You read stories all over the place about how Americans are not saving.  A large percentage of Americans don’t even have minimal liquid savings for relatively small emergencies, let alone an actual job loss.

According to this article, 66 million Americans do not have any emergency savings.  And 47 percent of Americans say they could not afford an emergency expense of $400 without selling something or borrowing.

We hear from financial advisors about the importance of having an emergency fund.  Some recommend up to 6 months worth of living expenses.  Some will even recommend 9 months.

I think this can depend on the person’s illiquid assets and also their lifestyle.  If you have a few hundred thousand dollars locked up in a 401k with your employer, then a job loss would not be as devastating because you could access your 401k funds.  I know this is far from optimal, especially having to pay a penalty for early withdrawal, but at least you won’t be starving.

Lifestyle is particularly important.  If you make a six-figure salary and have a lifestyle to match it, then a good emergency fund becomes that much more important.

On the other hand, if you are young and single and you live on $2,000 per month, then you aren’t going to be too scared about a job loss.  You could pick up any old job to cover your living expenses if you have to.  Your bigger threat is an unexpected expense such as a costly repair to your car or house, or a medical expense.

If you own a house, then you should have a bigger emergency fund than if you are a renter.  If you own a house, then you know what I am talking about.  There are always unexpected happenings and maintenance expenses.  It is even hard to call them unexpected.  It would be more unexpected if you can go for a full year without having to call a plumber, electrician, A/C repair, or some other type of handyman.

But most Americans do not have an emergency fund of 6 or 9 months worth of living expense.  Most don’t even have liquid assets that could pay for one month worth of living expenses.  Part of this is our consumer-based culture.  However, a large part is the simple fact that government at all levels has made our lives so expensive and discouraged saving.

The thing that pains me the most though is that many people are just throwing money away because they don’t have any money.  I know this doesn’t seem to make sense at first, but let’s think about this.

If you don’t have any money, you end up paying out a lot more money in the long run.  Think about someone with credit card debt who is paying an interest rate of 15% on the balance.  For every month that balance is not paid off, more money is going out the door.

But it isn’t just straight debt where this situation arises.  In many cases, you get a discount for paying something in full.  I see this with homeowners insurance, car insurance, and several other things.

Let’s say your car insurance is $800 for a year.  You can pay the $800 at the start of your coverage for the year.  Or you can make monthly payments of $80.  Maybe there are options for quarterly payments or something like that, but you get the point.

In this example, if you pay $80 per month, that will be $960 for the year.  You could have just paid the $800 up front.  Instead, you paid an extra $160.  And in today’s near-zero interest rate environment, forget about the time value of your money, unless you were putting it into some kind of a successful start-up business at the time.

You would be surprised how many people will make the monthly or quarterly payment.  It has to be a large majority.  The only thing sadder than people not being able to pay the amount in full is seeing people who can pay the amount in full yet choosing not to do it.

If you have the money, pay the amount in full and take the discount.  Even if you are trying to build an emergency fund, there is no point.  If you have an emergency, you are still going to be paying $80 per month per the above example.  This is not analogous to paying off a 30-year mortgage.

Therefore, if you are among the many of struggling middle class Americans, you should at least strive to get a cushion and have some emergency savings.  You should at least have the savings available as part of your own “discount fund”, where you can take advantage of reduced premiums for paying expenses up front.

If you keep paying out extra, then you will never get ahead because your expenses will continue to be higher than they should be.

There is a saying that it takes money to make money.  This is not true, especially in today’s world, where many people start up on the Internet for a few hundred dollars or less.

However, this saying does apply to saving money.  It takes money to save money.  Make sure you are taking advantage of the discounts you are offered, especially on the big stuff.  It will add up to hundreds, perhaps thousands, of dollars per year.  It may also cost you less time, as you pay the bill once.

As a hardcore libertarian, I am accustomed to being disappointed by elections.  While I consider myself a long-term optimist, I am generally a pessimist when it comes to people entering a voting booth.

I find optimism where many other libertarians fail to open their eyes of what is right in front of them.  Homeschooling has exploded in the United States.  Despite the efforts of the left, gun rights have remained relatively strong.  Meanwhile, thanks to technology, communication and information is better and faster than ever before.  There is even hope that information overload will bring down Hillary Clinton and all of her crimes.

But forgive me for being a pessimist when it comes to elections.  On that front, libertarians are used to losing.  And even when we “win”, it is usually a loss when we find out that the person who won is not really on our side.

Elections that don’t involve individual candidates can be a different story.  It not only impacts policy going forward, but it gives us a good idea of where public opinion stands.

I was surprised with most others when the Brexit votes came in.  I was watching television at 11:00 EST at night.  I had just seen the preliminary results on the Internet.  I changed the channel to find some news of the Brexit.  Fox News was running a repeat of O’Reilly, or something like that.  The only station I found with Brexit coverage was CNN.

It just shows how little Americans were paying attention.  Unfortunately, that plays in to the stereotype of Americans living in their own little bubble, as if nothing else matters on this planet.

But Americans quickly started paying attention in the morning, especially as stock futures showed a steep decline.

By the end of Friday, the Dow finished down over 600 points.  Gold surged over 4%, blowing past the $1,300 mark.  The 10-year yield sank below 1.5% before finishing the day around 1.58%.

The British pound absolutely tanked.  It went below $1.35 per pound at one point after having been near $1.50 before the results.  The euro was also down, although not as much.  The U.S. dollar surged in comparison, yet gold still spiked in dollar terms.

I have seen speculation already that the establishment purposely took down the markets as revenge for the vote, in hopes to scare people.  But while I like a good conspiracy, and it is certainly possible to a certain degree, I think it is a simple explanation of the status quo being broken.  Financial markets get volatile when the status quo is disrupted.

In the days leading up to the vote, stocks were surging because investors thought the vote to leave was going to fail.  If there had been high expectations of the “leave” vote winning, then stocks would have already been lower before the results.

One thing that I will have to revisit with this whole story is how virtually everyone got this wrong.  The thing that surprises me most is the financial markets.  Even the bond investors were not on top of this one.

In 2012, I knew that Obama was going to win the election.  Well, I couldn’t know for sure, but I was reasonably certain.  InTrade told me at the time.  It nailed virtually every state.  The only one where it was wrong was Florida, but it basically had that one as close to a toss-up, so it wasn’t even that wrong there.

This is a fascinating subject, as the betting sites were far more reliable than the polls.  When large numbers of people bet with their own money, most or all of the little factors get factored in.  It is the wisdom of large numbers acting individually.

But the betting sites got the Brexit vote wrong.  I think these sites are far less reliable now.  The U.S. government essentially outlawed them in the U.S.  Unfortunately, even these markets are too regulated to be particularly useful any more.

As far as the leave vote winning, it is quite encouraging for libertarians and anyone who leans that way.  I’m sure most of the people voting to leave in the U.K. are not libertarians, but they at least understood how foolish it was to be controlled by a bunch of unelected bureaucrats in Brussels.  At least now they can be controlled by a bunch of elected (and still some unelected) bureaucrats closer to home.

I’m sure there were a lot of varying reasons for the 52% that wanted to leave.  Some are probably against immigration.  Some are probably tired of helping to bail out Greece.  Some are tired of the establishment in general.

Americans are wondering if it will impact the U.S. presidential election.  I don’t think it will impact it much, but it may be giving us a good look at public opinion.  People are turning away from the agenda of the globalists and listening more to the nationalists.  Trump is a nationalist, so he has to be feeling pretty good about the vote in the U.K.

Still, every libertarian should cheer this vote that just happened.  Decentralization is almost always positive for the cause of liberty in the long run.  This was basically a secession.

It is nice that the British people (at least 52% of them) are so open to the idea of secession.  If only the British crown had been more understanding in the 1770s.  If only Lincoln had been more understanding in the 1860s.  Let’s hope the European Union doesn’t send in the military to suppress this secession.

The entire establishment was against this.  Obama spoke against it.  Janet Yellen essentially warned of it.  Presidents and prime ministers all around were opposing the Brexit.  And most of the establishment media swung hard against it.  Yet despite all of the propaganda, the leave vote passed.

This just shattered the dreams of the one-world government people.  The one-worlders lost this one.  Now they are afraid that the whole European Union may break apart.  For me, it couldn’t happen soon enough.

Libertarians, let’s savor this moment.  We don’t get to brag that often about victories at the ballot box.

The financial markets have been making some moves lately.  Gold briefly went over the $1,300 mark.  The 10-year yield was close to 1.5% before going back up a little.

Stocks have been up and down, but mostly trading within a fairly narrow range.  They were up on Monday.

The foreign bond market has been interesting to watch.  The German 10-year yield briefly went negative last week.  The Japanese 10-year yield fell to about negative 0.2%.  This yield has been negative for a while, but this was the lowest (the highest negative) it had reached.

Some are speculating this has to do with the British vote on June 23 on whether to leave the European Union.  Known as the Brexit referendum, the polls were recently showing that voters had shifted opinion to the “leave” camp.

The polls have reversed a bit in the last few days, which may have contributed to the rising stock prices on Monday.

My prediction is that the Brexit leave vote is going to fail and that the United Kingdom will remain a part of the European Union for now.  I hope I am wrong, but I think the establishment is going to squeak this one out.

Decentralization is usually good for liberty.  I know that some in the “stay” camp are arguing that it would hurt free trade, but that is rather ridiculous.  There is no reason, other than maybe the establishment intentionally blocking it, that Britain cannot trade freely with European Union countries, even if it is not a part of it.

You don’t need political unions or managed trade agreements for free trade.  You just need a government that does not put restrictions on the trade.  The term “free” means that it is free from government interference.

No matter what happens with the vote, Western Europe is in trouble.  Greece is still a mess.  Maybe the British people are tired of bailing out Greece.  A lot of the southern countries in Western Europe are a mess.

This state of affairs with massive monetary inflation, negative interest rates, and growing debt is not normal.  It isn’t normal regardless of whether it is in Japan, Western Europe, or anywhere else.  It is also unsustainable.

I think it is a matter of time until the European Union breaks up.  There are too many cultural differences and competing interests.  The people of the more solvent countries are going to get tired of bailing out the more irresponsible ones.

If the Brexit vote results in leaving, then there will probably be some extra short-term volatility in the markets.  It will settle down eventually.  If it doesn’t, it isn’t because of Brexit, although some might try to use that as an excuse.

If you have an investment plan, don’t let the Brexit vote impact your decision making over the short term, unless you are a day trader.

There is a lot of information still coming in about the Orlando shooting that took the lives of at least 50 people in a nightclub.  I purposely did not post about this subject right away.  I find that with incidences like these, there is a lot misinformation at the beginning.

There is probably still a lot of misinformation, but at least some things are a little clearer.  Still, there are a lot of bizarre twists to this story.

This story involves a lot of hotly debated political topics all in one realm.  We immediately heard talk about gun control, hate crimes, terrorism, and Islam, just to name the big things.

We first need a little perspective on this.  The U.S. is a country of about 330 million people.  The only reason this is a story is because those 50 deaths happened in one place at one time.  This isn’t to minimize the event.  It is certainly tragic for those involved and those who lost loved ones.

For perspective, there are tragedies every day in the U.S.  In every hour of the day, there are 50 deaths due to some kind of an illness or accident.

Also, why does there always have to be a solution to a problem that has already happened?  There are crazy people out there.  Luckily, even most crazy people don’t take things this far.  We don’t live in a perfect world.  And we also live in a somewhat free society.  Things will always happen.  They happen in authoritarian societies as well.

If there is a solution, it lies in our overall culture.  I don’t think it is possible to address this situation and to minimize the likelihood of these events happening in the future unless we take a really broad view.

Before getting to that, I would just like to point out some of the bizarre aspects of this story.  There have been reports that there may have been a second shooter.  If this is the case, why don’t we hear more about this?

Another bizarre thing is that the shooter was eventually killed when a SWAT team raided the club.  This was supposedly about four hours after his initial rampage.  How is this even possible?  He had already killed a huge number of people.  What was the SWAT team waiting for?  And were there severely injured people who could have possibly been saved if the police/ SWAT team had entered hours earlier?

Another strange, yet not-so-strange, thing is that these killers are always somehow connected to the FBI or CIA.  You could say this goes back to Lee Harvey Oswald with the CIA.  There were connections between the alleged bombers of the Boston Marathon and the CIA.  Was this Orlando shooter given this whole idea by FBI agents?

This event also shows the total uselessness of the FBI, CIA, NSA, and everything else government related.  It may or may not show their incompetence, but certainly the uselessness and maybe evilness.  The FBI received complaints about this guy being a danger.  The NSA is supposed to track everyone’s communications.  So why wasn’t this guy stopped?

This story is also bizarre in the fact that it is becoming apparent that this guy was gay or bisexual, or at least had gay tendencies.  Maybe he had a horrible conflict in his head between his sexual preference and his religion, but we really don’t know for sure.

The last important point – and this gets to the title of this post – is what this guy was saying.  Supposedly a witness heard him yelling about Afghanistan (what he considered his homeland) being bombed during the shooting.

In this Fox News article, it is told how the shooter was making posts on Facebook after his shooting (and before the SWAT team entered).

One of his Facebook posts read: “You kill innocent women and children by doing us airstrikes…now taste the Islamic state vengeance.”

In other words, this act of terrorism is another case of blowback.  If there is a solution to this problem, it is rather obvious at this point.  The U.S. government should withdraw all troops from foreign lands, particularly in the Middle East.  It also must stop drone bombing or doing any harm to foreigners.

This isn’t blaming the victims.  It isn’t excusing the actions of the killer.  It isn’t suggesting that we should turn our back on crime or terrorism.

It is suggesting that the U.S. government needs to stop killing innocent people overseas.  It is immoral.  It is wrong.  And it also comes back to our shores in the form of blowback.

In most cases, they don’t hate us for our freedoms.  They don’t hate us because we have pretty women in bikinis.  They hate us because our government is murdering innocent people overseas and occupying the lands.  It really is that simple.

Unfortunately, this lesson seems to be lost on most people.  The left calls for more gun control.  The right calls for tougher measures against immigration, or to ban Muslims.  Yet there is little discussion of the obvious, which is to simply adopt a non-interventionist foreign policy.  As Harry Browne said, “When will we learn?“

The FOMC released its latest statement on monetary policy on June 15, 2016.  As expected, the Fed did not hike its target federal funds rate.

According to the statement, jobs were a big driver in the decision to not hike.

The statement read, “Information received since the Federal Open Market Committee met in April indicates that the pace of improvement in the labor market has slowed while growth in economic activity appears to have picked up. Although the unemployment rate has declined, job gains have diminished.”

I have already written about how unemployment statistics don’t give us a good picture because of all of the variables.  And the jobs issue, in and of itself, is rather meaningless to economic growth.

One of the big mistakes that almost everyone makes is assuming that jobs are an indicator of prosperity.  But jobs are not what make us wealthy or increase our living standards.  Productivity is key.

The government could create a whole bunch of jobs, but it doesn’t mean we are better off, especially if they are mostly useless.

Jobs are not unimportant, but it is a confusing issue.  The reason that unemployment rises during a recession is because it signals a reallocation of resources.  The fact that some jobs are going away is just an indication that it was a previous misallocation.

But in terms of jobs, there is always work to do, as long as we live in a world with scarce resource.

The FOMC statement was similar to its last statement in April, except for the somewhat bearish statements (at least by Fed standards) on the jobs picture.

As a side note, it drives me nuts when I hear Obama talking about creating 14 million jobs, or whatever number he is using now.  In the words of Obama, “You didn’t create that.”  And that number is meaningless because he started during a deep recession.  Also, how much do those jobs pay?  Also, how much has the population increased since that time?

Back to the FOMC statement, it was interesting that Esther L. George – one of the committee members – voted in favor of the Fed’s action to essentially do nothing.  She had previously dissented, saying that she thought the target rate should be raised.  This time, it was a unanimous decision.

Does she see something coming?  If the Fed still can’t raise rates, what are they so fearful about?  Will the Fed even raise rates at all in 2016?

I have said that the federal funds rate does not mean as much as in the past because it is not dictating monetary policy, at least directly.  Still, it could impact market rates and bank lending to a certain extent.  If the Fed can’t raise the rate it pays to banks by one quarter of a percent, what does that tell us about the fragility of the economy?

I still have my bets on a recession in the near term, but these things can take a while to play out.  Politically speaking, it will be interesting if a recession hits within the next 4 months before the election.

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.