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

[M S E Refugee]

23 minutes ago, Harley said:

Bugger, I've been going to the wrong Spoons!

This is how my spoons ended up.

[Loki]

9 hours ago, Inigo said:

They may well be VAT free, but as far as I can tell, they just bump up their retail price to match other vendor's VAT included price.  End result for the purchaser appears to be the same.

Cool don't use them then

[Harley]

1 hour ago, Harley said:

See, this is the "narrative" which does my head in!  You are deemed "fortunate", "lucky", or "privileged" rather than we are deemed "unfortunate" (or more accurately "swindled" or "screwed") in having a (DB based!) Administrative Cartel which has held rates so low (for their own ends) we cannot buy an similar performing annuity.  DB types get slated while the true villains walk off scott free.  It's almost like they employ a load of bots (or willing fools) to promulgate this narrative to protect themselves.  At least such behaviour is becoming more obvious now what with CV, BLM, etc (except the fact that it becoming more obvious could be a worrying sign of their confidence).  When the size of a pie shrinks, those in it moronically start fighting over the scraps rather than challenge the baker as to why!

And chasing off the manipulative single issue victim hood identity politics a bit further, good on you for getting a DB scheme.  You may or not be better off than me but life is a kaleidoscope of fortune and I'm undoubtedly much more handsome than you!

I forgot to mention, this to me is an example of the new "Political Economy".

[Harley]

1 minute ago, M S E Refugee said:

This is how my spoons ended up.

And mine:

[sancho panza]

On 17/06/2020 at 11:27, Majorpain said:

No guns so far, Gentlemans rule to stop things escalating too much.

That doesn't mean that you cant do some real damage with bats and stones, some of which are starting to resemble WW1 trench melee weapons with nails etc.

Something's not being mentioned here.I read that the Indians got reinforcements from their base two miles away after their OC got whacked.There's no way they wouldn't have come back tooled up to the nines.Especially if the OC isn't there and it's looking like a survival fight.

I also doubt this whole patrolling without weapons.

I suspect there's a been a firefight and noone wants to admit it.

On 17/06/2020 at 11:35, DurhamBorn said:

@sancho panza he Fed wanted the dollar down and they still do.Fed has unlimited ability in disinflation to pump until the dollar falls.Fed works on the plumbing,the markets,the real economy in that order usually,but this time they are pumping into the plumbing AND monetizing government debt.The dollar isnt falling because of the monetary action,but because of the fiscal action being mostly monetized.The market is saying,oh you want inflation then?

It's intriguing to wathc.I was chatting to a friend this morning and we were talking about when the printing will stop/when will the rally peter out.My view and I maintian it is that the Fed will do as reasoned through on here,print until it can't ie inflation is running.When the Fed can't print any more then I think the Big K will be inbound.The solvency event.

thought provoking omment in bold. so basically you're saying the amount of printing isn't causing the wekness but rather the fact that the Fed and US insto's are the main buyers?

[jamtomorrow]

13 minutes ago, Cattle Prod said:

I like this reasoning. Liquidity injections are trumping all else, as DB has been smacking into our heads, much to the consternation of fintwit. People are marvelling aghast at the Robinhood traders bidding up US stocks, while failing to note that its just an expression of Fed lquidity, i.e. stimulus money to tens of millions of people looking to get rich quick. So the questions are (a) when will inflation start to show up, and (b) how much will cause the Fed to down tools? I'm thinking back to Carney and the like 'looking through' 5% inflation, and the Fed talking about inflation average over a number of years. Big K could be a while yet. Thoughts?

At what point does BK slip far enough into the future that it merges with RBK?

[Harley]

27 minutes ago, sancho panza said:

.......I suspect there's a been a firefight and noone wants to admit it......

I'm now outing @DurhamBorn as Anthony who discussed the same thing here yesterday.....

My partner has taken a more lively interest in investing since watching Anthony.  He must be very good!

PS:  In other news, the radio today had a piece on the possible benefits of Vit D for CV.  Only 3 months late by DOSBODS standards!

[Majorpain]

Ouch, confirmation tide is going out and naked swimmers getting exposed?

[Starsend]

Anybody been reading Daniel Amermam's stuff? He sent out some very good stuff recently showing fairly conclusively (to my mind) the contracyclical nature of gold and stocks over secular cycles, i.e gold does much better than stocks over a whole cycle and then stocks much better than gold over a whole cycle. What's interesting is how predictable this is when looked at over the last fifty years and also the massive differences in gains over a cycle if you're invested correctly.

"With the first secular cycle, almost every two year comparison favors gold, meaning the trend was sustained for over a decade. So it isn’t just that gold strongly outperformed stocks (price only) over the 11 years from 1969 to 1980, but there was a very strong consistency to it.

The advantage shifted to stocks strongly outperforming gold with an almost equal degree of consistency from 1980 to 2000. Then from 2000 to 2012 there was a sustained and highly consistent rolling two year advantage of holding gold over stocks. And from 2012 through 2019, there was an almost completely consistent rolling two year advantage to holding stocks over gold."

Seems that gold outperformed stocks 46% of the time over the last 50 years.

Guess who's turn it is next? His analysis also shows that it's not too late if you miss the beginning of the cycle as the gains are usually spread throughout the cycle. I've got 46% of my portfolio in physical gold/silver and miners and I reckon I need more miners 

He also thinks negative interest rates are a possibility in the US in which case bonds could go a lot further yet. Be interested in your thoughts on that DB? My understanding is that it's already the case in Europe.

 

[Gin]

8 minutes ago .

Bank pumps £100bn into UK economy to aid recovery

 

Bank policymakers voted 8-1 to increase the size of its bond-buying programme.

 

[reformed nice guy]

4 hours ago, jamtomorrow said:

Get thee some crypto.

Assuming DB's roadmap comes to pass and we enter systemic collapse in 10 years, *now* is the time to think about insurance.

I'm thinking in terms of: what replaces fiat when the Really Big Kahuna hits? A new global fiat, with global governance? Unlikely, looks like we're entering a period of sustained deglobalisation, and I doubt the international community will be capable of the level of cooperation required to pull it off. Besides, the credibility of the CB model will have taken a death blow by then.

PMs? Quite possible - you've got some, good.

Crypto? Possibly. A lot could go wrong for BTC between now and then. What if it turns out China controls more than 50% of hash rate in some mad Wizard of Oz moment? What if the usual suspects figure out how to manipulate spot BTC prices via derivatives?

*If* BTC is still standing after those trials, it's a strong candidate to have a central role in the post RBK system, IMO as a settlement layer i.e. reserve bank function - transaction throughput isn't sufficient for everyone to use it to pay for a tank of hydrogen on their flying car.

DYOR, but me personally I'm hodling approx 10% in BTC as a not-so-small bet at long odds for a big stake in what comes after.

I agree with this evaluation. 

As we enter a multi polar world then there will be little desire to centralise currency. I think crypto will be similar to what the US dollar is in many countries, especially shitty ones, as a way to preserve wealth when trust in local currency is low.

[JMD]

4 hours ago, TheCountOfNowhere said:

There would be no mortgages required, I have much cash to lose hence why I am a worried man. I have thought about your points but and it's a fair point to think about.  We were thinking Italy/Spain and Ireland.  After this month I dont plan to live in the UK again.  We did think about a nice villa in Turkey at one point, even went to the bother of doing re reccy, they are giving them away and some of them are fantastic, but it was too risky for my liking.

Count, that make sense - to me - now you provide more detail. What I mean is I have recently posted something along similar lines - as I also have a 'cash problem', and don't want to go 'all-in', into the markets. I'm thinking mainly commodities, including oil/potash, are best for me, in terms of risk/reward and long term holds (unfortunately I don't have trader skills).

Anyway, I think property (in the right areas, and bought at right price) will do ok in next cycle (though on average, property investment will suffer as per this thread). I think your right to reject Turkey on regional security grounds. But agree Italy/Spain/Ireland are all safe and cheap, did you consider Greece? I assume you intend renting two houses out, whilst living in the third property?

[JREWING]

Many on here worth over £750k including property equity?

I think the Spanish equivilant was $700k Euro's? 

https://docs.cdn.yougov.com/p54plx0gh9/NEON_PostCovidPolicy_200508_w4.pdf

Excluding any personal pension savings and their main home..

[jamtomorrow]

20 minutes ago, Panda said:

Many on here worth over £750k including property equity?

I think the Spanish equivilant was $700k Euro's? 

https://docs.cdn.yougov.com/p54plx0gh9/NEON_PostCovidPolicy_200508_w4.pdf

Excluding any personal pension savings and their main home..

Waste of time though - there'll be a miraculous spate of boating accidents the moment this looks like a reality.

[sancho panza]

18 hours ago, DurhamBorn said:

Rates have been negative for a long time,against inflation,in macro terms,thats what counts.I doubt we will see outright negative base rates,or for long,this cycle turn is all about fiscal injections being monetized,market will wake up to that at some point.

Rates have been even more negative than the official rates of inflation would imply as many on here know.Some of the omissions from CPI/CPIH defy belief.

17 hours ago, 201p said:

https://www.bbc.co.uk/news/business-53084853

The UK's biggest building society has tripled the minimum deposit it will ask for from first-time buyers.

The Nationwide will lower its ceiling for mortgage lending to new customers in response to the coronavirus crisis.

It said the change, from Thursday, was due to "these unprecedented times and an uncertain mortgage market".

First-time buyers are likely to be the most significantly affected because they often have smaller amounts saved to get on the property ladder.

Nationwide has reduced the proportion of a home's value that is willing to lend from 95% to 85%.

So for example, if a property costs £100,000, a new buyer would now need a £15,000 deposit rather than a £5,000 deposit.

Bit of a warning sign that they're either in trouble or think the market's about to bomb in the Mids and South.

[TheCountOfNowhere]

56 minutes ago, JMD said:

Count, that make sense - to me - now you provide more detail. What I mean is I have recently posted something along similar lines - as I also have a 'cash problem', and don't want to go 'all-in', into the markets. I'm thinking mainly commodities, including oil/potash, are best for me, in terms of risk/reward and long term holds (unfortunately I don't have trader skills).

Anyway, I think property (in the right areas, and bought at right price) will do ok in next cycle (though on average, property investment will suffer as per this thread). I think your right to reject Turkey on regional security grounds. But agree Italy/Spain/Ireland are all safe and cheap, did you consider Greece? I assume you intend renting two houses out, whilst living in the third property?

Hey JMD, what bit makes no sense ?

I'm not saying Im right, I'm saying i'm worried and I have no real idea what to do for the best.  It makes no sense to go all in into any market ever.  property is tangible and servers a purpose, we'd still have enough from the other (hopefully) less vulnerable investments to see us ok for many a year.  

I'd buy more shares now but I do think we are going to see a big US collapse at some point this year.  

My SIPP provider says they wont accept an in-specie shares transfer so I have to sell up to move in.  When I sell up I am not buying back any time before Jan, but I will buy back.

We love Greece but it's less stable and from what I read a lot of angry people there.  I'll pass on that one.

[sancho panza]

15 hours ago, Harley said:

The current Hertz stock price madness, especially given the new stock issue approved by the judge, makes me wonder if this a good way for bond holders to cash out at 100 cents on the dollar.

Your post also reminded me of Keiser's warning about the privatisation of the stock market - who says new dilutive stock issues need to go to all stock holders?  Happened already, justified on the grounds of expediency.

Impoverishment and serfdom await?

You've got to wonder who's putting money in there?

14 hours ago, Popuplights said:

I have some RDSB I paid 23 for, but have got the average down to 14.80. Not brilliant, but I can live with it. Still underwater though, my worst holding by far. 

Our very very top entry point was a bloc at £23.Few more lines between £20-£23,average price probably circa yours but we've been taking scrip and I can't be bothered working it out.If I'd have been offred the size of holding we've got at that price a year back-sub £15- I'd have happily taken it.

Don't judge yourself by the top market timers,they're the top market timers for a reason.

My Grandad always said to me words to the effect of leave the top 10%-20% and the bottom 10%-20% to the specualtors.20% of £15 is £3.I'm happy with that.The ambitous and talented go for single figures.

[Talking Monkey]

4 minutes ago, sancho panza said:

Rates have been even more negative than the official rates of inflation would imply as many on here know.Some of the omissions from CPI/CPIH defy belief.

Bit of a warning sign that they're either in trouble or think the market's about to bomb in the Mids and South.

Probably both I reckon, South for sure has to bomb over the next 2-3 years. Are the midlands super inflated too, how do you reckon say Coventry and Birmingham will fare SP

[sancho panza]

5 hours ago, jamtomorrow said:

Get thee some crypto.

Assuming DB's roadmap comes to pass and we enter systemic collapse in 10 years, *now* is the time to think about insurance.

I'm thinking in terms of: what replaces fiat when the Really Big Kahuna hits? A new global fiat, with global governance? Unlikely, looks like we're entering a period of sustained deglobalisation, and I doubt the international community will be capable of the level of cooperation required to pull it off. Besides, the credibility of the CB model will have taken a death blow by then.

PMs? Quite possible - you've got some, good.

Crypto? Possibly. A lot could go wrong for BTC between now and then. What if it turns out China controls more than 50% of hash rate in some mad Wizard of Oz moment? What if the usual suspects figure out how to manipulate spot BTC prices via derivatives?

*If* BTC is still standing after those trials, it's a strong candidate to have a central role in the post RBK system, IMO as a settlement layer i.e. reserve bank function - transaction throughput isn't sufficient for everyone to use it to pay for a tank of hydrogen on their flying car.

DYOR, but me personally I'm hodling approx 10% in BTC as a not-so-small bet at long odds for a big stake in what comes after.

genuine question as I have a mate looking to buy BTC.How do you do it?Is it easy?What's the selling like?

[TheCountOfNowhere]

1 hour ago, Majorpain said:

Ouch, confirmation tide is going out and naked swimmers getting exposed?

Wirecard AG

ETR: WDI

36.76 EUR −67.74 (64.83%)

Buy now before someone misses out

Just now, sancho panza said:

genuine question as I have a mate looking to buy BTC.How do you do it?Is it easy?What's the selling like?

I remember when it was dirty magazine people were embarrassed to buy

[TheCountOfNowhere]

4 minutes ago, Talking Monkey said:

Probably both I reckon, South for sure has to bomb over the next 2-3 years. Are the midlands super inflated too, how do you reckon say Coventry and Birmingham will fare SP

Badly...they're poor shit holes.

[sancho panza]

2 hours ago, Cattle Prod said:

I like this reasoning. Liquidity injections are trumping all else, as DB has been smacking into our heads, much to the consternation of fintwit. People are marvelling aghast at the Robinhood traders bidding up US stocks, while failing to note that its just an expression of Fed lquidity, i.e. stimulus money to tens of millions of people looking to get rich quick. So the questions are (a) when will inflation start to show up, and (b) how much will cause the Fed to down tools? I'm thinking back to Carney and the like 'looking through' 5% inflation, and the Fed talking about inflation average over a number of years. Big K could be a while yet. Thoughts?

Funnily enough was having similar conversation this morning ref this,as I've seen a number of people,not least kaplan selling energy stocks apparently(I'm sure I saw that downthread).

What ahs the last 13 years taught us but don't fight the Fed until it's out of ammo.DB's been banging that into us for some time.

Energy sector typically peaks last jsut before drops.Correlation,causation etc...

Fed pumping has kept liquid in the plumbing to use DB's analogy.The solvency event occurs when the Fed can't pump.

Whilst I hear the bear case(I'm a bear ie I think markets will go 75% ++ off peak), the situation jsut isn't ready yet for a major sell off.The banks are f***** but they were f***** years ago.

Having said that I think a few things will lead to the solvency phase and the Big K-higher energy prices normally have a role,USD denominated FX laons,cascading defaults in banking system(I think we're starting to see them in sub prime car loans/corporate defaults).

Personally,I think Big K will likely be Q1 or end Q3 2021.

 

[sancho panza]

20 minutes ago, Talking Monkey said:

Probably both I reckon, South for sure has to bomb over the next 2-3 years. Are the midlands super inflated too, how do you reckon say Coventry and Birmingham will fare SP

They're in deep trouble in the urban areas which msotly have real potential for social dislocation.Primarily because hosue prices are hgue multiples of average salary.Leicester has average hosue prices of £200k,average salary £25.Long way to go to mean.

[jamtomorrow]

13 minutes ago, sancho panza said:

genuine question as I have a mate looking to buy BTC.How do you do it?Is it easy?What's the selling like?

I use Coinbase - I've done *some* experimental selling and checked I can move GBP back off the exchange - selling's a doddle and extracting GBP went without a hitch. But I'm a hodler, not a trader, so I've been mostly buying.

My #1 recommendation - don't leave coins on the exchange. Remember Mt. Gox ... or more generally remember they're only as secure as the exchange (security of which is mostly unverifiable).

I don't have *extensive* knowledge of wallet options, but I'm finding Trezor for coldish storage of large amounts and Electrum on the phone for spending money is working well for me. Particularly impressed with Trezor, especially the whole deniable passphrase possibilities.

Oh, and you'll want to back up the BIP39 master key for your Trezor wallet - I use a blockplate kit where you stamp dots in squares on a laser-etched plate of stainless. Also impressed with that - the supplied spring-loaded punch will come in handy for DIY and car maintenace

[Talking Monkey]

26 minutes ago, sancho panza said:

Funnily enough was having similar conversation this morning ref this,as I've seen a number of people,not least kaplan selling energy stocks apparently(I'm sure I saw that downthread).

What ahs the last 13 years taught us but don't fight the Fed until it's out of ammo.DB's been banging that into us for some time.

Energy sector typically peaks last jsut before drops.Correlation,causation etc...

Fed pumping has kept liquid in the plumbing to use DB's analogy.The solvency event occurs when the Fed can't pump.

Whilst I hear the bear case(I'm a bear ie I think markets will go 75% ++ off peak), the situation jsut isn't ready yet for a major sell off.The banks are f***** but they were f***** years ago.

Having said that I think a few things will lead to the solvency phase and the Big K-higher energy prices normally have a role,USD denominated FX laons,cascading defaults in banking system(I think we're starting to see them in sub prime car loans/corporate defaults).

Personally,I think Big K will likely be Q1 or end Q3 2021.

 

That is my understanding too SP whilst the Fed is pumping I can't see the Big K happening. I reckon first half of next year the Big K gets underway