{"id":70117,"date":"2021-12-11T02:15:17","date_gmt":"2021-12-11T10:15:17","guid":{"rendered":"https:\/\/lenpenzo.com\/blog\/?p=70117"},"modified":"2024-10-27T12:36:20","modified_gmt":"2024-10-27T19:36:20","slug":"black-coffee-11-dec-2021","status":"publish","type":"post","link":"https:\/\/lenpenzo.com\/blog\/id70117-black-coffee-11-dec-2021.html","title":{"rendered":"Black Coffee: Lucky Number 13"},"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

Believe it or not, today is my blog’s 13th anniversary!<\/strong><\/span> When I wrote my first post in 2008<\/a> I never imagined that Len Penzo dot Com<\/em> would attract more than 10 million visitors and almost 17 million page views over the following decade – but it has! So I want to thank all of you who occasionally take a minute or two out of your day to stop by and visit – and a very special thank you to those who take the time to share your thoughts and leave comments because, without that two-way dialog, Len Penzo dot Com<\/em> would be a very lonely place.<\/p>\n

I hope everybody had an enjoyable week. Without further ado, let’s get right to this week’s commentary …<\/p>\n

Moral hazard is the big winner from the rapid-fire succession of rate cuts from the Fed; it projects an impression of central banks, yet again, coming to the rescue of leveraged investors who can’t cope with the slightest collateral damage. This pandering to global markets and homeowners has painted central banks into a corner. But having created over-valued everything through their cheap-money policies, central banks now find themselves as the ringmasters of the three-ringed circus that is cheap money, the hunt for yield, and richly-priced assets.<\/em><\/p><\/blockquote>\n

— Robert Guy<\/strong><\/p>\n

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

Credit:<\/strong><\/span> Did you see this? Last week bitcoin plunged from $57,000 to as low as $28,800 on some exchanges – in less than 48 hours. So much for it being a credible currency, let alone a store of value. As Wall Street on Parade<\/em> opined this week, “The problem with bitcoin<\/a> is the same problem that all other highly-leveraged trading instruments are having in the new world of Fed tapering. But bitcoin has an additional problem: credibility.” Ya think?<\/p>\n

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Debit:<\/strong><\/span> In other news, the CPI report for November was released on Friday and it shows inflation is now at a 40-year high<\/a>; officially, it’s now running at 6.9% annually. Never mind that if inflation was calculated using the same methodology the government used in 1980, inflation would be more than double<\/strong><\/em> the “official” figure. On the bright side, the average price of a gallon of gas in the US fell four cents this week; it’s now $3.34<\/a>. In terms of silver, gasoline is cheaper than it was back in 1964 – which, more than anything else, is a testament to the white metal’s ability to preserve wealth.<\/p>\n

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Credit:<\/strong><\/span> Speaking of inflation, the inimitable MN Gordon reminded us this week that the 21st century housing bubble was inflated by Fannie Mae and Freddie Mac, which “relaxed lending standards and, thus, funneled a seemingly endless supply of credit to the mortgage market.” He goes on to point out that while “their stated objective was to make housing affordable for Americans, their efforts did the exact opposite<\/a>.” Yep. Unfortunately, while you can’t fool all of the people all of the time, you can<\/strong><\/em> fool some of the people all of the time…<\/p>\n