Black Coffee: Attack of the Mendacious Money Monsters

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.

Let’s get right to this week’s commentary, shall we?

We create monsters and then we can’t control them.

— Joel Coen

The most difficult thing is the decision to act; the rest is merely tenacity. The fears are paper tigers.

— Amelia Earhart

Credits and Debits

Debit: Did you see this? More than 11 million families are at risk of losing housing when federal coronavirus eviction and foreclosure protections expire later this year; the Consumer Financial Protection Bureau found that a record 2.1 million homeowners are at least 90 days behind on mortgage payments and 8.8 million households are behind on rent. And yet housing prices and rents are at all-time highs in many areas. As if that makes any sense.

Debit: In other news, I see the supply chain turmoil is getting worse. At least it is if you peruse responses from the latest ISM manufacturing survey. Regarding electrical equipment, appliances and components, a respondent says, “Things are out of control; wide-scale shortages.” And a chemical manufacturer reports that, “Supply chains are depleted; inventories are empty, with increasing lead times, prices, and demand.” Too bad they can’t conjure real goods out of thin air like the US dollar.

Record prices paid & charged by US bizs. “IHS Markits flash mfg. PMI also showed supply shortages &shipping delays led to the longest delivery times in records back to 2007.” The talking Fed-heads won’t be able to underplay inflation realities much longer https://t.co/yBfAGqPBUV

fred hickey (@htsfhickey) March 24, 2021

Debit: Meanwhile, as if the latest $1.9 trillion stimulus package wasn’t enough, the US now has a $3 trillion infrastructure package in the works. And with tax revenue down, another record multi-trillion deficit in 2021 is all but certain — which is why the Fed will have no choice but to implement yield curve control (YCC) soon in an effort to ensure interest rates stay permanently depressed near the zero bound. No, they won’t admit it — but it’s coming.

& then will all the fantasy math as opposed to reality math they’ll claim it all pays for itself over 10 years.
Just like the GOP did with the tax cuts which was also all BS.
2 parties same operating principles.

Look at all the programs that have paid for themselves: pic.twitter.com/FJLpGtOHgG

Sven Henrich (@NorthmanTrader) March 22, 2021

Credit: Low interest rates push freshly-printed dollars to the least productive parts of the economy — so expect the number of zombie firms and unproductive debt to soar even higher when YCC is implemented. As economist Daniel Lacalle notes, “Allowing free-floating rates would transfer liquidity to productive (businesses), strengthen the recovery and reduce the government’s incentive to overspend.” Well … almost; he definitely lost me on that last point. And speaking of corporate zombies …

So WeDoesn’tWork?

AGFattal (@AGFattal) March 22, 2021

Credit: Then again, while Main Street continues to struggle, Wall Street is doing better than ever. But, as asset manager Matthew Piepenburg notes, “The very fact that markets reached all-time highs while global economies, employment and social conditions reached new lows during a world-wide shutdown should have everyone scratching their heads.” Uh huh. And here’s something else that should have us all scratching our heads …

Debit: By the way, Piepenburg isn’t scratching anything — or at least not his head — because he knows exactly what’s going on: “There’s no such thing as free market capitalism in a world where lawmakers and bankers have hijacked, distorted and destroyed price discovery — and every aspect of natural supply and demand — via (corrupt) fiscal and monetary policies.” Yes! Somebody give that man a prize. And this man too:

Underlying most arguments against the free market is a lack of belief in freedom itself.
― Milton Friedman pic.twitter.com/wcIWm3nPFX

Steve Hanke (@steve_hanke) March 25, 2021

Debit: In fact, thanks to these policies there are now so many dollars floating around that a Brooklyn-based art director is receiving bids to buy fart audio clips. No, really. His highest offer has been $183 for a year’s worth of air-biscuit recordings; he’s also sold a single barking-spider clip for $85. Laugh all you want, but at least it’s arguably tangible — unlike bitcoin. (Hodlers: Please send your hate mail to Len@LenPenzo.com)

Debit: Needless to say, in order to keep their fraudulent game going, it’s imperative that both central banks and the insolvent nations they serve make the otherwise-weak fiat currencies they peddle appear valuable — which is why they constantly suppress gold and silver prices by naked shorting paper contracts via their bullion bank proxies to maintain the illusion that paper is actual wealth. Imagine that.

Get it before you can’t! pic.twitter.com/9oFp3jhNhK

— LongShawnSilver (@LongShawnSilver) March 26, 2021

Debit: Of course, the bankers’ need to make their fiat trash appear to be anything but was perfectly exemplified this week by Fed chair Jerome Powell, who noted that “crypto assets such as bitcoin are highly volatile and therefore not really useful as a store of value (or) particularly useful as a means of payment. It’s essentially a substitute for gold rather than for the dollar.” Heh. And if you believe that, you’ll probably also believe this:

Debit: Powell’s follow-on remarks were just as absurd, saying — with a straight face, no less — that fiat currencies such as the US dollar are “are issued with the benefit of the public in mind.” But I think we all know that what he meant to say was that they are issued with the benefit of the government in mind.

A lie told a thousand times becomes the truth

OilOracle (@OracleOil) March 22, 2021

Credit: Sadly, Lacalle reminds us that “once YCC fails — like all other financial repression tools — central banks and governments will say that it didn’t work because they didn’t do enough. But it’s never enough when they use other people’s money.” You can say that again. Or this …

Debit: Until then, you can bet that governments and their criminal central bank cohorts will do everything in their power to continue making actual stores of wealth like gold and silver look far less valuable than what a truly free and fair market would show via honest price discovery. So don’t get fooled by their sleight of hand because I promise you this: When the monetary system ruse comes to an end, those who do will be the ones stuck paying the tab.

This should mean the price drops another 3% at least

Shepherd Neumayer – SILVERSQUEEZE (@ShepherdNeum) March 24, 2021

By the Numbers

Today marks one year since Congress signed the $2.2 trillion CARES Act. With that in mind, here are ten numbers that sum up where we’ve been over the last year and where we might be headed next:

$5,400,000,000,000 How much the federal government has now authorized in stimulus spending.

0% Current interest rates, after the Federal Reserve cut them to prevent the monetary system from imploding.

$3200 That’s how much eligible Americans received over the course of three rounds of stimulus checks

$1,600,000,000,000 Savings that US households accumulated last year.

$835,000,000,000 How much the government has authorized for struggling small businesses through the Paycheck Protection Program.

9,500,000 The number of COVID-related job losses that have yet to be recovered one year later.

10% That’s how much home prices soared between January 2020 and January 2021.

3.5% GDP losses in 2020.

$3,100,000,000,000 The US budget deficit in the 2020 fiscal year.

1957 According to the government’s official inflation measurement, the last year inflation fell as steeply as it supposedly did last month — despite steeply rising prices everywhere.

Source: Forbes

The Question of the Week

[poll id="365"]

Last Week’s Poll Results

What is your biggest life regret?

• Something else (20%)
• Not saving enough money (18%)
• Not taking more risks (17%)
• Not being a better parent, spouse or child (14%)
• Living an unhealthy lifestyle (12%)
• Making the wrong career choice (11%)
• Working too much (8%)

More than 2100 Len Penzo dot Com readers responded to last week’s question and it turns out that almost 1 in 5 said their biggest regret in life (so far) has been not saving enough cash. That was the most often cited regret among those who didn’t select “something else.” Hopefully, the majority of those who regret their inability to save enough are young enough to recover before they reach retirement age.

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.

Useless News: Doctor Check-up

An 80-year-old rancher from Oregon goes to the doctor for a check-up.

The doctor is amazed at what good shape the guy is in and asks, “How do you stay in such great physical condition?”

“I’m a rancher. I get up well before daylight riding herd and mending fences and when I’m not doing that, in my spare time I go out hunting or fishing.”

He pauses, then said “In the evening, I have a beer, a shot of whiskey, then take a hot bath just before I go to bed, and that’s why I’m in such good shape.”

“Well” doctor said, “I’m sure that helps, but there’s got to be more to it. How old was your father when he died?'”

“Who said my father is dead?” the rancher said.

The doctor is amazed. “You mean you’re 80-years old and your father’s still alive? How old is he?”

“He’s 102 years old,’ said the old cowboy. “In fact he worked and hunted with me this morning, and then we went to a roadhouse for a while and had five pints of beer and that’s why he’s still alive. He’s also a rancher and he hunts and fishes too!”

‘Well,” the doctor says, “That’s great, but I’m sure there’s more to it than that. How about your father’s father? How old was he when he died?’

“Who said my Grandpa’s dead?” the rancher shot back.

Stunned, the doctor asks, “You mean you’re 80-years old and your grandfather’s still alive?”

“He’s 118 years old,” the 80-year old cowboy said.

The doctor is getting frustrated at this point, “So, I’m guessing he went hunting with you this morning too?”

“No, Grandpa couldn’t go this morning because he’s getting married today.”

At this point the doctor is close to losing it. “Getting married? Why on earth would a 118 year-old guy want to get married?”

The 80-year old rancher replied, “Who said he wanted to?”

(h/t: RD Blakeslee)

More Useless News

Here are the top five articles viewed by my 37,333 RSS feed, weekly email subscribers, and other followers over the past 30 days (excluding Black Coffee posts):

1. The 7 Most Popular Ways to Commit Financial Suicide
2. 9 Important Strategies to Help You Manage Financial Risk
3. 25 Examples of Shrinkflation That Aren’t Fooling Anybody Anymore
4. 18 Fun Facts About Money You Probably Didn’t Know
5. A Few Thoughts From Aunt Doris: How to Make Ends Meet

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(The Best of) 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

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

Mr. Wonderful (don’t look at me; that’s what he calls himself) dropped this strange note in my inbox:

You got change for a hundy?

Um … if you’re so wonderful, how come you’re not married? Most married guys never have that kind of cash in their wallets. 😉

If you enjoyed this, please forward it to your friends and family. I’m Len Penzo and I approved this message.

Photo Credit: public domain