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 hope everybody had a wonderful week. And with that, let’s get right to this week’s commentary, shall we?
Money may not buy love, but fighting about it will bankrupt your relationship.
— Michelle Singletary
Credits and Debits
Debit: Did you see this? The US Bureau of Labor Statistics (BLS) says that just 66% of men age 20 and older are currently employed or actively seeking work. That figure has dropped sharply from 73% in 2006 and now sits near levels last seen during the fallout from the 2008 financial crisis. For those not crunching the numbers at home, that means 1 in 3 American men are no longer in the workforce. Yikes. Let’s just hope there’s a really good reason for this. Or not.
Debit: Meanwhile, Exxon Senior Vice President, Neil Chapman, offered more bad news last week when he warned that potential fuel shortages are on the horizon because “commercial inventories of crude oil, gasoline, diesel, and jet fuel have all been run down” at an alarming pace during the past 100 days. As a result, he says, “we’re approaching unheard of low inventory levels.” Now for the punchline: Mr. Chapman says there is an unknown trigger point where inventories will be so low that oil prices will immediately surge roughly 50% from their current levels. Well… if that’s so, it should preclude any fuel shortages. Er, as long as there are no market shenanigans to cap the price.
Credit: So far, Wall Street doesn’t seem to be worried about any kind of supply chain issues, as the major stock indecies continue to flirt with new all-time highs on an almost weekly basis. On the other hand, just 12 US companies have a market value of at least $1 trillion and combined a market cap of $29 trillion – seven short years ago the combined market cap was just $5 trillion. As a result, those 12 US companies make up almost 43% of the total market capitalization of all 500 stocks in the S&P500 index. Or, to put it another way: The other 488 stocks make up just 57% of the S&P’s total value. Nope; no sign of an unhealthy market there. Or here:
h/t: @CharlieBilello
Debit: Meanwhile, back in the world of cryptocurrencies, the price of bitcoin closed the week at $XX,XXX, which is down a jaw-dropping XX% since reaching its all-time high of $126,000 late last year. Hey… we’re not sayin’! We’re just sayin’. And apparently, we’re not the only ones…
Debit: In other news, inflation concerns have revealed yet another surprising statistic: The average “all-in” spend for a date in America — including pre-date grooming, gas money, and the cost of the date itself — has climbed to $189, up 12.5% from last year. This so-called “date-flation” has far outpaced the 2.7% inflation rate over the same period. At $252, millennials reported the highest average cost per date, followed by Gen Z ($205), Gen X ($173) and the boomers ($126). Obviously, the latter generation was assisted by the Denny’s Senior Citizens’ menu and other discount offers for folks in their golden years. As for the younger dating crowd, well…
Gary Larson – The Far Side
Debit: Speaking of inflation, the US government’s highly-manipulated Consumer Price Index (CPI) increased to 3.8% year-over-year, which continues to track well with the price inflation waves of the 1970s that occurred after the US dollar’s (USD) anchor to gold was officially broken and the Fed was forced to run protracted loose money policy in order to support its newly-established fiat currency. In fact, even the intentionally-understated CPI has “officially” increased almost 30% since the pandemic – which means actual inflation has been running far hotter than that over the past six years.
Credit: As macro analyst David Jensen points out, “The Fed claims that price inflation is caused by shortages. But if that is the case, after shortages during the 2020 to 2022 period abated, why didn’t prices return to the pre-2020 level?” Of course, that’s a rhetorical question, folks. The Fed either: A) knows their explanation is a lie; B) is staffed by the world’s dumbest bunch of economists with PhDs; or C) both A & B. As for the answer, it’s probably a safe bet that this guy knows…
Debit: Of course, the real cause of price inflation is expansion of the currency supply – and, at nearly $40-trillion, the rapidly-growing US National Debt belies that fact. As does the corresponding loss of USD purchasing power that comes with it. And we all know what they means: We’re all going to need a bigger spending jar…
Credit: Needless to say, the world is well aware of America’s disintegrating financial condition too, which is why gold has overtaken US Treasury (UST) bonds, notes and bills as the top reserve asset following years of relentless buying by central banks. In fact, bullion now accounts for more than 27% of all central bank reserve assets – that’s up from 20% in 2024 – while USTs fell to 22% from 25% over the same period. Imagine that.
Credit: We’ll end this week’s round-up with a reminder from sagacious macro-analyst Franklin Sanders, who points out that, “unlike USDs, bank certificate of deposits, notes, bonds or a share of stock, gold and silver are money outside the financial system; valuable for what they are and are the only financial assets without counterparty risk.” For everything else, “some counterparty must make good when it’s time to pay – and if the counterparty defaults, your wealth vanishes.” Absolutely! That fact alone should keep anyone who doesn’t own any precious metals awake at night, it really should.
By the Numbers
With 20% of new businesses failing within the first year, it’s important for entrepreneurs to find a place where their startup can not only survive but thrive. A recent study determined the most business-friendly small markets in the US by comparing more than 1300 cities with fewer than 100,000 residents across 18 key metrics. The data set ranges from small business growth rates and the accessibility of financing to investor access and labor costs. With that in mind, here are the best small cities in America for entrepreneurs:
10 Dover, DE
9 Ocala, FL
8 Cheyenne, WY
7 Boca Raton, FL
6 Cedar City, UT
5 Greenville, SC
4 Bozeman, MT
3 Washington, UT
2 Fort Myers, FL
1 St. George, UT
Source: Wallet Hub
Last Week’s Poll Results
Has your net worth ever gone negative (after starting a career)?
- No 76%
- Yes 24%
More than 2300 Len Penzo dot Com readers responded to last week’s question and it turns out that nearly 1 in 4 of you have seen your net worth dip into red figures at some point during your lives. This happened to me back in the early ’90s during the height of the Southern California real estate bust, thanks to my perfect timing and buying at the very top of the housing market shortly after starting my career as an engineer. It took me several years to finally climb out of that hole.
Last week’s question was submitted 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
Useless News: The Silent War
A man and his wife were having some domestic problems one particular Friday and found themselves giving each other the silent treatment. In fact, both spouses didn’t utter a single word to each other through the entire weekend.
On Sunday afternoon, the man — who was an incredibly deep sleeper — realized that he was going to need his wife to wake him at 5:00 AM on Monday for an early morning business flight.
So, not wanting to be the first to break the silence (and lose to his wife), the man wrote on a piece of paper, “Please wake me at 5:00 AM.”
He then left the note in a place where he was absolutely certain his wife would find it.
The next morning the man woke up — only to discover that it was 9:00 AM and he had missed his flight.
Furious, the husband was determined to find his wife and find out why she didn’t get him out of bed as he requested.
Then he noticed a piece of paper on the nightstand.
It said: “Wake up. It’s 5:00 AM.”
(h/t: Cowpoke)
Squirrel Cam
Hey… even squirrels occasionally enjoy a little lunch with their friends…
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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
Here’s a question I got from Brandon:
Hi, Len! What’s it take to become a sulbmie [sic] expounder of prose like yourself?
Practice, Brandon. Lots and lots of practice.
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Photo Credit: public domain