Black Coffee: The Love & Money Edition

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 an enjoyable week. Without further ado, let’s get right to this week’s commentary …

Money is not the most important thing in the world. Love is. Fortunately, I love money.

– Jackie Mason

Try paying the bills with love.

– T. Harv Eker

Credits and Debits

Debit: Did you see this? It turns out that 43% of all lovebirds who are going to take on Valentine’s Day debt don’t plan to tell their significant others. We bet that’s most likely because 67% of Americans who are in a relationship say they would be upset to learn their partner went into debt for their gift. Oh … and if you’re partner doesn’t get you a Valentine’s gift this year, perhaps it’s because 61% of those polled say that inflation is making it harder for them to afford Valentine’s gifts this year. We have to admit, they have a point …

Debit: Speaking of inflation, the latest reading of the Fed’s preferred inflation gauge – known as the “core” Personal Consumption Expenditures (PCE) index – showed that inflation remained above the central bank’s 2% target. The PCE, which strips out food and energy costs and is closely watched by the central bank, “officially” rose 0.2% – that was double the rate from the prior month. And on a year-over-year basis, core prices rose 2.8%. Then again, that seems low to us. Er … regardless of who you may think is to blame …

Debit: Despite a substantial drop in the rate of inflation from its 2022 highs, the Wall Street Journal correctly points out that a steady annual inflation of nearly 3% – assuming one believes the government’s CPI data – is still not acceptable. Why? Because the USD’s purchasing power is cut in half every 23 years with annual inflation at 3%. From that perspective, it’s much easier to see how that seemingly-modest degree of currency debauchery makes saving for the long-term an extremely iffy proposition. That being said, if actual inflation is running closer to 8%, then purchasing power is being halved every 9 years. How’s that for a reality check?

Debit: Hey … here’s something else that should make your head spin: After the US Treasury reluctantly gave access to the US government’s payment system used to disburse trillions of US dollars (USD) every year by the US Treasury to the Department of Government Efficiency (DOGE), the newly formed agency announced last week that it discovered, among other things, that payment approval officers at Treasury were instructed always to approve payments. Yes; always. Even those to known fraudulent or terrorist groups. Heh. Why are we not surprised?

Debit: Those Treasury bureaucrat’s pathetic “management” performance is among a long line of reasons why it now takes $3.90 of federal debt to generate $1 in domestic growth. This is an inevitable result of how our fraudulent debt-based monetary system operates. It also means that the US can only grow from here by issuing more debt at an ever-increasing pace. Now for the punchline: Any meaningful move by the DOGE to cut the federal deficit will be met with a deep recession – if not a devastating depression. It also illustrates why the government has become a boat anchor around the neck of the private sector – if not why this headline is almost believable …

Credit: In other news, tariffs of 25% took effect last weekend on Mexican and Canadian imports – and 10% on Chinese goods. With the Fed holding rates steady and inflation concerns growing, markets are on edge. By Monday, however, negotiations with Mexico and Canada resulted in the delay of those 25% duties on America’s southern and northern neighbors by a month. Imagine that.

Credit: Meanwhile, the mere threat of tariffs to begin roiling the precious metal markets, spurring massive shipments of gold from London – which is the world’s most important gold trading hub – to New York ahead of higher prices that might result if the yellow metal remained in the UK. Curiously, there is now a 4 to 8 week delay for London to deliver gold, versus the usual three day wait. That begs the question: Are the delays really due to the threat of tariffs – or, more likely, due to a lack of bullion in the London vaults. Needless to say, officials insist there is a perfectly good explanation for those suddenly-extended delivery times …

Credit: On a related note, precious metals analyst Chris Powell posits that, “If the fraudulent, derivatives-based Western gold market was breaking down, would it look much different than the situation reported in London (last) week? And if gold were to be revalued by the major central banks, might not revaluation be precipitated by a market shortage? I’ve long thought that a revaluation would have to be accomplished in a flash — that is, on a Sunday night before the Asian markets opened — and that central banks would be participating.” Even more intriguing is that Powell says “there’s evidence of official revaluation preparations.” Ya think?

Credit: For his part, sagacious macro analyst Franklin Sanders marveled this week that, “establishment-icon Goldman Sachs is recommending gold as the best safe haven hedge.” He’s not the only one. He then went on to say that “this helps explain why gold is filling up those basement vaults in New York – (despite) most having not yet caught onto gold elbowing aside the USD and US Treasury bonds as the safe haven investment.” Even so, the choice seems obvious – at least to us …

Credit: By the way, we’d like to thank Mr. Powell for also highlighting this additional bit of wisdom from GoldCore’s Jan Skoyles in his report: “No matter how much governments try to obscure it, gold remains at the center of the world financial system. (Gold) is the serene king of financial assets, and isn’t going away — at least not when you hold the real thing in your own hands … and avoid derivative and fractional-reserve gold.” Oh … and in case you’re wondering, despite the run-up in its USD price over the past several years, the yellow metal is nowhere near over-valued at the moment. Hey … we’re not sayin’. We’re just sayin’.

Credit: Precious metals analyst Jesse Columbo: “Over the past half-century, the rise of financialization and inflating asset bubbles has led to an explosion of paper financial assets: Approximately $135 trillion in bonds, $109 trillion in equities, and a staggering $1 quadrillion in derivatives. This complex web of counterparties creates significant systemic risk. In stark contrast, physical gold and silver stand apart as assets with no counterparty or default risk. This simplicity becomes a tremendous advantage in times of financial turmoil.” Indeed it does – but only if it’s in your possession. In other words: If you don’t hold it, you don’t own it.

By the Numbers

If you’re looking to find a sugar daddy before Valentine’s Day – or even a sugar momma – then you may be interested to know that a new study ranks US states by billionaire tax returns, revealing where the ultra-wealthy choose to live. Here are the states with the most billionaires as of the end of 2023:

186 California

135 New York

78 Florida

73 Texas

23 Illinois

22 Massachusetts

18 Georgia

18 Pennsylvania

17 Nevada

Source: Delia Law 

The Question of the Week

Last Week’s Poll Result

How many cars do you currently own?

• Two 38%
• One 28%
• Three 18%
• More than three 11%
• None 5%

More than 1900 Len Penzo dot Com readers answered last week’s question and it turns out that almost 1 in 20 of you don’t own a car – which means it’s also probably safe to assume that 100% of those people don’t live in Southern California.

If you have a question you’d like 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: Traffic Stop

A senior citizen drove his brand new Corvette convertible out of the dealership. Taking off down the road, he pushed it to 80 mph, enjoying the wind blowing through what little gray hair he had left. Amazing, he thought as he flew down the highway, pushing the pedal even more.

Looking in his rear view mirror, he saw a state trooper behind him, lights flashing and siren blaring. He floored it to 100 mph, then 110, then 120. Suddenly he thought: What am I doing? I’m too old for this. So he pulled over to await the trooper’s arrival.

Pulling in behind him, the trooper walked up to the Corvette, looked at his watch, and said, “Sir, my shift ends in 30 minutes. It’s Friday. If you can give me a reason for speeding that I’ve never heard before, I’ll let you go.”

The old gentleman paused. Then he said, “Years ago, my ex wife ran off with a state trooper. I thought you were bringing her back.”

“Have a good day, sir,” replied the trooper.

(h/t: Dr. J)

Squirrel Cam

Who let the squirrels out! How many bushy tails can you spot in this clip?

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More Useless News

Here are the top — and bottom — five states in terms of the average number of pages viewed per visit here at Len Penzo dot Com over the past 30 days:

1. Alaska (2.67 pages/visit) (!)
2. Kentucky (2.51) (!)
3. South Dakota (2.43)
4. Kansas (2.31)
5. Minnesota (2.24)

46. Vermont (1.50)
47. New Hampshire (1.32)
48. Iowa (1.30)
49. Virginia (1.27)
50. Wyoming (1.06)

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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 piece on things people overpay for, Kenny Schneider added this additional pearl of wisdom regarding the high cost of first-class air travel:

Coach gets you there just as fast.

So true, Kenny. Too bad it doesn’t keep the TSA from making air travel, ahem … frisky business.

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.