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.
Len asked me to fill in for him while he’s on vacation this week. I hope everybody enjoys this special “Grandfather Says” edition of Black Coffee.
Okay, away we go …
“What has destroyed every previous civilization has been the tendency to the unequal distribution of wealth and power.”
— Henry George
“It is hard to imagine a more stupid or more dangerous way of making decisions than by putting those decisions in the hands of people who pay no price for being wrong.”
— Thomas Sowell
“The only possible output of the way we create and distribute “money” (credit and currency) is soaring wealth/income inequality, as all the new money flows to the wealthy, who use the ‘cheap’ money from central and private banks to lend at high rates of interest to debt-serfs, buy back corporate shares or buy up income-producing assets.”
— Charles Hugh Smith
Credits and Debits
Credit: The price of the typical single-family house across Washington state’s King, Snohomish and Pierce counties has now risen an eye-popping 53% in just four years. But …
Debit: There has been a 46% increase in people living in vehicles including RVs in King County since 2017. Well, maybe we can “thank” the fed for conjuring up well-nigh endless fiat money, which finds its way into places like “Silicone” Valley and inflates their bubbles. Pun intended.
Credit: Retirees with some savings and other assets feel that their lives are overall quite positive, and that retirement is more or less as they expected; they don’t feel blindsided by unpleasant surprises, their outlooks are bright, and most have no regrets about their retirement path. Many of these retirees benefit from a rapidly-disappearing aspect of the American retirement experience: the defined benefit pension. But …
Debit: There has been more than a two-fold increase in the rate at which Americans age 65 and over file for bankruptcy — and an almost five-fold increase in the percentage of older persons in the US bankruptcy system. A lack of “some savings and other assets” is too bad, but life happens. It’s all a matter of luck, I guess. (Not.)
Credit:The balance of Treasury securities in July fell by $24 billion to $2.3 trillion; that’s the lowest since April 2014. Since the beginning of the QE unwind, the Fed has shed $129 billion in Treasuries. But …
Debit: The US government is set to borrow nearly $1 trillion this year, which is an 84% jump from last year. Of course, shrinking the money supply while greatly increasing borrowing won’t pinch anybody, right? Spending cuts, anybody? No? Well … can’t we at least hold back a little on the spending? Nope — because there’s a rush to spend every penny appropriated.
Debit: In fact, a government spending spree of potentially historic proportions will play out over the final seven weeks of fiscal 2018, as federal agencies look to spend $140 billion more than they thought they’d get before Congress signed the omnibus spending bill.
Debit: Last week, the Senate rejected proposed spending cuts of $15 billion in previously-appropriated government funding. Onward and upward the spending goes, until … when?
Credit: Meanwhile, it looks like 23% of small businesses are planning to create new jobs. But …
Debit: A survey by the National Federation of Independent Businesses found that 37% of business owners have job openings that they’ve been unable to fill. Maybe this is why:
Credit: In other news, the number of 401(k) millionaires increased to 157,000 at the end of the first quarter this year — that’s an increase of 45% compared with the same time a year earlier, according to Fidelity Investments. But …
Debit: Millions of workers’ average hourly earnings were unchanged, seasonally adjusted, from June 2017 to June 2018.
Debit: The share of men between the ages of 25 and 54 who are neither working nor looking for work has doubled since the 1970s. Charles Hugh Smith implies this imbalance will increase in the US. The question is: for how long?
Credit: And finally … The federal workforce is smaller by about 1% this year. But …
Debit: The same federal workforce remains the largest employer in the country. Remembering his own work as a US patent examiner, Grandfather says that many government jobs authorize this or that bureaucrat to tell folks what they can’t do or have — but …as Thomas Sowell observed, they bear none of the costs they impose. We need less of them, in Grandfather’s opinion.
Last Week’s Poll Result
What do you think is the smartest career decision for young people today?
- Learn a vocational trade (55%)
- Get a college degree (24%)
- Start your own business (21%)
More than 1400 Len Penzo dot Com readers answered this week’s survey question and it turns out that a college degree is no longer the sure-bet advice most people would give to students fresh out of high school — not quite 1 in 4 people say they would recommend that route to kids. Instead, more than half now say that learning a vocational trade is the smartest career path.
If you have a question you’d like to see featured here, please send it to me at Len@LenPenzo.com and be sure to put “Question of the Week” in the subject line.
The Question of the Week
[poll id="228"]
(The Best of) By the Numbers
For those who are interested, the first Monday of every March is Fun Facts About Names Day. But that doesn’t mean we can’t share a few facts in August:
97 Nicknames that can be derived from the name Elizabeth. See the complete list here.
0 The number of people in my family who knew that Barbie’s full name is Barbie Millicent Roberts.
9 Letters in the first name (male or female) that, on average, earns the highest income: Alexander. (Runner up: Meredith.)
58 Letters in: Llanfairpwllgwyngyllgogerychwyrndrobwllllantysiliogogogoch. That’s the name of a small village in Wales.
4 Seconds it takes to say “Llanfairpwllgwyngyllgogerychwyrndrobwllllantysiliogogogoch.”
20,799 The number of American babies given the name Emma in 2014. It was the most popular name for girls in the US that year.
5 The number of baby girls in the US who were named Xiclali in 2011.
5 The number of baby boys in America who were dubbed Zytavion in 2011.
Sources: 94.7 TheWave; World Record Academy; Mongabay
Useless News: Shopping at Costco
One day, while in line at the company cafeteria, John said to Scott, “My elbow hurts like hell. I guess I’d better see a doctor.”
“Listen, you don’t have to spend that kind of money,” said Scott. “There’s a diagnostic computer down at Costco. Just give it a urine sample and the computer will tell you what’s wrong and what to do about it. It takes ten seconds and costs ten dollars — and it’s a lot cheaper than a doctor.”
So later that afternoon, John deposited a urine sample in a small jar and took it to Costco where he inserted ten dollars into a slot in the diagnostic computer. The computer then lit up and asked for the urine sample. So John poured the sample into the slot and waited. Ten seconds later, the computer ejected the following printout:
You have tennis elbow. Soak your arm in warm water and avoid heavy activity. It will improve in two weeks. Thank you for shopping at Costco.
That evening, while thinking how amazing this new technology was, John began wondering if the computer could be fooled. So he mixed some tap water, a stool sample from his dog, urine samples from his wife and daughter. Then he tossed in a sperm sample from himself for good measure.
The next day John hurried back to Costco, eager to check the results. After depositing ten dollars, and giving the computer his concoction, the computer printed out the following:
1. Your tap water is too hard. Get a water softener. ( Aisle 9 )
2. Your dog has ringworm. Bathe him with anti-fungal shampoo. ( Aisle 7 )
3. Your daughter has a cocaine habit. Get her into rehab.
4. Your wife is pregnant; twins. They aren’t yours. Get a lawyer.
5. If you don’t stop playing with yourself, your elbow will never get better.
Thank you for shopping at Costco.
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 (1.85 pages/visit)
2. Alberta (1.68)
3. Nova Scotia (1.54)
4. Ontario (1.52)
5. Newfoundland and Labrador (1.47)
9. British Columbia (1.40)
10. Saskatchewan (1.37)
11. Northwest Territories (1.33)
12. Nunavut (1.25)
13. Prince Edward Island (1.11)
Whether you happen to enjoy what you’re reading (like those crazy French Canadiens in Quebec, eh) — or not (ahem, you hosers living on the frozen Prince Edward Island tundra) — please don’t forget to:
1. Click on that Like button in the sidebar to your right and become a fan of Len Penzo dot Com on Facebook!
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(The Best of) Letters, I Get Letters
Every week Len features the most interesting question or comment — assuming he gets 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 Len at: Len@LenPenzo.com
After reading Len’s critically important article explaining why Miracle Whip should never ever be placed on a tuna sandwich, Spencer F disputed his claim that fish is meat:
“According to the Ron Swanson Pyramid of Greatness, fish is for sport only; fish meat is practically a vegetable.”
And here was Len’s response …
Spencer: I’d like to argue with you and Ron Swanson, but I’ve got a splitting haddock. (Yes, I said that on porpoise.)
I’m RD Blakeslee, and I approved this message.
Original oil painting by: Grandfather’s wife
The special Grandfather Says edition of Black Coffee is fantastic!
I always enjoy Grandfather Says content! Thanks for being a Guest Host while Len is taking some time off.
Grandpa, that was so good it almost made me miss Len! Thanks for making sure I got my Black Coffee fix while Len is away.
Sara
Thank you, Jason, David and Sarah.
Glad this post fills the need and I hope Len is getting a good rest.
“Many of these retirees benefit from a rapidly-disappearing aspect of the American retirement experience: the defined benefit pension.”
The pensions are why markets are still being levitated! Anyone looking at the fundamentals know that stocks should be at 10,000 (at most) and interest rates at a minimum of 10%. But those numbers would instantly crush all of those pensions so the Fed must keep creating dollars to keep the ship from capsizing. It looks like all this money being created is finally kicking off serious inflation. At some point, the Fed is going to lose control!
The market levitation relates to 401K pensions, and the like.
The defined benefit plans will be less and less a tax burden as us old-system pensioners die out and paid benefits disappear, along with us.
But total government pension liabilities are already huge and growing more rapidly than funding is being provided for them, and the unfunded liability will have to be dealt with. How? Who knows – but it will have to be painful.
Profligacy always gets pricey, eventually.
That video made me laugh. Had to watch it twice. I’ve got a niece who is just like that. Allergic to any kind of work. That is a real problem today. Too many lazy people.
The nanny state ends to promote irresponsible personal behavior, which doesn’t excuse it, but is a reason why nannyism, so to speak, should be curtailed.
A larger, fundamental problem referred to by George and Smith (above) has never been solved, short of societal dissolution and reformation and the U.S. will, indeed, prove exceptional if the problem is solved here any other way.
I’ll admit it. I have no sympathy for all of these people living in RVs in high tax states like Washington (and CA, NJ, NY, IL, CT, etc.) where it’s impossible to live on $50k/yr. mainly because housing is so expensive. The key is to move to a state where the taxes are lower and housing is affordable.
Good idea – as long as they don’t bring their politics with them! Too bad they usually vote for the same kind of politicians who ruined the state they’re fleeing from.
See Colorado.
there is no such thing as “affordable” as job markets dictate housing, if you look at a place like Chattanooga, with more favorable taxes, the homes are priced double, with lower property/income taxes, as with a place like upstate Ny, depending on county, majority of the “affordable” housing purchase price is way less for an equal footprint, but the taxes… problems lie in the group think political scum spending, cut their coffers and homes become long term affordable, even if the fiat sticker shock and 20% interest, you can buy a 2k car and own it till it rusts out, no need to finance the latest greatest, grounding people and building lasting communities is not on the Agenda, rental planned obsolescent society is what we have
Bilderberg, there are people who do not allow the macro-economy to control their lives.
For example, there IS such a thing as affordable housing which is not dictated by any particular job market.
One may have to move to get “out from under” such local economic oppression and it may not be easy, but many of us have done it.
“…rental planned obsolescent society is (not) what we have.”
in my residential area.
for those who can work remotely, or from home, yes, they arent tied to areas, those who have carriers reliant on stationary business or industry dont have options of just packing it up to risk what little they can come up with already to start over
you may live in a microcosm bubble, but a lot of the foundation population dont
i figured you would be more open to this obvious conundrum hence rv lifestyle to save money in big income areas are boombing
Dark Knight and Peter, I have personal experience along the lines you discuss.
My life has been an odyssey out of the factories of Detroit into the mountains of West Virginia and I have contended often, over the forty-one years I have been here, with newcomers who don’t accept the lifestyle we have here, failing to recognize that what they want would destroy what we have.
Ya. You’d think they could put 2+2 together and figure things out, but they don’t. If only there was a way to change that.
“Fraid we can’t.
What is it Ron White says?
“You can’t fix ——“.
Good job, Grandfather! That video says it all about where we are – and I can’t stop laughing. 🙂
As for the bankrupt elderly, I know one sweet old lady. She has her own system to “support” herself (in addition, of course, to social security and government housing.) She gets as many credit cards as she can, runs them up to the limit (because she has to get presents for all the grandkids), and then declares bankuptcy. Rinse and repeat as necessary.
Oh my! Tut, tut, granny …
“Onward and upward the spending goes, until … when?”
Until it can’t. But I know you knew that, RD.
Yes, I do know it, W.A.
My finances are as independent of the macro-economy as is reasonable to make them.
Thank you for filling in this week, Grandfather. Good job!!!!
Thank you, Kendra.