It’s time to sit back, relax and enjoy a little Joe…
Welcome to another exciting edition of Black Coffee, your unusual weekly digest of what’s going on in the world of money and personal finance.
I hope everyone had a nice week. Without further ado, let’s jump right into this week’s commentary…
Every cloud has its silver lining, but sometimes it’s hard to get to the bottom of it.
– Don Marquis
Credits and debits
Debit: Have you seen this? Social Security (SS) was originally created to provide a relatively comfortable safety net for retirement, but times have changed: Two in five people who receive retirement benefits say they still works. The question is: what percentage of them are working because their SS benefits are not enough to cover the bills. Oh, and speaking of changing times…
Debit: Perhaps not coincidentally, Dollar Store reported this roughly this week 60% of shoppers earn more than $100,000. That’s up from 50% of new shoppers earlier this year, in the first quarter. Another 30% of those shoppers earn between $60,000 and $100,000. In fact, just as being a millionaire no longer has the same cachet as it once did, the $100,000 income benchmark no longer has the same cachet. It it was too. The moral of the story: your career choice is important. In more ways than one…
Debit: Car repossessions are on track to reach three million by 2025, matching levels seen during the Great Recession and making this the third-worst year on record. Q2 only saw 706,393 seizures, the largest volume in the second quarter ever recorded. Meanwhile, auto loan delinquencies are at their highest level since 2010, with subprime rates at their highest level since 1994. Frankly, that doesn’t sound like a booming economy to us – but what do we know?
h/t: @SpillTheMemes
Credit: In other news: market conditions now favor home buyers. In fact, there are 37% more home sellers than buyers nationwide – making it the strongest buyer’s market since 2013. Now for the punchline: Despite these conditions, potential home buyers are exiting the market at a higher rate than sellers. If YahooFinance reports: “The shift underscores how small gains in affordability are not enough to thaw a housing market where prices are more than 50% higher than pre-pandemic levels and mortgage rates are above 6%.” And no, this is not the answer…
Debit: Since 2008, GDP has more than doubled. However, with the exception of the services sector, many of which add little value, credit expansion is responsible for financing overconsumption and government spending. The proof is in the pudding, just as it is now in American industrial production lower than in 2008, while the debt ratio continues to rise.
h/t: Jesse Colombo Substack
Credit: As macro analyst Alasdair Macleod notes, in the U.S. all “government spending is now 40% of GDPby 23% at the federal level. Today, the easiest way to grow GDP is for the federal government to increase its useless and economically destructive spending. At least state government spending is relevant to their communities. But federal government spending is not – and that’s where the problems pile up.” Oh yes, sure… the politicians in Congress continue to insist that they will reduce their spending habits. The answer to this can be summarized as follows:
Debit: Unfortunately, US GDP figures are misleading because the US government underestimates the true inflation rate. As a result, GDP now represents credit and not economic progress. For example, as Mr Macleod notes: “The current inflation rate in the US is calculated at 3% by the Bureau of Labor Statistics (BLS), using the original inflation rates. Measurement criteria from 1980 calculates this as 12%. If we take nominal GDP growth currently estimated by the Congressional Budget Office at 4.5%, this changes “real” GDP growth from 1.5% to minus 7.5%. But again, this is not the only economic deception we are exposed to. (Don’t think about the corruption.)
Gary Larson – The Other Side
Debit: Of course, there are only three ways out of the debt bubble that is now gripping public finances: 1) default; 2) financial repression for decades; or 3) hyperinflation. Does anyone care that these endgames are now mathematical certainties? Not yet, it seems. That’s why it’s important that you, like this man, carefully assess your risk before deciding how to respond…
Credit: So how did we get here? How could the citizenry even allow such gross monetary malpractices to continue? The answer is decades of government-sanctioned manipulation in the gold and silver markets. As precious metals analyst David Jensen explains, they did this through “the use of commercial promissory notes for gold and silver instead of allocated and segregated vault metal for each contract sold in the market.” And that manipulation “has allowed enormous leverage to build claims for every ounce of metal actually available in the vaults of gold banks.”
“There’s nothing to see here!” says the Commodity Futures Trading Commission, which since 1975 has looked the other way regarding the shenanigans taking place in the silver market to protect the fiat US dollar. Government corruption at its best. (h/t: @jameshenryand)
Credit: It’s not surprising that Jensen notices that decades of price fixing the silver and gold markets have “eliminated these key warning signs of easy central bank monetary policy, (allowing) the gross inflation of the world’s currency equity and capital markets.” Although the undeniable shortage of physical metal now seems to be slowly unraveling the paper tricks of the elites. This will benefit everyone in the long run – if only because it should wake up even the most economically illiterate members of the public about the fiat currency fraud that is blinding them.
Credit: In the meantime, sufficient capital has migrated to physical precious metals, causing silver, for example, to rise in price more than 100% in 2025. Gold is up 62%. Remember that silver and gold are wealth insurance par excellence – and not just colors for decorating your Christmas tree.
h/t: @Duediligenceguy
By the numbers
On average, South Dakota currently has the shortest commute at just 18 minutes. That could be helpful news for people living in the following ten states with the the longest average commute (in minutes):
26.8 Washington
27.0 Virginia
27.6 Illinois
27.9 Florida
28.0 Georgia
28.3 California
28.7 Massachusetts
30.1 New Jersey
30.5 Maryland
32.4 New York
Source: BLS
The question of the week
The result of last week’s survey
How often do you upgrade your phone?
Over 1,700 Len Penzo dot Com readers answered last week’s question and it turns out that 1 in 6 of you replace your phone every three years or sooner. To give an idea of how long it actually takes you between phone upgrades, I finally got a brand new iPhone 16 this year – it replaced my iPhone 8. (Yes, eight.) I suspect I’ll get my next phone upgrade in another ten years or so, assuming the good Lord’s plans still have me here.
If You If you have a question you would like to ask the readers here, please send it to me Len@LenPenzo.com and be sure to include “Question of the Week” in the subject line.
Useless news: Supply Chain
Back in the days of the old Soviet Union, a Russian man walked into a local store in Moscow and noticed that all of the store’s display cases were completely devoid of any products whatsoever. So he asked the clerk, “Don’t you have any meat?”
“Actually,” the clerk replied, “this is the place where there are no fruits or vegetables. The non-meat store is right across the street.”
(h/t: Gregga)
Squirrel Cam
How low can you go?
.
Buy me a coffee? Thank you very much!
For the best reading experience, I present all my fresh Black Coffee posts without ads. If you enjoyed this week’s column, buy me a cup of coffee! (Dunkin’ Donuts; not Starbucks.) Thank you very much!
.
More useless news
Whether you enjoy what you read here – or not – please don’t forget:
1. Subscribe to my weekly Penzo dot Com newsletter only!
2. Make sure you follow me follow me on. And last but not least…
3. Please support this website purchasing my book! Thank you!!!! 😊
Letters, I get letters
Every week I post the most interesting question or comment, that is, if I get one. And people who are lucky enough to have the only question in the mailbox will get their letter marked here, whether it is interesting or not! You can reach me at: Len@LenPenzo.com
Lola sent me a note commenting on all the negative comments I received on this old article explaining why I believe private schools are a rip off:
Wow, Len, you’ve had a lot of criticism for this!
I can handle it. After almost 30 years of marriage to the Honeybee, I have been tested.
If you enjoyed and found this edition of Black Coffee informative, please forward it to your friends and family. Thank you! 😀
My name is Len Penzo and I approved this message.
Photo credit: stock photo
#Black #coffee #bumps #road