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.
Another glorious week comes to an end. Off we go …
If you’re for less government, you want sound money. The people who want big government, they don’t want sound money. They want to deceive you and commit fraud. They want to print money. They want a monopoly. They want to get you conditioned, as our schools have conditioned us, to the point where deficits don’t matter.
— Ron Paul
Credits and Debits
Debit: After peaking at an intraday price of $2799 on Thursday, bitcoin has fallen back more than $500 to close the week around $2200. That’s still more than 10% higher than the previous week’s close. Unfortunately, those who bought near Thursday’s high are already down 21%.
Credit: Meanwhile, stock market watchers are wondering whether Alphabet or Amazon will reach a $1000 share price first. Hooray!
Credit: Of course, while the stock market indices suggest that all is well, in reality their foundation continues to crumble. Dave Kranzler points out that the Dow and the S&P 500 have been levitating on the backs of just five tech stocks: Apple, Amazon, Facebook, Alphabet and Microsoft. And Apple alone is responsible for 13% of the S&P’s 2017 gains — and 25% of the Dow.
Credit: In fact, David Stockman says the market rot is so pervasive that he expects a crash between August and November. Keep in mind, though, that this is the same guy who incorrectly predicted there would be a market meltdown prior to the 2016 US presidential election. Just sayin’.
Debit: However, if Stockman is right this time, that’s bad news — especially for gold-plated government pensions, the vast majority of which are already underwater despite an 8-year bull market in stocks. For example, California’s pension liabilities skyrocketed 22% in the last year. And the state’s pension plans are now 65% underfunded — which is a nice way of saying “insolvent.”
Debit: Most government pensions have been taking money from future plan beneficiaries and using it to fund benefit payments to retirees for a long time now — even though the fund managers know that future retirees realistically have no chance of ever being paid in full. Yes, that’s a Ponzi scheme. And if a Wall Street hedge fund ran a similar operation, the managers would be in jail.
Debit: The 36-year bull market in bonds will be facing pressure too if the Fed’s decision to unwind its balance sheet this year is implemented. Needless to say, any prolonged sell-off in the bond market will also make the US government’s long-term addiction to deficit spending more problematic. Well … unless officials want to kill the US dollar. Actually, they really have no choice.
Debit: Then again, Main Street already has its own deficit-spending problems, as 7.5% of loans are now at least 30 days in arrears. During the height of the 2008 financial crisis that figure was approximately 10%. (Psst. That’s what happens when lending standards are lowered in order to keep our debt-based financial
system Ponzi scheme afloat.)
Debit: By the way, the combined enrollment in America’s four largest safety net programs has reached 236 million. Yes, that number is inflated because many Americans are double-, and in some cases, triple-dippers. Even so, more than one in three Americans are currently receiving some form of government assistance.
Debit: Speaking of safety net programs, Facebook creator and multi-billionaire, Mark Zuckerberg, says it’s time Americans “explore” guaranteed universal basic incomes for everyone. No, really. Obviously, Zuckerberg also believes every American deserves a nice government-provided suburban home with a white-picket fence — and a two-unicorn garage.
Credit: Am I the only one who thinks Zuckerberg is a great example of why you should never assume somebody truly understands what they’re talking about just because they’ve got a big bank account? I didn’t think so.
Debit: With all that “free money” in mind, you shouldn’t be surprised that the national debt is now growing far faster than the economy as a whole — although that really isn’t a problem. Well … that’s what the utopian guaranteed-income crowd — and those who believe in perpetual motion machines — tell me anyway. Right, Mark?
Debit: After all, as Greek authorities proved again this week, whenever the government — or its banker cronies — find themselves in a financial pickle, they have no qualms plundering the people’s wealth, whether it’s via mass confiscation of safe deposit boxes and other assets, or stealing your cash outright under the guise of a bank “bail-in.” Either way, it’s heads they win, tails you lose.
Credit: Ultimately, the only people who will come out of this looming financial disaster relatively unscathed will be wealthy people like Mark Zuckerberg and the folks who keep their exposure to the current financial system to the bare minimum — along with some wealth insurance in the form of physical gold and silver.
By the Numbers
With the Memorial Day holiday upon us here in the US, I thought I’d pass along a few facts about it:
1868 The year “Decoration Day” was established to decorate the graves of the Civil War dead with flowers.
1971 The year Memorial Day was declared an official US holiday by Congress.
1,264,123 The number of Americans killed in combat in Americas wars from 1775-1991.
39,300,000 The number of Americans who will venture at least 50 miles from home this weekend.
88 Percentage of Americans who will travel by car; that’s the highest figure since 2005.
75 The percentage of Americans who plan to barbecue this Memorial Day weekend.
818 The number of hot dogs per second that will be consumed in the US between Memorial Day and Labor Day.
23 The number of days between Memorial Day and summer, which officially begins on June 21.
Source: The Connecticut Post
The Question of the Week
Last Week’s Poll Results
If you were an American on the lam, which country would you rather escape to?
- Canada (81%)
- Mexico (19%)
An overwhelming majority of the more than 1300 Len Penzo dot Com readers who responded to last week’s question said if they were on the lam, they would flee to Canada, rather than Mexico. Unfortunately, I have no way of knowing if that’s primarily because they like poutine more than tacos, or prefer colder climes, or are worried about potential language barriers. As for me, I’m with the minority again — mainly because I can’t stand the cold.
Other Useless News
Here are the top five articles viewed by my 15,311 RSS feed, weekly email subscribers, and other followers over the past 30 days (excluding Black Coffee posts):
- Are Gas or Charcoal Grills More Cost Effective?
- 10 Famous People Who Have Gone Bankrupt
- 22 Signs Your College Degree Might Not Be Worth the Money
- How to Take Advantage of Error Fares for Booking Super Cheap Flights
- 6 Cheeky Ways Frugal People Save Money
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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 explaining why putting ketchup on a hot dog is definitely not poor etiquette — despite what the food snobs say — Char left this comment:
I take a lot of flak for putting mayo on hot dogs.
To be frank, I’ll continue to mustard up my dogs with whatever toppings I relish.
I’m Len Penzo and I approved this message.
Photo Credit: Community Coffee