The FOMC released its latest statement on monetary policy.  As was widely expected, the Federal Reserve will maintain its current federal funds target rate between 5.25% and 5.50%.  The market is expecting two rate cuts later this year, but that can change easily depending on what happens with the economy.

Jerome Powell had a press conference afterwards.  It is mostly bureaucratic talk.  Powell generally plays it safe and parses his words.  During the small part of his press conference I heard, Powell was asked a question about how the upcoming election impacts the Fed’s decisions.

Powell assured us that the Fed doesn’t look at politics and only is concerned about the economy and how it impacts the American people.  He said you can look at the transcripts of past meetings, and it is clear that the Fed does not make decisions based on politics.  But why does this mean anything?  Of course they aren’t going to outwardly say anything in a recorded meeting about playing politics.  It doesn’t mean there aren’t conversations off the record, and it doesn’t mean that individuals aren’t factoring politics into their decisions inside their heads.

Powell is one who shows very little emotion.  Yet, when he was answering the question and assuring the reporter that the Fed doesn’t make decisions based on political elections, he seemed to have a smirk on his face.  This doesn’t automatically mean that he was lying, but it was interesting to note.

While the media tends to focus on the direction of interest rates, there was an interesting part of the policy statement where things changed.

Decelerating Monetary Deflation

Up until now, the Fed had been reducing its balance sheet by $95 billion per month, at least according to previous meeting notes.  That was $60 billion in Treasury securities and $35 billion in mortgage-backed securities (MBSs).  Despite what anyone was saying, the Fed was in a mode of monetary deflation going back to 2022 when price inflation became a major problem.

Maybe some of the words of Fed officials are dovish.  Maybe interest rates in a free market would be higher than what the Fed is currently allowing.  But in terms of the base money supply, the Fed has been engaging in deflation.

This isn’t stopping yet, but it is slowing.  It is kind of like price inflation.  Price inflation hasn’t stopped, despite what anyone says.  Prices in general are still going up.  They are just going up at a slower pace compared to before.

And so it is with the money supply.  Monetary deflation hasn’t stopped, but the Fed has slowed it down.

According to the Implementation Note with the FOMC statement, beginning on June 1, 2024, the Fed will roll over maturing Treasury securities that exceed $25 billion per month.  In other words, the Fed will allow a $25 billion per month reduction in Treasury securities instead of $60 billion.  The MBSs will continue to roll off at $35 billion per month.

To sum it up, that means the Fed will reduce the base money supply by up to $60 billion per month in total instead of $95 billion per month.  It could be less if there isn’t that much maturing debt in a given month.

To any individual, these are massive amounts of money.  They are relatively small compared to the Fed’s balance sheet that currently sits near $7.4 trillion.  It has come down from a peak just below $9 trillion.

It is doubtful that the Fed’s balance sheet will get much below $7 trillion at this point.  Even though markets have generally been booming (not counting recent weeks), a deliberate policy of monetary deflation eventually brings the party to an end.

I think the central planners know this.  It doesn’t matter what rosy things Powell has to say.  They know that there is a significant risk for a deep recession and some kind of financial crisis.

Why else would they begin to reduce the rate of monetary deflation?  They are admitting that price inflation is still stubbornly above their 2% target rate.  Wouldn’t they keep draining the balance sheet at the previous pace if inflation is still a problem?

The reason is because they are scared of a massive recession.  They are scared that the bubble will burst.  They don’t care if the stock market goes down 10%.  They do care if the stock market goes down by 70% accompanied by a major financial crisis.

Conclusion

The Fed is finally in a tough position.  They were able to get away with massive monetary inflation after the 2008 financial crisis.  Price inflation never got out of control until 2022.

Now the Fed has to play a balancing act of not allowing price inflation to spike back up while also not allowing a major financial crisis.  The only reason they are in this position is because of previous Fed policy.

Even though monetary deflation will be slowed down, it is still monetary deflation.  Mises taught that even a reduced rate of monetary inflation can bring on a bust.  In this case, we still have monetary deflation.  The Everything Bubble could go bust at any time.  And in spite of what Powell says, he would probably prefer that to happen after the election in November.

Congress and Biden recently renewed FISA and warrantless spying.  In fact, they actually added a provision to require every company that provides internet-related services to assist the NSA.  Now the government can tell people to spy and they are not allowed to say anything.  According to the legislation, it seems it would make it legal for the government to instruct your cable guy to spy on you and prohibit him from saying anything.

There is great danger to our liberty with the surveillance state.  It’s not just that the government spies on you.  It’s also that is makes it nearly impossible for any kind of significant reform against the deep state.

The government is collecting billions of emails and text messages, probably in any given day.  The problem for the tyrants is that it is information overload.  They are dealing with so much data that most of it will go unseen by anybody.  Of course, it might not be pleasant for those who are being closely surveilled.

It makes a mockery of our justice system.  The powers-that-be in the federal government can destroy just about anyone that they are determined to destroy.  They could probably destroy Trump, but since he is so well known, they have to do it more delicately.  It seems strange to say because of these blatant attempts to get Trump on anything.  But I do think some of the elitists recognize the danger of just outright killing Trump or throwing him in jail on frivolous charges.

Anyone in favor of liberty should obviously be against government spying, particularly warrantless spying. There shouldn’t be people still around who believe in the myth that it is all to stop terrorism.  Of course, the government will define a mother going to a local schoolboard meeting as a terrorist.  They will define anyone who opposes certain official narratives as a terrorist.  So, by the government’s own definitions, perhaps they really are spying to stop terrorism if by terrorism they mean anyone who threatens the tyrannical powers of the deep state.

How Do We Get Reform?

Perhaps the even bigger problem is that is makes it almost impossible to achieve significant reform in this area without the whole system blowing up.

There are some people who enter Congress who actually want to do the right thing.  The power inevitably goes to their head, but it doesn’t make everyone in Congress completely evil.  The problem is that they can’t reform the system even if they wanted to.

When you think of Epstein island, it wasn’t just a child sex trafficking ring.  It was a blackmail scheme.  There were rich and powerful people who go caught up in it.  At that point, they always had to play ball with the establishment.  Otherwise, their lives would be instantly ruined.

It is a joke that nobody other than Epstein and Maxwell have faced charges over this.  The Department of Justice had no problem rounding up over 1,000 people who were on Capitol grounds on January 6, 2021 and prosecuting them, yet they just can’t seem to find anyone guilty from Epstein’s island.

Trump appointed Alexander Acosta as Secretary of Labor.  Acosta originally oversaw the easy treatment of Epstein (the first time) in 2007/ 2008.  Acosta said that he was told not to go any farther with Epstein because he belonged to “intelligence”.  Why is nobody from Congress demanding that Acosta testify and explain exactly who told him that?

The people in Congress are terrified of the intelligence agencies.  As Chuck Schumer accurately said about Donald Trump, “Let me tell you, you take on the intelligence community, they have six ways from Sunday at getting back at you.”

There are many evil people in Congress who don’t want the right things for the country.  But there are some who aren’t evil but are not able to confront the intelligence agencies and the spying state.  What’s worse than someone in Congress who is in on the evil is someone in Congress who is afraid to confront the evil.  With the latter, it shows little hope of ever reforming the system for the better because there is nobody in there who can be replaced with someone who will do it.

Imagine if a group of people in Congress put forth legislation to abolish the CIA, the FBI, and the NSA.  How long would it take for at least some of these members of Congress to find themselves in trouble with the law?  They would be facing the Trump treatment.  Who really wants to go through that?

You can see the problem here.  How do we ever rid ourselves of this evil if there is barely anybody willing to face it?  It is completely understandable why nobody wants to take on the deep state.  It is called self-preservation.  We see what happened to Edward Snowden and Julian Assange.

If it was just a matter of getting rid of some corrupt congressmen, that would seem like a doable task.  How do we get rid of the deep state characters who are truly evil who will punish anyone who threatens their power?

Conclusion

It’s not that there is no hope for the future.  There are ways for the evil people in power to at least lose power if not brought to justice.  The only real hope is that a large percentage of the population becomes aware of the evils being perpetrated upon them.

In 1985, it looked like the Soviet Union would last for a long time.  Yet, in 1989, it started to crumble.  A couple of years later, it ended.  Miraculously, it ended peacefully for the most part.

The worst of the criminals of the Soviet empire were never made to pay for their crimes.  Some of them probably went off into hiding with a lot of money.  But at least they lost power.  Sometimes a system can seem unbeatable even though it is not sustainable.

We can’t rely on people with political power to remove power from the tyrants.  But if enough people stop consenting to the system, it is possible to get changes for the better.

If you are an American, there is a lot to be pessimistic about with the state of the country.  Some will say it’s time to get out of America while you can.  America has seen its peak, and it’s time to move on to greener pastures.

How is America doing?

Perhaps it is like the old joke, “How’s your wife?”  Answer: “Compared to what?”

America has a lot of problems.  The national debt is beyond ridiculous.  The government at all levels spends almost half of our income.  The U.S. government spies on American citizens and has weaponized the “justice” system against dissidents.  They are trying their best to censor speech that goes against the official narrative.  The wars and interventions overseas continue.  And all this while the culture degrades with more crime, more homelessness, and a sizable portion of the young population thinking they need to choose their gender.

How is America doing?  Compared to what?

There are many reasons to get out, and they go beyond the reasons listed above.  Still, the grass is always greener on the other side.  There isn’t a place on earth that doesn’t have major problems.  And some of them are quite similar to what we see in America.

Getting Your Priorities Straight

All people are different.  Therefore, different people will have different priorities.  This even goes for libertarians.  You could have two libertarians who want a free society but want very different things.  Maybe the first guy just really wants to be able to legally do drugs.  The second guy hates drugs but doesn’t want to pay any taxes.  They should make their choice of where to live based on their priorities.

If you want to do drugs, you aren’t going to move to Singapore.  But if you want to open up a business and pay less in taxes, maybe Singapore is a good option.

If you want low crime, maybe you want a place like Switzerland.  But then you have to consider its high cost of living and also that it may be hard to get residency there.

If you want to homeschool your children, then you probably don’t want to go to a place like Germany or some other place where it is illegal or very difficult to do.  If you care about owning a handgun, then you probably want to stay away from Canada.

Of course, there is just the lifestyle too, which doesn’t always have to do directly with liberty.  Some people want city life, even if it is more expensive, while others want a rural setting.  Some people want to ski, while some people prefer a tropical paradise.

The point is that it is hard to tell anyone that they should move out of the U.S. if they seek greater liberty.  It depends on the subjective preferences of each individual.  Some people would have trouble surviving on the food served in certain countries.

The Good Old U.S.A.

It is easy to criticize the U.S., or more accurately, the U.S. government.  Of course, just about every government is highly corrupt.  The problem in the U.S. is that Americans are very wealthy (comparatively speaking), so the U.S. government has a lot of resources at its disposal to cause chaos and destruction.  The good news is that Americans are still able to retain some of those resources to fight back.

In spite of the U.S. government, there are many positive things Americans have that most foreign countries don’t.  You still mostly have the right to bear arms in the U.S.  We like to credit the 2^nd Amendment, but it is really that we have a culture of being armed.

In the U.S., it is mostly legal to homeschool with very little oversight.  The bureaucrats might not like it this way, but there are so many homeschooling families now that it would be hard to make it illegal at this point.

The U.S. still has a certain rugged individualism left in the culture that doesn’t exist elsewhere.  There is also an entrepreneurial spirit that doesn’t exist in many places.  Even though there is a massive welfare state, a rags-to-riches story is still looked upon positively.  Those with great wealth are not generally demonized.  Perhaps the elitists who have great wealth who try to rule over us should be demonized, but that’s another subject.

Even though the U.S. government tries to tell Facebook, Google, and establishment media sources what to say, they cannot control everything.  They are trying to ban TikTok, which will likely just backfire on the establishment as it enrages tens of millions of people.  The more they try to censor, the more we hear from people like Joe Rogan and Tucker Carlson who do not want to repeat the establishment narratives.

There is no doubt a great fight of good against evil.  The good news is that more people have awoken to the evil that is out there.  Many conservatives no longer trust the FBI and the CIA.  Many are questioning foreign policy and the military-industrial complex.  This is positive news.

There seems to be more fighting than ever, but that is because Americans are not obeying as much as they did a generation ago.  If the hostage doesn’t put up a fight with his kidnapper, then everything looks peaceful from a distance.  When the hostage puts up a fight and is about to escape, then things can look very unpleasant from a distance.  They are quite unpleasant, and in some ways, it would be easier for the hostage to go along.  But when people are pushed enough, sometimes they “enough” and no longer obey.  We may be entering that stage.  It won’t be a pleasant time, but the risk may be worth it to gain liberty in the future.

I was recently in Fort Myers Beach, Florida for a short time.  The beach on the Gulf of Mexico is beautiful.  One thing I did not expect is just how much the city is still recovering from Hurricane Ian, which was just short of being a category 5 hurricane when hitting shore.

There were many condos and apartments on the beach that were vacant.  The windows were boarded up if there were windows at all.  The hurricane hit in September 2022.  Over a year and a half later and they are still not even close to being back to normal.

There was massive flooding, as well as wind damage.  All of the buildings I saw on the beach that weren’t new would have been underwater during the storm, or at least the entire first floor would have been.

I spoke to someone who lived just north of Fort Myers.  He said that houses that had a certain amount of damage had to be torn down and rebuilt to new code.  In other words, you could have a house that could be fixed for far less than the cost of a new house, but it won’t get fixed.

The government has the building codes that have to be followed, but the insurance companies are really part of the determination.  It wouldn’t make sense to pour $50,000 to fix a house and then have another storm come along and do the same damage again.  I don’t know, but I expect new houses have to be built on stilts or be raised somehow to not get flooded in the main living area.

Some people think that the government building codes are good and necessary.  But this is just government hopping on board the parade.  If anything, government distorts things by often subsidizing insurance for places being built in high-risk areas.

Strict building codes in the United States are only possible because of the wealth that Americans have.  When there is an earthquake in a third-world country, you see massive devastation.  Sometimes there are thousands of people dead.  In the U.S., you might have just a few deaths from a similar incident.

You could implement these strict building codes in a third-world country, but if they were strictly obeyed then almost nobody would have a place to live.  It wouldn’t be possible to build houses to a strict code with the lack of capital.

In a free market economy, insurance companies would set the standards.  They wouldn’t be willing to insure a house made out of sticks near the beach.  In addition, a mortgage company wouldn’t be willing to lend money to someone using a stick house as collateral.  You would be free to buy land and build a stick house, but it’s not likely anyone would loan you the money to do it, and nobody would give you insurance.

Voluntary Action

One of the problems with government interference right after a disaster hits is that it is typical to have so-called anti price gouging laws.  In other words, sellers are not allowed to sell products for what they are worth in the market.

If you have a shortage of bottled water and generators, the last thing you want to do is prevent sellers from raising prices.  You need higher prices to help meet consumer demand.  You want to give buyers an incentive to conserve, and you want to give sellers an incentive to direct more supply to that area.

As with anything, the only role of government should be to protect people’s lives and property from aggression.  If there are evacuation orders, they should be voluntary.  They technically usually are voluntary.  It’s just that you won’t get emergency services during the storm if you are in trouble.

It is probably difficult to get contractors after the storm is over and the recovery begins.  You think about this one small area, and all of a sudden there is a massive increase in demand for roofers, plumbers, electricians, and other contractors.  Again, if you allow higher prices, it gives incentive for workers to go to that area.

It was kind of sad to see the place so long after the storm hit.  It was a beautiful day on the beach, and I even spotted a dolphin swimming near shore.  So, it was mixed emotions.  There was one building that looked nice that was occupied, probably with tourists.  I have no idea if it was a new building or if it was fixed up from the storm.  I was just surprised how many buildings were still sitting empty.

I heard that there were restaurants that used shipping containers to serve food.  I also heard that a new Margaritaville restaurant had opened up.  There were some shops that were open.  There was definitely activity, so it’s not as if the city is dead and not coming back.  Farther inland was busy.  If you were far enough inland to avoid significant flooding, then this is the big difference maker.  It is usually the difference between a livable and unlivable house.

The nice thing to see is people coming together.  We talk about voluntary action of people exchanging goods and services using money.  The reality is that when there is a disaster, people do come together and help each other.  They will give up their own time and resources in many cases to help their neighbor.

Conclusion

There are always disasters in life.  Government interference usually makes them worse.

It is possible for government to direct money to disaster areas.  This may or may not help.  But this has never made sense to me because there are many people who suffer tragedy who get nothing.

Why did the families of the victims on 9/11 get money?  This almost seemed like an admission of guilt from the government.  But it was to show how much politicians can care with other people’s money.  You could die of a disease or an accident, and your family isn’t getting anything from the government.  You depend on insurance and charity, if anything.

In spite of government, it is good to see people come together on a voluntary basis and make things better.  The hurricane gets covered by the news media well when it happens, and then everybody not in that area forgets about it.  The people in Fort Myers Beach haven’t forgotten.  Some of them have moved to other areas.  But there is still a spirit of recovering and getting back to normal with buildings that will be stronger than before.  This would have happened without building codes.

Now that Mike Johnson has been Speaker of the House for nearly 6 months, it might be a good idea to take a look at how he is doing for liberty.  In Johnson’s case, perhaps it is more accurate to say that we should take a look at how he is doing against liberty.

I wrote a post on October 27, 2023 titled “Will A New House Speaker Make a Difference?”  It’s hard to say for sure at this point if it has made any significant difference, but so far the answer seems to be “no”.

Mike Johnson is a total neocon.  He pretends to be a Christian and uses his religion to promote more war and U.S. government intervention overseas.  He is now fully in support of funding Ukraine (i.e., more war and death in Ukraine).  He is, of course, fully on board supporting the funding of Israel and its mass bombing campaign against the people in Gaza.

Just like Nikki Haley, who claims to be a fiscal conservative, Johnson is not a fiscal conservative.  How can you be when you want to spend hundreds of billions of dollars on war?  Is there ever an ending to funding overseas adventures for these people?  The question answers itself.

Johnson can pretend he’s a fiscal conservative like Haley, but it means nothing.  It is just a lie.  The deficit is completely out of control, but Johnson keeps supporting the massive spending coming out of Congress.

Johnson has now helped pass an extension to the Foreign Intelligence Surveillance Act (FISA).  This allows the government to spy on people, including Americans, without a warrant.  At this point, you could say that Johnson is bad on every single important issue.

Dump Johnson

Rand Paul recently said that he’s not sure if there’s a difference between Mike Johnson being in charge and Democrats being in charge.  I’m not so sure at this point either.

Marjorie Taylor Greene sent a warning to Johnson about the possibility of removing him as Speaker, just as they did to Kevin McCarthy.  So far, Johnson has seemed to ignore any warnings and continues on his statist ways.

Johnson has more leverage at this point than McCarthy did.  Are the Republicans really going to toss out Johnson now for another statist?  They also risk losing the Republican majority.

The Republicans in Congress are mostly either stupid or evil.  Some of them are both.  They expelled someone in their own party because he lied, yet Santos was probably more honest in a sense than most people in Congress.  Why would they stupidly get rid of someone who voted with them?  Perhaps it actually benefits someone like Johnson who can use it as leverage to keep in power since the Republican majority is so thin now.

When Thomas Massie opposed removing Kevin McCarthy as speaker, I couldn’t quite figure out why he had that position.  I could understand his position from a strategic reason, but I still thought it was better to toss out a statist even if he is replaced by another statist.

I have to admit at this point that Massie was probably correct, strategically speaking.  McCarthy is terrible, but I don’t think he would have been any worse the last 6 months as Johnson has been.

It will be interesting if Matt Gaetz and company try to get rid of Johnson.  I have a feeling Gaetz is ready to give up.  He took a lot of heat for standing up against McCarthy, and now we have another tyrant in the position.  I’m sure there are days he just shakes his head in disbelief.  It’s not that Gaetz is a libertarian, but he is certainly more pro liberty than most of the people in Congress.

It is interesting that, as Marjorie Taylor Greene threatens to vacate Johnson from his position, Donald Trump is defending Johnson.  This is not a good sign from Trump.  This is where he was at his worst in his 4 years as president.  He supports people who are authoritarians.  When Johnson one day stabs Trump in the back, he’ll get angry and act surprised.  It kind of shows how naïve Trump can be at times.

It is easy to say that Trump is just a statist himself, so of course he supports Johnson.  But then why do most of these statists oppose Trump?  Some of them pretend to be on Trump’s side until it is convenient to not be.  This is a bad sign for Trump that he learned nothing.  His running mate will probably also be a statist who will eventually turn on Trump.

Conclusion

Mike Johnson has been a total disaster.  I knew he was bad news from the beginning, but even I underestimated just how bad he would be.  I thought he would at least throw a few bones to the more pro freedom wing of the Republican Party.  Instead, he has thrown a lot more bones to the Democrats and the establishment in general.

2024 is already going to be one for the record books just because of the presidential election and the deep state’s attempt to stop Trump.  Now there is congressional politics in there too.  It seems unlikely that Johnson will hold onto his position for long.  The Republicans may lose the majority anyway because they believe in self sabotage.

The consumer price index (CPI) numbers came in higher than expectations for March 2024.  While expectations were for a 0.3% rise in March, the reality was a 0.4% rise.  The annual CPI now stands at 3.5%, which is actually the highest it’s been for the last 6 months.

The median CPI also came in at 0.4% for the month of March.  The year-over-year median CPI stands at 4.6%.

While this is an improvement from a couple of years ago, it is still not that close to the Fed’s 2% target. Perhaps the CPI is understated, and there is nothing magical about 2% price inflation, but the Fed is still off using government metrics.

How can there possibly be a rate cut while price inflation remains stubbornly high?  The only reason the Fed would cut its target rate at this point is because it anticipates a major crash or some kind of financial crisis.  It’s hard to say the Fed would cut rates for political reasons at this stage because the elevated inflation is in itself bad politics.

Stocks tumbled on the news of the CPI report.  Yields also jumped, sending bond prices lower.  Gold was also down, although not by much, especially considering the rather historic run in the last couple of months.

Gold has all of a sudden turned bullish, and anything but a hard recession is likely to keep it going higher.  High inflation has historically been good for gold investors, so maybe it is finally catching up with the game.

June Rate Cut?

With this latest CPI report, the chance of a Fed rate cut in June has dropped to about 17%.  In other words, it is not likely unless something major changes in the next couple of months.

It is curious why the Fed was projected to cut rates in June and not just because price inflation is still running high.  The Fed is continuing to drain its balance sheet that exploded in 2020.

It is kind of strange to talk about rate cuts while the Fed is deflating the base money supply.  Then again, monetary policy has been strange since the financial crisis of 2008.  The Fed doesn’t control its target rate much anymore with monetary inflation and deflation.  It controls it by paying interest on reserves to commercial banks.  This has just served to funnel more money to banks while making the budget deficits even worse.

The Fed is supposed to remit money made from interest payments back to the Treasury, but the Fed is actually losing money now.  It is paying out more interest than it is collecting.  So, we can add that to the two trillion dollars or so that the politicians are adding annually to the national debt.

The economy is anything but sound.  Let’s be clear that it isn’t Fed policy right now that is causing the trouble.  It was the prior policy of near zero interest rates and massive monetary expansion.

We don’t know when this whole thing is going to blow.  Still, it is clear that things are not right.  The yield curve is still inverted, as it was for all of 2023.  There are bad signs everywhere that most people are ignoring.

Luckily, we are a wealthy society, in spite of government and central bank interference in the economy.  It’s not that we are destined to be doomed.  However, there is going to be economic pain down the road.

The fact that the Fed is even considering rate cuts in the face of price inflation above 3% is a signal that even the Fed sees trouble ahead.

There is no question that the campaign of Robert F. Kennedy Jr. (RFK Jr.) will have a great impact on the 2024 election.  There are many people who don’t like both Trump and Biden and are looking for a viable third option.

In some ways, Kennedy is the only possible path back to some semblance of normalcy.  If Trump or Biden (or a Biden replacement) wins the election, there is going to be chaos.  That is almost a guarantee.

Biden is the chaos president.  His handlers are intentionally trying to ruin the country and cause chaos everywhere.  It’s not just that they don’t have the right policies.  They are doing the destructive things they are doing on purpose.

Trump probably actually wants the country to do well.  He really does want to make America great again, even if it is just to brag about it.  One problem is that some of his policies aren’t good.  The bigger problem is that his enemies want to destroy him and his followers.  Some of his enemies have a lot of money, power, and influence.  If Trump wins and is allowed to take office, they will purposely cause chaos just so that he can’t succeed at anything.

We had many years of a Russia collusion hoax.  We still do.  2020 gave us COVID lockdowns and hysteria.  It also gave us the George Floyd riots.  It was total chaos in 2020, and we shouldn’t assume this was by coincidence.  This is likely why some people voted for Joe Biden.  They saw that as the only chance to return to some normalcy.

But that didn’t really stop the chaos.  We got new chaos from Biden and his handlers.  Trump’s followers didn’t go away.  If anything, Biden has caused greater division within the country.

Kennedy seems like the only way we can possibly return to some kind of civilized society in the near future.  He is something of an old school Democrat, a little bit similar to his uncle.

The Good

Up until October 7, 2023 (the attacks in Israel), Kennedy was very good on foreign policy.  He understands the history of Ukraine.  He will explain that there was a U.S.-backed coup in 2014 that overthrew the democratically-elected president who wanted friendly ties with Russia.  Since 2014, the ethnic Russians in the eastern area of Ukraine have been attacked.  In addition, Putin has long said that Ukraine is his line in the sand.  The Russians don’t want NATO missiles right on their border.

Kennedy understands this very well.  It is a breath of fresh air.

Kennedy has been heroic on the COVID hysteria.  He literally wrote the book against Tony Fauci and the medical establishment.  He has been a long-time advocate for vaccine safety.  A big part of his book is questioning the official narrative of HIV/ AIDS.  Although he doesn’t say that he will abolish the FDA and CDC, any shakeup in those agencies has to be a good thing.  Aside from radical libertarians, there aren’t many people questioning the major narratives coming out of the medical establishment.

Kennedy has also been very good on speaking up against the so-called intelligence agencies.  He believes that the CIA killed his uncle.  He suspects that his father may have also been killed by the deep state, although he is less certain on this point.

He doesn’t take a libertarian position of defunding and abolishing the CIA, the FBI, the NSA, etc.  But at least he understands that there is evil at the top of these agencies.  Again, any shakeup in this area can’t be a bad thing.  Anything he can do to expose the evil in our system is positive.

Kennedy has also been good in more recent years on the issue of free speech.  He recognizes that the government is trying to censor speech that goes against their official narratives.

In addition, it should be mentioned that Kennedy has been willing to go on many shows with the alternative media.  He has made himself available to several libertarian podcasters in the past.  Aside from Vivek Ramaswamy, nobody else in this election cycle has been willing to take tough questions from outsiders.

The Bad

Kennedy is still a leftist at heart.  He is better than the Democratic establishment here.  He doesn’t believe in massive welfare for illegal immigrants.  He is much more measured when talking about welfare in general.

Kennedy has been really bad on climate issues in the past.  He has backtracked quite a bit on some of these stances.  He is now better than most Democrat politicians on environmental issues.  Still, he is a leftist at heart.

Just in general, Kennedy comes up with solutions to real problems that often involve central planning.  There are countless problems that are a result of government interference in the first place.  Kennedy’s inclination is to fix problems, but his first solution isn’t usually to remove government.  It is often to add another layer of government to fix the problem.

Kennedy’s heart is likely in the right place here.  But we really don’t need more central planning.  We don’t need more government out of Washington DC.  We need to reduce the size and scope of government, especially at the national level.

Unfortunately, Kennedy’s pick for vice president is not encouraging.  He argued with Dave Smith for over an hour about Israel and then offered Dave a chance to be his running mate.  It’s still not clear if he was serious.  Dave declined the offer, at least unofficially, mostly because of Kennedy’s stance on the Israeli state.  So, instead of having a radical libertarian as his running mate, Kennedy chose Nicole Shanahan.

Shanahan questions the official narrative on vaccines like Kennedy.  That is good.  Unfortunately, she is a leftwing attorney who was married to one of the founders of Google.  This doesn’t exactly inspire a libertarian, or even someone just looking for change, to support Kennedy.

He has obviously abandoned going after libertarians and libertarian-leaning conservatives.  Instead, he is going after Democrats and the left wing.  If he had gone after the left wing just by being anti war, that would have been fine.  But it seems he is going after the left with his domestic policies as well now.  It is encouraging in that it probably takes more votes away from Biden.  It is not so encouraging if Kennedy actually becomes president.

The Ugly

Ever since the attacks in Israel, Kennedy has been a huge supporter of funding and supporting the Israeli state.  He justifies the mass bombing of Gaza and the killing of innocent life.  It is a bizarre position to hold given his other views on foreign policy.

He says he has opposed American involvement in every war since World War 2, yet he supports American involvement in Israel.  This becomes an immediate deal breaker for many libertarians.

There are a few people who have insinuated that Kennedy is compromised because of his position here.  Even the name Epstein has been thrown out there a few times, questioning what they have on Kennedy for him to take this hawkish position with Israel.  But then you have to wonder why most politicians in DC feel the need to defend Israel on everything.

The most logical explanation for Kennedy’s position in defending the Israeli state is that he doesn’t want the criticism, and he has been propagandized on the issue like so many others.  He just believes that the Israelis are the good guys and anyone who would try to harm them must be bad.  It may not go any deeper than that.

Still, if Kennedy were just bad on this one thing, maybe some libertarians could overlook it.  If he got us out of every other war, then it would be a net positive.  The problem is that if Kennedy is taking this hawkish and interventionist position with Israel, can we really trust him when it comes to the rest of foreign policy?

When you become president there is massive pressure from the deep state and the military-industrial complex.  If you are not firm in your principles going into it, you have little chance to survive.  You will either get destroyed reputationally, or you will compromise in a major way.

Conclusion

There are a few reasons to get behind Kennedy from a libertarian perspective.  One is that he isn’t Biden.  Another reason is that our country might return to some normalcy.

Still, this second reason is debatable.  Normalcy in this sense means returning to something like 2014.  This was before COVID and just before Trump was entering the scene.  But there were a lot of wars going on in 2014 where America was involved.  There were a lot of domestic problems.  The intelligence agencies were criminal then too.  Some of the corruption and abuse of power just wasn’t as well known, or it wasn’t seen as such.

In many ways, it is impossible to return to 2014 at this point.  We have seen too much.  It’s possible Kennedy might bring some temporary sanity to America, but the problems are still there.

One thing that libertarians should understand is that almost all politicians are a disappointment.  Ron Paul is the exception and not the rule.  Kennedy has already been disappointing and he isn’t even a frontrunner yet.  Imagine how many compromises there will be if he is actually elected.

The dollar price of gold has hit another all-time high, this time surging past $2,300 per ounce.  I wrote an article on December 4, 2023 when it had gone above $2,000 and very briefly touched $2,100.

This means that gold has gone up about 15% over the last 4 months.  This is quite significant, even though stocks seem to do that with ease these days.

Gold is the only major asset that has not taken part in the Everything Bubble.  Stocks, real estate, and Bitcoin have all exploded in price over the last 5 years.  Bonds had done quite well up until a couple of years ago.  Perhaps oil hasn’t exploded in price, but that is a single commodity.  It is an important one, but it isn’t really representative of an asset class.

Here are my thoughts on gold’s current run and what to look for going forward.

Will Gold Join the Bubble?

• Gold is still not in a bubble.  This is what we should have expected it to do given the higher-than-normal price inflation.
• It should not be surprising if gold has a significant pullback from here.  It may or may not be very temporary.  But it has gone up so fast over the last couple of weeks that a pullback should be expected.
• Gold and mining stocks are finally catching up a little with gold.  They have mostly been in a bear market, even not keeping up with the price of gold.  It seems that these stocks have finally broken through.
• If we hit a recession, all bets are off.  Gold will probably pull back, but not nearly as much as stocks.  If and when the Fed quickly reverses course and starts adding to its balance sheet again (instead of trying to slowly drain it), then gold will likely be a good speculative bet at that point.  It is always a good insurance policy.
• It is interesting that there was one day this week where stocks and Bitcoin were both down in big percentage terms while the price of gold went up.  Bitcoin seems to be more correlated to the Nasdaq than gold, which is quite telling.  I believe it’s because Bitcoin and the Nasdaq stocks are quite speculative.  They are part of the casino game.
• Silver has finally gone up in price, but it is still way off the all-time high.  This is actually the place to speculate for investors in precious metals.  Gold is the rock.  It is more stable.  Silver has more potential to go multiples higher.  It also has the most potential to go significantly lower.  Central banks don’t buy silver.  They do buy gold.
• Maybe CNBC will finally start to show the price of gold more instead of constantly showing the price of Bitcoin.  As I’ve said, I don’t really blame CNBC for doing this, as they are just responding to consumer demand.

I have grown even more jaded with politics, if that was even possible.  It’s not that I’m bored with the subject, as I find it interesting.  It’s that I don’t trust anyone in political office or seeking political office to do the right thing.

To be sure, I am not someone who just throws up their hands and proclaims, “They’re all the same.”  They aren’t all the same.  This was shown during COVID.  Every governor was bad to some degree, but some were worse than others.

Still, I have entertained the argument that as long as we live in an unfree society, we should work within the system to the degree possible to make things better, even if it isn’t directly advancing liberty.

For example, let’s take the government schools.  Let’s say there are schools that are teaching kids that you can choose to be whatever gender you want in life and not even your parents can tell you otherwise.  I, personally, think this is quite destructive of society and children’s minds.  It is quite evil in many ways, especially in the harm it can cause children, whether the people teaching it know it or not.

I don’t want to be the libertarian who says, “Well, it’s better to let it happen so that others can see how awful the system is and we can abolish it sooner.”  I understand the argument, but I’m not sure it is correct.  First, we don’t really know that making things worse will lead to a better outcome in the longer run.  It is the same situation with a fiscal collapse.

Second, what about the individual child who has irreversible harm done to them?  This could be psychological harm or actual physical changes that are not reversible.  Am I going to give this person a lecture on the immorality of government schools when they are older?  That won’t do them much good then, even if it does resonate.

On the other hand, I don’t want to be a libertarian who comprises on everything in an attempt to make things just a little bit better in our corrupt system.

There has to be some kind of mix of trying to help the children of right now while simultaneously continuing to call for the abolishing of government schools.  Maybe there is an order of getting the federal government out of the way first and then moving on to the state governments, but even here I’m not so sure.

Government Property

Ron DeSantis has done some good things in Florida.  His opponents of the left like to smear him for banning books.  In most cases, DeSantis didn’t actually ban the books they are proclaiming that he did.  DeSantis did remove some pornographic material from government libraries, which includes government school libraries.  It is rather ridiculous to hear someone who says these things shouldn’t be banned.  It is like hearing a supposed free speech advocate saying that a teacher should be able to curse and say whatever they want in front of the third-grade class.

This wouldn’t be allowed in most private schools, and for good reason.  So, I don’t think it is unreasonable for a libertarian to say that as long as there are government institutions, there should be reasonable rules and etiquette that is standard in society.  I don’t think a homeless drug addict should be able to take up residence in the local library or a school classroom because they are “publicly owned”.

At the same time, libertarians should continue to call for the abolishment of government schools and government libraries.  If we never state our ultimate objective, how can we ever hope to achieve it?  How can we ever get others to think the same thoughts if they don’t ever hear them?

Politicians, One Disappointment After Another

Just about everyone is a disaster in politics these days.  Ron DeSantis just signed legislation in Florida that bans social media for anyone under 14.  It requires parental consent for 14 and 15 year olds.  I’m glad that Ron DeSantis thinks he knows how to parent my children better than I do.

Is DeSantis worried that young minds are getting corrupted by social media?  Trust me, Ron, they are getting far more corrupted in the institutions called government schools that you will never advocate abolishing.  It is the babysitter for America.  It is the biggest welfare program for middle-class America.

DeSantis was already a disaster in his run for president.  His foreign policy was, unsurprisingly, horrific from a libertarian standpoint.  Now he has resurrected his authoritarianism in the state of Florida.  I am happy I lived in Florida through the COVID craziness because he was less bad than most other governors, but he still locked down.

There was one state that didn’t have statewide lockdowns, and that was South Dakota.  It’s hard to say how much of a role Kristi Noem had in this.  But even she has been terrible lately.

She is joining the anti-free speech movement in South Dakota by declaring it illegal to criticize Jews.  Actually, it might be much worse than this, as it could be interpreted as a crime to criticize the state of Israel.  So, the least authoritarian governor when it came to COVID has shown her authoritarianism in other ways.

In the presidential race, it is a total disaster outside of the Libertarian Party.  We already know that Biden is a criminal in almost every way, and virtually everything he does is destructive of society.

There was some hope that Robert Kennedy Jr. would be significantly better.  He is something of an old-school Democrat.  He seemed to be the only possible path to some normalcy in the United States in 2025.  We all know that if Biden or Trump is elected in November, there is going to be chaos no matter what.

RFK Jr. has been really good on Ukraine.  He knows the history well.  He seemed like an actual anti-war candidate.  Then Israel happened.  He has gone all-in on supporting the funding of Israel and the Israeli state’s mass bombing of Gaza.

He previously went on Dave Smith’s show and they argued about it for at least an hour.  RFK then proceeded to offer Dave the VP slot on his ticket.  Since Dave declined, RFK decided to go another route and choose Nicole Shanahan as his running mate.

So, instead of having a principled libertarian as his running mate, RFK decided to pick a leftwing lawyer who was briefly married to one of the founders of Google.  She really sounds like a woman of the people.

Trump is probably the least disappointing at this point.  Maybe it’s because he is always inconsistent in his views and I don’t have high expectations of him anyway.

Still, his inconsistent views are better than the consistent views of the authoritarians.  Trump doesn’t even make sense when talking about Israel, but at least it is something different.  He just says things like, “If I’m president, then things will be great.  We’ll make sure to bring peace.”

He won’t say that he will cut off all funding to Israel or Ukraine.  At the same time, he doesn’t repeat the establishment narratives.  So, there is at least a little hope that Trump will be better on these issues.  Of course, if he is elected and allowed to take office again, the establishment is going to stir up major chaos domestically, perhaps more than we have ever seen.

Conclusion

I will most likely vote for the Libertarian Party candidate in November, unless Trump picks a really good running mate like Tucker Carlson.  I encourage other libertarians to do the same, especially if they live in a solid red or blue state.

Regardless of what you think is the best political strategy (even if that means not participating), I think libertarians need to be reminded to often repeat and explain the libertarian position on any issue.  I write this to remind myself.

If the issue is immigration, education, welfare, war, or any number of issues, there may be some non-libertarian solutions on the table that nonetheless make our society a little better.  It is hard to deal with these problems in a statist world.  Do we support building a wall?  Do we support another state in Gaza to bring temporary peace?  Do we support telling teachers what they can and can’t teach in government schools?  Do we support setting aside money for Social Security even though it is welfare?

It’s one of those things where I can ask 10 different libertarians these questions and get 11 different answers.  There are no easy answers for libertarians within the realm of a statist society.

The important thing is to state your principles.  If you want the government to build a wall, you emphasize the importance of ultimately having property privately owned and having secure property rights.  If you want teachers to stop teaching destructive things to children, you still emphasize that government shouldn’t be in the business of owning and running education systems.

You can always emphasize the libertarian solutions within a libertarian world, even if you support some state measures in between in order to make society a little more civilized in the meantime.

It is unbelievable how we get accustomed to the new normal.  In this case, the amount of government spending compared to a decade ago is staggering.  And it was quite staggering a decade ago just how much the government – particularly the federal government – was spending.

The latest budget proposal from the Biden handlers is for a total of $7.3 trillion.  That is just a ridiculous sum.  As usual, it is filled with corruption, waste, funding things that degrade our society, funding the military-industrial complex, and so much more.  But even if all of that money was being used in an attempt to help the American people, it would still be just an outrageous sum.

There are about 340 million people living in the United States.  If you take every man, woman, and child, that comes to over $21,000 per person.  That doesn’t include state and local government spending.  And a one-year-old baby isn’t going to be paying any taxes.

There are about 130 million American households.  That means that it costs the average household about $56,000 per year to fund the federal government.  Is your household getting $56,000 worth of “services” from the federal government?  The question answers itself.

To be sure, it is appropriate to say that all households ultimately fund the government.  Corporations pay taxes, but ultimately these taxes are paid for by employees, owners, shareholders, and consumers.  These are all individuals.

Imagine

I think back to Harry Browne’s book called The Great Libertarian Offer.  He proposed getting rid of the federal income tax.  He asked what you would do if you had an extra $10,000 per year.  Would you save more for retirement?  Would you take that vacation for your family that you always dreamed of?  Would you give money to your favorite charity and make a difference?

In today’s world, it might just mean paying off some debt.  Maybe it would mean homeschooling your children.  Maybe it would mean getting a new roof for your house.  It could be just taking the edge off of life and being more flexible.  It might mean less stress and anxiety for many people.

Of course, today’s numbers would be far bigger than $10,000.  Let’s say the federal budget were cut in half.  What would your household do with an extra $25,000 per year?  Some of that might come in the form of lower prices, but it would still be real.  It would be resources that the government wasn’t consuming and misallocating.

When Does This Insanity End?

Neither of the major parties is serious about getting any control of the federal budget.  They can’t even come close to a balanced budget, meaning one that doesn’t run a massive deficit.  The debt just keeps piling up.

To reduce the budget, or to just stop increasing it, would be politically impossible in today’s world.  The American people say they want less government and less government spending, but they almost never support the few people who say they want to make deep cuts in the budget.  The easiest place to cut would be in foreign affairs, but the politicians want to keep funding Ukraine and everything else under the sun.  Unfortunately, there just isn’t enough pushback yet from the American people.

I think the insane spending is going to end only when it can’t feasibly go on any longer.  The budget won’t be reduced politically, but it may be reduced because of the laws of economics.  It will come to a point that the debt just can’t go any higher because the government won’t even be able to pay the interest on the debt.  The only way they will be able to is by creating new money, which then will risk massive inflation.

There will be an end to this madness, but it isn’t going to come about in an orderly way.  It is going to be chaotic, and there will be quite a bit of pain associated with it.  But there is a lot of pain now for middle-class America anyway, so it is better that they hit the fiscal wall sooner rather than later.

We need a massive reduction in the size and scope of government, particularly at the federal level.  Only then will Americans see a significant increase in living standards.