Black Coffee: Faith and Confidence

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 hope everybody had an enjoyable week. Without further ado, let’s get right to this week’s commentary …

Nothing is so permanent as a temporary government program.

– Milton Friedman

Trust not too much to appearances.

– Virgil

Hell is truth seen too late.

– Thomas Hobbes

Credits and Debits

Debit: Did you see this? It turns out that more than 1.1 million prison inmates received stimulus checks, totaling over $1.3 billion. Even more astounding is that 163,000 of them were serving life sentences. Hey … who says crime doesn’t pay? And while that may annoy you, it’s especially good news for the over-30 crowd …

Debit: For those who insist the US is not in a recession – despite suffering two consecutive quarters of negative GDP growth – consider this: According to a recent survey, a record number of Americans are now taking second jobs, freelancing, or other side hustles while already holding down a main job. In fact, roughly 1 in 4 Americans said they had to take the extra work “out of necessity to support basic family needs.” That doesn’t sound like a healthy economy to me, but I’m not an economist either. Or a politician.

Credit: Believe it or not, there is some good economic news, and it’s related to housing. Well … assuming you’ve been having trouble finding a new home, and you don’t need a mortgage to afford one. Then again, if you’re looking to sell, not so much. That’s because, thanks to rising interest rates, the supply of new homes is not only skyrocketing, but is poised to reach its highest level ever. See for yourself:

Debit: Unfortunately, not everything is in plentiful supply; California has been struggling all week long to keep its electricity grid functioning. Hopefully, the bureaucrats there will figure out a way to bolster their overtaxed infrastructure before 2035 when everybody there will be forced to buy an EV. Then again, I guess there are always workarounds; you just have to be able think outside of the box …

Debit: Meanwhile, the Fed is in negotiations with the US Treasury; apparently, the Fed wants the Treasury to cover the central bank’s operating expenses. Temporarily, of course. According to legendary asset manager Jim Sinclair, that’s because the Fed has no income now that interest rates are rising. In other words: its balance sheet problems are finally coming home to roost. I know – the whole idea sounds crazy. I mean … how can an entity that routinely conjures countless quantities of fiat currency out of thin air be unable to pay its bills? Is there actually somebody out there who really believes that?

Credit: Sadly, few Americans are aware that after the US dollar’s (USD) gold anchor was “temporarily” broken in 1971, maintaining “full faith and confidence” in our debt-based monetary system has required  manipulation of derivative paper gold and silver prices via naked shorting. Since then, the notional value of those contracts has exceeded the actual supply of physical metal by 99%. And macro analyst Matthew Piepenburg says that the banks plan on keeping the paper gold price as low as possible until they feel they have enough physical gold in hand – and “that’s when the gold price will rip and the USD sinks.” But until then, it’s still …

Credit: Needless to say, the era of printing debauched fiat currency and then giving it to other nations as payment for their commodities is over. The fiat dollar circle jerk is blowing up and a complete and total monetary reevaluation of all physical commodities is just around the corner. And if you don’t believe me, just ask the Federal Reserve Chair:

Credit: Of course, we are already witnessing the death throes of the current fraudulent debt-based monetary system. As macro analyst Rafi Farber explains, “The reason European electricity prices are climbing so high and so fast right now is not demand-driven; rather, it’s a short squeeze due to the structure of the electricity market, which is derivative-managed. That’s just a tiny financial pyramid within a much larger pyramid that is the debt-based monetary system.” Confused? If so, try to picture a multi-level marketing program, wrapped in financial fraud, inside a Ponzi scheme. Er … or something like that.

Credit: By the way, Farber also notes that, over the past several years we’ve seen several significant commodity short squeezes that have broken their respective markets – namely, palladium in 2020 and nickel, natural gas, and electricity this year. Unfortunately, Farber says, “the last two commodities that will experience a similar market-breaking short-squeeze are silver and gold. The good news is, when they do finally break, fair prices will return – not only for gold and silver, but for all of commodities – because those precious metals are the money that ultimately determines the fair price of every commodity.” Imagine that.

Debit: One last point from Farber: He warns that when the manipulation ends and gold and silver suddenly find their true free market value, “hyperinflation will have instantly taken place, therefore making the USD, de facto dead. It will also mean that people with wealth insurance in the form of physical gold and silver will come out of this monetary system reset relatively unscathed, if not wealthier than they were before. Unfortunately, it also means those without wealth insurance may see themselves wiped out financially – which will no doubt leave a very bad taste in their mouth. How bad? Well … just ask this guy:

Credit: Speaking of being unprepared, Jeff Thomas warns that “the warning signs are already taking place but aren’t heavily publicized. The stage is set, and we’re approaching the first major events. The victims in this play will be average people who simply hope to have a decent life; but they’ll be caught unaware and unable to even understand what has occurred, let alone take action to save themselves. And those who haven’t spent the previous years educating themselves and preparing for an alternative life will suffer the most.” Sad but true. On the other hand, the central banks have most certainly been preparing …

Credit: Speaking of central banks, financial commentator Franklin Sanders asks you to consider this: “In this world, which would you rather trust with your wealth? The rotten and corrupt Federal Reserve Bank, whose genius in the last 21 years has guided the USD from 1/252nd ounce of gold to 1/1711th ounce today? Or (physical) gold and silver with a 5200-year track record of protecting families and their wealth? Y’all decide.” Oh, I have decided, Mr. Sanders; I have. Here’s hoping you folks have too.

By the Numbers

If you’re thinking of retiring soon – or want to retire sooner than you think you can – keep in mind that some cities will stretch your retirement dollars further than others. Here are the ten most affordable US cities according to a recent 2022 study:

10 Huntington, WV

9 Cheyenne, WY

8 Birmingham, AL

7 Fort Smith, AR

6 Memphis, TN

5 Caspar, WY

4 Knoxville, TN

3 Mobile, AL

2 Huntsville, AL

1 Montgomery, AL

Source: WalletHub

Last Week’s Poll Result

In order of importance, how would you rank: wealth, health and free time?

• Health; Wealth; Free Time (48%)
• Health; Free Time; Wealth (38%)
• Free Time; Health; Wealth (9%)
• Wealth; Free Time; Health (3%)
• Wealth; Health; Free Time (2%)
• Free Time; Wealth; Health (0%)

More than 2100 Len Penzo dot Com readers responded to last week’s question and it turns out that, not surprisingly, almost 7 in 8 of you say good health trumps both wealth and free time. Perhaps also not surprisingly, only 3% of respondents put health at the very bottom of that short list.

This week’s question was submitted by Kevinootz. 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.

The Question of the Week

[poll id=”439″]

Useless News: Psychology Test

A psychoanalyst showed a patient an inkblot, and asked him what he saw. After looking at the picture for a couple of seconds, the patient said: “A man and woman making love.”

So the psychoanalyst showed his patient a second inkblot. After briefly examining the picture, the patient said: “That’s also a man and woman making love.”

Finally, the psychoanalyst decided to show the patient a third inkblot. “That is a man and woman making love too,” said the patient.

Upon hearing the same answer for the third time in a row, the psychoanalyst told the patient: “You’re obsessed with sex.”

“What do you mean I’m obsessed?” said the patient. “You’re the one with all the dirty pictures!”

(h/t: Twizler)

More Useless News

Here are the top — and bottom — five states in terms of the average number of pages viewed per visit here at Len Penzo dot Com over the past 30 days:

1. West Virginia (2.31 pages/visit)
2. Kentucky (2.21)
3. Tennessee (2.10)
4. Wisconsin (2.09)
5. New Mexico (2.07)

46. Wyoming (1.62)
47. Oregon (1.58)
48. Montana (1.46)
49. Virginia (1.42)
50. South Carolina (1.36)

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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 out to me at: Len@LenPenzo.com

After reading about the factors that influence your credit score, Leanna left this comment:

I really like your website, Len. I can’t stop reading it!

Thanks, Leanna. After almost 14 years, there are now more than 2800 articles here — so if you read in bed, you’re going to be awake for a long long time.

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Photo Credit: public domain