{"id":50766,"date":"2018-09-08T04:15:07","date_gmt":"2018-09-08T11:15:07","guid":{"rendered":"https:\/\/lenpenzo.com\/blog\/?p=50766"},"modified":"2023-05-12T10:32:09","modified_gmt":"2023-05-12T17:32:09","slug":"black-coffee-8-september-2018","status":"publish","type":"post","link":"https:\/\/lenpenzo.com\/blog\/id50766-black-coffee-8-september-2018.html","title":{"rendered":"Black Coffee: Gold and the Unraveling Financial System"},"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 this week …<\/p>\n

“A system of capitalism presumes sound money, not fiat currency manipulated by a central bank.” <\/em><\/p><\/blockquote>\n

— Ron Paul<\/strong><\/p>\n

“The United States can pay any debt it has because we can always print currency to do that. So there is zero probability of default.”<\/em><\/p><\/blockquote>\n

— Alan Greenspan<\/strong><\/p>\n

“There is no pot of gold at the end of the rainbow.”<\/em><\/p><\/blockquote>\n

— Karen Black<\/strong><\/p>\n

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

Debit:<\/strong><\/span> How much has the richest Americans saved<\/a> for a rainy day? Well … a new study found that the median savings for the top 1% of US households as measured by income is currently $1.1 million. To put that in context, the bottom 20% of households have zero saved for an emergency — or anything else for that matter. Yikes.<\/p>\n

Debit:<\/strong><\/span> Did you see this? Although Venezuela’s new “sovereign bolivar” was released just a few short weeks ago to stop its rampant hyperinflation at the rate of 60 to the US dollar, it’s now trading at 87 to the dollar<\/a>. Oh wait … that was yesterday. It takes 91 bolivars to buy a buck today — meaning the new hyperinflation-busting currency has already lost a third of its value. In less than a month. Forward, amigos!<\/p>\n

Debit:<\/strong><\/span> In fact, inflation in Venezuela broke the 200% barrier for a single month in August — that means prices have skyrocketed 35,000%<\/a> since January and 200,000% year-over-year. But wait … it gets better: The International Monetary Fund predicts Venezuela’s annual inflation rate will reach one million percent (!) by the end of this year.<\/p>\n

Credit:<\/strong><\/span> Of course, people almost instinctively take an interest in gold during currency crises because it’s real money<\/em>, with tangible value and zero counterparty or default risks — unlike the easily-debauched fiat paper currencies issued today by central banks and governments around the world. And that makes gold the ultimate form of wealth insurance.<\/p>\n

Credit:<\/strong><\/span> Gold has reliably stored people’s wealth for 5000 years — so it’s no surprise that the Venezuelan government recently introduced a national gold savings plan<\/a> for its citizens, most of whom have seen their life savings completely evaporate via hyperinflation.<\/p>\n

Debit:<\/strong><\/span> Unfortunately, for the people of Venezuela, acquiring gold now<\/em> is a tad too late — equivalent to buying homeowner’s insurance after<\/em> the house has been completely gutted by fire. Then again, ignorance regarding the value of precious metals isn’t limited to South America’s socialist paradise — it’s clearly an American problem too:<\/p>\n