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

[Democorruptcy]

48 minutes ago, sancho panza said:

Yeah, that's right.It was along the lines of the trend is your friend.I see dollar dropping some more( and that's how we're positoned as well).I was going to add gold to the chart because the medium term top in gold,bottom in yields occurred around the start of august.

DXY's losing streak has beenrunning since April 20.

I'm still unclear about this. Which trend is supposed to be my friend? Are you implying because DXY has been in a downward trend since April then gold has been in a rising trend since then? It hasn't though has it? It's done nothing for months since after the 10 Yr yield bottomed out. Hence my question about where do you see the 10 Yr going from here.

I expected gold to do a lot better this year before the 10 Yr turned but it's done little more than the 2011 peak. In proportion to the drop in the 10 yr for the GFC, it's not gone up enough. Maybe Bitcoin has taken some of the juice?

[Loki]

13 minutes ago, StrugglingMillennial said:

Just putting this out there. 

Do you think this has a place in the next cycle?

https://www.theguardian.com/journey-towards-a-plastic-free-future/2020/dec/04/sustainable-abundant-and-low-cost-why-lignin-might-just-be-a-miracle-manufacturing-material

Looks bloody great to be fair, assuming accurate and not over-hyped

Only thing is wood/paper-mills produce the amount they do on the back of fossil fuels, I imagine it's a pretty energy intensive business.

[sancho panza]

22 hours ago, JMD said:

So no government released excess death rate figures? What a surprise! I was looking forward to those figures as my go-to statistics. SP, what are your thoughts on the latest Corona mutation? Is it really having any real impact on virus spread or is it just a convenient 'narrative device' to help keep scaring the masses?                                                                                                                                                                                                    Be very much interested also if you have a theory on why Asia has done so much better than the West. It is an aspect of this 'pandemic' that really troubles me, when for example comparing the UK to Japan and the alarming difference in death rates between the two countries. Ie I'm thinking the Japan low death stats can be believed, achieved whilst not shutting their own economy down - so is the crucial differentiator the difference in population health/diet between the two nations or is something else going on?

It's been known for years that viruses mutate into weaker forms so as not to kill the host.Mortalitiy rates are normal for this time of year-our repsiratory season generally peaks Jan/Dec.Hospital admissions aren't that exceptional either according to Dr Craig who knows her onions.

It says it all to me that the city of Wuhan had a relatively normal new years eve party from what I saw on twitter.That and they've filled their oil tanks at sub$40 oil.

I thinkt the big difference potentially could be obesity.Obesity is linked to diabetes type 2,heart failure,hypertension and a lot other comorbidities that predispose people to die of covid. @dnb24 may have a more nuanced view than my rather basic take.

https://ageconsearch.umn.edu/record/14321?ln=en

Only 3.6 percent of Japanese have a body mass index (BMI) over 30, which is the international standard for obesity, whereas 32.0 percent of Americans do. A total of 66.5 percent of Americans have a BMI over 25, making them overweight, but only 24.7 percent of Japanese.

11 hours ago, The Idiocrat said:

 That reminds me, I meant to post MoneyWeek's tips for 2021 from their last issue. It's a long article but this is their "experts'" buy list. What stood out for me is how much they were into UK banks in the article. Would be interesting to see what those stocks look like at the end of the year. We should do a DOSBODS index!

I honestly dont know who's buying UK banks at this point.

[sancho panza]

19 minutes ago, Democorruptcy said:

I'm still unclear about this. Which trend is supposed to be my friend? Are you implying because DXY has been in a downward trend since April then gold has been in a rising trend since then? It hasn't though has it? It's done nothing for months since after the 10 Yr yield bottomed out. Hence my question about where do you see the 10 Yr going from here.

I expected gold to do a lot better this year before the 10 Yr turned but it's done little more than the 2011 peak. In proportion to the drop in the 10 yr for the GFC, it's not gone up enough. Maybe Bitcoin has taken some of the juice?

I see UST yields heading higher into the BK.I'm not sure on BK timing but anythings between March(unlikely) or October.I think inflation will be running by then.

 

 

[sancho panza]

Some Wolftake.

Warning signs abound.

https://wolfstreet.com/2021/01/01/paper-dollars-in-circulation-globally-spike-amid-hot-demand-but-a-mexican-bank-after-run-ins-with-the-us-can-no-longer-unload-its-hoard-of-dollars/

The amount of “currency in circulation” – the paper dollars wadded up in people’s pockets and purses, stuffed under mattresses, or packed into suitcases and safes overseas – jumped again in the week ended December 30 to a new record of $2.09 trillion, according to the Federal Reserve’s balance sheet, where currency in circulation is a liability, not an asset. This was up by 16%, or by $293 billion, from February before the Pandemic. The amount has doubled since 2011:

This amount of currency in circulation is a function of demand – and that demand has been red hot: US Banks have to have enough paper dollars on hand to satisfy demand at ATMs and bank branches. Foreign banks will also request paper dollars from their correspondent banks in the US, or return unneeded cash to them.

IThe surge of paper dollars is a sign of hoarding, not of increased payments. In the US, the share of paper dollars for payments has been declining for years, replaced by electronic payment methods, such as credit and debit cards, PayPal, Zelle and similar systems, all kinds of smartphone-based payment systems, the automated clearinghouse (ACH) system, and checks every now and then.

During periods of uncertainty, people load up on cash, as they have done leading up to Y2K, during the Financial Crisis, and now during the Pandemic.

 

 

 

[sancho panza]

 

Go back 50 or 750 pages in this thread and there was an excellent disucssion about the USD reserve status.Conclusion was that the USD had one more crisis in it iirc.It's no coincidence that thsi thread has a lot of gold bug posters I guess.

WOlf takes up the topic.

https://wolfstreet.com/2020/12/31/us-dollar-as-global-reserve-currency-amid-feds-qe-and-us-government-deficits-dollar-hegemony-in-slow-decline/

The global share of US-dollar-denominated exchange reserves – US Treasury securities, US corporate bonds, US mortgage-backed securities, etc. held by foreign central banks – fell to 60.5% in the third quarter, according to the IMF’s COFER data release. This is the lowest since 1995. Over the past six years, the dollar’s share has been dropping at a rate of about 1 percentage point per year:

The dollar’s 20-year decline.

[Loki]

Wolf is excellent

[sancho panza]

COnsumers are paying down credit in the UK at the same time as QE/money supply/mortgage approvals rising..............warning signs...meh!!!

 

 

[sancho panza]

1 minute ago, Loki said:

Wolf is excellent

He's that good I donate monthly which is soemthing for a tight git like myself.Better than moneyweek to be honest by some distance except without the property section which I like to look at.

[JREWING]

On 01/12/2020 at 09:02, arrow said:

Cattle Prod's posts are invaluable. They are informative and provide insight into the oil/gas industry.

This thread is valuable in that it is (mostly) the opposite of other share forums. On the whole, there aren't stock pumpers and share shorters trying to get scare people into selling or buying. I do admire traders, but posts saying they made x profit on such a share aren't that useful. Good for you that you made a profit, but I'd much rather read Cattle Prod's view of oil/gas reserves, depletion, supply problems, oil fields and companies.

As I've said, this thread is valuable in that it discusses macro trends and investments, there are other threads that were created to discuss trading, The fact that there are few posting, if any, in those threads shouls tell you something.

Hope you've douched..

No clinging on's wanted by Cock Prod...

Nicely put. Lovely words. Well done.

 

Now go polish your cock ring.

Round two commuth..

Mwah.. Hehehe..

[leonardratso]

durrr?

has sir been at the sherry again?

[Harley]

6 hours ago, Alifelessbinary said:

.....and also beef up my commodities.

How you doing that if I may ask?  Through commodity equities?

PS:  Agree with the time aspect - need to find a pace/approach consistent with your life - why I don't trade atm.

[Harley]

5 hours ago, sancho panza said:

...

I thinkt the big difference potentially could be obesity.

Me too (in UK too), and maybe other bad health practices like US drug taking.

[wherebee]

7 minutes ago, Harley said:

Me too (in UK too), and maybe other bad health practices like US drug taking.

In the USA I suspect lung health is shocking as well.  People drive everywhere, which means lots of bad breathing issues.

Now in Asia they have the pollution problems in spades, but I don't know if the basic fitness from walking everywhere is a more significant factor

[Harley]

6 hours ago, Loki said:

Only thing is wood/paper-mills produce the amount they do on the back of fossil fuels, I imagine it's a pretty energy intensive business.

Several seem to have woodchip based biomass as a side gig.

[DurhamBorn]

6 hours ago, sancho panza said:

COnsumers are paying down credit in the UK at the same time as QE/money supply/mortgage approvals rising..............warning signs...meh!!!

 

 

Exactly as we exected.Governments are monetizing back the disinflation to get it out of the economy and into the BOE cupboard marked do not open 0.5% coupon.

[DurhamBorn]

6 hours ago, Cattle Prod said:

Point on the windy map: Ireland is windy too, but the seas are too deep apart from a few shoals in the Irish Sea. What the UK has in the North Sea is a perfect combination of shallow sea and wind. Especially the southern north sea off England, that's shallow out to the Dutch border. It will be carpeted with wind turbines, you already have to dodge cables and helicopter clearing zones etc to do any oil and gas work out there now.

Exactly and the key thing is people are looking at the Dogger Bank/Dutch side for wind and simply thinking the whole world is like that.Shell will end up controlling the Dutch side and using for hydrogen,SSE/Equinor,maybe some Bp the UK side .I think in a year or so people will wake up and nature based solutions will become the real winners.I think Bp know this and its why they are investing more and taking control of the carbon offset through trees business.I see that as the winner from all this in the end,though finding ways to invest direct in it is proving very difficult.

 

[Democorruptcy]

2 hours ago, DurhamBorn said:

Exactly and the key thing is people are looking at the Dogger Bank/Dutch side for wind and simply thinking the whole world is like that.Shell will end up controlling the Dutch side and using for hydrogen,SSE/Equinor,maybe some Bp the UK side .I think in a year or so people will wake up and nature based solutions will become the real winners.I think Bp know this and its why they are investing more and taking control of the carbon offset through trees business.I see that as the winner from all this in the end,though finding ways to invest direct in it is proving very difficult.

 

This iShares Global Timber & Forestry ETF was very volatile in recent years. They aren't making any more land! 

[Barnsey]

2 hours ago, DurhamBorn said:

Exactly as we exected.Governments are monetizing back the disinflation to get it out of the economy and into the BOE cupboard marked do not open 0.5% coupon.

Looks like we're getting much more £££ from Sunak as soon as today, I realise much of it is just sustaining things for business but my goodness, money supply soaring, suppliers of services and goods decreasing, the reasonably well off continuing to build up their wealth given restrictions, the path is becoming ever clearer. If and when the BK arrives, the guns are already loaded and ready, opportunists will be fast to act.

We're already in the hole, and due to unique nature of this crisis the wealthy are doing ok. I don't want to sound defeatist but with money this cheap it does indeed look like a distribution cycle to sort things out. It is what it is I suppose.

[nirvana]

10 hours ago, Democorruptcy said:

I'm still unclear about this. Which trend is supposed to be my friend?

the trend is your friend till the bend at the end.....

[nirvana]

9 hours ago, sancho panza said:

This amount of currency in circulation is a function of demand – and that demand has been red hot

that's not really true is it? It's a function of the printing press.....if USD was so much in demand why has Euro rocketed in value? ie DXY dumped it's arse

[dnb24]

10 hours ago, sancho panza said:

It's been known for years that viruses mutate into weaker forms so as not to kill the host.Mortalitiy rates are normal for this time of year-our repsiratory season generally peaks Jan/Dec.Hospital admissions aren't that exceptional either according to Dr Craig who knows her onions.

It says it all to me that the city of Wuhan had a relatively normal new years eve party from what I saw on twitter.That and they've filled their oil tanks at sub$40 oil.

I thinkt the big difference potentially could be obesity.Obesity is linked to diabetes type 2,heart failure,hypertension and a lot other comorbidities that predispose people to die of covid. @dnb24 may have a more nuanced view than my rather basic take.

https://ageconsearch.umn.edu/record/14321?ln=en

Only 3.6 percent of Japanese have a body mass index (BMI) over 30, which is the international standard for obesity, whereas 32.0 percent of Americans do. A total of 66.5 percent of Americans have a BMI over 25, making them overweight, but only 24.7 percent of Japanese.

I honestly dont know who's buying UK banks at this point.

Clinically I think there are a number of things at play for the differences in Asian numbers and Western numbers-

1. Primarily the dry tinder from UK 2019.

2. Lack of care- there have been more private home deaths this year than ever recorded- nhs shut down=death. 

2. I think BAME- lack of vit D- has a role due to increase in cardiac issues/diabetes etc make them low hanging fruit. Asian countries are more homogenous and therefore essentially adapted for their climate.

2. Obesity as per SP states (links in with vit D also).

However, i believe if we were not at a cross roads for western state finances, and therefore politics, then the media wouldn’t have spun this as they have. Excess deaths and NHS load was equal to or worse in 1999/2000, 2007/2008, winter 2018/18 yet no one remembers them. 
Which brings me to my fourth point- Japan is in a very different place to the West in terms of state financial and fiscal policies- it is arguably not necessary for Japan to shut down its economy to turn things towards an industrial cycle they are already there and have a population who are already insular in most aspects of life. Why I say this is because we can see direct Western government influence on media/PCR testing/testing availability/shutting the NHS down through staff shortages when it suits them. To turn a ship like the western economy and To change government policy you need to ensure the plebs are looking the wrong way for a fair amount of time. 
Barnsley mentions above thread that the BOE and FED have prepared for the BK, and I believe that, they’ve used covid to preload the coffers ready to take up the slack when the BK comes. The stats have allowed them to do this- fear has enabled them. 
Still it could be worse- they could have sent all men under 40s into a 2-3 year war!! 
 

[Hardhat]

4 hours ago, DurhamBorn said:

though finding ways to invest direct in it is proving very difficult.

 

Buy some woodland to hold in your SIPP?

[dnb24]

4 hours ago, DurhamBorn said:

though finding ways to invest direct in it is proving very difficult.

Dosbods fund???

[JMD]

18 hours ago, DoINeedOne said:

 

interesting video and images

 

For Solar

 

For Wind 

As @DurhamBorn has said its windy in the UK

 

 

 

 

 

Those integration costs he breaks down are scary. In particular, he highlights an aspect i was kinda already aware of - however if i understand him correctly, there is more to it. Those 'network inefficiency' costs he mentions increase exponentially - i.e. the more we increase the overall renewable supply %, the (hidden/unaccounted) cost of providing the backup supply increases at a even greater rate (backup supply required because renewable supply itself is intermittant).

Therefore total power costs get more and more expensive - its almost as though we will eventually need say 50% of our supply infrastructure (gas/nuclear) sittting idly, just waiting for when the sun don't shine or the wind don't blow (ie winter or nighttime!). I wonder how the history books will judge people like Gore and Thunberg.