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 same boiling water that softens the potato hardens the egg. It’s about what you’re made of – not the circumstances.
– Anonymous
Credits and Debits
Debit: Did you see this? While the debate over the health of the US economy continues, Starbucks announced that it will furlough 900 employees and close roughly 400 stores as part of its $1 billion restructuring plan. The number of stores in North America will decline by about 1% in fiscal year 2025. As for the rest of the US, things aren’t looking much better…
Debit: In other news, US consumer confidence declined more than expected in September amid mounting worries over the availability of jobs. The latest survey shows that consumers’ assessment of business conditions is declining, while their appraisal of current job availability fell for the ninth straight month. A lot of economists are warning everyone to hold on tight because they’ve seen this movie before – but have they really?
Credit: Meanwhile, inflation remained essentially unchanged since August – but it’s still rising 2.7% year-over-year (YoY) as measured by the Fed’s preferred inflation gauge, known as the Personal Consumption Expenditures (PCE) price index. The good news is that both the Fed and the federal government keep telling us that so-called “stablecoins” such Tether (USDT), USDC and Dai (DAI )will help save the day by putting a stop to the rapidly declining purchasing power of the US dollar (USD). Oh, wait…
Credit: On a related note, the chief economic strategist for Morgan Stanley Wealth Management, Ellen Zentner, said this week that the latest inflation data is suggesting that “the economy is percolating but not overheating.” As a result, he says that the Fed remains on course to deliver another rate cut in late October. Well… assuming anyone still believes any of the economic numbers they’re being fed:
Credit: Over on Wall Street, the three major stock market indices capped another winning week as investors fixated on the promise of artificial intelligence (AI), even as a government shutdown delayed the release of the monthly jobs report. At Friday’s closing bell, the Dow, S&P 500, and Nasdaq all finished the latest five-day run with gains of more than 1%. Then again, at this point, there really is no other option…
Debit: Meanwhile, the National debt is quickly approaching $38 trillion. Yeah… that’s a big problem. In fact, it’s an even bigger problem than what these morons willingly managed to get themselves into:
Credit: By the way, for those who believe the relentless rise in the USD price of gold is approaching its limit, keep in mind that the gold price has to more than triple from its current level of approximately $3800 just to reach its 1980 high when adjusted for the money supply. For those not counting at home, that would be almost $12,000 – and that assumes the money supply doesn’t increase from here.
Credit: Not coincidentally, the US Treasury’s hoard of the barbarous relic has surpassed $1 trillion in value for the first time in history. Why is that important? Because revaluing the reserves’ book value from the current $42.22 (sic) per ounce to today’s prices would unleash roughly $990 billion into the Treasury’s coffers, dramatically reducing the need to issue quite so many Treasury bonds this year. Not that anybody seems to be paying attention – yet.
h/t: @duedigenceguy
Credit: By the way, if the US revalued gold even higher than its current market price of nearly $4000, it would free up even more revenue while reducing the national debt-to-GDP ratio to a far-healthier level. That being said, if the US doesn’t have 8133 tons it officially claims, then the price of the yellow metal will have to go even higher than the $20,000 to $40,000 revaluation target currently being bandied about by the macro analysts. On a related note, even mainstream economists who used to steer their clients as far away from the yellow metal as possible are finally beginning to come around. Better late than never, we guess…
Credit: Of course, the burning question is: Will the US really revalue its gold? For its part, Bank of America is saying that any official gold revaluation remains a long shot until US Treasury Secretary Scott Bessent provides more credible details on his plans to “monetize the asset side of the US balance sheet.” Even so, many macro analysts are saying that a gold revaluation is inevitable – which is a big reason why the USD price of gold has been surging for the past 18 months. Got gold?
By the Numbers
With the third quarter of 2025 now behind us, let’s take a look at the year-to-date performance (through Sept. 30th) for some select major asset classes. And, no… the figures for gold, silver, and their respective mining stocks are not missing a decimal point:
-10% 10-yr US Treasury proxy (TNX)
+9% Dow Industrials
+9% Russell 2000
+14% S&P 500
+17% Nasdaq Composite
+45% Gold
+61% Silver
+123% Gold miners proxy (GDX)
+125% Silver miners proxy (SIL)
Source: Yahoo!Finance
The Question of the Week
Last Week’s Poll Results
How long has it been since you’ve traveled by air?
- More than 2 years 43%
- Less than 6 months 26%
- Between 1 and 2 years 19%
- Less than a year 12%
More than 2000 Len Penzo dot Com readers responded to last week’s question and it turns out that 2 in 5 of you have traveled by air in the last year. The good news for travelers is that airfares have been steadily falling with the declining price of jet fuel this year. Let’s hope the lower prices can stick around a while longer!
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.
Useless News: An Important History Lesson
In 1923, who was:
1. President of the largest steel company?
2. President of the largest gas company?
3. President of the New York Stock Exchange?
4. Greatest wheat speculator?
5. President of the Bank of International Settlement?
6. Great Bear of Wall Street?
These men were considered some of the world’s most successful of their day. Now, 102 years later, the history book asks us, if we know what ultimately became of them.
The Answers:
1. The president of the largest steel company. Charles Schwab, died a pauper.
2. The president of the largest gas company, Edward Hopson, went insane
3. The president of the NYSE, Richard Whitney, was released from prisonto die at home.
4. The greatest wheat speculator, Arthur Cooger, died abroad, penniless.
5. The president of the Bank of International Settlement, shot himself.
6. The Great Bear of Wall Street, Jesse Livermore, also committed suicide.
However: In that same year, 1923, the PGA Champion and the winner of the most important golf tournament, the US Open, was Gene Sarazen.
What became of him?
He played golf until he was 92 and died in 1999 at the age of 95. He was financially secure at the time of his death.
The Moral:Screw work.Play golf!
(h/t: Sam I Am)
Squirrel Cam
We caught this squirrel trying out his Halloween costume on our backyard wall. You have to admit, the costume could fool anybody into thinking it’s actually a Cooper’s hawk who is looking for its lunch…
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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
Lea left me a note this week complaining about some poor customer service she recently received:
I spoke to three different managers and each one said, ‘I’m sorry there is nothing I can do for you.’
Yep. Now you know why they’re managers.
If you enjoyed this edition of Black Coffee and found it to be informative, please forward it to your friends and family. Thank you! 😀
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Photo Credit: public domain
Hi Len,
Thanks for cuppa!
The hawk is a beautiful bird! I had to look up the word ambivert (never heard of that before).
Have a great weekend everybody!
Sara
Thanks, Sara! It turns out that most people are ambiverts (people who are introverts AND extroverts, depending on the situation).
Terrific. Thank you.
Loved the useless news. I always think of something similar when I see all the fawning lackeys performing every gyration possible to get picked for some cabinet position, or something else that appears to wield power and supposedly has prestige. Really? No one will remember or care. Give it ten years.
My Dad always used to say that if the World was just a little bit better off for you having lived, then your life had value and was worth living. Funny, hoarding money was never brought up by him.
This economy is scary!!!! You want a realistic look past the cheerleaders who tout how great everything is talk to a trucker, trucking company owner, lumber yard staff etc. Building is in the toilet. Manufacturing is in the toilet so no one needs a truck to haul product. And tariffs have reduced imports. Ask any farmer how life is? Or the tractor supply store, etc etc.
When this sucker blows, hold on. Have preps and have a plan. Enjoy the day. Go golfing 🙂
Funny how Wall Street and mainstream media have conditioned many people to believe that prudently holding a portion of their long term savings in real money (i.e., the hard assets known as physical gold and silver) that can’t be debased by other humans is “hoarding”, but somehow holding fiat currency in the bank, CDs, Money Market funds (or any investments denominated in fiat currency – be they hard assets or paper equities) isn’t.
Looks like I missed the big move in gold and silver miners. 🙁
Doubtful, Cowpoke. From precious metals analyst Tavi Costa:
“Despite their strong recent performance, (mining stock) P/E ratios have actually contracted — a sign that earnings are growing faster than share prices.”
Here is the article link.