{"id":77351,"date":"2023-03-04T01:15:02","date_gmt":"2023-03-04T09:15:02","guid":{"rendered":"https:\/\/lenpenzo.com\/blog\/?p=77351"},"modified":"2023-05-12T11:34:19","modified_gmt":"2023-05-12T18:34:19","slug":"black-coffee-4-mar-2023","status":"publish","type":"post","link":"https:\/\/lenpenzo.com\/blog\/id77351-black-coffee-4-mar-2023.html","title":{"rendered":"Black Coffee: Men In Suits"},"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\u2019ve got another busy weekend ahead of me, so let\u2019s get right to this week\u2019s commentary …<\/p>\n

Government is the only institution that can take a valuable commodity like paper, and make it worthless by applying ink.<\/em><\/p><\/blockquote>\n

– Ludwig von Mises<\/strong><\/p>\n

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

Debit:<\/strong><\/span> Did you see this? The price of the average new-vehicle is a record $49,507<\/a>, which may suggest that borrowers could be getting in over their heads. This is backed up by the fact that almost 16% of consumers who financed a new car in the last quarter of 2022 have monthly payments reaching $1000<\/a> – that’s up from 10.5% in 2021 and just 6.7% in the 2020. In case you haven’ guessed, that’s<\/strong><\/em> an all-time record too. At least until the next quarter.<\/p>\n

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Debit:<\/strong><\/span> Of course, with car payments so high, it’s no surprise that that drivers are starting to fall behind on their bills<\/a>. In fact, consumers with financed vehicles are so far behind that the percentage of borrowers at least 60 days late on their car payments is higher today than it was during the peak of the Great Recession in 2009. Which is hard to believe, considering that the economy is not in a recession. Or so we keep being told.<\/p>\n

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(h\/t: r\/WallStreetSilver u\/BoatSurfer600)<\/p><\/div>\n

Credit:<\/strong><\/span> Last week, the always-pithy financial commentator, Franklin Sanders, observed that today’s “society is divided<\/a> into the ‘actuals’ and the ‘virtuals.’ The virtuals work in the computer world pushing around electrons; the actuals are those who produce real, tangible things. The (US dollar) is a monster typical of the virtual world. Backed by nothing … it hath no substantial material existence, but dwelleth as electrons in a computer – I pass by for a moment the rapidly disappearing cash evidences of dollars; a vestige of ages past like your appendix.” True. That being said, don’t be surprised if the USD soon contracts appendicitis that’ll be very very<\/strong><\/em> real.<\/p>\n

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Credit:<\/strong><\/span> By the way, Sanders also points out that, despite the utter hollowness of the USD, “the actuals of this world – real things and production – are hostage to the virtual, insubstantial dollar. (But) the virtual world and its virtual dollar are drawing nigh to the end<\/a> of their virtual lives as the social and economic pendulum swings towards real things – the wealth of the world that men take out of the ground. The virtual dollar will pass away as a dream at breaking day; a cobweb brushed aside by gold, oil, and real commodities. Better get ready to roll up your sleeves and get calluses.” Uh huh. Actual calluses, that is; not virtual ones.<\/p>\n

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Credit:<\/strong><\/span> On the other hand, optimists have been pointing out that the US dollar index (DXY) has been gaining strength recently. Never mind that “the Dixie” compares the fiat USD to other dying fiat currencies; that is, the best looking horse in the glue factory. But as macro analyst Matthew Piepenburg notes, “Whether the DXY rises or falls in the near-term, the end result is as inevitable and mathematical as Germany’s two-front war, Pickett’s charge or Napoleon’s Waterloo: Disaster. Once stock and bond bubbles reach their tipping points, the last bubble to die<\/a> is always the currency.” Sadly, the last ones to figure that<\/strong><\/em> out is the public.<\/p>\n

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Credit:<\/strong><\/span> So what happens when people lose confidence in fiat currency and stop accepting it for their goods and services? The answer is: They demand real<\/strong><\/em> money in the form of gold or silver. And if you don’t believe me, just ask Venezuelan small-business owners<\/a> who are still demanding payment in precious metals today – or any Zimbabwean who experienced that African nation’s most recent currency crisis in 2008:<\/p>\n