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!
When a government debases the currency to cheat its creditors, this procedure is given the polite name of ‘inflation.’
– George Bernard Shaw
Credits and Debits
Credit: Did you see this? Artificial intelligence (AI) is increasingly shaping everyday financial decisions, and that growing reliance could be risky. Even so, 82% of Americans say they trust AI when it comes to financial information and guidance, and 64% say their financial health has improved since using AI. We suspect this has helped a bit too…
Debit: Unfortunately, it’s going to take more than AI to stop the middle class from getting squeezed. Whether it’s housing, healthcare, childcare, fuel, food or taxes, the cost of modern life has exploded. The US currently sets its official poverty line for a family of four at $32,150. However, no longer reflect reality because the benchmarks they use are from the 1960s. As a result, measuring the cost of living in terms of gold instead of US dollars (USD), reveals a very different story. How different? Well… according to precious metals analyst Mike Maloney, the current USD gold price implies an actual poverty line of $140,000 a year. No, really.
Credit: On the other hand, despite the major US stock indices being slightly down for the week, Wall Street is doing just fine, thank you very much. The markets were relatively unfazed by the growing uncertainty over the next Fed chair, or ongoing geopolitical tensions. In fact, the Dow, S&P, and Nasdaq all ended the week down about 1%. Even so, all three indices are still near their all-time highs. As for those timid investors who decided to finally dip a toe in the water and take a chance on cryptocurrencies for the first time last year, well…
Debit: In other news, credit card-lending has become more lucrative than ever, with JPMorgan saying that last year the net yield on its more than $200 billion in card loans was 9.7%. With that in mind, the current administration is proposing a 10% cap on credit card expenses. The good news is, bipartisan legislation was introduced in Congress last year that would do exactly that for five year period. Needless to say, card issuers weren’t impressed, which means don’t expect rates to be capped anytime soon.
Credit: Then again, not everyone is enamored with the idea of a cap on credit card interest rates. Why? Well… according to WalletHub CEO, Odysseas Papadimitriou, “Capping credit card interest rates at 10% is a horrible idea. yes, people who currently have credit card debt will get some short-term relief, but the move will inevitably block millions of people whose credit history does not merit a 10% APR from accessing credit at all.” The good news is, THAT will force people to save more. That being said …
Debit: On a related note, with the median US home now selling for $410,800, nearly 3 in 5 millennials say they are planning to spend less than $400,000 on their home purchase. Even so, 44% of millennials – including half of all first-time buyers – would be willing to spend more than half of their monthly income on housing to be able to afford a home. Yikes. Good luck with that. Especially now that the US announced that it is committed to lowering mortgage interest rates, which will only serve to artificially prop up the housing market.
Credit: To nobody’s surprise, mortgage rates immediately fell below 6% for the first time in three years, after lending giants Fannie Mae and Freddie Mac were directed to buy $200 billion in mortgage backed securities. And while Fed officials insist this will increase housing affordability, the reality is the only way to make homes more affordable in the long-run is to crash the housing market with double-digit interest rates. Hey – never say never…
Credit: For those who fail to understand the irony behind higher interest rates making homes more affordable, consider this example: All else being equal, the monthly payment on a $400,000 30-year mortgage at 6% is $2398, while the same payment on a $250,000 mortgage at 10% is almost $200 lower – and a $200,000 mortgage at 10% is just $1755. As an added bonus, when/if interest rates eventually fall again, those payments have the potential to drop even further in the future by refinancing the mortgage. That being said, this is apparently only an issue for us commoners – or so they say…
Gary Larson – The Far Side
Credit: Despite first-time homebuyers struggle to enter the market, and the middle class getting squeezed, the value of all US households’ stock portfolios rose by $5.5 trillion in the second quarter of 2025, while the value of real estate holdings rose by $300 billion. During the same period, the net worth of households and nonprofits rose to $182 trillion, from $176 trillion. But don’t be fooled. Rather than a sign of a healthy economy, this dichotomy is yet another sign of the falling purchasing power of the USD – all thanks to the US government’s insatiable appetite for debt…
Credit: Not coincidentally, the USD’s share of global reserves collapsed to roughly 40%, while gold’s share increased to 30%. That means gold is now bigger in central bank reserves than the euro, yen, and pound combined. As the macro analyst known as “no1” points out on his Substack account, “This isn’t diversification. This is a flight into a neutral – non devaluing – asset. And it’s been accelerating since 2023.” And now you know why the USD price of gold increased 65% last year. Oh… and silver 145%. Yep. And if you don’t believe us, just ask this guy …
By the Numbers
A new study has identified the states with the highest numbers of Powerball lottery jackpot winners per capita. Then again, “luck” is actually a reflection of resident engagement, creating the illusion that certain states are luckier than others – for example, third-ranked Rhode Island has the highest per-capita lottery spending in the country. With that in mind, here are the “luckiest” – and “unluckiest” – states among the 45 that participate in the Powerball lottery.
1 Delaware (Jackpot winners per million residents: 9.5)
2 New Hampshire (8.5)
3 Rhode Island (8.0)
4 Indiana (5.9)
5 Missouri (5.4)
41 Texas (0.6)
42 Colorado (0.5)
t-43 Wyoming (none)
t-43 North Dakota (none)
t-43 Mississippi (none)
Source: US Census; Powerball; WINZ.IO
The Question of the Week
Last Week’s Poll Result
- Chicken 33%
- Beef 24%
- Something else 23%
- Pork 11%
- Pasta 9%
More than 1900 Len Penzo dot Com readers answered last week’s poll question and it turns out that more than 2 in 5 respondents had something other than chicken or beef for dinner on the day they took this survey.
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: Groovin’
An old man was visiting his local Starbucks when he suddenly felt the urge to pass gas.
The place was packed but, thankfully, the music was really loud this particular day — so he decided to cover up his farts by timing them in rhythmic pulses to the music’s beat.
After several minutes of this, he figured his plan was working perfectly — then he noticed everyone was staring at him.
That’s when he remembered he was was listening to his iPod.
(h/t: Dave)
Squirrel Cam
If squirrels had an OnlyFans account …
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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 me at: Len@LenPenzo.com
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I’ve deleted your trashy website from my favorites. Hope your blog improves in the future. Good luck.
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Question of the Week