Jump to content
DOSBODS
  • Welcome to DOSBODS

     

    DOSBODS is free of any advertising.

    Ads are annoying, and - increasingly - advertising companies limit free speech online. DOSBODS Forums are completely free to use. Please create a free account to be able to access all the features of the DOSBODS community. It only takes 20 seconds!

     

IGNORED

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


spunko

Recommended Posts

  • Replies 35.1k
  • Created
  • Last Reply
18 minutes ago, nirvana said:

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

Hey Junior, keep up, I was up at 2am trading AsiaPac!  Yep, need to check the commods.  Typical, had them on watch way back but then deleted them as nothing was happening!!!!  Some things still take too long for me even now!

Link to comment
Share on other sites

22 minutes ago, Hancock said:

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

Murton is a right fecking shithole too....or it was decades ago :P......they all breed whippets and swap em for DIY tattoos up there, not sure you'd fit in......the burds are really fat though if you're into that sort of thing xD

Anyone watching the VIX?

Link to comment
Share on other sites

42 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 ;)

We live in two different time dimensions, that's all.  I'm paring back gold a bit today as the weeklies/monthlies still look bad to me.  I'll get back in when any daylies make it to the weeklies.  I had the signal weeks ago, did nothing even though overallocated due to gains, and am now well down.  I should have reallocated and moved to the (then cheaper) equities.  Allocation 1.1 is that.  Live and learn and learn again!

Link to comment
Share on other sites

6 minutes ago, Harley said:

We live in two different time dimensions, that's all.

price is the same on ALL timeframes ;) GOLD is a buy now unless it drops below 1760 :Jumping:

edit: where's that nutter @Errolhe must be creaming his panties now he can buy even more Gold at these levels xD

Link to comment
Share on other sites

2 hours ago, geordie_lurch said:

20210222_093742.jpg

Slightly bizzare that today was the first day i've heard both local and National (Radio one) 8AM news talking about bitcoins price rises, History is definitely starting to rhyme again.

Link to comment
Share on other sites

Possilby one of the best Dr Tim Morgan posts of all time.It covers a lot of the themes(USD in terminal decline,GBP following suit,Remnimbi only option for another global reserve currency,inflation looms,UK govt only response to weakening growth is to pump housing etc) developed here over the years by @DurhamBorn and dovetails really succinctly with what @Cattle Prod has been saying about oil supply deficits.

Just rereading this as I post, and must say that it's depressing.But forewarned is forearmed.We missed the chance to reform in 2009,now it's too late.

Highlights are mine to enable skim reading with apologies to the LPP,but some things need posting in full.

hattip @Democorruptcy

 

https://surplusenergyeconomics.wordpress.com/2021/02/06/189-dead-money-walking/

#189. Dead money walking

Posted on February 6, 2021

WHY THE RENMINBI COULD BE ‘THE LAST FIAT STANDING’

 

“It’s easy to be the last man standing – if all the others commit suicide”.

Although this isn’t one of the sayings of Confucius, it applies now with particular force to the Chinese renminbi – after all, to what currency, other than the RMB, can the world turn when each of its major rivals seems determined on self-immolation?

In Britain and America, economic and financial policy have long had all the hallmarks of self-destructive intent. Both countries believe that it makes sense to ship value-productive industries (such as manufacturing) out to lower-cost countries overseas, whilst trying to turn themselves into low-wage economies whose main profitable activity involves moving money around. The UK has driven debt upwards relentlessly, for the sole and senseless purpose of buttressing property prices which have already been over-inflated far beyond the point of affordability. America has binged on credit in an equally self-destructive effort to replace shock-absorbing corporate equity with inflexible debt, the result being a stock market which has become nothing more than a proxy for Fed monetary largesse.

Both countries seem now to have been driven to the point of policy despair. The American government is bent on injecting yet another $1.9 trillion of borrowed-out-of-nowhere money into the economy, whilst the Bank of England seems to be giving serious consideration to committing a symbolic currency surrender through the introduction of negative nominal interest rates. Both are deluding themselves about the real condition of their economies, with Britain, at least, seemingly persuaded that all will be well if consumers can only be induced to go on a spending-spree with money that they don’t have.

Britain and America have been described as “two countries divided by a common language”, but the operative definition now is that they are united in a shared commitment to economic fanaticism. It’s one thing to believe, mistakenly, that the economy is a wholly monetary system unconstrained by natural resources, but quite another to believe, as well, that the road to prosperity lies through the perpetual spending of borrowed and newly-created money.

Donald Trump may have coined the phrase “Make America Great Again”, but nobody can beat the British authorities when it comes to fatuous slogans. First there was the abolition of “boom and bust” during the biggest asset bubble in history. Next came “help to buy”, whose real meaning was ‘help young people to get deeply into debt to prop up the housing market’. Original thinking may be at a premium in Britain’s corridors of power, but the slogans keep coming.

In current circumstances, there’s something almost prurient in using the energy-based SEEDS economic model to evaluate the British and American economies, so let’s keep this brief. In the United States, prosperity per person turned down twenty years ago, falling from $48,850 (at 2019 values) in 2000 to $45,460 in 2019. Over that period, each person’s share of government, corporate and household debt rose, again at constant values, from $96,000 to $163,000. The ratio of debt to prosperity in America had risen to 360% at the end of 2019 – and probably at least 425% now – from 196% back in 2000. Government expenditures, on a per capita basis, rose by nearly $6,000 (37%) over a period in which prosperity per person declined by $3,240 (-6.6%).

Estimates for 2020 suggest that the prosperity of the average American declined by 8% last year, with only the most modest recovery in prospect before the gradual – but relentless – downtrend resumes. Using fiscal and monetary policy to boost financial demand whilst the supply of prosperity erodes is a recipe for inflation.

image.png.c1a550b01de396af9ed95db2c238876e.png

 

 

Financial recklessness is something in which Britain is fully competitive with the United States. Prosperity per person turned down later in the UK than in America, but has deteriorated more rapidly, falling by 10% between 2004 (£26,280) and 2019 (£23,560). Over the same period, debt per capita rose by £23,000 (38%) in real terms, and public expenditures per person by 14%. Worse still, British exposure to the global financial system, as of the end of 2019, stood at 10.8x GDP, equivalent to 15.2x prosperity. Aside from Ireland and Holland (both of which are far smaller economies), anyone in search of more extreme exposure to the world financial system would have to look at financial asset ratios in tiny economies like Singapore and the Cayman Islands.  

image.png.212b2170626fa50a493e5d021fc68123.png

 

 

This is the situation in which Washington is committing itself to yet more borrowed stimulus, whilst London thinks it makes great sense to proceed with a vastly expensive new rail project, together with anything else that can absorb huge amounts of money that can be conjured out of the ether, quite possibly at the cost of even more saver-punitive rates of interest.

Neither the US nor the UK seems to realise that boosting demand (through stimulus) at a time when you can do little or nothing to replace lost supply is an implicitly inflationary form of behaviour.  Both Britain and America have multi-trillion gaps in future pension provision, which we can estimate at about £8tn in the UK, and $37tn in the US. Both have student debt on which large-scale default (politely known as ‘forgiveness’) seems highly likely. Neither government seems to realise that granting rent and debt payment ‘holidays’ creates huge strains for lenders and landlords. Both are watching their commercial property sectors spiralling into an abyss. In an ominous portent of the shape of things to come, the British regulator has now approved an increase of 9% in the ceiling on the combined cost of domestic gas and electricity.

If, just for a moment, we put tact aside, we can remind ourselves that Britain (with its obsession with “light-touch” regulation) and America (with the creation of “weapons of financial mass destruction”) were the main architects of the “global” financial crisis. Both now favour a “reset”, seemingly unaware that the opportunity to reset the system came – and went – during 2008-09. That was when adherence to market principles would have preserved monetary credibility at the cost of sharp falls in the (purely notional) prices of assets such as stocks and property.

To be sure, this would have been accompanied by defaults, which would have been very costly to remedy. Even so, recapitalisation of the banking system might have been cheaper than what has happened since, and what still lies in the future – after all, the debts which were kept in the ‘performing’ category in 2008-09 are no more capable of repayment now than they were back then.

It would have been far better, of course, if neither Britain nor America had embarked on the preceding, decade-long debt binge without which the GFC wouldn’t have happened at all.

The situation now is one in which both countries have handed themselves over to the theory of the magic money tree, seemingly unaware that money itself commands value only as a ‘claim’ on the goods and services for which it can be exchanged. The recipe of ‘produce less, spend more, and delude ourselves by inflating asset prices’ has never been a formula for success. An objective observer, perhaps visiting from a distant planet, would see no logic whatsoever in owning American dollars or British pounds. Both countries seem to have persuaded themselves that soaring stock and property prices aren’t signs of systemic inflation, and don’t understand that pouring new credit and new money into faltering economies can have only one possible outcome. 

If our interplanetary visitor was looking for a viable alternative to USD and GBP, he or she might be tempted by EUR or JPY. Neither, though, really holds up under objective scrutiny. The euro is a political dream-currency, built on the economically-illiterate idea that one can combine a single, “one size fits all” monetary policy with nineteen different sovereign budget processes. This means that the role normally played within currency areas by ‘automatic stabilisers’ has to be filled by contentious, ad-hoc aid and a dysfunctional clearing system. Even before the onset of the pandemic crisis, the BoJ had used newly-created money to buy up more than half of all JGBs (Japanese government bonds) in existence, to the effect that central bank assets already exceeded 100% of GDP by the end of 2017.

During 2020, it seems that QE equated to about 29% of prior-year GDP in Japan, 25% in the Euro Area, 15% in the United States and 14% in Britain, for an average of 20%, which compares with barely 3% in China. We can be certain that there’s a lot more money creation to come from the Fed, the BoE, the ECB and the BoJ – but not from the PBOC.

With the US and the UK seemingly bent on “print to oblivion”, the EUR resembling the financial equivalent of a camel (“a horse designed by a committee”) and Japan deeply committed to ‘monetisation to the nth degree’, our imaginary visitor from outer space might seem to be running out of options. Having rejected cryptos – and after casting a considering eye at precious metals – his or her choices seem to have narrowed to just one.

That “last fiat standing” is the renminbi.

It seems quite clear that China, alone amongst the major currency areas, is committed to sound money. Beijing appears determined to mute the siren calls of Anglo-American style financial “innovation”, and even to allow SOEs to default at scale, if that’s the price that sound money now carries.

Link to comment
Share on other sites

13 minutes ago, Harley said:

I had the signal weeks ago

i remember saying Gold was a sell weeks ago too......I dare say nobody was listening and I'm not gonna look through the posts to find it......and again errol was probably saying buy more.....anyway I'm even starting to bore myself now, the charts never lie xD

Link to comment
Share on other sites

32 minutes ago, sancho panza said:

That “last fiat standing” is the renminbi.

It seems quite clear that China, alone amongst the major currency areas, is committed to sound money. Beijing appears determined to mute the siren calls of Anglo-American style financial “innovation”, and even to allow SOEs to default at scale, if that’s the price that sound money now carries.

The Chinese have printed about $30 Trillion since 2001, them not printing much in 2020 was more likely because they have reached the limits of printing and less likely because they are born again Austrians IMO!

Link to comment
Share on other sites

On 21/02/2021 at 13:16, JREWING said:

We talk about this “BIG KAHUNA”.

I don’t know how old you lot are, I’m 53 this year, and feel it. I joined HPC in Oct 2003, having sold to rent in the September of 2003; so put my money where my mouth was. I was eagerly awaiting the big crash.

Telling everyone who was sad enough to listen how the housing market was going to crash. I was going to buy back in at 1996 prices. The site was full of rampant posters all going crazy on how house prices had doubled, Could not go on any longer we all said. Bloodbath, Big K. No rabbits to be pulled outta this one we thought. F00k me how wrong I was, we all were.

Fuck me. I’m an old man now; I might not be here in 2030. If I am, what kind of health issues may I have? The way the world is going; well who know’s if you want to be here in 2030? It’s f00king crazy.

If you had told me back in 2003, what has happened since then will happen, as it has happened. I would have put you over my knee and smacked your ass.

NIRP, HTB, QE, TFL, Shitcoin, Fludemic, Johnson as PM, cross gender confused young adults and all the other crazy shit which has gone on.

Well if you can predict what will happen between today and 2030. If I get there, well I’ll see you there,and I bet you would never believe it; what will happen, has happened, relative to what you think may happen as of today.

Wouldn’t surprise me if we are not all living in little pods, allowed out for one hour a day, food delivered by designated inmates, and no travel outside your designated community. You will be happy, why because they told you you are happy.

 

Key thing is to reflect as unemotionally as you can on what you got right back then and what you got wrong.Break it down.

It's easy to be self critical if you STRed pre 2007,human nature even.However,I'd caution against using that to dismiss your logic in the here and now.

You got a lot right in 2007 but lsot out on a comparative basis with people who held property because the govt bailed them out thinking that the way out of the economic hole in 2007 was to dig an even bigger hole.Meh!

For me,my job here for my family(and me) is to work out the thesis that best protects us from what's coming and on that basis,property is an asset class to be traded like any other.

@Noallegiance is currently psoting some good stuff on investor psychology and I msut say that one of the harderst things I've ever done in investing is to try and rein in my emtoions-fear/greed/regret etc.

 

 

Link to comment
Share on other sites

1 hour 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.

 

DB, that looks good value to me. Have you noticed local house prices starting to increase, especially now with the influx of those 'southern accents'? I recall you saying a while back now, but think you said prices had hardly changed in the previous 10 years.  

Link to comment
Share on other sites

21 hours ago, Bobthebuilder said:

I hear ya.  I threw the towel in and stopped fighting in 2012. Our very own @crashmonitor had an inflation adjusted thread on TOS, many posters did not like it as it was not nominal prices. I had some NSI linkers maturing and prices were -30% inflation wise. Same as you, I bought a probate and had a bit of work to do. Loads of plasterboard....

I am debt free now and trying to build this bloody pension.

People have to work out where they'd like to be in ten years(that's my investing timeframe) and then work out the mix.Mrs P would love to buy a hosue,but as I've said before,that would involve me selling some £10 RDSB,$40 XOM,£2.50 BP or some goldies.If we were in a cheap part of teh country I'd consider it but Leicester isn't.

What i like with the Basement dweller community here compared to ToS is that there isn't the stigmatising of people who have a different thesis.

20 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.

 

I don't know your set up H,but @AWW and I were discussing last week the benefits of long term renting  and running your portfolio to either susbsidize the rent or using salary to cover rent and reinvesting divi's in pension.Would aslo leave some leeway for school fees.I jsut had a quick look at WInchester plus 5 miles and whilst it's not cheap,there's one or two nice pads for the price of a repayment mortgage.Might not look such a bad deal as rates go up.

Alternatively,if you've a chunky deposit then the 15 year fix that @Barnsey recently got could be an option.Put the min down and leave the rest in oilies etc.

Dyor natch

Link to comment
Share on other sites

Bobthebuilder
5 minutes ago, sancho panza said:

What i like with the Basement dweller community here compared to ToS is that there isn't the stigmatising of people who have a different thesis.

I must admit that I have not looked at property prices for quite a while now. I do feel for you, @Hancock I don't think there is much value anywhere in the country at the moment when we start thinking £210,000 for a semi in Durham is cheap.

I had a quick look in north Dorset, somewhere I would like to retire. Found this, still expensive in my book but a nice part of the world.

https://www.rightmove.co.uk/properties/74182122#/

Link to comment
Share on other sites

1 hour ago, nirvana said:

i remember saying Gold was a sell weeks ago too......I dare say nobody was listening and I'm not gonna look through the posts to find it......and again errol was probably saying buy more.....anyway I'm even starting to bore myself now, the charts never lie xD

Erm I believe it was you that was taking the micky out of my cup and handle pattern on the 1 yr silver chart.... looks pretty cup and handle-ish to me :P

47ECA6BF-EED0-426C-857B-E820053C4986.jpeg

Link to comment
Share on other sites

27 minutes ago, Lightscribe said:

Erm I believe it was you that was taking the micky out of my cup and handle pattern on the 1 yr silver chart.... looks pretty cup and handle-ish to me :P

More than likely ;) Patterns are more poofs, real men trade S and R lines xD

Link to comment
Share on other sites

1 hour ago, sancho panza said:

People have to work out where they'd like to be in ten years(that's my investing timeframe) and then work out the mix.Mrs P would love to buy a hosue,but as I've said before,that would involve me selling some £10 RDSB,$40 XOM,£2.50 BP or some goldies.If we were in a cheap part of teh country I'd consider it but Leicester isn't.

What i like with the Basement dweller community here compared to ToS is that there isn't the stigmatising of people who have a different thesis.

I don't know your set up H,but @AWW and I were discussing last week the benefits of long term renting  and running your portfolio to either susbsidize the rent or using salary to cover rent and reinvesting divi's in pension.Would aslo leave some leeway for school fees.I jsut had a quick look at WInchester plus 5 miles and whilst it's not cheap,there's one or two nice pads for the price of a repayment mortgage.Might not look such a bad deal as rates go up.

Alternatively,if you've a chunky deposit then the 15 year fix that @Barnsey recently got could be an option.Put the min down and leave the rest in oilies etc.

Dyor natch

That's right @sancho panza, house purchase in Telford moving very swiftly and efficiently. Mortgage offer approved and deed received at 2.59% for 15 years with a 25% deposit.

Just a reminder, we were renting in SW London for 8 years and had enough, moved to the Midlands almost 18 months ago.

For much less than the 1 bed rental flat in London we rented would sell for, yes we're in a relatively soulless new town with its fair share of council estates, but we've got a 4 bed detached in a very nice area of the town, 45 mins from Birmingham by car or train (direct to the airport too), 15 mins on the train to Shrewsbury, stunning Shropshire countryside on the doorstep, and a strong industrial base with an array of large employers.

So my caveat would be, do what I have done, but only if you're buying somewhere well linked, affordable, good amenities, and for a long (portable) fix. We've got every inch of house I could have hoped for, in a nice area and at a price and fixed mortgage term that allows me to sleep at night. Couldn't have stomached it any other way.

Link to comment
Share on other sites

3 hours ago, M S E Refugee said:

I have got a subscription with Simply Wall St and they have IMB at £67 fair value and BAT at £66.

Are they really that cheap?

Did they share their analysis?

Quite tempted to top up on BAT for the divis.

Link to comment
Share on other sites

M S E Refugee
6 minutes ago, Hardhat said:

Did they share their analysis?

Quite tempted to top up on BAT for the divis.

You can get a free trial and get analysis on 10 stocks if I remember correctly.

Link to comment
Share on other sites

5 hours ago, geordie_lurch said:

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.

Thanks for sharing this,

@geordie_lurch

Reminded me that I read 'when money dies', by Adam Fergusson on a recommendation from tos a good few years ago. A masterpiece on Weimar hyperinflation.

"When Money Dies: The nightmare of the Weimar hyper-inflation" by Adam Fergusson.

Start reading it for free: https://amzn.eu/8qSHWgM

(Amazon has provided me with this link^).

Also Paper Money Collapse is a read (!). Again a TOS recommendation.

"Paper Money Collapse: The Folly of Elastic Money and the Coming Monetary Breakdown" by Detlev S. Schlichter.

Start reading it for free: https://amzn.eu/iqi2GkX

Link to comment
Share on other sites

2 hours ago, sancho panza said:

 

@Noallegiance is currently psoting some good stuff on investor psychology and I msut say that one of the harderst things I've ever done in investing is to try and rein in my emtoions-fear/greed/regret etc.

 

 

The thing that causes me the biggest problem is looking at what people who aren't doing what I'm doing are doing. That's not an easy sentence to read.

I'm not a gambler. It's clearly late/approaching very late in the cycle where fashionable stuff is popular, with prices getting ridiculous for my (very) humble savings. 

I keep having to remember that I'm at the start of this. I don't have 000s to chuck at stuff and lose. I'm at least 25+ years from drawing my pension.

Today, my inflation/PM/telecoms/infrastructure/raw materials portfolio is looking well despite all indices being down. Those days are not common, but are becoming more so. I think money may be starting to flow toward where I have been positioned for just under a year. Long way to go yet, though. It's felt like a long year.  

For me, I'd be happier holding on to the reasons I'm doing this with my personal approach that suits me. If I start being duped into gambling now I'll hate myself for the losses and am unconvinced the 'wins' would be worth the stress.  

It's a very personal thing. I'll take 'more comfortable' in decision-making and outcome over 'moderately wealthy' but with added stress. 

But it's damned hard to keep that front and centre.

Link to comment
Share on other sites

1 hour ago, Cattle Prod said:

Interesting piece. I wonder where he sees evidence for this? I've seen other graphs recently that shows China has printed more yuan as a % of its GDP than anywhere else. Where does he see the sound money bit?

I suspect it's about the two graphs below but also CB assets net of liabilities.I personally wouldn't trust much that comes out of China-not least it's fiat currency-but if you bear with his thesis then it makes sense thata s they become the next world reserve they have significant capacity to expand their balance sheet.

I thought Gromen's assessment that the USD was the 'least dirty shirt ' at the minute was about right.

China's future good or bad,shouldn't stop us focsuing on how bad things are looking for the Western world.

image.thumb.png.39a8395a7ba7c29bcbc3cf7e72f28241.png

image.thumb.png.2a0ad6d9ee5bce2f6950f54b5657b1bb.png

3 hours ago, Cattle Prod said:

Yes...but are we out of this reccession yet?! @sancho panza

image.png.97f3ff99e58aff27f60588b299ba7447.png

Please note he is tweeting a 5 month old chart. We've already run up to $60.

Personally,I think we're still in the run up to the recession and there's a huge sell/buy opportunity ahead either side of teh BK>

The Lockdown merely bought forward the start date in my eyes and govt reactions have created a situation where it's a moot point if the CB's can generate two quarters of postive growth before the credit event occurs.

I think they will,which poss pushes out my BK to the October timeframe which is where I like it to be.I'm starting to see some signs that we're on the ramp up to the point of maximum dollar weakenss/commodity strength for this phase.

Link to comment
Share on other sites

4 hours ago, Cattle Prod said:

Can anyone explain to me what the catch is with Kinross? 

image.thumb.png.06bac7619e03d41e12b79fde0951d511.png

36% discount from peak so far (note negative MACD).

image.png.0aaf78e253d99e288d2735304e672e3c.pngPE of 6. Market cap of ~$8bn

image.thumb.png.12344f181f759288ca13186ba4ca34c6.png

Against operating cash flow of almost $2bn?! If I'm reading this right, they are clearing $775 an ounce above AISC at current prices. Or another $2bn or so for 2021, it's looking like it could earn its market cap in 4 years. What am I missing here?!

I've been running my slide ruile over barrick as well.I've jsut started doing coma scores for this year last Wed/Thu when kids at nrusery,so I'll be doing these in the next week or two.On first viewing KGC will get a strong score.FCF is looking like  $1bn+ for 2020.

Barrick yet to psot 2020 figures.But I'm hoping for some more drift.We're in Barrick sub $15 from 2018,and I'd happily add around that level again.

Our buy price on KGC is lower and I don't think we'll see sub $4-50 on that.But I'm thinking of offloading the royalty streamers to go into Barrick/KGC/Newcrest.

https://uk.investing.com/equities/kinross-gold-cash-flow

image.png.a23e81d120e72df2966e0aa5dbe0576b.png

Link to comment
Share on other sites

1 hour ago, Barnsey said:

That's right @sancho panza, house purchase in Telford moving very swiftly and efficiently. Mortgage offer approved and deed received at 2.59% for 15 years with a 25% deposit.

Just a reminder, we were renting in SW London for 8 years and had enough, moved to the Midlands almost 18 months ago.

For much less than the 1 bed rental flat in London we rented would sell for, yes we're in a relatively soulless new town with its fair share of council estates, but we've got a 4 bed detached in a very nice area of the town, 45 mins from Birmingham by car or train (direct to the airport too), 15 mins on the train to Shrewsbury, stunning Shropshire countryside on the doorstep, and a strong industrial base with an array of large employers.

So my caveat would be, do what I have done, but only if you're buying somewhere well linked, affordable, good amenities, and for a long (portable) fix. We've got every inch of house I could have hoped for, in a nice area and at a price and fixed mortgage term that allows me to sleep at night. Couldn't have stomached it any other way.

It's funny barnsey,I've even instructed Mrs P to speak to a mortgage broker on the back of your psots on the 15 year.Liek you,it has to be a long term thing ie ten years plus,but if we get anywhere near the infaltion predicted by DB/Luke Groemn-both sensible parameters imho -then borrowing at a 15 year fix is an eminently sensible option.

 

29 minutes ago, Noallegiance said:

The thing that causes me the biggest problem is looking at what people who aren't doing what I'm doing are doing. That's not an easy sentence to read.

For me, I'd be happier holding on to the reasons I'm doing this with my personal approach that suits me. If I start being duped into gambling now I'll hate myself for the losses and am unconvinced the 'wins' would be worth the stress. 

I've some experience gambling and learning to be dispassionate is the key to success.Part of that is consdiering others opinions but ultimately cutting your route through the jungle is the way to make sure you don't end up with mental health problems or a coke addiction.

Link to comment
Share on other sites

Archived

This topic is now archived and is closed to further replies.

  • Recently Browsing   0 members

    • No registered users viewing this page.

×
×
  • Create New...