Black Coffee: You Can Put Lipstick On a Pig — But It’s Still a Pig

It’s time to sit back, relax and enjoy a little joe …

Welcome to another rousing edition of Black Coffee, your off-beat weekly round-up of what’s been going on in the world of money and personal finance.

Let’s get right to it this week …

Credits and Debits

Debit: According to USA Today, only 1 in 8 Americans can afford the so-called American dream; that’s because their calculations show it now costs $130,357 annually. This is news?

Credit: Frankly, the real American dream was lost a long time ago. It started when Americans began discounting the importance of self-reliance and agreed to sacrifice liberty for government-provided “security” and dubious promises of cradle-to-grave protection.

Debit: Let’s face it; the United States of America is not what it used to be, folks — and the nation continues to be destroyed from within by a coalition of crony capitalists and advocates of the big-government nanny state on Capitol Hill.

Debit: In their world, up is down and black is white. For example, they are insisting that “immigration reform” is essential because businesses can’t find enough unskilled workers — even though the labor participation rate is at a 36-year low. Huh?

Credit: Here’s an idea: If US businesses are having trouble attracting employees, they can offer higher wages — and our politicians can eliminate the countless government handouts that currently permit otherwise able-bodied Americans to survive indefinitely without working.

Credit: Believe it or not, there was a time — before the US officially became a banana republic — when the federal government was honest enough to admit that uncontrolled illegal immigration only served to further depress US wages for unskilled workers and those with low-paying jobs. Not anymore.

Debit: Today, the White House says giving amnesty to millions of unskilled illegal immigrants would “strengthen the middle class.” If you believe that, you also believe that sweet is sour, and blue is red.

Debit: It’s not just the Executive branch; the Legislative branch is no better. Using the CBO’s twisted calculations, so-called “immigration reform” will reduce deficits by almost $1 trillion over the next two decades. Only in Utopia, folks.

Debit: Yes, that’s the same CBO that claimed Obamacare would miraculously reduce the federal deficit by $120 billion — despite $100-million websites and the addition of an enormous government bureaucracy. I know. Even so, that estimate persuaded fence-sitters in Congress to ultimately vote for the disastrous bill.

Credit: For what it’s worth, the CBO, with its tail between its legs, quietly rescinded their ridiculous Obamacare claim earlier this year. Too bad the damage is done.

Credit: Did you see this? If you include liquids derived from natural gas, Saudi Arabia is no long the world’s biggest oil producer. Nope. That honor now belongs to the United States. You’d never know it though with gasoline prices still at a six-year high.

Credit: Speaking of oil … Another nail was hammered into the petrodollar’s coffin last week when the CEO for the second-largest oil producer in Europe said he believes “there is no reason to pay for oil in dollars” anymore.

Credit: Meanwhile, the French finance minister took his own shot at the US dollar when he called for “rebalancing” the currencies used for global payments. The drumbeats are getting louder, folks.

Debit: How bad is the economy? Paul Craig Roberts, who was Assistant Secretary of the Treasury under Ronald Reagan, says that if the US calculated inflation as it did in 1980 (i.e., honestly), last quarter’s GDP would officially be negative 8.5% — not the reported contraction of 2.9%.

Debit: Of course, big-government comedians economists understand that a massive nanny state depends on politicians who lack fiscal discipline, which is why Paul Krugman is still trying to convince people that the Fed’s unrestrained money printing hasn’t resulted in any significant inflation. Apparently Paul no longer shops for groceries, gasoline, and other necessities.

Debit: Thankfully, there are a growing number of open-eyed economists and financial analysts who now see the writing on the wall: the Fed is trapped and we’ve pushed our flawed debt-based monetary system about as far as it can go.

Debit: Unfortunately for all of us, short of a sustained, but very unlikely, bout of spectacular growth — or a complete reset of the international monetary system — the only way out is via hyperinflation. The only question is the timing. Prepare accordingly.

By the Numbers

It’s almost time to pay the piper. Here’s why the US dollar — and our artificially-high standard of living — will soon be a thing of the past:

$17.59 trillion The US National Debt.

$122 trillion US unfunded liabilities (i.e., promised payouts for Social Security, Medicare, Medicaid, and other entitlements.)

$604 billion Money budgeted for national defense.

$1.73 trillion Combined annual Medicare, Medicaid and Social Security expenditures.

$249 billion Money budgeted for government pensions.

$226 billion Current annual interest payment on the National Debt.

0.25% Current federal funds rate established by the Fed.

20% Peak federal funds rate imposed by the Fed in June 1980 during their campaign to arrest high inflation.

$3.52 trillion Approximate annual interest payment on the current National Debt if rates were raised to 20%.

$3.52 trillion Approximate federal spending to date for the current fiscal year. (Which is why the Fed can no longer raise interest rates high enough to protect the US dollar from hyperinflation.)

Source: US Debt Clock

The Question of the Week

Did you watch any World Cup games this year?

View Results

Loading ... Loading ...

Last Week’s Poll Result

How many US states have you been to?

  • 11 – 20 (26%)
  • 21 – 30 (21%)
  • 1 – 10 (21%)
  • 31 – 40 (12%)
  • 41 – 49 (12%)
  • 0 (4%)
  • 50 (4%)

Anybody who has taken a road trip from the Atlantic to Pacific oceans can appreciate just how big a country America truly is. I’ve visited 45 states during my lifetime — with only Wisconsin, North Dakota, Montana, Idaho and Alaska to go. Anyway, last week’s question came about because I was curious how much of America my readers have seen. Well … almost 500 people answered and it turns out that almost half can lay claim to setting foot in at least 21 of the 50 US states — and 1 in every 25 have hit all 50 states! I hope to reach that impressive milestone within the next couple of years; the only question is will I try to tackle it in one epic road trip — or save Alaska for a special trip unto itself.

Other Useless News

Here are the top — and bottom — five states in terms of he average number of pages viewed per visit here at Len Penzo dot Com over the past 30 days:

1. North Dakota (1.86 pages/visit)
2. Idaho (1.82)
3. Tennessee (1.78)
4. Nevada (1.70)
5. Michigan (1.69)

46. Oregon (1.32)
47. Maine (1.32)
48. Mississippi (1.26)
49. Rhode Island (1.25)
50. Vermont (1.21)

Whether you happen to enjoy what you’re reading (like North Dakota) — or not (ahem, Ben & Jerry) — please don’t forget to:

1. Click on that Like button in the sidebar to your right and become a fan of Len Penzo dot Com on Facebook!

2. Make sure you follow me on Twitter!

And last, but not least…

3. Don’t forget to subscribe via email too! Thank you.

Here’s Some Posts You Might Enjoy …

Save Outside the BoxBuying New Cars Is Financially Irresponsible and I Just Bought One

Barbara Friedberg Personal Finance - Is Holding a Garage Sale Worth It?

Money Crashers - 11 Best Part-Time Jobs with Health Insurance Benefits

Budgeting In the Fun StuffMy Life’s Organizational Tools

Ready to Be Rich9 Things to Tell Yourself If Your Life Is a Financial Mess

Letters, I Get Letters

Every week I feature the most interesting question or comment — assuming I get one, that is. And folks who are lucky enough to have the only question in the mailbag get their letter highlighted here whether it’s interesting or not! You can reach out to me at: Len@LenPenzo.com

Christina was wondering about something:

Len! I have a serious question. Why do you call it “Black Coffee”?

Because “Sassafras Tea” was already taken.

I’m Len Penzo and I approved this message.

Photo Credit: brendan-c

Comments

  1. 1

    says

    Len, I’m afraid to admit that I didn’t watch the world cup. Please don’t tell anyone. but, I did go to an arena football game this week end (does anyone even know about this sport?)

  2. 2

    says

    I absolutely agree with the fact that it is crony capitalism that is eating us from inside. The fact remains that our economy encountered subprime crisis followed by an economic crisis is due to some handful crony capitalists formed CDOs and mortgage based derivatives on a flawed asset such as subprime loan. Moreover, failure of rating agencies to point out the flaw in this is that more worrying. And now the spiraling debt amount, which is out of control now. Though the market scenario along with employment condition is definitely better than what it was two years back, it remains to be seen whether it can reach normalcy in the coming two to three years or not. Keeping my fingers crossed to see a better tomorrow.

  3. 3

    Karen Kinnane says

    “$122 trillion US unfunded liabilities (i.e., promised payouts for Social Security, Medicare, Medicaid, and other entitlements.)” As a person who has worked for the last 51 years and contributed to Social security that entire time, and who as a self employed person and as an employed person who has contributed the employer’s share of SS payments or had employers contribute that SS payment, I RESENT having my recent Social Security payments labeled as “entitlements” as they were paid for me by 51 years of contributions. “Contributions” (as these extorted payments are laughingly called) on my current and future earnings are those from which I will never derive a single benefit as they disappear into the insatiable maw of the Federal government without a trace and with no increase to my social security payments. It is not my fault that the President and Congress of the United States STOLE my contributions and the contributions of my fellow citizens to buy votes with welfare programs for the non productive and overly generous government union benefits all out of proportion to those of the private sector workers. If I had been allowed to put my and my employers’ Social Security payments into a brokerage account I would now, with modest dividend increases, be receiving FOUR TIMES my current SS payment. I would also, after my death have a nice lump sum left for my heirs. The government has stolen my money and now claims to be giving me charity. The government has also stolen the Social Security payments of anyone who died before collecting any “benefits” and no one ever says what happened to that money either.

    • 4

      Len Penzo says

      “If I had been allowed to put my and my Social Security payments into a brokerage account I would now, with modest dividend increases, be receiving FOUR TIMES my current SS payment. I would also, after my death have a nice lump sum left for my heirs.”

      You’re right, Karen. We’ve all been robbed. The money we contributed was stolen by the politicians and used to pay for general fund items a long time ago.

      I have paid in almost $200,000 of my own money into Social Security myself. That is cash I will never see — as the system will implode before I ever get a chance to collect. Either that, or I will get my cash, but by the time I receive it, the payments will have zero purchasing power.

      We all would have been much better off if our incompetent, inefficient government had just forced us to save our money in a privately-managed retirement fund — regardless of whether it was put into stocks, bonds, CDs, money market accounts, or a mattress.

  4. 5

    kammi says

    Agreed. I would prefer to take the money and invest it myself, but I”m not from the US (only working here) and already have a house in my home country, and by the look of it, I definitely don’t plan on staying in the US so I’m just investing investing investing every penny; there is nothing here I really wish to consume/ buy. The other part of my family lives in the UK, so I have that covered. The financial ineptitude and lack of accountability right now in the US is insane. Btw, the World Cup was GREAT, if even JUST to see which sponsors made it to the field ($$, investing internationally, etc) I feel badly about saying this, but I really hope this doesn’t turn out to be the next Cyprus :(

  5. 6

    Doug says

    Good stuff Len. It’s very obvious, thanks to our politicians and the Federal Reserve, we are now a bankrupt nation. Why anybody would buy our debt (at its current pricing) is beyond me. Once the world figures this out, look out below!! Like you said, the only way out of this mess is through super extordinary growth, and with the buffoon’s in Washington (white house, congress, and the senate, plus the Fed) that is very unlikely.

  6. 7

    Paul N says

    Who exactly is the benefactor that gets the monthy interest payments?
    How does one get in on that action?
    Nice comments by Karen.
    But don’t you know, you didn’t earn that money it was given to you. Just by being one of the great subjects of the big guy in that white house. Count yourself as lucky.

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>