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 whats been going on in the world of money and personal finance. Heres what caught my attention over the past week
As I write this it’s a bit after midnight. I just got back from seeing Maroon 5 in concert under the stars at the Greek Theater in Los Angeles. Despite what Greg over at Control Your Cash thinks, they put on an awesome show. As an added bonus, One Republic was the opening act and they were phenomenal as well. Over all it was a great evening!
Okay, enough yapping. Let’s get down to business.
Blogs I’ve Been Following This Week
Yes I Am Cheap – 5 Dumb Ideas That Made Millions. There are lots of examples of really dumb ideas that have made millions of dollars for their brainchilds – or should I say brainchildren? For example, there’s Facebook. Dumb. Then there’s Twitter. Dumber. But even those ideas aren’t nearly as lame as the guy who made millions selling some clueless movie industry wonk the screenplay for The Back-up Plan, a so-called comedy about artificial insemination – that’s not a typo, folks – starring Jennifer Lopez. After all, when it comes to comedy, nobody does it like J-Lo! I should know – I have all her albums. And while I may eventually get my dollar back from Netflix, the 93 minutes of my life I wasted watching the movie are now gone forever. (I didn’t order this one either, folks. That one falls squarely on the Honeybee.)
Kiplinger – More Men Filing Sexual Harassment Charges. The world really has been turned upside down. If it’s not bad enough that women no longer need us men for procreation, now we have to deal with increased sexual harassment too from the fairer sex. This story in Kiplinger notes that the trend is due to more women in managerial positions that involves supervising men. If you think I’m going to make a joke here you’ve got another thing coming – er, no pun intended. (I know. Just move along and we can all pretend that never happened.)
Redeeming Riches – 7 Most Important Habits of Rich People. This is a nice article by Jason, but I notice he forgot to list step one: come up with a really stupid idea that will make millions of dollars.
…And Here’s Some Other Posts You Might Enjoy:
Out of Your Rut – How Car Leases Torpedo Your Finances
Live Richly – Boomerang Kids
Control Your Cash – I’ll Shop at Trader Joe’s When I’m Dead
Financial Samurai – How to Make Six Figures A Year At Almost Any Age.
Oblivious Investor – Planning Your Retirement Spending
Darwin’s Money – 3 Supercharged ETFs to Beat Gold Price Returns
Financial Highway – Can Unused Credit Cards Hurt Your Credit Score?
Bucksome Boomer – 3 Lessons from Babies
Barbara Friedberg Personal Finance – The 20 Minute Guide to Investing Is Here
Simple Financial Lifestyle – What are Your Personal Finance Ugly Ducklings?
Green Panda Tree House – Retirement Planning When You Are in Your 20s
Couple Money – Using Microsoft Excel to Save Money on Your Phone Bill
The Way-Back Machine: Past Posts Of Mine You May Have Missed
From May 2009:
Inflation: Why You Should Fear It, And Why the US Wants It – Last year I made this bold prediction: “In order to pay its massive bills the United States will have no choice but to abandon its commitment to fight inflation and ramp up the output of the Treasury printing presses.” Crazy?
Credits and Debits
Debit: Maybe I’m crazy like a fox. The Wall Street Journal reported this week that two Fed officials are considering using inflation as a tool to encourage folks to save less and investors to get their cash off the sidelines.
Debit: And so it begins. This is an obvious trial balloon, released by the Fed, to see how the public reacts to this proposal. I don’t think most Americans are paying attention.
Debit: Of course, the real motive here is not to “increase investment” or get the economy moving. But inflation is the most expeditious and painless way for politicians to pay for the trillions in debt and unfunded obligations that this country has accrued since FDR ignited the era of Big Government and massive social entitlement programs.
Debit: The only other alternatives for paying off this debt is to cut spending by reducing the size and scope of the government and its unfunded obligations – or increase taxes. The latter is economic suicide while, over the long term, the former is the best way out of this mess. Unfortunately, the current politicians in power are still looking to increase spending and expand the size of government even further.
Debit: What should have everybody fighting mad, though, is that instead of openly raising taxes through the legislative process, our representatives can choose to use inflation as a “silent tax” that pays government debt through devaluation of the dollar.
Credit: Meanwhile, with the price of gold reaching record highs for the third consecutive week, those who have invested in the shiny metal are more than happy to watch the Fed pull away from their mandate to control inflation.
Debit: In any case, the Fed chiefs’ inflation suggestion should send a shiver down the spines of not only people on fixed incomes, but everyone and anyone with retirement savings. In essence, it is just another form of redistribution of wealth – from the financially prudent to the financially irresponsible.
Debit: Remember that hyperinflation can wipe out a lifetime’s worth of prudent savings in almost no time at all.
Debit: “But, Len, we are closer to a deflationary cycle, rather than an inflationary one.” Maybe. But one only has to look back at the Great Depression to see how the US government transitioned from a severe deflationary period to one of high inflation on a dime (within months): the government changed the rules of the game.
Credit: “If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered.” – Thomas Jefferson.
By the Numbers
Don’t get complacent simply because there is no sign of inflation, despite all the deficit spending. History has shown things can turn quickly – in either direction.
15.6% The annual inflation rate for 1920.
-10.5% The annual inflation rate for 1921.
30 The number of consecutive months of negative or zero inflation (deflation) between October 1930 and May 1933.
-18.4% The annualized inflation rate in January 1933.
37.8% The annualized inflation rate in June 1933.
Other Useless News – Yes, That Was Me on San Francisco Radio Station KGO
Last weekend I was a guest on Michael Finney’s personal finance show over at San Francisco radio station KGO. Michael wanted to discuss my article entitled “Teach Your Kids How to Be Personal Finance Losers (In 6 Easy Steps).” It was a lot of fun and I want to thank Michael for having me on his show! I have to tell you, though, I was really nervous. My kids loved listening to their dad on the radio. Then again, the Honeybee wasn’t impressed at all; although to be fair, she did say I have a face that’s made for radio! Hey, wait a… Oh never mind.
If you want to hear my first foray into the world of AM talk radio, click here to check out the podcast. It’s a 5-minute interview and I come on at about the 45-minute mark.
Here’s another friendly reminder for ya: if you happen to enjoy what you’re reading – or not – please make sure you follow me on Twitter. And, if you’ll be so kind, don’t forget to subscribe to my RSS feed too! 🙂
Letters, I Get Letters
This week I got an interesting note from Shung Hin Hui, who wrote:
“I have $15.5 million for you. Contact me for details.“
I have to respectfully decline; I’m making way too much money blogging to be bothered with a measly $15.5 million. Maybe you should try John Chow.
If you have a question you’d like to ask, or a comment you’d like to make regarding some of my irritating opinions (assuming my web host provider, Mud, manages to keep its servers up and running), please feel free to drop me an e-mail at: Len@LenPenzo.com
I’ll feature the most interesting question or comment I get each week here on Black Coffee assuming I get one, that is.
If you’re lucky enough to be the only question in the mailbag I’ll highlight your letter, whether it’s interesting or not. 😉
Carnival News
This week I had articles featured at the following carnivals:
(No carnivals this week! I lost my tickets.)
Len
This cup of coffee was hilarious! I’m still laughing about J-LO’s “comedy” albums. Hee, hee. Personally, I’d take the $15.5M if I knew that the check wasn’t fake and that it would cost me a “finder’s fee” sent to someone in Nigeria. Thanks for including my crazy post! I keep saying that I’m waiting for stupidity to set in so that I can make millions.
Hi Len, Thanks for promoting my new eBook: 20 Minute Guide to Investing! You are the best 🙂
@Sandy: No doubt that $15.5 million is a scam. People must still be falling for those schemes though, because they are still being pushed out there – even after all these years.
@Jennifer: Inflation is hiding in the weeds – it’s going to pop up as soon as the economy starts to turn around.
@Barb: A pleasure as always! 🙂
Thanks Len. For the link to my post this week. As always enjoyed the roundup.
Is it just me, or have the debits been grossly outnumbering the credits in recent weeks? Are we pessimists, or merely realists?
24 days to the GOP takeover of the House (and maybe the Senate). I really hope that this time, they don’t forget who brought them to the dance.
@BSimple: And thank you for the weekly shout outs, B! 🙂
@Greg: Very astute observation, Greg! You know, I have really struggled to find any credits at all. If the GOP does revert back to what got them fired in 2006 and 2008, then it will be time to start a third party.
As long as that third party doesn’t reference any beverages.
I’m late to the round-up party here (away for the weekend and just getting caught up) but a belated THANKS for including my post.
On inflation…I think you’re right on the money. The sitution can turn at any moment, and it’s looking like the most politically feasible direction.
I’ve never been completely sold on the “we’re in a deflation” argument anyway. Even while real estate, stocks and wages were falling, prices of things we can’t do without–utilities, repairs and healthcare among them–have been quietly rising.
As others smarter than me have said, “inflation is baked into the cake”. The evidence and motivation for it are all around us, if we can turn off the talking heads long enough to see it…
Hi Len, thanks for linking to me! That was fascinating about the deflation to inflation switch in the Great Depression. I didn’t know that. The GD is popularly portrayed as several years of deflation.
I totally agree we will see high inflation not deflation. There are too many people $100k upside down on their houses for the Fed to allow deflation. Whenever they talk about deflation I suspect they’ve already started the printing press.