Tag: Peter Knight Advisor

One way we’re capturing the beautiful trends being generated in 2022

1) Analysis links, see EMA Track 1, section 4 for contact specifications, mini and micro contracts traded

Indices
 Daily 60 M
 120 M
 180 M
 Weekly Monthly Opinion
ES SP 500 ES 60 120 180 ES ES O
NQ Nasdaq 100 NQ 60 120 180 NQ NQ O
YM Dow Jones YM 60 120 180 YM YM O
QR Russell 2000 QR 60 120 180 QR QR O
FX Euro Stoxx 50 FX 60 120 180 FX FX O
JH E-Stoxx Micro JH 60 120 180 JH JH O
TM DAX TM 60 120 180 TM TM O
SZ Swiss  Index SZ 60 120 180 SZ SZ O
MX CAC 40 MX 60 120 180 MX MX O
AE AEX AE 60 120 180 AE AE O
NY Nikkei NY 60 120 180 NY NY O
HS Hang Seng HS 60 120 180 HS HS O
Metals
 Daily 60 M
 120 M
 180 M
 Weekly Monthly Opinion
GC Gold 100 GC 60 120 180 GC GC O
SI Silver 5000 SI 60 120 180 SI SI O
HG Copper HG 60 120 180 HG HG O
PL Platinum PL 60 120 180 PL PL O
Currencies
 Daily 60 M
 120 M
 180 M
 Weekly Monthly Opinion
A6 100,000 AUD A6 60 120 180 A6 A6 O
D6 100,000 CAD D6 60 120 180 D6 D6 O
S6 125,000 CHF S6 60 120 180 S6 S6 O
E6 125,000 EUR E6 60 120 180 E6 E6 O
B6 62,500 GBP B6 60 120 180 B6 B6 O
J6 12.5 M JPY J6 60 120 180 J6 J6 O
DX 100,000 USD DX 60 120 180 DX DX O
BT 5 Bitcoin BT 60 120 180 BT BT O
ER Ether  ER 60 120 180 ER ER O
Energy
 Daily 60 M
 120 M
 180 M
 Weekly Monthly Opinion
CL Crude 1000 B CL 60 120 180 CL CL O
HO Heating Oil HO 60 120 180 HO HO O
RB Gasoline RB 60 120 180 RB RB O
NG Nat Gas NG 60 120 180 NG NG O
Rates
 Daily 60 M
 120 M
 180 M
 Weekly Monthly Opinion
GE 3-Month GE 60 120 180 GE GE O
ZT 2-Year T-Note ZT 60 120 180 ZT ZT O
ZF 5-Year T-Note ZF  60 120 180 ZF  ZF  O 
ZN 10-Year ZN 60 120 180 ZN  ZN  O 
ZB 30-Year ZB 60 120 180 ZB  ZB  O 
Agricultural 
 Daily 60 M
 120 M
 180 M
 Weekly Monthly Opinion
ZC Corn  ZC 60 120 180 ZC ZC O
ZW Wheat ZW 60 120 180 ZW ZW O
ZS Soybeans  ZS 60 120 180 ZS ZS O
RS Canola RS 60 120 180 RS RS O
CT Cotton CT 60 120 180 CT CT O
KC Coffee KC 60 120 180 KC KC O
CC Coco CC 60 120 180 CC CC O
OJ Orange Juice OJ 60 120 180 OJ OJ O
LS Lumber LS 60 120 180 LS LS O
Risk Disclosure

2) Simplified EMA trend qualification procedure,
EMA9 red above EMA18 blue = Long
EMA9 red below EMA18 blue = Short

3) Any ATA strategy can be traded automatically for you account using full size, mini or micro contracts in any of the 42 markets above with overall account risk defined before the first trade goes on.

About Automated Tradiing Accounts (ATAs)
2 minutes 21 seconds

4) Defining overall account risk
4 minutes 59 seconds.

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Disclosure

Gold Option write/hedge opening instructions

First choice for the account would be Tradeview.

Tradeview opening instructions

Tradeview’s global desk enables you to trade on these exchanges. Tradeview is headed by Tim Furey , (X CBOT floor trader) and Mike Lombardo (ran a prop desk for 20 years in New York) they’ve provided us with excellent service, order execution and have a knowledgeable, polite back office.

Dorman would be a close second choice

Dorman opening instructions

Dorman does an excellent job and has a great back office, but trading activity is limited to futures and futures options, founded by Bernard Dorman in 1956, currently run by Daniel Dorman they’re an old school firm, deep roots, deep pockets equipped with the latest tools and platforms for professional futures traders.

If you have any questions, please contact me.

Peter Knight
Voice & Video Chats.
Message me

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1) Micro-D2 Jan-2000 Jul-2022 Performance Data Spreadsheet

CME micro contracts are 1/10 the size of a standard futures contract. The smaller contact size enables a $25,000 account the same diversification that previously required $250,000.

The Micro Diversified trades

Contract Specifications & Margin Requirement EMA
9-18 Chart		 Tick Size Current Margin Requirement
SP 500 Micro ET 0.25 = $1.25 $1,210
NASDAQ 100 Micro NM 0.25 = $0.50 $1,760
Gold 10 Ounces GR 0.10 = $1.00 $990
10,000 Australian Dollars MG 0.0001 = $1.00 $200
10,000 Canadian Dollars NK 0.0001 = $1.00 $148
12,500 Swiss Franc WN 0.0001 = $1.25 $363
12,500 Euro Dollars MF 0.0001 = $1.25 $242
100,00 Dollar Index DX 0.005 = $5.00 $2,000
1,250,000 Yen WM 0.0001 = $1.25 $363
0.10 Bitcoin BA 5 points = $0.50 $1,752
CY Crude 100 Barrel
 CY
 $1.00 = $100.00
 $575

2) 2000-2022 net performance, no compounding, withdrawing all profits annually.

Disclosure

3) Using this spreadsheet you can create any allocation of the EMA 9-18 markets and immediately review 2000-2022 performance.

    • Enter your start balance in cell H21,
    • Enter number of contacts traded for the daily EMA 9-18 in cells I-21 through I-47
    • Enter number of contacts traded for hourly EMA 9-18 in cells I-21 through I-47
    • 2000-2021 monthly and annual performance shows in cells F-55 through F-390
    • Net profit per unit H-22
    • Maximum month-on month drawdown H-23
    • Reward risk ration (profit divided by drawdown) .H-24

4) Any allocation can be traded automatically for your account.

5) Using any reasonable maintenance balance

About Automated Trading Accounts (ATAs)
The ATA Fee Structure
Defining Overall Risk for Your ATA
Brokerage Firms
How Funds Are Protected
Open An Account
Futures General Information
Options General Information
Market Analysis Pages
Educational Resources

 

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Hybrid February 2022

Hybrid Allocations through February 2022
Trading one unit, net of all spreads and commissions, no compounding and withdrawing all profits annually
Allocation pages provide full disclosure of trading methodology enabling performance verification
Allocation Webpage Mini- mum Life of Program Draw-
down 		Best
Year		 Worst
Year		 Annual Average Last 12 Months
GSI $300,000 $2,11,805 ($71,151) $528,183 $93,108 $211,805 $304,846
EUR-X $50,000 $337,474 ($21,987) $73,100 $20,047 $38,939 $31,946
S&P-NC $35,000 $375,039 ($13,636) $57,106 $11,363 $34,887 $34,738
S&P-C $35,000 $376,253 ($15,264) $56,288 ($1,846) $24,808 $15,797
GC-C $35,000 $401,553 ($14,206) $59,490 ($483) $23,635 ($5,467)
GC-NC $30,000 $383,727 ($12,885) $60,986 $1,668 $29,518 $7,232
FX-NC $35,000 $229,293 ($12,972) $39,937 $11,146 $23,122 $19,627
MM-NC
 $20,000
 $167,919 ($7,392)
 $28,004
 $8,487.25
 $19,010 $12,626
EUR-XM $12,500 $73,431 ($5,496) $14,620 $4,424 $8,472 $10,325
SPM-NC $12,500 $115,544 ($6,658) $19,059 $1,576 $10,478 $6,672
Other Automated Trading Account Programs
x

AUD Transfer Instructions

Most cost-effective way to transfer AUD

TransferMate 

TransferMate sign up, it’s free and fast

Traditional AUD wire transfer instructions

Account name WTSG Tradeview Ltd.
Account number 072-036473-2
Bank Name DBS
Bank Address
12 Marina Boulevard, DBS Asia Central
Marina Bay Financial Tower 3
Singapore 018982
Beneficiary Address
#12-01 Capital Tower.
168 Robinson Road
Singapore, 068912
Further credit Tradeview account name and number

Note DBS may charge up to 1.00% which far higher than normal

If you have any questions, please contact me.

Peter Knight
Voice & Video Chats.
Message me

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Capturing the move higher in rates

1) 25 October email also published on Barchart and Seeking Alpha.

Entry and exit strategy

4 October 2022 Short 250 GEM22 contacts at 99.80 representing a rate of 0.20% position value $125,000

Price 5 April GEM22 98.385, rate of 1.45% position value $1,009,375.00 open trade equity $884,375.00.

Maintaining this position until red EMA9 moves above the blue EMA18 on this chart

2) Fundamentals

14 February 2022, 3-month deposit rates had nearly the worst negative rate of return in history paying 7.09% less than reported inflation, more than 9.00% less than actual. 


Sources & Data


Sources & Data

14 February 2022 the world’s most liquid interest rate derivatives market was pricing in the following 3-month deposit rates through December 2031.


Sources & Data

The market is telling us there will be 7 rate hikes between now and December 2024 from 0.41%, to 2.21%, that this 1.81% increase will magically take a reported inflation from 7.90% down to 2.00% and rates will hold steady through December 2031. Not happening unless the Federal Reserve is they only one buying Treasuries. For more on the fundamentals that will fuel rates higher see this link.

How this trade works

If price action is above the EMA9 and the EMA9 is above the EMA18 we’re long.
Risk on long positions, if the EMA9 moves below EMA18 we’ll exit the trade.
If price action is below the EMA9 and the EMA9 is below the EMA18 we’re short.
Risk on short positions, if the EMA9 moves above the EMA18 we’ll exit the trade.
EMA chart to track this trade,  each 0.01 = $25.00 per contract
Chart prices are updated every 15 minutes

Contact me if you’d like to review more advanced strategies
Today’s Technical Opinion
Futures Quotes
Options Quotes

3) About the contract we’re trading

3-month rate futures (Eurodollars) represent the interest on $1,000,000 for 3 months, each 0.01% change in rate equals a $25.00 change in contract value, a 1.00% move $2,500 per contact.

How it works

As rates rise the contact price falls to reflect the increase in rate. To convert contact price into the rate it represents take 100.0000 – the contact price = the rate.


Sources & Data

To calculate contract’s value take the rate and multiply it by $2,500.00 USD.


Sources & Data

Educational

If you have any questions, contact me.

Peter Knight
Voice & Video Chats.
Message me

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Capturing the move higher in short term interest rates

On 10 February 2022 the world’s most liquid interest rate derivatives market was pricing in the following 3 month deposit rates through December 2031. What this market is telling us is that there will be 8, 0.25% rate hikes between now and December 2023,


Sources & Data

Its delusional to think a 2.35%, 3 month deposit rate would reduce inflation from 7.50% to less than 2.50%, 2.35% given current fundamentals won’t even contain inflation.

Over the last 24 months the Federal Government has cranked up nearly 7 trillion in new Federal debt. At the same time the Federal Reserve created nearly 5 trillion with keypunch entries for bailouts.

In March of 2020 the Federal Reserve dropped the Federal bank reserve requirement from 10.00% to 0.00% allowing banks to create borrow and lend money without reserves, this resulted in a spike in money supply (M1) from 4.6 trillion to over 20 trillion.

One position I believe has superior potential is trading the expected increase in rates between December 2023 and December 2027 from the current – 0.095% to +1.555%, if this occurs the anticipated 3 month deposit rate by December 2027 would be at 3.50% or 4.00% less than February’s reported inflation of 7.50%.

$25,000 allocation
Long 20 contracts GEZ23 at 97.640
Short 20 contracts GEZ27 at 97.765
Price –0.1250%
Chart to monitor this position with 15 minute updates, each 0.01 =$500.00

GEZ23 GEZ27 220210 to experiment with any investment amount, number of contracts traded and potential outcomes for this trade.

    • Enter number of contracts traded cell C-2
    • Investment amount C-3
    • Spread entry in percent cell E-2
    • Current price to monitor this position using this chart E-3 or experiment with any potential outcome for this trade in cell E-3
    • Profit or loss shows in Cell D-9
    • At the historic high 1.6950% on 19 March 2021, $25,000 would appreciate to $115,220
    • At the historic low of 0.125%, put in on 10 February $25,000 would be worth $25,000
    • From 0.125% to lose the $25,000 market anticipation for rate cuts would have to move from the current -0.125% to a rate cut of 0.625% between December 2023 and December 2027.

Fundamentals that will fuel the move higher in rates

Ask yourself how you can contain inflation when the Federal Reserve has created a total 8.756 trillion with keypunch entries, 7.865 trillion since 2008, 4.698 trillion in the last 24 months. 4.698 trillion in 24 months? that’s more than the total fiscal cost of World War 2 and 5 times more than FDR’s New Deal that built America’s infrastructure in the 1930’s.


Sources & Data

26 March 2020 the Federal Reserve reduced the 10% bank reserve requirement to zero resulting in money supply (M1) surging from 4.776 to 20.244 trillion.

The elimination of the 10% reserve requirement now allows banks to create nearly any amount of money, borrow, lend, and speculate with it, without reserves? This ensures the next banking crisis, more QE, continued high inflation and further long-term dollar devaluation against tangible assets and quality stocks.


Sources & Data

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

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

Sources & Data

This increase in money created by the Fed and banks makes it impossible for the United States to contain inflation, now that reported inflation is above 7%, true inflation north of 9% the Fed wants to taper and to try to contain it?, way too little, way too late.

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 7.12%
    • Current negative rate of return 5.11%

Sources& Data

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

Sources & Data

Tapering and normalization of rates is no longer an option for the U.S. with total annual federal revenue now a mere 13.85% of total federal debt.

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

Sources & Data

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

Sources & Data

We’re already seeing the impact from one round of tapering and rumored rate hikes on the equity market, sharp sell offs that have been contained by massive intervention funded by trillions of dollars created by Western banks (increase in money supply M1 and money created by the Fed QE).

Current Chart

Additional intervention money was raised from heavy sales of gold which explains why gold has been such a flat liner despite reported inflation above 7.00% and true inflation north of 9.00%. but Gold will have its day in the sun, until then we can trade hedged option write programs.


Sources & Data

Massive intervention in the U.S. equity market is failing, institutions are aware of this, evident by the massive increase in options volume as these institutions hedge their long positions.

Once hedging is completed I believe institutional liquidation of long positions will fully engage, most likely timed with the end of QE so the Fed will take the blame for the hard market selloff. Those that are allowed to will create net new short positions, fueling the market even lower, increasing the value of the new short positions and the puts they already own.

Daily on the NASDAQ rolled to short on the technical indicators 4 January 2022, overall market opinion at the time of this report was also a sell.

24th of January the weekly rolled from long to short

When the  the monthly rolls to short the next bear market has officially engaged.

The sell-off in stocks will give the Federal Reserve the justification they need to continue creating trillions with keypunch entries to buy Federal and mortgage debt at noncompetitive rates. What the Federal Reserve is doing isn’t new, it’s called monetization and it’s been around since money was created.


Sources & Data

When the QE printing press shifts into overdrive rate hike expectations will move from before December 2023 to after 2023 which will buy the Federal Government and Federal Reserve more time to try and figure out how they can contain the mess that they and politicians have created.

Chaos equals opportunity, it’s going to be a great year for trading packed with major market moves in indices, metals, energy, currencies and crypto long and short, message me if you’d like to track our trades in other markets as they occur.

Peter Knight Advisor
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

 

 

 

 

 

 

 

 

 

Setting up with Barchart to track trades Intra-day

1) Open this page, click on sign up, there is no cost and it never expires

2) Click on get free

3) Enter your name, email, pick a password, (no additional information is required).

4) login to your Barchart account, under “my account” click on portfolio

5) Click on new portfolio

6) Name the portfolio

7) Click on create

8) Add any markets you’d like to track

Any top performing American Stock over the last 5 days to last 10 years

Any American Futures market

Any European or Asian Futures market

Any currency market

9) Enter the contract code

10) Enter date, price, quantity of contracts traded,

11) Once built out your allocation’s performance is updated every 15 minutes.

1) Today’s total profit or loss
2) Total open trade equity
3) Total profit or loss
4) Current contract price
5) Today’s P&L per market
6) Total P&L per market

12) To offset any positions click on edit

13) Enter the offset price, then apply

14) What you’ll see

1)_Shows net trade profit or loss
2) Shows the position has been liquidated
3) The offset position’s profit or loss is added to closed P&L.

15) To organize the portfolio click on edit

16) Clicking on the arrow or dragging the trade moves the position


17) When finished hit save

If you have any questions, contact me.

Peter Knight
Voice & Video Chats.
Message me

 

 

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

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