{"id":71912,"date":"2022-03-26T02:15:22","date_gmt":"2022-03-26T09:15:22","guid":{"rendered":"https:\/\/lenpenzo.com\/blog\/?p=71912"},"modified":"2022-03-29T07:06:07","modified_gmt":"2022-03-29T14:06:07","slug":"black-coffee-26-mar-2022","status":"publish","type":"post","link":"https:\/\/lenpenzo.com\/blog\/id71912-black-coffee-26-mar-2022.html","title":{"rendered":"Black Coffee: Subterfuge and Sabotage"},"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

Tricks and treachery are the practice of fools who don’t have brains enough to be honest.<\/em><\/p><\/blockquote>\n

— Benjamin Franklin<\/strong><\/p>\n

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

Debit:<\/strong><\/span> Did you see this? After raising the fed funds rate a measly 25 basis points, Fed Chair Jerome Powell admitted this week that “we’re not expecting near-term progress on inflation.” Interestingly, the Fed’s feigned cluelessness<\/a> with regard to the non-transitory nature of inflation was highlighted by the Wall Street Journal’s<\/em> chief economist, Nick Timiraos, who notes that J-Pow rejects the Fed’s printing press as the reason for the high inflation afflicting the general public: “I don’t think it’s an important part of the story at this time.” Of course<\/strong><\/em>, you don’t, Jerome. Yes, folks; we’re living in a clown world.<\/p>\n

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Credit:<\/strong><\/span> Speaking of inflation, I’m going to paraphrase the inimitable MN Gordon, who astutely noted this week that “US financial markets have been rigged<\/a> for at least three decades, with the unintended consequences of massive asset and consumer price inflation having infected every sector of the economy.” They certainly have. In fact, prices for housing, groceries and fuel are so far off the hook now that I’m sure it makes most people pine for the “good ol’ days” …<\/p>\n

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Debit:<\/strong><\/span> It’s bad enough that the Fed’s paltry 0.25% increase will do nothing to arrest inflation that is running at more than 15%. But while the Fed was doing that it was also quietly expanding its balance sheet by another<\/strong><\/em> $44 billion – this time to a new record high of $9 trillion<\/a>– thereby adding even more<\/strong><\/em> fuel to the inflationary fire. Yes, it’s absurd monetary policy; equivalent to driving with one foot on the gas pedal while the other one is on the brake. On a related note …<\/p>\n

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Credit:<\/strong><\/span> It’s no secret the US economy is addicted to low interest rates, which is a problem because the Fed is now in a hiking cycle. Macroeconomist Peter Schiff warns that the Fed will only be able to raise rates so far before the economy, led by the stock and housing markets, “goes into withdrawal. We’re going to see the impact on consumers – who are already struggling with rising prices – begin struggling<\/a> with rising interest rates too. That’s when the real<\/strong><\/em> problems will start for the Fed.” Heh. As if they don’t have enough problems already.<\/p>\n

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Credit:<\/strong><\/span> In other news, for those who have been wondering when the monetary reset was going to happen, macro analyst Bill Holter revealed the answer this week. He says, “you’ve been watching the answer in real time<\/a>; last week marked many milestones as the world prepares to settle trade in something other than dollars. The reset is happening right now, and we’re not going back” to old US dollar-centric system. Then again, I guess that was to be expected as an increasing number of US dollar holders are finally waking up to the fact that the so-called “Almighty Dollar” isn’t quite as mighty as it appears to be …<\/p>\n