Tag: Futures Trading Advisors

The Fed was buying 54.04% of all new Federal debt, trillions more in mortgage backed securities all at noncompetitive rates. they did this using money they created with keypunch entries, these purchases have artificially contained interest rates since 2008. 

Now that it’s stoped 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 at the time of this report was 5.40%, true inflation is, and will be moving higher.  Ask yourself if inflation is “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

Since 2008

• • 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

• • Perception versus Reality
  • Track us capturing the move higher in Rates
  • Don’t Expect Much From The Fed At Virtual Jackson Hole
  • Fundamentals That Will Impact All Our Portfolios, Domestic And Internationally (NYSEARCA:SPY)
  • Last time we captured the move higher in rates

If you have any questions or want me to walk your through what we’re doing and how contact me.

Peter Knight Advisor
My current date and time July 22, 2026 4:52 pm
Direct VI Phone 24/7 +340 244 4310
Skype:: Peter Knight Advisor
Message me
Schedule an online review
Peter_Knight@peterknightadvisor.com

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Disclosure

Breton Woods 1944, the U.S. dollar was backed by gold, respected internationally and became the World’s reserve currency.

2022 the dollar is a fiat currency, back by nothing, whose central bank creates by the trillions to buy the majority of all new downgraded Federal debt at non-competitive rates.

What happened?

In 2008 politicians discovered “quantitative easing” and quickly realized they could instruct the Federal Reserve to create any amount of money they wanted to spend on nearly anything in the name of “economic stimulus” or “crisis”, following their instructions the Federal Reserve created 8.756 trillion, 7.865 trillion of it since 2008, 4.698 trillion over the last 24 months, total created is expected to be nearly 9 trillion by May of 2022.

Sources & Data

How much is 8.756 trillion? 461 billion more than the total debt of China, 4.698 trillion in 24 months? 237 billion more than the combined total debt of Brazil, Argentina, Mexico, Turkey, Greece, Russia and Indonesia.

In addition to the 8.756 trillion in created money the Federal Reserve forfeited 1.258 trillion in operating profits to the U.S. Treasury, 1.002 trillion of it since 2008.

Sources & Data

Total Federal Reserve funded bailouts 10.014 trillion or 273 billion more than the combined total debt of Russia, China, Taiwan, Hong Kong, Greece and Argentina.

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Fed bailouts and new Federal debt, 105 years pre covid, versus the last 24 months.

Formation of the Federal Reserve 1913

• • 1913-2007, 94 years
  • New Federal debt 8.951 trillion
  • Total Fed funded bailouts 1913-2007, 890.66 billion 

2008-2019, 11 years

• • New Federal debt 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 Fed funded bailouts 2008-2019, 4.167 trillion

2020-2021, last 24 months

• • Total new Federal debt 6.352 trillion
  • Total money created by the Federal Reserve 4.698 trillion
  • Federal Reserve profits forfeited to the U.S. Treasury 160.65 billion
  • Total Fed Funded bailouts 2020 & 2021, 4.859 trillion

6.352 trillion in new Federal debt (in 24 months) is 8 times more than the cost of FDR’s new deal that built America’s infrastructure, fueled the U.S. out of the great depression and prepared it for World War 2.

• • Total cost of the New Deal from 1933 to 1939, 41.70 billion (1934 USD)
  • The BLS.GOV translates this into 809.27 billion in 2022 dollars
  • Total cost of the New Deal in gold 1.226 million ounces (Gold at $34.01 per troy ounce)
  • Cost of the New Deal in 2021 if pegged to gold 2.207 trillion dollars 

6.352 trillion is 1.95 trillion more than the total fiscal cost of World War 2.

• • U.S. fiscal cost of World War 2,  291.18 billion (1946 dollars).
  • The BLS.GOV translates this into 4.347 trillion (2022 dollars)
  • The fiscal cost of WW 2 was 59.59% of what the Federal Government spent in 2020,
  • 97.35% of what the Federal Government spent in 2019.
  • U.S.’s fiscal cost of WW  2 in gold, 131.662,000 ounces
  • Cost of the WW 2 if pegged to gold 15.088 trillion (2022 dollars)

6.352 trillion justified by a virus that according to the CDC is 1/4 as lethal as road injury for citizens with no preexisting life threatening conditions.  

Sources & Data

Impact of record deficit spending and the Fed’s creation of money on U.S. fiscal creditability.

From 2008 through 2012 Federal debt increased by 7.100 trillion, at the same time the Fed created 2.016 trillion with keypunch entries, record new debt and the creation of money to partially fund it caused S&P to downgrade U.S. Federal debt for the first time in 2012, from AAA to AA+,  the U.S. now shares the same debt rating as Hong Kong and Finland.

Since 2012 Federal debt has increased by another 12.981 trillion during the same period the Fed created another 5.918 trillion, this increase in debt and the creation of money to partially fund it sets the U.S up for the next S&P debt downgrade from  AA+ to as low as AA-  if AA- occurs the U.S. will share the same debt rating as the Czech Republic, Estonia and Japan and the World will be far more motivated to replace the U.S. dollar as the World’s reserve currency with a basket of currencies or a new global currency backed by tangible assets.

Sources & Data

20.71 trillion in new Federal debt took the U.S.’s debt to GDP ratio from 61.93% at the beginning of 2008 to 125.77% by December 2021, the worst in U.S. history

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20.071 trillion, is more than the combined total debt of the United Kingdom, Canada, Australia, Israel, South Korea, Mexico, Taiwan, China, Russia, and India.

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Record deficit spending has reduced annual Federal revenue from 58.89% of total Federal debt to just 13.85%. If additional “stimulus” is approved total annual revenue will fall to less than 10.00% of total Federal debt.

1970 50.62%
1980 58.89%
1990 32.19%
2000 35.98%
2007 28.69%
2021 13.85%

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The only thing guaranteed in 2022 on the 10-year Treasury is a loss

If you were 35, wanted to retire at 65, bought a 30-year Treasury 5.00% coupon in December 2021 yielding 1.81% and were in a low tax bracket (28% Fed & State) the buying power of your 30-year Treasury would decline 79.83% by maturity, this assumes reported inflation is accurate and taxes remain constant.

Sources & data

From January 2008 through February 2020 monthly Fed bailouts averaged 22.383 billion, since March 2020 they’ve averaged 210.54 billion.

Sources & Data

In 2021 there’s no one to replace the Fed and buy 54% of all new Federal debt

• • Treasuries have a negative rate of return greater than 5.00%
  • The worst debt rating in history with more debt downgrades on deck
  • Issued by a country with the worst debt to GDP ratio in its history
  • Denominated in a currency the Fed creates by the trillions at the whim of politicians

The U.S. debt crisis is now beyond the point of no return.

On the 26th of March 2020 the Federal Reserve reduced the 10% bank reserve requirement to zero resulting in a spike in money supply (M1) from 4.776 trillion in March of 2020 to 20.244 trillion in January 2022.

The elimination of the 10% reserve requirement allows banks to create money, borrow, and lend without reserves, ensures the next banking crisis, more QE, continued high inflation and further dollar devaluation against tangible assets, quality stocks and further U.S. debt downgrades.

Sources & Data

This video explains how banks borrow at near 0.00% from the Fed, leverage it, speculate with it, receive the profits while the taxpayer assumes the risk.

Since 2008 more “stimulus” money has found its way to Wall Street than Main Street.

Sources & Data

Foreign held Treasury debt adds to the risk of holding U.S. dollars and debt.

Since 1970, regulation, taxation and litigation has forced U.S. companies to outsource offshore resulting in 14.125 trillion of wealth leaving U.S. balance sheets through trade deficits,

7.080 trillion since January 2008, 1.527 trillion since January 2020 and its not getting any better, in 2021 the U.S. is set to have it’s it’s worst trade deficit in history 846 billion, previous worst case 764 billion in 2006, 1 year before the last financial crisis started in 2007 and had fully engaged by 2008.

Sources & Data

Of the 14.182 trillion in wealth that’s left U.S. balance sheets to foreign 7.549 trillion is currently parked in U.S. Treasuries.

Sources & Data

With debt rocketing higher and the Federal Reserve creating trillions to finance the majority of it, does anyone honestly believe foreign holders of more than 7.5 trillion of U.S. Treasuries will maintain their positions in U.S. dollars and debt as Treasury prices, the dollar, and the U.S.’s debt rating fall deeper into the sewer? Adding to risk is the very good  possibility the U.S. dollar will lose its status as the World’s reserve prior to 2030.

11 countries now have higher rated debt than the U.S., all have substantially better debt to GDP. ratios, for a foreign investor, the debt of these countries, SDR’s, gold, real estate, quality international stocks or a new world reserve currency backed by tangible assets all offer a far better alternative than U.S. dollars and debt.

Country/Region	Rating	Outlook	Date
Canada	AAA	Stable	2002-07-29
Denmark	AAA	Stable	2001-02-27
Germany	AAA	Stable	2012-01-13
Liechtenstein	AAA	Stable	2016-02-26
Luxembourg	AAA	Stable	2013-01-14
Netherlands	AAA	Stable	2015-11-20
Norway	AAA	Stable	1990-11-08
Singapore	AAA	Stable	1995-03-06
Sweden	AAA	Stable	2004-02-16
Switzerland	AAA	Stable	1989-06-26
Australia	AAA	Stable	2020-10-20
Austria	AA+	Stable	2013-01-29
Finland	AA+	Stable	2016-09-16
Hong Kong	AA+	Stable	2017-09-22
United States	AA+ (S&P)	Stable/Negative	2013-06-10

What we know

• • Reported BLS.GOV inflation is fictional
  • Elimination of the 10% bank reserve requirement assures another banking crisis & bailout
    
  • The trillions in QE & M1 tell us inflation and debt monetization have fully engaged
  • The U.S. can’t afford to pay high enough rate on its current debt to attract enough buyers on the open market to fully fund current spending, much less the proposed “stimulus”.
    
  • Real rates of return aren’t going to happen this decade
  • Tapering, not inflation is transitory,
    
  • U.S, debt will be downgraded by 2030
    
  • Trade deficits will continue to suck wealth off U.S. balance sheets and onto foreign
  • Sales of 7.5+ trillion in foreign owned Treasury debt and dollars will likely engage.
    
  • The Fed will create trillions more trying to support the dollar, U.S. debt market and banks.
    
  • Reported inflation will escalate above 8.00%, true inflation north of 9.00%.
    
  • Growth in Federal debt will outpace growth in Federal revenue by more than 1.5 to 1
  • Desperate for income politicians will pass increases in income, corporate and long-term capital gains taxes forcing more corporations and citizens offshore, tax hikes could provide a short term solution but will do more long-term damage than short-term good, just like QE.
    
  • Stocks will have 1 to 3 corrections with recovery to new highs fueled by dollar devaluation and central bank intervention, again using money created with keypunch entries.
    
  • Proceeds from stock sales may go into Federal debt short-term but just until these dollars find new homes in tangible assets, higher quality stocks and higher rated debt.
  • Federal Reserve ownership of Federal debt will escalate from the current 5.911 trillion to more than 9 trillion by 2028
    
  • U.S. Mortgage delinquency rates will increase from 2.25% to more than 5.00%
  • Federal Reserve ownership of mortgage-backed securities will increase from the current 2.57 trillion to over 4 trillion dollars by 2028
    
  • A temporary selloff in real estate will be caused by higher rates, higher taxes, higher inflation, decreasing affordability with a recovery to new high fueled by dollar devaluation.
  • Debt monetization is the only remaining option for the Federal Governement in 2022

Debt monetization 101

1) Under report inflation to contain the majority of all Federal costs tied to reported inflation which include debt service cost, increases in Social Security, Medicare, Military and Civilian employee pensions, nearly every government expense is tied to reported BLS.GOV inflation.

Example, from 2008 to 2021 Federal debt increased by 224.23% yet annual debt service cost increased by only 39.42%.

Sources & Data

Difference between reported deficits and increase in total Federal debt

1970 to 2007 4.021 trillion,
2008 to 2020 4.637 trillion.

• Sources & Data

The objective of government during monetization is to control all cost increases linked to reported inflation, provide citizens with a false sense of security while devaluing debt in terms of constant dollars while increasing tax revenue. 

U.S. debt monetization scorecard 1970-2021.

GDP per capita for 2021 is estimated at $70,444, if pegged to reported inflation it would be $37,972, if pegged to gold $55,486. Monetization is working, the economy is growing nearly twice as fast as reported inflation.
 
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Personal Income for 2021 is estimated at $61,352, if pegged to reported inflation it would be $30,344, if pegged to gold $44,339. Monetization is working, income and income taxes are increasing more than twice as fast as reported inflation.

Sources & Data

Median 2021 sales price of a home $404,700, if pegged to reported inflation it would be $162,580, if pegged to gold $237,568. Monetization is working, property taxes and taxes on gains are increasing more than twice as fast as reported inflation. .

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S&P 2021 4615.00, if pegged to reported inflation it would be at 662.91 if pegged to gold 968.67. Monetization is working, taxes on gains are increasing more than 4 times faster than reported inflation.

Sources & Data

Annual Federal Revenue per capita for 2021 $12,284, if pegged to reported inflation it would be $6,725, if pegged to gold $9,827. Monetization is working, Federal Revenue is increasing nearly twice as fast as reported inflation,

Note the revenue spike higher in actual Federal revenue per capita from $10,339 in 2019 to $12,284 in 2021, +15.83%.

Sources & Data

A higher percentage of the population (45.10%) was working in 2021 than 40 out of the last 52 years, they’re incomes have outpaced reported inflation more than 2 to 1, Federal revenue in 2021 is at a record high, ask yourself, how could the U.S. pile on 6.352 trillion in new Federal debt in the last 24 months with these numbers?

• • • Working population is 1.68% from all-time high in 2000
    • 3.02% higher than the 52-year average,
    • 10.75% higher than the 52 -year low in 1971
    • Personal income has outpaced inflation more than 2 to 1
    • Federal revenue has outpaced reported inflation by nearly 2 to 1

Sources & Data

The problem, monetization only works if spending is contained or reduced, growth in revenue has to outpace spending or you end up with a larger problem than the one you were  trying solve with monetization.

Federal Spending per capita 2021 $23,063, if pegged to reported inflation it would be $7,023, if pegged to gold $9,866. Monetization can’t work with Federal spending outpacing reported inflation more than three to one.

Sources & Data

Federal debt per capita 2021 $88,053, if pegged to reported inflation it would be $13,574, if pegged to gold $19,835. Monetization can’t work with Federal debt outpacing reported inflation 6.5 to 1.

Sources & Data

Where there is chaos there is opportunity

These are several of the the many programs we track and trade if you’d like information on Managed Futures 16 Categories or Hedge Funds 46 Categories,  please register specifying your sectors of interest, initial investment amount, and risk tolerance.

If you have any questions, contact me.

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Perception

From 1970 to 2020 personal Income, stocks, home prices, precious metals, GDP, Federal revenue per capita and per employed person 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%

Personal income outperformed inflation by 100.72%

5.51% 1970-2020, 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

Sources & Data

Median home prices outperformed inflation by 74.88%

The S&P 500 outperformed inflation by 432.48%

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Gold outperformed inflation by 462.54%

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5.14% 1970-2020 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% 1970-2020average 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

Sources & Data

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

Sources & Data

Perception

With these glowing fundamentals 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 their AAA debt rating.

Reality

From 1970 to 2021 Federal debt increased by 28.16 trillion
Federal debt as a percent of GDP increased from 35.49% to 125.77%
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 deficit spending and the creation of trillions to fund it.
Borrowing out all monies paid into Social Security by issuing non marketable debt which has helped expedite its projected insolvency date to as early as 2028.
Borrowing the monies paid into Military and Civilian Employee Trusts by issuing non marketable debt which could jeopardize fair retirement income for beneficiaries.
Mismanaging Medicare pushing up it’s projected insolvency date to 2026
All in, Government had piled on 154.473 trillion in unfunded liabilities

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 outpaced inflation by 158.58%

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

Sources & Data

Average annual Federal spending above reported inflation.

Per Capita
1970-2007 1.77%
2008-2019 1.87%
2008-2020 6.40%
1970-2020 2.95%

Per employed person
1970-2007 1.04%
2008-2019 1.89%
2008-2020 7.25%
1970-2020 2.62%

Sources & Data

In 2020-2021 Federal spending per employed person is equivalent to 87.09% of median personal income.

Sources & Data

Increases in Debt to GDP from 1900 through 2021

1900 to 2006, from 10.29% to 35.49%
1970 to 2007, from 35.49% to 61.93%
2008 to 2021 from, 61.93% to 125.77%
1939, 43.30% (end of the Great Depression)
1946, 119.12% (end of World War 2)
High, 2020, 129.19%
1900-1970 Average, 38.97%
1970-2007 Average, 42.17%
2008-2021 Average, 100.53%
Low, 1907 7.19%

Sources & Data

Increases in 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%

Increases in 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%

Sources & Data

U.S. debt compared to other countries

1970-2020, 28.17 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, 19.60 trillion in new Federal debt, 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 8.26 trillion, more than the total debt of China, population 1.442 billion.

16 months, 5.88 trillion in new Federal debt, 304 billion more than the combined total debt of the United Kingdom and Canada.

Sources & Data

Impact of record deficit spending and the creation of money to fund it

2 Federal debt downgrades, in 2021 the United States has the worst debt rating in history, 11 countries are now rated higher.

Country/Region	Rating	Outlook	Date
Canada	AAA	Stable	2002-07-29
Denmark	AAA	Stable	2001-02-27
Germany	AAA	Stable	2012-01-13
Liechtenstein	AAA	Stable	2016-02-26
Luxembourg	AAA	Stable	2013-01-14
Netherlands	AAA	Stable	2015-11-20
Norway	AAA	Stable	1990-11-08
Singapore	AAA	Stable	1995-03-06
Sweden	AAA	Stable	2004-02-16
Switzerland	AAA	Stable	1989-06-26
Australia	AAA	Stable	2020-10-20
Austria	AA+	Stable	2013-01-29
Finland	AA+	Stable	2016-09-16
Hong Kong	AA+	Stable	2017-09-22
United States	AA+	Stable	2013-06-10

Debt to GDP by country

Sources & Data

Federal Reserve bailouts

1913-2007, 94 years
Formation of the Federal Reserve 1913
Total Federal Reserve bailouts 890.66 billion

2008-2019, 11 years
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 16 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

Sources & Data

In addition to the bailouts from 1998 to 2020 the Federal Reserve forfeited 1.242 trillion in operating profits to the U.S. Treasury, 142.49 billion more than total Federal debt in 1982.

Sources & Data

Since 2008 the U.S. has cranked up 19.3 trillion in in new Federal debt and required the Federal Reserve to create over 8 trillion with keypunch entries for bailouts in the real world this would be inflationary

In the world of government inflation magically disappeared until May of this year

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
Reported inflation over the last 12 months 5.40%
1970 through 2021 average annual inflation 4.03%

Sources & Data

What the BLS tells us a 1939, 1946 and 1980 dollar is worth today.

In 1980 total Federal was 863.45 billion closing in on 1.00 trillion dollars, citizens panicked, gold rallied to $850 an ounce and interest rates spiked above of 15%.

The BLS translates 863.45 billion in 1980 into 3.015 trillion in 2021 dollars, 2.865 trillion less than new Federal debt in the last 16 months

Cost of the New Deal 1933-1939

Total cost of the New Deal from 1933 to 1939, 41.70 billion (1939 dollars)
The BLS translates this into 809.27 billion in 2021 dollars .

Total cost of the New Deal in gold 1.226 million ounces
Cost of the New Deal in 2021 if pegged to gold 2.207 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.

Either President Roosevelt really knew how to stretch a buck in the 1930’s or BLS.GOV inflation is fictional.

Fiscal cost of World War 2

Total U.S. fiscal cost 291.18 billion in 1946 dollars.
The BLS.GOV translates this into 4.347 trillion in 2021 dollars

4.347 trillion is 59.59% of what the Federal Government spent in 2020,
97.35% of what the Federal Government spent in 2019.

The U.S.’s fiscal cost of World War 2 in gold, 131.662 million ounces
Cost of the WW 2 if pegged to gold 15.088 trillion 2021 dollars

Spending and new debt during last “crisis” and “recovery”, 2008-2019

47.689 trillion total 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 total New Federal Debt
1,695.11% the total cost of the New Deal
315.57% the total fiscal cost of World War 2

Sources & Data

Spending and new debt during the Covid crisis 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

BLS inflation calculations tell us that in the last 16 months new Federal debt grew by 724 billion more than the combined fiscal cost of the New Deal and World War 2 (5,156 trillion)

Annual Federal Revenue is now a mere 11.16% of total Federal debt.

1970 50.62%
1980 58.89%
1990 32.19%
2000 35.98%
2007 28.69%
2021 11.16%

Sources & Data

Difference between reported deficits and increase in total Federal debt

1970 to 2007 4.021 trillion,
2008 to 2020 4.637 trillion.

Sources & Data

Regulation, taxation and litigation have destroyed U.S. manufacturing and eliminated over 20 million jobs.

Sources & Data

The resulting trade deficits have eliminated 13.95 trillion in domestic wealth, 7.652 trillion since 2008.

Supporting Links & Data

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 Treasury market and dollar, hyper inflation will engage.

Sources & Data

In 2021 without ongoing Fed intervention the U.S would be insolvent

Since 2008 the Fed’s created over over 8 trillion dollars with keypunch entries to buy debt at non competitive rates the free market wouldn’t. In the last 16 months the Federal Reserve bought more Treasury debt than the previous 50 years.

2020-2021 last 16 months
Federal debt purchased by the Federal Reserve 2.764 trillion
Increase in Federal debt 5.881 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
Federal debt purchased by the Federal Reserve 2.637 trillion
Increase in Federal debt 22.289 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

Sources & Data

Percent ownership of total Federal Debt

2020
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%

1970
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%

Sources & Data

Income assets and spending in ounces of gold

Personal income in ounces of gold 1981-2021

Gold +36.46%, from 24.67 to 33.66, +8.99 ounces
Dollars +426.59%, from $11,326 to $59,642, +$48,316

2020 33.46 ounces
1981 24.67 ounces
1981-2021 annual average 55.33 ounces
High 2001 117.29 ounces
Low 1981 24.67 ounces

Sources & Data

Increase in Median home prices

Gold +1.28%, from 183.32 to 185.67 ounces, +2.24 ounces
Dollars +388.69%, from $68,950 to $336,950, +$268,000

2020 185.67 ounces
1981 183.32 ounces
1981-2021 average 312.01 ounces
High 2000 617.83 ounces
Low 2011 134.10 ounces

Sources & Data

S&P 500 futures contract

Gold +721.69%, from 14.78 to 121.47ounces, +106.69 ounces
Dollars +3,147.64, from $6,788 to $220,450 +$213,662

2020 185.67 ounces
1981 183.32 ounces
1981-2021 average 312.01 ounces
High 2000 617.83 ounces
Low 2011 134.10 ounces

Sources & Data

 GDP per employed person in gold

Gold +8.96%, from 78.27 to 85.28 ounces, +5.23 ounces
Dollars +320.45%, from $35,937.56 to $151.102.75, +$115,165.18

2020 85.28 ounces
1981 78.27 ounces
1981-2020 average 153.27 ounces
High 2001 297.62 ounces
Low 2012 73.07 ounces

Per capita

Gold +16.80%, from 31.14 to 36.37 ounces, +5.23 ounces
Dollars +350.72%, from $14,297.62 to $64,443.08 +$50,145.46

2020 36.37 ounces
1981 31.14 ounces
1981-2020 average 67.64
High 2001 137.94 ounces
Low 2011 31.14 ounces

Sources & Data

Federal revenue per employed person in gold

Gold -7.34%, from 14.74 to 13.66 ounces, -1.08 ounces
Dollars +257.58, from $6,766.66 to $24,196.85, +$17,429.94

2020 13.66 ounces
1981 14.74 ounces
1981-2020 average 27.13 ounces
High 1999 56.20 ounces

Per capita

Gold -0.67%, from 5.86 to 5.82 ounces, -0.04 ounces
Dollars, +283.32%, From $2,692.19 to $10,319.60, +7,627.14

2020 5.82 ounces
1981 5.86 ounces
1981-2020 average 11.98
High 1999 26.03 ounces
Low 2011 5.00 ounces

Sources & Data

Federal spending per employed person in gold

Gold +85.26% from 16.34 to 30.28 ounces, +13.93 ounces
Dollars +614.91% from $7,504 to $53,647, +46,143

2020 30.28 ounces
1981 16.34 ounces
1981-2020 average 32.86
High 2001 59.53 ounces
Low 1981 16.34 ounces

Per capita

Gold +100.86% from 6.50 to 13.06 ounces, +6.56 ounces
Dollars, +675.08% from $2,985 to $23,140, +20,154

2020 13.06 ounces
1981 6.50 ounces
1981-2021 average 14.48
High 2001 27.59 ounces
Low 1981 6.50 ounces

Sources & Data

Federal debt per employed person in gold

Gold +349.38%, from 23.73 to 106.65 ounces, +82.92 ounces
Dollars +1,634.08%, from $10,897 to $188,966, +178,069 

2020 106.65 ounces
1981 23.73 ounces
1981-2020 average 97.51
High 2001 161.09 ounces
Low 1981 23.73 ounces

Per capita

Gold +387.20%, from 9.44 to 46.00 ounces, +36.56 ounces
Dollars, +1,780.03%, from $4,335 to $81,507, +77,172

2020 46.00 ounces
1981 9.44 ounces
1981-2020 average 43.17
High 2001 74.66 ounces
Low 1981 9.44 ounces

Sources & Data

What could clean up this mess?

Fiscally responsible politicians on both sides of the isle
Giving up on trying to spend out of every crisis, 28.5 trillion in new debt proves it doesn’t work
Balanced budgets and paying down debt to minimize the damage to future generations
Effective regulations rather than regulations that foment fines & litigation
Bring companies back to the US by hiking tariffs rather than taxes
Trade surpluses rather than trade deficits,
Transparency in Federal revenue and expenditures that’s easy to understand and follow
Citizens joining Patrick Henry’s united we stand divided we fall party rather than being pawns of Julius Caesar’s divide and conquer.
Have a government that was afraid of voters rather than voters being afraid of government

What’s more likely to happen

Annual Federal Revenue is now a 11.16% of total Federal debt, this ratio makes it impossible for Federal government to raise interest rates high enough to attract enough buyers to finance the ongoing record deficit spending.

Sources & Data

For the U.S to remain solvent the Federal Reserve has to continue creating trillions of dollars with keypunch entries to buy all the debt the free market won’t.

We see total Fed created money increasing from 8.24 to 13.53 trillion by the end of 2026
Treasury debt owned by the Federal Reserve increasing from 5.30 to 8.66 trillion
Other debt owned by the Federal Reserve increasing from 2.898 to 4.689 trillion

This Fed link to monitor the creation of money
This Fed link to monitor Treasury debt owned by the Federal Reserve

Sources & Data

Record spending plus the creation of money to fund it equals inflation

Our estimate puts average annual BLS reported inflation above 4.50% through 2026.
Actual inflation averaging more than 5.25%.
Shadow Stats puts the average above 7.50%.

Sources & Data

Dollar devaluation and negative rates of return are here to stay.

Sources & Data

• • Inflation and debt monetization have fully engaged
  • Real rates of return aren’t going to happen this decade
    
  • Record deficit spending and the Fed’s creation of money to fund it will fuel inflation higher
    
  • .U.S’ debt will be downgraded two more times before the end of 2029
    
  • Sales of over 7 trillion in foreign owned debt and dollars will engage
  • The Fed will create trillions more trying to support the U.S. debt market and dollar
  • Inflation will escalate moving above 6.00%
    
  • Growth in Federal debt will outpace growth in federal income 1.5 to 1
  • Desperate for income politicians will pass increases in income, corporate and long-term capital gains taxes forcing more corporations and citizens offshore
    
  • Trade deficits will increase
  • Stocks will have 1 to 3 corrections with recovery to new highs fueled by dollar devaluation.
  • Proceeds from stock sales may go into Federal debt short-term but just until these dollars find new homes in tangible assets, quality stocks and higher rated debt.
    
  • Mortgage delinquency rates will increase from 2.75% to more than 5.00%
  • Federal Reserve ownership of mortgage backed securities will increase from 2.422 to over 4 trillion
  • A temporary selloff in real estate will be caused by higher rates, higher taxes, higher inflation, decreasing affordability, with a recovery to new high fueled by dollar devaluation.

It’s going to be a exciting decade to trade packed with beautiful up and down trends if you have any questions or need additional information please contact me.  

Peter Knight Advisor
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Peter_Knight@peterknightadvisor.com

 

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