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.
I just got back from a long business trip, so I’ve got an espresso edition for your enjoyment. Let’s get right to it, shall we?
Credits and Debits
Debit: Is 2016 the year the dollar finally collapses and economic reality blindsides 99.9% of Americans? More than a few people think so. As for me, I think the odds are better than 50/50 — although I could be off by a year … or several.
Credit: One thing is certain: The clock on the time bomb better known as our international monetary system is ticking — and the fuse is getting short. After all, it’s a relatively simple math problem, folks.
Credit: The fact such a scenario is being discussed with increasing frequency — in both the mainstream press and alternative media, pro and con — should put at least a few seeds of doubt in the minds of those who insist it’ll never ever happen.
Debit: Of course, 2016 may not be as catastrophic as the doom and gloom crowd suggest, but after this Monday saw the worst opening day of trading to a new year since the Great Depression, the stock market did its best to suggest the ride was going to get really bumpy.
Debit: And the market only got worse as the week progressed; by Friday’s closing bell, it was a total massacre, with stocks finishing their worst opening week to a new year ever. Yes, ever.
Debit: So … How bad was it? Well, for the week, the S&P was down 5.3%, the Dow plunged 5.6%, and the Russell 2000 lost 6.9%. Ouch. You know, at that rate the markets will be worthless in about six months. Okay, not quite — but I think you get my drift.
Debit: Meanwhile, across the Pacific, Chinese markets were even worse off. For awhile, the major stock indices there were losing 7% per day. One day, the benchmark CSI300 index lost 7% in just 15 minutes of trading.
Debit: In fact, rampant stock dumping in China was causing market circuit breakers — which were designed to stop panic selling — to trip so frequently that exasperated Chinese officials finally threw up their hands and suspended the rule in order to keep their bourses open. Unfortunately, they also imposed stock sell-limits.
Credit: From Jim Quinn at The Burning Platform: “The pompous professionals inhabiting the NYC financial district are still arrogantly ignoring the imminent bust headed their way. The Fed-juiced gains over the last six years will evaporate just as they did in 2007-2009.” I think Jim is quite the optimist — which means we have at least one thing in common.
Credit: One guy who says central bankers are to blame for the coming financial crisis is former Federal Reserve President, Richard Fisher, who actually admitted this week that, by conjuring trillions of dollars out of thin air, the Fed “front-loaded a tremendous market rally.” Oh, yes … he really did. And in other news: hell just froze over.
Last Week’s Poll Result
Do you have any gasoline company credit cards?
- No (91%)
- Yes, but just one (7%)
- Yes, more than one (2%)
More than 800 people chimed in for this week’s question and more than 9 in 10 of them say they have no gasoline credit cards. There was a time when I had three different gasoline credit cards. I know. These days, I still have two in my wallet — although I only use one of them regularly. Does that mean I’ll be getting rid of the other one soon? Probably not. Okay, check that … no!
The Question of the Week
[poll id=”95″]
By the Numbers
The long slide of declining union membership continues. Here’s a closer look:
14,600,000 Total US workers that currently belong to a union.
35.7% Government union workers in 2014. (That’s down from 35.9% in 2012.)
6.6% Private sector union members in 2014.
35% Union members who worked in the private sector during the 1950s, when union membership peaked.
11.1% Total US workforce that belonged to a union in 2014. (That’s down from 11.3% in 2012)
1912 The last year that union membership in the US was lower than it was in 2014. (11.0%)
Sources: Bureau of Labor Statistics; New York Times
Other Useless News
Here are the top — and bottom — five states in terms of the average number of pages viewed per visit here at Len Penzo dot Com over the past 30 days:
1. Idaho (2.46 pages/visit)
2. Massachusetts (2.42)
3. Arkansas (2.17)
4. North Dakota (1.92)
5. Utah (1.90)
46. Ohio (1.44)
47. Oklahoma (1.37)
48. Florida (1.35)
49. Montana (1.29)
50. Wyoming (1.17)
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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 out to me at: Len@LenPenzo.com
My article explaining why most people who can’t live on $40,000 per year have only themselves to blame struck a nerve with Mary Sue, who felt compelled to pass on to me a little advice of her own:
Your blog costs money. Get rid of it because you’re clearly not qualified to give rational advice.
Actually, Mary Sue, when it comes to blogging, being unqualified makes me over-qualified.
I’m Len Penzo and I approved this message.
Photo Credit: brendan-c
Len,
It was very interesting watching the news media in such a panic over the last week. They thought the carnage was over with that huge fake job report coming out, but the last few hours on Friday told them otherwise. The Keynesians were the funniest of all completely ignoring the destruction in front of their faces and continuing the mantra of the great recovery with all the new jobs and such. Thought it was intriguing that one of the Feds own told on them, wonder if he will have any death threats upon him in the coming days? If 2016 isn’t the year the SHTF (although I think it’s already beginning) then I definately don’t see us making it past 2017. Only way I see it extending a few more years would be the printing presses working overtime, but even then I would think confidence would be lost in currency. I’ll just continue to purchase metals at these ridiculously cheap prices, especially Silver until it happens.
Have a good day,
Jared
It’s getting close, Jared. We’re now 45 years into this unprecedented financial experiment where the entire world monetary system is anchored to a fiat currency backed by nothing but the “full faith and credit” of a single nation (which happens to be the US). That credit has enabled Americans to live with a standard of living far beyond what we’re entitled to, as we produce far less in real goods every year than we import.
More and more of the world’s nations are realizing that the US can never repay all of the debt it has accrued — the math explanation I linked to above in the first “credit” goes into the dirty details quite eloquently. For those who aren’t interested, it is enough to understand that, after 45 years, we are now entering the exponential portion of the debt curve — which means our debt will be accruing with increasing jumps in magnitude and the troubles that brings will be growing at ever-faster rates and consequences.
When this game finally ends, almost everyone will be saying “How could we not see something so obvious coming?”
Oh, and for those who say, “Well … we can just stop deficit spending and become a net-exporting nation once again.” No, we can’t. This debt-based monetary system is a Ponzi scheme that requires ever-growing debt to keep it from imploding. If managed properly, it could have lasted a decade or three longer, but we passed the Rubicon awhile back and are now so far beyond the pale that any hope of recovery is long gone.
Len,
If I’m not mistaken , didn’t Keynes (the creator of this horrific idea) say that it was a system that wouldn’t last, but he wouldn’t have to worry about it because he would be passed by then. How immoral and inconsiderate of someone! America was once a country who wanted better for the next generation! His prediction is now coming true and it’s amazing of the billions of people who are not paying attention!
Jared
Jared: I’m not sure if Keynes knew his theory was Utopian claptrap or not — but we’ll all soon be paying for it soon enough.
Anyone who believes in nanny-state policies and the fantasy-view that government administration and central planning can meet the peoples’ needs better than the free market, cling to Keynesian economics (and reject the sound-money Austrian school) because the latter acts as a choke on uncontrolled government expansion.