Black Coffee: The Final Countdown

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 hope everybody had a wonderful week. And with that, let’s get right to this week’s commentary, shall we?

Truth forever on the scaffold; wrong forever on the throne. Yet that scaffold sways the future, and, behind the dim unknown, standeth God within the shadow, keeping watch above his own.

– James Russell Lowell

Credits and Debits

Debit: Did you see this? Discount retail store chain Big Lots announced this week that it will initiate “going out of business” sales at all its remaining locations after it was unable to reach an agreement with an investment firm. Then again, maybe fate would have been different if they has only worked harder at coming up with a “can’t miss” loss leader. Am I right, Costco?

Debit: On a related note, we see that Party City suddenly closed the doors of more than 800 stores last Friday, officially ending its 40-year run in the retail industry.

Debit: One reason companies like Big Lots and Party City are going out of business is that consumers are pinched. In fact, Bank of America is reporting that almost a third of all US households now “spend more than 95% of their disposable income on necessities such as housing costs, groceries and utility bills.” Obviously, that doesn’t leave a lot of room for vacations and other discretionary purchases.

Debit: Sadly, there are other signs that American households are struggling to make ends meet, as a new survey found that almost 25% of all households said they couldn’t pay their electricity bill during at least one month within the past year. Now … does anybody care to guess how many of them hold college degrees?

Debit: In the meantime, The Fed lowered its benchmark interest rate again last week, despite fresh signs that inflation is once again rearing its ugly head – especially at the supermarket. In fact, the annual rate of grocery price inflation is the highest since this time last year. However, it’s a far cry from 2022 when grocery prices averaged 11.4% and peaked at 13.5%. And, yes, we know. Even that’s understated because those rates are based on the government’s highly deceptive consumer price index (CPI).

Debit: By the way, after several years of what seems like a continuous churn of uninterrupted gains, the major US stock market indices seem almost impervious to any sustained downdraft. Then again, you can blame the Fed’s penchant for meddling with the cost of money and, since 2009, pushing its quantitative easing (QE) program. Without their hand on the scales, you can bet the stock market would look a lot different than it does today. In other words, our economy is a complete illusion. And it will stay that way until the central bankers’ hocus pocus finally stops working. You know … kind of like this:

Debit: For the last three years, China has been steadily replacing its US dollar (USD) Treasury bond holdings with gold. In fact, between January 2022 and May of this year, China’s US Treasury bond portfolio fell almost 25% – from $1 trillion to $768 billion. In the meantime, even the experts seem oblivious to the implications of this:

Credit: After taking a six-month break from an 18-month gold-buying spree, the People’s Bank of China (PBOC) resumed its policy of large gold purchases in November. Meanwhile, here’s what was going on in the rest of the Middle Kingdom …

Credit: The strategic goal behind China’s gold policy is, at minimum, to reduce its reliance on the USD. That would include protecting itself as much as possible from the punitive measures – such as trade sanctions, restrictions, and tariffs – that America often imposes upon its economic or geopolitical adversaries.

Credit: With all this uncertainty in mind, if you find yourself laying awake at night worrying about the safety of your hard-earned money – including your retirement nest egg – please consider accumulating a little physical gold or other form of wealth insurance in 2025. Even if all you can afford is just one American Silver Eagle or Canadian Silver Maple Leaf per month. We promise you’ll sleep a whole lot better at night. Besides, it’s the responsible thing to do.

By the Numbers

Here are the cumulative price increases for some select products and services between January 2021 and December 2024. Just keep in mind, if some of these figures seem lower than what your experience shows, it’s because the data is based upon the CPI:

9% Medical care

12% Apparel

20% New cars

23% Groceries

24% Rent

27% Restaurant meals

29% Electricity

43% US homes

48% Gasoline

61% Auto insurance

Source: @CharlieBilello

The Question of the Week

Last Week’s Poll Results

What is the size of the bed you sleep on?

• Queen  41%
• King       38%
• Full        16%
• Twin       5%

More than 2000 Len Penzo dot Com readers responded to last week’s question and it turns out that 2 in 5 of you sleep on a full sized or twin bed. So much for sleeping like kings and queens.

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: The Wichita Lineman

Many years ago, a Kansas farm wife called the local phone company to report that her telephone failed to ring whenever her friends called. She also noted that on a few occasions, when the phone did ring, her dog always moaned right before she received the call.

So a telephone repairman was dispatched to the scene, curious to see whether the lady was senile — or whether she had a psychic dog.

When he arrived, the lineman climbed the telephone pole, hooked his test set to the wire, and dialed the subscriber’s house.

Sure enough, the dog moaned and then, several seconds later, the telephone began to ring.

Climbing down from the pole, the telephone repairman — who was now quite intrigued by what he had just witnessed — continued his investigation. Upon further inspection, he found that:

1. The dog was tied to the telephone system’s ground wire with a steel chain and collar.
2. The wire connection to the ground rod was loose.
3. The dog was receiving 90 volts of signaling current every time somebody dialed the lady’s phone number.
4. After a couple of jolts, the dog would start moaning and then urinate.
5. The wet ground would complete the circuit, thus causing the phone to ring.

This brings us to the obvious moral of the story: Some problems actually can be fixed by pissing and moaning.

(h/t: 4Sure)

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 five articles viewed by my 50,077 RSS feed, weekly email subscribers, and other followers over the past 30 days (excluding Black Coffee posts):

1. The Secret to Financial Freedom on a Modest Income
2. The Parable of the Mexican Fisherman: A Lesson on Happiness
3. 5 Tips to Help You Avoid Buyer’s Remorse
4. Using Duct Tape to Fix Your Personal Finances
5. 6 Ways to Save Money When You’re Living Paycheck to Paycheck

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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 the results of my brown bag sandwich price survey, Francis had this to say about the eggs at my local grocery store selling for $4.92 per dozen:

Where the heck do you shop for eggs?

Um … Would you believe New Yolk City?

If you enjoyed this, please forward it to your friends and family. 😊

I’m Len Penzo and I approved this message.

Photo Credit: public domain