{"id":26307,"date":"2014-08-02T11:30:10","date_gmt":"2014-08-02T18:30:10","guid":{"rendered":"https:\/\/lenpenzo.com\/blog\/?p=26307"},"modified":"2023-03-13T11:12:59","modified_gmt":"2023-03-13T18:12:59","slug":"black-coffee-neither-a-borrower-nor-a-lender-be","status":"publish","type":"post","link":"https:\/\/lenpenzo.com\/blog\/id26307-black-coffee-neither-a-borrower-nor-a-lender-be.html","title":{"rendered":"Black Coffee: Neither a Borrower nor a Lender Be"},"content":{"rendered":"

\"\"<\/a>It’s time to sit back, relax and enjoy a little joe<\/em> …<\/p>\n

Let’s get right to it this week …<\/p>\n

International News<\/strong><\/p>\n

This past week, I was interviewed by Doug Goldstein for a segment on his terrific money show, Goldstein on Gelt<\/a>, which is featured on Israel National Radio. No, really!<\/p>\n

Anyway, we had a great conversation and I had a lot of fun chatting with him — while we see eye-to-eye on most financial matters, we didn’t agree on everything<\/em> — so please be sure to stop by Doug’s site and check it out! (Hit the “Listen Now” button on the upper left side of the website. My interview starts at about the 7:30 mark on the recording.)<\/p>\n

Stacking Benjamin’s Podcast<\/strong><\/p>\n

Of course, as many of you know, my friend, Joe Saul-Sehy, has a fantastic — not to mention quickly-growing — money show too: Stacking Benjamins<\/a>. You can find me there most weeks as a regular contributor on his Money Roundtable segment.<\/p>\n

Credits and Debits<\/strong><\/p>\n

Debit: <\/strong><\/span>Argentina shirked its obligations to creditors this week by officially defaulting<\/a> on its debt. Meh. The free-spending South American country previously defaulted back in 2001; and since 1826, Argentina has left its lenders holding the bag eight times. I know.<\/p>\n

Debit:<\/strong><\/span> While Argentine president Cristina Fernandez gave her bondholders the shaft, the people of Argentina will be the biggest losers after they suffer the consequences<\/a> that come with decreased foreign investment and a dearth of future credit opportunities.<\/p>\n

Debit:<\/strong><\/span> Apparently, Argentina isn’t the only one repudiating its debts. According to USA Today, 35% of all Americans<\/a> currently have debt that is so far in arrears that the creditor has closed the account and hired a collection agency to recover it. Unbelievable.<\/p>\n

Debit:<\/strong><\/span> Call me crazy, but such a high default rate seems impossible in a country that is five years into an economic recovery<\/a>, with an initial GDP print of 4% last quarter<\/a>, low inflation<\/a>, and unemployment at just 6.2%<\/a>. Well … Unless it’s all a mirage. (Hint: It is.)<\/p>\n

Debit:<\/strong><\/span> It’s hard for anyone to make a case that we’re on the right track considering that the average American household’s inflation-adjusted net worth is 36% lower today<\/a> than it was in 2003. Then again, maybe they changed the meaning of the term “economic recovery” when I wasn’t looking.<\/p>\n

Credit:<\/strong><\/span> And another thing: If the economy expanded at a blistering 4% clip last quarter — after contracting almost 3% the previous quarter — you would think that single family home sales would be booming. Instead, they fell 8.1% in June<\/a>. Are you paying attention, flippers?<\/p>\n

Debit:<\/strong><\/span> Unfortunately, US economic growth is all smoke and mirrors. As ZeroHedge points out, more than half of the reported growth in nominal US GDP over the past year is the result of businesses accumulating inventory<\/a>, as opposed to actually selling their goods to the public. That’s definitely part of it — but not the whole<\/em> story.<\/p>\n

Credit:<\/strong><\/span> This week, Peter Schiff broke down what’s really<\/em> happening to the US economy: “The growth is a fantasy<\/a>. It’s a result of the assumption that there is no inflation — (but) there really is<\/a>. What we have is inflation masquerading as economic growth.”<\/em><\/p>\n

Credit<\/strong>:<\/span> In fact, according to Schiff: “The economy is contracting. That’s why the labor force is shrinking<\/a>, we’re using less energy<\/a>, the standard of living is (declining)<\/a>, real incomes are falling<\/a>, and job(s) are disappearing<\/a>. We’re in a recession and no one wants to admit it.”<\/em><\/p>\n

Debit:<\/strong><\/span> Recession?<\/em> Economist Jim Rickards says that we’re actually in a depression<\/em><\/a>. He’s right; and the only reason people don’t realize it is because the effects are being masked by massive Fed money printing and government welfare via EBT cards, unemployment benefits, disability payments and other handouts.<\/p>\n

Debit:<\/strong><\/span> The scary part is, the Fed will<\/em> eventually lose control — then the charade will end and the complacent and oblivious will finally come to grips<\/a> with the real<\/em> state of the US economy because most Americans’ artificially-high standard of living will drop. Precipitously.<\/p>\n

Credit<\/strong>:<\/span> Finally … Last week, a semi-truck carrying 45,000 pounds of butter hit a barrier<\/a> and overturned on an Indianapolis highway. The accident is yet another example of why truckers absolutely hate<\/em> hauling butter. After all, they know there’s no, ahem … margarine for error. (Sorry.)<\/p>\n

By the Numbers<\/strong><\/p>\n

I love butter. In fact, I’m not ashamed to say I eat a pat or two every once in awhile — without the bread!<\/p>\n

1860 <\/strong><\/span><\/span>Year the first butter factories appeared in the US. (New York)<\/p>\n

1940 <\/strong><\/span><\/span>Year that butter production peaked in the US. That’s because shortages brought about by World War II ushered in the margarine era.<\/p>\n

1957<\/strong><\/span><\/span> Year that margarine consumption surpassed butter consumption in the US.<\/p>\n

21<\/strong><\/span><\/span> Pounds of whole milk required to make one pound of butter.<\/p>\n

5 <\/strong><\/span><\/span>Current approximate annual US per capita butter consumption, in pounds.<\/p>\n

1.75<\/strong><\/span><\/span> Pounds of salted butter that Donald Lerman consumed in five minutes; a world record. (Okay. I love butter, but I don’t like it that<\/em> much.)<\/p>\n

Source: FoodReference.com<\/a><\/em><\/p>\n

The Question of the Week<\/strong><\/p>\n

[poll id=\"19\"]<\/code><\/p>\n

Last Week’s Poll Results<\/strong><\/p>\n

Squirrels: Love ’em or hate ’em?<\/p>\n