{"id":69262,"date":"2021-10-23T02:15:33","date_gmt":"2021-10-23T09:15:33","guid":{"rendered":"https:\/\/lenpenzo.com\/blog\/?p=69262"},"modified":"2021-10-26T07:56:09","modified_gmt":"2021-10-26T14:56:09","slug":"black-coffee-23-oct-2021","status":"publish","type":"post","link":"https:\/\/lenpenzo.com\/blog\/id69262-black-coffee-23-oct-2021.html","title":{"rendered":"Black Coffee: Half Truths and Whole Lies"},"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

I hope everybody had a wonderful week. And with that, let’s get right to this week’s commentary, shall we?<\/p>\n

We know they are lying. They know they are lying. They know we know they are lying. And we know they know we know they are lying — but they are still lying.<\/em><\/p><\/blockquote>\n

— Aleksander Solzhenitsyn<\/strong><\/p>\n

You can ignore reality, but you cannot ignore the consequences of ignoring reality.<\/em><\/p><\/blockquote>\n

— Ayn Rand<\/strong><\/p>\n

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

Debit:<\/strong><\/span> Did you see this? Although the stock market is continuing to hover near all-time highs, the Atlanta Fed slashed its estimate<\/a> for real GDP growth in the third quarter of 2021 to just 0.5% — that’s down from 1.2% on October 15, down from 6% about two months ago, and down from 14% back in May. If I didn’t know better, you’d think the stock market knows something we don’t. Is it crazy? Or crazy like a fox?<\/p>\n

\"\"<\/a><\/p>\n

Debit:<\/strong><\/span> It’s no coincidence that the Fed lowered its GDP estimate at the same time it was announced that US industrial production in September plunged 1.3%<\/a> on a month-over-month (MoM) basis — that’s the sixth consecutive month of basically flat or falling US manufacturing production, and the sharpest decline since February. Making matters worse, August was revised down from a 0.4% MoM increase to a 0.1% MoM decline. Uh oh.<\/p>\n

Debit:<\/strong><\/span> Consumers can certainly sense that there’s an ill economic wind blowing. The latest University of Michigan Consumer Sentiment data shows falling confidence and soaring inflation<\/a> expectations — which is just more evidence that stagflation expectations are getting stronger. So, with all this bad news in mind, let’s sum up the current economic situation: We’re in the midst of an economic contraction, with inflation raging and the Fed hellbent on holding interest rates at the zero bound. Hey … what could possibly go wrong?<\/p>\n

\"\"<\/a><\/p>\n

Credit:<\/strong><\/span> Speaking of surging inflation, it looks like it’s copper’s turn now. And since silver is considered a base metal like copper, precious-metals analyst Craig Hemke notes that “If copper hits a new all-time high, it’s highly likely that silver will tag along<\/a> for the ride too; maybe not immediately, but if copper is trading at $6 or $7, silver is not going (to remain) at $23. I can assure you of that.” Well … at least that’s how it’s supposed<\/strong><\/em> to work.<\/p>\n

\"\"<\/a><\/p>\n

Debit:<\/strong><\/span> Meanwhile, empty store shelves<\/a> are popping up with increasing frequency for all kinds of imported goods. Amazingly, despite the US being the world’s largest food producer, shortages are beginning to show up at grocery stores too — and they’re expected to get even worse in 2022. The good news is, there’s no shortage of chocolate bars. At least not yet …<\/p>\n