I understand this is premature because Donald Trump has not yet won the Republican nomination.  In fact, it would still not surprise me if the Republican establishment finds a way to rig the game and get a brokered convention to get Trump off the ticket.

Still, it is fun to speculate on who Trump should choose as a running mate if he holds on to the nomination.  It isn’t much fun guessing with Rubio or Cruz as the nominee because they are likely to pick another insider.  Maybe Cruz could surprise us, but probably not.

For Trump, I am not sure if he realizes how high the stakes are.  He has already taken out Jeb Bush, and he is likely to face Hillary Clinton unless she gets indicted.  Of course, even she does get indicted, he still may face her.

Trump is taking on perhaps the two most powerful families in existence.  They are extremely dangerous.

The Clintons have a long history of threatening people to make them fall in line.  It is incredible how many people associated with the Clintons have either gone to prison or met an untimely death.  Most of these deaths were labeled as accidents or suicides.

It is interesting that Roger Stone has recently released books on both the Clintons and the Bushes and their crimes.  I heard Roger Stone say he is planning to release a book on the death of John F. Kennedy Jr.  Kennedy was supposedly getting ready to announce a run for the Senate in New York.  This could have served as a stepping stone to the presidency.

This was the same time that Hillary Clinton was preparing her run for the Senate out of New York, which was also her stepping stone into the presidency.  Obama put a bump in her road, but she is trying to continue on now.

If JFK Jr. died in his plane accident due to foul play, elements of the establishment also had reason to keep him out of the Senate and the presidency.  He could have uncovered what happened in his father’s assassination.

On the Bush side, George H. W. Bush had his connections to Texas politics and the CIA.  He claimed he didn’t remember where he was when JFK was assassinated.  In other words, his hands are likely all over that one.

Bush 41 attended one of the Republican debates, right after his son Jeb had dropped out.  There is this creepy footage of Bush signaling a cut of the throat as Trump speaks.  He may be 91 years old, but people don’t become less evil with age.

https://www.youtube.com/watch?v=ooOpnJktxSY

And that brings us back to Trump.  I hope he knows that his life is in danger because of his threat to the establishment.  His best life insurance policy is to pick a running mate that is just as much, or more so, of a threat to the establishment as he is.  He should also stay separated from his running mate at all times.

I don’t think Ron Paul is at all likely because of his age and because of their difference in political positions.

The most obvious choice to me is Jesse Ventura.  Trump and Ventura have quite a bit in common.  Ventura is a truth seeker and he seems fearless in facing down the establishment.  Ventura has some libertarian leanings, but he isn’t that great on economics, which is similar to Trump.  Ventura is pretty good on the issue of war though, so him and Trump are not that far apart.

If Ventura were vice president, I don’t think the establishment would think about taking out Trump unless they could do a two-for-one deal.

If there are any attempts on Trump’s life at this point, it is unpredictable on what will result from it.  Obviously his base of supporters would be highly suspicious to say the least.  They would become even more anti-establishment.  I think most libertarians would figure things out too, but they already have things figured out.

Unfortunately, this is what we live in.  And it is nothing new.  The Kennedy assassination in 1963 was a coup.  It was likely the CIA and a few other insiders that did it.  It is the establishment.  Some refer to it as the deep state.

The deep state is not made up of any one individual or a defined group of individuals.  It is hard to describe, but it is definitely a group of insiders.  They don’t all have to have the same exact interests, but they share the interest of a secretive and powerful state.  Parts of the CIA are part of this.  The president may or may not be part of this.  Parts of the NSA are probably part of this now.

I find conspiracy theories fascinating.  And it would be nice if there is a smoking gun someday on something big that becomes widely known.  It is always nice when criminals are caught.

I think having conspiracies exposed does help our cause for liberty in the sense that it does weaken the consent for the state.

With that said, I’m not sure how much would change if a big conspiracy were uncovered.  If there was substantial evidence that the CIA took out Kennedy and it became widely known, would that change anything?  People might find it interesting, but they would say that it happened a long time ago and that most of the people involved are now dead.

But it is highly significant in the fact that it reveals there is a deep state.  When someone gets elected president who doesn’t go along with the deep state, then we can see what happens.

Ask someone you know what should happen if it were ever revealed that elements within the United States government were involved in the 9/11 attacks.  What do you think their answer will be?

Most likely, the answer will be that the people who were involved should be put in jail, or perhaps given the death penalty.

But this doesn’t solve anything in the long run because there is still an establishment.  It may take out a few individuals from the establishment and bring some form of justice to that one event, but it doesn’t change the deep state.

It is not as if a lot of people are going to say that since the government was involved in the 9/11 attacks that we should stop accepting Social Security from a bunch of murderers.  Even though elements of the government have no problem with the murder of thousands of people, most Americans will still say we need the federal government for protection.

Do you see the problem here?

Donald Trump made a statement a few months ago that he could stand on the streets of New York and shoot somebody and his supporters would still stick by him.  It was his attempt at a joke about the loyalty of his supporters.

I think we could have video footage of Hillary Clinton directing orders to take somebody out and I believe that some of her supporters really would stick with her.  I can just envision some women saying that it doesn’t matter what she does because she fights for women’s rights.

Again, I hope Trump understands what he has gotten himself into here.  Many people before him have been taken down by the establishment who were a lot less of a threat.

I’ve watched most of the Republican debate on Fox News, but that is not really the big political story of the day.

We just came off of Super Tuesday, and things seemed to be fitting into place. A Trump vs. Clinton matchup was looking inevitable. But what a difference a couple of days make.

It has been reported that the government has granted immunity to someone who worked for Hillary Clinton in order to gain evidence against her in the email scandal. In other words, it is actually possible that we could see an FBI indictment if Obama doesn’t step in to stop it.

Indictments tend to harm candidates running for political office, although not always. I will still be surprised if she does get indicted because of the politics involved and because the Clintons manage to get away with murder, figuratively and probably literally.

I have said for a while now that Bernie Sanders is Hillary Clinton’s third biggest threat. The first two are an FBI indictment and an economic recession.

On the Republican side, the most interesting story was seeing the establishment push out Mitt Romney for an anti-Trump speech. It came off as desperate. It showed Romney as having a lack of class, as well as being a hypocrite. I think a lot of Republicans are thinking, “Where was this guy when he was running against Obama in the general election?” He never said anything this bad about Obama.

There are only two people in the history of the United States who have signed legislation mandating that people buy health insurance or face a penalty. One is Obama. The other is Romney. You would think that the Republicans could have found any other candidate to go after Obama on Obamacare, which was the most vulnerable issue in 2012.

Trump is correct that Romney is a failed candidate. His campaign in 2012 was terrible. He played really nice with Obama compared to what he is doing with Trump now.

I don’t think Romney hurt Trump at all. If anything, he probably helped him. All of the people who are disgusted with the establishment (which is now a commonly used term) are probably just that much more disgusted after Romney’s speech.

It is also false to assume that all of the support for the other candidates would still go against Trump if it came down to two people. If it were Trump against Rubio, I think some Cruz supporters would go over to Trump over going to Rubio, who is now the establishment favorite.

The reason I said that things have changed in the inevitability of Trump getting the nomination is because Romney’s speech is a shot across the bow that the Republican establishment may try to thwart his nomination at the convention. If Trump falls one delegate short of 50%, you can bet that the Republican establishment will play games to get rid of Trump. Maybe Romney’s speech was a setup for him to step in as the possible nominee in a brokered convention.

If you go back to 2008, John McCain only won 9 states on Super Tuesday out of a total of 21 states. In terms of the popular vote, McCain in 2008 and Romney in 2012 were far from a majority at the early primaries. The point is that Trump should really be the nominee at this point if the past is any guide. But it is not a guide because Trump is not acceptable to the establishment.

Right now, Trump is hated by the Bush family and the Clinton family, perhaps the two most powerful and evil entities there are. I hope Trump trusts the people around him and that he has good security.

If I were Trump, I would pick someone like Jesse Ventura as a running mate if he does end up holding on to the nomination. He needs to find someone who is more feared by the establishment than he is. It would be the best life insurance policy he could find.

As far as the debate, it was the same three hacks on Fox News asking the questions. Megyn Kelly was sent out again to do an attack job on Donald Trump. There was no question they were trying to get him as compared to the other candidates.

Most of it was personal stuff that often plays into Trump’s hands. There was one good and tough question to Trump about the federal budget. I only wish it had been asked to the other candidates. As usual, there have been a lack of specifics in terms of any government cuts. Trump is the only one who offers anything vague. Occasionally Cruz will say he will cut something, but he doesn’t go out of his way to say it.

If they actually want to damage Trump, they should ask him specific policy questions. But most of them are too stupid to do so. They haven’t figured out that he is at his best when he is being attacked, especially about his businesses and his personal traits.

Trump really is all over the place. I have no idea how he would be as president. But I never would have thought just a year ago that a Republican candidate could say that we were lied into war in Iraq and still be the frontrunner.

Trump has also said that Libya was better off with Gaddafi and that Iraq was better off with Saddam Hussein. He also has said we shouldn’t overthrow Assad, although he has been inconsistent on this. Trump also doesn’t want to go to war with Russia. He actually wants to talk with Putin, where the others seem anxious to do battle.

So I am not a Trump fan per se, and I have no idea what he will actually do while in office. But we know we will get continued intervention with all of the other candidates. With Trump, we may have a chance for some sanity.

And no matter how bad Trump may be, it is a great show to watch the establishment squirm.

Harry Browne passed away on March 1, 2006. It is hard to believe that it has been 10 years since this great libertarian left us.

For those who are relatively new to libertarianism, you may be only vaguely familiar with Harry Browne and his work, if at all.

When we speak of hardcore libertarians in today’s world, the majority of them have probably identified themselves as such only within the last 10 years. Most young libertarians I know today were introduced to it by the 2007/ 2008 Ron Paul presidential campaign, or the 2011/ 2012 Ron Paul presidential campaign, coupled with using the internet for the vast amounts of information.

I wish Harry had been around to see the Ron Paul presidential campaigns. While he was always critical of the state, he retained a great deal of optimism and hope for the future, even during a time when the number of libertarians was far fewer than today.

Harry Browne is most famous for being the Libertarian Party’s presidential nominee in 1996, and again in 2000. Although he previously did not engage in the political process, even refusing to vote, he saw his presidential campaigns as an opportunity to educate others on the benefits of liberty.

When Harry ran for president, he never compromised his principles. He always had a way of delivering his message so that it would not necessarily come as a shock to the audience. But his message always revolved around seeking solutions outside of the state.

When he would do interviews during his campaigns, Harry would admit that he had no illusions of winning. He really didn’t even want to win. He would say what he would do as president just to make it obvious on how much our political process has failed. For example, he would say that he would pardon all people who had been convicted of victimless crimes only, including drug offenses. He also made it clear that he would bring all of the troops home immediately.

Harry’s most notable and most controversial articles appeared after September 11, 2001. He wrote a series of articles titled When Will We Learn. It was a critique of U.S. foreign policy, and he was one of the very few at that time willing to point out that the September 11 attacks were a result of blowback from an interventionist foreign policy. If you are not old enough to remember this time well, it was a period when Americans were seeking revenge, and patriotism was running at its highest. It was not an easy thing to speak out on at that time, and Harry certainly received a great deal of criticism and name-calling. It even somewhat fractured the Libertarian Party, although he was always clear that he was speaking on his own behalf and not for the party.

Harry saw himself as a salesman for liberty. He knew that we would not gain greater liberty through the political process, or at least not until a much greater percentage of the population understood the benefits of liberty. He took the opportunity of running for president to speak and write as often as he could to get his message out.

In 2000, he released The Great Libertarian Offer. It was a book that promoted his optimism, and also the need to offer something big for people to pay attention to. He correctly stated that a small tax cut isn’t going to get people excited. His offer was to eliminate the income tax completely (among other things) and to drastically reduce spending.

He pointed out that if you don’t offer something big, then people aren’t going to go for it. You can’t cut one little government program at a time because of the special interests. You have to offer something big so that people will get on board. If you never have to pay the federal income tax ever again, then you might be more willing to give up your favorite government programs.

Harry was very knowledgeable on the Federal Reserve and the issue of money. He would speak about it on his radio show and he would address the subject in articles at times. He didn’t talk about the issue a lot during his campaigns, as it was not something he saw as appealing to a large number of people. In this sense, he was like most other libertarians until the Ron Paul presidential campaign starting in 2007. Many libertarians today, including greats such as Tom Woods, will admit they had similar thoughts that this was not the ideal issue to present to the masses. But Ron Paul proved that this could be a popular issue, even amongst young people.

If you are a young libertarian, or simply new to the libertarian movement, then I strongly encourage you to read (or listen to) some of Harry Browne’s material. He wrote two books for his two presidential campaigns, which are really great primers on libertarianism. His writing is easy to read and understand.

Harry first gained notoriety in the early 1970s when he correctly predicted the devaluation of the dollar and the likely rise of gold. In 1970, he released How You Can Profit from the Coming Devaluation. While some of the book may not seem relevant today, the first 70 pages are a great primer on the issue of money and inflation.

Harry Browne was a financial advisor and helped develop the idea of a permanent portfolio. His little book Fail-Safe Investing describes the permanent portfolio, which is intended to help investors set up a safe investment portfolio designed to hold up in any economic environment. This book is still relevant today, and many people still use the permanent portfolio setup as a basis for their investment portfolios.

Aside from writing other books on investments and money, Harry helped many people with his self-help book titled How I Found Freedom in an Unfree World. While he recognized that our freedom was restricted by government, he pointed out all of the boxes people trap themselves in within their own lives. He showed that we all have options in making ourselves freer. The book was not without controversy, but some will still claim that it helped change their lives.

Aside from his many great speeches, Harry also hosted his own radio show discussing libertarian topics. For a short time before his death, he also hosted a separate show that just discussed the issues of money and investments.

If you don’t have time to read any books, Harry also wrote hundreds of timeless articles. They are on his website, which has been maintained by his widow, Pamela Wolfe Browne.

For me, Harry was instrumental in turning me into a hardcore libertarian. While many libertarians today will say the same about Ron Paul, it is important to recognize the people who helped lay the groundwork prior to the Ron Paul campaign in 2007/ 2008.

Harry Browne himself introduced many people to uncompromising libertarianism. If you haven’t seen any of his work, I encourage you to read it or listen to it. Even for those who are familiar with his work, I encourage you to look at some of it again. We can still learn a great deal from this man. Even though he left us 10 years ago, most of his writings and other works are as relevant and useful today as when he produced them.

Happy birthday to Carol Paul, wife of the great libertarian Ron Paul.

Carol Paul is celebrating her 20th birthday.  But before you think that Ron Paul married a much younger woman, consider that Carol Paul was born on February 29, 1936.  Since her birthday was on a leap day, the actual date of her birth only comes around once every four years.

Ron Paul and Carol Paul will celebrate their 60th wedding anniversary next year.

Ron Paul has converted more people to the ideas of liberty than perhaps anyone in history.  Thankfully, he has had one of the greatest supporters in his wife.

Happy birthday Carol Paul!

I am not a big chart person, but they can still be useful for reference and some historical perspective.  One interesting chart is the Dow-to-gold ratio.  It tells us how many ounces of gold it takes to buy the Dow Jones Industrial Average.

For example, if the gold price is $1,000 and the Dow is trading at 16,000, then the Dow-to-gold ratio is 16.  It would take 16 ounces of gold to buy the Dow index.

The current ratio is between 13 and 14.  It has gone down from over 16 in late 2015.  This is a result of a higher gold price and lower stock prices.

The ratio actually went over 42 back in 1999.  This is when gold was trading for under $300 per ounce.

On the other hand, the ratio briefly went close to one back in late 1979 and early 1980.  This was when gold briefly went over $800 per ounce before crashing down.  This was the biggest bubble in gold in American history.  The bubble popped after Paul Volcker, then chairman of the Fed, adopted the appropriate policy of stopping the monetary inflation and letting interest rates go higher.  This saved the dollar.

Again, there is nothing magical about the Dow-to-gold ratio, just as there is nothing magical about the gold-to-silver ratio.  There is nothing to say that it can’t break a certain range.  It is even less accurate using the Dow as a measure because of the change in the 30 stocks that make up the index.

It is just interesting to note how wide the variances are.  It is hard to believe that in 1979/ 1980, you could nearly buy the whole Dow index with one ounce of gold.  Then, 20 years later, it would take you 40 ounces of gold to buy the same Dow index.

Just think what it would take for the Dow-to-gold ratio to get back to one.  If the Dow fell by over 50% to 8,000, then gold would still have to go up by more than 6 times its current price.  A lot will have changed if we see the Dow at 8,000 and gold at $8,000 per ounce.

As of right now, we seem to be in an economic downturn.  This makes sense due to the tight monetary policy of the Fed since QE3 ended in October 2014.  While interest rates have remained low, the Fed has stabilized the monetary base for well over a year.  As long as we have a Fed, this is the right policy.  The problem is the massive monetary inflation from 2008 to 2014.  All of the misallocated resources from this loose monetary policy mean we will have a correction at some point.  The only question is whether we are near that full correction.  We have already seen it in the oil market.

Gold has done well in the last two months in the face of a falling stock market.  I believe investors are looking for positive yield.  With interest rates near zero – or even negative in some countries – it makes sense that at least a few investors would be looking at other asset classes.

The only way we will see anything close to a 1 to 1 ratio for the Dow to gold is if the Fed starts inflating again.  This is certainly a good possibility if the economy shows further signs of weakness, including falling stocks.

We should not hope for a 1 to 1 ratio.  This would mean some form of economic chaos.  We really don’t want a repeat of 1979/ 1980.  We should only want a repeat of the Fed’s response, which was to maintain a tight monetary policy, despite recession.

Still, what we want is not the same as what we should prepare for.  We should know that a Dow-to-gold ratio of 1 is a possibility, even if it seems remote at this time.

If we ever do get anything close to that, I hope I am smart enough to sell some of my gold to buy stocks.  If someone had done that in early 1980, they would have made out very well.

The latest Consumer Price Index (CPI) numbers were released on February 19, 2016 for January.  While the CPI is flat, the year-over-year change is now 1.4%.

The more stable median CPI ticked up, as the 12-month change is 2.4%.  You can view the numbers here.

Energy prices have had a big impact on the numbers.  It is the primary reason for such a low CPI reading.  For example, while the 12-month change in the CPI is 1.4%, it is 2.2% when you remove food and energy.  This is actually above the Fed’s supposed target of 2%.

I continue to stress that although the CPI is a government statistic that is far from perfect, it is still useful for a couple of reasons.

First, the CPI can show us trends.  As long as the weightings are the same, it does give us a picture of whether consumer prices are trending up or down.

Second, we have to believe that the Federal Reserve uses the CPI statistics in its decision making.  I believe that the numbers are probably understated, especially when it comes to health insurance premiums.  The weighting and methodology for including health insurance premiums is complicated to say the least.  We all know that premiums have skyrocketed while the actual health plans cover far less.

But to the Fed, consumer prices look tame.  In most things, prices are relatively tame in our fiat currency era.  Prices are going up, but nothing compared to the 1970s.

For this reason, I think it is more likely that the Fed will not be afraid to lower its target rate again, or start another round of so-called quantitative easing.

I know we hear about negative interest rates now, but the Fed is currently paying banks 0.5% on reserves.  This is to support its targeted federal funds rate.  So before the Fed imposes a negative interest rate, it would first have to actually stop paying the banks to not lend.

The Fed is sitting in a sweet spot right now in terms of lower unemployment and relatively low price inflation.  Therefore, the Fed will probably sit tight until the stock market falls a lot more, or until it is more evident that we are in, or heading into, a recession.

Things can happen quickly as we saw in the fall of 2008.  You could wake up on Monday morning and see the Dow futures down by 1,000 points.  If we see a few days in a row of plunging stocks, the discussion can change quickly.  It won’t be talk of whether the Fed will raise interest rates again, but whether the Fed will lower them or start more money creation.

The Fed has had a tight monetary policy since October 2014 when it ended QE3.  It has not been expanding the monetary base since that time.  Due to the tight money, I believe the misallocated resources built up from the easy money of 2008-2014 will be exposed shortly.  As stocks fall and long-term yields fall, a recession is looking more and more likely.

If the CPI were running at 3 or 4 percent, then I might think the Fed would sit still in the face of plunging stocks.  But since consumer prices are relatively low, the Fed may not hesitate as much to inflate.  We should consider this going forward.  It looks as though gold investors are already considering this, as the price has risen in the face of falling stocks and falling yields.

I have been a harsh critic of Thomas Sowell.  I fully understand that he has done some great things for liberty, and that on some issues of economics, he writes clearly and concisely.

Still, I know a lot of libertarians who like, or at least sympathize, with Sowell.  I do not.  I think he is a statist.  He wants to inject your children with vaccines.  He is generally a militarist.

I agree with Sowell on some economic issues.  So what?  I agree with some leftists on the drug war and foreign policy.  Even on some important economic issues, I am not with Sowell.  He is largely silent on the damages of the Federal Reserve.

Sowell recently wrote a column effectively endorsing Ted Cruz.  He doesn’t come right out and say it, but it is as close as you can get to an endorsement without actually uttering the words.

Sowell cites the importance of the passing of Justice Antonin Scalia.  I recently wrote a piece on why libertarians should not be so quick to revere Scalia.

Sowell comes across as the typical conservative, saying that the vacancy on the Supreme Court “makes painfully clear the huge stakes involved when we choose a President of the United States, just one of whose many powers is the power to nominate justices of the Supreme Court.”

The Supreme Court is used to divide the nation politically.  Both sides will come out and tell us how important this election is because of the nomination of Supreme Court justices.  We are always told that this is one of the most important elections of our lifetime.  It is left unsaid on what has gone wrong that 9 justices are deciding on policy for over 300 million Americans.

Sowell concludes his article saying that he has criticized Cruz before and will undoubtedly criticize him again.  But, “As someone who once clerked for a Chief Justice of the Supreme Court, he will know how important choosing Justice Scalia’s replacement will be.  And he has the intellect to understand much more.”

Ted Cruz is a politician.  His wife is part of Goldman Sachs.  He has a reputation of being outside of the establishment.  I have to admit that he is far from the establishment’s first choice as a nominee.  But they prefer him over Trump.

Cruz says he wants to bomb ISIS to see if sand can glow in the dark, meaning he wants to nuke the Middle East.  He occasionally questions U.S. foreign policy in subtle ways, but we can be sure he will be terribly pro war in office.

Even when it comes to economics, Cruz is not that great.  He is not preaching a major cutback in the federal budget.  I don’t hear him making constant calls to abolish the Department of Education or any other major departments or programs.

Sowell has gone from endorsing Newt Gingrich to Ted Cruz.  Meanwhile, he has little nice to say about Ron Paul.  And some people want to associate Sowell with being a libertarian, or even sympathetic to libertarianism?

In his article, Sowell talks about the extreme dangers in our world “where our adversaries’ military power and aggressiveness are increasing, while our military forces are being cut back.”

Sowell is a conservative.  He is preaching the line about our military being cut back as the U.S. government occupies most of the world in some form or another.  He thinks others are being more aggressive, yet he can’t bring himself to question U.S. foreign policy at all.

If you read an article by Sowell that helps explain an economic issue clearly, then by all means share it with your friends.  Just please don’t delude yourself into thinking that Thomas Sowell has anything to do with libertarianism.  He is a conservative and a statist.  Occasionally his thoughts overlap with libertarians.

My analysis of the presidential race will continue, even though I don’t support any of the candidates.  You could say that I despise some less than others though.  I have occasional sympathy for Trump, and even a little for Sanders, just for giving such headaches to the establishment.

Before discussing the South Carolina Republican primary, I just want to say a couple of things about Nevada, where caucuses were held for the Democrats.  Hillary Clinton won, although not by a big margin.

Even though Bernie Sanders has strong support from young people and the grassroots, he is not coming away with victories in the caucus states.  Of course, these states are a bit more prone to rigging, as we saw with all of the strange happenings in Iowa with coin flips and everything else.  When there is room for shenanigans, it will favor the establishment candidate.

We don’t really have a good measure yet in the Democratic race because Iowa and Nevada both had caucuses and New Hampshire has open primaries, which would tend to favor Sanders.

I have said that I think Sanders is the third biggest threat to Hillary Clinton right now.  The second biggest threat is an indictment by the FBI for her secret emails that aren’t as secret anymore.  Her biggest threat is an economic recession.

On the Republican side, Donald Trump won easily with about one-third of the voters going for him.  It looks like Marco Rubio will just barely edge out Ted Cruz, but just by a fraction of a percent.  They are both just over 22%.  Perhaps Rubio is recovering from his New Hampshire debate.

Jeb Bush is finally dropping out of the race.  No matter how bad Donald Trump ends up being, I will forever be thankful to him for stomping on Jeb Bush like a little cockroach.

At this point, we can basically write off Kasich and Carson as well.

So it is left between Trump, Rubio, and Cruz.  I can’t help but think that Cruz was damaged in South Carolina though.  It is evangelical country.  If Cruz can’t win there, or at least make a strong second place showing, then I can’t imagine him doing well anywhere else, except maybe Texas.

It is interesting that the three candidates still in the hunt are not governors.  Two are senators and one is a businessman.  Although the 2008 matchup was two senators (Obama and McCain), it is not that common.

At this point, I think we should expect Trump to be more guarded in his comments, but that may seem hard to believe.  Even if all of the Bush votes had gone to Rubio, he still wouldn’t have had enough to beat Trump.

Rubio would have to get most of the other supporters to coalesce around him quickly.  That would mean Kasich and Carson supporters would have to go to Rubio as well, which is far from certain, especially with Carson.

Trump’s best scenario is that Cruz and Rubio both stay in the race for the long haul to split votes.  He should hope that Carson and Kasich stay in as well.  He wants the anti-Trump vote to be split up for as long as possible.

A Trump vs. Clinton matchup is looking more likely.  It is hard to believe that the bigger pro war candidate will be coming from the Democratic side.

With the recent death of Supreme Court Justice Antonin Scalia, there has been much reflection of his life and his beliefs.

Scalia has the reputation of being an originalist, meaning he interpreted the U.S. Constitution according to its original intent.  He also has the reputation of being a conservative.

I have heard the typical comments about Scalia from the left and the right, which seem to be mostly talking points.  But I have also heard some libertarian commentary on him, which I will comment on below.

I would like to say that everything I have heard and seen about Scalia indicate that he was highly intelligent.  Even many on the left will admit that.  He also seemed to have a good sense of humor and to be likable in person.

In terms of his time as a Supreme Court justice, there is no question that he was a little different.  His written opinions were often well thought out and he was skilled at using rhetoric.  He is beloved by the conservative wing of the Republican Party, which is not surprising given his conservative stances.

Scalia also makes Ronald Reagan look good to conservatives.  Reagan’s other nominees who made it through confirmation were Sandra Day O’Connor and Anthony Kennedy, who are not known to be nearly as conservative.  Reagan also nominated Robert Bork, but he was blocked by the Senate.

I have heard and read some commentary by libertarians on Scalia including a piece by Judge Andrew Napolitano, who was actually a friend of Scalia’s.  The great Tom Woods also did a podcast with Kevin Guzman on the topic.

These are libertarian greats that I admire and learn from.  With that said, I thought they were much too soft on Scalia.  It is understandable that Napolitano does not want to criticize his friend who just passed away.  As far as the discussion between Woods and Gutzman, they did have some light criticism of Scalia, but I thought they could have gone deeper in some respects.

I don’t expect libertarians to agree on everything and that is fine.  But for those who don’t know a lot about Scalia, I just want to shed a little bit of light.

In terms of disagreement, libertarians often disagree on the U.S. Constitution.  Some think that we should defend it and uphold it.  Some think it is just a piece of paper that is meaningless.  Some think its adoption was a coup against the Articles of Confederation to centralize power.

Despite disagreements between constitutionalists and anarchists and others, most libertarians agree that we would be much better off if the U.S. government actually obeyed the Constitution and its enumerated powers as compared to the monstrosity that we have now.

I will also acknowledge that libertarians have differing views of certain aspects of the Constitution including the 14th Amendment and how it applies to states, and also about judicial review.  On the latter, there is a question of whether the U.S. Supreme Court should strike down laws that it deems unconstitutional.

Scalia had nearly 3 decades on the bench, so there are obviously a lot of rulings to examine.  There are many cases where libertarians could reasonably disagree.  But I just want to focus on one particular case where I’m guessing at least 99% of hardcore libertarians would agree on what the ruling should have been.  It is a case where, for me, it shows that Scalia was a conservative first, and a constitutionalist second, if at all.

The case is Gonzales vs. Raich.  It was argued in 2004 and decided in 2005.  The Court ruled by a 6 to 3 vote that the U.S. Congress can criminalize the production and use of home-grown cannabis where a state has legalized its use for medicinal purposes.  The ruling was justified under the Commerce Clause.

Realize that this doesn’t even involve the trading or selling of marijuana across borders, although I still believe that the only way this could be a legitimate case in front on the U.S. Supreme Court is if there were some kind of dispute between the states.  The federal drug laws are still unconstitutional, regardless of whether drugs are crossing state lines.

Still, this case was very narrow in just referring to home-grown marijuana.  In this case, the so-called originalist, Antonin Scalia, sided with the majority.

Of course, Scalia wrote his own opinion, separate from the majority, trying to dance around his interpretation.  But for me, this case makes it rather clear that Scalia was a conservative first and foremost.

The three dissenting opinions were Sandra Day O’Connor, William Rehnquist, and Clarence Thomas.  Actually, it was Justice Thomas in this case who had strong rhetoric on his side.  He wrote a scathing dissenting opinion, pointing out the absurdity of it all.

Thomas wrote that if the federal government can regulate this, “then Congress’ Article I powers – as expanded by the Necessary and Proper Clause – have no meaningful limits.”

Thomas also wrote: “If the majority is to be taken seriously, the Federal Government may now regulate quilting bees, clothes drives, and potluck suppers throughout the 50 States. This makes a mockery of Madison’s assurance to the people of New York that the ‘powers delegated’ to the Federal Government are ‘few and defined’, while those of the States are ‘numerous and indefinite.'”

I have had my disagreements with Clarence Thomas over the years as well, but by looking at this case, it is clear that there may be a much stronger case for libertarians to at least sympathize with Thomas over Scalia.

The federal drug war is a great issue to test conservatives who supposedly pledge allegiance to the Constitution.  There is obviously no enumerated power in the Constitution giving Congress the authority to legislate drug laws.  If a conservative believes that drugs should be illegal in all 50 states, but that ultimately it is up to the states to decide, then that would be consistent with taking an originalist approach in interpreting the Constitution.  But let’s face it; most conservatives strongly favor the federal war on drugs.

Again, I know libertarians can have differing views that are reasonable, but I thought it was important to point out this one particular case to show that Scalia was nothing close to a libertarian and was not even a strict constructionist or originalist when it conflicted with his personal conservative views.

I am a strong advocate of a permanent portfolio as described in Harry Browne’s book Fail-Safe Investing.  I believe it should make up the majority of one’s investable assets outside of any real estate or business ownership aside from stocks.

The permanent portfolio is simple.  Anyone with a little financial knowledge should be able to set one up with relative ease.  It just takes a little discipline in sticking to it and occasionally rebalancing.

The portfolio consists of cash, long-term government bonds, stocks, and gold.  The four investment categories are divided up equally.  You will have approximately 25% of each.  If any one investment gets too far above or below the 25%, then you can rebalance it.

I have mentioned ways before of tweaking the portfolio.  If you are a particularly aggressive investor, you could consider reducing your cash portion and adding it to the other portions.

For example, you could put just 10% into cash, and put 30% each into stocks, bonds, and gold.  This would make it more volatile.  You would also probably get hit harder in a recession.  Of course, the lack of volatility is one of the main attractions of the permanent portfolio.

When we talk about cash, it isn’t really cash.  Most of your cash will be in a checking account or short-term debt instruments.  You might have your “cash” in a money market fund, a savings account, or even a very short-term cd.

While I have made the suggestion of possibly reducing the cash portion for aggressive investors, I do want to emphasize the importance of cash in the portfolio.

First, as I already alluded to, cash is good to have in a recessionary environment.  It provides some stability.  As the saying goes, cash is king in a recession.

Second, even though cash would be seemingly bad in an environment of high inflation, it isn’t necessarily terrible.  If you have an environment of high price inflation and high interest rates as was seen in the 1970s, then cash won’t be as bad as you might think.  The reason is that you are still earning high interest rates.  The real interest rate (as opposed to nominal) may still be slightly negative, but at least it is somewhat keeping up.  In today’s environment, you are definitely getting a real negative interest rate on short-term debt.

Third, and probably most important, is that cash is there for rebalancing in a recession.  That is one of the reasons cash is king in a recession.  You have cash to buy beaten down investments while almost everyone else is feeling broke.

If we hit a recession and stocks and gold both go down, while bonds stay about even or even go up, then you will be able to use some of your cash position to buy gold and stocks when they are down.  That is one of the big benefits of the permanent portfolio.  You are forcing yourself to buy low and sell high.

The permanent portfolio has a bias built in for higher price inflation.  Overall, I think this is positive.  You obviously need higher returns during a time when you are losing purchasing power.

The permanent portfolio has basically done nothing over the last several years in terms of returns.  We are in an environment of low interest rates, relatively low price inflation, and struggling growth.  It is not a surprise that the portfolio is not up, especially considering the major downturn in gold until recently.

I still think the permanent portfolio is the best option for the passive investor.  It is probably the best option for most non-passive investors as well.  It is designed to hold up in any economic environment.

I believe that we are likely headed into some kind of a recession.  I am not stating that here for speculative reasons, but just to confirm the importance of having 25% cash in your permanent portfolio.  The bonds are also vitally important, as interest rates could fall even further.

If stocks plunge, then you will have other assets available, such as your cash, to buy stocks when they are low.

The permanent portfolio may not seem too exciting right now, but you will be happy when stocks are plunging and your friends can’t sleep at night.  You won’t worry too much if you lose a few percentage points here and there.  And you will have cash available to buy when virtually nobody else wants to buy or nobody else has the money to do so.