The consumer price inflation numbers were released, and January came in hot at 0.5%.  It isn’t 1970s hot, but it is definitely an acceleration.  This is just one month of course, but if it came in like that every month, then we would be looking at 6% annual price inflation (according to the government’s statistics).

The more stable measure of the median CPI even came in a little higher than usual at 0.3%.  The year-over-year median CPI is at 2.4%.

Perhaps some of the monetary inflation from 2008 to 2014 is leaking out a little faster now.  The Fed will say that they want to see higher inflation (meaning prices), but do they really?

We are in this awkward period where the Fed is actually tightening, while consumer prices seem to be rising at an accelerating pace.  And when I say the Fed is tightening, I don’t just mean raising its target on the federal funds rate or keeping its balance sheet stable.  Currently, the Fed is actually allowing $20 billion per month to roll off of its balance sheet.

Meanwhile, the Fed – under new chair Jerome Powell – is expected to hike its target rate again next month in the FOMC’s March meeting.  This all coincides with the recent explosion of volatility in stocks where the Dow has experienced two days of over 1,000 point drops.

Personally, I celebrate the higher consumer price inflation numbers.  It isn’t that I want to pay higher prices for things I buy, but it is the only thing that will limit the Fed in its monetary policy, and it may be the only thing (along with interest rates) that will eventually limit spending coming out of Congress.

The federal government will likely run a deficit of over $1 trillion in the next fiscal year.  And that is during a supposed recovery.  Imagine if the economy takes a plunge and tax collections fall.  Are we prepared to see our first $2 trillion annual deficit?

If consumer prices continue to show signs of increasing at an accelerating pace, then it will be difficult for the Fed not to follow through with its plan to reduce its balance sheet.  And if the economy takes a major downturn, it will make it harder for the Fed to ramp up monetary inflation.

We need a tight monetary policy for a prolonged period of time.  We need higher interest rates in order to encourage saving (assuming that the market rates would be much higher if not for the implicit backing of the Fed).  We need higher interest rates to stop the distortions and misallocations.  We need higher interest rates in order to put pressure on Congress to reduce its out-of-control spending.

From an investment perspective, it is interesting that stock investors did not react negatively to the news of higher than expected price inflation.  Perhaps they see it as a one-time event that will not impact the coming rate hikes.  Markets have already mostly priced in a rate hike in March, although the 10-year yield did go higher to some extent.

It is also interesting that gold spiked up on the news, especially since most economic news seems to be counterintuitive.  Yes, gold is supposed to be a hedge against inflation.  However, with this news, it makes it more likely the Fed will hike its target rate and keep tightening its monetary policy.  This would be bearish for gold.  Perhaps some investors don’t believe that the Fed will fully follow through.  Maybe some see this as a build up to something resembling the 1970s where there were high interest rates, high price inflation, and periods of recession.  The 1970s was one of the greatest times for gold in U.S. history, at least in comparison to the U.S. dollar.

I recommend something resembling the permanent portfolio.  This shows that it is especially important now to have that 25% in gold, or in investments that reflect the price of gold.  Most financial advisors will not recommend such a high allocation to gold or any other precious metals.  You are lucky if you can find an advisor that recommends 10%.  But they do not understand the threats of a depreciating currency to the extent that they should.  Their clients who take their recommendations and who do not diversify into gold will suffer greatly if we hit anything near a scenario resembling the 1970s.

The Dow Jones Industrial Average just experienced its two biggest one-day drops in terms of points in one week.  The Dow fell 1,175 points on February 5, 2008, and it fell again 3 days later on February 8, 2018 by 1,033 points.

Of course, this was starting out at a level above 25,000.  In percentage terms, it comes nowhere close to matching the October 27, 1987 crash (Black Monday) when the Dow fell by over 22% in one day.  It was a fall of 508 points.

Stocks had recently been on an upward trend for quite a while without any kind of significant pullback.  From that perspective, it shouldn’t have come as that big of a surprise.  The lack of volatility changed quickly.

The first question is whether this is the start of a new bear market (usually defined as a 20% or more drop), or simply a small blip before things turn up again.  I don’t claim to have the answers here, and you shouldn’t trust anyone who is 100% sure that he does have the answers.  That is because it is all based on human action.  We cannot accurately predict how millions of people will act each day.  We can make good guesses based on the conditions, but timing predictions are virtually impossible.

What I do know is that the Fed had an extremely loose monetary policy from 2008 to 2014.  Since then, it has kept a relatively stable money supply in terms of the monetary base.  According to the FOMC implementation notes, the Fed is slowly draining its balance sheet now.  This points to an eventual recession, as the previous misallocated resources become exposed.  It becomes evident that there is not adequate savings and demand to sustain certain longer-term projects that previously looked like a good idea when there was a loose monetary policy and lower interest rates.

There is little question that part of the gains in stocks is related to the previous loose monetary policy.  Sure, stocks were likely oversold in 2009, but they have run to almost ridiculous levels today.

Another major question is whether a bear market in stocks automatically implicates the economy going into recession.  This was definitely the case in 2008.  While the official recession was backdated to late 2007, it did not become evident until September 2008.  This corresponded with a massive fall in stocks.  Did the falling economy tell investors to sell stocks, or did stock sellers tell everyone else that we were in a recession?  The answer to this isn’t even clear.

Still, I do think it is possible that stocks could fall dramatically without necessarily plunging the entire economy into recession.  Look at what happened to oil in 2014 when it fell from over $100 per barrel to eventually under $30 in 2016.  Yet, everything else did not come crashing down.  There was one asset bubble that popped without everything else popping.  You can blame this on shale oil and increased production, but you can also blame an over-inflated stock market on exuberant investors in search of yield.  It doesn’t necessarily mean everything else has to go down with it.

If stocks keep going down, I certainly think the chances of a recession become greater.  It is a sign of weakness.  However, another consideration is the yield curve, which is still far from inverted.  An inverted yield curve is the biggest recession indicator, but long-term rates have been going up slowly with short-term rates.  We would really have to see at least a somewhat flattening of the yield curve before we are likely to see a major recession.  I suppose there is a first time for everything (a major recession without an inverted yield curve), but why start now?

Either way, it should not change your strategy in how to deal with either situation.  I recommend you have a majority of your financial assets in a permanent portfolio setup to weather any kind of storm.

If we hit a recession, the most important thing you can do is to protect your main source of income.  For most people, this is their job where they earn a salary.  You should avoid being on a short list for being fired, but this is good advice in any economic scenario.  It is also best to avoid being with a company that can easily go bankrupt, but it may be a little late to fix that now.

The average American actually needs a good hard recession to clear out some of the previous malinvestment.  It will make life more affordable in the longer run.  The problem is that part of the reallocation will mean an increase in unemployment and likely lower nominal wages.  This is necessary as part of the correction process, but certainly painful.

Our biggest fear should be the response of the Fed in the next recession.  If the Fed starts another round of massive monetary inflation, then hard assets like gold will become one of the best financial investments.  Until then, cash is still king.

On Monday, February 5, 2018, the Dow went down by 1,175 points.  It wiped out all of the gains from the previous month.  It shouldn’t have been that big of a surprise, as U.S. stocks were going the closest to parabolic as we have seen since the Nasdaq bubble of the late 1990s.

Still, the financial media needs an explanation for everything, other than just saying that there were more willing buyers and sellers at lower prices that day.

For the record, it is inaccurate to say that there were more sellers than buyers because every transaction needs at least one of each.  It is just that there may be more willing sellers, or fewer buyers at the previous high prices.

On Tuesday, stocks finished much higher, but that was after some major volatility.  We can probably count on a lot more volatility for a while now, which if often a precursor to a prolonged downturn.

The financial media is saying that the downturn in stocks is due to investor fear over rising interest rates.  In other words, rising rates, or the threat of rising rates, is causing stocks to fall.

And while this could be a small piece of the puzzle, it doesn’t really fit in with what actually happened on Monday, and is likely to happen again in massive down days for stocks.  I was watching the 10-year yield on Monday, and it was falling.  Or stated differently, bonds were going up.

I suppose one could argue that the cure for higher rates is lower stock prices, but this certainly doesn’t fit in neatly with history.  And why would rates be falling in almost direct correlation with stocks on the worst day in a long while?

I don’t think that higher interest rates, or the threat of higher rates, is causing the downturn and increased volatility in stocks.  If it is, it is a minor player.

If we want an explanation, other than just saying that there were more willing buyers and sellers at lower prices, I think it mainly lies in the business cycle.  Specifically, if this downturn continues, it is just the bust phase as described in the Austrian Business Cycle Theory.

The Federal Reserve engaged in massive monetary inflation from 2008 to 2014.  While the so-called recovery has been weak for middle class America in a lot of ways, it did result in something of an asset boom, particularly in stocks.  Now that the Fed is tightening, albeit slowly, the air may be finally coming out of the bubble.

Now, it is possible that the bull run in stocks may resume and we may see new all-time highs again before this is all over.  But with the last few days, the inevitable seems to be closer at hand than what it seemed a week before.

It is very easy to confuse cause and effect when dealing with the economy and financial markets.  Most people think we need some kind of event to initiate a precipitous fall in stocks or a recession.  In 2008, the fall of Lehman Brothers is seen as the triggering event.  But we have to be careful in how we analyze these things.  It wasn’t Lehman Brothers that caused the financial crisis in 2008.  It was just one of the symptoms.

Therefore, we don’t necessarily have to see any big financial news to get a drop in stocks or the beginning of an economic downturn.  The drop in stocks can be the triggering news in itself.  Sometimes things have just run as far as they can run.

As for interest rates, we should expect them to fall in a major crash of stocks and an economic recession.  Even if you don’t care too much for the federal government, U.S. Treasury bills and bonds are still seen as the safest investment there is.  The only exception to that rule is when there is a significant threat of price inflation.  So until we see a big pickup in the price inflation numbers, expect interest rates to stay relatively low.  And in a stock crash, investors will flee to safety, which will drive down rates further.

Incidentally, the new Fed chair, Jerome Powell, was sworn in the day after his 65th birthday on Monday, February 5.  He was sworn in on the same day that stocks took a dive.  Timing is everything, and now he gets to deal with the problems ahead.  If things get bad enough, expect the Fed to stop its slow draining of its balance sheet.  And if things get really bad, then we can start talking about QE4, or whatever the next round of monetary inflation will be called.

The last few days are a good example of why I advocate a permanent portfolio.  It has been tough not seeing the big gains that all-in stock investors have seen over the last several years.  But when things go the other way, you will be in a lot less misery with a good portion of your assets in a permanent portfolio.

The infamous FISA memo was released.  While I didn’t expect a really smoking gun, I was probably hoping for a little more than what was there.  Now don’t get me wrong; there is no question it has implications and is significant.  It’s just that it was built up a lot.  That is the problem with hype.  You then have to live up to the hype.

The memo implicates a lot of names, along with a couple of agencies – mainly the FBI and DOJ.  It turns out that the investigators are the ones who should be the investigatees.  Most of the names in the memo of people in the FBI and DOJ should probably be in jail, at least if they were held to the same standard as they hold us.

If Martha Stewart can be thrown in jail for five months for supposedly obstructing justice over a non-crime, then surely the actions described by the memo should be obstruction of justice, plus some.  (Remember with Martha Stewart, even though I don’t think insider trading should be a crime, she was never actually found guilty of insider trading.)

You can easily read the FISA memo in just a few minutes.  It is less than four full pages long.  I am thankful that I could just read it instead of reading a summary of it.  I have figured out that this has been a weakness for WikiLeaks.  There were many damaging things in releases last year against the federal government, the Democratic National Committee, the establishment media, and the Clinton campaign.  The problem is that it was information overload.  It was hard to get through it all, and you had to rely on other people to find the gems.

I think WikiLeaks should release, on average, about five pages in one day.  Let that be the news.  Then, two days later, they can release another five pages and let people digest it.  Many people are just unaware of the favoritism shown towards the Clinton campaign.  For example, she was fed questions before a debate against Bernie Sanders.

As far as the FISA memo goes, it really wasn’t any big news for people who have been paying attention in an honest way.  Now if you are strongly paying attention in the form of watching CBS news or CNN, or just reading what your friends say on Facebook, then you probably aren’t aware that the whole Russiagate is a fraud and that the real criminals are the ones doing the investigation.

I am not pro Trump because I disagree with a lot of his stances.  He is a protectionist and Keynesian when it comes to the economy.  In foreign policy, he said some good things on the campaign trail, but he has continued the wars and belligerence around the globe.

However, I do consider myself to be anti-anti-Trump.  The people who have Trump Derangement Syndrome (TDS) criticize the man for all of the wrong things.  And half the things they say are just based on made-up stories about him.  And by the way, there really is such a thing as Trump Derangement Syndrome.  People who have it just can’t think straight at all whenever the subject of Trump enters the conversation.  It is quite a spectacle to behold.

The bottom line with this memo is that the Democratic National Committee and the Clinton campaign (basically the same thing) paid (indirectly, of course) Christophe Steele to compile this dossier, which was then used as a basis for investigating the Trump campaign.  Again, this was already pretty well-known for anyone who was following the story and was not just listening to the establishment media.

The memo was put together by the majority of the House Permanent Select Committee on Intelligence (i.e., Republicans), but it still adds credibility to what was already known by some.  Of course, this credibility will only go so far, as the strong anti-Trump forces would never believe anything that puts Trump in a favorable light.

During Trump’s campaign in 2016, he was talking about how loyal his supporters are.  He said something to the effect that he could stand in the middle of the street and shoot someone, and his supporters would still support him.  He, of course, took a lot of criticism for this remark.  But if anything, this could more be said of Hillary Clinton, or better yet, the anti-Trumpers in general.  You could have the establishment media saying that Trump tried to punch somebody in the face.  Then when video is released showing the exact opposite, the anti-Trumpers would find a way to spin it against Trump, or to say that Trump really did throw the first punch.  Again, I can’t fully explain the Trump Derangement Syndrome.

And to be sure, this syndrome falls into some Republicans too.  You can see it in the Bush family, John McCain (who criticized the release of the memo), Mitt Romney (before Trump was the nominee), and many of the other war hawks in the establishment.

One other point is that Jeff Sessions, the attorney general, is completely useless.  Trump should fire this guy now.  While he figures out how to get the government into more asset seizures and more drug busts, he completely ignores the crimes of these agencies.

In response to the FISA memo, Sessions said that he has “great confidence in the men and women of this Department, but no department is perfect.”  Yeah, I guess you could say criminal is not perfect.  Let’s hope Trump realizes that Sessions is a major part of the swamp.

And that brings us to the only solution possible here.  I have warned in the past about the spy agencies, particularly the NSA.  The only solution to these corrupt agencies is severe budget cuts, or better yet, to close them down completely.  When you have many billions of dollars at your disposal, you can always point to some good things that have been done.  But the people at the top of these agencies are some of the worst characters on the planet.  And while seeing some of the criminals actually go to jail would be nice, it is not a long-term solution.  The only solution is massive budget cuts, or outright eliminations of agencies.

These spy agencies and intelligence agencies have teamed up against Trump and have been trying to take him down since before he took office.  Yet, for some reason, he will still continue to fund them.

The Federal Open Market Committee (FOMC) just finished up its meeting on monetary policy and released its latest statement.  There were no unexpected policy changes in terms of the federal funds target rate and the Fed’s slow draining of its balance sheet.

CNBC showed a nice comparison of the changes from the previous FOMC statement.

Probably the most significant change is the committee’s view of inflation.  The previous statement said, “Inflation on a 12-month basis is expected to remain somewhat below 2 percent in the near term but to stabilize around the Committee’s 2 percent objective over the medium term.”

The latest statement said, “Inflation on a 12-month basis is expected to move up this year and to stabilize around the Committee’s 2 percent objective over the medium term.”

In other words, the slight wording change in the statement indicates that the Fed sees inflation (based on its definition) as picking up slightly, or at least perceives slightly higher inflation in the near future.

Of course, in terms of monetary policy, we actually have slight deflation right now.  In terms of the Fed’s balance sheet, the money supply is going slightly down with the Fed’s policy of allowing a small amount (relative to the total size) to mature and not be rolled over.  In fact, as of February 1, 2018, the Fed will be rolling off $20 billion per month, which is up from $10 billion per month previously

The FOMC decision – or perhaps non-decision – came the day after Trump’s State of the Union speech.  From a libertarian standpoint, there was nothing unexpected.  There was the usual political theater.  And of course, the Democrats hated almost everything that Trump said.

While Trump is still a disaster on foreign policy, he is not as hawkish as he could be.  He is not as hawkish as other presidents have been in the past or as much as most of the other potential candidates from 2015/ 2016 could have been.

On economic grounds, he is right to say that we need less regulation.  He was right in calling for a cut in corporate tax rates.  Unfortunately, he doesn’t get much right after that.  He wants a massive infrastructure program that will centralize what should be done at a local level (or privately) if it should be done at all.  This will just be more boondoggles with another trillion dollars or so added to the already over-bloated debt.

As I have previously said, Trump is going to regret that he claimed so much credit for the booming (for some) economy and the booming stock market.  The Federal Reserve is still tightening its monetary policy.  The stock market has boomed with three rounds of QE, but we have to wonder how long the stock market can go without more Fed injections, let alone a slightly deflationary stance.

This was Janet Yellen’s last meeting as Fed chair.  Jerome Powell is set to take over on February 3, 2018.  He is not a good appointment by Trump, but perhaps Trump is depending on a Keynesian type who will juice the economy when it is needed.  We shouldn’t expect any radical shift when Powell takes over, but you can bet that the Fed will quickly reverse course if the economy takes a hit.  The Fed will not only stop rolling off securities, but it will probably start a new round of purchases (QE4?).

The markets, in the midst of its rather historic run, took a break on Tuesday.  Supposedly the thought of higher interest rates spooked the markets for one day.  Stocks, bonds, and gold all went down that day.  Or maybe investors just needed a short break before resuming the buying spree, particularly in stocks.

It is interesting that Yellen will escape without having to deal with any major crises on her watch.  Previous Fed chairs were not so fortunate.

For Jerome Powell, he may end up wishing he never got the position of Fed chair.  He could end up playing the role of Ben Bernanke, but the public may not be quite as patient with massive bailouts of the financial industry this time around.

Despite what Trump may have said in his speech, the state of the union can change quickly.  A boom can turn to bust quickly.

I think the president is overrated.  I don’t mean this president in particular, but the presidency in general.  The president certainly has a great deal of power, but I think he is often credited too much (or discredited too much) for the overall economy.

There is no question that the president matters.  The president approves legislation, which includes budgets, and only a two-thirds majority in Congress can override a presidential veto.  A president can also set the tone and the agenda.  Even with Trump, who is perhaps the most hated president ever by the establishment media, has a bully pulpit.  He not only has Twitter, but he could call a primetime speech at any time, and the networks would feel compelled to cover it.

If Ron Paul had been elected president and allowed to take office, he would have withdrawn troops from all over the world, or at least we can guess this is what would have happened.  If he had taken office and not followed through on this promise, then a democratic and peaceful revolution really would have been hopeless at that point.

But let’s say Ron Paul had taken office (it doesn’t matter if it had been 2009 or 2013 or 2017).  Just by ending the wars and bringing home the troops, hundreds of billions of dollars could have been saved right there on an annual basis.  Those resources could have been used to satisfy consumer demands.  In addition, a President Paul could have vetoed every single budget bill, or at least vetoed every bill that ran any kind of deficit.  Maybe Congress would have overridden him, but you can be pretty sure that some domestic spending cuts would be made.  Just the fact that Ron Paul was elected (in our example), the politicians would have felt somewhat compelled to go along with the electorate.

In this sense, a radical politician who advocates free market policies could dramatically improve the economy for the better in the long run.  But if there were massive spending cuts and a liberalizing of markets, it might expose some of the malinvestments from previous times.  You could still get what feels like an economic downturn while resources realign according to consumer demand.

In our reality, the economic policies from administration to administration do not change much.  There wasn’t that much difference between George W. Bush and Barack Obama.  Bush actually ramped up spending faster than Obama did.  Bush gave us Medicare coverage of prescription drugs.  Obama gave us Obamacare.  There were small differences in tax rates.  Bush gave us Bernanke, and Obama gave us Yellen at the Fed.

Trump has perhaps been slightly better in terms of regulations.  There were some elements of the tax reform package that were positive, especially the cut in corporate tax rates.  Still, spending is continuing to increase.  The debt is continuing to increase at a rapid pace.  Trump is a mercantilist who believes in protectionist tariffs.  And his appointments to the Federal Reserve consist of more Keynesians.

So unless a president is going to radically break from the status quo, the president does not impact the economy that much.  It is more a matter of timing and a matter of Federal Reserve policy.

Trump Takes Ownership

Unfortunately for Trump’s sake, he is taking full ownership of the supposed boom that is happening now.  He is touting GDP and other government statistics.  Worst of all, he is touting the stock market.

In a recent interview on CNBC, Trump said, “The stock market is up almost 50% since my election.  Had the Democrat won [Hillary Clinton], I believe you would have been down 50%.”

I think he is going to really regret those words.

He can’t avoid taking ownership now.  If he is using the booming stock market to brag, then what is he going to say when it goes bust? He can’t turn around at that point and talk about his warnings of a bubble during his campaign.

If Trump is still president in November 2020 when the next presidential election occurs, it is a safe bet that we will have had some kind of bust at that point.  My bet is that the stock market will be lower at that time than it is now.  And if it is higher at that point, then it will be because the Fed has started another round of massive monetary inflation.

Trump’s job in dealing with the media and intelligence agencies is hard enough.  But when stocks crash, he will have nobody to blame but himself.  He would have had a case to be made if he weren’t bragging about the stock boom.  But now, if a recession hits, most people are going to blame him, and he isn’t going to have any good response.  His approval ratings will drop below where they are now.

The only thing we can do is to refute Trump now, before the crash hits.  The boom in stocks does not have a lot to do with Trump’s presidency.  Part of the portion that is attributable to Trump’s policies is artificial and unsustainable.

When things get bad economically, let’s hope enough Americans understand that it wasn’t the free market that brought us to this point.  It is government regulation, massive government spending, and Federal Reserve manipulation of the economy that make our living standards lower than they otherwise would be.

For legal reasons, I should probably say that I haven’t really created my own cryptocurrency, as the title suggests.  But I could create my own cryptocurrency.

I could call it Libertarian Coin.  Or maybe Anti-Fed Coin works better.  At this point, it is all marketing.

I like cryptocurrencies for a few reasons:

1. The technology behind them, while still in need of significant improvement, is innovative.  The technology will be useful for other purposes in the future even if I don’t fully understand it.
2. I like competition for the central banks.
3. The cryptocurrencies draw attention and discussion towards the Fed and central banking in general.

Unfortunately, on the last point, some of the attention it is starting to draw isn’t so much as cryptocurrencies as an alternative to fiat money, but the parallels between cryptocurrencies and the government-issued fiat currencies.

As a libertarian, I try to be somewhat sympathetic to cryptocurrencies and those who advocate them.  After all, it isn’t easy to find vocal opponents of government-issued currencies.

With that said, I feel the duty to warn those who will listen that this is a giant bubble just waiting to implode.  This isn’t to say that more money will not be made in cryptocurrencies.  When I say money, I mean U.S. dollars or other government money.  The bubble may last a while longer, and maybe a few will be smart enough to cash out, even though we have no idea when the right time will be.

Cryptocurrencies are very similar to government-issued currencies except in the fact that we are not essentially compelled to use them. With legal tender laws and tax implications, it is virtually impossible to live in the United States and not use U.S. dollars.

When you buy a stock, you are buying a share of the company.  It is usually a very tiny share, but it is a share in the company nonetheless.  If you own stock in Apple, you own a tiny fraction of its operations.  You own a tiny fraction of its buildings and equipment.  You own a tiny share in the profits in the form of dividends.  When you buy Apple stock, you are buying something.

When you buy gold, or even a certificate representing gold, you are buying something.  You can actually touch the gold, and you can use it for jewelry, or industrial purposes, or as an alternative form of money.  Gold has a history of being used as money for thousands of years up through part of the 20th century.  It is still held by central banks today.

If you buy a cryptocurrency – let’s say Bitcoin, since it is the most popular – then what are you buying?  Bitcoin isn’t a company like Apple.  You can’t redeem your Bitcoin shares for anything tangible like gold.

Bitcoin does not sell products like Apple.  It doesn’t make a profit as a corporation would.  The only profit is coming from the next sucker who will buy it at a higher price than what you paid for it.

Someone might say that you are buying the technology behind Bitcoin.  But this means nothing.  That technology isn’t earning a profit.  It isn’t patented, as can be seen with well over a thousand cryptocurrencies today.  There is no Bitcoin company selling technological services to consumers.  And there is no building owned by a Bitcoin company.

In other words, when you have shares of Bitcoin – as opposed to shares of Apple or another company – you don’t really own anything. You don’t own anything tangible, and you don’t own anything that can be sold to consumers other than the speculation itself.

There will be a major crash in Bitcoin and all of the other cryptocurrencies, unless there is something out there that is actually backed by something.  The only thing I am unsure of is whether the crash in cryptocurrencies will happen before a stock market crash and recession, or after.  Or maybe they will occur simultaneously.

But as much as stocks are in a bubble, they aren’t going to zero.  That is because you still own the company and its underlying assets.  Some stocks might go to zero where the company’s debt is greater than its assets and it is no longer able to make a profit.  But as a whole, stocks aren’t going to zero.  I can’t be sure of cryptocurrencies, but they really could go to essentially zero.

Ok, so I didn’t really create my own cryptocurrency, but here are a couple of guys who did.  Maybe you could get in early.

(Warning: You may not want to watch at work or around the kids.)

It has been one year since Donald Trump was inaugurated as president and delivered a speech that promised to shift power out of Washington DC (the swamp) and back to the people.

It is still somewhat surreal that Trump was elected president.  It isn’t so much because he was a reality tv star or he can be loud and somewhat obnoxious at times; it is because he defied the establishment and still managed to win.

Aside from Fox News, just about the entire television industry was against Trump.  Even with Fox News, it had Megyn Kelly at the time, along with several war hawks, who vehemently opposed Trump.  And the establishment media’s opposition to Trump wasn’t the same as opposition to Romney or Bush.  It was, and still is, absolute hatred.

So just the fact that Trump was able to win the presidency on at least a somewhat anti-establishment platform should give us great hope.  He went into South Carolina and said that Bush had lied us into war in Iraq.  He said he wanted to get along with Putin in Russia.  He said we shouldn’t be footing the bill for NATO.  He was certainly inconsistent, but he dared to question the U.S. empire in his campaign.  For that reason, it is amazing he won, and those who love liberty should recognize that, even if they don’t like Donald Trump.

It was also very entertaining to watch the election results come in and the reactions of the establishment media pundits.  They were shocked and squirming in their seats.  It showed that their opinions didn’t matter as much as what they thought.

Now that Trump has been president for one year, we can assess the positives and negatives.  He has mostly been a disaster, but there are certainly some good points.

He pulled the U.S. out of the Paris Agreement.  I’m not sure how much it really means, but even symbolism can matter.

The FCC under Trump pulled out of net neutrality.  This is positive, as anything should be celebrated where the government has less regulatory authority, even if the internet service providers rely on local government-granted monopolies to a large extent.

I have written extensively on the tax reform, and a lot of it is good.  The cut in the high corporate tax rates is especially positive.  But as I’ve pointed out, it unfortunately does not address the issue of spending.

I have heard some Trump defenders say that Trump has been good for liberty because he hasn’t done much.  In other words, libertarians should want someone who doesn’t do much in office.  The problem with this argument is that it isn’t true, and it’s not going to be true in the future.  Unless Trump is being overridden by Congress, he is partially responsible for the spending that comes out of Washington DC.  It is hard to say that a president is “doing nothing” when the federal government is spending $4 trillion (and growing) per year.  That’s a lot to pay for nothing.

It isn’t that Trump isn’t doing much.  It is more that he is maintaining the status quo in a lot of areas, including overall spending.  On spending, if anything, he is proposing even more than Obama, so we can’t even call it the status quo.

In terms of foreign policy, Trump has been mostly bad.  His Secretary of State, Rex Tillerson, is actually less hawkish than a lot of other potential people who could have been put in that position.  Tillerson is very far from having anything resembling a libertarian position on foreign policy, but he is less disastrous, at least so far, than past people in that position, including Hillary Clinton.

Trump has mostly fallen in line with the establishment on foreign policy.  He sent missiles into Syria.  He continues all of the wars.  He continues the U.S. government’s policy of cozying up to Israel and Saudi Arabia.

Perhaps one good thing that Trump did as compared to Obama is that he stopped overtly funding ISIS.  That is why ISIS has broken up to a large degree.  There are still a lot of terrorists out there to be sure (that is what happens when you kill their relatives and destroy their countries), but at least the U.S. government has seemed to withdraw its heavy support of ISIS, the supposed enemy.

Trump did appoint a lot of bad people, including Nikki Haley.  He is getting a lot of bad advice.  Luckily, he has not started any major new wars yet, but there is still time for that.

Overall, Trump’s promises to drain the swamp have not come true.  If anything, Trump is now just a weird creature living in the swamp.  Most of his promises were empty.  He may or may not get the wall.  Obamacare, while taking a hit, has still not been fully repealed.  There are some things we can be especially thankful that he did not fulfill his promises.  High tariffs is one area.  The wall is another area, although I recognize that some libertarians are not opposed to one.

Even some of the smaller things he hinted at have been left behind. I was hoping he was going to have a committee – headed by RFK Jr. – to study the ill effects of vaccines.  I guess the pharmaceutical lobby was too powerful.

As far as Russiagate, I think the whole thing is a scam.  The crimes were committed by the Clintons, the Obama administration, and the intelligence/ spy agencies.  It is amazing that it is still used as a story against Trump when there is no evidence of anything of significance, except for the crimes of the people who set the whole thing up.

One of the most frustrating things of the Trump presidency is his lack of use of the bully pulpit.  He uses Twitter, but not everyone is on Twitter.  And not everyone hears or sees the exact messages that he sends.

Trump should start making speeches in primetime.  The networks will essentially be forced to cover the speeches.  He should lay out the corruptness of the investigators in Russiagate.  He should lay out his case and point out that there is no evidence other than hearsay from a few anonymous sources in the intelligence agencies.

Trump should also pick some easy fights to win.  The Bureau of Land Management (BLM) and the FBI clearly lied in the Bundy case.  Trump should explain this in a primetime speech and propose massive budget cuts to each of the agencies.  They obviously have way too much money to spend if they are spending millions trying to prosecute people through lying and evidence tampering.

Trump is obviously very smart in certain ways.  He has some good political instincts, which is why he was able to get the Republican nomination and get elected.  On the other hand, he is not an intellectual.  Of course, we don’t want an intellectual who thinks they know how to run other people’s lives better than they do.  But it would be nice if Trump had some intellectual curiosity other than just watching Fox News.  It would be nice if he would read a book on some basic economics.

I don’t know if Trump will survive four years, but he has made it through one.  I will continue to be anti-anti-Trump.  In other words, I oppose his deepest enemies in the swamp.  His greatest enemies are the political left and the hardcore war hawks.  They truly do have Trump derangement syndrome, and they really don’t even make sense any more.  They grasp at straws trying to point out every flaw of Donald Trump.  And they get offended, or pretend to get offended, when Trump sends out a Tweet that is impolite.  But they don’t get offended when Trump or any of the presidents before him drop bombs on innocent people overseas.

The biggest positive of the Trump presidency is that he is helping to expose the whole rotten system.  Some of it is intentional on his part, and some of it is not.  While I don’t hold out any great hope for the Trump presidency in the next three years, let’s hope he doesn’t start any major wars, and let’s hope he keeps exposing the corrupt system that is Washington DC.

As I write this, it was 20 years ago today that the story was broken of a 23-year old White House intern who was having sexual relations with the president of the United States.

The Drudge Report, which originally reported the story, celebrated the 20th anniversary of this breaking news by displaying several links about the event.  It was this story that really catapulted Matt Drudge and his website into uncharted waters.  It is now a favorite news site amongst conservatives, many libertarians (myself included), and probably even some on the left.  Drudge should be celebrating this event because he is now worth likely somewhere in the neighborhood of $100 million.

But it wasn’t the sexual scandal of Bill Clinton and the ensuing impeachment that is really the big story.  It is certainly memorable, and perhaps entertaining, but the actual story probably didn’t change our lives all that much in the long run.

The significance of the story is that it marked a change in modern news and communication.  It broke the first hole in the gate that was managed by the gatekeepers.  The gatekeepers are the establishment media.

Newsweek magazine had the story and was supposedly going to report it, but ended up killing the story.  There were likely other outlets that knew of the story.

To this day, we don’t know what would have happened if the internet was not in existence in 1998.  Maybe the story would have never been released, or maybe it would have just come from the National Enquirer.  It probably would have gone down as an unsubstantiated rumor.

The internet was in its infancy in 1998.  But for anyone paying close attention, it was Drudge’s story about Lewinsky that really signaled a changing of the guard.

We will never go back to the world of 1990.  It is too late for the establishment to stop it.  And since the internet plays such a vital role in our economy and our lives every day, it would be impossible for politicians to shut it down for any significant length of time.  Politicians would rather have their constituents on Facebook than having them stand outside their office with pitchforks.

To be sure, the establishment media is still there and kicking.  It still does great damage and influences people to a large degree.  But it also faces competition as it never did before.

Most people get at least some of their news from the internet now.  Whether it is from actual news sites or blogs or social media, there is a lot to choose from.  Of course, there is a lot of inaccurate and bad information out there, but at least one can search for the truth.  At least you have a chance of finding something that you are looking for.

In the old days, you basically had to walk around in a virtual state of ignorance.  If you were curious about some obscure fact, there was almost no way to easily find it out, unless it happened to be in the Almanac or Encyclopedia.  You could go to a library, but the search could be daunting, and it may not even have what you are looking for.

Now we have the free flow of information between billions of people  on the planet.  We can get first-hand accounts of things that happened instead of relying on the news to report what they want to report.  We are no longer dependent on 3 or 4 television stations that report basically the same thing.

For this reason, I don’t understand why so many people are pessimistic about the future.  There are certainly a lot of things to be concerned about in terms of foreign policy, civil liberties, and living standards.  But we have one of the greatest things going for us in that the gatekeepers no longer have a sealed gate.  We don’t have to rely on them for information any longer.

This is very positive for the prospects of liberty.  It is the establishment and the cronies who rely on false information and propaganda to continue a system of government control.  It is much easier to manipulate the people when you have control over the information that they are fed.

That control has shifted, and libertarians should celebrate this fact.  The truth is on our side.  Therefore, anything that opens up communication and the free flow of information is beneficial because more people can hear the truth.

Things changed in the 1990s, and it has grown far more powerful than we could have imagined.  Drudge’s story about Monica Lewinsky signified that change in 1998.  It allowed tens of millions of people to shut off their television and close their newspapers and turn on their computer.

We are better off for it, and we have more liberty because of it.

There was quite a stir recently after Oprah Winfrey’s speech at the Golden Globe Awards.  There is now speculation on whether Oprah (known by her first name) will run for president of the United States.

I have already written on the prospects of a Mark Cuban presidency.

There is little doubt that Oprah would run on the Democratic ticket.  And assuming Trump is still around in 2020 and decides to run again, it would make quite the showdown in the general election if Oprah won the nomination.

The left would have a hard time trumpeting up Oprah’s success as a businesswoman.  After all, they hate Donald Trump, yet it is hard to deny his success as a businessman.  The same can be said with Mark Cuban.  It is true though that being good in business does not translate into success as a politician, at least not in terms of liberty.

Most business people will say that they can bring more efficiency to a bureaucratic government.  This almost never happens.  Plus, efficiency isn’t a goal for libertarians.  The goal is liberty.  In fact, there are many times that libertarians prefer an inefficient government to an efficient one.  We certainly don’t want an efficient IRS. I wouldn’t even necessarily want an efficient government education system.  It means politicians would be more efficient in teaching (indoctrinating) students with their ideas.

Being a good businesswoman is Oprah’s strength.  She was a highly successful talk show host and she is still highly successful in her business ventures.  She should keep doing what she is good at.  The marketplace has rewarded her with great wealth for providing value to others.  The profit signal tells her that she should keep doing what she’s been doing, and it will better serve mankind.

When you get into government, there are no signals of profit and loss.  There is no feedback mechanism.  This is why it is impossible for government to be efficient at allocating resources.

While I have several positive things to say about Oprah, her past judgement in company is not one of them.  She is close to the Obamas.  She has been in the company of the Clintons.  She was on the inside with Harvey Weinstein.  There are already a lot of pictures that tell more than a thousand words.

Oprah is not guilty of the crimes of these people for associating with them.  But it shows a lack of good judgement of character on her part.  I have no idea if Oprah is an honest person, but I like to give her the benefit of the doubt.  Either she lacks good character, or she lacks good judgement of character in others.  In other words, she would not be a good president.

If you can’t figure out that Hillary Clinton is a corrupt criminal that should be behind bars, then I really think that alone is reason enough to disqualify you in my eyes.  It is possible to have someone who is highly principled and believes in liberty, but just doesn’t pay any attention to current events.  If there were such a person and they didn’t know much about Hillary Clinton, then maybe that person could get a pass.  But Oprah knows the Clintons, and if she can’t figure out just how corrupt they are, then there is little hope for her in figuring out the corrupt system that is Washington DC.

Oprah is even closer with the Obamas.  I assume she mostly approves of their agenda.  If Obamacare doesn’t bother Oprah, and if the wars in Libya and Syria and elsewhere don’t bother Oprah, then she is certainly nowhere near on the side of liberty.

There is always a chance that someone could get into office and study up on the issues and realize just how bad and corrupt things are.  This may have happened with John Kennedy to a certain degree, at least in terms of foreign policy and the CIA.

However, if Oprah really is a good person and just naive about everything, then she is going to get eaten alive by the swamp.  If she even gets to the general election, then she will get hit hard by all of the lobbyists and the insiders if she is elected president.  She will be quickly corrupted, or else she won’t survive long.  She won’t even know how to handle it.  Also, if she doesn’t have a clue going in, then it will be the Obama and Clinton types who will surround her like vultures.  They will get the cabinet appointments and the advisor jobs.  She will get a lot of bad advice.

It is understanding that people want change.  That is why Obama was elected in 2008.  It is why Trump was elected in 2016.  If Oprah is elected president in 2020, it will be a continuation of the discontent with the status quo.

Unfortunately, if Oprah is elected, she will be eaten alive by Washington DC.  She will also preside over a very difficult time for this country.  The national debt is already out of control.  The unfunded liabilities (Medicare and Social Security) are on the verge of bankruptcy without some kind of reform.  And meanwhile, the empire overseas goes on.

If you happen to be reading this Oprah, my advice for you is to forget politics.  Maybe you can disassociate with your political friends too.  Just keep on making money and serving society through the marketplace.