{"id":57786,"date":"2019-11-16T02:15:47","date_gmt":"2019-11-16T10:15:47","guid":{"rendered":"https:\/\/lenpenzo.com\/blog\/?p=57786"},"modified":"2019-11-19T07:13:49","modified_gmt":"2019-11-19T15:13:49","slug":"black-coffee-16-nov-2019","status":"publish","type":"post","link":"https:\/\/lenpenzo.com\/blog\/id57786-black-coffee-16-nov-2019.html","title":{"rendered":"Black Coffee: Beware of False Profits"},"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 see another week has come and gone — so without further ado, let’s get this show on the road.<\/p>\n

(QE<\/a>) eased financial conditions in the past and, so far, looks to be effective again … Lower mortgage rates will make housing more affordable and allow more homeowners to refinance. Lower corporate bond rates will encourage investment. And higher stock prices will boost consumer wealth and help increase confidence, which can also spur spending. Increased spending will lead to higher incomes and profits that, in a virtuous circle, will further support economic expansion.<\/em><\/p><\/blockquote>\n

— Ben Bernanke, Washington Post<\/em> op-ed, 2010<\/strong><\/p>\n

There are some ideas so absurd that only an intellectual could believe them.<\/em><\/p><\/blockquote>\n

— George Orwell<\/strong><\/p>\n

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

Debit:<\/strong><\/span> Did you see this? October was the first month of fiscal 2020, and the US deficit shortfall hit $134 billion — that’s 34% higher than the $100 billion deficit in October 2018. In fact, last month’s deficit was the biggest in five years<\/a> — just shy of the $136.5 billion in October 2015 — and sets the US on the path to surpassing a $1 trillion deficit for the first time in eight years. Imagine that.<\/p>\n

Credit:<\/strong><\/span> Meanwhile, the major stock market indices continued making new all-time highs<\/a> throughout the entire week on their relentless climb to the sun — despite dismal earnings and deteriorating economic data. Why? Well … it’s because the Fed is expanding its balance sheet at the fastest pace<\/a> since the peak of its last round of fradulent money-printing scam better known as quantitative easing (QE).<\/p>\n

Debit:<\/strong><\/span> Needless to say, most other central banks have active money-printing campaigns too, so it’s no wonder stock markets are on a tear. Take the Swiss National Bank (SNB), for example; it has been buying stocks with no regard for price or cost<\/a>. But it doesn’t really matter when you own a printing press and can conjure cash out of thin air — pecuniary subterfuge not much different than this<\/em><\/strong>:<\/p>\n