{"id":48070,"date":"2018-03-31T04:15:51","date_gmt":"2018-03-31T11:15:51","guid":{"rendered":"https:\/\/lenpenzo.com\/blog\/?p=48070"},"modified":"2020-05-17T14:19:25","modified_gmt":"2020-05-17T21:19:25","slug":"black-coffee-31-march-2018","status":"publish","type":"post","link":"https:\/\/lenpenzo.com\/blog\/id48070-black-coffee-31-march-2018.html","title":{"rendered":"Black Coffee: Bitcoins, Bolivars and Other Rotten Easter Eggs"},"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

Let’s get right to it, shall we?<\/p>\n

“Those have a short Lent who owe money to be paid at Easter.”<\/em><\/p><\/blockquote>\n

— Benjamin Franklin<\/strong><\/p>\n

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

Debit:<\/strong><\/span> Bitcoin investors who filled their Easter baskets anywhere near its $19,000 apex last December are probably thinking they got stuck with a bunch of rotten eggs<\/a> right now. The plunging cryptocurrency closed the first quarter of 2018 at a price south of $7000<\/a>. That’s a 60% decline in a little more than three months. Ouch. Oh, I know … Just HODL, baby<\/a>!<\/p>\n

Credit:<\/strong><\/span> After a couple of frustrating postponements, China’s new crude oil futures<\/a> exchange got off to a roaring start<\/a> on Monday, with brisk contracts trading for September and the months beyond. In fact, more than 62 million barrels of oil changed hands on Monday for a notional volume approximately 27 billion yuan — that’s the equivalent of $4 billion. Not bad!<\/p>\n

Debit:<\/strong><\/span> One thing is certain: China’s crude futures exchange threatens the international primacy of the dollar<\/a>. Remember, the petrodollar is backed by Treasuries, which are used to fuel US deficit spending. Take that away, and America is in trouble because dollars that would normally be kept off shore by foreign nations to buy oil are more likely to return to America, thereby stoking much higher inflation here.<\/p>\n

Debit:<\/strong><\/span> By the way, the timing couldn’t be worse; the United States sold roughly $294 billion of debt<\/a> this week — that’s the highest weekly borrowing binge since the 2008 financial crisis. On second thought, meh. Million, billion … what’s a few more zeroes when the National Debt<\/a> is $21 trillion?<\/p>\n

Debit:<\/strong><\/span> Meanwhile, the Socialists in Venezuela outlined their monetary “rescue plan” to end the hyperinflation that has completely collapsed their economy. As the Washington Post notes, “In a country where a dozen eggs costs 250,000 bolivars amid worsening inflation, President Nicolas Maduro wants to chop three zeros off the currency, arguably bringing the price for those eggs down to 250.” Heh. No, really<\/a>. Forward!<\/p>\n

Credit:<\/strong><\/span> Henri Falcon, a former governor who is running against Maduro in the next election, is proposing a far more radical fix: chop four<\/em> zeroes off the price. Just kidding! Actually, Falcon wants to follow in the footsteps of Ecuador, Panama and Zimbabwe by dollarizing<\/a> the Venezuelan economy. He claims it would revive their moribund socialist economy by preventing the printing of new bolivars. (Psst. And he’s correct.)<\/p>\n

Credit:<\/strong><\/span> In other news, strong stock-market performance and rising real-estate valuations increased the ranks of American millionaires<\/a> by 700,000 people. Then again, that’s really not so impressive when you realize that when the Fed prints trillions of dollars and then hands it to Wall Street, there’s always going to be a lot of new millionaires. If you think about it, everybody in Venezuela today is a “millionaire” too.<\/p>\n

Debit:<\/strong><\/span> Speaking of Fed-minted American millionaires — or should I say, billionaires? — Simon Black says the recent $50 billion (!) pay package Tesla shareholders approved<\/a> for CEO Elon Musk indicates that “Tesla, without any doubt, is on the verge of bankruptcy.” Perhaps stockholders are beginning to feel the same way — Tesla’s stock price has plunged more than 25%<\/a> in the last month. Oops.<\/p>\n

Credit:<\/strong><\/span> Says Black: “As a reality check<\/a>, Tesla is worth twice as much as Ford, yet Ford made six million cars last year at a $7.6 billion profit while Tesla made 100,000 cars at a $2 billion loss. Ford also has $12 billion in cash for ‘a rainy day’ while Tesla will likely run out of money in three months. I’ve never seen anything so absurd in my career.”<\/em> Well, Simon … I don’t know about that. Apparently, you never saw this<\/em>:<\/p>\n