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 …
“I’ll gladly pay you Tuesday for a hamburger today.”
— J. Wellington Wimpy
“Hope in reality is the worst of all evils because it prolongs the torments of man.”
— Friedrich Nietzsche
Credits and Debits
Credit: The last time daily US crude output is about to hit the eight-digit mark was in the early 1970s — and it’s about to do it again. Hooray! The bad news is our decreasing reliance on foreign oil causes problems for the petrodollar; that’s because the fewer barrels of petroleum we buy from exporters, the less incentive they have to force everyone else to pay for oil in US dollars.
Debit: Meanwhile, with empty shelves everywhere, and starving mobs now brazenly slaughtering grazing cattle, hyperinflation in the People’s Socialist Paradise of Venezuela has pretty much run its course. The only step left is for those same mobs to begin gathering rope and hunting down the politicians responsible for their needless suffering. Er, assuming they can still find rope in their completely collapsed economy.
Debit: Of course, North America has its own Socialist Paradise: the
great failed State of California. Its politicians are now complaining that, with the federal tax bill cutting off deductions that benefited wealthy Californians, its well-off citizens may leave. Wait a minute! Socialists love it when “the wealthy” are forced to pay their “fair share.” Hmm. I guess that only applies when they’re not affected. Forward!
Debit: In other news, home prices in Southern California have surpassed levels of the last housing bubble, yet real wages are still hovering around levels from two decades ago, when home prices were much lower — so nothing has been fixed. Frankly, the economic imbalances are worse than ever. For example, only 22% of LA County households can now afford a house at the median price, compared with 42% in 2012. Ouch.
Debit: Then again, if you dig below the surface, you’ll see that the current economic boom fueling the housing bubble in California — and most markets worldwide, including stocks and bonds — isn’t really a boom at all. In fact, it’s a mirage based upon an orgy of debt via long-term synchronized central bank currency-printing campaigns. It’s just too bad that the mainstream media generally refuses to acknowledge it.
Credit: For now, however, the orgy continues: the Dow, S&P, and Nasdaq all closed the week on record highs. Again. In case you’re wondering, the Dow has gained 44% since election day — yes, that’s just 14 short months ago.
Debit: I see that long-term care insurance has turned out to be the latest Ponzi scheme, as some insurers are now doubling premiums just to keep their losses manageable. Sad. And yet more evidence that the growing financialization of America during the past 40 years — and the resulting monetary hocus pocus that comes with it — is finally nearing its mathematical limit. There really is no such thing as a free lunch.
Credit: You can bet that fast-approaching mathematical limit is why questions from China and Russia about US gold reserves are growing louder. As Bill Holter notes, such previously unthinkable public grousing from two of the world’s major gold holders is only the opening salvo of an eventual “cash call” on America’s yellow metal, with the aim of ending the long-held dominance of the US dollar. Uh oh.
Debit: Did you see this? Once upon a time, Nicholas Cage was one of Hollywood’s biggest stars, with a net worth of $150 million. But, as CNBC notes, Cage has since “squandered it away on a string of expensive and eccentric purchases, eventually facing foreclosure on several properties, and owing more than $6 million in property taxes.” As a result, he’s now worth “just” $25 million — and working overtime to pay off his debts.
Credit: Speaking of blown fortunes, according to Peter Schiff, “The (US) economy is going to blow up like a bomb; it’s the end game, and Trump’s going to be the fall guy.” On the bright side, Schiff also says, “In the long run, maybe America comes back. But first we’re going to have to pay the piper.” There’s no “maybe” about it, Peter. America will come back, and stronger than ever — but there will be pain as it adjusts to reality.
Debit: That sentiment was echoed this week by the BIS, which is the central banks’ central bank; they warned that the world financial system is as dangerously stretched today as it was during the last bubble peak in 2008. The BIS also acknowledged this time the central banks are stuck in a “policy trap” with no way out. Well … short a return to a global financial system based on real money. I know. But one can always hope.
By the Numbers
Here is a little more detail on how Nicholas Cage managed to blow a $150 million fortune:
2 The number of European castles purchased by Cage.
15 Multi-million dollar residences Cage once owned, including a $25 million waterfront home in Newport Beach, California, a $15.7 million countryside estate in Newport, Rhode Island, and an $8.5 million abode in Las Vegas.
$3,400,000 Amount Cage paid for the infamous LaLaurie mansion in New Orleans, known as one of the most haunted houses in America.
$3,000,000 Price Cage paid for a private island in the Bahamas.
$450,000 Amount Cage spent to purchase a Lamborghini previously owned by the late shah of Iran.
$150,000 The price tag for Cage’s pet octopus.
$276,000 Price that Cage paid for a 70 million year old dinosaur skull. However, the artifact was stolen, and Cage was forced to return it to the Mongolian government.
The Question of the Week
Last Week’s Poll Results
Did you grow up in a household with a stay-at-home parent?
- Yes (59%)
- No (32%)
- Occasionally (9%)
More than 1500 people responded to last week’s question, with 1 in 3 saying they were raised in a home without a stay-at-home mom or dad. As a point of reference, the latest data available shows that, in 2012, 29% of all US households had a stay-at-home mom. Another 4% of homes had stay-at-home dads.
Other Useless News
Here are the top five articles viewed by my 18,949 RSS feed, weekly email subscribers, and other followers over the past 30 days (excluding Black Coffee posts):
- 11 Dollar Store Bargains You’d Be Crazy to Buy Anywhere Else
- 8 Ways to Make Money on Your Morning Commute
- 5 Ways to Ring in the New Year by Cleaning Out Your Financial Garage
- How Banks Work vs. How People Think They Work
- You Can Call Me Almost Anything, But Don’t Call Me Cheap
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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 smart people aren’t impressed with people who drive luxury cars, cj, had a question for people who don’t mind driving their vehicles until they can’t be driven any more:
“I just want to know why (some people) are willing to drive an old car for 30 or 50 years? What are they saving the money for?”
You’ll eventually figure it out, CJ. I promise — although it may take 30 or 50 years.
I’m Len Penzo and I approved this message.
Photo Credit: brendan-c