{"id":26884,"date":"2014-09-13T08:22:01","date_gmt":"2014-09-13T15:22:01","guid":{"rendered":"https:\/\/lenpenzo.com\/blog\/?p=26884"},"modified":"2020-01-03T14:02:32","modified_gmt":"2020-01-03T22:02:32","slug":"black-coffee-yes-the-fed-is-blaming-hoarders-for-the-rotten-economy","status":"publish","type":"post","link":"https:\/\/lenpenzo.com\/blog\/id26884-black-coffee-yes-the-fed-is-blaming-hoarders-for-the-rotten-economy.html","title":{"rendered":"Black Coffee: Yes, the Fed Is Blaming Hoarders for the Rotten Economy"},"content":{"rendered":"

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

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.<\/p>\n

I’m helping my father-in-law move into a new apartment this weekend, so let’s get right to it …<\/p>\n

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

Credit:<\/strong><\/span> Check out this national heat map from Gas Buddy<\/a>. It provides a terrific comparison of the latest gasoline prices across the United States: (They have a similar map for Canada<\/a>.)<\/p>\n

\"Gas<\/a><\/p>\n

Debit:<\/strong><\/span> Unfortunately for me, I live in Southern California, where this week the average price for a gallon of unleaded topped out at $3.80 per gallon<\/a>.<\/p>\n

Credit:<\/strong><\/span> In case you’re wondering, Gas Buddy reports that Roanoke, Virginia, currently enjoys the lowest average pump price: $3.08 per gallon.<\/p>\n

Debit:<\/strong><\/span> Believe it or not, since 1998, gasoline prices have climbed 290%<\/a>, which is too bad because you can bet most people’s paychecks haven’t increased that much over the same period.<\/p>\n

Debit:<\/strong><\/span> It’s not just gasoline; over the past 16 years, college tuition has skyrocketed 140%, electricity is up 75%, healthcare is 54% more expensive, and milk is up 60%. In fact, this week milk futures hit an all-time high; and that<\/em> portends higher pizza prices<\/a>. Just in time for football season, right?<\/p>\n

Debit:<\/strong><\/span> You know the American economy is in dire straits when Vice President Biden’s former chief economist, Jared Bernstein, floats a trial balloon in the New York Times calling for the end of the US dollar<\/a> as the world’s reserve currency. Oh yes, he really did.<\/p>\n

Credit:<\/strong><\/span> <\/strong>Of course, having a reserve currency is the so-called exorbitant privilege that has allowed the US to accrue a massive debt load over the past 50 years without destroying the dollar — and with it, Americans’ high standard of living. So why would Mr. Bernstein make such a suggestion<\/a>?<\/p>\n

Credit:<\/strong><\/span> Mr. Bernstein is no dummy; I suspect he knows the dollar’s reserve currency status is a privilege that can no longer be sustained<\/a>. For such an article to come out in the New York Times suggests to me that the dollar’s demise — at least as we know it — is closer than most people think.<\/p>\n

Debit:<\/strong><\/span> Then again, there are plenty of people who didn’t need Mr. Bernstein’s op-ed piece to become aware of the decline of America, the looming demise of the dollar, and the end of the current international monetary system — the signs are everywhere<\/a>.<\/p>\n

Debit:<\/strong><\/span> For example, the unwanted attention surrounding the United States’ alarming amount of unfunded liabilities — $205 trillion and counting — finally forced the federal government to stop publishing the statistics<\/a>.<\/p>\n

Debit:<\/strong><\/span> Meanwhile, as CNS reports<\/a>, government “assistance” is apparently so generous now that: “An unemployed American is more likely to be shopping — for stuff other than gas or groceries — than to be looking for a new job.” <\/em>Must be nice.<\/p>\n

Credit:<\/strong><\/span> With 92 million Americans<\/a> currently out of the labor force, the welfare benefits being handed out are enormous — but the financial consequences of maintaining them will only remain manageable as long as the US government can continue abusing its exorbitant privilege via unfettered money printing.<\/p>\n

Debit:<\/strong><\/span> Here’s another indication that the US economy is in a free fall: Outside of healthcare and education, guess how many net new jobs have been created in America since July 2000. If you said “one,” um … try again — your estimate was too high<\/a>.<\/p>\n

Debit:<\/strong><\/span> The Fed has painted itself in a corner with its reckless monetary policies, and it is clearly frustrated. We truly live in a bizarro financial world when the Fed is blaming lackluster GDP growth on consumers “hoarding” cash<\/a>. Heh. In the old days we called that “saving.”<\/p>\n

Debit:<\/strong><\/span> Needless to say, with today’s zero- and negative-interest rate policies<\/a> — which are necessary to keep the international monetary system from imploding — the world’s central banks are doing everything they can to discourage people from hoarding money … I mean saving.<\/p>\n

Debit: <\/strong><\/span>As Simon Black points out<\/a>, the banking system is so absurd now that ANZ bank actually placed a newspaper ad touting a 0% interest rate. Yes, zero. As in zero-point-zero.<\/p>\n

Credit:<\/strong><\/span> Naturally, there are minimum deposit requirements to qualify for that premium interest rate; for example, those saving in Japanese yen need the equivalent of $223,000 US dollars. If inflation and taxes cost 5%, the depositor loses more than $11,000 the first year alone. Sheesh. Talk about an exorbitant privilege.<\/p>\n

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

Some scary facts about how little Americans save today:<\/p>\n

$240,000<\/strong><\/span><\/span> According to Fidelity Investments, the amount of money a couple aged 65 should have on hand to cover medical expenses throughout their retirement.<\/p>\n

11<\/strong><\/span><\/span> According to Aon Hewitt, the rule-of-thumb salary-multiple required to maintain your standard of living if retiring at 65.<\/p>\n

6.7<\/strong><\/span><\/span> According to Aon Hewitt, the salary multiple the average American will actually save upon retirement.<\/p>\n

$1327<\/strong><\/span><\/span> The average Social Security benefit for retired workers, according to the Social Security Administration.<\/p>\n

50<\/strong><\/span><\/span> Percentage of American workers in 1991 who planned to retire before age 65.<\/p>\n

23<\/strong><\/span><\/span> Percentage of American workers today who plan to retire before 65.<\/p>\n

Source: Timothy Sykes
\n<\/em><\/p>\n

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

[poll id=\"25\"]<\/code><\/p>\n

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

Credit or Debit: Which payment method do you usually use?<\/p>\n