{"id":73762,"date":"2022-07-09T02:15:25","date_gmt":"2022-07-09T09:15:25","guid":{"rendered":"https:\/\/lenpenzo.com\/blog\/?p=73762"},"modified":"2022-07-17T14:06:07","modified_gmt":"2022-07-17T21:06:07","slug":"black-coffee-9-july-2022","status":"publish","type":"post","link":"https:\/\/lenpenzo.com\/blog\/id73762-black-coffee-9-july-2022.html","title":{"rendered":"Black Coffee: The Hair of the Dog"},"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 an enjoyable week. Without further ado, let’s get right to this week’s commentary …<\/p>\n

I never met anyone who gets up out of their bed after a night on the town and says, ‘Oh I wish I’d had another drink last night. That would have been a great idea.’<\/em><\/p><\/blockquote>\n

– Arthur Matthews<\/strong><\/p>\n

There’s one surefire hangover cure, and that’s time.<\/em><\/p><\/blockquote>\n

— Mikhail Varshavski<\/strong><\/p>\n

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

Debit:<\/strong><\/span> Did you see this? The G7 nations are working out a plan to cap the price fetched by Russian oil. But JPMorgan analysts say Moscow’s strong fiscal position means the nation can afford to slash daily crude production by 5 million barrels without damaging their economy, while much of the rest of the world ends up feeling the pain. In fact, the analysts warn that global oil prices could reach a “stratospheric” $380 per barrel<\/a> if US and European penalties prompt Russia to inflict retaliatory crude-output cuts. Trust the plan, folks. With inflation already raging, I’m sure we won’t even notice.<\/p>\n

\"\"<\/p>\n

Debit:<\/strong><\/span> On a related note, the Fed said it was going to begin fixing the problem by selling $47.5 billion of bonds in June as part of a long-term quantitative tightening (QT) program. The reality is the Fed sold less than $1 billion last month<\/a>; a mere $728 million, to be exact. Heh. It’s almost as if the Fed knows that if they stop printing currency – or even simply withdraw more than a tiny fraction of the money supply<\/strong><\/em> from circulation – both the financial markets, and<\/strong><\/em> the entire monetary system will collapse. Strike that … they do<\/strong><\/em> understand, which is why they’ll shrink the money supply as slowly as possible. If at all.<\/p>\n

\"\"

(h\/t: @The92ers)<\/p><\/div>\n

\"\"<\/p>\n

Credit:<\/strong><\/span> As asset manager Matthew Piepenberg points out: “In 2008 the Fed’s balance sheet was under $1 trillion; in 2020 it was $9 trillion. We printed more currency in 2020 than we did from 2009 to 2014, and our public debt is at an all-time high. So the next crisis will be infinitesimally worse<\/a> than anything we’ve even seen, as the Nasdaq crisis at the turn of the century was relatively confined to tech stocks, and the 2008 crisis affected real estate, and mortgage-backed and asset-backed securities.” Yep. It was a terrific party, but the bar has finally closed and the tab needs to be paid. Now we just wait for the hangover …<\/p>\n