- This is the week of the June FOMC meeting, although it’s really going to be a dud
- For a while there was speculation that the Fed was going to pull the trigger and increase interest rates for the second in almost 10 years – for the first time this year
- I don’t know if anybody expects the Fed to raise rates on Wednesday – it’s a 2 day meeting, it gets started tomorrow and we get the announcement on Wednesday afternoon
- Brexit was one of the things they were concerned about
- Now the polls are showing that a British exit of the EU is becoming more and more likely and that was one of the things supposedly the Fed was concerned about
- I think all that is an excuse – they’re really concerned about the U.S. bubble economy and domestic problems
- But they don’t want to acknowledge that so they want to rationalize their decisions with problems abroad
- That vote is looking like it may go the wrong way as far as the powers that be are concerned
- I’ve already mentioned on this podcast that if I were in Britain, I would vote to go
- It’s not because I’m anti free trade, I’m for free trade – it’s just that the EU is no longer about free trade
- That was its initial pretext and it might have been a good idea, but no idea that involves more government can ever be good
- The problem with government is that it grows and grows and grows
- Like the camel getting its nose under the tent
- That’s what happening in the EU and the British are finally saying we’ve had enough
- It’s too bad the British don’t have enough with their own big government, but they don’t want big government imposed from Brussels
- Whatever benefits member nations got in the beginning from freer trade, they’ve lost from regulations, taxation and micro-management coming out of the EU
- As I said before, the only reason there was a need for the EU is because governments impose too many tariffs and regulation and theoretically the solution was to let some other entity circumvent all the other government regulation
- And they made the deal with the devil and it didn’t work out
- But the same thing is true in the United States
- The original American colonies all made a deal – we came together, abandoned the Articles of Confederation we went for a less weak central government and we passed the Constitution of the United States
- But the problem is, the Federal government is not abiding by its constitutional restraints on its powers
- The Federal government is not acting the way the framers envisioned, it has usurped powers that were not granted to it in the Constitution, so the Federal government is no longer a benefit to the United States, just like the EU is not longer a benefit to Europe
- The difference is, the EU disintegrated a lot quicker
- The U.S. government lasted for a much longer period of time, and was a positive factor for the colonies
- But the EU quickly degenerated
- Every time you can remove a layer of government, you restore more freedom and prosperity
- So I wish the British luck with their revolution
- So this is just one more cloud on the horizon providing a reason for the Fed not to raise rates this week
- A more important reason is the stock market
- Once again on the decline, the NASDAQ is down a little over 2% over the last 2 days
- The Dow Jones is down about 1.5% – down a little more than 130 points today
- Meanwhile gold continues to rise
- The last 2 days it was up about $15 – nothing huge, but it is making progress toward the $1300 level
- It was up about $10 today – we closed around $1284
- I don’t know if the Orlando terrorist event had anything to do with the weakness in the market today – probably not
- But psychologically, events like that probably take some kind of a toll
- And it may take a toll later in consumer confidence numbers, which by the way, are already on the decline
- I read that the terrorist who attacked the Orlando night club was originally looking at Disney World
- It could have been a lot worse
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