{"id":47475,"date":"2018-02-24T04:15:13","date_gmt":"2018-02-24T12:15:13","guid":{"rendered":"https:\/\/lenpenzo.com\/blog\/?p=47475"},"modified":"2023-02-18T17:02:37","modified_gmt":"2023-02-19T01:02:37","slug":"black-coffee-24-february-2018","status":"publish","type":"post","link":"https:\/\/lenpenzo.com\/blog\/id47475-black-coffee-24-february-2018.html","title":{"rendered":"Black Coffee: Why Hyperinflation Ain’t All Bad"},"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

Another glorious week comes to an end. Off we go …<\/p>\n

“All deception in the course of life is indeed nothing else but a lie reduced to practice.”<\/em><\/p><\/blockquote>\n

— Robert Southey<\/strong><\/p>\n

“Uncertainty is no virtue when the facts are clear, and ambiguity is mere obfuscation when more precise terms are applicable.”<\/em><\/p><\/blockquote>\n

— Julian Baggini<\/strong><\/p>\n

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

Debit:<\/strong><\/span> For those of you who paid $19,203 at the bitcoin price peak last December, I have good news and bad news. The good news is bitcoin’s two-month slide has turned into a bit of a bounce<\/a>, as the cryptocurrency ended the week up almost 1%. The bad news is that bitcoins are now only fetching $10,000 or so on the open market. Oops.<\/p>\n

Debit:<\/strong><\/span> Last week I told you that interbank lending has dropped dramatically. In fact, after falling 80% (!) last month, interbank loans are now at their lowest level since 1973, suggesting that the banks no longer trust each other; the same phenomenon occurred prior to the Great Financial Crisis of 2008. Curiously, the Fed has now decided that they’ll no longer be tracking interbank lending<\/a>. Just a coincidence, I’m sure.<\/p>\n

Credit:<\/strong><\/span> On a related note, technical analyst Clive Maund points out, “The central banks have gotten away with a rising bond market, rising stock market, and low interest rates, thanks to allowing uncontrolled expansion of debt and derivatives — but they’re out of time<\/a>, which is what the bond market drop and consequent plunge in stocks is signaling.”<\/p>\n

Credit:<\/strong><\/span> Meanwhile, Peter Schiff says that rising interest rates reflect bigger debt<\/a> — not faster growth. He also warns that a continued decline in both the dollar and bonds — which have been underway for more than a year now — will ignite inflation, increase mortgage rates, raise borrowing costs, and expand federal deficits. Okay. But, other than that, I’m sure the economy will be just fine. Who’s with me?<\/p>\n