{"id":79746,"date":"2023-08-05T01:15:54","date_gmt":"2023-08-05T08:15:54","guid":{"rendered":"https:\/\/lenpenzo.com\/blog\/?p=79746"},"modified":"2023-10-28T08:16:28","modified_gmt":"2023-10-28T15:16:28","slug":"black-coffee-5-aug-2023","status":"publish","type":"post","link":"https:\/\/lenpenzo.com\/blog\/id79746-black-coffee-5-aug-2023.html","title":{"rendered":"Black Coffee: Looking Out for #1"},"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’ve got another busy weekend ahead of me, so let’s get right to this week’s commentary …<\/p>\n

Paper is a check drawn by legal looters upon an account which is not theirs: upon the virtue of the victims. Watch for the day when it bounces, marked: \u2018Account Overdrawn.<\/em><\/p><\/blockquote>\n

\u00a0– Ayn Rand, Atlas Shrugged<\/em><\/strong><\/p>\n

If he knew one thing about life, it was this: Look out for yourself. No one else would do it for you. If you were cheated or tricked, it was your own fault, and a lesson best learned before the world devoured you.<\/em><\/p><\/blockquote>\n

– Kelly Armstrong, Omens<\/em><\/strong><\/p>\n

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

Debit: <\/strong><\/span>Did you see this? After a brief cool down, US home prices rose again in the midst of high inflation and mortgage rates. As a result, first-time homebuyers are once again facing the highest home prices in years, as the average sale price of a typical starter home is $243,000 – that’s 2.1% higher than June 2022, and 45% above pre-pandemic levels. It also means first-time buyers now need to earn $64,500 per year to afford a home – that’s $7200 more than last year, representing a 13% increase<\/a>. That being said, the big mystery is: Where in the US can you still buy a starter home for $243,000? Maybe if it’s a refrigerator box.<\/p>\n

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Credit: <\/strong><\/span>Meanwhile, as we all wait for the expected unveiling<\/a> of a new gold-backed currency at the next BRICS conference later this month, skeptics abound. However, as macro analyst Luke Gromen points out, any debate around the purported introduction of a new BRICS currency misses a critical point: All that’s needed is for the world’s biggest energy exporter and importer – Russia and China, respectively – to establish a gold-oil settlement ratio above the ratio that is currently determined by the West. Once they do, the free market will take it from there. (h\/t: Bently)\u00a0<\/em><\/p>\n

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Credit: <\/strong><\/span>Then again, any attempts to end the dollar’s global superiority won’t be easy. Why? Well … as the macro analysts at Cross Border Capital point out, “the dominance of the US dollar parallels the dominance<\/a> of the US financial system. Thus, the end of the US dollar as international money first requires the demise of US finance. And that would require far more than merely displacing the dollar as the dominant currency – itself no small feat – because the current global dollar-based monetary system is built upon the stability of the very large and liquid US Treasury market.” Er … and debt. Lots and lots of debt.<\/p>\n

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Debit: <\/strong><\/span>On a related note, it turns out that in fiscal 2022 the federal government spent $6 trillion of the nation’s $30 trillion nominal GDP – that’s 20%! Of that total spending, $5 trillion was paid with federal revenues; however, the other $1 trillion was funded through debt. For those not counting at home, 88% of all federal expenditures<\/a> are comprised of social welfare and interest on the debt – and those payments require $5.3 trillion of the government’s $5 trillion revenue stream. Talk about things that make you say “hmmm.” So … does anybody else see the problem here? Okay … then how about here:<\/p>\n