{"id":32624,"date":"2015-07-25T03:15:31","date_gmt":"2015-07-25T10:15:31","guid":{"rendered":"https:\/\/lenpenzo.com\/blog\/?p=32624"},"modified":"2024-01-07T08:15:13","modified_gmt":"2024-01-07T16:15:13","slug":"black-coffee-theyre-the-government-and-theyre-here-to-help","status":"publish","type":"post","link":"https:\/\/lenpenzo.com\/blog\/id32624-black-coffee-theyre-the-government-and-theyre-here-to-help.html","title":{"rendered":"Black Coffee: They’re the Government and They’re Here to Help"},"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’ve been out of town all week, and I have a lot of honey-dos to take care of this weekend. As a result, I’m serving up an espresso edition for you.<\/p>\n

Okay, off we go …<\/p>\n

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

Debit:<\/strong><\/span> Even though Greek depositors are still only able to withdraw the equivalent of $67 per day, bankers there are imploring fellow citizens<\/a> to return all of the cash they’ve withdrawn, promising there will be no “haircuts” later on if they do. Heh. Riiiiiiight.<\/em><\/p>\n

Debit:<\/strong><\/span> Meanwhile, the US has its own debt issues. It’s been using accounting tricks to balance the books since reaching the $18.1 trillion debt limit last March. Now the GAO is warning that an economic catastrophe<\/a> is in the cards if Congress doesn’t raise the limit by November. Heh. Riiiiiiight.<\/em><\/p>\n

Credit:<\/strong><\/span> The GAO is right about one thing: an economic catastrophe is coming. But we’ve crossed the rubicon<\/a> and there is no longer any legislation that Congress can pass to permanently stop it. That’s because every Ponzi scheme is mathematically doomed to fail.<\/p>\n

Credit:<\/strong><\/span> That’s bad news for the growing number of government employees in their 50s with six-figure cost-of-living-adjusted pensions<\/a> who end up making more in retirement than they did working. You don’t see pensions like that in the private sector — if you see them at all.<\/p>\n

Debit:<\/strong><\/span> You’d think the trillions in fiat currency being conjured out of thin air by the world’s central banks would be reflected in skyrocketing gold and silver prices but, remarkably, it’s just the opposite<\/a>. For now.<\/p>\n

Debit:<\/strong><\/span> You can thank the Plunge Protection Team for keeping gold and silver on sale. I know I do. Heck, they’re so desperate now<\/a>, they no longer even attempt to hide their blatant ham-handed efforts to manipulate<\/a> the precious metals markets.<\/p>\n

Debit:<\/strong><\/span> On a related note, other commodity prices such as coffee, sugar, wheat, silver and copper have been taking it on the chin all year too. In fact, this week alone saw the Bloomberg Commodity Index plunge 7.2%<\/a>, putting it at a 13-year low. And it’s going to go lower.<\/p>\n

Credit:<\/strong><\/span> David Stockman says collapsing commodity prices are the culmination of more than a decade of failed central bank interventions<\/a> in the free market that ignited a debt-fueled consumption spree and massive malinvestment.<\/p>\n

Debit:<\/strong><\/span> In other words, the financial party on Wall Street — fueled by years of ridiculously cheap money from the Fed — is just about over. What we’re witnessing now are the first pangs of a vicious economic hangover — although many people aren’t ready to admit it<\/a>. Yet.<\/p>\n

Debit:<\/strong><\/span> Finally … Not every worker in the progressive “paradise” of Seattle is happy the city raised the minimum hourly wage to $15. Apparently, some workers are now requesting fewer hours<\/a> in a bid to limit their income so they don’t lose government subsidies for food, child care and rent. Forward!<\/p>\n

Credit:<\/strong><\/span> Of course, McDonald’s and other fast food joints have found a way around Seattle and other socialist city governments’ attempts at manipulating the free market: self-serve kiosks<\/a>. Now if only our government overlords would see the light and start using them too.<\/p>\n

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

At $4.7 trillion and counting, government pension liabilities are a growing nationwide problem — but nowhere is the problem worse than in California:<\/p>\n

$750,000,000,000<\/strong><\/span><\/span> Current high-end estimate of California’s pension liabilities.<\/p>\n

17%<\/strong><\/span><\/span> Growth in California local governments’ pension spending between 2008 and 2012.<\/p>\n

4%<\/strong><\/span><\/span> Growth in California tax revenue over the same period.<\/p>\n

1841<\/strong><\/span><\/span> Retirees pulling a $100,000+ pension from the California Public Employees Retirement System in 2005.<\/p>\n

16,838<\/strong><\/span><\/span> Retirees pulling a $100,000+ pension from the California Public Employees Retirement System in 2013.<\/p>\n

2010<\/strong><\/span><\/span> Year police in Oakland were asked to contribute 9% of their salary into their pensions in order to prevent layoffs.<\/p>\n

80<\/strong><\/span><\/span> Oakland police officer positions eliminated after its union voted in 2010 to continue contributing nothing into their taxpayer-guaranteed pensions.<\/p>\n

44<\/strong><\/span><\/span> Number of crimes that the Oakland police department no longer responds to, due to staffing cutbacks.<\/p>\n

Sources: Orange County Register; The Sacramento Bee<\/a><\/em><\/p>\n

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

[poll id=\"72\"]<\/code><\/p>\n

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

What is your favorite fruit?<\/p>\n