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.
Here’s a friendly tip: If you’re going to be out of town on any of the twelve days of Christmas this year, try not to miss Day Five.
Okay … and with that, we’re off and running!
“Inflation is the crabgrass in your savings.”
— Robert Orben
“All paper money eventually returns to its intrinsic value: nothing.”
Credits and Debits
Credit: China plans to roll out a yuan-denominated crude oil futures contract that can be converted to gold on a domestic exchange by the end of the year. This week they held market-wide training simulations to prepare for the big event. Amazingly, the news, which has dire consequences for the US dollar — and most Americans’ standard of living — was barely an afterthought for the US mainstream media.
Debit: Meanwhile, I see the wealthiest 1% of American households own 40% of the nation’s wealth — that’s more than at any time in the past 50 years. If you don’t think that’s a problem, then you need to think again.
Debit: On a related note, according to the Census Bureau, the five richest US counties by median household income are all suburbs of Washington, DC. Surprised? You shouldn’t be. Now you know where the bulk of your federal income taxes end up. Hardly seems fair.
Debit: Speaking of income — or a lack thereof — for the first time since November 2009, real average hourly earnings have tumbled for four consecutive months. That begs the question: Why are Americans’ wages falling if the nation is supposedly at full employment?
Debit: Despite the establishment’s continuing claim that the US labor market is rosy, by every reasonable standard, it isn’t even close. The truth is, after adjusting for the number of new jobs created in 2017 to account for the geometric progression of population gains, employment growth today is less than two-thirds of what it was in the 1990s. It’s also less than half the growth of the 1980s. But you already knew that.
Debit: I suspect you don’t need to see the latest Fed data that shows financial asset values are as high as ever — and rapidly outpacing growth in nominal income — because you’re aware of that too. Uh huh. I thought so.
Credit: By the way, according to the latest Fed figures, household net worth was 670% of income as of this July — which means it’s poised to go higher because asset values have only continued their upward trajectory. In case you’re wondering, the current net-worth-to-income ratio surpasses the previous high of 654% that occurred during the last housing bubble in 2006.
Debit: In other news … Just when you thought bitcoin mania couldn’t get any nuttier, there’s this: According to the New Zealand Herald, a 30-year-old IT professional recently sold his house and used the $60,000 in equity to purchase high-powered computer equipment required for bitcoin mining. I know. To each his own, I guess. I’m sure my Australian friends can find a sheep joke somewhere in there.
Credit: Then again, I guess cryptocurrency craziness shouldn’t be a surprise anymore now that bitcoin is officially the largest financial bubble in history. That’s right; the Bitcoin Bubble is now bigger than the previous “Mother of All Bubbles” — that is, the infamous Tulip Mania of 1636-1637. But, hey … maybe an ethereal bitcoin really is worth more than 1000 ounces of physical silver. Or not. Yeah … not.
Credit: Of course, it’s not just bitcoin. Long-time hedge fund manager Doug Noland says, “The granddaddy of all bubbles has reached the heart of money and credit,” and warns of “tremendous losses” hitting all assets classes once “central banks lose control of the monster they created.” Yep. That’s when they’ll have to start printing more cash or try to hold yields down. Regardless, Noland says: “There will be no way out.”
Credit: Actually, there will be a way out — but it will require the reintroduction of precious metals to the monetary system. However, as Alasdair Macleoud notes: “A return to sound money will only occur when the purchasing power of (fiat) currency is sliding in the midst of a global crisis.” At that point, he says, a panicked public will demand gold-backed currency. Sadly, by then it will be too late. Well … for most people.
By the Numbers
FedEx, UPS and the US Postal Service (USPS) expect to deliver record numbers of packages this holiday season:
15,000,000,000 Pieces of mail the postal service will deliver between Thanksgiving and New Year’s Day.
400,000,000 The number of packages FedEx will deliver over the holidays.
750,000,000 The number of packages UPS will deliver during the holiday season.
850,000,000 The number of packages the postal service will deliver over the holidays.
10 Percentage increase in the number of packages the postal service is is delivering in 2017, compared to last year.
6,000,000 The number of packages the postal service will deliver on Sundays this December.
Source: USA Today
The Question of the Week
Last Week’s Poll Result
How many employers have you had during your lifetime?
- 5 to 10 (57%)
- Less than 5 (28%)
- More than 10 (15%)
More than 1300 people answered this week’s survey question and it turns out that slightly more than 1 in 7 Len Penzo dot Com readers have had more than 10 employers during their lifetime. I’m not sure if that is a reflection of a booming job market — or a decline in the types of jobs that offer good wages and benefits.
An old man, a boy and a donkey were going to town. The boy rode on the donkey, and the old man walked.
As they went along they passed some people who remarked, “What a shame, the old man is walking, the boy is riding.”
The man and boy thought maybe the critics were right, so they changed positions.
Later they passed some people who remarked, “What a shame, he makes that little boy walk.”
So they decided they’d both walk.
Soon they passed a few more people who remarked, “They’re really stupid to walk when they have a decent donkey to ride.”
So they both decided to ride the donkey.
Then they passed some people who shamed them by saying, “How awful to put such a load on a poor donkey.”
The boy and the man figured they were probably right, so they decide to carry the donkey. As they crossed the bridge, they lost their grip on the donkey … and the donkey fell into the river and drowned.
The moral of the story: If you try to please everyone, you might as well kiss your ass goodbye.
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. Quebec (2.74 pages/visit)
2. Newfoundland and Labrador (2.31)
3. Alberta (1.80)
4. Manitoba (1.79)
5. Ontario (1.72)
9. Nova Scotia (1.42)
10. New Brunswick (1.39)
11. Prince Edward Island (1.35)
12. Yukon Territory (1.33)
13. Nunavut (1.00)
Whether you happen to enjoy what you’re reading (like those crazy French Canadiens in Quebec, oui, oui!) — or not (ahem, you hosers living on the frozen Nunavut tundra) — please don’t forget to:
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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 me at: Len@LenPenzo.com
I’m asexual so I don’t have to worry about having sex on the waterbed.
Congratulations, Al … I think.
I’m Len Penzo and I approved this message.
Photo Credit: (coffee) breweddaily.com