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Your Personal Bank
Your Personal Bank
May 16, 2023
Kip and Lora Brown Interview
Play • 1 hr
More episodes from Your Personal Bank
6 days ago
Inflation is Still Increasing. Prices are Still Increasing. Only 14% of Americans Are Better Off Financially than 3 Years Ago
The Biden Administration is taking credit for inflation reducing 65% - Prices of goods are still increasing. - Inflation has not been under 4% annual since May 2021. - This is double the Federal Reserve target inflation rate of 2% annually for a stable economy. - The Biden administration's claim of inflation reducing 65% actually means the rate of increase is increasing slower. Inflation is still increasing. Prices are still increasing. - CPI: Consumer Price Index o 2021: 4.7% o 2022: 8.0% o 2023: 4.0% approximately o Total: 16.7% o $100 item, now cost over $116 - Has your income increased 16% in the past 3 years? If not, you are poorer. Financial Times: 14% of Americans are better off financially because of inflation. 86% are falling behind. Interest rates are likely to be higher for longer. - Business Insider: easier to sell Moroccan and Vietnam bonds than US bonds do to all the financing. 30 years bonds are selling at a huge discount because bond investors are concerned interest rates will be higher in the future. - The massive debt and higher interest rates create record levels of interest payments the government pays. - Borrowing more money will be increasingly difficult and expensive. - As the interest on the debt increases, the government will be under extreme pressure to increase revenues (raise taxes). - Potential tax liability on any taxable asset will increase. Higher interest rates = higher insurance company dividends Interest rate sensitive assets will thrive while asset values on most stocks and real estate will suffer. Your Personal Bank dividends are interest rate sensitive and will thrive in a higher interest rate environment. Dividends are likely to increase for the next several years due to higher interest rates. Your Personal Bank funds grow income tax-free and you can access tax-free. This shields you from likely higher future tax rates. You can grow your money safely, with guarantees, tax-free, and highly liquid.
Nov 15, 2023
Interest Rates High for Longer! Why? Debt Spiral Accelerating
Expect Interest Rates Higher for Longer! Why? The Debt Spiral is Accelerating. Due to higher interest rates, the interest on the debt is increasing faster than expected. The interest on the debt now exceeds $1 trillion annually. The cost of interest has doubled in the past 19 months. According to the Congressional Budget Office (CBO), the deficit will be about $3 trillion for fiscal year 2024. This is 50% higher than the CBO estimates recently. This is known as a debt spiral. The interest increases at an increasing rate. The current level of government spending and increased interest cost is unsustainable. Interest rates are likely to remain high for longer. As the government continues to spend more than they receive, bond buyers will demand higher interest rates due to the higher risk. This will push interest rates higher for longer. The Federal Reserve also has stated interest rates will have to remain higher for longer to tame inflation. If bond buyers start balking at buying bonds because the debt and interest payments are too high, the government will be forced to stop spending more than it receives. If the government is then unable to print money to spend more, increasing taxes will be more likely to increase revenues. Therefore, the risk of future higher tax rates has increased. Interest rate sensitive assets will thrive while asset values on most stocks and real estate will suffer. Your Personal Bank dividends are interest rate sensitive and will thrive in a higher interest rate environment. Dividends are likely to increase for the next several years due to higher interest rates. Your Personal Bank funds grow income tax-free and you can access tax-free. This shields you from likely higher future tax rates. You can grow your money safely, with guarantees, tax-free, and highly liquid. Contact Ferenc at 866-268-4422 or yourpersonalbank.com for more info.
Nov 8, 2023
Interest Payments on the US Government Debt Will Soon Increase Significantly, Interest Rates Will Likely Stay High Far Longer
Treasury Secretary Janet Yellen has made the biggest blunder in Treasury Department history for not issuing more long dated bonds when interest rates were at historic low rates. Bonds are a debt instrument. When the government sells a bond, they promise to pay a set interest rate for a certain period of time. The interest rate is based on interest rates when the bond is sold and does not change. If the Treasury Department had sold more bonds with longer terms, they could have locked in low interest rates for up to 30 years. Yet they failed to do so. Most people refinanced mortgages when interest rates are at historic low rates. The Treasury Department is now selling bonds with interest rates 2-3 times higher interest rates than a year or so ago. Interest payments on the debt will increase rapidly. In 2022, the federal government paid $879 Billion interest on the debt. This is the 3rd largest expense in the Federal budget. It is more than the entire Department of Defense budget. According to the Congressional Budget Office, total annual outlays will be about $10 trillion in 10 years, mostly due to increased interest payments. According to hedge fund titan Stanley Druckenmiller, if interest rates remain the same interest expense will be 4.5% of GDP in 10 years. Interest expense will be 7% of GDP in 20 years. This is 144% of current discretionary spending. Discretionary spending is about one-third of total expenditures. Most of the direct activities of the federal government are included. Mandatory spending is about two-thirds of total expenditures. This includes entitlement programs, Social Security and Medicaid, and interest on the debt. We likely will face one of two scenarios sooner than most people expect: 1. Debt Death Spiral: Unless government spending is reduced significantly soon, the country will go into a debt death spiral. The interest will continue to grow rapidly, until the interest payments are more than total revenues. 2. Austerity Measures: Bond buyers (mostly large institutional investors) stop buying bonds. When the government can no longer sell their bonds, it will be forced to live within its means. The government will only be able to spend revenues received. This will create short-term economic chaos but create financial responsibility longer-term. All government benefits would have to be dramatically cut and/or taxes significantly increased. My opinion is this is the more likely option. This happened with Greece about 10 years ago. Higher bond rates will keep interest rates higher. The size of the federal debt will likely keep interest rates higher for an extended time. The bond market has already increased at the fastest rate since 1792. In this environment interest rate sensitive assets will thrive. These include bonds, bank accounts, and dividend paying life insurance policies. Asset values on most stocks and real estate will suffer. We are seeing the effect recently. Your Personal Bank dividends are interest rate sensitive and will thrive in a higher interest rate environment. As government interest payments increase, the pressure to increase revenues through higher taxes will rise. Your Personal Bank dividends grow income tax-free and you can access tax-free. This shields you from likely higher future tax rates. Your Personal Bank allows you to reduce market risk and volatility with your portfolio. You can grow your money safely, with guarantees, tax-free, and highly liquid. Contact Ferenc at 866-268-4422 or yourpersonalbank.com for more info.