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

[Chewing Grass]

5 minutes ago, Barnsey said:

Quite the stat...

 

Indeed, that will be a huge sum of money, Walmart shares will be going up.

However once given never removed unless eroded away and a greater incentive for those eager to enter the bottom 20% to enter from Latin America.

[Yadda yadda yadda]

9 minutes ago, Barnsey said:

Quite the stat...

 

What is EITC?

Bring on the inflation!

[wherebee]

1 minute ago, Chewing Grass said:

Indeed, that will be a huge sum of money, Walmart shares will be going up.

However once given never removed unless eroded away and a greater incentive for those eager to enter the bottom 20% to enter from Latin America.

accelerates the brazilification of the USA - a huge underclass kept in bread and water, whilst the 1% make out like bandits with the backing of a bent media and legal system, whilst the middle class sink further into debt and danger.

death of a republic, in our lifetimes.

[Barnsey]

5 minutes ago, Yadda yadda yadda said:

What is EITC?

Bring on the inflation!

Tax credits.

And behold:

 

[ThoughtCriminal]

5 minutes ago, wherebee said:

accelerates the brazilification of the USA - a huge underclass kept in bread and water, whilst the 1% make out like bandits with the backing of a bent media and legal system, whilst the middle class sink further into debt and danger.

death of a republic, in our lifetimes.

I've been saying this for a while now. 

 

1776 America is dying before our eyes: Founding fathers, constitution etc, it's over. 

 

I can't say I'll miss its hegemony given how many bad ideas come from there. 

 

Can we buy shares in mandarin classes? 

 

 

[Barnsey]

Last one for the night...

 

[Yadda yadda yadda]

29 minutes ago, wherebee said:

accelerates the brazilification of the USA - a huge underclass kept in bread and water, whilst the 1% make out like bandits with the backing of a bent media and legal system, whilst the middle class sink further into debt and danger.

death of a republic, in our lifetimes.

Brazil is great. A wonderful place. If you're rich.

If you're poor? I glimpsed poverty that was truly dangerous. People living in shacks on the banks of obviously polluted rivers.

America could easily go that way. We're not so far behind. Thing is being rich in America has just about all the good parts of being rich in Brazil and is overall better.

[moneyscam]

1 hour ago, wherebee said:

accelerates the brazilification of the USA - a huge underclass kept in bread and water, whilst the 1% make out like bandits with the backing of a bent media and legal system, whilst the middle class sink further into debt and danger.

death of a republic, in our lifetimes.

'There is nothing new under the sun."

We're going back to feudal times. Pope Francis will be happy, read his last two encyclicals namely 'Laudato Si' and 'Tutti Fratelli' (we're all brothers in Italian).

I'm only surprised the woke brigade hasn't taken him to task as for them it should be 'Tutti Fratelli e Sorelle' (we're all brothers and sisters). 

[Hardhat]

47 minutes ago, Yadda yadda yadda said:

If you're poor? I glimpsed poverty that was truly dangerous. People living in shacks on the banks of obviously polluted rivers.

Flint Michigan, USA?

https://www.nrdc.org/stories/flint-water-crisis-everything-you-need-know

Inequality is the major risk of our time.

[Lightscribe]

55 minutes ago, wherebee said:

accelerates the brazilification of the USA - a huge underclass kept in bread and water, whilst the 1% make out like bandits with the backing of a bent media and legal system, whilst the middle class sink further into debt and danger.

death of a republic, in our lifetimes.

And still the FT and the MSM business news fail to understand why BTC has exploded like it has.

FT article comments today hashing out the same old 2010 fud. Used for drugs/criminality/dark web/electric mining cost/useless with no electricity /not an asset/investment/ponzi/ millennials -gen-z will lose everything etc.

They don’t care and that’s what the MSM doesn’t get just like with GME. They view it as it may be 1 and 0’s but so is digitally created QE money which is devaluing to nothingness. At least you can’t make more BTC.

The younger generation know the game is rigged. They don’t want to work until death funding pensions in traditional financial models for the rest of their lives, knowing they’ll never see it themselves.

They see crypto and defi as they’re only hope of turning the system. Everyone knows that it could/will be regulated to death, but the genie is out the bottle. Governments go digital, use their own crypto and ban BTC now (with the big institutions moving into it) then they show their true colours of fearing it and they’ll be an uprising on their hands.

[Viceroy]

On 09/02/2021 at 11:29, DurhamBorn said:

Its 22%,but there are the likes of DRAX and SSE in there as well in smaller amounts.I have sold some DRAX down as it was up 150% though still own a decent holding.My whole portfolio has risen by a very decent amount since last March mostly thanks to some big holdings in several 200%+ increases in areas like potash and silver so my oilies holdings have gone up a lot in cash terms but not in percentage terms.Iv actually been adding BAT,Imperial and GSK lately from divis flowing in because i didnt want to increase percentages in other areas.Iv also built up 6 years of cash so i can get to SIPP access age without a penny coming in if needed.Oil ,and more gas is now competing with physical silver for divi flow as im nearly full again on my old tobacco stocks.

If i was 25 again id be happy to take the risk and be bigger in energy.

Thx! Am i correct in thinking that you loosely aim towards: 20% energy, 20% precious metals (miners/producers/streamers with an emphasis more towards silver), 15% tobacco, 15% telecoms, 15% potash, 15% misc (chemicals, carbon capture etc)?

+ 5-6 yrs cash living expenses, house paid for and physical stashed away.

I still have 50% of my investment pot as cash ready to rock. 27% is energy, 14% US ETF, 10% (mostly silver) miners/producers/streamers, 8% telecoms and a few bits+bobs (crypto, tobacco, potash, semiconductors).  Plus a physical stash.

I want one more BK so I can allocate it all and then chill for a few years and concentrate on other things!

 

 

 

 

 

[wherebee]

50 minutes ago, Cattle Prod said:

It's not different this time, it's just the wrong comparison. People are comparing it to the last three or four business cycles, when this is the end of a much longer cycle. It's happened before, more than once, just most people aren't looking back far enough.

Recency bias, where a human working life is recent. Need to look back more than 40 years to understand what's going on. It's a huge opportunity that most people aren't doing this.

Chinese people and culture tend to think and plan in centuries rather than electoral or business cycles. The next few years are going to be interesting, and revelatory.

can you explain this?  do you mean people alive only look at their own life?  or something else.

 

or do you mean back to feudalism (which is where we are headed without some big changes).

[Bricks & Mortar]

1 hour ago, Lightscribe said:

And still the FT and the MSM business news fail to understand why BTC has exploded like it has.

FT article comments today hashing out the same old 2010 fud. Used for drugs/criminality/dark web/electric mining cost/useless with no electricity /not an asset/investment/ponzi/ millennials -gen-z will lose everything etc.

They don’t care and that’s what the MSM doesn’t get just like with GME. They view it as it may be 1 and 0’s but so is digitally created QE money which is devaluing to nothingness. At least you can’t make more BTC.

The younger generation know the game is rigged. They don’t want to work until death funding pensions in traditional financial models for the rest of their lives, knowing they’ll never see it themselves.

They see crypto and defi as they’re only hope of turning the system. Everyone knows that it could/will be regulated to death, but the genie is out the bottle. Governments go digital, use their own crypto and ban BTC now (with the big institutions moving into it) then they show their true colours of fearing it and they’ll be an uprising on their hands.

If Bitcoin goes down massively in a BK event, and lots of Gen Z lose their hard-earned.  It'll be a lot easier to regulate.  The big institutions might well get the nod about the regulation first, and their selling will ensure the collapse.   The media will oblige with wall-to-wall coverage of Brandons and Ashleys who spent their house deposit and ran up 5 grand on credit cards buying half a bitcoin, now worth only a few hundred, and maybe worthless tomorrow.  If only they'd stuck with the safety and security of sterling... ah, the young have been so foolish, and now we must protect them from themselves.

[Lightscribe]

39 minutes ago, Bricks & Mortar said:

If Bitcoin goes down massively in a BK event, and lots of Gen Z lose their hard-earned.  It'll be a lot easier to regulate.  The big institutions might well get the nod about the regulation first, and their selling will ensure the collapse.   The media will oblige with wall-to-wall coverage of Brandons and Ashleys who spent their house deposit and ran up 5 grand on credit cards buying half a bitcoin, now worth only a few hundred, and maybe worthless tomorrow.  If only they'd stuck with the safety and security of sterling... ah, the young have been so foolish, and now we must protect them from themselves.

No doubt that the MSM news will, as well as painting them on the wrong side of the political spectrum as they already have with Redditors. Bitcoin = bad, defi = drugs/alt right funding terrorism, young people need protection from themselves = heavy regulation.

The younger generation won’t be swallowing the kool aid however. They are the extreme internet generation where the MSM narrative sticks out like a sore thumb and it’s agenda has little gravitas and impact compared to previous generations. They won’t play by the rules that they’re supposed to.

Also bear in mind we’ve already seen BTC crash epic proportions several times over the years (last March was the most recent) in which they’ve just invested more. Calling it a safe haven is incorrect, when the BK happens everything crashes. BTC isn’t a safe haven but it is the ultimate hedge against mass inflation as result of central ‘banks go BRRRRR’ as they say, which follows. 

Even in the BK, I expect a drop from here to $15-20k as I don’t believe we’ll ever see BTC below $10k again (as long as it’s allowed to continue). Yes they’ll be people that lose lots especially with easy access to leveraged trades nowadays.

They’ll be be far more overweight FAANG/tech asset passive index pension funds that will be decimated to far a greater extent however.

[wherebee]

20 minutes ago, Lightscribe said:

Even in the BK, I expect a drop from here to $15-20k as I don’t believe we’ll ever see BTC below $10k again (as long as it’s allowed to continue). Yes they’ll be people that lose lots especially with easy access to leveraged trades nowadays.

They’ll be be far more overweight FAANG/tech asset passive index pension funds that will be decimated to far a greater extent however.

In the BK I think you are right in terms of a drop in BTC, as a lot of Asian holders will be liquidating to cover margin calls for other investments.  I saw it in the mini asian crash in 12/13 as investors were desperate not to be forced out of stock positions they saw as long term holds - they sold gold, other assets, anything to generate cash to satisfy the margin call.

And the narrative about nasty bitcoin will ring hollow with the young, I think, when they see their parents Apple and Tesla shares go down by 80%.

[DurhamBorn]

5 hours ago, Cattle Prod said:

It's not different this time, it's just the wrong comparison. People are comparing it to the last three or four business cycles, when this is the end of a much longer cycle. It's happened before, more than once, just most people aren't looking back far enough.

Recency bias, where a human working life is recent. Need to look back more than 40 years to understand what's going on. It's a huge opportunity that most people aren't doing this.

Chinese people and culture tend to think and plan in centuries rather than electoral or business cycles. The next few years are going to be interesting, and revelatory.

Its exactly this.I think a few are starting to come around to it,but people dont understand the huge differences going on.Labour is going to get more of the pie for starters,at least nominal.Higher pay or higher corporate taxes.Onshoring is real and in progress.Its almost certain to reward the de-comlex areas who can leverage the inflation,or at least match it.Of course one last big deflation event could hit to make sure few gain from the cycle,or maybe the increases in inflationary areas are more subtle and so people take profits.

[DurhamBorn]

See here

https://www.telegraph.co.uk/politics/2021/02/09/britain-secures-trade-partnership-india-investment-will-create/

As iv said way back,India and China will continue to face off and the west will be fronting up India.Britain has a fantastic chance here due to obvious reasons.

[MrXxxx]

7 hours ago, Yadda yadda yadda said:

Brazil is great. A wonderful place. If you're rich.

If you're poor? I glimpsed poverty that was truly dangerous. People living in shacks on the banks of obviously polluted rivers.

America could easily go that way. We're not so far behind. Thing is being rich in America has just about all the good parts of being rich in Brazil and is overall better.

You want to see an example of a `North-South divide` forget the UK, go to Brazil.

[MrXxxx]

7 hours ago, Yadda yadda yadda said:

 

 

[MrXxxx]

6 hours ago, Lightscribe said:

And still the FT and the MSM business news fail to understand why BTC has exploded like it has.

FT article comments today hashing out the same old 2010 fud. Used for drugs/criminality/dark web/electric mining cost/useless with no electricity /not an asset/investment/ponzi/ millennials -gen-z will lose everything etc.

They don’t care and that’s what the MSM doesn’t get just like with GME. They view it as it may be 1 and 0’s but so is digitally created QE money which is devaluing to nothingness. At least you can’t make more BTC.

The younger generation know the game is rigged. They don’t want to work until death funding pensions in traditional financial models for the rest of their lives, knowing they’ll never see it themselves.

They see crypto and defi as they’re only hope of turning the system. Everyone knows that it could/will be regulated to death, but the genie is out the bottle. Governments go digital, use their own crypto and ban BTC now (with the big institutions moving into it) then they show their true colours of fearing it and they’ll be an uprising on their hands.

There are only two things that matter, hard assets and theft...think your hard assets are safe and the government will create a law to steal them, they have to be `hidden from the thief` hence anything that has a legal tie i.e property can be exploited.

[Chewing Grass]

8 hours ago, Yadda yadda yadda said:

Brazil is great. A wonderful place. If you're rich.

If you're poor? I glimpsed poverty that was truly dangerous. People living in shacks on the banks of obviously polluted rivers.

 

40 minutes ago, MrXxxx said:

You want to see an example of a `North-South divide` forget the UK, go to Brazil.

The big advantage of places like Brazil if you are poor is you can live in a shack without a heating bill.

In the UK/USA you would be permanently hypothermic for nearly 6 months of the year.

[Talking Monkey]

1 hour ago, DurhamBorn said:

Its exactly this.I think a few are starting to come around to it,but people dont understand the huge differences going on.Labour is going to get more of the pie for starters,at least nominal.Higher pay or higher corporate taxes.Onshoring is real and in progress.Its almost certain to reward the de-comlex areas who can leverage the inflation,or at least match it.Of course one last big deflation event could hit to make sure few gain from the cycle,or maybe the increases in inflationary areas are more subtle and so people take profits.

DB when you say labor is going to get more of the pie is that from a UK or global perspective. With the headwind of tech and automation I do wonder is that a sustained increase or just a blip over the next say 3 to 5 years then the downward pressure is exerted as automation gathers pace.

[ThoughtCriminal]

I don't think we've ever had the debt levels, the derivatives, the can kicking that's meant the 2008 correction STILL hasn't happened, the money printing. 

 

There are many key variables that are unprecedented. 

[Lightscribe]

33 minutes ago, Cattle Prod said:

People tend to view the world through their own experience. People who are younger than 65 have not experienced a 40 year cycle. Think of this, from Ray Dalio (you can download stuff of his for free):

X axis is 80 to 100 years. Small business cycles within longer wavelength inflation/disinflation, or debt cycles. Debt increases with disinflation, decreases with inflation. Arrow is probably pointing at the GFC. We're going through the big inflection point now. Debt is still increasing, though growth is slowing, hence a BK still possible. Can get inflation with no growth too though to wipe out debt (governments are trying for this) This whole thread is about preparing and being positioned fir this transition. The vast majority of people aren't.

I do think everybody on this board gets this and have agreed with the thesis from the start back when this thread was created in the HPC days.

Yes we’ve been in a disinflation since 1980 for 40 years but I think the actual economic devastation is more akin the Great Depression, so potentially a 100 year cycle.

Im sure back then having come from the First World War, spanish flu, moving away from gold/silver standard (in our currency) they thought too how could the economy survive?

But it is difficult to totally discount that the global economic system is so intertwined in modern day society, global economic impact so big, many countries printing to infinity that there is no way out other than a financial reset. So indeed it may not be a 40 or 100 year cycle, but a much longer cycle transition from the end of an Anglo world power to a a global one.

 

[Chewing Grass]

I think I have experienced a 40 year cycle, I was 14 in 1979/80 and used to venture on dilapidated trains into Liverpool once a month by myself to trawl around the record shops of that once great musical city. The whole place was rapidly turning into a seedy shit tip of decayed buildings and shops the pinnacle of which was probe records.

Then it was regenerated following 'the garden festival' on the back of easy credit and falling interest rates while all around the outskirts large manufacturing businesses continued to close.

I suspect 40 years later we are on the cusp of dilapidation and dereliction again at 0% with nowhere to go and little domestic manufacturing.

A service economy with no real money to service it.

Edit: Never noticed but it said 'Enterprise House' on the step in paint

http://news.bbc.co.uk/local/liverpool/hi/people_and_places/newsid_8917000/8917746.stm