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


spunko

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5 hours ago, Chewing Grass said:

Just checked and my big pension co personal pension is down 5% since that the Americans elected their new so-called president.

Perhaps the pound is doing well and all the investments are in EuroDollars.

as I posted a few weeks back, I moved everything into cash and am up very slightly.  With very limited options to select investment buckets ('foreign', 'high risk', etc) I have no doubt that a BK would see a 25% wipe out in the pension value.

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leonardratso
2 minutes ago, wherebee said:

as I posted a few weeks back, I moved everything into cash and am up very slightly.  With very limited options to select investment buckets ('foreign', 'high risk', etc) I have no doubt that a BK would see a 25% wipe out in the pension value.

id say more, last march if id left the work pension in the standard bucket, it would have wiped out 25 to 27%, as it is i caught it a little late at 12% down, but i kept a note of the unit values when they bottomed out, looked like -27% ish of previous high value.

Anyway, i bought back in but diversified a little, although the diversification was just as bad, so im looking to ram it all back into cash again as soon as i see it tanking, could be a fake, so ill realistically just trickle it back to cash slowly.

 

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Bricormortis
1 hour ago, Loki said:

True, nothing is certain.  Can you give a couple of key points that make you see this as more likely?

Its more like something I have concerns about rather than something I see as more likely. I was sold on the BK as inevitable, currently I am more open minded about outcomes. 

Sods law.. recession economics with stimulus, commodities demand are part of my musings. Also some things Michael Oliver and others  said in various places.  Re Michael Oliver iirc He does expect melt up then fangs to go down hard and kick off a less dramatic bear market in the broader S+P . He is a momentum technical analyist.  Generally he seems clued up, well worth a listen.

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desertorchid
12 minutes ago, Cattle Prod said:

This is the answer to the divergence of opinion on inflation. Your timescale covers the great disinflation, and still managed to rack up an 80% loss in wealth/purchasing power.

"The greatest failing of the human race is the inability to understand the exponential function" said a physicist I can't remember. 3.8% is exponential if you run it long enough, the only difference between inflation and hyperinflation is that hyperinflation happens quickly. Same end result. Governments, with very long term fixes, have time. Do you? Their debt will dissapear with inflation the average joe will never notice. Wont stop them taxing you, mind.

Look at your 5% council tax (what creature put their hand up and said 'make it 4.99% boss, looks more palatable'). 5% is exponential over 30-40% years, or the length of a young buyers mortgage:

Screenshot_20210302-222056_Chrome.jpg.68c13e19d011945815e1ffe7118ff2c2.jpg

Council tax, at that rate, will take all your (already taxed) money in time. There will be riots over it.

Edit: another view. If they run council tax ahead of inflation, it's a boot on your throat. And you'll be paying it in already taxed, exponentially devalued pounds.

20210302_223223.jpg.6216df4c99fdbc111fd0d35d21b3129a.jpg

If we don't take DBs advice above and tell your employer what you're willing to work for we are screwed. Hyperinflation talk is misdirection, the boiling frog approach is more likely but will have the same end result. There is little difference between an 80% loss in wealth/purchasing power and 99%, you're screwed either way.

 

The only limits to this SCAm is our lifespan, if we happened to live 200 years and a working like of 100 it wouldnt be acceptable. EVERYTHING is designed to keep us motivated and incentivised to work for the system for 30 odd years without us throwing in the towel. 

 

PS check out what happens in countries where inflation gets too high for our lifespans minds to tolerate, people ignore the state, give up working beyond using their own skills to get by and barter.

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18 minutes ago, Cattle Prod said:

This is the answer to the divergence of opinion on inflation. Your timescale covers the great disinflation, and still managed to rack up an 80% loss in wealth/purchasing power.

"The greatest failing of the human race is the inability to understand the exponential function" said a physicist I can't remember. 3.8% is exponential if you run it long enough, the only difference between inflation and hyperinflation is that hyperinflation happens quickly. Same end result. Governments, with very long term fixes, have time. Do you? Their debt will dissapear with inflation the average joe will never notice. Wont stop them taxing you, mind.

Look at your 5% council tax (what creature put their hand up and said 'make it 4.99% boss, looks more palatable'). 5% is exponential over 30-40% years, or the length of a young buyers mortgage:

Screenshot_20210302-222056_Chrome.jpg.68c13e19d011945815e1ffe7118ff2c2.jpg

Council tax, at that rate, will take all your (already taxed) money in time. There will be riots over it.

Edit: another view with a samole 150 pound council tax. If they run council tax ahead of inflation, it's a boot on your throat. And you'll be paying it in already taxed, exponentially devalued pounds.

20210302_223223.jpg.6216df4c99fdbc111fd0d35d21b3129a.jpg

If we don't take DBs advice above and tell your employer what you're willing to work for we are screwed. Hyperinflation talk is misdirection, the boiling frog approach is more likely but will have the same end result. There is little difference between an 80% loss in wealth/purchasing power and 99%, you're screwed either way.

 

Fantastic post. People think 5% compounded isn’t much.

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1 hour ago, Cattle Prod said:

This is the answer to the divergence of opinion on inflation. Your timescale covers the great DISinflation, and still managed to rack up an 80% loss in wealth/purchasing power.

"The greatest failing of the human race is the inability to understand the exponential function" said a physicist I can't remember. 3.8% is exponential if you run it long enough, the only difference between inflation and hyperinflation is that hyperinflation happens quickly. Same end result. Governments, with very long term fixes, have time. Do you? Their debt will dissapear with inflation the average joe will never notice. Wont stop them taxing you, mind.

Look at your 5% council tax (what creature put their hand up and said 'make it 4.99% boss, looks more palatable'). 5% (blue line) is exponential over 30-40 years, or the length of a young buyers mortgage:

Screenshot_20210302-222056_Chrome.jpg.68c13e19d011945815e1ffe7118ff2c2.jpg

Council tax, at that rate, will take all your (already taxed) money in time. There will be riots over it.

Edit: another view with a samole 150 pound council tax. If they run council tax ahead of inflation, it's a boot on your throat. And you'll be paying it in already taxed, exponentially devalued pounds.

20210302_223223.jpg.6216df4c99fdbc111fd0d35d21b3129a.jpg

If we don't take DBs advice above and tell your employer what you're willing to work for we are screwed. Hyperinflation talk is misdirection, the boiling frog approach is more likely but will have the same end result. There is little difference between an 80% loss in wealth/purchasing power and 99%, you're screwed either way.

 

This is the lesson everyone should learn and exactly how western economies work.There is no hyperinflation risk.None.The risk is ordinary,nastly inflation.Council tax as you say is disgusting,and will cause massive problems.It would steal every families wealth if they lose income but have assets.Councils are out of control and i had to hedge myself by choosing a partner with a council final salary pension.

I see no reason why anyone would accept a job these days unless its really well paid and has superb work life balance,holidays etc.The budget tomorrow will be more of the same.

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4 minutes ago, DurhamBorn said:

This is the lesson everyone should learn and exactly how western economies work.There is no hyperinflation risk.None.The risk is ordinary,nastly inflation.Council tax as you say is disgusting,and will cause massive problems.It would steal every families wealth if they lose income but have assets.Councils are out of control and i had to hedge myself by choosing a partner with a council final salary pension.

I see no reason why anyone would accept a job these days unless its really well paid and has superb work life balance,holidays etc.The budget tomorrow will be more of the same.

It is an evil, evil tax. The vast majority have no idea how insidious it is. Great post, as always.

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7 minutes ago, DurhamBorn said:

Councils are out of control and i had to hedge myself by choosing a partner with a council final salary pension.

There's your anniversary card message right there DB! xD

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15 minutes ago, DurhamBorn said:

This is the lesson everyone should learn and exactly how western economies work.There is no hyperinflation risk.None.The risk is ordinary,nastly inflation.Council tax as you say is disgusting,and will cause massive problems.It would steal every families wealth if they lose income but have assets.Councils are out of control and i had to hedge myself by choosing a partner with a council final salary pension.

I see no reason why anyone would accept a job these days unless its really well paid and has superb work life balance,holidays etc.The budget tomorrow will be more of the same.

My wife and I have specifically talked about her getting a council job again, for this very reason.  Public sector will do very nicely until woke and broke are seen as the same bad thing.

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2 hours ago, Harley said:

9,999 reps.  Go on, be my 10k buddy!

I'm deeply touched by the response which seemed to have brought the system down for a while there!  It was close and you're all buddies in my book but @lid, get yer running shoes on mate! :Beer:.

PS:  I can confirm there is no such thing as a "super stealth" thread.  Or is there! :ph34r:

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For those of you who haven't seen it, Margin Call is on Youtube in pretty good format.  Not sure if you'll have to pay depending on where you live. 

 

It details very realistically, in my view, how big organisations react to market ending events and how fast things can turn.  I've been in meetings like the 4am one, in a different life, and it's very well written in terms of how the dynamics can work.

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5 minutes ago, wherebee said:

My wife and I have specifically talked about her getting a council job again, for this very reason.  Public sector will do very nicely until woke and broke are seen as the same bad thing.

Had exact same chat with mine. Offered to move anywhere in the country if necessary.

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20 minutes ago, wherebee said:

For those of you who haven't seen it, Margin Call is on Youtube in pretty good format.  Not sure if you'll have to pay depending on where you live. 

 

It details very realistically, in my view, how big organisations react to market ending events and how fast things can turn.  I've been in meetings like the 4am one, in a different life, and it's very well written in terms of how the dynamics can work.

Great movie. The pace of the action makes it work very well. And, the boardroom scene with Jeremy Irons is amazing.

Also, it's worth pointing out it highlights what total c**ts bankers are.

 

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20 minutes ago, Mapper said:

Great movie. The pace of the action makes it work very well. And, the boardroom scene with Jeremy Irons is amazing.

Also, it's worth pointing out it highlights what total c**ts bankers are.

 

I disagree.  Some are.  Some aren't.  But they are, in the main, more honest about what they are doing than any politician or public servant at the top level.

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2 hours ago, Shamone said:

Had exact same chat with mine. Offered to move anywhere in the country if necessary.

The "new" universities (old polytechnics) mostly have their admin staff in council schemes because they used to be under local authority control, so that's another place to look for a job with a council pension.

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On 01/03/2021 at 07:44, Barnsey said:

I'm a big fan of Millers Diesel Power Ecomax, 500ml bottle so 10 full tank doses, £1.30 a tank. Much more effective than paying for premium diesel. Great stuff, definitely not snake oil.

Apologies for taking 48 hours to spot this, and furthermore apologies if I'm teaching granny to suck eggs here. However I figure since I don't have much to contribute to the investing side of this thread I can at least contribute to the money saving side.

So I was interested in the Millers stuff but am inherently suspicious of anything that comes in a fancy bottle and costs more than £20 a litre. So I found the safety data sheet:

https://www.millersoils.co.uk/wp-content/uploads/2019/12/6204.pdf

...and from that found that it's 70-90% 2-ethylhexyl nitrate, which is the cetane boosting component.

So then I googled that, and found that you can purchase a litre for 13 quid, so half the price per litre of the Millers stuff, or 5 litres for £36, less than a third of the price.

https://www.amazon.co.uk/Ethylhexyl-Nitrate-Treats-Cetane-Enhancer/dp/B01A0VGQ88/ref=asc_df_B01A0VGQ88/?tag=googshopuk-21&linkCode=df0&hvadid=310739960565&hvpos=&hvnetw=g&hvrand=7677539105166732570&hvpone=&hvptwo=&hvqmt=&hvdev=c&hvdvcmdl=&hvlocint=&hvlocphy=9044975&hvtargid=pla-699093083920&psc=1

Now 5 litres of it apparently treats 5000 litres of fuel, which in a 60mpg diesel car would be more than 60,000 miles worth. So if anyone wants to do a group buy and dole it out I'd be interested...

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ThoughtCriminal

So theyre extending furlough until at least september. 

 

I can see big problems ahead when people have to return to full time work after 18 months of being paid to do fuck all. 

 

Lots of sullen people who've had their eyes opened to the fact there's more to life than work. I anticipate our already dog shit productivity levels are going to plummet. 

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5 minutes ago, ThoughtCriminal said:

So theyre extending furlough until at least september. 

 

I can see big problems ahead when people have to return to full time work after 18 months of being paid to do fuck all. 

 

Lots of sullen people who've had their eyes opened to the fact there's more to life than work. I anticipate our already dog shit productivity levels are going to plummet. 

Especially if their income tax threshold is frozen for the next three years.

Don't want to be a stubborn contrarian for the sake of it, but the Inflation narrative rapidly becoming consensus in light of vaccine progress...

 

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1 hour ago, ThoughtCriminal said:

So theyre extending furlough until at least september. 

 

I can see big problems ahead when people have to return to full time work after 18 months of being paid to do fuck all. 

 

Lots of sullen people who've had their eyes opened to the fact there's more to life than work. I anticipate our already dog shit productivity levels are going to plummet. 

What do you guys think about that extending to SEISS?

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4 hours ago, Rave said:

Apologies for taking 48 hours to spot this, and furthermore apologies if I'm teaching granny to suck eggs here. However I figure since I don't have much to contribute to the investing side of this thread I can at least contribute to the money saving side.

So I was interested in the Millers stuff but am inherently suspicious of anything that comes in a fancy bottle and costs more than £20 a litre. So I found the safety data sheet:

https://www.millersoils.co.uk/wp-content/uploads/2019/12/6204.pdf

...and from that found that it's 70-90% 2-ethylhexyl nitrate, which is the cetane boosting component.

So then I googled that, and found that you can purchase a litre for 13 quid, so half the price per litre of the Millers stuff, or 5 litres for £36, less than a third of the price.

https://www.amazon.co.uk/Ethylhexyl-Nitrate-Treats-Cetane-Enhancer/dp/B01A0VGQ88/ref=asc_df_B01A0VGQ88/?tag=googshopuk-21&linkCode=df0&hvadid=310739960565&hvpos=&hvnetw=g&hvrand=7677539105166732570&hvpone=&hvptwo=&hvqmt=&hvdev=c&hvdvcmdl=&hvlocint=&hvlocphy=9044975&hvtargid=pla-699093083920&psc=1

Now 5 litres of it apparently treats 5000 litres of fuel, which in a 60mpg diesel car would be more than 60,000 miles worth. So if anyone wants to do a group buy and dole it out I'd be interested...

Very cool:D

Actually @DurhamBorn aka Mr Diesel what do you think of the 3.0 D4D in the Hilux? Part of the reason i want a petrol truck is the big bills diesels can potentially incur (injectors, common rail, turbo, DPF. etc)

i don't do the miles to warrant a diesel either and petrol is slightly cheaper

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Looks like furlough till next April then. I called that month's ago. Paying airline pilots 2.5k a month to watch TV. Could carry on for years and nothing to do with virus anymore.

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1 hour ago, ThoughtCriminal said:

So theyre extending furlough until at least september. 

 

I can see big problems ahead when people have to return to full time work after 18 months of being paid to do fuck all. 

 

Lots of sullen people who've had their eyes opened to the fact there's more to life than work. I anticipate our already dog shit productivity levels are going to plummet. 

No chance ending in September. Will run till April 2022 at least. How is that fair. Imagine the scams going on? What is to stop friend employing you as a book keeper last week and now furlough you. You can pay people paye even if self employed yourself. Can you employ new people if already have another furloughed? What's the limit of employees you can pay if you are a 50k self employed earner?

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8 hours ago, Shamone said:

It is an evil, evil tax. The vast majority have no idea how insidious it is. Great post, as always.

I haven't paid council tax for years. Vanlife in the UK and living overseas.

Being homeless has some advantages.

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