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 have another busy weekend ahead of me, so let’s get straight into this week’s commentary…
The future is already here – it’s just not evenly distributed.
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If you don’t know where you’re going, you’ll end up somewhere else.
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Credits and debits
Credit: Have you seen this? The move to abolish property taxes is growing with efforts in Florida, Texas, Georgia and North Dakota, among others, to reduce costs for homeowners. Proponents argue that property taxes undermine real ownership – especially when unpaid bills can lead to foreclosure. Still, critics warn that these plans threaten funding for schools and local governments that rely heavily on property taxes. On the other hand, many of those same critics are not in favor of tax cuts each type. Or worse…
Credit: In other news, after taking into account expected asset class returns and inflation, Morningstar analysts say the highest “safe” withdrawal rate for people retiring in 2026 3.9% of the portfolio assets – that’s 20 basis points higher than Morningstar’s recommended rate of 3.7% for 2025. In 2021, this rate was just 3.3%. By ‘safe’ Morningstar means the highest percentage that gives people a 90% chance of having some money left over after a 30-year retirement. However, depending on subsequent shooting schedules, this may be the case is possible to graduate with a higher initial withdrawal rate. But caution is always advised, as wealth can drain away faster than expected:
Credit: By the way, you should be aware that recent Monte Carlo simulations predict that retirees following the generic “4% rule” now have more to spend, while retirees following the generic “4% rule” now have more to spend. 72% success rate for 30 years, compared to a 92% chance that their money is sustainable for the group that followed Morningstar’s guidelines. Hopefully most people are smart enough to understand the implications of these results when planning life in those so-called “golden years.” And just to be clear, we said “most”…
Gary Larson – The Other Side
Debit: Oddly enough, despite a growing number of major financial analysts recommending a portfolio of 60% stocks, 20% bonds, and 20% physical gold to replace the previously popular “60/40” equity-bond paradigm, the Morningstar model is curious enough. has no gold component included in the calculation. If that were the case, we strongly suspect that the recommended “safe” withdrawal rate at retirement would be slightly higher than what they calculated for this year. And while the general public and Wall Street have been slow to understand this, we are very grateful that the current US Treasury Secretary do got it.
Debit: Unfortunately, the general public no longer understands that the entire debt-based monetary system since 1971 has been based on debt expansion and artificially low interest rates to maintain it. That’s because that was the year that the Fed and US Treasury authorities, tasked with protecting the long-term purchasing power of the US dollar (USD), decided on the merits of break his anchor to the yellow metal outweighed the consequences. Well… as we now know, they were wrong. And to think I thought this guys had cornered the market with bad ideas…
Credit: For what it’s worth, in January the S&P 500 rose 1.4%, the Dow Jones rose 1.7% and the Nasdaq finished 1% in the green. Many investors focus on the “January barometer” and its associated saying: “As January goes, so goes the year” – and the January barometer has a pretty good track record. Since 1945, whenever the S&P 500 has ended the first month of the new year with a gain, the market has risen an average of 16% that year, versus an average annual increase of 9.3%. Then again…
h/t: @julz5421980
h/t: @florintruth
Credit: On a related note, remember when all the markets on Wall Street plummeted last week after Kevin Warsh was named Fed chairman candidate? We certainly do that. Anyway…that led astute macro analyst Franklin Sanders to ask, “Why the wild reaction? Tough is seen as fighting inflation. This is pretty much the same as appointing a new lady running a brothel because she is tough on fornication. After all, what is the Fed’s goal other than to inflate inflation?” Indeed. It’s just a shame that most people are completely unaware of this fact and believe that the Fed is working in their best financial interests.
Credit: By the way, Mr. Sanders also gave a little advice that we would probably all be wise to follow: a tissue of lies andlegerdemain to make the public believe that the Fed will limit inflation, when they not only don’t want to, but they can’t. Stopping inflation would mean stopping the US government, which cannot survive without the Fed monetizing its deficits is inflation.” And we all know that the US government’s only interest at this point is to ensure that it continues to expand with each new annual budget.
Credit: Speaking of pointless, after the Western paper silver market lost 30% on January 30, the price of physical silver in China continued to trade at a 29% premium. What a farce! Macro analyst Matthew Piepenberg admitted that “the CME may have done that won a paper battlebut rising demand for physical silver and gold will win the war, as the paper system loses credibility, power and options with each tick of the global debt time bomb, as the increasing superiority of physical gold and silver will steadily outpace the increasingly desperate mechanizations of the heavily taxed paper exchanges.” Yes. And it seems that, after almost 60 years, time is finally running out.
Credit: Despite the historic silver market decline on January 30, there were no new discoveries – or even a single new silver mine coming online to erase the current four-year-old structural supply shortages caused by decades of artificially suppressed prices. Or, as Mr. Piepenberg put it: “For those who own physical gold and silver as part of a long game of wealth preservation against the short game of desperate but dying paper money, the January 30 speed bump was just that: a bump in an otherwise wide-open road forward.” Got gold?
By the numbers
The most popular Valentine’s Day gifts this year are, in order: a greeting card, a box of chocolates, diamond earrings, a dozen roses and dinner for two, totaling $774 for the entire package. That’s $262 more than the best Valentine’s Day gifts of 2016, in order: a box of chocolates, diamond earrings, a dozen roses, dinner for two and a bottle of champagne. Here are their respective price increases of those same gifts over the past decade:
31% Greeting card
36% Diamond earrings
66% Roses
127% Champagne
160% Dinner for two (excluding tax and tip)
236% Chocolate
Source: Investor observer
The question of the week
Was your last big splurge worth the cost?
- Yes – and I would do it again! 71%
- Meh. It was fun, but never again. 18%
- No – it wasn’t worth it. 11%
More than 2,000 Len Penzo dot Com readers responded to last week’s question and it turns out that for 3 in 10 of you, your last big splurge was disappointing – or worse. On the other hand, that also means that for a significant majority, they will break the bank for an expensive item or experience was worth it.
Last week’s question was resubmitted by the reader Frank. Thank you, sir! If You If you have a question you would like me to ask the readers here, please send it to me at Len@LenPenzo.com and be sure to include “Question of the Week” in the subject line.
Useless News: Grizzly Bear Warning
Following the increasing frequency of conflicts between humans and grizzly bears last year, the Montana Department of Fish & Game is now officially warning all hikers, hunters and fishermen to take extra precautions and stay alert for bears while in the field this summer. Here is the official public advisory from the state’s chief game warden in Helena:
“We recommend that all hikers make noise and wear small bells on their clothing so as not to startle any bears they are not expecting. In addition, we advise all outdoorsmen to carry pepper spray in case they unexpectedly encounter a bear. It is also a good idea to be aware of emerging signs of bear activity; both hunters and hikers should be able to recognize the difference between black bear poop and grizzly bear poop. For example, black bear poop is smaller and contains mainly berries and squirrel fur. Grizzly bear poop, on the other hand, is much larger, smells like pepper and contains bubbles.”
(h/t: Cowpoke)
Squirrel Cam
It only lasts four seconds, but when the camera was on, this little guy was ready for his close-up!
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More useless news
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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
I found this message in my inbox from Heather Madison:
I’m contacting you because I’m looking for a Bozo who is interested in taking on more clients.
I have to stop by, Heather – the clown car is in the shop and my agenda is fully booked.
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Photo credit: public domain
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