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

[Sugarlips]

Anyone with a spare hour or 2 this weekend could benefit from listening to this. Yes there is lots of crypto discussion but I learnt a lot, not least that the future is bright albeit timing the entry/exit price remains one of the most aspects to investing in the new digital world.

[Lightscribe]

19 hours ago, Cattle Prod said:

Here's a demographic driver I hadn't considered, and I think very inflationary:

https://www.bloomberg.com/news/articles/2021-04-30/more-americans-are-considering-retirement-because-of-covid

So less workers means higher wages, and more cash chasing fewer goods and services. I think we here can relate to the sentiment of the article, personally I am where they are: I don't want to work any more and to spend time pursuing my passions. I'm in my 40s, so it may take a few years yet, but if I was in my early 50s I wouldn't be going back to the office either. I wonder how many will opt out? This is happening de facto in early careers too by immigrants 'retiriing' back to their home countries and not coming back. If the stimulus checks and generous unemployment benefit keep coming in the US, there will be a whole generation of young workers retired, too. 

As the article says, Powell mentioned it in his press conference, which is probably important.

I don’t doubt that this will force sectors into increasingly investing in automation and AI at a rapid clip, especially once UBI is implemented longer term.

However we’re all just ratcheting up to the peak top of the rollercoaster at the moment and everyone’s just enjoying the view.

The devastation of the post pandemic landscape is yet to hit. The majority of the masses financial set ups won’t fare well over the next stage and they’ll soon start changing plans. Companies will cut costs and outsource remote working abroad etc, costs of everything will rise, cheap debt will become harder to source.

All those that have swanned off to live their idealistic dreams in the countryside patting themselves on the back for saving on SDLT, may soon reconsider. Then there’s those that think they’ll be retiring very soon who’s  pensions are heavily invested in passive FAANG funds and bonds.

A bit of hardship can do amazing things to change the landscape rapidly and realign perspective.

[DurhamBorn]

For you Ferrari lovers the Caputo Blue 00 is on Amazon at the moment for £21.97 for 10 and i think this lot has 11 months date on it so a very decent price,not dispatched for a couple of weeks so likely fresh batch arriving.Iv ordered.Im trying a 36 hour cold proof on my dough for tonight.7 of us and my aim is to feed everyone for under a tenner ,thats everyone not each  ,Lidls pepperoni is only 89p and very decent and freezes well,i find i can get 4 pizzas from one without scrimping,Home bargains also now sell cooked bacon bits for 79p and they make an easy and lovely topping and also mixed in with the pasta bake.

The Tipo 00 flour seems expensive for a tight wad like me,but the difference at high temps is huge,its simply the best and with fresh yeast still works out only 60p a base for flour/yeast and about £1.40 a pizza all in with cheese,sauce topping.

https://www.amazon.co.uk/Caputo-Flour-Blu-Type-Kg/dp/B0173KM9EY/ref=bmx_3?pd_rd_w=2Puw9&pf_rd_p=6398e171-4f42-4318-a493-6aac0e34c3e5&pf_rd_r=0KPYNDCGV2KY7BGPWEYX&pd_rd_r=81fd551a-4327-4440-be87-5701a3f99274&pd_rd_wg=VQOp0&pd_rd_i=B0173KM9EY&psc=1

My fresh yeast is still performing great after being frozen in 20g blocks for a year,i find 20g to 25g does the 1kg of flour perfect.

https://www.ebay.co.uk/itm/313190219450?hash=item48eb977eba:g:Y4QAAOSwLc9fPq47

The kilo can be had for £9.65 

https://www.ebay.co.uk/itm/381172919674?epid=1354078083&hash=item58bfad2d7a:g:OFsAAOSw-7RVCuv8

Remember to cut into 25g blocks as soon as you get it and freeze,i just wrap each bit in some clingfilm.

 

[NogintheNog]

5 hours ago, Sugarlips said:

Anyone with a spare hour or 2 this weekend could benefit from listening to this. Yes there is lots of crypto discussion but I learnt a lot, not least that the future is bright albeit timing the entry/exit price remains one of the most aspects to investing in the new digital world.

Really interesting when he talks about the 'assets' of the world correlating with the supply of printed money since 2008, but CPI barely budging! Wages being hollowed out (think all of us on here can see that happening).

And the point that it's not just the US Fed doing the printing, milkshake theory and all that. Gold not performing as the monetary store of value that it should in terms of the debasement by all the CB's actions??? Compared of course to, you guessed it, Bitcoin.

Meanwhile the debasement continues.....

http://fingfx.thomsonreuters.com/gfx/rngs/GLOBAL-CENTRALBANKS/010041ZQ4B7/index.html

It's hard to get your head around these 5 CB's going from under $5 trillion in August 2008, to over $20 trillion + now. 4-fold in 13 years!!!!

 

[reformed nice guy]

Here some local data about inflationary pressures.

Was out with a friend that does "agricultural services" - digging ditches, putting up sheds, topping etc

Parts for JCBs have got a 12 week lead as lots are made in India then shipping to Uttoxeter for the "Made in GB" badge.

The best big tyres for machinary come from America. Suppliers are saying its a 10 week wait (maybe more), pre-order basis with no guarantee that the current price will be the same price in 10 weeks.

Good prices just now for lambs, steers so lots of farmers getting work done as they hate paying tax. More money in for them goes to more money out on sheds etc. They are grumping at the price for concrete, wood etc but swallowing it

Selling price is up but feed price, fertiliser price etc all up as well. Most have last years stock to use but they are smarting on buying in new supplies.

Lots of yards are selling shitty vans that dont run for crazy money to townies because the townies need to follow rules on number of people per van etc.

Every bit of wood that can be cut down is being cut down. Big bottle neck on getting it felled. Also a problem that companies that fell are often the ones planting new trees. Plenty of government money just now doing planting versus private money felling every tree possible - a funny paradox.

[Bobthebuilder]

2 hours ago, DurhamBorn said:

Im trying a 36 hour cold proof on my dough for tonight.

If you are doing that in the fridge it works a treat. It's what all the top pizza places do, more dough for your dough. Top stuff.

I'm surprised you haven't got into sourdough yet, no yeast to buy so even cheaper.

Mmmmh pizza. But not just pizza, that dough will make anything bread based, loafs, rolls, etc.

[DurhamBorn]

https://www.telegraph.co.uk/business/2021/05/01/perilously-close-another-inflationary-age-no-one-cares/

Interesting that the article uses our term "disinflationary" for the past cycle.

More and more are moving into our roadmap,but dont offer any advice to their readers on where to position.I still think the cycle risk is bonds,after maybe one last jump up in a BK

[Loki]

29 minutes ago, DurhamBorn said:

https://www.telegraph.co.uk/business/2021/05/01/perilously-close-another-inflationary-age-no-one-cares/

Interesting that the article uses our term "disinflationary" for the past cycle.

More and more are moving into our roadmap,but dont offer any advice to their readers on where to position.I still think the cycle risk is bonds,after maybe one last jump up in a BK

 

Quote

The economy is also less energy intensive, significantly reducing the inflationary impact of any repeat of the oil price spikes of those decades.

 

No mention of why it's less energy intensive, or what the disinflation could mean for energy use

 

Even I know that (I think!)

 

[JMD]

20 hours ago, Sugarlips said:

Anyone with a spare hour or 2 this weekend could benefit from listening to this. Yes there is lots of crypto discussion but I learnt a lot, not least that the future is bright albeit timing the entry/exit price remains one of the most aspects to investing in the new digital world.

A clear message from Raul Pal about how ramped he is about crypto, delivered in his own distinctive narrative style. I broadly agree with his analysis of what form and function future money, assets and institutions will look like. Whether and how we can make investment returns from crypto is a different question. Declaration, I own some crypto but view the sector currently as being more speculation and/or hedge, than investment. However i shall endeavour to learn more about the sector in order to help position/allocate a % of my portfolio, which I will then be prepared to hold for next few years and watch what unfolds.                                                                                                                                                                                                     The following is I believe on thread but i accept is slightly off the beaten track. It's just that the events of the past year have forced me to try to think more deeply/tangentially about things.                                                            I know most of us here rail against post modernist thinking and politics (relativism, identity politics etc) which now infects all of today's society. Until recently I thought that all this crazy thinking was a blip and sanity would resume in order that the West could continue with its rationalist enlightenment journey. However I now believe we have several decades ahead of more similar craziness until things get put back on track. A depressing thought but i can't see any sizemic social shifts rotating us back in the short term.... Anyway just my perspective on the 'v. super-wide' macro view. And I mention it because I found some of Raul Pal's thesis, as related to the crypto/tech space and his gaming comments in particular, as sort of road-mapping us toward living in a highly-virtual almost anti-reality lifestyle - which for me, chimes depressingly with more post-modern mantra... But to be clear, I don't think crypto itself is a negative (it's just a component part of the Fourth Turning cycle) - so for example, and for anyone who cares to comment - how about NFTs providing a potential solution for the 'tragedy of the commons' dilemma?     (if you have read this far, please excuse my ramblings)

[sancho panza]

On 30/04/2021 at 16:50, Cattle Prod said:

Here's a demographic driver I hadn't considered, and I think very inflationary:

https://www.bloomberg.com/news/articles/2021-04-30/more-americans-are-considering-retirement-because-of-covid

So less workers means higher wages, and more cash chasing fewer goods and services. I think we here can relate to the sentiment of the article, personally I am where they are: I don't want to work any more and to spend time pursuing my passions. I'm in my 40s, so it may take a few years yet, but if I was in my early 50s I wouldn't be going back to the office either. I wonder how many will opt out? This is happening de facto in early careers too by immigrants 'retiriing' back to their home countries and not coming back. If the stimulus checks and generous unemployment benefit keep coming in the US, there will be a whole generation of young workers retired, too. 

As the article says, Powell mentioned it in his press conference, which is probably important.

Interesting to see that a third of physicians are over 60.

It's one thing I've ntoiced with this 'no jab,no jab' policy they were looking at trying.They tired it with care home workers first to see how they got on before taking on the moneyed,close to retirement doctors.I don't think it's going to happen.In London 50% of care home workers haven't bothered-good luck replacing them in ahurry.

It's a sign,as it were of how tight the labour market is in some areas.I suspect care home workers wages might be about to get above minimum wage-and not before time too.

[Harley]

On 01/05/2021 at 05:58, Sugarlips said:

Anyone with a spare hour or 2 this weekend could benefit from listening to this. Yes there is lots of crypto discussion but I learnt a lot, not least that the future is bright albeit timing the entry/exit price remains one of the most aspects to investing in the new digital world.

Glad he did this video.  It was needed.  Thanks for sharing.  Nice to see someone talking about my burning building similie of old and talking about value.  That guy's got brains, he could go far!   Not that his picture of the outside may be 100% but must be close.  But the burning building, oh yea!

[sancho panza]

On 30/04/2021 at 21:14, Barnsey said:

Thinking outside the box then, perhaps a short but sharp deflationary event would halt this dynamic? Starting to see many consequences of generous support, albeit temporary of course. Will be hard for employers to unwind imminent pay increases once stimulus runs dry(ISH)? My expectations for the long term are also of much higher wage inflation ahead despite the deflationary counter effects of an older population. Tricky one.

In other news, highest since 1983!!!

 

I think a lot of 401k retirmenet accounts in the US have been flattered by the performance of the FAANG stocks as most will be tracking S&P500 performance.That new found retirement security could be illusory unless you can find a way-as this your average basement dweller has done-to transfer wealth into value stocks that are bringing income.Reality is that you can't jsut buy UST's and retire here.$1million in 30 yr's brings you,what $23,000 per annum.

On 30/04/2021 at 21:21, Cattle Prod said:

Super interview here folks from Michael Kao on RealVision. It's subscription only but you can do a trial for $1. Ok, he's got a bull thesis and it may be my selection bias, but it's the best analysis I've seen in a while, Art Berman seems to have lost the plot since Covid stuck. Lots of nuggets in there. US shale, long cycle production starved of capital, OPEC, backwardation, problems producers have hedging, I've said a lot of it here but if you want to hear a professional managing money saying it rather than a randomer off the internet, check it out:

https://www.realvision.com/shows/the-expert-view/videos/is-crude-oil-the-best-inflation-hedge-and-other-oil-questions

FWIW he mentions the contango to backwardation flip @sancho panza, and studied it back 30 years. Significantly higher prices a year later in all but 4 cases (for specfic reasons). I cant remember if I shared it here, but my base road map is off backwardation flips, which happened on 23rd November.

Teaser (though the editor didn't actually catch the best bits):

Thanks for the heads up on this CP,I'll do the one dollar option tonight if I get time amongst my domestic duties.Ref your other post,I remember drawing historical parameters for pre recesion bounces in oil prices where oil ran up from pre recession low were roughly 200% in 1990,270% in 2000,200% in 2008.

Giving us histoical precedent for a Brent price at peak of $100.If we use a little lattitude due to the man made nature of the covid panic,then the peak in this run could be higher.

I think the bull case is strong here so I'm looking forward to this vid.I've been active last week in the options market but I'll psoot the detail in @MvR options thread.

ALso,I think we need to look at what copper's doing as it often runs ahead of oil by a few months.That's looking higher.

 

[sancho panza]

21 hours ago, NogintheNog said:

Really interesting when he talks about the 'assets' of the world correlating with the supply of printed money since 2008, but CPI barely budging! Wages being hollowed out (think all of us on here can see that happening).

And the point that it's not just the US Fed doing the printing, milkshake theory and all that. Gold not performing as the monetary store of value that it should in terms of the debasement by all the CB's actions??? Compared of course to, you guessed it, Bitcoin.

Meanwhile the debasement continues.....

http://fingfx.thomsonreuters.com/gfx/rngs/GLOBAL-CENTRALBANKS/010041ZQ4B7/index.html

It's hard to get your head around these 5 CB's going from under $5 trillion in August 2008, to over $20 trillion + now. 4-fold in 13 years!!!!

 

Thats the key thing with current infaltion measures is that they've completely missed the huge rise in cost of buying a home or a dollar of pension income.

shocking in many ways,scale/act of omission etc.

Huge problem will occur when prices rise and people find their retirement income isn't what they've expected.  @DurhamBorn has been saying for years thats these IFA run 60/40 epsnion set ups are going to get bruned and looking at this picture you can see why

[planit]

I feel all low paid jobs are going to see a shortage, this had been hidden largely by Covid but within 6 months the hospitality sector will be on overdrive and there are not enough immigrants to do the work. There are also problems with the seasonal workers, buiilding trade and you mention the care homes. 

Brexit has been forgotten due to Covid but all the above will be brought back into focus at around the same time.

 

It is the same theme again, Covid had made statistical analysis impossible hiding the trends and everyone has been looking the other way so there has not even been any debate on these problems.

Over the next 2 years there will be issue after issue with "no one saw that coming" comments and on here we will be hitting our heads against the wall wondering why everyone is so stupid.

 

 

There is a good podcast with Jordon Peterson and Bjorn Lomberg

 Is Everything Better Than We Think?

If you have some time free, great discussion on the misallocation of effort/money with regards to the worlds problems. The money chucked at climate change is 3 times more than all other problems added together including disease/hunger/etc.

Also if just $150bn was thrown at Tuberculosis it could be eradicated (and that is probably 1% of the money chucked at Covid worldwide this year). TB kills as many people as Covid has every year!

 

 

[Loki]

Quote

 

  OIL MAJORS: WALKING AWAY

Almost every week, we hear of Shell, BP, or other Western oil and gas majors exiting a project or dumping assets to "reduce carbon footprint" or whatever bullshit they would have us believe.

But has anyone stopped to think what actually happens to those assets? This Bloomberg article provides some interesting insights:

The chief executive officer of BP Plc had ­something ­exciting to tell investors in September 2019. The fifth-­largest multinational oil producer in the West had just inked a deal to sell everything it owned in Alaska, marking a sudden exit from a region the company had prized since the birth of the state 60 years earlier. The $5.6 billion sale would help reduce corporate debt, but that wasn’t the only boon. BP would be proudly shedding unwanted greenhouse gases, paving the way toward what would soon become its signature goal: zeroing out emissions by midcentury.

For a fossil fuel behemoth such as BP to undergo a sustainable transformation, smaller entities like Hilcorp must sit on the other side of the transaction. Owned by Houston billionaire Jeff Hildebrand, the privately held company has made a name buying oil and gas assets no one else wants.

BP’s sale to Hilcorp is a harbinger of what’s coming to the wider world of divested fossil fuel assets. By the end of this decade, Royal Dutch Shell, Total, Chevron, Exxon Mobil, and the rest of the top eight oil and gas companies will sell a combined $111 billion worth of assets “to adjust to the energy transition,” Oslo-based consultant Rystad Energy predicted last year. BP alone plans to cut oil and gas output by 40% in the next 10 years.

Oil and gas is probably the most toxic, unloved sector in the world, probably even more hated than coal (if that is possible). You would probably be more popular if you’d been friends with Jeffrey Epstein than investing in oil and gas. But we’re quite content to do so.

 

 

Extract from Capitalist Exploits newsletter 

[DurhamBorn]

1 hour ago, sancho panza said:

Interesting to see that a third of physicians are over 60.

It's one thing I've ntoiced with this 'no jab,no jab' policy they were looking at trying.They tired it with care home workers first to see how they got on before taking on the moneyed,close to retirement doctors.I don't think it's going to happen.In London 50% of care home workers haven't bothered-good luck replacing them in ahurry.

It's a sign,as it were of how tight the labour market is in some areas.I suspect care home workers wages might be about to get above minimum wage-and not before time too.

All wages are.Its not just money/demand.During a cycle change attitudes change as well.People have tasted more freedom,had death shoved in their face,even if just a small blip.Then they look at the wages and say no thanks.Its incredible the amount of jobs im being offered,its every day,sometimes a few a day.I tell them all the same thing,not enough money for the loss of time.

What i have done this week though is sign on JSA,its the new tax year and so i might as well have the 6 months free money.Its also really interesting.They offered me to sign up with these guys

https://www.aptem.co.uk/

Another Serco outfit to syphon taxpayers money.Its so woke its unreal.Of course its all online.First up you get a telephone interview,nice girl,seems interested in helping.Then your onto the portal.Suddenly im signed up for a couple of useless online group sessions.So iv messaged her and told her i wont be attending as i dont use Zoom or any other work from home Teams type thing,but to message and let me know when there is a face to face session local and il attend  

At the end of the 6 months il phone my quack and tell him im really down and feel really angry all the time,like i want to hurt people for locking me down and stealing my freedom,il then get a sick note and get on ESA,you can get that for a year none means tested as well.Might as well.

 

[geordie_lurch]

I know a few people have mentioned the direction the car trade is headed but not seen this model pushed before in the UK i.e not PCP or leasing

The following is from Volvo:

No long-term commitments. Change car or cancel with 3 months’ notice.

 

All-inclusive. With an option to add insurance or use your own.

 

No hidden costs. No deposit. Just a clear monthly fee.

https://www.volvocars.com/uk/care-by-volvo/

[Harley]

Watch out for a dividend yield trap?

I'm performing my weekly market screens and seeing some new companies pop up because they have hit my dividend yield target.  But not due to a fall in market capitalisation (share price times shares outstanding) as one would normally expect but because of material increases in their dividend payouts. 

For example, one close to our heart:  Yara International (YARO:Sweden).  Currently yields 4.60%.  Why the change?  Has the share price fallen on the monthly?  No, remains overbought.  The reason may be more because the total cash dividend paid (per the cash flow statement) has gone from 1.89B in 2019 to 8.35B in 2020 and 8.89B TTM.  Is this justified?  Maybe.  Operating cash flow jumped in 2019 to 17.88B from 6.30B and has risen steadily since, although allowing for changes in working capital the increase is not so large.  Regardless, note the increase in dividends is (proportionally) far larger than the increase in cash flow.  I also note a large increase in share buy backs in 2020 and TTM. 

So maybe these increased dividend payments are justified if this is a longer term trend, but of concern if this is just the distribution of shorter term super profits.  I'm looking for valuations that justify a steady income stream, not ones at risk by volatility in that stream.  That said, you could argue for some companies these streams will continue for a while.  It'll be interesting to watch to see if this becomes a more pronounced trend.         

[DurhamBorn]

29 minutes ago, Loki said:

 

Extract from Capitalist Exploits newsletter 

Its incredible the hate for the sector,that is until you go cold or starve.

At the moment all those massive wind farms with huge subs are producing 1% of the UKs electricity,not energy,just electricity.1%.49% from gas,and even around 8% from biomass,mostly DRAX.See why i said buy DRAX and we have trebled our money.

https://gridwatch.co.uk/

Now imagine if all cars were electric now.

Now solar is producing 16% so its not all bad for renewables,but tonight they wont be.

As a macro strategist the best moments are when the macro meets sentiment.Iv only seen it as extreme once before,and that was tobacco.BAT made me more money for a quite small investment than i got working for 10 years with GSK.

Big oil wont do that as they are already huge companies,but i think trebling money including divis over the cycle is likely.

 

[Harley]

2 hours ago, sancho panza said:

Thats the key thing with current infaltion measures is that they've completely missed the huge rise in cost of buying a home or a dollar of pension income.

shocking in many ways,scale/act of omission etc.

.......

IMO it's more than that.  As he says, inflation measures are becoming meaningless as they are based on the same common UOM of value.  They are all in the burning building together where true devaluation is not noticed as it is by stealth against the rest of the world outside of that building.  It's a bit like feeling good about house prices because they have gone up.  Sure, but only against a devalued UOM.  And being houses, which you have to live in, makes them a great poignant example.  Outside the building (the burning one or the one you have to live in!), they've gone nowhere.   They feel more expensive because they are, but that's relative to your declining income (using that same UOM).  Real capital preservation involves thinking more about value and opening the door and looking out.  Raoul is right - the building will burn down; it cannot be saved and their current excesses show they know they're in the end game and they have no intention of trying to save it.

[Harley]

1 hour ago, Loki said:

"For a fossil fuel behemoth such as BP to undergo a sustainable transformation, smaller entities like Hilcorp must sit on the other side of the transaction. Owned by Houston billionaire Jeff Hildebrand, the privately held company has made a name buying oil and gas assets no one else wants".

Bang, right there.  Privatisation of value and income streams under the guise of wokedom.  "No one else wants" or should that be "no one else allowed to have"?

[Harley]

27 minutes ago, DurhamBorn said:

Its incredible the hate for the sector,that is until you go cold or starve.

At the moment all those massive wind farms with huge subs are producing 1% of the UKs electricity,not energy,just electricity.1%.49% from gas,and even around 8% from biomass,mostly DRAX.See why i said buy DRAX and we have trebled our money.

https://gridwatch.co.uk/

Now imagine if all cars were electric now.

Now solar is producing 16% so its not all bad for renewables,but tonight they wont be.

As a macro strategist the best moments are when the macro meets sentiment.Iv only seen it as extreme once before,and that was tobacco.BAT made me more money for a quite small investment than i got working for 10 years with GSK.

Big oil wont do that as they are already huge companies,but i think trebling money including divis over the cycle is likely.

 

Maybe they will regulate cars like tobacco, so fewer of them (mostly short term rentals) at a higher price.  You will own nothing an be happy and the climate will be saved without having to build all that generating capacity (which BTW we're not so QED!).  We can say what we like but the vast majority have almost willingly done things they probably would have previously said "no" to these last few months.  And TPTB now know that.

[DurhamBorn]

1 hour ago, Harley said:

Bang, right there.  Privatisation of value and income streams under the guise of wokedom.  "No one else wants" or should that be "no one else allowed to have"?

I think thats a huge part of what is going on.Removing access to un-earned income from capital for ordinary people.The very very first thing i was taught in this game was that the rich need to stop the poor taking back the land.To do that they tax the middle and give to the poor.Then they own the assets that all those people use,so all the money goes to the top.Thats it.Amazing system,for them.

Like you say oil.Industries that have reached the end of their growth,or are in slow decline are cash cows.They are actually the best companies to own for income,and indeed protection of capital.Nobody wants to enter the sector,nobody will sanction the billions needed to build up a new company etc.So the last ones merge together until there are a few.Then they tick over their assets,cut capital spending right down,and slowly increase prices above falling use.

 

It seems the markets are losing investments going private that actually create cash,and are being left with all the growth stuff.Most 40/60 type funds now pretty much fund big tech to grow but never pay much of an income,and government debt to never pay an income.

So the publics assets are ending up only in areas that dont and wont create an income,and the elite slowly own all the assets that actually do produce free cash in the 10% to 13% range of turnover.

The result?,less people can retire early,or until they are knackered,and to escape state control is getting out of reach of almost everyone.

[Talking Monkey]

1 hour ago, DurhamBorn said:

I think thats a huge part of what is going on.Removing access to un-earned income from capital for ordinary people.The very very first thing i was taught in this game was that the rich need to stop the poor taking back the land.To do that they tax the middle and give to the poor.Then they own the assets that all those people use,so all the money goes to the top.Thats it.Amazing system,for them.

Like you say oil.Industries that have reached the end of their growth,or are in slow decline are cash cows.They are actually the best companies to own for income,and indeed protection of capital.Nobody wants to enter the sector,nobody will sanction the billions needed to build up a new company etc.So the last ones merge together until there are a few.Then they tick over their assets,cut capital spending right down,and slowly increase prices above falling use.

 

It seems the markets are losing investments going private that actually create cash,and are being left with all the growth stuff.Most 40/60 type funds now pretty much fund big tech to grow but never pay much of an income,and government debt to never pay an income.

So the publics assets are ending up only in areas that dont and wont create an income,and the elite slowly own all the assets that actually do produce free cash in the 10% to 13% range of turnover.

The result?,less people can retire early,or until they are knackered,and to escape state control is getting out of reach of almost everyone.

How do you think BTL fits into this. There's many in the middle with smallish portfolios. Do you think in the coming decade regulation and tax policies will try to take this wealth in order to keep the plates spinning, in order to keep the poor subdued. 

[Chewing Grass]

^^^ The Biden Bounce....