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


spunko

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geordie_lurch

Regarding bitcoin and future prices fwiw these are my thoughts...

I think BTC will probably go to $300,000 or more in the next 5 years maximum. However I don't really find the fiat price relevent as if BTC fulfills its promise it might be £1,000,000 per BTC but you won't want to swap it for any fiat currency but trade it direct with others for all the things gold and silver bugs thought they would be able to by now.

The more I have learned about it, whilst also seeing the smartest people in the tech world creating companies and industries around it, the more I think it has a real chance of taking over from the dollar globally within the decade.

Fiat money is also long overdue one of its regular hyperinflationary episodes and I can't see any realistic candidate to replace it in the current and future tech age. The old money world of Central banks will try with their centralised digital currency versions but the genie is out of the bottle for decentralised BTC and once you truly 'get it' you can't unsee its potential or be tempted back to the rigged casino of fiat.

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10 hours ago, Castlevania said:

I’ve only bought Eni and Telecom Italia. They claim to have everything listed on the Italian Stock Exchange available.

AJBell allow you to buy Japanese stocks but have to be bought in standard lot sizes - which can easily mean having to buy in the tens of thousands of pounds. Quite a few Japanese companies do have ADR’s available, which can be bought via HL.

I have AJ and Bell and didnt know this. Can you give examples of what you can buy?

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39 minutes ago, No One said:

I have AJ and Bell and didnt know this. Can you give examples of what you can buy?

I can’t find any Tokyo Stock Exchange listed companies on their list of available stocks. I’d suggest either emailing or calling them.

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3 hours ago, M S E Refugee said:

 

Why would anyone want to leave a totalitarian regime to move to another one with shit weather.

I'd say of my contacts in HK, around 50% are actively looking to move elsewhere in the world.  Of those, maybe 50% to the UK due to historical or family connections.  Rest to USA, Canada, Australia, Singapore, and a smattering of other places.

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3 hours ago, geordie_lurch said:

Regarding bitcoin and future prices fwiw these are my thoughts...

I think BTC will probably go to $300,000 or more in the next 5 years maximum. However I don't really find the fiat price relevent as if BTC fulfills its promise it might be £1,000,000 per BTC but you won't want to swap it for any fiat currency but trade it direct with others for all the things gold and silver bugs thought they would be able to by now.

The more I have learned about it, whilst also seeing the smartest people in the tech world creating companies and industries around it, the more I think it has a real chance of taking over from the dollar globally within the decade.

Fiat money is also long overdue one of its regular hyperinflationary episodes and I can't see any realistic candidate to replace it in the current and future tech age. The old money world of Central banks will try with their centralised digital currency versions but the genie is out of the bottle for decentralised BTC and once you truly 'get it' you can't unsee its potential or be tempted back to the rigged casino of fiat.

True but they might force the whole world to act on something they cannot control or influence 

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Yadda yadda yadda
52 minutes ago, wherebee said:

I'd say of my contacts in HK, around 50% are actively looking to move elsewhere in the world.  Of those, maybe 50% to the UK due to historical or family connections.  Rest to USA, Canada, Australia, Singapore, and a smattering of other places.

Would you say your contacts are the typical HKer or are they skewed towards the more mobile/well off?

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5 hours ago, Harley said:

Good question.  I assume all will be synthetic except possibly for some precious metals, including palladium and platinum.  Hence one reason people prefer the equities.  Plus some equities (e.g. BHP) pay divs.  So it goes with the terrain.  I got burnt on a general commodity fund once so am cautious.  i need to rework the article and may go for a small punt for part of my hard asset allocation, but will mainly be in the equities.  And probably individual equities unless I can find a worthy ETF or fund.

Thanks. I hadn't thought it through, it is obvious now thinking about it that commodity etf's will almost always be synthetic. 

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30 minutes ago, Yadda yadda yadda said:

Would you say your contacts are the typical HKer or are they skewed towards the more mobile/well off?

more mobile/well off, often non-chinese bloodlines.

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geordie_lurch

I highly recommend the following linked tweets from Michael Burry - yes that Michael Burry of The Big Short fame where he is putting out the background for a public warning of the hyperinflation he (and others like me as per my post above) is coming...

The public warning...

I also like the following image of a description of what things were like in Germany at the time - sounds a bit like us and the Robin hood lot are ahead... for now xD

EDIT: That snippet is a description of 1923 Weimar Germany in the book Defying Hitler by Sebastian Haffner

20210222_093742.jpg

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5 hours ago, Sugarlips said:

More invaluable thoughts from Lyn, well worth the read for those with the time..

https://www.lynalden.com/february-2021-newsletter/

Thanks for that.  I used to struggle reading these long articles but just used a text to speech app.  Excellent!  Can listen on the go!  Might try it on this forum too, especially for the longer posts, although you'll all going to sound a bit girly to me! :)

PS:  Has to be girly I'm afraid as Lyn rulez!

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geordie_lurch
34 minutes ago, Cattle Prod said:

What's that clip from, Geordie? Sounds interesting.

I have added the details to my original post above now I'm back on my computer @Cattle Prod :Beer:

However in case others miss it then and the following is from Defying Hitler by Sebastian Haffner. You should be able to find more of it online for free. I've pasted some more of it below, with my emphasis added which sounds a bit like some of us and our Bitcoin investments to me and maybe the dating bit was the equivalent to Tinder :D

The old and unworldly had the worst of it. Many were driven to begging, many to suicide. The young and quick-witted did well. Overnight they became free, rich and independent. It was a situation in which mental inertia and reliance on past experience was punished by starvation and death, but rapid appraisal of new situations and speed of reaction was rewarded with sudden, vast riches. The twenty-one-year-old bank director appeared on the scene, and also the ‘sixth-former’ [the student in Britain between 16 and 18 years old, in his final two years of school, before entering the university] who earned his living from the stock-market tips of his slightly older friends. He wore Oscar Wilde ties, organized champagne parties, and supported his embarrassed father.

 

Amid all the misery, despair and poverty there was an air of light-headed youthfulness, licentiousness and a carnival atmosphere. No, for once, the young had money and the old did not. Moreover, its nature had changed. Its value lasted only a few hours. It was spent as never before or since; and not on the things old people spend their money on.

 

Bars and nightclubs opened in large numbers. Young couples whirled about the streets of the amusement quarters. It was like a Hollywood movie. Everyone was hectically, feverishly searching for love and seizing it without a second thought. Indeed, even love had assumed an inflationary character.

 

Unromantic love was the fashion: carefree, restless, light-hearted promiscuity. Typically, love affairs followed an extremely rapid course, without detours. The young who learned to love in those years eschewed romance and embraced cynicism. I myself and those of my age were not among them. At fifteen or sixteen we were a few years too young. In later years when we had to entertain our girlfriends with twenty-odd marks’ pocket money, we often secretly envied the older boys who had had their chance at this time. We only caught a glimpse through the keyhole, just enough to preserve a whiff of the perfume of the time forever in our nostrils. To us, it was thrilling to be taken by chance to a wild party; to experience a precocious, exhausting abandon and a slight hangover next day form too many cocktails; to listen to the older boys with their worn faces showing the traces of their dissolute nights; to experience the sudden transporting kiss of a girl in daring makeup . . .

 

There was another side to this picture. There were beggars everywhere and many reports of suicides in the papers. The poster columns were full of police ‘Wanted’ notices for burglars. Robbery and burglary occurred on a grand scale. Once I saw an old woman – perhaps I should say an old lady – seated on a bench in a park looking strangely blank and stiff. A little crowed gathered round her. ‘Dead,’ said someone. ‘Of starvation,’ said another. It did not surprise me particularly. At home, we also often went hungry.

 

Indeed, my father was one of those who did not, or did not wish to, understand the times, just as he had already refused to understand the war. He entrenched himself behind the maxim: ‘A Prussian official does not speculate’, and bought no shares. At the time I regarded that as extraordinarily narrow-minded and out of character, for he was one of the cleverest men I have known. Today I understand him better. In retrospect, I can sympathize with the disgust with which he rejected the ‘monstrous scandal’ and with the impatient contempt that lay behind the attitude that ‘what ought not to be, cannot be’. Alas, the practical result of such high-mindedness could degenerate into farce, and the farce would have turned to tragedy if it had not been for my mother, who adapted to the situation in her own way.

 

This is how the family of a high Prussian official lived from day to day. On the 31st or 1st of the month my father would receive his monthly salary, on which we depended for our survival. Bank balances and securities had long since become worthless. What the salary was worth was difficult to estimate; and its value change from month to month. One month a hindered million marks could be quite a substantial sum; a little while later five hundred milliards would be small change. In any case my father would first try to purchase a monthly pass for the underground as quickly as possible. That would at least enable him to get to his office and back, even though the underground involved considerable detours and waste of time . Then cheques would be written out for the rent and school fees, and in the afternoon the whole family went to the hairdresser’s . What was left was handed to my mother. Next day the entire family except for my father, but including the maid, would get up at four or five in the morning and go to the wholesale market by taxi. There, in a giant shopping spree, an Oberregierungsrat’s monthly salary would be spent on non-perishable foodstuffs in an hour. Giant cheeses, whole hams, stacks of tinned food and hundredweights of potatoes were piles into out taxi. If there was not enough room, the maid, with one of us to help, would get hold of a hand-cart. At about eight o’clock, before school began, we would return home, more or less provisioned for a month’s siege. And that was it. There was no more money for the rest of the month. A friendly baker gave us bread on credit. Otherwise we lived on potatoes, smoked or tinned food and soup cubes. Now and then there might be an unexpended supplementary payment, but it was quite common for us to be as poverty-stricken as the poorest of the poor for four weeks, not even able to afford a train ride or a newspaper. Putting aside money for such purposes would have been quite senseless. Within a few days the whole month’s salary would not have paid for a single tram ride. I cannot say what would have happened if some misfortune like a serious illness had befallen us.(pp.46-50)

...   

In August 1923 the dollar reached a million. We read it with a slight gasp, as if it were the announcement of some spectacular record. A fortnight later, that had become insignificant. For, as if it had drawn new energy at the million mark, the dollar increased its pace ten-fold, and began to mount by a hundred million and milliards [by British measurement, thousands of millions] at a time. In September, a million marks no longer had any practical value, and a milliard [a thousand million] became the unit of payment. At the end of October, it was a billion [by British measurement, a million million]. By then terrible things had happened. The Reichsbank stopped printing notes. Its notes – 10 million? 100 million? – had not kept up with events. The dollar and price levels in general had anticipated them. There was no longer any usable currency. For some days trade came to a standstill, and in the poorer parts of the city the people resorted to force and plundered the groceries. The atmosphere became revolutionary once again.

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After too long throwing darts at the board blindfolded I came up with seriously more robust approaches to managing my investments.  Still being perfected though and tbh always will.

Anyways, did my weekly review this weekend and nada.  IMO (DYOR) no buy signals for major value stocks (all in or well on the way to the overbought zone); bonds (all durations and countries) are still a sell; gold is still a sell; silver and other commodities are overbought; crypto is overbought; and there was a dirth of good trade signals. 

I suppose I could lower my standards and buy some overboughts in the hope they keep going up.  Tell myself I'm cleverly laddering in on the rise.  But this has always ended badly for me in the past. 

What I am learning though is there is no such thing as a quite moment.  That these only happen when you're not looking in the right direction!  Seek and ye shall find.  Maybe it's telling me my time should be spent checking allocations and battening down the hatches.

Or has this whole thing just gone crypto and run away from me and my nice systems.  That it's OK to buy overboughts or near overboughts in this crazy world if you try and stay close to the exits.  But I'm not even sure this is even a trader's (excl. scalper's) market anymore.

But bottom line is I was not sufficiently ready to go in March (mentally as much as other).  Sure I dabbled but not hard enough given my allocations.  I should have sold down PMs and cash and bought more value equity.  Maybe now I should just suck it up.  That has historically been the hardest lesson to learn but, with hindsight, the most valuable.  I'm out of synch with the market, marching on the wrong foot, and just going to have to skip a step to get back in line!

A hard mistress these markets.  But I still love her and the way she keeps me grounded and humble.

PS:  Think I'll just go out and build something eff off big instead.

PPS:  Oh and stock up (farmers telling me prices are up but no way enough to cover all their input costs, from feedstock to machinery).

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15 hours ago, harp said:

No one knows the future and listening to others who think they do is bollocks. When does a contrarian become mainstream thinking? All I've done is spray and pray. Bit of this bit of that and a lot of bitcoin.

Well you’ve kinda copied my mantra, invest in everything and you’ll be right in one way or another. Everyone will think you're the oracle regardless! :)

Ok as the BTC chat has surfaced again, I’ll give my two pence on the matter.

We are heading towards a digital currency, like it or not. That currency will incorporate blockchain technology and automation.

If a farmer needed fertiliser, wouldn’t it be so much more efficient to have it all done automatically. Past/present average yields, weather/soil conditions, current product price/weight, optimum growth/time. What if the supply of just the right amount was delivered to the farmer at the right time all automated and tailored to a individual need. That’s how digital currency using smart contracts and AI would work.

BTC will have nothing to do with that. It’s use will be the same as physical gold and currency today, just solely to underpin value.

In a stock market crash, BTC will fall with everything else, it’s not a safe haven. Longer term however it’s not worth trying to value BTC in $ value if $ no longer exist.

China has used this used this covid period (amongst plenty of other things to do in its favour) to rapidly roll out DCEP. It stands entirely the opposite to BTC and ETH (or BNB/ADA/API3 etc)

https://www.forbes.com/sites/jasonbrett/2021/01/27/chinas-digital-yuan-reported-to-be-ultimate-financial-censorship-tool/?sh=2fd036f550ac

The future will be interesting on what the west do once we reach the point of a currency reset. Join China under a global currency? If so BTC could go to zero.

https://www.bbc.com/news/business-54261382

Maybe we will. I’ll hedge my bets and keep some of my LINK aside to run smart contact node in return for an extra portion of gruel and some social credit tokens.

https://www.prnewswire.com/news-releases/bsn-integrates-chainlink-oracles-bringing-real-world-data-into-its-irita-powered-network-301081572.html

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5 minutes ago, Harley said:

gold is still a sell; silver and other commodities are overbought; crypto is overbought

on what timescale? Pick yourself up and trade lower timescales you big fat puff! xD

6 minutes ago, Harley said:

A hard mistress these markets.  But I still love her and the way she keeps me grounded and humble

I love a good pegging first thing to keep me grounded :x

Metals bull market and inflation is all over the twitterati :P I'll give you a couple of pics for today then try to STFU :Jumping:

 

EuylDN5XEA0vtsO.jpeg

inflation.jpeg

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12 hours ago, wherebee said:

I'd say of my contacts in HK, around 50% are actively looking to move elsewhere in the world.  Of those, maybe 50% to the UK due to historical or family connections.  Rest to USA, Canada, Australia, Singapore, and a smattering of other places.

IME, many of those who came from South Africa and Rhodesia didn't stay as it turned out this country was nothing like what grandma had romantically told them.  They moved on to the US, Canada, Australia, and NZ.  They were refreshingly more pioneering in spirit, used to big spaces, and to self advancement.  But then maybe HKs are better at living in cramped sh*tholes.

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17 minutes ago, nirvana said:

on what timescale? Pick yourself up and trade lower timescales you big fat puff! xD

I love a good pegging first thing to keep me grounded :x

Metals bull market and inflation is all over the twitterati :P I'll give you a couple of pics for today then try to STFU :Jumping:

 

EuylDN5XEA0vtsO.jpeg

inflation.jpeg

Ta!  Keeping me real!

Weekly and monthly.  Dailies are for the hyperactive kids out there who like sitting and watching all day while life moves on outside!

Don't see the love in 'em charts.  Rising yield means lower prices and I ain't about to open a savings account!  Ratio up 'cause gold on a downer and copper overbought.

Running away from the inflationary guns right into the deflationary ones I fear!

Timing!  Of course, I'll keep looking!

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18 hours ago, Hancock said:

I've worked and saved best part of £1/4 million a fucken unreal amount of money for someone who works with their hands. Was about to buy in early 2014, but whilst on a stopover on my way to a 6 week job i quickly checked the internet and saw that cunt Gidiot brought Help to Sell forward to start immediately as opposed to the following April. I knew the next 42 days of work would be taken by HPI. (and they were)

By the time i got back to England prices were already rocketing up, custody battle later that year which took a further year, with the result meaning i had to stay living in Yorkshire for a while longer meant i've kind of been forced to sit on the side lines, as i've no intention of living in Yorkybarland for life.

All that hard work and best part of £250k buys fuck all, when it would have got something acceptable in 2013. Same place will be £350k now.

 

Just around the corner from me you can get this for £200k.They have fantastic back gardens,really big,and loads of space at the front and side.Close to the station,about a minute in the car and that gets to east coast mainline at Darlington in 15 minutes.

https://www.rightmove.co.uk/properties/67354249#/

It backs onto a nice estate and not overlooked at the back much.Only slight downside is i think the drive between houses is shared.

Its always really surprised me more people dont move here,we havent been diversified to any extent,and its a fantastic area to live,though iv noticed southern accents cropping up more and more.

 

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1 minute ago, Harley said:

Ta!  Keeping me real!

I'm cross posting now BUT Gold was a screaming buy on Friday you can see it clearly on the 4 hour.....and yes I missed it cos 15 minutes can be a long time for hyperactive arseholes like me ;)

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12 minutes ago, DurhamBorn said:

Just around the corner from me you can get this for £200k.They have fantastic back gardens,really big,and loads of space at the front and side.Close to the station,about a minute in the car and that gets to east coast mainline at Darlington in 15 minutes.

https://www.rightmove.co.uk/properties/67354249#/

It backs onto a nice estate and not overlooked at the back much.Only slight downside is i think the drive between houses is shared.

Its always really surprised me more people dont move here,we havent been diversified to any extent,and its a fantastic area to live,though iv noticed southern accents cropping up more and more.

 

Plus you could hack DBs wifi!  Effing long drive atm!

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46 minutes ago, nirvana said:

I'm cross posting now BUT Gold was a screaming buy on Friday you can see it clearly on the 4 hour.....and yes I missed it cos 15 minutes can be a long time for hyperactive arseholes like me ;)

Hyperactive, maybe, a*holes not!  :)  Nothing wrong being hyperactive.  I was one once!  Thats spot on - I just can't tie myself down to trading daily anymore. Too much to do and not able to take the drama - 90% nothing then 10% hell!  Old traders either end up bankrupt, dead, or hiding in the weeklies/monthlies! :Old:

PS:  I'm only here 'cause I'm ill through sitting around too long looking at a monitor.

PPS:  Still some life left in this old dog.  39 "plain Jane" equity trades on the go atm, all with a duration of less than four weeks, most up double digit (top being 57%), losses cut early so not a thing.  My concern is the lack of "new blood"!

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5 minutes ago, DurhamBorn said:

Just around the corner from me you can get this for £200k.They have fantastic back gardens,really big,and loads of space at the front and side.Close to the station,about a minute in the car and that gets to east coast mainline at Darlington in 15 minutes.

https://www.rightmove.co.uk/properties/67354249#/

It backs onto a nice estate and not overlooked at the back much.Only slight downside is i think the drive between houses is shared.

Its always really surprised me more people dont move here,we havent been diversified to any extent,and its a fantastic area to live,though iv noticed southern accents cropping up more and more.

 

Looks expensive for NE England, prices in Whitley Bay and surrounds are utterly bonkers. I noticed southern accents in outer regions of Newcastle, at one time that'd never happen.

But with kid in tow i need to move south so i don't always have to work away so much. Had to bring my kid to the hotel where im staying for work  last week and leave her there for a couple of hours at a time. Not good.

 

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11 minutes ago, Harley said:

Plus you could hack DBs wifi!  Effing long drive atm!

Just got this email from Self Build Scheme for Durham, if anyone is interested.

£1700/m2 seems expensive. (looks f'en diversified to me)

image.png.1bc9662e42d347ffd479a52ff6a74e78.png

image.png.c38077f12457fc9c7c940533e1810f4b.png

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14 minutes ago, Harley said:

PS:  I'm only here 'cause I'm ill through sitting around too long looking at a monitor.

I'm only here cos I was already looking at charts at 4am, have traded DAX, missed the dump and rebound on Cable and been out for a bike ride :P

Have you guys been discussing the 'metals bull market'? FCX is getting some love, copper is fecking exploding.....other metals are doing well too......do they call it 'trend trading'? :Jumping:

edit: someone sees the same as me on Gold.......NASDAQ futures are getting fooked though!!

 

Eu0XyKOXcAE3M2o.png

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