{"id":56083,"date":"2019-08-03T02:15:23","date_gmt":"2019-08-03T09:15:23","guid":{"rendered":"https:\/\/lenpenzo.com\/blog\/?p=56083"},"modified":"2019-08-06T06:27:08","modified_gmt":"2019-08-06T13:27:08","slug":"black-coffee-3-aug-2019","status":"publish","type":"post","link":"https:\/\/lenpenzo.com\/blog\/id56083-black-coffee-3-aug-2019.html","title":{"rendered":"Black Coffee: Overdosing on Crazy Pills"},"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

Well … another glorious weekend is upon us, so let’s get this party started, shall we?<\/p>\n

The lunatics are running the asylum. Debt has become so highly priced, locking in guaranteed losses is now seen as ‘wisdom.’ In fact, negative interest rates mean the world now values debt more than money. If you think this through, it means ‘everything is worth nothing.’<\/em><\/p><\/blockquote>\n

— Bill Holter<\/strong><\/p>\n

Radical monetary policy begets more radical monetary policy.<\/em><\/p><\/blockquote>\n

— Jim Grant<\/strong><\/p>\n

A nation without a central bank is like a cockroach without a cell phone.<\/em><\/p><\/blockquote>\n

— Franklin Sanders<\/strong><\/p>\n

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

Credit:<\/strong><\/span> Well … it turns out that last quarter’s GDP was far stronger than expected<\/a>, with US households going on a massive spending binge. In all, consumers were responsible for 138% of the 2.1% quarterly GDP print. Last quarter, personal consumption was up 4.3% — that’s the strongest rate in five years. Hooray!<\/p>\n

Credit:<\/strong><\/span> However, market analyst Sven Henrich wonders if last quarter’s spending surge was due to something else<\/strong><\/em>: credit card debt, which rose 8% (vs. 1.5% in Q1) to a new all-time high. He says, “With 78% of US workers living paycheck to paycheck, that’s called ‘living on the edge<\/a>‘ — and warns of a coming storm.” Uh huh. By the way … now you know why Sven never gets invited to any neighborhood parties.<\/p>\n

Debit:<\/strong><\/span> Then again, it’s not just US consumers who are saddled with record debt. The federal government is drowning in red ink too — which is why this week the US Congress suspended the debt ceiling<\/a> until August 2021. Congress also lifted spending caps that would otherwise have put a yoke on its relentlessly-expanding federal agency and military budgets. Yes, yes …. we’ve all seen this movie many times before:<\/p>\n