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 today.
The Way-Back Machine: Past Posts Of Mine You May Have Missed
From August 2010:
22 Signs Your College Degree Might Not Be Worth the Money – This is the time of year when most college kids are heading off to start the new year. Unfortunately, many are pursuing a degree that will never pay off for them.
And Here’s Some Other Posts You Might Enjoy …
Careful Cents – The Best Health Insurance Options for the Self-Employed
The College Investor – 101 Essential Tips and Resources for College Freshmen
Barbara Friedberg Personal Finance – What are the Best Ways to Save for My Kid?
Snark Finance – Should You Pay Off Debt or Save for Retirement?
Wealthy Turtle – 6 Creative Ways to Cap College Costs
Credits and Debits
Debit: Most people consider kids to be a blessing. Unfortunately, the average cost of raising a child in the US to age 18 is now $241,080; that’s up 3% over the past year. No, it doesn’t include the cost of college.
Credit: One parent who should have no trouble affording kids is Callie Rogers. In 2003, the British mom, at the tender age of 16, was fortunate enough to win $3 million playing the lottery.
Debit: Today Callie has three kids — but just $3300 of her winnings left. Oops. I know what you’re thinking … The answer is: she squandered $415,000 on cocaine. Go ahead; I’ll wait while you read that again.
Credit: Instead of snorting cocaine, perhaps Callie would have been better off using her windfall to flip a mansion or two. In the US, high-end homes are once again being bought, upgraded and resold in less than a year for profits as high as 30%.
Credit: I suspect the resurgence in house flipping is one reason why US homebuilder confidence is at its highest level since 2005.
Debit: Despite the optimism of the housing industry, I wonder if prospective home buyers feel the same way — especially considering mortgage interest rates are expected to continue rising through the rest of the year.
Debit: Speaking of bonds, the 10-year treasury yield — which affects mortgage rates — spiked to its highest level in two years. Although the Fed denies it, that’s going to make it tougher for them to taper their quantitative easing campaign anytime soon.
Debit: Of course, there are some people who will insist that rising interest rates signal a healthy economy. Tell that to the thousands of Chicago residents who stood in line for government subsidized housing this week.
Credit: It’s not just interest rates that are spiking. Gold and silver — the US dollar’s arch enemies — had their best week in months. The yellow metal climbed 4.5% — but silver was the real star, as its price surged 14%.
Credit: You can be sure that gold’s price increase won’t slow China’s drive to hoard as much of it as they can in advance of a potential new gold standard.
Credit: As for the US dollar, its strength will continue to wane as more and more investors come to realize that the Fed will never be able to quit printing money without tanking the financial markets. That’s because the markets have become hopelessly addicted to the Fed’s stimulus.
Debit: For its part, the Dow Jones Industrial average suffered its biggest drop in two months on Thursday; it fell 225 points. The Dow, which was virtually unstoppable all year long, has now posted losses on 11 of the last 15 trading days.
Debit: Let’s see … Despite the Fed’s constant juicing, treasury yields and mortgage rates are now rising, and the stock market has lost its momentum. Meanwhile, precious metals are spiking and even oil prices are increasing despite ample supplies. It all signals serious economic trouble on the horizon.
Debit: Meanwhile, a recent Hindenburg Omen cluster has some people more convinced than ever that financial markets will crash in September or October. In fact, Thursday saw the dreaded indicator make an unprecedented sixth appearance in eight trading sessions. Uh oh.
Debit: Here’s another disturbing sign: The US government ran a $98 billion deficit in July. However, the Treasury reported that the National debt remained unchanged for the month at exactly $16,699,396,000,000; just $25 million under the legal federal debt limit. Huh?
Debit: Believe it or not, the Treasury has been reporting no change to the National Debt for 90 consecutive days now — despite running deficits in May, June and July. How can anyone have faith in the US dollar when the government is blatantly cooking the books? Anyone?
Credit: One would expect that kind of behavior from a banana republic — not the holder of the world’s reserve currency. It’s also one more reason why the US dollar is destined to eventually lose its exorbitant privilege — the only question is when.
Credit: Finally … A man who committed suicide caused a minor frenzy after he left GPS coordinates on a website that supposedly lead to a cache of gold and silver coins worth $200,000. Psst. The coordinates are in Kansas (38.800542, -94.687884). You’re welcome.
Debit: Before you get too excited, keep in mind that the local police — who’ve been busy turning away gold diggers armed with picks and shovels — say there is no buried treasure. They claim they used metal detectors to search the area, but found nothing. Sure. Whatever you say, officers.
By the Numbers
With the Hindenburg Omen showing up more frequently, I thought I’d share a few facts about its more infamous namesake:
1937 Year that the German airship burst into flames while trying to land in Lakehurst, New Jersey.
400 Weight, in pounds, of the Hindenburg’s specially-designed lightweight baby grand piano. The piano was made of aluminum and covered in yellow pigskin.
97 Passengers and crew on board during the Hindenburg’s fateful cross-Atlantic voyage from Germany to the United States. Sixty-two survived.
1 Atomic number of hydrogen, the extremely combustible gas used in the Hindenburg. When it exploded, the doomed dirigible was filled with 7 million cubic feet of the nasty stuff.
2 Atomic number of helium; a far-less flammable alternative. Unfortunately for Germany, the US had a monopoly on helium production at the time and refused to export it.
1 Smoking lounges on board the Hindenburg. I know. But the room was pressurized to prevent hydrogen from entering. It also had a double airlock for extra protection.
17,000 Pieces of correspondence that were carried across the Atlantic on the Hindenburg’s fateful flight. Incredibly, 176 pieces survived the conflagration.
The Question of the Week
Last Week’s Poll Result
Are you ready for summer to end yet?
- No (64%)
- Yes (30%)
- I’m not sure. (6%)
Other Useless News
Here are the top — and bottom — five Canadian provinces and territories in terms of the average number of pages viewed per visit here at Len Penzo dot Com over the past 30 days:
1. New Brunswick (3.14 pages/visit)
2. Prince Edward Island (2.81)
3. Alberta (2.06)
4. Newfoundland (2.01)
5. Manitoba (1.88)
9. Ontario (1.74)
10. British Columbia (1.69)
11. Nova Scotia (1.52)
12. Northwest Territories & Nunavut (1.50)
13. Yukon Territory (1.00)
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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 me at: Len@LenPenzo.com
The other day I found this invitation from Jamie sitting in my inbox:
(I’m) hosting a Google On Air Hangout to discuss buying a car! The event will take place on Thursday, August 153th [sic] at 12pm.
Sorry to be a pedant, Jamie, but I think you meant to say “August 153rd” — and I’m going to be out of town that day.
I’m Len Penzo and I approved this message.