Black Coffee: Pillow Talk

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 …

Ignorance is the softest pillow on which a man can rest his head.

– Michel de Montaigne

Credits and Debits

Debit: Did you see this? MyPillow owner Mike Lindell said in a lawsuit this week that his company took on a loan at an annual interest rate of 409%, compunding the company’s already-dire financial straits. The loan agreement was made official in September for $1.6 million, which would require a significant payback at a 409% annual interest rate. Lindell isn’t alone; 18 other companies joined in the lawsuit, which leaves us wondering: Don’t these companies have CFOs who are supposed to review this stuff before signing on the dotted line?

Credit: The good news for Mr. Lindell is that the Consumer Financial Protection Bureau just put the finishing touches on a proposed rule that would cap how much banks can charge their customers for overdrawing their checking accounts. The new regulation would require large banks and credit unions to either charge just $5 for overdrafts or pick an amount no higher than the cost of offering overdraft protection. Today, banks commonly impose overdraft fees upward of $35 on their suffering customers. Crazy, isn’t it? Oh, and speaking of suffering individuals …

Debit: Of course, federal government bureaucrats with a lick of experience in the private sector aren’t the only ones who like to tell the citizenry how to run their businesses; state and city officials do too. For example, California politicians forced a contraction of the Golden State’s fast food industry by imposing an ill-conceived mandatory minimum wage of $20 per hour. But that was enough reason to dissuade the Los Angeles city council from considering a proposal this month to raise the minimum wage for workers at Los Angeles International Airport eateries to $30 per hour. We’re sure that “brilliant” idea will have similar results. In the meantime …

Credit: With only a handful of days left before Christmas, you may be interested in a new survey that found that 80% of Americans say they’ll spend $100 or less on average for each person’s Christmas gifts in 2024. As for those more important gifts spent on “special someones,” the average amount Americans spend is $278. Just be careful to always clearly communicate who your “special someones” actually are …

Credit: Meanwhile, US household wealth hit a fresh record last quarter, thanks in great part to the seemingly never-ending stock market rally and stubbornly-elevated home prices. For those not counting at home, total household net worth climbed 2.9% from the prior quarter, with Americans’ equity holdings climbing to $3.8 trillion. There’s just one problem: There are an increasing number of signs out there that suggest that “wealth” may be fleeting:

Debit: Not coincidentally, rising household wealth coincided with government spending, which continued to grow exponentially. This is at the same time that tax receipts flatlined. In fact, the six month average in October was just $380 billion in revenue, which is the same amount as three years ago! The good news is, it looks like Congress is suddenly having trouble agreeing on any future spending at all:

Debit: Not surprisingly, the flatlining revenue resulted in the US deficit exploding to a staggering $624 billion over the first two months of the new 2025 fiscal year – that’s 64% higher than the same period one year ago. It was also the highest deficit on record for the first two-months of any fiscal year – and that includes years engulfed by the pandemic spending insanity.

Credit: On a related note, macro analyst Bill Holter sys that, “Last year, (US) GDP was roughly $29 trillion. Cutting $2 trillion is about 7% of $29 trillion. If you take that $2 trillion out, that is 7% of GDP that doesn’t exist. So, instead of . . . 3% growth, subtract 7% from that and you have negative 4% growth. That’s what we would have had since 2008. If we were not running deficits, we would have been running a negative GDP economy.” Uh huh. Which begs the following question …

Debit: More Holter: The incoming US administration “is not going to be able to come in and save the system because … they’re stuck in a quagmire of mathematics – and the mathematics in this country is broke. The whole financial system is a Ponzi scheme that depends on (continuous) deficit spending and increases in the money supply.” Sadly, he is absolutely correct. The US dollar’s fate was sealed when its anchor to gold was broken in 1971, but the seeds of fraudulent debt-based monetary system were devised and enacted by men of questionable character during the very late hours of Christmas Eve 1913. Guys like this …but without the Santa suits:

Credit: By the way, the growing US debt problem lends credence to mounting evidence that monetary authorities’ long time control of the gold market may soon be coming to an end. Ironically, the world’s appetite for the yellow metal was relatively stable despite America’s growing debt troubles, which kept the gold price from drawing too much public attention. Then the US decided to weaponize the USD by freezing Russian assets. Needless to say, since then the world has shown an undeniably strong preference for gold over US Treasuries and, um, other upstart “reserves.” Don’t believe it? See for yourself:

Credit: One thing is certain: Younger generations are finding it increasingly difficult to achieve the American Dream because our fraudulent debt-based fiat monetary system is in its death throes, with the US in the untenable position of essentially burning the furniture to keep its financial house warm. The studs and rafters are next – and the process will continue until the entire house is burned to the ground. Thankfully, it’s not too late to protect yourself. Remember, gold is a proven instrument of wealth protection – not just for central banks, but for individuals too.

By the Numbers

If you’re wondering which of the so-called Magnificent 7 companies have shown the most revenue growth over the past decade, you can wonder no more:

77% Apple

198% Microsoft

617% Amazon

1208% Meta

2553% Alphabet

2651% Nvidia

3021% Tesla

Source: @JohnErlichman

The Question of the Week

Last Week’s Poll Result

How much is your budget for Christmas gifts this year?

• $501-$1000          32%
• $100 – $500             26%
• More than $1000    25%
• Less than $100        17%

More than 1700 Len Penzo dot Com readers answered last week’s poll question and it turns out that slightly more than 2 in 5 of you are planning on holding the holiday gift budget to under $500. For those with kids – in addition to other friends and family that might be on your list – that can be easier said than done!

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: New Driver

After Martin received his brand new driver’s license, the entire family trooped out to the driveway, and climbed into the car so he could take them on a ride for the first time.

As they got to the car, Dad immediately headed for the back seat, directly behind the newly-minted driver. Spying his dad in the back of the car, the beaming boy said to his father, “I’ll bet you’re back there to get a change of scenery after all those months of sitting in the front passenger seat teaching me how to drive!”

“Nope,” replied Dad. “I’m gonna sit here and kick the back of your seat as you drive, just like you’ve been doing to me for all these years.”

(h/t: Jon)

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 (2.23 pages/visit)
2. Quebec (1.91)
3. Alberta (1.88)
4. Northwest Territories (1.75)
5. Prince Edward Island (1.72)

9. Saskatchewan (1.56)
10. British Columbia (1.50)
11. Nova Scotia (1.47)
12. Yukon (1.33)
13. Newfoundland & Labrador (1.25)

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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 me at: Len@LenPenzo.com

After reading My 38 Secrets to Financial Success, long-time Len Penzo dot Com fan Lauren P. shared the following interesting observation:

Great list, Len. To any Star Trek: Deep Space Nine fan, your list reads like a counterpart to the Ferengi Rules of Acquisition!

And many of those 285 rules are actually related to personal finance, Lauren — like #162: ‘Even in the worst of times, someone turns a profit.’

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