{"id":73620,"date":"2022-07-02T02:15:35","date_gmt":"2022-07-02T09:15:35","guid":{"rendered":"https:\/\/lenpenzo.com\/blog\/?p=73620"},"modified":"2022-07-04T19:28:12","modified_gmt":"2022-07-05T02:28:12","slug":"black-coffee-2-july-2022","status":"publish","type":"post","link":"https:\/\/lenpenzo.com\/blog\/id73620-black-coffee-2-july-2022.html","title":{"rendered":"Black Coffee: Born on the 4th of July"},"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

The desire of gold is not for gold. It is for the means of freedom and benefit.<\/em><\/p><\/blockquote>\n

— Ralph Waldo Emerson<\/strong><\/p>\n

Liberty means responsibility. That is why most men dread it.<\/em><\/p><\/blockquote>\n

— George Bernard Shaw <\/strong><\/p>\n

No state shall … coin money; emit bills of credit; or make any thing but gold and silver coin a tender in payment of debts.<\/em><\/p><\/blockquote>\n

— US Constitution<\/em>, Article I, Section 10<\/strong><\/p>\n

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

Credit:<\/strong><\/span> Did you see this? Target, Walmart, and other retailers say they have so much inventory that it’s costing them too money to store it. The situation is so dire that stores are now considering new policies<\/a> that will give customers their money back – while letting them hang onto the stuff they don’t want. Huh. So apparently, all of that “pent up demand” we were told was coming never materialized. I guess the economy was never really as strong as the pols in DC and the central bankers at the Fed have been telling us. Imagine that.<\/p>\n

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Debit:<\/strong><\/span> You can bet most stock investors and 401k participants will certainly get a jolt when they open their quarter-end statements next week. That’s because as of June 30th, both the Dow and the S&P are officially down almost 21% for the year – that’s their worst first-half performances<\/a> in 52 years. And if you think that’s bad, a proxy index for the US 10-year Treasury bond had its worst first-half since 1788. The good news is investors will be more<\/em><\/strong> than eager to continue buying the market dips as soon as they realize that the American consumer actually still feels as financially secure as ever. Oh, wait …<\/p>\n

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I know … when you read “1788”, you thought it was a typo.<\/p><\/div>\n

Debit:<\/strong><\/span> The trouble is, since the Great Financial Crisis in 2008, the entire global economy – not to mention stock, bond and housing markets around the world – have been artificially propped up by central bank currency printing. Perhaps the biggest example of this is the Australian real estate market, which is so absurd<\/a> that residential land down under is now worth more, relative to GDP, than residential land in Japan at the peak of their epic 1980s bubble. I wonder if anybody out there wonders how that worked out for Japan. (Hint: It didn’t.)<\/p>\n

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Debit:<\/strong><\/span> Meanwhile, here in America, today’s first-time homebuyer now has has to shell out an average of $27,400 – that is, 7% of the sales price – as a down-payment on the median-priced house. Sadly, this means 92% of people looking for their first home are officially on the outside looking in<\/a> because they lack sufficient funds. Just how lacking are they? It turns out that the median savings of all US renters is currently just $1500 – and dropping like a rock with each passing month. In other words: Most people still hoping to buy their first home are just going to have to, well …<\/p>\n