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.
Apparently, I’m not the only one who thinks Derrick Peltz was robbed when Claudia Sandoval was crowned the winner of MasterChef Season 6. Wow. What were Gordon Ramsay, Graham Elliott and Christina Tosi thinking?
Oh well, onward and upward …
Credits and Debits
Credit: If you listen to the usual suspects, the US has been enjoying an economic recovery for the past six years — even though they’re now admitting it hasn’t lifted the living the standards of low- and middle-income Americans. That doesn’t sound like a “recovery” to me, but okay …
Debit: After all, if we’re in the midst of a recovery, then why on Earth did the Fed decide this week to maintain its zero-interest rate crutch, which has been propping up the US economy since 2008? If they won’t raise rates now, then when? Bueller? Anyone?
Credit: Of course, the Fed has been intimating it would raise rates after the economy recovered for years. Now its credibility is shot. Assuming it wasn’t already.
Debit: By standing pat — yet again — the Fed is tacitly admitting it’s all a charade. After almost seven years, they’re still afraid a minuscule 25 basis-point rate hike will collapse the economy. (Psst. It probably would.)
Debit: Clearly, something isn’t right. It’s hard to see how anyone can claim the economy has recovered when incomes are 6.5% lower than when the recession began. Aside from the usual suspects, that is.
Credit: As for the housing market, there are a growing number of signs that it has finally reached a top. The latest indicator is plunging sales for mansions listed at $100 million or more. Not that the millionaires who buy them usually have to worry about that.
Debit: Then again, with some people spending $75 million for a birthday cake these days, I can see why they’d be less inclined to drop $100 million on pricey real estate. No, really.
Debit: Let’s face it folks: It’s pretty hard to argue with a straight face that the US economy is back — well … unless you’re referring to the fact that the median household income is at the same level it was back in 1989.
Debit: And while household incomes continue falling for most Americans, the federal government’s income continues to set records: almost $2.9 trillion over the past 11 months alone. Even so, the government has still managed to run up a $530 billion deficit over the same period. I know.
Debit: Speaking of government deficits, Illinois is so deep in debt now — $163 billion and climbing — that they’re stuck issuing IOUs to state lottery winners. You can blame those ridiculous government pensions and retiree healthcare expenses for the bulk of the red ink. As usual.
Debit: The irony is, eventually the state of Illinois will make good on its paper promises by paying their lottery winners with more IOUs — otherwise known as US dollars. The only question is: Will the buck still buy something when they finally collect?
Debit: By the way, on Friday gold closed at $1138.93 per ounce. Meanwhile, the Comex now has 255 paper claims for every ounce of physical gold in their vaults that’s available for sale.
Credit: Yes, that’s the biggest disparity between paper and physical gold ever. With that in mind, it’s only natural to wonder what physical gold’s true purchasing power really is. We may find out soon. Or not.
Debit: The bottom line is that the precious metals market is now a pathetic charade of breathtaking magnitude. One thing is certain: When this criminal economic sleight of hand finally stops working, it will change America as we currently know it — and a lot of people won’t be happy.
Credit: And finally … A California man is taking Experian to court, claiming that they’ve sold reports marking him as dead for more than a year, thereby making it impossible for him to obtain credit. Hmmm. Maybe Experian should consider running Chicago’s elections. Hey … It’s just a thought.
By the Numbers
Here’s a closer look at consumer credit card debt in the US:
3 Rank of credit card debt among all other household indebtedness sources. (Mortgage and student loan rank 1 and 2, respectively.)
$7,327 Credit card debt owed by the average household (among all households).
$15,706 Average credit card debt among households that carry a balance from month to month.
43.2 Percentage of households with a credit card balance in 2010.
46.7 Percentage of households with a credit card balance in 2012.
$890,900,000,000 Credit card debt owed by Americans as of August 15, 2015.
Source: Nerd Wallet
Last Week’s Poll Result
What is your primary credit card?
- VISA (41%)
- MasterCard (24%)
- American Express (16%)
- I don’t have a credit card (13%)
- Something else (6%)
More than 600 people answered this week’s survey question and it turns out that most people use VISA as their primary credit card. Last year, 71% of consumers had at least one credit card — and when it comes to Len Penzo dot Com readers, that number climbs to 87%.
The Question of the Week
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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. Quebec (2.74 pages/visit)
2. British Columbia (2.05)
3. Nunavut (2.00)
4. Saskatchewan (1.98)
5. Alberta (1.94)
9. Northwest Territories (1.75)
10. Prince Edward Island (1.69)
11. New Brunswick (1.59)
12. Nova Scotia (1.35)
13. Yukon Territory (1.25)
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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
Belinda dropped the following kind words in my inbox this week:
Len, your blog has so many good articles! I think you could make it go viral quite easily.
Thank you, Belinda. The good news is it already has: almost 8 million page views so far!
I’m Len Penzo and I approved this message.
Photo Credit: brendan-c
Nice summary of the state of the economy in the news this week.
While I can believe the Fed didn’t raise rates, after all, they’re intentionally ruining our economy, there’s always that tiny bit of hope that enough people will wake up to what’s being done to them, that we will be able effect some real change, and do some real good, not just spin a few headlines that sound good while we continue with the status quo.
What can I say, I’m a dreamer. I just hope I’m not the only one.
Most Americans are too distracted by the bread and circuses to notice, Jack. The NFL is back! And Caitlyn Jenner and Dancing with the Stars too! Others are busy posting pictures of their dinners on Facebook and leaving snarky remarks about Kim Kardashian on Twitter. Almost all of them have no idea how our monetary system works, how it is mathematically doomed to fail — and how it has become so rife with corruption.
Those in power have a vested interest in keeping this game going for as long as possible — including the mainstream media — so nothing will change until the dollar dies … only then will we have a chance for real reform. Until then, America’s centrally planned economy will continue its steady decent.
Well I read a shocking report about if the 7 year bull / bear market is over by accurate market timer this week.
The fed sure have stuffed up alot….
Lots of stuff going on, and loved the fact that they said, the market would sell off, if they raised rates, but the rates remained the same the market sold off. haha.
Regarding Friday’s market sell-off: You ain’t seen nothing yet, Emma. The worst is yet to come.
When I saw the news that the Fed did not raise the rate, the first thing that crossed my mind was “Dammit Janet”. (Shameless “Rocky Horror” reference.)
At a family dinner later that evening, no one knew anything about it and were more concerned about Darth Trump’s performance at the Republican Debate.
Priorities, I guess.
It’s going to get ugly, but I sometimes feel like a man in the wilderness when trying to get family and friends to look around and read up on this stuff. My son, has begun to figure it out, which makes me very proud.
Most people think I am cuckoo for cocoa puffs too, David. It’s okay though. My conscience will be clear, knowing that I tried my best to get the word out, when the day of reckoning gets here. (Assuming I’m still here when it does!)