Economic perception versus reality
Income, assets and GDP in ounces of gold
U.S. debt compared to other countries in 2021
What I see happening between now and the end of 2025
Tools, markets and contracts for capturing major market moves long or short
From 1970 to 2020 personal Income, stocks, home prices, precious metals, GDP, Federal revenue all outperformed reported inflation.
1970-2020 average annual reported inflation 4.03%
Average annual growth in personal income 5.51%
Average increase in median home prices 5.25%
Average increase in the S&P 500 8.63%
Average increase in Gold 9.81%
Average increase in Federal revenue per capita 4.99%
Average increase in Federal revenue per employed person 4.53%
Average annual growth in GDP per capita 5.14%
Average annual growth in the GDP per employed person 4.70%
1970 to 2021 personal income outperformed inflation by 100.72%
5.51% average annual growth in personal income
1.48% average annual growth above reported inflation
$29,714 what personal income would be in 2020 if pegged to inflation
$59,642 actual personal income in 2020
$29,928 overall growth in annual personal income above inflation
2008-2019 Median home prices outperformed inflation by 74.88%
1.22% average appreciation above inflation
$192,671 what median home prices would be in 2020 if pegged to inflation
$144,279 overall appreciation in median home prices above inflation
2008-2019 the S&P 500 outperformed inflation by 432.48%
4.83% average appreciation above inflation
705.40 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
2008-2019 gold outperformed inflation by 462.54%
5.78% average appreciation above inflation
$315 what the price of gold would be in 2020 if pegged to inflation
$1,457 overall appreciation of gold above inflation
Federal revenue per capita outperformed inflation by 44.13%
4.99% average annual growth in Federal revenue per capita
0.96% average appreciation above inflation
$7,160 what Federal revenue would be per capita if pegged to inflation
$10,320 actual Federal revenue per capita in 2020
4.03% 1970-2021 average annual reported inflation
Federal revenue per employed person by 20.43%
4.53% average annual growth in Federal revenue per employed person
0.50% average appreciation above inflation
$20,093 what Federal revenue would be per employed person if pegged to inflation
$24,197 actual Federal revenue per employed person in 2020
GDP per capita outperformed inflation by 67.16%
5.14% average annual growth in GDP per capita
1.11% average growth above inflation
$38,551 what GDP per capita would be if pegged to inflation
$64,443 actual GDP per capita in 2020
GDP per employed person by 49.33%
4.70% average annual growth in GDP per employed person
0.67% average growth above inflation
$101,190 what GDP per employed person would be if pegged to inflation
$151,103 actual GDP per employed person in 2020
In 2021 the U.S. has a higher percentage of the U.S population working and paying taxes than 36 out of the last 52 years.
44.23% of U.S. population is employed in 2021
2.25% from its 52 year high of 46.79% set in 2000
2.16% higher than the 52 year average 42.07%
9.88% higher than the 52 year low of 34.35% set in 1971
With more Americans working than 36 out of the last 52 years, personal income, assets, economic growth and Federal income all outperforming inflation, you’d expect quality of life for U.S. citizens to be at or near an all time high, that the Federal Government would be running budget surpluses, paying down debt, and working hard towards restoring their fiscal credibility and AAA debt rating.
From 1970 to 2021 Federal debt increased by 28.16 trillion
Federal debt as a percent of GDP from 35.49% to 137.20%
Federal debt per capita, from $1,879 to $86,025
Federal debt per employed person from $5,365 to $195,836
Federal Spending per employed person, from $2,929 to $53,210
9.1 trillion dollars in Federal Reserve bailouts, 8.2 trillion since 2008
2 debt downgrades caused by record spending and the creation of trillions to fund it.
Borrowing the all monies paid into Social Security by issuing it non marketable debt which helped expedite the insolvency date to as early as 2028 to the latest 2035
Borrowing all the monies paid into Military and Civilian Employee Trusts by issuing these trusts non marketable debt jeopardizing beneficiary retirement income.
Mismanaging Medicare moving up it’s insolvency date to 2026
All in, Government piled up 153.473 trillion in unfunded liabilities
1970-2020 Federal spending per capita increased by 228.46% more than inflation.
6.88% average annual growth in Federal spending per capita
2.85% average growth above inflation
$23,406 actual Federal spending per capita in 2020
$7,242 what per capita Federal spending would be in 2020 if pegged to inflation
Federal spending per employed person by 158.58% more than inflation.
6.49% 1970-2020 average annual growth in Federal spending per employed person
2.46% average growth above inflation
$53,547 actual Federal spending per capita in 2020
$20,705 what per employed person Federal spending would be in 2020 if pegged to inflation
Average annual Federal spending above reported inflation.
Per employed person
In 2020-2021 Federal spending per employed person is equivalent to 87.09% of median personal income.
Increases in Federal Debt
Since 1970 28.168 trillion
Since 2008 19.599 trillion
Since 2020 5.880 trillion
Federal Debt as a percent of Gross Domestic Product (GDP) 1900-2021
1970 to 2021 Federal debt to GDP, 35.49% to 137.20%
2008 to 2021 Federal debt to GDP, 61.93% to 137.20%
1939 debt to GDP, 43.30% (end of the Great Depression)
1946 119.12% (end of World War 2)
High, 2021 137.20%
Low, 1907 7.19%
Federal debt per capita
1970-2021 actual increase in Federal debt per capita, $1,879 to $86,025, +4,478.23%
1970-2021 if pegged to reported inflation, $1,879 to $13,206, +602.63%
2008-2021 actual per capita increase in Federal debt, $29,998 to $86,025, +186.77%
2008-2021 if pegged to reported inflation $10,036 to $13,206, +31.58%
2020-2021 actual per capita increase in Federal debt, from $69,392 to $86,025, +23.97%
2020-2021 if pegged to reported inflation $12,374 to $13,206, +6.72%
Federal debt per employed person
1970-2021 actual increase per employed person $5,365 to $195,836, +3,691.59%
1970-2021 if pegged to reported inflation $5,365 to $37,693, +602.63%
2008-2021 actual increase per employed person, $64,871 to $195,836, +201.89%
2008-2021 if pegged to reported inflation, $28,645 to $37,693, +31.58%
2020-2021 actual increase per employed person. $150,228 to $195,836, +30.36%
2020-2021 if pegged to reported inflation. $35,420 to $37,693, +6.41%
U.S. debt compared to other countries
1970-2020, 28.168 trillion in new Federal debt, this is more than the total debt of the United Kingdom, Italy, France, Germany, Australia, Canada, Mexico, Russia, China, Taiwan and India combined, total population of these countries 3.468 billion, U.S. population 332 million.
Since 2008, 19.598 trillion in new Federal debt, this is more than the total debt of the United Kingdom, Canada, Australia, Switzerland, Greece, Turkey, Taiwan, China, Russia, India, Argentina, Mexico and Nigeria combined, total population of these countries 3.587 billion.
Fed Bailouts since 2008 8.261 trillion, this is more than the total debt of China, population 1.442 billion.
18 months, 5.88 trillion in new Federal debt, that’s 304 billion more than the combined total debt of the United Kingdom and Canada.
The U.S. has required more Federal Reserve bailouts in the last 19 months than the previous 13 years and 7 months
2008-2019 – last 13 years 7 months
Total new debt Federal 13.719 trillion
Total money created by the Federal Reserve 3.275 trillion
Federal Reserve profits forfeited to the U.S. Treasury 892 billion
Total Federal Reserve bailouts, 4.167 trillion
2020-2021 – last 19 months
Total new federal debt 5.881 trillion
Total money created by the Federal Reserve 4.036 trillion
Federal Reserve profits forfeited to the U.S. Treasury 144 billion
Total Federal Reserve bailouts, 4.180 trillion
From 1998 to 2020 the Federal Reserve forfeited 1.242 trillion in operating profits to the U.S. Treasury, that’s 142.49 billion more than total Federal debt in 1982.
2 Federal debt downgrades caused by record Federal spending and the creation of trillions of dollars to pay for it.
In 2021 the United States has the worst debt rating in history, 11 countries are now rated higher, the U.S. now shares the same debt rating as Hong Kong and Finland.
With continued overspending and the creation of money to fund it, U.S. debt is expected to be downgraded again.
As Federal debt increased by 19.30 trillion the Federal Reserve created over 8 trillion dollars for bailouts and Federal debt was downgraded twice.
Inflation magically disappeared until May of this year?
1970-2021 Average Treasury rates and real rate of returns
1970 to 2007 average Treasury rate 8.70% paying 3.99% more than reported inflation
2008 to 2020 average Treasury rate 2.67% paying 0.94% more than reported inflation
2021 average Treasury rate 2.01% paying 3.39% less than reported inflation
1970 through 2021 average annual inflation 4.03%
Reported inflation over the last 12 months 5.40%
Ask yourself how can you possibly have these dismal fundamentals when personal income, stocks, home prices, precious metals, GDP and Federal revenue all outperformed reported inflation?
Reported inflation factual or fictional?
1939 total cost of the New Deal in gold 1,211504,939 ounces
Cost of the New deal in 2021 if pegged to gold 2.179 trillion dollars
What the New Deal did for 809.27 billion BLS 2021 dollars
- Job training for 8.5 million unskilled men to learn a new professions as they carried out public works infrastructure projects.
- Built or modernized more than 55,000 civilian and military buildings.
- Built 32 naval vessels, many played key roles during World War 2.
- Built 4,026 new schools, the majority are still open today.
- Built 130 new hospitals, including Fitzsimons , Allegheny General & Jersey City
- 29,000 new bridges & tunnels including Lincoln,Throgs Neck and Golden Gate.
- Scores of Dams including Hover & Shasta, the majority still produce power today
- Built or modernized over 180,000 miles of highways including the Los Angeles Freeway, the Overseas Highway(107 miles) connecting Key West to the mainland
- Built or modernized more than 150 airports including La Guardia and Midway.
- Built or modernized nearly 9,000 miles of storm drains and sewer lines.
New Deal Programs provided more than Infrastructure.
- The laborers of the New Deal programs worked in schools serving more than 900 million hot lunches to hungry children during the depression.
- Operated 1,500 nurseries enabling childcare so parents could work.
- Funded over 225,000 concerts and thousands of plays.
- New Deal cultural programs produced more than half a million works of art including Jackson Pollock’s 17A which sold for 200 million in 2016.
- The New Deal Writers’ program featured works from soon-to-be famous Authors like John Steinbeck, Steinbeck went on to win the Pulitzer Prize in 1940 for his novel The Grapes of Wrath.
Since 2008, 22.14 trillion (2021 dollars) in new Federal debt?
Where are the U.S’s new hydroelectric dams like Hoover and Shasta, the 4,026 new schools, 130 new hospitals,180,000 miles of new and repaired roads, new bridges, tunnels or high speed trains like the rest of the industrialized world?. Where’s the training programs and 8.5 million jobs, the detox programs and shelters for over half a million homeless?
Either President Roosevelt really knew how to stretch a buck in the 1930’s or BLS.GOV inflation is purely fictional.
What U.S. does have to show for this 22.14 trillion is divided country, burned/looted cities, record crime and homeless rates, lost wars, lost credibility, lost personal freedom, lost personal privacy, vacant retail space, a decaying infrastructure and a DNA sample on the majority of it’s citizens.
BLS.GOV calculations for the total fiscal cost of World War 2
4.347 trillion is 59.59% of what the Federal Government spent in 2020,
97.35% of what the Federal Government spent in 2019.
1946 U.S. fiscal cost of World War 2 in gold 131,662,345,145 ounces
Cost of the WW 2 if pegged to gold 15.088 trillion 2021 dollars
2008-2019 Federal spending compared the New Deal and WW2
Average annual Federal spending 3.974 trillion,
491.06% the total cost of New Deal (1933-1939)
91.42% the total fiscal cost of World War 2 (1941-1945)
Average annual new Federal debt 1.143 trillion,
141.23% the total cost of New Deal
26.29% the total fiscal cost of Word War 2
2008-2019 total spending during the last “crisis” and “recovery”
47.689 trillion in Federal Spending (all in)
5,892.84% the total cost of New Deal
1,097.06% the total fiscal cost of World War 2
13.718 trillion in New Federal Debt 2008-2019
1,695.11% the total cost of the New Deal
315.57% the total fiscal cost of World War 2
Spending and new debt 2020-2021
11,312 trillion in Federal Spending (all in)
5.88 trillion in New Federal Debt
Data on pre Covid causes of death, Covid causes of death
Annual Federal Revenue is now a mere 11.16% to total Federal debt, anything below 12.50% is considered beyond repair
An 11.16% annual revenue to debt ratio makes it impossible for the U.S. to accurately report inflation, normalize interest rates or any increases in any Federal expense that’s pegged to reported inflation such as Social Security, Medicare, Military or Civilian employee pensions.
Example, if Treasury rates normalized to the 1970 – 2008 average of 8.70%, 68% of all Federal Revenue would be consumed by debt service cost alone.
Accurate increases in Medicare would push it’s insolvency up from the projected 2026, Social Security before the projected 2028 to 2035.
Under reporting inflation contains Federal costs
Example, from 2008 to 2021 Federal debt increased by 200.00% yet annual debt service cost increased by only 30.91%.
Total Federal debt in 2007 8.950 trillion, annual debt service cost 411.32 billion
Total Federal debt in 2020 26.880 trillion, annual debt service cost 538.45 billion
Adding to deteriorating credibility is how the U.S. reports budget deficits, the poverty and the homeless rates.
1970-2020 reported deficits versus increases in total Federal debt
Cumulative reported budget deficits $17.857 trillion
Cumulative increase in Federal debt $26,515 trillion
According to U.S. politicians this 8.658 trillion dollar difference doesn’t count because they’re mandatory expenses and they don’t get to vote on them.
Annual difference between reported deficits and increase in total Federal debt
1970 to 2007 4.021 trillion,
2008 to 2020 4.637 trillion.
U.S poverty rate
The Federal Government has contained the official poverty rate and all subsides linked to the poverty rate by lowering what the poverty rate is.
By redefining who’s homeless the Department of Housing and Urban development has reduced the official homeless rate by 173,691 people since 2005.
In 2021 Federal Debt as a percentage of GDP is the worst in history
Regulation, taxation and litigation have destroyed U.S. manufacturing and eliminated over 20 million jobs.
The resulting trade deficits from 1970 to 2021 have eliminated 13.95 trillion in domestic wealth, 7.652 trillion since 2008.
Foreign held Treasury debt now impedes the U.S.’s ability to negotiate fair trade
If the 7.012 trillion in foreign held Treasury debt hits the market for any reason it will create an unprecedented financial crisis, unprecedented dollar sales by foreign investors and additional dollar devaluation fueled by the Federal Reserve’s creation of trillions of dollars trying to support the U.S. Treasury market and dollar, hyper inflation will engage.
In 2020 and 2021 the Federal Reserve has been the largest buyer of new Treasury debt using money they created from and backed by nothing,
The creation of over 8 trillion dollars makes it impossible for the dollar to maintain it’s long-term value against any quality stock or tangible asset, It also moves closer the sale of 7.012 trillion in foreign owned Treasury debt.
The Federal Reserve has purchased more Treasury debt in the last 19 months than the previous 50 years
2020-2021 last 19 months
Increase in Federal debt 5.881 trillion
Federal debt purchased by the Federal Reserve 2.764 trillion
Domestically purchased Federal debt 2.694 trillion
Debt purchased by foreign investors 311.5 billion
Non marketable debt held by Federal agencies & Trusts 111.8 billion
1970-2019 previous 50 years
Increase in Federal debt 22.289 trillion
Federal debt purchased by the Federal Reserve 2.637 trillion
Domestically purchased Federal debt 7.301 trillion
Debt purchased by foreign investors 6.716 trillion
Non marketable debt held by Federal agencies & Trusts 6.01 trillion
Percent ownership of total Federal Debt
Domestic, publicly held Federal debt 35.01%
Federal debt held by foreign investors 24.62%
Non marketable Federal debt held by Federal Agencies & Trusts 21.46%
Federal debt held by the Federal Reserve 18.92%
Domestic publicly held Federal debt 79.58%
Federal debt held by foreign investors 4.12%
Non marketable Federal debt held by Federal Agencies & Trusts 0.00%
Held by the Federal Reserve 16.30%
The numbers in ounces of gold
1981-2020 reported personal income in gold
Personal income increased from 24.67 to 33.66 ounces, +8.99 ounces, +36.46%
Personal income in dollars increased from $11,326 to $59,642, +$48,316, +426.59%
2020 personal income 33.46 ounces
1981 24.67 ounces
1981-2021 annual average 55.33 ounces
High 2001 117.29 ounces
Low 1981 24.67 ounces
1981-2020 median home price in gold
Median home prices increased from 183.32 to 185.67 ounces, +2.24 ounces, +1.28%
In US dollars from $68,950 to $336,950, +$268,000, +388.69%
2020 185.67 ounces
1981 183.32 ounces
1981-2021 average 312.01 ounces
High 2000 617.83 ounces
Low 2011 134.10 ounces
1981-2020 value of an S&P 500 futures contract
An S&P contract increased from 14.78 to 121.47ounces, +106.69 ounces, +721.69%
In US dollars, from $6,788 to $220,450 +$213,662, +3,147.64%
2020 185.67 ounces
1981 183.32 ounces
1981-2021 average 312.01 ounces
High 2000 617.83 ounces
Low 2011 134.10 ounces
1981-2020 GDP Per employed person in gold
GDP increased from 78.27 to 85.28 ounces, +5.23 ounces, +8.96%
GDP in dollars increased from $35,937.56 to $151.102.75, +$115,165.18, +320.45%
2020 85.28 ounces
1981 78.27 ounces
1981-2020 average 153.27 ounces
High 2001 297.62 ounces
Low 2012 73.07 ounces
GDP increased from 31.14 to 36.37 ounces, +5.23 ounces, +16.80%
GDP in dollars increased from $14,297.62 to $64,443.08 +$50,145.46 +350.72%
2020 36.37 ounces
1981 31.14 ounces
1981-2020 average 67.64
High 2001 137.94 ounces
Low 2011 31.14 ounces
Federal revenue in gold 1981-2020
Per employed person
Decreased from 14.74 to 13.66 ounces, -1.08 ounces, -7.34%
In dollars increased from $6,766.66 to $24,196.85, +$17,429.94, +257.58
2020 13.66 ounces
1981 14.74 ounces
1981-2020 average 27.13 ounces
High 1999 56.20 ounces
Low 2011 11.81 ounces
Decreased from 5.86 to 5.82 ounces, -0.04 ounces, -0.67%
In dollars increased from $2,692.19 to $10,319.60, +7,627.14, +283.32%
2020 5.82 ounces
1981 5.86 ounces
1981-2020 average 11.98
High 1999 26.03 ounces
Low 2011 5.00 ounces
Federal spending in gold 1981-2020
Per employed person
From 16.34 to 30.28 ounces, +13.93 ounces +85.26%
Federal spending in dollars, from $7,504 to $53,647, +46,143, +614.91%
2020 30.28 ounces
1981 16.34 ounces
1981-2020 average 32.86
High 2001 59.53 ounces
Low 1981 16.34 ounces
Increased from 6.50 to 13.06 ounces, +6.56 ounces +100.86%
In dollars, from $2,985 to $23,140, +20,154, +675.08%
2020 13.06 ounces
1981 6.50 ounces
1981-2021 average 14.48
High 2001 27.59 ounces
Low 1981 6.50 ounces
Federal debt in gold 1981-2020
Per employed person
Increased from 23.73 to 106.65 ounces, +82.92 ounces, +349.38%
In dollars increased from $10,897 to $188,966, +178,069, +1,634.08%
2020 106.65 ounces
1981 23.73 ounces
1981-2020 average 97.51
High 2001 161.09 ounces
Low 1981 23.73 ounces
Increased from 9.44 to 46.00 ounces, +36.56 ounces, +387.20%
In dollars increased from $4,335 to $81,507, +77,172, +1,780.03%
2020 46.00 ounces
1981 9.44 ounces
1981-2020 average 43.17
High 2001 74.66 ounces
Low 1981 9.44 ounces
What believe is on deck for the U.S. between 2021 through 2026
With Federal Revenue is now a mere 11.16% of total Federal debt, the Federal Government cannot afford to raise rates to attract enough buyers to keep it solvent. We expect this this ration to drop below 7.5% by the end of 2026.
2021-2026 projected increase in Federal Debt
From 28.57 to 38.67 trillion dollars
Debt to GDP from the projected 137.20% in 2021 to 142.56% by the end of 2026
Because the Federal government can’t attract enough buyers at rates they can afford to pay the Federal Reserve will need to create more money from and backed by nothing to keep the U.S. solvent
Expectations for Debt owned and money created through 2026
Total money created by the Federal Reserve increasing from 8.24 to 13.53 trillion
Federal debt owned by the Federal Reserve increasing from 5.30 to 8.66 trillion
Other debt owned by the Federal Reserve from 2.898 to 4.689 trillion
2021-2026 Inflation Expectations
Reported inflation averaging more than 3.75%
Actual inflation averaging more than 5.25%
(Shadow Stats puts the average above 7.50%)
Interest rate expectations
The Federal Reserve is providing no specific conditions, levels or guidance
Today’s probability of a rate cut or hike at the next Fed meeting
Today’s Treasury Rates (Bloomberg)
Data Prime Rate, Fed Funds, 3 month, 2 year, 5 year, 10 year & 30 year
BLS.GOV Inflation Calculator
Interest Rate Futures Educational Page
Interest rate 3 month to 30 year curve
Fed Meetings and Press Conferences
Understanding the FOMC Report
Sales of foreign owned debt and dollars
Potential hikes in income, corporate and long-term capital gains tax rates depends on the 2022 elections.
Sales of U.S stocks to avoid increase in the capital gains tax with recovery fueled by dollar devaluation.
Insert stock table
Mortgage delinquency rates increasing from 2.75% to more than 5.00%
Federal Reserve ownership mortgage backed securities from 2.422 trillion to over 4 trillion
A temporary selloff in real estate caused by higher rates, higher taxes, higher inflation, decreasing affordability and decreasing discretionary income with recovery to new highs fueled by dollar devaluation.
For my trading accounts I”ll remain properly capitalized, maintain discipline and trade with the trend long or short.
There is no excuse for not trading with trends, exponential moving averages (EMAs) is a very simple solution and a great place to start, it’s this simple, red line (9 day EMA) above blue line (18 day EMA) trade long, red below blue trade short.
Using nothing but the 9 day and 18 day EMA generated these results since 2000 on these futures contacts.
Drop in EMAs
You can experiment with any combination of the these EMAs using these instructions
Top EMA allocations are on this page
Creating you own allocation on this page
Instructions for tracking your own EMA allocation this page
Watch what the Fed chair is in, the Fed coincidentally always seems to support these markets, follow the chair’s disclosure on his OGE 278e forms.
It’s going to be a exciting year to trade packed with beautiful trends contact with any questions.