{"id":30140,"date":"2015-03-14T12:31:42","date_gmt":"2015-03-14T19:31:42","guid":{"rendered":"https:\/\/lenpenzo.com\/blog\/?p=30140"},"modified":"2021-01-05T16:07:08","modified_gmt":"2021-01-06T00:07:08","slug":"black-coffee-why-the-debt-really-doesnt-matter-anymore","status":"publish","type":"post","link":"https:\/\/lenpenzo.com\/blog\/id30140-black-coffee-why-the-debt-really-doesnt-matter-anymore.html","title":{"rendered":"Black Coffee: Why the Debt Really Doesn’t Matter Anymore"},"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

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

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

Debit:<\/strong><\/span> It’s baaaack: After a one year hiatus, US politicians have to consider raising the debt ceiling<\/a> again. This is what happens when a nation spends $8 trillion it doesn’t have — in six years, no less.<\/p>\n

Credit:<\/strong><\/span> Frankly, I’m over this debt ceiling kabuki theater and the Big Government statists who piously insist that the debt doesn’t matter because “we owe it to ourselves.” Heh. They’re wrong<\/a>, of course. The debt doesn’t matter only because we’re now mathematically past the point of no return.<\/p>\n

Credit:<\/strong><\/span> Anyone who insists that we can simply continue paying for real products and services by simply “printing currency” out of thin air without financial consequences is either being intellectually dishonest<\/a>, or failed Macroeconomics 101 — and World History too.<\/p>\n

Debit:<\/strong><\/span> It’s hard to reason with folks who essentially argue that they can’t be broke because they still have checks<\/a> in their checkbook.<\/p>\n

Debit:<\/strong><\/span> Oh, sure. The statists will tell you that it’s apples and oranges<\/a>. After all, they say, law-abiding citizens can’t print money out of thin air like the Fed can. True. The trouble is, the dollar isn’t<\/em> money — it’s an IOU.<\/p>\n

Credit:<\/strong><\/span> The “I still have checks” brigade also forgets that the US has creditors too — just like the rest of us do. And when creditors see that there are too many of those IOUs floating around, they eventually lose confidence<\/a> in their value.<\/p>\n

Debit:<\/strong><\/span> Unfortunately, confidence is the only<\/em> thing backing the US dollar today. Yes, the greenback used to be backed by the nation’s, um, impeccable credit<\/a> too — but, in case you haven’t noticed, that’s up for debate with increasing frequency nowadays.<\/p>\n

Credit:<\/strong><\/span> So … Can we just stop the charade<\/a>? Since we all agree that the “debt doesn’t matter,” let’s permanently suspend the ceiling. Please.<\/em> Because doing so will reduce the time it takes for economic law to finally reassert itself. And it will.<\/p>\n

Debit:<\/strong><\/span> It’s sad, but true: When the currency bubble pops, the pain will be enormous — especially for 99% of the middle class, whose dollar-based savings will be decimated<\/a>.<\/p>\n

Debit:<\/strong><\/span> Most folks who are receiving government welfare benefits<\/a> will feel the pain too because they’ll have to find work again in order to make ends meet.<\/p>\n

Credit:<\/strong><\/span> The good news is, after the dollar goes belly up and a new — and hopefully smarter — monetary system is established, the US will regain the ability to competitively manufacture real products domestically. And that means, unlike today<\/a>, more quality jobs will be available for Americans who want them.<\/p>\n

Credit:<\/strong><\/span> As the US economy slowly rises from the ashes, low-paying entry-level jobs<\/a> that were never supposed to support a family — think: fast-food fry cooks and grocery store baggers — will also be reclaimed by teenagers, as opposed to middle-aged adults and senior citizens. As they should be.<\/p>\n

Credit:<\/strong><\/span> Best of all, interest rates will be restored to a level that reflect the true price of money relative to risk. That, in turn, will encourage saving and pragmatic investment<\/a> in the capital goods and structures needed to benefit Main Street’s economy — as opposed to the cronyists on Wall Street and Capitol Hill.<\/p>\n

Debit:<\/strong><\/span> You can argue that the debt doesn’t matter, but the math indicates that we’ve kicked the can<\/a> about as far as we can. If we’re lucky, we can muddle along for several more years with this dying debt-based monetary system — albeit with little hope of ever growing ourselves out from under the massive debt overhang that the world has foolishly accumulated.<\/p>\n

Credit:<\/strong><\/span> Then again, if the debt really<\/em> doesn’t matter, then the powers-that-be should just write a $100-trillion check<\/a> to themselves and be done with it.<\/p>\n

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

With the arrival St. Patrick’s Day this week, I thought I’d share a few facts with you related to the popular Irish holiday:<\/p>\n

34,700,000<\/strong><\/span><\/span> Irish-Americans who live in the United States.<\/p>\n

4,595,000<\/strong><\/span><\/span> The current population of Ireland.<\/p>\n

1762<\/strong><\/span><\/span> Year that New York City held its first St. Patrick Day’s parade.<\/p>\n

100<\/strong><\/span><\/span> Minimum number of St. Patrick’s Day parades held in American cities every year.<\/p>\n

$245,000,000<\/strong><\/span><\/span> Estimated amount to be spent on beer this St. Patrick’s Day.<\/p>\n

385<\/strong><\/span><\/span> Year that St. Patrick was born.<\/p>\n

0<\/strong><\/span><\/span> Amount of Irish blood in St. Patrick. He was born in Britain to parents who were Roman citizens.<\/p>\n

0.01%<\/strong><\/span><\/span> Chance of finding a four-leaf clover on your first attempt.<\/p>\n

Source: International Business Times<\/a><\/em><\/p>\n

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

[poll id=\"52\"]<\/code><\/p>\n

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

Is better to buy or rent a home?<\/p>\n