Cheapo Groovo

USA Borrowing Costs Increase Once Again

Stat: For every tril­lion dollars the gov­ern­ment bor­rows, a one basis point increase in inter­est rates trans­lates to an extra $100 million in annual bor­row­ing costs.

Looking at the 10 year Treasury, it went from 1.756% on January 1st to to 1.863% today. That is 11 basis points!

January 31st UPDATE

The 10 year is just under 2% (1.99%). That's another 13 basis points. So add $1.3 billion in annual interest.

Rigged Financial Markets

I covered this topic before here  here here and here. But is is always a good idea to remind blog readers that the global elite control everything and a true free market exists in concept only.

• Germany’s stocks market is up about 30 percent year-to-date.  Germany’s GDP is expected to grow less than one-percent this year!
• Back in September 2012 the SEC charged the NYSE with a violation of prop feeds to proprietary customers before it went to the public.  In other words, they were giving data to the big boys before the public was getting it.
• Knight Capital Group lost $440 million when it sold all the stocks it accidentally bought because a computer glitch.Now they are up for sale!
• The SEC wants high frequency traders.
• Companies simply increase their market share and stock prices around patent litigation. The outcome of which is completely unpredictible for stock investors.

Revisiting The Zero Coupon Bond Trade

If u look back at the chart I posted 2 years ago, ZROZ was trading at $80. Because the FED has continued to buy up ALL U.S. debt, the FED has destroyed the Treasury market!

In simple terms, they have enshrined  Sharia law where you are not allowed to pay interest on the time value of money.

ZROZ is now almost at $118

The Way It Works ~ for liberals and conservatives

 

 

 

 

You get your education, work, but nothing every changes #video

 

 

 

Why the FED keeps interest rates at 0%

The MSM will tell you low rates stimulate the economy and decrease unemployment. That hasn't happened has it?

Beginning January 1st, 2011 every single day more than 10,000 Baby Boomers will reach the age of 65.  That is going to keep happening every single day for the next 19 years. Low rates are forcing seniors out of CDs and money markets and into riskier investments! The exact opposite of what they should be doing.

So why does an all knowledgeable FED that keeps us in slavery do it?

Simply put, the government and the FED are in cahoots. Historically, 10-year Treasury rates have averaged 6.68%.  When they return to 6.68% from the current 1.50%, interest on the current debt of $16 trillion will amount to $1.069 trillion per year.  That is considerably more than the total projected defense spending for FY2013.  It is more than is spent on education and health care combined.  It is more than is spent on Social Security.

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5 Outrageous Money Facts

1. Currently the U.S. monetary base is sitting somewhere around 2.7 trillion dollars.  So if you went out and gathered all of that money up it would only make a small dent in our national debt.  But afterwards there would be no currency for anyone to use.
2. U.S. households are now actually receiving more money directly from the U.S. government than they are paying to the government in taxes.
3. The government's total indebtedness -- its fiscal gap -- now stands at $211 trillion, by my arithmetic. The fiscal gap is the difference, measured in present value, between all projected future spending obligations and all projected future taxes.
4. The United States government is responsible for more than a third of all the government debt in the entire world.
5. The total notional value of all OTC derivatives (the ones responsible for the crash of 2008) now exceeds one quadrillion dollars!

Option Selling Netted Me $377.69 in January

In February, I might get 100 shares of VXX and 100 shares of TMV put to me at a lower price than today. Since I buy low, sell high, I have no problem with that.

If TMV heads to $82, then 100 shares get called away in February. Nice!

Which Financial Analyst Told You About This?

Zero Coupon Bonds ~ bonds that are stripped of their interest. Since bond quotes and purchases are difficult to find from the Internet (another conspiracy as far as I'm concerned), I'm using ETF ZROZ as a proxy. It's up over 2% since the Fed agreed to buy up all US debt (aka Treasury bonds).

Zroz