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.
Okay, off we go …
Credits and Debits
Credit: The economic rot within the People’s Socialist ParadiseTM of Venezuela has become so widespread that it’s now affecting their hospital morgues. Uh huh. Electricity shortages are making it hard to keep the coolers running — and that’s led to a spate of exploding corpses. Hey … Just in time for Halloween!
Credit: Speaking of exploding socialist corpses, with only six of 23 exchanges still in business, and a majority of young healthy people unwilling to pay skyrocketing premiums with absurdly-high deductibles, it’s obvious that Obamacare’s death spiral will soon reach its inevitable conclusion. At least it is to all but the most rabid ideologues.
Debit: In fact, while everyone waits for their $2500 annual premium reduction, those in Arizona, Illinois, Montana, Oklahoma, Pennsylvania, Tennessee and New Mexico will see their 2017 premiums increase between 50% and 93% — and another 15 states will see increases between 20% and 49%. Don’t yell at me — I warned everyone here six years ago that the Obamacare math was nonsense.
Debit: So … how onerous are those “Affordable” Healthcare Act premiums for working people? Well … they’re so high that an increasing number of middle class families are now faced with a choice that was once unthinkable: buy a house or get health insurance. Forward!
Debit: Meanwhile, 35% of all Americans currently have debt in collections — in other words, at least six months past due. Wow. I can only imagine how many have debt that’s more than a month or two in arrears.
Debit: Of course, the US government has debt trouble too. Yes, the debt situation was almost as bad at the end of World War II and we managed to pay down much of what we owed — but America was a manufacturing powerhouse then, with millions more wealth-creating factory workers than wealth-destroying government employees.
Debit: Today there are, incredibly, 10 million (!) more government employees than manufacturing workers in the US — and that makes it nearly impossible to retire even a fraction of the $20 trillion National Debt that is acting as a financial noose around our nation’s neck.
Debit: For her part, Fed Chair Janet Yellen says that “high pressure” policy may be only way to kick start the economy back to what it was before the last crisis in 2008. In case you’re wondering, “high pressure” means high inflation. Too bad she didn’t explain how reducing everyone’s purchasing power is good for what ails us. It’s just more proof the lunatics are running the asylum.
Debit: By the way, the rest of the world is in dire financial straits too. Europe is so deep in debt that the architect of the euro currency is warning that the euro is a house of cards that is about to collapse. No, really. Say … you don’t think he’s covering his rear so he can tell everyone he told ya so after it happens, do you? Yeah, I do too.
Credit: The truth is, whether it’s the euro — or the dollar, yen, yuan, or pound sterling — confidence in fiat cash is waning and the dollar-based international monetary system is breathing its last breaths. The good news is, a new monetary system will restore global economic growth. Frankly, it’s the only solution now.
Credit: I’ll give financial analyst Andy Hoffman the last word, as he summed things up perfectly this week: “No matter what schemes and frauds are perpetrated, or who is elected, the global economy is doomed. As history’s largest, most destructive fiat Ponzi scheme unravels more rapidly with each passing day, the only possible resolutions are outright debt repudiation or hyperinflation.” Believe it.
By the Numbers
With many middle class Americans trying to decide whether to purchase healthcare insurance or a new house next year, I thought we’d look at some data from last year on American homebuyers:
44 Average age of American homebuyers.
$86,100 The median household income of all homebuyers.
34 Percentage of homebuyers age 35 or younger.
24 Percentage of homebuyers older than 60.
32 Percentage of first-time homebuyers.
8 Percentage of homebuyers who moved because they were following a job relocation.
13 Percentage of homebuyers who bought a multi-generational home.
15 Percentage of multi-generational homebuyers who did so to save money.
Source: MoneyTips
The Question of the Week
[poll id="134"]
Last Week’s Poll Results
How much will you spend on Halloween candy, costumes and decorations this year?
- Less than $25 (78%)
- $25 to $50 (15%)
- More than $50 (7%)
More than 1300 people responded to last week’s question and nearly 4 out of 5 of them will spend less than $25 this trick-or-treat season. I just hope what little they did spend went to Halloween candy — preferably Reese’s Peanut Butter Cups. Bonus points for the dark chocolate variety.
Other Useless News
Here are the top 5 articles viewed by my 11,158 RSS feed, weekly email subscribers and followers over the past 30 days (excluding Black Coffee posts):
- 10 Unique Halloween Treats Kids Love — But Rarely Get!
- 21 Reasons Why Corner Lots Are for Suckers
- Is It Okay to Eat Foods Past Their Expiration Dates?
- The Tried-and-True Guide to Wealth Creation
- 7 Ways to Improve Your Financial Outlook Before Winter Sets In
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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
Frank G. sent me an email this week that opened up with this:
At first I couldn’t figure out if you were shoveling bullshit or fertilizer, but you finally won me over.
See … More proof that my blog is intended for manure audiences only.
I’m Len Penzo and I approved this message.
Photo Credit: brendan-
Has anyone put pencil to paper to figure out how much the affordable Care act is costing us? I assume we are paying to bail out the poor insurance companies that didn’t feel like they got everything they deserved from this debacle. Never fear. We can count on our wonderful civil servants to fix the problems in the near future. They should only have to borrow a few more billion (possibly trillion) $, but, by God, we are going to have affordable Care in this country if it kills us.
For me, Ed, the obvious tell that predicted Obamacare was not going to be a pleasant experience for most Americans — aside from the math — are the financial penalties imposed by the Act on those who choose to not buy health insurance.
After all, if Obamacare is such a great deal for healthcare consumers, then the penalties would be unnecessary.
At some point the US will find it impossible to roll over its debt because no one will want to take it. At that point, government spending must stop. Print all you like, but it’s what happens when fiat currency becomes so worthless that nobody will take it. That’s when the US will finally have to default and start over. Zimbabwe ended up doing that, and issued new fiat pegged to the US dollar. A new monetary system will have to peg to gold.
Sam, I assume by “no one will want to take it” you mean “no one will want to fund it.”
We are getting to that point now. Nobody seems to be buying Treasuries in significant quantities now. China quit buying our debt a couple of years ago. I think Japan has all but stopped too.
In the near future there will come a time when the return on loaning money is no longer worth the risk. I would argue we are almost there. Eventually, nobody will want to loan money because they are afraid they will never be repaid, or only repaid in green paper that has been so devalued that it is basically worthless.
When this happens the only safe place to store wealth will be in tangible assets and the only lenders will be those who print the money that nobody wants. At that point, an economic reset will be the only option.
Bruce, I think you are echoing Jim’s point.
The time to be storing at least some of your wealth and long-term savings in tangible assets is now. If there is a financial crisis, it will unfold too rapidly to convert your fiat into tangible goods — especially precious metals.
The theater is enormous and the exit door is just too small to remedy any ensuing panic.
My friend sent me a link to your site today and said I should read this. Good article! Love the blog too.
Welcome aboard, Ellen! And thank your friend for me too!
I depend on and encourage my readers to share my articles with their friends and relatives. In fact, it’s the primary way for me to expand my audience.
Have a nice weekend Len!
You too, Sara!
Thanks for a great roundup Len. I can’t believe that 35% of Americans have debts in arrears. That’s insane! It sure does start to sound like a pretty dire situation.
I know, Jay. People need to stop and think about that number; more than one in three Americans have debt that is more than six months in arrears. It truly is an incredible number. And based on that figure I can only assume another one in three — if not more — have debt that is more than one month old.
Len, I just visited Money Tips and there are more interesting statistical data. Nice that you shared it. Thanks.
You’re welcome, Jayson. Thanks for stopping by.
Great post, Len. Thank you for telling it like it is about the American economy. Too many “experts” are still touting that everything is wonderful, lulling people into sticking their heads into the sand, yet 35% of Americans have debt in collections and the national debt is pulling us under like a cement block on the ankle. Time to wake up, America!
The last time a president paid off our national debt it triggered the Great Depression. You don’t understand that the nations debt is not harmful.
And we should have single-payer health insurance. If the republiCons would have passed that The President wouldn’t have had to go to “Obamacare”. Not helping everyone to have healthcare is about a unchristian as you can get.
Andrew Jackson retired the National Debt in 1835 — and killed off the Second Bank of the US. The Panic of 1837 had nothing to do with that — it was caused by the world’s financial giant at the time, Great Britain. The Bank of England increased interest rates, which forced the US banks to do the same — and that popped a US land bubble that sent the economy into a tailspin.
Your assertions on the debt are dangerous and misguided. If the nation’s debt is not harmful, why doesn’t the Federal Reserve Bank simply print as much currency as it wants and hand it out to every citizen? After all, the Fed could wipe out poverty and everyone could live in the lap of luxury if what you claim was true.
And please don’t try to blame the failure of Obamacare on the Republicans. That is terribly naive at best and intellectually dishonest at worst. Obamacare was passed without a single Republican vote in either house of Congress.
The truth is, the Democrats promised everyone gullible enough to buy their economic snake oil that Obamacare would solve a healthcare “problem” that only needed fixing on the margins in the first place. Now you are trying to say a single-payer system is the REAL answer. Sure. And the debt doesn’t matter either. Only in the Utopian world of socialists. Yes, Venezuela, Cuba, Zimbabwe and North Korea agree with you — but I don’t.