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

[Majorpain]

British Steel stops taking orders in face of ‘extreme’ demand | Construction Enquirer News

If only there was a Blast furnace and Steel mill sitting around unused, that would come in real handy right about now!  Whist this is demand lead, Chinese overproduction can't continue forever.

[Chewing Grass]

11 minutes ago, Majorpain said:

British Steel stops taking orders in face of ‘extreme’ demand | Construction Enquirer News

If only there was a Blast furnace and Steel mill sitting around unused, that would come in real handy right about now!  Whist this is demand lead, Chinese overproduction can't continue forever.

Was mentioned at work, not worried over rebar but more the quantity of structural sections and specialist steel needed over the next 3 years, Chinese/Indian stuff verboten.

[planit]

I have been doing some reallocation today but the oilies have been crap.  

It's like everyone has decided that inflation can take off and oil prices drop at the same time.

Oh yes I forgot, we all use wind, EV's and don't use plastic, iron or chemicals now!*

 

*The worlds farming is done with magic unicorns that don't need feeding.

[Green Devil]

1 hour ago, Cattle Prod said:

 

If 10 yr 'normalises' to 4.9%, the US would have to spend what they've just spend on covid every year to pay the interest. (Well done CNBC monkeys for screwing up the key slide).

 

When you have to print money to pay interest on the money you already owe, then the systems fucked. Get out of dodge (the $).

 

[Talking Monkey]

3 hours ago, sancho panza said:

This is taken from Lyn Aldens sub.I'm sure she wouldn't mind as it's good advertising.Very much backing up @Cattle Prod thesis

 

'In 2019, global oil demand reached just over 100 million barrels per day. After falling very fast in 2020, demand has since recovered to about 95 million barrels per day, with various forecasts that generally point to late 2021 or sometime in 2022 that it’ll reach previous peak demand levels.

China and India still present significant oil demand potential. They have a lot of consumption growth that is offsetting the stagnant levels of energy consumption in developed markets. Here’s China’s pre-pandemic oil consumption per year:

Chart Source: CEIC

To put things into perspective, the United States consumes more than 3x as much oil per capita as Thailand, and Thailand consumes more than 2x as much oil per capita as China. If China ever reaches the point where it consumes as much oil per capita as Thailand does now, that change alone would add 15 million barrels of daily demand.

India consumes a little over a third as much oil per capita as China, which totals about 5 million barrels per day. If they ever reach China’s current consumption levels (which, again, are only half as much as Thailand and one sixth as much as the US), that would add nearly 10 million barrels to daily global demand.

And then there’s Indonesia, Nigeria, and other large population countries with low per capita demand that have a lot of upward demand potential as well.'

When you see demand for oil articulated like that it really brings into perspective the narrative from Surplus Energy Economics. The upward trajectory in standard of living for the global average guy is coming to a screeching halt soon. Factor in population growth over the next decade and it points to some serious social dislocation. 

[nirvana]

35 minutes ago, Green Devil said:

Get out of dodge (the $).

but don't get out of doge whilst Musk is ramping it.....I've liquidated most of an ISA and now need to buy every dog coin in town 

[Animal Spirits]

2 hours ago, Cattle Prod said:

 

If 10 yr 'normalises' to 4.9%, the US would have to spend what they've just spend on covid every year to pay the interest. (Well done CNBC monkeys for screwing up the key slide).

Luke Gromen more or less summarised the situation as the government either has to impose real austerity and renege on unfunded spending commitments or print the difference. In the latter case, you don't want to be a bond holder.

Back in 2016, Bill White formerly of the BIS said "It will become obvious in the next recession that many of these debts will never be serviced or repaid, and this will be uncomfortable for a lot of people who think they own assets that are worth something".

In 2008, former chair of The Dallas Fed Richard Fisher delivered a speech to the audience about unfunded liabilities. The numbers will have changed quite a bit since but worth reading in full if you have the time and its not too long, here are a couple of quotes:

"For the existing unfunded liabilities to be covered in the end, someone must pay $99.2 trillion more or receive $99.2 trillion less than they have been currently promised".

"Throughout history, many nations, when confronted by sizable debts they were unable or unwilling to repay, have seized upon an apparently painless solution to this dilemma: monetization".

https://www.dallasfed.org/news/speeches/fisher/2008/fs080528.cfm

[Green Devil]

59 minutes ago, nirvana said:

but don't get out of doge whilst Musk is ramping it.....I've liquidated most of an ISA and now need to buy every dog coin in town 

Take note of the number of rug pulls on that whose who of dogshit coins on the spreadsheet you posted. You have been warned! 

[Lightscribe]

https://u.today/eu-country-to-reduce-cryptocurrency-tax-by-50-percent-to-attract-billions-to-its-budget
 

Hungry decide to get in on the action

[Noallegiance]

Just come back from kids football.

Unable to ignore crypto chatter from behind me.

Everyone's an expert. Plenty of nods over what to buy and how.

Shine ya shoes, guvna?

[nirvana]

6 minutes ago, Noallegiance said:

Plenty of nods over what to buy and how.

 

did you get a note of what they're buying?

[Green Devil]

1 hour ago, Lightscribe said:

https://u.today/eu-country-to-reduce-cryptocurrency-tax-by-50-percent-to-attract-billions-to-its-budget
 

Hungry decide to get in on the action

15% tax? attractive? lol. They'll have to do better!

[arrow]

Some here are invested in K+S. It released its earnings figures today. Looks like the potash companies are seeing increasing demand now and in the future. K+S has sold its American businesses, reducing its debt. But, K+S is still being investigated by a German regulator over an impairment charge in its accounts, so got Deloitte to check them. Deloitte said that K+S was right not to declare the impairment earlier.

"Strong sales volumes of de-icing salt in the first quarter
Improved market environment in the Agriculture customer segment
Revenues: +13% to €733 million (Q1/2020: €647 million)
EBITDA: +27% to €126 million (Q1/2020: €99 million)
Closing of Americas transaction completed on April 30, 2021 - debt significantly reduced after purchase price payment of ~€2.6 billion
Write-up of property, plant and equipment due to improved potash price development in the amount of €180 million
2021 outlook: EBITDA forecast from continuing operations raised to between €500 million to €600 million (previously: €440 million to €540 million, in each case including REKS one-off gain of around €200 million)"

 

 

"04-30-2021
Today, K+S Aktiengesellschaft completed the sale of its Americas salt business consolidated in the Operating Unit Americas to Stone Canyon Industries Holdings LLC ("SCIH"), Mark Demetree and partners.

The enterprise value amounts to USD 3.2 billion corresponding to 13.4 times the 2020 EBITDA of USD 239 million. Taking into account debt and cash, the purchase price is now approximately EUR 2.6 billion. This payment has been made today entirely in cash.

With the sale of the Operating Unit Americas, K+S has implemented the most important component of the package of measures announced in December 2019. This is an important milestone in the planned reduction of debt. The net proceeds equivalent to around €2.6 billion will be entirely used to successively reduce debt. Accordingly, the level of debt (net financial debt/EBITDA) will improve significantly."

But, K+S is still being investigated by a German regulator over an impairment charge in its accounts, so got Deloitte to check them. Deloitte said that K+S was right not to declre the impairment earlier.

 

"03-09-2021
Company's auditor, Deloitte GmbH Wirtschaftsprüfungsgesellschaft, Hanover, today issued an unqualified audit opinion on the 2020 consolidated financial statements.

The impairment loss on assets in the Europe+ operating unit now amounts to EUR 1.86 billion in the consolidated financial statements as of December 31, 2020, around EUR 140 million lower than previously expected. On balance, this lower impairment was mainly the result of more specific assumptions for the individual calculation components in the course of preparing the financial statements. In addition, exchange rate effects occurred in the fourth quarter. The unqualified audit opinion confirms that the impairment loss should not have been recognized earlier.

The examination by the German Financial Reporting Enforcement Panel (Deutsche Prüfstelle für Rechnungslegung e.V.) into this complex of questions, which was announced in our ad hoc release dated February 17, 2021, has not yet been completed. K+S Aktiengesellschaft continues to assume that it will be able to invalidate the indications for the examination."

 

 

 

[Majorpain]

That's 100-110m oz of silver reported in the vaults that never actually existed, a mere 11% of total silver in LMBA.  They have got some real problems with silver now if they are having to lie to keep a lid on the price.

[Loki]

2 minutes ago, Majorpain said:

That's 100-110m oz of silver reported in the vaults that never actually existed, a mere 11% of total silver in LMBA.  They have got some real problems with silver now if they are having to lie to keep a lid on the price.

Oh YES  Great find

[Hancock]

2 hours ago, Cattle Prod said:

As @DurhamBorn says, I didn't see many fridges in India. 

 

Thats why they've always made spicy food out there i.e. to stop it going bad.

When they all get fridges they'll be importing Fray Bentos.

[nirvana]

3 minutes ago, Majorpain said:

They have got some real problems with silver now if they are having to lie to keep a lid on the price.

I'm hodling that one.....for now

 

[Noallegiance]

11 minutes ago, Majorpain said:

That's 100-110m oz of silver reported in the vaults that never actually existed, a mere 11% of total silver in LMBA.  They have got some real problems with silver now if they are having to lie to keep a lid on the price.

Just watching Arcadia Economics run through this.

It's so blatant it's way beyond a joke.

Brilliant quute from Chris Marcus:

"So one day before the LBMA calculator broke, before Jeff Currie (Goldman) went on TV as silver was falling 10% while his trust was setting records, two days before widespread change of silver prospectus, three days before he (Currie) went on TV and lied about it again which was a couple of months before the LBMA reveal how worried they were about running out of metal, a couple of weeks later we find out.......oops......they made a mistake. So while they were talking about their record silver holdings it was all based on incorrect data."

[Castlevania]

4 minutes ago, Hancock said:

Thats why they've always made spicy food out there i.e. to stop it going bad.

When they all get fridges they'll be importing Fray Bentos.

 

A. Fray Bentos comes in a tin

B. Hindu’s don’t eat beef

[DurhamBorn]

Gas use in India will nearly double for electric production when they all get a fridge.Just a fridge.Nothing else.

Cycle will see fantastic gains in energy assets.

[DurhamBorn]

1 minute ago, Castlevania said:

 

A. Fray Bentos comes in a tin

B. Hindu’s don’t eat beef

No meat in a Fray Bentos  ,hard to get for £1 now,£1.50 everywhere.

[Loki]

3 minutes ago, DurhamBorn said:

Gas use in India will nearly double for electric production when they all get a fridge.Just a fridge.Nothing else.

Cycle will see fantastic gains in energy assets.

The grid will need a bit of spit and polish too

 

[Hancock]

8 minutes ago, Castlevania said:

B. Hindu’s don’t eat beef

So they'll be ok with a Fray Bentos then!

[Bear Hug]

40 minutes ago, Castlevania said:

 

A. Fray Bentos comes in a tin

B. Hindu’s don’t eat beef

I doubt India's healthcare will cope with Fray Bentos. I've ended up in A&E once after slicing my thumb when trying to open Fray Bentos while drunk. Still got a scar. 

[Noallegiance]

Just now, Bear Hug said:

I doubt India's healthcare will cope with Fray Bentos. I've ended up in A&E once after slicing my thumb when trying to open Fray Bentos while drunk. Still got a scar. 

Yeah Indian healthcare isn't the best. Just ask the cousins from Calcutta - Cutti Zahmnhaf and Sunil Avaskar.

Probably better than the dentistry. Minister for Dental Health is Akeem Atif Inajaa Besadabed.