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

[Fully Detached]

40 minutes ago, Hancock said:

Aren't those reasons that the more placid won't want to return to the orifice. 

Yes quite, but I think what they want to do and what they feel they have to do might turn out to be two different things.

 

22 minutes ago, JimmyTheBruce said:

Why does so much of modern life seem to involve all of us having to stoop to the level of the little bastards?  I'm not playing, I opted out of the greasy pole, keeping up with the Joneses game a while ago.

Exactly the conversation I had with Mrs FD a couple of days ago - I don't want to have to tread on anybody else's toes or worse still flatten them, but it seems if you take that approach you'll just get trodden on by other people, so you either have to totally opt out, which I can't afford to do, or play the game to some extent.

Not office related, but about 10 years ago we had the opportunity to gazump somebody on a beautiful little 3 bed detached place in a rural area with a nice garden and garage. I didn't do it because I've been gazumped once before and I know the feeling - simply put, I didn't want some family to go through what we did. Put me in that same situation today and I'm afraid I would do it. My minor little act of fairness has led to 10 more years of getting shafted by the housing market, and frankly, I'll be the little bastard next time.

[Harley]

Whoops, posted at the same time!

However:  Mr Hunter mentioned his quarterly newsletter.  He mentioned one can enquire via Twitter.  I don't do Twitter.  Could anyone PM an alternative contact please and optionally any thoughts on the newsletter.

The best interview I've ever heard with Mr Hunter.  Part because he's in good form and part because of the excellent questions from an excellent interviewer. 

 

[The Idiocrat]

13 minutes ago, Fully Detached said:Not office related, but about 10 years ago we had the opportunity to gazump somebody on a beautiful little 3 bed detached place in a rural area with a nice garden and garage. I didn't do it because I've been gazumped once before and I know the feeling - simply put, I didn't want some family to go through what we did. Put me in that same situation today and I'm afraid I would do it. My minor little act of fairness has led to 10 more years of getting shafted by the housing market, and frankly, I'll be the little bastard next time.

I too have learnt that the hard way in life and nowadays try to remember the saying that “No good deed goes unpunished”. Sad that things should come to that, but that’s the harsh reality of modern life.

[JMD]

15 hours ago, Yellow_Reduced_Sticker said:

 

I banned myself from the covid threads as they just got me down , ...anyway I had a watch of this video last night, in a way glad i watched it for the info...BUT Really wish i never watched this as the ending was VERY DEPRESSING!!!

YRS, Monty Python says... always look on the bright side of life.

But i agree discussions here have been serious lately, so for balance maybe watch this new George Gammon and (a slightly 'lubricated'?, but very on-form) Marc Faber interview. Tbh, the video is both funny and serious, eg at approx 8:00 George uses his regular metaphor of how US is addicted to stimulous like a heroin addiction, and Mark interjects and asks if he is talking about Hunter Biden!!, then explains he is being both funny and serious because it's symptomatic of the current crop of crappy political leadership (Marc has used lockdown to read lots of history, apparently he learnt that 'there have been good leaders... though not many!!!'). 

 

 

[feed]

https://www.telegraph.co.uk/business/2021/04/20/great-inflation-boom-coming-fed-complicit/

 

After a decade as a deflacionista, I think that this process has bottomed out and we are lurching abruptly into an inflationary secular cycle. I do not fully believe the Fed any longer and I suspect that it is either in denial or subtly complicit, a little too creative in trying to justify why the exploding money M3 supply will not lead to inflation.

[JMD]

1 hour ago, Hancock said:

Aren't those reasons that the more placid won't want to return to the orifice. 

They are all 'little sh1ts', or to give them their technical term - meconium.

 

@sancho panza, being a paramedic might particularly appreciate the pun.

[Cosmic]

40 minutes ago, Fully Detached said:

Not office related, but about 10 years ago we had the opportunity to gazump somebody on a beautiful little 3 bed detached place in a rural area with a nice garden and garage. I didn't do it because I've been gazumped once before and I know the feeling - simply put, I didn't want some family to go through what we did. Put me in that same situation today and I'm afraid I would do it. My minor little act of fairness has led to 10 more years of getting shafted by the housing market, and frankly, I'll be the little bastard next time.

Feel the same about times were I didn't shag someone else's girlfriend when the opportunity arose. What a clot I was...

[Harley]

54 minutes ago, The Idiocrat said:

I too have learnt that the hard way in life and nowadays try to remember the saying that “No good deed goes unpunished”. Sad that things should come to that, but that’s the harsh reality of modern life.

I strive for faith and grace.  I've never knowingly screwed over anyone and I was very pleased I didn't that time I faced the very real possibility of death.  It taught me what hell could look like at a fortunately young age.  We're all held to account in the end, brutally and with no duff, to ourselves.

1 Corinthians 13:11

[JMD]

1 hour ago, wherebee said:

I've been talking to a few office monkeys I know in Oz over the past month, and the push to get back in the office is growing, not least because productivity is down massively.  Of course it bloody is!  They don't call it home netwanking for nothing.

'netwanking' you say, they were called curtain-twitchers in my day?!?                                                                                                            Oh well, the tech may have changed, but the fundamentals stay the same !!!

[The Idiocrat]

1 minute ago, Harley said:

Have faith and grace.  I've never knowingly screwed over anyone and I was very pleased I didn't that time I faced the very real possibility of death.  It taught me what hell could look like at a fortunately young age.

Agree. Although I’m not talking about screwing other people over, but I am talking about not doing people favours, who often react not only without gratitude, but either think you’re a pussy so try to extract more and more from you, or do screw you over when they get the chance. 

[Harley]

4 minutes ago, The Idiocrat said:

Agree. Although I’m not talking about screwing other people over, but I am talking about not doing people favours, who often react not only without gratitude, but either think you’re a pussy so try to extract more and more from you, or do screw you over when they get the chance. 

I wasn't aimed at you, I just took the last post I saw on the theme to quote!  Apologies.

[JMD]

39 minutes ago, Harley said:

Whoops, posted at the same time!

However:  Mr Hunter mentioned his quarterly newsletter.  He mentioned one can enquire via Twitter.  I don't do Twitter.  Could anyone PM an alternative contact please and optionally any thoughts on the newsletter.

The best interview I've ever heard with Mr Hunter.  Part because he's in good form and part because of the excellent questions from an excellent interviewer. 

 

Harley, I believe DH frequently states that he can only be contacted via Twitter? A few months back during another interview i'm pretty sure i recall DH mentioning his newsletter cost $1000/year. I'm sure its worth the cost - but just mentioning as at the time it struck me as characteristic DH to mention the cost, but in an almost apologetical way.  

[Loki]

15 minutes ago, JMD said:

Harley, I believe DH frequently states that he can only be contacted via Twitter? A few months back during another interview i'm pretty sure i recall DH mentioning his newsletter cost $1000/year. I'm sure its worth the cost - but just mentioning as at the time it struck me as characteristic DH to mention the cost, but in an almost apologetical way.  

He has a Gmail address but i am out so don't have it to hand. Will post later if no-one else knows it

[DurhamBorn]

16 hours ago, Yellow_Reduced_Sticker said:

 

I banned myself from the covid threads as they just got me down , ...anyway I had a watch of this video last night, in a way glad i watched it for the info...BUT Really wish i never watched this as the ending was VERY DEPRESSING!!!

 

@DurhamBorn have you watched this? Also are YOU still in touch with the elderly gentlemen that taught you the macro stuff back in the day? I remember you always saying that he hoped he would be gone by 2030?

 

It would be nice to have ya thoughts/view on this video's ending theme, CHEERS mate!

 

The increase in state spending is a disaster,but certain due to the macro position,but what needs to be remembered is the more the state spends the more private assets are built up.If state spending falls fast then private assets will crash,at least at first.What i see is state spending will rise but then fall back relative to the economy.

What is certain at some point is a UBI though.We have a situation now where working people are no better off than none working,that wont last.I think £100 UBI is coming,the only question is when,and how.

Our political parties are all highjacked of course now ,but they can be removed and hanged in 30 minutes if the people ever decide it.

My friend doesnt do much now on the macro front,though he does still look after a few different charities investments.I message him every now and again,but he tends to talk more about the political cycle now in the US more than anything,he is very very worried about a civil war at the end of the cycle.He thinks the left are allowed to use violence all the time,and people/media think its ok if its aimed at someone who doesnt think their way.He says the people getting on with their lives will turn though,and it could be full on civil war.Ironic is he is left leaning.

[DurhamBorn]

5 hours ago, CVG said:

Can we confirm this?

I prefer Bp and Repsol,Shell is the first one im selling,if/when i sell

[DurhamBorn]

1 hour ago, Cosmic Apple said:

Feel the same about times were I didn't shag someone else's girlfriend when the opportunity arose. What a clot I was...

I shagged someones girlfriend once and she dumped him thinking me and her were an item.She wasnt happy when i told her we werent and to go away.I hadnt seen her for about 15 years until i had to appear at court.She saw me and said oh good your in mine  Luckily when i got in she was only clerk of the court and not the judge 

[leonardratso]

56 minutes ago, Loki said:

He has a Gmail address but i am out so don't have it to hand. Will post later if no-one else knows it

he did reply to me on twitter a few months back, seemed ok, i wasnt probing his methods or conclusions, just in passing really.

[sancho panza]

4 hours ago, NogintheNog said:

Can't argue with the maths here. However the future is being clouded by the lingering virus and potential new variants and of course the woke brigade. Both Shell and BP seem to be far more ingrained into green washing than their American counterparts.

But from another maths viewpoint look at the current yields. Shell decided from the outset that their cut was gonna run deep, and the yield is at today's price at <4%, whereas most of the others are at >5%. Does that not help explain the differential?

I don';t think it does.Obviously there's a huge DYODD with what I'm going to say and maybe I should be talking in the options thread.

This isn't advice etc but only someone like @Cattle Prod who knows the industry inside out could roughly approxiamte which are the better run companies/resourced etc.I'm not saying XOM is super value here,nor indeed am I saying RDSB is.What I'm saying is that there's a trading opportunity to arbitrage the disparity between different members of the asset class.

From what that chart is saying the two Brit stocks have not receovered as quickly as the others.Could be a lot of reasons.I jsut want to predictly call whether it's going to go up or down.With RDSB I'd get a little isnurance as it's closer to the floor than XOM for example.But these are short term trading calls not long term money.This thread is about longer term investments

Company	Share price	Date	Chart	Inc	BS	CF	Sector	SCS
Baker Hughes	USD-23.14	18/02/21	3	1	3	2	5	14
BP	GBP-2.69	18/02/21	5	1	2	1	5	14
Can Nat Res							5	5
Chevron	USD 99.61	24/02/21	2	1	4	2	5	14
Conoco Phillips	USD-48.43	18/02/21	2	1	3	2	5	13
Devon	USD-21.59	24/02/21	5	1	2	2	5	15
Enbridge	USD 36.52	24/02/21	2	3	3	4	5	17
ENI	E 9.464	24/02/21	5	1	3	2	5	16
Equinor								0
Exxon Mobil	USD 55.45	24/02/21	4	1	3	1	5	14
Imperial Oil	USD 22.99	24/02/21	3	1	4	1	5	14
Kinder Morgan	USD 15.29	24/02/21	4	2	3	4	5	18
Lukoil							5	5
Occidental							5	5
OMV AG	USD 50.53	24/02/21	2	4	5	4	5	20
Phillips 66							5	5
Pioneer							5	5
Repsol	E 10.162	24/02/21	4	1	3	3	5	16
RDSB	GBP-1337	18/02/21	5	1	3	5	5	19
SLB	USD-26.04	18/02/21	5	1	2	3	5	16
Total	E36.66	18/02/21	3	1	3	3	5	15

[The Idiocrat]

1 hour ago, Harley said:

I wasn't aimed at you, I just took the last post I saw on the theme to quote!  Apologies.

Don't worry mate, no offence taken at all 👍

[sancho panza]

17 hours ago, Cattle Prod said:

The (2.) scenario is the easiest bet for me I've ever seen. At some point during that time, all hell is going to break loose, there will be a panic about supply, and supply will not be able to respond. Once the risk of a deflationary bust has passed, I intend to have over half my net worth in this sector.

In short, if you can take another savage whipsaw down if BK hits, just sit tight and ignore my ramblings. Listen to DB, he's in for the cycle, and will no doubt ladder down in to the BK. Copy him. 

In the next 9-12 months there is a fair chance of a spike above $80 if demand normalises. It could happen inside 4 months. But be prepared: this will guarantee another crash, so if you don't have itchy fingers and a high risk tolerance like me, don't bother. Today was nothing, it may be a lower high pointing toward $54, which would be a repeat of the Oct/Nov price action, setting up a bullish run up to late summer per @sancho panza timings. 

Just rereading this excellent disucssion between you and @planit

Ref first bit in bold,I'm a lot surer of this after the last two days posts.Educated me about stuff I didn't knowI think I've finally grasped why there's a limited time Saudi can run production hard..The set up could be potentially horrendous for some countries that are running huge structural deficits and don't have reserve currency status.The effect on food prices will be relatively quick I'd have thought.

Ref second bit,that's the thing I'm convinced off.Big oil run virtually bakes in a BK deflationary event.I'm going to run my simplistic chart set up and see if I can get a reasonable upper bound.

[Lightscribe]

https://finance.yahoo.com/news/biden-administration-crypto-regulatory-framework-092500388.html
 

All bread and circuses. They fully well know (and have known for some time) the regulations that will be imposed on crypto and the roadmap into integrating digital currency.

[Cosmic]

41 minutes ago, DurhamBorn said:

I shagged someones girlfriend once and she dumped him thinking me and her were an item.She wasnt happy when i told her we werent and to go away.I hadnt seen her for about 15 years until i had to appear at court.She saw me and said oh good your in mine  Luckily when i got in she was only clerk of the court and not the judge 

Why would you form a relationship that started with her monkey branching? Deluded 

My thought these days would be "Well if I'm not then someone else will be, so why not?", back then I was all noble or something...

[sancho panza]

49 minutes ago, DurhamBorn said:

I message him every now and again,but he tends to talk more about the political cycle now in the US more than anything,he is very very worried about a civil war at the end of the cycle.He thinks the left are allowed to use violence all the time,and people/media think its ok if its aimed at someone who doesnt think their way.He says the people getting on with their lives will turn though,and it could be full on civil war.Ironic is he is left leaning.

I must say,I think it's a real possibility although very few people can see it getting that far,particualrly the left.In the US,politcal discourse has deteriorated to two polarized sides screaming at each other.One of them-so far-showing a distinct tendency towards violence to air their grievances.It won't be long before there's a push back.

Historically,we have been here before,both Russia as it was pre 1917 had a governing 1% that had 90% of the countries wealth.The USA is heading there but for different reasons.Their 1% is benefitting from monetary policy,mismeasurement of inflation(reduces wages/boosts assets).Huge chunks of society are reliant on handouts and whilst the 1% are gaining an increasing amount of it.

A rise in food/fuel prices,a drop in income from a fiscal draw down and you have a potentially worrying situation

https://wolfstreet.com/2021/04/12/i-now-track-the-most-important-measure-in-the-feds-vision-of-the-economy-the-wealth-effect-and-how-it-impacts-americans-individually/

[Hardhat]

5 minutes ago, sancho panza said:

Historically,we have been here before,both Russia as it was pre 1917 had a governing 1% that had 90% of the countries wealth.The USA is heading there but for different reasons.Their 1% is benefitting from monetary policy,mismeasurement of inflation(reduces wages/boosts assets).Huge chunks of society are reliant on handouts and whilst the 1% are gaining an increasing amount of it.

https://wolfstreet.com/2021/04/12/i-now-track-the-most-important-measure-in-the-feds-vision-of-the-economy-the-wealth-effect-and-how-it-impacts-americans-individually/

Wow that really is stark. I'd like to see a similar chart for the UK, I expect  it wouldn't be so different. I'm pretty sure a £60k income puts you in the top 10% of earners.

 

[sancho panza]

4 minutes ago, Hardhat said:

Wow that really is stark. I'd like to see a similar chart for the UK, I expect  it wouldn't be so different. I'm pretty sure a £60k income puts you in the top 10% of earners.

 

There are nuances obviously,but if we get a credit deflation running alongside food/fuel price increases,things will trun nasty very quickly.

In the UK there's the illusion of wealth.As in a lot of politicians who don't do macro analysis think we're wealthy.A lot of the public think they're wealthy.But the reality is that you can't eat a house and if you sell it to raise cash,you then need income for rent.

Similarly,inflation adjusted pensions are fine until there's no taxes to pay them,or even worse,you get paid in worthless specie.

I'm not saying this is going to happen,but the West is setting itself up for an epic societal crash imho. @DurhamBorn often refers to claimant levels versus employment levels as one parameter to monitor.It's sustainable until it isn't.

It's one of the reasons I think all this covid lockdown bullshoot will end quickly once it dawns on Bozo Bozza what a hole we're in thanks to him and Hatt Mancock.

The below chart obviously excludes private debt hat tip Steve Keen

There's about 44 mn americans on food stamps and have a national debtThat's not a wealthy country

https://www.politico.com/news/2021/01/27/food-stamp-spending-2020-463241