How to Protect Yourself From the Federal Reserve

kcb wrote: [questions about how/why to buy Treasuries]

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At Dow 14K, I recommended that everyone, who does not have a risk profile compatible with shorting, move to 100% cash and Treasuries. That was mid-2007 (the first pop of Dow 14K) with T rates around 6%.

Since then, Treasuries have been crushed by demand to around 0% (or even negative) yield, by people and entities with real money ($millions to $billions) who are investment savvy.

So it's true that the smart money has already removed the possibility of getting the 6% yield that I urged everyone to jump-on. But it's still not too late to switch to cash and Ts. To the contrary, with the most expensive Dow ever by roughly five fold, as priced by P/E, broad market prices are only beginning their multi-decade decline. With the dumb money still fully vested in stocks, paper gold, and banks, Treasuries at 0% are the opportunity of a lifetime. Every time prices halve, safe cash bags a cool 100% return.

In order to survive the current and future financial chaos, the most important thing is to convert as many assets into cash as possible. I'm talking about everything, not just your "investment portfolio." Cars, vacation homes, boats, extra furniture, everything you can sell for cash should be sold. Next, figure out a way to protect that cash.

In the coming decades, protection of cash will be extremely difficult, much more difficult than it is today. Banks are not a safe option. Some will survive, but which ones will be unpredictable, it depends which politicians the private Fed has purchased, which banks they wish to destroy, and how long the Federal Reserve banks themselves survive.

As a minimum, avoid any large American bank that is not based in NY. These are the Fed's primary objectives for destruction, they will likely be the early casualties of the Federal Reserve's war on Americans. Hint: a big bank with a name like Washington Mutual is not generally a member of the NY Fed's bank cartel. Big, Carolina-based Bank of America is an easy pick to fall in the opening battles, while the Federal Reserve still has residual political clout.

Especially avoid FDIC insured banks. The private FDIC, desperate to avoid insurance payouts, will kick dead insured banks to stronger insured banks, bringing down most of them.

So, where to stash your cash? First, if you have the means, protect it yourself. This will be the lowest risk option for most people. Hide it; fireproof it; waterproof it. FDR sent thugs door to door to steal Americans' gold at gunpoint. He jailed any American who didn't submit. The same thing could happen tomorrow with cash.

With cash you cannot safely store, buy Treasuries. Treasuries are a near-cash equivalent. Once the big banks start to fall, it will be too late to buy Treasuries without paying a large premium, so do it now. Treasury prices have already exceeded $1 per $1. Once $15T in bank deposits starts competing for a few billion in weekly T auctions, don't be surprised to pay an 80% surcharge to preserve 20% of your cash.

The U.S. Treasury is NOT your friend. It is indirectly controlled by the commercial Fed banks like most of our government and court system. But it is where the smart money hides and they have political power in our country, so you cannot do better.

There may be safer options in other countries, but given the U.S. propensity to commercialize and legalize Federal Reserve counterfeiting, while possibly safer, other currencies will not experience the same surge in buying power as U.S cash as our economy crumbles. I've said this many times but I'll say it again, I recommend U.S. cash and/or Treasuries not as a safe INVESTMENT, but as a high yield TRADE as prices tumble around you. The risk:reward ratio can't be beat.

Because our government is owned by the for-profit Federal Reserve banks, there are some wonderful, recent Treasury innovations aimed directly at destroying their American bank competitors. You should take advantage of these features, unless you want to go down with the ship.

The first is the Treasury's new zero percent C of I account. C of I stands for Coupon of Indebtedness. It functions like a U.S. Treasury "bank account" (but without bankers habitually gambling away your deposits). You can buy electronic coupons of any size, and your balance is recorded at the U.S. Treasury. You can redeem all or part of your C of I balance at any bank you select, by electronic funds transfer which takes one business day. You can change your selected bank if it fails, any redemption to a dead bank bounces back into your Treasury account.

C of I was recently implemented. Why? To encourage and accelerate bank runs; to help cause the Fed's depression. There is no reason in the world today to keep money a risky bank account. The Fed and the Treasury need your help to destroy their commercial competition, they are going to do it with or without you, so place your money with them.

C of I has one very important limitation. It doesn't seem important, but it is. You can only directly buy C of I coupons up to a $1,000 at a time. However, you can redeem Treasury instruments of any size into your C of I account. So if you want to get, say, $10 million into your C of I account quickly, there is only one way to do that, buy a 4 week T-Bill and elect C of I as the destination upon maturity.

Why this limitation?

Simple.

They want the dumb money, the late money, to have to pay a potentially huge negative yield when the roof falls in. The new option to hold C of I, plus the requirement to fight for Treasuries via auction, will be a multi-trillion dollar money making machine during the coming Federal Reserve-engineered panic.

How do you purchase Treasuries?

Visit: https://www.treasurydirect.gov/go_to_login.htm

Register. It takes about a week to receive the "decoder card" they require to login, via snail mail. You have to jump through a couple of pages of login hoops...


Set up a bank to fund your Treasury account. This is similar to using any financial site, acct #, routing #, etc. To buy Treasuries, all you do is select an instrument, it pulls funds from your bank account on the auction date.

Be sure to select...



...to keep money from flowing back into your bank account.

You can buy any any type of Treasury instrument in any odd dollar amount using the site, it is self-explanatory. You bid on instruments, meaning you must pay the going rate. Usually, that means paying a price slightly lower than face value at maturity. The discount is your yield. If you pay 99 cents on the dollar for a 52 week Treasury, that's like getting a 1.01% yield.

When times get bad, you may actually have to pay more than $1 per $1. Throughout the entirety of U.S. history, all of our precipitous ups and downs, World Wars, the Great Depression, through the struggle and strife of our storied nation, that has never happened. Until recently. Now, it is not uncommon. Soon, it could become punishing. Beat the rush.