{"id":82243,"date":"2024-02-24T01:15:14","date_gmt":"2024-02-24T09:15:14","guid":{"rendered":"https:\/\/lenpenzo.com\/blog\/?p=82243"},"modified":"2024-02-27T07:42:39","modified_gmt":"2024-02-27T15:42:39","slug":"black-coffee-24-feb-2024","status":"publish","type":"post","link":"https:\/\/lenpenzo.com\/blog\/id82243-black-coffee-24-feb-2024.html","title":{"rendered":"Black Coffee: Decisions, Decisions"},"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

Losing, cheating, and mediocrity are easy. Stay away from easy.<\/em><\/p><\/blockquote>\n

— Scott Alexander<\/strong><\/p>\n

On the plains of hesitation bleach the bones of countless millions who, at the dawn of decision, sat down to wait – and waiting died.<\/em><\/p><\/blockquote>\n

— George W. Cecil<\/strong><\/p>\n

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

Debit:<\/strong><\/span> Did you see this? A new survey by CNBC<\/em> found that 61% of adults between 18 and 34 say they’re not saving for retirement<\/a> – even though 34% have a side hustle outside of a traditional job to earn more money. That strongly suggests that more than 3 in 5 young Americans now need two jobs to maintain their current standard of living. Unfortunately, we can’t be 16 forever …<\/p>\n

\"\"<\/p>\n

\"\"<\/p>\n

Debit:<\/strong><\/span> In other news, the recent mainstream media narrative that ‘prices are coming down\u2019 got smashed last week with the release of the government\u2019s latest batch of gamed inflation numbers. In fact, both producer prices and<\/strong><\/em> the cost of services soared last month, with the core producer price index (PPI) reaching a new record high<\/a>; it\u2019s up 17.4% since January 2021. Which, in the real world, means it\u2019s actually up by at least twice that amount. That’s reality. And so is this:<\/p>\n

\"\"<\/p>\n

\"\"<\/p>\n

\"\"<\/p>\n

Debit:<\/strong><\/span> Speaking of gamed data, new figures released this week revealed that new housing starts are once again at their post-pandemic lows<\/a>. Even so, there is a record gap between what the government tells us about construction employment (they say its booming) and actual construction activity (based on permits and actual new homes being completed). This prompted Zero Hedge<\/em> to ask, “Did builders all suddenly get massively less productive? Or is the BLS just making shit up as usual?\u201d The respective answers, of course, are \u201cno\u201d and \u201cyes.\u201d Heck, … maybe they’re just bad at math. Regardless, housing prices are higher than ever, which begs this<\/strong><\/em> question:<\/p>\n

\"\"<\/p>\n

\"\"<\/p>\n

\"\"<\/p>\n

\"\"<\/p>\n

Debit:<\/strong><\/span> Then again, the housing market has nothing on cocoa<\/a>, where futures contracts now command $6000 per ton – that\u2019s triple<\/strong><\/em> the price cocoa was fetching in 2023 and a new all-time high. Anybody who has bought chocolate recently is aware of this – and more pain is on the way for consumers as commodities analysts say the cost of cocoa could reach as high as $10,000 per ton due to a severe cocoa shortage in West Africa that will be felt across supermarkets worldwide. That being said, as vices go, chocolate is still cheaper than smoking. For now. Oh, and shares of the latest stock market darling: AI-chip manufacturer, Nvidia (NVDA<\/a>):<\/p>\n

\"\"<\/p>\n

\"\"

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

\"\"<\/p>\n

Debit:<\/strong><\/span> Of course, the latest PPI data finally has the typical mainstream media economic cheerleaders questioning the so-called \u201csoft landing\u201d narrative<\/a>. However, the Fed is insisting all is well. “Let’s not get amped up when you get one month of (inflation data) that was higher than what you expected,” Fed President Austan Goolsbee said this week. “It is totally clear that inflation is coming down.\u201d Never mind that this is one of the same guys who insisted two years ago that inflation was … what’s that word again? Oh, yeah: “transitory.”<\/p>\n

\"\"<\/p>\n

\"\"<\/p>\n

Credit:<\/strong><\/span> By the way, the PPI is a leading indicator for the CPI because inflation hits producer prices first and those increases are then passed on to the consumer. Unfortunately for the Fed, that means their policy noose continues to tighten. As macro analyst Peter Schiff points out, despite claims to the contrary, \u201cthe Fed has no intention of continuing its inflation fight<\/a> – in fact, it has already surrendered.\u201d However, that won\u2019t become apparent until the Fed refuses to raise rates as inflation begins its second sustained wave upward. In the meantime …<\/p>\n

\"\"<\/p>\n

\"\"<\/p>\n

Credit:<\/strong><\/span> By the way, Schiff says despite record high consumer borrowing, government spending, and a growing currency supply, the Fed won\u2019t raise interest rates to arrest inflation because doing so would completely devastate the economy<\/a> – which would, in turn, make the government\u2019s budget deficit problem even more problematic. The good news is, the situation could be a lot worse. And if you don’t believe it, just ask anybody who works at Ikea:<\/p>\n