Black Coffee: A Shot Across the Bow

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 party started …

Life’s big changes rarely give advance warning.

– H. Jackson Brown, Jr.

To not know is bad. To not want to know is worse.

– David Rogers Webb, The Great Taking

Credits and Debits

Debit: Did you see this? The Michigan Wolverines clinched their first national college football championship since 1997, but the only viral photo from the game has nothing to do with the gridiron gameplay. Instead, it highlights the staggering cost of refreshments: specifically, $33.55 for a single alcoholic beverage – before tax and tip. To be fair, those cocktails – served in a plastic cup – did have gold dust in them. However for that price they should have been served in real glasses with a souvenir one-gram gold coin.

Debit: On a related note, we see that rising expenses pushed the Federal Reserve system deep into a record loss last year. How bad was the central bank’s bottom line, you ask? Well … Fed income after expenses came in at a negative $114 billion last year, versus a $59 billion profit in 2022. The good news for the Fed is they have a currency printer. Too bad they’re the only ones in America that can legally use it.

Credit: Speaking of Fed operating losses, the economist who predicted the financial collapse of the Soviet Union two years before it happened, Judy Shelton, notes that “the scandal, is not just that the Fed is running an operating loss, but that our central bank is paying real money (at current rate, about $240 billion annually) to banks, hedge funds, and private businesses – expenditures not appropriated by Congress.” Yep. The corruption has reached all facets of society – just as it did in the old Soviet Union.

Debit: For the Fed and 99% of Americans, the inflation situation could be much worse. Take Argentina for instance: Thanks to a bloated government and decades of humongous federal deficits, its annual inflation is now “officially” 211%, but the newly-installed libertarian government says its 3678%. Regardless, prices there are now rising so frequently that businesses have started giving employees raises three times per year – and that’s still not enough because stores are updating their prices multiple times per month. Then again, if you think that’s crazy, you probably haven’t seen this:

Credit: Not surprisingly, black markets have sprung up where people are trading the Argentina peso for the US dollar (USD) in a desperate attempt to retain purchasing power and slow the steady decline in their living standard. Because, of course, the USD is a rock solid store of value … said no one ever. If you don’t believe me, just ask this guy – if only because he seems to know everything. I said “seems” …

Debit: This week the US Treasury reported that the budget deficit picture for December and it ain’t pretty. The US collected $429 billion through various taxes in December – but total outlays hit $559 billion. For those without a calculator, that means the US deficit last month alone was $130 billion. I know what you’re thinking: But, Len, December is probably one of those months where the government spends more than usual. Uh … in a word: no.

Debit: But wait … it gets better. The budget deficit for fiscal 2024 is already more than a half trillion dollars, which makes it the biggest deficit in US history after one quarter with the exception of the pandemic outlier year of 2021. In short: the US is spending money like a drunken sailor. Although that’s not a truly fair comparison because drunken sailors have to stop spending when their wallet is empty. And another thing: The sailor is spending his own money.

Debit: By the way, if the Fed crisis facility known as the Bank Term Funding Program (BTFP) – which was initiated last year to stabilize the banking system after the failures of Silicon Valley and other major banks – is allowed to expire in March, this will result in an immediate withdrawal of nearly $400 billion in additional currency from the monetary system. This could prove to be quite a shock to a financial system – not to mention the entire economy – which are both now completely depend on a growing currency supply to stay afloat. The Fed insists they will close the BTFP as scheduled – but reality suggests otherwise.

Credit: Indeed, macro analyst Alasdair Macleod points out that this is the year that “the US Government’s debt trap will almost certainly lead to increasing uncertainty over the future value of USD reserves and of the USD’s suitability as a medium of exchange” with the rest of the world. “In other words,” he says, “over the course of 2024 the conditions for the replacement of USDs with gold as the international measure of value will improve with the USD’s decline.” The fact that foreign central bank gold holdings relative to US Treasury bond holdings just surpassed 50% for the first time ever. See for yourself:

Debit: By the way, Macleod also warns that, “Under cover of a gathering recession, the Fed will face mounting pressure to monetize the debt problem as much as possible. And for a fiat currency over-owned by foreign interests, the inflationary implications are potentially catastrophic for the USD.” Uh huh. What you’re witnessing, folks, is the terminal phase of the fraudulent debt-based monetary system, where the debt is now growing exponentially; in fact, the pace is so obvious that even Stevie Wonder can see it. Oh … and this too:

Debit: On average, the US is adding $1 trillion to its debt approximately every five months now. Believe it or not, as old Treasuries expire and new ones are sold at higher interest rates, the rate of debt accumulation will speed up even faster. Eventually, the US will reach the point where it’s adding $1 trillion per month to the National Debt. And things will only grow worse from there.

Credit: So … how you deal with it in the coming months and years is critical with respect to your hard-earned nest egg and future standard of living. Of course, it’s vitally important to first understand the difference between fiat currency and real money – and the difference between hard- and paper-assets. Because, unfortunately, most people who don’t are going to learn anyway from the proverbial school of hard knocks.

By the Numbers

Here were the top ten destinations for one-way U-Haul truck users in 2023, according to the annual U-Haul Growth Index:

10 Virginia (2022 rank: 5)

9 Colorado (11)

8 Arizona (7)

7 Washington (23)

6 Idaho (10)

5 Tennessee (6)

4 South Carolina (3)

3 North Carolina (4)

2 Florida (2)

1 Texas (1)

Source: U-Haul

The Question of the Week

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Last Week’s Poll Result

What type of car is your primary vehicle?

• Japanese (50%)
• American (33%)
• Korean (7%)
• German (6%)
• Something else (4%)

More than 1900 Len Penzo dot Com readers answered last week’s poll question and it turns out that 2 in 3 of you drive a car with an American nameplate. That being said, many cars with foreign nameplates are made in America. For example, in 2022, more than two-thirds of the Honda vehicles sold in the US were made in America — that’s the second-highest percentage of any full-line automaker.

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: Anniversary Night

For their anniversary, a couple went out for a romantic dinner. Their teenage daughters said they would fix a dessert and leave it waiting. When the couple got home, they saw that the dining room table was beautifully set with china, crystal and candles, and there was a note on the table that read:

Dear Mom and Dad, your dessert is in the refrigerator. We’re staying with friends tonight — so go ahead and do something we wouldn’t do!

“Well … ,” the husband responded dryly, “I suppose we could clean the house.”

(h/t: Sharon)

Buy Me a Coffee? Thank You So Much!

For the best reading experience, I present all of my fresh Black Coffee posts without ads. If you enjoyed this week’s column, buy me a coffee! (Dunkin’ Donuts; not Starbucks.) Thank you so much!

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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. Prince Edward IslandYukon (2.23 pages/visit)
2. British Columbia (2.17)
3. Manitoba (2.05)
4. Yukon (1.75)
5. Alberta (1.69)

9. Ontario (1.51)
10. Saskatchewan (1.46)
11. Quebec (1.40)
12. New Brunswick (1.33)
13. Newfoundland & Labrador (1.31)

Whether you happen to enjoy what you’re reading (like those crazy canucks in the Yukon, eh) — or not (ahem, you hosers living on the frozen New Brunswick tundra) — please don’t forget to:

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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 me at: Len@LenPenzo.com

After reading a blog post here by staff writer Tex Freitag on ways to help improve your credit score, Paul left this comment:

I contacted a consultant who helped fix my credit and he was able to deliver. He helped me increase my credit score to 800 and paid off all my debt collectors. I was satisfied with his service. The bad news is it cost me $10,000.

Good for you, Paul. I think.

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: stock photo