Credit deflation and the reflation cycle to come (part 2)

[Democorruptcy]

35 minutes ago, Cattle Prod said:

Funny you say that, I've been looking at doing the same. At least for some of the time. What I can't figure out is if I will be liable for CGT in the UK only to the point where my residency changes? Per the theme of this thread, I prefer medium to long term investment, will they take the who gain, or just that year's worth, marked to market? Then, if I am NHR, do I still pay CGT in the UK if my accounts are there, or are they still CGT exempt if I move them to Potrugal?

Obviously a mine field, and will need professional advice, so not asking for answers, but that is the key question for me. No way am I handing over 40% of gains. I feel slightly more urgent about it this week, as I was talking to a friend who works in the City. He was talking about the trial balloons they are currently flying. I said 'yeah, but no way can the do it in March, things are way too weak, money will run'. He said 'they could only double CGT with capital controls alongside'. 

Oh sh*t. 

Thought back to Russell Napier and financial repression.

There's some links about it in a thread in stealth.

 

[Eventually Right]

Interesting macro article from Ambrose Evans-Pritchard in the telegraph (behind a paywall I think):

https://www.telegraph.co.uk/business/2021/01/20/joe-biden-ushers-keynesian-inflation-era-2020s1/

“Mr Powell reassures them that rates will stay pinned to the zero-floor until inflation tops 2pc and stays there for a year. But this is more hawkish than it sounds. Inflation will hit 2pc by the late spring. The broad M2 money supply has risen 24pc over the last year and while the transmission channel may be blocked for now, it is not broken. It sits there like reflation rocket fuel waiting for ignition.”

 

[Democorruptcy]

1 minute ago, Cattle Prod said:

Where is stealth? I can't see it 

You know the secret handshake

It's the 5th section down in my list but the order could be different if there is a super stealth that I'm not allowed in.

https://www.dosbods.co.uk/

'Living in Portugal'

[Democorruptcy]

24 minutes ago, Cattle Prod said:

What if what?

My understanding of the 'British' strain is that it's not from here, but was just picked up here due to good genome sequencing facilities. Was detected in other countries earlier etc. I don't know about Brazil or South Africa, but maybe they tested the vaccines there because of similiar facilities? Occams razor and all that.

All this talk of mutant viruses is very scary to the uninitiated, but it's perfectly normal really. Think of the finches beaks on the Galapogas, they were all random mutations which offered the birds an advantage, so evolution selected for them. What was their population base, hundreds of thousands? The virus is trillions, there are hundreds of mutations and variants by now, and evolution will select for the weaker variants (i.e. more successful, the ones that don't kill the host). This latest variant looks promising, if that is the right word, defintely seems to be more contagious, anecdotally I know of a good few people whove had it now versus no one who had the first. And they all seem to get over it after a few days. It'll still kill the old and weak though, just as the common cold can. Hopefully it keeps mutating toward the common cold.

I'm not a biologist, and Darwin's finches are A level biology. I am just constantly amazed that no one in the media can seem to remember their A level biology, or first year epidemiology.

Whatever I'm looking at I'm a "what are the odds of that" type chap. It just seemed a big coincidence that the 3 most publicised new more contagious strains are from the same 3 testing countries.

I know there are a lot of strains, I looked at this months ago and it's very colourful

https://nextstrain.org/sars-cov-2/

[Castlevania]

45 minutes ago, Cattle Prod said:

Funny you say that, I've been looking at doing the same. At least for some of the time. What I can't figure out is if I will be liable for CGT in the UK only to the point where my residency changes? Per the theme of this thread, I prefer medium to long term investment, will they take the who gain, or just that year's worth, marked to market? Then, if I am NHR, do I still pay CGT in the UK if my accounts are there, or are they still CGT exempt if I move them to Potrugal?

Obviously a mine field, and will need professional advice, so not asking for answers, but that is the key question for me. No way am I handing over 40% of gains. I feel slightly more urgent about it this week, as I was talking to a friend who works in the City. He was talking about the trial balloons they are currently flying. I said 'yeah, but no way can the do it in March, things are way too weak, money will run'. He said 'they could only double CGT with capital controls alongside'. 

Oh sh*t. 

Thought back to Russell Napier and financial repression.

You’d be liable for UK CGT on any sold positions you held prior to leaving the country and only if you return to the U.K. within 5 years. Anything bought and sold whilst living elsewhere is exempt from U.K. CGT. If you did return to the U.K. you’d be liable for CGT on any positions sold whilst a U.K. resident based on the original price paid even if you originally purchased the position whilst abroad.

I’d look into Portuguese taxation. Whilst you might be able to avoid paying UK CGT you might not avoid the Portuguese equivalent. Also, I don’t think any countries recognise ISA’s as exempt from tax - so chances are you’d need to pay at least one of CGT; dividend taxation; wealth taxes on your ISA.

 

[Talking Monkey]

1 hour ago, sancho panza said:

 

Good news for the basement dwellers there DB.Dollar roadmap of yours has been pretty darned accurate past few years compared to the competition for sure..

There are a few issues following on from teh Groemn interview that I didn't mention last night.

 

As per @Cattle Prod highlighting the option 2 in terms of fed remontezing gold.It's the first time I think I've read that (well first time that I've read it and it's chimed in with the evidecne).You really can't argue with gromen's logic.The best/route of least resistance way out is to wipe out bond holders/welfare recipients with soft default.

Using a gold standard of sorts/Bretton Woods would kill a lot of birds with one stone,reign in the Chinese,aid the US to soft default via bond holders,possibly extend USD reserve currency status.

However,the underlying problem caused by the unwinding of the Dollar hegemony and US role as world policeman will see geo politics rise and create the background for DH's 'hope it happens when I'm dead' predictions.

 

Some gtypes of grain are similar price to 25 years ago.

That Gromen interview was interesting, did I understand correctly its option 1 lots of inflation over 5 to 7 years or option 2 lots of inflation over a couple of years doing the Gold standard thing. Was interesting on his thoughts on treasuries as a safe haven and how they behaved in March last year.

His opinion on a crack up boom I thought gave the impression he doesn't see the likelihood of a near term BK happening.

His views on golds current price chimed with Hunter in seeing limited down side from here no matter the unfolding of events from here.

I wonder if my strategy to start to rotate into treasuries as the s&p increases past 4200 needs a bit of a rethink.

[AWW]

Re hydrogen safety concerns - if H2 molecules are able to leak out through the "gaps" in a metal crystal, they'll have no problem leaking out through the gaps around doors and windows, so it won't be able to build up indoors in enough quantity to cause an explosion.

Methane, on the other hand - well, gas explosions, accompanied by the standard "gap in a row of houses" photo, are a fairly frequent news story.

I'd much rather have a hydrogen leak in my house than a methane leak.

[Castlevania]

1 hour ago, Cattle Prod said:

I am just constantly amazed that no one in the media can seem to remember their A level biology, or first year epidemiology.

I’m pretty sure none of them studied A level biology

[leonardratso]

1 minute ago, Castlevania said:

I’m pretty sure none of them studied A level biology anything.

Just fixing that for you..

[sancho panza]

2 hours ago, Cattle Prod said:

Funny you say that, I've been looking at doing the same. At least for some of the time. What I can't figure out is if I will be liable for CGT in the UK only to the point where my residency changes? Per the theme of this thread, I prefer medium to long term investment, will they take the who gain, or just that year's worth, marked to market? Then, if I am NHR, do I still pay CGT in the UK if my accounts are there, or are they still CGT exempt if I move them to Potrugal?

Obviously a mine field, and will need professional advice, so not asking for answers, but that is the key question for me. No way am I handing over 40% of gains. I feel slightly more urgent about it this week, as I was talking to a friend who works in the City. He was talking about the trial balloons they are currently flying. I said 'yeah, but no way can the do it in March, things are way too weak, money will run'. He said 'they could only double CGT with capital controls alongside'. 

Oh sh*t. 

Thought back to Russell Napier and financial repression.

Difference between domicile and residency.As per @Castlevania says,you may lose your ISA's if you move abroad.

Defo worth spending good moeny on pro advice.

Could be possible to establish domicile elsewhere and then move your tax residency as it suits..?jsut ideas.

https://www.expertsforexpats.com/expat-tax/the-difference-between-domicile-and-residence/

 

Onanotehr matter.Investing.com listing ways Biden may push energy prices higher.

https://uk.investing.com/analysis/8-possible-moves-oil-traders-should-watch-as-biden-administration-takes-charge-200452864

1. Cancelling new offshore drilling projects in federal waters

This would have little immediate impact on the supply-side as offshore drilling projects can take years to get up and running. The market probably wouldn’t react all that much if this occurs.

2. Complicating permitting for fracking or ending it entirely on federal lands

This move wouldn’t impact wells already drilled or permits already in place, so the supply of oil from the U.S. wouldn’t change immediately, but it would hurt future prospects.

This would have a faster impact on oil supply from the U.S. than ending offshore drilling permits. A move like this would almost certainly impact prices, especially WTI, in the short term.

3. Refuse permits or buyback leases to drill for oil in ANWR

This move is likely forthcoming, but it should not impact the market. The Arctic National Wildlife Refuge (ANWR) was only recently opened for drilling permits by the Trump administration, and the lease auction did not generate much interest

4. Limitations on energy infrastructure in the U.S.

Putting in place regulations that limit refinery expansions, pipeline projects or the expansion or upgrade of ports could limit crude oil supplies as well as hit the refined products market. If the government makes it more difficult for crude oil to be transported, refined or exported then traders should expect to see stocks of crude oil in the U.S. grow until producers are forced to curb production.

5. Reverse legislation to allow crude oil exports

At the very end of the Obama administration, the U.S. halted the ban on exporting crude oil. Since then, U.S. crude oil exports have grown from under 1 million bpd to a high of 3.4 million bpd in October 2019. Stopping U.S. crude oil exports would have a major impact on oil prices and would also cause the differential between WTI and Brent to increase significantly.

This move, however, is very unlikely.

6. Limits on LNG export facilities

 If the Biden administration decides to curb the growth of either of these or put restrictions on the places where U.S. facilities can export natural gas, then U.S. LNG exports will be hurt.

7. Regulation on oil and gas production

The Biden administration is likely to increase regulations that govern methane release and flaring. They could also issue new regulations governing water use and seismic implications of fracking.

These kinds of regulations would have an immediate impact on current production and could cut down on output. They would likely have an immediate impact on prices.

8. Environmental regulations on users

The Biden administration is likely to pursue higher emissions standards for cars and other vehicles in the U.S.

The Obama administration promoted EVs with tax incentives, but the Biden administration could try to implement regulations that would push consumers towards EVs in a more aggressive way. These types of policies could change gasoline consumption in the U.S. such that oil prices are impacted.

1 hour ago, Talking Monkey said:

That Gromen interview was interesting, did I understand correctly its option 1 lots of inflation over 5 to 7 years or option 2 lots of inflation over a couple of years doing the Gold standard thing. Was interesting on his thoughts on treasuries as a safe haven and how they behaved in March last year.

His opinion on a crack up boom I thought gave the impression he doesn't see the likelihood of a near term BK happening.

His views on golds current price chimed with Hunter in seeing limited down side from here no matter the unfolding of events from here.

I wonder if my strategy to start to rotate into treasuries as the s&p increases past 4200 needs a bit of a rethink.

I think he sees a crack up boom but wasn't tested on a credit event.The one thing that interview did was make me even more careful with selling PM exposure.

 

[Harley]

https://www.realvision.com/podcast/realvision/episode/f8a0c656-57be-11eb-a006-7375b0abfa21

First part about the further deflationary effects of technology.  Second part is a wider ranging Q&A which provides some food for thought, ending with my burning house simile.

 

[DurhamBorn]

Its pretty obvious bond holders are going to take the pain.Remember all that government debt is someone's assets.My main focus once i get out of work early next month is to look at my inflation targets over the cycle and roadmap that affect onto bonds,and then roadmap the losses from bonds onto stocks and commods.Im going to roadmap as if its a straight swap out from bonds to stocks in the liquidity,but im going to add a multiplier onto our areas as i think they will leverage.

Im a bit worried that in looking for a BK we are perhaps missing the fact that it might be a slow kahuna in bonds and growth stocks.There is massive systemic risk in the system still though but that article does chime more and more with a few maybe's from the macro.

One of the key parts of the roadmap was jobs/manufacture coming back,and id like to see supply chains starting to buckle as lockdowns end.That should give us enough velocity to get M2 moving into the economy.

I think its likely we will see 35% real terms losses in bonds minimum,and thats my roadmap number,so il be using that as the baseline for the liquidity transfer.

Remember,if bonds lose 35%,government loses nothing.If a telcos profits go up 100% due to the inflation government gets a lot more tax.

[Loki]

7 minutes ago, DurhamBorn said:

Im a bit worried that in looking for a BK we are perhaps missing the fact that it might be a slow kahuna in bonds and growth stocks.There is massive systemic risk in the system still though but that article does chime more and more with a few maybe's from the macro.

What would be your most important indicators for a slow-cooked kahuna stew? 

[Yadda yadda yadda]

22 minutes ago, Loki said:

What would be your most important indicators for a slow-cooked kahuna stew? 

Slow-cooked kahuna stew is an acquired taste. Some find it disagrees with them violently and never quite recover. Others can't get enough and will chow down at the all-you-can-eat buffet until it closes.

[DurhamBorn]

35 minutes ago, Loki said:

What would be your most important indicators for a slow-cooked kahuna stew? 

The CBs to keep printing even as inflation starts to move higher.

[Loki]

Just now, DurhamBorn said:

The CBs to keep printing even as inflation starts to move higher.

Thank you, that makes sense. Would that shorten your  SHTF end of decade estimate at all?

[reformed nice guy]

9 hours ago, Loki said:

Does anyone here follow grain prices and exports? Not ag stocks but the product itself

Inflationtastic

https://www.esmmagazine.com/uncategorized/chinas-corn-wheat-imports-in-2020-reach-record-highs-119403

https://www.esmmagazine.com/retail/wheat-holds-near-6-12-year-peak-as-focus-stays-on-russian-export-tax-119555

https://www.world-grain.com/articles/14759-us-cpi-grain-based-foods-indexes-turn-in-another-solid-year-of-gains

https://www.reuters.com/article/us-china-economy-trade-soybeans/chinas-2020-u-s-soybean-imports-surged-though-likely-missed-trade-target-idUSKBN29P10T

 

I dont follow the market but lots of farmer friends.

All feed prices are up (oats, wheat, soy even silage) but nitrogen prices are up a good bit which they say is unusual

[Loki]

12 minutes ago, reformed nice guy said:

I dont follow the market but lots of farmer friends.

All feed prices are up (oats, wheat, soy even silage) but nitrogen prices are up a good bit which they say is unusual

Fantastic info thanks for confirming.  I've heard that livestock is getting culled due to feed shortages, which will lead to a glut then a shortage and ties in with the thread's leads and lags.

[Errol]

Silk Road trade on track: Freight train sets off from China to Russia, drastically cutting travel time

A special China-Europe freight train departed from Dongguan in South China’s Guangdong province to Russia on Wednesday. It will arrive in Moscow within 15 days, cutting the travel time by two-thirds compared with the sea route.

https://www.rt.com/business/513186-china-russia-freight-train/

[Barnsey]

2 hours ago, DurhamBorn said:

The CBs to keep printing even as inflation starts to move higher.

Like I said previously, things are going to get even crazier with this woman at the helm...

 

[DurhamBorn]

50 minutes ago, Barnsey said:

Like I said previously, things are going to get even crazier with this woman at the helm...

 

Indeed,she seems to be saying they are happy to print the welfare budget.Of course until everyone is on welfare.Access to the benefits they need means inflating other peoples earnings away.You can do it in a honest way with tax,but that is why people are so angry about scroungers.Through monetizing treasuries/gilts etc you do it by debasing the saved labour people have in their pensions etc.

[Noallegiance]

This week's entry from Mr Macleod sounds like it partly came from here:

https://www.goldmoney.com/research/goldmoney-insights/keynesians-going-all-in

 

 

[Loki]

1 hour ago, Noallegiance said:

This week's entry from Mr Macleod sounds like it partly came from here:

https://www.goldmoney.com/research/goldmoney-insights/keynesians-going-all-in

 

 

I'm sure he said there was gonna be a bank collapse or some sort of big event before the end of 2020.  It was a while ago.  I remember thinking he gets it but doesn't quite get it, anyway. Based on my understanding of this thread anyway

[Noallegiance]

1 hour ago, Loki said:

I'm sure he said there was gonna be a bank collapse or some sort of big event before the end of 2020.  It was a while ago.  I remember thinking he gets it but doesn't quite get it, anyway. Based on my understanding of this thread anyway

I think there's something to be said for continual underestimation of tptb and their accounting tricks that continue to make things look far better than they are. Which is saying something.

Can-kicking has been turned into an art form.

[Loki]

8 minutes ago, Noallegiance said:

I think there's something to be said for continual underestimation of tptb and their accounting tricks that continue to make things look far better than they are. Which is saying something.

Can-kicking has been turned into an art form.

No arguing with that