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

[JMD]

On 02/05/2020 at 22:35, DurhamBorn said:

$200 to $300 an ounce by 2028.I dont care how it gets there,but iv got my eye on a holiday home on the Yorkshire coast.Il buy it when my silver value goes past the cost price.At the moment my silver is 11% of the house prices im looking at.I cant get out of it if it happens,my partner keeps checking the prices 

I think that's an excellent idea - to set a personal target sell price for silver in relation to another asset and/or aspiration. Will the holiday home be mainly for personal use or for income?

[Transistor Man]

1 hour ago, Bobthebuilder said:

Thats shocking, i pay £110 a month on a house in London.

I didn’t know, as my wife takes care of that bill. £245 per month. Ouch, more than I thought. We’ve got an outdoor pool and new play Park, though.  

[sleepwello'nights]

2 hours ago, DurhamBorn said:

Yep,thats exactly whats happened.Scroungers at the top and the bottom.

Aren't a lot of the scroungers at the bottom a result of manufacturing jobs being off-shored. The backlash against China might bring some back. 

Will some of the belt tightening that the government may have to engage in result in a reduction to state benefit payments. If so would that make working rather than a reliance on benefits a rational decision that would further reduce the number of scroungers at the bottom.  

[Chewing Grass]

£136 per month 3 bed semi up north, next door has a bigger extension with an extra bedroom theirs is £152.

Didn't realise you can nosey around checking online.

So I/m 8/9ths, the lowest is 6/9ths and Ritchie Riches £20 Million mansion the other side of the canal is 18/9ths.

Band A £102/month (1 bed shit-hole new-build flat with service charges) to Band H £204/month (new build mega mansion).

£204/Month

£102/Month

 

[DurhamBorn]

59 minutes ago, Agent ZigZag said:

Council tax is out of hand with the poorest paying the most.that is a tax after take home pay. Here are a few examples of how extreme they are. Chelsea £3 million flat £1800pa. london flat zone 3 £450,000, £1400pa,. Shepherd Bush house £850,000 £900pa, friends house North West of England’s £650,000 £2,800pa, Richmond house £800,000, £2800pa. It’s the tax I fear the most.

Worse its taken from taxed income if you pay it.Ours is one of the highest in the country here because the council spend that much.the waste is incredible.

[DurhamBorn]

36 minutes ago, sleepwello'nights said:

Aren't a lot of the scroungers at the bottom a result of manufacturing jobs being off-shored. The backlash against China might bring some back. 

Will some of the belt tightening that the government may have to engage in result in a reduction to state benefit payments. If so would that make working rather than a reliance on benefits a rational decision that would further reduce the number of scroungers at the bottom.  

Three things from a macro point made welfare shoot up.First rates being kept too high to try to stop southern house inflation made sterling too high (relative).That aided the loss of manufacturing.Then the government deciding to replace men with benefits.First argument Susan boots him out as she knows the nash is the same money.

One of my outside bets with my dad is that they will announce a new Arc furnace steel works for Teesside.That would be a huge signal of intent.

[DurhamBorn]

 

 

1 hour ago, M S E Refugee said:

Talking of Buffett,he is having a stinker at the moment.

Lost a ton of cash in airline's and lent money to Occidental to help buy Anadarko.

I wouldn't be surprised if he fancies a few Centrica shares.

He always refused to invest in airline stocks for decades as he said they just eat capital.I think he has likely decided he was right all along and made a mistake and is glad to be shot of them.

[Harley]

I've ploughed through the monthly charts for my FTSE income stocks, regional ETFs, PMs, and commodities and a big fat nada except for two new sectors and those already well on the rise.  The weeklies are often still in an uptrend but weakening after the early April bounce.  The trading screener pulled a few on the weekly data (FTSE n=70) but nothing exciting on the daily data (FTSE n=13).  I hope I'm not missing it but to me my data says a melt up looks unlikely right now, not without more of a prolonged pull back.  My worry is my models can't handle the compressed volatility and that there could also be white swan moves from the CBs, etc.  So a good chance I'm wrong but I need to be consistent so maybe the best I can do is prepare now for the consensus falls later with maybe a few trades on the side to keep busy and hedge a bit.  Maybe I should also check the US markets for a better looking picture.  That bounce has cost me but TBF I would only have picked them up on my trading screens as they have not followed through into the monthly investment screens. So to me a traders market with a cautious approach warranted for me when it comes to wealth preservation.  I'm spending the time trying to identify wealth preservation ideas for the forthcoming consensus hit (David Hunter et al) but proving a tough one.  I really hope I'm not widely wrong on all this! 

PS: The only thing softening the blow is my balanced asset allocation which goes to show the importance of this first and foremost.  Indeed, things would have been better had I achieved my 25% bond target allocation (although the validity of this later on is questionable).

[MrXxxx]

14 hours ago, JMD said:

iit wasn't just one pope that banned usury, usury was effectively banned by the Christan church from ithe earliest times (ie. Jesus and the money lenders in the temple). I believe that's why Newton didn't accept the position of governor of Bank of England because he was so devout. This is the reason btw, why Jews came to dominate finance as it was one of the few progressions left open to them. So an own goal by 'our side' if you will, and not a conspiracy

Is this not a bedrock belief of the Islamic faith as well?

[MrXxxx]

14 hours ago, DurhamBorn said:

Blaming the CBs is like blaming the fire brigade for ruining your carpets with water when they turned up to put a massive fire out

This is a good analogy, I use a similar one for Treasury/CB control of money...QE is the size of the header tank, and the buying/selling of bonds in the market is turning on/off the tap of liquidity into the market.

[MrXxxx]

13 hours ago, DurhamBorn said:

So you have worked all your life,own a house,have £400k mixed between ISAs,a SIPP and some cash and are 50.Where do you invest it?

This thread is about the macro picture and the way CBs and governments will likely respond to that and then the likely results.Its so ordinary people can try to find a route through the cycle and protect their wealth and protect their families.For myself,im not interested in the morals,and couldnt care less about bankers apart from how they will respond to the macro picture.The system is what it is.We cant wish it away.

Agree...until recently I found that I was a `mad dog barking at the moon`, I then realised it didn't matter how much `barking` I did it still rose every evening. I have now decided to `lay down`, make my bed as comfortable as possible and if the rest of society wants to sleep in the gutter due to their ignorance that's their problem/choice.

[DoINeedOne]

22 minutes ago, MrXxxx said:

Agree...until recently I found that I was a `mad dog barking at the moon`, I then realised it didn't matter how much `barking` I did it still rose every evening. I have now decided to `lay down`, make my bed as comfortable as possible and if the rest of society wants to sleep in the gutter due to their ignorance that's their problem/choice.

So true the same with most things life just play the game arguing and getting stressed about the rules never achieves anything even though most think the rules are shit

Started reading a book i have had for years "how to stop worrying and start living" after it was recommended again

Not that im worrying about stuff just been recommended a few times its interesting how a lot the stories are about people worrying about the past the future, what if this, what if that and making themselves ill in the process even though like what we talk about here nobody actually knows what's going happen all you can do is have a rough idea or plan of what may happen and play the game and try to protect ourselves 

 

[Shamone]

8 hours ago, Chewing Grass said:

£136 per month 3 bed semi up north, next door has a bigger extension with an extra bedroom theirs is £152.

Didn't realise you can nosey around checking online.

So I/m 8/9ths, the lowest is 6/9ths and Ritchie Riches £20 Million mansion the other side of the canal is 18/9ths.

Band A £102/month (1 bed shit-hole new-build flat with service charges) to Band H £204/month (new build mega mansion).

£204/Month

£102/Month

 

Is that a ghost in the flat window?

[Chewing Grass]

1 minute ago, Shamone said:

Is that a ghost in the flat window?

I thought ghosts were white or grey shadows, looks more like a middle aged naturist/voyeur.

[Majorpain]

8 hours ago, DurhamBorn said:

Worse its taken from taxed income if you pay it.Ours is one of the highest in the country here because the council spend that much.the waste is incredible.

On an related note, your council's new riverbank HQ looks really nice!

https://www.durham.gov.uk/article/21246/Information-about-our-new-HQ

[Harley]

5 minutes ago, Majorpain said:

On an related note, your council's new riverbank HQ looks really nice!

https://www.durham.gov.uk/article/21246/Information-about-our-new-HQ

The address brought a rye smile too!

[TheCountOfNowhere]

10 hours ago, Bobthebuilder said:

Bollocks.

You doubt the man who made 60% in a week on a accidentally purchased share ?

[sleepwello'nights]

9 hours ago, DurhamBorn said:

Then the government deciding to replace men with benefits.First argument Susan boots him out as she knows the nash is the same money.

 

So a return to our traditional family values could be a consequence of the collapse of the economy.  It could turn out to be a beneficial result.

To sound a personal note that is contradictory my mother would frequently tell us that she only stayed with my father for our sakes. A truly miserable family life ensued that even now 60 years later I still carry the scars. Mind you I put that down as a consequence of the rise and fall of facism and the result that British and American troops married European women, Hitler has a lot to answer for.

Not to mention the loss of our Empire 

[afly]

On 02/05/2020 at 22:35, DurhamBorn said:

$200 to $300 an ounce by 2028.I dont care how it gets there,but iv got my eye on a holiday home on the Yorkshire coast.Il buy it when my silver value goes past the cost price.At the moment my silver is 11% of the house prices im looking at.I cant get out of it if it happens,my partner keeps checking the prices 

This is very clever way to plan an exit strategy. You've got silver gains and property losses working together to get you to your goal and if/when it happens, you're out.

Doesn't matter if silver continues to the moon of property hits the floor you got what you wanted for a fraction of today's prices so you can only be so remorseful. Will have to have a think myself about such a plan

[DurhamBorn]

1 hour ago, Majorpain said:

On an related note, your council's new riverbank HQ looks really nice!

https://www.durham.gov.uk/article/21246/Information-about-our-new-HQ

Dont even go there,its 100% crazy.That part is called The Sands,its right next to the river and gets very wet in heavy rain,and used to flood.They are building on top of the best car park in Durham where all the coach's go bringing tourists.I usually park just around the corner from there where there are some free places on a sunday for "Freemen of Durham" nobody hardly knows about them as they are off the beaten track,but only 2 minute walk to that car park then over that little bridge.There is no other parking there once the council build over the car parks.

The council own old offices and land in poorer parts of the county like Spennymoor where they could build and help the economy but instead they choose to build on a flood area,destroy half of the parking in Durham etc.Obvious why,its so the officers and members can swan around Durham for "meetings".

During the week if i go i use the park and ride.Its only £2 all day and really good,but the drop of places are quite a way from The Sands.

Our council is probably one of the worst in the country for wasting money though.

 

 

[Sasquatch]

Someone mentioned GALP Energia (GALP) over the weekend? Portuguese oil and gas firm but with the potential to go into solar led hydrogen production.

Looks interesting. Stock is down 6% so far today (Lisbon exchange). 

[DurhamBorn]

11 minutes ago, afly said:

This is very clever way to plan an exit strategy. You've got silver gains and property losses working together to get you to your goal and if/when it happens, you're out.

Doesn't matter if silver continues to the moon of property hits the floor you got what you wanted for a fraction of today's prices so you can only be so remorseful. Will have to have a think myself about such a plan

Exactly,and it gives my partner something to think about.My son has just bought/is buying a house and he has got a good 10 year fix at 2.64%.You can overpay 10% years 1-6,then from 6 to 10 ,its fixed,but no lock in at all.He has put a 15% deposit down on the house and will owe £106k.Hes also bought £27kish of silver between him and his partner.They are going to over pay 5% to 10% a year then after the 5 year lock in sell the silver if/when it equals whats left of the mortgage.If before that it ever gets to the mortgage amount they will sell it and keep the cash,over pay 10% a year then the full lot at year 6.So if silver trebled in 3 years they would sell etc.

Hes only 21 and his partner is 23,shes a teacher.He has been living with my dad for a few years learning the ropes 

[Agent ZigZag]

20 minutes ago, afly said:

This is very clever way to plan an exit strategy. You've got silver gains and property losses working together to get you to your goal and if/when it happens, you're out.

Doesn't matter if silver continues to the moon of property hits the floor you got what you wanted for a fraction of today's prices so you can only be so remorseful. Will have to have a think myself about such a plan

As a guide a number of years ago I used as a barometer the number of gold ounces required to buy a property. In 2012 I noticed it costing more ounces of gold to acquire Prime Central London property. It was also marking the peak in gold at that time. Dominic Frisby did a piece on this and there are some interesting historical charts that show this if you care to look it up

[CVG]

10 hours ago, Harley said:

Indeed, things would have been better had I achieved my 25% bond target allocation (although the validity of this later on is questionable).

Me too. The bonds in the PP should be Gilts with 30+ years remaining. I sold out early thinking I had an 'edge'. Turned out to be best performing asset over the last 12mo. Too afraid to buy back in now.

[DurhamBorn]

3 minutes ago, Sasquatch said:

Someone mentioned GALP Energia (GALP) over the weekend? Portuguese oil and gas firm but with the potential to go into solar led hydrogen production.

Looks interesting. Stock is down 6% so far today (Lisbon exchange). 

Yes i think im going to get a few of them,they seem to have a rag bag of assets,but are in the right places.

 

5 minutes ago, CVG said:

Me too. The bonds in the PP should be Gilts with 30+ years remaining. I sold out early thinking I had an 'edge'. Turned out to be best performing asset over the last 12mo. Too afraid to buy back in now.

I sold most of my bonds late last year,but very pleased with the performance.They should have a bit longer in the sun,but i have very few now.At this stage im counting cash as bonds.