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’ve got another busy weekend ahead of me, so let’s get right to this week’s commentary …
The rich buy assets. The poor only have expenses. The middle class buys liabilities they think are assets.
— Robert Kiyosaki
A nickel ain’t worth a dime anymore.
– Yogi Berra
Credits and Debits
Credit: Did you see this? Last month a woman played the Powerball lottery game with numbers she found in a fortune cookie. Don’t knock it until you tried it, folks – because five of those numbers came up in that day’s lottery drawing, netting her a cool $50,000. Unfortunately, it’s not a multi-million dollar payoff. Even worse, that $50,000 prize is the amount before taxes – which means after getting her check, she should have juuust enough to enjoy three or four meals at her favorite Chinese restaurant. If she’s smart, that is …
Debit: Speaking of restaurants, in times past, when the cost of living rose, fast-food joints were an option for families who could not afford to go to a traditional restaurant for a meal. Not today. A new study reveals that a hamburger and fries from a fast food restaurant is now considered “a luxury” for 78% of Americans. And it’s just not those who are struggling to make ends meet – even among households earning more than $100,000 annually, 52% say they are eating less fast food. And probably getting healthier too, in the process.
![](http://cdn-0.lenpenzo.com/blog/wp-content/uploads/2024/06/MC-DONALDS-MENU-1024x769.png)
Circa 1964
![](http://cdn-0.lenpenzo.com/blog/wp-content/uploads/2024/06/Untitled-13-1024x967.png)
(h/t: @WallStreetSilv)
Debit: On a related note, the same survey also found that 44% of Americans say they’ve been asked to tip on fast food in the past six months, and 43% of those asked refused to add gratuity. That number seems like a ridiculously low figure to us … then again, maybe we’re just cheap bastards.
Debit: In the early days of the pandemic, ultra-low interest rates drove housing sales and remodeling spending. But that has changed; these days Americans are delaying their home renovation plans and opting for more affordable options amid high borrowing costs. In fact, Home Depot noted this week that big-ticket transactions exceeding $1000 were down 6.5% compared to the first quarter last year. And Lowe’s reported this week that sales fell 6.2% last quarter as homeowners continue to delay larger discretionary projects. And while that is a worrisome trend, the banking industry says “hold my beer” …
![](http://cdn-0.lenpenzo.com/blog/wp-content/uploads/2024/06/Untitled-14-917x1024.png)
For many people, the need to slow down their DIY home renovation plans is probably a good thing.
Debit: It’s no secret that the elites who manage our debt-based monetary system will do whatever it takes to protect their own wealth – wealth that is derived from that very same corrupt system. That’s why the Fed pumped trillions of dollars into the system to prop up the value of financial assets. As a result, the stock markets are now at or near all-time highs – but who owns the majority of all stocks? Answer: The wealthiest 10% of all Americans own 93% of all the stocks. As for the bottom 50%? Well … they held just 1% of all stocks in the third quarter of 2023. So … does anybody else see a problem here? No? Okay … then how about here:
Credit: Of course, stocks aren’t the only forms of wealth. But, as financial commentator Michael Snyder points out, when you include all assets, “the bottom 50% of the US population still only owns just 2.6% of all the wealth.” Imagine that.
Credit: A recession could be imminent, according to Piper Sandler’s chief economist, Nancy Lazar, 19 US states – accounting for 40% of America’s total GDP – have now recorded at least a 0.5 percentage point increase in their average unemployment rate, which has been a nationwide recession indicator in the past. As for the cause of the economic downturn, Lazar blames the delayed impacts of the Fed’s interest-rate hikes and credit drying up. With that in mind, nobody would blame your for thinking something big is coming. Then again, I had the exact same feeling after eating here last night:
Debit: By the way, for those not counting at home, Lazar also pointed out that “recessions strike an average of 10 quarters after the Fed begins a rate-hike cycle but have arrived up to 16 quarters later. The first hike of this cycle was in March 2022, meaning eight quarters have already elapsed.” Then again, a recession used to be defined as occurring whenever the economy suffers through two consecutive quarters of negative GDP, as it did between January and June 2022 – but then officials changed the definition. Voila! No more recession. See how life is so much easier when we ignore our lying eyes?
Debit: Indeed, the question of whether or not the economy is doing well may depend on whether you own your home. The newest data shows that renters are struggling more financially, while homeowners continue to reap the rewards of refinancing during the pandemic when mortgage rates were at historic lows. This is bolstered by the fact that home prices in America’s 20 largest cities rose for the 13th straight month in March; that’s 7.4% more than the same time last year – and it’s the fastest price appreciation since October 2022. That’s great news for existing homeowners. As for everyone else …
Credit: In other news … the US House of Representatives passed a bill last week barring the Fed from issuing a central bank digital currency (CBDC) unless it has explicit authorization from Congress. Meanwhile, for the third consecutive year, the world’s central banks are not only buying gold hand over fist, but the world’s second largest economy is rapidly moving away from the US dollar (USD). But we’re sure that’s all probably nothing to be concerned about.
Debit: Incredibly, the ranking member of the House Financial Services Committee, Maxine Waters, argued against banning CBDCs, saying that such a ban “directly threatens the primacy of the US dollar (USD), attempts to stifle US innovation and competitiveness abroad, and undermine the federal agency that is the most critical to fighting inflation.” As if those claims weren’t absurd enough, she also claimed that “there is nothing inherent about a CBDC that would compromise privacy.” No, really. It’s yet more proof that everyone running for Congress should be subjected to an IQ test prior to being placed on the ballot.
Credit: When it comes to currencies, the only one that can be implicitly trusted is gold. That’s why for the past three years there has been an ongoing – albeit clandestine – surge in central bank gold purchases. And those purchases are pointing to a significant shift in the international monetary landscape, with a strategic move away from the USD and towards gold as the world’s premier reserve asset.
By the Numbers
Speaking of the previously-mentioned survey about consumers’ relationship with fast food, respondents were also asked what they thought was the “most high-end” – we know; but just play along – among the ten fast-food chains with the most US sales. Here were the results of that poll:
1% Dunkin Donuts
2% Domino’s
2% Burger King
3% Taco Bell
4% Subway
5% Wendy’s
16% McDonald’s
21% Chipotle
22% Starbucks
25% Chick-fil-A
Source: LendingTreee
The Question of the Week
Should all prices be rounded to the nearest nickel?
- No (51%)
- Yes (41%)
- I'm not sure (7%)
Total Voters: 1,882
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Last Week’s Poll Results
How long do you typically drive your car before buying a replacement?
- 10 to 15 years (36%)
- More than 15 years (29%)
- 7 to 10 years (20%)
- 4 to 6 years (11%)
- Less than 4 years (4%)
More than 1800 Len Penzo dot Com readers responded to last week’s question and it turns out that 2 in 3 of you drive a car at least 10 years before getting a new – or newer used – vehicle. As for yours truly, my current vehicle is 11 years old, and I plan on keeping it for at least another nine years – if not more.
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.
Useless News: Psych Test
During a visit to the mental asylum, a visitor asked the director, “So … what is the criterion that defines whether or not a patient should be institutionalized?”
“Well,” said the director, “we fill up a bathtub. Then we ask the patient to empty it and we offer him a teaspoon, a teacup, or a bucket.”
“Of course,” said the visitor, with a chuckle. “I totally get it. A normal person would choose the bucket as it is larger than the spoon and the teacup.”
“No,” the director replied. “A normal person would pull the plug.”
(h/t: Salamander)
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More Useless News
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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 out to me at: Len@LenPenzo.com
After reading my recent Len Penzo dot Com article explaining how to avoid paying a mandatory gratuity for bad service, Samantha left this comment:
What really irks me is take-out restaurants like Denny’s that guilt you into leaving an 18%+ tip … Then you get back to your hotel to find out they forgot to give you your onion rings. Grrrr.
Well … it’s still better than forgetting the Moons Over My Hammy.
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I’m Len Penzo and I approved this message.
Photo Credit: public domain
Hi Len,
How does Taco Bell get even 3% of the people in that survey to agree that is their favorite high-end fast food joint!!???!!!
I agree, Chik-fil-A is excellent. My favorite place for sure.
Have a great weekend everybody!
Sara
I have a confession, Sara: I used to LOVE Taco Bell. Lately though the quality (I can hear the laughter from here) has fallen off the cliff.
Len! The metals took a breather this week. They’re still up big this year and I have a good feeling they’re going to be much higher before the year is out. Very excited!
Breathers are good, Maddy! Very few assets go up in a straight line. Well … with the probable exception of the latest housing bubble. 😉
Delisting a home that isn’t selling and then relisting it a few weeks later to hide the number of days it’s been “on the market” is one of the oldest tricks in the book. It may rekindle interest but it doesn’t work though because those houses aren’t selling because they are priced too high.
I think the increase in delistings is pretty interesting. We’ll see if it is just a statistical blip or the sign of a slowing market.
Surprised the “no’s” are leading the poll. You can’t buy anything with a penny or a nickel these days. They may as well round up and get rid of the need for pennies when making change in cash transactions.
Cowpoke, if I had my way we would round up – or down – to the nearest dime.
Good morning Len! Now that a certain verdict has been reached and campaign donations have skyrocketed, it seems more folks have begun to wake up to the idea that we shouldn’t trust Fearless Leader & Co. I’m curious to see how that affects the stock market & PM prices in the next few weeks.
Also, that “Crush” pic is hilarious! Thanks for the laugh and have a great week! 🙂
Hi Lauren! Glad you enjoyed the Crush thread. That dude is pretty funny.
As for metals and stocks …. thanks to currency supply inflation, I think they are both going up long term – metal in real terms and stocks in nominal terms.
I can’t vote in your survey it just shows the results
Send me your vote, Dan.
Never tip if you are served standing up! Be brave, hit “skip” and don’t get guilted into tipping (paying) for standing at the counter and buying a product. Ignore the tip jar at the dry cleaner, the bagel shop and the fast food restaurant. As to fast food I satisfy my occasional cravings for cheese sliders by waiting until the local Wednesday coupons arrive in the PO box and when the White Castle page of BOGO coupons arrive I then take mine from the box and collect a half dozen discarded White Castle ad pages from the trash. Clip and send the extras to my friend who is a White Castle junky who sometimes buys her sliders retail which I consider scandalous! Recently bought 2 double breakfast combos of sausage, egg, cheese on buns, each also with small soda and little potato discs and “buy five, get five free” cheese sliders and total was $14. I think that’s a lot of money even though the dog gets some of the extra sliders. It is exorbitant if bought retail as that would have been about $28.!!!! Mostly I cook breakfast at home: One Martin’s sweet dinner roll ($.50), 2 Jumbo eggs over light ($.60), piece of ham end ($3.50 pound so maybe $1 or less) and some butter to fry plus electricity for stove and wash the dishes with the other dishes ($.50). Home cooked breakfast will cost about $2.50.
I want them to keep pennies. Every time one is on the ground face down, I turn it face up. Later, I tell people what I do, and they freak out. lol
That’s funny … every time I find one on the ground I don’t even bother to pick it up. Don’t want to take the chance of throwing my back out for a penny.
If I won the lottery (I don’t play it), the first thing I would do is set up a protected trust. Then, I’d disappear. New location, phone, emails, and everything else.
Smart man.