Black Coffee: Covering the Bases

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.

Another busy week is crossed off the list. So without further ado, let’s get right to the commentary …

Those entrapped by the herd instinct are drowned in the deluges of history. But there are always the few who observe, reason, and take precautions, and thus escape the flood. For these few gold has been the asset of last resort.

— Antony C. Sutton

Credits and Debits

Debit: Did you see this? Americans’ economic outlook is the poorest it’s been since 2013. As a result, the government’s index for measuring consumers’ short-term outlook for income, business, and labor market conditions hit its lowest level in four years. For the second straight month the index reading has also triggered a threshold signal indicating that a recession is imminent. Well … unless the government changes the definition of what even constitutes a recession. Again.

Credit: Perhaps the struggling economy is why a bipartisan bill is floating around Congress that would cap credit card interest rates at 10%. For what it’s worth, the president has indicated that he would sign the bill into law if it does get enough votes in both houses. Needless to say, that’s especially good news for younger credit card holders who are still struggling just to leave the nest. Or not … (Warning: Mature audiences only.)

Credit: On a related note, we see that last week’s rumors have been officially confirmed: DoorDash customers will soon be able to pay in full at checkout, split payments into four equal interest-free installments, or defer to dates that align conveniently with payday schedules. No, really. Frankly, it’s hard to believe that as late as the 1970s, buying almost anything on credit – short of a home or new car – was generally considered financial taboo. Today, nobody blinks an eye at using credit, even it means financing quick delivery of ten chicken nuggets and a diet Coke …

Credit: In other news, an 11 year-old put his one-of-a-kind rookie baseball card of Pittsburgh Pirates pitching ace Paul Skenes up for auction, and collected a cool $1.1 million. Not too shabby! Oh … and for those of you not counting at home, only five baseball cards have ever sold for more. Next up for the kid: A lesson on the cost of Big Government. That’s because after the federal and California state bureaucrats get their “fair share” – for the greater good, of course – this kid will get to keep less than $600,000 of his money. One can only imagine how much less he’d have if he chose to sell one of his other cards …

Debit: Not surprisingly, most taxes that aren’t used to fund fraud, waste and abuse, end up being used to help pay for an expanding bureaucracy. That explains why an ongoing study by government watchdog Open the Books has discovered that federal government spending now easily outstrips growth of its 411 agencies (!) staff and even inflation – often many times over. It’s an enormously difficult problem that needs to be solved. Yes; even more difficult than these …

Debit: In other news, DOGE has revealed that an IRS modernization program – designed to move old mainframes running COBOL and Assembly code into the 21st century – is 29 years beyond schedule and $15 billon over budget. In the private sector, this type of technology conversion typically takes only a few years and several hundred million dollars. And we thought the DMV was slow. But, hey … this is the government. And as anybody who’s paying attention knows, it’s incapable of doing anything cheaply or efficiently …

Debit: Meanwhile, Wall Street took it on the chin on Friday, with the Dow, S&P 500 and Nasdaq falling 1.7%, 2.0%, and 2.7%, respectively – and all three indices were in the red for the week. As a result, the S&P and Nasdaq have finished underwater in five of the last six weeks. Then again, some investors have are still trying to squeeze more juice from the lemon – well … at least the ones who are willing to bet on long shots with highly dubious business plans. Er … and other highly-speculative volatile investments such as bitcoin, which has lost roughly 23% of its purchasing power since peaking at $109,026 just two months ago; it ended the week below $84,000. Ouch.

Credit: By the way, according to market analyst Stephanie Pomboy, despite recent market decline, “At present the market is trading at two times GDP. Historically, it has traded at 77%. (That’s) a $36 trillion over-valuation. In other words, if the market were cut in half tomorrow it would still be overpriced.” Uh huh. But everybody knows that. And, apparently, everybody knows this too…

Debit: While everybody knows some things, there’s even more that they don’t know. For example, did you know that in 1960, $1000 could purchase 1087 ounces of silver, but today, that same amount of cash will only fetch 30 ounces. That happens to be a staggering 97% decline in the US dollar’s (USD) purchasing power relative to the white metal. It’s a similar story for gold. Maybe that’s why headlines like this are now popping up with increasing frequency …

Credit: Speaking of gold, the USD price of the yellow metal was under $40 way back in 1971. However, after a decade of debilitating stagflation and lower living standards, the price peaked at more than $800 in 1980 – a level that would have enabled a return to the Gold Standard. This free market determined the ultimate value of gold as money during the 1970s; and gold’s latest revaluation is only in the middle stage of being replayed again today. In fact, as of February, gold prices would have to be approximately $35,000 to achieve a 40% backing of the current M1 money supply – which was last achieved more than five decades ago. Imagine that.

Credit: We’ll let market analyst Greg Mannarino wrap things up this week. He reminds us that “Artificially suppressed rates are a destroyer of USD purchasing power and a wrecking ball for the economy and middle class. It’s the same mechanism which has been, up until now, pushing the stock market higher, responsible for the largest wealth transfer in history. Wealth that’s being stolen straight from the economy itself, and the middle class, and transferred to the one percenters.” Thankfully, precious metals can protect both us, and our lifetime savings, from these brazen robbers. Got gold (and/or silver)?

The Question of the Week

Last Week’s Poll Results

How many miles do you typically put on your primary each year?

• Less than 3000 31%
• 6000 – 12000 27%
• 3000 – 6000 25%
• More than 12,000 17%

More than 1900 Len Penzo dot Com readers responded to this week’s poll and it turns out that slightly less than twice as many of you drive fewer than 3000 miles than those of you who drive more than 12,000 miles. Before I retired – and working from home became almost commonplace – I routinely put 12,000 to 15,000 miles per year on my primary vehicle. Now … it’s usually less than 3000.

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.

By the Numbers

A recent study found that the average cost of a large cheese pizza across 100 of the most-populous US metro areas is $18.02. At that price, a person who buys a large cheese pizza every week spends about $937 on pizza per year. The survey of 2000 Americans also found that 58% believe living close to popular restaurants – including pizzerias – increases property values, while 1 in 4  say they’d pay more for a home closer to a  popular pizza joint. On average, here are the five cities with the most – and least – expensive large cheese pizza pies among the 100 most-populous US metro areas.

100 New York City, NY ($26.00)

99 San Diego, CA ($25.35)

98 Las Vegas, NV ($24.48)

97 San Jose, CA ($24.28)

96 Seattle, WA ($24.25)

5 Harrisburg, PA ($14.17)

4 Grand Rapids, MI ($14.14)

3 El Paso, TX ($13.82)

2 Akron, OH ($13.81)

1 Madison, WI ($13.77)

Source: ListWithClever.com

Useless News: The Charity Chair

The chairman of a local charity was going over some files and realized that he hadn’t received any donations from the town’s most successful lawyer. So the chairman called the lawyer and said, “Good day, Mr. Jones. I’m sorry to bother you, but our records show that you haven’t made any donations to us.”

The lawyer replied, “Well, did your records show that my mom is sick with bills three times her annual income? Or that my sister’s husband died in an accident which left her penniless with three children, or that my brother is blind and has no money to pay for an aid or a nurse?”

Embarrassed, the chairman said, “Oh my … I’m very sorry, Mr. Jones. I had no idea.”

“You should be!” said the indignant lawyer. “After all, if I don’t give any money to them, why would I give any to you?”

(h/t: Kerri)

Squirrel Cam

Here is another example of how we can tell the squirrels apart from each other: We know this is Richard because of a peculiar robotic twitch he displays every time he finishes eating a nut.

.

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!

.

Hey, while you’re here, please don’t forget to:

1. Subscribe to my weekly Len Penzo dot Com Newsletter!

2. Make sure you follow me on Twitter.

3. Become a fan of Len Penzo dot Com on Facebook too!

And last, but not least …

4. Please support this website by visiting my sponsors ads!

Thank you!!!! 😊

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 article on Starbucks’ expensive java, Garrett took exception to my suggestion for saving money by brewing Folgers coffee at home:

I agree that Starbucks is overrated and overpriced, but Folgers?? Come on.

You’re right, Garrett. But I was on a tight deadline and “Chock Full O’ Nuts” was too many words.

If you enjoyed this, please forward it to your friends and family. I’m Len Penzo and I approved this message. 🙂

Photo Credit: stock photo