Len Penzo dot Com

The offbeat personal finance blog for responsible people.

Black Coffee: Something for Nothing

By

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 …

Government is the great fiction, through which everybody endeavors to live at the expense of everybody else.

– Frederic Bastiat

Credits and Debits

Credit: Did you see this? According to a new survey, nearly 75% of workers report that they or a spouse have saved for retirement. Among workers, 27% said they have less than $25,000 in savings, excluding home equity — and one-third say they’re doing well financially, with $250,000 or more saved for their golden years. Hooray!

Credit: The same survey also found that 80% of retirees are “optimistic about their financial prospects” and three out of four US retirees and workers believe they’ll have enough cash for retirement, with 72% of workers saying they’re somewhat or very confident that they’ll be able to live comfortably in their golden years — that’s close to the survey’s all-time of 74% in 1993. “Comfortably,” huh? Obviously, they have more confidence in today’s currency of the realm than I do. Oh … and the supply chain:

Debit: Speaking of doing well, why does anyone still work in the stress-filled private sector when they can be an overpaid government employee? This is no more apparent than in Illinois where annual pay is: $115,000 for prison barbers; $123,000 for janitors; $174,000 and $222,278 for Chicago bus drivers and transit workers, respectively; and $418,677 for community college presidents. It’s also where 171 small town managers out-earned the governor ($181,670) last year. No, really.

Debit: In fact, Illinois public employees and retirees with $100,000+ paychecks grew from 109,881 in 2019 to an all-time high of 122,258 last year. The annual cost: nearly $16 billion — and that will only increase in the coming years. How can Illinois afford such lunacy? You can blame Congress’ recent $2 trillion ‘American Rescue Act’ — it sent $14 billion to Illinois state and local governments. Heh. Remember that the next time you turn in your Form 1040.

Credit: By the way, an updated analysis at OpenTheBooks.com shows that an Illinois family of four now owes more in unfunded pension liabilities ($98,000) than they earn in household income ($63,585). In a state of 13 million residents, every man, woman, and child owes $24,000 — on an estimated $317 billion pension liability. On second thought … now that every American is footing the bill for all of the fiscally irresponsible states, I guess those numbers are officially moot.

Debit: Of course, when it comes to overpaid government employees, Illinois is far from alone. For example, it’s no secret that the highest-paid Los Angeles County lifeguards earn up to $392,000 annually — and dozens of others rake in more than $200,000 a year. So it doesn’t take much imagination to figure out what other state and municipal workers in California are bringing home if the government lifeguards are earning that much. Obviously, it’s a great gig if you can get it …

Debit: Unfortunately, this game of robbing the taxpayers will continue — and only get worse — as long as the federal government keeps bailing out free-spending Big Government states such as Illinois, New York, California and Michigan. And why not? Congress and these bankrupt states have become partners in crime. Too bad it’s at the expense of all the small-government fiscally-conservative states. (Psst. Now it’s really time for everyone to get out of the pool …)

Credit: Meanwhile, the looting of the US Treasury to cover these expenditures continues. And the unfettered currency printing required to keep the game going has far-reaching consequences. So much so that financial commentator Jim Quinn observes, “There’s now a baseball card bubble frenzy on par with stocks, bonds, real estate, crypto, art, used cars, NFTs, and just about anything not tied down.” Yep. It’s just more proof that the money our fragile social fabric depends on to function has lost all meaning. Thanks Fed.

Credit: The good news is the public at large has yet to figure out just how debauched the cash in their wallets and bank accounts truly is. Ironically, that ignorance is the primary factor that’s preserving whatever is left of the dollar’s rapidly dwindling purchasing power. Then again, there isn’t a carpenter in America who isn’t aware of what has happened to the greenback during the last ten months …

Debit: Now for the bad news: The thoroughly-debauched dollar is what we’re paid for our labor — and then use to buy the things we need for daily life. Unfortunately, we also use it to store our hard-earned retirement savings. Just don’t expect any changes to the rotting system until it completely collapses because it’s wildly profitable for both the politicians and the bankers. And if you don’t believe me, just ask this guy:

Debit: The plunging purchasing power of the dollars in your wallet is easier to see when viewing commodity prices, which rose sharply this week. Yes, again. In fact, for the year, more than half of all major commodity contracts have soared by 50% or higher — and that’s something that hasn’t happened in 50 years. And why is that? Well … while not a perfect answer, Sir Isaac Newton might point to his Third Law of Thermodynamics, which says that for every action, there is an equal but opposite reaction.

Credit: This week Alasdair Macleod illustrated just how broken markets are, as all commodities have surged since January — except gold and silver. Uh huh. Those metals are not only down, but they’re also the worst performers in 2021. The good news is, that also means wealth insurance is on sale. I realize that’s of no concern for those of you who believe the US dollar will remain the world’s premier reserve currency in the coming years … but I wasn’t talking to you.

By the Numbers

The number of billionaires on Forbes’ 35th annual list of the world’s wealthiest people exploded to an unprecedented 2755 — that’s 660 more than last year. Here are the 10 richest, in reverse order:

$84,500,000,000 Mukesh Ambani (Primary wealth source: multiple)

$89,000,000,000 Surgey Brin (Google)

$91,500,000,000 Larry Page (Google)

$93,000,000,000 Larry Ellison (Oracle)

$96,000,000,000 Warren Buffett (Berkshire Hathaway)

$97,000,000,000 Mark Zuckerberg (Facebook)

$124,000,000,000 Bill Gates (Microsoft)

$150,000,000,000 Bernard Arnault (Louis Vuitton)

$151,000,000,000 Elon Musk (Tesla)

$177,000,000,000 Jeff Bezos (Amazon)

Source: Forbes

The Question of the Week

[poll id="370"]

Last Week’s Poll Results

How much was your federal tax refund this year?

  • I didn’t get a refund (55%)
  • More than $1000 (26%)
  • $1000 or less (16%)
  • I don’t know yet (4%)

More than 2000 Len Penzo dot Com readers responded to last week’s question and it turns out that more than 3 in 5 either received a rebate from Uncle Sam of less than $1000 — or got nothing at all. For those of you wondering why the government bothers to tax us at all in light of its willingness to print as many US dollars as it needs to satisfy its every need, the answer can be summed up in one word: power. More specifically, politicians use tax policy to gain more power (and contributions) by offering tax breaks to their friends — and threatening higher taxes on their opponents. Then again, if the US Constitution was followed to the letter, that little game wouldn’t be quite so effective as it is today — or as it has been for the last century.

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: Social Work

A husband and wife who worked for the circus went to an adoption agency, but the social worker raised questions about their suitability. So the couple produced photos of their 50-foot motor home, which was clean, well-maintained and equipped with a beautiful nursery.

Not convinced, the social worker then raised concerns about the education a child would receive while in the couple’s care.

The husband responded, “We’ve arranged for a full-time tutor who will teach the child all the usual subjects along with French, Mandarin, and computer skills.”

The social worker solemnly nodded her head in apparent approval — but then she proceeded to express concerns about a child being raised in a circus environment.

The wife tried to allay the social worker’s trepidation. “Our nanny is a certified expert in pediatric care, welfare, and diet,” she explained.

Upon hearing that, the social worker was finally satisfied. She then asked, “What age child are you hoping to adopt?”

“It doesn’t really matter,” replied the husband, “as long as the kid fits in the cannon.”

(h/t: Antonio Fortunato)

More Useless News

Hey, while you’re here, 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!

2. Make sure you follow me on my new favorite quick-chat site, Gab — oh yeah, and Parler too! Of course, you can always follow me on Twitter too. Just be careful what you say there.

3. Subscribe via email too!

And last, but not least …

4. Please support this website by patronizing my sponsors!

Thank you!!!! 😊

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

Imagine my surprise when Melinda left this apparent, well … let’s call it “fan mail” in my email inbox:

Len, the cure for my loneliness is in your pants!

Really? Three pennies, two nickels, a Swiss army knife and some lint?

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

Comments

  1. 1

    Sara King says

    Hi Len,

    Love this week’s question! I’m one of those people who don’t need a lot to be happy. I think those who live a simple life are the ones who are also most content.

    Have a great weekend!

    Sara

    • 2

      Len Penzo says

      Thank you, Sara. I think by definition, “low maintenance” people lead MUCH happier lives.

  2. 3

    Lauren P. says

    Good morning Len! Thanks for the cuppa and for addressing the issue of why we’re still taxed when Gov’t. just prints all the $ they want. My husband’s been asking that for a few months. IMO your answer could also be used for ‘why are some still made to wear masks and distance themselves even after being vaccinated’? ;o) Enjoy your day!

    • 4

      Len Penzo says

      Hi, Lauren! Definitely agree about the masks – it’s main effect now is to signal your fealty to government.

  3. 5

    Sam I Am says

    Those in control of the system are going to keep suppressing gold and silver prices until they completely lose control. On that fateful day the price is going to gap higher by many multiples. Then those who own it won’t sell and those who finally realize what is happening will not be able to get it.

    • 6

      Len Penzo says

      Well, Sam … people who want silver now — especially is any significant quantity — can’t get it now. They are being told there is a six- to eight-week minimum wait (which, of course, is a big red flag that signals the official “market” price is seriously incorrect).

      Another red flag that official prices are being suppressed by the powers that be: although the official spot silver price of silver is supposedly under $26, APMEX is selling generic silver rounds for almost $32 — but you have to wait weeks for them).

      The “good” news is that, as of Sunday morning, APMEX does have about 7000 American Silver Eagles in stock — but you have to pay $39 per ounce for one.

      By the way, think about that … there are 300 million people in America, and its largest precious metals dealer has about 7000 American silver Eagles to satisfy demand. That’s not a lot of silver to go around.

  4. 7

    Dan says

    A baseball card bubble. If only I had kept mine in a shoebox instead of ruining them by hooking them to my bike forks with a clothespin!

    • 8

      Len Penzo says

      I both, Dan! 😃

      The trouble for me is, after all of these years I can’t seem to find where I put my shoebox — and I had a lot of cards!

  5. 9

    InhalingCO2 says

    Crazy chart on the Money Supply. Too much money will chase too few goods. Look for the 9-11 blip. That used to huge. Thanks for the Cuppa Jo

    • 10

      Len Penzo says

      You make an excellent point on the 9-11 blip! If you click on the tweet and then click on the actual graph, you can just barely see it. Of course, that little blip at the turn of the century really was a big deal at the time — and unlike now, the Fed actually was able to withdraw ALL of the added liquidity with no negative repercussions after Y2K came and went.

      There is also one more tiny blip in 2008-9 at the start of the Great Financial Crisis. It’s only slightly larger than the initial blip; that too raised eyebrows at the time. Again, it is amazing it appears only as a blip compared to the most recent surge.

      The signs that the dollar is dying are all around us, yet the majority of the public remains blissfully unaware.

      The rapidly escalating inflation problem will change that soon.

  6. 11

    M4693 says

    Gold and silver are not keeping up. It’s Bitcoin for the win!

    • 12

      Len Penzo says

      Uh huh. 🤣 🤣 🤣

      You’re trying to press my buttons, M — but it ain’t working.

  7. 13

    RD Blakeslee says

    Strange feeling – like time is suspended, waiting for something to break and cause the world to shake.

    • 14

      Len Penzo says

      I get the same feeling, Dave. The quiet before the storm.

  8. 15

    samam says

    Is there a minimim oz of silver required for a family? instead of a net worth proportion is there. certain amount in oz of silver that is recommend by the wise for a family to have during these financial crises ? thank you.

    • 16

      Len Penzo says

      I think every family should have some so-called “junk” silver on hand — that is, American silver coins minted in 1964 and earlier — for barter purposes, in case the credit system seizes up in a currency crisis.

      Remember, as a point of reference, one silver US dime will always buy a loaf of bread or a dozen eggs or a pound of bacon, and a US silver quarter will always buy a gallon of gasoline or a pound of chicken.

      You can gauge how much junk silver you need based on those examples. Here are other benchmarks: https://lenpenzo.com/blog/id47735-historical-gold-and-silver-benchmarks-for-job-wages-and-commodity-prices.html