Black Coffee: Stupid Money Games

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 …

I am the Empire at the end of decadent days, watching the pale tall Barbarians advance …

— Paul Verlaine

The key is not to predict the future, but to prepare for it.

— Pericles

Credits and Debits

Credit: Did you see this? This week the mainstream media gushed that, while investors have been fretting about weak consumer spending, retail sales in August had actually surpassed Wall Street’s estimates. Hooray! Now for the punchline: That final figure showed that sales rose by just 0.1%. When it comes to the press, the jokes continue write themselves, folks.

Credit: Now for some actual good news: The number of eggs hatched in the US has risen by more than 3% since early July, while the number of chicks placed for production rose to the highest seasonal level in two years. As a result, growing supplies should result in lower chicken retail prices over the coming months. That’s great – but we’re hoping falling pizza prices aren’t far behind …

Debit: On the other end of the meat spectrum, the US beef cattle herd size has collapsed to its lowest level in 73 years. This has resulted in soaring beef prices across America. It also means that many consumers will be substituting chicken for beef as a way to hold their grocery bills down – much to the relief of neighborhood cats and park geese everywhere.

Debit: Indeed, a key measure of US inflation showed prices rising at a faster pace in August than they did in the prior month, with services prices rising swiftly (0.4%) even while goods prices remained flat. That caught most economists completely off guard. As for their reason why, well … let’s just say we were hard pressed to find a truly satisfying answer. In fact, we may as well have asked these people:

Debit: In other news, as we predicted here last week – and as Peter Schiff noted above – the Fed announced a massive 50-basis-point rate cut on Wednesday; such moves at the start of any cutting cycle have always been reserved for full-blown financial crises. The folly of it all is this massive rate cut comes with the housing market and major US stock market indices at or near all-time highs – and, supposedly, unemployment near all-time lows. Heh. Talk about life inside the economic rabbit hole. Still, that didn’t stop some politicians from asking for an even deeper cut, despite their endless gaslighting of the public regarding a “roaring economy.”

Debit: By the way, lower rates makes Treasury bonds even less attractive than they already are. They also make gold even more attractive than it already is to those looking to protect their wealth – and that includes central banks.

Debit: Of course, it’s no secret that the National Debt, price inflation, and American households’ ability to enjoy a comfortable lifestyle on a single income began to unravel after the USD’s anchor to gold was broken in 1971 – as anyone from Gen Z could probably tell you …

Credit: As Jeffrey Tucker observed last week, “What we’re watching now is the final unraveling of the (current monetary) system. The way out of this predicament is … a return to fiscal soundness. Above all else, the United States must get its house in order, with balanced budgets and sound money – even if that means letting go of its imperial ambitions abroad. That’s the best – and probably only – path to restarting the beautiful ambition of a free-trade world.” Yep. Unfortunately, we’re afraid the US isn’t going to make any changes until a devastating systemic crisis is upon us. Yes … one that’s even worse than this:

Credit: For what it’s worth, while MarketWatch is now predicting a gold price of $4000, silver’s market dynamics become even more interesting. That’s because compared to gold, silver’s significantly smaller market size makes it far more sensitive to shifts in supply and demand. As a result, the white metal tends to experience higher gains during bull markets. For example, between 2008 and 2011, gold gained 166% while the silver price increased 448%. Then there’s this: During the ’70s bull market, gold rose 2328% while silver skyrocketed nearly 4000% from peak to trough. Could it happed again? Perhaps this little fun fact offers a clue …

Debit: We’ll end this round-up with an article that YahooFinance! published this week that noted the Fed has entered a new era with its rate-cutting regime now in place. They then proceeded to ask their readers: what’s next? Needless to say, we think we know the answer: a currency crisis. After all, the Fed had a choice to make this week: save the economy or save the US dollar. They chose the former. With that in mind, if you think gold and silver were on a roll before the fed lowered rates this week, well … you ain’t seen nothin’ yet. Got gold?

By the Numbers

A recent study has identified the ten largest metropolitan areas in the US with the greatest percentage of mortgages at least 30 days delinquent. Are any of these where you live?

2.9% Virginia Beach-Norfolk-Newport News, VA-NC

3.0% Baltimore-Columbia-Towson, MD

3.1% Atlanta-Sandy Springs-Roswell, GA

3.2% Philadelphia-Camden-Wilmington, PA-NJ-DE-MD

3.3% Tulsa, OK

3.5% Birmingham-Hoover, AL

3.7% San Antonio-New Braunfels, TX

3.8% Houston-The Woodlands-Sugar Land, TX

3.9% Memphis, TN-MS-AR

4.2% New Orleans-Metairie, LA

Source: Construction Coverage

Last Week’s Poll Result

What is your current long-term care plan?

• Self-funded (61%)
• Long-term care insurance (18%)
• Hope I die before I get old (15%)
• Pray for a big inheritance (6%)

More than 1900 Len Penzo dot Com readers answered last week’s poll question and it turns out that nearly 2 in 9 of you are relying on luck (good or bad) to avoid become destitute in your old age.

This is another question contributed by reader, Frank. Thanks, bud! 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="544"]

Useless News: Tennis Anyone?

While in the park one morning, a handsome jogger found a brand new tennis ball laying on the ground. So he stopped and, seeing nobody nearby who it might belong to, decided to slip it into the pocket of his shorts.

Later on, near the end of his run, he stopped at a pedestrian crossing, waiting for the light to change. A blonde woman standing next to him eyed the large bulge in his shorts.

“What’s that?” she asked, her eyes gleaming with lust.

“Tennis ball,” came the breathless reply.

“Oh,” said the blonde sympathetically, “that must be painful. I had tennis elbow once.”

(h/t: Cowpoke)

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. Ontario (2.19 pages/visit)
2. Nova Scotia (2.04)
3. Newfoundland & Labrador (1.95)
4. Alberta (1.88)
5. Saskatchewan (1.81)

9. Manitoba (1.54)
10. Yukon (1.50)
11. New Brunswick (1.45)
12. Quebec (1.44)
13. Northwest Territories (1.38)

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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

Gina wasn’t too happy after reading my article explaining how to know when it’s better to buy or rent:

We just bought a new house. After running the test you suggested, it looks like we should have kept renting. I’m so confused!

Gina … you’re supposed to do the test before you buy!

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