The FOMC released its latest statement on monetary policy.  As expected, it raised its target federal funds rate by one-quarter of a percentage point.  The target range is now 0.75% to 1%.  There was one dissenting member who wanted to maintain the existing rate.

This was not a surprise.  The market had already priced in this rate hike.  The Fed is now indicating that two more rate hikes are likely this year.  Stocks, bonds, and gold all soared.

The subject is now coming up about the Fed’s balance sheet of approximately $4.5 trillion.  Yellen is indicating that the federal funds rate is the main tool that is being used and considered at this moment.

The Fed has been rolling over maturing debt.  It has been its policy for a long time now.  The Fed could drain its balance sheet by letting debt mature and not replacing it.  But the Fed has little incentive to do such a thing, even though this has been talked about ever since the dramatic expansion began with QE1 in 2008/ 2009.

The Fed ended QE3 in October 2014.  It has been almost 2 and a half years, and miraculously there has been no recession yet.  The Fed’s easy money from the past has not haunted us directly yet.  The malinvestment in the oil market showed up, but not much else.  It has likely contributed to slow growth and a lack of savings and capital investment.  It has prevented a strong base for actual prosperity.  But we have not seen the major malinvestment exposed yet.

As long as the excess reserves do not pour out of the commercial banks, then I don’t expect price inflation to go considerably higher.  If price inflation does not go considerably higher, then I don’t expect the Fed to drain its balance sheet.  What would be its incentive?

The CPI numbers just came in for February.  The CPI for February showed an increase 0.1% from the previous month.  But the year-over-year is now 2.7%.  The more stable median CPI continues to show a 2.5% increase from 12 months ago.  According to the FOMC and Yellen, inflation expectations are still below their 2% target.

As I have stressed many times in the past, the Fed is not hiking its target rate by selling off assets, as it would have done in prior times.  Instead, it is raising its target rate by paying a higher interest rate to banks for their reserves.  This is free money for the banks.  It is also less money that the Fed will remit back to the Treasury at the end of each year.  If anything, this will just increase the deficit.

Right now, it is a wait-and-see game.  It is a wait-and-see game for the Fed, and it is really a wait-and-see game for us as investors and just as participants in the economy.  We’ll see if these rate hikes contribute at all to a shrinking money supply.  The only way this is possible is if it is enough to encourage banks to lend even less than they already were.

While the Fed’s target rate (overnight borrowing rate for banks) is not completely meaningless, we have to keep our eyes on the big picture.  This includes the Fed’s balance sheet, the excess reserves held by banks, and the price inflation rate.  The demand for money is also important, but that is virtually impossible to measure until after the fact.

We may be in something of a mini-boom right now, at least with some assets.  But middle class America is struggling.  And at this point, I still believe there is more downside for stocks than upside.  Is it worth getting another 10% out of stocks with the risk of them falling 30% or more?  Diversification is important now, and having a decent cash position is a good idea.  If we hit a recession, you can use the cash to purchase assets that have fallen in price.

The Securities and Exchange Commission (SEC) recently denied a request to list an exchange-traded fund (ETF) that would have tracked Bitcoin.

For comparison, this would be similar to an ETF that tracks gold such as GLD.  In the case of an ETF holding bitcoins, there would be no physical inventory to hold since bitcoins are electronic.

I am not as optimistic as some libertarians regarding Bitcoin.  I don’t think it is likely to serve as a common form of money.  Still, I am in favor of competition to the Federal Reserve and its monopoly over the U.S. dollar.  If competition includes cryptocurrencies, then it is all for the better.

The problem is that the government does not want the competition. That is why there are legal tender laws.  The best thing that could happen to our monetary system is for competition to be legalized.  People should be free to use anything they want for money.  Legal tender laws should be abolished, and taxes on gold (among other things) should be abolished.

This latest move by the SEC shows just how rigged the marketplace really is.  This isn’t just a monetary issue, but also an issue of financial regulation in general.  Why do we need an SEC that has to approve a listing on the stock exchange?

This is just another issue that people take for granted.  They don’t consider that we don’t need the government to approve what gets listed for public trading.  They don’t consider whether we need an SEC at all.

After this announcement, the price of bitcoins went down, although has largely recovered since then.  Of course, when we speak of price, it is the number of dollars that bitcoins will redeem.  The fact that we  put everything in terms of dollars should tell us something.  Whether we like it or not, the U.S. dollar – at least to Americans – is the main form of money.

You can’t walk into most stores and pay with Bitcoin.  You can’t even use it that much through online shopping.  There are very few places that accept Bitcoin for payment.

Maybe this Bitcoin ETF will still go through at some point.  If it does, I would consider investing a small amount in it.  Actually, the term investing may not be as accurate as the term speculating.  It really is a crap shoot.

I much prefer gold to Bitcoin.  Gold has a history of thousands of years as compared to less than a decade for Bitcoin.  Still, I like the competition, and I like the attention that it receives.  If it leads to more people educating themselves about certain aspects of the monetary system, then we will be better off for it.

We should get rid of the SEC.  Unfortunately, people think it is there to protect them.  How did that work out for the Bernie Madoff investors?

We should also get rid of the Fed.  But we really just need to legalize competition for money.  That will phase out the Fed over time.  That will accomplish what we need, while also providing some stability to the monetary system.

While I have defended Trump at times from some of his critics, I have never been a fan of Trump’s economics.  He gets a few things right (such as reducing government regulations), but he is mostly bad when it comes to issues of free trade and government spending.  Trump falsely believes that government spending can help the economy.

One thing about Trump is that, perhaps naively, I see a hint of integrity in him.  Unlike most other politicians, I have this little bit of optimism that he might actually do the right thing if he has the right information and has processed it correctly.

And that leads me to my latest project and how it will help debunk Trump’s economics.  There are two different lessons here.

I recently finished writing a book on free market economics.  Actually, I finished most of the writing a couple of months ago, but it takes a little time to do the final editing and prepare it for publishing.

When I started the book, Trump was not even a declared candidate for president.  I was working on the book a lot during his campaign, but I wasn’t writing it at all with Trump in mind.  Still, when I look at the book now, somebody like Trump (or a major Trump supporter) could really learn a lot from what I wrote.  I could say the same thing about Hillary Clinton, but I don’t think she is honest.  Even if she read and understood the content, she would be thinking of ways to use the information for her own power.

My book is non-partisan in the sense that I don’t talk about political parties.  It is strictly dealing with economics and how the government reduces our living standards.  I wrote it so that it would be just as applicable 20 years from now as it is today.  Still, I think the book does a good job of debunking many of the economic fallacies that Trump believes, even though I had no intention of doing that.

There is a second lesson here also that I would like to share.  As I finished preparing my book, I used Fiverr.com for the first time (where most things are actually more than five dollars).

For the cover design, I outsourced it to someone in the United States (California, I think).  It cost me $40 plus a $2 processing fee, and I was able to pick a picture, get a cover design, and get the designs for both Kindle (digital) and CreateSpace (hard copy).  She did exactly as I requested and gave me a cover design that I liked.

One thing I didn’t realize is that I had to give her an exact page count for the CreateSpace cover.  I think it is because it determines the width of the spine of the book.  I had to rush to get a good page count, even though I already had the electronic version complete.

I started researching and watching YouTube videos on how to format for CreateSpace in Microsoft Word.  I was struggling with the margins and footers and everything else.

So I went back to Fiverr.  I found a guy in Ukraine who would do it for ten bucks.  I figured I didn’t have much to lose.  I described how I wanted it formatted, and he returned it to me within 24 hours.  I requested one minor revision and got it back quickly again.  It was just how I wanted it.  I tipped him an extra five bucks for the effort.

So here is the lesson for Trump.  I outsourced my work to this guy in Ukraine (a country that has been put into further chaos by the U.S. government’s help to overthrow the government there).  For a small amount of money (to me), I was able to save probably many hours of headaches.  This was a voluntary agreement enabled by Fiverr.  We both benefitted from the arrangement (as did Fiverr).

If it had cost $50 for someone in the United States to format my document, maybe I just would have spent the extra hours and struggled through it myself.  But for such a cheap price, it was easily worth it for me to outsource the job.  Meanwhile, this guy in Ukraine is obviously happy to work for this amount.  This is a very poor country, and 10 dollars probably goes a long way there.  Plus, when you have little to begin with, any little bit helps.

I have no idea how long it took him to do this.  Maybe it took him an hour because he has become really good at what he does.  My guess is that it probably took him a couple of hours.  But for him, making 10 dollars for a couple of hours of work is worth it.

According to Trump economics, I shouldn’t be outsourcing my work. I should be hiring an American to do the job.  But I wouldn’t have hired an American unless the person was willing to work cheaply.  And most Americans wouldn’t spend a couple of hours to format a document for 10 dollars.  Of course, most Americans wouldn’t know how to do that either.

Free and open trade is beneficial for everyone.  It is one of the themes of my new book.  It was demonstrated effectively with my use of Fiverr.

As a side note, Fiverr can be used for many tasks.  My recommendation is to be precise in your search and to check the reviews carefully.

As for my new book, it will be released shortly.  I will run a promotional at some point where you can download it for free through Kindle.  I will post something on here when it becomes available and I run the promotional.

Wikileaks has released documents exposing the extent of the CIA’s spying and its criminality.  For any libertarian, this should come as no surprise.  But perhaps it will be a turning point for more Americans to examine this horrible government agency.

First, here is what I am not saying.  I am not saying that every person who works for the organization is a criminal.  I am also not saying that the agency has never done anything good.

What I am saying is that, on net, the agency is bad.  It should be abolished immediately.  And we don’t even know a small percentage of the horrible things that it plots and does.  We don’t know how many government overthrows and assassinations are attempted by the CIA.

Thanks to these latest documents and at least one brave whistleblower, we can now provide stronger evidence of the CIA’s criminality.  I don’t use that word lightly either.

There are two things in particular that stuck out to me right away.  As more people comb through all of the documents, we can be sure that much more will come to light.

The first interesting thing is that the CIA had plans to hack automobiles in order to assassinate people without being detected.

If you are familiar with the story of Michael Hastings, this is particularly interesting.  Hastings was a journalist who died in a car accident in 2013, except we aren’t sure about the word “accident”.

Hastings was doing some investigative journalism (reportedly about the CIA itself) and feared that his life was in danger.  After his death, there were speculations that his car was hacked and made to speed up and crash.  Now with the latest Wikileaks cables, the conspiracy theorists don’t seem so crazy anymore.

The second major thing that caught my attention was that the CIA stole Russian malware in order to blame the Russians for cyber attacks.  Of course, this could not have come at a more perfect time.

If these Wikileaks documents had been released in October 2016, we never would have heard any allegations of the Russians hacking the U.S. elections.  Instead, they would have found something else or someone else to blame for Trump’s victory.

This whole thing about the Russians hacking the election is a lie.  It is a CIA lie.  And now we have these documents to show that the CIA specifically planned to blame Russia for cyber attacks.  When this was planned, they didn’t know that Donald Trump would win the election, but it sure came in handy for them when he did.  Now it has all back-fired on the CIA.

These are just two of the big things.  There are many others.  These documents show the CIA’s ability to control people’s electronic devices to spy on them.  They can watch you through your television if it has a camera.  They can listen to you through your cell phone.  Again, this is nothing new to me, but at least there is some evidence now.  And again, the conspiracy theorists don’t seem so crazy any longer.

I have warned previously about the major danger of the NSA and the spy state.  I have warned about the dangers of the CIA.  This is all part of what is now termed the deep state.  As Donald Trump is finding out, it is very hard to fight the deep state.  Kennedy tried to fight the CIA, and look where he ended up.

So what is the solution to this?  The solution is for Americans to care.    When Edward Snowden did America a favor by exposing the spying of the NSA, most people shrugged their shoulders.  There were a few that cared.

If Americans tolerate this from their government, then it will continue.  And the answer isn’t to reform any agencies or get the right people in office.  The answer is to eliminate these agencies.  At the very least, we need massive budget cuts.

I believe that only the American people can force this to happen.  They have to demand that their so-called representatives in Congress defund these corrupt agencies.  Until there are major budget cuts, unfortunately, not a lot is going to change.

In Trump’s recent speech before Congress, he stated the following:

“My administration wants to work with members in both parties to make childcare accessible and affordable, to help ensure new parents have paid family leave, to invest in women’s health, and to promote clean air and clear water, and to rebuild our military and our infrastructure.”

This one sentence spoken by Trump is filled with so much Keynesianism and economic fallacies that it should make any libertarian cringe.  It should make anyone hold onto their wallet.

For this particular post, I want to focus on his proposal to have paid family leave.  Of course, any company that wants to offer paid family leave as an employee benefit is free to do so.  Therefore, by Trump bringing this up, he is implying that the federal government would force companies to offer some kind of paid family leave.

According to the TurboTax website, Paid Family Leave (PFL) is defined as follows, at least for tax purposes:

“Paid Family Leave (PFL) income is money you receive from your employer, an insurer, or the government while you are away from work for an extended period of time so you can recover from a serious health issue, take care of a seriously ill family member, or bond with your newborn or newly adopted child.”

As with almost all government programs, there are unintended consequences.  In fact, many government programs end up doing the exact opposite of their stated intention.  For paid family leave, it could end up hurting the people that it is supposed to help.

Whether it is economic ignorance or evil intentions that drive politicians to support these laws, it does nothing to negate the fact that they are harmful to a free society.

For a libertarian, the first problem with any kind of paid family leave as required by the government is that it is immoral.  It is using the threat of force to compel employers to do something.  If an employer and an employee want to trade (an employer gives up money, while an employee gives up his time and labor), then they should be free to do so without having any requirement of the employer paying family leave.

The second major problem is that this is a cost to employers, and it ultimately makes up poorer.  It hurts employers, employees, investors, and consumers.

Let’s say that an employer has to pay an employee for 8 weeks if that employee has a newborn child.  This could be for either a mother or a father.  If someone takes off for 8 weeks and gets paid, then the employer is paying that employee to do nothing for 8 weeks.  And, of course, the law prohibits the employer from firing the employee during this time.

There are any number of consequences from this.  In many cases, it is probably a combination of consequences that impact different groups of people.

It may hurt the people who never use paid family leave because they have to keep working while others are taking time off and getting paid.  It could hurt investors who find that their companies are less profitable because of the added expense.  It could ultimately hurt consumers if companies are able to pass down some of the added expenses in the form of higher prices, especially if competitors are forced to incur the same added expenses.

What many don’t think about is the cost it could actually have on those who would be most likely to use the paid family leave.  If an employer is going to hire someone who is about to have a baby, or even is at an age where they are more likely to have a baby, then the employer may factor in the added expense of paid family leave.  The employer might offer a lower salary than it otherwise would have.

Even worse for the potential employee, an employer might be more willing to hire someone who is less likely to have babies.  Maybe the employer will hire a 40-year old who already has some older kids over a 30-year old who is recently married.  Or maybe the employer will prefer a 20-year old who is not married.

The problem here, aside from the immorality of using force, is that such a law distorts the marketplace.  It puts employers on the back burner, which eventually just hurts the employees and the consumers.

In a free society, people (which includes companies) should be free to engage in voluntary associations as they wish.  Many companies will offer specific employee benefits, but they weigh these costs when they offer them.  Employers compete against each other to obtain good employees.  Employees compete against each other for jobs and the salaries and benefits that they offer.  A free market system offers some harmony in this process.

When the government distorts this process, such as requiring paid family leave, it makes the whole process less efficient.  It misallocates resources, and it ultimately hurts production.  It ultimately makes our living standards lower than they otherwise would have been.

Donald Trump gave his first major speech since his inauguration in an address to Congress, which was really an address to the American people.

I tuned in late.  I turned it on just before 10:00 EST.  It showed a woman in tears listening to thunderous applause.  My wife immediately said that she must be a widow of a fallen soldier.  My response: I only know of one fallen soldier in combat since Trump became president.  Sure enough, it was the widow of this U.S. soldier.

Trump stated, quoting General Mattis, that “Ryan was a part of a highly successful raid that generated large amounts of vital intelligence that will lead to many more victories in the future against our enemies.”

Ryan Owens was a Navy seal who died on January 29, 2017, just nine days after Trump took office.  He died in a raid in Yemen.

When I heard about his death, my first thought was: “I didn’t know there were U.S. boots on the ground in Yemen.”  I knew the U.S. helped Saudi Arabia in starving and drone bombing the people of Yemen, but I didn’t know there were troops on the ground.  It doesn’t surprise me though.

Of the seven countries that Trump tried to put a temporary immigration ban on, the U.S. is bombing and killing civilians in 6 of them.  The seventh is Iran, which the U.S. has imposed sanctions and threatened war repeatedly.

This widow was put out there by Trump as a political pawn.  She was being used for political purposes.  Trump followed in the footsteps of many presidents before him.  I had slight hope that maybe he was better than that, but apparently not.

This woman’s husband did not die in a highly successful raid.  If it was successful at all, it was only for the military-industrial complex and the establishment that is so thrilled with war and empire.  Are we supposed to believe he was there doing something important other than helping to starve and murder innocent people in Yemen?

This is the militarism that is so rampant in the United States.  Can people wake up and wonder why this guy was in Yemen in the first place?  Does anyone honestly believe he was defending our freedom by being in Yemen?

Trump’s overall speech (which I read the text of) was horrible from a libertarian viewpoint.  The only good thing about it is that he didn’t threaten war with Russia or Iran, although he did mention imposing new sanctions on Iran, which could be seen as an act of war.

Trump was more politically correct than normal, and he did not put any emphasis on the things that libertarians would normally cheer.

On economics, he continues to be terrible.  He used the tyrant Lincoln in order to defend his proposed tariffs.  He keeps saying we need to hire American and buy American.  Trump is either playing on the economic ignorance of the populace, or he is economically ignorant himself.  I think it is both.  We should not be trying to save jobs in the United States.

While Trump says he is going to cut income taxes and corporate taxes, we can’t really be sure to what extent and if there will be tax hikes in tandem.  Still, it doesn’t matter much because he doesn’t want to cut government spending, which is the biggest economic problem there is.  Instead, he proposes one trillion dollars in new infrastructure spending.  He also says he wants one of the largest increases in national defense spending in American history.

Tax cuts won’t mean much if government spending continues to balloon.  It is still capital that is being sucked out of the private sector and being misallocated.  It is money being spent according to politicians and bureaucrats, and not being spent or saved by the individuals who actually earned it.

Trump also said he wants to “make childcare accessible and affordable” and “to help ensure new parents have paid family leave”.  I guess he was channeling Bernie Sanders on this.

Actually, the whole speech could have been taken out of the Bill Clinton playbook.  It was actually classic Clinton.  He had the welfare programs.  He had the widows and the tears.  He had all of the new government spending, while still pretending to be a defender of freedom.

This speech might have somewhat pleased the establishment.  It might have pleased some of those who live in a state of economic ignorance, although I’m sure many in that same group were opposed to his speech simply because the words were being spoken by Trump.

From a libertarian perspective, this speech was mostly a disaster.  He was bad on almost everything.  If this is any indication of how the next four years will be, then I am not going to feel sorry for Trump.

Stocks continue to hit all-time highs.  The Dow went above 21,000 after his speech.  The economy may be in a mini-boom cycle right now, at least in terms of stocks, but it isn’t going to last.  The longer it lasts, the more painful it will be.  Trump is most likely going to have to deal with this.  Maybe he can find someone who understands some basic economics that he will listen to.  One can always dream.

Alan Greenspan is one of those people whom I find very intelligent, yet I have a lot of contempt for him.  He could have done so much for the cause of liberty, but instead he chose to sell out.

For some reason, I find parallels with Colin Powell.  This is a man who is supposedly very intelligent and honorable.  To me, Powell is the opposite of honorable.  He is a disgrace.  He sat in front of the United Nations and lied about weapons of mass destruction in Iraq.  He knowingly lied.  Whether or not he was pressured to lie or was just part of the evil people plotting war, I don’t know.  But he knew the information he was presenting was false.  He could have resigned his position in protest, and he wouldn’t have starved from being unemployed.

Greenspan was part of Ayn Rand’s circle in the 1960s.  He wrote one of the best essays ever on gold and its check against the state.

But Ayn Rand suspected that Greenspan was a social climber.  She did not live long enough to see this come to full fruition.

I know some libertarians, when asked what they would do if nominated to the Federal Reserve, say they would instantly resign.  But I don’t necessarily fault Greenspan for becoming Fed chair in and of itself.

The problem is that Greenspan used his long tenure as Fed chair to defend the establishment and continue the process of monetary inflation, bailouts, and loan guarantees.

Greenspan, even if he had sort of gone along with the system, still could have used his position for educational means.  At least Ronald Reagan was somewhat educational in defending liberty in his speeches, even if his policies did not always reflect that.

Greenspan’s policies were a disaster, and his rhetoric was a disaster.  Most people didn’t understand what he was saying half the time anyway.  If he had used his position as a platform to advocate a return to a gold standard, perhaps we could go a little easier on him.

Instead, when he was in office, he actually told Ron Paul that the Fed could essentially mimic what a gold standard would do.

In a recent interview, Greenspan referred to this moment, stating: “When I was Chair of the Federal Reserve I used to testify before US Congressman Ron Paul, who was a very strong advocate of gold. We had some interesting discussions. I told him that US monetary policy tried to follow signals that a gold standard would have created. That is sound monetary policy even with a fiat currency. In that regard, I told him that even if we had gone back to the gold standard, policy would not have changed all that much.”

Yet, in that same interview, Greenspan said: “But if the gold standard were in place today we would not have reached the situation in which we now find ourselves.”

This is a typical politician.  It is like Vicente Fox all of a sudden showing some opposition to the war on drugs after his time in office as president of Mexico.  Now it doesn’t matter much.

When politicians do things such as advocate higher minimum wages or advocate more spending to stimulate the economy, we can’t always be sure if they are just economically ignorant or if they are knowingly promoting bad policies just to advance their own power.

In the case of Greenspan, I think it is clear.  Greenspan is not economically ignorant.  The policies he promoted as Fed chair were evil.  He was knowingly promoting policies that were harmful to the U.S. economy and the average guy on the street.  He was knowingly helping the bankers and the politicians to spend more.

This is why principles and ethics are so important.  I would rather elect a politician who is honest while economically ignorant, than someone who understands economics but is unethical.  Of course, the right combination is to have someone who is ethical and principled, and who understands economics.  But Ron Paul only comes around once in a generation, at most.

There is always talk about a new gold standard coming within small circles.  But with the election of Trump and more focus on auditing the Federal Reserve, there is more talk than normal about the possible coming of a new gold standard.

The U.S. dollar has been the world’s reserve currency since at least the end of World War 2.  The dollar is a global currency.  It is used frequently in international trade.  Most importantly, it is used for trade in the oil market.  The Saudi’s use of the dollar is probably one of the main reasons that the U.S. government favors the House of Saud so heavily, despite its ties to terrorism.

As time goes on, the U.S. dollar will lose its status as the world’s reserve currency.  It is not because the yuan (China) or any other currency is going to replace it.  With globalism and today’s technology, there is just less of a need for a reserve currency.  The currency markets are digital and very liquid.  If some country wants to sell oil to Japan, they don’t need to get dollars.  They can easily accept yen and quickly convert them into their own currency, or whatever currency they want.

With massive worldwide debt (run up by national governments), and with major economic uncertainty, it is not out of the realm of possibility that gold will become something of a world currency again.  Of course, gold is already a reserve asset, as most major central banks hold a significant amount of gold.

While I don’t think the return of a gold standard (internationally, or by a national government) is imminent, I do think it is a possibility in the future.  There is already a wave of skepticism against central banks.  If there is a worldwide economic downturn and financial crisis that rivals 2008 (or worse), then public opinion can move quickly.

What would happen if the U.S. or some other major country were to adopt a gold standard?  What would happen if gold were used once again in international trade, basically taking the place of the U.S. dollar?

In the case of a national government adopting the gold standard, this would mean that a government-issued currency would be redeemable in gold.  It would mean that the government would have to store gold representing the currency in circulation.  This would severely limit its ability to issue new debt and engage in massive monetary inflation.

As a side note, in a true free market, the issue of money would be left for the market to decide.  People could use gold, silver, a basket of commodities, cryptocurrencies or any number of things.  History has shown that gold is the most favored commodity for use as a medium of exchange, closely followed by silver.  But in today’s world, it is doubtful that we would go straight to this step.  It would be more likely that we would have some kind of government-controlled gold standard.

If the U.S. adopted a gold standard, or if gold were widely used in international trade, it would drastically increase the demand for gold.  And as we know, there just isn’t that much of the yellow metal to go around in this world.

If every individual on this planet owned the same amount of the entire supply of gold that has ever been mined from the ground, then each person would get less than one ounce each.  In other words, if you own just one ounce of gold, then you own more than your share already if it were divided up equally on the planet.  This includes all of the gold held by central banks.

I believe that just the announcement of some kind of gold standard, whether by the U.S., China, or some other major country, would instantly send gold prices soaring.  Again, I don’t think this is likely in the near future, but I don’t discount something in the longer run.

If the U.S. were to back every dollar by the gold that is reportedly currently held by the central bank, then the price of gold would be multiples higher than it is currently.  Depending on the money supply used, estimates vary from $10,000 to $40,000 or more per ounce.

It is also possible that the U.S. or any other government could provide a partial backing of gold to its currency.  This would not be the first time.  Even a backing of less than 100% would still likely result in a big spike in the gold price.

The bottom line is that any serious announcement or consideration of a new gold standard, or the widespread use of gold in international trade, would lead to an increased value for gold.  You would want to own gold before any such announcement or event takes place.

I recently listened to a podcast episode of Radical Personal Finance.  In this episode, there were two guests talking about financial independence (FI).  The two guests have their own podcast called Choose FI.

One of the guests was talking about how he paid down a big student debt (in the six figures) and casually acknowledged that his higher-than-average income helped.  Luckily, the host of the show – Joshua – stopped him and basically said that having a higher income is a big piece of the puzzle in paying down debt and/ or achieving financial independence.  It is something that some may take for granted.

This interview took place at Camp Money Mustache.  For those who don’t know, Mr. Money Mustache is a famous blogger within the FI movement (if that is what it can be called) who advocates frugal living.

I am not a Mustachian.  I think being frugal is positive up to a point.  Even though I don’t watch a lot of television by American standards, I still like to watch cable television.  I also like having a smartphone for accessing the Internet practically anywhere.  My guess is that most self-identified Mustachians do not have cable, and a higher-than-average percentage probably don’t have smartphones.

In terms of becoming financially independent, I think it is important to figure out what you want.  Achieving financial independence is great in terms of reduced stress.  You generally don’t worry about unexpected bills because you know you have more than enough to cover them.

I find that many people who achieve FI status at a relatively young age continue to work and make money.  In this sense, I don’t think they really could retire for the rest of their lives with a decent lifestyle.  There are a few, but I don’t think there are many 40-year olds who really could afford to never work for money another day in their life.

The key here is that they have flexibility.  Some call it “F-You money”.  A more polite way to say it is that it is freedom money.  If you have very significant savings, it makes it easier to quit a job you don’t like.  Maybe you still have to get another job or source of income, but you could go for a couple of years or more without much worry.

One thing that Joshua (the host of Radical Personal Finance) has spoken about is living the life you want to live now.  This doesn’t mean not working.  It means finding work that is fulfilling.  It means doing things in life without necessarily having a huge retirement fund built up.

There are many people, particularly Americans, who have the mindset that you work for 40 years and then you retire and enjoy life.  They think you have to wait until retirement to travel and enjoy life.

Ask yourself what you would do if you were financially independent. In many cases, you could do those things now while still working.

I don’t advocate seeking a job that you always love, because most people do not like some aspect of their job.  Even a professional golfer may get tired of going to the practice range.  The key here is to find something that you are content with, but with the realization that most jobs are going to have certain aspects that may not thrill you.

If you already have your dream job, I think it gives you more flexibility just to enjoy life, both inside and outside of work.  Still, even for the rare person in this situation, it is still a good idea to save some money and look towards financial independence, even if you do it at a slower pace.  You should have emergency money.  Plus, you never know if your dream job will one day go away.

In order to save money to achieve financial independence, there are really only two variables: how much you make and how much you spend.  The difference (accounting for taxes) makes up your savings. If you want to become financial independent, you need to spend less than you save.  This means that to increase your savings, you need to spend less, earn more, or some combination of the two.

To break down the income side into more detail, you can also earn investment income.  This could come from financial investments, real estate, a business, or something else.  In order to get to this point of having significant investment income, you first have to start a business or save money to invest.

The spending side of the equation and the earning side of the equation are both important for financial independence.  There are people who earn well into six figures who save almost nothing.  This is more of a spending problem than an earning problem.

Still, I think the answer for most people is to earn more.  I know it is easier said than done, but you are limited in how much you can cut your spending.  You still need a place to live and food to eat and clothes to wear.

You are not limited on the upside of earning money.  You could double your income, or you could increase it by 2,000% if you are creative enough.

If you are earning $55,000 per year (close to the median family income) and you are managing to save $2,000 per year out of that, then it will probably be hard to cut spending more.  And when you do, it isn’t going to add up to much.  If you are only saving $2,000 per year, you are going to take a long time to save up for a decent retirement.  It is better than saving nothing, but it still isn’t that much in today’s world.

The one good thing about someone in this scenario is that he is accustomed to living a simple lifestyle.  If someone else is earning $150,000 per year and saving $2,000 per year, then he is farther behind in a sense.  He has more luxuries in his life than the other guy, but he is going to need to save a lot more money in order to fund his current lifestyle.  The one good thing about this person is that he could possibly have a revelation at some point and start to save some of his high income.

The person making $55,000 has an upside though.  Perhaps he has a better chance of earning a higher income than the guy already earning $150,000 per year.  If he is able to get a higher income, he can more easily maintain his current living standard and save a lot of money.

We know the reality is that most people who earn more money are quick to move into a higher lifestyle.  If you always do this, then you will never save any significant money.

In the podcast episode I reference above, there was another throwaway line by the guest.  He said there are better ways to earn a six-figure income without going into debt.  I wish the host had asked him his thoughts on this.  It is interesting to get someone’s take on how to earn a six-figure income (without college) considering that the large majority of people are not earning this much.

It is important to not box yourself in.  If you are earning, let’s say, $50,000 per year, don’t assume that increased savings means having to lead a ridiculously frugal lifestyle.  Consider if there is a better job out there for you.  Consider if you can start a small side business or do some kind of freelance work on the side.  Consider other avenues in making money.

Nobody can tell you how exactly you should make more money.  But assuming you don’t already have a really high income, this is something that you should consider.  The way to achieve financial independence is by earning a high income (business or salary) and to live a middle-class lifestyle.  Then you can still enjoy life while you work, while also making progress towards your ultimate goal of being able to claim financial independence.

There is no secret formula other than making more than you spend.  For most people, it is actually easier to make more money than to spend less.

On January 8, 2016, Barack Obama vetoed a bill called “Restoring Americans’ Healthcare Freedom Reconciliation Act of 2015”.  This legislation, if passed, would have repealed the Affordable Care Act (a.k.a. Obamacare).

The Republicans in Congress attempted many times to repeal Obamacare.  It was about a year before Obama left the presidency that a bill appeared on his desk that he vetoed.

There is no question that the Democrats in Congress, along with Obama, are responsible for having passed the disastrous bill that essentially requires the purchase of health insurance.  But both major parties are responsible for the overall calamity in medical care and health insurance in the country.

And while the Republicans have put on a unified front against Obamacare, it seems that things might have changed a bit.  Now that Donald Trump occupies the White House and the Republicans maintain a majority in the House and Senate, many congressional Republicans are all of a sudden becoming more timid about a full repeal of Obamacare.

From a libertarian standpoint, I think Trump’s fighting against the spy agencies and the lying establishment media are important.  Trying to stay out of war with Russia is extremely important.  Still, on the domestic front, there is probably nothing more symbolically important than repealing Obamacare.  Of course, it is important in substance too.  But if you offered me a $1 trillion cut in federal spending or a repeal in Obamacare, I would take the cut in federal spending.

The thing with Obamacare is that it is a campaign promise by Trump and the Republicans.  While Trump is doing battle with many in the GOP establishment, the repeal of Obamacare was supposed to be one unifying front against the Democrats.  If the Republicans fail to repeal this, they are going to come out looking really bad, as they should.

While I think Trump should continue to stand up to the liars who are trying to take him down (including many in the Republican camp), he needs to stop being distracted by the smaller things.  He is expending too much effort and political capital on immigration bans and keeping jobs in the United States.  The issue of keeping jobs in the U.S. is just bad economics.  And even if it were a legitimate battle, there isn’t much Trump can do about it anyway that wouldn’t devastate the economy in other ways.

Trump needs to start focusing on repealing Obamacare.  It is a campaign promise.  If he pushes it, and the Republicans in Congress fail to reproduce what they did a year ago, then they are going to look really bad.  Trump won’t look as bad as long as he is convincing that he wants repeal.

We have heard the phrase “repeal and replace” for many years now, but we never hear specifically on what replace means.  If there is a replace part, it should be to free up the market.  If it is only a partial repeal of Obamacare, or tinkering around the edges, then I don’t think the citizenry will be fooled by this.  They are going to expect a full repeal, or something very close to it.

If there is ultimately no repeal, I think the Republicans will lose their majority in Congress in two years.  It’s not that most Republicans will vote for a Democrat.  It’s just that some Republicans will decide to stay home on the day of the election.

I have my doubts about whether we will see a full repeal.  It is quite telling that it has even taken this long, even though we aren’t even a month into Trump’s presidency.  Still, there is no reason that the Republicans in Congress and Trump couldn’t have had something ready to go in January.

This is a real issue that impacts middle class America.  It is also a symbolic issue about the principles and honesty of Republican politicians in Congress.  It will be a good test.  So far, it isn’t looking good for them.