{"id":79389,"date":"2023-07-08T01:15:00","date_gmt":"2023-07-08T08:15:00","guid":{"rendered":"https:\/\/lenpenzo.com\/blog\/?p=79389"},"modified":"2023-07-11T07:16:41","modified_gmt":"2023-07-11T14:16:41","slug":"black-coffee-8-july-2023","status":"publish","type":"post","link":"https:\/\/lenpenzo.com\/blog\/id79389-black-coffee-8-july-2023.html","title":{"rendered":"Black Coffee: Sharp-Dressed Men"},"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

Forget about style; worry about results.<\/em><\/p><\/blockquote>\n

– Bobby Orr<\/strong><\/p>\n

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The pickpocket is usually very well dressed and of prepossessing appearance.<\/em><\/p>\n<\/blockquote>\n

– Harry Houdini<\/strong><\/p>\n

Trendy is the last stage before tacky.<\/em><\/p><\/blockquote>\n

– Karl Lagerfeld<\/strong><\/p>\n

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

Debit:<\/strong><\/span> Did you see this? After two consecutive years of negative real wage growth resulting from high inflation, households have been depleting their personal savings<\/a> and racking up enormous amounts of credit card debt while paying some of the highest interest rates in a generation. As a result, lower-tier consumers are now cracking under the weight of high food, shelter, and energy prices. In fact, some consumers have become so stretched that they’ve been forced to trade down grocery shopping from Walmart to Dollar Tree.<\/p>\n

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Debit:<\/strong><\/span> Frankly, it’s hard to enough to make ends meet when inflation has resulted in real wages falling<\/a> uninterrupted for the last two years. It’s even harder to pay the bills when the economy is struggling to provide enough work for its citizens. As for those who insist that the economy has been booming for the last two years, please explain this:<\/p>\n

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Debit:<\/strong><\/span> On a related note, one of The Fed’s favorite inflation indicators – the so-called core personal consumption expenditures (PCE) deflator – rose 4.6% in May<\/a>, indicating that it’s still hovering at very high levels. The good news is headline PCE fell to 3.8% – that’s the first time it has been below 4% since April 2021. Even so, the latest data also shows that inflation-adjusted personal spending was unchanged in May. So … is the consumer starting to pull back? Doesn’t seem that way, as stalling spending combined with sticky core PCE – smells like stagflation. But don’t worry, the Fed has everything under control. Or not …<\/p>\n

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\"\"Credit:<\/strong><\/span> By the way, last week Jerome Powell was at a conference in Portugal that was attended by lots of other sharp-dressed men and women. That prompted the always-sagacious Franklin Sanders to ask the following questions: “Ever wonder<\/a> what central bankers do at a conference? Circle up their chairs and pull the wings off flies? Tie burning sticks to cats’ tails and let ’em loose? Unlimber their BB guns on mockingbirds? Stomp on toads? The thought staggers my imagination.” Mine too, Mr. Sanders. Mine too.<\/p>\n

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Debit:<\/strong><\/span> One thing we do<\/strong><\/em> know is that Powell said at the conference that the world’s central banks were committed to getting inflation back under control<\/a>. Yes, the same central banks that were responsible for unintentionally unleashing the inflation genie from the bottle. In the meantime, others are taking matters into their own hands …<\/p>\n

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

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Debit:<\/strong><\/span> Of course, we all know the Fed will never be able to fix the inflation problem because there is far too much debt in our debt-based monetary system to ever recover; the system is destined to implode. And relatively soon. As for those of you who insist that more taxes can fix things, well … cool story, Bro. But the reality is this: the government has a spending problem<\/a> – not a revenue problem.<\/p>\n