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


spunko

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50 minutes ago, working woman said:

For the rest of us Southerners, if they are anything like me, it is probably the call of the sea and the south coast

As an Eastender my only experience as a kid of 'The Coast' was Southend...more like an effluent output pipe from London than 'The Coast'; sorry Southend but its true :-)

That said you make some good points, and as you say if you leave and are not earning/earning SE salaries then every year you are falling further behind financially and so further away from ever getting back.

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41 minutes ago, ThoughtCriminal said:

Colder?

 

I'm having to try really hard to avoid inserting a soft southern b*stard joke here 😆😉

 

 

Its because you're more hairy up there...and that includes the women as well!.....must be remnants of the Neanderthal genome still 'knocking about' :-)

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19 minutes ago, ThoughtCriminal said:

It's all getting a bit "North Vs South" on here, so in the interests of repairing relations, here's a newly discovered ancient map of Britain drawn up by the vikings. 

 

This should cool things down. 👍😉

 

Just a bit of Sunday banter in case anyone is easily offended. We're all just English. 😘

Screenshot_20210228_142026.jpg

Well when the economy finally collapses I know how I will be earning my money then!....the Welsh won't be interested, and I won't be 'taking' anyone from The North either, as I would want a 'Gentle'man!

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working woman
11 minutes ago, MrXxxx said:

As an Eastender my only experience as a kid of 'The Coast' was Southend...more like an effluent output pipe from London than 'The Coast'; sorry Southend but its true :-)

 

As a student in East London, and not being able to drive, I occassionally  used to take myself off to Stratford Bus Station and get on any bus for a mystery tour. Ended up in Southend a couple of times, yes it's grim. Lots of concrete and boy racers driving along the front.

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2 hours ago, MrXxxx said:

...must admit I couldn't be 'doing' with any of that gravy on chips nonsense thought! :-)

Amazing.  Probably neither curry sauce.  Next you'll be saying you don't do "half and half"!.........Oh my god, you don't do you?  You don't do half and half.  You really don't do you?  :o 

 

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1 hour ago, working woman said:

@DurhamBorn Thank you for your advice, I will take another look and crunch the numbers.  I have two lovely nieces that I hardly see, so it would be nice to see more of them as well as my sister.

Re the cold, I should stop being such a wimp and just buy some thermals for the cold and a wet suit for the sea - sorted.  

 

 

I know you'd think it was tropical down south the way they go on. 

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54 minutes ago, working woman said:

As a student in East London, and not being able to drive, I occassionally  used to take myself off to Stratford Bus Station and get on any bus for a mystery tour. Ended up in Southend a couple of times, yes it's grim. Lots of concrete and boy racers driving along the front.

Brill init?  Really nice and grotty well back in the day.  The Kursel and all those aspiring bands like ACDC!!!!!

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7 minutes ago, Harley said:

Amazing.  Probably neither curry sauce.  Next you'll be saying you don't do "half and half"!.........Oh my god, you don't do you?  You don't do half and half.  You really don't do you?  :o 

 

Doesn't everyone?

O.o

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2 hours ago, MrXxxx said:

........must admit I couldn't be 'doing' with any of that gravy on chips nonsense thought! :-)

Yes, wouldnt want anything to put you off your native dish of jellied eels.

Jellied eels - Wikipedia

Gravy on chips isnt a NE England thing, must be for Yorkshire/Manchester folk as theyre all a bit dim.

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16 minutes ago, Harley said:

Amazing.  Probably neither curry sauce.  Next you'll be saying you don't do "half and half"!.........Oh my god, you don't do you?  You don't do half and half.  You really don't do you?  :o 

 

As in half chips half rice?

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On 27/02/2021 at 15:50, ThoughtCriminal said:

How's this for inflation? 

Bought a load of gear for an azzy job next week from a supplier (we usually get it from the, ahem, black market) and the prices are through the roof compared to a year ago. 

 

Half mask respirator 50, was 22. Some covid inflation there but, fuck me...... 😳

 

Roll of polythene 40, was 30

 

Bags 50, was 42

 

Box of tape 30, was 25 

 

Anyone else in trades etc noticing materials rocketing? 

 

Yes, very much so. Anything from China being hit by the increase in shipping container costs.

Some off the self industrial components from a large EU based manufacturer are almost double the price they were six months ago.

I've noticed a hike in prices of small electricial components from Aliexpress.

Domestically, there must be a huge increase in costs for just about every UK employer and business due to CovID. Not just loss of business but the increased cost of running a business. We have just made the whole country take a big step back in terms of efficiency - social distancing, extra PPE requirements, plastic screens everywhere, different working practices, working bubbles etc.

Even the transport system (trains and buses) have now become inefficient as the commuter numbers are lower. Packed trains are not pleasant but they are efficient. Automotive transport however has gone the other way with the reduction in road traffic - its been some time since I've been stuck in a jam. In previous times I've been stuck in traffic and wondered at the huge costs of hundreds of people every day just sitting in their cars/trucks/vans burning fuel doing nothing and going no where.

I feel we must be on the edge of all these costs starting to feed through to the inflation figures. My guess is that we will see a blip of high inflation this year, peaking around December and then settling down.

 

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Bobthebuilder
18 minutes ago, Hancock said:

Gravy on chips isnt a NE England thing, must be for Yorkshire/Manchester folk as theyre all a bit dim.

Manchester / Cheshire, I spent a while in those parts early 90s. Jumbo sausage, chips and gravy was 89p from my local chippy, I used to live on the stuff. Wonderful.

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3 hours ago, JREWING said:

Personal Allowance - £12500

CGT Allowance - £12300

Dividend Allowance - £2000

Total Tax free income - £26800

You can earn currently £46300, and pay only £3400 in tax; so you tax rate is 7.35%

Income from work, savings interest and dividends combined must not exceed £16000, and you then can earn £30300 in capital gains from shares and only pay £3400 in tax.

Income combined from work, savings interest, dividends and capital gains above £46300 is taxed at 20%.

If your income from work, savings interest and dividends combined does exceed £16000, all income from capital gains on shares up to and beyond is taxed at 20%.

JREWING, I must say your examples are very informative. Thank you for taking the time to illustrate the tax allowances in that way. But seeing the figures laid out like that has really piqued my interest and I have posed a generic question below, really hoping that you can indulge me(!!!) in answering my question.                                                                                                                                                                                                                Since my misleading post the other day regarding the coming LTA pension changes (real thanks to those who took time to correct me), I have been reading up on tax. The thing is I would very seriously consider retiring early - well, stopping F/T paid employment, but replacing with alternative 'income streams'. If only I could get my head around the different tax allowance cutoffs, especially as they are not straightforward when attempting to combine different sources of income...                                                                        So I'd like to ask a follow up question. DurhamBorn has mentioned 'a sweet spot' (my term) for his own sipp withdrawal of £16800/year, which I think comprises the max. income and cgt (25%) withdrawal before tax needs to be paid. If I were to do something similar in terms of extracting max. tax free income from my own sipp, would there be any other tax allowances available, or would I have effectively 'exhausted them all'? I'm thinking specifically: the £2000 share dividend allowance, or company dividends (eg £8000 divis taken from a personal ltd company), or the £12300 cgt allowance.                                                                            To be clear, just looking for ways to begin strategizing. If you feel unable to answer, that's ok. But maybe you could instead recommend a good online calculator that might help me? Understanding the rules in isolation is straightforward, its when combining incomes streams, thats when it gets complicated. I think for those lucky enough to be able to structure their income to take advantage of tax system, it is a very powerful thing to do, and of course it's what the rich have been doing for centuries.

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working woman

In Devon you get thirds on your pudding, a bit of custard a bit of cream and a bit of ice-cream - well that is what my dad always asked for, a bit of everything. No wonder he was diabetic.

 

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49 minutes ago, invalid said:

Domestically, there must be a huge increase in costs for just about every UK employer and business due to CovID. Not just loss of business but the increased cost of running a business. We have just made the whole country take a big step back in terms of efficiency - social distancing, extra PPE requirements, plastic screens everywhere, different working practices, working bubbles etc.

As I sabotaged this thread [above] lets try to get it back on course...so, maybe this was the governments intention...use lockdown aspects to reduce GDP, and then 'open the floodgates' of pent up demand by stopping lockdown and you get a massive spike in GDP..."See how good The Conservatives  are for the economy we got x growth in GDP this year"

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46 minutes ago, JMD said:

DurhamBorn has mentioned 'a sweet spot' (my term) for his own sipp withdrawal of £16800/year, which I think comprises the max. income and cgt (25%) withdrawal before tax needs to be paid.

Hi @JMD,

I think when @DB mentioned this figure it consisted of his PTA of £12500 plus the first 25% Tax Free allowance on any sum taken from a DC type pension [not CGT]. I am hoping you could also get the CGT on top of this hence my though/discussion point a couple of pages ago about potentially transferring an employers DC pension into a SIPP and then selling of some shares/stock each you to maximize the CGT allowance as well....Maybe @FrankHovis may see this and comment as I believe he has a background in this area.

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3 hours ago, Cattle Prod said:

If you're working in London in a job you could do in York or Kendal, like solicitor, bank manager, carpenter then you're nuts. I'm here for the money, it's a good place to raise a kid, and once he's finished school I'm off. And I'll start stepping away sooner.

Exactly what I did and retired at 48. Why more people in London do not do this is beyond me. Where do you have in mind retiring to. My next step if my investments run good might be a small farm/holding.

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Friday in the Guardian:

Rates may have to rise sooner to tame inflation threat, says Bank economist

Central bank complacency risks letting the “inflation tiger” out of the bag, a senior Bank of England policymaker has said.

Adding to market jitters about the resurgence of price pressures as the global economy recovers from the Covid-19 pandemic, Andy Haldane said borrowing costs could need to go up sooner than the City expected to tame the inflationary threat.

 

From the FT a week ago, my bold:

Economists predict Bank of England’s 2 per cent target rate will be passed later this year

economists said inflation was likely to continue to rise as surging oil prices are passed on to consumers and VAT cuts introduced in the pandemic are reversed.

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4 hours ago, working woman said:

What we would really love is to live on a canal boat and move around and have recently done a lot of research on that. Guess what puts me off?  You lot saying fuel will go through the roof over the next 10 years. No point having a canal boat if you can't afford the fuel :) 

I used to pay a reduced 5% tax rate on fuel for the boat as HMRC assume you are using it for heating too. Not sure if that is still the case, it was a couple of years back, worth checking.

It is a cheap way to live. When I got work in London we bought a small one up in Braunston for £25k and brought down the Grand Union then across Regent's Canal (you go through London Zoo which is a bit surreal!). It took a week and was a great trip.

I had managed to get a mooring and sold the boat with the mooring for £50k a few years later. No CGT as residential.

Mostly though in London you have to buy an expensive boat cos it already has the mooring. The cut is very busy in London, crazily so but the rest of the canal system outside major cities is very quiet and idyllic.

Even Tesco's will deliver to a pub or something near where you are moored up for the night.

 

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3 hours ago, MrXxxx said:

To a certain extent you may be right...if your F&F live near a major city and you pick your overseas city right it may even be quicker [and possibly cheaper] to fly in and visit....I had exactly this scenario when working overseas and visiting my Father.

Currently in Stafford, almost the north, 1hr 15mins from Euston, under an hour with HS2.

3 hours ago, MrXxxx said:

My employer didn't give a yearly inflation rise this year, but said they would reinstate it next year.

Same

4 hours ago, working woman said:

@MrXxx "Agree, can never understand why Southerners are so `locked` into this, can only assume its something to do with `keeping up with appearances`/with what others think".

Why don't Londoners move North? Many would like to leave London but worry that if they want to move back, they couldn't afford it.  They are correct. My husband and I left and couldn't afford to move back now. His parents left for a few years to look after their parents in the Midlands. They had sold a house in London, but when moved back could only afford a flat.

Hear this all the time, the price divergence has occurred almost perfectly in line with this 40 year disinflation cycle. Not convinced this will remain the case.

1.-House-prices-in-UK-nations-1-600x450.png.b3aa4fbbbf4898a407a923ce3f11bc95.png

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On 25/02/2021 at 21:26, AWW said:

It's a miracle that anyone with the sort of personality that makes a successful entrepreneur ever gets to the end of the application process. I started an application for this scheme not too long ago and decided that it's a fantastic example of how the government just doesn't understand entrepreneurs and small business.

Example: "how you will consider equality, diversity and inclusion implications in the development and design of your innovation (for example unintended exclusion of minority groups)"

Oh that's disgusting  to have as a requirement for what's essentially R&D funding.

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5 hours ago, working woman said:

@MrXxx "Agree, can never understand why Southerners are so `locked` into this, .

Age 17, my sister moved from Devon up to County Durham and has been there for 35 years. My neice, her daughter lives North of Newcastle. I have visited many times and loved the wildness of Northumbria and it's coast and have been taken to the local seaside towns. My husband and I like moving around and have thought many times about moving up there for a while, but do you know what stops us? It is colder.  Where we live, we get lots of rain, but over the years my sister always tells me about the cold and the snow and sends me photos. Probably trying to put me off moving up there :)

years. No point having a canal boat if you can't afford the fuel :) 

Wooh there.

The coast and the exposed hill cans be cold.

But its not a huge difference- 3-5% at worse. It's not Moscow - or even Paris.

What you've got to look for us microclimates.

The moors near me are pretty unpopulated bar sone idiot sheep farm.

But when you go into valleys n dips you've loads of sheltered cottages.

 

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