{"id":80606,"date":"2023-10-21T01:15:24","date_gmt":"2023-10-21T08:15:24","guid":{"rendered":"https:\/\/lenpenzo.com\/blog\/?p=80606"},"modified":"2023-10-24T08:34:15","modified_gmt":"2023-10-24T15:34:15","slug":"black-coffee-21-october-2023","status":"publish","type":"post","link":"https:\/\/lenpenzo.com\/blog\/id80606-black-coffee-21-october-2023.html","title":{"rendered":"Black Coffee: Sitting on a Powder Keg"},"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

Well … another busy week is behind us. So with that in mind, let’s get this party started …<\/p>\n

In economics, things take longer to happen than you think they will – and then they happen faster than you thought they could. <\/em><\/p><\/blockquote>\n

– Rudiger Dornbusch<\/strong><\/p>\n

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

Debit:<\/strong><\/span> Did you see this? US bureaucrats are proposing tighter fuel-efficiency regulations that “would save Americans hundreds of dollars at the pump, all while making America more energy secure and less reliant on foreign oil.” Car manufacturers, however, aren’t on board<\/a> with the idea. They<\/strong><\/em> say that the tougher requirements will add $3000 to car prices. According to the carmakers, “The plan exceeds reason and will increase consumer costs with absolutely no environmental or fuel savings benefits.” Of course. So to sum things up: Consumers will pay $3000 extra at the dealership in order to “save hundreds at the pump.” That’s government math for you.<\/p>\n

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Debit:<\/strong><\/span> While government bureaucrats are working hard to increase living costs by imposing more senseless automobile regulations, price inflation is continuing to run rampant on just about everything else. So it shouldn’t be a surprise to anyone that a recent study has found that 64% percent of American adults say they are spending less on non-essentials<\/a>, while an equally high share say they pay more attention to bargains or deals. As for the other end of the consumer spectrum, only 11% of respondents say they haven’t changed their behavior at all. Curiously, nobody admitted they have resorted to shoplifting. Yet.<\/p>\n

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(h\/t: @WillCity_)<\/p><\/div>\n

Credit:<\/strong><\/span> On a related note, the ex-CEO of WalMart warned this week that, after a long period of cheap money cut short by the Fed’s rapid rate hikes, consumers are now beginning to buckle<\/a>. According to Bill Simon, “Consumers had an incredible 12-year run. Markets were buoyant, interest rates were low and money was available.” But now, he is warning that the music has stopped – save for a handful of key stocks keeping the market afloat – and the party is grinding to a halt. Thanks, Captain Obvious – but I don’t think many folks needed a CEO to tell them that. Besides, a CEOs job is to think outside<\/strong><\/em> the box. You know … like this:<\/p>\n

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Debit:<\/strong><\/span> Speaking of rising prices and buckling consumers, the National Association of Realtors’ latest housing affordability index fell<\/a> to its lowest level ever<\/strong><\/em>. Okay … at least it’s the lowest level since they started accumulating data in 1989. For those counting at home, the index is sitting at 91. For comparison purposes, 100 is the point where the median income can qualify for a mortgage with a 20% down payment; currently that income threshold is about $107,000. Put another way: Only higher-income American households that earn at least six-figures annually are now able to comfortably buy a home. Yikes.<\/p>\n

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(h\/t: @Retro1upArmy)<\/p><\/div>\n

Debit:<\/strong><\/span> Of course, inflation is merely a symptom of something more sinister: Government theft of your purchasing power, courtesy of spendthrift politicians. The US National Debt is now more than $33.5 trillion<\/a>, which comes out to $99,847 per citizen and $258,000 per taxpayer. Keep in mind this does not<\/strong><\/em> include unfunded liabilities such as Social Security, Medicare, and government pensions. Frankly, Americans’ total financial burden is hard to comprehend when those liabilities are included; today, that’s an astonishing $578,000 for every US citizen. Ouch. If only Congress was as inept at stealing others’ money as this<\/strong><\/em> guy …<\/p>\n