{"id":74242,"date":"2022-08-20T02:15:01","date_gmt":"2022-08-20T09:15:01","guid":{"rendered":"https:\/\/lenpenzo.com\/blog\/?p=74242"},"modified":"2022-08-23T06:34:09","modified_gmt":"2022-08-23T13:34:09","slug":"black-coffee-20-aug-2022","status":"publish","type":"post","link":"https:\/\/lenpenzo.com\/blog\/id74242-black-coffee-20-aug-2022.html","title":{"rendered":"Black Coffee: The Long Slow Grind Continues"},"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

If you control the food, you control a nation. If you control the energy, you control a region. If you control the money, you control the world.<\/em><\/p><\/blockquote>\n

— Henry Kissinger<\/strong><\/p>\n

The way to crush the bourgeoisie is to grind them between the millstones of taxation and inflation.<\/em><\/p><\/blockquote>\n

— Vladimir Lenin<\/strong><\/p>\n

Gold would have value if for no other reason than that it enables a citizen to fashion his financial escape from the state.<\/em><\/p><\/blockquote>\n

— William F. Rickenbacker<\/strong><\/p>\n

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

Debit:<\/strong><\/span> Did you see this? Almost 60% of video streaming subscribers in the US have three or more subscriptions – but for many people that’s a luxury that may be getting tougher to afford. For example, Disney just announced that they’re raising prices<\/a> on both Disney+ and<\/strong><\/em> Hulu, while Netflix recently implemented its second price increase in less than two years. And although 67%<\/a> of consumers say they would cut back on their subscriptions when money gets tight, it remains to be seen if they will actually do so. Obviously, the streaming services don’t seem to be bothered by such threats.<\/p>\n

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Debit:<\/strong><\/span> Meanwhile, a new survey of millennials who bought a home on or after January 2021 found that 31% of them paid more than the asking price, with the median homebuyer paying $65,000 over list. Now get this: Another 36% bought their home sight-unseen<\/strong><\/em>. No, really. Not surprisingly, 80% of respondents said they ended up compromising on their priorities, while 72% admitted they have regrets<\/a> about buying. As someone who foolishly bought near the top of the Southern California housing bubble way back in 1990, I know exactly how they feel. Live and learn.<\/p>\n

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Credit:<\/strong><\/span> Speaking of rueful homebuyers, according to the latest National Association of Realtors’ (NAR) housing-affordability index, this past June was the most expensive time to buy a US home in more than 30 years<\/a>, as record-high home prices collided with a surge in mortgage rates. The index is based on family income, mortgage rates and existing single-family home sale prices. The good news is local realtors are still<\/strong><\/em> insisting that it’s never been a better time to buy. (I know … but just trust ’em.)<\/p>\n

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Debit:<\/strong><\/span> Unfortunately, despite the slowing home sales, prices continue to hover in the stratosphere; so it’s not surprising that the median US rent is climbing at the fastest pace in three decades<\/a>, having surpassed $2000 per month for the first time ever. In fact, rents are now above where they were prior to the pandemic in most major cities. Look … I realize that San Diego is a beautiful place with perfect weather, but with the median renter there paying $3304 a month, it’s not that<\/strong><\/em> beautiful. Whether it’s higher wages or lower rents … something<\/strong><\/em> is going to have to give. And it will. Eventually.<\/p>\n

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Debit:<\/strong><\/span> If you’re wondering why living costs are unhinged, consider this: Since the US was founded it took 227 years to print its first $6 trillion. Then the US government recently printed another $6+ trillion – in a few short months<\/strong><\/em> – thereby increasing the money supply by a whopping 41%, which is why the National Debt is now pushing $31 trillion. And it’s growing at an accelerating pace too. To put that in perspective, if you earned $1 per second, it would take 966,484 years to pay it off. But don’t panic: Congress just passed the $742 billion “Inflation Reduction Act<\/a>” – which we’re told is going to fix the problem. Somehow.<\/p>\n

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Debit:<\/strong><\/span> Even the geniuses at the Fed can see that almost every economic signal in the US is beyond awful. Consumer confidence has never been worse<\/a>, while the yield curve becomes ever more inverted<\/a>, with the 10-year minus 2-year Treasury yield at its most negative since 1981 – with no signs of slowing down – which is hard to believe considering the downturns of 2000, and 2007 were both economic super storms. The trouble is, the Fed is trapped; it can either destroy the dollar to save the stock, bond and housing markets – or it can save the dollar by crushing the economy. And I thought these<\/strong><\/em> people had problems \u2026<\/p>\n