The latest CPI numbers came out for January, up 0.6% from the previous month.  The year-over-year CPI is now showing 2.5%.

The more stable median CPI is, well, stable.  It did show a 0.3% rise from the previous month, but the year-over-year still stands at 2.5%.

According to this Bloomberg article, food prices only rose 0.1%.  In a true free market, many consumer prices would actually be going down.

It is hard to know if food prices are actually nearly flat.  There are hedonic adjustments that make it hard to judge.  Of course, there is no true way to measure consumer prices, since products are constantly changing and tastes are constantly changing.

Still, this little creep up in price inflation could be significant from the standpoint of the Fed.  Perhaps it makes it more likely that we will see a hike in its target rate in March.

I am actually optimistic that consumer prices may be picking up, but not for the same reasons as many others.  We are probably in some sort of mini-boom period right now, with stock markets hitting all-time nominal highs.

Higher prices could help gold prices, but that is not the main reason I am a little happy to see consumer prices picking up.  The main reason is that I want the damage to stop.

If we were in a boom period because of actual prosperity due to savings and capital investment, then that would be great.  But the problem is that much of the mini-boom we are in is because of previous Fed monetary inflation.  It is not all built on real wealth.

The boom needs to come to end in order to stop doing damage.  The artificial boom phase is actually a misallocation of resources taking place.  If the Fed is facing higher price inflation, it is less likely to prop up the artificial boom in the future.

The Fed has had something of a free lunch.  Sure, there is much more criticism now than in decades past, but the Fed is not exactly on the hot seat right now as long as the economy continues to hum along, even if slowly for the middle class.

The Fed was able to expand its monetary base by almost five times from 2008 to 2014, yet there was little consumer price inflation to show for it.  The Fed got away with this.  The problem is that it did major damage by allowing massive deficit spending and by misallocating resources.

If this insanity is going to end – meaning the Fed won’t come up with a new QE program every time there is a bump in the economy – it is going to be from higher price inflation.  The Fed will be forced to protect the dollar instead of reigniting another monetary boom.

Of course, this could all be out the window quickly if another market crash happens.  If we hit a deep recession, price inflation could fall back down quickly.

There is also a possibility of a weak economy with rising consumer prices as something similar to what was seen in the 1970s.  The late 1970s and early 1980s was the last time that the Fed allowed a good cleansing of the malinvestment in the system.  The Fed allowed interest rates to rise and did not engage in monetary inflation during this period.  We got a couple of recessions, and we also got a new base for some actual real prosperity.

We’ll continue to keep an eye on the consumer price inflation numbers, only to give us a hint of what the Fed is more likely to do in the future.  Right now, I think we should expect the Fed to keeps its monetary policy relatively tight, and we should not be surprised by another hike in its target rate coming out of the March meeting.

We’ve all heard the expression: “Money doesn’t buy you happiness.”  There are different variations such as, “Money can’t buy you happiness.”  There are a lot of obvious statements we can make about life.  There is nothing profound about this.

Money doesn’t buy you happiness if you aren’t a happy person.  It also can’t automatically buy you health, although it can help at times.

One key point is that little or no money can buy you misery.  I know there are stories of poverty-stricken people who live a simple life in a third-world country who are seemingly happy.  But some of these people may just have a good attitude given their situation in life.  It doesn’t mean they wouldn’t like a big meal, a soft bed, and a nice air conditioner.

We do get accustomed to the lifestyle we live.  It doesn’t mean we will find happiness by downgrading our lifestyle, but we should occasionally pause and give thanks to what we have.  This goes back to the joke of a guy in an airplane who is complaining that his Internet is running slowly on his laptop computer as he flies thousands of feet above the ground.

I have found that many on the political left, who do not necessarily view capitalism kindly, are quick to spend their money.  They don’t know how to handle it.  There are certainly many exceptions, and there are certainly many people who say they favor free markets who are more than willing to spend money and go into debt.

There is this crazy narrative that there are these rich greedy people who just want to roll around in money and spend frivolously.  Of course, there are such people.  But I find that the biggest spenders are the rich celebrities who seem to feel guilt over having money.  While they are quick to say that money doesn’t buy happiness, they are also quick to spend a lot.  It is as if they will be seen as greedy if they hold onto their money.

While Americans certainly like their consumer goods in the form of gadgets and luxury items, we shouldn’t underestimate the number of people who want to accumulate wealth just to buy some freedom.

If you ask most people what they would do if they won $5 million, I don’t think the majority of people would start listing the stuff they would buy.  I think the majority of people would say they would quit their job first.

This isn’t an issue of wanting more stuff.  They want freedom.  They want to buy time, whether it is in the form of leisure time, or in the form of time to do more fulfilling work.  They probably want to spend more time with friends and family.  Also, it shouldn’t be neglected that many people suffer from stress and anxiety over money, which is quickly alleviated with a significant amount of money.

Buying more stuff will not make you happy.  Maybe getting your kitchen remodeled will make you marginally more happy, but it is nothing compared to alleviating stress and having more freedom with your time.

It really is amazing how much stuff Americans accumulate.  There are many people who use storage units for the long term, and not just something temporary when moving.  The storage business is a big industry in America.

When I was younger, I thought it was better to buy something than to take a vacation because once the vacation was over, it was over.  If you bought something, you still had it after a week.  I have changed my view of this completely has I’ve gotten older.  If you are going to spend money, I think it is often better to buy experiences (and memories) rather than accumulating more stuff, unless it is stuff that you will use on an almost daily basis.

Stuff that you don’t use on a regular basis tends to accumulate.  It clutters your house, and it clutters your life.  If you are going to accumulate anything, it is better to accumulate digits in a bank account.

You can roll around in your money if you want to, but it is only because it is a feeling of joy that you get from being free.  If you want to quit your job, then you can do so.

For me, wealth is not defined by having a big mansion and a nice car to drive.  Maybe these things are nice, but not if you are working all of the time in a job that you don’t really like.  Having wealth means having the ability to make greater choices, including the choice of having more leisure time, or time to spend on your calling.

Money won’t buy you happiness if you are always trying to accumulate more stuff.  Money can help you be happier if it represents more freedom to you.

The Russian people have been through some trying times over the last few years.  While it is nothing compared to the days under the Soviet Union, there has still been much economic and political turmoil.

If we are to believe the polling data, Russian President Vladimir Putin is very popular amongst the Russian population.

I don’t think Putin is a saint, but he is also not the evil madman that the establishment media in the U.S. make him out to be.  He is a nationalist who, in many ways, is like Donald Trump.  I’m sure he believes in a “Russia first” policy.

It is understandable that Putin and the Russian people do not want NATO on their doorstep (which is contrary to what was originally agreed to).  The U.S. government has been destabilizing the Middle East and causing mass chaos.  The Russian people don’t really want that chaos spreading to their borders.

Putin did not really invade Crimea as many people (including some libertarians) will state.  This is a stretch of language.  It was the U.S. government that orchestrated an overthrow of the elected government in Ukraine, which destabilized the region.  The people of Crimea, who are Russian for the most part, voted overwhelmingly to join Russia.  They essentially seceded from the disaster of the Ukraine.  Who could blame them?  Also, consider that the Russian economy is far stronger than that of Ukraine.  The people of Ukraine live in mostly deep poverty.

When the U.S. (under Obama) placed sanctions on Russia, the ruble (the Russian currency) fell dramatically.  Fortunately for them, the Russian central bank allowed interest rates to rise in order to stop the bleeding.

While the ruble is still down considerably since its high back in 2008, and since dropping from the imposed sanctions in 2014, it has held up reasonably well against the U.S. dollar over the last couple of years.

There are a few significant things to note that have happened since the sanctions were first instituted in 2014.  First, the Russian central bank has been continually adding to its gold reserves.  Since January 2014, gold reserves have increased a total of about 50%.

The other interesting thing to note is that the Russian central bank has decreased its holdings of U.S. government debt.  Its holdings of U.S. Treasury securities at the beginning of 2014 was $138.6 billion.  At the end of November 2016, its holdings were $86.6.  There was actually a bump up in November too, but we don’t know if this is related to the election of Donald Trump.  It should be noted though that the Russians were already decreasing its holdings prior to the U.S.-imposed sanctions.

The overall trend is clear.  The Russians are diversifying away from U.S. dollars.  And who can blame them?  Perhaps it is ironic that the advocates of big government are the ones who pushed for sanctions on Russia, while these same people are the ones who depend on debt financing from other countries.  They also depend on a strong dollar.

This may be a slow process, but the Russians are helping to undermine the dollar.  They are coming to the same conclusion that many other countries are realizing – that you don’t have to use U.S. dollars as a middleman for world trade.

I believe the Chinese and the Russians are both increasing their gold reserves in order to shore up their own currencies, as well as to have a true world reserve currency that doesn’t involve the dollar.

While the sanctions hurt Russia, they are finding ways to get around them.  I believe that turning towards gold, even if slowly, is one of the ways to bypass the U.S. dollar.

This is a long-term reason to be bullish on gold.  As more foreign governments become tired of the antics and bullying of the U.S. politicians, they are going to cut out the U.S. dollar if they can.  The world will eventually return to gold as the most reliable form of money.

It was recently reported that life expectancy in the U.S. dropped for the first time since 1993.  This was a reflection of the statistics from 2015, which saw a decrease of one-tenth of a year from 2014.

These numbers don’t mean a whole lot because there are so many variables determining life expectancy.  Many people look at medical care as a big driving factor, but it probably does not account for much.

There are issues such as crime, suicides, and, of course, diet.  Advocates of socialized medicine will often point to the fact that some countries with socialized healthcare (Canada, for example) have higher life expectancy rates than the United States.  They therefore conclude, or want you to conclude, that the government-run system is responsible for this.

When you look at the U.S. as compared to Western Europe or Japan, the U.S. has a relatively high rate of obesity.  If you want to blame anything on the lower life expectancy, you should look to culture before medical care.

Of course, the U.S. does not have anything resembling a free market in medical care.  It is mostly a fascist system, and also partially socialized.  You can still find a doctor and pay the doctor from your own pocket (something HillaryCare would have made illegal), but it is nothing close to a free system.

If you have a serious accident and need trauma care, there is probably no better place to be than in a large city inside the United States.  But outside of true emergencies, sometimes I think it is better just to not go to the doctor in many circumstances.  The U.S. is an overly-medicated society that turns to drugs to fix symptoms.  The medical establishment does not look at the root causes.

If socialized medicine helps in life expectancy in any way, it is because people are less likely to go to the doctor because of wait times and hassle.  It is easier to go to the doctor in the U.S.  If you don’t go to a doctor, then you figure out how to deal with your ailment.

In the libertarian world, we talk about how big government kills people with their wars of aggression.  But big government kills people in many ways.  While some will correctly point to the FDA keeping life-saving drugs from coming to market, I believe the entire government apparatus has been extremely detrimental in putting out bad information.

I recently went to the grocery store and my kids were picking out some yogurt off the shelf.  Most of the yogurt was labeled as “low fat”.  These little containers typically contained anywhere from 14 grams to 18 grams or more of sugar.

The American culture, largely promoted by big government working to protect a few big food/ agriculture companies, has been brought down with bad food choices.  People have been fooled into believing bad science.

The government promotes these diets that are high in carbohydrates and sugars and low in fat.  The low fat diets are not healthy for most people.  Here, we are not talking about trans fats.  It is healthy fats, which includes saturated fats.

The government has had a war on cholesterol, while the big pharmaceutical companies push to put people on these cholesterol lowering drugs.  They are making these ridiculous claims that people should not eat such things as egg yolks, when egg yolks are healthy and highly beneficial to most people.  The government is not just wrong; it is giving information that is the exact opposite of the truth.

There is a massive epidemic of obesity and disease in the United States.  Most people understand heart disease is a major killer.  But many people suffer from auto-immune diseases that just weren’t that prevalent in the past.  The number of type-2 diabetics has absolutely skyrocketed.  There are an estimated 29 million Americans who are diabetic.

This is mostly diet related.  A lot of it is a result of government pushing these foods that are bad for us, while telling us that some of the good foods are bad for us.  The government works with the big food/ agriculture/ pharmaceutical companies to put out this bad information.  Of course, the medical establishment carries a great deal of blame too.

This is why we need a separation of health and state.  The government shouldn’t be giving us information on what is supposedly healthy and unhealthy.  The FDA should be abolished.

Still, as individuals, we have a responsibility to exercise the freedom that we do have.  There is a world of information that exists out there that didn’t exist a couple of decades ago.  We must question the state at every turn and not buy into the bad science.

I preach often on this blog about being careful with your money and making good investments.  But health should figure into this as well.  You must invest in yourself, which includes being healthy.  You are free to eat whatever you want and do whatever you want to your body, just as you are free to invest in anything you want.  But it doesn’t mean you should throw away good judgement.

Eating a reasonably healthy diet and taking care of your body is truly one of the best investments you can make.  It will save you money in the long run, and you will live a more fulfilled life.  Just as being future-oriented is important for saving and investing, it is just as important in treating your body well.

I see people who are future-oriented in their careers and saving money, yet they generally ignore their health.  This eventually catches up with them.

While we live in a world of big government, we still have choices.  Just because you have a choice to eat whatever you want, it doesn’t mean you should not make wise choices.

If you are not an American football fan, bear with me on this post.  It is still relevant to you.

The New England Patriots just won the Super Bowl, making an incredible comeback after being down by 25 points in the second half.  Tom Brady won his fifth Super Bowl.  He has appeared in the NFL championship game 7 times now, as the Patriots lost to the New York Giants in two previous appearances.

When the Giants won both Super Bowls against the Patriots, there was an amazing catch each time late in the game.  There were several key plays where it could have changed the outcome of the game on both occasions.

There was also a crazy catch in the Patriots’ victory over the Falcons.  But as Brady said after the game, there were probably 30 plays where if something different had happened, it likely would have impacted the result of the game.

There were a lot of factors leading to the great comeback by the Patriots.  Some of it was probably just bad coaching and play calling by the Atlanta coaching staff.  Some of it was obviously the incredible skill and determination of Brady and his teammates, along with his coaching staff.  Some of it was just plain luck.

And I want to focus on the luck part.  I once had someone say to me that the two victories by the Giants in the past over the Patriots in the Super Bowl were a fluke.  And to be sure, there was some luck involved.  But let’s face it; they were in the position to be lucky.

Brady and his team have had their share of luck too, especially in this latest Super Bowl win.  But on every occasion, they put themselves in a position to accept the luck.

Does it ever seem that some guys just get lucky more often than others?  If that is the case, it probably isn’t all due to luck.

You have to put yourself in a position where you can actually get lucky and benefit from it.  And when luck does come your way, you have to be able to seize the moment.

Here is an example of not seizing the moment.

This, of course, isn’t just about football.  This is life in general.  It is business opportunities.  It is financial wealth.  It is relationships with others.  It is life.

If you write a book, you probably won’t be a best-selling author.  If you do, some of it will probably be due to luck.  You may just happen to pick the right topic at the right time.  There is one thing for sure though.  If you never write a book, you definitely will not become a best-selling author.

There are musicians who have been extremely lucky in getting in front of someone and making it big.  There are probably other musicians in the world who are more talented.  But if you don’t put in the time to practice and then put your work out there, then you will definitely never be a star musician.

There are YouTube videos out there with 20 million views.  They happened to go viral.  Some of them are really well done.  Some are just stupid, but it all depends on your perspective.  Either way, for many people, they got lucky with their video going viral.  But again, if they had never uploaded the video to YouTube and told their friends about it, they never would have gotten “lucky”.

I know people like to criticize Donald Trump for his many failed business ventures.  But trying different ideas lets you know what works and what doesn’t.  Even if he just got lucky on the ones he tried, at least he tried.  And most of the people criticizing him have never tried any business venture, even on a small scale.

When opportunities present themselves in life, accept your luck.  But in order to get lucky in the first place, you have to put in the work, and you have to put yourself out there in a position to get lucky.

During his campaign, Donald Trump warned that stocks were in a bubble that was going to pop.  While it wasn’t a theme he repeated often, his tune has changed somewhat since winning the election.

No president wants to issue dire warnings of a recession or stock market collapse.  But if a major downturn is going to occur in the next 4 years, from Trump’s point of view it would be better if it happened sooner rather than later.

The question is: If Trump is actually successful in implementing an agenda of reduced taxes and reduced regulations, would that be enough to avoid a possible recession?

Frank Shostak recently wrote an article for the Mises Institute titled “Tightening the Money Supply will Inevitably Lead to a Bust”.  Shostak’s article focuses on the Fed, and more specifically following the Taylor rule.

Shostak states in his article the following: “Unfortunately, a gradual tightening cannot prevent a subsequent economic bust.  Economic busts are simply the inevitable removal of various activities that emerge on the back of loose monetary policy.”

As followers of Austrian school economics and the Austrian Business Cycle Theory understand, the bust phase is not the problem.  It is a problem only in the sense that it is the time that people feel the most pain.  But the damage was done during the artificial boom phase.  This is when resources are misallocated.  The bust phase is trying to correct the previous misallocations.

The Fed had an extremely loose monetary policy from 2008 to 2014.  Although the Fed has only hiked its target federal funds rate twice since that time, it has kept a tight monetary policy since October 2014 when it ended QE3.

While the lack of bank lending helped to limit some of the damage, we cannot pretend that there was no damage done.  The Fed nearly quintupled its balance sheet in this six-year period.  There have been misallocations.

Given that the damage has already been done, is there anything that Trump can do to stop it?

The answer is “no”, but he can certainly do things to alleviate the pain.  Cutting taxes, including corporate taxes, would certainly help.  Repealing burdensome regulations would help, which would include Obamacare.

The one area where libertarians focus more is on overall government spending.  Unfortunately, it does not seem that Trump or the Republican Congress is going to do anything in the near term to cut federal spending in any significant way.

We need huge spending cuts in order to leave more capital in the private sector.  When the government spends money – whether that money is obtained through taxes, debt, or inflation – it is misallocating resources.  It is being spent on things that are not in accordance with consumer demand.

If Trump were to accomplish significant cuts in spending (unlikely), along with reducing regulations and taxes (slightly more likely), then it could go a long way to lessening the severity of a recession.

Still, the misallocations need to correct at some point.  They corrected in the oil industry to a large degree a few years ago.  Many companies went into too much debt and invested too much in drilling for oil that was only worth it at a higher oil price.  When the oil price went down, it was quickly discovered that some of the investment was actually malinvestment.

If there are minor misallocations due to central bank policy, it is possible for technology and productivity to offset the reallocation (bust phase).

Think of it this way.  If the Fed were to inflate the money supply 1% higher, it is still a misallocation of resources.  But it is small enough in comparison to the entire economy that growth would likely offset that in the future.  You could still have a small bust in some sectors, but overall growth could still be positive despite the corrections.

The problem we are facing here is that the misallocations are likely much larger.  Again, the Fed went on a digital money printing spree from 2008 to 2014.  While oil has corrected, there is a lot that hasn’t corrected, including U.S. stocks.

I don’t think it is possible for Trump to avoid a recession at this point.  If the Fed decides to start inflating again (unlikely at the moment), this could delay a recession.  Even a massive increase in government spending could temporarily delay a recession.  But these actions only delay the inevitable, and they also ultimately would make the recession worse when it does come.

Trump is better off getting a major recession over with now.  Reagan survived the recession years of 1981 and 1982 and won re-election by a landslide in 1984.  If there is a recession after 2018, Trump will not have much chance of being re-elected.

If Trump can repeal some significant regulations and actually cut government spending, this is going to ultimately help the economy.  If a recession happens within the next year, maybe things will be looking up in time for the next presidential election.

But if the government keeps spending more money, we are not going to see any strong growth that is sustainable.  The middle class people (who elected Trump) are struggling.  They are struggling because so much of their money is flowing to Washington D.C. where the elites live well.

I don’t think Trump can avoid a recession at this point, and I also don’t think he should try.  We have to get the painful adjustment over with.  He can help make it a little less painful by removing Washington’s boot on our throats.  This would not just lessen the pain of a recession, but also help set the stage for some actual sustainable growth in the future.

The Federal Open Market Committee (FOMC) released its latest monetary policy statement.  As expected, the FOMC kept its target federal funds rate the same, which is a range of 1/2 to 3/4 percent.

The next meeting on March 14/ 15 will be more important, as this is when a possible rate hike is expected.  That meeting will be associated with a press conference following.

This most recent statement said, “Inflation increased in recent quarters but is still below the Committee’s 2 percent longer-run objective.  Market-based measures of inflation compensation remain low; most survey-based measures of longer-term inflation expectations are little changed, on balance.”

The bottom line is that the Fed wants more consumer price inflation.  Yellen and company want the money that you hold to depreciate at a faster rate than what it has been doing.

The CPI numbers for December showed that year-over-year inflation went above 2% (2.1% to be exact), while the median CPI year-over-year is at 2.6%.

The Fed has gotten us into a major mess, particularly from its massive monetary inflation of 2008 to 2014.  I am not sure if Fed officials have any idea on how to get us out of this.

The next FOMC meeting will be more interesting.  I will watch it closely and provide more analysis on this subject when the time comes.

There is much uproar over Donald Trump’s executive order to temporarily ban people from a list of seven particular countries.  There has been a lot of confusion about it all, but it seems that it has been clarified that green card holders are still able to return to the U.S.  If this had not been the case, it really would have been outrageous.

While I am offering my libertarian perspective here, I do have to say that it is my perspective.  There is much disagreement over the subject of immigration amongst libertarians, and there is much disagreement over this ban by Trump.

It is a tough issue for libertarians because of the fact that we are so far removed from anything resembling a free society.  Libertarians can agree that there should not be government welfare for immigrants (or anyone else), which would go a long way to solving the problem.  In addition, libertarians (at least the real ones) can agree that the U.S. government should stop the war making and interventions in other countries, especially since the governments of these countries did not aggress against us.  If this were the case, the threat of terrorism would decrease tremendously.

It becomes hard though when you have a state (government) and national borders.  There are libertarian arguments to be made for both sides of the immigration debate, as well as other alternative views that are not often discussed.

Overall, I do not agree with Trump’s ban, even if it is temporary.  But I do understand the thinking of those who favor it.

Of course, terrorism is an irrational fear for most Americans.  It is statistically ridiculous to worry about it.  The same people who are afraid of terrorists under their bed have little fear when they get into a car or take a bike ride.  They don’t have a fear of eating too much sugar, or going to the hospital and picking up an infection.  With terrorism, there is a miniscule chance of something actually happening.  You just hear about it when something does happen.

Another ridiculous thing about this ban is that – as some have pointed out – it doesn’t include Saudi Arabia.  That is a country that specializes in radicalizing people (for the worse).  It is a country where most of the 9/11 hijackers originated from, and the Saudi government was likely involved in supporting the 9/11 attacks.  Again, it makes no sense.

But the immigration ban itself isn’t the biggest story for me.  It is the absolute hypocrisy of most of the left.  It is a story of just how much the establishment media controls the narrative.

It goes without saying that many on the right can be hypocritical too, but not so much on this issue.  If they are wrong on this issue, at least they are being consistently wrong.

The media is pushing out all of these tragic stories about chaos at airports and people returning to the U.S. who are being denied access.  We hear about people missing a family member’s wedding or someone who was going to finish up their education.

I’m not trying to minimize all of these stories, but a little perspective would help.  Most of the people wailing and crying about this ban were silent for the last 8 years.  I know some have pointed out that Obama had some kind of 6-month ban on Iraqis entering the U.S., but that isn’t even what I’m talking about here.

The whole reason there is a refugee crisis in many of these countries is because the U.S. government has either threatened war or instituted war.  Obama and company overthrew the government in Libya and caused complete chaos.  Obama and company tried to overthrow Assad in Syria, and it has caused complete chaos.  The U.S. has been funding many of the bad guys there.

Over 26,000 bombs fell in 2016 alone by the U.S. government.  There are tens of thousands of people who have died at the hands of Obama (O-bomb-a?).  Where were the outcries?

While I don’t agree with Trump’s temporary ban, it is on a completely different scale from what has already happened.  It’s not to say that Trump won’t continue the bombing and interventions, but that is not what the left is crying about right now.

If I were a Muslim living in the Middle East, I would be a lot more upset about U.S. bombs blowing up my family members than not being able to enter one particular country on the entire planet.

If the left is so upset at Trump, should they not also be upset at every other country on the planet?  Why can’t some other first-world country take these people in if it is so important?  New Zealand, Canada, Australia, Switzerland, Norway, Japan, and Singapore would all be great places to live.  In fact, if you are coming from a war-torn region, even Mexico or Malaysia would be a great step up.  Where is the outcry?

These people are either total hypocrites, or completely naïve, or some combination of the two.  Obama and the presidents before him have completely destroyed civilization in much of the Middle East.  They have caused total chaos.  That is the number one problem.  It isn’t Trump’s ban on immigration from some of these countries.

The thousands of people who have died in Libya, Syria, Iraq, and elsewhere all had a story.  The family members still suffering all have a story.  We don’t hear about the death and destruction though.  We hear about the poor Iranian guy who just missed a family member’s wedding because he was denied access.  We don’t hear about the Libyan guy who saw his child blown up at a wedding.

I think the death is a much bigger outrage, but that is just me.  Apparently the left doesn’t mind death and destruction, as long as it is being done by a Democrat.  It just really upsets them that the whole world can’t enter the United States and go on welfare.  At least we know where their priorities are.

After Donald Trump’s inaugural speech on January 20, 2017, many of his critics went after Trump because his speech was supposedly not unifying.  They say that we typically have these tough campaigns where harsh words may be said, and that the inauguration of the new president should be a time where he brings us together in a conciliatory tone.

Trump’s speech was certainly not conciliatory, but it was unifying in a sense.  It depends on your perspective.

The reason Trump received the Republican nomination in the first place is because many Republicans are tired of electing politicians who don’t stand firm once they are elected.  While some view Trump as a bully, his supporters saw his tone as coming from someone who is an advocate and who is willing to fight on their behalf.  They are tired of politicians going to Washington D.C. only to appease all of the special interests.

Donald Trump is the first elected president in the U.S. in a very long time (maybe ever) who doesn’t really owe anything to anyone other than the general population.

If you didn’t see Trump’s speech, it is a good idea to read the text of it.  In fact, I think reading the text is actually a better idea than watching it because it can take some of your biases out of it.

Trump said, “we are transferring power from Washington D.C., and giving it back to you, the people.”

He went on, “For too long, a small group in our nation’s capital has reaped the rewards of government while the people have borne the cost.  Washington flourished, but the people did not share in its wealth.  Politicians prospered, but the jobs left.  And the factories closed.”

Trump continued, “The establishment protected itself but not the citizens of our country.  Their victories have not been your victories.  Their triumphs have not been your triumphs.  And while they celebrated in our nation’s capital, there was little to celebrate for struggling families all across our land.  That all changes starting right here and right now.  Because this moment is your moment.  It belongs to you.”

Trump also reiterated his “America First” message.  He said, “We will seek friendship and goodwill with the nations of the world.  But we do so with the understanding that it is the right of all nations to put their own interests first.  We do not seek to impose our way of life on anyone but rather to let it shine as an example.  We will shine for everyone to follow.”

There are certainly some aspects of Trump’s speech that libertarians should not like.  His vow to eradicate radical Islam is in conflict with his message of a less interventionist foreign policy.  He also repeats his protectionist lines about saving American jobs, but that is just bad economics.

Overall though, his speech is once again an anti-establishment speech.  He was pointing out the truth to the American people that they have been ripped off.  And many of the people ripping them off were sitting around Donald Trump while he was giving this speech.

So to the political establishment that has benefitted greatly at the expense of the average American, this was not a unifying speech.  He was specifically calling them out.

It was unifying for the American people if only they would pay attention to his actual words.  I am not saying that Trump is going to be able to fix everything, or even have any significant impact in the short term.  But Trump is identifying the criminals who are starting wars based on lies and who are ripping off the American public.

If a slave goes along with his master and doesn’t question anything, then this is unifying according to the Trump critics.  If someone points out to the slaves that they are being abused and can do better, then this is not a unifying message according to these people.

Trump actually had one of the most unifying speeches in presidential history.  He was trying to unify the 325 million people who are getting ripped off.  It was not unifying to those who have had the power in Washington D.C.

My conclusion, which is no great revelation, is that the non-libertarian Trump haters simply don’t understand that they are enslaving themselves.  Of course, you could say the same about many Trump supporters too, but to a lesser degree.

The Trump haters don’t understand the evils of the state.  They don’t understand, or don’t care to understand, the death and destruction that is brought to foreign lands at the hands of the U.S. government.  They don’t understand that the federal government spends $4 trillion per year, which is about $32,000 per household.  They don’t consider how much they could do with this money if left in their own hands.

Yet many of these Trump haters call for still bigger government.  Would they be happy if the government spent $5 trillion per year?

There is an irrational hatred of Trump.  Even though Trump won the election in the face of a hostile mainstream media, the media is not irrelevant.  If it were, there would not be so much irrational hatred of Trump.

If you want to criticize Trump on libertarian grounds, that’s fine.  But I don’t think most of these marchers and protesters and loud critics would have done the same thing if Hillary Clinton had been elected.  They were nowhere to be found over the last 8 years with Obama starting and continuing wars and cracking down on whistleblowers.

The non-libertarian Trump haters worship the state.  They do not understand that they are supporting evil.  They don’t understand that they are enslaving themselves.

The Dow finally hit the 20,000 mark.  It seemed as inevitable as an anti-Trump story hitting the nightly news.

The Dow is only 30 stocks, and 20,000 is only a nice round number.  Maybe it is psychologically significant, but I think it is more significant as a symbol of our economy.

As I speculated recently, we may be in something of a mini-boom right now.  It is a mild boom for certain sectors of the economy.  Unfortunately, this does not include most of middle-class America.

And even for those in middle-class America who do seem to be doing ok, some of it may be an illusion.  It may be a rug under their feet that is about to be pulled.

I think stock prices are highly misleading as economic indicators.  There is no question that they are relevant.  It is no coincident that stock prices tumbled in the fall of 2008 with the fall of the economy.

But the economy was set to fall anyway.  There was a bubble economy that had been set by many years of monetary inflation and low interest rates, courtesy of the Fed.  This happened under Greenspan, before Bernanke took office.  The short time Bernanke was in office prior to the financial crisis, the Fed had actually tightened monetary policy.  Then the inevitable bust came.

Stocks are not an indication of the health of the economy.  If they are at all, it is the exact opposite of what we are told.  A booming stock market often means that there is a great deal of malinvestment (misallocated resources) taking place.  While the times may feel good for some, much of it is an illusion.

Imagine a world without any monetary inflation.  It doesn’t matter if it is a highly disciplined central bank that doesn’t print money, or if it is some kind of commodity that can’t increase.  In such a world, rising stock prices would not be the norm.  Individual stocks would go up and down as usual based on company profitability and potential future profitability.  But stock indexes would likely be relatively stable.

People would still own stocks for the possibility of capital gains, but the primary reason would be dividends from the profits.  It is confusing in today’s world where supposedly profitable companies pay little or no dividends.  What is the point of owning an investment if it never pays out a dividend?  Much of the capital gains are a result of easy money and speculation, and little to do with future dividends.

Of course, in a world with no monetary inflation, your purchasing power would increase as productivity increases.  Even if your stocks did not increase in price, your purchasing power would still be increasing if the prices stayed the same.

Japan in an interesting example of where the stock market (the Nikkei) hit its all-time high in 1989.  After a major crash, it has done very little since that time.  It has been a horrible investment.  It is only with the recent monetary inflation that stocks have done ok there (but still down about 50% from its all-time nominal high nearly 3 decades ago).

Japan had a relatively tight monetary policy throughout the 1990s and 2000s.  But the economy still struggled due to high government spending.  It is unique because the government spent massive amounts of money and accumulated great amounts of debt, but did not finance it through central bank inflation until only recently.  For some reason, the Japanese people felt some kind of patriotic duty to buy their government’s debt at low interest rates.

In most cases, a tight monetary policy is good for an economy because it limits government spending.  It may not seem like a booming time, but it is key in avoiding the busts.  It is better to grow consistently rather than having these booms and busts that distort production and make us poorer than we otherwise would have been.

Dow 20,000 is no victory.  If anything, it should serve as a warning sign.  We could have Dow 100,000 if the Fed really wanted it that way.  They could start up QE4 and start buying up assets at a rate of $100 billion per month or more.  If they are more aggressive than QE3, then they could keep this party going for quite a bit longer.

Of course, this would be highly destructive in the long run.  It would only serve to misallocate more resources and divert investment away from consumer goods that would be most in demand if left to the free market.

Nobody should hope for Dow 100,000.  It would be a sign of great monetary inflation and a massive drain on capital investment that is in accordance with consumer demand.  Dow 20,000 is bad enough.

We should hope for a tight monetary policy and a reduction in government spending.  This is the key ingredient for more savings and capital investment.  This is the key to greater productivity that is in accordance with consumer demand.  This is the way we increase our living standards sustainably.