{"id":60035,"date":"2020-03-21T02:15:59","date_gmt":"2020-03-21T09:15:59","guid":{"rendered":"https:\/\/lenpenzo.com\/blog\/?p=60035"},"modified":"2020-03-24T05:06:25","modified_gmt":"2020-03-24T12:06:25","slug":"black-coffee-21-mar-2020","status":"publish","type":"post","link":"https:\/\/lenpenzo.com\/blog\/id60035-black-coffee-21-mar-2020.html","title":{"rendered":"Black Coffee: The Reckoning Is Here"},"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

Here we are, more than a fortnight into the ongoing financial market meltdown. I wish I could say otherwise, but the reckoning is finally here; the piper is at the door and it’s time to pay up.<\/p>\n

We’re now entering into an economic depression that I believe will ultimately be deeper than the Great Depression that kicked off in 1929. Returning to a monetary system based on sound money is the only way we’ll get out of the current mess that has taken us five decades to get into. The sooner our politicians can make that happen, the sooner our prosperity — and previous standard of living — will return.<\/p>\n

A financial panic is a very bad thing, but a government panic can do far greater damage in a far shorter time.<\/em><\/p><\/blockquote>\n

— Tom McClintock<\/strong><\/p>\n

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

Credit:<\/strong><\/span> This week’s kick-off question is posed by macroeconomics guru par excellence<\/em>, Bill Holter: “What happens when the most over-levered global economy in history shuts down for a month or more? Global bankruptcy. It’s over folks; the system is coming apart at the seams and the promises’ are being laid bare. Which promises? All<\/strong><\/em> promises. This is not a drill folks — Humpty Dumpty has fallen<\/a> and the supply of super glue is gone.” Egg-zactly. Ahem.<\/p>\n

Debit:<\/strong><\/span> Did you see this? Last week YahooFinance claimed that “gold has been stripped of its safe haven status<\/a>.” Sure<\/strong><\/em> it has. Folks: Don’t be misled by these clueless financial journalists posing as macroeconomic “experts” — they wouldn’t recognize Exter’s pyramid<\/a> if it smacked them upside their empty skulls. Paper gold contracts have never<\/strong><\/em> been a safe haven — but physical gold will always<\/strong><\/em> be a secure port that provides shelter from any<\/strong><\/em> monetary storm.<\/p>\n

Debit:<\/strong><\/span> Speaking of dubious safe havens, despite massive cash injections from the Fed, the US Treasury market is no longer functioning<\/a> properly. In fact, recent Treasury market moves have been staggering, and belie just how illiquid they’ve become. On Monday, 30-year yields had the biggest intra-day decline since October 1998. Folks, that’s what happens when the wheels come off the clown car known as the global financial system. Let’s go to the tape:<\/p>\n