{"id":71297,"date":"2022-02-19T02:15:29","date_gmt":"2022-02-19T10:15:29","guid":{"rendered":"https:\/\/lenpenzo.com\/blog\/?p=71297"},"modified":"2022-02-22T08:39:11","modified_gmt":"2022-02-22T16:39:11","slug":"black-coffee-19-feb-2022","status":"publish","type":"post","link":"https:\/\/lenpenzo.com\/blog\/id71297-black-coffee-19-feb-2022.html","title":{"rendered":"Black Coffee: America’s Faustian Bargain"},"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

Well … another busy week is behind us. So with that in mind, let’s get this party started …<\/p>\n

Money is multiplied in practical value depending on the number of W’s you control in your life: what you do; when you do it; where you do it; and with whom you do it.<\/em><\/p><\/blockquote>\n

— Timothy Ferriss<\/strong><\/p>\n

Be thankful for problems. If they were less difficult, someone with less ability might have your job.<\/em><\/p><\/blockquote>\n

— Jim Lovell<\/strong><\/p>\n

Robotics aren’t the only job killers out there; outsourcing steals far more gigs than automation.<\/em><\/p><\/blockquote>\n

— Daniel Lyons<\/strong><\/p>\n

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

Debit:<\/strong><\/span> Did you see this? The Los Angeles Rams won the Super Bowl on Sunday. For the record, the Rams won the game despite losing the opening coin toss – that was the eighth year in a row the team that lost the opening toss won the game. The Rams also wore their white jerseys; 14 of the last 18 Super Bowl winners have worn white. Let’s hope those are all just coincidences, as this is what happened to the stock market – and the NASDAQ, in particular – the last<\/strong><\/em> time the Rams won<\/a> the Super Bowl:<\/p>\n

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

Debit:<\/strong><\/span> In other news, the latest producer price index (PPI) numbers for January were released on Tuesday; the PPI measures final demand goods and services. For those counting at home, the January PPI increased 1%<\/a>, which was double Wall Street’s estimate of 0.5%. Over the past 12 months the gauge rose an unadjusted 9.7% – that’s just a hair under the all-time high. But just look at how prices have taken off since the pandemic started:<\/p>\n

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

Debit:<\/strong><\/span> Unfortunately, higher producer prices eventually get passed on to the consumer. And to illustrate that point, a record 60% of surveyed corporations say they’ve already raised prices over the past three months, while another 45% say they plan to raise prices by April 30th. Both of those<\/strong><\/em> figures are the highest since 1975<\/a>, which also happens to be the very first year of this survey. Why am I not surprised?<\/p>\n

 <\/p>\n

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

Debit:<\/strong><\/span> In case you’re wondering, thanks to price inflation, last year the typical American family spent an extra $600 on gasoline, $70 on electricity, $300 on natural gas and $1000 on heating oil. Cumulatively, the average American household paid about $1000 more in energy costs<\/a> in 2021 compared to 2020. Now here’s the kicker: Because energy is such an important commodity, those higher prices are now baked into the costs of virtually all<\/strong><\/em> goods and services bought and sold in the economy which, in turn, contributes to across-the-board inflation.<\/p>\n

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

Credit:<\/strong><\/span> Inflation also provides a misleading boost to the nominal GDP figure that is reported by the government on a quarterly basis, which is why macroeconomist Alasdair Macleod noted this week that politicians and central bankers point “to GDP growth as a primary measure of economic performance; but this confuses growth with progress<\/a>, where quality of life is the driving factor.” Macleod goes on to say that using GDP to measure economic health is folly because, mathematically, GDP actually<\/strong><\/em> measures the quantity of currency in circulation. In other words: It’s a deceptive statistic that helps the Fed make the case for this<\/strong><\/em>:<\/p>\n