{"id":86982,"date":"2025-04-05T01:00:32","date_gmt":"2025-04-05T08:00:32","guid":{"rendered":"https:\/\/lenpenzo.com\/blog\/?p=86982"},"modified":"2025-04-08T19:17:22","modified_gmt":"2025-04-09T02:17:22","slug":"black-coffee-5-apr-2025","status":"publish","type":"post","link":"https:\/\/lenpenzo.com\/blog\/id86982-black-coffee-5-apr-2025.html","title":{"rendered":"Black Coffee: Winners & Losers"},"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’ve got another busy weekend ahead of me, so let’s get right to this week’s commentary …<\/p>\n

If stocks double but the dollar loses half its value, who beyond Wall Street are the winners and losers? <\/em><\/p><\/blockquote>\n

– David Malpass<\/strong><\/p>\n

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

Debit:<\/strong><\/span> Did you see this? A new survey of 1000 American parents with adult children revealed that they were doling out an average of $1474 a month<\/a> to their kids every month<\/strong><\/em> for things like groceries, cell phone bills, rent, health insurance and even vaccinations. On average, Gen Zers were receiving $1800 every 30 days from mom and dad, while millennials were collecting $900. It\u2019s just more proof that the American Dream died after Gen X became adults. The good news is: There\u2019s still hope! At least as long as they don\u2019t outlaw the state lotteries …<\/p>\n

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Debit:<\/strong><\/span> On a related note, US government data released this week showed a combination of a continued slow-down in manufacturing couple with higher prices. In other words: stagflationary pressures<\/a> are continuing to build up in the economy. And the odds are those pressures almost certainly going to continue<\/strong><\/em> to increase for the foreseeable future, so buckle-up buttercups. Now for the punchline: And this before the Fed has even kicked off its next round of currency printing to stave off the next market collapse …<\/p>\n

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Debit:<\/strong><\/span> Meanwhile, this week the Department of Government Efficiency (DOGE) uncovered more shenanigans<\/a> – this time relating to Social Security (SS). To wit: 270,000 Social Security numbers (SSN) issued to non-citizens in 2021 – a figure that’s disturbing on its own. But the situation has only gotten worse with each passing year since then. In fact, fully 2.4 million<\/strong><\/em> SS numbers were allocated to foreigners last year<\/strong><\/em>. Then again, that hasn’t stopped people from complaining about DOGE. We suppose that’s because they’re certain all of those new SSNs are perfectly legit – and that they have absolutely zero<\/strong><\/em> impact on SS solvency.<\/p>\n

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Credit:<\/strong><\/span> Market analyst Egon VonGreyerz notes that, “global debt grew 75 times<\/a> from 1971 to 2021. Today, it is around $360 trillion. But if we add unfunded liabilities and derivatives which is a form of debt (when the derivative market implodes), then total debt and liabilities are around $3 quadrillion<\/strong><\/em>.” Yes, that’s quadrillion, with a Q. And guess where a big chunk of that “money” – actually, debt – ended up? Hint: Check your 401k valuation. Three-quadrillion US dollars (USD) is rarified air even for the fiscal stimulus world. In fact, it’s so rarified that the letter Q still refuses to sponsor us – unlike the letters M, B, and T.<\/p>\n

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h\/t: @CarlBMenger<\/p><\/div>\n

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Debit:<\/strong><\/span> By the way, VonGreyerz also reminded us this week that years of “massive money printing<\/a> and credit expansion have created the biggest stock market bubble in history.” At the 2000 stock market bubble top, the vaunted Buffett Indicator – which measures the ratio between US stock valuation to GDP – was \u201conly\u201d 145%. Soon after, the Nasdaq fell 80%. Now for the punchline: Today, the US Stock-to-GDP is more than<\/strong><\/em> 200%<\/strong><\/em>. Which reminds us of the following maxim: If we could create wealth by simply printing currency, then there would be no poverty and everybody would be rich.<\/p>\n

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h\/t: Egon VonGreyerz<\/p><\/div>\n

\"\"Debit:<\/strong><\/span> Although the stock market is still in bubble territory, it has clearly been struggling for more than a month, with a series of lower highs and – more importantly – lower lows<\/strong><\/em>. Perhaps not surprisingly, this week was no different, capped off by massive sell-offs on Thursday and Friday. Even so, the market arguably seemed to be in the process of a much-needed controlled rapid descent, rather than a panic-generated crash. No matter how you look it, on Friday alone the Dow plunged 2231 points<\/a> (5.5%), while the S&P 500 and Nasdaq saw 6.0% and 5.8% declines, respectively. Ouch!<\/p>\n

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h\/t: Chris Newhouse via Stacking Benjamins Basement<\/p><\/div>\n

Credit:<\/strong><\/span> Speaking of stock market woes, all 11 S&P sectors are now in a bear market against gold \u2013 a rare signal<\/a> that has preceded massive wealth transfers throughout history. And here\u2019s something else you probably don\u2019t see every day. Well \u2026 unless you live in Kansas. Or the American Southwest:<\/p>\n