{"id":39508,"date":"2016-10-15T05:15:52","date_gmt":"2016-10-15T12:15:52","guid":{"rendered":"https:\/\/lenpenzo.com\/blog\/?p=39508"},"modified":"2016-10-17T20:15:56","modified_gmt":"2016-10-18T03:15:56","slug":"black-coffee-are-we-in-utopia-yet","status":"publish","type":"post","link":"https:\/\/lenpenzo.com\/blog\/id39508-black-coffee-are-we-in-utopia-yet.html","title":{"rendered":"Black Coffee: Are We In Utopia Yet?"},"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

Thomas More’s Utopia<\/em> was not a recommendation. It was a warning.<\/p><\/blockquote>\n

— A.E. Samaan<\/p>\n

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

Debit:<\/strong><\/span> For months now, asset classes have been moving in a very narrow sideways pattern<\/a>; somewhat ironically, such sustained paralysis is extremely rare and signals a market that is full of confusion.<\/p>\n

Credit:<\/strong><\/span> In fact, as Jeffrey P. Snyder of Alhambra Investment Partners notes, as companies’ earnings continually fail to meet expectations on a quarterly basis, “The market appears to be waiting<\/a> for earnings to ‘correct’ rather than prices.”<\/p>\n

Debit:<\/strong><\/span> And as economic growth expectations continue to plumb new lows, those expected earnings aren’t anywhere on the horizon — despite government data showing that initial jobless claims have fallen to their lowest level in 53 years. Sure<\/em> they have. Something is definitely rotten<\/a> in Denmark.<\/p>\n

Credit:<\/strong><\/span> Meanwhile, this week governor Mark Dayton (D-Minnesota) said Obamacare is “no longer affordable<\/a> to increasing numbers of people.” No, really. Psst. Hey, Governor … it was never<\/em> affordable.<\/p>\n

Credit:<\/strong><\/span> Actually, as the Utopian economics behind Obamacare smash into the block wall of stark reality, insurance companies are discovering the “Affordable” Healthcare Act isn’t even affordable for them — so they’re bailing out. As a result, more than one million people are losing their plans<\/a> next year. Forward!<\/p>\n

Debit:<\/strong><\/span> The truth is, Obamacare is not a transfer of wealth so much as it is a transfer of insurance, where the government steals insurance benefits from the working class and pass them along to the dependent class. The end result: increased costs and fewer benefits<\/a> for the self-reliant people who foot the bill for everyone else. What’s not to like about that?<\/p>\n

Debit:<\/strong><\/span> Of course, with almost 70% of Americans having less than $1000<\/a> in their savings account, I suspect most people with Obamacare couldn’t afford to pay the absurd healthcare deductibles anyway. The big takeaway here being that health insurance isn’t the same thing as healthcare.<\/p>\n

Debit:<\/strong><\/span> It’s not just Obamacare that was built on the back of Utopian economic principles; government pensions are too. Most are so badly underfunded<\/a> now that it will be almost impossible for them to recover without massive benefit cuts, humongous tax hikes and\/or a federal bailout. The good news is at least Social Security is still financially rock solid. Oh, wait<\/a> …<\/p>\n

Debit:<\/strong><\/span> The US isn’t the only country in debt up to its eyeballs — the world is so deep in debt it has little appetite for more<\/a>. For its part, the IMF — also known as the central bank to the world’s central banks — recently warned that because global debt is now $152 trillion and 225% of global GDP, an unprecedented financial crisis may be just around the corner. Ya think?<\/p>\n

Debit:<\/strong><\/span> As for the IMF’s solution, the answer is really quite simple: issue even more<\/em> debt<\/a>! Okay, Scotty … you can beam me up now.<\/p>\n

Debit:<\/strong><\/span> For those of you keeping score at home, financial analyst Bill Holter says<\/a> that $152 trillion debt edifice is currently supported by just $2 trillion of central bank gold. Yes, yes; since the central banks can print fiat currency to make up the difference, this isn’t a problem — well … until confidence evaporates. (And in case you haven’t noticed, it’s in the process of evaporating now.)<\/p>\n

Credit:<\/strong><\/span> One thing is certain: When the central banks’ fragile and failing house of fiat does collapse, they’ll have to sharply revalue their gold to a much higher level — or grab picks and shovels and start digging for more. I think you know which way the bankers will go.<\/p>\n

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

Samsung announced this week that it would permanently stop production and sales of its Galaxy Note 7 smartphones after a spate of battery-related explosions and fires:<\/p>\n

1,000,000<\/strong><\/span><\/span> Number of Note 7 smartphones sold.<\/p>\n

2,500,000<\/strong><\/span><\/span> Number of Note 7 smartphones that have been officially recalled.<\/p>\n

92<\/strong><\/span><\/span> Reports of batteries overheating prior to the recall.<\/p>\n

55<\/strong><\/span><\/span> Reports of property damage prior to the recall.<\/p>\n

26<\/strong><\/span><\/span> Reports of burns prior to the recall.<\/p>\n

994<\/strong><\/span><\/span> Southwest airlines flight that was evacuated on October 5th after a Note 7 phone caught fire.<\/p>\n

7.5<\/strong><\/span><\/span> Percentage drop in Samsung’s share price after the recall announcement.<\/p>\n

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

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

Which of Mother Nature’s furies do you fear the most?<\/p>\n