The Fed is currently buying 54.04% of all new Federal debt, trillions more in mortgage backed securities all at noncompetitive rates. they’re doing this using money they’ve create with keypunch entries, these purchases have artificially contained interest rates since 2008.
When this slows or stops who’s going to replace the Fed?
- The Fed has created 8,556 trillion dollars with keypunch entries.
- Purchased 5,644 trillion in Federal debt.
- Purchased another 2,527 trillion in mortgage backed securities.
Current Inflation “transitory”, yes, reported inflation is 5.40%, true inflation is, and will be moving higher. Ask yourself if inflation was “transitory “would Social Security (which is facing insolvency by 2035) be hiking Beneficiary payments by 5.9% in 2022, the largest increase in 40 years?
Next crisis on deck, currently there is 7.202 trillion in foreign held Federal debt,
When rates rise, Treasury prices fall, do you honestly believe these foreign investors are going to maintain their positions or sell Treasuries, dollars, repatriate and reallocate funds to tangible assets, quality stocks or debt instruments in any of the 11 countries that have higher debt rating than the U.S.?
When this Fed chart Federal Debt Held by Foreign and International Investors turns lower aggressive sales of U.S. Treasuries and dollars will engage.
When this occurs the first waves of “Quantitative Easing” totaling 8,556 trillion will look like moderation.
What “politicians” have accomplished since they discovered “Quantitative Easing”
60.888 trillion spent since 2008 that didn’t produce anything more than a U.S. debt downgrades and a 19.917 trillion dollar bill for future generations of Americans to pay off.
From 2008 through 2019 (144 months)
- Federal debt grew by 13.972 trillion from 8.86 trillion to 22.833 trillion
- The Federal Reserve created 3.274 trillion dollars with keypunch entries
- 13.972 trillion is more than 3 times the fiscal cost of World war 2 in 2021 USD
- 13.972 trillion is more than the combined total debt of United Kingdom, Ireland, Australia, Mexico, China and Russia total population of these countries 1.816 billion, U.S., 331 million.
2020 through 21 October 2021 (last 22 months)
- Federal debt grew by 6.072 trillion from 22,833 trillion to 28.905 trillion
- The Federal Reserve created 4.315 trillion dollars with keypunch entries
- 6.072 trillion in new Federal debt over the last 22 months is 86 billion more than the combined debt of Brazil, Argentina, Mexico, Russia and India, population of these countries 1.918 billion, U.S. 331 million.
- 6.072 trillion is more than 6 times the cost of FDR’s new deal
- 40.970 trillion in cumulative Federal Revenue
- 60.888 trillion in cumulative Federal Spending
- 19.917 trillion in new Federal debt
- 7.590 trillion created by the Federal Reserve with keypunch entries
- Cumulative median personal income 2008-2021 $684,478
- Federal Revenue per employed person $277,670
- Federal revenue as a percent of median income 40.69%
- Federal spending per employed person $412,654
- Federal spending as a percent of median income 60.46%
- New Federal debt per employed person $134,985
- Money created by the Federal Reserve per employed person $51,441
Corrupt Incompetence during the 21st century has reduced annual Federal Revenue to a mere 11.16% of total federal debt, down from 35.98% at the end of 2000 and 28.69% in 2007. An 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 increase in Federal expenses pegged to reported inflation such as Social Security, Medicare, Military and Civilian employee pensions.
Dollar devaluation and monetization of U.S. debt have fully engaged creating unprecedented opportunities for those who are prepared and potential fiscal ruin for those who are not.
For more information of what’s on deck and strategies we’ve used and are using to capture the moves see these Articles
If you have any questions or want me to walk your through what we’re doing and how contact me.
Peter Knight Advisor
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