{"id":78196,"date":"2023-04-22T01:15:04","date_gmt":"2023-04-22T08:15:04","guid":{"rendered":"https:\/\/lenpenzo.com\/blog\/?p=78196"},"modified":"2023-04-25T13:01:52","modified_gmt":"2023-04-25T20:01:52","slug":"black-coffee-22-apr-2023","status":"publish","type":"post","link":"https:\/\/lenpenzo.com\/blog\/id78196-black-coffee-22-apr-2023.html","title":{"rendered":"Black Coffee: More Holes in the Boat"},"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

Beware of little expenses. A small leak will sink a great ship.<\/em><\/p><\/blockquote>\n

– Benjamin Franklin<\/strong><\/p>\n

It sounds mercenary and smacks of rats leaving the sinking ship, but get real; when everyone is bailing out, you don’t want to be the last man in line.<\/em><\/p><\/blockquote>\n

– Robbie Fowler<\/strong><\/p>\n

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

Debit:<\/strong><\/span> Did you see this? Americans’ inflation expectations<\/a> over the next year are soaring again. A new survey has found that 70% of Americans admit to being stressed<\/a> about their personal finances these days, while 52% said their financial stress has increased since before the Covid-19 pandemic began. Not surprisingly, 60% of respondents cited inflation as the main contributor to their financial stress, followed by economic instability (43%), rising interest rates (36%) and a lack of savings (35%). And if that<\/strong><\/em> ain’t bad enough, 15% are worried about their favorite stores closing down …<\/p>\n

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Debit:<\/strong><\/span> By the way, the same survey also found that 58% of all Americans are now living paycheck to paycheck<\/a>. I guess that’s not surprising when you consider the latest survey of US leading economic indicators (LEI) tumbled for the 12th consecutive month<\/a> – and 13th time in 15 months. That’s the longest streak of declines since just prior to the Great Financial Crisis, when the US LEI survey saw 22 straight months of declines from June 2007 to April 2008. But there’s no need to panic – I’m sure that’s only a coincidence.<\/p>\n

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Debit:<\/strong><\/span> Of course, the real reason for the price inflation that’s stressing Americans out is the US government, which is currently borrows a staggering $6 billion<\/a> every single day<\/strong><\/em>. Sadly, a big chunk of that cash is “paid for” with the printing press, rather than tax revenue. In other words: The government is spending far more than it earns.<\/p>\n

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\nDebit:<\/strong><\/span> For those who are wondering why the US prints so much money that it doesn’t have, the answer is: because it can. That exorbitant privilege is the result of the US dollar (USD) being the undisputed global reserve currency since the 1940s; as a result, any excess dollars that are conjured out of thin air end up being willingly accepted by other nations in exchange for their hard-earned goods and products. Even so, the annual cost of servicing the US debt exceeded $800 billion<\/a> as of March – but with yields still rising, expectation are for that<\/strong><\/em> figure to hit $1 trillion by late summer.<\/p>\n

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Credit:<\/strong><\/span> However, as economist Peter St. Onge points out, “Reserve currency status looks great on paper: You get to print stacks of green paper and foreigners give you cool stuff for it, like toasters, luxury cars, and copper mines. The problem is: who profits<\/a>? Who gets paid when foreigners crave the green paper? Unfortunately, it’s not the American people; it’s whomever is printing money: The Fed, meaning the Treasury, to whom they hand their ill-gotten profits, and – you guessed it – Wall Street. Commercial banks.” Oh … and speaking of Wall Street:<\/p>\n