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!
The wise man doesn’t ask whether his currency will be reset. He asks only which weekend.
– Annonymous
Credits and Debits
Credit: Did you see this? For those of you looking to earn the best interest rate returns on cash you won’t be needing for at least the next 12 months, you should know that the annualized yield for new US Treasury (UST) I-bond purchases made through April is now 5.51% – that’s up from the 4.26% annual return in effect since May. Keep in mind that those UST bonds are arguably safer than bank and corporate money-market funds and/or CDs; they’re also not subject to gating in a financial crisis. Plus, interest earned on all USTs is exempt from state and local taxes. Heck… if these rates keep climbing, the US Treasury may abandon its decision to make USTs sexy again…
h/t: reddit/wallstreetbets
Debit: In other news… almost 70% of new homes sold in the US were priced below $500,000 in October, with the median US home sale price falling to a new low of $389,600 – that’s down 0.1% year-over-year. It also marks the first annual decline in the median home price in more than three years. Despite the decline, we highly suspect that first-time homebuyers are wholly-unimpressed. After all, the median US mortgage payment is still at the breathtaking figure of $2786, which is the second-highest level on record.
Credit: On a related note, with 60% of Americans saying they’re worried about being able to afford healthcare for themselves and their families, employer healthcare plan premiums are projected to increase by 10% in 2027. If you think that’s bad, Obamacare premiums are going to rise 13% next year. Yes; this is the same Obamacare that politicians claimed in 2010 would lead to lower annual premiums of “up to $2500 annually for the typical family.” So… how did that work out? Well… Obamacare actually led to even higher annual premiums, larger yearly rate increases, and longer wait times for everybody. Oh… and it also made super-affordable catastrophic healthcare insurance illegal. But other than that, O-care has been a huge success.
Gary Larson – The Far Side
Credit: Meanwhile, billionaire hedge fund manager Ken Griffin is warning that we’re in the midst of an historic artificial intelligence (AI) bubble, as many companies are still trying to figure out what, exactly, they’re getting for it. “Corporate America has been very uneven in its ability to extract value from its AI models. I think they’re looking at their bills from Anthropic and OpenAI and saying, ‘Okay, we need to think about how to make sure we’re getting productivity out of this.’” That could be a problem because AI has yet to accelerate any measurable economic productivity growth. Uh oh.
Scott Adams – Dilbert
Debit: By the way, the bubble narrative isn’t being created out of thin air. In fact, although the S&P 500 is just 2% off its record high, the median S&P 500 stock is slightly more than 15% below its all-time high. According to Goldman Sachs, that important breadth measure remains near its narrowest level since the Dot-Com Bubble.
Debit: Unfortunately, much of Wall Street continues to be in denial. Michael Rosen, chief investment officer at Angeles, offered the following assessment: “The question is: Is this a systemic issue? Obviously, increased debt issuance is something to observe and continue to watch and be concerned about if it continues to get to levels of excessiveness. But we’re not remotely close to that right now” (emphasis ours). Heh. Riiiiiight. Welcome to La La Land, folks.
Debit: Apparently, Mr. Rosen overlooked the fact that the federal government just ran its biggest annual budget deficit in five years; it was $2 trillion in fiscal 2026. For those not counting at home, that’s the third largest budget deficit in history. If that wasn’t bad enough, the interest expense of $1.3 trillion was the second largest spending category after Social Security. Now… we know what a lot of you may be thinking. Assuming this trend continues – and it absolutely will – what will eventually happen to everybody who is hitching all of their wagons to the “Almighty” US dollar (USD) train? Well… let’s go to the tape:
Debit: For those of you not counting at home, last year’s interest on the National Debt amounted to 48% of all personal income taxes collected during the same period – that’s the third largest budgetary line item, behind only the Social Security Administration and Health & Human Services. And if you include entitlements and Veteran’s Affairs, that figure rises to 103%. In other words: It’s officially “game over” for our corrupt debt-based fiat USD monetary system. The only mystery that remains is the date that it’s recognized, either via a chaotic collapse of the UST market, or with a controlled – but massive – official devaluation of the USD relative to gold. Whichever path is chosen, they both lead to the same fate for the fiat USD.
Debit: Speaking of debt servicing costs, the 10-year UST yield was 3.97% in late February. It recently touched 5.26%, an increase of roughly 129 basis points. That might not seem like much, but with more than $40 trillion in debt, every basis point increase in the government’s average borrowing cost now adds $4 billion in its annual interest expense. Currently, that translates to nearly $516 billion, which threatens to materially widen that $2 trillion budget deficit for this new fiscal year, which began last month. Fortunately, the US supposedly has vaulted 8133 tons of gold to protect against an imploding USD. Even so, the Fed still sheepishly feigns ignorance as to the reason why it lists the yellow metal on its balance sheet…
Credit: We’re going to close this week with some words of wisdom from one astute Internet commentator who recently pointed out that, “Every fiat currency is a promise. And every one of those promises has an expiry date that history has never failed to collect. A currency reset is the moment a monetary system is forced to admit what markets already know: The money in circulation is worth far less than the promises denominated in it.” Clearly, that admission is getting closer with each passing day. The good news is that a monetary system reset isn’t a destruction of wealth; it’s a violent relocation of it, from creditors to debtors, and from those whose savings are held in fiat currency to holders of real money. Got gold?
By the Numbers
With the average credit limit decreasing in 36 of the 50 states year-over-year as of September 30, 2026, a new study highlighted the areas where people might be struggling financially by identifying the top 10 US states where credit limits decreased the most.
10 Connecticut
9 New Hampshire
8 Florida
7 Indiana
6 New Mexico
5 Georgia
4 Nebraska
3 Montana
2 Minnesota
1 Utah
Source: Wallet Hub
Last Week’s Poll Results
Do you, or would you ever, own a fully-electric vehicle?
- No 62%
- I’m still on the fence 23%
- Yes 15%
More than 3000 Len Penzo dot Com readers responded to last week’s question and it turns out that more than 8 in 10 of you either say you steadfastly refuse to buy a fully-electric or are, at best, sitting on the fence. Put me in the camp with those who will never buy one.
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: Love and Marriage
One thing about older women: They really know how to solve an old guy’s problems.
One day after 54 years of marriage, an old guy said to his wife: “Fifty-four years ago we had a cheap apartment, an old car, slept on a sofa and watched black & white TV on a 10-inch flickering screen – but I got to sleep with you, a hot 20-year-old girl. Now, we have a $900,000 house, a $72,000 car, a California king-sized bed, and a theatre flat-screen TV with surround sound – but I’m sleeping with a 74-year-old woman.”
Upon hearing that, the old guy’s very-logical wife said: “Go out and find a hot 20-year-old girl and I’ll see to it that you are once again living in a cheap apartment, driving an old car, sleeping on a sofa, and watching TV on a cheap set from WalMart.”
(h/t: RD Blakeslee)
Squirrel Cam (After Dark)
It’s always squirrel world at my house – just ask them. Sound up…
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More Useless News
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(The Best of) 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
Kevin had this to say after finding my article highlighting a foolproof hack for annoying DVDs with “unskippable” trailers and ads:
It’s disgusting how the entire world is slowly limiting people’s freedom. Soon they’ll decide when the DVD player lets you watch your movie.
I hear ya … it’s going to be war if they take away my Raisinettes.
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Photo Credit: public domain