DurhamBorn

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DurhamBorn last won the day on May 20

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  1. Yes,they are simply pumping liquidity.Those £50k loans free money to any Ltd are the real disgusting bit.A factory worker might get that in his pension after 15 years of graft.They are destroying the connection (what was left of it) between working and not.Im thinking 25% inflation is now a real risk by 2028/30 and above 12% almost certain.The key is though that they are walking into a trap.As soon as inflation gets over around 4% the BOE will stop printing.The FED will likely stop when around 3%.Thats the point the squeeze starts to bite on the government.They have a 12 month window on a lag. For myself iv got the whole family covered now and have been very happy with the turn so far,though any messing with the pension age for SIPPs would hurt going forward as my assets are now weighted to my SIPP. We have a situation where the half of the population who are fleeced to pay for the other half are about to be rinsed.The government will simply ramp spending up and up.There is no other way out for them. My prediction is that a 40/60 or 20/80 pension entering drawn down from next year with 2% fees and 4% draw down will empty to nothing over 10/12 years. Commods will keep up and more with inflation due to the structure of the coming cycle,and its critical for people to own the areas that can leverage those assets. Im really missing being able to buy the likes of SILJ and URA as well.Mid cycle is going to get very interesting as mortgage rates get to 5%+,every HTB without over payments is in negative equity and on SVRs and the CB are trying to pull back inflation,but due to massive leverage in the economy are behind the curve all the way. Sterling could put on 10% though before it heads lower again.Never linear.
  2. I remember going to an older workmates house who had a bit of dosh and had got a PC,Freeserve and had got online.It was the first time i used the internet or even thought of it.He had a chat programme called ICQ.I went on and remember the noise "ee-aww" as you got a message.I started chatting to a woman in Canada called Diane,an artist.I knew within a few seconds it was going to change the world like nothing else ever invented. I rushed home and went and bought a PC,£1300 it was.I got ICQ of course and ended up very friendly on there with another girl in Canada called Jennifer.It was the first time in my life that i got emotionally/sexually connected to someone id had never met.I ended up sending her underground rave tapes with doves inside and she was the most popular girl in college for parties after that,nobody has heard music like that over there yet,or had doves .She ended up a TV producer and years later i met her when she was in London,and we still catch up now and again.For a few years it seemed like a secret world only a few people knew about.
  3. Yes the problem is the debt will be so high and we could see complete currency collapse.Its too far ahead,but the end of the next cycle looks terrible.So far this one has followed the macro playbook and the CBs have responded as expected.So we were right,but still hinged on the CBs right sizing things.
  4. I have a lot less in K+S than others,but thats mainly simply due to them having so much debt.Im likely to increase though as divis roll in from other areas.If i had a smaller amount to play with and was prepared to take the risk then id probably go for K+S first in the sector because the reward could be very high as long as they dont roll over.There are a lot of big projects on the horizon and the fact the biggest and best miners in the world are getting involved (Anglo and BHP) shows they must be seeing the cycle.I rate Anglo Americans CEO as the best in the industry,so the fact they bought Sirius is telling.If BHP green light their massive Jansen project they must be seeing un-balanced ahead.We need to hope the price increases arrive before the big projects start producing.
  5. Id add on the CBs QE and them buying bonds in the market.As @sancho panza highlights in the article above a lot of that is now sat with pension schemes. Thats how financial plumbing works and is exactly want the CBs want.They print money and buy those bonds.That means the pension schemes now have cash and profits locked in.There is no loss as the consumption the bonds created has already been deflated by the economy.The pension scheme now has lots of cash,cash without incurring a big loss on falling bonds.That means they can use that cash to fund rights issues being issued by companies they hold shares in.By doing so they inject directly into the economy,into companies.The CB though by printing the money to buy the bonds has ensured that this isnt deflationary in itself because the "bonds" still exist.They have simply oiled the plumbing and made sure the pension funds and other market participants have the currency needed to fund the equity issues.The CBs are in affect signalling that the age of credit is over,the age of equity is beginning.The MSM and macro tourists think that the CBs QE is to help keep rates low.What they miss is that it is only doing so while it injects enough liquidity.Once it is done it will step back from the longer end of the curve. That is when all the QE that bought the bonds from the pension schemes etc and was injected into the economy through rights issues flows into the real economy and increases demand and inflation. Once that happens bonds will have to compete with real assets providing a much higher return and there will be a shift and rates will move up.
  6. I think the 70s provided the answer SP.Politicians are allowed to print by the Central Banks when the fear of unemployment is greater than their fear of inflation.Given where we are there is a fear of unemployment maybe even higher than the Great Depression (even if missguided) and no fear at all of inflation.Putting the two together as a contrarian it says we are going to end up with lower unemployment (always with a lag) and much higher inflation. "At the surface level, the United States had a burst of inflation in the 1970s because no one-until Paul Volcker took office as chairman of the Federal Reserve-in a position to make anti-inflation policy placed a sufficiently high priority on stopping inflation. Other goals took precedence: people wanted to solve the energy crisis, or maintain a high-pressure economy, or make certain that the current recession did not get any worse. As a result, policymakers throughout the 1970s were willing to run some risk of nondeclining or increasing inflation in order to achieve other goals. After the fact, most such policymakers believed that they had misjudged the risks, that they would have achieved more of their goals if they had spent more of their political capital and institutional capability trying to control inflation earlier. At a somewhat deeper level, the United States had a burst of inflation in the 1970s because economic policymakers during the 1960s dealt their successors a very bad hand. Lyndon Johnson, Arthur Okun, and William McChesney Martin left Richard Nixon, Paul McCracken, and Arthur Burns nothing but painful dilemmas with no attractive choices. And bad luck coupled with bad cards made the lack of success at inflation control in the 1970s worse" Does everyone see the above?,could it be today? "solve the energy crisis" "other goals" " "make certain the current recession doesnt get any worse" If anyone wants to read a really good take on the 70s inflation that takes in the macro,but also the ducks that line up to create the conditions (both economic and political,and a lack of leadership) iv always thought this is the best on the subject https://core.ac.uk/download/pdf/6483544.pdf
  7. https://stockhead.com.au/stockhead-tv/rocktalk/rocktalk-why-the-cycle-smells-right-for-potash/ Interesting talk from people in the industry on potash.From about the 10 minute mark the talk is on SOP potash,the big gainers from that would be K+S and Intrepid.Mosaic produce but it wouldnt have as big an affect on them due to product mix.
  8. Theres the £100 billion.Just look at the spend on out of work benefits,tiny.Then look at tax credits and incapacity.Huge increases. And the furlough the same cost. https://www.telegraph.co.uk/business/2020/05/12/mervyn-king-calls-government-keep-furlough-open-ended/ In other words the government hands out the same amount of free money every year in benefits as it has to pay everyones wages during furlough.Maybe they should keep furlough and end welfare?.
  9. Inflation.They can print massive amounts when they have nearly 40 years of dis-inflation to put back into the system,but once inflation roars they have to stop printing and will.Come 28/30 we will have probably inflation between 12% and 22%,nothing will be printed then,however much things are collapsing.I expect that is when we will see currency controls so savings can be inflated to nothing over a few years.
  10. The incredible thing about all this furlough money is the fact by the time it ends after 8 months,it will still only equal what the government hand out every year in working age welfare payments (about £100billion).It shows the incredible amounts been handed out in welfare year in year out.
  11. The locals here will unload to the idiots like they did last time,then mostly went back and took the boilers and copper out as they kept a spare key. This £50k loan for Ltds is nuts.Disgusting actually.A factory worker could take half a lifetime to save £50k,yet a Ltd can have it for free then go under. Government dont care though,its all about liquidity and getting money into the economy.
  12. I love those Queens Beasts,my next lot of self employed furlough might find its way into a load
  13. Or in Co Durham for £450k https://www.rightmove.co.uk/property-for-sale/property-68161191.html
  14. Phone them and go over to Blackpool,they will show you into the back ,plus you can buy a kiss me quick hat at the same time and mingle with a few hen parties.
  15. Very good actually.We are in a great position for hydrogen etc.Nissan staying here is a good indicator.UK is small and although planning etc and faffing about wastes a lot energy etc should get going fine.The key is all these countries are moving from the consumer consuming with the debt to industry consuming.Its subtle,but makes a massive difference.We could/should be looking at a cycle where commods outpace everything else,and the companies leveraged to commods do even better.