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

[ThoughtCriminal]

3 minutes ago, Bricormortis said:

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

Re Boons post.

Some choice quotes in there. 

 

"In his suburb, the neighbourhood patrol operates only at night. He has joined it, along with about 25 other men.

"Some have guns, but most of us just carry sticks, pipes and torches. I never thought I'll ever do this, but we have no choice. There are no police; no soldiers," he said.

"We block all intersections with our cars. Some of us will stand there; others will do foot patrols." 

 

32% unemployment. 

 

 

[Talking Monkey]

12 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

 

I watched all three parts fascinating stuff.

[NTB]

2 hours ago, BurntBread said:

@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?

I don't think you're going to read about it in the MSM! I picked it up from the Anons a while back. It was info about farmers being paid 50% over the odds provided the crop was destroyed. I can't find that but Biden is playing the same game using climate bullshit.

https://www.westernjournal.com/world-faces-food-shortage-biden-pushes-american-farmers-take-fields-production/

[HousePriceMania]

Continuing my US Lumber price series, 13% down yesterday, if anyone is looking to justify transitory inflation and what we might see deflation wise then this chart is a winner.  It's going down much quicker than I expected and could be back at 1990s peak prices in a few days

[Barnsey]

13 hours ago, Barnsey said:

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.

 

[Lightscribe]

20 minutes ago, HousePriceMania said:

Continuing my US Lumber price series, 13% down yesterday, if anyone is looking to justify transitory inflation and what we might see deflation wise then this chart is a winner.  It's going down much quicker than I expected and could be back at 1990s peak prices in a few days

Looks like a silver chart, I wouldn’t be surprised if JP Morgan had started to keep all the lumber in their vaults and flood the market with fractional paper ETFs.

[Sugarlips]

35 minutes ago, HousePriceMania said:

Continuing my US Lumber price series, 13% down yesterday, if anyone is looking to justify transitory inflation and what we might see deflation wise then this chart is a winner.  It's going down much quicker than I expected and could be back at 1990s peak prices in a few days

At the retail level, until Home Depot etc clear their huge overhang there is no demand. The stores paid well over odds to secure supply during the panic and builders simply won’t pay even if it means delaying work. The bigger buyers will circumvent retail and go direct to buy at today’s prices.. 

I imagine if there were such a thing, the toilet paper index would’ve looked similar last year, the pull forward of demand only lasts a while.

[VeryMeanReversion]

1 hour ago, Boon said:

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

SIPP is 25% cash, 25% oilies, 15% mining, 12% PMs, 12% utilities, 5% tobacco and the rest is finance/transport/retail/investment-trusts

The only ones I'm looking to sell is the last group if they recover.  I have no bonds.

No plans to buy anything until there is are some big price drops.  I'll take the inflation hit on the cash whilst waiting and pick up divis on everything else.

Non-SIPP savings is mostly cash with some investment trusts and extra tobacco as I can't resist the yield.

I call this my OAF strategy (Oil and Fags).  This will be the new money when everyone realises cash is just a promise to be broken.

 

 

 

 

 

[Starsend]

2 hours 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.

I'm 40% oil & gas, 26% precious metals miners. Hilariously unbalanced but sometimes you got to have faith in your calls and go in big.

If I was 40% in FAANGS I'd be crapping myself because they're expensive. I'm happy with my exposure to energy because I think the whole sector is very cheap and cheap sectors never stay cheap forever.

I'm looking at diversifying more into emerging markets as recommended by Jeremy Grantham - he reckons they're cheapish and along with cash one of the better places to be in the event of the big mofo crash that's got to be coming.

I like the Henderson Far East fund which I believe some people on here own. Extra juicy dividend but it concerns me a bit that there seems to be a fair few Chinese companies and the sentiment against China is definitely becoming aggressive. Also Singapore (I like exposure to their currency), Australia, Hong Kong, South Korea, Taiwan and Indonesia. Might get me some of that along with IBZL.

 

 

[HousePriceMania]

14 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

 

Thanks for that.  

The crazy bit is the...cant get your money out the bank while they let inflation rip.

You cant win.

[Starsend]

8 minutes ago, HousePriceMania said:

Thanks for that.  

The crazy bit is the...cant get your money out the bank while they let inflation rip.

You cant win.

Yep you've got to see these things coming ahead of the masses.

At some point they'll force savers into their crappy bonds while they keep inflation above the yield for year after year. It's fine knowing they're going to do this kind of stuff but it's how they implement it that is the big question. For example, what if they come out with a new law saying that all pensions (including SIPPS) and ISAs must hold 40% government bonds? Wouldn't surprise with the way things are going.

[HousePriceMania]

3 minutes ago, Starsend said:

Yep you've got to see these things coming ahead of the masses.

At some point they'll force savers into their crappy GREEN bonds while they keep inflation above the yield for year after year. It's fine knowing they're going to do this kind of stuff but it's how they implement it that is the big question. For example, what if they come out with a new law saying that all pensions (including SIPPS) and ISAs must hold 40% government bonds? Wouldn't surprise with the way things are going.

 

[Loki]

8 minutes ago, Starsend said:

what if they come out with a new law saying that all pensions (including SIPPS) and ISAs must hold 40% government bonds? Wouldn't surprise with the way things are going.

Anyone who doesn't support Freedom Bonds (!) is clearly a racist

[Barnsey]

First Ramsden, now Saunders. Busy day for hawkish perspectives, perhaps testing the waters given good job numbers also out today?

 

[DurhamBorn]

38 minutes ago, Starsend said:

I'm 40% oil & gas, 26% precious metals miners. Hilariously unbalanced but sometimes you got to have faith in your calls and go in big.

If I was 40% in FAANGS I'd be crapping myself because they're expensive. I'm happy with my exposure to energy because I think the whole sector is very cheap and cheap sectors never stay cheap forever.

I'm looking at diversifying more into emerging markets as recommended by Jeremy Grantham - he reckons they're cheapish and along with cash one of the better places to be in the event of the big mofo crash that's got to be coming.

I like the Henderson Far East fund which I believe some people on here own. Extra juicy dividend but it concerns me a bit that there seems to be a fair few Chinese companies and the sentiment against China is definitely becoming aggressive. Also Singapore (I like exposure to their currency), Australia, Hong Kong, South Korea, Taiwan and Indonesia. Might get me some of that along with IBZL.

 

 

Iv been buying the Henderson fund with some profits and divis that are rolling in.They have been buying Chinese banks,but own a lot of nice reflation type value stocks.Im leaning towards all this woke crap will weaken the west badly.Its a disaster,and Asian equities,value ones are a nice hedge against that.

I really hope the oilies can stay down so they can buy back as many shares as possible before renewables blow up.The costs of mining the things needed for the energy transition are huge,a magnitude, and people dont undertsand the energy use in that.Each tonne you need to mine of rock has a cost on how much percentage grade is what your after.I think the cost roughly trebles compared to what you need for carbon cars etc.The  irony is the higher the carbon tax,the higher the cost of transition.A classic inflation feedback loop.

Down the line blue hydrogen will easily outprice green,and natural solutions will become huge as politicians use them to get net zero when they realise their plans are a disaster.

I see no way they will be able to force people to get a heat pump etc,its all just pie in the sky talk.

[Starsend]

16 minutes ago, DurhamBorn said:

Iv been buying the Henderson fund with some profits and divis that are rolling in.They have been buying Chinese banks,but own a lot of nice reflation type value stocks.Im leaning towards all this woke crap will weaken the west badly.Its a disaster,and Asian equities,value ones are a nice hedge against that.

I really hope the oilies can stay down so they can buy back as many shares as possible before renewables blow up.The costs of mining the things needed for the energy transition are huge,a magnitude, and people dont undertsand the energy use in that.Each tonne you need to mine of rock has a cost on how much percentage grade is what your after.I think the cost roughly trebles compared to what you need for carbon cars etc.The  irony is the higher the carbon tax,the higher the cost of transition.A classic inflation feedback loop.

Down the line blue hydrogen will easily outprice green,and natural solutions will become huge as politicians use them to get net zero when they realise their plans are a disaster.

I see no way they will be able to force people to get a heat pump etc,its all just pie in the sky talk.

Top holding is a chinese bank. I like Rio Tinto, BHP and TSMC. Overall 22% in China so need to keep an eye out for things hotting up between the West and China.

There's some utterly mentalist talk going on at the moment, like banning gas boilers in a couple of years - I mean what kind of Government is that retarded!

Do you have any thoughts on the likelihood of Governments eventually forcing us to buy their crappy paper in our SIPPS/ISAs?

 

 

China Construction Bank	4.80
Rio Tinto	3.92
BHP Group	3.75
Taiwan Semiconductor Manufacturing	3.52
Macquarie Korea Infrastructure Fund	3.11
Vinacapital Vietnam Opportunity Fund Ltd USD	3.08
SK Telecom	2.93
Bank of Communications	2.91
Samsung Electronics	2.88
Hindustan Petroleum	2.83

 

 

 

 

 

 

[No One]

@DurhamBorn I have a question for you.

 

I'm seeing lot's of red. Buying opportunity or the end of the reflation trade?

Telefonica is down, would you buy more?
BP? Shell? etc

[DurhamBorn]

6 minutes ago, No One said:

@DurhamBorn I have a question for you.

 

I'm seeing lot's of red. Buying opportunity or the end of the reflation trade?

Telefonica is down, would you buy more?
BP? Shell? etc

Its a reflation cycle,so its a 6 to 10 year timeframe.Telefonica is down slightly ,Telefonica Germany is up 7% since it was no 1 on @sancho panza Coma scores.There will be lots of pullbacks along the way,some very violent.Every one will see people shook out who think we are going back to dis-inflation etc.Its crucial to keep diverse,but id be happy to but most sectors we follow at the moment.Only one i took profits from was Shell.I bought a lot right at the bottom and have sold a lot between £14 and £15,but still own a decent holding.

[reformed nice guy]

1 hour ago, Starsend said:

I'm 40% oil & gas, 26% precious metals miners. Hilariously unbalanced but sometimes you got to have faith in your calls and go in big.

If I was 40% in FAANGS I'd be crapping myself because they're expensive. I'm happy with my exposure to energy because I think the whole sector is very cheap and cheap sectors never stay cheap forever.

I'm looking at diversifying more into emerging markets as recommended by Jeremy Grantham - he reckons they're cheapish and along with cash one of the better places to be in the event of the big mofo crash that's got to be coming.

I like the Henderson Far East fund which I believe some people on here own. Extra juicy dividend but it concerns me a bit that there seems to be a fair few Chinese companies and the sentiment against China is definitely becoming aggressive. Also Singapore (I like exposure to their currency), Australia, Hong Kong, South Korea, Taiwan and Indonesia. Might get me some of that along with IBZL.

 

 

I am 42% oil as well due to large purchases last year that have performed very well (thanks DB!)

[ThoughtCriminal]

Interesting historic milestone 

[reformed nice guy]

1 hour ago, DurhamBorn said:

I see no way they will be able to force people to get a heat pump etc,its all just pie in the sky talk.

Its bollocks, can confirm

[No One]

58 minutes ago, DurhamBorn said:

Its a reflation cycle,so its a 6 to 10 year timeframe.Telefonica is down slightly ,Telefonica Germany is up 7% since it was no 1 on @sancho panza Coma scores.There will be lots of pullbacks along the way,some very violent.Every one will see people shook out who think we are going back to dis-inflation etc.Its crucial to keep diverse,but id be happy to but most sectors we follow at the moment.Only one i took profits from was Shell.I bought a lot right at the bottom and have sold a lot between £14 and £15,but still own a decent holding.

Ok, so how does Dr. Werner's model fit with yours?

 

 

Tim 28;00 onwards u to 32:40

[Mapper]

2 hours ago, Starsend said:

Yep you've got to see these things coming ahead of the masses.

At some point they'll force savers into their crappy bonds while they keep inflation above the yield for year after year. It's fine knowing they're going to do this kind of stuff but it's how they implement it that is the big question. For example, what if they come out with a new law saying that all pensions (including SIPPS) and ISAs must hold 40% government bonds? Wouldn't surprise with the way things are going.

This is what Russell Napier constantly warns about.

Financial repression.

[Harley]

3 hours ago, Starsend said:

I like the Henderson Far East fund which I believe some people on here own. Extra juicy dividend but it concerns me a bit that there seems to be a fair few Chinese companies and the sentiment against China is definitely becoming aggressive. Also Singapore (I like exposure to their currency), Australia, Hong Kong, South Korea, Taiwan and Indonesia. Might get me some of that along with IBZL.

As with all markets, I buy the companies direct which means some odd sleep patterns (but only once a week).  I'm annoyed some (all?) of the UK based retail brokers impose the US ban on US citizens owning some HK stocks onto their UK investors too.  But yet again IB do it right.

[Harley]

6 minutes ago, Mapper said:

This is what Russell Napier constantly warns about.

Financial repression.

I trust we've all been working hard to mitigate that during this quiet period!