{"id":79974,"date":"2023-08-26T01:15:56","date_gmt":"2023-08-26T08:15:56","guid":{"rendered":"https:\/\/lenpenzo.com\/blog\/?p=79974"},"modified":"2023-08-28T14:13:52","modified_gmt":"2023-08-28T21:13:52","slug":"black-coffee-26-aug-2023","status":"publish","type":"post","link":"https:\/\/lenpenzo.com\/blog\/id79974-black-coffee-26-aug-2023.html","title":{"rendered":"Black Coffee: Cutting Out the Middle Man"},"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

If our nation can issue a dollar bond, it can issue a dollar bill. The element that makes the bond good, makes the bill good also. The difference between the bond and the bill is that the bond lets the money brokers collect twice the amount of the bond plus an additional 20%, whereas the currency pays nobody but those who contribute directly in some useful way. <\/em><\/p><\/blockquote>\n

– Thomas Edison<\/strong><\/p>\n

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

Debit:<\/strong><\/span> Did you see this? The BRICS trading bloc wrapped up its annual summit this week in South Africa with many observers and talking heads predicting that a new currency with an anchor to gold would be unveiled to challenge the US dollar (USD). Well … that<\/strong><\/em> didn’t happen. But there’s no room for “Almighty Dollar” proponents to be smug, as it was<\/strong><\/em> announced that Saudi Arabia, Iran and the UAE will officially join the BRICS at the end of this year, thereby giving the economic bloc four of the world’s six largest oil producers<\/a> (including Russia) and effectively killing the petrodollar in the process.<\/p>\n

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Credit:<\/strong><\/span> In other news, I see that Fidelity recently analyzed the balances of its 45 million retirement savings accounts and found that 378,000 people with Fidelity 401(k) plans had at least $1 million<\/a> in their accounts at the end of June – that’s up 25% from the same time last year. And the number of individual retirement account (IRA) millionaires also grew by roughly the same amount over the same period, with 349,104 at the end of June. Hooray! Then again …<\/p>\n

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Credit:<\/strong><\/span> By the way, the total contribution rate – which combines employee and employer contributions – for the second quarter was 14%, in line with the generally-accepted 15% recommendation that many experts advise. That being said, a seven-figure balance is far from the norm. Overall, the average 401(k) balance today is just $112,400<\/a>, while the average IRA balance is $113,800. No doubt those averages are skewed by extremely high and low balances at both ends of the spectrum, which is why it’s often more enlightening to look at median<\/strong><\/em> balances – that is, the middle value of all the samples in a given set:<\/p>\n

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Debit:<\/strong><\/span> That being said, there are far more Americans who can only wish they had any retirement savings at all, as evidenced by rising retail theft, organized crime, and vendor fraud. In fact, so-called “inventory shrink” was a $100 billion problem<\/a> for stores in 2021 – that’s more than double the what it was in 2015 when the total was $45 billion. And based on last week’s earning calls from Home Depot, Target, Walmart, and other large retailers, the problem is only getting worse. How bad is it? As one example, Target complained that they lost $400 million in the past year to crime. And it’s not just retailers; crime is affecting the fast food joints too:<\/p>\n