Keep it organized and to the point don’t be repetitive
Dollar devaluation is pushing the market higher not the glowing economic fundamentals or fiscal restraint of the 21st century.
Dollar devaluation hasn’t been against the currencies of other countries just as addicted to spending and debt as the U.S. but quality stocks, precious metals, real estate and nearly every tangible asset.
The dollar’s decline is being fueled by Absurd Federal Spending and Federal Reserve’s creation of money. Initial justification for the creation for creation of money resulting in debt monetization was the financial crisis starting in 2008. From 2008 through 2019 the Federal Reserve created
2008 – 2019
55.319 trillion dollars in Federal Spending
17.930 trillion in New Federal Debt
17.930 trillion in new Federal debt is greater than the total debt of the United Kingdom, Ireland, Greece, Norway, Russia, Australia, China, South Korea, Taiwan, Canada, Mexico, Argentina and Nigeria combined. Combined population of these countries 2.198 billion.
4.166 trillion total Money created by the Federal Reserve
1.650 of the 4.165 trillion went to buy bad debt in the private sector.
2.516 of the 4.165 trillion to buy U,S. Treasury debt the free market wouldn’t.
The Fed’s money creation timeline emphasizes how the Treasury’s dependence on the Federal Reserve bailouts has escalated.
771 billion 1913 – 2007 was created by the Fed for Bank & Treasury bailouts.
3.441 trillion 2008 – 2019
Where record deficit spending has left the United States.
In 2020 annual Federal revenue is now a mere 11.16% of total Federal debt down from 50.62% of total Federal debt in 1970
31.73% Average 1970 2020 annual revenue to total federal debt ratio
11.16% Record low year 2021
The 11.16% annual Federal revenue to total Federal debt ratio makes it impossible for the U.S. to accurately report inflation, normalize interest rates or any Federal expense whose increase is pegged to reported inflation such as Social Security, Medicare, Military or Civilian employee pensions. If interest rates normalized in 2021 to the 1970 – 2007 average of 8.70%, 68% of total Federal Revenue would be consumed by Federal debt service costs.
How did this ratio get so ugly when GDP, income, assets and Federal revenue all outpaced reported inflation from 1970 through 2021?
The numbers on Personal Income
1.48% Average growth above inflation
$29,714 Is what Personal income would be in 2020 if pegged to inflation
$29,928 Overall growth in annual personal income above inflation
Overall growth in personal income was 100.72% more than reported inflation
Median home prices
1.22% Average appreciation above inflation
$192,671 Is what median home prices would be in 2020 if pegged to inflation
$144,279 Overall appreciation in median home prices above inflation
Overall appreciation in median home prices was 74.88% more than reported inflation.
S&P 500
4.83% Average appreciation above inflation
705.40 Is what the S&P 500 would be in 2020 if pegged to inflation
3,050.70 Overall appreciation of the S&P 500 above inflation
Overall appreciation of the S&P 500 was 432.48% more than reported inflation
Gold
5.78% Average appreciation above inflation
$315 Is what the price of gold would be in 2020 if pegged to inflation
$1,457 Overall appreciation of gold above inflation
Overall appreciation of gold was 462.54% more than reported inflation
Growth in GDP Per Capita
5.14% 1970-2020 average annual growth GDP per capita
1.11% Average appreciation above inflation
$38,551 Is what GDP per capita would be if pegged to inflation
$64,443 Actual GDP per capita in 2020
Overall growth in GDP per capita was 67.16% above reported inflation inflation
Growth in GDP Per Employed Person
4.70% 1970-2020 average annual growth GDP per employed person
0.67% Average appreciation above inflation
$101,190 what GDP per employed person would be if pegged to inflation
$151,103 Actual GDP per employed person in 2020
Overall growth in GDP per employed person was 67.16% above inflation
Growth in Federal Revenue Per Capita
4.99% 1970-2020 average annual growth in Federal income per capita
0.96% Average appreciation above inflation
$7,160 What Federal income would be per capita if pegged to inflation
$10,320 Actual Federal income per capita in 2020
Overall growth in Federal income per capita was 44.13% higher then reported inflation
Growth in Federal Revenue Per Employed Person
4.99% 1970-2020 average annual growth in Federal income per employed person
0.50% Average appreciation above inflation
$20,093 What Federal income would be per employed if pegged to inflation
$24,197 Actual Federal income per employed person in 2020
Overall growth in Federal income per employed person was 20.43% higher than reported inflation
45.19% Percentage of U.S. population is Employed in 2021
1.60% from the 52 year high of 46.79% set in 2000
3.10% higher than the 52 year average of 42.09%
10.84% higher than the 52 year low of 34.35% set in 1971
In 2021 a higher percentage of the U.S. population has jobs than 42 out of the last 52 years.
The official current unemployment is 6.10%, a 6.10 % unemployment rate is higher than 30 out of the last 52 years.
Perception
With growth in GDP, Personal Income, assets and Federal Revenue all outpacing reported in Inflation and a higher percentage of the population working now than 42 out of the last 52 years you’d expect the quality of life in the United States to be at or near an all time high, the Federal Government should be running budget surpluses, retiring debt and working on restoring their AAA credit rating.
The reality of what these strong numbers produced
A record 26.5 trillion in new Federal debt
9.163 trillion in Federal Reserve bailouts to keep the U.S. solvent
1.241 of the 9.153 trillion of it forfeited Federal Reserve operating profits
7.922 trillion of Fed created money from and backed by nothing
148.084 trillion in unfunded liabilities
2 debt downgrades with at least one more on deck
(During the last financial crisis the U.S lost it’s AAA debt rating for creating 3.441 trillion dollars for bank and Treasury bailouts then labeling it “quantitative easing” quantitative easing and debt monetization are basically the same thing, the creation of money from and backed by nothing to devalue a country’s currency)
Despite this 3.411 trillion in created money 12 years latter the U.S. found itself in yet another financial crisis that over the last 16 months has required 10.107 trillion in Federal spending and 5.655 trillion in new Federal debt.
10.107 trillion in Federal spending over the last 16 months is equivalent to the combined total government debt of the United Kingdom, Canada, Australia, Mexico, Russia and India, combined population of these countries 1.792 billion.
10.107 trillion in 16 months is 2.05 trillion more than China’s total reported debt of 8.057 trillion, population of China 1.422 billion.
Federal spending from 2008 through 2020 has exceeded 55.319 trillion dollars, new Federal debt 17.930 trillion.
Since 1913 the Federal Reserve has created a net total 7.992 trillion from and backed by nothing for Bank, Corporate and Treasury bailouts
2.792 trillion of the total 7.922 trillion went to buy bad bank debt, the majority of this bad debt was from the same banks that caused the 2008 financial crisis, the Fed still owns the majority of this junk debt today.
5.128 trillion to buy Treasury debt the free market wouldn’t
Fed’s money creation timeline 1913 – 2021
771 billion, 1913 – 2007 total created for bank and Treasury bailouts
3.441 trillion 2008 – 2019 for bank and Treasury bailouts
By January 2020 Federal debt had gotten so high, Treasury ratings and yields so low, the U.S. has been unable to sell enough Treasury debt on the open market to to satiate their ever increasing spending addiction.
January 2020 though April 2021
10.107 trillion total Federal Spending
5.671 trillion new Federal debt
3.738 trillion money created by the Fed to buy debt the free market wouldn’t
10.107 trillion is equivalent to the total government debt of the United Kingdom, Canada, Australia, Mexico, Russia and India combined. Total population of these countries 1.792 billion people.
5.671 trillion in new Federal debt is 758 billion in 2021 dollars more than the entire fiscal cost of World War 2 between of 291.18 billion which according the BLS translates into 4.913 trillion in 2021.
3.738 trillion in the last 16 months is 69 billion more than the combined total debt of Brazil, Argentina, Mexico, Russia and Taiwan combined population of these countries 557.865 million.
Out of the 5.671 trillion in new Federal debt the free market would only by 1.933 trillion of it, 65.91% of the 3.738 trillion had to be funded with Fed created money or the U.S. would have been insolvent.
