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

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Canada UBI incoming or glitch? 

 

 

[JMD]

On 16/04/2021 at 14:43, Harley said:

Sounds good.  What worries me about this thread is we talk about making money but only keeping it in terms of the current failing system (e.g. inflation).  We are trying to play (with good intent) the very thing that contains the seeds of our destruction.  But we must do this, we must push on as best we can.  But then this thread cannot take on all the problems of the world.  Life is a never-ending series of hurdles.  How many do we wish to cover here?  To me, I can't help thinking the current "all quiet on the financial front" is because the Treasury and co are busily tunneling under us with an almost imminent mother of all shock and awe where a crater will replace our life savings once the dust has settled!  We need to start preparing for that now as well as deal with the immediate task in hand.  It's a tough gig.

Harley, sorry to maybe ask a thick question, but your post uses dramatic imagery, so i am wondering if your immediate investment thesis has changed in a similarly stark way? So in terms of that 'tough gig' scenario you allude to, do you intend to push on and continue investing in the stock market, attending and playing at these mainstream gigs (manipulated exchanges, etc)... or are you now venturing further afield, off-road and experimental? Also what's your timing on the final 'mic drop moment'!! (excuse my puns/imagery), ie monetary collapse, etc... I'm thinking you are still ostensibly in agreement with the thread, of say 2028+?                                                           You said you'd prefer the substance of this particular topic and it's debate to happen on the other thread begun by @201p, and I understand your reason why - it's a complicated minefield to navigate after all. So will definitely visit there to continue the debate, but if you could clarify that would also be great.

[M S E Refugee]

David Hunter

 

@DaveHcontrarian

 

 

There are a lot of calls for a market correction here.While we can see a 3-4% pullback at anytime,what I see is a market poised for its steepest rally yet.We are in the final parabolic run to the top. In the weeks ahead we'll see a sprint to the finish.S&P to 4700 & NASDAQ 17,000

 

3:19 PM · Apr 18, 2021·Twitter Web App

[Harley]

5 hours ago, JMD said:

Harley, sorry to maybe ask a thick question, but your post uses dramatic imagery, so i am wondering if your immediate investment thesis has changed in a similarly stark way? So in terms of that 'tough gig' scenario you allude to, do you intend to push on and continue investing in the stock market, attending and playing at these mainstream gigs (manipulated exchanges, etc)... or are you now venturing further afield, off-road and experimental? Also what's your timing on the final 'mic drop moment'!! (excuse my puns/imagery), ie monetary collapse, etc... I'm thinking you are still ostensibly in agreement with the thread, of say 2028+?                                                           You said you'd prefer the substance of this particular topic and it's debate to happen on the other thread begun by @201p, and I understand your reason why - it's a complicated minefield to navigate after all. So will definitely visit there to continue the debate, but if you could clarify that would also be great.

Apologies if I'm being a bit disruptive.  TBH, I find it very hard thinking anyone takes any notice of me! 

Here's what's up - I am worried about my hard earned and fear something bad is going to happen.  I need to motivate myself to go against the inertia and do something about it.  I'm a bit weak at follow through sometimes, especially if I have spent time on the upstream problem statement.  I need to force myself to raise the priority and do something given all the competing demands on my time and the sheer width of the problem.  Plus, I had a personal Eureka moment on stuff so am probably behaving like Eureka did back then too!

Like everything, I hope to do a bit of everything.  I have no religion, no need to be right, I just want to be left alone and free so will diversify and prudently play all the possible outcomes.  So no, I'm still in (to a point) but that's just part of a bigger game to be played.

Regarding dates, I wait for the data, not dates.  Dates are an interesting stake in the ground but nothing else. and I would never blindly follow such things.  I don't have to.  My expectation though is something I could do without may well happen sooner, regardless of what happens in 2028+.

I've probably reached peak post having got my outlook and approach sorted so should hopefully quietly drop off into execution mode.  Apologies for the interruption, may normal service resume! 

[Harley]

5 hours ago, PrincessDrac said:

China - Gold Link

Might see Gold tick up next week.

Hope not.  I was going to buy Friday.  I really need to execute quicker. 

[DoINeedOne]

Interesting video about Nordstream 2 its pretty much done apparently

Think the funniest part was the US sanction on the construction ship fews day later it just carried on as normal

 

[JMD]

3 hours ago, Harley said:

Apologies if I'm being a bit disruptive.  TBH, I find it very hard thinking anyone takes any notice of me! 

Here's what's up - I am worried about my hard earned and fear something bad is going to happen.  I need to motivate myself to go against the inertia and do something about it.  I'm a bit weak at follow through sometimes, especially if I have spent time on the upstream problem statement.  I need to force myself to raise the priority and do something given all the competing demands on my time and the sheer width of the problem.  Plus, I had a personal Eureka moment on stuff so am probably behaving like Eureka did back then too!

Like everything, I hope to do a bit of everything.  I have no religion, no need to be right, I just want to be left alone and free so will diversify and prudently play all the possible outcomes.  So no, I'm still in (to a point) but that's just part of a bigger game to be played.

Regarding dates, I wait for the data, not dates.  Dates are an interesting stake in the ground but nothing else. and I would never blindly follow such things.  I don't have to.  My expectation though is something I could do without may well happen sooner, regardless of what happens in 2028+.

I've probably reached peak post having got my outlook and approach sorted so should hopefully quietly drop off into execution mode.  Apologies for the interruption, may normal service resume! 

Disruptive?... not at all, in fact I personally like disruptive ideas - such concepts and thoughts gleamed from you and others on here have enabled me to make much progress in sorting out my portfolio over the previous couple years. Having said that Harley, diversification and asset allocation into uncorrelated assets (a performance 'free lunch' some call it), are for me crucial aspects of portfolio construction - areas I'm always keen to learn more about - so if I'm reading your posts correctly Harley, I will be very disappointed (in a totally selfish way you understand!!) if you won't be posting too much in future.                                                                                                  ...As for 'taking notice', I know you enjoy your crypics Harley... anyway suffice to say when you mention 'eureka', I do note that it was Archimedes who exclaimed eureka after solving his tricky gold ('store of value' theme?) assaying problem... hmm very intriguing, but I shan't pry further, 'nuff said already. (btw no such thing as reaching peak oil, or for that matter 'peak post'!!)

[Green Devil]

 

Definately worth a watch if you have a spare 1h18mins.

Prob the smartest guy in the room. 

[Nomad]

I see house prices are still going up, crazy. Where I live on the south coast, they seem to be sold within weeks of being put on the market. Now more fuel is being added to the fire by lenders re introducing 95% mortgages, won't be long before we see the 120% mortgage returning (link is from a 2011 article).

https://www.lovemoney.com/news/11068/the-new-120-mortgage

Is this madness ever going to stop?

[M S E Refugee]

Sold half of my holdings today.

I think I would rather be early leaving the party than trying to time it.

David Hunter has been on fire, I just hope my FOMO isn't too bad when the melt up starts.

I'm still holding onto my Gold and Silver Miners.

[Hancock]

28 minutes ago, Nomad said:

I see house prices are still going up, crazy. Where I live on the south coast, they seem to be sold within weeks of being put on the market. Now more fuel is being added to the fire by lenders re introducing 95% mortgages, won't be long before we see the 120% mortgage returning (link is from a 2011 article).

https://www.lovemoney.com/news/11068/the-new-120-mortgage

Is this madness ever going to stop?

I think the SDLT holiday has brought many purchases forward. Once it end there will be tumbleweed running through the property market ... assisted by the end of furlough and high unemployment.

I see govt have started the 95% mortgage scam today, which is such a gift after making house price £15k more expensive in a year.

How the fuck anyone who wants something close to free markets and a decent society can vote Tory is beyond logic.

[Fully Detached]

11 minutes ago, Nomad said:

I see house prices are still going up, crazy. Where I live on the south coast, they seem to be sold within weeks of being put on the market. Now more fuel is being added to the fire by lenders re introducing 95% mortgages, won't be long before we see the 120% mortgage returning (link is from a 2011 article).

https://www.lovemoney.com/news/11068/the-new-120-mortgage

Is this madness ever going to stop?

IMO no, not until we reach total collapse or a debt jubilee, one of which I am sure is unavoidable.

I am prepared about as well as I can be for total collapse, it's the debt jubilee that has me head scratching at present. Knowing the taste governments have for total control of the populace, I cannot see debt forgiveness being given without some sort of trade off. If that's the case, I imagine they would attempt to sucker as many people in as possible (95% mortgages?) before kicking away the supports and leaving as many people as possible desperate for some of that State Daddy support. In exchange for say, an implanted microchip or something, I don't know.

Paranoid perhaps yes. But about 3 days into lockdown 1.0 last year I realised that the reaction to covid was vastly more severe than the risk of the virus. Since then I have seen nothing to change that view and everything to support it. The bastards are up to something, I am sure of that.

So debt jubilee - presumably means that house prices revert to what people can afford to pay for them with cash. If we have any left, that is.

[JMD]

44 minutes ago, Fully Detached said:

IMO no, not until we reach total collapse or a debt jubilee, one of which I am sure is unavoidable.

I am prepared about as well as I can be for total collapse, it's the debt jubilee that has me head scratching at present. Knowing the taste governments have for total control of the populace, I cannot see debt forgiveness being given without some sort of trade off. If that's the case, I imagine they would attempt to sucker as many people in as possible (95% mortgages?) before kicking away the supports and leaving as many people as possible desperate for some of that State Daddy support. In exchange for say, an implanted microchip or something, I don't know.

Paranoid perhaps yes. But about 3 days into lockdown 1.0 last year I realised that the reaction to covid was vastly more severe than the risk of the virus. Since then I have seen nothing to change that view and everything to support it. The bastards are up to something, I am sure of that.

So debt jubilee - presumably means that house prices revert to what people can afford to pay for them with cash. If we have any left, that is.

Yes, they - the government - are up to many things. But they don't need to 'implant that microchip' you  mention, after all most of us are already surgically attached to our phones!                                                              I regularly watch Click - the BBC tech program. It's actually a good roundup of trends - if you watch using the right 'filters'!! - but do need to endure the irritating  presenters and the focus on games. Anyway last edition had a segment on Covid passports, and evan dared raise the controversial subject of civil liberties. However the scary bit was when it reported that despite the government repeated denials over wanting such a passport scheme, it has in fact had running 8 separate projects!!!,, whith some having begun a year ago if I recall correctly. They showed some of the tech... mostly phone app based, but with some incorporating face recognition and other biometrics. The project interviewees, of course, framed their answers in terms of it really being mostly about international travel security?!?

[planit]

40 minutes ago, Cattle Prod said:

EIA projections, like all of them, are always wrong, and just revised retrospectively. I trend to look at the trend of revisions for guidance, and the trend I've seen in 2021 so far is that they've switched from revising demand down to up. I've recently being trying to do some DD on shale, as much as I can from 5000 miles away. What I can tell you is:

- All major basins apart from the Permian are dropping steadily, and will continue to drop into the year end at current rig numbers.

- They are are piling most new rigs into the Permian. This is the biggest and least mature basin, the bedrock of shale production if you pardon the pun. It's about half of the total, so the whole story hinges here.

- More specifically, they are piling into the New Mexico part of the Permian. The Texas side is looking like it will decline into year end, which is to me very significant. If they are high grading and chasing the best bits, they don't see them in Texas. The NM side is smaller in area. Here is a heat map of activity:

 

Thanks for the effort you have gone to here CP, this fits in with the FT article which implies supply will fall pretty steeply once they have extracted the easy oil 

Here is the link again for anyone that missed it US oil drillers ‘dying on the vine’ on funding drought

 

I read the OIES April report and they list available spare capacity all over the world that can be made available over the next 2 years. Iran for example it still lists as 1.5mbpd available (after 0.5mbpd China sales) but this seems much higher than other commentaries I have read recently which put it at 0.5mbpd.

The report doesn't have oil demand to 2019 levels until end of 2022 but this is almost entirely due to western countries not using aviation fuel (so they don't expect a big holiday spending spree next year). China demand is already higher than 2019 (prediction is 1.5mbpd higher than 2019 at end of year). India is predicted to have a slower recovery (which looks certain with Covid cases at the moment) and predicted to be +0.5mbpd at end of 2022.

They have supply currently at 9mbpd of spare capacity, hopefully this is overly optimistic as CP points out

Saudi 4m

UAE 1m

Iraq 1m

Rest OPEC 1.3m

NON-OPEC+ 2.2m

They also have 4m off the market due to geopolitical reasons (Venezuela and Iran = 3.7m of that)

They have current supply at 92.5mbpd

The report paints the impression that there is loads of available supply (92.5+9+4 = 105.5mbpd) to cover demand going forwards.

Most countries around the world are desperate for cash and I can't think of a reason why they wouldn't be producing as much as possible at current prices (outside OPEC+). Perhaps they are ramping back up after the cuts last year but the report implies its more like supply can be switched on or off.

 

 

[JMD]

2 hours ago, Nomad said:

I see house prices are still going up, crazy. Where I live on the south coast, they seem to be sold within weeks of being put on the market. Now more fuel is being added to the fire by lenders re introducing 95% mortgages, won't be long before we see the 120% mortgage returning (link is from a 2011 article).

https://www.lovemoney.com/news/11068/the-new-120-mortgage

Is this madness ever going to stop?

You ask will the 'madness ever stop'. I think shared equity, between buyer and government is where we'll end up. But it will be something far more insidious and shocking than what that term conjures up today. Initially such shared ownership mortgages will be offered by the banks, with government offering the lending backing/insurance, but ultimately the phased withdrawal/demise? of the banks will allow government to 'step up' and gradually take control of the nation's housing wealth. It will bolster the government's balance sheet, and provide it with a nice problem to have really. I think this type of policy falls in line with what Russel Napier believes will happen - that is governments taking bigger and bigger share of the economy.                                  The thing is, if Western governments do go toward controling 60%+ of economy in GDP terms, Scandinavian countries are already approx at this high gdp level, plus the increasing trend of companies going private, what I would ask in all seriousness is what will be left for us - dosboders - to invest in?                                      @DurhamBornperhaps you disagree with the above, but I wonder does your model (perhaps not a relevant risk currently?) say anything about the squeezing out of the retail investor, and how we might need to play this investment-wise later in the cycle?

[Hancock]

1 hour ago, Fully Detached said:

IMO no, not until we reach total collapse or a debt jubilee

There wont be a debt jubilee as thats how TBTP make their money.

A debt jubilee would involve the debt that bank owes people and companies being wiped out also ... ie deposits in their accounts.

There can and will be a house price correction without such extremes.

[Fully Detached]

2 minutes ago, Hancock said:

There wont be a debt jubilee as thats how TBTP make their money.

I think TPTB value power over money. I agree that a debt jubilee or total economic collapse would be extreme but I've seen just about every non-extreme catalyst come and go and the bloody HPI just keeps on coming.

[Noallegiance]

Not an intentional thread derailment - just a musing:

European Super League money grab another sign of impending financial craziness. $billions available to shell out to top clubs.

I feel it's not a coincidence that the plan has been there a little while, but liquidity has now been pushed through the system to the hedge funds running these things resulting in showering football club assets in toilet paper with the queens head on.

These are clearly now far from 'normal times'.

The fabric of things is unravelling.

 

[Bricormortis]

10 minutes ago, Noallegiance said:

 

European Super League money grab another sign of impending financial craziness. $billions available to shell out to top clubs.

I feel it's not a coincidence that the plan has been there a little while, but liquidity has now been pushed through the system to the hedge funds running these things resulting in showering football club assets in toilet paper with the queens head on.

These are clearly now far from 'normal times'.

The fabric of things is unravelling.

 

Reminds me of the Martin Armstrong article  shown on this thread a few pages back. He said his magic beans or whatever the flip he uses were telling him this year would see increased fracturing of structures generally iirc. 

[DoINeedOne]

13 hours ago, Green Devil said:

 

Definately worth a watch if you have a spare 1h18mins.

Prob the smartest guy in the room. 

Great video downloaded and saved...

[Barnsey]

 

[DurhamBorn]

3 hours ago, JMD said:

You ask will the 'madness ever stop'. I think shared equity, between buyer and government is where we'll end up. But it will be something far more insidious and shocking than what that term conjures up today. Initially such shared ownership mortgages will be offered by the banks, with government offering the lending backing/insurance, but ultimately the phased withdrawal/demise? of the banks will allow government to 'step up' and gradually take control of the nation's housing wealth. It will bolster the government's balance sheet, and provide it with a nice problem to have really. I think this type of policy falls in line with what Russel Napier believes will happen - that is governments taking bigger and bigger share of the economy.                                  The thing is, if Western governments do go toward controling 60%+ of economy in GDP terms, Scandinavian countries are already approx at this high gdp level, plus the increasing trend of companies going private, what I would ask in all seriousness is what will be left for us - dosboders - to invest in?                                      @DurhamBornperhaps you disagree with the above, but I wonder does your model (perhaps not a relevant risk currently?) say anything about the squeezing out of the retail investor, and how we might need to play this investment-wise later in the cycle?

Retail investors are being squeezed and its always been so.There will always be things to invest in though because a retail investor can be quicker than almost anyone else.

Take BT

This thread highlighted the cycle was turning in its favour, @sancho panza even had it as the best value telco in his coma scores,we moved and i went in hard on that one,very hard,many at 95p.60% up and now the big banks who were saying sell then now start to see what we saw back then.Now i see what they see now.I agree with them.The point is though we understand the leads and lags on these macro road maps and thats the critical thing.

https://www.sharecast.com/news/broker-recommendations/bt-in-line-for-major-rerating-jp-morgan-says--7872894.html

As for the oilies,its sentiment still as the narrative is oil is dead,even Wood Mackenzie is saying $30 a barrel and falling by 2030 and $10 by 2050.

I think they are wrong.I think oil use will be just a little less than now by 2050 and inbetween i think the big oilies will cash flow in 5x their market caps and maybe a lot more.I HOPE Bp etc can stay down for as long as possible,i want them buying back shares at £3,not £4,£5 etc and i hope when they said at least 60% of cash flow after the div on buybacks they also use the other 40% as well until there is at least a £4 at the front of the share price.

As for the goldies ,im not a chartist and usually use ladders and not advice etc,but iv being buying Yamana Gold.

[stop_the_craziness]

13 minutes ago, Barnsey said:

 

BRIT coin?  Jesus, that twat really is the reincarnation of Wanker Blair, stupid soundbites and all.

[DurhamBorn]

16 minutes ago, Barnsey said:

 

Imagine where they can simply add as many digits as they want.Take your money in the press of a button.I take it your gold and silver isnt for sale anytime soon Barnsey 

[geordie_lurch]

33 minutes ago, Barnsey said:

 

They have been working on it and exploring it for YEARS!

A webinar on it all from April 2020: https://www.bankofengland.co.uk/events/2020/april/cbdc-discussion-paper-webinar and then back in May 2018: https://www.bankofengland.co.uk/-/media/boe/files/working-paper/2018/broadening-narrow-money-monetary-policy-with-a-central-bank-digital-currency.pdf

They are just getting the general public ready now to be forced onto it

EDIT: Jeez, just noticed one of the guys who worked for them on it early on is now "Leading on digital identity and cross-border payments at BIS Innovation Hub Singapore" - BIS being Bank of International Settlements

If you don't know who BIS are look into them... seems their plans for 2021/22 are online here: https://www.bis.org/topic/fintech/hub/programme.htm