{"id":87668,"date":"2025-05-24T01:00:43","date_gmt":"2025-05-24T08:00:43","guid":{"rendered":"https:\/\/lenpenzo.com\/blog\/?p=87668"},"modified":"2025-05-26T19:21:05","modified_gmt":"2025-05-27T02:21:05","slug":"black-coffee-24-may-2025","status":"publish","type":"post","link":"https:\/\/lenpenzo.com\/blog\/id87668-black-coffee-24-may-2025.html","title":{"rendered":"Black Coffee: Forward March!"},"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

Hitting rock bottom is an opportunity to rebuild.<\/em><\/p><\/blockquote>\n

— Anonymous<\/strong><\/p>\n

We’ve come to the edge of the abyss. Now it’s time to take a bold step forward.<\/em><\/p><\/blockquote>\n

— Ed Balls<\/strong><\/p>\n

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

Credit:<\/strong><\/span> Did you see this? A new Harvard poll has found that, for the first time in four years, a slight majority of Americans perceive the economy as \u201cstrong<\/a>\u201d – this despite constant fear peddling from mainstream media that trade tariffs will harm the economy. Huh. We’re not sure if this is more evidence that the mainstream media has truly lost any semblance of credibility, or that its ability to influence a significant portion of the public is finally dead.<\/p>\n

\"\"<\/p>\n

\"\"<\/p>\n

Credit:<\/strong><\/span> On a related note, the CFO for Home Depot said this week that the home improvement retailer has diversified where it sources its merchandise and doesn\u2019t plan to raise prices<\/a> because of higher tariffs. In fact, more than half of all its inventory is American made – and no foreign nation supplies more than 10% of its inventory. This is in direct opposition to WalMart, which warned that it would most likely have to raise prices by the end of this month because the majority its inventory is currently sourced from China. See how that works? Oh, and speaking of sources …<\/p>\n

\"\"<\/p>\n

\"\"<\/p>\n

Debit:<\/strong><\/span> Meanwhile, over on Wall Street, the Big 3 stock market indices all finished in the red on Friday. The Dow Jones Industrial Average sank 0.6%, the S&P 500 fell 0.7% and the tech-heavy Nasdaq Composite backed off 1%. That only served to make the major averages’ weekly performance figures worse than they already were. In fact, for the week, all three major averages fell more than 2%<\/a>. Needless to say, the bear market continues. Then again, for some people, it’s always<\/strong><\/em> a bear market …<\/p>\n

\"\"<\/p>\n

\"\"<\/p>\n

Debit:<\/strong><\/span> Last week, the Moody\u2019s rating agency downgraded the US credit rating<\/a> by a notch to “Aa1” from “Aaa”, citing rising debt and interest “that are significantly higher than similarly rated sovereigns.\u201d For those not counting at home, that was the last top credit rating the US had among the major credit rating agencies. Yes; that means higher interest rates to borrow in the future. Oh \u2026 and we know what you\u2019re thinking. So here\u2019s a refresher for those who forgot what each of the credit rating scores actually mean …<\/p>\n

\"\"

h\/t: @GoldSilverHQ via @TFMetals<\/p><\/div>\n

\"\"<\/p>\n

\"\"

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

Debit:<\/strong><\/span> The lower credit rating is not surprising when considering that the federal budget deficit is running near $2 trillion a year<\/a> – that\u2019s more than 6% of gross domestic product (GDP). At least the US government can print its own currency to \u201cpay\u201d the bills – unlike the many state and local governments who currently find themselves in deep fiscal holes. On the bright side, at least all of that local spending – and the taxes that partially support it – is being put to good use by highly-pragmatic leaders. Oh, wait \u2026<\/p>\n

\"\"
\n\"\"<\/p>\n

Debit:<\/strong><\/span> Meanwhile, America’s nearly $37 trillion National Debt has already surpassed the size of its economy – especially since the pandemic borrowing. Making matters worse, higher interest rates have also pushed up the cost to service the debt. As sagacious macro analyst Franklin Sanders points out, “This year $9.2 trillion of that debt matures and must be rolled over at much higher rates. The snowball is rolling downhill. When does it become uncontrollable<\/a>?\u201d It\u2019s a good question. Eventually the debt will lead to destruction of the US dollar (USD). If only that was as fun as destroying this<\/em><\/strong> stuff:<\/p>\n