84 Comments

  1. Catherine, are US treasury bonds (treasury bills, notes, bonds, Floating Rate Notes, Treasury Inflation-Protected Securities TIPS) safe during this time? I have seeing a 9% return which is impressive. Thanks.

    1. Yes. It is impressive. Trying to figure out why they are offering such an impressive rate. I will not touch them as my experience is that the US Treasury and the US government is “not agreement capable.”

      1. Thanks Catherine.
        No agreement capable? Well, it makes sense, too good to be true.
        How can it be good considering the current state of the US gov? I believe there is a cap of $10K, so many people are buying under multiple account types (LLCs, etc). I find it very interesting that most investors are advising to get an account. It tells you how bad and corrupted our system is. Very concerning. I don’t think people are preparing well for how they will be affected “if nothing changes”. Counting with assets, stocks, a job/education and cash at this point – and maybe some silver coins!

  4. there was a question in the ask-Catherine section about government bonds paying over 9%. I had been looking at them as well, even though I dislike lending to the Mob as much as I like borrowing from them. Here is the link to the treasury website:

    “The initial interest rate on new Series I savings bonds is 9.62 percent. You can buy I bonds at that rate through October 2022.”
    https://www.treasurydirect.gov/indiv/research/indepth/ibonds/res_ibonds.htm

    1. Peter:

      Thanks. I had no idea. Will do some sleuthing.

      Catherine

    2. —–Original Message—–
      From: Catherine Austin Fitts Sent: Monday, May 9, 2022 11:08 AM
      To: Timothy Caban
      Subject: Re: TIPS

      `Thanks, Tim. Very much appreciated. OK if I post this in the ASK Catherine script – with our without your name Let me know

      On 09/05/2022 16:00, Timothy Caban wrote:
      Catherine,

      I think its because the reference rate CPI-U is flowing through to the inflation adjustment on TIPS. According to the link below, that CPI is 8.5 for all items.

      https://www.treasurydirect.gov/indiv/research/indepth/tips/res_tips_ra
      tes.htm

      https://www.bls.gov/news.release/cpi.t01.htm

      I think this is a good example from the below website.

      The best way to understand how TIPS work is by example. TIPS pay interest semi-annually, but for the purposes of simplicity, the following looks at how the value of the bond changes in each calendar year.

      Suppose the Treasury issues an inflation-protected security with a $1,000 face value and a 3% coupon. In the first year, the investor receives $30 in two semi-annual payments. That year, the CPI increases by 4%. As a result, the face value adjusts upward to $1,040.

      In year two, the investor receives the same 3% coupon, but this time it’s based on the new, adjusted face value of $1,040. The result: instead of receiving an interest payment of $30, the investor receives interest of $31.20 (.03 times $1,040). In year three, inflation drops to 2%. The face value rises from $1,040 to $1060.80, and the investor receives interest of $31.82.

      This process continues until the bond matures. In this way, the TIPS’ payout consists of two parts: the increase in CPI and the “real yield,” that is, the yield above inflation.

      Once the bonds mature, investors receive either the adjusted, higher principal or their original investment, whichever is greater. As a result, investors cannot ever receive less than the face value of the bond, even in the rare case of deflation (falling prices).23
      https://www.thebalance.com/how-do-tips-work-417128

      One other thing that always comes up if I talk to a bond guy in trying to understand this is the 5 year Breakeven Inflation Rate which says it is “The latest value implies what market participants expenct inflation to be in the next 5 years, on average. ” Right now it is 3.22 and is the highest it has been on the data set which only goes back to 2003.
      https://fred.stlouisfed.org/series/T5YIE/

      One last thing is that I enclosed a performance summary for a TIPS fund that is similar to an etf in terms of performance. I enclosed it because at the bottom of the first page on the left, it breaks out market returns by maturity. Even though the fund was down by 3.02%, when you break it out across maturities it follows the same pattern as any other bond where the longer the maturity (duration) the more it will go down for a given 1% rise in interest rates. That detail is not always understood when looking at the etf by itself. It also depends on the weighting within the index. The index has a weighted duration of about 7.5 and the general advice I have always heard is that you want to match the duration to your holding period. However, I would question that depending on how much interest rates rise and for how long and the possibility that the price of the bond fund is down at the wrong time 7.5 years from now because the ETF or fund never matures.

      If I were advising a client to buy tips which I don’t, I would recommend they plan to hold the bond to maturity instead of having to sell in the meantime when the price is down because rates went up.

      One good option for individuals is I Savings Bonds because they never go down in value. They are such a good deal that the govt caps it at 10k per person per year. That is of course if you don’t account for the missing money and all the things that you point out on Solari about whether you want to own treasuries or be in business with the government to begin with but something else to throw in there.

      https://www.treasurydirect.gov/indiv/products/prod_ibonds_glance.htm

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      Timothy L. Caban, EA, CFP®
      Copper Beech Advisors, LLC
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      Malvern, PA 19355

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      1. Catherine,

        thank you for following up on this. I know several people parking money (10k/year limit) in these I savings bonds and not looking to hold until maturity. The 3 month penalty is not that much, considering. And these compound semi-annually as well.
        Considering the disintegration of so many structures in the world, I’d feel more comfortable at 25% return–but then again, if it were offering 25% I’d be more preoccupied by much more grave concerns.

        1. Agreed. 3 month penalty is not that much. That said, I find the insane the notion of turning over physical possession of my deposits to a party who is not agreement capable and whose head is sucking up to Klaus Schwab while he proposes the end of property rights and while the governing authority is proposing a world wide seizure infrastructure and has a domestic one that has been lawless for years and is setting up a construct where EVERYONE can be deemed a domestic terrorist. We need to integrate these developments.

  6. Howdy
    As I await for the wrap up I have a few comments.

    Pope Francis said “The barking of NATO at the gates of Russia is likely what motivated to attack Ukraine”. In other words NATO did not adhere to “social distancing”.

    Is Ukraine the keystone in the arch of the old financial system that is collapsing onto itself?

    Am I seeing things or did Ursula von der Leyen just jumped into the backseat of Thelma & Louise 1966 Ford thunderbird?

    And has anyone seen Nadya Suleman, Octo Mom, as her birthing service maybe needed for a basket currency to replace the USdollar?

  7. Catherine – the amazing lecture by Fursov posted on the Solari Telegram channel a few days ago left me in awe. Is it posted on Solar/library?

    For anyone wishing to hear a brilliant mind go over long view economic/history/future plan from the view point of Mr Global, this might be it. The first and last 20 mins especially are essential (and entire 1 hr for the theory minded). And if you hadn’t known about the 2018 Santa Fe Conference, you will.

    https://t.me/solarireport/1568

    1. I asked out team to post on our video server so I could post at Solari

    2. This really is excellent… the “Part 2” is actually the entire presentation.

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