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

[Yellow_Reduced_Sticker]

On 04/10/2019 at 00:27, Harley said:

Was in Aldi, Tesco's and the Co-op tonight!  Rubbish amounts off in Tesco and the employees were clocking out with most of it.  Aldi a no go as usual.  Co-op is the one - proper discounts on a wide range, not that I would pay the elevated full prices.

PS:  At least my spell of PMS (Panza Missing Syndrome) is over!

From my understanding Aldi do their reductions in the morning ?

this was from @DurhamBorn as i remember it well cos he mentioned running into a "YUMMY Mummy" clad in her spandex leotards workout gear!

I did Tesco again last night and it just hopeless, spoke to the woman scavenger who is there EVERY night!  i kid you not!  even she says its crap every day, the good times have definitely gone...

SO glad i'm moving to the SW should complete end of this month, just can't wait to get out of this warzoneSh*tHole!

they have a waitrose & Aldi not to far from my village, so hopefully will do better there...i have a relative who lives in a posh part of surrey who does waitrose at around 6pm she CLEANS UP and i talking big time, with top quality food,  she reckons last year she saved around £4K cos of the waitrose YRS!

[DurhamBorn]

3 hours ago, spygirl said:

People just need to vote.

As a rule, people on working age benefit just dont vote.

Besides, when Shazza's kids get to 170, her benefits gets cut, and, at the grand age of ~50, she finds herself having to 60h a week to afford the small bedsit, whilst pyaing taxes to support ShazJr and her 3 kids on benefits in a big house .... their outlook on benefits and taxes tend to change.

 

 

 

Most get on the sick then though spy.A friend of mines partner is doing that now,two years before benefits go on her oldest child she is at the quacks ever week with "depression",seems 100% fine when i see her,but she has now being told she has some weird named mental illness and so she is trying to get PIP in her own name.She says she isnt used to working now,so it would be unfair on her to work,and it doesnt suit her life,she says other people like working but she doesnt.My mate had to do a day at the local food bank from his work,he said the amount of people getting food bags who had new iphones and new nails done etc was amazing.

[DurhamBorn]

Just now, Yellow_Reduced_Sticker said:

From my understanding Aldi do their reductions in the morning ?

this was from @DurhamBorn as i remember it well cos he mentioned running into a "YUMMY Mummy" clad in her spandex leotards workout gear!

I did Tesco again last night and it just hopeless, spoke to the woman scavenger who is there EVERY night!  i kid you not!  even she says its crap every day, the good times have definitely gone...

SO glad i'm moving to the SW should complete end of this month, just can't wait to get out of this warzoneSh*tHole!

they have a waitrose & Aldi not to far from my village, so hopefully will do better there...i have a relative who lives in a posh part of surrey who does waitrose at around 6pm she CLEANS UP and i talking big time, with top quality food,  she reckons last year she saved around £4K cos of the waitrose YRS!

Aldi do them before they open usually,its hit and miss but you sometimes get good stuff.My Tesco is still ok,not as good as it was,but usually get a few good nights.Asda is too brutal,Morrisons the same.Co-op is great if you live near a decent sized one once you figure out the times.

[Yellow_Reduced_Sticker]

27 minutes ago, DurhamBorn said:

3 kids,one down as ADHD ,partner claims carers allowance for that one plus PIP,plus all the extra tax credits.They have brand new car,new house they bought before they went on bennies,and eat out 3 nights a week at least.Up here most people are poor who work and have no kids,the well off are all those on benefits with kids,most fiddle them as well getting the full whack as single but have a working partner.I know a lot of people where the guy buys a house,rents it to his partner who gets housing benefit lives with her and they use the benefit to pay the mortgage off.When i was a councillor we had around 1/5 of houses rented to people where it had 5 or 6 people living there,when nobody lived there,they were simply a benefit drop address.

The two child limit has meant the massive payouts wont happen in the future,but the ADHD/PIP get a child down as disabled when really just a bit naughty route is still open and thats where the big money is.I know families who will get over a million in their lifetimes in benefits and havent worked since leaving school.

reading the above just makes ya BLOOD BOIL!

WHY oh WHY is it like this here? !

This is another REASON i'm moving, 75% of my street are full of these bennie scroungers!

on to better talk...

Quote

Aldi do them before they open usually,its hit and miss but you sometimes get good stuff.My Tesco is still ok,not as good as it was,but usually get a few good nights.Asda is too brutal,Morrisons the same.Co-op is great if you live near a decent sized one once you figure out the times.

so i need to be there right by the door at opening? i'll give it a shot when i move and report back...

EDIT agian!

forgot to metion, where i'm moving 2 houses have come up in the last 3 weeks, one house sold in 3 days, cos sellers reduced price by £20k because they want a quick sale don't want to go through a winter with it empty and around the corner from me a single pensioner is selling to move in with her daughter, put on sale last monday ...just reduced her house by 10K - its a buyers market now and yeah prices are going south...

 

[Barnsey]

Things like this make me think we'll see quite the opposite (with a lag after the deflationary bust next year)

[King Penda]

2 hours ago, DurhamBorn said:

3 kids,one down as ADHD ,partner claims carers allowance for that one plus PIP,plus all the extra tax credits.They have brand new car,new house they bought before they went on bennies,and eat out 3 nights a week at least.Up here most people are poor who work and have no kids,the well off are all those on benefits with kids,most fiddle them as well getting the full whack as single but have a working partner.I know a lot of people where the guy buys a house,rents it to his partner who gets housing benefit lives with her and they use the benefit to pay the mortgage off.When i was a councillor we had around 1/5 of houses rented to people where it had 5 or 6 people living there,when nobody lived there,they were simply a benefit drop address.

The two child limit has meant the massive payouts wont happen in the future,but the ADHD/PIP get a child down as disabled when really just a bit naughty route is still open and thats where the big money is.I know families who will get over a million in their lifetimes in benefits and havent worked since leaving school.

This and a bonus is if mum or dad also has mental health problems

[Sasquatch]

3 hours ago, Yellow_Reduced_Sticker said:

forgot to metion, where i'm moving 2 houses have come up in the last 3 weeks, one house sold in 3 days, cos sellers reduced price by £20k because they want a quick sale don't want to go through a winter with it empty and around the corner from me a single pensioner is selling to move in with her daughter, put on sale last monday ...just reduced her house by 10K - its a buyers market now and yeah prices are going south...

 

We're sticking our house on the market in the next couple of weeks. Having two more valuations on Tuesday. The agents we spoke to reckon the market is still hot where we live and they have just had a great September. We've got our fingers crossed that the wheels keep on turning locally for a few months so we can get sold (we're moving into a rental for a couple of years before our retirement move to northern parts).

[DurhamBorn]

4 hours ago, Barnsey said:

Things like this make me think we'll see quite the opposite (with a lag after the deflationary bust next year)

I think thats right,and could be even lower in places,but not for long.What people are missing from what im seeing is the fact this is the end of a long dis-inflation cycle,not the middle of one.Political ,social,and geo-political forces are all pointing to a reflation response once the CBs act to counter a bust.Im working for a world leader in what they do,and they have been for 100 years.If they dont get the next cycle right though they might not exist at the end of it as the inflation drives massive investment in new technology etc.My hope is nobody spots the reflation ahead and keeps hitting the sectors that love it and continue to expect long term inflation at 1.5%.I think we might see 15%+ at some stage.The people holding long term credit assets at sub 3% rates will be destroyed.

https://tradingeconomics.com/sweden/manufacturing-pmi

Swedish PMI smashed lower.Might not mean much to most it been Sweden,but they are the best indicator in Europe due to the way the economy is structured in supply chains.Thats a better signal to me than Germany.

[MvR]

A short but interesting analysis of this week's reversal in the S&P by one of my go-to TA/market analyst YouTubers. He also talks a little about gold and his expectations of a break to the upside.

In summary, declining factory orders increased market expectations of a recession and therefore a rate cut, which equities like. An interesting chart of historic interest rate expectations is shown.. link here.. click on "historic" to see the chart :- https://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html

He also discusses the S&P as viewed using Market Profile charts, and suggests Thursday's low showed "excess", implying it was a panic / capitulation move and the low should hold in the near term at least.

 

[Talking Monkey]

20 minutes ago, DurhamBorn said:

I think thats right,and could be even lower in places,but not for long.What people are missing from what im seeing is the fact this is the end of a long dis-inflation cycle,not the middle of one.Political ,social,and geo-political forces are all pointing to a reflation response once the CBs act to counter a bust.Im working for a world leader in what they do,and they have been for 100 years.If they dont get the next cycle right though they might not exist at the end of it as the inflation drives massive investment in new technology etc.My hope is nobody spots the reflation ahead and keeps hitting the sectors that love it and continue to expect long term inflation at 1.5%.I think we might see 15%+ at some stage.The people holding long term credit assets at sub 3% rates will be destroyed.

https://tradingeconomics.com/sweden/manufacturing-pmi

Swedish PMI smashed lower.Might not mean much to most it been Sweden,but they are the best indicator in Europe due to the way the economy is structured in supply chains.Thats a better signal to me than Germany.

DB with the massive investment in tech I'm guessing there will be huge automation loads of people will be removed from the workforce over the next cycle as their jobs get automated away

[sancho panza]

6 hours ago, Barnsey said:

Things like this make me think we'll see quite the opposite (with a lag after the deflationary bust next year)

One optionw e've discused before is the japanese situation whereby we get a credit deflation followed by printing but no inflation...as yet.

2 hours ago, DurhamBorn said:

I think thats right,and could be even lower in places,but not for long.What people are missing from what im seeing is the fact this is the end of a long dis-inflation cycle,not the middle of one.Political ,social,and geo-political forces are all pointing to a reflation response once the CBs act to counter a bust.Im working for a world leader in what they do,and they have been for 100 years.If they dont get the next cycle right though they might not exist at the end of it as the inflation drives massive investment in new technology etc.My hope is nobody spots the reflation ahead and keeps hitting the sectors that love it and continue to expect long term inflation at 1.5%.I think we might see 15%+ at some stage.The people holding long term credit assets at sub 3% rates will be destroyed.

https://tradingeconomics.com/sweden/manufacturing-pmi

Swedish PMI smashed lower.Might not mean much to most it been Sweden,but they are the best indicator in Europe due to the way the economy is structured in supply chains.Thats a better signal to me than Germany.

I constantly reassess where I think we're at and where we're going in this process.I've been a deflationista for 15 years but over the last couple I've had to accept that print they will.I still find it hard to reason how we won't all go Japanese.Could it be that they went japanese on their own and you can't have 100 countries all devaluing at the same time.....we have aging populations in the West which may inhibit any attempts at reflation.......

 

 

Intrigued by your last comment re Sweden DB,any chance you could elaborate some more? ie with an example of how their supply chain is structed is it things like Forestry etc?

 

 

[sancho panza]

12 hours ago, Harley said:

What's wrong with Interactive Investors?

Nothing,they're superb in terms of service and you can buy all sorts of obscure shares through them even Aussie...

I jsut like to be well spread  across brokers.and since this thread has got me to join the 21st century and set up online accounts,I'm getting well into it.I find HL a bit restrictive as they don't offer multi currency.

 

Interactive offer options as well.

Always prefer to go on a recommnedation though.

[DurhamBorn]

2 hours ago, sancho panza said:

One optionw e've discused before is the japanese situation whereby we get a credit deflation followed by printing but no inflation...as yet.

I constantly reassess where I think we're at and where we're going in this process.I've been a deflationista for 15 years but over the last couple I've had to accept that print they will.I still find it hard to reason how we won't all go Japanese.Could it be that they went japanese on their own and you can't have 100 countries all devaluing at the same time.....we have aging populations in the West which may inhibit any attempts at reflation.......

 

 

Intrigued by your last comment re Sweden DB,any chance you could elaborate some more? ie with an example of how their supply chain is structed is it things like Forestry etc?

 

 

They manufacture 18% market share for heavy vehicle powertrains.Orders for those tend to be leading indicators.Per capita they export double the UK and treble the US.Almost half of value added in manufacture is from automotive.The sectors that turn down first are the largest in Sweden and so are picked up first.These are supply chains into Europe,Germany mainly.2 to 3 month lag roughly,so expect Europe PMI to flag badly November/December.

The main reason i see inflation next cycle is the scale of printing,and the fact it will be everyone like you say.Lots of geo-political risk out there,and governments will be in a green rush against each other.All Fiat will be going down against assets/commods.

[DurhamBorn]

Cross market work on this flagged the transports as being winners for the cycle ahead.

https://www.telegraph.co.uk/business/2019/10/05/end-road-cheap-car-loans-crisis-looms/

Arriving like clockwork now it seems.

[Barnsey]

23 minutes ago, DurhamBorn said:

The main reason i see inflation next cycle is the scale of printing,and the fact it will be everyone like you say.Lots of geo-political risk out there,and governments will be in a green rush against each other.All Fiat will be going down against assets/commods.

I completely understand the stance of turning Japanese but the narrative out there is changing based on the lack of results of QE in the Eurozone this past decade, definitely seeing a large tilt towards fiscal gov spending being the socially accepted way forward. Naturally rates will be dropped and QE resumed, but it'll have such little effect that it'll be the fiscal side and perhaps some MMT helicopter money that does it. Heck, why not when rates are this low (as Javid et al keep spouting).

[Harley]

3 hours ago, sancho panza said:

Always prefer to go on a recommnedation though.

Multi-currency is very useful, although less do with this KID thing, but not many offer it.  I'm only aware of II, IB, and some foreign ones like Internaxx and Swissquote.  I've been close to trying IB many times.

II offer options or is that IB?  European I assume, not US terms.

[leonardratso]

full of shit

https://www.bbc.co.uk/news/business-49923459

 

[Durabo]

 

3 hours ago, leonardratso said:

full of shit

https://www.bbc.co.uk/news/business-49923459

 

Surely thats a good thing? A drop in commercial property precedes a drop in residential?

[King Penda]

The question is when do things go totally tits up I'm fed up of waiting

[Yellow_Reduced_Sticker]

15 hours ago, Sasquatch said:

We're sticking our house on the market in the next couple of weeks. Having two more valuations on Tuesday. The agents we spoke to reckon the market is still hot where we live and they have just had a great September. We've got our fingers crossed that the wheels keep on turning locally for a few months so we can get sold (we're moving into a rental for a couple of years before our retirement move to northern parts).

the villige i'm buying is a STUNNING part of the Cotswold's, the properties i mention are value wise ...£270K reducded 250 sold in 3 days, the one aroud corner 265 now on sale for 255 , at these prices they seem to be selling...there are a lot more houses in this area for sale at 350/480 BUT they are NOT selling!? been on the market for yonks...

1 hour ago, stokiescum said:

The question is when do things go totally tits up I'm fed up of waiting

at the end of this month when i move into my newly bought place!

[King Penda]

19 minutes ago, Yellow_Reduced_Sticker said:

the villige i'm buying is a STUNNING part of the Cotswold's, the properties i mention are value wise ...£270K reducded 250 sold in 3 days, the one aroud corner 265 now on sale for 255 , at these prices they seem to be selling...there are a lot more houses in this area for sale at 350/480 BUT they are NOT selling!? been on the market for yonks...

 

at the end of this month when i move into my newly bought place!

This ones been reduced and I'm watching to see what it goes for it's a nice house (no laughing at the back ) High Lane, Tunstall, Stoke-on-Trent, ST6
https://www.rightmove.co.uk/property-for-sale/property-83548910.html

[Majorpain]

2 hours ago, stokiescum said:

The question is when do things go totally tits up I'm fed up of waiting

Whilst i potentially stand to make a lot of money from it, it will hopefully hold off as long as possible.  There will be a LOT of misery about, and not necessarily from greedy people who deserve it.

[Talking Monkey]

1 hour ago, stokiescum said:

This ones been reduced and I'm watching to see what it goes for it's a nice house (no laughing at the back ) High Lane, Tunstall, Stoke-on-Trent, ST6
https://www.rightmove.co.uk/property-for-sale/property-83548910.html

That is defo nice Stockie crazy what you can get up north. I doubt you could get a studio in London for the money they want for that

[DurhamBorn]

9 hours ago, Barnsey said:

I completely understand the stance of turning Japanese but the narrative out there is changing based on the lack of results of QE in the Eurozone this past decade, definitely seeing a large tilt towards fiscal gov spending being the socially accepted way forward. Naturally rates will be dropped and QE resumed, but it'll have such little effect that it'll be the fiscal side and perhaps some MMT helicopter money that does it. Heck, why not when rates are this low (as Javid et al keep spouting).

Thing in Barnsey they didnt track where the QE went,they just roll out the old oh in went into assets,but it didnt.Most of the QE is equal to government welfare spending.If you take the deficits and the printing and the welfare spending they pretty much average out.In affect here in the UK they printed the tax credit and housing benefit bill.

So QE was spend on trampolines in council house gardens,BTL landlords,nail bars and people who hire out bouncy castles for kids parties and lease cars.Of course that is just a simple way of looking at it and it went on much more,but almost all the areas were where we imported the stuff mostly,or low productivity service things.

That is why we didnt get the inflatiom,China sucked a lot of it up as paddy field workers became trampoline makers

Iv been tracking what i call "backbone",its the investment that goes into the basics of an economy,and its lagged way behind for 30 years apart from a shoot higher in telcos during the .com boom.That cycle is flashing an end and i think everything points to a new technical cycle ahead based on green energy and everything around that.Instead of extra tax credits winding up with trampoline makers in Zhejiang it will be investment here in the UK.The US and Europe will be doing the same.

Inflation had no chance in this cycle due to structural forces at work,and people who expected high inflation missed the point,dis-inflation forces have been way higher since around 1983.That is now ending.Im pretty convinced most of the market is going to get caught out by this massive change.Long term bonds have some more time in the sun yet,but will destroy massive wealth in the next cycle.

People need to ignore all the hyperbole as well.Our economies are vast and complicated and arent going back to the stoneage,its just they are going to become inflationary for a cycle,because that is what is needed.Carnival will sell less cruises,telcos will see much higher use of their networks as everything gets a sim and the cloud moves onto their assets.

In lots of ways inflation levels things for people,because the safest becomes the most unsafe (bonds and cash) and the areas that make our lives better but need capital and cause pain during a dis-inlation will move into the sun.

[DurhamBorn]

1 hour ago, stokiescum said:

This ones been reduced and I'm watching to see what it goes for it's a nice house (no laughing at the back ) High Lane, Tunstall, Stoke-on-Trent, ST6
https://www.rightmove.co.uk/property-for-sale/property-83548910.html

Beautiful house that stokie,those bricks are like steel as well.My dads house has similar ones,i think around 1920 and was a nightmare putting cables through the wall,blunted loads of drill bits.A lot been spent on that by the look,i could see you setting up home there and settling down though that would mean many a broken heart in Stoke and surrounding shires