Front entrance of the Marriner S. Eccles Federal Reserve Board Building, built in 1937.

The Senate has confirmed Kevin Warsh as the new Chairman of the Federal Reserve for the next four years and for a 14-year term as a governor.

You know that my preference is to end the Fed. The central bank has a 100% error rate. But as long as it exists, aiming to give the Fed the best leadership possible is important. 

No chairman will be perfect, and every chairman will be forced to make compromises because the Federal Reserve is built on a contradictory mandate that sometimes gives policymakers no good options. But during the Financial Crisis, Warsh was one of the few Fed officials who stood up to suggest restraint at a time when the bank’s leadership seemed hell-bent on breaking all the rules. 

When the Fed began its second round of quantitative easing (QEII), Warsh criticized the move, writing in an op-ed in The Wall Street Journal at the time (November 2010):

The Fed’s increased presence in the market for long-term Treasury securities poses nontrivial risks that bear watching. The prices assigned to Treasury securities—the risk-free rate—are the foundation from which the price of virtually every asset in the world is calculated. As the Fed’s balance sheet expands, it becomes more of a price maker than a price taker in the Treasury market. If market participants come to doubt these prices—or their reliance on these prices proves fleeting—risk premiums across asset classes and geographies could move unexpectedly.

Later in 2015, Warsh expanded his criticisms of QE during a Brookings discussion in 2015. Watch:

I noted Warsh’s fracturing relationship with the Bernanke-run Fed in 2009, writing:

There are two paths to higher interest rates: infla tion, or a painful stew of Fed tightening and a flood of Treasury issuance. I’d put my money on higher inflation, but recent comments from the Fed indicate there is an outside chance Bernanke and company could surprise us. The Fed is likely just talking a big game to keep inflation expectations contained, but in a recent Wall Street Journal editorial, Fed governor Kevin Warsh said that monetary stimulus may have to be reversed with the same fervor that accompanied its implementation during the panic. His editorial was followed by hawkish comments from the president of the Richmond Fed about pre emptive rate increases. I don’t think Bernanke and the Fed have the will to take the necessary steps to prevent an inflation spiral, but we shall see.

The more likely path to higher interest rates is through rising inflation. When should we expect inflation to accelerate? We are already seeing it. Goods and services inflation isn’t rising yet, but asset price inflation is running rampant. We’ve blown right through fair value in stocks, credit spreads in many sectors have dropped back to pre recession levels even though the risk of default is now much greater than prior to the recession, and commodities and gold prices are rising. The Fed has driven interest rates down to zero, has printed money with abandon, and is supporting securitiza tion markets with an alphabet soup of programs.

Skepticism is a strong quality in a Federal Reserve Chairman. Hopefully, Warsh will continue his skepticism of the Fed’s expanded role during his chairmanship. 

Exports of oil and natural gas products have hit their highest levels ever as a result of the war with Iran and the disruption to energy flows out of the Persian Gulf. 

And it’s not just LNG and crude oil that are reaching new highs, other natural gas plant liquids are also being exported at the highest levels ever. The EIA reports:

Data source: U.S. Energy Information Administration, Petroleum Supply Monthly

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Natural gas plant liquids (NGPL) exports reached 3.1 million barrels per day (b/d) in 2025, growing 7% from the previous year. These fuels are primarily extracted from the natural gas stream. NGPL plant production has increased every year since 2005, driven by higher production of NGPLs and more global demand for NGPLs, especially as petrochemical feedstocks.

Producers have increasingly targeted liquids-rich supply basins in recent years. Higher production of NGPLs has led to lower prices in the United States relative to global benchmarks in East Asia and the Middle East, increasing global demand for U.S. NGPLs, particularly ethane, propane, and butane.

NGPL exports grew by 212,000 b/d last year with a 70,000 b/d (101%) increase in exports to India. Most NGPLs are waterborne exports. In 2025, the top five destination countries for exports of U.S. NGPLs were China, Japan, Canada, Mexico, and South Korea.

Data source: U.S. Energy Information Administration, Petroleum Supply Monthly

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Ethane exports grew by 92,000 b/d (19%) in 2025, mostly from demand created by two newly completed projects: the Coatzacoalcos ethane cracker expansion project completed in May 2025 in Mexico and a new Yantai 2 ethane cracker in China completed around March 2025. Ethane is used primarily in petrochemical production of plastics by cracking ethane into ethylene, a base feedstock for petrochemicals. The United States is one of the only countries capable of exporting waterborne ethane, apart from Norway, which exports small amounts around Northwest Europe.

In 2025, the United States exported a total of 579,000 b/d of ethane to nine countries. A little more than 50% of U.S. ethane exports went to China, with the second-highest volume going to Canada by pipeline and the third-highest volume going to India by tanker. We expect U.S. ethane exports to grow in 2026 with the completion of the INEOS Project One cracker in Antwerp, Belgium, which is slated to come online in the third quarter of 2026 with a capacity of about 80,000 b/d of ethane. This cracker will be the largest in Europe and one of the largest in the world.

Data source: U.S. Energy Information Administration, Petroleum Supply Monthly

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U.S. propane exports averaged a record 1.8 million barrels per day (b/d) in 2025, the most since we began collecting this data in 1973. U.S. propane exports rose just 3% compared with the previous year. Propane is consumed globally for space heating, and it’s increasingly used as a petrochemical feedstock, especially in Asia, among other uses. Three of the top five destinations for U.S. propane exports are in Asia, including China, Japan, and Korea.

Despite the overall increase, the top three importing countries from Asia of U.S. propane decreased or had no change year over year. U.S. exports to South Korea decreased 20% and volumes to Japan remained unchanged compared with the previous year. The largest importer of U.S. propane in the world, China, reduced U.S. propane receipts by 29% because of reciprocal tariffs on imported propane from the United States at the end of the year. Decreases in U.S. propane exports to those countries were more than offset by increases in exports to other Asian countries, especially India, which increased from 2,000 b/d in 2024 to 41,000 b/d in 2025. Exports to other countries in Asia such as Vietnam, Singapore, and Indonesia increased by a combined 70,000 b/d. Increases in Europe, Latin America, and Africa also contributed to the cumulative increase in U.S. propane exports.

Data source: U.S. Energy Information Administration, Petroleum Supply Monthly

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U.S. normal butane exports have increased every year since 2006, reaching a record-high average of nearly 535,000 b/d in 2025, a 9% increase from the previous year. Butane is used as a cooking fuel, a petrochemical feedstock, and a gasoline blendstock during the winter. Butane can also be converted to isobutane through isomerization, producing high-octane gasoline components. The United States exports a small amount of isobutane. Generally, butane demand has grown along with petrochemical demand. However, in many developing markets, governments have subsidized butane as a cleaner-burning replacement for other fuels (for example, wood or charcoal) for uses such as cooking or heating.

U.S. butane exports increased despite a 6% drop in exports to Morocco, the largest importer of U.S. butane at 65,000 b/d in 2025. Indonesia, the second-largest destination for U.S. butane increased by 11,000 b/d (22%). There was a significant rise in U.S. exports to India, which increased to 36,000 b/d in 2025, a 34,000 b/d increase from the previous year. The major other countries that import U.S. butane were Japan, South Korea, and Egypt.

Although natural gasoline exports rose to 176,000 b/d (22%) in 2025, exports have been relatively stable after growing from 2007 through 2016, when they peaked at 202,000 b/d. Nearly all natural gasoline exports go to Canada by land, with insignificant amounts going to Mexico and Brazil.

Read more here. 

President Donald J. Trump oversees Operation Epic Fury at Mar-a-Lago, Palm Beach, FL, March 1, 2026. (White House photo by Daniel Torok)

Since the United States and Israel began bombing Iran last Friday in Operation Epic Fury, the price of West Texas Intermediate crude oil has gone from $65.20/barrel at the close on February 26, to $78.20 at the close on March 5, and prices are already at near $86/barrel in trading this morning. That’s an increase of over 31%, and doesn’t include rising prices as markets began to price in an attack earlier in the year. Since December 16, WTI crude oil prices are up over 55%. War is expensive. 

President Trump posted this morning that there will be no deals made with Iran, writing on Truth Social:

By alones @ Adobe Stock

There has been a lot of discussion in the financial news media over the decline of the dollar, and certainly America’s rapidly increasing debt and inflation have added risk to the currency, but the dollar’s decline since its peak at the start of 2025 doesn’t appear to be at crisis levels, just yet. Take a look at my chart below of the Bank of International Settlements’ Real Effective Exchange Rate Index (broad) for the dollar.

In the chart, you can see larger moves in the dollar compared to what has happened over the last year. The most significant is that which occurred from February 2002, bottoming out in July 2011.

A number of factors contributed to the long decline of the dollar from 2002, including somewhat the uptake in the use of the euro, but mostly loose monetary policy and aggressive nation-building policies by the Bush administration and the so-called “stimulus” by the Obama administration, both of which demanded massive federal spending and debt issuance to fund. After the financial crisis hooked the government on debt, subsequent Congresses seemed to abandon fiscal responsibility altogether.

The dollar isn’t dead yet, but if politicians and Federal Reserve officials are sincere in their stated commitments to a strong dollar, they will maintain reasonable interest rates and forgo drastic interventions in the economy and abroad.

By Jittapon @ Adobe Stock

With a big ice storm coming, natural gas buyers have driven prices up on worries that production facilities will be impacted by the severe weather. Prices for Henry Hub gas rose to $4.96/MMBTU yesterday, a jump of 62% compared to only two days prior. 

The intense storm predictions cover areas of Texas, Oklahoma, and Arkansas, as well as Pennsylvania, home to the Marcellus shale formation. 

Source: National Weather Service

In the map below, you can see America’s top 100 natural gas fields by reserves, with a significant portion positioned within the storm’s predicted track. 

Source: EIA

As America has reduced coal consumption, it has rapidly increased natural gas consumption. Disruptions to production now will mean greater uncertainty for energy consumers, both for heating and power generation. 

Be sure your family is prepared for the storm. 

From August 15, 1971, the day President Nixon officially took America off the gold standard (the system had been breaking down for years beforehand) to September 17, 2007, the day before the Ben Bernanke-led Federal Reserve began what would be an unprecedented economic intervention in the face of the Financial Crisis, the mean interest rate of 3-month T-bills was 6.08%. For the 18 years following Bernanke’s intrusion on markets, it’s been 1.39%.

For decades, I have called the 90-day T-bill the investor’s “North Star.” The T-bill is the risk-free rate of return you can use to chart your course among other investments. The “Real North Star” is the risk-free rate of return with inflation taken out. It’s a measure of the growth or decline in Americans’ purchasing power.

During the pre-Bernanke era, the yields on T-bills rarely fell below the rate of core CPI inflation, and then only for brief periods. Since Bernanke’s response to the Financial Crisis, yields on T-bills have spent more time below the rate of core inflation than above.

Low rates are harmful for savers. When the Fed pushes short rates below 4%, investors should be wary. Here’s how I explained it in 2003:

The 90-day T-bill is often referred to as the risk-free rate of return. Here we are looking at ultimate safety. In retirement, I advise you to draw no more than 4%. When T-bills are 4%, and ideally 4% plus the current inflation rate, you can invest defensively with ultimate safety and a satisfactory, if not munificent, return. When the T-bill rate is below 4%, you cannot make your draw. As such, you are knocked out of the box with the ultimate safety investment. That’s a big deal, no way around it. Aggressive investors and know-it-alls eschew T-bills as dull and boring and certain to produce modest results. Well, all of that is true, but you know what? So what? You can win the day with (1) no credit risk, (2) no interest rate-cycle risk, (3) no stock market risk. You’ll sleep well at night. No, you won’t get rich on your investments, but when you already have your nest egg, you just may not need to get a whole lot richer. With the North Star today at 1.1%, red lights are flashing in a really big way.

The recent release of minutes from the last meeting of the Federal Open Market Committee showed that Federal Reserve officials are internally debating the efficacy of future interest rate cuts. The Federal Reserve should be cautious about lowering rates further than it already has. The Real North Star is still in positive territory, but every cut brings investors closer to losing purchasing power on the risk-free rate. The last thing Americans need after years of Bidenflation is further erosion of their purchasing power.

Originally posted May 28, 2025.

Ray Kurzweil has been a leading developer of artificial intelligence for 61 years, longer than any other living human. I am reading his most recent book, The Singularity is Nearer: When We Merge with AI. The implications of artificial intelligence are immense, and Kurzweil is viewing the technology from the forefront in his position as Principal Researcher and AI Visionary at Google. The book’s website explains:

By Ksu_Sha @ Adobe Stock

In July 2014, I outlined for readers a plan by Pat Buchanan to end the corporate income tax. Pat’s plan, or one like it, could revolutionize the American economy. I wrote:

Pat Buchanan suggests abolishing the corporate income tax and replacing it with a revenue-neutral 10% tariff on imports. Pat maintains that imports kill U.S. jobs and subtract from GDP. What, laments Pat, has our political class done to our once self-sufficient American Republic? Pat’s idea would give a huge boost to our economy. A flat 10% tax on corporate profits, personal income, and retail sales might face less severe headwinds in passing muster in Congress. Either concept would prove a valued tonic that all Americans could warmly embrace.

The tariff plan released by President Trump, with a 10% tariff on most countries and higher tariffs on countries with the largest trade deficits, is substantially similar to Pat’s plan from all those years ago.

President Trump has said a number of times that he’d like to replace the income tax with tariffs, but according to the Tax Foundation, that probably isn’t possible. Erica York and Huaqun Li write:

Even eliminating income taxes for a subset of taxpayers, such as those earning $200,000 or less, would require significantly higher replacement revenues than tariffs could generate. We simulated zeroing out positive tax liability for taxpayers earning under $200,000 without making any changes to tax credits (so, taxpayers could still qualify for refundable portions of tax credits but many would not benefit from non-refundable tax credits as they have zero tax liability to offset). We estimate it would reduce federal tax revenue by $737.5 billion in 2025 on a conventional basis. Over the 10-year budget window, it would reduce federal tax revenue by nearly $8.5 trillion on a conventional basis.

The tariffs Trump has imposed and scheduled as of April 2025 would generate nearly $167 billion in new tax revenue for the federal government in 2025 on a conventional basis, or less than 25 percent of the cost of eliminating income taxes for people earning below $200,000.

The Tax Foundation’s prediction of $167 billion in new revenue from tariffs suggests about $14 billion per month, on top of what was about $7 billion per month of tariff duties collected regularly. In May, the United States collected a total of $22 billion in customs duties (tariffs). Pulling out the $7 billion that was normal before Trump’s tariffs, that’s an additional $15 billion per month, or $180 billion per year. That’s already more than the Tax Foundation’s projection, and Trump hasn’t even instituted full tariffs on most countries. But this week, he announced that more tariffs are coming fast for countries that refuse to make trade deals. On August 1, tariffs on a number of countries will be raised from 10% to 25% or higher. Those countries include:

• Japan 25%
• South Korea 25%
• Malaysia 25%
• Kazakhstan 25%
• Tunisia 25%
• South Africa 30%
• Bosnia and Herzegovina 30%
• Indonesia 32%
• Bangladesh 35%
• Serbia 35%
• Cambodia 36%
• Thailand 36%
• Laos 45%

It remains to be seen just how high American tariffs on imports will be, and if trade deals are signed between Trump’s administration and foreign nations, perhaps there won’t be many tariffs at all. But it appears that revenues could be significantly higher than the original Tax Foundation prediction. And while probably not high enough to eliminate the individual income tax, perhaps, as Pat suggested, the corporate tax could be reduced drastically or even eliminated altogether.

In 2024, the United States collected just under $490 billion in corporate tax receipts. The annualized 12-month moving average of imports to America in May was $4.16 trillion.  

So, how much would Trump have to charge on all those imports to generate enough to cover the corporate tax? First, I’ll back out $7 billion a month, so it’s only “new” customs duties being used. Once that’s factored in, replacing corporate taxes with tariff revenues would demand a 13.8% effective rate on all imports.

These are static numbers in a dynamic world, but as a thought experiment, it’s compelling. The idea of bringing the corporate tax rate to zero creates a host of new possibilities for job creation and innovation in the United States. Imagine how competitive American corporations could be when paying no taxes on their profits. The rate is slightly higher than Pat Buchanan was hoping for, but if he reads this, I don’t think he’ll grumble too much.

Pat wrote in one of his most read columns, in May 2019, titled Tariffs: The Taxes That Made America Great, “Of the nations that have risen to economic preeminence in recent centuries — the British before 1850, the United States between 1789 and 1914, post-war Japan, China in recent decades — how many did so through free trade? None. All practiced economic nationalism.”

Perhaps the elimination of the corporate tax rate could make American business great again.