{"id":85317,"date":"2024-11-23T01:00:59","date_gmt":"2024-11-23T09:00:59","guid":{"rendered":"https:\/\/lenpenzo.com\/blog\/?p=85317"},"modified":"2024-11-27T08:36:12","modified_gmt":"2024-11-27T16:36:12","slug":"black-coffee-23-nov-2024","status":"publish","type":"post","link":"https:\/\/lenpenzo.com\/blog\/id85317-black-coffee-23-nov-2024.html","title":{"rendered":"Black Coffee: A Lesson In Creative Accounting"},"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

Ponzi and all of his successors tap into a fundamental part of human nature. One part of our brain tells us this is too good to be true. The other side tells us this is too good to miss. The key to any con is getting a mark to tip to the too-good-to-miss side.<\/em><\/p><\/blockquote>\n

– Mitchell Zuckoff<\/strong><\/p>\n

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

Debit:<\/strong><\/span> Did you see this? After losing $6 billion during the 2023 fiscal year, the US Post Office (USPO) increased its rates to stop the bleeding. The result: This year the USPO lost more<\/a> than $9 billion<\/strong><\/em>. Heh. Ladies and gentlemen, any private sector company that was run this poorly would be out of business by now. Perhaps its time for the incoming Department of Government Efficiency – yes, it\u2019s an oxymoron – to make the USPO its first victim. Never mind the USPO’s<\/strong><\/em> countless victims …<\/p>\n

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Credit:<\/strong><\/span> Elsewhere, bitcoin (BTC) is pushing $100,000; all while the powers-that-be are openly admitting that the cryptocurrency is being used<\/a> to stimulate purchases of US Treasuries (USTs) – and refinance US debt by exporting inflation around the world – via the dubious BTC purchasing-facilitator known as \u201ctether\u201d (USDT). Macro analyst Rafi Farber calls this \u201ca monetary Mobius Strip<\/a> from Hell (where) USDT is backed by USTs, which back the US dollar (USD), which is what you redeem USDT for, which is used to buy BTC, which is backed by USDT, which is backed by USTs.” In other words: it’s a scam. Just don’t tell that to the Church of Bitcoin congregation.<\/p>\n

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Whatever bitcoin is, it isn’t a safe haven from a fiat monetary system failure – so … caveat emptor. (h\/t: athena-alpha.com)<\/p><\/div>\n

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Credit:<\/strong><\/span> Oh … and Mr. Faber wasn’t finished, observing that this new paradigm “is a spiral of monetary nothingness.\u201d Ironically, this also means BTC buyers are prolonging the debt-based monetary system’s finite lifetime just a wee bit longer – unlike physical precious metals buyers who speed up the demise of the monetary scam by draining currency from it. As a result, Faber points out the swindlers who are benefitting from this scheme don’t care how high the BTC price<\/a> actually climbs. It’s also why those controlling the system do<\/strong><\/em> have a vested interested in keeping a lid on the USD price of gold and silver – a fact that’s as indisputable as this<\/strong><\/em>:<\/p>\n

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Debit:<\/strong><\/span> On a related note, the relentless price inflation that most Americans have been struggling with over the past four years appears to be on the verge of making another run higher<\/a>. Although if you ask some people, the inflation genie is already<\/strong><\/em> out of the bottle again and running amok:<\/p>\n

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Debit:<\/strong><\/span> Needless to say, as long as prices continue to rise faster than real (inflation-adjusted) wages, living standards will continue falling. With that in mind, it’s not surprising that the average American household currently has about $8871 in credit card debt<\/a>, based on the most recent US credit card debt and household data. In total, Americans have $1.2 trillion in credit card debt – that\u2019s 53% higher than it was in 2020. At the same time, the total percentage of credit card accounts that are at least 90 days delinquent is at its highest point in 13 years. But for now, the financial world continues to hum along, seemingly without a care in the world.<\/p>\n

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Debit:<\/strong><\/span> But wait, it\u2019s not just credit cards. US household debt of all kinds is currently a record $17.9 trillion. That includes a record $12.6 trillion in mortgages, $1.6 trillion in auto loans (another record), and $1.6 trillion in student loans. Ouch. Clearly, Americans are addicted to credit. In fact, the Kobiessi Letter<\/em> reported this week that, “Total household debt is up 56%<\/a> over the last 10 years. Meanwhile, delinquency rates on credit cards and auto loans are now at 2008 levels.\u201d As for their conclusion? Not surprisingly, it\u2019s this: “Consumers are \u2018fighting’ inflation with debt.\u201d It’s a dangerous game, to be sure. So, as they say in England, mind the gap:<\/p>\n