It’s time to sit back, relax and enjoy a little joe …
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.
I hope everybody had a wonderful week. And with that, let’s get right to this week’s commentary, shall we?
There are no markets; only interventions.
— Chris Powell
Credits and Debits
Debit: Did you see this? US cattle supplies, have fallen to the lowest level in 73 years. The good news is that while cattle supply remains down year-over-year, record-high animal weights are helping to offset the decline in volume. It also helps that the cattle industry is also likely at or near the bottom of its usual 12-year inventory cycle, which suggest price pressures should be easing soon. In the meantime, cattle will continue to be maligned by the usual suspects, and under-appreciated by most of society.
Debit: Still, US beef prices from the end of May showed the average price for a pound of ground beef reached another all time high of nearly $6 a pound – which makes us wonder if Costco’s $1.50 hot dog is truly “all-beef” – or something a bit more… mysterious. On the other hand, who cares, when you can have enjoy one of their famous tube-steaks for just four easy payments…
Debit: In other news, more than 1 in 3 baby boomers who are homeowners said they will never sell their homes. Another 30% percent say they’ll sell their home at some point, but “not within the next decade.” As for the Silent Generation, 45% say they do not plan to sell their residential properties. Not that anybody can afford them anyway …
Credit: Then again, it’s not as if there is a shortage of homes on the market – last month saw yet another monthly increase in the number of homes put up for sale. As a result, the official inventory of homes available for sale has now increased for 19 consecutive months. We wonder if the older generations are saying they have no intention of selling because they saw the latest existing home sales data for May, which reported the weakest number of closings since the depths of the housing market crisis in 2009. In the meantime …
Debit: The truth is, the housing market is completely broken as prices not only remain high – they keep climbing – despite a growing inventory. In fact, the median sales price last month increased 1.3% from a year ago to $422,800 – that’s the highest price for any May on record. Since the pandemic five years ago, prices are up 51% – which suggests that, at some point, the market should be due for an epic takedown. We’ll see. And speaking of epic take downs:
Credit: Meanwhile, this week the stock market resumed its ascent to new heights, with the S&P 500 leading the way with its first record high since February. Along with the Dow and Nasdaq, all three major US stock indexes posted weekly gains, and the Nasdaq confirmed it entered a bull market since its post-“Liberation Day” trough on April 8th.
h/t: @HPierre_
Credit: Speaking of the stock market, macro analyst Greg Mannarino says that, “Apple, Microsoft, Google, Meta, Nvidia, all engaging in record buybacks. Why Now? Because these companies know that the underlying economy is weakening with respect to the job market, manufacturing, imports, dollar collapse. They are using buybacks to mask the coming earnings deterioration.” Yes, that’s essentially nothing more than a little mathematical manipulation that will eventually backfire – unlike this …
Debit: By the way, the US National Debt surpassed $37 trillion this week…
Debit: With that in mind, the latest projection of the looming ‘X date’ – that is, the point when the US federal government is no longer able able to pay its bills because of the debt ceiling cap – finds that the deadline is likely to fall as early as August 15th. Well… that is unless Congress acts and raises the debt ceiling for the millionth time. Then again, with clowns to the left of us and jokers to the right, we don’t think that’s going to be a problem.
Credit: Needless to say, the debt drama is pure folly because our fraudulent fiat monetary system can’t function without sustained debt issuance at an increasingly-faster accrual rate. That’s why macro analyst James Turk says that “the US dollar (USD) will be finished” only when Americans finally figure out that the price inflation they see — not just in assets, but everything else — is the direct result of the Fed’s relentless USD debasement policy. That’s also when those who should have known better will feel like a giant, well, you know …
Credit: The bottom line is that both gold and silver offer unparalleled protection from the economic hard times and a declining living standard that result from our failing debt-based monetary system. The only catch is that, like any other type of insurance, those precious metals must be in your possession beforehand.
By the Numbers
Summer is peak moving season. When it comes to interstate migration, among those US states with net outbound-traffic, the same five states have had a monopoly on the top positions since 2020. Here are the ten states with the most outbound traffic in 2024:
10 Connecticut (outbound traffic: 54%)
9 Nebraska (55%)
8 Mississippi (56%)
7 Wyoming (57%)
6 North Dakota (58%)
5 Massachusetts (58%)
4 California (58%)
3 New York (59%)
2 Illinois (60%)
1 New Jersey (67%)
Source: United Van Lines
The Question of the Week
How many different addresses have you lived at during your lifetime?
- Less than 3
- 3 to 5
- 6 to 8
- 9 to 12
- More than 12
Last Week’s Poll Results
Do you have a life insurance policy?
- Yes 51%
- No 49%
More than 1800 Len Penzo dot Com readers responded to last week’s question and it turns out that they are almost evenly split between those who do carry a life insurance policy, and those who don’t. As the household’s sole breadwinner, I maintained a policy on myself up until the time my last child, Nina, reached adulthood. There was little reason to carry a policy after that.
If you have a question you’d like to see featured here, please send it to me at Len@LenPenzo.com and be sure to put “Question of the Week” in the subject line.
Useless News: Amazing Grace
An atheist was walking through the woods and he thought to himself: What majestic trees! What powerful rivers! What beautiful animals!
Suddenly, he heard a rustling in the bushes behind him. He turned to look and saw a 7-foot grizzly bear charging towards him. So the atheist began running as fast as he could along the path.
As he was running, he looked over his shoulder and saw that the bear was closing on him.
After running a little bit more, he looked over his shoulder again. This time, the bear was even closer.
Then the atheist tripped and fell.
Rolling over to pick himself up, he found the bear was right on top of him, reaching towards him with its left paw, while raising the right paw for a deadly strike.
At that instant the atheist cried out, “Oh my God!”
Time Stopped. The bear froze. The forest was silent.
Then a bright light shone upon the man, and a voice came out of the sky: “You deny my existence for all these years. You teach others I don’t exist, and even credit creation to a cosmic accident. Do you still expect me to help you out of this predicament? Am I to count you as a believer?”
And with that, the atheist looked directly into the light and replied, “It would be hypocritical of me to suddenly ask you to treat me as a Christian now … but perhaps you could make the bear a Christian?”
“Very well,” said the voice.
The light disappeared, and the sounds of the forest resum