It’s time to sit back, relax and enjoy a little joe …
Wow. Can you believe it’s November already? Christmas will be here before we know it.
I once read that the passage of time is like a roll of toilet paper — the closer you get to the end, the faster it goes. I think that’s true.
In other news, some of you may have noticed that I’ve been a bit detached from the blog this week. That’s because our family dog, Major, passed away on Wednesday. He was 11. Needless to say, it’s been a tough week here in the Penzo household.
Okay, enough babbling. On to the credits and debits …
Credits and Debits
Debit: There are 893,851 active professional physicians in the United States — and 214,000 of them have chosen to not be a part of Obamacare. So far. That means, despite promises to the contrary, it’s getting harder to keep your doctor — no matter how much you like him. Or her.
Debit: Meanwhile, USA Today reports that the housing market is “waking up to a hangover.” It doesn’t help that home mortgage applications in the US have fallen to their lowest level in eight months while the number of homes now going onto the market is increasing markedly.
Credit: The pain hasn’t been limited to Main Street. Earlier this month, Wall Street suffered its worst slump in more than two years as it anticipated the end of the Fed’s third market-pumping quantitative easing program; thankfully, QE finally concluded this week.
Credit: You’d think that, with the headwinds facing the housing market, the high cost of Obamacare, and the end of QE, ailing stocks would continue tanking — but the market made a miraculous comeback instead, finishing off a wild week with record gains and the Dow and S&P 500 at all-time highs. Yes, again.
Debit: No, the markets didn’t rise on the strength of the underlying world and domestic economies. The markets rose on Friday only because they found a new financial drug dealer to replace the Fed and keep the easy money flowing: the Bank of Japan.
Debit: The Wall Street Journal notes that the BoJ is tripling the pace of its stock market and property fund buys, thereby increasing its asset purchases from $550 billion to $730 billion per year. Hey, folks — keeping the illusion of a healthy economy alive isn’t cheap.
Debit: As Zero Hedge points out, the BoJ will be buying most, if not all, of the new bonds that the Japanese government issues now. That’s on top of the additional stock purchases — even though the BoJ already owns 2% of the entire Nikkei. Talk about a market fantasy land.
Credit: Speaking of the Nikkei, after the BoJ announced it would be ramping up the dosage of its financial stimulus, Japan’s addicted stock market rose 1000 points in seven hours; it finished at a seven-year high. No — there’s no addiction here.
Debit: Unfortunately, as this chart from ZeroHedge points out, stock market performance — whether it is the Nikkei, the Dow, or the S&P 500 — no longer has anything to do with fundamentals and everything to do with central bank policy:
Debit: The markets are dead. What we’re witnessing are the impacts of a currency war in its final stages. The world’s central banks cannot operate in a deflationary environment, which is why they’re artificially propping up prices — and debasing their currencies in the process.
Debit: Of course, the central banks have been forced into this war because world debt is now more than $223 trillion and the ever-increasing cost of servicing that debt has the world economy in a stranglehold. We are living in historic times — although most people have no idea. They will.
Debit: After decades of reckless deficit spending, the math is finally catching up to us. And here’s the rub: Our debt-based monetary system ensures that the only way out of this mess is via hyperinflation — or a preemptive reset — but not before the current bout of deflation that has enveloped the world markets reaches a crisis point. So hedge accordingly.
Credit: Speaking of financial hedges, in July a prospector found a gold nugget in Northern California weighing — get this — six pounds! Yep. Although the spot market price for that much gold is currently $100,000, he sold the rock for $400,000.
Credit: And if you think that gold hunter was fortunate, consider this: A Chicago woman recently received two Illinois lottery scratch-off tickets from her Dad for her 19th birthday — and one of them revealed a $4 million prize. I wonder how her dad plans on topping that next year.
By the Numbers
With Halloween officially behind us, let’s take a look at the financial impacts, as well as a few other fast facts about one of the biggest holidays of the year:
148 million Estimated number of Americans who celebrated Halloween this year.
$840 million Amount spent this year on Halloween decorations.
$66.28 Amount the average American spent on Halloween in 2014.
40 Percentage of Americans who dressed up this year.
12 Percentage of Americans who dressed up their pets.
$23.37 The average expenditure for a Halloween costume.
$20.29 The average amount spent on Halloween candy this year.
15,000 Number of Halloween “pop-up” stores in 2014.
34 Percentage of Americans who believe in ghosts.
Source: Local10
The Question of the Week
[poll id="32"]
Last Week’s Poll Results
Lawyer jokes: well-deserved or unfair?
- Well deserved. (78%)
- I’m not sure. (19%)
- Unfair. (3%)
More than 300 Len Penzo dot Com readers weighed in for this week’s survey — and as you might expect, four out of five respondents say those mean-spirited lawyer jokes are well deserved. I agree. Just 3% of those polled believe the jokes are totally unfair. (I’m assuming most of them are probably lawyers.)
Other Useless News
Programming note: Unlike most blogs, I’m always open for the weekend here at Len Penzo dot Com. There’s a fresh new article waiting for you every Saturday afternoon. At least there should be. If not, somebody call 9-1-1.
Hey! If you happen to enjoy what you’re reading — or not — please don’t forget to:
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Top 25 Referrers for October
It’s the first weekend of the month, which means it’s time once again to thank the top 25 referring websites to Len Penzo dot Com.
1. Creative Home Ideas
2. Business Insider
3. Kiplinger
4. Rockstar Finance
5. Facebook
6. MSN
7. The Globe and Mail
8. LifeHacker
9. Budgets Are Sexy
10. Deseret News
11. Art of Manliness
12. Wisebread
13. Modest Money
14. Ready for Zero
15. Forum: Mr. Money Mustache
16. Save Outside the Box
17. Money Crashers
18. The Apartment Prepper
19. Getting a Rich Life
20. Coin Thrill
21. Stacking Benjamins
22. Escaping Dodge
23. Money Talks News
24. Don’t Quit Your Day Job
25. Frugal Fringe
Thank you to everyone who refers their readers to this little ol’ blog! It’s much appreciated.
(The Best of) 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
For some reason, way back in 2011, Louie felt an overwhelming need to deposit this question in the Len Penzo dot Com mailbox:
Hey Len! How many calories are there in a booger?
Heh. You don’t really expect me to bite on that one, do you?
I’m Len Penzo and I approved this message.
Photo Credit: brendan-c
Len,I’m very sorry to hear about Major passing. One day he will greet you again at the Rainbow Bridge.
I’ve lost two Bernese Mountain Dogs to cancer.Matilda was twelve and Tequila was eight when they passed.
Losing our canine buddies is as tough as it gets. Only dogs know how to give unconditional love at all times.
It’s sad that our larger breeds have short life spans. They pack a whole lot on love into that time period.
I still have my Golden Retriever with me.Maggie is nine years old and experiencing a second childhood “-)) with tons on energy.
Last week my next door neighbors house burnt down. Fortunately they were not home,unfortunately their pets were and could not be saved. They kids are devistated.
Len, I suggest you get another buddy soon as it does help to fill that empty spot in your heart. Dogs are truer than people and have only love and dedication to their human buddy to give.
Thank you, Ray. I agree, the larger breeds may not live as long, but they are something special. I’ve owned two Great Danes during my lifetime and the oldest one only made it to seven. I love the breed — they are the biggest-hearted most-lovable dogs in the world — but I had to move on because I can’t bear their short life spans.
Last year we got a second Rhodesian Ridgeback, Jack — so we still have him to love.
So Len,
I have purely “speculative guess” question for you.
When is the reset going to happen? This is just an opinion question, you can feel free to change at anytime. I won’t hold you to it. 🙂
I don’t know, Josh. My gut tells me the powers that be are almost out of tricks to keep this game going — but they never cease to surprise me. It seems as if they’ve been using duct tape and bailing wire since at least the last big crash in 2008, if not before. There is real distress in the currency markets now — and the big drop in oil and precious metals signal real trouble is brewing. Remember, gold and oil had similar big declines ahead of the 2008 crash.
If I had to guess, I think there will be a reset (done over the course of a weekend) before the end of 2015. However, there is a chance that this whole system could limp along in this zombie-like state for years.
Worst case, I don’t think they will be able to hold the current system together beyond 2019.
One thing is certain: We will not see any significant real (as opposed to nominal) growth again until we have a reset. There is just too much debt now on the books — and it can only get worse from here because our perverse debt-based monetary system requires an ever-increasing expansion of that debt just to keep the system going. Like I’ve said before, the math doesn’t lie.
When the time comes to replace a beloved pet, head to “petfinder” first, plug in your zip code and desired breed (including mixes) and give a home to a deserving, abandoned animal. Please consider not adding to the problem of pet overpopulation and euthanasia by buying from a puppy mill. You can get a lot of wonderful dogs, cats, horses and all other types of pets who are often six months to eighteen months, have all their meds, have been altered, and have known temperaments, for a miniscule amount of money. And a rescue dog if chosen wisely will love you as passionately as a puppy, if not more so because you have given him a home.
So sorry to hear about Major… now no more of him being included in your taste tests.
You have my condolences Len. Here’s hoping Jack can help to perk you and your family up.
Thank you, Taddy. Yes, he was the anchor panelist for all of my taste test experiments. A bit of trivia: In all of those taste tests — and I’ve done more than a dozen of them so far — Major eagerly gobbled up everything he ever tasted except for one item: Quaker Cinnamon Life cereal. He actually spit it out! (He liked the store-brand oat squares though. That’s more proof that the store-brands can be better than the national ones!)
Are there ANY good/strong/protected national economies out there?
If every country has huge debt loads and is debasing their currencies, won’t we all reset together? Or is it a zero-sum game and when the reset happens, will there be some CRAZY big winners? If there are big borrowers, there must be some big lenders out there too, right?
“Are there ANY good/strong/protected national economies out there?”
In short, Brian: no. Without going into the details now, the international monetary system is tied to the dollar. Because of that, national currencies are all tied together — when the first currency falls, the others (with the possible exception of the euro, which marks its currency to the market price of gold) should follow; and I expect relatively quickly.
When the reset occurs — whether it’s planned or not — there will be a tremendous transfer of wealth from those who have paper-based assets (think bonds, stocks — especially financial-based stocks, etc.) to those who own precious metals, and other hard assets.
Here’s another thing to consider: If there is a reset, then there should also be a transfer of wealth from lenders to debtors with fixed-rate loans. For example, mortgage holders should, in theory, be able to pay off their loans much easier with sharply-devalued dollars. Although there are those who believe laws will be passed to keep this from happening. I disagree with that; I don’t think the public will allow the government to get away with inflating away its debt with sharply devalued dollars, while still forcing its citizens to still pay off its debts at the full value. I believe that would bring out the pitchforks and torches — and, who knows, possibly even the guillotines.
I wonder how many Americans can even understand what you just said, let alone get mad about it enough to grab a pitchfork. If they do change the laws, there will be a media blitz about how it is the right the thing to do, how it is fair, how it is necessary for the common good. Blah Blah, The sheep will believe what they are told. A few of us will want to grab our pitch forks but will realize it is pointless when so many others will just sit there.
I wonder if they do pass the laws, if there will be a window of time where the “price” of PM’s will rise and we can sell them and sneak in and pay off the mortgage before the laws change?
This is all just guessing about a very questionable future.
I hope you are right. hope they don’t change the laws.
So sorry to hear about your dog 🙁 At least he got lots of good treats in the taste tests.