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

[JMD]

22 minutes ago, Transistor Man said:

No, rolls Royce cars are owned by bmw.

They licence the name. A funny thing happened with VW buying Bentley and the “winged woman”, but not the name RR. I forget the details.

Aero Engines and submarine nuclear are separate. 

Thanks TransistorMan. I think that's important to know. RR nuclear tech might not be completely read-to-go off-the-shelf, but British government might just contract them to develop it if there is half chance of RR delivering, especially if electricity supplies become strained in future. I think such technology could provide a very valuable stop gap, before (hydrogen, etc) renewables come on stream.   

[TheCountOfNowhere]

Cant find any news that broke at 3pm. 

 

Did the BoE asset purchaser have the morning off ?

[nirvana]

6 minutes ago, TheCountOfNowhere said:

Something must have been announced.

PPT = plunge protection team, someone at the FED gave the nod to buy the markets at 10am New York time methinks.......

once the US markets are open, the whole world just follows them.....even the Germans  the DAX had a dramatic bounce too

Individual stocks are pretty much irrelevant, it's just 'follow the money markets'.......

[JMD]

45 minutes ago, Harley said:

I wasn't limiting myself to the oilies, by a long way.  I once had cause to trace an ownership chain as part of an acquisition and ended up with a secretive private equity company resident in the Caribbean.  All sorts could be going on, including secretive shares for favours.  Great if you are on the inside proper (i.e. not a patsy just thinking you are).  there is also a TED talk on the matter by a biologist(?) who used their trace techniques to look into who owns what in the world.  Ultimately came down to a handful, like 60 or 600 odd people/organisations/families.  Max Keiser has been all over this subject.  

thanks Harley, its that kind of insight that has helped me greatly with understanding risk, etc. To think i didn't even know what a synthetic etf was until a couple years ago, i really was a danger to my self!, not to mention my my wealth!!

[nirvana]

Bernie Sanders Hasn’t Quite Captured What Wall Street Does: It’s Actually a Fraud-Monetization System with a Money-Printing Unit Called the New York Fed 

https://wallstreetonparade.com/2020/01/bernie-sanders-hasnt-quite-captured-what-wall-street-does-its-actually-a-fraud-monetization-system-with-a-money-printing-unit-called-the-new-york-fed/

[TheCountOfNowhere]

20 minutes ago, 5min OCD speculator said:

PPT = plunge protection team, someone at the FED gave the nod to buy the markets at 10am New York time methinks.......

once the US markets are open, the whole world just follows them.....even the Germans  the DAX had a dramatic bounce too

Individual stocks are pretty much irrelevant, it's just 'follow the money markets'.......

It's criminal.

If you know it's coming you can make a fortune.

At some point I reckon the bankers will be strung up for what they've done.

It's all going 1920's Germany

[nirvana]

I just checked BT, they bounced start going up just after 3pm BST, coincidence or did the MD just announce a new contract win? 

Anyway I got a tip to buy RDSB at £10.26 ......let's see 

@TheCountOfNowhere exactly, the primary dealers get the nod, us plebs just have to rummage around looking at the charts for 'scraps' 

4 minutes ago, TheCountOfNowhere said:

At some point I reckon the bankers will be strung up for what they've done

they won't cos the one percenters are all in on it and getting even richer 

[JMD]

2 hours ago, Sasquatch said:

I am quite concerned at the moment of staying in cash. This is on both the personal and business side of things (with more cash 'exposed' with the latter). I accept it's a nice problem to have but it's a problem nonetheless. I sincerely believe that we are now at a point in history where anything can happen, socially, politically, financially. Despite the FSCS £85K scheme, I remain to be convinced that this is entirely watertight if more than one bank happens to go under. Our business cash is our pension but it not yet fully 'made up' in that we need 3 more years of earnings nor is the current balance ready to be deployed into the right areas (which might include property). I've moved a tranche into bullionvault but I'm not confident enough to chuck it all into PM. Bought some stocks as well but again it's too volatile at the moment. If there was a NS&I scheme for businesses I would probably move all surplus cash into there (but there isn't).

I was very interested to catch up with David Hunter's latest macro blog and his prediction of a final melt up to labor day and then the big slide downwards for stocks (and also temporarily for PM). However, even that brings problems if one was to temporarily cash out before going back in later. eg even more cash in the bank just when the wheels are falling off.

It's going to be a bumpy ride for the next 2 to 3 years. I think the path will be clearer by then (even if it's full of burning wreckage)

Yes, the realisation of a future systemic market collapse happening (2028?) has personally 'hit me' big time since the CV19 entered our lives. Yes, we were warned about the prospect of a black swan event happening, but when it did arrive, i admit the policy response, lockdown, etc (and lapped up by the public, which i have found equally as shocking) has figuratively knocked me for six, because i now appreciate how quick these things can/will happen and how far our leaders are likely to go (with, in all likelihood, the blessing of the electorate). But i am now forewarned, so not all bad i suppose!

Like you i have a similar - 'nice problem' to have - in that i have a large amount sitting in cash. I need to decide what to do with it, but do have it currently in different banks. But what worries me is how much i should reasonably invest into my single Interactive Investor sipp. I will be transferring my DB pension into my sipp later in the year and so for a time (perhaps a long period of time) my sipp will be holding a large cash amount. Of course once invested in equities, etc, i will still be investing via one platform provider (ie interactive investor), but I am assuming that this problem is a common one experienced by many sipp investors and could really only be mitigated by opening several sipps with different providers?          

[Harley]

3 minutes ago, JMD said:

I am assuming that this problem is a common one experienced by many sipp investors and could really only be mitigated by opening several sipps with different providers?          

Is the problem not that the compensation scheme limit is per bank and the providers are sharing the same banks (but good luck getting that level of detail from them)?  I'm actively researching drawdown.   Take out 25% tax free, shove in NS&I, etc and then filter back into ISAs, etc.  And that includes a normal trading account (overseas?).  People forget the first £12,300 or whatever of gains per person per year is CGT free which would be enough for me to live on, should I be lucky enough to make that much (even more if I include up to another £12,500 income).  So a couple could take out £24,600 capital gains plus £25,000 tax free income a year.  Far more than we need.

[Sasquatch]

5 minutes ago, JMD said:

Yes, the realisation of a future systemic market collapse happening (2028?) has personally 'hit me' big time since the CV19 entered our lives. Yes, we were warned about the prospect of a black swan event happening, but when it did arrive, i admit the policy response, lockdown, etc (and lapped up by the public, which i have found equally as shocking) has figuratively knocked me for six, because i now appreciate how quick these things can/will happen and how far our leaders are likely to go (with, in all likelihood, the blessing of the electorate). But i am now forewarned, so not all bad i suppose!

Like you i have a similar - 'nice problem' to have - in that i have a large amount sitting in cash. I need to decide what to do with it, but do have it currently in different banks. But what worries me is how much i should reasonably invest into my single Interactive Investor sipp. I will be transferring my DB pension into my sipp later in the year and so for a time (perhaps a long period of time) my sipp will be holding a large cash amount. Of course once invested in equities, etc, i will still be investing via one platform provider (ie interactive investor), but I am assuming that this problem is a common one experienced by many sipp investors and could really only be mitigated by opening several sipps with different providers?          

It's impossible to be sure of making the right decision but decisions ultimately need to be made. I think the majority view amongst the dosbods lot and similar minded people outside is that cash will be a very poor choice long term as inflation takes hold. I want to get our personal money into the right long term home (we are trying to move at the moment!) and bring this new house up to a high spec level in terms of repair and fit out. Second to this is buying all of the useful gear one would aspire to owning (garden equipment and tools, trailer for car etc, DIY equipment, ) and then leisure equipment (ie bicycles, walking gear and the like). At that point any spare cash needs to be kept somewhere - maybe in premium bonds or a decent interest bearing account with the best bank/surety you can find. Business money may end up being used to buy property and partly drawn down on an annual basis. We may help our children buy their first homes and it's also possible we could buy our aged parents a house which they could rent back from our business. Again, we need to get the business money out of cash as a medium term goal (3 to 5 years). We are aiming to be fully retired within the next 5 years.

Finally I have a SIPP which I took into my 100% total control last year (it was previously a SIPP being partly handled by an IFA). It's with James Hay. 65% is in gold (via bullionvault), 20% in reflation stocks, 15% currently in cash. I may put the remaining cash into gold but will see if there is a pull back later in the summer before doing this. The SIPP is above the £85,000 FSCS compensation level but I'm reasonably relaxed as more than half of the SIPP money is sat in bullionvault. Worst case scenario would be the SIPP provider going bust and the inevitable delay as my SIPP got transferred to a new provider. The bullionvault account and Selftrade accounts would presumably simply transfer across. I haven't dug deep into the consequences of a SIPP provider going bust but unless someone can tell me otherwise, I would think the only risk would be monies held in the cash above the £85,000 level.

[CVG]

2 hours ago, Cattle Prod said:

he's got it out the wazoo

Please stop it. I cant get this ad out of my mind

 

[Harley]

5 hours ago, Sasquatch said:

I think the path will be clearer by then (even if it's full of burning wreckage)

 

[MrXxxx]

8 hours ago, geordie_lurch said:

Thanks for highlighting that @sancho panza - I take your point and your subsequent Big Kahuna comment. I'm not basing my decisions on anyone's specific advice here or elsewhere but simply a gut feeling I need to spread what little cash I have around to cover myself and already have outside of stocks and shares. All the best

Hi GL,

have a listen to some of the podcasts about 5 pages ago and then form your own opinion based on these and other factors...that's what I did...whether it will play out the that way though who knows :-)

[geordie_lurch]

28 minutes ago, MrXxxx said:

Hi GL,

have a listen to some of the podcasts about 5 pages ago and then form your own opinion based on these and other factors...that's what I did...whether it will play out the that way though who knows :-)

Yes I have listened to most of them and I'm well aware there's no guarantees for any of life.

[MrXxxx]

5 hours ago, TheCountOfNowhere said:

What happened at 3pm to make various share prices jump back up ????

 

 

It's a fair bet.

@YRS bought them in the morning before they dropped and then after a good lunch changed his mind and sold them in the afternoon? :-) :-) :-)

[Bobthebuilder]

4 hours ago, Harley said:

As in my diver days when things got a bit hairy, just hug yourself! 

Ive been 30+ meters down and had to deal with a couple of problems, like zero viz due to silt, i found holding hands helped.

[MrXxxx]

15 minutes ago, Bobthebuilder said:

Ive been 30+ meters down and had to deal with a couple of problems, like zero viz due to silt, i found holding hands helped.

This reminds me of that Chuck Berry song for some strange reason:

 

[Harley]

1 hour ago, Bobthebuilder said:

Ive been 30+ meters down and had to deal with a couple of problems, like zero viz due to silt, i found holding hands helped.

Excuse me, foocking Navy mate, not the puffy Arty Farce!

[DurhamBorn]

5 hours ago, Harley said:

Indeed.  They still have an unfinished war!

Exactly Harley.You always hear the narrative about nobody could war with China on the ground when India could with Western arms.Western companies moving production to India from China would serve a dual purpose.The US could easily grease the way with tariffs.In return the US would expect India to import farm products etc.

They are already having the odd scrap on the borders

https://www.livemint.com/news/india/iaf-had-to-scramble-fighter-jets-to-india-china-lac-in-ladakh-report-11589267490692.html

[Harley]

2 minutes ago, DurhamBorn said:

Exactly Harley.You always hear the narrative about nobody could war with China on the ground when India could with Western arms.Western companies moving production to India from China would serve a dual purpose.The US could easily grease the way with tariffs.In return the US would expect India to import farm products etc.

They are already having the odd scrap on the borders

https://www.livemint.com/news/india/iaf-had-to-scramble-fighter-jets-to-india-china-lac-in-ladakh-report-11589267490692.html

1962.  Still simmering along then

[Shamone]

7 hours ago, Harley said:

I wasn't limiting myself to the oilies, by a long way.  I once had cause to trace an ownership chain as part of an acquisition and ended up with a secretive private equity company resident in the Caribbean.  All sorts could be going on, including secretive shares for favours.  Great if you are on the inside proper (i.e. not a patsy just thinking you are).  There's also a TED talk on the matter by a biologist(?) who leveraged their trace techniques to look into who owns what in the financial world.  Ultimately came down to a handful, like 60 or 600 odd people/organisations/families.  Max Keiser has been all over this subject.  

‘Moneyland’ is worth a read.

[sancho panza]

 

8 hours ago, Sasquatch said:

I am quite concerned at the moment of staying in cash. 

I was very interested to catch up with David Hunter's latest macro blog and his prediction of a final melt up to labor day and then the big slide downwards for stocks (

I'd keep your cash at the systemic banks if you're anxious about the £85k.

If you're anxious you can shovel it into Gilts for a period in a Crest account.

I think Labor Day is a key date historically in trading US stocks as usually ,any nervousness for October shows then.Personally,I think we'll get through this year before the big kahuna but Labor Day is big on my horizon.

8 hours ago, Cattle Prod said:

 America doesn't need Chinese trade if it can still print the worlds reserve currency. And China badly needs the dollars. The China hawks in Washington will now be pushing for a proper 'realignment' with them. I expect to see massive onshoring announcements in the run up to the election, and it may well get Trump re-elected. The US can effectively force companies to bring manufacturing back to the US by shutting off dollars to China. Supply chains there will break down quickly, no one wants to be paid in Yuan. And I have to admit, as a guy from a humble working class backround, I think onshoring is the right thing to do. Being able to support his family with a good, secure job is all a working class guy really wants. Well some beer and a truck too, of course! I would love to see those opiate devastated rust belt communities celebrating the opening of a new factory. What goes for the US, goes for the UK a little bit later. 

The calculus has shifted. If you're not on the list of swap line countries, you are going to suffer.

What that means for us here is for example I have been very happy with discounted Mexican miners like Fresnillo, when others see risk there. There is no risk of nationalisation in Mexico as long as they still want to get dollars at the Fed.

This whole notion of suppy lines getting shorter/onshoring is very compelling and could be the basis of some serious cost push inflation.

I have to agree on onshoring working out for Main St.I voted for Ukip for years on that basis for my sins.

I think your point re swap lines is bang on.I think the Chinese are in deep trouble and when their shadow banking system implodes it will be an epic watch.

7 hours ago, JMD said:

SP, did you see the recent BBC series DEVS? I thought it was great btw, but anyway if you did see it, then surely you realise already that everything is/has been written in our 'stars'  - or in our 'simulation'!... makes your head hurt if you dwell to long on this kind of stuff (if you didn't watch it, please excuse my strange interjection).

No idea JMD…….I read this forum in the evenings while Mrs P watches TV.She doesn't do sci fi.:-)

[sancho panza]

7 hours ago, DurhamBorn said:

Yeah,i think its certain big shareholders have warned them.I think the divi should of been cut at Shell,but 30% cut not 66%.I expect it will go back to what will be a 30% to 40% cut.

Im really pleased that Trump is now putting it out there about China,a key part of the inflation road map is that this would happen and force both blocks to put the pedal to the metal.Uk should be able to supply lots of arms to the Aussie's they will want ships for certain.

I think a lot will come back west,but the easy stuff will go to India.Expect moves soon where the US and the UK really start to big up India.They hate the chinks and a strong India is a nightmare for China.

If they shut China down then it's game on and we don't have to worry about us going Japanese.

India will be a beneficiary but could see China starting to take over Pakistan.

[sancho panza]

7 hours ago, Cattle Prod said:

I read something recently that India have an area the size of Luxembourg pertmitted, cleared and ready for factories etc.

I think this is very likely, both brownouts and modular nuclear. RR will never be allowed go bust IMO, it's strategically impor

My only issue with RR is entry price.I don't think we're near the bottom yet.

 

Meanwhile in the US,pictures paint 1000's words

https://wolfstreet.com/2020/05/14/week-8-of-the-collapse-of-the-u-s-labor-market-nearing-a-previously-unthinkably-deep-bottom/

This number of “insured unemployed” rose by 456,000 to 22.83 million for the week ending April 25. The sad record of the pre-Covid-19 era was 6.63 million in May of 2009. This chart shows the spike in historic context:

[JMD]

7 hours ago, Harley said:

Good lad!  As in my diver days when things got a bit hairy, just hug yourself!  This could be one freaky ride.  And as DB says, the main (maybe most realistic) objective is to just to manage to do less bad.  I've suffered paralysis for too long and am now royally sick of it.  This stuff is really hard mentally but I've got better support and recognition this time round and maybe more (slowly accumulated) critical mass to build on.  I've banked too many good (non-material) things in life to be scared anymore so "whatever".  Bring it on, if the cowardly bullies dare!   I may crudely go on about such "off topic" shite but getting in the right head space is paramount.  Too many castles have been in built in the sand.   Resilience.

Very true Harley. I think i've gotten over my shock/awe ref recent 'political mischief and market corrections' - so much so that I'm downplaying it already! My main focus now is to not become a helpless victim for whats about to unfold and be inflicted upon most over the coming decade. And yes, I certainly would consider it a win just to get through the next cycle with my wealth intact, so long as this included being well positioned investment wise (whatever that may require I'm not sure) for the 2028? main-event. Just hope this forum is still going strong  then as sure to need the wisdom of the forum members even more so then, as DB has stated that 2028 will likely be very very bad and we ain't seen nothing yet!