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, away we go …
“Gold all is not that doth golden seem.”
— Edmund Spenser
“In levying taxes and in shearing sheep it is well to stop when you get down to the skin.”
— Austin O’Malley
Credits and Debits
Credit: In yet another sign of eroding trust — and faith in the dollar-based monetary system — the Hungarian National Bank has decided to repatriate Hungary’s gold reserves, joining Germany, the Netherlands, Belgium and Austria, among others. Hungary will be removing three tons of the yellow metal it now stores in London. For some reason, Hungary seems to think gold is money par excellence, unlike some people:
Credit: Heck, even the socialist Hugo Chavez knew that only gold and silver were real money. It’s why he repatriated 180 tons of the yellow metal to Venezuela in 2011 — gold that the nation has been selling ever since to pay debts after its fiat currency, the bolivar, collapsed. By the way, the US dollar is a phony fiat currency too — which means it will suffer a similar fate once it finally loses its global reserve currency status.
Debit: Today, the Venezuelan bolivar is almost worthless; prices are currently increasing at a rate of 7459% year-over-year — and it’s only getting worse. Forward!
Credit: Venezuela’s hyperinflation recently caused deli managers at one supermarket to stop ordering ham because, after years of hyperinflation, the price is too large for the store’s deli scales. Uh huh. Ham — when it can be found — is retailing in Venezuela nowadays for about 1,480,000 bolivars per kilo. Unfortunately, the scales only have six digits. That has everyone in a bad mood. Well … except for the pigs.
Debit: You can bet taxpayers in New Jersey are in a bad mood now that their new governor, Phil Murphy, has proposed taxing online-room booking, ride-sharing, marijuana, e-cigarettes and Internet transactions, as well as raising taxes on millionaires and retail sales. In short, almost everything. The reason: funding a record $37.4 billion budget that boosts spending for schools, mass transit and pension fund bailouts. Wow.
Debit: As Zero Hedge observed, “Murphy said his goal is to give New Jerseyans more value for their tax dollars; instead he plans on bleeding them dry.” Heh. That’s one way to put it. Many many years ago, our federal and state governments existed to serve the people. Today, almost everywhere you go, it’s the other way around — and it’s worse than ever before.
Credit: Frankly, if the governor really wants to provide taxpayers with “more value,” then he should focus on working to radically reduce the size of his bloated government — not increase spending. Just sayin’.
Debit: Don’t look now, but home flipping just hit an 11-year high. You know what else is higher? Interest rates. Needless to say, rising interest rates are important because the world runs on credit — and that’s bad news for house flippers, car dealers, and deeply-indebted American consumers. It’s also bad for the US in general, which just had a $57 billion trade deficit in January — that’s its largest tab since 2008.
Debit: Of course, the red-hot housing market is just one reason why the Fed is determined to cool the economy before it overheats. There’s just one problem: because fear always trumps greed, I suspect the Fed will be unable to control rising rates in the same orderly manner that they did on the way down, when they were buying bonds.
Debit: Dave Kranzler says that, if you dig into the dirty details, you’ll find that the US Labor Bureau’s claim that 313,000 new jobs were created in February is actually fake news. In fact, those “impressive” net gains were concentrated in the part-time workforce; the US saw a net decline of 52,000 full-time jobs. You know, the only kind that pay enough to support the typical household of a growing family.
Debit: The current “official” unemployment rate of 4.1% is the result of the long “recovery” that began in June 2009. However, as Paul Craig Roberts points out, there’s a big problem with that figure: it doesn’t include millions of discouraged workers who quit looking because they couldn’t find jobs. Probably because most of those jobs went overseas — or were co-opted by illegal immigrants who were willing to work for less.
Debit: If we include discouraged workers who have been unemployed less than a year, then the rate is 8.2%. The US conveniently stopped tracking unemployment among discouraged workers out of the labor force for more than a year — but Shadowstats’ John Williams estimates the figure is close to 23%. I know … but it’s an easy problem to hide these days because EBT cards have eliminated the need for soup lines.
Debit: Finally … Speaking of soup, a restaurant owner in New Orleans is hoping to raise awareness of racial wealth differences by charging white customers more. Yep. White customers can choose to pay: A) the listed menu price of $12; or B) the “suggested” price of $30. Even so, 78% of white customers have paid the higher price. No, really. Surely, Martin Luther King is turning in his grave.
By the Numbers
Saturday is St. Patrick’s Day. Here’s a closer look at some of the numbers behind this unofficial American holiday:
60% Percentage of Americans who planned to celebrate St. Patty’s Day this year.
83% Percentage of Americans who planned to wear something green.
60 Pounds of dye required to turn the Chicago River green.
1 According to the Census Bureau, Boston’s rank among US cities with the largest percentage of Americans reporting Irish ancestry. (20%)
13,000,000 Glasses of Guinness that will be consumed worldwide on St. Patrick’s Day.
$39.65 Amount the average American will spend this year celebrating St. Patrick’s Day.
The Question of the Week
Last Week’s Poll Result
Tariffs: Good or bad?
- It depends. (51%)
- I’m not sure. (23%)
- Good (15%)
- Bad (11%)
More than 1600 people answered this week’s survey question and it turns out that only 1 in 9 Len Penzo dot Com readers believe that tariffs are always a bad idea. Just over half say it depends on the situation which, in my opinion, is the right answer. As I mentioned a couple of weeks ago, there’s a difference between free trade and fair trade — and tariffs can be used to ensure fair trade in instances where, for example, a foreign country is dumping a heavily-subsidized product on domestic shores to the detriment of home-grown manufacturers.
Useless News: The Sunday Golfer
It was a sunny Sunday morning, and a golfer was beginning his preshot routine, visualizing his upcoming shot, when a voice came over the clubhouse loudspeaker. “Would the gentleman on the ladies’ tee please back up to the men’s tee.”
The golfer remained in his routine, seemingly unfazed by the interruption.
A little louder: “Would the man on the women’s tee kindly back up to the men’s tee!”
The golfer raised up out of his stance, lowered his driver, and shouted, “Would the announcer in the clubhouse kindly shut up and let me play my second shot?”
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. Northwest Territories (9.75 pages/visit) (!!!)
2. Manitoba (1.92)
3. Quebec (1.72)
4. Saskatchewan (1.69)
5. Alberta (1.52)
9. Nunavut (1.25)
10. British Columbia (1.22)
11. New Brunswick (1.21)
12. Prince Edward Island (1.20)
13. Nova Scotia (1.19)
Whether you happen to enjoy what you’re reading (like those really crazy canucks in the Northwest Territories, eh) — or not (ahem, you hosers living on the frozen Nova Scotia 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
After reading a recent article on my blog asking if it is still possible to retire in today’s economy, Jason shared a question of his own:
“I question how many of the people who are unprepared for retirement live in 4000+ square foot houses in expensive neighborhoods, go on expensive vacations every year, buy a new car every other year, and wonder why they can’t put more than 10% away for retirement.”
I do too. But for most people today, even instant gratification takes too long.
I’m Len Penzo and I approved this message.
Photo Credit: (coffee) brendan-c