{"id":71528,"date":"2022-03-05T02:15:58","date_gmt":"2022-03-05T10:15:58","guid":{"rendered":"https:\/\/lenpenzo.com\/blog\/?p=71528"},"modified":"2022-03-08T13:23:07","modified_gmt":"2022-03-08T21:23:07","slug":"black-coffee-5-march-2022","status":"publish","type":"post","link":"https:\/\/lenpenzo.com\/blog\/id71528-black-coffee-5-march-2022.html","title":{"rendered":"Black Coffee: What’s Past Is Prologue"},"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’ve got another busy weekend ahead of me, so let’s get right to this week’s commentary …<\/p>\n

Those who don’t learn history are doomed to repeat it.<\/em><\/p><\/blockquote>\n

— George Santayana<\/strong><\/p>\n

What has been will be again, what has been done will be done again; there is nothing new under the sun.<\/em><\/p><\/blockquote>\n

– Ecclesiastes 1:9 (NIV)<\/strong><\/p>\n

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

Debit:<\/strong><\/span> Did you see this? The oil price topped $115 per barrel this week. Not surprisingly, the latest data for the Fed’s favorite inflation indicator – the PCE – was also released and it shows that the consumer is tapped out and that inflation is continuing to worsen<\/a>; the worst in more than four decades, as a matter of fact. Can you say, “stagflation”?<\/p>\n

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Credit:<\/strong><\/span> Needless to say, Sprott’s lead strategist, John Hathaway, says, “People are trying to get in front of each other, talking about all the rate hikes and where 10-year Treasury bonds are going to go in 2022. But inflation is problematic and maybe more problematic than most investors would like to think, which leads to the thought that the medicine to cure inflation from the Fed’s point of view could also kill the stock market<\/a>.” Which means inflation it will be. Well … if the Fed gets its<\/strong><\/em> way. (And it will.)<\/p>\n

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Debit:<\/strong><\/span> In case you haven’t noticed, the stock market is already<\/strong><\/em> wobbling. In fact, last Thursday, the Nasdaq experienced an intraday reversal of more than 5%<\/a> for the first time since 2008. And here’s some interesting trivia to amaze your friends with: The last 21 times Nasdaq had an intraday reversal of 5% or more, they all happened during brutal bear markets of 2009-10 and the dot com bubble crash. No, really. See for yourself:<\/p>\n

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Debit:<\/strong><\/span> Hey … it’s not just stocks who ended February on a sour note. The US Treasury market’s two-month performance through February is its third worst start to a year<\/a> – ever.<\/p>\n

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Debit:<\/strong><\/span> No matter what you think about the war in Ukraine, the recent move to cut off Russia from the SWIFT international payment system is now playing – if you’ll pardon the pun – Russian Roulette with the US dollar’s status<\/a> as the global reserve currency. For those of you counting at home, this was the very first time the world’s premier reserve currency was weaponized against one of the G-20 economies.<\/p>\n

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Credit:<\/strong><\/span> Of course, I’m not the only one who thinks the US is playing with a loaded revolver. This week macro analyst Matthew Piepenburg warned that, “kicking Russia out of the SWIFT system would simply give Russia more reason to find other markets<\/a> and currencies to trade in – such as Chinese yuan, or even gold, of which Russia and China have been quietly stockpiling. Such a move would destabilize the USD and, hence, just about everything else.” Very true. Although I don’t think anybody has anything to worry about until we see signs that Fed Chair Jerome Powell is starting to crack. Oh, wait …<\/p>\n

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Credit:<\/strong><\/span> Speaking of Russia, journalist and former Russian intelligence agent Daniel Estulin says, the US is now in the same precarious position that the Soviet Union was in 1991, several months before it disintegrated – and he warns that America is going to suffer a similar fate. Estulin says “40% of my countrymen lost everything” and that the US can expect unimaginable economic upheaval<\/a> that will be twice as bad as the Great Depression, with future generations infinitely worse off than (older) generations. Well … there goes the American Dream. Brother, can ya spare a dollar?<\/p>\n