{"id":35768,"date":"2016-02-13T03:00:11","date_gmt":"2016-02-13T11:00:11","guid":{"rendered":"https:\/\/lenpenzo.com\/blog\/?p=35768"},"modified":"2020-01-03T14:11:31","modified_gmt":"2020-01-03T22:11:31","slug":"black-coffee-you-never-give-me-your-money","status":"publish","type":"post","link":"https:\/\/lenpenzo.com\/blog\/id35768-black-coffee-you-never-give-me-your-money.html","title":{"rendered":"Black Coffee: You Never Give Me Your Money"},"content":{"rendered":"

\"black<\/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

Too little time and too much to do, so I’ve got an espresso edition for your enjoyment this week.<\/p>\n

Let’s get right to it …<\/p>\n

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

Debit:<\/strong><\/span> A recent poll of Millennials found that a majority of them prefer socialism over capitalism<\/a>. Sad. If true, America is in much bigger trouble than I originally thought; the country’s fabulous success was born from the self-reliance and rugged individualism of its citizens — not the nanny state.<\/p>\n

Credit:<\/strong><\/span> Did you see this? According to 24\/7 Wall Street<\/a>, some places could soon be seeing “gas prices below $1.” Not here in California. We’re still waiting for pump prices fall below $2.50 again.<\/p>\n

Credit:<\/strong><\/span> This week David Stockman lamented central banks’ war on savers<\/a>: “Interest at 0.3% on a $250,000 nest egg buys (one cappuccino at Starbucks). What kind of crank economics contends that brutally punishing two historically-proven economic virtues — thrift and prudence — is the key to economic growth and true wealth creation?” <\/em>Sing it, David!<\/p>\n

Credit:<\/strong><\/span> But wait … Stockman wasn’t finished: “What kind of insult to common sense argues that human nature is prone to save too much, defer gratification too long, shop too sparingly and consume too little? (Central Bankers) enthrall to a dogma of debt that is so primitive that it’s just plain dumb.”<\/em> David, if I wasn’t married, er … and heterosexual …<\/p>\n

Credit:<\/strong><\/span> Believe it or not, even Deutsche Bank is begging for the end<\/a> of low- and negative-interest rates. Yes, that<\/em> Deutsche Bank. It’s just more evidence that central bankers are hopelessly trapped in a web of their own making.<\/p>\n

Debit:<\/strong><\/span> Of course, Deutsche Bank is fighting for its life now; in six short weeks, wary investors<\/a> unsure of the bank’s ability to remain solvent caused its stock to plunge almost 40%. So this week, the bank’s CEO issued a statement defending its liquidity<\/a>. I’m sure their balance sheet is solid as the Rock of Gibraltar. Yep. No need to worry; the CEO said so.<\/p>\n

Debit:<\/strong><\/span> According to Markit<\/a>, the high number of “distressed” high-yield bonds trading at more than 10% is not only alarming, but it’s growing faster than ever. Consider that another indication of collapsing credit markets<\/a>; very bad news for companies that generate few profits — if any. Cough. Twitter. Cough. Uber. Cough. No, I’m fine … really!<\/p>\n

Debit:<\/strong><\/span> This week CNBC asked, “Is another US recession on the way<\/a>?” But CNBC is asking the wrong question. As financial analyst Bill Holter wisely notes<\/a>: “This isn’t about a ‘recession’ — this is about whether the entire system fails or not.”<\/em><\/p>\n

Credit:<\/strong><\/span> As for those who are looking for the exact date systemic failure will occur, Holter believes we’re watching it now<\/a>: “The collapse is happening right before your eyes; ‘when?’ is a process and you are watching history!”<\/em>As for that sound you hear … It’s millions of harrumphs from the scoffers out there. (They just better hope he’s wrong.)<\/p>\n

Credit:<\/strong><\/span> On the other hand, judging by Thursday’s gold-buying panic in the UK — where newly-minted precious metals customers “queued round the block<\/a>” to exchange some of their fiat funny paper for real<\/em> money — not everybody is scoffing.<\/p>\n

Debit:<\/strong><\/span> Canada sure ain’t afraid of a stinkin’ global economic meltdown: they’re in the process of selling the last of their gold reserves<\/a>. In fact, Canada’s Treasury now has just 21,929 ounces of the yellow metal left in its vault — that’s less than one metric ton<\/em>. Then again, I suspect that’s still more than the US has in Fort Knox.<\/p>\n

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

How many cavities have you had during your lifetime?<\/p>\n