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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.

Trump v. Slaughter: The Deep State on trial

JIM WATSON / Contributor | Getty Images

The administrative state has long operated as an unelected super-government. Trump v. Slaughter may be the moment voters reclaim authority over their own institutions.

Washington is watching and worrying about a U.S. Supreme Court case that could very well define the future of American self-government. And I don’t say that lightly. At the center of Trump v. Slaughter is a deceptively simple question: Can the president — the one official chosen by the entire nation — remove the administrators and “experts” who wield enormous, unaccountable power inside the executive branch?

This isn’t a technical fight. It’s not a paperwork dispute. It’s a turning point. Because if the answer is no, then the American people no longer control their own government. Elections become ceremonial. The bureaucracy becomes permanent. And the Constitution becomes a suggestion rather than the law of the land.

A government run by experts instead of elected leaders is not a republic. It’s a bureaucracy with a voting booth bolted onto the front to make us feel better.

That simply cannot be. Justice Neil Gorsuch summed it up perfectly during oral arguments on Monday: “There is no such thing in our constitutional order as a fourth branch of government that’s quasi-judicial and quasi-legislative.”

Yet for more than a century, the administrative state has grown like kudzu — quietly, relentlessly, and always in one direction. Today we have a fourth branch of government: unelected, unaccountable, insulated from consequence. Congress hands off lawmaking to agencies. Presidents arrive with agendas, but the bureaucrats remain, and they decide what actually gets done.

If the Supreme Court decides that presidents cannot fire the very people who execute federal power, they are not just rearranging an org chart. The justices are rewriting the structure of the republic. They are confirming what we’ve long feared: Here, the experts rule, not the voters.

A government run by experts instead of elected leaders is not a republic. It’s a bureaucracy with a voting booth bolted onto the front to make us feel better.

The founders warned us

The men who wrote the Constitution saw this temptation coming. Alexander Hamilton and James Madison in the Federalist Papers hammered home the same principle again and again: Power must remain traceable to the people. They understood human nature far too well. They knew that once administrators are protected from accountability, they will accumulate power endlessly. It is what humans do.

That’s why the Constitution vests the executive power in a single president — someone the entire nation elects and can unelect. They did not want a managerial council. They did not want a permanent priesthood of experts. They wanted responsibility and authority to live in one place so the people could reward or replace it.

So this case will answer a simple question: Do the people still govern this country, or does a protected class of bureaucrats now run the show?

Not-so-expert advice

Look around. The experts insisted they could manage the economy — and produced historic debt and inflation.

The experts insisted they could run public health — and left millions of Americans sick, injured, and dead while avoiding accountability.

The experts insisted they could steer foreign policy — and delivered endless conflict with no measurable benefit to our citizens.

And through it all, they stayed. Untouched, unelected, and utterly unapologetic.

If a president cannot fire these people, then you — the voter — have no ability to change the direction of your own government. You can vote for reform, but you will get the same insiders making the same decisions in the same agencies.

That is not self-government. That is inertia disguised as expertise.

A republic no more?

A monarchy can survive a permanent bureaucracy. A dictatorship can survive a permanent bureaucracy. A constitutional republic cannot. Not for long anyway.

We are supposed to live in a system where the people set the course, Congress writes the laws, and the president carries them out. When agencies write their own rules, judges shield them from oversight, and presidents are forbidden from removing them, we no longer live in that system. We live in something else — something the founders warned us about.

And the people become spectators of their own government.

JIM WATSON / Contributor | Getty Images

The path forward

Restoring the separation of powers does not mean rejecting expertise. It means returning expertise to its proper role: advisory, not sovereign.

No expert should hold power that voters cannot revoke. No agency should drift beyond the reach of the executive. No bureaucracy should be allowed to grow branches the Constitution never gave it.

The Supreme Court now faces a choice that will shape American life for a generation. It can reinforce the Constitution, or it can allow the administrative state to wander even farther from democratic control.

This case isn’t about President Trump. It isn’t about Rebecca Slaughter, the former Federal Trade Commission official suing to get her job back. It’s about whether elections still mean anything — whether the American people still hold the reins of their own government.

That is what is at stake: not procedure, not technicalities, but the survival of a system built on the revolutionary idea that the citizens — not the experts — are the ones who rule.

This article originally appeared on TheBlaze.com.

1 in 20 Canadians die by MAID—Is this 'compassion'?

Vaughn Ridley / Stringer | Getty Images

Medical assistance in dying isn’t health care. It’s the moment a Western democracy decided some lives aren’t worth saving, and it’s a warning sign we can’t ignore.

Canada loves to lecture America about compassion. Every time a shooting makes the headlines, Canadian commentators cannot wait to discuss how the United States has a “culture of death” because we refuse to regulate guns the way enlightened nations supposedly do.

But north of our border, a very different crisis is unfolding — one that is harder to moralize because it exposes a deeper cultural failure.

A society that no longer recognizes the value of life will not long defend freedom, dignity, or moral order.

The Canadian government is not only permitting death, but it’s also administering, expanding, and redefining it as “medical care.” Medical assistance in dying is no longer a rare, tragic exception. It has become one of the country’s leading causes of death, offered to people whose problems are treatable, whose conditions are survivable, and whose value should never have been in question.

In Canada, MAID is now responsible for nearly 5% of all deaths — 1 out of every 20 citizens. And this is happening in a country that claims the moral high ground over American gun violence. Canada now records more deaths per capita from doctors administering lethal drugs than America records from firearms. Their number is 37.9 deaths per 100,000 people. Ours is 13.7. Yet we are the country supposedly drowning in a “culture of death.”

No lecture from abroad can paper over this fact: Canada has built a system where eliminating suffering increasingly means eliminating the sufferer.

Choosing death over care

One example of what Canada now calls “compassion” is the case of Jolene Bond, a woman suffering from a painful but treatable thyroid condition that causes dangerously high calcium levels, bone deterioration, soft-tissue damage, nausea, and unrelenting pain. Her condition is severe, but it is not terminal. Surgery could help her. And in a functioning medical system, she would have it.

But Jolene lives under socialized medicine. The specialists she needs are either unavailable, overrun with patients, or blocked behind bureaucratic requirements she cannot meet. She cannot get a referral. She cannot get an appointment. She cannot reach the doctor in another province who is qualified to perform the operation. Every pathway to treatment is jammed by paperwork, shortages, and waitlists that stretch into the horizon and beyond.

Yet the Canadian government had something else ready for her — something immediate.

They offered her MAID.

Not help, not relief, not a doctor willing to drive across a provincial line and simply examine her. Instead, Canada offered Jolene a state-approved death. A lethal injection is easier to obtain than a medical referral. Killing her would be easier than treating her. And the system calls that compassion.

Bureaucracy replaces medicine

Jolene’s story is not an outlier. It is the logical outcome of a system that cannot keep its promises. When the machinery of socialized medicine breaks down, the state simply replaces care with a final, irreversible “solution.” A bureaucratic checkbox becomes the last decision of a person’s life.

Canada insists its process is rigorous, humane, and safeguarded. Yet the bureaucracy now reviewing Jolene’s case is not asking how she can receive treatment; it is asking whether she has enough signatures to qualify for a lethal injection. And the debate among Canadian officials is not how to preserve life, but whether she has met the paperwork threshold to end it.

This is the dark inversion that always emerges when the state claims the power to decide when life is no longer worth living. Bureaucracy replaces conscience. Eligibility criteria replace compassion. A panel of physicians replaces the family gathered at a bedside. And eventually, the “right” to die becomes an expectation — especially for those who are poor, elderly, or alone.

Joe Raedle / Staff | Getty Images

The logical end of a broken system

We ignore this lesson at our own peril. Canada’s health care system is collapsing under demographic pressure, uncontrolled migration, and the unavoidable math of government-run medicine.

When the system breaks, someone must bear the cost. MAID has become the release valve.

The ideology behind this system is already drifting south. In American medical journals and bioethics conferences, you will hear this same rhetoric. The argument is always dressed in compassion. But underneath, it reduces the value of human life to a calculation: Are you useful? Are you affordable? Are you too much of a burden?

The West was built on a conviction that every human life has inherent value. That truth gave us hospitals before it gave us universities. It gave us charity before it gave us science. It is written into the Declaration of Independence.

Canada’s MAID program reveals what happens when a country lets that foundation erode. Life becomes negotiable, and suffering becomes a justification for elimination.

A society that no longer recognizes the value of life will not long defend freedom, dignity, or moral order. If compassion becomes indistinguishable from convenience, and if medicine becomes indistinguishable from euthanasia, the West will have abandoned the very principles that built it. That is the lesson from our northern neighbor — a warning, not a blueprint.

This article originally appeared on TheBlaze.com.

A Sharia enclave is quietly taking root in America. It's time to wake up.

NOVA SAFO / Staff | Getty Images

Sharia-based projects like the Meadow in Texas show how political Islam grows quietly, counting on Americans to stay silent while an incompatible legal system takes root.

Apolitical system completely incompatible with the Constitution is gaining ground in the United States, and we are pretending it is not happening.

Sharia — the legal and political framework of Islam — is being woven into developments, institutions, and neighborhoods, including a massive project in Texas. And the consequences will be enormous if we continue to look the other way.

This is the contradiction at the heart of political Islam: It claims universal authority while insisting its harshest rules will never be enforced here. That promise does not stand up to scrutiny. It never has.

Before we can have an honest debate, we’d better understand what Sharia represents. Sharia is not simply a set of religious rules about prayer or diet. It is a comprehensive legal and political structure that governs marriage, finance, criminal penalties, and civic life. It is a parallel system that claims supremacy wherever it takes hold.

This is where the distinction matters. Many Muslims in America want nothing to do with Sharia governance. They came here precisely because they lived under it. But political Islam — the movement that seeks to implement Sharia as law — is not the same as personal religious belief.

It is a political ideology with global ambitions, much like communism. Secretary of State Marco Rubio recently warned that Islamist movements do not seek peaceful coexistence with the West. They seek dominance. History backs him up.

How Sharia arrives

Political Islam does not begin with dramatic declarations. It starts quietly, through enclaves that operate by their own rules. That is why the development once called EPIC City — now rebranded as the Meadow — is so concerning. Early plans framed it as a Muslim-only community built around a mega-mosque and governed by Sharia-compliant financing. After state investigations were conducted, the branding changed, but the underlying intent remained the same.

Developers have openly described practices designed to keep non-Muslims out, using fees and ownership structures to create de facto religious exclusivity. This is not assimilation. It is the construction of a parallel society within a constitutional republic.

The warning from those who have lived under it

Years ago, local imams in Texas told me, without hesitation, that certain Sharia punishments “just work.” They spoke about cutting off hands for theft, stoning adulterers, and maintaining separate standards of testimony for men and women. They insisted it was logical and effective while insisting they would never attempt to implement it in Texas.

But when pressed, they could not explain why a system they consider divinely mandated would suddenly stop applying once someone crossed a border.

This is the contradiction at the heart of political Islam: It claims universal authority while insisting its harshest rules will never be enforced here. That promise does not stand up to scrutiny. It never has.

AASHISH KIPHAYET / Contributor | Getty Images

America is vulnerable

Europe is already showing us where this road leads. No-go zones, parallel courts, political intimidation, and clerics preaching supremacy have taken root across major cities.

America’s strength has always come from its melting pot, but assimilation requires boundaries. It requires insisting that the Constitution, not religious law, is the supreme authority on this soil.

Yet we are becoming complacent, even fearful, about saying so. We mistake silence for tolerance. We mistake avoidance for fairness. Meanwhile, political Islam views this hesitation as weakness.

Religious freedom is one of America’s greatest gifts. Muslims may worship freely here, as they should. But political Islam must not be permitted to plant a flag on American soil. The Constitution cannot coexist with a system that denies equal rights, restricts speech, subordinates women, and places clerical authority above civil law.

Wake up before it is too late

Projects like the Meadow are not isolated. They are test runs, footholds, proofs of concept. Political Islam operates with patience. It advances through demographic growth, legal ambiguity, and cultural hesitation — and it counts on Americans being too polite, too distracted, or too afraid to confront it.

We cannot afford that luxury. If we fail to defend the principles that make this country free, we will one day find ourselves asking how a parallel system gained power right in front of us. The answer will be simple: We looked away.

The time to draw boundaries and to speak honestly is now. The time to defend the Constitution as the supreme law of the land is now. Act while there is still time.

This article originally appeared on TheBlaze.com.

Why do Americans feel so empty?

Mario Tama / Staff | Getty Images

Anxiety, anger, and chronic dissatisfaction signal a country searching for meaning. Without truth and purpose, politics becomes a dangerous substitute for identity.

We have built a world overflowing with noise, convenience, and endless choice, yet something essential has slipped out of reach. You can sense it in the restless mood of the country, the anxiety among young people who cannot explain why they feel empty, in the angry confusion that dominates our politics.

We have more wealth than any nation in history, but the heart of the culture feels strangely malnourished. Before we can debate debt or elections, we must confront the reality that we created a world of things, but not a world of purpose.

You cannot survive a crisis you refuse to name, and you cannot rebuild a world whose foundations you no longer understand.

What we are living through is not just economic or political dysfunction. It is the vacuum that appears when a civilization mistakes abundance for meaning.

Modern life is stuffed with everything except what the human soul actually needs. We built systems to make life faster, easier, and more efficient — and then wondered why those systems cannot teach our children who they are, why they matter, or what is worth living for.

We tell the next generation to chase success, influence, and wealth, turning childhood into branding. We ask kids what they want to do, not who they want to be. We build a world wired for dopamine rather than dignity, and then we wonder why so many people feel unmoored.

When everything is curated, optimized, and delivered at the push of a button, the question “what is my life for?” gets lost in the static.

The crisis beneath the headlines

It is not just the young who feel this crisis. Every part of our society is straining under the weight of meaninglessness.

Look at the debt cycle — the mathematical fate no civilization has ever escaped once it crosses a threshold that we seem to have already blown by. While ordinary families feel the pressure, our leaders respond with distraction, with denial, or by rewriting the very history that could have warned us.

You cannot survive a crisis you refuse to name, and you cannot rebuild a world whose foundations you no longer understand.

We have entered a cultural moment where the noise is so loud that it drowns out the simplest truths. We are living in a country that no longer knows how to hear itself think.

So people go searching. Some drift toward the false promise of socialism, some toward the empty thrill of rebellion. Some simply check out. When a culture forgets what gives life meaning, it becomes vulnerable to every ideology that offers a quick answer.

The quiet return of meaning

And yet, quietly, something else is happening. Beneath the frustration and cynicism, many Americans are recognizing that meaning does not come from what we own, but from what we honor. It does not rise from success, but from virtue. It does not emerge from noise, but from the small, sacred things that modern life has pushed to the margins — the home, the table, the duty you fulfill, the person you help when no one is watching.

The danger is assuming that this rediscovery happens on its own. It does not.

Reorientation requires intention. It requires rebuilding the habits and virtues that once held us together. It requires telling the truth about our history instead of rewriting it to fit today’s narratives. And it requires acknowledging what has been erased: that meaning is inseparable from God’s presence in a nation’s life.

Harold M. Lambert / Contributor | Getty Images

Where renewal begins

We have built a world without stillness, and then we wondered why no one can hear the questions that matter. Those questions remain, whether we acknowledge them or not. They do not disappear just because we drown them in entertainment or noise. They wait for us, and the longer we ignore them, the more disoriented we become.

Meaning is still available. It is found in rebuilding the smallest, most human spaces — the places that cannot be digitized, globalized, or automated. The home. The family. The community.

These are the daily virtues that do not trend on social media, but that hold a civilization upright. If we want to repair this country, we begin there, exactly where every durable civilization has always begun: one virtue at a time, one tradition at a time, one generation at a time.

This article originally appeared on TheBlaze.com.