{"id":67220,"date":"2021-06-19T02:15:04","date_gmt":"2021-06-19T09:15:04","guid":{"rendered":"https:\/\/lenpenzo.com\/blog\/?p=67220"},"modified":"2021-06-22T10:18:12","modified_gmt":"2021-06-22T17:18:12","slug":"black-coffee-19-june-2021","status":"publish","type":"post","link":"https:\/\/lenpenzo.com\/blog\/id67220-black-coffee-19-june-2021.html","title":{"rendered":"Black Coffee: Peak Insanity"},"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

Happy Father’s Day to all you dad’s out there!<\/p>\n

I hope everybody had a terrific week. With the hardest part of it over, let’s get right to this week’s commentary …<\/p>\n

The life of the inflation in its ripening stage was a paradox which had its own unmistakable characteristics. One was the great wealth; at least of those favored by the boom. Many great fortunes sprang up overnight. Prices in Germany were steady, and both business and the stock market were booming. Speculation alone, while adding nothing to Germany’s wealth, became one of its largest activities; the fever to join in turning a quick profit infected nearly all classes. Everyone from the elevator operator up was playing the market.<\/em><\/p><\/blockquote>\n

— Adam Fergusson, When Money Dies<\/em><\/strong><\/p>\n

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

Debit:<\/strong><\/span> Did you see this? According to a recent survey, 64% of millennials aged 25 to 40 regret buying a home<\/a>, compared with 33% of those aged 57 to 75. The survey found that the older the buyer, the less likely they were to have homebuyer regret. What to make of this? Well … with at least a few<\/strong><\/em> of those gigantic mortgage payments under first-time homebuyers’ belts, I’d say the honeymoon phase of the latest housing bubble is officially over.<\/p>\n

Debit:<\/strong><\/span> In other news, I see America’s debt-to-GDP ratio is now at 135% — that is an all-time high<\/a>. In case you’re wondering, America’s average debt-to-GDP since 1790 is just 35%. Then again, the debt problem isn’t limited to the US. It took the world 2000 years to take global debt from virtually nothing to just under $100 trillion at the end of the 20th century — with most of that occurring since 1971. Since then, the pace has predictably accelerated, with the debt tripling from $100 trillion to $300 trillion.<\/p>\n

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Twas a time when the US used to run regular budget surpluses … then, in 1971 the government decided to break the dollar’s anchor to gold. It’s not a coincidence that 1971 was the same year Americans’ ability to comfortably support a family on a single blue-collar income began to wane.<\/p><\/div>\n

Credit:<\/strong><\/span> Of course, that massive debt load is exactly why the statists leading this week’s annual G7 meeting were, as macroeconomist Daniel Lacalle points out, “light on detailed decisions<\/a>, except on the most damaging of them all: a minimum global corporate tax. Why not an agreement on a maximum for global public spending?” It’s a rhetorical question. After all, these Brobdingnagian global bureaucracies didn’t get that way because the people running them believe in small, efficient, highly-decentralized government.<\/p>\n

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It’s not capitalism when an authoritarian Gov’t keeps stepping in and allowing it’s central bank to control the cost of money, the issuance of money, and who gets the money. There’s no free market when the medium of exchange is manipulated by the Gov’t.<\/p>\n

Jeff S. (@Pro_Libertatis) March 10, 2020<\/a><\/p><\/blockquote>\n