I am a strong advocate for having a permanent portfolio as described by Harry Browne in his book Fail-Safe Investing.

I can’t say that it is necessarily a timeless strategy, but it seems to be a pretty good formula for the long run.  If the U.S. government ever threatens to seriously default (aside from inflation) on its debt, then we may have to reconsider.

I recommend that you have at least 50% of your financial assets in a permanent portfolio setup, or something similar.  This would not include real estate investments, ownership in a business (not including stock ownership), or home equity.

It is a portfolio designed to help you sleep at night.  You don’t have to fear what the stock market, or any other market, is going to do the next day.  If there is a stock market crash that drops stocks 20%, your portfolio will probably go down.  But the cash and bonds portion will likely help offset a large portion of the losses.

If you are a more conservative investor, you will probably want to have even more than 50% of your financial assets in a permanent portfolio setup.

Although I recommend this portfolio, it hasn’t been doing all that well over the last 5 or so years.  It served its purpose in the 2008/ 2009 financial crisis, but it has been rather weak since then.

It is hard to get a good accurate figure because you are supposed to rebalance the portfolio.  People will rebalance at different times.  In addition, the 25% allocated to each asset (stocks, bonds, gold, and cash) are approximations.

I like to track the permanent portfolio mutual fund.  The symbol is PRPFX.  It does not precisely mimic the portfolio as described by Harry Browne.  Still, it is close enough to use as a measuring stick.

The 5-year average return for PRPFX is just 1.12%.  The share price of the mutual fund is actually lower than it was 5 years ago, but it does pay out dividends.

The only reason it is positive at all over the last 5 years is because of 2016.  As of right now, the year-to-date return is 14.21%.

I have read in various articles that all (or most) asset prices are inflated right now.  Stock markets are at or near all-time highs in the U.S.  The U.S. dollar has still been relatively strong.  Gold has started to surge lately.  And bonds continue to do well, as long-term yields continue to fall.

With all of this, you would think that the permanent portfolio would be doing really well.  For 2016, it has done really well.  But prior to 2016, this wasn’t really the case.

This is easily explainable though.  The permanent portfolio, which is well designed for all economic environments (inflation, deflation, recession, and prosperity), has a bias towards inflation.  The portfolio will tend to generate higher returns during times of higher price inflation.

This is how it should be.  You want higher nominal returns in an environment of higher price inflation.  Since your purchasing power is declining, you need higher nominal returns to compensate for this.

While there has been significant monetary inflation from 2008 to 2014 as measured by the adjusted monetary base, this has not translated into high consumer price inflation.  Perhaps the CPI is understated, but it is still relatively low as compared to the rest of the era of the Fed.

It makes sense that the permanent portfolio returns have been low in an era of low price inflation and low interest rates.  Gold makes up 25% of the portfolio.  PRPFX has a little silver mixed in, which is worse in terms of volatility.  Gold has done poorly over the last 5 years, except for its recent surge in 2016.

In addition, the low interest rates mean smaller dividends.  Falling rates are good for bond prices, but the low interest rates hurt the payouts from bonds and the cash portion.  We all know that savings accounts pay close to nothing these days.  Therefore, the cash portion is basically ineffective in terms of providing any return at this point.

The main purpose of having cash is to lessen the blow of a recession, and to also buy assets if they fall in price and you need to rebalance.

I personally do not have all of my eggs in one permanent portfolio basket.  I like the investment though and I highly recommend it, but it is tough during this period of low interest rates.

I don’t like fooling with the portfolio, but I have previously suggested tweaking it a little if you can make it fit your needs better.  Instead of having the full 25% in cash and 25% in bonds, it could make better sense to take a small portion and pay down mortgage debt (or other debt), especially if the interest rate is high enough.

You have to be very careful with this strategy though, as things can change quickly.  If you pay down your mortgage, you are tying up this money.  You cannot use this money to buy cheap assets in an economic downturn.  You also can’t use it as emergency money, unless you are planning to sell your house or refinance.

In conclusion, I know that the permanent portfolio has been disappointing for some over the last several years.  But it has still served its purpose of preserving wealth.

You have to be patient and realize that the economy won’t stay like this forever.  We will see a stock market crash, or a spike in interest rates, or a spike in price inflation, or maybe a combination of some of these things at some point in the future.  When we hit more turbulent times, you will be thankful that you have your money in a permanent portfolio designed to weather almost any storm.

The FBI recently announced that it would not recommend charges against Hillary Clinton for using a private email server while working as Secretary of State.  While some of her opponents are disappointed, it comes as little surprise.

The Clintons have gone through life by using lies and threats and violence in order to gain power and to prevent others from dethroning them.

They are both highly intelligent.  I believe Bill Clinton is a sociopath.  He has the ability to turn on his emotions at a whim, as seen at Ron Brown’s funeral.

People who meet Bill Clinton say he is incredibly charming and can win people over almost instantly.  But this is the classic sign of a sociopath.  He can easily trick others into thinking that he is empathizing with them.

Hillary Clinton is not as skilled.  She is a liar and criminal, but she does not have the same ability as Bill to instantly charm people.  Still, she is pretty good at faking it for some people.  If she weren’t any good, then she wouldn’t be the presumptive Democratic nominee for president.

The lying and criminality goes way back to at least Arkansas.  I firmly believe that both of these individuals will do anything to gain and retain power.  That includes threatening others with violence, and following through with violence if necessary.

The number of people associated with the Clintons who either ended up in jail or ended up dead is astonishing.  It is hard to get an accurate count because some of the associations are more direct than others.  Even for a governor and president, it seems statistically impossible.

I understand that people in positions of power have greater connections and more people within their circles.  But if you don’t think that the Clintons are behind murdering people (not counting foreign policy), then you must believe it is a statistical aberration that so many of their friends and associates end up dead or in jail.

If you think this is too conspiratorial, you don’t have to dig much to still conclude that the Clintons are a highly corrupt and criminal duo.

The email scandal itself is obvious evidence.  There are many people who have gone to jail for much lesser offenses.  Military people have gone to jail for sharing pictures or text messages, where they didn’t even intend to disclose anything.  So even if Hillary Clinton did not have intent, if she were not above the law, she would be going to prison.

Of course, to think that there wasn’t intent would be incredibly naive at best.  She is obviously very intelligent and she knew exactly what she was doing when she used private email for state business.

Even aside from all of this, let’s go back to the final days of the Clintons in the White House.  Bill Clinton issued 140 pardons on his final day in office.

As a side note, issuing pardons is actually a constitutional function.  If any libertarian ever became president, he or she could instantly pardon all people convicted of federal crimes in which there was no victim.  This would include all people convicted of federal drug laws.

So it was certainly within Clinton’s constitutional power to issue pardons.  But when you look at the list, it is a lot of friends and associates.  It includes his brother.  It includes Susan McDougal, who went to jail so that she could spare jail time for Bill Clinton.

Clinton also pardoned Marc Rich, who was one of the most wanted men in America.  He was on the run from tax evasion and other charges.  From a libertarian standpoint, maybe he should have been pardoned, but it is the inconsistency and hypocrisy.  Bill Clinton did not pardon other tax evaders, most of whom would owe far less.

This was a complete abuse of power.  It actually received a little bit of attention from the mainstream press at the time.  But Americans have short memories.  Most vaguely remember anything about these pardons, which was a complete abuse of power.

Hillary Clinton is part of her husband’s (if in name only) team.  They married as a business partnership in order to gain wealth and power.

With the FBI passing on recommending charges against Hillary Clinton, it almost seems she is unstoppable.

Still, I remain optimistic.  Donald Trump is the best candidate to go up against her because he will attack her personally.

Don’t get me wrong here.  The actual political issues are incredibly important, but almost everyone is on the wrong side.  If anyone gets a little bit right in terms of foreign policy, it is Donald Trump.  That is why he is such a threat to the establishment.

I hope Trump continues to go after Hillary on her husband’s rape of Juanita Broaddrick.  I hope he keeps suggesting that Vince Foster died under mysterious circumstances.

In today’s world of the Internet, it is easy for anyone to look up these things and get a different side of the story (or any side of the story) that they wouldn’t hear on television.

I want to see the Clintons go down.  I want to see them in prison.  I want them to live long enough for most of the world to know just how bad these people are.  Their policies are terrible, but they are completely evil individuals.  Maybe they are matched by the Bush family, but that is a subject for another day.

I think Hillary Clinton could still lose the general election.  Donald Trump is very effective at debating.  I hope he doesn’t become conservative (not in a political way).

If there is any kind of a major economic downturn over the next 3 or 4 months, that could quickly derail Clinton’s campaign as well.

I think Hillary Clinton would be an absolutely horrible president in almost every way.  But there could be a few benefits.

First, the Republican Congress would oppose almost everything.  Sure, spending would still be out of control, but there would be no major legislation like Obamacare.  If there is one big fear I have, it is that Hillary Clinton would start yet another war.  I can’t count on the Republicans to oppose that.

One other possible benefit of a Clinton presidency is that it would keep the spotlight on her and her criminal career.  Maybe more investigations will be done on Vince Foster and others.  Maybe more investigations will be done on Bill and his possible child molestations.

Again, I want to see the Clintons humiliated and sent to jail for the rest of their sorry lives.  They are pure evil.

Unfortunately, even if there was a YouTube video of Hillary Clinton issuing orders to murder one of her political opponents, there would still be Hillary supporters.  They either would refuse to believe it or would somehow justify it.  But there will always be deranged or clueless people on this planet as long as the human race is in existence.

To answer the original question – What can stop Hillary Clinton? – the answer is the same as what can stop big government.

The answer is public opinion.  If a significant majority come to view Hillary Clinton as the liar and criminal that she is, then that will take away any legitimacy that she has.  It is possible she could still win the election with a plurality of votes (as her husband did), but she would quickly lose a lot of power if she loses legitimacy with a significant majority of Americans.

All the public has to do is open their eyes.  Look up the past of the Clintons.  It is out there for you to see.  You can learn all about their shady dealings, their “foundation”, their associates who have gone to prison, their associates who have mysteriously died, their various scandals including Whitewater, the pardons, the rapes, and so on.

It is a long list.  It is amazing that these two evil individuals have been able to go so far and do so much damage.  It shows how corrupt our system is.  Public opinion can stop it though.

The American public should not give them any more power.  But ultimately, I want to see them behind bars.  I want the public to know the truth about these two criminals.

Happy Secession Day! Or otherwise known as Independence Day.

The entire independence movement and the war that ensued from the American colonists is a fascinating subject. There are a lot of elements that come in to play, so I find myself critical of virtually all sides in some manner.

When you look at King George III, he was a rather peaceful and lenient guy when you compare him to many dictators throughout history. Even when you compare him to most politicians in countries with democratic elections, King George III seems rather benign.

Taxes were incredibly low by today’s standards. It is difficult to get an exact rate because it was mostly a combination of excise taxes and tariffs. But most colonists were probably paying around 1 or 2 percent in terms of their total income. Even if it was higher than this, it is a far cry from the 20% or more that the federal government extracts from us today in one form or another.

In terms of taxation, I would love to go back to the days of the American colonists under George III. Today we are stuck with income taxes, payroll taxes, business taxes, various excise taxes and tariffs, plus all of the inflation and debt.

In that sense, maybe the colonists were better off living under one tyrant three thousand miles away as opposed to three thousand tyrants one mile away (as stated in the movie The Patriot).

This isn’t to excuse the actions of George III. His policies were rather benign as compared to what we have today, but he was still a thug for starting a war. And yes, he is the one who started it. He should have allowed the colonists to secede peacefully. He should have let them go without a fight.

And secession is exactly what it was. You can call it whatever you want, but it doesn’t negate the fact that the colonists seceded from Great Britain. Yet many who never question the independence of the colonists will call you a traitor, a racist, an extremist, and many other things if you suggest that a state be able to secede from the United States.

By the way, the United States is now thought of as one entity. But back in the day, you would say that the United States were a confederation of states. In today’s world, the U.S. is thought of as one entity (singular). Back then, the United States were multiple entities (plural).

If the states had remained under the Articles of Confederation, things would likely be much better today with a lot more liberty. Instead, we have the Constitution, which greatly centralized power. It is ironic that those who tend to love liberty the most are the ones who most revere the Constitution.

If the politicians in Washington DC actually followed the document, then we would certainly be much better off. But this doesn’t change the fact that the Constitution handed over a lot more power to the politicians, which has exploded over time. The national government was weak under the Articles, which is much better for liberty. And the Constitution has been little help, especially in the last century, in terms of limiting government power.

With the voters of the United Kingdom recently voting to leave the European Union, this was a vote for secession. It was their own declaration of independence. Hopefully nobody will start a war with them. I think there will be heavy-handed tactics, but I don’t expect an outright war.

Now that the Brexit has happened, some American libertarians (and even a few non-libertarians) are wondering if some states could do the same in seceding from Washington DC. Will there be a Texit (Texas exit) or something of that sort?

While I like the talk of the idea, I am realistic in the fact that things would have to get a lot worse before that would happen. The two main reasons that we will not see a state secede any time soon is Medicare and Social Security. Right there, there would be too many voters opposed to the idea because they want to collect their “benefits”.

If there ever is a major default with these two programs, then maybe the idea will be entertained more. The less people have to lose, the more likely they are to support a secessionist movement.

The other thing we have to consider is that the culture in the U.S. is far more similar than in Europe. I know there are certainly differences between Texas and New Jersey, but they are fewer than amongst the European countries. And in the U.S., we have a common language. There may be a few cities where Spanish dominates, but for the most part, English is the accepted language.

If people want to talk about state secession though, I welcome the conversation. Maybe it will get more people accustomed to the idea without thinking it is completely crazy.

There will be major problems ahead for the U.S. government, especially when it comes to the debt and unfunded liabilities. When things get worse, more people will be open to new ideas, or at least new to them.

In the meantime, celebrate your Independence Day, even though you live in a mass surveillance state and you have to fork over about half of your money. At least we have freedom of speech, at least for the most part, so you should take advantage of it where you can. This doesn’t mean being rude to people or shouting them down. It just means gently exposing people to the ideas of liberty, especially those who may be open to them.

And be sure to take advantage of the freedom that you do have and occasionally enjoy the pleasures in life. What is the point of fighting for freedom if you never get to experience any of it? And nobody wants to be around someone else who is constantly complaining.

It has been a week since the Brexit vote, and the financial markets are backing off the initial reaction.  This happens quite often when there is unexpected news.  Investors tend to overreact.

In terms of the U.S. economy, it is hard to believe that it would be much affected by the Brexit leave vote.  Obama can threaten to put the United Kingdom at the back of the queue, but the reality is that trade will continue.  The only way it won’t continue is if Obama and company purposely block trade to punish the British voters.

Very few people saw the results of this vote coming.  The polls were mostly wrong, the betting sites were wrong, and most of all, the financial markets were wrong.

Stock investors don’t like uncertainty.  The “leave” vote was a repudiation of the status quo.  Stock investors don’t want to deviate from the status quo, even if it is potentially good in the long run.

Even though stocks fell dramatically on the Friday right after the results, they have since mostly recovered.  The interesting thing is that bonds and gold have not really reversed, as of right now.

Gold surged past $1,300 per ounce and it closed near $1,325 as of this writing.  This is while the U.S. dollar has actually gained because of the weakness of the euro and the British pound.

What is sticking out even more to me than gold is the bond market.  The 10-year yield is currently just below 1.5%.  Since the initial surge in bonds, they have not given up their gains at this point.

Some of the foreign bonds are even crazier.  The 10-year yield in Japan is -0.23%.  That is a negative sign in front of that number.

The German 10-year yield has now gone negative as well.  It was slightly above zero just before the Brexit vote.

So even though U.S. stocks seem to be recovering from the initial reaction, there is still a lot of clinging to safety.

In a time of fear, investors seek safety in different things.  The three main things that come to mind are the U.S. dollar, bonds, and gold.  The first two are safe havens in an environment of low price inflation.  Gold tends to be more of a safe haven when inflation is running higher.

All three of these asset classes are holding up well right now.  The U.S. dollar is doing well though because of the weakness of some of the other major currencies.

I’m not sure which one is going to win out.  While I tend to favor gold in the long run, I think the bond investors may win this in the short run.  Meanwhile, stock investors are likely clueless for the most part.  I say this as a generality of the markets.  Think about all of the 401k investors out there who blindly throw money in any fund they can find.

The bond market tends to be an accurate predictor of the state of the economy.  The dropping of long-term yields is signaling a possible slowdown.  An inverted yield curve is the classic indicator of a recession.

Just think about the 10-year yield in the United States.  People are turning over their money to the government in order to get an interest rate of just 1.5% per year over 10 years.  And this is with little idea of what the dollar will be worth 10 years from now when you would get your principal back.

In conclusion, I wouldn’t trust the stock market here.  It may or may not go higher.  But the bond market, if it holds, is telling us to watch out for something.  The long-term yields aren’t low just because of Brexit.  There is already weakness out there.

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.