{"id":62230,"date":"2020-08-01T02:15:40","date_gmt":"2020-08-01T09:15:40","guid":{"rendered":"https:\/\/lenpenzo.com\/blog\/?p=62230"},"modified":"2022-03-28T09:00:04","modified_gmt":"2022-03-28T16:00:04","slug":"black-coffee-1-aug-2020","status":"publish","type":"post","link":"https:\/\/lenpenzo.com\/blog\/id62230-black-coffee-1-aug-2020.html","title":{"rendered":"Black Coffee: All That Glitters"},"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

Let’s get right to this week’s financial commentary …<\/p>\n

It is extraordinary how many emotional storms one can weather in safety if they’re ballasted with ever so little gold.<\/em><\/p><\/blockquote>\n

— William McFee<\/strong><\/p>\n

Gold is money. Everything else is credit.<\/em><\/p><\/blockquote>\n

— JP Morgan<\/strong><\/p>\n

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

Debit:<\/strong><\/span> Did you see this? Just three stocks<\/a> make up more than 16% of the S&P 500 and over a third of the Nasdaq 100: Apple, Amazon and Microsoft. These three behemoths now have a combined value of nearly $5 trillion — that’s larger than Germany’s entire economy, and almost as large as Japan’s economy. Does anybody else see a problem here?<\/p>\n

Credit:<\/strong><\/span> This week Peter Schiff reminded us that US prices fell by approximately half<\/a> between the 19th and 20th centuries. Even so, he notes that the US economy still managed to expand at a tremendous clip that ultimately culminated with the Industrial Revolution. I know what you’re thinking: How could prices fall amid such a massive economic expansion?<\/em> You can thank the monetary system in place at the time, which was backed by — wait for it … precious metals.<\/p>\n

Debit:<\/strong><\/span> Meanwhile, the coin shortage continues with one Wisconsin bank paying a 5% premium for coins<\/a>. No, really. And while millennials and Gen Z will probably find this hard to believe, there was a time when the banks routinely offered a similar rate of return on their customers’ saving accounts too. If you don’t believe me, ask your mom. Or Dad. Wait … on second thought, just ask Mom.<\/p>\n

Credit:<\/strong><\/span> By the way, I read an interesting theory that postulates the current coin shortage is an intentional prelude to replacing the US dollar<\/a> with a brand new devalued currency. Why? Because replacing the coins is costly. And since their denomination would remain the same after the change-over, the coins would also hold their original value. It’s definitely something to ponder …<\/p>\n