The Federal Open Market Committee (FOMC) is set to meet this week to issue its latest announcement on monetary policy.  It is expected that the Fed will not hike interest rates.

This means the Fed will not hike the federal funds rate, which is currently targeted in a range of 0.25% to 0.5%.  This is just a reflection of the interest that the Fed is paying to banks for their reserves.

In the past, the federal funds rate really meant something.  If the Fed increased this rate, it meant that it would likely have to contract the money supply in order to achieve its target rate.  It would have to sell assets to drive the rate higher.

But the federal funds rate isn’t dictating monetary policy as it used to.  Since QE1, QE2, and QE3, the banks have piled up massive excess reserves.  Monetary policy is not controlled by the Fed’s target rate.  The target rate was between zero and 0.25% for 7 years during three rounds of QE and delays in between.

Libertarians who understand monetary policy will say that the Fed artificially lowers interest rates.  This is generally true.  And it is true that low interest rates and a loose monetary policy generally go together, although not as much as in the past.

Right now, it is true in the sense that a higher federal funds rate might mean even less bank lending, which is equivalent to a tighter monetary policy.

Also, we have to realize that rates are really low right now because of previous policies of the Fed.  The Fed blew up the housing bubble and the general artificial boom that led to the deep downturn in 2008.  Then the Fed was aggressive with its monetary stimulus to a degree that has never been seen before.  It quintupled the monetary base over a 6-year period.

The low interest rate now isn’t just because of the Fed’s current policy.  It is a reflection of fear in the general economy.  It is a reflection of people and businesses not wanting to take on even more debt, despite the low rates.

There is a saying in the world of economics that the cure for low prices is low prices.  Or conversely, the cure for high prices is high prices.

Well, interest rates are prices.  When interest rates are low, it is a signal that there is plenty of savings.  The low rates will tend to discourage more savings and will encourage more borrowing.

If rates are high, it means that savings are too low.  This will signal borrowers to cut back because they will pay a higher price to borrow.  It also sends a signal for savers that they will get paid a higher rate for their savings.  It encourages less borrowing and more saving.

This all works out well except when the interest rate is distorted.  It sends false signals, usually with low rates signaling that there are more savings than what actually exists.

So while the Fed isn’t directly pushing rates lower right now, it seems there is still a disconnect and that the low rates do not really reflect market conditions.  Because if rates did reflect actual conditions, then it means that savings are really high right now.

I don’t think it is a matter of savings being high.  I think it is a matter of people just not having that much money to save.  And many are not going to borrow because they know they may not have the means to pay it back.

In other words, everything is a total mess right now.  Don’t try to figure out the “market” in regards to interest rates.  There are a lot of emotions and things at play that are driving this market.

I am still not betting against low interest rates at this point, at least in the short run.  If we fall into a recession, you can expect longer-term rates to go even lower.  U.S. bonds and Treasuries are still seen as a safe haven.

You may not think they are a safe haven, but it doesn’t really matter what you think.  It matters what everyone else thinks.  And as long as bonds are seen as safe, then you shouldn’t bet against them.

I think the one thing that will eventually drive rates higher is inflation fears.  That will come long before any fear of an actual default.

Before we get inflation fears, we will probably need to see more Fed money creation.  And before we see more Fed money creation, we will probably have to get a recession.

So if you ever want to short the U.S. bond market (bet on higher interest rates), then you should at least wait until the tail end of the next recession.

Gold mining stocks have done well lately.  As gold has stayed above $1,200 per ounce and flirted with $1,300, gold stocks have done even better.  This is typical, as the mining stocks are leveraged and tend to be far more volatile than the price of the metal.

Now we need some context.  If you had bought shares of the VanEck Vectors Gold Miners ETF (symbol: GDX) one year ago, then you would be doing well.  If you had bought it five years ago, you would still be down by a whole lot.

If you had bought GDX in January 2016 at a low of about $12.47 per share, then you would have doubled your money as of today, with the share price sitting just below $26.

This shows the volatility of mining stocks.  GDX is not one stock that happened to have good news.  It is like a mutual fund, made up of many mining companies.  The gold price is up less than 20% so far for the year.  Meanwhile, this gold ETF has nearly doubled.

So the big question is whether this whole move in gold mining stocks is a fake out, or whether it will continue.

Of course, nobody can predict the future when it comes to pricing securities.  But we can look at the driving forces, both up and down.

The big threat to the mining sector is a deep recession.  Virtually all stocks were hammered in the fall of 2008.  Gold and gold mining stocks did recover with the rest of the market in 2009 with the Fed’s aggressive monetary creation.

In a recession, cash is king.  Or maybe bonds are temporarily king.  But unless it is a recession within a high inflationary environment (think 1970s), then cash and bonds are typically the winners.

Still, I find it interesting that gold surged upward in January 2016 when stocks were taking a tumble and scaring investors.  It seems that all rules are being thrown out the window in today’s environment.  So it wouldn’t completely surprise me if gold prices, and maybe even gold stocks, actually held up in the face of a recession and falling stocks in the general market.

The good performance of gold stocks in 2016 may just be a matter of getting back a little of what was lost in the previous 5 years.  Gold stocks were an absolutely terrible investment from 2011 to early 2016.

GDX was briefly above $60 per share in 2011.  So even with the big run in 2016, it is still less than half of its all-time high.

Generally speaking, I am favorable towards gold mining stocks right now, but I still think it should be a relatively small portion of one’s portfolio just because of the risk.  A recession, which I see as likely in the near future, is a real risk, but I think gold stocks would survive better than in many past recessions.

If we keep muddling along, then gold stocks will probably do the same.  We might see more gains, but they won’t be astronomical by any means.

The one thing that would really set gold mining stocks on fire is if the Federal Reserve announces another so-called quantitative easing program.  This means that the economy would likely have to get much worse first.  But another injection of money by the Fed might be the catalyst to scare people away from the U.S. dollar and into hard assets, particularly gold.

If the gold price can go up less than 20% with GDX doubling in price, imagine what the mining stocks would do if the gold price went up 50%.  Those would be some serious returns.

That is why I like gold mining stocks, but with the disclaimer that they are very risky.  While they can easily lose 75% in a bear market, they could also gain 500% or 1,000% in a renewed gold bull market.  Those are gains to get excited about.

Gary Johnson may be a Libertarian with a large “L”, but he is not a libertarian with a small “L”.  He is a member of the party, who also happens to be the LP presidential nominee, but philosophically, he deviates quite a bit from libertarianism.

The more I see of Johnson and the more I think about it, the more disappointed I am.  It was a great opportunity for the party to put somebody out there who would actually represent the libertarian viewpoint.  Instead, we have a guy trying to get elected, or at least get a high vote total.

There is nothing wrong with trying to get elected if it is secondary.  But if it means throwing principle out the window, then it doesn’t do any good.  If that is the case, there is no point on getting him in office because he won’t govern like a libertarian.

New Mexico may have been more fiscally sound than the average state during Johnson’s time in office, but that isn’t saying much.  Did he fundamentally change the structure of anything significant?  He didn’t decline all federal money for education in the state.  He didn’t get rid of the state income tax.  It took Colorado to be the first state to legalize marijuana.  It still isn’t legal in New Mexico.  In other words, other than not blowing up spending in the state to astronomical levels, he didn’t really do all that much.

When you get to Washington DC, and especially the White House, the pressure is a lot greater than any governor ever experiences.  The lobbyists and special interests are at the door before you ever move in.

Johnson doesn’t believe in the freedom of association, which is a basic libertarian element.  Maybe it is uncomfortable for him to take this position, but that is what we need.  We need for someone to take a stand and be willing to educate the public.  Unfortunately, Johnson is not at all philosophical and just doesn’t come across as all that intelligent.

Tom Woods has spoken about Johnson and libertarianism.  He says it drives him nuts when he hears that a libertarian is someone who is fiscally conservative and socially liberal.  That is what Johnson is saying all the time in response to the question of “What is a libertarian?”  That phrase now drives me nuts too.

That question is a great opportunity to introduce people.  There are many ways to effectively answer it.  You could say that it means you should not initiate aggression against others.  Or you could say that it means you should be able to live your life how you want to live it, and not the way that the politicians want you to live it.

This whole answer of fiscally conservative and socially liberal is so lame.  I am almost embarrassed to say that I probably used it a time or two in the distant past.  But libertarians don’t have to be socially liberal.  They just have to oppose aggression against others who are not encroaching on other people.  It doesn’t mean you have to approve of what they are doing.

And then there is foreign policy.  If there is one issue where the president could really make a difference, this is it.  I talk about economics a lot because that is what interests me and perhaps what I am strong at.  But foreign policy is really the number one issue, especially when talking about the presidency.  And even here, it is closely linked with economics because the spending on foreign policy is hundreds of billions of dollars per year (at least).

While Johnson certainly sounds better than Ted Cruz, Jeb Bush, or Hillary Clinton, I am not convinced that he would do the right thing if he actually got into office.  Now that he is the libertarian nominee, he is already getting wishy-washy.

When asked about ISIS, Johnson said that he would involve Congress.  But what is there to involve Congress about?  He could withdraw the troops within the first week of taking office.  All U.S. troops can get out of Iraq and Syria, or better yet, the entire Middle East.  There, the ISIS problem is solved.

Let’s say Hillary Clinton gets indicted and is forced out of the race, just hypothetically speaking.  Now let’s say it is a three-way race between Bernie Sanders, Donald Trump, and Gary Johnson.  Out of those three, I would have the least amount of confidence in Johnson (and Weld) than I would the other two in terms of foreign policy.

Trump and Sanders are not libertarian when it comes to foreign policy.  They are both inconsistent.  But I believe these two would have a better chance of standing up for what’s right and actually come closer to enacting a non-interventionist foreign policy than Johnson and Weld.  There is a better chance that Sanders and Trump would not sell out to the special interests.  It’s my opinion and I could be wrong, but it is a strong and telling statement.

Right now, Johnson is giving ammunition to those who like to say that a libertarian is just a Republican who likes to smoke pot.  That describes Johnson really well, except he is not a libertarian.

The Swiss people have helped me confirm my faith in humankind.

I recently wrote about a ballot initiative in Switzerland that would “give” a guaranteed income to all people.  While the proposed initiative had no set figures, the general figures advocated were 2,500 Swiss francs for every adult per month and 650 Swiss francs for every child per month.

Since the franc is close to par with the U.S. dollar, you can figure out how much this would be.  A family of four (two adults and two children) would “earn” over $75,000 per year without doing anything.

Well, the Swiss people have spoken and struck down the proposal overwhelmingly, with over three-quarters of voters going against the initiative.  This is good news for the Swiss and good news for liberty.

I don’t know what other countries would have done with a similar proposal, but I’m guessing that it would not have turned out as well in most places.  If such a vote happened in the U.S., I think more than a quarter of the voters would vote “yes”.  But I am optimistic that a majority would still vote “no”.

I haven’t heard the Bernie socialists (or Hillary socialists) propose anything similar for Venezuela.  I mean, if it is such a good idea, maybe it can help the people there.  For some reason, the self-described socialists and progressives in the U.S. don’t really want to talk about Venezuela these days.  They would prefer to talk about Norway, which isn’t actually a socialist state.

If Switzerland had passed this initiative, or even if the vote had been close, then it probably would have encouraged similar legislation or initiatives elsewhere.  But maybe this overwhelming defeat will keep this idea away, at least for a while longer.

As I wrote before, I can understand why a non-socialist might actually favor this proposal, if he thought that we could get rid of the rest of the welfare state.  But only a truly naive person would think that.  We know from experience that the handouts and lobbying would not go away just because of a guaranteed income.

I actually don’t think a lot of U.S. politicians would really favor the idea because it would call into question the whole welfare state.  They like the status quo too much to rock the boat in this fashion.

I am often seen as a pessimist in what I say and write about the U.S. economy.  I prefer to see myself as a realist.  I am only pessimistic in the short run.  Compared to most other libertarians, I am a major optimist.  I believe that the prospects for liberty in the future are very strong.  As Harry Browne said, human nature is on our side.

I think the Swiss showed this recently.  Harry Browne was a big fan of Switzerland and even lived there for a time.  The country has slipped in certain aspects in terms of liberty, but we see that the deep roots are not easy to tear up.

Now if only the U.S. would emulate Switzerland with its foreign policy.  That would really make me an optimist.

The most recent jobs report came out and the results were seen as rather dismal.  The numbers for May showed the fewest number of jobs created in the U.S. since September 2010, nearly 6 years ago.

The statistics show there are currently just over 144 million payroll jobs in the U.S.  But about 29% of the eligible population (16 and older) is not in the labor force.  This is almost 95 million Americans.

These are really complicated numbers and I am not aiming at analyzing them here.  I just want to point out the many variables and the many reasons for changes in the numbers.

As many economic bears like to point out, the official unemployment rate is likely understated because it includes those with part-time jobs (some of whom would like full-time work).  In addition, the unemployment statistics don’t count those who have simply given up looking for work.  It is true that some people just may give up because they can’t find a decent job, or at least a job that pays something that is worth it to them.

I believe that the critics of the unemployment statistic are correct that they are probably understated.  However, they probably aren’t as understated as what they make them out to be.

For example, some people may want to work part-time.  In addition, some people may stop looking for work for reasons other than just not finding a job.  A family might decide that it is better for the mother/ wife to stay at home with the kids rather than pay for daycare.  Maybe she could find a job making $25,000 per year, while daycare for two kids would cost $15,000 per year.  When you factor in taxes, she might only be netting a few thousand dollars per year, which just isn’t worth the effort.

In addition, we have to consider that some people do work under the table, or in the black market.  There are people who find part-time work who don’t report their incomes.  These do not get counted in the employment numbers.

As far as the total number of Americans not participating in the labor force, there are again many variables.  Some might be having difficulty locating work.  Some couples may just find that it isn’t worth it for one of them to work because of the higher marginal tax rates.  If one person makes $100,000 per year and the spouse could make $20,000 per year, it makes sense for the spouse to stay at home, especially when the net pay will end up being closer to $12,000 after taxes.

There is also a factor of retirement and early retirement.  Some people may decide to retire a little earlier than planned and just cut expenses more, since they can’t find a job that pays nearly as much as what they were previously making.

Sometimes unemployed people is good news.  Maybe it means increased savings or income.  If a family elects to have one of the parents stay at home, maybe that just means that one of the parents is doing well enough for that to happen.  Unfortunately, on the flip side, taxes can be a large deterrent to working, which distorts the job market.

There is also an argument to be made that taxes can encourage more work because people need to earn more to make up for the lost money in taxes.  This is probably the main reason there are more families with two working parents than what existed in the 1950s.

In terms of retirement, you could have a situation where someone does very well and decides to fully retire at age 55.  This is not the common situation, but it does happen.  In this case, the person exiting the work force is a sign of good economic news.

Again, I didn’t set out to come to any conclusions with all of this.  I just want to point out that there are many reasons and variables to consider when looking at jobs numbers.  It is not all good news or all bad news.

Overall, I am a short-term bear on the economy.  I think the one statistic that matters is real income, which is basically flat.  If price inflation is understated, real incomes are probably down significantly.  Most people are finding that their raises don’t even cover the increasing costs of health insurance.

There is little question that the American middle class is struggling more today than it has in the past.  We are far better off in terms of technology and certain aspects in our living standards.  But in terms of income as compared to the costs of basic needs, things are stagnant at best.

That is why I expect some kind of a major correction.  We need a correction to reallocate resources and to lower prices so that things are more affordable.  It will be painful, but it is needed.  The longer it is delayed, the more painful it will be.

I’ll keep watching the jobs numbers, but they do not give us the overall picture because of the many variables.

The economy has been very quiet.  Stocks started out 2016 looking bad and making the economy look unsettling.  But stocks have done reasonably well over the last few months.

The Fed has held off raising interest rates, which is really just the interest it pays banks to hold reserves.  Maybe the Fed will hike the federal funds rate by one-quarter of a percent in a couple of weeks, but either way it doesn’t tell us much.

We have an election in November which is grabbing the national news.  Some people think the economy will hold up well until that time.  I hear people say that the Fed isn’t going to allow stocks to crash leading up to the election.

This is giving way too much credit to the Fed.  It can’t control the decisions of millions of people.  The most the Fed could do is create more money out of thin air in hopes that it props things up for a while longer.  But the Fed hasn’t been creating new money since the end of QE3 in October 2014.

History also tells us that stock crashes and recessions are common prior to a presidential election.  The economy was terrible in 1980 when Carter had to face off against Reagan.  And, of course, the economy tanked just before the 2008 election.

One thing that is a bit strange right now is that there are no obvious massive bubbles, except perhaps stocks.  Real estate is a bubble in certain areas such as Silicon Valley.  But nationally, housing prices are nowhere near the bubble levels of 9 or 10 years ago, especially when you adjust for the inflation of the last decade.

The oil bubble already crashed, as well as any bubble in precious metals, particularly silver.

And while stocks would get hit hard in a recession, it is interesting that they are somewhat stable right now.  This can change quickly.  But typically with a bubble, there is a last stage where everything is completely irrational.  In 1999, tech stocks were going up at ridiculous rates.

Still, it doesn’t always have to happen this way.  The bottom could drop out of U.S. stocks next week without a last major surge.  Maybe January 2016 was the last warning for everyone to get out.  You can only get so many warnings.

The important thing to remember is that the Fed created a massive amount of money from 2008 to 2014.  The adjusted monetary base quintupled over that time.  Much of this new money went into excess reserves at the banks, but not all of it.  And it is still somewhat inflationary nonetheless.

The Fed has been tight for a year and a half.  The Austrian Business Cycle Theory tells us that the misallocated resources will be exposed and a correction will occur.  The artificial boom will become a bust.

One of the things that also makes this strange is that there was never that much of a boom, except in stocks.  It is almost hard to call the last 7 years a recovery.  Unemployment has dropped, but wages have remained stagnant at best.  The average American is feeling the pinch with incomes just not going as far as they used to go.

Meanwhile, the national debt continues to grow, and the unfunded liabilities get ignored.

When things are relatively quiet, it is easy to expect that things will just keep humming along quietly.  But when things are unsustainable, they must eventually stop.

And based on knowledge of monetary policy and government intervention, we know that our current situation is unsustainable.  The debt is unsustainable.  The unfunded liabilities are unsustainable.

Do you ever wonder what it was like for people a hundred years ago or more when they didn’t have weather radar?  You could have a hurricane just a couple of hundred miles offshore with little warning that it was about to hit you within a day.

There is often a calm before the storm, literally and figuratively.  When you see some clouds forming in the distance and the waters start to get choppy, how do you know if a big storm is about to hit?

The answer is, you don’t really know.  You just have to be prepared for what you know is possible.  You should really be prepared when you know it is inevitable.

The Libertarian Party has just selected its presidential and vice-presidential candidates in Orlando.  Gary Johnson was nominated as the candidate for president, while William (Bill) Weld was nominated as the candidate for vice-president.

Johnson barely missed the nomination in the first round of voting, falling just short of the needed majority.  He easily beat Austin Petersen (21 percent) and John McAfee (14 percent) in the second round of voting.

It was similar with Bill Weld.  He came up just short in the first round of voting, but then won a majority in the second round.  Weld was Johnson’s pick for VP, so it is little surprise that the vote was similar.

I am not a huge Johnson fan, but he really does seem like a decent guy.  He is no hardcore libertarian and does not understand the issues in depth as many libertarians do.  Unfortunately, with Johnson going out of his way to promote Bill Weld as his running mate, he goes down a few more notches in my book.

Weld is a former governor of Massachusetts.  Johnson, being a former governor of New Mexico, claims this makes a strong ticket.  The problem is that Weld is a Republican hack.  It would not surprise me if the “Never Trump” crowd of the Republican establishment helped Weld behind the scenes.

Weld has supported the past Republican presidential nominees including Romney, McCain and Bush.  He actively campaigned for Romney.

“The past is the past”, you say?  Weld endorsed John Kasich in the 2016 Republican primary.

This guy, who is a member of the Council on Foreign Relations, is the Libertarian Party’s nominee for vice president.

I think I would prefer Trump.

You can’t get much more “Republican establishment” than Bill Weld. It is disappointing that the delegates ultimately chose him.  It is disappointing that Gary Johnson had him as his first choice for a running mate.

Unlike some hardcore libertarians, I am not against voting in its entirety.  I am not even completely against voting for the lesser of evils, as long as the lesser evil is somewhat close to where I want to be.

If Johnson had preferred an actual libertarian as a running mate, perhaps I would have considered voting for him just as a protest vote.  But with this support for Weld, there is no way I can do it now.

The most important issue to me is foreign policy.  It may not directly impact me in the short run, but I believe from a moral standpoint, it is the number one issue.  We should advocate an end to murder and suffering from U.S. foreign policy.

This is also the one issue that the president can have the greatest impact, assuming he survives long enough to do it.  The president can withdraw all of the troops from overseas and bring them home for a purely defensive stance.

As a bonus, ending all of the wars and interventions would save hundreds of billions of dollars per year.  This would also help the economy, assuming it weren’t wasted elsewhere.

On the issue of foreign policy, I actually trust Donald Trump more than I do Gary Johnson and Bill Weld.  Johnson says he is not an interventionist, but he still doesn’t say it with the same authority as someone like Ron Paul.  Johnson sometimes sounds more like Rand Paul than Ron Paul.

I have no idea what Trump would do as president.  He has been inconsistent with his message.  But his inconsistency on foreign policy is better than the horrible consistency of the interventionists, which includes Hillary Clinton and all of the other previous Republican candidates who went up against Trump.

At least with Trump, there is a chance for a less interventionist foreign policy.  If Johnson gets in, then Weld gets in.  If Weld gets in, then  the Republican establishment gets in.

It is terribly disappointing for me.  I have been active locally with the party in previous times.  The Libertarian Party has not had a really strong (and libertarian) candidate since at least 2004.  Michael Badnarik (2004) may not have been the best candidate, but at least he stood on principle.  In 1996 and 2000, there was Harry Browne, who was great.

Since 2004, it has been a disaster with Bob Barr in 2008 and now Johnson in 2012 and 2016.

Johnson is saying that he needs Weld so that they have a chance to win the election.  He has absolutely no chance of that.  He is playing spoiler in favor of Hillary.  The Republican establishment wants Hillary Clinton because they don’t want Donald Trump.

I hate it when LP candidates say they can win.  That should not be the point of running a LP presidential candidate.  The point should be to educate and inform others of a libertarian message.  Harry Browne used his candidacy for many interviews to spread his message.  These were interviews that he would not have otherwise had.  He never had any illusions of winning.

I could have easily attended the convention in Orlando this year.  Unfortunately, there was nobody I was excited about.  I miss Harry Browne.  I miss when Ron Paul was running for president.  Right now, there is nobody to convey the libertarian message from a political platform.

I will probably not be voting in the general election.  If I could be nearly certain that Trump would stop the wars, then I might consider him as the lesser of evils.

In June, the Swiss will vote on a referendum that would set a guaranteed minimum income.

Although the details are not spelled out – which is rather strange considering it is an initiative to be voted on soon – the campaigners have generally been calling for an income of 2,500 Swiss francs per month for adults, and 625 Swiss francs per month for children.

The U.S. dollar is currently around par with the franc, so this would be about $2,500 and $625 respectively.  This would mean a guaranteed income of about $30,000 for a single individual without a family.  A family of four would be looking at $75,000 per year.

The first thing to note is that apparently socialists (or some variant) infect every livable corner of this entire planet.  If this can happen in Switzerland, it can happen anywhere.  We’ll see what happens with the actual vote, but just the fact that this is an initiative  that will be voted on is saying something.

And that leads to a second point.  You would think Switzerland would be the last place on earth to consider something like this.  Not only does the country have a long history of liberty (relatively speaking), it is also a very decentralized country.  This is probably one of the main reasons it has been able to maintain neutrality in foreign affairs and stay relatively free.  Decentralization tends to work in favor of liberty.

But what are the possibilities of such a program being enacted, not just in Switzerland, but also the United States?  There have not been any serious proposals in the U.S., such as pending legislation, but there have been suggestions about a guaranteed national income.

There may be, at least in one sense, some libertarians who would actually be sympathetic to the proposal.  To be sure, there probably aren’t many libertarians advocating it in Switzerland.

The one aspect that could be attractive to libertarians is the hope that it would do away with the rest of the welfare state.  If you are a family of four making $75,000, what justification is there for subsidized housing or food stamps?  Why would you need government healthcare, when you should be able to easily afford insurance at that point?  Of course, this is assuming minimal price inflation.

And what about the minimum wage?  If a single person is guaranteed $30,000 per year in the U.S., there is no need to have a minimum wage, even if it actually did “work”.  Someone could go out and make $5 per hour ($10,000 per year) and still have an income of $40,000 at that point.

Unfortunately, as libertarians, we also know that it wouldn’t work this way.  You can’t get rid of the lobbyists that easily.  You can’t get rid of the vote-buying that easily.  There will always be someone with a “need”.  There will always be inequality that constitutes an injustice to somebody.

The other factor, as mentioned above, is inflation.  How would the Swiss (or Americans) pay for such a scheme?  The tax money doesn’t magically appear out of thin air.

A family of four might get $75,000 per year, plus whatever regular income they make, but they also might find the average house price in the U.S. to be over a million dollars.  They might find gasoline going for $12 per gallon.  They might find a casual lunch out to cost $50.

And that is the key here.  We know that there is no magic.  Wealth is produced based on the savings and investment that go into production.  The most wealth is produced when we live in a society that upholds property rights and allows voluntary individuals to engage in peaceful economic activity.  If there is a magic formula, this is it.  You don’t get rich by shuffling around bank accounts and printing gobs of money on a computer screen.

Ultimately, I don’t think such a proposal would fly in the United States.  There are too many special interests who do not want a change to the current system that we have now.

For the sake of the Swiss, let’s hope this referendum fails overwhelmingly.  If for some reason it does pass, it would make for an interesting experiment.  Then again, Venezuela is an interesting experiment right now, which is translating into massive suffering for millions of people.

Bernie Sanders won’t go away.  Despite Hillary Clinton’s lead in the race for delegates, Sanders refuses to drop out.  Some say he wants to grow his donations and mailing list based on California, even though he knows he can’t win.

I am wondering if Sanders is just hanging around just in case.  Sanders himself is not that big of a threat to Clinton, at least in terms of the Democratic nomination.  But Hillary Clinton has other problems that might make Sanders the default nominee.

It is interesting that the media has not been all that warm to her.  It is certainly not an all-out attack as we see on Trump, but networks other than Fox News have actually been somewhat critical, as well as other so-called mainstream media outlets.

I think the establishment does not really want Hillary Clinton as the nominee.  They probably don’t want the baggage that goes with her and her husband.  It is not that they care about her immorality or anything like that.  It is just that they don’t want the whole system to be questioned as more Americans learn how bad she really is.

I have been saying for a while now that Sanders is her third biggest threat.  The first two are a possible FBI indictment over the email scandal and an economic recession.

I now push Sanders into fourth place amongst her major threats.  Donald Trump has moved into the top three.

I wrote in an earlier post about the possibility of bringing up the crimes of the Clinton family.  I specifically mentioned the “suicide” of Vince Foster, as well as the many other suspicious deaths that surround the Clinton family.

While Trump has gone there yet, he has already invoked Juanita Broaddrick, who claims she was raped by Bill Clinton.  I have seen her in several interviews and she does not seem like one who craves media attention.  I believe what she is saying and I think many others would do the same if they knew about her.  It is hard to believe that many Americans do not know the story of Juanita Broaddrick, or who do not care enough to look into it.

Trump is already running an ad against Clinton which invokes the story of Juanita Broaddrick.

I think the next step will be to link Bill Clinton with the pedophile Jeffrey Epstein.  Clinton has taken repeated trips on his private jet.  Personally, I would be surprised if Bill Clinton isn’t a pedophile.

That will be stage two for Trump.  He just has to mention it and it becomes an elephant in the room that the media can’t ignore.  They can call him crazy, but you know millions of people will hit “Google” and read more.

It is hard to believe that the allegation of rape is in third place in terms of serious crimes.

In first place is Vince Foster and the other mysterious deaths.  I think Trump should wait until a debate to bring this up.  This would catch Hillary Clinton flat-footed.  Again, millions of people would be on Google looking up the story.  I think she would be destroyed if the majority of people had any doubts.

Hillary Clinton really wouldn’t know how to respond.  The best she could do is say that Trump is a conspiracy theory nut.  But she won’t be prepared.  Do you think Hillary’s debate-prep team is asking her questions about Vince Foster?

This may be the reason that the media is ok with letting her fall now. They probably hope for an indictment by the FBI so that they can force her to step down.

At that point, Sanders may or may not be the nominee.  He hopes he would be the nominee, but it would make it easier for the establishment to call in Joe Biden or someone else.

So while the bets are on Hillary Clinton to win the nomination, and even the presidency, I still have my doubts.  Maybe it is wishful thinking.  If someone is bold enough to bring up Hillary Clinton’s shady past, it is Donald Trump.  He is already doing it.

It is alleged by the SEC that golfer Phil Mickelson is guilty of insider trading.  Mickelson profited $931,000 from a stock trade after supposedly receiving a tip from a sports gambler to whom Mickelson allegedly owed money.

Mickelson has avoided criminal charges and has agreed to pay back all of the gains, plus interest.

First, it is important to remember that just because he has agreed to pay back the money he made from the stock transactions, it does not mean he is guilty of anything.  We hear about plea deals all of the time, but it doesn’t mean the person is guilty.  The lawyers just know the risk of going to trial, even if their client is completely innocent.

In the case of Mickelson, he makes millions of dollars from his golf winnings.  He makes tens of millions more per year from his endorsement deals.  He would rather pay approximately one million dollars to the federal government rather than risk going to jail.  Even if his lawyer thought he had a 95% chance of escaping jail time, it would make sense to pay the money rather than risk the 5% chance of going to jail.

Second, it is important to distinguish between what is written in law (or federal regulations) versus what the law should actually be.  Just because there are insider trading laws, it does not mean that it should actually be illegal or even that it is immoral.

This is a point that was made by some libertarians when Martha Stewart went to jail.  She actually ended up going to jail for supposedly lying or obstructing justice.  But it all originated over allegations of insider trading.

Of course, politicians get away with insider trading all of the time.  They are writing the laws.  And we can be sure that bankers are getting a major advantage due to their inside knowledge.  And by the way, does anyone remember that Hillary Clinton made $100,000 trading cattle futures?  Is Hillary Clinton that much of an investment pro?

Insider trading should not be a crime.  As it stands now in the legal system, it is a victimless crime.  There is no victim.  Mickelson will pay the government about $1 million.  It isn’t going to anyone who was actually hurt by his actions.

When somebody acts on inside information, it is actually bringing information to the marketplace.  It means that stocks and other assets are more accurately priced given reality.  You could say that it hurt people who were selling the stock, but that isn’t even true.  They were going to sell anyway.  If anything, the insider trader is giving them a better price than what they would have sold for anyway.

It is also interesting to note that inside information doesn’t always work.  There are many people who act on tips where it turns out to be untrue.  Or, even if it was true, maybe the market didn’t react the way it was expected.  Someone could tell me what the Fed will do at its next meeting, but even with that information, I probably couldn’t tell you with any certainty how stocks would actually react.

The whole notion of insider trading is rather ridiculous because we all have unique knowledge.  Otherwise, what would be the point of reading about any companies or any economic news?

I may have had a bad experience shopping in a particular store.  From that, I may decide not to ever buy that company’s stock because I saw first-hand how it treats its customers.  Maybe this was just a rare experience for this store.  Maybe it is widespread.  But someone else may not have had that same experience and bought the company’s stock.  I didn’t buy the stock because I had “inside information”.

In terms of the financial industry, it tends to be self-regulating.  It is actually the presence of the SEC and other agencies that provide some moral hazard.  People think they are safer than they actually are because of these agencies.  Just think about the failure of the SEC in regards to the Bernie Madoff scandal.

Most companies don’t want a reputation of having their employees trading stocks based on inside information.  If I knew that someone was trading a stock before making trades for their clients for that same stock, then I would surely not do business with that company.  It is not because of government regulation that most companies run a tight ship in keeping their employees from trading individual stocks around the same time as making trades for clients.

Since there is no victim involved, insider trading should not be a crime.  I don’t believe it is immoral in many cases either, but that is for the marketplace to decide.

With regards to Mickelson, I will say that he was rather stupid for doing what he did.  He may have a gambling problem, but I really don’t know.  Still, the guy earns tens of millions of dollars per year.  He has absolutely no need to buy any individual stocks.  At most, he should buy an index fund as part of a well-balanced portfolio that would also include other asset classes.

But stupidity is not a crime.  Otherwise, most of us would be criminals.

I hope that Mickelson learns his lesson and stays away from trading individual stocks.  He received good advice from his lawyer in agreeing to pay back the money rather than face a criminal trial.

More so, I hope the American people stop listening to the media and start thinking for themselves.  They should demand an end to these victimless crimes and this injustice.