{"id":37781,"date":"2016-06-18T05:15:06","date_gmt":"2016-06-18T12:15:06","guid":{"rendered":"https:\/\/lenpenzo.com\/blog\/?p=37781"},"modified":"2016-06-21T09:39:09","modified_gmt":"2016-06-21T16:39:09","slug":"black-coffee-the-rose-colored-glasses-edition","status":"publish","type":"post","link":"https:\/\/lenpenzo.com\/blog\/id37781-black-coffee-the-rose-colored-glasses-edition.html","title":{"rendered":"Black Coffee: The Rose-Colored Glasses Edition"},"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

Let’s get right to it today …<\/p>\n

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

Debit:<\/strong><\/span> I see a recent GAO study found that 99.6% of all US federal employees<\/a> receive ratings of ‘fully successful’ — or higher — from their management. Heh. So … when it comes to government performance, I guess it’s all downhill from here. Scary.<\/p>\n

Debit:<\/strong><\/span> To almost no one’s surprise, Janet Yellen and the rest of the academic blowhards at the Fed failed to raise interest rates<\/a> at their June meeting this week — despite their misleading suggestions to the contrary in the weeks leading up to the event.<\/p>\n

Credit:<\/strong><\/span> Of course, that begs the question: If the economy is as rosy as the government and the Washington Post want you to believe<\/a>, then why in the world can’t it handle a piddly 25 basis-point interest rate increase?<\/p>\n

Credit:<\/strong><\/span> As financial analyst Dave Kranzler correctly points out, the Fed failed to implement another hike because America’s “massive, money-printing-inflated asset bubbles rest on the teetering foundation<\/a> of zero-percent interest rates.” Thank God it’s nothing serious.<\/p>\n

Debit:<\/strong><\/span> Kranzler isn’t blowing hot air. The truth of the matter is, if GDP calculations today were done the same way as they were in the 1980s, we would see that the US has been in a depression since 2001<\/a>. On the bright side, that’s only 15 years or so.<\/p>\n

Credit:<\/strong><\/span> By the way, those near-zero interest rates are one reason that foreign selling of US treasuries is at the highest level since 1978<\/a>. As it should be.<\/p>\n

Debit:<\/strong><\/span> Never mind zero interest rates; the rest of the world has since broken the bond barrier<\/a> and moved on to the absurdity of negative interest rates, where bond holders now “pay” governments for the “privilege” of lending them money. Lord help us; the world has truly gone mad.<\/p>\n

Debit:<\/strong><\/span> In fact, this week the yield on the 10-year benchmark German bund fell into negative territory<\/a> for the first time ever. It’s not just Germany, folks — one-third of the world’s sovereign debt<\/a> now has a negative yield. And you thought your<\/em> savings account rate was a rip off.<\/p>\n

Credit:<\/strong><\/span> As Bill Holter notes, “Negative rate bonds are priced at a premium to the ‘cash’ they promise to return upon maturity. This is an impossibility<\/a> in any world where sanity and logic exists.” Yes! But before moving on, I’ll give you a minute to think about that and let it soak in.<\/p>\n

Credit:<\/strong><\/span> For what it’s worth, those negative yields are also the result of a 35-year $10 trillion bull market in bonds that bond guru Bill Gross said will one day result in a “supernova explosion<\/a>.” I’m not sure why Bill insists on minimizing the severity of this, but okay …<\/p>\n

Debit:<\/strong><\/span> Bond bubble or not, more than a few economists are now saying that US bond yields may go negative<\/a> in the near future too. Unbelievable. If that happens, you can expect a tremendous surge in mattress sales. Then again, maybe not.<\/p>\n

Debit:<\/strong><\/span> Widespread adoption of negative rates have turned Economic Laws on their head and proves that the financial system is broken<\/a>. Unfortunately, multiple generations have now grown up thinking the current something-for-nothing Ponzi scheme masquerading as our monetary system is “normal.” It’s not. As we’ll all soon see.<\/p>\n

Debit:<\/strong><\/span> The public’s economic ignorance is a product of our education system and the mainstream media. John Hinderaker highlights a great example of this using an NPR interview with a discombobulated New York Times reporter<\/a> on Venezuela’s economic collapse. Incredibly, despite living there, the reporter seemingly blames Venezuela’s troubles on its failure to print enough fiat currency. No, really.<\/p>\n

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

This week, Stacking Benjamins’ host Joe Saul-Sehy asked his podcast roundtable panelists — including yours truly — to comment on a few of these random statistics:<\/p>\n

71<\/strong><\/span><\/span> Percentage of Americans who sleep with their pets.<\/p>\n

43<\/strong><\/span><\/span> Percentage of people who don’t like their food touching other food on their plate.<\/p>\n

97<\/strong><\/span><\/span> Percentage of Americans who say they eat potatoes.<\/p>\n

1<\/strong><\/span><\/span> The potato’s rank among all vegetables that people crave the most. (24%)<\/p>\n

3<\/strong><\/span><\/span> Broccoli’s rank among most-craved vegetables. (14%)<\/p>\n

0<\/strong><\/span><\/span> Number of people who actually believe that broccoli is truly the third-most craved vegetable.<\/p>\n

84<\/strong><\/span><\/span> Percentage of heterosexual women who say they are attracted to geeky men.<\/p>\n

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

I believe that podcast episode will officially post this coming Friday. For access to all of the latest episodes, click on the Stacking Benjamins banner on my blog’s sidebar.<\/p>\n

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

How do you like your steak?<\/p>\n