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.
I heard somebody the other day say the world has gone completely insane and they just want to make it stop. The truth is the insanity will continue until our corrupt debt-based monetary system is replaced with a new one based upon real wealth. Why? Because, as I’ve said here many times before: Corrupt money eventually leads to a corrupt society.
The further a society drifts from truth, the more it will hate those who speak it.
– George Orwell
A lie would have no sense unless the truth were felt dangerous.
— Alfred Adler
Fidelity bought with money is overcome by money.
— Agamemnon
Credits and Debits
Debit: Did you see this? It’s not a coincidence that blue-collar jobs have been going overseas ever since the dollar was officially decoupled from gold in 1971. And now the COVID crisis is putting white collar workers at risk too, as many companies are beginning to ask: If we know we can successfully run our business through Zoom meetings, why can’t we offshore the work for a fraction of the cost? Don’t laugh; it’s coming.
Credit: On the other hand, Fed governor James Bullard predicted the US economy will recover from the highest unemployment since the Great Depression of the 1930s with a rebound so powerful that the jobless rate will be under 10% by year end. Yes, this year end; as in December 2020. Heh. I wonder if I can get some of what he’s been smokin’. Or maybe both of these guys …
Debit: Needless to say, most of you who aren’t fortunate enough to have the same, uh, medicinal prescription as Mr. Bullard can probably see why it’s far more likely that the economy will be struggling with high unemployment for at least several years — which is especially bad news news for lenders, who are dealing with loan defaults that are now at a six year high. (Psst. A year from now, the current default rate will be looked at as the good ol’ days.)
Debit: Meanwhile, retail landlords have been sending out thousands of default notices to tenants, who in turn have experienced a collapse in foot traffic, sales and — most importantly — cash flow due to the COVID-19 economic shut down. In fact, only 25% of expected rent payments was received by landlords in April — that’s an estimated shortfall of $7.4 billion. And if you think that’s bad, just wait until the ripple effects get started.
Debit: Of course, retailers aren’t the only ones struggling to pay their bills at the moment. The United States’ largest shopping center, the Mall of America in Minneapolis, has missed two months of payments on its $1.4 billion mortgage. Making matters worse, the lender is having trouble finding a repo man with a big enough flatbed.
Credit: I’ve been saying for more than a month now that I believe the coronavirus will be used by the powers-that-be as a scapegoat for the imminent death of our debt-based monetary system. Which is why I was happy to see a fellow engineer, John Titus, come to the same conclusion in Part 5 of his excellent documentary series on the criminal Fed entitled Mafiacracy Now — which is both enlightening and highly entertaining. Here’s a little taste to whet your appetite:
Debit: By the way, you can take it to the bank that the Fed is going all-in this time. They essentially admitted it when Fed Chair Jerome Powell recently told us that, “We’re not out of ammunition by a long shot. There’s really no limit to what we can do with these lending programs to support the economy, and we’re committed to doing everything we can as long as we need to.” You know what, Mr. Powell? That’s exactly what we’re afraid of.
Credit: The great Franklin Sanders certainly heard Powell threaten us with more “support.” I know this because he said so in his always-terrific daily newsletter. Mr. Sanders also left this particularly wise and pithy admonition: “Take this home: All of the central banks are trying to inflate their way out of the financial crisis — that is, solve the debt problem with more debt. Just like starting a fire with dynamite.” Makes sense. To a central banker.
Credit: As asset manager Eric Peters notes, although the Fed doesn’t seem to realize it yet, the reality is we’ve finally reached the point where “Monetary policy has pulled the entirety of future prosperity to the present — and no matter how many monetary magic wands are waved, the real economy will remain unresponsive because monetary policy is now utterly impotent.” Unfortunately, that hasn’t stopped the Fed from continuing to screw the rest of us.
can we get a fact check on this? pic.twitter.com/3lgQFdU0hC
StockCats (@StockCats) May 29, 2020
Debit: For now, all of the funny money being created by the Fed continues to turn economic law on its head. The most recent example: Despite the highest unemployment numbers ever, the average US income climbed an incredible 10.5% in April — that’s the biggest gain ever — and it’s all thanks to “enhanced” unemployment benefits. No, really.
Debit: So as a result of all this Fed “help” most people on the dole now have no incentive to work whatsoever. The good news is it appears as if the unlimited currency printing has finally resulted in the “utopia” its backers have been promising the rest of us for 100 years. The bad news is the monetary system is in a vegetative state — and the politicians and central bankers look like they have no intention of pulling the plug until things get a lot worse.
The Question of the Week
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Last Week’s Poll Results
Have you missed dining in restaurants during the COVID lockdown?
- No (46%)
- Yes (36%)
- Meh (18%)
More than 1700 Len Penzo dot Com readers responded to this week’s poll and it turns out that almost 2 in 3 of them aren’t itching to eat a restaurant meal. Looks like I’m in the other camp, yet again. I really miss the experience of having a nice restaurant meal — whether it’s with my family, friends or just the Honeybee and me.
If you have a question you’d like me to ask the readers here, send it to me at Len@LenPenzo.com — and be sure to put “Question of the Week” in the subject line.
By the Numbers
If I seem a little grumpy, it’s because I’m on a diet. With that in mind, here are some calorie counts of various foods:
236 Calories in a baker’s dozen of fried breaded shrimp.
227 Calories in one avocado.
231 Calories in a small serving (2.5 oz) of McDonald’s French fries.
290 Calories in a four-ounce serving of Ben & Jerry’s Chunky Monkey ice cream.
33 Minutes of jogging required to burn one serving of Chunky Monkey.
80 Minutes of walking needed to burn the same number of calories.
0 Percentage of people in their right minds who think 2.5 ounces of McDonald’s fries and four ounces of Chunky Monkey are legitimate single-serving sizes.
Source: Calorie King
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Useless News: The Rookie Salesman
It was the first day on the job for a young but very enthusiastic door-to-door vacuum salesman.
At his very first house, the salesman knocked on the door — and it wasn’t long before he was greeted by a very mean and tough looking lady. But before she had a chance to say anything, the eager salesman ran past her and dumped cow patties all over the living room carpet.
The salesman then said, “Ma’am, if this vacuum cleaner don’t do wonders cleaning this horrendous mess up, I’ll promise to eat every last chunk of it!”
Upon hearing that the lady smirked and said, “So … do you want ketchup on that?”
“Why do you ask?” said the salesman.
The lady replied, “Because we just moved in and we haven’t got the electricity turned on yet.”
(h/t: Sam I Am)
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
Stefano wasn’t buying any of my reasons explaining why a 30-year loan is better than a 15-year mortgage. At least I think he wasn’t when he left this comment:
I must say, I can’t concur with you 100%. But that’s merely my opinion, which could be wrong. I don’t know.
Maybe it’s just me, Stefano, but I’m betting you hate it when people want you to recommend a good restaurant.
If you enjoyed this, please forward it to your friends and family. I’m Len Penzo and I approved this message.
Photo Credit: stock photo
Hi Len,
I love my cup of joe of every Saturday morning! Thank you for putting these together every week.
It’s pretty quiet and seems like the system has stabilized for now. But the next crisis is right around the corner. I just don’t know what it will be. Maybe the failure of a major bank?
Sara
Thanks, Sara! I don’t know when the next shoe is going to drop or what it will be.
I’m just enjoying the relative calm and full grocery store shelves for now.
Good luck on your diet. Food is corrupt. I offshore my calories. I Zoom back and forth. Forcing function diet works the best. I don’t get to read Len Penzo until I jog and work out! Was goin to take this idea to Shark Tank but they don’t know how to do math in gold!
“I don’t know how to do math in gold!”
Duke, you’re so funny! I almost spit my coffee out when I read that.
(p.s. – coffee with no sugar)
The financial devastation that is coming will be impossible to escape. All we can do is to mitigate it on a personal level. Government entities, institutions, and the people who rely on them are going to have real problems as this continues to play out. My strategy is to save myself, and I suggest everybody else do the same. Get out of the debt based fiat Ponzi by becoming your own central bank and socking away some gold and silver.
Great advice, Daniel. The Fed’s policy is a ponzi scheme that was intended to be drawn out for as long as possible. When it fails inflation will soar. So everyone better get their wheel-barrows ready for hauling your paper to market for a loaf of bread. A change ain’t coming until things are so bad that the streets look like what’s going on in Minneapolis and other big cities right now. Then the government will ditch the dollar and we’ll have the Amero. Let’s hope it is not a cryptocurrency!
I will say this, Daniel: There are more than a few Len Penzo dot Com readers here who understand the importance of what you are saying. However, getting out of the system entirely for most people is impossible — but I agree everyone should have some wealth insurance.
Len, I totally agree with one part of your message that I hope isn’t lost on others as they read. Everybody is still acting like we’ll be able to just turn the economy back on like a light switch and then we’ll all go back to how things were before this lock down B.S. started. Normal isn’t coming back. When this is all over, nothing will ever be the same.
Agree … but that doesn’t mean things won’t get better than they currently are either. I am confident that a year or two after we convert to a new monetary system (or at least reset the current system), things will be much better than they are now.
And if we truly do return to a monetary system backed by gold, we should see a return to the glory days of the 50s and 60s when the US was a manufacturing powerhouse, and blue collar workers could support an entire family on a single income.
The bad news is it will take some time to recover; rebooting an economy as large as the US economy is like starting a mile-long freight train from a dead stop — it takes awhile to get up to speed.
The Fed was merged with the Treasury a couple months ago. I think Trump is going to keep the Fed but reset the system to a gold backed currency.
The system died the first time the Fed decided to buy commercial debt backed with over-valued collateral. That was back in 2009. Now they are buying everything in sight to keep asset prices propped up and zombie companies from going under. The system is still alive only because the Fed is acting as the heart-lung machine. As soon as enough people wake up, they are going to force the Fed to pull the plug.
You are so funny. Good luck with the lifestyle changes. Eating more vegetarian meals has done wonders for us. I really think the answer to the plastic pollution crisis and much of the world problems is everyone should eat more beans, oatmeal and fresh vegetables/fruits! Good luck!
Oh … I could never be a vegetarian, Dr. P! (Although up until recently my sister had been one most of her life.)
Reported on Yahoo thus morning: “We crossed a lot of red lines that had not been crossed before,” Powell said. “I’m very confident that this is the situation where you do that and then you figure it out.”
Sounds like Nancy Pelosi’s famous admission of incompetence: “First you have to pass a law, then you read it.”
Dave, you and I both know the Fed has been making things up as they go along for quite awhile now — at least since 2008.
The criminals at the Fed are privatizing profits and socializing losses. It needs to go.
If not the Fed, then the debt-based monetary system it is enabling does.
Len, do you know if anyone ever successfully sued the Fed to get them to stop the never ending money printing reckless market rigging?
Not that I know of, Oscar.
Please send your column to my son as I think he will enjoy it as much as I do. hp
Harold, thanks for the recommendation. However, I do not send unsolicited emails. But I encourage you to copy the URL for this column at the top of your browser and send it to your son via email!