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

[Democorruptcy]

39 minutes ago, Cattle Prod said:

I was thinking about that, but BTC is still only around 6% the market cap of gold. So a little juice, but not much. Gold went up over 2% yesterday, or a third of BTCs market cap. I think gold has just been in a consolidation for the last 5 months as many have pointed out, and BTC has just filled the speculative vaccum during that time, garnered the headlines, the FOMO and the stim checks. As you say, the next few months will be telling. I think both will go up.

That said, comparing golds market cap to BTC glosses over the differences between the physical and paper gold markets.

Is gold market cap above ground ounces x price?

[Alifelessbinary]

11 hours ago, Harley said:

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.

Yes mainly through a mixture of commodity equities, ITs and ETFs. Across all sectors commodities are trading at huge lows and for my portfolio they represent a great buy and hold strategy, which I can then assess yearly. Im under 40 so I have a fairly long timeframe to play with.

while I love the game of investing I just don’t have the time to crunch the numbers or adequately review markets. I have also proved to myself over the last few years I don’t have the  personally to make time based decisions.

70% of my portfolio is now purely passive. The other 30% of my portfolio  is active to a point.
 

One area I differ from most people on this thread is that I’m long tech, which has provided an incredible return over the last 5 years. I have taken some profits, however Covid showed how resilient some of the main players are. I fully agree that valuations are now bonkers, but I’m happy to stay in for the long haul.
 

 

[nirvana]

52 minutes ago, geordie_lurch said:

What was that roughly?

boston dynamics will have created herds of zombie whores with pointy tits who offer you a bj for a millionth of a bitcoin
meanwhile some fat bloke appears from around the corner with an axe or a chainsaw and tries to nick all your chickens.....and 'yer stuff' and your keys 
bit like this

 

[nirvana]

ps US OIL has broken out....50s.....

I'm beginning to think the markets are gonna go bonkers before BK just fecking buy any old shite.......that's what excess money printing does to the druggies  

[A tremendous # on the lung]

1 hour ago, Errol said:

Commodities breaking out of a massive decade-long wedge:

 

Bit like my boxer shorts

[Majorpain]

57 minutes ago, sancho panza said:

the reality is that they could finish this pandemic by limitng PCR cycles to 15.Like you say,it's the obvious get out of jail card and then we go back to people dying of flu/pneumonia.

Just out of interest do you know what the current NHS PCR cycle # is?  I had a look on the PHE website, but whilst it provided a lot of interesting stuff the actual numbers were a little thin on the ground.  I haven't seen anything to stop them doing "dial a pandemic" by ramping the cycles.

The Pfizer second dose had a notable kick to it for even the young, the timing of dropping to only one dose a few weeks after the first "vulnerable" people got it was mighty suspicious.  I just hope there are not metaphorical or literal bodies being buried there.

[Noallegiance]

I the spirit of the current convo from Mr Hunter:

"...I am calling for an inflation scare in the early months of this year led by commodities. This will trigger a Fed tightening response that will help trigger the deflationary bust I have been forecasting..."

[DurhamBorn]

8 hours ago, Barnsey said:

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.

It will be a distribution cycle Barnsey,but nothing to fear for anyone on here our assets will be leveraged by inflation.

[DurhamBorn]

8 hours ago, Democorruptcy said:

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

Its a really good idea that.A simple investment that nobody spots.Im convinced nature based carbon offsets will be huge winners once people realise a lot of green investment is a bubble that wont achieve very much.

[DurhamBorn]

Just now, Cattle Prod said:

Weyerhauser for equity ownership and divis. They own many, many trees. Not sure how the balance sheet is mind you.

Yeah i think they are a great investment.Iv been looking to see if there are any ways i can really leverage it,but i might have to accept playing it with the big boys.Offsetting is going to be the main winner from climate change ,that and gas 

[DurhamBorn]

7 hours ago, 5min OCD speculator said:

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

Euro hasnt gone up,the dollar has fallen.You know this.Reason is the EBU are way behind the Fed,dollar will turn back up between 85 and 88 im looking at.Commod currencies the places to be in a year or so,CAD and Aussie

[DurhamBorn]

5 hours ago, dnb24 said:

Dosbods fund???

Joking apart it has crossed my mind for us to set up a Ltd company,buy some shit land and plant a load of trees.

[Loki]

2 minutes ago, DurhamBorn said:

Joking apart it has crossed my mind for us to set up a Ltd company,buy some shit land and plant a load of trees.

I want to buy a field in the bust, just because i think it would be cool to own land. There's a possible extra reason to justify it 

[DurhamBorn]

3 hours ago, dnb24 said:

I personally don’t think (more like hope) it will be spun out further than the end of 2021. I think (hope) once industry and inflation spark, the job will have been done and they will need us to more freely move around and interact for inflation to do its magic in the West over the next 10 years. Though I can see the benefits of locking people down to stimulate a drive of pent up inflation.

From medical aspect with intro of Lateral flow tests/vaccine/change in PCR cycles over the next 3-6 months i my hope is increased as it gives the west a get out of jail card as these should show direction of change- ie magically sars coV-2 disappears and Healthcare goes back to normal staffing, less covid, more pneumonia, less need to have separate wards etc. Media lose interest, odd story here and there- and if we get a big economic downturn- the public/media will probably have got over covid and be more worried about putting food on the table.

I’m not sure a BK is being engineered as such, my interpretation is that they (just as DB/David Hunter)  predicted & know the fractious state the west is in- and a cycle change was required-I think they’ve taken advantage of something to do this. But like Harley I struggle working out whether it’s  the head or tail!?!

Superb post dnb24 ,one of the reasons this thread is so valuable to everyone.However much you have your head and numbers around the cycle,sometimes others thoughts really help clarify things.

I think now they know what we knew.The west was going to go down the pan with China a huge threat so they needed a cycle change.They knew one was coming,and Covid provided the cover to monetize and provide the liquidity.Thats why i love macro strategy,it points where we are likely to go before we know why or how.

[DurhamBorn]

1 hour ago, Noallegiance said:

I the spirit of the current convo from Mr Hunter:

"...I am calling for an inflation scare in the early months of this year led by commodities. This will trigger a Fed tightening response that will help trigger the deflationary bust I have been forecasting..."

Good to see David focus us in on what to watch.I think inflation hits 3% and they continue printing as they expect it to fall back,but if they do tighten then id agree 100% it would be a disaster and cause massive dislocation.However my thinking is the Fed and BOE etc all want rates 3% below inflation for the cycle,so wont tighten until that happens.

Critical we  keep a close eye on this though and David is right to focus on the Feds actions when inflation moves higher.

[Loki]

12 minutes ago, DurhamBorn said:

Superb post dnb24 ,one of the reasons this thread is so valuable to everyone.However much you have your head and numbers around the cycle,sometimes others thoughts really help clarify things.

I think now they know what we knew.The west was going to go down the pan with China a huge threat so they needed a cycle change.They knew one was coming,and Covid provided the cover to monetize and provide the liquidity.Thats why i love macro strategy,it points where we are likely to go before we know why or how.

 And shutting down the consumer economy could have forced some hands to make sure they allocate the CB funds where they are needed 

[Noallegiance]

18 minutes ago, DurhamBorn said:

Good to see David focus us in on what to watch.I think inflation hits 3% and they continue printing as they expect it to fall back,but if they do tighten then id agree 100% it would be a disaster and cause massive dislocation.However my thinking is the Fed and BOE etc all want rates 3% below inflation for the cycle,so wont tighten until that happens.

Critical we  keep a close eye on this though and David is right to focus on the Feds actions when inflation moves higher.

This is horrible.

I mean, sure, with the assets talked about here, having a financial nap through it all until 2026 would be lovely. But imagine selling a portion of each stock and buying back in to top up for the cycle at 50-80% down.

There are times when I dislike the frailties of my human mind.

[Barnsey]

1 hour ago, DurhamBorn said:

Good to see David focus us in on what to watch.I think inflation hits 3% and they continue printing as they expect it to fall back,but if they do tighten then id agree 100% it would be a disaster and cause massive dislocation.However my thinking is the Fed and BOE etc all want rates 3% below inflation for the cycle,so wont tighten until that happens.

Critical we  keep a close eye on this though and David is right to focus on the Feds actions when inflation moves higher.

The issue I have with David's thesis is that the memory of the huge plunge due to Fed tightening still very vivid, and huge % of population unable to handle rising rates and won't be participating in any recovery anytime soon unless rates kept as low as possible.

Crazy theory from rockstar Glaswegian Hugh Hendry, Fed go massively negative.

[Barnsey]

7 minutes ago, Cattle Prod said:

Good point, and I agree as a logical thinker.

But maybe 500 constipated PhDs will persuade the board otherwise.

You might be right...

 

[Talking Monkey]

4 hours ago, sancho panza said:

the reality is that they could finish this pandemic by limitng PCR cycles to 15.Like you say,it's the obvious get out of jail card and then we go back to people dying of flu/pneumonia.

I don't think our political class are bright enough to pre empt this and are far more likely to be reacting and choosing the easiest option out of whatever mess they've got themselves into.The western debt situation is the stuff of utter stupidity and short sightedness.There's no way even people as stupid and irresponsible as our political class would have gone down that road if they'd understood the consequences.

David Hunter's rather dark warning about what comes after he's dead has stayed with me ever since I first heard him utter it.I do think think we're lumbering into a crisis that will threaten modern society as we know it.

There's too many people with too many claims on production and too many people becoming superfluous to requirements as each year passes.

[mcdongle]

https://www.theedgemarkets.com/article/asian-lng-sold-above-benchmark-record-amid-supply-deficit

[The Idiocrat]

My monthly SIPP payment has hit my account and I’m wondering what to buy. As we’ve said on here, it’s proving difficult finding value. I still like the oilies but am well overweight on those. I’ll probably do a few good divi payers, but I’m also thinking of emerging markets, excluding China, and more specifically India and Russia. Does anyone have any thoughts on those, or share/fund ideas?

[spygirl]

Investors sceptical over Bank of England’s QE programme

FT survey finds big players in bond market think plan is attempt to finance government deficit

https://www.ft.com/content/f92b6c67-15ef-460f-8655-e458f2fe2487

The Bank of England is on course for a difficult 2021, after a Financial Times survey found investors believe the central bank’s quantitative easing programme is a thinly veiled attempt to finance the government’s deficit to keep its borrowing costs down.

The BoE maintains that its QE programme is calibrated to keep inflation close to its 2 per cent target. Andrew Bailey, the central bank’s governor, said in November: “We do not . . . set a level of quantitative easing and asset purchases in any way related to what the government is going to borrow.”

But investors are convinced the BoE bought an additional £450bn of gilts during the Covid-19 crisis in order to ease the government’s huge programme of borrowing by keeping debt servicing costs at rock bottom.

...

In particular, most said they thought the scale of BoE bond buying in the current crisis had been calibrated to absorb the flood of extra bonds sold this year, suggesting they believe the central bank is financing the government’s borrowing. “In this extraordinary year of gilt supply, the BoE has been the dominant buyer,” said Matthew Amis, of Aberdeen Standard Investments. “Without this significant support, bond yields would have risen significantly. Very simply, the gilt market could not have taken down the record £485bn supplied by the Debt Management Office to the market this year.”

 

Pants on fire!

 

[spygirl]

Comments

(Edited)

 

Did FT just wake up or simply ignoring the fact for so long?!

 

The QE engine will keep running till it hits a brick wall.  The question one should start asking is 'are we prepared for this?' 

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[Sugarlips]

5 hours ago, DurhamBorn said:

Yeah i think they are a great investment.Iv been looking to see if there are any ways i can really leverage it,but i might have to accept playing it with the big boys.Offsetting is going to be the main winner from climate change ,that and gas 

Another interesting suggestion however it’s gone from $15 to $33 this year has a 2% yield and a P/e of 50, still a great investment today?

as an aside does anyone like Lithium as a little gamble, the last price breakout was a while after the silver one and it’s not moved much recently, yet. I appreciate battery tech is going to keep evolving but it’s an essential component presently.