Tag: Peter Knight Advisor trading

How to track trades as they occur

February 3, 2026 8:17 pm BVI updated by 8 pm BVI time

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30 The demise of the dollar and monetization of Federal debt
31 What Monetary Fairy is going to replace the Fed?
32 Others published on Seeking Alpha 2015-2021

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Fundamentals of the financial crisis on deck

1) Since 1981 U.S. Federal debt has grown 5.39 times faster than Federal revenue.

Growth in Federal debt from 1981 to 2023 +3,384.49%,
Growth in Federal revenue from 1981 to 2023 +627.39%

Annual Federal revenue as a percentage of total Federal debt has fallen from 60.26% in 1981 to 12.94% in 2023, if rates rose to the same level we saw in 1981 110% of all federal revenue would be consumed by debt service cost alone.  .

1981 60.26%
2008 25.28%
2023 12.94%


Data & Sources Spreadsheet

2) Chronology of U.S. debt and demise of the dollar.

15th of August 1971 Richard Nixon “temporarily” took the USD off the gold standard which enabled politicians to create and spend nearly any amount of money at will,

 

3) During the first 9 years off the gold standard from 1971 through 1980 Federal debt increased from 424.27 billion to 909.04 billion,  reported inflation from 4.35% to 14.60%.

4) In 1980 politicians had two choices,

A) To reel in deficit spending, balance budgets and implement responsible fiscal policy which would have contained inflation, earned back the open market’s trust in Treasuries and enabled the Federal Government to finance deficit spending on the open market.

B) To revise the way inflation was calculated this would immediately contain it, without making any of the necessary spending cuts and, if the market bought these revised inflation numbers it would contain debt service cost and potentially make U.S. Treasuries attractive enough to find bids on the open market. 

They chose B and instructed the BLS.GOV to come up with a solution, the BLS.GOV did and Hedonic Quality Adjustments were born. in short if a car increased in price from 50K to 75K prior to Hedonic Quality Adjustments the increase in price would have been 50%, post Hedonic Quality Adjustments if the same car went from 50K to 75K because the car according to the BLS.GOV is now of a higher quality and is going to last twice as long, according to the BLS.GOV it’s gone down in price and lowers the overall inflation rate. See Inflation – Perception versus Reality, for more on how inflation has been twisted since 1981.

5) In 1981 the market saw through Hedonic Quality Adjustments, their purpose and dramatically reduced purchases of U.S. Treasuries to the extent the majority of all U.S. Treasury debt hitting the market did not find bids.

Rather than fix the problem the Federal Government opted to transfer all unsold debt to Federal Agency and Trust Accounts. From 1981 through 2023 they literally have cleaned out the entire 6.743 trillion paid into all Federal agency and Trusts.

6) The mandatory deposits made by beneficiaries of these Trusts had their hard earned dollars replaced with special issue debt , special issues are nothing more than non marketable government IOUs that pay non competitive rates, The decision to remove marketable Treasuries and replace them with “special issue”  debt is the major reason for the estimated insolvency before 2031 of first Medicare, then social security and finally military and civilian government employee trusts.


Data & Sources Spreadsheet

7) Unfortunately cleaning out every Federal Agency and Trust wasn’t enough to satiate the spending appetites of politicians, multiple bad trade deals including NAFTA were cut resulting in cumulative total trade deficits increasing by 18.993 trillion from 351 billion in 1994 to 19.334 trillion in 2023.


Data & Sources Spreadsheet

8) Of this 19.334 trillion in trade deficits 7.601 trillion was rolled into U.S. Treasuries, this supported the dollar, enabled U.S. consumers to continue to borrow money and buy goods from foreign manufacturers.Because of deals like NAFTA U.S. Manufacturers were unable to compete and were decimated by regulation, taxation and litigation, resulting in the loss of 6.5 million good paying U.S. jobs and hundred’s of billions in U.S. tax revenue.

Data-Sources-Spreadsheet

9) In 2021 these trade deficit beneficiaries went from net buyers of U.S. Treasuries to sellers. with the face value of their positions dropping from 7.740 trillion to 7.099 trillion. From the in 2021 peak including  unrealized profit or loss, in 2023 U.S Treasuries owned by Non U.S. investors has already declined by nearly 2 trillion dollars with this trend continuing making it that much harder for the Federal Government to finance it’s unprecedented deficit spending.


Data & Sources Spreadsheet

10) By 2008 cleaning out every Federal Agency & Trust account, the bad trade deals like NAFTA to motivate trillions in Treasury debt purchases by non-U.S. investors wasn’t enough. The US needed multiple crises to justify lowering Treasury deposit rates to historic lows and to fire up the quantitative easing printing press to buy all the debt the free market wouldn’t at noncompetitive rates.

The Federal Government and Federal Reserve represented that the historic low deposit rates and creation of money was to save and stimulate the U.S. economy, Ironic that during this 15 year period of “economic stimulus” only deposit rates dropped to an average of 2.79% consumer loan rates stayed steady averaging 13.89%.

You have to ask yourself how does stripping depositors of over 14 trillion in interest income while at the same time letting the banks that taxpayers & depositors bailed out overcharge them on their consumer loans stimulate an economy?


Data & Soruces Spreadsheet

11) The true reason for the historic low deposit rates was to contain Federal debt service cost while Federal deficit sending spiraled out of control.

From 2007 through 2021 Federal debt increased from 8.95 to 26.88 trillion up 17.93 trillion, or plus 200.32%. At the same time Federal debt service cost increased from 411.32 to 538.45 billion up 127.133 billion or plus just  30.91%.


Data & Soruces Spreadsheet

12) Since 2008 rather than fix the problem by containing deficit spending and offering a high enough rate on Treasuries in the open market to attract bids for U.S. Federal debt the Federal Reserve decided to create over 8 trillion dollars with keypunch entries of which 5.713 trillion was used to buy the U.S. Treasury debt


Data & Sources Spreadsheet

13) By 2020 the Fed was holding over 8 trillion in debt they bought with created money, both S&P and Fitch told the U.S. Treasury and the Federal Reserve they would downgrade U.S. Federal  debt further from AA+ Negative to AA- stable, at AA- stable U.S. Federal debt would be rated the same as Estonia and Slovenia. An AA- stable rating would also narrow the Federal Government’s captive buying pool by eliminating institutions, like Insurance companies, Trusts and Pensions that would no longer be able to buy U.S. debt because it would be rated too low.

14) By 2020, 5 decades of corrupt monetary policy had put the Federal Government and Federal Reserve between a rock and a hard place , Federal Agency and Trust accounts we’re cleaned out, non U.S. trade deficit beneficiaries had gone from being net buyers of U.S. Treasuries to net sellers, rating services like S&P and Fitch had turned off the Federal Reserve’s QE printing press, The Federal Government’s resources were exhausted and they still had trillions of dollars of debt that needed to be sold at non competitive rates,

15) Boxed in this bad did the U.S. finally realize they needed to stop record deficit spending, stop creating money to pay for it, balance budgets, report inflation honestly and pay a high enough rate on Treasury debt in the open market to attract bids?

16) No, this didn’t happen the only solution from the Federal Government was to spend trillions more, the only solution offered by the Federal Reserve was to eliminate the 10% bank Reserve requirement, this would enable banks to literally borrow any amount of money from the Federal Reserve at near zero and use this money to buy longer dated Treasuries with an average yield of 1.86% above their borrowing cost, banks made money and,  this temporarily solved the problem of finding buyers for the trillions in U.S. debt at non-competitive rates the free market wouldn’t touch.

17) By 2023 institutions owned to nearly 14 trillion of U.S. debt, the majority of it bought with money borrowed short-term (overnight to 30 day) from the Federal Reserve at near zero then deposited into U.S. Treasuries with durations from 2 to 5 years, many of these institutions like Silicon Valley, Signature and First Republic  didn’t properly hedge which added too or caused their insolvency.


Data & Sources Spreadsheet

18) From 2008 through 2023 Treasury debt owned by non institutional U.S. investors increased from a total of 176.05 billion to 432.52 billion up 255.47 billion. This increase of 255.47 billion over this 15 year period is an amount equivalent to what Federal debt increased by over the last 6 weeks.


Data & Sources Spreadsheet

19) Since 2008 the U.S. has cranked up 24.53 trillion in deficit spending,

Federal debt December 2008, 8.95 trillion,
Federal debt estimate by December 2023 33.48 trillion +24.53 trillion or +274.07%,
Federal revenue 2008, 2.567 trillion.
Federal revenue estimate December 2023  4.359 trillion +69.80%.

20) Deficit spending of 24.53 trillion in 2023 USD is 5 times the fiscal cost of WW II, 23 times the cost of  FDR’s New Deal. (The New Deal was FDR’s stimulus program that employed 4 million citizens, built America’s infrastructure, prepared the U.S for World War 2 and lifted the U.S. out of the Great Depression)

21) 15 years, 24.53 trillion in deficit spending, can you name one thing in the United States that is better in 2023 than 2008? You would think after spending more the 5 times the fiscal cost of World War 2 the U.S. would have something to show for this 24.53 trillion other than a crumbling infrastructure and over 1 million homeless.

22) Over the next 12 months the U.S has 4+ trillion in maturing debt that needs to be refinanced, 2+ trillion in new debt that needs to be sold, they’re going try and sell this record 6+ trillion dollars in debt on the open market with a debt rating below Taiwan, Hong Kong and Finland that pays an average of 1.63% below the 12 month average of their fictional inflation rate of 6.30%.

23)  What it took to attract buyers for U.S. debt prior to quantitative easing was a debt rating of AAA stable paying an average of 8.70%, or 3.99% above more accurately reported inflation of 4.71%, even with these stellar numbers the U.S. couldn’t find enough bids for the debt it needed to sell.

  Data & Sources Spreadsheet

24) All Federal debt sold through 2007 totaled 8.957 trillion of this 8.957 trillion, 1,611 trillion was sold to domestic institutional buyers, 152.415 billion non institutional domestic buyers, 2.353  trillion was purchased by non-us investors using trade deficit proceeds.

Who is going to buy this record 6 plus trillion of downgraded U.S. debt?

25) Domestic non institutional investors? No, it would be a little challenging for them to cover this 6+ trillion over the next 12 months with 5.693 trillion in assets that could be used to purchase downgraded treasury debt, you have to remember domestic non institutional investors can’t create trillions with keypunch entries like the Federal Reserve or U.S. banks. A stock market sell off could access trillions more but my bet would be the money would roll into gold, tangible assets or higher rated government debt, not Treasuries.

Source Federal Reserve

26) Federal Agency and Trust accounts?  No,

Social Security, Military and Civilian Pensions funds have and are being cleaned out as quickly as the beneficiaries make their mandatory payments of 6.20% to 12.40%  of thier income into these Trusts. Since 1981 the Federal Government has “borrowed” all the money out of these Trusts and dumped (non marketable “special issue” Federal debt) into them paying non competitive rates, this is the cause of their projected insolvency before 2031.   

 
Federal Reserve Site for Data

27) Banks? No, they are already over leveraged and have literally trillions in unrealized loses on their books generated by the rate hikes and inverted yield curve. 

28) The Fed ending the 10% bank reserve requirement in March 2020 enabled banks to create nearly any amount of money to do anything with, this immediately spiked money supply (M1) from 4.26 trillion in March of 2020 to 16.244 trillion by May 2020.  

29) Current M1 of 18.447 trillion tells you banks are using more than 10 times the leverage in 2023 than 2008 and the severity of the Federal debt, banking and mortgage crisis on deck will be multiple times what we saw in 2008.when M1 totaled 1.378 trillion versus the current 18.447 trillion.


Fed Chart

30) The Fed’s fund rate is now averaging 5.33%, average Treasury rate 5.18%. The borrow from the Fed and deposit into treasury spread is gone, it went from paying an average of 1.86% above bank borrowing cost to below zero.

31) The last time we had the Fed funds rate at or above the Treasury rate was 2007, the banking crisis fully engaged by 2008, by 2012 465 banks had failed. This occurred when money supply M1 was at 1.378 trillion, M1 in 2023 18.447 trillion.


Data & Sources Spreadsheet

32) Liquidation value of the 5 year has fallen from 126 to below 106 -16.01%, see this chart. Banks that are in these trades and didn’t adequately hedge risk are getting hammered, it’s a safe bet Silicon Valley, Signature and First Republic are just the tip of the iceberg.

33) Fed Funds (bank borrowing cost) versus the 5  Year has gone from paying 2.61% on 22 April 2022 to costing -0.95% in 2023 heavy bank speculation in these positions will be one of the main causes of the next banking crisis.


Data & Sources Spreadshet

34) In 2023 unrealized loses for banks just on their treasury positions alone now exceeds 1.743 trillion, 360 billion more than total money supply M1 at the start of the last banking crisis in 2008.


Data & Sources Spreadsheet

35) Federal Reserve article The Implications of Unrealized Losses for Banks,pdf
More on hedging issues by the Fed The Misleading Notion of Notional

36) Video, impact of the end of the 10% bank Reserve Requirement  (18 minutes)

37) Can the U.S. depend on Foreign buyers of U.S. Treasuries? No,

The 19+ trillion dollar trade deficit beneficiaries, who bought 7.740 trillion in U,S, Treasuries by 2021 turned net sellers by 2023 their net holdings of Treasuries from the 2021 high including unrealized profit or loss declined by 1.933 trillion, this gives you a pretty good idea what they think about current U.S. monetary policy, the Federal Reserve and the outlook for the U.S. economy.


Data & Sources Spreadsheet

38) Brics is yet another increasing threat to the dollar’s dominance as the world’s reserve currency, in short it’s a group of countries that are growing in number that are trying to start a new world reserve currency backed by tangible assets like metals and energy, their objective is to negate the U.S.s ability to dictate political policy through control of U.S. dollar trade.

39) For the 37 years prior to the Federal debt downgrades and the QE creation of money to buy debt at non competitive rates the U.S.paid an average of 3.99% above reported inflation or 6.20 trillion more on a fraction of the debt than if the Treasury rate was tied to the reported inflation rate.

40) From 2008 through 2021 the Fed created over 8 trillion dollars with keypunch entries of the 8+ trillion 2.517 trillion was used to buy bad bank debt,  5.713 trillion was used to buy treasuries at non competitive rates, an additional  2.637 trillion was “borrowed” from Federal Agencies and Trusts, this 8.35 trillion pushed Treasury yields to near zero and enabled the U.S. Treasury to pay 12.554 trillion less in interest on Federal debt than if the Treasury rate was tied to reported inflation.

Data & Sources Spreadsheet

41) In 2023 the only option left for the U.S. is to let another crisis engage or god forbid a war this will give the U.S. the justification they need for the Federal Reserve to lower rates once again to new zero to contain Federal Debt service cost and to fire up the Quantitative Easing printing press to buy trillions more in bad bank, and Treasury debt at non competitive rates the free market won’t touch.

42) Currently the Federal Reserve is holding over 8 trillion in debt bought with created money during the last two crises, I see this number growing above 15 trillion by 2028 with both S&P and Fitch downgrading U.S. Federal debt further from the current AA+ Negative to AA- stable. 

43) At AA- stable U.S. Federal debt will be rated the same as Estonia and Slovenia. An AA- stable rating will also narrow the Federal Government’s captive buying pool further by eliminating institutions, Insurance companies, Trusts and Pensions that will no longer be able to buy U.S. debt because it is rated too low, leaving yet another gap for the Federal Reserve to fill by creating even more money.

44) Use this link to monitor total money created by the Federal Reserve, in 2023 as in 2019 (before the covid crisis) we’re seeing a reduction in the Fed’s balance sheet which will be temporary, within the next 24 months I see this once again trending aggressively higher.

Federal Reserve Site for Data

45) Ironic how during this period of dangerously low inflation from 2008-2021 which according to the Fed required them to keep the Fed Funds rate near zero and to create 8+ trillions dollars that gold rallied from $643 to $2000 per ounce up 211.07%.


Gold data and chart

46) That during this dangerously low inflation consumer loans from 2008-2022 averaged 13.149%, according to the Federal Reserve and Federal Government, stripping savers of trillions in interest income, devaluing their currency and letting banks that their tax dollars bailed out overcharge them on their consumer loans is good thing for them and the U.S. economy. 


Data & Sources Spreadsheet

47) If rates stay at 5.50% Federal debt service cost,  will consume 43.50% of total Federal revenue and will eventually cause U.S insolvency, bank failures from existing leveraged Treasury positions, declining real estate prices, mortgage defaults and ultimately another mortgage crisis..

Another mortgage crisis?

48) Commercial Mortgages have increased from 2.77 trillion in 2008 (start of the last banking crisis) to 3.58 trillion in 2023 +29.24%,  897 billion of this 3.58 trillion or 23.35% is coming due within the next 12 months.

49) In the last 12 months commercial real estate had it’s biggest decline since 2008

Data & Sources Spreadsheet

50) Commercial mortgage rates for the refi on these properties have increased from 3.51% to over 7.00%.

51) In 2019 the overall vacancy rate, was 11.14%, in 2023 18.60%, this number will increase dramatically as leases expire and are not renewed. Local governments forcing employees to work from home during the COVID scamdemic ensures many of these employees will never return full time to the office, retail COVID closures, online sales of products at more competitive prices have lessened demand for retail space, many of the retailers that survived covid and online competition were finished off by looters, this decline in demand is expected to push the average vacancy rate from 18.60% to above 29% prior to 2026,

52) With fewer tenants, nearly twice the carry cost and 29.24% of the commercial mortgages needing to be refinanced  over the next 12 months, commercial property is holding together far better than expected with first quarter delinquency rates still below 1.00% (2010 recent high 8.93%) unfortunately it’s expected to rise above 4.00% prior to 2025 putting pressure on banks and other institutions that hold loans on these properties. . .

53) Commercial mortgages, rate of change and delinquency rate

54) Total residential mortgages have increased from 12.146 trillion in 2008 to 15.508 trillion in 2023 up 27.67%,

55) Residential 30 year fixed mortgage rates have increased from 2.67% to 7.76%

Home affordability for the median American family in 2023 it’s non existent

56) Real household income is down 2.77% from 2020,  median post tax monthly family income stands at $5,226,  median monthly home ownership cost, $2,962.94, median cost of 1 automobile $894, median cost for family health insurance $1,280, this leaves $89 per month for all other family expenditures, this math makes it clear it’s impossible for a median U.S. family to currently buy a median family home.

57) According to Fortune  post tax family income to comfortably afford a median priced home in the U.S. should be $10,750 per month, roughly twice current median family post tax income this by itself will pressure home prices lower, additional  pressure will be generated from holders of adjustable rate mortgages who will not be able to afford afford higher the rate and will foreclose.

Initial impact of the rate hikes on home prices . 

58) Median Home prices have dropped from $479,500  to $416,100, -13.22%  in 2023 and are expected to fall further, if the decline exceeds 20% to $383,600 many of the analysts I follow tell me they won’t stabilize until they drop to 2020 levels of  $322,500, This will hammer banks that are holding mortgage debt and investors holding mortgage backed securities.

59) Monitor total transactions, an increase gives a good idea of how hot a market is, decrease how cold..
 

60) With these fundamentals a “soft landing” for the U.S. economy is highly unlikely.

61) Continued out of control deficit spending with zero plans to contain it?, the only solution the Federal Government has offered in 2022 & 2023 to reduce the Federal deficit was hiring another 87,000 IRS agents to squeeze more money out of U.S. citizens, the Fed hasn’t offered any solutions, Powell’s statements over the last 5 years have given less direction than reading yesterday’s news.

62) The biggest unanswered question in 2023 is where is the 6 plus trillion dollars going to come from over the next 12 months to cover the refi on maturing issues and to finance new Federal debt?  The Federal Reserve can’t print any more money or US debt will be rated below Estonia and Slovenia, Federal Agencies and Trusts have been cleaned out  and non U.S. investors have gone from net annual buyers to net annual sellers of U.S. Treasuries, ask yourself, where is this 6 plus trillion going to come from?

63) The second biggest question is who’e going to bail out the banks that currently have  unrealized loses on their treasury positions exceeding 1.74 trillion, 360 billion more than total money supply in 2008.

64) With real estate prices are having their biggest decline since 2008 who’s going to cover bank mortgage losses, mortgage rates have more than doubled, commercial vacancy is at 18.06% and climbing, home affordability non existent as I see it it leaves only one direction that real-estate can go if rates stay constant or rise.

65) The only thing that could prevent further bank insolvencies, declining real estate prices and another bank crisis is a cut in the Fed Funds rate by at least 2.50% and the creation of more money, this might buy the U.S. some time but will ultimately lead to further debt downgrades, higher inflation, the dollar losing it’s status as the world’s reserve currency and the eventual collapse of the U.S. dollar and debt market as we know it.

66) Fact, in 2023 the situation in the U.S. is beyond repair, I would challenge anyone to present a viable solution that could prevent what I believe will be a monetization meltdown by 2027.

In 2023 we have two choices, prepare for the coming major market moves to protect and enhance family wealth or be complacent ignoring the severity of these dismal,  verifiable fundamentals and watch our wealth evaporate.

I’m preparing for tomorrow’s major market moves and making sure I have multiple tools and programs in place to capture these moves long or short.

If you have any questions, please contact me.

Peter Knight
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Capturing the projected  CME Group CVOL range in gold through 28 May 2024.

This strategy does not trade in and out of the market it’s a defined risk long-term trade that enables us to maintain positions until the profit objectives are achieved or the contacts expire 28 May 2024. 

Start balance
 $10,000
Potential outcomes for this trade     Net Profit or loss New Balance
If gold trades at $2,255 (+10.26%) once by 28 May $23,920 $33,920
If gold trades at $1,655 (-19.32%) once by 28 May   $37,920 $47,920
Gold trades at $1,655 and $2,255 once by 28 May  $61,840 $71,840
Worst case, if gold stays flat through 28 May 2024 -$7,280 $2,720
June 2024 gold quotes & chart to track this trade Quotes June 24 Daily

Gold 2023 CVOL spreadsheet

2) Historical ranges in gold 1980-2023

CVOL  projected range in gold over the next 12 months 29.58%
Average 12 month range, 1980-2023 29.36%
Max 12 month range,  Jan 79 – Jan 80 270.21%
Min  12 month range, Sep 94 – Sep 95 6.74%
Highest High, August 2020 $2,070.48
Lowest Low, July 1999 $252.48
Average price 1980 – 2023 $752.70

3) Position

Action # Strike Type Price Paid/Collected Purpose
Buy 5 2355 Calls 41.00 -$20,500 To hedge upside risk on the 2255 write
Write 10 2255 Calls 56.10 +$56,100 Write, to generate time premium 
Buy 5 2155 Calls 78.10 -$39,050 Capture the move from 2155 to 2255 
Market 2020 Option Expiration 28 May (337 days)
Buy 5 1750 Puts 19.40 -$9,700 Capture the move from 1750 to 1650 
Write 10 1650 Puts 10.10 +$10,100 Write, to generate time premium 
Buy 5 1550 Puts 5.10 -$2,550 To hedge downside on the 1650 write
Potential outcomes
Max risk net of bid/ask & all fees -$7,280 Gold stays flat for 337 days
Gold hits $2,255 once by 28 May
 +$23,920 requires a +10.26% move up
Gold hits $1,650 once by 28 May
 +$37,920 requires a -19.32% move down
Hits $2,255 & $1650 once by 28 May
 +$61,840 Does not matter which occurs first
Disclosure

4) About CME CVOL and how it works

Following the Fed’s June meeting, the CME Group FedWatch tool tells us the probability of further interest rate hikes remains while the turmoil surrounding the banking sector has not disappeared, traders and investors have been torn, between higher rates that would pressure gold lower or parking funds in the oldest monetary safe haven gold pressuring the price higher.

  •  March 10: US regulators take over SVB
  • March 15: Credit Suisse borrows over $53B from the Swiss National Bank
  • March 17: SVB files for Ch 11 bankruptcy
  • March 18: UBS agrees to purchase Credit Suisse
  • May 3: FOMC meeting
  • May 30: Rule Committee brings debt ceiling legislation to the floor

Using the CME Group CVOL measurement, in the chart above the convexity in gold options represents the range.  Convexity is a measure of the ratio of the volatility level of the out-of-the-money strikes to that of the at-the-money, meaning how expensive are the “extreme move” options. 

CVOL Indices measure the expected risk or volatility of an underlying futures contract based on the information contained in the prices of options on that underlying futures contract.

CVOL indexes use an improved simple variance estimation method to provide expected volatility metrics derived from the entire Implied Volatility Curve. The original simple variance methodology was introduced in two papers by Ian Martin, Professor of Finance at the London School of Economics, see Simple Variance Swaps and What is the Expected Return on the Market?“

CVOL Skew calculations

If you’d like to learn more contact or message me, I’ll answer your questions and provide supporting links for additional information and/or verification.

To open an account to do this trade please complete this form my team will match you to a Member firm that can accommodate your regulatory jurisdiction.  .

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  Disclosure

 

 

1) Auto-Trade Markets

Opinion 5 min 15 min 30 min 60 min Daily Option S&R Weekly
S&P (ES) ES-5 ES-15 ES-30 ES-60 ES-D Opt S&R ES-W
Russell 2000 (QR) QR-5 QR-15 QR-30 QR-60 QR-D Opt S&R QR-W
NASDAQ (NQ) NQ-5 NQ-15 NQ-30 NQ-60 NQ-D Opt S&R NQ-W
Dow (YM) YM-5 YM-15 YM-30 YM-60 YM-D Opt S&R YM-W
Euro Stoxx 50 (FX) FX-5 FX-15 FX-30 FX-60 FX-D Opt S&R FX-W
FTSE (X) X-5 X-15 X-30 X-60 X-D Opt S&R X-W
Swiss Index SZ SZ-5 SZ-15 SZ-30 SZ-60 SZ-D Opt S&R SZ-W
Dax (DY) DY-5 DY-15 DY-30 DY-60 DY-D Opt S&R DY-W
CAC 40 MX MX-5 MX-15 MX-30 MX-60 MX-D Opt S&R MX-W
Gold (GC) GC-5 GC-15 GC-30 GC-60 GC-D Opt S&R GC-W
Silver (SI) SI-5 SI-15 SI-30 SI-60 SI-D Opt S&R SI-W
Copper (HG) HG-5 HG-15 HG-30 HG-60 HG-D Opt S&R HG-W
Australian (A6) A6-5 A6-15 A6-30 A6-60 A6-D Opt S&R A6-W
Canadian (D6) D6-5 D6-15 D6-30 D6-60 D6-D Opt S&R D6-W
Swiss (S6) S6-5 S6-15 S6-30 S6-60 S6-D Opt S&R S6-W
Euro FX (E6) E6-5 E6-15 E6-30 E6-60 E6-D Opt S&R E6-W
B-Pound (B6) B6-5 B6-15 B6-30 B6-60 B6-D Opt S&R B6-W
Japanese Yen (J6) J6-5 J6-15 J6-30 J6-60 J6-D Opt S&R J6-W
U.S. Dollar Index DX DX-5 DX-15 DX-30 DX-60 DX-D Opt S&R DX-W
Fed Funds Rate ZQ 5 ZQ-15 ZQ-30 ZQ-60 ZQ-D Opt S&R ZQ-W
3 Month (SQ) SQ-5 SQ-15 SQ-30 SQ-60 SQ-D Opt S&R SQ-W
2 Year (ZT) ZT-5 ZT-15 ZT-30 ZT-60 ZT-D Opt S&R ZT-W
5 Year (ZF) ZF-5 ZF-15 ZF-30 ZF-60 ZF-D Opt S&R ZF-W
10 Year note (ZN) ZN-5 ZN-15 ZN-30 ZN-60 ZN-D Opt S&R ZT-W
Euro Bund (GG) GG-5 GG-15 GG-30 GG-60 GG-D Opt S&R GG-W
Crude Oil (CL) CL-5 CL-15 CL-30 CL-60 CL-D Opt S&R CL-W
Heating oil (HO) HO-5 HO-15 HO-30 HO-60 HO-D Opt S&R HO-W
Gasoline (RB) RB-5 RB-15 RB-30 RB-60 RB-D Opt S&R RB-W
Natural Gas (NG) NG-5 NG-15 NG-30 NG-60 NG-D Opt S&R NG-W
Disclosure

2) Simplified trading procedure

Red EMA9 below blue EMA18 trade short, red EMA9 above blue EMA18 trade long.
Use opinion to confirm direction, S&R for objectives and stops
Contact me anytime. and I’ll walk you through it

Below an example trading the gold daily 9-18 using GC-D

Opinion 5 min 15 min 30 min 60 min Daily Option S&R Weekly
Gold (GC) GC-5 GC-15 GC-30 GC-60 GC-D Opt S&R GC-W

3) All markets are set up on CQG integrated client to auto trade, using our MAM, your platform fees are zero versus $595 to $1,578 per month on your own.

How it works, you decide on an allocation or markets/periods you want to traded, we place, monitor, manage all trades 25 hours a day, markets, periods traded and contact sizes can be changed at any time..

Define your overall account risk, but it should be realistic, in 2023 with the benefit of hindsight, diversification and optimization a capable analyst with access to 6,200 hedge funds, CTA’s and trading programs could optimize performance and produce an allocation where there are no losing months over a 10 year period.

Our fee structure is based on 5.00% to 12.50% of net new high profits quarterly (depends on start balance).

    • 0.00% front load.
    • 0.00% management fee.
    • We pay all server, platform and add on fees.
    • Quarterly incentive fees are approved by the client prior to being deducted.
    • Allocations can be changed at any time.
    • Liquidity 2 to 48 hours in any major currency.
    • Minimums $12,500 to $500,000.

How balances are guaranteed plus or minus trading activity

Every firm we use segregates customer accounts, balances are guaranteed plus of minus trading activity the Financial Safeguard System the FSS has protected customer balances for over 100 years with zero defaults, unlike SPIC that protects balances up to 500,000 or FDIC up to 250,000 the FSS has no limit.

To open an account please complete this form my team will match your criteria to a brokerage firm on this list that can accommodate the markets, programs you want to trade and your regulatory jurisdiction.

Educational videos and resources

10.01 Futures General Information
10.02 Options General Information
10.03 Stock Index Futures
10.04 Interest Rate Futures
10.05 Metals Futures
10.06 Energy Futures
10.07 Currency Futures
10.08 CME Learning Center
10.09 Futures Fundamentals
10.10 Education Material
10.11 Resource Center
10.12 Research Reports
10.13 Podcasts
10.14 Monthly FX Review
10.15 Media Room
10.16 Economic reports & data

If you have any questions, please contact me.

Peter Knight
Voice & Video Chats.
Message me

Top 50 active VBO allocations January 2019 – December 2025

All allocations are fully automated through our platform on ChartVPS using CQG integrated client linked to multiple exchange members worldwide.  Overall account risk is defined (Risk Tolerance) before the first trade goes on. We cover all platform costs and base compensation on 5.00% to 12.50% of net new high profits quarterly. Allocations can be changed at any time, liquidity in portion or all, 2 to 48 hours.

1) Top 50 allocations minimums $25,000 to $500,000 USD or equivalent.

Web- Suggested Net Profit Last 12 R/R Maximum Risk 
page Minimum Unit Months Ratio Drawdown Tolerance
0479 $25,000 $147,916 $35,693 30.61 -$4,833 -$8,458
0171 $25,000 $171,329 $40,312 30.97 -$5,532 -$9,680
0188 $27,500 $188,107 $47,407 30.86 -$6,095 -$10,667
0211 $30,000 $211,467 $47,188 35.47 -$5,962 -$10,434
0227 $30,000 $227,999 $51,077 35.08 -$6,499 -$11,374
0242 $35,000 $266,309 $68,185 42.62 -$6,249 -$10,936
0306 $35,000 $306,427 $73,105 40.63 -$7,542 -$13,199
0344 $35,000 $344,146 $58,714 34.28 -$10,039 -$17,569
0310 $40,000 $310,748 $75,194 42.09 -$7,383 -$12,921
0377 $40,000 $377,865 $70,384 38.56 -$9,798 -$17,147
0422 $40,000 $422,776 $82,134 41.01 -$10,309 -$18,041
0491 $50,000 $491,509 $95,398 44.25 -$11,109 -$19,440
0509 $50,000 $509,232 $107,064 39.85 -$12,777 -$22,360
0521 $50,000 $521,109 $106,444 40.67 -$12,812 -$22,420
0792 $75,000 $792,545 $149,516 48.87 -$16,218 -$28,382
0828 $75,000 $828,423 $149,153 49.02 -$16,899 -$29,574
0863 $75,000 $863,515 $153,592 46.30 -$18,651 -$32,639
1145 $100,000 $1,145,980 $224,446 65.56 -$17,480 -$30,591
1189 $100,000 $1,189,453 $228,628 63.90 -$18,615 -$32,577
1201 $100,000 $1,201,602 $238,483 64.75 -$18,556 -$32,473
1212 $100,000 $1,212,683 $244,841 64.54 -$18,789 -$32,880
1218 $100,000 $1,218,380 $245,578 65.85 -$18,502 -$32,379
1298 $125,000 $1,298,209 $264,244 65.12 -$19,936 -$34,889
1357 $125,000 $1,357,639 $268,095 67.14 -$20,221 -$35,386
1393 $125,000 $1,393,308 $282,347 67.33 -$20,693 -$36,213
1463 $125,000 $1,463,211 $289,153 67.36 -$21,721 -$38,011
1540 $125,000 $1,540,141 $301,136 68.33 -$22,540
 -$39,445
1639 $150,000 $1,639,826 $323,950 68.84 -$23,820 -$41,685
1682 $150,000 $1,682,912 $332,455 71.74 -$23,459 -$41,053
1716 $150,000 $1,716,348 $334,615 68.74 -$24,968 -$43,694
1798 $150,000 $1,798,659 $348,051 68.25 -$26,355 -$46,121
1973 $200,000 $1,973,707 $392,557 75.03 -$26,305 -$46,034
2074 $200,000 $2,074,570 $425,778 75.54 -$27,462 -$48,058
2214 $200,000 $2,214,095 $445,437 81.51 -$27,163 –$47,535
2348 $200,000 $2,348,380 $471,178 79.28 -$29,621 -$51,837
2691 $250,000 $2,691,989 $510,499 75.30 -$35,752 -$62,565
2770 $250,000 $2,770,745 $530,286 74.20 -$37,344 -$65,351
2886 $250,000 $2,886,464 $547,671 73.26 -$39,400 -$68,949
2991 $250,000 $2,991,408 $569,010 75.26 -$39,747 -$69,556
3438 $300,000 $3,438,541 $666,545 81.55 -$42,164 -$73,787
3669 $300,000 $3,669,882 $713,604 80.85 -$45,391 -$79,435
4096 $350,000 $4,096,072 $800,806 77.25 -$53,025 -$92,794
4231 $350,000 $4,231,952 $818,077 81.20 -$52,117 -$91,204
4536 $400,000 $4,536,146 $879,855 82.68 -$54,863 -$96,010
4719 $400,000  $4,719,637 $916,333 82.22 -$57,403 -$100,455
4892 $400,000 $4,892,846 $946,924 81.41 -$60,104 -$105,181
5176 $450,000 $5,176,988 $1,034,929 82.42 -$62,812 -$109,921
5383 $450,000 $5,383,452 $1,049,554 82.04 -$65,621 -$114,837
5687 $500,000 $5,687,654 $1,146,479 88.54 -$64,240 -$112,420
5777 $500,000 $5,777,705 $1,141,759 85.83 -$67,319 -$117,809
6054 $500,000 $6,054,202 $1,171,470 85.55 -$70,765 -$123,839
Net profit = Trading one unit net of all brokerage and fees, withdrawing all profit annually
Maximum drawdown = Highest daily high to lowest daily low prior to recovery to a new high
R/R Ratio = Cumulative net profit per unit divided by maximum highest high to lowest low drawdown
Risk Tolerance = equity stop, if hit all positions are liquidated (=175% of previous max drawdown)
We are not licensed for US retail accounts, only Institutional and QEP’s with your firm’s compliance department and CFTC approval, if you need a referral for a US firm licensed to accommodate US retail accounts  message me. 
Disclosure

2) Track trades in any allocation as they occur

2.1) Current positions, today’s stops, reversals and profit objectives
2.2) 2019-2025 monthly & annual performance trading all 24 active VBO models 
2.3) Disclosure of strategy, all data, orders & trades 2019-2026 
2.4) Top 100,000 allocation summaries
2.5) How to create your own allocation
2.6) Register  for information on other top programs

3) Structure and Account Opening Procedure

3.1) ATA Fee Structure
3.2 Defining Overall Risk For Your Account
3.3) How Balances Are Guaranteed Plus or Minus Trading
3.4) Schedule an online review
3.5) How To Open An Account

3) Educational videos and resources

3.01)  Futures General Information
3.02) Options General Information
3.03)  Stock Index Futures
3.04) Interest Rate Futures
3.05)  Metals Futures
3.06)  Energy Futures
3.07)  Currency Futures
3.08)  CME Learning Center
3.09)  Futures Fundamentals
3.10) Education Material
3.11)  Resource Center
3.12) Research Reports
3.13)  Podcasts
3.14) Monthly FX Review
3.15) Media Room
3.16)  Economic reports & data

If you’d like to learn more about Automated Trading Accounts (ATAs) contact me. My current date & time is February 3, 2026 8:17 pm I’m available from 7 am to 7 pm Monday through Thursday, 7 am to 2 pm on Fridays, off hours text or onsite message me with a call back date and time (please use your local time zone).

Peter Knight
Contact Information

 

Disclosure

What Magical Monetary Fairy is going to replace the Fed?

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

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 February 3, 2026 8:17 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

The demise of the dollar and monetization of 30+ trillion in U.S. Federal debt

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.


Sources & Data

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


Sources & Data

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.


Sources & Data

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%

Sources & Data

A 13.85% annual Federal revenue to total Federal debt ratio makes it impossible for the U.S. to raise rates high enough to attract enough buyers on the open market to fully fund existing deficit spending much less any additional “stimulus”.  Buyers on the open market, (using their own money, not banks using money ultimately created by the Fed) are going to want a positive rate of return, not a negative rate of return greater than 4.75%.

If Treasury rates normalized to the pre QE average of 8.70%, 62.83% of total Federal Revenue would be consumed by debt service cost alone. 

Sources & Data

Treasuries as an investment 1970-2019 versus Dec 2021

1970-2007

    • Average Treasury rate 8.70%
    • Average reported inflation 4.70%
    • Average positive rate of return 4.00%

2008-2019

    • Average Treasury rate 2.72%
    • Average reported inflation 1.77%
    • Average positive rate of return 0.96%

December 2021

    • Average Treasury rate 2.01%
    • Reported inflation 7.20%
    • Negative rate of return 5.19%

Sources& Data

10 Year Treasuries pre “quantitative easing” versus Dec. 2021

    • Pre QE Treasury debt rating AAA (the highest possible)
    • Average price for a 10-year, $100,000, 5.00% coupon $87,524
    • Average yield on a 10-year, $100,000, 5.00% coupon 7.01%
    • Average BLS.GOV and more accurately reported  inflation 3.16%
    • Average positive rate of return 3.85%

December 2021

    • Treasury Rating AA+ (the lowest in history, same as Hong Kong & Finland)
    • 10-Year, $100,000, 5.00% coupon, yield 1.43%
    • 10-Year, $100,000, 5.00% coupon price $133,050
    • Reported and less accurate BLS.GOV inflation 6.90%
    • Negative rate of  return 5.07%
    • Instrument profit at the low for the 10-year rate of 0.62%, $9,290, +6.98%
    • Instrument loss at the pre QE average of 7.01%, -$45,526, -34.22%
    • Instrument loss at the high for the 10 year of 14.30%, -$81,000, -60.88%
    • Dollar volatility and inflation adds additional risk on a Treasury position.


Sources & Data

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%.

    • Federal debt 2007 8.950 trillion, annual debt service cost 411.32 billion
    • Federal debt 2021 29.020 trillion, annual debt service cost 573.457 billion

Sources & Data

    • Under reporting inflation strips the free market economy of trillions of dollars in interest income, retirement benefits and pension payouts, citizens lose, banks and government benefit.
    • Treasuries are denominated in dollars, Inflation reduces the value of dollar against everything, dollar devaluation equals Treasury debt devaluation, holders of Treasury debt lose, banks and government benefit.
    • Inflation pushes the prices of goods, services, tangible assets and stocks higher increasing tax revenue, citizens lose, banks and government benefit.

2) Under report budget deficits to give citizens a false sense of security

1970-2020 cumulative reported budget deficits were $17.857 trillion, cumulative increase in Federal debt $26,515 trillion. According to U.S. politicians the 8.658 trillion doesn’t count because they’re mandatory expenses and they don’t get to vote on them.


Sources & Data

Difference between reported deficits and increase in total Federal debt

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


3) Under report the poverty rate to contain all subsidies linked to the poverty rate.The Federal Government contained the official poverty rate and all subsides linked to the poverty rate by lowering what the poverty rate is.

In 1970 if your income was less than 49.60% of median personal income you were below the poverty threshold and qualified for government assistance.
In 2020 your income needed to be below 21.70% of median personal income to be below the poverty threshold to qualify for government assistance.


Sources & Data

4) Under report the homeless rate

By redefining who’s homeless the Department of Housing and Urban development has reduced the official homeless rate between 2005 and 2020 by 173,691 people this enbles politicians to redirect resoucres for those who really need them to programs that will enrich them.

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.
 
Sources & Data

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. .

Sources & Data

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.

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Create Your Own Allocation

1) Using this Spreadsheet you can create any allocation of the 24 ATA trading models and instantly review 2019-2025 daily, monthly and annual performance.

1.1) Current positions, today’s stops, reversals, objectives
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2) Disclosure of trading methodology by market and model, daily historical data, every order generated, every trade entry, offset, net profit or loss, trade-by-trade cumulative profit and drawdown

2019-2025  All Data, Orders, Trades Profit and Draw-downs Net  Per  Contract Net Last 12  Months Max
Draw		 Risk Tolerance Specs & Quotes
ESN011 Mini S&P $311,725 $86,300 -$31,150 -$54,513 ESN
ESM014 Micro S&P $16,779 $7,095 -$4,634 -$8,109 ESM
NQN007 NASDAQ 100 $458,810 $56,945 -$38,265 -$66,964 NQN
NQM019 Micro NASDAQ $40,138 $6,876 -$5,090 -$8,908 NQM
YMN007 Dow Jones $259,495 $53,670 -$21,430 -$37,503 YMN
YMM015 Micro Dow $22,260 $5,139 -$2,362 -$4,133 YMM
GC1023 Gold 100  $255,537 $62,693 -$29,933 -$52,383 GC1
GC2026 Gold 50  $129,513 $23,527 -$10,737 -$18,790 GC2
GC3010 Gold 10  $21,059 $5,272 -$2,479 -$4,337 GC3
SI1018 Silver 5000 $493,770 $111,935 -$27,455 -$48,046 SI1
SI2003 Silver 2500 $237,058 $59,500 -$17,288 -$30,253 SI2
SI3015 Silver 1000 $78,202 $20,778 -$7,667 -$13,417 SI3
HG1005 Copper 25K $146,525 $29,641 -$14,853 -$25,992 HG1
HG2001 Copper 12.5K $63,551 $11,494 -$7,701 -$13,477 HG2
PLA008 Platinum 50 $112,062 $19,702 -$10,832 -$18,956 PLA
CL1004 Crude 1000 $192,480 $34,110 -$20,070 -$35,123 CL1
CL2009 Crude 500 $99,545 $12,405 -$9,000 -$15,750 CL2
RBN005 Gas 42K  $205,787 $30,769 -$15,290 -$26,757 RBN
BTC022 Bitcoin (0.10) $22,456 $5,875 -$3,038 -$5,317 BTC
J6N012 Yen $61,562 $5,869 -$9,944 -$17,402 J6N
DXX016 Dollar Index $26,329 $3,366 -$5,536 -$9,687 DXX
S6N003 Swiss $82,906 $15,719 -$9,325 -$16,319 S6N
E6N031 Euro $56,300 $13,912 -$5,463 -$9,559 E6N
E7M015 Mini Euro $25,050 $6,656 -$2,956 -$5,173 E7N
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Inflation – Perception versus Reality 

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%

5.25% 1970-2020 average annual appreciation
1.22% average appreciation above inflation
$192,671 what median home prices would be in 2020 if pegged to inflation
$336,950 actual median home price in 2020
$144,279 overall appreciation in median home prices above inflation
x


The S&P 500 outperformed inflation by 432.48%

8.63% 1970-2020 average annual appreciation
4.83% average appreciation above inflation
705.40 what the S&P 500 would be in 2020 if pegged to inflation
3,756.10 actual price for the S&P in 2020
3,050.70 overall appreciation of the S&P 500 above inflation
x

Sources & Data

Gold outperformed inflation by 462.54%

9.81% 1970-2020 average annual appreciation
5.78% average appreciation above inflation
$315 what the price of gold would be in 2020 if pegged to inflation
$1,772 actual price of gold in 2020
$1,457 overall appreciation of gold above inflation
x

Sources & Data

Federal revenue per capita outperformed inflation by 44.13%

4.99% 1970-2020 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% 1970-2020 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

x

GDP per capita outperformed inflation by 67.16%

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

Federal spending per capita from 1970 to 2021 outpaced inflation by 228.46%

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

Impact

An 11.16% annual revenue to total debt ratio makes it impossible for the U.S. to accurately report inflation, normalize interest rates or increases in any Federal expense that’s pegged to reported inflation such as Social Security, Medicare, Military or Civilian employee pensions.

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 date closer than the projected 2026, Social Security before the projected 2028 to 2035.

Under reporting inflation contains the majority of all Federal costs

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


Sources & Data

How the U.S. reports budget deficits, the poverty and homeless rates have further eroded U.S. fiscal credibility.

1970-2020 cumulative reported budget deficits $17.857 trillion, cumulative increase in Federal debt $26,515 trillion. According to U.S. politicians the 8.658 trillion doesn’t count because they’re mandatory expenses and they don’t et to vote on them.


Sources & Data

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.

In 1970 if your income was less than 49.60% of median personal income you were below the poverty threshold and qualified for government assistance.
In 2020 your income needed to be below 21.70% of median personal income to be below the poverty threshold and qualify for government assistance.


Sources & Data

Homeless rate

By redefining who’s homeless the Department of Housing and Urban development has reduced the official homeless rate between 2005 and 20920 by 173,691 people.

Sources & Data

In 2021 Federal Debt as a percentage of GDP is the worst in history


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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