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.
Well … another busy week is behind us. So with that in mind, let’s get this holiday party started …
Please to put a nickel; please to put a dime. How petitions trickle in at Christmas time!
– Phyllis McGinley
Christmas is a time when kids tell Santa what they want and adults pay for it. Deficits are when adults tell the government what they want – and their kids pay for it.
– Richard Lamm
Credits and Debits
Debit: Did you see this? Price inflation in Egypt is causing its national currency, the pound, to lose value at a rapid pace over the past year. If that isn’t bad enough, the Egyptian central bank is expected to make an additional devaluation to the Egyptian pound in the coming weeks. As a result, panicked Egyptians are now turning to gold and are hoarding as much as the yellow metal as they can in an effort to protect what is left of their savings from total annihilation. The bad news is, they are now paying far higher prices for the yellow metal than those who bought their wealth insurance before the currency crisis started. Imagine that.
Credit: Meanwhile, here in the US approximately 450,000 homebuyers currently owe more than their house is worth. Of those, around 60%, or 270,000, bought their homes in the first nine months of 2022. In total, around 8% of mortgages taken out in 2022 are now marginally underwater, with another 20% having a low equity position. And while the overall total is far from staggering, the growing number of underwater homeowners is yet another sign that the latest housing bubble is about to burst. Oh … and speaking of bursting bubbles:
Debit: On a related note, one agency that forecasts 30-year mortgage rates into the future is currently predicting rates as high as 9.1% in 2023, 12.4% in 2024, 13.5% in 2025, and 14.8% in 2026. Since most homebuyers who depend on mortgages make their purchasing decisions based on monthly payments, that can’t be good news for anybody who is counting on increasing their home equity anytime soon – like people who may have taken out a mortgage for a new home and need to move. Or those who have taken advantage of a big cash-out refi in the last decade – or two.
Debit: Maybe all of those depressing housing market numbers are why a recent poll found that only 23% of Americans feel “very comfortable” about their finances. Fewer – just 12% – consider themselves wealthy. Even more surprising, despite their high net worth, less than half of all millionaires, or 44%, say they feel “very comfortable” about their finances and only 29% felt wealthy. Now why do you think that is? Anybody?
Debit: Perhaps all those millionaires aren’t feeling so wealthy because they’re holding commercial real estate. After all, prior to the pandemic, roughly 95% of US commercial office space was occupied. But by March 2020, occupancy plummeted to 10%; since then it has only recovered to 47%, with tenuous prospects for additional significant improvement. As a result, $453 billion in office commercial real estate value has been wiped out since 2020 in what is being called “an office real estate apocalypse.” Or maybe it’s because a lot of those “millionaires” are now ex-millionaires – for one reason or another … 
Debit: In other news, this week the November CPI was released and it shows that inflation isn’t quite as bad as last month – it’s now “only” 7.1% on an annualized basis. The bad news is, at that pace, your purchasing power will still be halved in less than ten years. On the bright side, used car and truck prices fell for the fifth consecutive month – while the cost of medical care and energy also dropped. In contrast, prices continued to climb for food, communications, recreation, motor vehicle insurance, education, and apparel. Unlike American workers’ real wages, which have fallen for 19 consecutive months; and soon to be 20.
(h/t: r/WallStreetSilver u/SilverSurfer)
(h/t: MediaCloud.theweek.com)
Debit: Of course, price inflation is actually the manifestation of reduced currency purchasing power which, in turn, is merely a symptom of a government printing fiat currency far beyond the amount of actual goods and services being generated by its economy. And history has proven time and again that governments which are unable to wean themselves from the printing press eventually drive the purchasing power of their currencies to zero – unlike gold and silver, which are real money that always retain their value.
(h/t: r/WallStreetSilver u/BoatSurfer600)
Debit: Then again, global inflation could soon be especially problematic considering that the European Union announced a set of new directives to make cash usage more difficult, as the bloc approved a new $10,557 limit for all cash transactions. However, EU countries will be allowed to reduce the limit even more. For example, Spain currently has the lowest cash transaction limit at just $1055. Behold! Yet another prediction the “tin foil hat” crowd that has come to pass.
Debit: Not surprisingly, the private-sale market isn’t the only sector that will be affected by this new round of cash restrictions; other sectors including jewelry and goldsmithing will also face heightened control from the EU authorities now. Of course, this is happening because both Europe and the US have been backed into a corner, thanks to the staggering amount of individual, business, and government debt on the books. In fact, the debt is so enormous that former International Monetary Fund advisor Nouriel Roubini is warning that the world will soon be faced with “the mother of all economic crises.”
Credit: Obviously, the powers-that-be are well aware that the global debt-based monetary system is unraveling, which is why many analysts believe that Saudis are now surreptitiously taking Chinese yuan as payment for their oil. The conventional wisdom is that, for now, the Saudis will be turning their yuan into gold while they continue to wait for Russia to introduce its new Eurasian Economic Trade Settlement currency that is currently in development. In other words: It looks like the USD is about to have a very uncomfortable encounter with this guy …
Credit: The original thinking was that the global economy was beholden to “the West” and – by extension – the fiat US dollar (USD). But that’s turned out to be an old wives’ tale. In fact, it has become perfectly clear that there’s a new paradigm afoot because the economic bloc that comprises “the West” is continuing to shrink; so much so that it currently makes up just 15% of the world’s population. One thing is certain: As the world’s dependence on the USD wanes further, the purchasing power of America’s currency will continue to fall – along with most Americans’ standard of living. At least until the US becomes far less dependent on imports.
Credit: Macroeconomist Alasdair Macleod notes that “the Russian official who is (developing) this new trade settlement currency, is also behind the proposed Moscow Gold Exchange – so the new trade currency will almost certainly be gold-based. If that happens I think the dollar is toast.” Frankly, if the fiat USD is toast, then all fiat currencies pretending to be real money will be toast. The good news is, it’s an outcome that should be welcomed – at least for those who have been prudent enough to protect themselves with a little wealth insurance. In the meantime …
By the Numbers
A recent study compared inflation for the 23 largest MSAs (Metropolitan Statistical Areas) in the US to determine where inflation has risen the most – and the least – over the past 12 months.
23 Minneapolis (year-over-year inflation increase: 5.3%)
22 Washington DC (5.6%)
21 Honolulu (5.8%)
20 New York (5.9%)
19 Los Angeles (6.0%)
5 Seattle (8.9%)
4 Tampa (9.6%)
3 Miami (10.1%)
2 Atlanta (10.6%)
1 Phoenix (12.1%)
Source: WalletHub
The Question of the Week
[poll id="453"]
Last Week’s Poll Result
How many US states have you visited?
- 6 to 10 (15%)
- 26 to 30 (14%)
- 41 to 49 (14%)
- 21 to 25 (13%)
- 11 to 15 (12%)
- 16 to 20 (11%)
- 31 to 35 (8%)
- 36 to 40 (7%)
- 5 or less (6%)
- All 50! (0%)
More than 2100 Len Penzo dot Com readers answered last week’s poll question and it turns out that 43% have visited more than half of America’s states – that includes the seven respondents who say they have been to all 50 of them. As for yours truly, I’ve got five more states to go: Idaho, Montana, North Dakota, Wisconsin and Alaska.
Last week’s question was contributed by reader Frank. 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.
Useless News: Looking for Work
(h/t: Santander)
More 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. Newfoundland & Labrador (2.25 pages/visit)
2. Ontario (1.91)
3. Alberta (1.85)
4. Saskatchewan (1.80)
5. Yukon (1.67)
9. British Columbia (1.45)
10. Prince Edward Island (1.33)
11. Manitoba (1.28)
12. Quebec (1.21)
13. Nunavut (1.00)
Whether you happen to enjoy what you’re reading (like those crazy canucks in Newfoundland & Labrador, eh) — or not (ahem, you hosers living on the frozen Nunavut tundra) — please don’t forget to:
1. Subscribe to my weekly Len Penzo dot Com Newsletter! (It’s easy! See the big green box in the sidebar at the top of the page.)
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Thank you so much!!!! 😊
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 me at: Len@LenPenzo.com
After reading about the most important things homeowners should consider in a pest control company, Amanda D. shared this:
I’ve been dealing with mice. So many mice! I hear them in the walls. The other day I found three of them in a sack of rice!
Heh. OK … I’m really sorry, but I have to ask: Were they blind?
If you enjoyed this edition of Black Coffee and found it to be informative, please forward it to your friends and family. Thank you! 😀
Photo Credit: stock photo
Hi Len,
I love the Christmas season!
Silver and gold are starting to make their moves but they still have a long way to go to catch up with reality.
Merry Christmas everyone!
Sara
Merry Christmas, Sara!
I know at least one person who has never been outside the state he was born in – and he is in his mid 40’s. Granted, he lives in Texas and that’s a big state, but it’s pretty impressive! I’d say almost as impressive as somebody who has been to all 50 states.
If you told me he lived in Rhode Island that would be even more impressive.
Very true!
That is pretty amazing, Cowpoke. But who knows? With more people able to work from home now, that may end up being rather common in the future.
Enjoyed the holiday roundup. As things get worse and worse with each passing day it gets easier to see that the current system is coming to an end. If you asked me whether the system was going to end 2 years ago I would have said no.
I think more pain is coming, but we’ll be better off after this system dies and is hopefully replaced with one backed by gold.
Yep. Things are going to get worse before they get better if only because there is no other alternative.
Here’s how I plan to survive the coming new year (and beyond). I’m going to spend less than I earn. I’m going to stay out of debt (except maybe a mortgage). I’m going to only invest in real things.
I’m going to try to stop using DoorDash. I have been wasting a lot of money on it lately. 🙁
Great idea, Madison. DoorDash is expensive!
Those are all very worthy plans, Oscar. We should all strive to do the same.
That new law making $10k cash transactions illegal in the EU is more proof we are moving closer to a cashless society. The vice is getting squeezed tighter and tighter and nobody seems to notice.
I’ll admit, a cashless world seems like a good idea on paper and don’t get me wrong, cashless transactions does have its benefits. You can’t say it’s not convenient. But a 100% cashless society? It’s a terrible idea.
Don’t people realize how easy it would be to bring a cashless world to its knees? If the electricity gets turned off, good luck trying to pay for your groceries. And if the government doesn’t like your political point of view, good luck accessing your digital accounts! How will you live? You will be at their mercy.
Let’s hope the people fight any ideas to become truly cashless with all their might. We can’t let that happen!
Shocked that SBF is actually in jail. Who else thinks he is going to be Epsteined?
Me. And I just read he is so tired of being in the Bahamian jail that he is now not going to fight extradition to the U.S.A.
Dead men tell no tales. And SBF has MANY MANY tales powerful people don’t want to be known.
Me too.
Len, imo today’s comments are as interesting as the Black Coffee! Re: this week’s question, we’re still saving, but a LOT less than in prior years thanks to inflation. Merry Christmas, everyone!! 🙂
Thanks for stopping by every week and taking the time to say hello, Lauren! Merry Christmas to you and your family! 🙂
I know you preach about owning gold and silver. They are important. But the most important things we can have are the basic necessities of life. If the entire system collapses, people better learn how to grow some food!
I don’t think it will get that bad, Betty – but it would be wise to have at least a few months of food stores in case supply chains temporarily break.
Well, another year is coming to an end and I think, again, that I’m lucky to have experienced it. One often make one’s own good luck by wise decisions, but life itself can’t be “decided”.
As I reflect on Len’s blog, it has been increasingly hampered by powerful forces in virtual control of the internet, exploiting it for their own power and wealth, to the detriment of those of us who don’t contribute very much to their care and feeding.
But there are a few things we offbeat financially responsible people can do to help ourselves. For example, let’s look at the Google search engine’s affect on Len’s site, and what we can do to counter it.
When I searched GOOGLE for “offbeat personal finance” I got nothing at all. But when I searched Brave ( https://brave.com/ ) the following came up at the top of the list:
Len Penzo dot Com – Page 76 of 138 – The offbeat personal finance …lenpenzo.com › home
The offbeat personal finance blog for responsible people.
Len Penzo dot Com – Page 91 of 136 – The offbeat personal finance …lenpenzo.com › home
The offbeat personal finance blog for responsible people.
Visit Lenpenzo.com – Len Penzo dot Com – The offbeat personal finance …links.giveawayoftheday.com› lenpenzo.com
Len Penzo dot Com – The offbeat personal finance blog for responsible people. The offbeat personal finance blog for responsible people.
Len Penzo dot Com – Page 78 of 138 – The offbeat personal finance …lenpenzo.com › home
The offbeat personal finance blog for responsible people.
Len Penzo dot Com – Page 3 of 137 – The offbeat personal finance …lenpenzo.com › home
The offbeat personal finance blog for responsible people.
lenpenzo.com ▷ Len Penzo dot Com – The offbeat personal finance …webrate.org› index.php › site › lenpenzo.com
The offbeat personal finance blog for responsible people.
Brave has proven entirely adequate for finding other stuff I need on the web and, unlike Google, does not track your searches and sell your data.
But, to turn to more important personal things, I reflect on my good fortune to have had the opportunity to contribute to Len’s blog.
Len, I wish you and all the folks here great love and happiness with family and friends this holiday season, and a new year filled with contentment.
Dave, I am very fortunate to have you as a long-time contributor here, both for Grandfather Says, and your comments on many articles. 🙂
As for Google … you are correct. The search engine has been slowly strangling my visibility on their website; it started several years ago and now it is very hard to find anything of mine on Google. It’s so bad that many of my articles that have been syndicated show up on Google for the syndicating sites, while there is no listing for my original website link at all. It is absolutely infuriating.
Oh well! That’s the way the cookie crumbles, It’s also why I remind my readers to PLEASE PLEASE PLEASE share anything they enjoy here with their friends and family via social media and/or email. Or for even more help, link one of my relevant articles in other website comment sections.
Just this morning; A comprehensive analysis of the dramatic run on available supplies of precious metals: https://www.zerohedge.com/commodities/comex-silver-registered-ratio-falls-111-lowest-22-years
The plot thickens!
My last tour with the Foreign Service before retiring was in Sweden. They have almost eliminated cash transactions at the retail level. Many Swedish banks don’t even have cash on hand! I tried to buy some fresh berries from a street vendor and even he would not take cash, had to use the app. This has a snowballing effect, the fewer folks use cash it tends to discourage the remaining vendors from accepting cash (handling cash is expensive), and leads to even less cash usage. Cash transactions are down from 60% to 12% over the last 10yr period.
I wonder if cash still survives in the US due to the high rates that credit cards charge (to vendors) for their use. Somehow the Visa and MC stranglehold has not been broken. But if these rates came down, then I suspect a lot of vendors would discourage cash in lieu of charging as cash is expensive (security, theft, cost of handling, etc.).
Merry Christmas 🙂
I can see how a cashless society can be addicting. Of course, most (all?) addictions tend to have their drawbacks, and a cashless society is loaded with many terrible ones.
Hi Len, I love reading Black Coffee while sipping said from my bunker! My 6 month necessities are secure. Now I would like to hold some of the physical gold and silver to brighten up the bunker. My question is where is the best place to buy such shiny materials? I’m sure you’ve covered that but I seem to be search challenged…
I use JMBullion.com they are reliable and fast shipping
Another good choice!
Shawn, I prefer APMEX. They are slightly more expensive than other options, but they are the largest dealer in the US. As such, their selection is unparalleled, their customer service is absolutely stellar, and you don’t have to worry about them ever going under and leaving you holding the bag after you order, like some smaller dealers have in the past.