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

[harp]

7 minutes ago, Hancock said:

See what happens next week with regards taxation and landlords; the economy cant function if most earned income and borrowing continues to pour into property in one way or another. (as the last 2 decades have shown)

If i can get something like this for 300k ish

or this for 250k ish then i'll buy

Stick your money into Bitcoin for a couple of weeks then you'll be able to afford those.....or a shitty flat if it goes pearshaped!

[Hancock]

Just now, Bobthebuilder said:

Best of luck Mr Hancock. They are mental prices, even at your valuations. It's a crime it has come to this level, really terrible.

Yes thinking if i can get it for 250k ish with a 50K mortgage, will have 50k to chuck into a private school for the little, just need a bit of a break. Maybe see what comes up for auction.

Single parent fathers do things in style!

Just now, harp said:

Stick your money into Bitcoin for a couple of weeks then you'll be able to afford those.....or a shitty flat if it goes pearshaped!

I'd sooner Russian roulette!

[goldbug9999]

57 minutes ago, Hancock said:

Isn't rising in interest rates what you need for gold to go to the moon.

ie. after the print like no tomorrow thus creating high inflation.

Low IR + printing hand over fist == inflation of non fiat assets such a as gold and bitcoin. Its working out very nicely right now.

[JMD]

41 minutes ago, harp said:

Stick your money into Bitcoin for a couple of weeks then you'll be able to afford those.....or a shitty flat if it goes pearshaped!

Ok, I realise that your (mostly?) joking Harp. However as we speak BTC is motoring toward 60k dollars - so what if someone were to decide literally to 'bet their house' on BTC price this cycle, what would be your own personal sell price? ie There seems to be pattern - every halving price goes parabolic, then after 12-18 months it falls back dramatically, then rises slowly until the next halving, rinse repeat; I know, I know ...might not (prob won't) happen so neatly this time, plus institutional money element is a big unknown factor this time.                                                                                                                                                                                            I accept that the risk/reward element here is crazy and mental, but just for fun!?!, are you willing to make any prediction or guess regarding its top parabolic price?

[Harley]

2 hours ago, JMD said:

Harley, I know that's not your own article, but I note that all the etfs on their list are synthetics. I remember you posting and explaining about being against taking on extra counter party risk etc. Do you still think this? I ask because I am still convinced of that argument, and so for example would only want to own the physical etfs, at least that is until way after any potential BK that still looms ominously ahead of us.

Good question.  I assume all will be synthetic except possibly for some precious metals, including palladium and platinum.  Hence one reason people prefer the equities.  Plus some equities (e.g. BHP) pay divs.  So it goes with the terrain.  I got burnt on a general commodity fund once so am cautious.  i need to rework the article and may go for a small punt for part of my hard asset allocation, but will mainly be in the equities.  And probably individual equities unless I can find a worthy ETF or fund.

[ThoughtCriminal]

1 hour ago, Hancock said:

As a single parent i could have moved to a nice area, and then got a council house. I was a mug to think working away and leaving my toddler with grandparents was the best thing to do for her life.

Council house on my search for £350k
https://www.rightmove.co.uk/properties/78075555#/

Every penny i earn over tax threshold will go into a pension as not funding this regime is the moral thing to do (that and the fact i can get 6/7k in tax credits if i play it this way)

Are you not tempted to bugger off abroad for good? 

 

I've seen far too many unbelievably cheap houses in Europe to ever buy anything again in this joke of a country. 

[Barnsey]

2 hours ago, Hancock said:

I've worked and saved best part of £1/4 million a fucken unreal amount of money for someone who works with their hands. Was about to buy in early 2014, but whilst on a stopover on my way to a 6 week job i quickly checked the internet and saw that cunt Gidiot brought Help to Sell forward to start immediately as opposed to the following April. I knew the next 42 days of work would be taken by HPI. (and they were)

By the time i got back to England prices were already rocketing up, custody battle later that year which took a further year, with the result meaning i had to stay living in Yorkshire for a while longer meant i've kind of been forced to sit on the side lines, as i've no intention of living in Yorkybarland for life.

All that hard work and best part of £250k buys fuck all, when it would have got something acceptable in 2013. Same place will be £350k now.

 

Problem is, £350k is pocket money for many of those selling up in HK...

Why Britain's anti-immigration politicians are opening the doors to thousands of Hong Kongers

https://edition.cnn.com/2021/02/20/uk/uk-hong-kong-bno-scheme-intl-gbr-hkr/index.html

The visa does not account for the most vulnerable Hong Kongers: young pro-democracy protesters, like Malcolm, who were born after 1997 and are therefore not eligible. But it is nonetheless remarkable in its scope -- in a city of 7.5 million people, 5.2 million Hong Kongers and their dependents are eligible for it.

[Hancock]

19 minutes ago, ThoughtCriminal said:

Are you not tempted to bugger off abroad for good? 

 

I've seen far too many unbelievably cheap houses in Europe to ever buy anything again in this joke of a country. 

If made an offer to the mother of kid recently but its not happening. Looks like im stuck in HMP England.

1 minute ago, Barnsey said:

Problem is, £350k is pocket money for those selling up in HK

Why Britain's anti-immigration politicians are opening the doors to thousands of Hong Kongers

https://edition.cnn.com/2021/02/20/uk/uk-hong-kong-bno-scheme-intl-gbr-hkr/index.html

The visa does not account for the most vulnerable Hong Kongers: young pro-democracy protesters, like Malcolm, who were born after 1997 and are therefore not eligible. But it is nonetheless remarkable in its scope -- in a city of 7.5 million people, 5.2 million Hong Kongers and their dependents are eligible for it.

My brother lives there, he reckons not too many will take up the offer.

[Barnsey]

1 minute ago, Hancock said:

My brother lives there, he reckons not too many will take up the offer.

From the article:

The Home Office estimates that up to 153,700 BN(O) holders will arrive in the country this year -- and estimates they could bring £2.9 billion ($4.1 bn) into the economy over five years.

[M S E Refugee]

2 minutes ago, Hancock said:

If made an offer to the mother of kid recently but its not happening. Looks like im stuck in HMP England.

My brother lives there, he reckons not too many will take up the offer.

 

3 minutes ago, Hancock said:

If made an offer to the mother of kid recently but its not happening. Looks like im stuck in HMP England.

My brother lives there, he reckons not too many will take up the offer.

Why would anyone want to leave a totalitarian regime to move to another one with shit weather.

[harp]

30 minutes ago, JMD said:

Ok, I realise that your (mostly?) joking Harp. However as we speak BTC is motoring toward 60k dollars - so what if someone were to decide literally to 'bet their house' on BTC price this cycle, what would be your own personal sell price? ie There seems to be pattern - every halving price goes parabolic, then after 12-18 months it falls back dramatically, then rises slowly until the next halving, rinse repeat; I know, I know ...might not (prob won't) happen so neatly this time, plus institutional money element is a big unknown factor this time.                                                                                                                                                                                            I accept that the risk/reward element here is crazy and mental, but just for fun!?!, are you willing to make any prediction or guess regarding its top parabolic price?

To be honest I have no idea. But if there's a BK then it would crash like everything else I'm sure. I'm totally relaxed this time round because I took my stake money and then the same again out. I really don't care what it does now. BUT for sure it has been my best investment ever. I'm still down on my reflation shares probably because back when the thread started and the likes of CNA, VOD, BT, etc etc had fallen, general consenses was if there was a market crash they would unlikely fall much further. They did and we haven't had the BIG BK yet. I pretty much froze last March and swore that I'd had enough of these dogshit shares
But I threw in a fair chunk into Bitcoin. It's saved my bacon. My initial stake money and 100% profit is now sitting in my HL account since 2 weeks ago. I'll leave the rest to do it;s thing. But the next Bitcoin I'll sell will be £50k and every £5k there after. I'll always hold at least a couple though and would buy back in rather than buying PM's.Had enough of david cunter so sold all my PM's weeks ago to buy more Bitcoin.

No one knows the future and listening to others who think they do is bollocks. When does a contrarian become mainstream thinking? All I've done is spray and pray. Bit of this bit of that and a lot of bitcoin.

[geordie_lurch]

Regarding bitcoin and future prices fwiw these are my thoughts...

I think BTC will probably go to $300,000 or more in the next 5 years maximum. However I don't really find the fiat price relevent as if BTC fulfills its promise it might be £1,000,000 per BTC but you won't want to swap it for any fiat currency but trade it direct with others for all the things gold and silver bugs thought they would be able to by now.

The more I have learned about it, whilst also seeing the smartest people in the tech world creating companies and industries around it, the more I think it has a real chance of taking over from the dollar globally within the decade.

Fiat money is also long overdue one of its regular hyperinflationary episodes and I can't see any realistic candidate to replace it in the current and future tech age. The old money world of Central banks will try with their centralised digital currency versions but the genie is out of the bottle for decentralised BTC and once you truly 'get it' you can't unsee its potential or be tempted back to the rigged casino of fiat.

[No One]

10 hours ago, Castlevania said:

I’ve only bought Eni and Telecom Italia. They claim to have everything listed on the Italian Stock Exchange available.

AJBell allow you to buy Japanese stocks but have to be bought in standard lot sizes - which can easily mean having to buy in the tens of thousands of pounds. Quite a few Japanese companies do have ADR’s available, which can be bought via HL.

I have AJ and Bell and didnt know this. Can you give examples of what you can buy?

[Castlevania]

39 minutes ago, No One said:

I have AJ and Bell and didnt know this. Can you give examples of what you can buy?

I can’t find any Tokyo Stock Exchange listed companies on their list of available stocks. I’d suggest either emailing or calling them.

[wherebee]

3 hours ago, M S E Refugee said:

 

Why would anyone want to leave a totalitarian regime to move to another one with shit weather.

I'd say of my contacts in HK, around 50% are actively looking to move elsewhere in the world.  Of those, maybe 50% to the UK due to historical or family connections.  Rest to USA, Canada, Australia, Singapore, and a smattering of other places.

[King Penda]

3 hours ago, geordie_lurch said:

Regarding bitcoin and future prices fwiw these are my thoughts...

I think BTC will probably go to $300,000 or more in the next 5 years maximum. However I don't really find the fiat price relevent as if BTC fulfills its promise it might be £1,000,000 per BTC but you won't want to swap it for any fiat currency but trade it direct with others for all the things gold and silver bugs thought they would be able to by now.

The more I have learned about it, whilst also seeing the smartest people in the tech world creating companies and industries around it, the more I think it has a real chance of taking over from the dollar globally within the decade.

Fiat money is also long overdue one of its regular hyperinflationary episodes and I can't see any realistic candidate to replace it in the current and future tech age. The old money world of Central banks will try with their centralised digital currency versions but the genie is out of the bottle for decentralised BTC and once you truly 'get it' you can't unsee its potential or be tempted back to the rigged casino of fiat.

True but they might force the whole world to act on something they cannot control or influence 

[Yadda yadda yadda]

52 minutes ago, wherebee said:

I'd say of my contacts in HK, around 50% are actively looking to move elsewhere in the world.  Of those, maybe 50% to the UK due to historical or family connections.  Rest to USA, Canada, Australia, Singapore, and a smattering of other places.

Would you say your contacts are the typical HKer or are they skewed towards the more mobile/well off?

[JMD]

5 hours ago, Harley said:

Good question.  I assume all will be synthetic except possibly for some precious metals, including palladium and platinum.  Hence one reason people prefer the equities.  Plus some equities (e.g. BHP) pay divs.  So it goes with the terrain.  I got burnt on a general commodity fund once so am cautious.  i need to rework the article and may go for a small punt for part of my hard asset allocation, but will mainly be in the equities.  And probably individual equities unless I can find a worthy ETF or fund.

Thanks. I hadn't thought it through, it is obvious now thinking about it that commodity etf's will almost always be synthetic. 

[wherebee]

30 minutes ago, Yadda yadda yadda said:

Would you say your contacts are the typical HKer or are they skewed towards the more mobile/well off?

more mobile/well off, often non-chinese bloodlines.

[Sugarlips]

More invaluable thoughts from Lyn, well worth the read for those with the time..

https://www.lynalden.com/february-2021-newsletter/

[geordie_lurch]

I highly recommend the following linked tweets from Michael Burry - yes that Michael Burry of The Big Short fame where he is putting out the background for a public warning of the hyperinflation he (and others like me as per my post above) is coming...

The public warning...

I also like the following image of a description of what things were like in Germany at the time - sounds a bit like us and the Robin hood lot are ahead... for now

EDIT: That snippet is a description of 1923 Weimar Germany in the book Defying Hitler by Sebastian Haffner

[Harley]

5 hours ago, Sugarlips said:

More invaluable thoughts from Lyn, well worth the read for those with the time..

https://www.lynalden.com/february-2021-newsletter/

Thanks for that.  I used to struggle reading these long articles but just used a text to speech app.  Excellent!  Can listen on the go!  Might try it on this forum too, especially for the longer posts, although you'll all going to sound a bit girly to me!

PS:  Has to be girly I'm afraid as Lyn rulez!

[geordie_lurch]

34 minutes ago, Cattle Prod said:

What's that clip from, Geordie? Sounds interesting.

I have added the details to my original post above now I'm back on my computer @Cattle Prod

However in case others miss it then and the following is from Defying Hitler by Sebastian Haffner. You should be able to find more of it online for free. I've pasted some more of it below, with my emphasis added which sounds a bit like some of us and our Bitcoin investments to me and maybe the dating bit was the equivalent to Tinder

The old and unworldly had the worst of it. Many were driven to begging, many to suicide. The young and quick-witted did well. Overnight they became free, rich and independent. It was a situation in which mental inertia and reliance on past experience was punished by starvation and death, but rapid appraisal of new situations and speed of reaction was rewarded with sudden, vast riches. The twenty-one-year-old bank director appeared on the scene, and also the ‘sixth-former’ [the student in Britain between 16 and 18 years old, in his final two years of school, before entering the university] who earned his living from the stock-market tips of his slightly older friends. He wore Oscar Wilde ties, organized champagne parties, and supported his embarrassed father.

 

Amid all the misery, despair and poverty there was an air of light-headed youthfulness, licentiousness and a carnival atmosphere. No, for once, the young had money and the old did not. Moreover, its nature had changed. Its value lasted only a few hours. It was spent as never before or since; and not on the things old people spend their money on.

 

Bars and nightclubs opened in large numbers. Young couples whirled about the streets of the amusement quarters. It was like a Hollywood movie. Everyone was hectically, feverishly searching for love and seizing it without a second thought. Indeed, even love had assumed an inflationary character.

 

Unromantic love was the fashion: carefree, restless, light-hearted promiscuity. Typically, love affairs followed an extremely rapid course, without detours. The young who learned to love in those years eschewed romance and embraced cynicism. I myself and those of my age were not among them. At fifteen or sixteen we were a few years too young. In later years when we had to entertain our girlfriends with twenty-odd marks’ pocket money, we often secretly envied the older boys who had had their chance at this time. We only caught a glimpse through the keyhole, just enough to preserve a whiff of the perfume of the time forever in our nostrils. To us, it was thrilling to be taken by chance to a wild party; to experience a precocious, exhausting abandon and a slight hangover next day form too many cocktails; to listen to the older boys with their worn faces showing the traces of their dissolute nights; to experience the sudden transporting kiss of a girl in daring makeup . . .

 

There was another side to this picture. There were beggars everywhere and many reports of suicides in the papers. The poster columns were full of police ‘Wanted’ notices for burglars. Robbery and burglary occurred on a grand scale. Once I saw an old woman – perhaps I should say an old lady – seated on a bench in a park looking strangely blank and stiff. A little crowed gathered round her. ‘Dead,’ said someone. ‘Of starvation,’ said another. It did not surprise me particularly. At home, we also often went hungry.

 

Indeed, my father was one of those who did not, or did not wish to, understand the times, just as he had already refused to understand the war. He entrenched himself behind the maxim: ‘A Prussian official does not speculate’, and bought no shares. At the time I regarded that as extraordinarily narrow-minded and out of character, for he was one of the cleverest men I have known. Today I understand him better. In retrospect, I can sympathize with the disgust with which he rejected the ‘monstrous scandal’ and with the impatient contempt that lay behind the attitude that ‘what ought not to be, cannot be’. Alas, the practical result of such high-mindedness could degenerate into farce, and the farce would have turned to tragedy if it had not been for my mother, who adapted to the situation in her own way.

 

This is how the family of a high Prussian official lived from day to day. On the 31^st or 1^st of the month my father would receive his monthly salary, on which we depended for our survival. Bank balances and securities had long since become worthless. What the salary was worth was difficult to estimate; and its value change from month to month. One month a hindered million marks could be quite a substantial sum; a little while later five hundred milliards would be small change. In any case my father would first try to purchase a monthly pass for the underground as quickly as possible. That would at least enable him to get to his office and back, even though the underground involved considerable detours and waste of time . Then cheques would be written out for the rent and school fees, and in the afternoon the whole family went to the hairdresser’s . What was left was handed to my mother. Next day the entire family except for my father, but including the maid, would get up at four or five in the morning and go to the wholesale market by taxi. There, in a giant shopping spree, an Oberregierungsrat’s monthly salary would be spent on non-perishable foodstuffs in an hour. Giant cheeses, whole hams, stacks of tinned food and hundredweights of potatoes were piles into out taxi. If there was not enough room, the maid, with one of us to help, would get hold of a hand-cart. At about eight o’clock, before school began, we would return home, more or less provisioned for a month’s siege. And that was it. There was no more money for the rest of the month. A friendly baker gave us bread on credit. Otherwise we lived on potatoes, smoked or tinned food and soup cubes. Now and then there might be an unexpended supplementary payment, but it was quite common for us to be as poverty-stricken as the poorest of the poor for four weeks, not even able to afford a train ride or a newspaper. Putting aside money for such purposes would have been quite senseless. Within a few days the whole month’s salary would not have paid for a single tram ride. I cannot say what would have happened if some misfortune like a serious illness had befallen us.(pp.46-50)

...   

In August 1923 the dollar reached a million. We read it with a slight gasp, as if it were the announcement of some spectacular record. A fortnight later, that had become insignificant. For, as if it had drawn new energy at the million mark, the dollar increased its pace ten-fold, and began to mount by a hundred million and milliards [by British measurement, thousands of millions] at a time. In September, a million marks no longer had any practical value, and a milliard [a thousand million] became the unit of payment. At the end of October, it was a billion [by British measurement, a million million]. By then terrible things had happened. The Reichsbank stopped printing notes. Its notes – 10 million? 100 million? – had not kept up with events. The dollar and price levels in general had anticipated them. There was no longer any usable currency. For some days trade came to a standstill, and in the poorer parts of the city the people resorted to force and plundered the groceries. The atmosphere became revolutionary once again.

[Harley]

After too long throwing darts at the board blindfolded I came up with seriously more robust approaches to managing my investments.  Still being perfected though and tbh always will.

Anyways, did my weekly review this weekend and nada.  IMO (DYOR) no buy signals for major value stocks (all in or well on the way to the overbought zone); bonds (all durations and countries) are still a sell; gold is still a sell; silver and other commodities are overbought; crypto is overbought; and there was a dirth of good trade signals. 

I suppose I could lower my standards and buy some overboughts in the hope they keep going up.  Tell myself I'm cleverly laddering in on the rise.  But this has always ended badly for me in the past. 

What I am learning though is there is no such thing as a quite moment.  That these only happen when you're not looking in the right direction!  Seek and ye shall find.  Maybe it's telling me my time should be spent checking allocations and battening down the hatches.

Or has this whole thing just gone crypto and run away from me and my nice systems.  That it's OK to buy overboughts or near overboughts in this crazy world if you try and stay close to the exits.  But I'm not even sure this is even a trader's (excl. scalper's) market anymore.

But bottom line is I was not sufficiently ready to go in March (mentally as much as other).  Sure I dabbled but not hard enough given my allocations.  I should have sold down PMs and cash and bought more value equity.  Maybe now I should just suck it up.  That has historically been the hardest lesson to learn but, with hindsight, the most valuable.  I'm out of synch with the market, marching on the wrong foot, and just going to have to skip a step to get back in line!

A hard mistress these markets.  But I still love her and the way she keeps me grounded and humble.

PS:  Think I'll just go out and build something eff off big instead.

PPS:  Oh and stock up (farmers telling me prices are up but no way enough to cover all their input costs, from feedstock to machinery).

[Lightscribe]

15 hours ago, harp said:

No one knows the future and listening to others who think they do is bollocks. When does a contrarian become mainstream thinking? All I've done is spray and pray. Bit of this bit of that and a lot of bitcoin.

Well you’ve kinda copied my mantra, invest in everything and you’ll be right in one way or another. Everyone will think you're the oracle regardless! 

Ok as the BTC chat has surfaced again, I’ll give my two pence on the matter.

We are heading towards a digital currency, like it or not. That currency will incorporate blockchain technology and automation.

If a farmer needed fertiliser, wouldn’t it be so much more efficient to have it all done automatically. Past/present average yields, weather/soil conditions, current product price/weight, optimum growth/time. What if the supply of just the right amount was delivered to the farmer at the right time all automated and tailored to a individual need. That’s how digital currency using smart contracts and AI would work.

BTC will have nothing to do with that. It’s use will be the same as physical gold and currency today, just solely to underpin value.

In a stock market crash, BTC will fall with everything else, it’s not a safe haven. Longer term however it’s not worth trying to value BTC in $ value if $ no longer exist.

China has used this used this covid period (amongst plenty of other things to do in its favour) to rapidly roll out DCEP. It stands entirely the opposite to BTC and ETH (or BNB/ADA/API3 etc)

https://www.forbes.com/sites/jasonbrett/2021/01/27/chinas-digital-yuan-reported-to-be-ultimate-financial-censorship-tool/?sh=2fd036f550ac

The future will be interesting on what the west do once we reach the point of a currency reset. Join China under a global currency? If so BTC could go to zero.

https://www.bbc.com/news/business-54261382

Maybe we will. I’ll hedge my bets and keep some of my LINK aside to run smart contact node in return for an extra portion of gruel and some social credit tokens.

https://www.prnewswire.com/news-releases/bsn-integrates-chainlink-oracles-bringing-real-world-data-into-its-irita-powered-network-301081572.html