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 …
From its creation in 1913, the most important Fed mandate has been to maintain the purchasing power of the dollar; however, it’s difficult to think of another government agency that has failed more consistently on its key mission than the Fed.
– James Rickards
Credits and Debits
Credit: Did you see this? Burger King is updating its Whopper hamburger. According to the company, the quarter-pound burger patty will remain the same, and it will still be served with freshly cut onions and tomatoes, lettuce, tangy pickles – but it will now have “better tasting mayo” and a higher-quality bun. Those updates will cost franchise owners about $4000 annually. For those not counting at home, the original Whopper sold for 37 cents in 1957 – but it has an average cost of $4.36 today. So the fast food war continues:
Credit: In other news, despite sweeping US tariffs, global trade climbed sharply in 2025, defying doomsayer predictions that higher duties would choke off cross-border commerce. The volume of goods traded worldwide rose 4.4% last year – that surpassed the 2.5% growth seen in 2024. That being said, we’re anxiously awaiting the eventual impacts of the latest military conflict in the Middle East – although there are some early indications…
Debit: Over on Wall Street, war jitters led the major stock market indices to finish the week in the red, with the Nasdaq down 1.2%, the S&P 500 shedding 2.0% and the Dow losing 3.0%. And don’t look now, but it appears as if the previously invincible Magnificent 7 stocks are beginning to lose a bit of their luster. In fact, as a group, they’re down a cumulative 6.7% since the start of the new year. So who are the new market darlings? Here’s a hint: After more than a decade of being completely shunned and mocked by everyone on Wall Street – and, collectively, a huge year in 2025 – many of them are finally reaching brand new all-time highs (ATHs)…
Debit: For those who are wondering what’s going on with the shift in sentiment on Wall Street, consider this: With the National Debt pushing $39 trillion, the Fed’s battle to protect the US dollar (USD) is becoming markedly tougher with each passing day. Ironically, they are only making their job tougher by continuing to monetize the ever-growing US federal debt that results from politicians’ insatiable appetite to expand the government. Yes, that’s crazy. But if you think that’s crazy, then you haven’t seen this:
Debit: Meanwhile, interest payments for America’s bar tab have grown by greater than three-fold in the last five years, making it the largest federal expenditure. Needless to say, when a household’s largest expense is the cost to service its debt, it’s time to consider bankruptcy. If only the citizenry wasn’t prohibited from printing legal tender, unlike its rulers. Or so they say…
Credit: Of course, as macro analyst Matthew Piepenburg points out, “With US debt at historically unprecedented as well as unpayable highs, such debt can be made worthless by making money more worthless – which is a win for Uncle Sam but open robbery for Joe Sixpack.” Uh huh. It’s also bad news for the US Treasuries (UST) market. Despite that risk, our currency minders at the Fed were right on cue this week …
Credit: By the way, financial analyst Wolf Richter reports that “at the end of Q4-2025 US national debt reached $38.5 trillion, raising the debt-to-GDP ratio to 122%. At the end of 2025 the US deficit as a percent of GDP was 5.8%, with the current fiscal year deficit being the third largest in the last six fiscal years.” Sheesh. For God’s sake, relax, Wolf. After all, with a little creative accounting, I’m sure the boys in the Congressional Budget Office will tell us the numbers look absolutely fabulous:
Credit: The ever-rising National Debt also caught the attention of sagacious macro analyst, Franklin Sanders, who remembered that, fellow “macro analyst Luke Gromen wrote a couple of years ago that ‘’since 1991, all 18 other governments with deficits exceeding 11% of GDP and debt-to-GDP ratios exceeding 110% defaulted within two years.’ As anyone who has been living in Zimbabwe could tell you.
Credit: Oh… we should also mention that Mr. Sanders goes on to point out, “This is just another billboard warning you to flee USDs – not gold and silver. Hold your excess funds in metals, not dollars. Is there market risk in doing that? Sure; (gold and silver) might go up or down in the short term, but long term they’ll rise while the dollar will surely fall – and that is a sure thing.” In other words: the fiat USD is a time bomb.
Credit: And so, we’ll end this week with a final observation from precious metals analyst Craig Hemke, who reminds us that, “It took 1200 USDs to acquire an ounce of gold ten years ago and it took $2000 to acquire an ounce five years ago. That it now takes over 5000 USDs tells you nothing about the gold itself. Instead, the price illustrates just how badly the USD has been devalued over time! And don’t expect this trend to reverse. As the (National) Debt surges toward $40 trillion and beyond, the amount of new USDs needed to service that debt will only continue to grow.” Got gold?
By the Numbers
With the “official” year-over-year inflation rate at 2.7%, WalletHub released its updated inflation report for major US cities, where analysts compared 23 major metropolitan statistical areas (MSA) across two key metrics involving the Consumer Price Index (CPI). Specifically, they took long- and short-term inflation snapshots by looking at the CPI for the latest month for which BLS data is available to two months prior and one year prior. With that in mind, here are the five MSAs with the current biggest and smallest inflation impacts among the 23 surveyed:
23 Phoenix AZ (smallest inflation impact)
22 Dallas TX
21 Anchorage AK
20 San Francisco CA
19 Washington DC
5 San Diego CA
4 St. Louis MO
3 Chicago IL
2 Boston MA
1 Seattle WA (biggest inflation impact)
Source: WalletHub
The Question of the Week
This poll is no longer accepting votes
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401(k), 403(b), or 457(b) 23%
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Roth IRA 21%
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Traditional IRA 18%
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Employer Pension 17%
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Rollover IRA 12%
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Spousal IRA 5%
- SEP or SIMPLE IRA 4%
More than 2300 Len Penzo dot Com readers responded to last week’s question and it turns out that approximately 1 in 6 of you are fortunate enough to have a company pension. Today, the only people who can generally expect a pension upon being hired are government employees.
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: Traffic Stop
An Amish lady driving her horse and buggy on the local thoroughfare got pulled over by a traffic cop.
“I’m not going to cite you,” said the officer. “I just wanted to warn you that the reflector on the back of your buggy is broken and it could be dangerous.”
“I thank thee,” replied the Amish lady. “I shall have my husband repair it as soon as I return home.”
“Also,” said the officer, “I noticed that one of the reins to your horse is wrapped around his testicles. Some people might consider this cruelty to animals so you should have your husband check that too.”
“Again I thank thee. I shall have my husband check this when I get home.”
True to her word, when the Amish lady got home, she told her husband about the broken reflector; he said he would put a new one on immediately.
“Also,” said the Amish woman, “the policeman said there was something wrong with the emergency brake.”
(h/t: Dr. Jerome)
Squirrel Cam
Sometimes, even a squirrel will find a “nut” that is too hard to crack…
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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
Although it is admittedly getting harder to do with each passing day, Kyle joined the long line of people I’ve annoyed with my article explaining why it’s your own fault if you can’t live today on $60,000 annually:
You’re out of your mind, guy.
Well … if that’s true, then sanity is overrated.
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
Oil is a global commodity and it matters not a whit if the US is producing in BTUs what it uses every year. First of all, most US refineries need heavy crude for many products they make so the fracked light sweet is currently exported at a higher price and replaced with cheaper imports….4+ million bbl per day from Canada alone. It takes 3-5 years to replace or renew a refinery, and billions of dollars to do so. As such, oil is a global commodity and if it is more expensive in the World due to the 20% currently being taken offline in the ME, or more, then that will be reflected at all of the pumps…..despite the propaganda. Or, will the Govt now tell industry who it can sell its oil to and for how much? I think it is the other way around, to be honest.
40% of US fertiliser stock is currently stuck in the Gulf. There is already a 15% tariff on Canadian potash….80% of that what is used by US farmers. Planting season…..Stupid policies have consequences at the till, for everyone. And now these policies are compounding.
I look for stagflation; higher interest rates in effect and climbing to slow inflation and stop dollar flight, but also higher consumer costs and increased unemployment slowing the economy every day going forward. It is fun to bash the Fed, but they have still managed to head off the usual recession everyone is/was so afraid of. Now, we might see both, inflation and a big economic slowdown. Remember, last months 93K job loss was before the bombs started falling. It takes energy for everything produced, created, or transported. Some products like aluminum and cement require insane amounts of energy to produce and everything moves on a truck from drywall to veggies. Look for higher costs all around, for sure.
If you lived through the late 70s and early 80s you know what might soon be coming. Higher costs every day, job losses, rapidly rising interest rates (my mortgage renewal went from 7% to 18% but luckily I didn’t owe much due to buying within my means.) People just walked away from their homes. I had to leave my family and work away for 3 month stretches as there was little work in my area….all areas, actually.
This will not be pretty for regular folks. Sure, on paper PMs will retain value, but daily expenses requires cash flow….readies in the wallet. I have yet to see a grocery store shave off gold or silver shavings for payment. You have to have a way to access cash, in whatever form. During this mentioned recession, one year I completed a reno on a shop and was paid with a piano and a wood stove by the owner. He did not have financing and my daughter needed piano lessons. 🙂 That winter the same shop hired me to help rebuild components for fire fighting aircraft. Paid in cash. You do what you have to in order to survive and I fear a coming downturn, bigly. If you have skills for cash work, great. If you need full time regular employment there are no guarantees, whatsoever.
Personal preps are required and always have been. The recent prosperity of the last 40 years for regular working people was an aberration in historical context. And the 70s mess wiped out the economic resurgence after WW2. Now, as Len always points out, there is so much debt imbedded in everything we have a distorted impression of reality. There really is no free lunch or money tree.
A billion dollars per day using borrowed money and it’s just getting started.
Regards and good luck
Hey Len, it’s good to see today’s Black Coffee! I read that you only plan to do them bi-weekly now, and think that’s great if it gives you and your Honeybee more time to get a few things done and (hopefully) ENJOY life a bit!
The world keeps throwing curve balls, and just when I think things can’t get more ‘interesting’, they DO! Got my 1st APMEX newsletter today, and while I’ve only scanned it, they include lots of graphs and historical comparisons re: PMs over time. I hope it’s worth reading in detail!
Re: paying with a check, I just wrote a check at the market yesterday. Usually use the rewards credit card, but a check still works, at least HERE.
Enjoy your week, everyone! 🙂
Hi, Lauren! The Honeybee still pays a couple of our bills with checks, but each year that number gets lower and lower.
As for the bi-weekly Black Coffees, I was burning out writing them as they are a lot of work – about 10 to 12 hours per week. I am much happier now doing this every other week!
I just read the Pentagon estimates the war in Iran cost almost 1 billion a day in the first two weeks of the conflict.
Wonder how much our debt will be after this is over. It’s not looking good.
No, it’s not, Maria. A billion here, a billion there and pretty soon we’re talking about a lot of money!