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

[jamtomorrow]

5 hours ago, Transistor Man said:

Have you looked at Exergy Economics?

From what I remember, Your thinking seems along the lines of what this attempts to deal with. 

The grade or quality of energy is accounted for, during conversion processes, via second law of thermodynamics, and information theory - I guess.

I looked into it a little when working on cogeneration. I can’t remember too much, but it looked interesting. Also, we discuss something similar in electronics .... via Landauer principle. 

https://www.researchgate.net/profile/Steve-Sorrell/publication/329787826_Exergy_economics_New_insights_into_energy_consumption_and_economic_growth/links/5c1aba83458515a4c7eb05c0/Exergy-economics-New-insights-into-energy-consumption-and-economic-growth.pdf?origin=publication_detail

 

 

https://www.nasa.gov/sites/default/files/atoms/files/40_gilbert_uses_of_exergy_in_systems_engineering.pdf

 

Not looked into exergy, no - thanks for the pointer @Transistor Man, a nice chunky add for the reading list!

To be fair to SEEDs, I believe there is some attempt to account for the "quality" of different energy sources, but I think that's as far as it goes.

[Hancock]

3 hours ago, Hardhat said:

In a way I think corporate landlords would be a good thing and certainly better than private.

But my issue in general is the turn towards the middle and working class of this country becoming tenant classes.

With the asset ownership of the two above classes overwhelmingly in property, it wouldn't be hard for a coalition of corporate landlords to squeeze those classes increasingly out of ownership and into permanent rental.

Problem i have with this, is if people are spending money on rent all their working life ... then they have sweet FA to put into the actual economy.

The reason for printy printy and endless borrowing is to make up for this short fall.

[jamtomorrow]

1 hour ago, JMD said:

Jamtorrow please could you elaborate more on what you mean by 'entropy economy'? I kinda understand that extracting fossil fuels increases entropy. But for the information/digital economy my - very basic understanding - is that If say a company move online... profits usually increase/marginal costs decrease so I assume that overall company utility has increased, therefore a more 'effective' company means that entropy has decreased?

Purely casual speculation on my part as to whether there might be an even better lens than energy alone for understanding macro at the centuries scale. I did a bit of engineering thermodynamics in another life, so it seems natural to reach for entropy when you find yourself trying to reconcile energy and information.

That said, it does seem like if there's such a thing as economic entropy, then the aggregate entropy in the economy has surely increased over the last couple of decades of rampant consumerism, as we've gone through the economic equivalent of burning the furniture to stay warm. In that sense entropy seems analogous to the eroded capital backbone DB sometimes talks of.

[Hancock]

Centrica -

https://www.telegraph.co.uk/business/2021/07/04/centrica-ready-put-16bn-hydrogen-storage-site/

Utilities giant Centrica is preparing to press the button on a £1.6bn overhaul of its Rough gas storage site in the North Sea so it can store hydrogen instead of methane.

The FTSE 250 owner of British Gas says repurposing the site roughly 18 miles off the coast of Yorkshire could create 3-4,000 jobs during construction and help develop the market for hydrogen to help meet climate goals.

Greg McKenna, managing director of Centrica Business Solutions, said the company is waiting for clarity on the Government’s strategy around hydrogen and what subsidy guarantees will be given to help the hydrogen industry scale up, before knowing whether to progress.

He said: “If we could get a decision this year, I think we could be up and running by 2025/26.

“You’re talking about a £1.6bn investment which will create thousands of jobs and help roles in the oil and gas industry move into the green economy.”

Hydrogen does not produce carbon emissions when burned so it is expected to be used more widely as the UK overhauls its energy system to try and meet its legally binding target of cutting carbon emissions to net zero by 2050.

However, the extent of its role is unclear as hydrogen is expensive and difficult to produce as well as being inefficient. There is particular debate over how widely it should be used to heat people’s homes instead of electric heat pumps. It is likely to have a larger role in industry and heavy duty vehicles.

 

Centrica decided to close Rough, the UK’s largest gas storage site, in 2017 due to problems with its ageing infrastructure, although it has continued to produce what is left in the field.

Chief executive Chris O’Shea is trying to reshape the company following a 70pc slide in Centrica’s share price under his predecessor Iain Conn.

[XswampyX]

10 minutes ago, Hancock said:

However, the extent of its role is unclear as hydrogen is expensive and difficult to produce as well as being inefficient. There is particular debate over how widely it should be used to heat people’s homes instead of electric heat pumps. It is likely to have a larger role in industry and heavy duty vehicles.

 

[Barnsey]

China PMIs rolling over

 

[nirvana]

13 hours ago, Hancock said:

if people are spending money on rent all their working life ... then they have sweet FA to put into the actual economy

get a grip man! property and land IS the economy, it's called 'rentier capitalism' 

gaining significant amounts of profit without contribution to society......alas Thatcher said there is no such thing as society 

[DurhamBorn]

1 hour ago, nirvana said:

get a grip man! property and land IS the economy, it's called 'rentier capitalism' 

gaining significant amounts of profit without contribution to society......alas Thatcher said there is no such thing as society 

Property and state spending.Its the state spending that has mostly caused the housing problem.Take a lot of BTL.Council workers,civil servants because they know they have a certain pension etc,so they feed capital into BTL.Then they are mostly paid from the tenants getting benefits.Thats doing young working private sector workers over at every point.Then of course tax credits and now UC.Import millions of people and funnel benefits through them to the BTL owners.

Dis-inflation allowed all of this to happen though because CBs can print more and more to fund the structural deficits of the government.The key is when that inflection point is reached where QE has to stop and that is inflation.Of course thats why they fiddle the rate so much and are way understating inflation.

 

[nirvana]

20 minutes ago, DurhamBorn said:

Dis-inflation allowed all of this to happen

I don't see this disinflation argument! OK the definition might be a 'slow down' in the rate of inflation BUT by any measure inflation has been going bonkers for 50 years at least! All caused by TOO MUCH PRINTING! AND the fukkers are always under reporting it so what's gonna make em change that? 

How much have the CBs created recently? The FED and the ECB must have added 20 trillion 'pirate coins' between them alone!!

It's funny when folks mention the gypos, tramps, gimmigrants demographic but how much is the welfare budget compared to that 20 trillion that the one percenter demographic keep begging for more? Clown world in extremus....

[HousePriceMania]

2 hours ago, nirvana said:

get a grip man! property and land IS the economy, it's called 'rentier capitalism' 

gaining significant amounts of profit without contribution to society......alas Thatcher said there is no such thing as society 

https://www.theguardian.com/business/2021/jul/04/john-lewis-plans-to-build-10000-rental-homes-on-its-land-waitrose

 

John Lewis plans to build 10,000 rental homes on its land

....

[DurhamBorn]

6 minutes ago, nirvana said:

I don't see this disinflation argument! OK the definition might be a 'slow down' in the rate of inflation BUT by any measure inflation has been going bonkers for 50 years at least! All caused by TOO MUCH PRINTING! AND the fukkers are always under reporting it so what's gonna make em change that? 

How much have the CBs created recently? The FED and the ECB must have added 20 trillion 'pirate coins' between them alone!!

It's funny when folks mention the gypos, tramps, gimmigrants demographic but how much is the welfare budget compared to that 20 trillion that the one percenter demographic keep begging for more? Clown world in extremus....

Dis-inflation is slowing of inflation,not deflation and since 82 thats what we have had.Without the printing prices would of fallen hard,so yes printing caused prices to be far higher than they would of been,but price increases still slowed and slowed over the cycle.Like you said the printing ended up in land and property like it nearly always does in the end.

In the UK the printing is pretty much the working age welfare budget over the decade.There is nothing wrong with expanding the money supply at 1%/1.5% a year,the problem is that they are printing to fund structural deficits.Thats the point where the gainers are mostly people getting from the government,the losers most of those who arent.

I expect in the UK we are very close to the end of QE,maybe some more smaller tranches then nothing.Government then has a £100billion+ structural deficit and a distribution cycle on its hands.

Of course one answer is to tax hard the 1% and the companies fleecing tax.Will they?.

[Talking Monkey]

On 04/07/2021 at 09:08, BurntBread said:

The surplus energy articles are nice, although always just a minor variation on things they have said already.

I do wonder though whether they are being a bit blinkered in their own way? For example, even in their own terms, we don't really inhabit an "energy economy", but an "energy-and-technology" economy, and technological advances can let us exploit surplus energy more efficiently (as a trivial example, think of LED bulbs replacing incandescent; although [Jevons' paradox] we tend to use these advances to use more energy than before; but in extremis we could imagine reducing our energy usage while keeping up our standard of living).

I also don't remember a detailed discussion on nuclear energy, which has a pretty high EROEI.

Overall, I'm guessing we might avoid their dire prediction of discretionary income falling to zero in the mid 2030's ... but I can certainly recognise the broad thesis of average prosperity falling from now on.

I see your point BB that they are being blinkered in their own way. Though when taken alongside the various strands discussed here and what we see in everyday life then a substantial decline in discretionary spend seems inevitable, though I agree falling to zero by late 2030s seems a bit dramatic.

[nirvana]

12 minutes ago, DurhamBorn said:

Dis-inflation is slowing of inflation,not deflation and since 82 thats what we have had

yes I said slowing, dunno what you're saying man! Inflation has been going bonkers since the 80s, that's why the place is a bizarre mix of

'Mr paranoid whitey man in his flash shiny motor, don't pick up hitchers cos they might put a bit of brown fluff on your precious car seat'

'Mrs fat arse, talk shite on boomerbook cos I've now got 2 x BTL properties'

AND no they won't tax the 1% cos it's a game of 'fuck the middle class and shit all over their offspring'

The government (left or right) AND the BANKER SCUM really does think we're some sort of smelly thing like that which gets stuck to the bottom of yer shoe 

[nirvana]

PS I'm happy with a 1% PA money supply increase BUT it's OFF THE FOOKING SCALE!!!

what's that annually?

PS for noobs, the FED hasn't got just $7700 in the bank, that's in BILLIONS

there are 12 zeros in a TRILLION

it is a big number 

Note to self: DUDE CALM DOWN, it's all irrelevant to your irrelevant existance 

 

[MrXxxx]

42 minutes ago, nirvana said:

All caused by TOO MUCH PRINTING!

All caused by moving away from the gold standard.

[nirvana]

7 minutes ago, MrXxxx said:

All caused by moving away from the gold standard.

Nixon the war monger did it, gotta fund more wars, ALL WARS ARE BANKER WARS 

[DurhamBorn]

17 minutes ago, nirvana said:

yes I said slowing, dunno what you're saying man! Inflation has been going bonkers since the 80s, that's why the place is a bizarre mix of

'Mr paranoid whitey man in his flash shiny motor, don't pick up hitchers cos they might put a bit of brown fluff on your precious car seat'

'Mrs fat arse, talk shite on boomerbook cos I've now got 2 x BTL properties'

AND no they won't tax the 1% cos it's a game of 'fuck the middle class and shit all over their offspring'

The government (left or right) AND the BANKER SCUM really does think we're some sort of smelly thing like that which gets stuck to the bottom of yer shoe 

Not in goods it hasnt.Thats how they have managed to disguise it until now.The middle class are the victims yes,or more actually the children of the middle class.However the real victims are the working working class.Those who actually go to work and dont have parents with capital or state final salary pensions etc.Its them who have had the lower rung houses removed from them,pensions,wages increasing with RPI+ etc.

The public keep voting for change, but are ignored.Lets see what happens over the next few years as CBs have no choice but to pull back.

[DurhamBorn]

39 minutes ago, nirvana said:

PS I'm happy with a 1% PA money supply increase BUT it's OFF THE FOOKING SCALE!!!

what's that annually?

PS for noobs, the FED hasn't got just $7700 in the bank, that's in BILLIONS

there are 12 zeros in a TRILLION

it is a big number 

Note to self: DUDE CALM DOWN, it's all irrelevant to your irrelevant existance 

 

About 30% pa flat,compounding its about 16%pa increase 

[ThoughtCriminal]

More in one year than the previous 20 combined. 

 

I can't escape the feeling that things are about to go tits up in a spectacular way. 

[Bricormortis]

2 minutes ago, ThoughtCriminal said:

More in one year than the previous 20 combined. 

 

I can't escape the feeling that things are about to go tits up in a spectacular way. 

 

[Bricormortis]

 I am less sure of a crash this year. Bubbles can get called way too early. Was listening to a Leslie Grantham video and it credited him with calling out the dot com implosion 3 years before it actually happened !

Rotation out of growth stocks into commodities is quite possible. If / when DXY gets around 88 metals will wake up.

Im not posting much currently, leaving it to the clever people atm, feeling quite reflective.

[nirvana]

23 minutes ago, DurhamBorn said:

Not in goods it hasnt.Thats how they have managed to disguise it until now

ONLY cos the CORPORATE NEOLIBERAL CUNTS outsourced all their jobs to wee chinaman!!

And who helped em? those BANKER CUNTS AGAIN! 

[Sugarlips]

20 minutes ago, DurhamBorn said:

About 30% pa flat,compounding its about 16%pa increase 

I believe you are inadvertently saying buy more silver whilst prices are suppressed.

[nirvana]

1 minute ago, Sugarlips said:

I believe you are inadvertently saying buy more silver whilst prices are suppressed.

that's a sore point with me, I bought a shitload o that stuff and the price has been going down ever since.....off to check the price....I won't be back for a while cos I'll be crying 

[DurhamBorn]

47 minutes ago, nirvana said:

ONLY cos the CORPORATE NEOLIBERAL CUNTS outsourced all their jobs to wee chinaman!!

And who helped em? those BANKER CUNTS AGAIN! 

Exactly,and that is starting to reverse.They are making TVs again 1 mile from my house,washing machines 3 miles.Inflation adds in at each point,so long supply chains get smashed.The lorry from the Chinese factory,the ship,everything.Thats why Nissan are building everything around their factory including the battery plant.

You havent posted a fit woman for ages by the way 

 

Guess what the below is,its a miracle of a type