{"id":39145,"date":"2016-09-17T05:15:44","date_gmt":"2016-09-17T12:15:44","guid":{"rendered":"https:\/\/lenpenzo.com\/blog\/?p=39145"},"modified":"2024-01-27T11:15:09","modified_gmt":"2024-01-27T19:15:09","slug":"black-coffee-a-scatological-look-at-the-real-economy","status":"publish","type":"post","link":"https:\/\/lenpenzo.com\/blog\/id39145-black-coffee-a-scatological-look-at-the-real-economy.html","title":{"rendered":"Black Coffee: A Scatological Look at the Real Economy"},"content":{"rendered":"

\"\"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 dive right in this week …<\/p>\n

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

Credit:<\/strong><\/span> According to the US Census Bureau, median household income rose to $56,516<\/a> in 2015; that’s up a whopping 5.2% from a year earlier — it also marks only the second increase in median income since 2007. Wow!<\/p>\n

Credit:<\/strong><\/span> CNN proudly proclaimed that, “The jump in median income was one of the largest annual increases<\/a> the Census has recorded.” I’ll say; that 5.2% figure is bigger than any wage gains made during the booming 1980s when average GDP growth was more than twice what it is today. Double wow!!<\/p>\n

Debit:<\/strong><\/span> Hey … I know what you’re thinking: If you feel like you missed the party, you’re not alone. But what CNN didn’t<\/em> say was that the data is based upon a new measurement methodology<\/a> implemented by the Census in 2013. Uh huh.<\/p>\n

Debit:<\/strong><\/span> In other words, the income data is just more government bull $#&%<\/a>!<\/p>\n

Credit:<\/strong><\/span> Then again, in this day and age, I’m sure there are more than a few people out there who will say with a straight face that they see nothing strange with the latest government figures. What do you<\/em> think? Take a look:<\/p>\n

\"wages-by-year\"<\/a><\/p>\n

Debit:<\/strong><\/span> If we assume the sharp rise in wages is<\/em> real, then it strongly suggests workers now have the upper hand over desperate employers looking to fill open positions. I hope somebody tells that to all of the homeless people who are currently living in the dozens of tent cities across America<\/a> now.<\/p>\n

Debit:<\/strong><\/span> US economic health may be up for debate, but the rest of the world is definitely struggling. And paper cash is proving to be a critical impediment<\/a> to the oppressive negative interest rate campaign currently being waged by the world’s central banks in order to jump start the global economy. Frankly, their plan is nuttier than squirrel $#&%.<\/p>\n

Debit:<\/strong><\/span> Of course, $#&% happens, and the central banks are eventually going to fail because their debt-based international monetary system is a Ponzi scheme that’s quickly reaching its mathematical limit<\/a>. If they don’t radically overhaul the system, this is where we’re headed — with or without negative rates:<\/p>\n

\"shtf\"<\/a><\/p>\n

Credit:<\/strong><\/span> By the way, central bank PhDs believe negative rates encourage spending — which is probably why investment advisor Mish Shedlock sent this snarky tweet<\/a> last week: “Negative Interest Rate Theory: Supposedly, getting people to buy things they do not need or want will create prosperity!”<\/em> Indeed. Obviously, Mish understands that PhD stands for “Piled higher and deeper.”<\/p>\n

Credit:<\/strong><\/span> It’s also just as obvious why @federalreserve<\/a> and @ECB<\/a> don’t follow him on Twitter.<\/p>\n

Credit:<\/strong><\/span> In Switzerland, the bizarre world of negative rates has resulted in more and more companies taking out insurance policies<\/a> — at an annual rate of $1000 per $1 million — to protect the cash stored in their corporate vaults. In other words: NIRP has turned insurance companies into de facto banks — and fellow competitors too. Oops.<\/p>\n

Debit:<\/strong><\/span> It’s not just big corporations that are trying to protect their cash from negative rates — the little people are too, which is why it’s no coincidence that ivory-tower Harvard academic, Kenneth Rogoff, is making a big push for banning paper currency<\/a> altogether. Again.<\/p>\n

Credit:<\/strong><\/span> However, as the always-eloquent economist Jim Grant points out, “Strip away the technical pretense and what you have is politics. Rogoff wants the government to control your money<\/a>. It’s as simple as that.” That it is, Jim. Unfortunately, it appears as if most people can’t see that. Or maybe they just don’t give a $#&%. If not, they should.<\/p>\n

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

The collapse of South Korea’s Hanjin Shipping, the world’s seventh-largest container carrier, has disrupted global trade networks and driven up freight rates. Here are some key numbers:<\/p>\n

141<\/strong><\/span><\/span> The number of ships Hanjin has. More than half are currently blocked from docking, and four have been seized as of Sept 11.<\/p>\n

$14,000,000,000<\/strong><\/span><\/span> The estimated value of cargo tied up globally while Hanjin ships sit idle outside ports that wont let them in.<\/p>\n

$38,000,000<\/strong><\/span><\/span> The value of goods, mostly TVs and appliances, that Samsung Electronics alone has said it has stuck aboard two Hanjin ships.<\/p>\n

7.8%<\/strong><\/span><\/span> Trans-Pacific trade volume for the U.S. market carried by Hanjin.<\/p>\n

400,000<\/strong><\/span><\/span> The estimated number of containers stranded on Hanjin ships.<\/p>\n

$226,000,000<\/strong><\/span><\/span> Hanjin’s second-quarter operating loss in 2016, on revenue of $1.3 billion.<\/p>\n

$5,500,000,000<\/strong><\/span><\/span> Hanjin’s debts at the end of June 2016.<\/p>\n

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

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

[poll id=\"129\"]<\/code><\/p>\n

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

What is the highest auto insurance deductible on your primary car?<\/p>\n