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?
I know this is war, but everyone is still trying to pretend it’s a party.
– Kristin Cashore
Credits and Debits
Debit: Did you see this? If you thought this year’s Independence Day cookout was more expensive than last year, you weren’t going crazy. It turns out that the average Fourth of July cookout for 10 people this year cost $73.82. For those of you who are really crummy at math, that’s $7.38 a person. It’s also a 4% increase over 2025. As for the main culprit? Well… it was largely driven by higher costs for ground beef and hamburger buns. It’s enough to make many people consider veganism. Or not…
Debit: Meanwhile, a new Fed study estimates that the federal government’s decision to tacitly promote illegal immigrant worker flows between 2021 and 2024 accounted for roughly 30% of US employment growth. More to the point: That growth also translated to a 2.2% increase in US home prices and a 1.4% rise in rents. Oh, and to nobody’s surprise, those researchers also found that homebuilding was unable to meet that additional demand. Instead, the influx acted as a housing demand shock in markets where supply was already constrained. Talk about a major policy error. Oh, and speaking of big mistakes…
Debit: On a related note, the latest jobs report was released last week and it shows that the US labor force participation rate dropped to 61.5% in June – that just happens to be the lowest level since March 2021. At least this isn’t a concern for the gainfully-employed. Well… at least for now, anyway. In the meantime…
Debit: Unfortunately, the situation gets even worse when one looks under the hood of the latest jobs report. This is because while the number of part-time jobs declined by 53,000, workers holding full-time positions collapsed by a whopping 514,000. Yes, more than a half-million people! So by any measure, it’s obvious that the composition of the US labor market remains absolutely abysmal. Although we suspect that this guy hasn’t heard the bad news yet…
Debit: Of course, to almost nobody’s surprise, the government also stealthily reduced the number of previously-claimed new jobs created in the April and May labor reports by 74,000, proving yet again that the data being pumped out by our highly-compensated government bureaucrats is all a sham designed to keep Americans in the dark.
Credit: As for the retired crowd, independent estimates for Social Security’s 2027 cost-of-living (COLA) are forecasting a raise for the upcoming year between 3.8% and 4.7%. If that high-end prognostication proves accurate, a 4.7% boost to SS payouts would be the fourth largest since 1991, surpassed only by increases of 5.8% in 2009, 5.9% in 2022, and 8.7% in 2023. Wow! Not surprisingly, those kind of numbers have clearly got the Baby Boomer generation in the mood to party, much to Gen Z’s chagrin…
Credit: In other news, macro analyst Peter Schiff believes the Fed is bluffing about raising interest rates soon. Why? He says that, “Even if the Fed is serious about bringing inflation down to 2% with aggressive rate hikes and quantitative tightening (QT), once the stock market accepts that and crashes, the Fed will (reverse course). A stock market crash, plus a real estate crash, threatens not only a recession but another financial crisis.” Yep. In the meantime, all the economy has no choice but to continue plowing ahead, regardless of the potential (and real) obstacles before it…
Credit: The trouble, as macro analyst David Jensen reminds us, is that “the central banker’s illusion that currency (printing) and rising debt levels increase real growth only works for a little while. But in reality, they drive consumption that’s unsupported by productive economic output. Instead, loose monetary policy – as we’ve witnessed for decades – actually drives speculation (“the Dow is at 53,000!”), price inflation, and misallocation of resources and capital.” By the way, Japan is finally beginning to suffer the consequences of this, with interest rates there at a 30-year high – and the piper clearly pounding at the door…
Gary Larson – The Far Side
Credit: Needless to say, we’re in the waning stages of an irreversible monetary system metamorphosis that’s been underway since the Great Financial Crisis in 2008. And as macro analyst Marc Jeftovic points out, the underlying “architecture is completely different now, as the measuring stick known as fiat money is ill-equipped for the task of describing it. (And) until we change that measuring stick – any (major market downturn) will be papered over with incessant ‘big prints’ until the system … completes its metamorphosis.” Uh huh. Sadly, it’s a monetary tale that has been repeating itself since time immemorial, to the ruin of otherwise fiscally disciplined people around the world.
Credit: We’ll close the week with this final observation from Mr. Jensen: “The end of the fiat currency illusion occurs over a very short period of time as central banker abuse vests in visible terms with sharply rising prices of goods and services and also of safe havens such as gold and silver as the currency ultimately fails.” Indeed. Got gold?
By the Numbers
With the number of delinquent credit card accounts falling by as much as over 41% in some American cities over the past year, a new study has determined where people are struggling the least based on the US cities where credit card delinquency rates are improving at the fastest pace. Here are the top 10:
10 Fort Wayne, IN
9 Jersey City, NJ
8 Omaha, NE
7 Anchorage, AK
6 Minneapolis, MN
5 Boston, MA
4 Cincinnati, OH
3 Madison WI
2 San Bernardino, CA
1 St. Louis, MO
Source: WalletHub
Last Week’s Poll Results
How many US states have you lived in?
- 4 or more 44%
- Three 21%
- One 19%
- Two 12%
- None 4%
More than 2600 Len Penzo dot Com readers responded to last week’s question and it turns out that 2 in 3 of you have lived in at least three US states – and nearly half have lived in at least four! Wow. Outside of a temporary four-month residency in North Carolina to support a job assignment, I’ve lived my entire life in California.
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: A Day in the Life
At the end of a very long day, a man came home from work and found his children outside, still in their pajamas, playing in the mud, with empty food boxes and wrappers strewn around the yard.
His wife’s van door was also open — as was the front door to the house — and there was no sign of the family dog.
Walking in the front door, the man found … an even bigger mess. A lamp had been knocked over and the throw rug was against one wall. In the family room, the TV was loudly blaring the Cartoon Network; and the den was strewn with toys and various items of clothing.
In the kitchen, dishes filled the sink, breakfast food was spilled on the counter, the fridge door was wide open, dog food was strewn across the floor, a broken glass lay under the table and, inexplicably, a rather large sand pile was blocking the door to the backyard.
Thinking something terrible had happened, the man quickly headed upstairs, stepping over toys and more piles of clothes, looking for his wife.
At the top of the stairs, he was met with a small trickle of water as it made its way out the bathroom door. As he peered inside he found soaking wet towels, a scummy bar of soap, and a rubber duck laying on the floor. But that’s not all: Miles of toilet paper were also laid in a heap and toothpaste had been smeared over the bathroom mirror and walls.
Now completely frantic, the worried man rushed to the bedroom, where he found his wife still curled up in bed — in her pajamas and reading a novel. She immediately looked up at him.
“How was your day, Honey?” his wife said with a beaming smile.
Bewildered, the man looked at her and asked, “What on Earth happened here today?”
She again smiled and answered, “You know how you always come home from work and then you ask me what in the world I do all day?”
“Yes,” was his incredulous reply.
“Well,” she answered, “Today I didn’t do it.”
(h/t: Charlotte)
Squirrel Cam (After Dark)
Looks like we found a critter who is just a little bit camera shy….
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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
Frank G. sent a message to me this week that opened up with this eye-opener:
At first I couldn’t figure out if you were shoveling bullshit or fertilizer, but you finally won me over.
Wait … so I guess you’re telling me that my blog is intended for, er, manure audiences only. 😜
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Photo Credit: public domain