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

[Cosmic]

10 hours ago, MrXxxx said:

Q regarding SIPPs.

Say you have set-up a SIPP,

do you/your employer have to transfer capital in directly 

OR

can you pay in from your post-tax capital and then have the SIPP provider add the 25% tax into your SIPP?

If you can do it via Salary Sacrifice you'll get your NI too, and possibly upon negotiation the employer NI (depends on your employer though).

Mine wouldn't do it to a SIPP, but would do it to a PP, so I've done that for the past several years. CBA to make up numbers, I take a £350 hit in my take home and get something like £580 in to the PP. Sadly it means I'm limited to my choices of investments, but it does act as a hedge to my contrarian ISA.

Ideally I'd do it straight to the SIPP, that will come in time

[MrXxxx]

8 minutes ago, Cosmic Apple said:

If you can do it via Salary Sacrifice you'll get your NI too, and possibly upon negotiation the employer NI (depends on your employer though).

Mine wouldn't do it to a SIPP, but would do it to a PP, so I've done that for the past several years. CBA to make up numbers, I take a £350 hit in my take home and get something like £580 in to the PP. Sadly it means I'm limited to my choices of investments, but it does act as a hedge to my contrarian ISA.

Ideally I'd do it straight to the SIPP, that will come in time

So what will you do when you finish with your current employer, transfer it to a SIPP so that you can control your investment options?....i`m pretty sure this is possible as I think @DurhamBorn has mentioned doing it himself if I am not mistaken.

[Cosmic]

11 minutes ago, MrXxxx said:

So what will you do when you finish with your current employer, transfer it to a SIPP so that you can control your investment options?....i`m pretty sure this is possible as I think @DurhamBorn has mentioned doing it himself if I am not mistaken.

Its not very likely I will leave, but precisely, do a transfer in to my SIPP, once I have the power to do so.

[DurhamBorn]

1 hour ago, MrXxxx said:

So what will you do when you finish with your current employer, transfer it to a SIPP so that you can control your investment options?....i`m pretty sure this is possible as I think @DurhamBorn has mentioned doing it himself if I am not mistaken.

You can transfer any company or private money purchase pension to your SIPP in a couple of minutes with HL,just a few details and if the pension scheme uses something called Orio it transfers between a week and ten days.If its a final salary pension you need to be a fantastic actor,get an IFA onboard,convince him/her they can fleece you for years etc and get the transfer to them,but the minute it arrives hand them a letter not to invest it,launch a transfer on them into your SIPP.

[JMD]

3 hours ago, ONC said:

ok, Zerohedge.  

says Goldman Sachs has aggressively sold a quarter of its proprietary equities (I think this means there own investment money). 

https://www.zerohedge.com/markets/goldman-has-aggressively-and-quietly-liquidated-quarter-its-equity-investments

I was 100% equities myself at the start of year. I have been slowly selling. Now I am 30% cash.

From the Jeremy Grantham interview posted by Noallegiance, Jeremy tells of publishing an article calling the bottom of market in 2009 titled “ investing when terrified”

Is it now time for an article called   “ Divesting when Euphoric”???

 

 

 

 

Unfortunately the article doesn't mention which sectors GS sold most heavily, or perhaps it was across the board? Would be interesting to see their thinking (eg. look at what they do, not what they say).

[desertorchid]

7 hours ago, JMD said:

Anyone watching Gold Town (bbc2)? It's a 3 part humbrum documentary, but it's the story of Scotland's first commercial goldmine... and we do like our Goldie's here!! Apparantly It took 4 different companies, nearly 40 years, to eventually crack it and to get where they are now which is a working gold mine.                                                                                                                                                                       'Only' £200million estimated reserves, so small, however the actual land owner doesn't appear to own what's beneath his land and so won't profit directly from the discovered riches. Does anyone know if this is a 'Scottish thing', or across the whole UK, ie landowner can't benefit from minerals discovered beneath their land?

Watching it now. AFAIK this is how the mining industry works. Landowners will need to contractually offer the rewards of the mining to contractors who then take all the risk in the excavation work. I spoke to a commodities trader who claimed vast majority of projects never create a revenue stream. Don't think landowners can be expected to be the big gainers when they take none of the risk and don't hold the capital needed for the mining in the first place. In the program, I belive the owner does benefit in other ways e.g rent/shares. If you follow the murky world of mining companies shares, news from their prospective mines is what causes the huge volatility in this sector.

[Barnsey]

As for the building inflation worries in the U.S., it's all about rent inflation, looking at quite a scary increase in August/September. Taper tantrum to follow?

[Majorpain]

51 minutes ago, Barnsey said:

As for the building inflation worries in the U.S., it's all about rent inflation, looking at quite a scary increase in August/September. Taper tantrum to follow?

RPI Jun 2020 1.1% - Jun 2021 3.9%, a slightly more accurate measure IMO since RPI is what's used for Indexed Gilts....  and the BOE pension fund IIRC!

https://www.ons.gov.uk/economy/inflationandpriceindices/timeseries/chog/mm23

https://www.ons.gov.uk/economy/inflationandpriceindices/timeseries/dogd/mm23

I get 2.3% service inflation and 4.2% on goods for Jun 20 - Jun 21, which is nice as its reasonably similar to US data.

[HousePriceMania]

22 hours ago, Majorpain said:

US CPI print is actually worse than first seems, Goods inflation is 8.7%, headline was held back by only 3.1% Service sector inflation.

So basically stuff that involves actual tangible things is starting to reflect the money printing.

Would it be fair to say, that is the sharpest rise in inflation in the US ever ?

[Sugarlips]

16 minutes ago, HousePriceMania said:

Would it be fair to say, that is the sharpest rise in inflation in the US ever ?

Not sure about ever but if you want real data try shadowstats.com they reckon it’s running at 13% and climbing

[Barnsey]

Great article featuring Russell Napier, must read! (Honestly)

https://themarket.ch/interview/russell-napier-we-are-entering-a-time-of-financial-repression-ld.4628

"Why are yields not just signalling that they are not convinced that inflation is going to stick?

As you know, I was on the deflation side of the argument for 25 years. The reason I changed is because the structure has changed. Banks didn’t lend up until 2019, broad money was stagnant, velocity fell, so you had to be on the deflation side. But now banks do lend, because they are compelled to by the government, broad money is growing, and, as we will find out, the velocity of money will be rising. That’s why I’m in the inflation camp now."

[HousePriceMania]

5 minutes ago, Sugarlips said:

Not sure about ever but if you want real data try shadowstats.com they reckon it’s running at 13% and climbing

While the fed artificially suppress rates.

Peoples savings devalued 13% in a year.

The poor 13% worse off.

Somethings gotta give.

[DurhamBorn]

58 minutes ago, HousePriceMania said:

While the fed artificially suppress rates.

Peoples savings devalued 13% in a year.

The poor 13% worse off.

Somethings gotta give.

Not my savings,they are up 55% in a year.Of course you are right for most of the population.I said on this thread inflation was going into double figures and we have it already.However my roadmap said later in the cycle not now and around 60% over the cycle. 

We will likely see a deflation yet though or at the least a slow down in inflation and that will make the market and the CBs think the threat is over,but it isnt.

The whole cycle is inflationary.The energy transition alone will see big inflation pressure.Carbon tax makes mining more and more expensive depending on how much material you get out per tonne.Coal etc is very very cheap to mine.Copper for instance will see the costs of mining go to over $200 a tonne.Energy transition materials are in very low grades in rock compared to fossil fuel needed ones and so will take a lot more energy to remove.There is also the fact that miners will have to mine lower grade deposits to get enough.

The governments think renewables will lead to deflation in costs,and they are right,in the much longer term.To get there though means large inflation,and there is no way to avoid it.Transition you get high inflation for maybe 20 years,dont transition you get very high inflation in 10 ears anyway and certain collapse as the energy runs out at some point.

That is why we want companies who can gain and leverage the inflation,and ones that can increase their prices with or close to it,but their costs lag.

[HousePriceMania]

42 minutes ago, DurhamBorn said:

Not my savings,they are up 55% in a year.Of course you are right for most of the population.I said on this thread inflation was going into double figures and we have it already.However my roadmap said later in the cycle not now and around 60% over the cycle. 

We will likely see a deflation yet though or at the least a slow down in inflation and that will make the market and the CBs think the threat is over,but it isnt.

The whole cycle is inflationary.The energy transition alone will see big inflation pressure.Carbon tax makes mining more and more expensive depending on how much material you get out per tonne.Coal etc is very very cheap to mine.Copper for instance will see the costs of mining go to over $200 a tonne.Energy transition materials are in very low grades in rock compared to fossil fuel needed ones and so will take a lot more energy to remove.There is also the fact that miners will have to mine lower grade deposits to get enough.

The governments think renewables will lead to deflation in costs,and they are right,in the much longer term.To get there though means large inflation,and there is no way to avoid it.Transition you get high inflation for maybe 20 years,dont transition you get very high inflation in 10 ears anyway and certain collapse as the energy runs out at some point.

That is why we want companies who can gain and leverage the inflation,and ones that can increase their prices with or close to it,but their costs lag.

Couldn't lose on the stock market if you bought anything after March 2020.  My best perform is he1, was up about 500% at one point.  The big problem's the UK ( world ) face will be avoided by many on here but for the general population you can't help but think there are massive issues coming, many of which might affect you indirectly.  

Looking at all the graphs, info, numbers, lies, truths that are out there I have to conclude that we could easily see the mother of all collapses.   If the FED are really prepared to not act in the face of 20% inflation then:

a) The banking system is f**ked beyond repair

b) There will be a lot of angry people

Imagine if something like an earthquake hit the US west coast, there are no end of events that could spark the mother of all crisis.

People might do well to read up on the great depression and how many decades it too for people to recover their losses.

"The stimulus package managed to restore confidence in the markets and 25 years later, in 1954 to be exact, the Dow Jones Industrial Average managed to recoup its losses."

 

Some of us will be dead before we recover our losses if we see a proper collapse and given what's been going on, we should.

[Gin]

Those who fear inflation could pose a threat to the United States economic recovery got another dose of ammunition on Wednesday with the latest government data showing producer prices kept galloping upward in June.

 

https://www.aljazeera.com/economy/2021/7/14/inflation-watch-us-producer-prices-see-biggest-surge-on-record

[Gin]

1 hour ago, HousePriceMania said:

Imagine if something like an earthquake hit the US west coast, there are no end of events that could spark the mother of all crisis.

 

Will the mother of all heatwaves do .? Well it is a start.

Look well if we are close to the climate tipping point already . Then we really are fucked .

[Barnsey]

3 hours ago, DurhamBorn said:

We will likely see a deflation yet though or at the least a slow down in inflation and that will make the market and the CBs think the threat is over,but it isnt.

100% agree. Either covid related slowdown or "thank God it was transitory after all" or taper tantrum in autumn. We're playing the long game here.

[Sugarlips]

3 hours ago, HousePriceMania said:

.

People might do well to read up on the great depression and how many decades it too for people to recover their losses.

.

I intend to start watching these today, I’m told there is a lot of forgotten truths in this little series

 

[Bricormortis]

 

 

NASDAQ By Year - Historical Annual Returns

 

https://www.macrotrends.net/2623/nasdaq-by-year-historical-annual-returns

[macca]

On 11/07/2021 at 21:03, ThoughtCriminal said:

Even more horrendous

That's chicken feed.. We know how to privatise profits.. 

The Danish government still holds around 75% of the Danish Oil and Natural Gas Group’s assets. All offshore pipelines connecting the North Sea to the Danish coast and natural gas storage facilities are still owned by former the Danish Oil and Natural Gas Group. Third parties can access the pipelines, but must negotiate the terms and tariffs for access with the company. 

Total state revenue for 2014 has been calculated at DKK 18.8 billion. 

 

 

[Talking Monkey]

7 hours ago, HousePriceMania said:

Couldn't lose on the stock market if you bought anything after March 2020.  My best perform is he1, was up about 500% at one point.  The big problem's the UK ( world ) face will be avoided by many on here but for the general population you can't help but think there are massive issues coming, many of which might affect you indirectly.  

Looking at all the graphs, info, numbers, lies, truths that are out there I have to conclude that we could easily see the mother of all collapses.   If the FED are really prepared to not act in the face of 20% inflation then:

a) The banking system is f**ked beyond repair

b) There will be a lot of angry people

Imagine if something like an earthquake hit the US west coast, there are no end of events that could spark the mother of all crisis.

People might do well to read up on the great depression and how many decades it too for people to recover their losses.

"The stimulus package managed to restore confidence in the markets and 25 years later, in 1954 to be exact, the Dow Jones Industrial Average managed to recoup its losses."

 

Some of us will be dead before we recover our losses if we see a proper collapse and given what's been going on, we should.

Joe average on the street is going to get smashed, the average portfolio is not going to be structured like we have they'll be full of glamour stocks. There's middle aged career folks who's pension pot will get smashed in a BK then get battered through the inflation cycle.

[BurntBread]

10 hours ago, Sugarlips said:

I intend to start watching these today, I’m told there is a lot of forgotten truths in this little series

 

@NTB mentioned on another thread that US farmers are being paid to destroy crops, which has a very depression-era ring to it. I wasn't expecting that outside of a real depression, though. I think in the 1930s it was a desperate attempt to keep agricultural prices up so farmers would be able to pay their debts (utter lunacy if you take even one small step back), but I'm guessing this time the perverse motivations are different. Searching turns up a few links, but I wonder if NTB has a good source, with background?

[Boon]

BP below 300... didn't think I'd see that.

Very tempted for a top up but I am 20% oilies now - what kind of exposures do other people have?

Also reading up last night about the troubles in South Africa, not exactly got much coverage in the news here but that seems pretty serious.

[Bricormortis]

https://www.bbc.co.uk/news/world-africa-57835756

Re Boons post.

[ThoughtCriminal]

19 minutes ago, Boon said:

BP below 300... didn't think I'd see that.

Very tempted for a top up but I am 20% oilies now - what kind of exposures do other people have?

Also reading up last night about the troubles in South Africa, not exactly got much coverage in the news here but that seems pretty serious.

Read some data last night that SA has seen the biggest societal decline of any country outside of a war zone. 

 

IQ will exert itself every single time, you can't fight it.