{"id":38908,"date":"2016-09-03T05:15:56","date_gmt":"2016-09-03T12:15:56","guid":{"rendered":"https:\/\/lenpenzo.com\/blog\/?p=38908"},"modified":"2016-09-06T11:57:57","modified_gmt":"2016-09-06T18:57:57","slug":"black-coffee-the-labor-day-edition-2","status":"publish","type":"post","link":"https:\/\/lenpenzo.com\/blog\/id38908-black-coffee-the-labor-day-edition-2.html","title":{"rendered":"Black Coffee: The Labor 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 the long Labor Day weekend.<\/p>\n

By the way, if you find my weekly Black Coffee columns informative and enjoyable, please help me get the word out by sharing it with your friends and relatives. I’d be much obliged!<\/p>\n

Okay, off we go …<\/p>\n

 <\/p>\n

The Fed can change how things look, but it cannot change what things are.<\/em><\/p><\/blockquote>\n

— Jim Grant<\/a><\/p>\n

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

Debit:<\/strong><\/span> With Obamacare insurers bleeding cash due to risky mandates that allow sick people to buy insurance with preexisting conditions, and healthy customers rejecting its one-size-fits-all plans, high premiums and even higher deductibles, it won’t be long before taxpayers will be forced to pay the bills<\/a>. Aside from that, Obamacare has been a raging success!<\/p>\n

Debit:<\/strong><\/span> Of course, the healthcare law from hell is actually on life support. As Obamacare continues its inevitable slow-motion implosion, 36% of the country will have only one insurer offering Obamacare<\/a> plans in 2017. Imagine that.<\/p>\n

Credit:<\/strong><\/span> Then there are the residents of Arizona’s Pinal County; they’ll have zero Obamacare providers<\/a> next year. Yes, zero. But there’s a silver lining: Pinal County finally found a way to make Obamacare affordable. At least to those who’ve been stuck paying for it. Hooray!<\/p>\n

Credit:<\/strong><\/span> I would never be so brash to say “I told you so!” to all of the misinformed Obamacare advocates<\/a> who lectured opponents like me and called us “fearmongers” … on second thought, yes, I would: I told you so! And so did everybody else in America who has an aversion to sticking their head in the sand.<\/p>\n

Debit:<\/strong><\/span> Obamacare isn’t the only thing that’s collapsing — investment fund manager and financial analyst Dave Kranzler is warning that Puerto Rico’s recent bond default is merely a preview of what’s to come in the US<\/a>. Phew! I’m just glad it’s nothing serious. Say … Does anybody know if the Dodgers are on television this weekend?<\/p>\n

Debit:<\/strong><\/span> More good news: WalMart announced that it’s cutting 7000 jobs<\/a>. Even better, they’re all higher-paying backroom management positions, which means there should still be plenty of WalMart greeter jobs available for laid off US manufacturing workers. I know, right? Obviously, it’s morning in America<\/a> again.<\/p>\n

Credit:<\/strong><\/span> Meanwhile, the stock market continues its miraculous levitation act<\/a>.<\/p>\n

Credit:<\/strong><\/span> Those who follow the financial markets closely understand it’s a sham. Even highly-respected financial manager Bill Gross now admits that, “The Fed has mastered the art of market manipulation<\/a>.” Yes, he actually said that last week. And Gross isn’t just talking about the stock market — it’s all<\/em> financial markets.<\/p>\n

Debit:<\/strong><\/span> The sad truth is, those manipulated financial markets are just another sign of society’s mass escape from reality<\/a> in seemingly every aspect of life. Today, down is up, black is white and bad is good — and those who dare to point that out are routinely ridiculed. Or worse.<\/p>\n

Debit:<\/strong><\/span> The proof is in the pudding — a recent Deutsche Bank study found that central banks are currently responsible for 40% of the “value” of the S&P<\/a>; that is, 100% of the gains since 2012. Incredibly, there are plenty of folks out there who don’t see a problem with that. Well … at least as long as the profits keep rolling in.<\/p>\n

Credit:<\/strong><\/span> Meanwhile, the Fed’s meeting at Jackson Hole<\/a> last week resulted in nothing significant. According to John Embry, who is the chief investment strategist at Sprott Asset Management, “That’s not surprising because the very people who got the world into this mess have no idea what to do now other than produce bogus economic statistics, while manipulating markets and making absurd statements.”<\/p>\n

Credit:<\/strong><\/span> Financial analyst Bill Holter says there’s a good reason why the system is being gamed: “If gold and silver weren’t suppressed, could we have 0% interest rates, or the buying power that fiat currencies currently afford, or stocks at many multiples of book value and 20+ times earnings? No, we’d already be living in a very different world — and one that will certainly arrive when the rigging finally fails<\/a>.”<\/p>\n

Credit:<\/strong><\/span> The bottom line is that the Fed and the rest of the world’s central banks are desperately trying to keep confidence alive<\/a> in a fiat currency system that is in its death throes. (Psst. They’re failing.)<\/p>\n

Credit:<\/strong><\/span> In fact, savers around the world have already lost faith in the banking system, as evidenced by a 25% increase in home safe sales<\/a> across Germany since 2014 — and a doubling of home safe sales<\/a> in Japan from the previous year.<\/p>\n

Credit:<\/strong><\/span> So … what will economic collapse look like<\/a>? I suspect it will be a tough slog for awhile — but it won’t be the end of the world. In fact, over the long run it’s the best thing that could happen.<\/p>\n

Credit:<\/strong><\/span> To be sure, the most immediate — and important — change would be that reality would return to the markets and interest rates would return to a level that discourages wasteful malinvestment. And that’s bad news for grossly unprofitable companies<\/a> like Tesla and Twitter<\/a> that only survive because of government subsidies or cheap loans.<\/p>\n

Credit:<\/strong><\/span> More importantly (to paraphrase a Zero Hedge reader<\/a>) savers would regain their rightful place in the world of capitalism and be paid appropriately for their prudence — but the biggest change of all will be that everyone<\/em> will finally rediscover the true value of productive labor. Amen. And Happy Labor Day.<\/p>\n

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

It’s probably no surprise that the average price of new cars and SUVs is at an all-time high in 2016:<\/p>\n

$33,845<\/strong><\/span><\/span> The average sale price of a new car or SUV this year.<\/p>\n

3.5<\/strong><\/span><\/span> Percentage price increase of a new car over the previous year.<\/p>\n

$30,000<\/strong><\/span><\/span> Value of the average car loan in 2016.<\/p>\n

$1287<\/strong><\/span><\/span> Average mark-up for a car with a backup camera, rear-parking sensor, and adaptive headlights.<\/p>\n

42<\/strong><\/span><\/span> Percentage of people who spent less than $20,000 on their last new car.<\/p>\n

16<\/strong><\/span><\/span> Percentage of people who spent more than $40,000 on their last new car.<\/p>\n

Source: Time<\/a><\/em><\/p>\n

Insider Notes: If the US Has a Debt Problem, Why Isn’t Inflation Rampant?<\/strong><\/p>\n

Hey! You need to be an Insider to view this section! If you’d like to join, please click “Insider Membership” at the top of my blog page.<\/em><\/p>\n

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

How much was your electricity bill last month?<\/p>\n