Black Coffee: Pay No Attention to Those Bankers Behind the Curtain

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 …

Credits and Debits

Debit: This week, Deutsche Bank settled lawsuits accusing it of conspiring with other banks to manipulate gold and silver prices. Wow. I gotta tell ya: I am utterly shocked by this absolutely stunning revelation. Boy howdy.

Credit: On the bright side, folks, at least we can all take solace in the fact that our sacrosanct stock markets aren’t manipulated. Not one iota. Oh wait …

Debit: Frankly, it’s probably a good thing markets are manipulated today. Otherwise the day of reckoning for those ridiculously-generous public pensions would have already came and went. That’s not to say they aren’t going to implode; what can’t be sustained won’t. It will just take a little while longer.

Debit: You think I’m kidding? US public pensions are in a $3.4 trillion hole. According to the Financial Times, that’s “three times larger than official figures show, and is getting bigger.” You didn’t expect those public pension managers to reveal the truth, did you? Remember, when all else fails, obfuscate. And when that doesn’t work, lie.

Credit: Despite all of the lies and manipulation going on behind the scenes today, there’s a growing number of people challenging the data being presented — along with the “omnipotence” of central bank bureaucrats. And as Bill Bonner notes, “They’re right; central banks can only do so much. They made the situation what it is. Now, they can only make it worse.” Well … isn’t that comforting.

Debit: After all, increasingly desperate central banks have arbitrarily set the price of money to such absurd levels that a German furniture store is now offering loans for up to two years at negative 1%. So while Germans are buying new furniture with loans they’re getting paid to take, the banks are burning theirs. (And after all the furniture gets torched, the buildings come next.)

Debit: The outrageously-overvalued housing market in Vancouver, Canada, is just as absurd. It’s there that a modest 4-bed 3-bath bungalow recently sold for $1 million … over its $3.19 million asking price. No, really. For the math challenged, that’s $4.19 million total. I know.

Credit: On the other hand, high-end real estate agents in the Big Apple would love it if luxury Manhattan condos could fetch those crazy prices; a glut of high-end apartments there is only getting worse as demand continues to dry up. Naturally, prices are beginning to tumble. Hey … do you think this means Bravo’s Million Dollar Listing New York is in its final season?

Debit: Real wages peaked 45 years ago, but since then the illusion of growing American “prosperity” has been maintained via the printing press. The trouble is: For real national prosperity, a country must produce more than it consumes. It’s true. See? Macroeconomics isn’t rocket science. Trust me.

Debit: By the way, give yourself a gold star if you understand that it’s no coincidence that, after Nixon severed the dollar’s link to gold in 1971, the US has run — with one or two exceptions — a perpetual annual trade deficit with the rest of the world. And give yourself another gold star if you know it’s no coincidence that real wages peaked around the same time too.

Debit: On a related note, for two decades naive voters in the People’s Socialist Paradise of Venezuela^TM have elected nanny-state politicians who think bureaucrats can control commerce and allocate scare resources more efficiently than the free market. You know … the same guys who also believe in free lunches, unicorns, and perpetual motion machines.

Debit: Sadly, those Venezuelan voters are finally reaping what they’ve sown: a rapidly disintegrating society in a state of total economic collapse. Forward!

Credit: Oh, I hear you: “But, Len, Venezuela’s President just made every weekend for the next two months a three-day holiday!” Yes, he most certainly did. Psst. Just don’t tell the proletariat that the move is actually a desperate last-ditch attempt to save the nation’s imploding electric grid. Viva la Revolucion!

Credit: The frightening truth is, without the United States’ exorbitant privilege provided by the dollar’s status as the world’s reserve currency, the US is really not too different from Venezuela. That will become painfully obvious to every American only after the rapidly-failing international monetary system is finally reset to reflect economic reality. Until then … party on.

By the Numbers

If you’re an American and haven’t turned in your taxes to the IRS yet, well … you’re officially late. Here are a few more tax facts for you:

31 Minutes the average American sat on hold when calling the IRS in 2015.

62% Calls to the IRS that went unanswered in 2015.

16 Hours the average American spends preparing taxes each year.

35% Taxpayers who would rather discuss sex with their kids than do their taxes.

27% Americans who would get an IRS tattoo if it allowed them to avoid taxes for life.

700% Increase in tax-related identity theft cases since 2010.

23% Decrease in IRS enforcement staff since 2010.

Source: WalletHub

Last Week’s Poll Result

Do you use a budget to help manage your personal finances?

• Yes (56%)
• No (44%)

More than 900 people answered last week’s question about budgeting and the results were pretty much as I expected — a slight majority use a budget to help instill a bit of financial discipline on their personal finances. I used a budget for many years to keep our household finances on an even keel, and only stopped after my income became high enough that I felt I had plenty of cushion to handle those odd months when our discretionary spending was higher than usual. That being said, I strongly suspect I’ll bring the budget back after I retire.

The Question of the Week

[poll id=”109″]

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. Alberta (2.20 pages/visit)
2. British Columbia (2.18)
3. Newfoundland (2.15)
4. Ontario (2.11)
5. Saskatchewan (1.92)

9. Prince Edward Island (1.65)
10. Manitoba (1.61)
11. Yukon Territory (1.50)
12. Northwest Territories (1.33)
13. Nunavut (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 out to me at: Len@LenPenzo.com

After reading an article from one of my staff writers about affordable ways to upgrade an outdated bathroom, Ellis took exception to one of the more novel suggestions:

Propane heating for the floor? I’m all for in-floor heating, but I’ll stick with non-explosive, non-flammable ways to do it.

So, Ellis … Does this mean you won’t be reading my upcoming story on low-cost hydrogen-filled party balloons?

I’m Len Penzo and I approved this message.

Photo Credit: brendan-c