{"id":42644,"date":"2017-05-06T05:15:54","date_gmt":"2017-05-06T12:15:54","guid":{"rendered":"https:\/\/lenpenzo.com\/blog\/?p=42644"},"modified":"2017-05-08T17:16:42","modified_gmt":"2017-05-09T00:16:42","slug":"black-coffee-a-view-from-the-cuckoos-nest","status":"publish","type":"post","link":"https:\/\/lenpenzo.com\/blog\/id42644-black-coffee-a-view-from-the-cuckoos-nest.html","title":{"rendered":"Black Coffee: A View from the Cuckoo’s Nest"},"content":{"rendered":"

\"\"<\/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

Okay, off we go …<\/p>\n

It’s a question that drives me hazy: am I or are the others crazy?<\/em><\/p><\/blockquote>\n

— Albert Einstein<\/strong><\/p>\n

It’s okay to be crazy, but don’t be insane.<\/em><\/p><\/blockquote>\n

— Sean Combs<\/strong><\/p>\n

I’m crazy, but I’m not stupid.<\/em><\/p><\/blockquote>\n

— Jackie Chan<\/strong><\/p>\n

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

Debit:<\/strong><\/span> Cryptocurrencies continue reaching for the stars; a single, ethereal, Bitcoin ended the week at $1562 — that’s currently 27% more valuable than an ounce of real gold and 95 times more than an ounce of physical silver. Is it just me or am I the only one who’s beginning to think the whole world has gone cuckoo for Cocoa Puffs?<\/p>\n

Credit:<\/strong><\/span> Speaking of cuckoos, in the People’s Socialist Paradise of VenezuelaTM<\/sup>, President Nicolas Maduro proudly ordered a 60% increase<\/a> in the nation’s minimum wage last week. Too bad el Presidente’s<\/em> proletariat comrades are struggling with an inflation rate that’s quickly approaching 2000%. Forward!<\/p>\n

Credit:<\/strong><\/span> Meanwhile, for us Norte Americanos<\/em> here is the States, the value of stocks is higher now than at any time in history<\/a> versus GDP. Hooray! I think.<\/p>\n

Credit:<\/strong><\/span> Wait — it gets even better: The non-farm payroll increased by 211,000 jobs<\/a> in April — although that number isn’t so great when you consider that it takes about 145,000 new jobs<\/a> every month to merely keep up with population growth. Just keepin’ it real, homies.<\/p>\n

Debit:<\/strong><\/span> By the way, the April payroll report is even more<\/em> suspect when you consider that the loony “birth\/death model” — that is, bureaucratic hocus pocus designed to goose employment figures — resulted in a positive adjustment of 255,000 jobs<\/a>. Without that dubious manipulation, the economy actually lost<\/em> 44,000 positions.<\/p>\n

Credit:<\/strong><\/span> Of course, you’ve got to have a screw loose if you think that birth\/death model is going away any time soon. After all, it’s been around for more than two decades — and without it, government officials wouldn’t be able to brag that US jobless claims are at a 43-year low<\/a> as they were last month.<\/p>\n

Debit:<\/strong><\/span> One thing is certain: Those US employment numbers better be as good as the government is reporting. That’s because a recent study by Northwestern Mutual found that 45% of Americans spend up to half their income<\/a> repaying credit card debt. No, really.<\/p>\n

Debit:<\/strong><\/span> With that in mind, I guess it should be no surprise that US households will soon have as much debt<\/a> as they did right before the Great Financial Crisis of 2008. Uh oh.<\/p>\n

Debit:<\/strong><\/span> Then again, Americans aren’t the only ones in debt up to their eyeballs — the US government is too. In fact, the US is going to expand its $20 trillion National Debt by another<\/em> trillion dollars over the next five months<\/a>. Yes, a trillion bucks. Yes, by September’s end.<\/p>\n

Debit:<\/strong><\/span> Hey … Get used to it — the dollar Ponzi scheme<\/a> won’t survive unless the National Debt hits $40 trillion over the next ten years. Er, assuming public confidence in the greenback can actually hold out that long. (Psst. The odds are it won’t.)<\/p>\n

Debit:<\/strong><\/span> To put that gobsmacking, rapid, $1 trillion debt-increase in perspective, think about this: a trillion dollars is a thousand billion — or, if you prefer, a million million<\/a>. Either way, adding that much debt in five short months is outright immoral — not to mention incredibly unfair to our children, who we’re expecting to pick up the tab.<\/p>\n

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

Debit:<\/strong><\/span> Needless to say, there’s a very good reason why the debt is increasing faster than ever: it’s the only way our phony, broken, economy<\/a> can generate growth anymore. Well … that is, assuming you can call 0.2% GDP “growth.”<\/p>\n

Debit:<\/strong><\/span> Unfortunately — or fortunately, depending on your perspective — the Fed has no way out<\/a> of the mess it finds itself in. Oh, sure; they can raise interest rates when the inevitable run on the dollar occurs — but if rates climb above 3.5%, massive defaults would probably follow. And at 5%, servicing the National Debt would cost $1 trillion — that’s more than one-third of current US tax revenue.<\/p>\n

Credit:<\/strong><\/span> Those who said Soviet communism wouldn’t work because it couldn’t<\/em> work were disparaged until the USSR finally imploded. America isn’t any different; ultimately, any economic system anchored by fraud is doomed to fail. The only question is “when?” — which is why economic collapses always come as a surprise<\/a>, even to those who know they’re coming.<\/p>\n

Insider Notes: Why the Dollars In Your Wallet Aren’t Money – They’re Debt<\/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

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

China’s first large jetliner took its maiden flight on Friday. The successful first flight<\/a> is a big deal for China, and a signal that Boeing and Airbus will soon have a key competitor in an aviation market that they currently dominate:<\/p>\n

487,000,000<\/strong><\/span><\/span> The number of domestic and international journeys made last year in China.<\/p>\n

168<\/strong><\/span><\/span> Seats on the new Chinese commercial airliner, known as the C919. The plane will compete with Boeing’s 737 and Airbus’ A320.<\/p>\n

5100<\/strong><\/span><\/span> New airplanes similar in size to the C919 that China will need over the next two decades.<\/p>\n

$1,000,000,000,000<\/strong><\/span><\/span> Estimated cost for China to buy those 5100 planes from a foreign supplier.<\/p>\n

55<\/strong><\/span><\/span> Number of Chinese airlines in operation.<\/p>\n

8<\/strong><\/span><\/span> Nations that have developed large airliners. (US, Russia, Brazil, Canada, UK, France, Germany and China)<\/p>\n

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

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

[poll id=\"162\"]<\/code><\/p>\n

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

Which of these estate-planning options do you have?<\/p>\n