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 …
Credits and Debits
Credit: After adding a paltry 11,000 jobs in May, the US supposedly managed to add 287,000 positions last month. Sorry, folks, but I’m not buying it.
Debit: Apparently, the bond market ain’t buying it either, as yields continue to scream that the economy is in a nasty recession — and headed for a depression. In fact, 10-year Treasury yields hit an all-time low this past week, after the 30-year rate hit its historical low a week prior. Folks … something is rotten in America. Somewhere.
Debit: Please pardon my cynicism toward any government data or information. But if you had any doubt Americans have been living in a banana republic for years now — any doubt at all — then the pathetic event that occurred last Wednesday should put that to rest once and for all. God help us.
Credit: Count David Stockman as another financial guru who says the economy isn’t nearly as rosy as government and Fed officials desperately want need us to believe. According to Stockman, “Our monetary Humpty-Dumpty is heading for a great fall.” Finally! Economics explained in terms even pre-schoolers and socialists can understand.
Credit: Okay … Upon further reflection, that’s probably still too complicated for the socialists. Forward!
Debit: But seriously, how can anybody say with a straight face that the American economy is doing well when US factory orders just declined for the 19th consecutive month. Yes, 19. That’s never happened during the 60 years that particular statistic has been tracked. At the same time, US stock indices are near their all-time highs. I’m sure there’s a logical explanation. Or not.
Debit: Across the pond, a large number of UK property funds began freezing assets and suspending redemptions this week, signaling the start of a collapsing real estate market bubble that’s been building there for years. Yes, I know: UK realtors are still insisting that, “It’s never been a better time to buy!TM”
Credit: The situation in the UK is a stark reminder why those who exit any kind of financial panic first, always exit best. The trouble is, that usually only applies to the first 0.00001% of those who want to leave. And I suspect that figure may be too large.
Debit: Meanwhile, Italy’s $2.2 trillion banking system is on the verge of collapse as nearly 20% of their loans are considered non-performing — that is, they aren’t worth the paper they’re printed on. Or putting it more bluntly: the Italian financial system is hanging by a thread. Other than that, everything’s great in Europe. No, really! Just fine. Yesiree …
Debit: Folks, the entire globe is stuck in a Weekend at Bernie’s economy — where those in power are trying to convince us everything is fine, despite the presence of certain economic indicators that are immune from manipulation.
Credit: As financial analyst Dave Kranzler notes, “The global financial system is collapsing. If the central banks stepped away from both their observable and covert money printing, the system would collapse tomorrow.” Of course, they won’t — so the worldwide economic zombie stomp will continue. Until it doesn’t.
Debit: It also means free-lunch government officials like the clown who now wants New York City to pay for citizens’ sunscreen at parks, beaches, pools and playgrounds will stay in power a little while longer too. Surprised? You shouldn’t be. Clearly, “the land of the free” no longer means what it used to — and hasn’t for a long time. Banana, anyone?
By the Numbers
According to Pew, middle class households in America are those that earn between 66% and 200% of the median U.S. annual household income. Here are a few more facts about the US Middle Class:
$24,000 The current lower bound of “middle class” for a single person.
$73,000 The current upper bound of “middle class” for a single person.
$126,000 The current upper bound of “middle class” for a family of three.
61% Share of all middle income adults in 1971; the share has declined every year since.
50% Share of all adults in 2015 who qualified as “middle class.”
88% Share of adults in 2015 attaining a bachelor’s degree who qualified as “middle class” or higher.
83% Share of adults in 1971 attaining only a high school education who qualified as “middle class” or higher.
64% Share of adults in 2015 attaining only a high school education who qualified as “middle class” or higher.
Source: NPR
Last Week’s Poll Result
How often will you be watching the Olympics this year?
- Not at all (35%)
- Occasionally (33%)
- Very little (25%)
- As often as I can (7%)
More than 1200 people chimed in for last week’s question and, after paying billions of dollars in broadcast rights, the folks at NBC will be dismayed to learn that 3 in 5 of them plan to watch none or, at best, very little of the upcoming Olympic games in Rio. Hmm. Perhaps those Len Penzo dot Com readers are afraid NBC will be broadcasting this year’s games in Smell-o-vision.
The Question of the Week
[poll id=”119″]
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. South Dakota (2.18 pages/visit)
2. New Hampshire (2.14)
3. Nebraska (2.13)
4. Alabama (1.93)
5. North Dakota (1.82)
46. Maine (1.40)
47. Alaska (1.36)
48. South Carolina (1.33)
49. West Virginia (1.32)
50. Delaware (1.28)
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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 my article entitled 18 Facts You Didn’t Know About ATM Machines, edogg decided to contribute one of his own:
Here’s another fun fact: Calling it an “ATM Machine” is redundant.
So … does this mean you’re going to report me to the Department of Redundancy Department?
I’m Len Penzo and I approved this message.
Photo Credit: brendan-c
The corruption in our government is so bad now it’s scary Len. There is no more accountability and the rule of law doesn’t apply to those in power anymore. It’s a total disgrace.
It may be hard for some folks to believe, Paul, but the serious moral decay in our society started with the corruption of our monetary system (when we began to decouple our currency from gold — initially with the birth of the Fed in 1913, although the job wasn’t officially completed until shortly after Nixon closed the gold window in 1971). That has allowed and “taught” multiple generations that a “free lunch” is not only possible, but normal — and that in turn discouraged the need for accountability, self-reliance and personal responsibility. That, of course, leads to apathy. And now that twisted free lunch mindset is what we’re stuck with — until the current system finally collapses. Hopefully, we’ll return to sound money after that happens.
The same sad story has played out around the world since time immemorial.
Count me among those who are disgusted with what has happened to our country.
Me too.
Noted … and noted.
Len, you constantly preach about us living in a land of illusion. This is off topic (sorry) but now they are saying there was only one shooter in Dallas when all of the earlier reports point to multiple shooters, and the evidence seems to back that up. Things are very surreal right now. Seems you can’t believe anything anymore.
Yes, the one-shooter narrative strains credulity. Reminds me of another questionable “single-shooter” event that happened in Dallas more than five decades ago.
Yes, and that day is one of my earliest childhood memories. I remember where I was and what I was doing that day at the age of three. (giving away my age, but hey, 56 and darn proud of it!)
I agree that these days have become so surreal to the point that we seem to be living in a never ending Twilight Zone episode, or worse, a nightmare that you can’t wake up from. And it’s becoming very weird.
Don’t leave us hangin’, Pete! Where were you when JFK was shot and what were you doing???
I was sitting on the living room floor playing a card game with my older sister, Go Fish I believe it was, when the announcement came on television that the President had been shot.
From what I gather Kennedy was ready to set our monetary system on a silver standard along with the gold standard and that’s why he was murdered. My grandfather always told me that he felt the story was made up about the Russians being behind it and that he thought Johnson had him murdered. I can see how this could be possible because Johnson was about to embark upon his dream of the welfare state, which is still all about getting votes to this day! They couldn’t create all this welfare fiat without getting rid of gold and Kennedy would have made their problem worse by promoting a silver standard. So in 1971, Nixon followed up on Johnson welfare state and ended the gold standard and people have been blind ever since, but perhaps now a few might be awakening.
Hi Len, there are so many things that are happening in our world, and I think after election, whoever wins, I just hope that our economy and employment rate improve and the President would consider giving voice to those voiceless in the past administration. This is what we need, giving equal and fair treatment to everyone and do what is best for the majority, if not all.
Thanks for the comments, Jayson. Unfortunately, there are deep structural problems with our monetary system that will prevent any true recovery. The only way back is by completely overhauling the current financial system — which will require writing down or inflating away all of the existing debt that is currently on the books, or revaluing gold to a much much higher level than it is today.
Hey Len,
Your Credits + Debits are Gold as usual.
Did you by chance read any of the 800 comments in the NPR article, no wonder this country is in trouble. I’m sure the “revised numbers” in a few weeks will cut that number in half. It is school break time no, maybe they are counting student lemonade stands, painters and seasonal help? But I’m sure that revised number will be buried on page 25…
Have by chance ever looked into a “Goldmoney” account. It looks interesting, I’m thinking of trying just a small account to try their gold backed credit card. I watched an hour hour podcast of it. The founder of PayPal is involved. Basically you have a savings account in physical gold and a Master card that is connected to it. It’s an interesting concept. Since you look into just about everything “money”, be nice if you could look at it and maybe use it as a blog post one week. I wonder how they calculate any tax implication?
Thank you, Paul.
Yes, I read a lot of the NPR comments; many of them are what Josef Stalin once called “useful idiots.” Then again, it’s NPR, so no surprise there.
And, yes, I am strongly considering opening up a Goldmoney account.