{"id":55220,"date":"2019-06-15T02:15:30","date_gmt":"2019-06-15T09:15:30","guid":{"rendered":"https:\/\/lenpenzo.com\/blog\/?p=55220"},"modified":"2020-02-22T17:41:24","modified_gmt":"2020-02-23T01:41:24","slug":"black-coffee-15-jun-2019","status":"publish","type":"post","link":"https:\/\/lenpenzo.com\/blog\/id55220-black-coffee-15-jun-2019.html","title":{"rendered":"Black Coffee: Addressing the Elephant in the Room"},"content":{"rendered":"

\"\"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 is having a nice relaxing Father’s Day weekend — especially all you dad’s out there. I know I am! Okay, away we go …<\/p>\n

The best way to destroy the capitalist system is to debauch the currency.<\/em><\/p><\/blockquote>\n

— Vladimir Lenin<\/strong><\/p>\n

Those people who think they know everything are a great annoyance to those of us who do.<\/em><\/p><\/blockquote>\n

— Isaac Asimov<\/strong><\/p>\n

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

Credit:<\/strong><\/span> What do you say we start off with some really<\/em><\/strong> good news? This week, the People’s Socialist Paradise of Venezuela announced that its inflation rate slipped below 1 million percent<\/a>. Hooray! Unfortunately, with their printing presses in overdrive, the pullback is almost assuredly only temporary — and with inflation still running at an astounding 815,945%, prices are still doubling<\/a> almost daily<\/strong><\/em>. Forward, amigos!<\/p>\n

Debit:<\/strong><\/span> Did you see this? We all know that numbers are a big part of economics and personal finance. With that in mind, a researcher recently asked 3200 Americans if their kids should be taught Arabic numerals<\/a> in school; 56% said no. Another 15% had no opinion. I know. Not surprisingly, the New York Times<\/em><\/a> chalked up those head-scratching results to racism. Rather, I think it primarily reflects the quality of our education system.<\/p>\n

Debit:<\/strong><\/span> Here’s another head scratcher: Despite his claims that the US is supposedly enjoying “the greatest economy ever<\/a>,” the President continues to badger the Fed<\/a> for lower interest rates. Hmm. At some point, you would think a booming economy would require higher<\/strong><\/em> interest rates to keep inflation in check. But what do I know? (Don’t answer that.)<\/p>\n

Credit:<\/strong><\/span> Maybe the President is worried about the bond inversions<\/a> in both Europe and the US. Dave Kranzler says that’s a signal that the elites know something has already busted that could lead to another major financial crisis; with its stock now under $7, he suspects it’s Deutsche Bank. Kranzler also speculates that Deutsche Bank would already be sleeping with the fishes if not for direct monetization by the ECB<\/a>. Yikes.<\/p>\n

Debit:<\/strong><\/span> Deutsche Bank’s dwindling stock price notwithstanding, Tavi Costa pointed out this week that the Commodities-to-S&P-500 ratio just hit its lowest point since 1969. That should be no surprise considering that the nominal<\/strong><\/em> price of silver is still roughly 67% lower today than it was in 1980. How many other products can say that? Say … do ya think there’s a potential opportunity there? Yeah. Me too:<\/p>\n

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Commodities-to-S&P 500 ratio just reached a fresh 50-year low!<\/p>\n

Amazes me how many ways stocks look absurdly overvalued at the likely top of the business cycle. pic.twitter.com\/HSuMBEYMZ8<\/a><\/p>\n

Otavio (Tavi) Costa (@TaviCosta) June 11, 2019<\/a><\/p><\/blockquote>\n