{"id":60637,"date":"2020-04-25T02:15:01","date_gmt":"2020-04-25T09:15:01","guid":{"rendered":"https:\/\/lenpenzo.com\/blog\/?p=60637"},"modified":"2022-06-30T08:37:44","modified_gmt":"2022-06-30T15:37:44","slug":"black-coffee-24-apr-2020","status":"publish","type":"post","link":"https:\/\/lenpenzo.com\/blog\/id60637-black-coffee-24-apr-2020.html","title":{"rendered":"Black Coffee: Less Than Nothing"},"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

We’re now six weeks into the Greatest Depression and the markets are clearly broken beyond repair, as the events of this week so vividly showed. So let’s get to right the commentary …<\/p>\n

When a man has nothing of his own, and owes 50 crowns, it is certain that he has 50 crowns less than nothing, for if any one were to make him a present of 50 crowns to pay his debts, he would still be only at the point of nothing — though really richer than before. Therefore, as positive numbers are incontestably greater than nothing, negative numbers are less than nothing.<\/em><\/p><\/blockquote>\n

— Mark Napier<\/strong><\/p>\n

Every negative quantity standing by itself is a mere creature of the mind, and those which are met with in calculations are only mere algebraic forms, incapable of representing anything real and effective.<\/em><\/p><\/blockquote>\n

— Lazare Carnot<\/strong><\/p>\n

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

Debit:<\/strong><\/span> Did you see this? On Monday, the price for a barrel of West Texas Intermediate crude oil closed at negative<\/strong><\/em> $37.56<\/a>. In other words, oil producers and speculators had to pay their customers to take the oil off their hands! No, really.<\/p>\n

Credit:<\/strong><\/span> Of course, aside from being catastrophic for the oil industry, this is another nail in the petrodollar’s coffin<\/a>. As Bill Holter notes, “The dollar has been supported from oil revenues being reinvested into Treasuries since 1973. Yes, the Fed will step in to replace the demand but this is outright monetization and anyone with half a brain knows where this will end up.” Yep; a monetary conflagration. (See? I do<\/strong><\/em> have half a brain.)<\/p>\n

Credit:<\/strong><\/span> By the way, Holter also notes that, “Negative interest rates and oil prices make no sense whatsoever<\/a>. For those who believe the Plunge Protection Team<\/a> can rig all prices all the time, what’s happening shows there are loose ends and unintended consequences not previously thought of. They’ve lost control of the car and have only the gas pedal left as the brakes failed and the steering wheel is unattached.” In other words — kinda like this:<\/p>\n