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.
Well … another busy week is behind us. So with that in mind, let’s get this party started!
Fire tests gold; suffering tests brave men.
– Seneca
Credits and Debits
Debit: Did you see this? Each week, Publishers Clearing House (PCH) pays out approximately $30,000 to prize winners, with roughly $1.8 million owed to recent recipients. In fact, PCH currently owes past winners about $26 million over the next 60 years. Now for the punchline: The company filed for bankruptcy last week, claiming to have only $490,000 in cash – but $40 million in outstanding debts. Even so, PCH says they still intend to continue its sweepstakes operations during the bankruptcy process. Maybe so – but will they actually be able to provide the payouts? Stay tuned.
Credit: In other news, we see that the consumer price index (CPI) rose a seasonally adjusted 0.2% for the month, putting the 12-month inflation rate at 2.3%; that is its lowest level since February 2021. Hey … just don’t get too excited. All that means is that prices are still going up – just not as fast as before. At least for now. On a related note …
Credit: Digging a little deeper into the inflation data, there was a bit of bad news – it turns out that restaurant prices continued to climb, increasing 0.1% in April. The good news is that grocery prices decreased 0.1% in April – that’s after a 0.4% jump in March. That suggests more people will continue to make and consume the majority of their meals at home. And that’s not a bad thing. Especially with grilling season just getting started. Then again …
Debit: In other news, a quick look at the US National Debt shows that it surged six-fold over the past 25 years, to a staggering $36.8 trillion. Even worse, the debt is now growing by roughly $1 trillion every three months – and the pace of accumulation is accelerating as well. Yes; it’s an extremely alarming situation. That being said, you can bet these guys probably don’t care:
Credit: Of course, trying to keep America’s debt load under control is a mug’s game because it’s a feature of our debt-based fiat monetary system. In fact, as sagacious macro analyst Franklin Sanders pointed out last week, under our current system, “all (currency) is borrowed into existence; so it’s born with an interest rate burden. This is why they must inflate or die – if (the Fed) stops inflating there won’t be enough (currency) to pay the interest and the system will collapse in deflation.” Yes; it’s a terrible dilemma. Especially for the Fed, which is responsible for managing this fraudulent system. Thankfully, there’s an AI-based app for that …
Credit: Unfortunately for all of us, the debt-based system has been in force for so long now that it’s quickly approaching its effective mathematical limit. As a result, financial analyst Michael Howell says that Wall Street and the banks are no longer focused on businesses going to the capital market and getting funding. Instead, he says, the banks are focused on “a world dominated by debt and debt refinancing, with three-quarters of all market transactions today involving debt refinancing.” True dat. Needless to say, that’s also one of the worst kept secrets in America …
Debit: Going back to Mr. Sanders … he offered a final reality check for everyone when he pointed out that, in the current monetary system that we’re all stuck with, “there is no money; it’s all bank credit created out of thin air. Economists will either dodge saying this or, if they admit it, will assure you that it doesn’t matter. Our monetary system is one gigantic con game.” It sure is. Needless to say, it’s all so obscene. And it’s certainly more obscene than this …
Debit: For those who believe that calling our current monetary system a “con game’ is a bit harsh, maybe they’ll reconsider when they realize hear Catherine Austin Fitts’ claim that a rigorous independent review of public US budget documents reveals that between 1998 and 2015 there is $21 trillion in spending – yes, trillion with a T – that the US government can’t account for. We believe it. Pro tip: That kind of fraud would be utterly impossible if the US dollar (USD) was anchored to gold.
Debit: Here’s another reality check: Gold is flashing a clear warning about the deteriorating US fiscal situation. The yellow metal’s surging price is a big sign that it’s well-aware the con-game will soon be coming to an end because, as we previously mentioned, there is absolutely nothing the Fed can do to rein in – let alone slow down – the US government’s uncontrolled debt accumulation. That’s right; nothing. Why? Because the debt is now on what we call “the business end” of an exponential curve – and the math doesn’t lie …
h/t: Egon Von Greyerz
Credit: Hey … we’re not the only ones who are convinced that the con game is ending. Sprott market strategist Paul Wong warned this week that, “global investors are losing faith in a US financial architecture that had been previously seen as reliable for decades. For the first time since 1977, US equities, US Treasury bonds (USTs) and the USD fell together, while gold vaulted to record highs. What was once a stable pattern of flight to quality in US assets has flipped – and we believe this inversion is a warning sign that something fundamental has changed.” Ya think? Thankfully, a growing number of people are finally waking up …
Credit: In fact, the only thing the Fed can do from this point forward is to try and extend the con game for as long as possible using more quantitative easing (QE) – whether overt or covert – and yield curve control. As macro analyst Jesse Columbo points out, “Gold is increasingly pricing in the risk of a fiscal and currency crisis, (due to) rising debt. So it’s only natural that gold continues to move higher in lockstep with that growing risk.” Indeed. After all, while gold’s role as a monetary system smoke detector can be tampered with in the short term, over the long term it has never failed to ultimately expose any dying fiat currency.
Credit: Remember: Gold is wealth insurance because it is, first and foremost, money. In fact, this week market analyst Frank Holmes reminded us that, “Gold … is money you want to own when the world is on fire. As global fiat currencies get printed with increasing abandon, the yellow metal remains one of the few truly finite, unprintable stores of value.” We couldn’t agree more. It’s also an important observation with the global debt-based monetary system currently billowing smoke from underneath its hood.
By the Numbers
The summer movie season is just around the corner. With that in mind, how many of the 10 biggest movies of 1995 have you seen? Frankly, it’s hard for me to believe that these movies are already 30-years old!
1 Batman Forever (US box office gross: $184 million)
2 Apollo 13 ($172 million)