{"id":60778,"date":"2020-05-02T02:15:36","date_gmt":"2020-05-02T09:15:36","guid":{"rendered":"https:\/\/lenpenzo.com\/blog\/?p=60778"},"modified":"2020-05-04T18:16:14","modified_gmt":"2020-05-05T01:16:14","slug":"black-coffee-2-may-2020","status":"publish","type":"post","link":"https:\/\/lenpenzo.com\/blog\/id60778-black-coffee-2-may-2020.html","title":{"rendered":"Black Coffee: A Banquet of Consequences"},"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

For as bad as the state of the economy and the monetary system that supports it is at this very moment in time, the real trials still lie before us. Sadly, I know most people have absolutely no idea about the financial challenges that almost everyone will be forced to confront in the coming months — if not years.<\/p>\n

If, before every action, we were to begin by weighing the consequences; first the immediate consequences, then the probable, then the possible, then the imaginable ones, we should never move beyond the point where our first thought brought us to a halt.<\/em><\/p><\/blockquote>\n

— Jose Saramago<\/strong><\/p>\n

Cheer up; the worst is yet to come!<\/em><\/p><\/blockquote>\n

— Mark Twain<\/strong><\/p>\n

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

Debit:<\/strong><\/span> Did you see this? According to Gallup, nearly one in three Americans<\/a> have experienced a temporary layoff, permanent job loss, reduction in hours, or reduction of income as a result of the COVID-19 shut down, and 18% have experienced more than one of these disruptions. Sadly, the real<\/strong><\/em> economic impacts of crippling the economy for a virus with a death rate essentially equivalent to the flu<\/a> haven’t been felt yet — and won’t be for months.<\/p>\n

Credit:<\/strong><\/span> If there is any good news at all, it’s that the malaise has resulted in lower US fuel prices. In fact, gasoline is selling at its lowest price in a decade<\/a> — and in some cases, even longer. Right now, Oklahoma stations have the cheapest average gas prices<\/a> at $1.35 per gallon, with Wisconsin not far behind. Not surprisingly, Hawaii and the People’s Socialist Utopia of California are bringing up the rear at $3.06 and $2.74, respectively.<\/p>\n

Credit:<\/strong><\/span> Of course, those low fuel prices are, as the following chart shows, due to the breathtaking plunge in US oil consumption. It turns out that shutting down the economy — not just nationally, but around the world — has led to a global oil supply glut; so much so that the entire planet is suddenly having trouble finding places to store the world’s excess crude<\/a>. Imagine that.<\/p>\n

\"\"

Does this look like the sign of an ordinary recession to you?<\/p><\/div>\n

Debit:<\/strong><\/span> And while everyone loves low gas prices, there’s a looming downside too: The entire oil production industry is shutting down<\/a>. After all, why should they stay in business if they have to pay buyers to hold the oil they’re producing? Again, while everything seems fine now, the ramifications of stalled production and the ensuing lost jobs won’t be felt for months, which is why Shell Oil cut its dividend<\/a> to shareholders this week — for the first time since World War II. Hey … speaking of lost jobs:<\/p>\n