answers itself.

When it was announced that Kamala Harris would be Biden’s running mate, Jo tweeted out, “I’m glad that Joe Biden has brought another woman into the race; the vice presidency shouldn’t be a boys’ club.  When I think about the millions of girls and young women across America, I think they deserve a voice this year when it comes to the top job in the country.”

Sure, Kamala Harris is an authoritarian, establishment, war hawk, but let’s cheer that she is a woman.  Who is Jo trying to appeal to in this?  Does she think that a bunch of women who are Democrats are all of a sudden going to switch their vote to Jo?  Again, the question answers itself.

I also saw a tweet from Jo’s account talking about abortion and a woman’s right to choose.  I know this is a contentious issue within the libertarian community, but I don’t know why she would send something like this.  Is she trying to turn away anyone who believes that abortion is murder?  As president, she would have no role in this issue anyway, except to push for overturning Roe vs. Wade on constitutional and decentralization grounds.

I have seen suggestions that Jo may not be running her own Twitter account.  If that is the case, then she should have fired whoever is running it a while ago.  She should be controlling the words that are sent out in her name.

For me, even worse than the bad messages are the missed opportunities.

I haven’t followed a lot of what she has said and done, but it is easy to get someone’s general message when you watch them a few times.  She is usually good on the big issues from a libertarian standpoint, but messaging matters.  The focus of your attention matters.

Jo is getting involved in the culture wars.  She is allowing the establishment media to dictate what she talks about instead of creating her own narrative.  It may be impossible to avoid talking about the culture wars, but why put so much focus on it without even really selling a message of liberty?

We still have wars raging on overseas.  If Black Lives Matter, do Foreign Lives Matter?  Do Foreign Black Lives Matter?  Unfortunately, to most Americans, foreign lives really don’t seem to matter.  There are probably at least a thousand times the number of foreigners who die at the hands of U.S. bombs and interventions than there are black Americans who die at the hands of police brutality.  Of course, Jo would never say this because it might upset the people she is trying to pander to. 

While I think war and interventions are always a major issue, there is another major issue that Jo is mostly ignoring at her own peril.  She has been handed an issue in the year 2020 that is a populist issue and one where she can easily sell libertarianism.

The issue is the American middle class.  There are 50 million people who have filed for some kind of unemployment this year.  There are tens of millions of more people who are struggling financially and are scared at what comes next in this crazy world.  There are hundreds of thousands of people who have had to shut down their businesses due to government.  We have seen the debt run up by several trillions of dollars in the matter of months.  We have seen the Federal Reserve balance sheet expand by nearly $3 trillion in the matter of months.  We are hearing about contact tracing and forced vaccination.

In terms of government shutdowns, it is largely due to governors and mayors.  Still, she can speak to it as a human being, and the federal government is largely responsible for pushing the propaganda that resulted in the fear and the subsequent shutdowns.

She should talk about the hundreds of thousands of small businesses that were forced to close that may never reopen again.  She should talk about the tens of millions of people who were forced out of their jobs.  She should talk about the anxiety and depression that largely get ignored in place of more virus fear propaganda.

She should speak boldly about libertarian solutions.  She should state that the answer to the economic problems is not more government spending and regulation.  The answer is less.  We need a dramatic reduction of spending from the federal level instead of having these resources consumed and misallocated by politicians and bureaucrats.

She should speak boldly about the damage being done by the Federal Reserve – the nation’s central bank.  She should point out that the monetary inflation will be very harmful and will only serve to enrich the already-wealthy people at the expense of the rest of the American people.

Jo should show empathy for the tens of millions of Americans who are really hurting right now, largely because of government policy.  This is a message that resonates.  It is a message that sells.  And when people are hurting, they are open to hearing a new message.

Instead, Jo is pandering to cultural leftists who won’t vote for her anyway.  If she focuses her message on the struggling American middle class, she may actually convert people towards libertarianism.  She may inadvertently get a few million more votes than she otherwise would have.

If she sold this message and ended up receiving five million votes in the general election, there would be no mistaking these votes as votes against the status quo and votes in favor of smaller government.

There is a real opportunity in 2020 for libertarians to sell a principled message of smaller government, while also exploiting a populist issue.  What normal American doesn’t want more prosperity at this point?

Unfortunately, Jo Jorgensen has largely failed up to this point in selling a strong libertarian message.  So far, it is just another election year of disappointment.

I don’t know whether or not I will vote for Jo at this point, and I am not trying to tell anyone else what to do.  It is still a vote against the establishment and the status quo. But it would be nice to vote for someone for more than a protest vote.  To paraphrase Jo: It is not enough to be passively not an advocate of the establishment; we must be actively anti-establishment.

Happy Birthday to Ron Paul. He turns 85 years today, August 20.

Ron Paul has done more for the cause of liberty than any person in modern times. Perhaps he has done more for liberty than anyone in all of history.

We would be in a lot worse shape today if it weren’t for Ron Paul. There are hundreds of thousands of people in the U.S. alone who are hardcore libertarians because they found Ron Paul. Most of those came from his two presidential runs as a Republican.

There are many great things about Ron Paul. He is a family man and a good man. Maybe he isn’t the best or most charismatic speaker when compared to other public figures, but this is part of what makes him genuine and believable. He has remained principled and continues to deliver his message for liberty.

Ron could have easily retired a long time ago and spent his days relaxing. But that is not Ron. He has a personal devotion to the cause of liberty, and it brings him joy in spreading his message to others.

He has particularly been a voice of sanity in 2020 with all that has happened. Despite his age and his son having a partially removed lung and testing positive for coronavirus, Ron has warned us from the beginning not to fall for the media hype and propaganda regarding the virus. Ron says that kids need to go outside and play football. I wish more people had listened to this doctor’s advice from the beginning.

Thank you, Ron Paul, for everything you have done and continue to do.

I follow the FIRE community.  That stands for Financial Independence, Retire Early.  I am more into following FI than FIRE actually.  If you had asked me when I was younger, I would have said that I wanted to retire early.  I wouldn’t say that now.

I want financial independence for the flexibility.  I want to be able to work on the things that I want to work on.  Maybe you could call that retirement, but I don’t think most would.  I like going to the beach, but I don’t want to do it all the time.  I still want to be productive.

I like following the FIRE movement because it is entertaining to me, and I get some good ideas.  You can learn different ways that people make more money, save more money, and are more efficient with their time and resources.

The one area where I tend to disagree with the typical FIRE person is when it comes to investing. A large portion of the FIRE community advocates investing most or all of your money in low-cost mutual funds. They will say that stocks historically always go up in the long run.

I have pointed out the example of stocks in Japan, which peaked in 1989.  Over 30 years later, they are still down by nearly 50% from the peak.  Nobody has given me a good explanation on why that can’t happen here, meaning the United States.

I don’t predict it will happen here, but it shows it’s possible.  And Japan is a first-world country, so it isn’t an unrealistic example.

To be sure, there are some FIRE people who are more in my camp.  I have seen gold mentioned as a possible hedge against inflation by a few people.  There may even be a few people who like the permanent portfolio concept.  But it is safe to say that a vocal majority favors mostly stocks for an investment portfolio.  They also tend to be more positive about retirement accounts.  I’ll say that most people should probably take an employer match for a 401k, but that’s it. Many FIRE people will say to max out a 401k.

Aside from the concept of investing mostly in stocks, it also bugs me when I hear people downplay the benefits of paying off a home mortgage.  There is the classic argument of whether to invest or pay down a mortgage.  And I get that there are good arguments for either one.  But I disagree with those who are adamant about not paying down a mortgage. And the only reason for this is because they assume that you should be able to get a greater rate of return from investing than the interest rate on your loan.

Dave Ramsey on Mortgages

I recently saw a clip of Dave Ramsey taking a call about the subject of paying off a mortgage. He talked about his baby steps. He talked about studying millionaires and how most millionaires pay off their mortgage and save for retirement.

He makes the profound point that you wouldn’t want to borrow money to invest.

To be sure, he says that you should save 15% of your income towards retirement before paying down your mortgage.  So that in itself may be a little contradictory about not borrowing to invest.  However, I understand the concept and the rationale. This is especially true for people who get an employer retirement contribution match.

I have written about Dave Ramsey before, and I have just about the same opinion of him today as I did 10 years ago.  I think he offers a lot of wisdom, but I believe he gets the investing side wrong.  I wrote about Dave Ramsey and Suze Orman back in 2011.

I follow the FIRE movement because I find it is more advanced and more detailed in discussing financial topics.  People get into things that Dave Ramsey just wouldn’t dive deep into.  But it is nice to go back to Dave Ramsey from time to time for some simple, but much-needed financial advice.

When I watched this short video of him talking about paying off a mortgage, it reminded me that many people in the FIRE community could stand to listen to some of this. While the FIRE people tend to be more advanced than Dave Ramsey listeners, I think some FIRE people get too advanced for their own good.  This is especially true when they think they should never pay off their mortgage because they can make such high returns investing in the stock market.

Anyway, I appreciated what I heard from Ramsey.  I agree with him that it is wise in most situations to pay down a mortgage if you are in a good position to do so.  I think more FIRE people should take this advice.

Dave Ramsey on Gold

After all of that, I remembered why I didn’t care for Dave Ramsey at times.  I saw a recent video of him talking about hyperinflation and gold.  He unequivocally says not to buy gold.

He says it is just a golden-colored rock.  He says it’s no different than a green piece of paper with a picture of a president on it.  This is completely wrong because the green pieces of paper we call dollars are essentially forced on us.  And let’s not forget they originated as certificates for gold.

Gold has been used as a form of money for thousands of years.  It was chosen in the open marketplace.  It also does have uses other than being money, which can’t really be said for dollars.  Gold has industrial uses, and it is used for jewelry.

The worst part of this gold segment is when he said that the price of gold doesn’t have to go up in hyperinflation.  He says the dollar isn’t tied to gold any more.

Isn’t that the point?

Ramsey says that gold goes up in price when there is a perceived shortage.  He talks about gold going up in “value”.  I find it hard to believe that somebody with Ramsey’s wisdom doesn’t understand that gold would go up in price with more money in circulation, all else being equal.

He uses the word “value”, but it’s not that gold necessarily goes up in value.  It is that it holds its value, unlike the dollar or any other fiat currency.

There is no question that gold goes up and down in price based on a lot of factors, including perceived shortages or perceived over supplies.  It also tends to go up with more money in circulation. This would be especially true in a hyperinflation situation where the demand for a fiat currency goes way down. People are spending their depreciating money quickly to convert it to hard assets before prices go even higher.

So, after all of these years, it is still frustrating that Dave Ramsey has such a bad grasp on economics and monetary policy.  Remember, in this video, he wasn’t saying that hyperinflation was out of the question.  He was saying that he doesn’t recommend gold under any circumstances.

The crazy thing is that we don’t even need hyperinflation to get a massive rise in the dollar price of gold.  I wouldn’t consider 15 to 20 percent annual price inflation to be hyperinflation, but I would imagine that gold would go a lot higher in such an environment.

In conclusion, as I stated almost a decade ago, listen to Dave Ramsey when it comes to managing money and debt, but ignore him when it comes to investing.  I would recommend the same strategy when dealing with a majority of people in the FIRE movement.

We finally learned this week that Kamala Harris has been chosen by Joe Biden to be his running mate.  Perhaps more accurately, the establishment has chosen Harris to be Biden’s running mate.  Maybe even more accurately, the establishment has chosen Harris to be president of the United States.

I wasn’t sure if Biden would actually be the Democratic nominee.  I guess they are going forward with him for now, gaffes, blunders, and all.

If Biden wins and takes office in January 2021, I think it is highly unlikely that he would finish a full four years in office.  He would be 78 years of age when taking office and 82 when finishing.  It would be hard to imagine that his cognitive decline would stop, especially with how rigorous the job is.

Even if Biden stayed about the same from where he is now, that may not be acceptable.  There are moments where Biden seems ok, but you never know when he will get off track and say something really stupid or start tripping over his words.  The establishment media can often provide cover-up for scandals, crimes, corruption, personal affairs, and a host of other things, but it is hard to disguise continued verbal gaffes, especially when that person is president of the United States.

Biden serves one purpose at this point.  In the eyes of the establishment, he has to defeat Trump in November. After that, they can discard him like an old rag.  Biden already did the establishment a major favor in defeating Bernie Sanders. They just need Biden to hold on for three more months and give them one more victory.  They are hoping he doesn’t say anything too outrageous during that time.  That is why his campaigning will be limited, at least when it comes to him speaking.

If Biden wins, Kamala Harris will likely become president.  She was soundly defeated in the Democratic primaries, but her path to the presidency looks clear now.  She is just hoping that Biden doesn’t do anything really stupid and that the anti-Trump vote is strong enough to provide victory in November.

A Winning Message?

Biden and Harris appeared together after the announcement had already been made and people were talking about the impacts.  In a joint press conference in which they didn’t take questions, Biden went on about how everyone should wear masks and that wearing masks for the next three months will save 40,000 American lives, according to the “models”.

Why three months, Joe? Why not until the end of the year? You could have at least said for the rest of the year to not make it so obvious.  He said this with the election being just over three months out.  In other words, let’s make life as miserable as possible for the next three months so that people will feel like any change (i.e., getting Trump out of office) will be good.

After Biden’s spiel about mask wearing, Harris steps up to the microphone and said that that is what real leadership looks like.  I guess she got over all of the allegations of sexual abuse and the racial bussing that she hammered Biden on in the primary debates.

Kamala Harris then goes on to talk more about mask wearing, and then about contact tracing and vaccines.  She is criticizing Trump for not giving us a timeline on when “we” will get vaccinated.  In other words, she wants Trump to lie. But if Trump did offer such words, I’m sure she would have criticized him for lying about it.

So is this the winning message that we will hear from Biden/ Harris over the next three months? Wear a mask, social distance, line up for a vaccine, and allow the government to trace your every move in case you come into contact with someone who may have had the virus.

I understand the anti-Trump message.  Most people aren’t voting for Biden/ Harris.  They are voting against Trump.  There are many people holding their noses in voting for Biden. The anti-Trump message unites a large segment of the country.  That in itself could be a winning message if enough people hate Trump at the beginning of November.

But what’s with the obsession over masks?  I know the political left tends to be more onboard with the mask wearing and obeying government orders to shut down and everything else.  But you have to imagine that there is a decent percentage of people who would not necessarily identify as conservative or libertarian who think the mask thing and the over-response to the virus is way overblown.  As I have said before, when they showed crowds of people packing the beaches for spring break, do you really think most of these people were Trump voters?

What will be the final slam-dunk message from Biden/ Harris?  Everyone should wear face shields?  Everyone should walk around in an astronaut suit?  All candidates have a marketing problem right now, but the Biden/ Harris message of major fear really seems to be the worst.  I mean, there are probably at least 30 million people who don’t have a job or have a job that is paying them less now.  There are tens of millions of people who are on pins and needles about their own job or their own business and worried that life will never be the same again.  There are major cities in flames.  But the Biden/ Harris message is to double-down and mask up.

I also have to think about Bernie Sanders, whom I haven’t heard much from.  Bernie never was the revolutionary that he was made out to be.  He did the same thing in 2020 as he did in 2016.  The establishment worked hard to deny him the nomination, so Bernie lines up and dutifully supports the Democratic nominee.

Still, as bad as Bernie is, I have to imagine that he would be selling a little different message right now if he were the nominee.  He would certainly be anti-Trump, and I’m sure he is enthusiastic about everyone wearing a mask.  However, if Bernie appeared with his new running mate, I’m pretty sure he wouldn’t have spent his time talking about masks, vaccines, and contact tracing, or at least his time on those things would have been minimal.

Bernie would have been talking about healthcare as a right.  He would have been talking about the need to raise wages (through legislation, of course) for lower and middle-income Americans.  He would have shown some empathy for the tens of millions of people struggling to pay their bills.  He would have at least tapped in somewhat to the real problems facing Americans, even if we disagree with his solutions.

Instead, we get the Biden/ Harris message of wear a mask and line up for vaccination.  Are they sure that is the message they want to sell for the next three months in order to beat Trump?

President Harris?

If Biden (i.e., the establishment) defeats Trump in November, I give it a much greater than 50% chance that Kamala Harris will be the president by the beginning of 2023.

Harris is an authoritarian to the bone.  If you think I’m criticizing her heavily now just because she is now Biden’s running mate, read some of my blog posts from the Democratic debates. I pointed out, several time, that she was the scariest candidate of them all, and that she is an authoritarian. She is bad on almost every issue.

I said: “Tulsi had some great moments in the debates.  She took down the worst person of them all – the authoritarian Kamala Harris.”

I said: “She [Harris] is still an authoritarian.  She is still unlikeable.  Luckily, I think others are not finding her likeable either.”

I said: “Kamala Harris is still the scariest of all the candidates.  She is an authoritarian leftist.”

I said: “Kamala Harris is still, I think, the scariest candidate.  She is very authoritarian.”  I also said” “Harris would be horrible in almost every aspect.”

I quote myself here only to show that I am not especially attacking Harris now just because she is now the VP candidate.  I would have been critical of any establishment pick, but I was very clear during the primary debates that I thought Harris was the worst of them all.

It’s funny, in a sick sort of way, that Biden delivered Harris as the black female candidate. I have my many criticisms of the Black Lives Matter (BLM) movement, but there are areas where I find common ground with some people.  I do believe that police brutality is an issue, even if it may not be the most important issue in my eyes.  I believe that we need prison reform.  I believe that the war on drugs should be ended and that people should not be locked in a cage for drugs.

Yet, Kamala Harris has been horrible on all of these issues.  Before becoming a senator, she was a prosecutor and attorney general in California.  She has a record of locking people up for non-violent crimes.  She has a record of enforcing a police state.

I have heard a few hardcore leftists criticize Harris since becoming Biden’s running mate. Unfortunately, most leftists ignore her record and just cheer on the fact that she is a black woman.  If she is a friend to the black community, I hate to see what an enemy looks like.

Harris is just bad in every way, especially to a libertarian.  She favors a police state at home.  She favors more government spending, more taxation, more cronyism, and more government control.  She is also a major war hawk.  She is like Hillary Clinton without quite as much personal baggage.

My only hope is that if Harris does become president, there will be sufficient resistance to her authoritarian plans.  I have seen the American people roll over easily in 2020.  If we have an all-out authoritarian who is not shy about her intentions in the presidency, then maybe it will wake some people up. That’s my hope anyway.

Donald Trump has issued a series of executive orders to provide “relief” because Congress can’t agree on legislation.  So Trump has done what previous presidents have done for a long time. He made dictates (executive orders) with no Congressional authorization.  It is unconstitutional.

Some might say that Trump’s orders are more blatant than ever before.  He is essentially changing the tax code without Congressional permission, and he is also spending money that has not been approved.

Trump’s executive orders bring back the federal government’s supplemental unemployment benefits ($400 extra per week instead of $600 extra per week).  They will extend a prohibition on evictions (sort of) and will defer student loan payments.  Most interesting is the order to suspend the payroll tax from September 1 through the end of the year.  It is this last item in which this article will address.

To be sure, Trump’s orders are quite authoritarian and perhaps unprecedented, but more in terms of taxation and budgeting.  I can easily think of worse things that presidents have done.

Just going back to Obama, he started major wars without any Congressional authorization, let alone an actual declaration of war.  The two major ones that stand out to me are Libya and Syria.  Obama didn’t exactly use an executive order.  He just commanded a start to these wars. In fact, Congress had previously refused to authorize a war in Syria, so Obama just waited a little while and then did it anyway.  This is far worse than anything Trump has done.

I want to focus on the payroll tax cut, if that is what you call it.  To quote this article, “The order defers the employee’s obligation to pay a 6.2% Social Security tax per paycheck.  It applies to people who ‘generally’ make less than $4,000 every two weeks, which works out to an annual salary of $104,000.”

This is interesting first because the Social Security payroll tax is highly regressive. It hits every W-2 worker. It hits self-employed people and contractors worse when they have to pay double because they are also considered the employer.  But the Social Security payroll tax, unlike the Medicare tax, is capped.  In 2020, the cap is $137,700.  Anything you make beyond that is not subject to the payroll tax.

This is also an interesting political move by Trump.  This tax hits most workers, and he knows it.  Since this is an executive order, Trump couldn’t get away with just reducing the tax.  Instead, he is instructing the Treasury not to collect it.  Right now, it is technically a deferment, which means it will all have to be paid at the end of the year by employees.

But who is going to want to do that?  Who wants to have to budget for that?  And it’s not like you can stick it in a high-interest savings account in the meantime.

This will be like property taxes that you don’t escrow.  This is what I do, but I know most people use escrow.  The mortgage company estimates your property taxes and you pay the monthly amount with your regular payment each month.  You may owe a little or receive a small refund once property taxes are due each year, but even here the mortgage company will often just make a small adjustment to your escrow payments each month.  I don’t escrow, so I have to write a big check once a year to my local tax collector.

If you make $1,000 per week ($52,000 per year), then you would currently pay (have deducted) $62 per week for the Social Security payroll tax.  If Trump’s order goes from September 1 to December 31, that will be about 17 weeks.  That would total $1,054.  It’s amazing how much we pay.

How do you think most Americans will feel having to write a check for over a thousand dollars after the year is over for this 4-month timeframe?  Sure, they will be getting an extra $62 per week in their paycheck, but do you think everyone is going to set this aside and budget for this?

This brings in to question whether employers will actually reduce the payroll tax when processing checks (direct deposits) for their employees since it is uncertain if the tax cut might just be a deferment.

Trump says he wants to eventually make this permanent.  I don’t know if this would mean just making it permanent for this 4-month time period (not a deferment), or if it would mean forever getting rid of the tax.

Trump said that if he is re-elected in November, then he will make it permanent.  In other words, if you vote for the other person, then you may have to make a big payment after the year is over.  I don’t know if this is politically smart, or if he is overplaying his hand.

Less Taxation, More Spending

The long-term implications with this order deal with something I have discussed several times before.  As the spending continues to increase, which has been especially dramatic this year, the direct taxation seems to be going down.

The payroll tax is a significant portion of tax collections for the Treasury.  If the employee portion of the payroll tax is eliminated, this will likely reduce tax collections significantly.  And since spending isn’t going down, the annual deficit will continue to increase.

We are already at a point in 2020 where the federal government is funding over half of its expenditures through debt instead of tax collections.  A permanent elimination of the employee payroll tax for Social Security will further this.

At this point, I ask why the federal government doesn’t just eliminate all taxes and fund the entire budget through debt, most of which is bought up by the Federal Reserve, at least at this point.

This used to be a rhetorical question, but it doesn’t seem all that rhetorical any longer.  It is becoming closer to reality.

There is a part of me that favors this.  I don’t want to see hyperinflation, but I do want to see the Fed and the government pay the price for their inflationary policies.  Up until now, it seems they have largely gotten away with just issuing trillions of dollars in new debt with no noticeable consequences.

Now, I know that our living standards are far lower than they should be because of this.  I know the government has served to misallocate resources on a large scale.  I know that many people and businesses were already in trouble before 2020 due to a lack of savings.  But up until this point, we haven’t see rampantly high consumer price inflation.

If the federal budget is completely financed with new debt, I believe the breaking point will be reached much faster.  Private investors and foreign central banks can only buy so much.  It would leave the Fed to buy up most of the new debt, which would be many trillions of dollars per year.

I doubt the Fed could get away with this for more than a few years.  If the Fed has to continually create $5 trillion or more per year to help finance the federal budget, it would be hard to imagine that we wouldn’t see high price inflation.

Eventually, the Fed would be forced to scale back or face massive price inflation.  As bad and as stupid as the Fed is, I don’t think the Fed members want to risk hyperinflation.  So Congress would be forced to cut back its spending dramatically or raise taxes.  Maybe we would see a combination of both.  But at least it would put a cap on the reckless spending coming out of Washington DC.

This is why I tend to favor this approach of the Fed financing everything.  I think financing the budget with debt and inflation is a disastrous policy, but it’s happening anyway.  The government is experiencing virtually no limits on what it can do.  By eliminating more direct tax collections, it will speed up the time to the day of reckoning where Congress is finally forced to scale back significantly.

I have said for several years that Trump does things that tend to expose the establishment, even if inadvertently.  Maybe this is another one of those things.

I have been surprised and disheartened by the events of 2020.  My outlook for liberty in the long term has generally been positive, but I have to admit that my positive outlook has been shaken a bit in 2020.

I try not to write a lot of sensationalist headlines.  I actually believe that my blog might be more popular if I used more clickbait headlines and outlandish predictions.  I could say that gold is going to $20,000 per ounce by next year or that the New World Order is right around the corner or that hyperinflation will wipe us all out in the next few years.  I don’t write things that I don’t believe, and I am cautious in my predictions.

The reality is that, even when major world events happen, things tend to not change much for most people.  The significant changes we do see are so gradual that we barely notice them.  It is easy to forget that smartphones didn’t exist 20 years ago.

When a new war breaks out, things certainly change for those in the war region.  I am quite sensitive to that.  But for most Americans and people in other first-world countries, things don’t change that much.  If you didn’t lose your job in 2008/ 2009, then the financial crisis/ recession probably had very little long-term impact on you.

With that said, I don’t know that I can say the same thing in 2020.  Things really are different, and significantly so.  I don’t think it is the craziest time in American history.  I believe that event would go to the so-called Civil War.  That was pure devastation, with hundreds of thousands of people dead when the population was a small fraction of today’s United States.

But 2020 has brought major changes to our lives.  For most of us, it isn’t from the coronavirus.  It is from fear of the coronavirus and the general population allowing governments at all levels to react in tyrannical fashion.

I have to say that I am actually worried about our future.  I don’t think life on the planet is going to end, but I do worry about the kind of world that my children will have to grow up in.

First, there are the draconian measures being put on virtually everyone, from businesses being forced to shut down or operate with major restrictions to requiring face masks.  I have already wondered whether we will wear face masks forever.

I don’t want to live in a world where people are walking around wearing face masks all the time. I don’t want to live in a world where it is inappropriate to shake someone’s hand.  I don’t want to live in a world where you can’t attend live concerts or sporting events.  I don’t want my children growing up in such a world.

But now I also have to worry about the economic conditions that are being brought on by the highly disproportionate reactions to a virus.

Extreme Poverty and Economic Decline

I still feel fortunate to live in a first-world country.  I can still go to the grocery store and find most things I am looking for.

I think about people in third-world countries and how devastated they must be.  These are places that were already poor, and I’m sure many people have been brought to the edge of starvation.  Some places like India have brought totalitarian lockdown measures.  This is in a place where most people cannot afford to miss a few days of work, let alone longer.

I think of a place like the Bahamas that relies on tourism.  Think of the workers who previously worked at resorts.  I have no idea how many resorts are still open there.  People who are unemployed aren’t getting $600 weekly checks like Americans were getting from the federal government (on top of state unemployment benefits).  Most countries don’t have the same level of wealth as the U.S.  They can’t just redistribute wealth for a few months and expect everything will be fine.

We don’t hear many stories about third-world countries.  We barely hear many stories about the major hardships within the U.S. The establishment media is too busy selling the coronavirus fear narrative.  They don’t want to acknowledge the devastation that has happened due to the policies of the authoritarian politicians.

The media will keep a ticker going of the number of (highly overinflated) coronavirus deaths, but we aren’t going to get a ticker about the number of suicides, or the number of businesses filing for bankruptcy, or the number of people living with fear and depression due to the propaganda.

While the United States is a relatively wealthy country, there are limits.  You can’t just have bad policy and not have consequences.

This year, we have seen a dramatic rise in the Federal Reserve’s balance sheet.  We have seen trillions of dollars of new debt piled on to the massive debt that had already accumulated. We saw Congress rush through legislation of over $2 trillion that included so-called stimulus checks, expanded unemployment, and business bailouts.  Now Congress is debating another bill. 

The Democrats want to continue the extra $600 per week, thus paying a majority of people more than they were making at their job.  The Republicans do not want this much, but they already sold out the principle several months ago when they agreed to it in the first place.

The Democrats also want a bailout for state governments, because obviously (to them) fiscally responsible states should have to bail out places like California, Illinois, and New York so that they can keep paying massive welfare benefits and six-figure pensions.

There seems to be no end to this madness.  I am not surprised that gold has surged past $2,000 per ounce.  My only surprise is that it took this long.

I really am worried about our future.  The federal government is confiscating resources on a scale that most of us have never seen.  It is probably more than what happened in World War 2, but at least there was a definitive end to that war.

I don’t even know what to tell people at this point.  The best you can do is to try to prepare mentally, physically, and financially.  I still recommend the permanent portfolio, but even here I have my concerns.

If you are already set up well financially, I recommend that any additional savings should go toward gold and debt repayment (half and half seems like a good percentage).  If you don’t have any debt (including mortgage), then save the money.  The gold portion will help protect against the depreciation of the currency.

I will warn you though that this doesn’t make you immune either.  Everyone is vulnerable today.  Gold is good as long as things keep functioning.  It won’t do you much good if food stops getting delivered to the grocery stores.

I don’t think it is going to come to that.  I think the more likely scenario is that we have a severe depression, but life will continue for most people.  It will just be a harder life.  It will be unnecessarily harder because people are acting like fools today and allowing governments to spend recklessly and impose major restrictions that violate private property rights.

I am worried about our world ahead.  It is not all bad news, but I am preparing for really rough times ahead.

Presidential elections are generally overrated.  The federal government has vast powers over our lives, but it is questionable just how much the president plays into this.  As long as there isn’t a hardcore libertarian president, it seems that not much will change.

The wars overseas continue.  The so-called entitlement programs continue.  The massive spending continues.  The deficit spending continues and is getting worse.  The unfunded liabilities keep going higher.  To top it off, we live in an administrative state where alphabet agencies with little oversight write the regulations that we are required to follow.

The best I can say for Trump is that he hasn’t started any new major wars, although you never know what tomorrow may bring.  Trump has also helped expose the deep state for what it is (sometimes inadvertently) for those who care to pay attention.  Aside from this, Trump has been mostly a mess.  He does provide some entertainment value, but that can only make up for so much.

I have already made a case for not wanting Trump to be re-elected.  If I thought that the mask mandates and lockdowns would end soon after Trump losing the election, then I want him to lose.  Maybe the establishment would loosen its grip and stop punishing the gullible American people for Trump being in office.

With everything that has happened in 2020 so far, presidential politics has largely taken a back seat since March.  Now we await Joe Biden’s choice for running mate.  It is perhaps the most important vice presidential pick ever.  If Biden makes it to Election Day and actually wins, then I don’t know if he will take office.  I put the odds of him actually being president for a full 4-year term very low.

All three presidential candidates have a major marketing problem.  I refer to Donald Trump, Joe Biden, and Jo Jorgensen.  These are the three I am following.  They are the three that will get the most votes, assuming that Biden is the nominee.  There will be other third-party candidates, but I don’t think they carry much weight.

Joe Biden

I will start with the easy one.  Biden’s whole personality is a marketing problem.  His cognitive abilities (or lack of) are a major marketing problem.  He can barely put together a coherent sentence.  Bernie Sanders, who is slightly older than Joe Biden, is far more charismatic, energetic, and coherent.

This is why Joe Biden has been locked up in his house.  The less he says, the better it is for his campaign.

Even when he puts out a YouTube video, he is tripping over his words.  These are not recorded live.  Does his mean his advisors don’t want to tell him to re-record some of these segments?  Worse, does it mean that Biden is recording several takes and the bad ones we see are the least bad of the bunch?

Now we’re hearing that Biden might try to avoid debating Trump.  If they use the coronavirus as an excuse, I don’t think that will play well with the American people.  You can easily have a debate and distance the candidates and the moderators.  Obviously, the Biden campaign would prefer not to have debates because it means fewer opportunities for Biden to mess up and stick his foot in his mouth.

Maybe it doesn’t matter though.  The people voting for Biden know he’s incoherent.  They aren’t really voting for Biden.  They are voting against Trump.

Donald Trump

The establishment has been throwing everything at Trump for over 4 years now.  For half the country, not much stuck.  The other half hates him or doesn’t really care about him.  The establishment finally nailed him in 2020 with the coronavirus.  They were able to decimate the American economy, which took away Trump’s number one issue to run on.

Trump hasn’t been the same since.  He also doesn’t have rallies now with tens of thousands of people.  This has taken away some of his spunk.

Trump sometimes has some decent things to say on the coronavirus and the lockdowns.  But he waffles a lot.  He tries to play both sides.  I don’t think that will work.

Trump hasn’t had a primetime speech to the nation in quite a while.  I believe the last time was in March when the hysteria had just taken hold.  I don’t understand why he doesn’t call a primetime speech that the media is essentially forced to cover.  He could bring out a lot of statistics showing the absurdity of shutting down the American economy because of a bad flu season.

He should have had primetime speeches explaining the Russia hoax when that happened.  He should have explained that it originated from a dossier that was linked to the Clinton campaign.  He should have explained that the FBI never actually verified that Russia stole emails from the DNC and that the story just came from a company contracting with the DNC.

He should have done the same with Ukraine.  In fact, he should be running commercials showing Joe Biden bragging about threatening to withhold foreign aid to Ukraine in order to get the prosecutor fired who was investigating the company his son worked for.

But Trump doesn’t do any of that.  Instead, he is too busy trying to blame China for his problems and banning the popular Tik Tok app. Yeah Donald, that’ll get you some votes.  Try to shut down a private company just because it is a Chinese company.  That should be popular with the young people who actually use the app.

It is amazing how politically stupid he is these days.  Maybe he’ll figure things out in the next few months.  Maybe he’ll turn it around like he did after his first debate with Hillary in 2016.  He needs to throw punches.

Unfortunately, some of those punches need to be thrown at his own cabinet members.  They also need to be thrown more at people like Fauci, the chief propagandist of the coronavirus.

When he throws punches at Biden, it shouldn’t come across as low blows.  He has many legitimate things in which to attack Biden. Trump doesn’t need to point out his cognitive problems.  People can figure that out on their own.  He does need to point out Biden’s involvement with Ukraine and getting that prosecutor fired.  He needs to point to his long record of big government.

Trump has been thrown off his game with the coronavirus.  I don’t know how much of this was planned by the powers-that-be, but they finally got something to work against him.  If Trump doesn’t come back swinging soon, he will be defeated, even by an incoherent Biden.

Jo Jorgensen

She has no chance of winning this race, but I still like to follow the Libertarian Party candidate. I think she is the best candidate the party has had since 2004, but that isn’t saying much.

I wanted her to run a campaign something along the lines of Ron Paul in 2007/ 2008 and again in 2011/ 2012.  She does sometimes have some good things to say.

Unfortunately, Jo has gone astray too.  She is allowing the establishment media to dictate what is important. That’s why she is trying to reach out to Black Lives Matter.

Now, I think there is nothing wrong with reaching out to people with different viewpoints, but it is coming across as pandering to me.  And I highly doubt it will do any good.

By pandering to Black Lives Matter, she is just turning off libertarians like me.  And while there aren’t a ton of hardcore libertarians, there are probably a few hundred thousand of them.  It is a lot more than any votes she will get from Black Lives Matter.

I would be surprised if she gets a couple of dozen people who identify as BLM to actually vote for her.  I am not counting people who already call themselves libertarians or Libertarians who may be sympathetic to BLM.

I think it would have been fine to state that libertarians have been advocating for the elimination of qualified immunity for police and an end to the federal war on drugs for a long time.  There are things where libertarians can agree with BLM.

At the same time, let’s acknowledge that most of the BLM people are not friends to liberty, and I don’t see many changing their minds just because Jo is pandering to them. A lot of them are self-identified socialists.  They have little respect for private property, which is why most of them will not repudiate the property destruction that has gone on with the protesting.  Most of these people either want a free handout in the name of reparations, or they want to be part of this “hip” movement where white people can relieve some of their collective guilt.

Overall, it is just a bad idea.  She is pandering, and it is to a very small minority of people who have loud voices.  Those loud voices are amplified by the establishment media, but police brutality towards black people isn’t the number one issue on the mind of most Americans.  It shouldn’t be the number one issue for most black people either.  You could magically end all police brutality tomorrow, and it wouldn’t solve most of the problems for black people.

Jo should learn the 80/20 Pareto principle.  Why is she spending time concerning herself with an issue where it isn’t that important to the vast majority of people?  And to the people who hold it as a top issue, they are highly unlikely to ever support Jo for president.

Meanwhile, she is mostly ignoring the tens of millions of middle class Americans, including many black people, who are getting completely screwed over by their government. There are tens of millions of people who have been forced into unemployment and the federal government and central bank think they can just solve it all by creating money out of thin air and handing it out.

She should be continually pointing out that the American middle class is getting screwed over by the elitists.  The answer is to vastly reduce the size and scope of government power.  We need less government in every area of our lives.

In fact, this is the message that all of the candidates should be selling.  They may not favor reducing government, but they should all be empathizing with the American middle class.  Joe Biden is too busy pandering to the so-called progressives.  Trump is too busy blaming China for everything.  And Jo Jorgensen is too busy attending BLM rallies.

They all have a major marketing problem.  Trump got the Republican nomination in 2016 largely because he tapped into this. Maybe he will figure out that he has to do it again.  He won the election because of states like Pennsylvania, Michigan, and Wisconsin.  He appealed to the working middle class.

It is painful to watch the Libertarian candidate throw away this opportunity by pandering to a bunch of self-identified socialists.  We need all of the libertarians we can get at this point, and I don’t think she’s converting a lot of people right now.

Conclusion

Regardless of who wins, at least half the country will be mad.  The establishment will cheer if Trump loses, but the 60 million people who vote for him are not going away.  If Trump wins, then the establishment and its propaganda are not going away, and I fear they’ll make us pay dearly for the next four years by selling viruses to the American people.

The price of gold hit new all-time highs this week in terms of U.S. dollars.  As I write this, the price is at about $1,990.  One small up day from here will put it over $2,000 per ounce.

It’s about time. The Fed has been on a money creation spree since the fall of 2008.  The Fed did hold steady from late 2014 up until last year, but the rest of the time saw unprecedented balance sheet expansion.

It’s still a bit curious why gold peaked in 2011 and started to fall in 2012.  Perhaps it was in anticipation of the Fed winding down its QE.  But really, I think it is just mostly about demand.  The economy seemed to be getting a little stronger at that point even though the Fed was still creating money and keeping interest rates low.  Most investors went to stocks and real estate.

I think this officially marks the resumption of the gold bull market that started at the turn of the century.  I should know because I bought my first gold in 2000 or 2001 when it was around $300 per ounce. It’s now up almost seven-fold over two decades, which is actually better than if I had bought stock index funds. I understand that I am comparing it based on gold’s low point, but it is still worth noting because I hear so often that gold is a bad investment because it doesn’t pay any dividends.

The Fed’s balance sheet has calmed down a bit since late May, but there was a lot of damage done from March through May of this year.  The balance sheet exploded by almost $3 trillion.  Plus, Congress is still running massive deficits, tax collections are presumably way down, and they are talking about another massive bailout/ stimulus bill. I don’t think bond investors can support all of this new debt at these low rates without the Fed playing a significant role.  In other words, I expect the Fed will continue to expand its balance sheet.

The FOMC met this past week, but its major moves happened months ago.  Its targeted federal funds rate is already near zero, and its QE is essentially open ended.  Therefore, there isn’t much to report.  The Fed will do whatever the Fed feels like doing.

In its statement, it said “The coronavirus outbreak is causing tremendous human and economic hardship across the United States and around the world.”  I have had to frequently correct people on this point.  The coronavirus isn’t causing economic hardship. It is the fear and reactions to the coronavirus that have caused the economic hardship.

So the Fed is just playing it by ear.  It has always done this to some degree, but at least in the past there was some predictability.  I suppose there is predictability now in the sense that rates will stay near zero and the Fed will continue to buy up government debt.

When it comes to politicians and central bankers, I think there is a lot of evil.  They lie, and they purposely do things to enhance their own power.  And while I still think that’s true, I also believe that the central bankers really don’t have that much of a clue of what to do other than to just keep creating money.

While I think the establishment hyped the coronavirus up, it wasn’t the Fed that locked down the economy.  It isn’t even the Fed that is running up the debt.  But the Fed is enabling the run up of the debt by supporting it.  It really doesn’t know what else to do. Jerome Powell and company don’t necessarily want a destroyed economy, but they have no other solutions. They could tell Congress that the Fed will no longer be buying U.S. government debt, but we all know that’s not going to happen.

On top of all this, GDP came in this week.  In the second quarter, there was a decline of 32.9% (see update below).  This is unprecedented.  While it isn’t a perfect measurement, it does give us an idea of just how bad things were and will continue to be.  There probably hasn’t been a decline in economic growth that steep since the so-called Civil War in the 1860s.

It’s interesting that economic growth can decline by one-third and we can have over 40 million new unemployment claims, while stocks are at or near all-time highs. Stocks seem to like the Fed’s funny money as much as gold.

Still, I would bet on gold over stocks over the next few years.  Stocks are still in a massive bubble.  Investors almost seem to no longer worry about actual earnings.  Eventually, there is something of a return to the mean, even with the massive monetary inflation.

I still like gold stocks as a speculation play.  It is an opportunity that I have been waiting for, for quite some time. There will be significant pullbacks in the gold market, but I expect it will continue to go higher from here.

Update: To be clear, the 32.9% GDP drop in the second quarter is an annualized rate.

I am ready to cry “uncle”.  The establishment is showing that it is still in charge as long as Americans are stupid enough to believe the propaganda they put out.  The establishment briefly lost control in 2016.  There was Brexit.  Then there was the election of Trump.

The establishment and its media told us that we have to vote for Hillary Clinton.  They told us that Trump is a horrible human being who would be a horrible president.  Maybe they were right, but compared to what?

I didn’t vote for Trump, but I sure did enjoy the night of the election in November 2016 when the results started rolling in.  I enjoyed the next day watching the shocked faces of the establishment shills.

Ever since then, they have been trying to destroy Trump and what he represents.  There are a lot of bad things to say about Trump, but he has represented a thumb in the eye of the establishment to a large degree.

They tried the Russia hoax.  They tried Ukrainegate.  They got an impeachment, but he is still in office.  They have turned the lives upside down of many of his former associates by accusing them of Russian collusion, or lying to Congress, or whatever they can get away with.  They hang on to every word Trump says, trying to make him look bad.  It has worked on the people who already hated Trump, but close to half the country doesn’t hate Trump.

In early 2020, Trump downplayed the coronavirus.  He basically said it isn’t a big deal and that Americans should carry on with their lives.  This was the opportunity the establishment had been waiting for, and they took advantage of it.

This is one of the main reasons why there is so much hype coming from the establishment media. We hear about the death counts, even though they are wildly inaccurate.  We hear about the cases.  We continually hear anecdotal stories about someone who isn’t elderly and supposedly died of the virus.  We have had government lockdowns due to the hysteria, and now we have mask mandates almost everywhere.

The economy has largely been destroyed, which is the one major theme Trump had to run on.  I personally don’t think the economy was strong anyway heading into 2020, but the forced lockdowns obviously brought on a hard recession very quickly.  Now the only thing Trump can say is that the economy was strong and that it will eventually come roaring back (even though it won’t).

The establishment, in 2020, has finally been able to take the air out of the Trump bubble. They have made us all pay dearly for ever having put Trump in the presidency.  I can’t be sure, but if Trump weren’t president, I have a feeling the coronavirus would have been more similar to the swine flu of 2009/ 2010.  There would have been some extra precautions in hospitals, but most of life would have gone on as normal.

Trump hasn’t lost yet though.  I think the left is overplaying their hand with the protests and race wars.  This could actually help Trump.

I’m still not sure if Biden will actually be the Democratic nominee, but if he is, Trump is definitely still in it.  Biden can’t stay in his basement and say nothing up until Election Day. He will have to come out and make a fool of himself at some point.

I am not voting for Joe Biden or Donald Trump in November.  I will consider voting for Jo, not Joe.  That is Jo Jorgensen with the Libertarian Party, although I may not even vote for her.  She is too busy trying to please the radical leftist social justice warriors instead of selling a message of a liberty to the American people. But that’s a subject for another day.

I may not even be cheering for Trump in November as I did in 2016.  While it might be fun for a day to see the look of despair on the faces of the most evil people on television, I don’t want to be punished for another 4 years.

Since most Americans are willing to believe almost anything they are told by the establishment media, at least when it comes to the coronavirus, I don’t know what will be done to us next if Trump actually wins.  Will we be on lockdown for another 4 years?  Will we have permanent mask mandates?

The American people are eating the propaganda given to them, and they are enslaving themselves as I never thought they would.  From now on, all the establishment has to do is announce the next dangerous version of the flu, and nearly everyone will just fall into line.  They’ll isolate themselves, they’ll destroy the livelihoods of their children, and they’ll destroy the economy.  I hope I’m wrong, but this is what has happened in 2020 so far.

Trump has served his purpose.  He has exposed the deep state for what it is for anyone who cares to pay attention.  Most of his policies are still bad.  We are getting spending and deficits today that would have shocked us even under a Bernie Sanders presidency.  Can it get much worse?

It could get worse if Biden or whoever starts yet another war.  Biden or whoever could try to impose mask mandates and lockdowns from the federal government, but I think there would actually be some resistance there, and it would be tough to enforce.

Economically, I don’t see how the policies could get much worse at this point, but I won’t discount the possibility.  Anyway, if things are going to be bad, maybe it’s better for a Democratic Party president to take the blame.

The establishment failed to take down Trump for over 4 years (as candidate and president).  Now the fear of the coronavirus has changed all of that.  A majority of Americans have been played for suckers.  They have believed the same people who continually lie to them about wars. If the establishment and its media will lie to get us into war, why wouldn’t they lie about the threats of the coronavirus?

Since there are so many gullible Americans, I am crying “uncle”.  I don’t want four more years of Trump if they are going to be like this.  I want my children to be able to have activities.  I want to go to concerts and sporting events.  I don’t want to walk around with a mask on my face.

If Trump loses in November, I don’t know if this all goes away.  The politicians obviously like the political power they have gained.  But at least there won’t be an incentive of making everything look bad because of Trump.

If all this hysteria goes away with a Trump loss, then it is hard to cheer for Trump at this point. The establishment has won this round big time, as the American people were played for fools.

After an historic rise, the Federal Reserve’s balance sheet has settled down.  After going up nearly $3 trillion in a matter of three months, it peaked in early June 2020. The balance sheet actually fell in June, but not by a lot, relatively speaking.  It has started to go back up again in July.

It was obvious the Fed would not be able to maintain the pace of monetary inflation that was seen from March through May.  Still, the federal government continues to run massive deficits that are beyond comprehension.  Meanwhile, Congress is considering another “relief” package, which will probably include more direct payments to Americans.  It is not so much of a relief when you go to the grocery store and see the prices.

I can’t imagine the Fed’s balance sheet will flatten out from here.  I think it will continue rising, although at a slower pace than March through May.  Someone has to buy up all of this government debt, and I don’t think foreign central banks and private investors will be able to cover it all at low rates.

I think we are going to see massive deficits for a while now.  They were already projected to be high before the coronavirus and the lockdowns.  I also think we will continue to see Fed inflation to cover much of these deficits.

The only thing that will change this situation is high consumer price inflation.  That is already a reality with food and some other items.  But we have price deflation with other things that are not in high demand right now, especially in the travel and leisure industry.

With a massively growing national debt and Fed inflation, it is understandable that gold and silver are on the rise.

Gold and Silver vs. The Fed’s Balance Sheet

The Fed massively inflated from 2008 to 2014.  Gold and silver rose substantially from 2009 to 2011/ 2012.  But then the prices retreated while the Fed’s balance sheet kept going up for another 2 or more years.  Still, there was an anticipation that the Fed was slowing down its asset purchases, so there is still somewhat of a correlation.

If the Fed promised right now that it would stop inflating and keep that policy for several years, and if people believed it, then gold and silver prices would likely come crashing down.

But that’s not what is expected to happen.  Most people expect that the deficits will continue and that the Fed will help fund these deficits by buying government debt.  The Fed is now on the hook to bail out a lot of people and businesses and industries.

Gold has hit $1,900 and is near its all-time nominal high.  Silver is well over $20 now, but would still have to more than double to reach its all-time high.

We can’t be sure of anything in this world any more, but I do expect that the price of gold and silver will continue to rise.  Silver carries more risk, but the rewards could also be more lucrative.

Even more lucrative will be mining stocks, which have been hammered for the last 9 years or so, up until this year.  Some of these mining stocks will explode in price if and when gold and silver soar higher.

It is going to be a wild ride though.  There will be big up days, but there will also be big down days.

If you want to speculate in mining shares, I recommend an ETF such as GDX or GDXJ.  They provide some diversification in an otherwise risky industry.  You can also find mutual funds that focus on mining stocks.

I think gold is a necessary hedge against massive inflation and disaster.  It should always be part of your portfolio.  But I think now presents a special time where you can actually try to profit off of it.

Stocks and bonds have both done well lately.  But this may not last.  I still think there is a giant stock bubble.  There is also a bond bubble, but people seek U.S. Treasury debt for safety, as long as price inflation is not seen as an imminent threat.

If and when stocks and bonds fall out of favor, where else will investors turn?  Where will anybody turn who is just looking to preserve their wealth?  I think gold is an obvious answer.