Watching a Monetary System In Its Death Throes
.Watching a Monetary System In Its Death Throes
By Len Penzo
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.
Don’t be fooled by this week’s market rebound — the monetary system is flat-lining and the Fed and Congress will not be able to revive it. The only question now is how long the US government and its increasingly impotent central bank remain in denial.
Their refusal to acknowledge reality could go on for many many months — so don’t be surprised if they foolishly decide to look the other way until hyperinflation rears its ugly head.
Gold is an objective value, an equivalent of wealth produced. Paper is a mortgage on wealth that does not exist, backed by a gun aimed at those who are expected to produce it. Paper is a check drawn by legal looters, upon an account which is not theirs, upon the virtue of the victims. Watch for the day when it bounces, marked, ‘Account Overdrawn.’– Ayn Rand, Atlas Shrugged
All paper money eventually returns to its intrinsic value: nothing.— Voltaire
5 Key Lessons Learned in 25 Years of Retirement Planning
.5 Key Lessons Learned in 25 Years of Retirement Planning
Smart Insights From Professional Advisers
By Nino Pavan, Investment Adviser, CFP | Financial Designs July 5, 2019
After witnessing the accomplishments that retirement savers have achieved, and the mistakes they've made, a few helpful truths become clear.
Like most financial advisers, I’ve spent (and still spend) a good share of my time building on the technical knowledge I need to do my job. The financial industry is always changing, and it’s important to stay on top of new theories, trends and tools.
But after 25 years of working with retirees and pre-retirees, I’ve learned that experience — and a lot of listening — can be every bit as valuable. It helps me to ask the right questions, keep an eye out for potential red flags, and to understand (as well as predict) certain emotions and behaviors.
Helping clients plan for a successful retirement means sharing the lessons I’ve learned during that time. Here are five lessons that stand out:
Don’t Underestimate How Much Income You’ll Need In Retirement
10 Signs The US Is Heading For A Depression
.10 Signs The US Is Heading For A Depression
by Tyler Durden Thu, 04/02/2020 -
Authored by Mike Whitney via The Unz Review,
1– Unemployment Is Off-The-Charts
Thursday’s jobless claims leave no doubt that the country is in the grips of another severe recession. More than 6.6 million Americans filed for unemployment insurance in the last week. That number exceeds the gloomiest prediction of more than 40 economists and pushes the two-week total to an eye-watering 10 million claims.
According to CNBC:
“Those at the lower end of the wage scale have been especially hard-hit during a crisis that has seen businesses either cut staff outright or at best freeze any new hiring until there’s more visibility about how efforts to contain the coronavirus will work.
“We’ve lived through the recession and 9/11. What we’re seeing with this decline is actually worse than both of those events,” said Irina Novoselsky, CEO of online jobs marketplace CareerBuilder.” (CNBC)
According to New York Magazine:
“Economists at the Federal Reserve Bank of St. Louis projected Monday that job losses from the coronavirus recession would reach 47 million and push America’s unemployment rate to 32.1 percent — more than 7 points higher than its Great Depression–era peak.”
White Hats Auxiliary Information Briefing 150
.The Philippicae – What Cicero Didn’t See
White Hats Auxiliary Information Briefing #150 April 2 2020
After the assassination of Julius Caesar, Cicero, a senator who had no love of Caesar, and did not partake in the assassination, turned his attention to attacking the character of Marc Antony. He felt that Antony was just as much a threat as Caesar, and should have also been done away with.
The written attacks became known as “The Philippicae”, or “The Philippics”. They were intended to rally support of the senate against Antony. It worked, and the senate raised an army, declared Antony an enemy of the state, and commenced to do battle with Antony’s forces at Mutina and Forum Gallorum.
Both battles were victories for the senate, but their key generals, Hirtius and Pansa, were killed, and the armies were leaderless and open for acquisition. The local magistrate of Cisalpine Gaul who assumed command, Decimus Brutus, was one of Caesar’s assassins. Octavian (Caesar’s heir), refused to work with him, and the two armies soon switched loyalties to Octavian.
The senate scrambled to bypass Octavian and retake command of the armies. However, always the clever man, Octavian reconciled with Antony, and along with Lepidus, a military general once aligned with the senate, formed the First Triumvirate. This left the senate defenseless.
Why I’m NOT Lending You the Money
.Dear Friend: Here Are 41 Reasons Why I’m NOT Lending You the Money
By Len Penzo
I recently saw a curious article in the Huffington Post that attempted to explain why our friends often fail to repay money that they borrow from us. In a nutshell, the piece offered five reasons:
You refuse to ask for the money back.
You make it too easy for your friends to ignore you.
You didn’t get the loan in writing.
Your friends assume that their unpaid debt won’t result in a broken friendship.
Your friends never planned to give you the money back in the first place.
Strangely enough, the author failed to offer the most logical — not to mention obvious — reason why anyone would ever welch on a loan from a friend or relative: they’re a deadbeat.
Truth be told, I have occasionally loaned money to my financially-pinched friends and relatives. Not often, but I have.
In several cases, I’ve offered the cash with no strings attached because I believed the bind they were in was due to something out of their control.
There’s A Major Sovereign Debt Crisis Looming
.There’s A Major Sovereign Debt Crisis Looming
Notes From The Field By Simon Black
April 2, 2020 Bahia Beach, Puerto Rico
By the mid 1300s, the Republic of Florence in modern day Italy had experienced one of the greatest economic booms in human history.
In less than a century, Florence had grown from a tiny, irrelevant backwater to become one of Europe’s largest cities and preeminent financial center.
The expansion was truly impressive. Florence’s population had grown 10x. It had become a leading manufacturer in both weapons and textiles.
(Many etymologists believe the word ‘pistol’ is derived from the name of a town near Florence called Pistoia, which was renowned for its quality arms.)
And the city’s innovations in the banking industry were revolutionizing business across Europe.
Florence’s phenomenal economic success is quite similar to what the United States experienced in its early history.
Why You Need a National Emergency Fund
.Here’s How Much Emergency Cash You Need Stashed if an Emergency Happens
Jaime Catmull GOBankingRates April 1, 2020
You’ve probably heard time and again that it’s important to have a rainy-day fund set up “just in case” something unexpected were to happen. But we’re now at a time when having an emergency fund is more vital than ever.
The coronavirus pandemic has already had devastating effects on the economy at large and, on an individual level, it has led to job loss and reduction of hours for many workers around the world.
Even if the coronavirus’ financial impacts haven’t hit you personally yet, here’s how to be prepared in case it does — plus how to set up a fund for unexpected future national emergencies.
Why You Need a National Emergency Fund
Part of being prepared for any contingency, big or small, is having a reserve of emergency cash at your disposal at all times. When you can’t rely on accessing your funds electronically, you’ll need some legal tender to buy food, gas or other necessities.
“Whether it’s Mother Nature or some other disaster out of your control, you always want to be prepared by having some emergency cash on hand,” said Annalee Leonard, an investment advisor representative and president of Mainstay Financial Group. “Banks and ATMs may not be up and running for days after a strong storm. I recommend my clients have three to five days’ worth of spending money, just in case.”
How To Decide How Much To Save
How to Manage Your Finances During a Depression
How to Manage Your Finances During a Depression
By Enero Febrero
By all measures, it has been a bad month for the American economy. Whether or not we’re about to enter a deep full-scale recession — or possibly even a depression — isn’t quite clear yet.
However, it’s fairly obvious that the coronavirus pandemic has had a significant impact on the monetary outlook of virtually every person on the planet.
Given that fact, it’s important for business owners, investors, entrepreneurs, and professionals in all walks of life to understand how to manage their finances during an economic downturn. Thankfully, there are proven ways to help you do exactly that. Here are four of the most basic ones:
Don’t Panic!
One of the hardest things to do during a recession is to remain calm. After all, no one likes to see the stock market plummet, interest rates hitting near zero, or a spike in unemployment.
How to Deal With Unexpected Change
.How to Deal With Unexpected Change
By Karima Mariama-Arthur March 26, 2020
Change is inevitable. When you’re expecting it, the transition can feel easy. When you’re not, it can be devastating.
Without question, your perception of change influences your response to it: Will the shift produce a positive or negative outcome for you? Will it be challenging, causing you to stretch and experience some periods of discomfort? Or, will it inspire you to get up early and stay up late, preparing for its new and prominent role in your life?
For better or worse, here’s what to do when change rears its head and requires you to pivot with it:
1. Acknowledge that the change is the new normal.
Denying the existence of change rarely frustrates its staying power. Instead of rejecting change, our most rewarding course of action is to acknowledge its presence and effect on our way of life.
In a new and riveting TED Talk called Coronavirus Is Our Future, global health expert Alanna Shaikh shares insights on the global pandemic in a straightforward and approachable way. She makes clear that our collective, human experience is the new normal.
She urges that while we cannot escape the multi-faceted impact of this crisis, we can admit our vulnerability to it and appreciate its influence on our global ecosystem. To be clear, this is the first logical step in confronting any kind of change and initiating the way forward.
First Thing’s First-- I Screwed Up
.First Thing’s First-- I Screwed Up.
Notes From The Field By Simon Black
March 31, 2020 Bahia Beach, Puerto Rico
First thing’s first-- I screwed up.
Yesterday I wrote to you about the US government’s initiative to loan money to small businesses, and I was wrong about an important detail. https://dinarrecaps.com/our-blog/the-small-business-administration-is-now-bigger-than-walmart
I said the maximum amount of the loan was equal to 2.5x a company’s annual payroll expense. That’s incorrect.
The correct maximum loan amount is 2.5x a company’s average MONTHLY payroll expense over the past 12 months.
[The total amount that the government intends to shovel into the economy through this program-- $350 billion-- is still correct.]
So, apologies for the error… that’s what I get for reading legislation at 5am on Sunday.
A few readers alerted us to my oversight. And when I re-read the legislation to confirm my mistake, I couldn’t believe what I was seeing.
Honestly, a loan of 2.5x annual payroll made sense to me. It would give small businesses plenty of firepower to stay afloat for the long haul.
But this bailout is just 2 ½ months! That’s nothing. It implies that the government thinks everything will be back to normal by mid-June.
This is the “V-shaped recovery” theory-- the idea that, while the economy has come to a screeching halt, it will come roaring back in a few months… and we’ll see an economic bonanza by the end of the year.
Most of the world certainly seems to buy into this belief, swinging from one extreme to another.
Not even ten days ago the general mood was abject terror, fear, and hysteria. Today we’re back to complacency and misguided optimism.
How To Use Your $1,200 Stimulus Check
.How To Use Your $1,200 Stimulus Check
Here's how to use your $1,200 stimulus check from the government's coronavirus relief package
Aimee Picchi, USA TODAY March 30, 2020
Millions of workers and their families will receive a one-time check from the government as part of the coronavirus stimulus package. Most adults will get $1,200, while children will receive another $500.
For workers who have already lost their jobs because of the pandemic’s hit to the economy, that extra money will likely be immediately put to good use — paying rent, mortgages, utility bills and more.
But if you have a paycheck, what’s the best use of that money? Should you save it, pay down debt or spend it to help keep your local economy working?
It’s a tricky calculation given the unknowns facing many families, such as whether the pandemic will linger for months or if businesses will resume normal operations within weeks. Layoffs are rippling through the economy, not only hurting restaurant workers but professionals such as lawyers and insurance providers.