National Debt and Federal Spending

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Higher taxes, alone, are not the solution to out-of-control federal government spending. Americans need to understand and address the problem.  And, they need to convince politicians and bureaucrats to end their unfettered spending habits.

The national debt enables the federal government to pay for federal programs and services even if it does not have funds immediately available. Increased in federal government spending further increases the deficit.

The federal government spends money on a variety of goods, programs, and services to support the American public and pay interest incurred from borrowing.

  • If the government spends more than it collects in revenue, then there is a budget deficit.
  • If the government spends less than it collects in revenue, there is a budget surplus.

From FY 2019 to FY 2021, spending increased by about 50%, largely due to the COVID-19 pandemic. In fiscal year (FY) 2022, the government spent $6.27 trillion, which was more than it collected (revenue), resulting in a deficit.


Federal government spending pays for everything from Social Security and Medicare to military equipment, highway maintenance, building construction, research, and education. This spending can be broken down into two primary categories: mandatory and discretionary. These purchases can also be classified by object classand budget functions.

Tax cuts, stimulus programs, increased government spending, and decreased tax revenue caused by widespread unemployment generally account for sharp rises in the national debt.

References:

  1. https://fiscaldata.treasury.gov/americas-finance-guide/national-debt/
  2. https://fiscaldata.treasury.gov/americas-finance-guide/federal-spending/

The 10-Year Treasury Bond Yield

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The 10-year Treasury bond yield is closely watched as an economic indicator of broader investor confidence.

An economic indicator is a piece of economic data, usually of macroeconomic scale, that is used by analysts to interpret current or future investment possibilities, according to Investipedia. .

This 10-year bond signals investor confidence. The U.S Treasury sells bonds via auction and yields are set through a bidding process.5 When confidence is high, prices for the 10-year drop and yields rise. This is because investors feel they can find higher-returning investments elsewhere and do not feel they need to play it safe.

But when confidence is low, bond prices rise and yields fall, as there is more demand for this safe investment.

This confidence factor is also felt outside of the U.S. The geopolitical situations of other countries can affect U.S. government bond prices, as the U.S. is seen as safe haven for capital.

  • BecauseTreasury securities are backed by the U.S. government, They securities are seen as a safer investment relative to stocks.
  • Bond prices and yields move in opposite directions—falling prices boost yields, while rising prices lower yields.
  • The 10-year yield is used as a proxy for mortgage rates. It’s also seen as a sign of investor sentiment about the economy.
  • A rising yield indicates falling demand for Treasury bonds, which means investors prefer higher-risk, higher-reward investments. A falling yield suggests the opposite.

Changes in the 10-year Treasury yield tell long-term investors a great deal about the economic landscape and global market sentiment. Professional investors analyze patterns in 10-year Treasury yields and make predictions about how yields will move over time.

Declines in the 10-year Treasury yield generally indicate caution about global economic conditions while gains signal global economic confidence.

Prices (and therefore effective yields) change for bonds almost constantly. That’s because a bond’s price is inversely related to yield: When demand is high and Treasury prices rise, yields fall—conversely, when demand is low Treasury prices fall and yields rise. This ebb and flow ultimately creates the Treasury pricing market as people flock to (and then from) Treasuries based on the economic environment they find themselves in.

It’s important to remember, all U.S. Treasury securities are regarded as risk free—since they’re backed by the full faith and credit of the United States government, which has never defaulted on its debts.

When investors get worried about the economy and market risk, they look for safe investments that preserve capital, and Treasuries are among the safest investments out there.

One of the foundational principles of finance is that risk and return are correlated. When markets are booming and the economy is expanding, the appetite to take on risk and generate returns is high. Risk-free Treasuries become much less appealing because of their lower returns. Demand declines and Treasury notes sell at less than their face value.

References:

  1. https://www.forbes.com/advisor/investing/10-year-treasury-yield/

Hot PPI in January 2023

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Inflation at the wholesale level, measured by the Producer Price Index (PPI), rose more than expected in January 2023. 

The U.S. Labor Department reported that its producer price index, which measures inflation at the wholesale level before it reaches consumers, came in hotter than expected and rose 0.7% in January from the previous month. On an annual basis, prices are up 6%. In short, PPI is reflects intrinsically the prices consumers will be paying for goods and services in the near future.

Those figures were both higher than the 5.4% headline figure and 0.4% monthly increase in forecast by Refinitiv economists, a worrisome sign for the hawkish Federal Reserve as it seeks to cool inflationary price gains and tame consumer demand with the most aggressive interest rate hike campaign since the 1980s.

Excluding food and energy, core inflation increased 0.1% for the month – matching the estimate from economists.

Stubborn inflation has caused more Americans to live paycheck to paycheck despite 5.1% increase in wages, reports Fox Business. Increased wages are not keeping pace with soaring prices of consumer goods and services, prompting many Americans to live paycheck to paycheck.

References:

  1. https://www.foxbusiness.com/economy/wholesale-inflation-surges-january-more-expected-high-prices-persist

Half of Americans Say They Are Worse Off – Gallup

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According to a new Gallup poll, 50% of Americans say they are worse off than a year ago, compared to only 35% who say better.

When Americans take the time to reflect on their personal financial situations compared to a year ago:

  • 35% of Americans say they are better off now than they were a year ago,
  • 50% of Americans say they are worse off now than they were a year ago
  • 14% of Americans say that their finances are  “the same” as last year.

(Per Gallup: Lower-income is defined as having an annual household income less than $40,000. Middle-income is defined as having an annual household income between $40,000 and $99,999. Upper-income is defined as having an annual household income of $100,000 or more.)

These financial self-assessments are the worst since Great Recession era and since Gallup first asked this question in 1976. It has been rare for half or more of Americans to say they are worse off, states Gallup’s Jeffrey M. Jone . The only other times this occurred was during the Great Recession era in 2008 and 2009.

Gallup regularly tracks Americans’ ratings of their personal financial situation as getting better or worse, as well as their views on whether the economy is getting better or worse.

Currently, more than four in five U.S. adults rate economic conditions in the country as only fair (38%) or poor (45%), with few describing conditions as excellent (2%) or good (15%). Furthermore, 72% of Americans say the economy is getting worse, 22% say it is improving, and 4% think it is staying the same.

The results are based on a January 2-22 Gallup poll. They follow a year of persistent high inflation, with the highest inflation rates since 1982. Stock market values declined and interest rates rose in 2022, but, on average, personal wages have increased.

In both 2021 and 2022, Americans were evenly divided between saying they were better off versus worse off, including a 41% to 41% split in last year’s survey.

High inflation and other challenging economic factors have not dampened Americans’ expectations about their financial situations in the year ahead. Sixty percent expect to be better off a year from now, while 28% predict they will be worse off.

High inflation, rising interest rates, and declining stock values in 2022 all likely took their toll on Americans’ financial situations, with half saying their situation got worse in the past year, Jones writes.  Lower-income Americans, who have consistently been most likely to report that higher prices are causing them financial hardship, are particularly inclined to say they are financially worse off.

References:

  1. https://news.gallup.com/poll/469898/half-say-worse-off-highest-2009.aspx
  2. https://news.gallup.com/poll/468983/cite-gov-top-problem-inflation-ranks-second.aspx

Building Wealth ‘One Brick at a Time’

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“Rome wasn’t built in a day, but they were laying bricks every hour.” – James Clear

Laying bricks systematically to build a city works similarly well for building wealth. Building wealth is a slow systematic process of investing over the long term and compounding returns over time for most savers and investors. Successfully building wealth is not an overnight success.

“Goals are good for setting a direction, but systems [habits] are best for making progress.” ~ James Clear

January 2023 CPI Inflation Grew at 6.4% annual rate

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January 2023 consumer price index (CPI) report showed that inflation grew at a 6.4% annual rate, slightly higher than expected, reports CNBC.

Stubbornly high January inflation reading and the December CPI report was revised to show a slight gain instead of a decline was largely better than feared, but at the same time unlikely to cause the Fed to back off from its tightening campaign.

“While there were no major surprises in today’s CPI reading, it is a reminder that while inflation has peaked it could be a while before we see it moderate to normal levels,” said Mike Loewengart, head of model portfolio construction at Morgan Stanley Global Investment office.

“The question remains if inflation will be able to fall to the Fed’s target levels with the labor market as tight as it currently is,” he added. “That could be the recipe for a soft landing, but it remains to be seen when the Fed will shift away from rate hikes and if the labor market will lose its resiliency.”

References:

  1. https://www.cnbc.com/2023/02/13/stock-market-today-live-updates.html

Invest with a purpose and a strategy. Pay yourself first.

The purpose of a system is to continue to play the game.

Omega 3 and Metabolic Health

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Omega-3 are essential fatty acids and getting sufficient Omega-3 fatty acid levels are a pillar of maintaining your brain, heart and immune health.  ~ Sports Research

Omega-3 are an essential fatty acids that our bodies cannot produce and have been linked to many health benefits and is necessary for many metabolic processes. In particular, omega 3 may help promote brain and heart health, reduce inflammation, and protect against several chronic conditions.

There are three main types of omega 3 fatty acids:

  • lpha-linolenic acid (ALA),
  • eicosapentaenoic acid (EPA), and
  • docosahexaenoic acid (DHA).

Many studies show that eating fatty fish and other types of seafood as part of a healthy eating pattern helps keep your heart healthy and helps protect you from some heart problems, according to the National Institute of Health’s Fact Sheet for Consumers of Omega-3 Fatty Acids.

Getting more EPA and DHA from foods or dietary supplements lowers triglyceride levels, and may promote brain health.

Decades ago, researchers observed that fish-eating communities had very low rates of metabolic diseases. This was later linked to omega-3 consumption.

Since then, omega-3 fatty acids have been tied to numerous benefits for heart health.

These benefits include:

  • Triglycerides: Omega-3s can significantly reduce levels of triglycerides.
  • HDL cholesterol: Some older studies suggest that omega-3s could raise HDL (good) cholesterol levels.
  • Blood clots: Omega-3s can keep blood platelets from clumping together. This helps prevent the formation of harmful blood clots, according to some older research.
  • Inflammation: Omega-3s reduce the production of some substances released during your body’s inflammatory response.

Our metabolism is defined by a complex series of chemical reactions that occur throughout our whole body, in all our tissues, all the time, to keep us up and running. Our metabolism breaks down nutrients into smaller, bite-size molecules that our cells can use for all kinds of good things, including generating energy and allowing cells to communicate with each other.

Metabolism also includes building larger molecules that our bodies can use to form tissues and perform more complex functions that make our bodies smarter, faster, and healthier.

Thus, your metabolism is a fully functioning factory that takes nutrients in and turns them into, well…you. Your metabolism takes place on a cellular level. Your cells make up tissues, that make up organs, that make up entire bodily systems. When something goes wrong with your metabolism, there’s a domino effect that can add up to some pretty significant issues.

When we’re younger, our metabolism runs like a well-oiled machine. Unfortunately, as we age, our metabolism slows, resulting in an increasingly poorly functioning factory that produces an increasingly less-healthy you

Metabolic syndrome is a term for a group of conditions that place you at a higher risk of developing heart disease and stroke. These include:

  • Excess weight, which can lead to obesity(especially around the midsection)
  • Insulin resistance, which can lead to diabetes and fatty liver disease
  • High blood pressure
  • High cholesterol

These conditions can also cause chronic, low-level inflammation, which researchers now believe is a major underlying cause of many age-related illnesses and diseases.

It goes without saying that diet and exercise are important, but in terms of your metabolic health, they’re incredibly crucial.

Proper diet and exercise are at the foundation of any healthy lifestyle.

Your heart is a muscle, and just like any muscle, you should exercise it. You should aim to dedicate at least 30 minutes a day to movement and exercise.

And, a proper diet includes prioritizing your veggies, eating your whole grains, and choosing lean meats and poultry. Try to reduce your intake of salt, sugar, refined carbs and “unhealthy fats” such as those found in butter, fried food, processed snack foods, and red meat.

References:

  1. https://sportsresearch.com/blogs/wellness/daily-habits-for-a-healthy-heart
  2. https://ods.od.nih.gov/factsheets/Omega3FattyAcids-Consumer/#h1
  3. https://fatty15.com/blogs/news/promoting-your-metabolic-health-a-focus-on-pentadecanoic-acid-c15-0
  4. https://www.healthline.com/nutrition/17-health-benefits-of-omega-3#TOC_TITLE_HDR_5

Benefits of Consuming Dark Chocolate and Cacao

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Dark chocolate can lower stress, inflammation and improve memory

Consuming dark chocolate and/or cacao has several benefits to brain function, including reducing stress levels and inflammation, and improving mood, memory and immunity, according to two studies. The natural stuff in dark chocolate and cacao is chock-full of ingredients called flavanols, antioxidant compounds found in cocoa beans.

Researchers at Loma Linda University Adventist Health Sciences Center in Southern California studied how consumption of dark chocolate with a high concentration of cacao — at least 80 percent — has positive health benefits and effects.

Tests revealed that dark chocolate or cacao can stimulate the body to produce nitric oxide. Nitric oxide relaxes blood vessels to allow an increased flow of blood and oxygen to the heart, brain, and other organs of the body.

In the past, research has shown that cacao is a major source of flavonoids. Because they are extremely potent antioxidants and anti-inflammatory agents, flavonoids benefit brain and cardiovascular health, the researchers said.

“For years, we have looked at the influence of dark chocolate on neurological functions from the standpoint of sugar content — the more sugar, the happier we are,” Dr. Lee S. Berk, associate dean of research affairs at Loma Linda and principal investigator on both studies, said in a press release. “This is the first time that we have looked at the impact of large amounts of cacao in doses as small as a regular-sized chocolate bar in humans over short or long periods of time, and are encouraged by the findings.”

Tests have found that the equivalent of four cups of flavanol-rich cocoa dramatically increased blood flow to the arms and fingers of people after only four days. Such an increase can help people fighting diseases ranging from high blood pressure, hardening of arteries, and stroke to diabetes, vascular dementia, and preeclampsia, a serious condition that affects pregnant women.

 

References:

  1. https://www.upi.com/Health_News/2018/04/25/Studies-Dark-chocolate-can-lower-stress-and-inflammation-improve-memory/3201524661285/
  2. https://news.harvard.edu/gazette/story/2007/02/cocoa-shows-promise-as-next-wonder-drug/

Anti-Aging Laboratory Breakthroughs

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In Boston labs, experiments have shown that aging is a reversible process, capable of being driven “forwards and backwards at will,” said anti-aging expert David Sinclair, a professor of genetics in the Blavatnik Institute at Harvard Medical School and codirector of the Paul F. Glenn Center for Biology of Aging Research.

“Our bodies hold a backup copy of our youth that can be triggered to regenerate”, said Sinclair, the senior author of a new paper showcasing the work of his lab and international scientists.

The combined experiments, published in the journal Cell, challenge the scientific belief aging is the result of genetic mutations that undermine our DNA, creating a junkyard of damaged cellular tissue that can lead to deterioration, disease and death.

“It’s not junk, it’s not damage that causes us to get old,” said Sinclair. “We believe it’s a loss of information — a loss in the cell’s ability to read its original DNA so it forgets how to function — in much the same way an old computer may develop corrupted software. I call it the information theory of aging.”

Epigenetic changes control aging

While DNA can be viewed as the body’s hardware, the epigenome is the software, writes CNN Health. Epigenes are proteins and chemicals that sit like freckles on each gene, waiting to tell the gene “what to do, where to do it, and when to do it,” according to the National Human Genome Research Institute.

The epigenome literally turns genes on and off. That process can be triggered by pollution, environmental toxins and human behaviors such as smoking, eating an inflammatory diet or suffering a chronic lack of sleep. And just like a computer, the cellular process becomes corrupted as more DNA is broken or damaged, Fr. Sinclair said.

“The cell panics, and proteins that normally would control the genes get distracted by having to go and repair the DNA,” he explained. “Then they don’t all find their way back to where they started, so over time it’s like a Ping-Pong match, where the balls end up all over the floor.”

In other words, the cellular pieces lose their way home, much like a person with Alzheimer’s.

“The astonishing finding is that there’s a backup copy of the software in the body that you can reset,” Sinclair said. “We’re showing why that software gets corrupted and how we can reboot the system by tapping into a reset switch that restores the cell’s ability to read the genome correctly again, as if it was young.”

It doesn’t matter if the body is 50 or 75, healthy or wracked with disease, Sinclair said. Once that process has been triggered, “the body will then remember how to regenerate and will be young again, even if you’re already old and have an illness. Now, what that software is, we don’t know yet. At this point, we just know that we can flip the switch.”

To prove the theory and with the help of other scientists, Sinclair and his Harvard team have been able to age tissues in the brain, eyes, muscle, skin and kidneys of mice.

To do this, Sinclair’s team developed ICE, short for inducible changes to the epigenome. Instead of altering the coding sections of the mice’s DNA that can trigger mutations, ICE alters the way DNA is folded. The temporary, fast-healing cuts made by ICE mimic the daily damage from chemicals, sunlight and the like that contribute to aging.

In his lab, Sinclair said his team has reset the cells in mice multiple times, showing that aging can be reversed more than once, and he is currently testing the genetic reset in primates. But decades could pass before any anti-aging clinical trials in humans begin, get analyzed and, if safe and successful, scaled to the mass needed for federal approval.

Here’s how to eat to live longer, new study says

But just as damaging factors can disrupt the epigenome, healthy behaviors can repair it, Sinclair said.

“We know this is probably true because people who have lived a healthy lifestyle have less biological age than those who have done the opposite,” he said.

His top tips? Focus on plants for food, eat less often, get sufficient sleep, lose your breath for 10 minutes three times a week by exercising to maintain your muscle mass, don’t sweat the small stuff and have a good social group.

References:

  1. https://edition.cnn.com/2023/01/12/health/reversing-aging-scn-wellness/index.html

Dietary Fat is Health Food

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“Nothing beats the true healing power of food and food is the best medicine for chronic disease.  It works faster and better, and is cheaper than medication. And all the side effects are good ones.”  ~ Dr. Mark Hyman

Many Americans have long been told that consuming dietary fat makes them fat, contributes to heart disease, and generally erodes their health. Now a growing body of research debunks long held beliefs about dietary fat, revealing the immense health and weight-loss benefits of a high-fat diet rich in eggs, nuts, oils, avocados, and other delicious superfoods, explains Dr. Mark Hyman, M.D., author of “Eat Fat, Get Thin” and director of the Cleveland Clinic Center for Functional Medicine, and founder and director of The Ultra-Wellness Center.

We now know that refined sugars and ultra process carbs, not fat, are the true causes and villains of obesity and heart disease. Overconsumption of refined sugars and processes carbohydrates causes a spike in the body’s production of the hormone insulin, which increases the storage of fat, especially dangerous visceral fat, explains Dr. Hyman. Instead, consuming healthy fats and plant based food, which are packed with powerful antioxidants and photochemicals is what your body and mind need.

Fat is one of the body’s most basic building blocks. The average person is made up of between 15 and 30 percent fat!

Essentially, dietary fat does not cause a spike in insulin.  Unlike eating refined sugars and processed carbs, eating fat makes your body burn fat, rather than store fat. Fats like butter and coconut oil boost your body’s metabolism, suppress hunger, lower triglycerides, reduce fat storage, and even improve athletic performance.

By increasing dietary fat into your diet, and eliminating sugar and process carbs, studies demonstrate that you can lose more weight, improve your metabolic health, and begin to feel and look better.

“Dr. Mark Hyman has helped thousands of people lose weight and lead happier, more energetic lives,” writes Toby Cosgrove, CEO of Cleveland Clinic. “His powerful insights on the dynamics of dietary fat will change the way you think about everyday eating, and show you how easy it is to enjoy a healthier, more satisfying diet.”

In short, the right fats can improve your mood, skin, hair and nails, while protecting you against Type 2 diabetes, dementia, cancer and much more, according to Dr. Hyman. Among his favorite sources of fat include:

  • Avocados.
  • Nuts—walnuts, almonds, pecans, macadamia nuts, but not peanuts (one study showed a handful of nuts a day reduced death from all causes by 20 percent).
  • Seeds—pumpkin, sesame, chia, hemp.
  • Fatty fish, including sardines, mackerel, herring and wild salmon that are rich in omega-3 fats.
  • Extra virgin olive oil (a large study showed that those who consumed 1 liter a week reduced heart attacks by 30 percent).
  • Grass-fed or sustainably raised animal products.
  • Extra virgin coconut butter, which is a great plant-based source of saturated fat that has many benefits. It fuels your mitochondria, is anti-inflammatory and doesn’t cause problems with your cholesterol. In fact, it may help resolve them.

References:

  1. Dr. Mark Hyman, Eat Fat, Get Thin, Little, Brown and Company. February 23, 2016.
  2. https://www.ecowatch.com/dr-mark-hyman-10-reasons-why-you-should-eat-fat-to-get-thin-1882141535.html