Black Coffee: Financial Horse $hit

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 …

Mules have more horse sense than horses. They know when to stop eating — and they know when to stop working.

— Harry Truman

Credits and Debits

Debit: Did you see this? For those of you who may be interested in a boat, Amazon billionaire Jeff Bezos has put his $500 million floating palace, Koru, up for sale. The jaw-dropping 417-foot vessel has two support ships and costs $30 million per year to operate. Unfortunately for Mr. Bezos, there are very few people with enough cash and interest to buy a monstrously-expensive super-yacht – proving yet again that the two happiest days in any boat-owner’s life are the day he buys it… and the day he sells it.

Debit: Back in the real world, a recent study found that more than 8 in 10 young adults rate economic conditions in the US as either bad or terrible. The survey, which was conducted during the last week of April, found that 55% of respondents between 18 and 24 said they view the economy as bad, while 29% said it was terrible. We agree. Just remember, things could always be worse…

h/t: @Spillthememes

Gary Larson – The Far Side

Debit: Clearly, America’s young adults are on to something. The latest US unemployment numbers came out last week and it showed that the U-6 figure – which is the preferred barometer when the labor market starts to weaken because it includes everyone who is looking for a job – climbed to 8.2%. Even more importantly, the number of Americans who want full time jobs but had their hours cut or could only find part time work soared by 450,000 to 4.9 million. Uh oh. On the bright side, that’s one way to opt out of the conventional workforce’s debt-overwork-deadend-treadmill. Or not…

Debit: Not coincidentally, a recent survey found that 27% of American consumers of all ages have purposefully taken an item from a self-checkout counter without scanning it. Meanwhile, 36% of users admitted they’ve accidentally left with an unscanned item, and though they didn’t intentionally steal, 61% of those who accidentally took something said they kept it. This might explain why a growing number of large retailers are eliminating self-checkout machines, including Walmart, Costco, and Dollar General, while Target is now limiting its self-checkout kiosks to 10 items or less. Perhaps this also explains why Wall Street has been in a jubilant mood lately…

Debit: On a somewhat related note, at nearly $4.50 per gallon, the average price of gasoline in the US is now at its highest point in more than three years. If there is a silver lining to be had, it’s that at least the US isn’t Europe, where the socialist government there typically add upwards of $4 per gallon in excise duties, so-called “green” levies, and value-added taxes (VATs). When it comes to self-inflicted high gasoline prices, the worst offender is Germany, where “petrol” is $8.75 per gallon, thanks to taxes that make up more than half the total price; compare that to the US, where most state fuel taxes hover near 20 cents. But that’s small comfort to Main Street.

h/t: Zero Hedge

Debit: Of course, when it comes to gasoline sales, there are some states that prefer the punitive European model. For instance, the People’s Socialist Republik of California routinely posts fuel prices that are $2 above the US average thanks to its 81-cent state gas tax, an additional cap-and-trade penalty of 70 cents, plus costly special blend fuel mandates and other punitive environmental rules to discourage driving gas-powered vehicles and machinery. The “good” news is Sacramento imposes those taxes to “save the environment” and build “pragmatic cost-effective transportation” like its $200 billion bullet train boondoggle (to nowhere). So there’s that. Oh, and on a related note…

Credit: Speaking of taxes, a recent court ruling found that US tax filing and payment deadlines shall be postponed whenever a federal disaster declaration is in effect. Since the COVID-19 federal disaster period lasted more than three years, the National Taxpayers Advocate (NTA) says millions of taxpayers may be entitled to a refund or penalty and interest reductions of any assessed penalties and interest during that timeframe. Now for the catch: Most affected taxpayers must act by July 10, 2026, to request refunds by using a paper – not electronic – version of IRS Form 843. Now, let’s just hope that eligible taxpayers who read the fine print use their windfalls wisely…

h/t: @BaronBoehm

Debit: Unfortunately for the US, no amount of taxes will be able to extract it from its current fiscal conundrum: Last month the federal debt load exceeded 100% of GDP for the first time since World War II. The difference this time is the US is no longer supplying the world with most of its manufactured goods. Or, as macro analyst Jesse Columbo puts it: ” Unlike the last time the debt burden reached these levels, the US is unlikely to grow out of it, making a sovereign debt and currency crisis the more likely outcome.” Uh huh. And don’t think other nations are unaware of this. So buckle up, buttercups!

Debit: Needles to say, if the world could become prosperous simply by allowing governments to deliver freshly-printed currency to the public, then nobody would have ever had to toil in the factories or fields during the last 5000 years. Even so, millions of statists out there still believe that wealth generation and social prosperity comes from a government printing press rather than the private sector; it’s a notion that’s as crazy as believing a horse can play baseball. Oh, wait…

Credit: Needless to say, this increasingly unsustainable fiscal position will ultimately force the US to rely more heavily on money printing to meet its obligations. As a result, gold’s role is being reinforced as the only major reserve asset that sits outside the global debt-based fiat monetary system. The good news is that holding a small amount of precious metals in your portfolio will preserve the purchasing power of your long-term savings. Got gold?

By the Numbers

After years of steady increases, rents are stabilizing in some parts of the US – but not everywhere. Here’s a look at the 10 states with the highest USD increase in average monthly rents since 2021:

$300 Nebraska

$320 Connecticut

$324 Oklahoma

$328 Massachusetts

$329 Mississippi

$442 Texas

$444 Rhode Island

$463 Colorado

$616 Louisiana

$717 Florida

Source: Google Docs

Last Week’s Poll Results

More than 2500 Len Penzo dot Com readers responded to last week’s question and it turns out that only 1 in 3 of you say consulting with a financial advisor is moderately or extremely important.

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

Useless News: Daylight Robbery

Two lawyers were in a crowded bank when a gang of three armed robbers burst into the lobby …

While one of the robbers began taking the money from the tellers, the other two proceeded to take the wallets, cell phones, watches, and other valuables from the customers.

In the midst of all the chaos, the first lawyer jammed something into his friend’s pocket.

Without looking down, the second lawyer whispered to his friend, “What in the world did you just put into my pocket?”

The first lawyer replied, “It’s the $100 I owe you.”

(h/t: Don R.)

Squirrel Cam (After Dark)

Well, well, well… would ya look at hoo visited my backyard last night! (We suspect he saw a mouse, which we often catch on camera visiting the squirrel feeding area to forage for nut scraps.)

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More Useless News

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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

After reading my article regarding tips to consider before buying home, auto and life insurance, Sariah shared this story:

“My brother bought an expensive new car and my parents reminded him to also purchase auto insurance. But he didn’t get it and two days later he crashed his car into a tree!”

Was the car a Mercedes? If so, now your brother knows exactly how a Mercedes bends.

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