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’ve got another busy weekend ahead of me, so let’s get right to this week’s commentary …
The waiting is the hardest part.
– Tom Petty
Credits and Debits
Credit: Did you see this? Last month, the US housing market saw canceled deals and pulled listings surge to their highest levels in almost a decade. Sales of existing homes slumped to a seasonally adjusted average annual rate of 3.9 million in June – that’s a nine-month low in what’s typically the housing market’s busiest season. In fact, 15% of all homes that went under contract last month fell through – that’s the highest share of canceled deals in June going back to 2017. It’s okay, folks. Nothing to see here. Uh… or here:
h/t: @Kenneth_Dredd
Debit: A cracking housing market isn’t the only bad news for Main Street – well, at least those who recently bought an over-priced house. That’s because the latest USDA cattle report shows America’s cattle herd population has fallen to 94 million, which is its lowest level since 1973. As a result, the nation’s shrinking herd size has pushed retail ground beef prices to record highs. The average price for a single pound of ground beef is now $6.12. The good news is that the US GDP figure was up sharply last quarter …
Frankly, we start unfriending the cook at Step 3. And even Step 2 results in a stern warning.
Debit: In other news, the US government has spent $1.7 billion so far to deliver just 250 electric trucks for the US Postal Service (USPS), which means those trucks have cost taxpayers a minimum of $6.8 million a piece. Sheesh. Looks like the USPS got robbed. And on a related note …
Gary Larson – The Far Side
Debit: As if that wasn’t bad enough, the USPS is still waiting for the remaining 44,750 trucks, which are due by 2028. At the current delivery rate, it will take the government another 539 years – and who knows how much more money – to complete their order. Er… assuming the entire government program isn’t taken to the basement and put out of its misery first.
Debit: Of course, these ubiquitous government boondoggles are only possible because the “Almighty Dollar” is a debt-based currency which can be freely counterfeited into existence. But since there is no such thing as a free lunch – despite what the MMT zealots insist – that incessant currency printing is the primary reason for the relentless loss of purchasing power of the US dollar (USD), as well as the cause of our slow living-standard decline. Unfortunately for us mortals, the Fed can always print more currency – but we can’t print more time …
Credit: Macro analyst Alasdair Macleod: “Perceptions of currency risk are driving government bond yields, not assumptions that central banks continue to control interest rates and bond yields. Initially, it is a concern for foreign holders of dollars and underlying financial instruments and investments totaling some $40 trillion, one-third more than US GDP.” Needless to say, the Fed is in a bind, which is why the next Fed chair is rumored to be this guy …
Credit: Here’s the rub, as summarized by GoldFish Charts: The inconvenient reality is that, “Just as the US buying its own bonds through printing pushes gold upwards – so too printing trillions in stablecoins will also propel gold constantly higher. It’s the ever-increasing debt with no attempt to bring it down that creates this chaos. The US needs a continual stream of buyers for its debt, and that (stream) is increasing in size exponentially. They’ve been expanding their debt through bonds but that system is failing and stablecoins are the next (scam).” And Lord knows there have been lots of similar scams lately…
h/t: @trendspider
Debit: By the way, this supports Macleod’s prediction that currency risk perceptions will “spread from foreign investors to domestic institutions, who will realize that if the Fed is forced to reduce interest rates in the event of a domestic financial and economic crisis, then the USD will fall in its purchasing power. Central banks, predominantly in Asia, already see this probability and have been adjusting their reserves by selling fiat currencies for the safe haven of gold.” In the meantime, here in the West, unwitting investors are clamoring to buy silver that doesn’t exist. No, really. As if that is going to end well …
h/t: @StockCats
Debit: The silver supply is not keeping up with demand, as silver mine supply has declined by 7% since 2016. Not coincidentally, analysts are predicting that the global silver market will remain in deficit for the seventh consecutive year in 2025, putting upward pressure on prices. Along with gold, silver has been posting impressive gains. In fact, for the first six months of 2025, silver bullion gained 25%, following its 21.5% in 2024.
Graph: Sprott
(For those of you who skipped chemistry: Au=gold, Ag=silver, Cu=copper, U=uranium.) h/t: @duediligenceguy
Debit: Silver remains undervalued relative to gold, opening it to significant upside potential. On average, gold has historically been priced at 53 times the price of silver. With the current ratio near 90, silver is selling at a strong discount to gold. Further, silver is mined at only a 7:1 ratio compared to gold. The good news is reversion to mean is all but guaranteed.
Credit: According to Sprott macro analyst Paul Wong, “Historically, silver has served as a store of value in periods of crisis – much like gold – but with the added benefit of being significantly more affordable and accessible.” As a result, Wong says that “silver is regaining prominence as a trusted safe-haven asset in today’s environment of increased geopolitical tensions, inflationary pressure and financial instability.” And for good reason.
Last Week’s Poll Results
Are your children on track to be better off financially than you?
- At this point, it’s a toss up. 33%
- Some, but not all. 24%
- No. 22%
- Yes. 21%
More than 2000 Len Penzo dot Com readers responded to last week’s question and it turns out that the American Dream is clearly not the sure thing that it used to be. Let’s hope things will eventually turn around. Returning to a monetary system based on sound money, rather than debt-based fiat currency would go a long way towards reestablishing what was once considered a generational birthright.
This week’s question was provided by reader Frank. 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.
The Question of the Week
By the Numbers
As we’re officially into August, let’s take a look at the year-to-date performance (through July 31st) of some select major asset classes:
-7.2% 10-yr US Treasury proxy (TNX)
-4.1% Russell 2000
+3.7% Dow Industrials
+7.8% S&P 500
+9.4% Nasdaq Composite
+25% Gold
+26% Silver
+48% GDX (Gold miners ETF)
+51% SIL (Silver miners ETF)
Source: Yahoo!Finance
Useless News: Good Question
(h/t: GLH)
Squirrel Cam
As you can see, the squirrels were on vacation this week …
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More Useless News
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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
This week I got some exciting news from Francis Egoyibo, from the Office of the Accountant General:
The Auditor-General for the country of West Africa has determined that you are owed $9,241,000.66. We would like to know how you wish to be paid …
Great! Please send a check for the entire amount to the IRS as an advance tax payment on my future income.
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: public domain
Question of the Week