Black Coffee: Slaves & Skeptics

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!

Whenever destroyers appear among men, they start by destroying money, for money is … the base of a moral existence. Destroyers seize gold and leave to its owners a counterfeit pile of paper, delivering men into the arbitrary power of an arbitrary setter of values. Gold is an objective value, an equivalent of wealth produced. Paper is a mortgage on wealth that doesn’t exist, backed by a gun aimed at those who are expected to produce it.

— Ayn Rand

A US dollar is an IOU from the Federal Reserve Bank; a promissory note that doesn’t actually promise anything.

— PJ O’Rourke

Credits and Debits

Debit: Did you see this? A new study by Real World Investor has found that, at the current average interest rate of 4.4%, Americans with the median savings account balance of $8000 who make additional monthly contributions of $100 would accumulate just $57,629 in 20 years. This falls far short of the $1.25 million required to fund a 25-year retirement with a modest annual living cost of $50,000. For those not counting a home, that means the gap between projected savings and retirement needs amounts to $1.19 million.

Debit: In other news, the CPI showed year-over-year inflation ticked up to 2.7% in June – that’s up from 2.4% in May. The data has defied claims that tariffs would sharply increase prices. As a result, economists have lowered their December inflation expectation from 3.6% to 3.0%. On the other hand inflation remains above the Fed’s 2% target sham. In fact, the economy should always be in a state of zero-inflation or mild deflation. And while that should be intuitively obvious to the general public, it’s not because they’ve been hopelessly indoctrinated to believe the exact opposite. So now you know why there are still posted signs like this …

Debit: Meanwhile, the great Warren Buffett continued to ramp up his position in US Treasury bills to an astonishing $314.1 billion, solidifying his dominance as the single largest non-government holder of short-term US debt. As of the end of March, the entire US T-bill market sat at $6.2 trillion, meaning Buffett’s gargantuan stake now amounts to 5.1% of the entire Treasury market. That being said, that doesn’t mean you have to follow every bit of advice that Warren passes out for general consumption…

Credit: Last week’s BRICS summit concluded with a pledge to continue  … The BRICS nations – which act as a counterweight to the Group of Seven (G7) – represent almost half of the world’s population, 36% of global land area, and more than a quarter of global economic output. The bloc – which sees itself as a forum for cooperation between countries of the Global South and the leading Western economic powers – solidified its plans to complete work on or competing financial institutions to existing Western-dominated frameworks – which have yet to be challenged by any real competition. Until now …

Debit: On a related note, the latest tariff policy is driving the BRICS to speed up their financial and monetary system infrastructure, and take control of the gold trading market from London and New York. Needless to say, there are plenty of people who find that hard to believe. Oh… and here’s something else we found a bit hard to believe:

Debit: By the way, we have to assume that any skeptics who are still out there aren’t aware that China’s Cross-Border Interbank Payment System (CIPS) recently surpassed the US-based SWIFT system in single-day transaction volume for the first time ever. In fact, CIPS processed roughly $1.8 trillion worth of transactions in April, while SWIFT has yet to process a similar volume on a single day. This event suggests a shift in global financial transaction processing, with CIPS playing an increasingly significant role, especially in RMB-denominated transactions. Still dubious? Behold, Exhibit 87B:

Credit: So how did we get here? Well, as macro analyst Matthew Piepenberg notes, “Ever since Nixon took away the gold chaperone from the US dollar (USD), politicians have been buying temporary prosperity, debt-based “growth” and duped voters by taking US public debt levels from $248 billion in 1971 to $37 trillion today.” Uh-huh. Just don’t tell the mainstream media; they seem to believe that paper USDs conjured out of thin air by the Fed are superior wealth protection to “unbacked” physical gold and silver. No, really. Now quiet on the set! Cameras are rolling in 3… 2… 1…

Credit: Macro analyst Daniel Oliver also opined on America’s ever-growing debt, correctly observing that our fraudulent debt-based monetary system ensures that, “One need not examine debt figures or debt-to-GDP-ratios to understand that, once entered, there is no political escape from the debt vortex, (regardless of whether) … Reagan, the Bushes, Obama, Biden, Trump, the Democrats (or) Republicans” are in charge. In other words: The good ol’ days don’t exist. Well… at least not after 1971.

Credit: So… short of starting over with a new monetary system based on wealth creation rather than debt, how do we get out of this mess? Short of a new currency, Piepenberg notes that there’s really only one reasonable fix left: “The Fed can add revalued gold certificates to its balance sheet, which can then become assets of the Treasury to pay down a sliver of its $37 trillion public debt. By remarking these gold certificates from $42 per ounce to $3300 would instantly give Uncle Sam $850 billion in new money to pay off some debts.” In the meantime, the price of gold has been on a tear for the last 16 months. Coincidence?

Credit: Unfortunately, it’s going to take far more than $850 billion to actually alleviate the mathematical debt problem currently facing the US while simultaneously restoring trust in the USD. In fact, Piepenberg believes the US government’s only escape route is to revalue the yellow metal to somewhere near $20,000 gold, which would bring the debt-to-GDP figure closer to a very manageable 70%. Oh … and speaking of escape routes:

Credit: Here’s the bottom line, folks: If you find yourself laying awake at night worrying about the safety of your hard-earned money – including your retirement nest egg – consider accumulating a little wealth insurance. Just remember: You can only buy insurance policies before you encounter a financial loss – and not a second after.

Besides, it’s the responsible thing to do.

By the Numbers

Life insurance experts recently revealed industries that require greater safety awareness and coverage planning. Here are last year’s top injury rates per 1000 employees, making these jobs among America’s “most dangerous industries” in 2024. We have to admit, we found some of the industries that made this list more than a bit, shall we say, surprising:

9 Mining, and Oil & Gas Extraction

14 Firefighting

15 Agriculture, Forestry, Fishing & Hunting

19 Waste Management

20 Utilities

21 Real Estate (!)

28 Recreation, Arts & Entertainment

36 Roofing

40 Transportation & Warehousing

42 Public Administration (!)

135 Police

Sources: Everyday Life and Google AI

The Question of the Week

Last Week’s Poll Result

• Two  64%
• One  12%
• Three  11%
• I don’t have a garage!  10%
• More than three  3%

More than 1900 Len Penzo dot Com readers answered last week’s poll question and it turns out that almost 1 in 7 of you have a garage that holds three or more vehicles. I wonder how many of those garages hold more junk than automobiles. As for me, I have a two-car garage and I’m happy to report that both of my vehicles reside comfortably within it. Thank you very much!

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: Disappearing Act

A man and a woman were having dinner in a fine restaurant. Their waitress, taking another order at a table a few paces away noticed that the man was slowly sliding down his chair, with the woman acting unconcerned. The waitress continued to watch this couple as the man slid all the way down his chair until he was out of sight and completely under the table.

Still, the woman dining across from him appeared calm and unruffled, apparently unaware that her dining companion had disappeared.

After the waitress finished taking the order, she came over to the other table and said to the woman, “Pardon me, ma’am, but I think your husband just slid under the table.”

The woman calmly looked up at the waitress and replied firmly, “No he didn’t; he just walked in the door.”

(h/t: Susan)

Squirrel Cam 

A few weeks ago I showed a standoff between a California ground squirrel and its red-squirrel cousin. But that is the exception to the rule; they usually play nice …

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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 (2.17 pages/visit)
2. Saskatchewan (2.13)
3. Alberta (2.06)
4. Northwest Territories (2.00)
5. Quebec (1.81)

9. British Columbia (1.52)
10. Yukon (1.33)
11. Nova Scotia (1.25)
12. Prince Edward Island (1.17)
13. Nunavut (1.00)

Whether you happen to enjoy what you’re reading (like those crazy canucks in Ontario, eh) — or not (ahem, you hosers living on the frozen Nunavut tundra) — please don’t forget to:

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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 post explaining why I’m not impressed by people who drive fancy cars, Linda Lee felt compelled to share this:

I have zero debt. I have an MBA in Finance. I own three BMWs: a 328i, an X3 and an M3. I also just bought a brand new 28 ft Sea Ray Sundancer power cruiser and a gorgeous 3-bed/3-bath downtown Chicago Loop condo.

Good for you. Now if you could only buy a little humility …

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