{"id":88410,"date":"2025-07-19T01:00:31","date_gmt":"2025-07-19T08:00:31","guid":{"rendered":"https:\/\/lenpenzo.com\/blog\/?p=88410"},"modified":"2025-07-24T08:16:21","modified_gmt":"2025-07-24T15:16:21","slug":"black-coffee-19-july-2025","status":"publish","type":"post","link":"https:\/\/lenpenzo.com\/blog\/id88410-black-coffee-19-july-2025.html","title":{"rendered":"Black Coffee: Slaves & Skeptics"},"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

Well… another busy week is behind us. So with that in mind, let’s get this party started!<\/p>\n

Whenever destroyers appear among men, they start by destroying money, for money is … the base of a moral existence. Destroyers seize gold and leave to its owners a counterfeit pile of paper, delivering men into the arbitrary power of an arbitrary setter of values. Gold is an objective value, an equivalent of wealth produced. Paper is a mortgage on wealth that doesn’t exist, backed by a gun aimed at those who are expected to produce it.<\/em><\/p><\/blockquote>\n

— Ayn Rand<\/strong><\/p>\n

A US dollar is an IOU from the Federal Reserve Bank; a promissory note that doesn’t actually promise anything.<\/em><\/p><\/blockquote>\n

— PJ O’Rourke<\/strong><\/p>\n

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

Debit:<\/strong><\/span> Did you see this? A new study by Real World Investor<\/em> has found that, at the current average interest rate of 4.4%, Americans with the median savings account balance of $8000 who make additional monthly contributions of $100 would accumulate just $57,629 in 20 years<\/a>. This falls far short of the $1.25 million required to fund a 25-year retirement with a modest annual living cost of $50,000. For those not counting a home, that means the gap between projected savings and retirement needs amounts to $1.19 million.<\/p>\n

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Debit:<\/strong><\/span> In other news, the CPI showed year-over-year inflation ticked up to 2.7% in June<\/a> – that\u2019s up from 2.4% in May. The data has defied claims that tariffs would sharply increase prices. As a result, economists have lowered their December inflation expectation from 3.6% to 3.0%. On the other hand inflation remains above the Fed\u2019s 2% target sham. In fact, the economy should always be in a state of zero-inflation or mild deflation<\/strong><\/em>. And while that should be intuitively obvious to the general public, it’s not because they’ve been hopelessly indoctrinated to believe the exact opposite<\/strong><\/em>. So now you know why there are still posted signs like this …<\/p>\n

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Debit:<\/strong><\/span> Meanwhile, the great Warren Buffett continued to ramp up his position in US Treasury bills to an astonishing $314.1 billion<\/a>, solidifying his dominance as the single largest non-government holder of short-term US debt. As of the end of March, the entire US T-bill market sat at $6.2 trillion, meaning Buffett’s gargantuan stake now amounts to 5.1% of the entire Treasury market. That being said, that doesn’t mean you have to follow every<\/strong><\/em> bit of advice that Warren passes out for general consumption…<\/p>\n

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No, really<\/a>.<\/p><\/div>\n

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Credit:<\/strong><\/span> Last week’s BRICS summit concluded with a pledge to continue\u00a0 \u2026 The BRICS nations \u2013 which act as a counterweight to the Group of Seven (G7) \u2013 represent almost half of the world\u2019s population, 36% of global land area, and more than a quarter of global economic output. The bloc \u2013 which sees itself as a forum for cooperation between countries of the Global South and the leading Western economic powers \u2013 solidified its plans to complete work on or competing financial institutions<\/a> to existing Western-dominated frameworks – which have yet to be challenged by any real competition. Until now …<\/p>\n

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Gary Larson – The Far Side<\/p><\/div>\n

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Debit:<\/strong><\/span> On a related note, the latest tariff policy is driving the BRICS to speed up their financial and monetary system infrastructure<\/a>, and take control of the gold trading market from London and New York. Needless to say, there are plenty of people who find that hard to believe. Oh… and here’s something else we found a bit hard to believe:<\/p>\n

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Jim Unger – Herman<\/p><\/div>\n

Debit:<\/strong><\/span> By the way, we have to assume that any skeptics who are still out there aren’t aware that China’s Cross-Border Interbank Payment System (CIPS) recently surpassed the US-based SWIFT system in single-day transaction volume for the first time ever. In fact, CIPS processed roughly $1.8 trillion<\/a> worth of transactions in April, while SWIFT has yet to process a similar volume on a single day. This event suggests a shift in global financial transaction processing, with CIPS playing an increasingly significant role, especially in RMB-denominated transactions. Still dubious? Behold, Exhibit 87B:<\/p>\n

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Credit:<\/strong><\/span> So how did we get here? Well, as macro analyst Matthew Piepenberg notes, “Ever since Nixon took away the gold chaperone from the US dollar (USD), politicians have been buying temporary prosperity, debt-based \u201cgrowth\u201d<\/a> and duped voters by taking US public debt levels from $248 billion in 1971 to $37 trillion today.\u201d Uh-huh. Just don’t tell the mainstream media; they seem to believe that paper USDs conjured out of thin air by the Fed are superior wealth protection to “unbacked” physical gold and silver. No, really. Now quiet on the set! Cameras are rolling in 3… 2… 1…<\/p>\n