{"id":64689,"date":"2021-01-23T02:15:52","date_gmt":"2021-01-23T10:15:52","guid":{"rendered":"https:\/\/lenpenzo.com\/blog\/?p=64689"},"modified":"2021-02-06T09:50:46","modified_gmt":"2021-02-06T17:50:46","slug":"black-coffee-23-jan-2021","status":"publish","type":"post","link":"https:\/\/lenpenzo.com\/blog\/id64689-black-coffee-23-jan-2021.html","title":{"rendered":"Black Coffee: A Land of Confusion"},"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 commentary …<\/p>\n

There are only three ways to meet the unpaid bills of a nation. The first is taxation. The second is repudiation. The third is inflation.<\/em><\/p><\/blockquote>\n

— Herbert Hoover<\/strong><\/p>\n

The American people have a love-hate relationship with inflation. They hate inflation, but love everything that causes it.<\/em><\/p><\/blockquote>\n

— William E. Simon<\/strong><\/p>\n

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

Debit:<\/strong><\/span> Did you see this? With another round of COVID-relief checks in the mail, the latest government-funded spending spree<\/a> has commenced. Bank of America data shows that, for the first week of the new year, total credit- and debit-card spending was up 10% year-over-year. For the lowest income tier spending was up 22% — which makes sense when you realize that lower-income households have the highest propensity to spend financial windfalls.<\/p>\n

Debit:<\/strong><\/span> Meanwhile, growing demand for both new and existing homes has pushed house prices to record levels<\/a>. However, that has also managed to place homeownership beyond the reach of average earners in 55% of US counties — that’s compared to 43% a year ago. Thankfully, the economy is booming — and that’ll ensure that wages continue to keep up with these rapidly-increasing living costs. Oh, wait …<\/p>\n

Debit:<\/strong><\/span> The truth is, a lot of people seem to think rising prices are a sign of pending economic growth when it’s actually a sign of monetary inflation. And you can bet that home prices aren’t the only<\/strong><\/em> thing that’s skyrocketing — commodities are booming<\/a> too. Then again, when you consider the money supply has been rising uncontrollably for quite a while now, that shouldn’t be a surprise to anyone. Okay … at least to anyone who is paying attention.<\/p>\n

\n

Just wow! US M1 Money Supply is up a staggering 70% from a year ago. That is a lot of #USD<\/a>. pic.twitter.com\/vBeqtmmR7F<\/a><\/p>\n

jeroen blokland (@jsblokland) January 11, 2021<\/a><\/p><\/blockquote>\n