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 …
Rather than love, or money, or fame, give me truth.
– Henry David Thoreau
Try paying the bills with love.
– T. Harv Eker
Credits and Debits
Credit: Did you see this? The cost to fuel electric vehicles in the US is higher than gas-powered cars for the first time in 18 months. According to the Anderson Economic Group, “In Q4 2022, typical mid-priced internal combustion engine (ICE) car drivers paid about $11.29 to fuel their vehicles for 100 miles of driving. That cost was around 31 cents cheaper than the amount paid by mid-priced EV drivers charging mostly at home, and over $3 less than the cost borne by comparable EV drivers charging commercially.” Heh. Just wait until they have to replace the batteries.
Debit: Speaking of another scam, hackers stole $3.8 billion from crypto investors in 2022 – that’s a 13% increase from 2021. It also marks a new all-time high for annual theft of so-called digital coins. Think about that while you’re watching all of those cryptocurrency exchange commercials during this year’s Super Bowl telecast. Oh, wait …
Debit: And if you think the cryptocurrencies are a scam, this week the US government said “hold my beer.” In fact, the Bureau of
Labor Lying Statistics (BLS) reached a state of peak stupidity last week by celebrating a net gain of more than a half-million new jobs in January; a story the mainstream media happily published with giant headlines. Why is that stupid? Because that half-million figure included a seasonal adjustment of more than 3 million to the upside. So if you have your critical-thinking cap on, you understand that, in reality, more than 2.5 million jobs were actually lost in January. See how that works?
Debit: But wait … the subterfuge gets even better. Thanks to a captured financial media that is happy to dutifully transcribe whatever pablum that’s fed to them – rather than ask tough questions – almost every American is also blissfully unaware that the same jobs report also showed that the same DC bureaucrats quietly revised the employment numbers for the second-quarter 2022 – from a net gain of 1.1 million jobs to a net loss of 287,000 jobs. Frankly, the deception can only be a sign of abject incompetence or nefarious intent. I suspect it’s the latter, as repeated errors of this magnitude are usually intentional. Just ask this guy:
Credit: In other news, investment strategist Charlie Ripley noted this week that Jerome Powell’s lack of clarity on future interest rate moves is a signal that the Fed will soon be ending its rate tightening cycle, . He further opined that “the Fed is essentially speaking out of both sides of their mouth, as they signaled further increases are appropriate, while also acknowledging they’ll consider their cumulative tightening in future policy decisions.” Then again, the doublespeak makes perfect sense after you realize the Fed is the same organization that uses these trash receptacles in their Eccles Building corridors …
Credit: Frankly, last week’s remarks by Powell weren’t the only faux pas made by the Fed Chair. As macro analyst Peter Schiff points out, Powell also absurdly blamed “consumer expectations” for persistently-high prices when, in fact, “inflation is actually caused by the Fed printing money and Congress spending it.” As for the Fed’s rate hike campaign, Schiff says that even if the Fed delivers a few more modest rate hikes, it won’t be enough to slay the inflation dragon because even the recent spate of rate hikes hasn’t put the brakes on Americans’ habit of borrowing to maintain their living standard. Oh … and speaking of bad habits:
Debit: On the other hand, the Fed can’t raise rates high enough to choke off inflation in everything from food to the housing and stock markets without destroying the already-anemic economy. And even if they did, the cost to service the $31 trillion National Debt would overwhelm tax revenues and cripple the government. Never mind that the long-running currency debasement is a self-inflicted problem that’s been happening since the US dollar’s (USD) gold anchor was broken – thanks to the government’s spending addiction. Which is why you should never listen to what central bankers say. Instead, watch what they do.
Debit: Unfortunately for most Americans, inflation and rising interest rates are a one-two punch. And with average credit card annual percentage rates (APRs) near 20% and rising – as well as more consumers leaning on their plastic to maintain their standard of living – it should be no surprise to anyone that total credit card debt rose to a record $931 billion in 2022. That’s an increase of 18.5% from the previous year. Yikes.
Debit: By the way, for those of you counting at home, the average credit card balance rose to $5805 last year. We know that’s inconceivable to all of the financially responsible consumers out there who insist on paying their credit card balances in full every month. And who can blame them? After all, a credit card holder who made minimum monthly payments toward this average credit card balance with an APR of 20% would take more than 17 years to pay off the debt, including more than $8213 in interest. Ouch.
Credit: Meanwhile, the currency supply continues to shrink at an unprecedented pace, which is poison to our debt-based financial system. How so? As macro analyst Bill Holter warns, sustained deflation could cause the system to crash in the blink of an eye. “All you need,” he says, “is one large institution to become upside down and unable to pay – and it’ll spread like wildfire.” If you’re wondering how fast things could unwind, Holter says “after the first major entity collapses, I imagine it won’t take more than 72 hrs until everything else burns down.” Thankfully, there’s always a beacon in the night for those seeking shelter from the storm:
Credit: Needless to say, asset manager Egon VonGreyerz was singing from a similar play sheet this week. He believes it won’t be long before everyone “soon discovers that $325 trillion in global wealth isn’t real, but rather just an illusion based on fake (currency). ” He also warned that this will become apparent to all when $250 trillion in current global debt implodes. Why? Because the asset values that are supported by that debt will also implode. Uh huh. Now, if only somebody would send this to the big spenders who run things in Washington DC. Preferably before the fiat USD loses its global reserve currency (GRC) status …
Credit: Of course, despite myriad warning signs, there are plenty of naysayers who insist such warnings remain the exclusive domain of the tin foil hat crowd – which is why we’ll close this week with a final observation from Mr. Schiff, who says “the US economy is addicted to artificially low interest rates – but you can’t take an addict’s drug away without sending him into withdrawals.” Schiff notes that rates haven’t been this high since 2007, when the Fed was forced to reverse course due to the housing bust. His conclusion: Brace for impact because “the Fed knows it has backed itself into a corner. They just haven’t admitted it.” Yes … but more importantly, have you?
Last Week’s Poll Result
If the government eliminates cash, to what degree will that impact your freedom?
- Unacceptably (46%)
- Significantly (23%)
- Minimally (17%)
- Moderately (14%)
More than 2000 Len Penzo dot Com readers responded to last week’s question and it turns out that more than 2 out of every 3 of you say eliminating cash would pose a significant or unacceptable impact to your liberty. I suspect that figure would quickly climb even higher if a cash ban were to ever actually happen. Let’s hope we never have to find out.
Last week’s question was submitted by reader Kevin. 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
By the Numbers
With Valentine’s Day right around the corner, let’s take a look at some numbers behind this celebratory day of love and affection:
$25,900,000,000 Projected amount that will be spent to celebrate Valentine’s Day this year.
23% Percentage of Americans who expect their significant other to spend less on Valentine’s Day this year.
20% Share of people who think a Valentine’s Day gift is worth going into credit card debt.
$5,500,000,000 Amount Americans will spend on jewelry for Valentine’s Day gifts this year.
36% Percentage of people who say going out to dinner on Valentine’s Day is a bad deal.
$4,400,000,000 Amount Americans will spend on a special Valentine’s Day evening out this year.
55% Share of Americans who feel that financial infidelity can be worse than cheating.
50% Percentage of Americans who wouldn’t marry someone with a bad credit score.
25% Share of all marriages that begin online.
33% Increase in overall online dating activity in the US between February 1 and February 14.
Source: Wallet Hub
Useless News: TGIF
A drunk guy staggered out of a bar one particular Friday evening. As he did so, a fire engine raced past the bar, with its siren wailing and lights flashing.
Immediately, the drunk started chasing the truck down the street, begging the driver to pull over.
Despite his impaired condition, he ran as fast as he could – but less than 100 feet after starting his journey, he realized his pleas would go unanswered.
So the dejected man stopped and watched the fire engine continue racing down the street.
Then he shouted, “If that’s the way you want it, fine! I don’t need your stupid ice cream!”
(h/t: Julie H.)
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. Wyoming (3.88 pages/visit) (!!!)
2. New Hampshire (2.49)
3. Vermont (2.29)
4. Tennessee (2.25)
5. North Dakota (2.08)
46. Nebraska (1.66)
47. Maine (1.61)
48. Delaware (1.48)
49. Alaska (1.39)
50. South Carolina (1.27)
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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
After reading my article on money mirages that appear to offer savings — but really don’t — Topper left an impressive detailed commentary on the science of topping off a car gasoline tank, that finished with this simple request:
“I’ll continue to top (my tank). If you see me, don’t be mad. Instead, be mad at people who park in front of the pumps while they do their shopping.”
I never considered people who take a few minutes to buy a chili cheese dog, some beef jerky, a 128 ounce soda and a pack of smokes to be “shopping.” But that’s just me!
If you enjoyed this edition of Black Coffee and found it to be informative, please forward it to your friends and family. Thank you! 😀
I’m Len Penzo and I approved this message.
Photo Credit: public domain
Derek H says
I attribute to the appearance of credit card balance increases.
My bank offered me balance transfer checks last September, at a fee of 2%. They gave me 12 months to pay it off interest free.
The amount of money I took now sits in my savings account earning 3.25% interest (and rising), until I use it to pay off the transfer balance this September.
It’s a small win, but one that I celebrate with a sense of humor.
Len Penzo says
If you’d like to earn even higher interest rates on your savings, Derek, consider short-term US Treasury bills – that is what I am doing at the moment. The latest 8-week bill is paying 4.6% and the 4-week is around 4.56%. Go to TreasuryDirect.gov to buy them.
As an added bonus they are safer than bank savings accounts and money market funds, as they are not subject to crisis gating and/or fees. The earnings are also exempt from state and local taxes.
Sara King says
Thanks for today’s cup of joe. It was a really tasty one this week!
On your question of the week, I used to watch only the Super Bowl commercials. They were “must see TV” for me, but not any more. Not sure what happened, but they’ve been pretty lame for quite a while. Budweiser sometimes has a good one, but that’s about it.
Have a great weekend everybody!
I’m not watching either. Better things to do with my time.
Len Penzo says
I think the commercials have been lame for a long time now too, Sara. The bloom is definitely off that rose.
Karen Kinnane says
I look at the Budweiser commercial after the Super Bowl. All Budweiser commercials show up online. I occasionally look back at earlier Bud commercials, they are so lovely, many of them heart warming. I don’t drink beer but I love horses and the wonderful creativity and general “niceness” of the Bud ads! What, NO crypto commercials this year? No Matt Damon mumbling “Fortune favors the brave.” while hawking a pyramid scheme to the clueless while harvesting a huge paycheck????
Credit cards are a financial death trap for a lot of people! I have a friend who ran up $15,000 of debt in the blink of an eye. And for a long time she was only paying the minimum because that’s all she could afford to pay (or so she said).
She finally declared bankruptcy. It sounds bad, but in a way it was a good thing. Now she pays for everything with cash or out of her checking accounts.
Len Penzo says
It happens. Sometimes bankruptcy is the only way out, Madison.
Hard to believe 20% of people say it’s ok to go into credit card debt for a V-day gift. I’m guessing those people are thinking something like very expensive ring or necklace. Crazy world.
Len Penzo says
That one had me shaking my head too, Ted. I can only assume that percentage represented the share of people who are basically free spenders with no sense of financial responsibility.
Re: credit card debt. Credit cards are designed for people who lack self discipline. They’re great though if you are disciplined.
I take advantage of the rewards they offer and I earn enough points to pay for a nice hotel suite for a week every year. Other people prefer cash back bonuses and get hundreds of dollars back in cash a year.
The trick is to only spend what you can and use the credit card to pay then pay it all off, never carry a balance. The credit card companies are counting on you carrying a balance.
Photo Fred says
I put a lot of necessary expenses on credit cards (groceries, gas, etc.), utilizing the cash-back card that gets the best return in each category. Then I make sure to pay the card in full each month. This saves me several hundred dollars every year on a few cards. Not sure why everybody doesn’t do this?
Len Penzo says
We do the same thing. EVERYTHING goes on the rewards credit card, including groceries and gasoline – and it always gets paid in full at the end of the month.
Those credit card companies hate people like us!
Len, $5805 in average credit card debt is a scary statistic. I used to have around $6k in credit cards alone and haven’t accumulated as much debt since. Americans, including myself, need some type of motivation to stop spending carelessly. We all know to spend less than we earn but our emotions get the best of us.
Len Penzo says
It seems to me staying out of debt and not being an indentured servant to your creditors would be motivation enough.
RD Blakeslee says
Re the cartoon “What central bankers claim as money vs. What central bankers hoard as money”:
Len Penzo says
Yep, Dave. Do as they do, not as they say!
RD Blakeslee says
AND…the citizens of these countries are buying gold at a record rate, also:
If my grandpa had spent a lot on V-day, my grandma would have given him heck. haha
If you don’t show your love, respect and affection every day, going into debt V-d is fraud.
Len Penzo says
I agree with that whole-heartedly, Bill. (No pun intended. Okay … yes it was.)
I wonder, Mr. Dave do you think Mrs. Len bought him a fruitcake for V-Day?
RD Blakeslee says
Today would have been my grandpa’s 135th birthday. Grandma made it more about his birthday than Valentine’s Day. Valentine’s Day, and every holiday was about celebrating with the ones you loved, and lots of good homecooked food. It never was about exchanging gifts. Loving people was far more important than material things.
People today should learn from that.