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 a wonderful week. And with that, let’s get right to this week’s commentary, shall we?
A penny saved is a penny earned.
– Ben Franklin
Be careful who you call your friends. I’d rather have four quarters than one hundred pennies.
– Al Capone
Never trust money more than gold.
– Toba Beta
Credits and Debits
Credit: Did you see this? A multimillion-dollar hoard of more than 800 US Civil War-era coins was recently found in a Kentucky cornfield. Most of the gold US dollars, dated from 1850 through 1862, were found loose in the ground, although some had remnants of a cloth bag adhered to it, suggesting that the coins were in a bag when they were originally buried. Meanwhile, others are finding plenty of gold elsewhere:
This is the gold that was waiting for someone to find in a Kentucky cornfield.
Credit: Somewhat coincidentally, I see a realtor discovered more than a million old copper pennies with a face value of at least $10,000 in a basement crawlspace of her late father’s former Los Angeles home (see photo below). Unfortunately, the copper load is so bulky there isn’t a single bank willing to take them. At the same time, the family is reluctant to pay CoinStar 8%. So what to do? Well … coin collectors point out that rare pennies can fetch millions of dollars. Others suggest melting them down; the copper content of a million pre-1982 pennies is currently $30,000. However, what everyone can agree on is this: nobody likes pennies …
Proof that one million pennies takes up a lot of space. (Photo Credit: John Reyes)
Credit: By the way, the so-called “Kentucky Gold Hoard” sold out almost as soon as it was offered for sale. And you can bet those same bankers who didn’t want anything to do with those old copper pennies, would have jumped at the chance to take those gold coins found in that Kentucky cornfield. These are the same bankers who continue to argue that their debt-based currency is a superior alternative to precious metals. Frankly, it’s a claim that’s about as convincing as this:
Debit: Needless to say, the person who found those gold coins in that Kentucky cornfield was instantly bestowed with a multi-million dollar nest egg that should last the rest of their lives. Unfortunately, that’s not the case for most Americans as only 10% of retirees have $1 million or more in savings. In fact, according to the Fed, the median American between 65 and 74 has $164,000 in their retirement account, while the median citizen older than 75 has savings of just $83,000. I know. The good news is there’s plenty of expert advice out there for anybody who wants to be in a better financial position by the time they retire …
Debit: Then again, it’s not just retirees who are struggling; millions of Americans are currently unable to afford a home, which is probably why Home Depot is offering a build-it-yourself house kit for $43,832. And while the home includes a living room, kitchen, a full bathroom, and a bedroom – plus a rooftop deck accessible by a spiral staircase – the kit only includes framing material. No, really. The doors, windows, electrical, plumbing, and finishes are extra. In total, the “tiny home” has only 540 square feet of living space. Good luck trying to hide a million pennies in that house. Not to mention that it doesn’t sound like much of a deal anyway.
(h/t: r/WallStreetSilver u/BoatSurfer600)
Debit: Just to show you just how much purchasing power the US dollar (USD) has lost over the years, consider this: In 1962 my dad bought his first house in Southern California for $17,000; a solid 1500 square-foot abode with three beds and two baths on a 10,000 square foot lot. Today, Zillow claims that same house would sell for $561,000. But I guess that’s to be expected when the federal government can spend as much as it wants simply because its national currency is no longer anchored to gold, thereby allowing unlimited USDs to be conjured out of thin air. But don’t blame the Fed for enabling that spendthrift behavior. No, siree:
(h/t: NeptuneQuest)
Debit: Of course, home prices aren’t the only thing that are sky high – have you checked the price of ground beef lately? According to the latest government data, ground beef prices increased by 2% to $5.35 per pound – that’s 10 cents below the all-time high set in August of $5.45.
Chart: Zero Hedge
(h/t: @RD_btc)
Debit: Hey! Here’s an interesting statistic: Those who still aren’t convinced the economy is in a recession should consider that demand for cardboard boxes is at its lowest point since the Great Financial Crisis of 2008. Think about that.
Credit: Meanwhile, sagacious macro analyst Franklin Sanders points out that, “For the first time in US history, the National Debt surpassed $32 trillion. In a hilarious non-coincidence, this comes less than two weeks after Joe Biden signed the preposterously misnamed ‘Fiscal Responsibility Act’.” More proof that the eventual outcome of any Congressional legislation that becomes law is almost always the opposite of its title. For example: the Affordable Healthcare Act; the Wall Street Reform & Consumer Protection Act; the American Recovery & Reinvestment Act; the Patriot Act; etc., etc.
Credit: As macro analyst Greg Manarino points out, “If you were to ask 99% of people what kind of financial system we have, 99% would have no answer. But the answer is this: We have a debt-based system! And a debt-based system demands that the debt expands in perpetuity.” Uh huh. Anybody who assumes the powers-that-be can nurse this monetary system along for another decade are only fooling themselves. In fact, since 2008 the system has been getting increasingly unstable. At the same time, the number of nations willing to fund America’s insatiable appetite for debt has been falling. See for yourself:
(h/t: Forest for the Trees)
(h/t: r/WallStreetSilver u/BoatSurfer600)
Debit: Here’s the rub: There is now so much debt on the books that there is no longer enough collateral in the system to back it up. Despite this, the masters of the “moneyverse” are trying to do the financial equivalent of spinning straw into gold – but they’re going to fail. All one has to do to see this is look at the America’s debt curve, as we’re now on the business end of 50-year logarithmic progression. As a result, the Fed has been forced to walk an increasingly risky tightrope between currency rejection and debt default – and that wire is becoming narrower with each passing month. And we thought this was risky:
Credit: Here’s the bottom line: The West is going to milk this fraudulent debt-based monetary system for as long as they possibly can. Of course, the nest egg you’ve been building over many years of hard work is ultimately going to depend on whether or not you convert at least a small portion of your paper-based fiat-denominated wealth into physical precious metals and other non-monetary assets before the system resets. And not one second after.
By the Numbers
New research reveals the top 10 metropolitan areas with the highest ratio of house shortages in accordance with job growth. As a point of reference, the average job-growth to building-permits ratio for cities included in the study was 7.6:
18.3 Los Angeles, CA
19.2 New Haven, CT
19.5 Chicago, IL
20.2 Miami, FL
20.4 Boston, MA
21.8 Syracuse, NY
25.1 Honolulu, HI
26.6 Springfield, MA
29.2 San Francisco, CA
31.4 New York City, NY
Source: PortlandRealEstate.com
The Question of the Week
[poll id="480"]
Last Week’s Poll Results
How do you like your steak?
- Medium rare (38%)
- Medium (33%)
- Rare (10%)
- Well (10%)
- Medium well (9%)
More than 2000 Len Penzo dot Com readers responded to last week’s question and almost half of you prefer a steak that is less than medium. Meanwhile, 1 in 5 prefer a steak more like shoe leather. As you might ascertain after a snide remark like that, I prefer my steak to be mooing when it reaches my plate.
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: Memorial Day
An elderly man rear-ended a guy driving an expensive sports car. Enraged, the guy hops out and confronts the old man.
“Look what you did to my car” he yells. “You’re going to give me $10,000 right now or I’m going to beat you to a pulp!”
“Oh, my!” says the old man, “I don’t have that kind of money. Let me call my son; he trains dolphins and he will know what to do.”
“Dolphins!” the other driver huffs, while rolling his eyes.
So the old man pulls out his phone and dials his son. However, just as his son answers, the irate man snatches the phone away from the old man. “So, you’re a dolphin trainer, huh? Well, your old man here just rear-ended my car and I need 10 grand right now or I’m going to beat you and your old man to a pulp!”
“I’ll be there in 10 minutes,” says the voice calmly on the other end.
Exactly 10 minutes later a Jeep pulls up and a guy hops out and proceeds to pulverize the bully, leaving him in a heap on the side of the road. The man then walked over to his father and said, “Dad! For the last time, I train Seals. Navy Seals … not dolphins!”
(h/t: Keynesian Kryptonite)
More Useless News
Here are the top five articles viewed by my 45,999 RSS feed, weekly email subscribers, and other followers over the past 30 days (excluding Black Coffee posts):
- How to Stop Junk Mail Easily: What Marketers Don’t Want You to Know
- 9 Ways to Ensure Your Road Trip Sucks
- Lost Checks: Is Not Stopping Payment Worth the Risk?
- The Ethics of Found Money: Should You Keep It?
- Embarrassed About Being Frugal? Here Are 6 Reasons Why You Shouldn’t
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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 an article here explaining why people shouldn’t be embarrassed about being frugal, Les Conyers added this:
I’ve chosen to be frugal and I’m proud of it! The Joneses are broke, busted and disgusting!
And yet, Les, so many people insist on keeping up with them anyway.
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
Good morning, Len, good Coffee today. Lately, seems many folks we know are counting on the increased valuation of their homes to help them in retirement. I hope they’re correct in that assumption.
Meanwhile, I’m cashing out all savings bonds for the Real Deal before it’s too late! BTW, GREAT joke today! 😀
That joke made me LOL.
Hi Lauren, Glad you enjoyed the joke! My philosophy about using my home as a piggy bank is this: The equity will only be tapped only if I still need cash above and beyond Social Security (assuming it is still around when I finally start taking payments in 11 years) and all of my other paper-based retirement savings have been exhausted. Essentially, it is my retirement emergency fund – a very hefty retirement fund at the moment, but an emergency fund nevertheless.
I had forgot all about that old Wendy’s commercial. Too bad they don’t make ’em like that anymore.
Yep … there were lots of great commercials from the 60s, 70s and 80s.
Hi Len,
Thanks for the cuppa! Looks like it’s nostalgia week! When I was a kid I used to love going to our local indoor mall with my parents. I liked it even better as a teenager when I could drive me and my friends there. So much fun!
Have a great weekend everybody!
Sara
Same for me, Sara! It was like going to the amusement park without having to pay $100 to get in. When I was a teen I’d spend a few hours there on the weekend with my best friend and we’d have a great time.
I kind of miss going to the mall. Most of the malls near my place are dying – although there are still a couple doing pretty darn well.
And to think all of those pennies are worth just 15 gold eagles.
I would melt the coins down and be done with them.
Illegal. (But I would too.)
Funny to think you need about 1000 of them just to buy anything of value these days.
Gold is called a precious metal for a reason!
On the other hand, up until 1860 or so, the purchasing power of a penny was large enough that the US was minting half-pennies (i.e., worth 0.5 cents).
Is it just me or were the videos this week particularly good? Maybe cuz they remind me of better times in America when you could buy a Wendys burger for about 100 pennies or less!
I’m so old I can remember as a kid getting a $5 book of McDonald’s gift certificates in my stocking at Christmas time – and that book was enough to cover two separate trips to the Golden Arches. Now $5 will barely fetch a Big Mac.
I remember when McDonald’s original “assembly line” burgers were 15¢ each. Each one was assembled with a bun, a piece of beef, a pickle slice or two and condiments.
Since I liked mine plain with no toppings, my burger had to be prepared as a special order. My dad would give me a dollar to order for the family, and I had to stand and wait at the counter while the family waited in the car.
This all ended some time after the ads came out promising “Your way, right away. At Burger king now.”
Tom, I also liked my cheeseburgers (and double cheeseburgers) plain. But the wait for the special order was worth it – at least to me – since my burgers were always hotter than the premade ones that were sitting in the warmer waiting to be bought.
The Home Depot offering is crap…a rip off. Building is not hard to do and there are countless books and DIY videos to help out folks with a little gumption. I have been a carpenter most of my life and framing up a house is pretty straightforward. Follow the building code for parameters. The Home Depot kit still requires a concrete foundation and unless you know concrete you will have to hire that done in any event. Then, as the article states, you still have to hire everything else done with after tax dollars.
If I was starting out with no home and did not have the skills to build my own, this is what I would do. Buy a small modular. You can get a gem for 200K, and we are not talking trailers and pad rentals. These are homes brought to site and set up on a foundation, modern, and ready to go. 2X6 walls, well insulated, most likely 200 amp service, etc.
The other option is to buy a renovation project. If people want to pay builders with after tax dollars…their business. But sweat equity has got to be worth $100 per hour for your time.
There are solutions out there beyond looking at real estate adds and worrying about interest rates. I have lived through 18% mortgage rates and lost my job with the resulting layoffs designed to crush inflation back in the 80s. It crushed it all right and I had to work away for 3 years to pay the family bills. My parents lived through the Great Depression and were very poor for years. My Father in Law’s family barely survived in northern Saskatchewan and pretty much lived on frozen fish the freight train brakemen would kick off when passing their cabin in the middle of nowhere. Today’s issues are bugger all in comparison.
There is a reason why the US and Canada are both meccas for immigration. Sure, you will probably have to work 7 days per week to start out, but that is just reality unless your parents are well off and able to make it all easier for youth. You can still make it work in today’s economy. Sure, there are a zillion reasons why people can’t and I’m sure we’ve heard every one of them, but if you have your health, stay focused, and have a sequential plan with measurable goals to get ahead it is still possible.
regards
Thanks for sharing that, Paul!
Back in 1973, I remember my dad paying a carpenter to add a very large room addition to my childhood home. I’m guessing it was 15′ x 30′ – large enough to have a pool table, separate living room area with a grand fireplace, and a very fancy large built in wet bar. Anyway, since this was a side job for the carpenter, he came by every Saturday over 12 consecutive weeks. Every Saturday my dad would provide the carpenter a nice lunch at noon (fresh deli meat from the local meat store and rolls from the local bakery) and at the end of the day hand him a $100 bill for his work. As I previously noted, this was back in 1973 – so that $100 back then was equivalent to about $650 today.
As a 9 year-old, it was a great learning experience for me!
The room came out great, by the way. My dad’s friend did the electrical for free, and his cousin was a mason who built a beautiful brick fireplace and a brick base for the bar; I don’t remember what he paid for that. But that was a big job … I’m sure it wasn’t free.
Funny (in a sad way) that the names of congressional acts are exactly the opposite to the actual function/effect of the act, hence, the “Fiscal Responsibility Act” is quite the opposite of financial responsibility, same for most previous acts. The “Patriot Act” ended up with the USG spying on the us “the Patriots.”
Yep. It’s almost as if they’re mocking us, Frank.
This is a harder one to answer because it is a bit vague.
My first question is how do you define “indoor mall?” This past winter we took a snowboarding trip to France, and the town had a little indoor market with a bunch of shops. It certainly didn’t resemble the malls that became ubiquitous in the USA, UK and Canada, but by the text book definition I think it was a mall? Len get’s to decide because it is his poll.
What about the shopping malls that are built into most airport terminals? Does killing time there count?
Finally, is it shopping if you are just browsing (“window shopping”) and don’t spend any money?
I meant “indoor mall” in the traditional American sense.
LOL thank you for the joke. I knew several Navy Seals. They were the most kind, gentle, and respectful men you could ever meet. They had nothing to prove to anyone. They knew they could take care of business.
I have no doubt about that, Bill.
The Federal Reserve person who said that the Fed is not printing money for the government deficit was disingenuous. The fed doesn’t “print” money to lend to the Federal Government, it creates it electronically through the ‘magic’ of fractional reserve banking. Actual printed cash represents only a percentage of the money in circulation. The rest is only numbers in computers.
The federal deficit does inflate the currency.