{"id":38050,"date":"2016-07-02T05:15:47","date_gmt":"2016-07-02T12:15:47","guid":{"rendered":"https:\/\/lenpenzo.com\/blog\/?p=38050"},"modified":"2022-07-31T08:50:40","modified_gmt":"2022-07-31T15:50:40","slug":"black-coffee-the-independence-day-edition-2","status":"publish","type":"post","link":"https:\/\/lenpenzo.com\/blog\/id38050-black-coffee-the-independence-day-edition-2.html","title":{"rendered":"Black Coffee: The Independence Day 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

I hope everyone is enjoying their long holiday weekend!<\/p>\n

Off we go …<\/p>\n

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

Debit:<\/strong><\/span> On Friday, Puerto Rico became the first US state or territory to default<\/a> on a general obligation bond since the Great Depression — more than $800 million. Apparently, a fiscal oversight board has been tasked with coming up with a solution to the island’s problem. Here’s one: start living within its means.<\/p>\n

Credit:<\/strong><\/span> In other news, with only four weeks until the Olympics, host-city Rio has building debris everywhere, an unfinished subway, bays filled with human waste, and the stench of sewage<\/a> in the air. Oh, yeah … and the Zika virus too. But aside from that, Olympic officials say that Rio is ready to go!<\/p>\n

Debit:<\/strong><\/span> Don’t tell that to Rio’s police force — last week they were greeting Olympic tourists at the airport with a giant “Welcome to Hell<\/a>” banner warning that “whoever comes to Rio will not be safe.” I’m not sure if the police officers were referring to the city’s criminal element or its gastrointestinal microbes.<\/p>\n

Credit:<\/strong><\/span> Let’s all pray that those Brazilian officers can avoid the colorectal amoeba in Rio because the city’s boys in blue are currently plagued by a toilet paper shortage<\/a>. No, really. What is it with socialists’ inability to produce enough TP for its citizens? Yes, that’s rhetorical; the answer is obvious to everyone but<\/em> the socialists. Forward!<\/p>\n

Debit:<\/strong><\/span> I see Brazil’s comrades in the People’s Socialist Paradise of VenezuelaTM<\/span><\/sup> are now transporting its dwindling food supplies under armed guard<\/a>. Of course, when farmers and other “greedy” producers are told by statist politicians and bureaucrats how much they’re “allowed” to earn for their labor, scarcity is always the end result. (Psst. Quien es<\/em> John Galt<\/a>?)<\/p>\n

Debit:<\/strong><\/span> On a somewhat related note, I see that McDonald’s is in the process of closing 500 stores<\/a> across the globe. Of course, you know what that means: The Rio Tourism Bureau better start looking for a new scapegoat.<\/p>\n

Credit:<\/strong><\/span> I suspect a big reason the Golden Arches is closing all of those stores is because previous growth in fast food visits<\/a> has finally hit a wall. You can blame that on a faltering economy and a widening price gap between restaurant fare and groceries. Better health is just a bonus.<\/p>\n

Credit:<\/strong><\/span> Meanwhile, a growing number of beleaguered fast food restaurants are effectively blunting striking fry cooks’ ludicrous $15 per hour wage demands by using robots as replacements<\/a>. Gee, nobody could see that<\/em> coming. Well … except those who believe unskilled entry-level jobs are supposed to support a family.<\/p>\n

Debit:<\/strong><\/span> Did you see this? Pending home sales in May are at their lowest level in six years<\/a>. Curiously, the National Association of Realtors blames the drop in demand on lack of supply<\/em>. Hmm. So, to sum up: housing market supply is low, demand is also low — but prices are hovering near all-time highs<\/a>. I see Janet Yellen is nodding her head, so I guess we’ll move on.<\/p>\n

Debit:<\/strong><\/span> Who knows? Maybe Obamacare is the real reason housing sales are hitting the skids. After all, healthcare costs are rising<\/a> sharply — and it’s only going to get worse, since large rate increases are expected for most people this November. Yes, again.<\/p>\n

Debit:<\/strong><\/span> Last but not least, in case you haven’t noticed, there is now a staggering $11.7 trillion worth of bonds offering negative yields<\/a>. When people willingly buy an “investment” that’s guaranteed to return less than they originally paid for it, that’s the definition of bubble-buying insanity.<\/p>\n

Credit:<\/strong><\/span> By the way, those negative yields — which are screaming that the financial system has broken — are what will eventually lead to nervous investors stampeding from bonds into precious metals<\/a>. The only trouble is, when they do, there won’t be enough gold and silver to satisfy all of that demand. Well … at current prices<\/em> anyway. Not even close.<\/p>\n

Credit:<\/strong><\/span> Whistle past the graveyard if you dare, but even Alan Greenspan is now warning that a terrible financial crisis is imminent<\/a> — and to save us, he’s begging for a return to the gold standard. Yes, the same Alan Greenspan who began the now all-too-common Fed manipulation that has finally put the US dollar on its death bed.<\/p>\n

Debit:<\/strong><\/span> Frankly, it doesn’t really matter what<\/em> Alan Greenspan thinks; going to the gold standard is politically unacceptable<\/a> because it imposes financial discipline on Uncle Sam. Not to mention a very painful devaluation of the US dollar. So we’ll have to wait for economic mother nature to reassert herself. Folks, like it or not, the piper is going to be paid — one way or another.<\/p>\n

Credit:<\/strong><\/span> I wonder if Alan Greenspan issued his clarion call for us to prepare for the economic storm that’s coming because he saw Zero Hedge’s claim that: “The ‘real’ financial fear index just hit 11<\/a>.” That it did. Hey … I wonder if Spinal Tap knows about this:<\/p>\n

\n