Black Coffee: French Toast, Waffles & Nest Eggs

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 …

Room service? Send up a larger room.

– Groucho Marx

I once went out with this wild girl. She made French toast and got her tongue caught in the toaster.

– Rodney Dangerfield

Credits and Debits

Debit: Did you see this? Bloomberg is reporting that 42% of American households with an income of more than $100,000 report being behind or delinquent on so-called “buy now, pay later” (BNPL) payments. So it’s not just the poor who are being negatively affected financially – the upper-middle-class is also clearly suffering. Come to think of it … if X (nee Twitter) is any indication, the economy is even forcing some American millionaires to start pinching their wallets. Or so they say …

Debit: By the way, it’s not just working households that are feeling the pinch. A new survey has found that just 4% of today’s retirees said they’re “living the dream” – and the same percentage they’re “living the nightmare.” The top concern – cited by 89% of respondents – is inflation lessening the value of their assets. Imagine that.

Credit: Americans believe they need around $1.46 million to retire comfortably. That’s probably a good thing when one considers that only 1 in 1000 American retirees achieve a $5 million nest egg. Unfortunately, only 3.2% of all American retirees were able to amass over $1 million. In fact, the median retirement savings account balance of the average American paints a much grimmer picture, standing at only $87,000, which obviously leads to only one conclusion: Most retirees failed to make the correct career decision when they were younger …

Debit: Not surprisingly, the inability of Americans to save for retirement during their productive working careers is the reason why 91% of American retirees admit to being dependent on their Social Security checks to help make ends meet. Never mind that those Social Security checks are also losing ground to inflation, as the annual adjustments are tied to the CPI, which severely understates the true inflation rate.

Debit: Meanwhile, the Fed is clearly losing its fight against higher consumer prices as the latest data shows that it doesn’t have inflation under control. How bad is the war going? Well … for starters, US producer prices are now accelerating at the fastest pace since March 2023. In a normal world, the Fed immediately would raise interest rates to tamp down the fire … but the US absurd debt situation puts the kibosh on that. For now, at least. Ah, who are we kidding? Probably forever. Besides, it’s pretty obvious that at least one Federal Reserve general – not to mention central bankers everywhere – are still completely discombobulated by the fog of war anyways:

Debit: Needless to say, inflation is pinching the wallets of everyone in the middle class . However, some places are worse than others. For instance, when comparing large US cities, a new government report says Houston is experiencing the highest grocery price inflation in the nation; in 2023 prices increased 7.8%. If you’re wondering about the inflation sweepstakes runner-up, it’s Boston (7%). Compare those figures to the national average of 5%. Frankly, we think all three of those numbers are wildly understated. We know the survey failed to check grocery prices in our neighborhood, where grocery prices increased by double digits in the past year. And that’s before any “delivery” fees are applied:

Debit: Speaking of inflation … in the pantheon of skyrocketing food commodity prices, first it was cocoa, then coffee … now OJ. That’s right; after a slight decline over the past year or so, the price of orange juice has reversed course – concentrated OJ futures in New York rose 5% last week – and are now only 8% off their all-time record high of $425. Anybody care to take a guess at which food commodity will be next? Sugar? Rice? Corn? Pork bellies? Anyone? Bueller? Meanwhile, my local gas station is selling a gallon of regular for $5.39 …

Debit: Not coincidentally, the US government announced last week that it is no longer publishing its average price series for coffee. While this is not as egregious as removing it from the “official” CPI inflation index – it is another attempt to obscure the declining purchasing power of the US dollar (USD). Regardless, we’re certain that bureaucrats will also continue tweaking the CPI index to hide the true impacts of price inflation until the only component in the CPI are large screen TVs and other consumer electronics. In the meantime, they can work on passing the “Inflation Reduction Act – Part II.” And maybe hire a more competent “fixer” … like this guy:

Debit: Of course, higher grocery prices are affecting not only US households, but American restaurants too. In fact, Dine Brands, which owns both Applebee’s and International House of Pancakes (IHOP), noted this week that “consumers have become more price sensitive, as indicated by the response to our limited time promotions. For example, at Applebee’s 28% of our transactions were tied to a limited time promotion, which was up from 19% in the previous quarter as well as the prior year.” They also noted that guests are also trading down from higher-priced items. Hopefully, they’re avoiding the French toast too …

Credit: Yes, stocks have been on a bit of a tear lately but, sagacious macro-analyst Franklin Sanders analyzed the major stock market indices measured in gold and silver – rather than in dollars – for the S&P500 in gold, the S&P500 in silver and the Dow in gold. and points out that, “Against both metals stocks are in very long-term primary downtrends.” How long? Would you believe since the turn of the century? It’s true. Which means for the last 25 years, gold has provided superior returns – without the stock market’s risks. But I’ll bet most precious metals holders already knew that; if not overtly, certainly intuitively. Then again, others seem to be just catching on …

Credit: One thing is certain: A growing segment of the public is finally starting to sense the importance of holding at least a little physical gold in their portfolios, as Mr Sanders also points out that Austin cookie delivery firm Tiff’s Treats is now adding gold bullion to its menu. For approximately $2500, customers can buy a “bullion bundle” containing a box of cookies plus a one-ounce, 24-karat bar of gold. Sounds like a yummy deal! Let’s hope bundling wealth insurance with crunchy treats will encourage more people to protect their hard-earned nest eggs.

By the Numbers

If you’re looking to minimize the hit to your living standard imposed by high price inflation, you may be interested in knowing the top ten major US metropolitan areas with the smallest year-over-year increase in the CPI as of April 2024:

3.4% Washington, DC

3.3% Boston, MA

3.2% Anchorage, AK

3.1% Atlanta, GA

3.0% Chicago, IL

2.9% Baltimore, MD

2.9% Houston, TX

2.8% Denver, CO

2.7% Minneapolis, MN

2.6% Phoenix, AZ

Source: Wallet Hub

Last Week’s Poll Result

How are you saving money on food for your family?

• Shopping at discount grocers (23%)
• Eating out less often (22%)
• Using coupons (20%)
• I haven’t changed anything (16%)
• Growing your own food (12%)
• Eating less (7%)

More than 1700 Len Penzo dot Com readers answered last week’s poll question and it turns out that 1 in 6 of you are not doing anything differently to reduce your food bills. At the other extreme, 1 in 14 of you are actually eating less – which could be a good thing for those who needed a good reason to go on a diet anyway!

This week’s question was submitted by Barbara. 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.

The Question of the Week

[poll id="536"]

Useless News: The Secret to Long Life

An elderly, but hardy cattleman from Texas once told a young female neighbor that if she wanted to live a long life, the secret was to sprinkle a pinch of gunpowder on her oatmeal each morning. So she did this religiously – and lived to the ripe old age of 103!

She left behind 14 children, 30 grandchildren, 21 great-grandchildren, five great-great-grandchildren and a 40-foot hole where the crematorium used to be.

(h/t: Gary H.)

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. Newfoundland & Labrador (2.22 pages/visit)
2. Ontario (2.12)
3. Alberta (1.98)
4. Saskatchewan (1.85)
5. Manitoba (1.81)

9. Yukon (1.67)
10. New Brunswick (1.53)
11. Nunavut (1.50)
12. Quebec (1.48)
13. British Columbia (1.41)

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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

Justine Mee didn’t like my recent article explaining how people can avoid paying a mandatory gratuity for lousy service. Here’s just a small sample of a lengthy diatribe she sent to the Len Penzo dot Com complaint box:

You should actually call that (article) ‘How to be a cheap F***!’ There’s always one a$$hole with every party! I’m a waitress, not your royal wench!”

I agree, Justine. You’re a waitress … and an overpaid one at that.

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