{"id":83479,"date":"2024-06-08T01:00:18","date_gmt":"2024-06-08T08:00:18","guid":{"rendered":"https:\/\/lenpenzo.com\/blog\/?p=83479"},"modified":"2024-06-11T09:20:00","modified_gmt":"2024-06-11T16:20:00","slug":"black-coffee-8-june-2024","status":"publish","type":"post","link":"https:\/\/lenpenzo.com\/blog\/id83479-black-coffee-8-june-2024.html","title":{"rendered":"Black Coffee: Let Them Eat Cake"},"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

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In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value.<\/em><\/p>\n<\/blockquote>\n

– Alan Greenspan<\/strong><\/p>\n

The American people have a love-hate relationship with inflation: They hate inflation but love everything that causes it.<\/em><\/p><\/blockquote>\n

– William E. Simon<\/strong><\/p>\n

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

Credit:<\/strong><\/span> Did you see this? Nvidia, Microsoft, Apple, and Alphabet alone added over $1.4 trillion<\/a> in value in the month of May, more than all other S&P 500 stocks combined. Nvidia, boosted by AI demand, accounted for half of this gain. While AI advancements, like the launch of ChatGPT, have fueled significant growth, there are concerns that the surge may echo the unsustainable profit levels seen in previous market bubbles. On the other hand, it looks like AI is working to solve that problem all by itself. Or not:<\/p>\n

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Debit:<\/strong><\/span> Then again, if the business barometer known as the Chicago purchasing managers\u2019 index (PMI) is any indication, the good times for these companies may be coming to an end<\/a> – if only temporarily. That\u2019s because it fell in May to 35.4 – that happens to be the sixth consecutive monthly decline and the lowest level since the pandemic in May 2020. Curiously, the Chicago PMI has been in contraction for 19 of the past 20 months – and yet the economy is supposedly still not in a recession. Makes sense.<\/p>\n

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Debit:<\/strong><\/span> Meanwhile, back on Main Street, a new survey reveals that 32% of retirees lack confidence<\/a> in their ability to live comfortably in retirement. Inflation was the most common reason for that lack of confidence. Additionally, more than one-half of retirees who responded said they were worried they would need to make significant spending cuts to compensate for rising prices. Imagine that. Then again, happy are those who can set aside our everyday travails and focus on the things that truly<\/strong><\/em> make life worth living.<\/p>\n

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Debit:<\/strong><\/span> On a related note, the Senior Citizens League is estimating that the average retired worker’s monthly Social Security (SS) benefit will be $1967 next year. That would be a 2.7% cost-of-living allowance (COLA) resulting in the average retiree receiving an extra $51 per month<\/a> – that\u2019s a whopping $612 for all of 2025. Paltry COLAs like that are why there are many retirees out there whose biggest regret is not saving a dime in their working years for retirement. Although I’m quite sure there is a subset that will say it’s only their second<\/strong><\/em> biggest regret in life – at least among those who didn\u2019t waste two hours of their life watching Gotti<\/em>.<\/p>\n