Trading Update

Sold the platinum eagles I bought at $1083.74 on 8/24/21 for $904.34 ($40 over spot) today. Fairly hefty loss, with nearly half of it coming from transaction fees (counting both the buying and the selling). In hindsight, not ideal. It was a very small position, but painful just the same.

I intended to hold for many years, but what a difference a year makes. When I bought, the 10-year TIPS yielded -1.01%. Today, it yields +1.39%. I must admit that I never saw that coming. It's a game changer, at least temporarily, if nothing else.

That's not the main reason why I sold though. I needed to sell something in order to pay ongoing expenses. My choices were TIPS outside my retirement account, I-Bonds, EE-Bonds, and these coins.

I don't want to sell anything that would push up my income this year, because I still qualify for the health insurance subsidy of the Affordable Care Act. I also don't want to sell things that are generating inflationary gains with inflation running so hot.

So, as much as it pains me, the coins had to go (and some I-Bonds too, soon). At least I can put the capital loss to very good taxation use thanks to my other investments tied directly to inflation.

Not the first difficult selling choice I've had to make. Won't be the last. TIPS generate plenty of inflationary gains but not all that much current income, savings bonds generate no income until cashed out, but the ongoing expenses continue to mostly come at night, mostly.

Thoughts on Food, Services, Health, and the Economy

The following chart compares the annual percentage change in personal consumption expenditures of food and services.

Looking forward to a return to normal.

There are three reasons we spent more money on food since the pandemic started. First, we have more food stockpiled. Second, our food has been delivered. Third, we have not been as price conscious. Taking advantage of sales hasn't been nearly as important to us over the past year. All of these things will soon reverse once we are vaccinated.

There is a disturbing fourth reason that food expenditures are up for others.

March 11, 2021
One year later, a new wave of pandemic health concerns

Weight change is a common symptom when people are having difficulty coping with mental health challenges. A majority of adults (61%) reported experiencing undesired weight changes, since the start of the pandemic, with more than 2 in 5 (42%) saying they gained more weight than they intended. Of this group, adults reported gaining an average of 29 pounds (with a median gain of 15 pounds), and 1 in 10 (10%) said they gained more than 50 pounds. For the 18% of Americans who said they lost more weight than they wanted to, the average amount of weight lost was 26 pounds (median of 12 pounds).

50 pounds is a lot to gain in one year, and a surprisingly large number of people managed to do it. Ouch.

For what it is worth, I intentionally lost about 10 pounds. It wasn't from eating less. I chose to walk more. I've averaged 6.7 miles per day during the pandemic. Trying to make a permanent habit out of both walking and cycling. Bought a bicycle late last year and will soon be riding it again. I'm optimistic that even more weight will be lost this summer.

I'm more optimistic in general. I do think inflation will be transitory. I do think interest rates will remain low. If true, I'm not even that concerned about debt. I don't currently see a stock market bubble or a housing bubble (although I do see pockets of great excess). Like Japan, it won't be a great era for savers, but that's okay. There are worse things than ZIRP. Not expecting the roaring twenties, but perhaps the meowing twenties? Could that be a thing?

I'm basing my optimism on a reversion to the mean, or lack thereof. We are continually told that when interest rates normalize, blah, blah, blah. I am arguing that rates have been normalized. They've been decaying exponentially for 40 years. That's what has been normal. Unless someone can give me a good reason why rates will soon stop decaying then I'm going to continue to believe that they will continue to decay. More money deposited in banks certainly won't lead to higher interest rates. Any counterargument based purely on excess money makes no sense to me at all. And man, has there ever been more excess money than right now?

This is not investment advice. My optimism is tempered. A friendly reminder that this is still an Illusion of Prosperity blog. The meowing twenties could easily become the hissing thirties. Sustainable and stable is not the long-term path we find ourselves on. Each economic crisis has been worse than the last.

My Long-Term Inflation Expectations Remain Well-Anchored

 

This is a can of petite diced tomatoes. Target will currently sell it to us for 49 cents. It’s not on sale. That’s the normal price.

If we spend $35, they will ship it to us for free. If we buy 72 cans, that would cost us $35.28. Each 14.5oz can weighs almost exactly 1 pound (due to the extra weight of the empty can). That means the total shipment weighs a whopping 72 pounds (expect some dented cans).

At the beginning of the pandemic, we also paid 49 cents for these cans at Target. How is it that pandemic hoarding, intermittent shortages, and massive monetary stimulus have not caused the price to go up? How can Target continue to ship us goods this cheap even as online shipping demand has skyrocketed?

It’s not just petite diced tomatoes. I’m only using this as an example. It’s pretty much everything we’ve stocked up on from Target, Costco, Walmart, and Amazon since the beginning of the pandemic.

In related news, it’s not too late to read the 2008 Hyperinflation Special Report on Shadowstats. For what it is worth, I’m personally waiting until their $175 subscription price starts inflating. I need to see them put their money where their mouth is. Even a token one cent increase to $175.01 would attract my attention. Is it too much to ask? It’s been the same price for more than a decade. In my opinion, it’s very difficult to sell a hyperinflation story without at least one subscription price increase in 12+ years!

Our government is definitely taking a “shock and awe” approach to thwarting deflation. Will it be enough to counter the increased pace of automation due to a pandemic though? Robots don’t get sick, nor do they require living wages. Based on Japan’s “success” at thwarting deflation, my long-term bet is on the robots. Their present seems to be our future.

January 1, 2021
NHK World - Japan: Autonomous delivery robots hit Japanese streets

A robot knocks on your door to deliver a freshly brewed cup of coffee, which you ordered just minutes earlier with one tap on your smartphone. This vision of the future could soon turn into reality as Japanese companies have started testing autonomous delivery robots on public streets. This comes as the need for social distancing amid the coronavirus pandemic has pushed up demand for autonomous delivery services.

Today's Redundant News Today

May 3, 2017
ABC News: Senate changes likely for Republican health care bill

For the Senate to pass a version of the Obamacare replacement bill, the two chambers would likely have to reconcile differences in what’s known as a conference committee. It’s not clear whether House Republicans who voted for their version of the bill would sign on to changes requested by senators and vice versa -- a perennial concern for any legislation that goes through conference committee

For the Senate to pass a version of the Obamacare replacement bill, opposing sides would likely have to reconcile differences in what’s known as a conference committee. It’s not clear whether House Republicans who voted for their version of the bill would sign on to changes requested by senators and vice versa -- a perennial concern for any legislation that goes through conference committee.



Proofreading jobs may soon become available at ABC News. Put another way, jobs involving proofreading may soon become available at ABC News.

Bad Mark. Bad! Bad! :)

My Personal Cynicism Level Trending Higher

First, allow me to offer a free interview tip.

When trying to land that perfect police job, try not to confess to any serious crimes. Always keep in mind that you have the right to remain silent.

March 14, 2017
Man confesses to date rape during police job interview, lands in jail instead

A West Virginia man mistakenly confessed to a date rape while interviewing for a probation officer job in South Charleston and is now facing sexual assault charges.

They say that we can become more cynical as we age. Now we know why. A younger, more naive version of me, might have expected this man to help pay for my Social Security. The older, wiser version of me, realizes that I may need to help pay for his incarceration.

P.S. Don't even get me started on Trumpcare.

The Sarcasm Report v.264

November 2, 2016
My Cat Is Sick, Expensive, and Keeping Me in Debt. Is It Time to … You Know?

Here’s the major issue: I have an elderly cat whom I love very, very much. She’s quite happy, but her medical care for a number of chronic illnesses runs about $600 to $700 a month for specialized food, prescription medicines, quarterly vet visits, and other needs. This is quite a burden. And if it wasn’t for this expense, which has been going on for four years now, I could—at least mathematically—not only be out of debt but have a cool $10,000 in savings.

You and your husband earn a combined $160,000 per year (a mere three times the median household income). Your gross income is only $13,333 per month. At $650 per month, your cat's current expenses add up to 5% of your combined gross income. Oh, yes. It is definitely your beloved cat that is keeping you in debt. Shame on her!

You have my permission to kill your happy cat that you love very, very much. Once that burden is removed, think how much happier you all will be. And remember, you are never obliged to pay for those you love, no matter how much they might depend on you or how much you might love them. It's all purely discretionary. Further, she is not actually your child. You did not give birth to her! You aren't even the stepmother. You should have opted for the "cool $10,000 in savings" years ago! Think how many younger and cuter kittens you could have had with that!

But pets are not children. We may refer to ourselves as pet mommies, but we aren’t obliged to pay for their medical care. While being an animal-lover feels necessary to you and me, it is all but the definition of discretionary spending.

See? I am not alone in my thinking. We animal-lovers need to stick together.

In all seriousness, our pets are our kids. We do feel obliged to pay for their medical care. If you cannot afford to pay 5% of your annual gross income to keep beloved happy pets alive in their elderly years, then perhaps you should not have pets in the first place.

Live and let live.

Seriously, if you really love your cat and your cat is indeed happy, then let her live.

The Sarcasm Report v.263

October 20, 2016
USA Today: Your groceries may be cheaper, but farmers and supermarkets feel the pain

Christopher says many shoppers are using the savings to buy more groceries.

This is great news. Market forces are finally tackling the widespread problem of shrinking waistlines in America, says my secret source, an anonymous executive of a for-profit statin drug manufacturer.

Michelle Morris, 45, of Canton, Mich., estimates her family is saving $10 to $20 a week at the grocery store. As a result, they’re eating out less frequently...

More great news. Now that food prices have fallen, people can finally afford to eat at home instead of dining out. There's nothing quite like anecdotal evidence to support a questionable implied theory.

The Sarcasm Report v.261

September 24, 2016
USA Today: How to turn a 3% raise on a $60,000 salary into $479,000

If you were able to save every penny of every raise for 15 years, using the same numbers above, you’d end your 15 years with over $479,000 in your retirement plan. In order to realistically pull this off, you’d have to somehow become immune to cost-of-living increases. Which means you somehow are able to keep your health care premiums stagnant, energy prices stagnant and consumer goods prices stagnant. It’s a very difficult task, but not impossible.

If someone out there has "somehow" become immune to cost-of-living increases and no longer sees health care premiums rise, please let us all know how you did it!

Next up, find out how to "somehow" lose 2 pounds each and every day eating nothing but pizza and ice cream while binge-watching Netflix from the comfort of your own couch! It's a very difficult task, but nobody can actually prove it's impossible!

Liposuction 24/7? Hooked up to a central home vacuum system? Think outside the box, people. This is America. Nothing is impossible!

Surveys, Surveys, Surveys

May 24, 2016
Most Americans Wouldn't Join a Clinical Trial, Survey Finds

TUESDAY, May 24, 2016 (HealthDay News) -- Just four in 10 Americans have a positive impression of clinical trials, a new survey finds.

July 27, 2015
Survey Response Rates

Internal surveys will generally receive a 30-40% response rate (or more) on average, compared to an average 10-15% response rate for external surveys.

Of the one in ten who respond well to surveys, four in ten respond well to clinical trials. Good to know.



Those who have never seen this British sitcom have missed out on one of the greater joys in life! :)

Compounding and Confounding Medical Errors

May 23, 2016
Just 5% of Terminally Ill Cancer Patients Understand Prognosis

Patients were asked what stage cancer they had, their current health status, how long they expected to live and if they had recently had a life-expectancy discussion with their doctor. Just 5 percent of the patients accurately answered all four questions about their disease and prognosis correctly.

5% sounds very optimistic. We're not done factoring in the rest of the errors yet. How about those doctors?

July 7, 2014
Do doctors understand test results?

Gigerenzer's research shows just how confused doctors often are about survival and mortality rates. In a survey of 412 doctors in the US he found three-quarters mistakenly believed that higher survival rates meant more lives were saved. He also found more doctors would recommend a test to a patient on the basis of a higher survival rate, than they would on the basis of a lower mortality rate.

Not done yet. Need to factor in defensive medicine.

One trend, evident in some health systems more than others, is for doctors to practise medicine "defensively", recommending treatments that are least likely to leave them open to being sued.

Not done yet. Need to factor in the lawyers.

February 2, 2013
Guilty as charged

According to a study in 2006, America has more lawyers per person of its population than any of 29 countries studied (except Greece), and it spends two to three times as much on its tort system, as a percentage of GDP, as other big economies (except Italy, where things are nearly as bad).

Not done yet. Need to factor in the Corporate America propaganda machine.



P.S. I'll probably get sued for saying this sarcastically, but it makes me feel real good, as an American, to share the lawyerin' top honors with Greece and Italy. Gives me great confidence in our long-term financial future, lol. Sigh.

The Hole Retail Story

May 18, 2016
Yahoo Finance: The whole retail story in 2 earnings announcements

The divergent quarterly results of Lowe’s (LOW) and Target (TGT) on Wednesday confirm a trend in consumer spending: Americans are spending less on apparel while spending lots in home-related categories.

Are people still shopping at grocery stores? Buying cars? Filling their prescriptions? Eating at restaurants? Buying gasoline? Furniture? Electronics? Sporting goods? Shopping online? How's Eddie Lampert at Sears holding up? Are there any Memorial Day sales this year? Are we going to have a great Christmas? How about next year? Have robots replaced all the retail employees yet? Is Walmart still hiring older workers to greet shoppers and make sure nobody is leaving the stores without paying? How about the bathroom situation? Have we finally figured out who can use which ones? Has Cramer chimed in yet? Is Ackman still shorting Herbalife? When can I expect sales taxes to go up again? Why don't they ever seem to fall? Are Canadians still coming down to buy stuff or is our dollar too strong? Would now be a good time to buy stuff in Canada? How about Apple? The gaming industry? People still downloading apps? Any good ones I don't know about?

Oops. That's one helluva paragraph. Sorry about that. Unfortunately, I have many more questions to ask. I don't know. Seems like I'm missing part of the whole retail story, but maybe that's just me.

So help me, if I get to the last page of this whole book and find out the butler did it, this story's gonna suck.

Dammit. That was supposed to be the end of my post but... Are people still buying physical books? Or are they all electronic now? What's the current Emergency Room Bill to College Textbook price ratio? Why do those two seem so linked? Coincidence? How can textbooks be so expensive when most books with text are so cheap? Where has Borders gone? Is Barnes & Noble next? What will replace them? Will our strip malls shrink? How about nail salons? Can there ever be too many?

Gasping for breath! I need to know!! Are...

To Be Continued

We're Finally Winning the War on Drugs!

May 20, 2016
Coke Has Suspended All Production in Venezuela

Coca-Cola FEMSA has suspended all production in Venezuela because of a sugar shortage, the Mexican beverage multinational said in a statement.

Coca-Cola? Oops. My bad. I totally misread the headline! Sorry about that.

Comment of the Day

May 17, 2016
Hertz brings back Shelby's Ford Mustang GT-H 'Rent A Racer'

From the comments:

Xxxxx Xxxxxxxx
Looking for work at Unemployed

Rates will be very high but even at $1000 for two days it's well worth it

(Commenter's name redacted.)

Why did I single this comment out?

1. The unemployed fine print.
2. $182,500 annual car rental offers value?
3. The curious need to rent a racer.
4. Instant gratification society evidence.
5. Concern over his retirement plan.

The answer shall remain a mystery.

Ah, who am I kidding? It's obviously #2! No, wait. It's #1. #5? Dammit. Made this quiz way too tough! Don't worry. This question won't be on the final.

Listeria (Musical Tribute)

May 2, 2016
CRF Frozen Foods Expands Voluntary Recall to Include All Frozen Vegetable and Fruit Products Due To Possible Health Risk

This is a huge recall. 358 consumer products under 42 separate brands! We've got some of the items in our freezer, thankfully unopened. So, on that note...

Listeria


It's poisoned me
Eating me
Twisting my guts around

Yeah I'm endlessly
Crapping blood
My insides turning out

So I vomit now
I vomit now
Up comes THAT corn with the sole!
But the toilet's clogged!
The toilet's clogged!
Bad time to lose control!!

Gallows humor. :(

My Nomination for Ironic Recall of the Year

March 25, 2016
Revised Press Release For: "Reliable Drug" Recall of all Compounded Medications Due to a Potential for Mislabeling and Lack of Quality Assurance

Reliable Drug Pharmacy is voluntarily recalling all unexpired lots of compounded products due to concern of lack of quality assurance and potential mislabeling.

It's early in the year but I think we have a winner! ;)

Savings Bond News

This is just a reminder that the rates and terms may change on November 1st for EE Savings Bonds. (The rates and terms have the potential to change every six months for newly issued bonds.)

While others scramble to partake of the "massive" interest that short-term treasury bills may soon offer in a perfect world, I am preparing to make yet another purchase of EE Savings Bonds before the November 1st deadline.

On the one hand, the 0.3% rate currently offered is something that I do not really wish to lock in for the long-term.

On the other hand, a bond that is guaranteed to double in price in 20 years is equivalent to earning a 3.53% annual yield, which is a full percent higher than what the comparable 20-year treasury is currently yielding. Further, since EE Savings Bonds are tax deferred, buying them lowers my current income and therefore gives me a slightly larger subsidy on my government sponsored health care insurance.

This is not professional investment advice. We know this because in all the time I've owned Savings Bonds (since 2000), I can't ever recall hearing about them on CNBC. It's almost like Wall Street can't make any money off of me if I buy bonds directly from the government. Go figure.

So, here we go again. This is not my first EE Savings Bond rodeo. I've bought them in the past and held my nose when I did it. I'm holding my nose a lot less on those past purchases these days. Thanks ZIRP and tame inflation for not giving me any buyer's remorse so far!

In related news, I may buy I-Bonds as well. I'm going to wait until November 1st though, on the off chance the long-term fixed rate moves higher than the current 0.0%. I see little reason to lock in the absolute floor as long as there is a is a glimmer of hope. Realistically, the glimmer is extremely tiny though. I'd say there is a very high probability that the rate will stay 0.0% on November 1st. But we can all hope, right? That's especially true when holding out hope can't actually hurt me, as in this case.

EE Savings Bonds may or may not offer a good value right now, but I can say this with absolute conviction. They offer tremendous value relative to the 20-year treasury, and these days I'll take what I can get. Sigh.

Everything you need to know about Savings Bonds can be found at TreasuryDirect. It has been well worth my time to learn. Might be worth yours as well. No promises though. The future, as always, is hard to predict.

0.5 Cents per Hour

That's how much I've spent on the video game Real Racing 3 for the iPhone so far this year.

That's 1,061 hours of game play for $5.46 (an initial accelerator game pack helped get me started and removed in-game advertising, including sales tax). I have no choice but to declare this my favorite video game of all time, based solely on the number of hours played.

I'm still just addicted as ever. The price per hour should only go down from here, which is good because 1/2 a penny per hour seems a bit excessive for high quality entertainment these days. ;)

Is it any wonder newspapers and movie theaters are struggling? Seriously.

In the eyes of a gamer such as myself, this is real prosperity. No doubt about it. Too bad we can't carry it over to property taxes and health care expenses.

I do believe that it will someday carry over to tuition though. It should only take one seriously gifted physics professor to create online physics courses for the entire country. Right? In theory, that should be an incredibly cheap learning environment. Perhaps even 0.5 cents per hour too. Just sayin'.

The Sarcasm Report v.243

March 26, 2014
Small, Frequent Meals Don't Rev Metabolism

Dieters are often told to eat small, frequent meals instead of two or three bigger meals a day to shed extra pounds, but eating this way does not boost metabolism and may increase diabetes and cardiovascular disease risk, researchers found.

December 16, 2014
Small, frequent meals are better for your metabolism

Big feasts and too many treats don’t just pack on extra pounds. Duke research finds that overeating can also change your metabolism – meaning how the cells in your body process the food you consume – and that can lead to chronic health problems including diabetes. Smaller, more frequent meals are optimal, the researchers say.

You heard it here first. If you wish to avoid diabetes then you should not eat small, frequent meals. You should eat small, frequent meals instead.

In related news, economists say that the Fed should not hike interest rates in September. The Fed should hike interest rates in September instead.

A Friendly Reminder for Mexico

The cash we keep sending you is very valuable so please stop pooping on our vegetables! Thank you! Have a nice day! :)

September 10, 2015
2nd death linked to salmonella-tainted cucumbers

The outbreak, caused by a strain called salmonella Poona, has been identified as coming from cucumbers grown in Mexico...

September 5, 2015
What We All Need To Know During A Cucumber Salmonella Outbreak

While Salmonella comes from animal feces, fruits and vegetables can become contaminated.

Two Common Math Errors That Can Ruin Your Retirement

May 14, 2015
The Fiscal Times: 7 Common Myths that Can Ruin Your Retirement

Factoring in inflation, and that non-recurring expenses tend to increase with age, that amounts to some $40,000 per year for a 30-year retirement.

I've been retired 16 years. I apparently need $40,000 per year for health care expenses to go another 30 years. That's a whopping $1.2 million. WTF! Two people would therefore need $2.4 million. It better at least come with a bonus foot massage!

A typical couple would need nearly $250,000 on hand to have a 90 percent chance of covering all their medical expenses in retirement.

How am I supposed to turn $250,000 into the $2.4 million you just claimed that I need? I know. I'll invest in a 30-year treasury at 3% and let the power of compound interest perform a g#%^*mn f%^king miracle, lol. Sigh.

At an average 3 percent rate, your costs will double every 10 years.

1.03^23.5 = 2.00

Assuming a 3% inflation rate, it would take 23.5 years for costs to double. Not 10. If close only counts in horseshoes, hand grenades, and nuclear war, then you've gone scoreless but at least you still have all of your limbs and are completely free of radiation, lol. Sigh.

The financial math in this article is not like rocket science, assuming you don't want the rocket to tip over on the launch pad then expend all its fuel in a single explosion.

Myths, assumptions, and bad math, baby. That's what I'm talking about. Sigh.