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


spunko

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sleepwello'nights
6 hours ago, Bobthebuilder said:

I am not disagreeing with you but ive been in the heating business for 20 years and have heard all these things a million times before, if it was me i would install a log burner with a back boiler. I have done a few all electric systems with ground source heat pumps etc and 9 out of 10 have gone back to a gas / oil fired boiler because of running costs.

If wood became the mostly used fuel for domestic heating would there be enough timber available in the UK to satisfy demand or would it lead to the destruction of more forests?

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2 minutes ago, sleepwello'nights said:

If wood became the mostly used fuel for domestic heating would there be enough timber available in the UK to satisfy demand or would it lead to the destruction of more forests?

Wood has a low calorific value and high transport costs so is nearly useless for domestic heating other than occasional use in wood burning stoves or if you have a couple of acres of readily accessible broad leaved woodland for your exclusive use.

i.e. you would need approximately 2 acres of wooded land to supply 1 house all year round without destroying it.

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sleepwello'nights
7 minutes ago, Chewing Grass said:

Wood has a low calorific value and high transport costs so is nearly useless for domestic heating other than occasional use in wood burning stoves or if you have a couple of acres of readily accessible broad leaved woodland for your exclusive use.

i.e. you would need approximately 2 acres of wooded land to supply 1 house all year round without destroying it.

So not viable as a fuel for large scale use. 

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On 28/09/2019 at 10:19, DurhamBorn said:

Most big firms pension schemes are huge.Over time of course they are slowly moving away from DB pensions.It is a huge point in whats ahead though.Companies who used the debt to build out assets and have a long debt profile should do very well as rates increase,mainly as it halts competition.One of the great causes of a debt deflation is the fact margins reduce down to zero when almost anybody can borrow for almost free.It then reverses.

Of course that debt push has created the assets on the other side of the economy,all the expensive lease cars on the road are a great example.The tricky bit for us all is to make sure we avoid the sectors and carnage as best we can,and position for the following cycle.

I still don't see why the BoE buying corporate bonds to drive the yield down forces firms to put more in their pension funds. I only see that from them buying Gilts to drive the yield down. You could argue driving the corporate bond yield down helps compensate for the lower Gilt yield. It reduces debt servicing costs so gives them spare cash to help plug the pension deficit.

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1 hour ago, Chewing Grass said:

Wood has a low calorific value and high transport costs so is nearly useless for domestic heating other than occasional use in wood burning stoves or if you have a couple of acres of readily accessible broad leaved woodland for your exclusive use.

i.e. you would need approximately 2 acres of wooded land to supply 1 house all year round without destroying it.

I remember reading you plant Willow and Beech. The Willow takes 3 years to produce wood but the Beech takes years longer. Once the Beech is ready you are self sufficient and that burns slower than the Willow.

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8 hours ago, Bobthebuilder said:

Interesting.

All combi boilers have 2 gas rates, domestic hot water minimum 25kw @19 mbar and heating 12kw @ 9 mbar burner pressure.

as you say you can heat a average house with 12kw from gas on a 15mm pipe.

I am not disagreeing with you but ive been in the heating business for 20 years and have heard all these things a million times before, if it was me i would install a log burner with a back boiler. I have done a few all electric systems with ground source heat pumps etc and 9 out of 10 have gone back to a gas / oil fired boiler because of running costs.

I suppose all I was saying is that there are options other than simple resistive heating.

I think there are several problems, not least being retrofit (which seldom works well) and also people's expectations -- gas is just so good at heating that anything else brings compromises.  I also think that our expectations of 'having a warm house' will have to change -- as said upthread, what's wrong with wearing a jumper when it gets really cold.  Nevertheless, it really does look as though plain old gas boilers are only going to be 'accepted' for so long.

[another real problem is maintenance costs -- heat pumps in the UK are still a novelty, and it is difficult to get them installed and serviced, at least not at a cheap price.  That'll change as soon as numbers increase (heat pumps are way cheaper in other countries).]

[wood burners aren't the solution -- they're great if you're in the country and/or associated with agriculture, but it really can't be something that 'everyone uses']

An interesting potential solution is micro CHP, which hasn't really been sufficiently exploited in the UK -- it is a fairly good option, in that on the coldest nights the micro CHP systems powered by gas can be providing the electricity for those people who are using only heat-pumps.

But I think that the time of everyone having their own little gas burner that heats up their water is on the way out (whether people like it or not).

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Couple of questions for the builders on this forum.

1.I assume the cost of building a house has stayed very much the same (accounting for inflation) over the last 30-40 years, is this the case?

2. Generally wages for the majority of the population haven't really changed in the last 10 years irregardless of inflation (although this has been pretty low), is this the case for the building trade and the cost of building?

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Modern heating options for modern houses no problem but gets bigger pants the older the house.  I spent 18 months way back researching all this stuff and saw the modern options being pushed for old houses as a con well before it was realised.

My "old house" approach for space heating (hot water is trivial):

. Oil combi boiler as my backstop (sometimes you just need that quick punch of BTUs)

. Very careful use of insulation (to maintain breathability and prevent mould (I also have a PIV))

. Log burner (plus good wood supply, albeit currently low thermal value stuff!)

. Zoning of rooms, including insulating internal stud walls (may even but back the door to the upstairs!)

. Air to air heat pump for a well insulated (modernish) dayroom

. Shelterbelt (trees) to reduce cold winds on house

. Plenty of warm clothing

And to ensure I stay on topic, loads of current and future energy stocks paying good divs to cover my increasing oil bills!

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56 minutes ago, MrXxxx said:

Couple of questions for the builders on this forum.

1.I assume the cost of building a house has stayed very much the same (accounting for inflation) over the last 30-40 years, is this the case?

2. Generally wages for the majority of the population haven't really changed in the last 10 years irregardless of inflation (although this has been pretty low), is this the case for the building trade and the cost of building?

1. Most materials have risen way above inflation for many years,a lot so in the last say 6 years. Things like toilets, taps etc have been cheap coming from China, but a good quality sheet of ply is now about £70!!!! and a Vaillant Ecotec plus 825 with flue and smart controls is about £1500, that was about a grand five years ago.

2. Labour has stayed pretty much the same for qualified ticket holding trades for the last 10years or so, the same cannot be said for the EE filled labour trades im afraid.

Harley? this is all pointing to many of the relation stocks i think. Inflation is very high in a lot of materials at the moment.

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On 27/09/2019 at 16:59, DoINeedOne said:

 

The flow of US investors flows into China is somewhere between 0 and 0.

Foreigners *cannot* even buy a tiny noodle stand inthe arsehole of nowhere in China.

 

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On 28/09/2019 at 11:19, dgul said:

I really don't understand why the central banks get to choose which companies to subsidise with lower debt costs.  

And I really don't understand why our central bank would subsidise foreign companies with lower debt costs.

Hooray!

BoE has reinvented a planned economy.

Because some over promoted civil servant whos gone straight from HE to the number churning in the BoE has a real good grasp on the eocnomy.

Thats why all the BoEstaf from 30 years ago are so rich, as they invested in google, ARM and Apple.

Oh they didnt, did they. Because they arefucking clueless.

 

 

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I have spent my life not really being warm enough at home. Childhood was 1 coal fire in an end terrace and frost on inside of windows. Adulthood being broke and shouting at the kids sneakily trying to turn up the thermostat. I know this is dosbods but there's a limit to how many fucking jumpers you can put on. 

When are things going to get good? Stuff your boilers carefully calculated to produce almost enough heat to stop your teeth chattering I want my own nuclear reactor and sit about in my shorts all day 

 

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7 hours ago, Bobthebuilder said:

2. Labour has stayed pretty much the same for qualified ticket holding trades for the last 10years or so, the same cannot be said for the EE filled labour trades im afraid.

In London you're looking at 200-250 day rate for a decent sparks, skilled trade etc, 100-150 for labourers.

It has been the same number for the last ten years, i.e. its been stagnant, but materials (and bills, petrol etc) have all gone up.

What's also changed is that programmes are getting squeezed more and more... building firms are being asked to do the same work in less and less time for the same money. Everyone I know is plenty busy though... I've personally never been busier than the last year and have often struggled to get decent blokes on site as they're all busy as well.

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22 minutes ago, Hardhat said:

What's also changed is that programmes are getting squeezed more and more... building firms are being asked to do the same work in less and less time for the same money. Everyone I know is plenty busy though... I've personally never been busier than the last year and have often struggled to get decent blokes on site as they're all busy as well.

It's easy to be busy when you're doing more work in less time for the same money! xD

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6 hours ago, spygirl said:

The flow of US investors flows into China is somewhere between 0 and 0.

Foreigners *cannot* even buy a tiny noodle stand inthe arsehole of nowhere in China.

 

A few years old but I think there was a film about some Chinese chancers dressing up made up companies to be sold on by US banks to retail investors in some kind of weird IPO affair.

Think the film was the China hustle https://m.imdb.com/title/tt7215388/

Anyway definitely remember seeing some Chinese laughing all the way to the bank on the opening bell.  

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4 hours ago, Funn3r said:

I have spent my life not really being warm enough at home. Childhood was 1 coal fire in an end terrace and frost on inside of windows. Adulthood being broke and shouting at the kids sneakily trying to turn up the thermostat. I know this is dosbods but there's a limit to how many fucking jumpers you can put on. 

When are things going to get good? Stuff your boilers carefully calculated to produce almost enough heat to stop your teeth chattering I want my own nuclear reactor and sit about in my shorts all day 

 

I hate bring hot in a house.

I find hot houses pretty uncomfortable.

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14 minutes ago, spygirl said:

I hate bring hot in a house.

I find hot houses pretty uncomfortable.

Part of the problem is acclimatisation.  People have their houses, cars and offices set at a warm temperature all year round -- they then can't cope with any deviation from that temperature as it is considered uncomfortable.  If you're the sort that moves with the seasons you'll then find that sort of house uncomfortably hot in winter.

[I happen to think that it is important for the human animal to feel the seasons.  I think that our increasing isolation from the seasons has a negative impact on human mental and physical health.]

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8 minutes ago, dgul said:

Part of the problem is acclimatisation.  People have their houses, cars and offices set at a warm temperature all year round -- they then can't cope with any deviation from that temperature as it is considered uncomfortable.  If you're the sort that moves with the seasons you'll then find that sort of house uncomfortably hot in winter.

[I happen to think that it is important for the human animal to feel the seasons.  I think that our increasing isolation from the seasons has a negative impact on human mental and physical health.]

They need to pitch it better - lose weight, turn the heat down.

I used to work for a company where i got moved to my own office due to my habits of just working in a shirt with the window open in winter.

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19 hours ago, Bobthebuilder said:

Interesting.

All combi boilers have 2 gas rates, domestic hot water minimum 25kw @19 mbar and heating 12kw @ 9 mbar burner pressure.

as you say you can heat a average house with 12kw from gas on a 15mm pipe.

I am not disagreeing with you but ive been in the heating business for 20 years and have heard all these things a million times before, if it was me i would install a log burner with a back boiler. I have done a few all electric systems with ground source heat pumps etc and 9 out of 10 have gone back to a gas / oil fired boiler because of running costs.

I have a ground source heat pump and know several others who have them nearby (West Country).  All are very happy with them and our one copes easily with a 500 year old cob built house.  We get a 1kw to 3kw output on hot water and 1to 4 on heating so no contest with oil costs. 

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15 minutes ago, Loki said:

I run a heat source pump inside the house, so it takes the heat from inside rather than outside and puts it back inside.

I'm an economist, BTW.

Just so long as you only extract the heat from inside a well insulated box, but put the heat outside the box.  That would work.

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