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Holding T-bills now pays 30x more than your bank savings account

May 22, 2018
Sharon McCutcheon/Unsplash
Adam Taggart

Peak Prosperity

Six months ago, I alerted readers to the very attractive benefits that the TreasuryDirect program offers to investors who are defensively sitting on cash right now.

Since then, those benefits have continued to improve. Substantially.

Back in November, by holding extremely conservative short-term (i.e., 6-months or less) Treasury bills, TreasuryDirect participants were receiving over 16x more in interest payments vs keeping their cash in a standard bank savings account.

Today, they're now receiving over 30 times more. Without having to worry about the risk of a bank "bail-in" or failure.

So if you're holding cash right now and NOT participating in the TreasuryDirect program, do yourself a favor and read on. If you're going to pass on this opportunity, at least make it an 'eyes-wide-open' decision.

Holding Cash (In Treasurys) Now Beats The Market

There are many prudent reasons to hold cash in today's dangerously overvalued financial markets, as we've frequently touted here at PeakProsperity.com.

Well, there's now one more good reason to add to the list: holding cash in short-term Treasurys is now meeting/beating the dividend returns offered by the stock market:

"Cash Is King" Again - 3-Month Bills Yield More Than Stocks (Zero Hedge)
'Reaching for yield' just got a lot easier...
For the first time since February 2008, three-month Treasury bills now have a yield advantage over the S&P 500 dividend yield (and dramatically lower risk).
Investors can earn a guaranteed 1.90% by holding the 3-month bills or a risky 1.89% holding the S&P 500...

The longest period of financial repression in history is coming to an end...

And it would appear TINA is dead as there is now an alternative.

And when you look at the total return (dividends + appreciation) of the market since the start of 2018, stocks have returned only marginally better than 3-month Treasurys. Plus, those scant few extra S&P points have come with a LOT more risk.

Why take it under such dangerously overvalued conditions?

If You Can't Beat 'Em, Join 'Em

In my June report Less Than Zero: How The Fed Killed Saving, I explained how the Federal Reserve's policy of holding interest rates at record lows has decimated savers. Those who simply want to park money somewhere "safe" can't do so without losing money in real terms.

To drive this point home: back in November, the average interest rate being offered in a US bank savings account was an insutling 0.06%. Six months later, nothing has changed:

(Source

That's virtually the same as getting paid 0%. But it's actually worse than that, because once you take inflation into account, the real return on your savings is markedly negative.

And to really get your blood boiling, note that the Federal Reserve has rasied the federal funds rate it pays banks from 1.16% in November to 1.69% in April. Banks are now making nearly 50% more money on the excess reserves they park at the Fed -- but are they passing any of that free profit along to their depositors? No....

This is why knowing about the TreasuryDirect program is so important. It's a way for individual investors savvy enough to understand the game being played to bend some of its rules to their favor and limit the damage they suffer.

Below is an updated version (using today's rates) of my recap of TreasuryDirect, which enables you to get over 30x more interest on your cash savings than your bank will pay you, with lower risk.

TreasuryDirect

For those not already familiar with it, TreasuryDirect is a service offered by the United States Department of the Treasury that allows individual investors to purchase Treasury securities such as T-Bills, notes and bonds directly from the U.S. government.

You purchase these Treasury securities by linking a TreasuryDirect account to your personal bank account. Once linked, you use your cash savings to purchase T-bills, etc from the US Treasury. When the Treasury securities you've purchased mature or are sold, the proceeds are deposited back into your bank account.

So why buy Treasuries rather than keep your cash savings in a bank? Two main reasons:

  • Much higher return: T-Bills are currently offering an annualized return rate between 1.66-2.04%. Notes and bonds, depending on their duration, are currently offering between 2.6% - 3.1%
  • Extremely low risk: Your bank can change the interest rate on your savings account at any time -- with Treasury bills, your rate of return is locked in at purchase. Funds in a bank are subject to risks such as a bank bail-in or the insolvency of the FDIC depositor protection program -- while at TreasuryDirect, your funds are being held with the US Treasury, the institution with the lowest default risk in the country for reasons I'll explain more in a moment.

Let's look at a quick example. If you parked $100,000 in the average bank savings account for a full year, you would earn $60 in interest. Let's compare this to the current lowest-yielding TreasuryDirect option: continuously rolling that same $100,000 into 4-week T-Bills for a year:

  1. Day 1: Funds are transferred from your bank account to TreasuryDirect to purchase $100,000 face value of 4-week T-Bills at auction yielding 1.68%
  2. Day 28: the T-Bills mature and the Treasury holds the full $100,000 proceeds in your TreasuryDirect account. Since you've set up the auto-reinvestment option, TreasuryDirect then purchases another $100,000 face value of 4-week T-Bills at the next auction.
  3. Days 29-364: the process repeats every 4 weeks
  4. Day 365: assuming the average yield for T-Bills remained at 1.68%, you will have received $1,680 in interest in total throughout the year from the US Treasury.

$1,680 vs $60. That's a 27x difference in return.

And the comparison only improves if you decide to purchase longer duration (13-week or 26-week) bills instead of the 4-week ones:

Repeating the above example for a year using 13-week bills would yield $1,925. Using 26-week bills would yield $2,085. A lot better (34x better!) than $60.

Opportunity Cost & Default Risk

So what are the downsides to using TreasuryDirect? There aren't many.

The biggest one is opportunity cost. While your money is being held in a T-Bill, it's tied up at the US Treasury. If you suddenly need access to those funds, you have to wait until the bill matures.

But T-Bill durations are short. 4 weeks is not a lot of time to have to wait. (If you think the probability is high you may to need to pull money out of savings sooner than that, you shouldn't be considering the TreasuryDirect program.)

Other than that, TreasuryDirect offers an appealing reduction in risk.

If your bank suddenly closes due to a failure, any funds invested in TreasuryDirect are not in your bank account, so are not subject to being confiscated in a bail-in.

Instead, your money is held as a T-Bill, note or bond, which is essentially an obligation of the US Treasury to pay you in full for the face amount. The US Treasury is the single last entity in the country (and quite possibly, the world) that will ever default on its obligations. Why? Because Treasurys are the mechanism by which money is created in the US. Chapter 8 from The Crash Course explains:

As a result, to preserve its ability to print the money it needs to function, the US government will bring its full force and backing to bear in order to ensure confidence in the market for Treasurys.

Meaning: the US government won't squelch on paying you back the money you lent it. If required, it will just print the money it needs to repay you.

So, How To Get Started?

Usage of TreasuryDirect is quite low among investors today. Many are unaware of the program. Others simply haven't tried it out.

And let's be real: it's crazy that we live in a world where a 1.68-2.09% return now qualifies as an exceptionally high yield on savings. A lot of folks just can't get motivated to take action by rates that low. But that doesn't mean that they shouldn't -- money left on the table is money forfeited.

So, if you're interested in learning more about the TreasuryDirect program, start by visiting their website. Like everything operated by the government, it's pretty 'no frills'; but their FAQ page addresses investors' most common questions.

Before you decide whether or not to fund an account there, be sure to discuss the decision with your professional financial advisor to make sure it fits well with your personal financial situation and goals. (If you're having difficulty finding a good one, consider scheduling a free discussion with PeakProsperity.com's endorsed financial advisor -- who has considerable experience managing TreasuryDirect purchases for many of its clients).

In Part 2: A Primer On How To Use TreasuryDirect, we lay out the step-by-step process for opening, funding and transacting within a TreasuryDirect account. We've created it to be a helpful resource for those self-directed individuals potentially interested in increasing their return on their cash savings in this manner.

Yes, we savers are getting completely abused by our government's policies. So there's some poetic justice in using the government's own financing instruments to slightly lessen the sting of the whip.

Click here to read Part 2 of this report (free executive summary, enrollment required for full access)

NOTE: PeakProsperity.com does not have any business relationship with the TreasuryDirect program. Nor is anything in the article above to be taken as an offer of personal financial advice. As mentioned, discuss any decision to participate in TreasuryDirect with your professional financial advisor before taking action.

Vox co-founder Matthew Yglesias: America doesn't do GREAT things by fighting amongst ourselves

This week on the Glenn Beck Podcast, Glenn spoke with Vox co-founder Matthew Yglesias about his new book, "One Billion Americans: The Case for Thinking Bigger."

Matthew and Glenn agree that, while conservatives and liberals may disagree on a lot, we're not as far apart as some make it seem. If we truly want America to continue doing great things, we must spend less time fighting amongst ourselves.

Watch a clip from the full interview with Matthew Yglesias below:


Find the full podcast on Glenn's YouTube channel or on Blaze Media's podcast network.

Want to listen to more Glenn Beck podcasts?

Subscribe to Glenn Beck's channel on YouTube for FREE access to more of his masterful storytelling, thought-provoking analysis and uncanny ability to make sense of the chaos, or subscribe to BlazeTV — the largest multi-platform network of voices who love America, defend the Constitution and live the American dream.

'A convenient boogeyman for misinformation artists': Why is the New York Times defending George Soros?

Image source: Simon Dawson/Bloomberg via Getty Images

On the "Glenn Beck Radio Program" Tuesday, Glenn discussed the details of a recent New York Times article that claims left-wing billionaire financier George Soros "has become a convenient boogeyman for misinformation artists who have falsely claimed that he funds spontaneous Black Lives Matter protests as well as antifa, the decentralized and largely online, far-left activist network that opposes President Trump."

The Times article followed last week's bizarre Fox News segment in which former House Speaker Newt Gingrich appeared to be censored for criticizing Soros (read more here). The article also labeled Glenn a "conspiracy theorist" for his tweet supporting Gingrich.

Watch the video clip below for details:


Want more from Glenn Beck?

To enjoy more of Glenn's masterful storytelling, thought-provoking analysis and uncanny ability to make sense of the chaos, subscribe to BlazeTV — the largest multi-platform network of voices who love America, defend the Constitution and live the American dream.

'Color Revolution': The Obama Admin's plan UPEND America—and it's all happening NOW

The former ambassador to Russia under the Obama Administration, Michael McFaul, came up with "7 Pillars of Color Revolution," a list of seven steps needed to incite the type of revolution used to upend Eastern European countries like Ukraine and Georgia in the past two decades. On his TV special this week, Glenn Beck broke down the seven steps and showed how they're happening right now in America.

Here are McFaul's seven steps:

1. Semi-autocratic regime (not fully autocratic) – provides opportunity to call incumbent leader "fascist"

2. Appearance of unpopular president or incumbent leader

3. United and organized opposition – Antifa, BLM

4. Effective system to convince the public (well before the election) of voter fraud

5. Compliant media to push voter fraud narrative

6. Political opposition organization able to mobilize "thousands to millions in the streets"

7. Division among military and police


Glenn explained each "pillar," offering examples and evidence of how the Obama administration laid out the plan for an Eastern European style revolution in order to completely upend the American system.

Last month, McFaul made a obvious attempt to downplay his "color revolutions" plan with the following tweet:

Two weeks later, he appeared to celebrate step seven of his plan in this now-deleted tweet:



As Glenn explains in this clip, the Obama administration's "7 Pillars of Color Revolution" are all playing out – just weeks before President Donald Trump takes on Democratic candidate Joe Biden in the November election.

Watch the video clip below to hear more from Glenn:


Watch the full special "CIVIL WAR: The Way America Could End in 2020" here.

Want more from Glenn Beck?

To enjoy more of Glenn's masterful storytelling, thought-provoking analysis and uncanny ability to make sense of the chaos, subscribe to BlazeTV — the largest multiplatform network of voices who love America, defend the Constitution and live the American dream.

Start your free trial and get $20 off a one-year subscription with code BANTHIS.

Modern eugenics: Will Christians fight this deadly movement?

Photo by Olga Kononenko on Unsplash

Last month, without much fanfare, a new research paper disclosed that 94 percent of Belgian physicians support the killing of new-born babies after birth if they are diagnosed with a disability.

A shocking revelation indeed that did not receive the attention it demanded. Consider this along with parents who believe that if their unborn babies are pre-diagnosed with a disability, they would choose to abort their child. Upwards of 70 percent of mothers whose children are given a prenatal disability diagnosis, such as Down Syndrome, abort to avoid the possibility of being burdened with caring for a disabled child.

This disdain for the disabled hits close to home for me. In 1997, my family received a letter from Michael Schiavo, the husband of my sister, Terri Schiavo, informing us that he intended to petition a court to withdraw Terri's feeding tube.

For those who do not remember, in 1990, at the age of 26, Terri experienced a still-unexplained collapse while at home with Michael, who subsequently became her legal guardian. Terri required only love and care, food and water via feeding tube since she had difficulty swallowing as a result of her brain injury. Nonetheless, Michael's petition was successful, and Terri's life was intentionally ended in 2005 by depriving her of food and water, causing her to die from dehydration and starvation. It took almost two excruciating weeks.

Prior to my sister's predicament, the biases that existed towards persons with disabilities had been invisible to me. Since then, I have come to learn the dark history of deadly discrimination towards persons with disabilities.

Indeed, some 20 years prior to Germany's T4 eugenics movement, where upwards of 200,000 German citizens were targeted and killed because of their physical or mental disability, the United States was experiencing its own eugenics movement.

U.S. Supreme Court Justice Clarence Thomas documented some of this history in his concurring opinion in Box v. Planned Parenthood of Indiana and Kentucky, Inc., Justice Thomas describes how eugenics became part of the academic curriculum being taught in upwards of 400 American universities and colleges.

It was not solely race that was the target of the U.S. eugenics movement. Eugenicists also targeted the institutionalized due to incurable illness, the physically and cognitively disabled, the elderly, and those with medical dependency.

In 1973, the U.S. Supreme Court handed down Roe v. Wade, which wiped out pro-life laws in nearly every state and opened the floodgates to abortion throughout the entirety of pregnancy. Since then, 60 million children have been killed. Abortion as we know it today has become a vehicle for a modern-day eugenics program.

Since the Catholic Church was established, the Truth of Christ was the greatest shield against these types of attacks on the human person and the best weapon in the fight for equality and justice. Tragically, however, for several decades, the Church has been infiltrated by modernist clergy, creating disorder and confusion among the laity, perverting the teachings of the Church and pushing a reckless supposed “social justice" agenda.

My family witnessed this firsthand during Terri's case. Church teaching is clear: it is our moral obligation to provide care for the cognitively disabled like Terri. However, Bishop Robert Lynch, who was the bishop of the Diocese of St. Petersburg, Florida, during Terri's case, offered no support and was derelict in his duties during the fight for Terri's life.

Bishop Lynch had an obligation to use his position to protect Terri from the people trying to kill her and to uphold Church teaching. Indeed, it was not only the silence of Bishop Lynch but that of the United States Conference of Catholic Bishops (USCCB), which also remained silent despite my family's pleas for help, that contributed to Terri being needlessly starved and dehydrated to death.

My family's experience, sadly, has turned out to be more of the rule than the exception. Consider what happened to Michael Hickson. Hickson was a 36-year-old, brain-injured person admitted to a Texas hospital after contracting COVID-19. Incredibly—and against the wishes of Michael's wife—the hospital decided not to treat Michael because they arbitrarily decided that his “quality of life" was “unacceptably low" due to his pre-existing disability. Michael died within a week once the decision not to treat him was imposed upon him despite the efforts of his wife to obtain basic care for her husband.

During my sister's case and our advocacy work with patients and their families, it would have been helpful to have a unified voice coming from our clergy consistently supporting the lives of our medically vulnerable. We desperately need to see faithful Catholic pastoral witness that confounds the expectations of the elite by pointing to Jesus Christ and the moral law.

A Church that appears more concerned with baptizing the latest social and political movements is a Church that may appear to be “relevant," but one that may also find itself swallowed up by the preoccupations of our time.

As Catholics, we know all too well the reluctance of priests to preach on issues of abortion, euthanasia, assisted suicide, and other pro-life issues. We have heard that the Church cannot risk becoming too political.

At the same time, some within the Church are now openly supporting Black Lives Matter, an organization that openly declares itself hostile to the family, to moral norms as taught by the Church, and whose founders embrace the deadly ideology of Marxism.

For example, Bishop Mark J. Seitz of El Paso, Texas, knelt in prayer with a cardboard sign asserting his support for this ideology.

Recently, during an online liturgy of the mass, Fr. Kenneth Boller at The Church of St. Francis Xavier in New York, led the congregation with what appears to sound like questions affirming the BLM agenda. Moreover, while reading these questions, pictures of George Floyd, Breonna Taylor, and Ahmaud Arbery, assumed victims of racial injustice, were placed on the altar of St. Francis Xavier Church, a place typically reserved for Saints of the Catholic Church.

Contrast these two stories with what happened in the Diocese of Lafayette, Indiana, where Rev. Theodore Rothrock of St. Elizabeth Seton Church fell victim to the ire of Bishop Timothy Doherty. Fr. Rothrock used strong language in his weekly church bulletin criticizing the Black Lives Matter movement and its organizers. Consequently, Bishop Doherty suspended Fr. Rothrock from public ministry.

In 1972, Pope Pius VI said, “The smoke of Satan has entered the temple of God." It seems that too many of our clergy today are enjoying the smell.

I encourage all who are concerned about the human right to life and about Christ-centered reforms in our culture and our Church to raise your voices for pastoral leadership in every area of our shared lives as Christian people.

Bobby Schindler is a Senior Fellow with Americans United for Life, Associate Scholar at the Charlotte Lozier Institute, and President of the Terri Schiavo Life & Hope Network.