{"id":53966,"date":"2019-03-30T02:15:08","date_gmt":"2019-03-30T09:15:08","guid":{"rendered":"https:\/\/lenpenzo.com\/blog\/?p=53966"},"modified":"2019-04-02T07:18:05","modified_gmt":"2019-04-02T14:18:05","slug":"black-coffee-30-mar-2019","status":"publish","type":"post","link":"https:\/\/lenpenzo.com\/blog\/id53966-black-coffee-30-mar-2019.html","title":{"rendered":"Black Coffee: The Natives Are Getting Restless"},"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

I hope everybody had a great week. I know I did. Of course, I love weekends even better, so let’s dig right in and then I’ll get mine started.<\/p>\n

The corruption of the best things gives rise to the worst.<\/em><\/p><\/blockquote>\n

— David Hume<\/strong><\/p>\n

You will not be punished for your anger, you will be punished by your anger.<\/em><\/p><\/blockquote>\n

— Buddha<\/strong><\/p>\n

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

Debit:<\/strong><\/span> Stop me if you’ve heard this before: 48% of Americans who are 55 and older have nothing<\/a> saved in a 401(k) or IRA. That’s right; zero. Nada. Zilch. Zippo. The good news is two in five households do<\/strong><\/em> have access to a pension — assuming those stay solvent. On the other hand, 29% of older Americans had neither a pension, or<\/strong><\/em> assets in a 401(k) or IRA account. Yikes.<\/p>\n

Debit:<\/strong><\/span> On a related note, the Fed has raised its benchmark rate from 0.25% to 2.5%, but US regional banks are still raping customers<\/a> with paltry saving account payouts; on average, just 0.05%. Uh huh. It’s even worse at the big banks: Citi pays 0.04%, and JP Morgan offers 0.01%. So if you consider actual inflation<\/a> — not the manipulated CPI rate — then real saving account interest rates are close to negative<\/strong><\/em> 10%. #bendoversuckers<\/p>\n

Credit:<\/strong><\/span> Speaking of inflation, Bill Fleckenstein asks: “Can somebody stop these idiot central bankers<\/a> from misusing the English language? They say they want more inflation; no one wants more inflation. With inflation comes nothing but misery. No one minds when product prices drop. What they mean when they say they don’t want deflation is they don’t want a depression.” Then again, people in hell want ice water too.<\/p>\n

Debit:<\/strong><\/span> The Fed may not want a depression, but the odds of a recession are certainly growing. Why is that, you ask? Well .. it’s because, for the first time since 2007, there is now an inversion of the 3-month-10-year curve<\/a>. Such an inversion has occurred six times over the past 100 years or so, and a recession followed shortly thereafter every single time. But, hey … that’s probably just a quirky coincidence.<\/p>\n

Debit:<\/strong><\/span> Meanwhile, the US Treasury Department reported this week that the government ran a budget deficit of $234 billion in February — that’s the biggest monthly shortfall on record<\/a>. And it is all the more remarkable considering that this is during a so-called economic expansion. If you think the deficits are bad now<\/strong><\/em>, just wait until the next official recession hits.<\/p>\n

Credit:<\/strong><\/span> During the next downturn, US funding requirements will skyrocket, as will interest on debt payments — and wealth inequality will only continue to get worse too, which is why Sven Henrich is asking if there is, “Any wonder why people are pissed off<\/a> and political movements are starting to gravitate toward redistribution?” It’s true, folks. People are<\/em><\/strong> pissed. And if you don’t believe that<\/em><\/strong>, then how do you explain this?<\/strong><\/em><\/p>\n