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

[Loki]

Has anyone read the In Gold We Trust 'Freegold' paper?  I'm just reading it now.  It's fascinating.

https://ingoldwetrust.report/wp-content/uploads/2019/05/IGWT_2019_SPECIAL_Freegold_EN.pdf

[Barnsey]

18 minutes ago, Popuplights said:

Hardly surprising with their fucking derisory rates

Where else are you going to put it at the moment? I’m thinking it’s much more about needing the cash rather than relocation. I see Lloyd’s are offering me a savings account at 0.01%

[DurhamBorn]

55 minutes ago, MrXxxx said:

Well in all my time trading the lowest profit my portfolio has been is plus 25%, so I am happy to share my `Pearls of Wisdom` with you and others if you wish?...But as always DYOR!

NOTE I have been trading since 16 Mar 2020 and only have five stocks in my portfolio so far :-)

Well you picked a very nice day to start 

[spygirl]

22 hours ago, DurhamBorn said:

@sancho panza its something we have avoided talking about,but it looks huge doesnt it this pensions problem.State workers have fantastic pensions compared to the private sector and it simply cant last.The problem is will they simply keep pushing back the pension age to try to deal with it.?If so then that also hits hard the private sector who for a growing percentage the state pension is hugely important.The way the government have handled every problem for 40 years is to tax the ones working hard to  hand to the rest.That is at breaking point.Councils could be ground zero,because council tax is already a hugely destructive tax for ordinary workers and more and more of it is simply going to council pensions.

No matter how bad you think public sector pensions are, its actually worse due to being 70% women.

 

[spygirl]

1 hour ago, Barnsey said:

Knight Frank seem to be doing most of the firefighting at the moment.

The house I was interested in was a no go, owner would only take £3k off instead of the £30k I was after, definitely for the best, it’s still on for sale of course.

Have made enquires about a couple others stating our strong position but apprehension of economic downturn, both replies from the estate agents have said that the market is buzzing and no price drops yet.

What I am seeing now is a flood of properties to the market, many of which went sold STC late last year or early this year. I’m following the market closely but taking a step back now until after the end of the furlough scheme and further 3 month mortgage holiday extension, so end of October.

https://www.housepricecrash.co.uk/forum/index.php?/topic/236653-nationwide-index-may-2020/&do=findComment&comment=1103586356

Just finished the import to houseprices.io

There seems to be an amazing number of "Additional price paid transactions" (highlighted yellow) at the moment. These are:

• transfers under a power of sale (repossessions)
• buy-to-lets where they can be identified by a mortgage
• transfers to non-private individuals

Difficult to draw any conclusions from that, without knowing how many there are of which.

This is before the virus.

 

[Errol]

1 hour ago, Loki said:

Has anyone read the In Gold We Trust 'Freegold' paper?  I'm just reading it now.  It's fascinating.

https://ingoldwetrust.report/wp-content/uploads/2019/05/IGWT_2019_SPECIAL_Freegold_EN.pdf

The IGWT report is the best thing on gold all year. Compulsory reading for anyone interested in the sector. 2020 edition just released.

[Loki]

4 minutes ago, Errol said:

The IGWT report is the best thing on gold all year. Compulsory reading for anyone interested in the sector. 2020 edition just released.

I am reading that too, but at 356 pages I needed something related but easier going to break it up!

Have a read of that Freegold PDF, it's only 46 pages.  I'd be interested in your thoughts

[nirvana]

2 hours ago, Chewing Grass said:

If you want to see the burd start from the beginning, however she is a unnecessary distraction

hmmm, quite entertaining but somehow I don't see an end to 'crony capitalism' myself......

and he's ripped off Gil Scott-Heron's original song

 

[nirvana]

9 minutes ago, Errol said:

The IGWT report is the best thing on gold all year. Compulsory reading for anyone interested in the sector. 2020 edition just released.

Gold is being manipulated, you can see it in the charts  Is it your mates in Russia?? The 'gold custodian' here looks pleased with his work 

 

 

[Hardhat]

2 hours ago, MrXxxx said:

Well in all my time trading the lowest profit my portfolio has been is plus 25%, so I am happy to share my `Pearls of Wisdom` with you and others if you wish?...But as always DYOR!

NOTE I have been trading since 16 Mar 2020 and only have five stocks in my portfolio so far :-)

MrXxxx imagine... you could have stabbed the bottom of a 10+ year cycle on your first day 

Time will tell...

[BearyBear]

Has anyone noticed this..?

https://www.bankofengland.co.uk/statistics/money-and-credit/2020/april-2020

Key points:

• UK households and businesses are continuing to increase their deposits in banks and building societies. Sterling money holdings of households, non-financial businesses, and financial businesses rose by £37.3 billion in April, following an increase of £67.3 billion in March.
• Households and private businesses have been repaying loans from banks, on net, but corporates have accessed significant funds through corporate bond and commercial paper issuance. Households repaid £7.4 billion of consumer credit, on net, in April, the largest net repayment since the series began.
• The cost of credit fell in April. For individuals, effective rates on overdrafts fell 15 percentage points. The interest rate on new fixed-rate mortgages was little changed, but floating-rate mortgage borrowing rates fell by 46 basis points. The interest rate paid on new borrowing by businesses fell by 10 basis points, with larger falls on rates for SMEs.

[DurhamBorn]

Remember that this thread started about a coming debt deflation.

Well how about the biggest paying off of consumer debt in history.?.How many in the MSM or anywhere else would of expected that.People in lockdown being paid furlough money and paying down their debts.

Notice BearyBear has already posted it above,worth a read.

 

[BearyBear]

Looks like RobinHood users love bankrupt companies..! Number of HODLers shoot up by 50%+ on the news.

[JMD]

What are people's view on the UK honouring and even extending right of Hong Kong nationals to 'temporarily' reside here. Numbers are unclear, but could be 300,000 - 3M HK Chinese. Obviously the temporary visas will be defacto permanent. I guess with 250,000 net migration we could cope with the lower end estimate in terms of numbers, who knows perhaps we could freeze all future immigration for say next 10 years. But if say 1M+ came, how would this work if unemployment was rising, recession, etc? The skills and work ethic would be great but the timing would be awful.                                                                                                                                                                                                                                         (Personally I think it would be an interesting 'experiment', because I expect in 20 years time the new british-chinese would be doing very well, showing I think that different cultures have different attributes and talents. Though I suspect that a vocal section of this country will still be screaming that any difference in attainment levels between the different communities is due to racism, be it subconscious, structural, or homeopathy!)

[MrXxxx]

9 hours ago, 5min OCD speculator said:

Gold is being manipulated, you can see it in the charts  Is it your mates in Russia?? The 'gold custodian' here looks pleased with his work 

 

 

The whole finance market from gold to housing is manipulated by the big boys, its just as a retail punter your have to avoid following the herd as this is where they will make their money.

[MrXxxx]

9 hours ago, Hardhat said:

MrXxxx imagine... you could have stabbed the bottom of a 10+ year cycle on your first day 

Time will tell...

The problem was being a `virgin` I was taking it extra careful :-)...and although I wouldn't wish it to be different, I appreciate my success so far has been down to luck and so not much of a learning exercise. ....

....and by being `late to the party` I have seen gold go from $1200 to $1800, every month hoping it would drop back down so that I could gain an entry :-(

[MrXxxx]

6 hours ago, JMD said:

What are people's view on the UK honouring and even extending right of Hong Kong nationals to 'temporarily' reside here. Numbers are unclear, but could be 300,000 - 3M HK Chinese. Obviously the temporary visas will be defacto permanent. I guess with 250,000 net migration we could cope with the lower end estimate in terms of numbers, who knows perhaps we could freeze all future immigration for say next 10 years. But if say 1M+ came, how would this work if unemployment was rising, recession, etc? The skills and work ethic would be great but the timing would be awful.                                                                                                                                                                                                                                         (Personally I think it would be an interesting 'experiment', because I expect in 20 years time the new british-chinese would be doing very well, showing I think that different cultures have different attributes and talents. Though I suspect that a vocal section of this country will still be screaming that any difference in attainment levels between the different communities is due to racism, be it subconscious, structural, or homeopathy!)

But would the second generation show the same enthusiasm for personal advancement?...

..seems to be a pattern seen that the first generation migrants work hard for a better life, and their offspring having had it easy (er) lack the same motivation.

On another note, it would be an idea selling opportunity for all of those inner London mega apartment developments that were/are about to become unsold.

[UnconventionalWisdom]

45 minutes ago, MrXxxx said:

But would the second generation show the same enthusiasm for personal advancement?...

..seems to be a pattern seen that the first generation migrants work hard for a better life, and their offspring having had it easy (er) lack the same motivation.

On another note, it would be an idea selling opportunity for all of those inner London mega apartment developments that were/are about to become unsold.

Ahh the 3 generations wealth loss...

Quick Google- 

The Chinese have a saying: “Wealth does not pass three generations.” But it’s not unique to China; the same sentiment is expressed across multiple cultures, from Japan (“rice paddies to rice paddies in three generations”), to Scotland (“the father buys, the son builds, the grandchild begs”) to even here in the U.S. (“shirtsleeves to shirtsleeves in three generations”).

[spygirl]

US yield curve steepens as 30-year Treasury falls from favour

Traders eye Fed policy shift, ballooning government spending and stabilising economy

https://www.ft.com/content/7ad69c8a-dba4-4b83-a6ce-12e2c07593a3

46 minutes ago, MrXxxx said:

But would the second generation show the same enthusiasm for personal advancement?...

..seems to be a pattern seen that the first generation migrants work hard for a better life, and their offspring having had it easy (er) lack the same motivation.

On another note, it would be an idea selling opportunity for all of those inner London mega apartment developments that were/are about to become unsold.

Cantonese, yes.

Culture is very education n work based.

Wont be laundries and takeaways mind.

Other countries - less likely.

 

[UnconventionalWisdom]

1 hour ago, MrXxxx said:

The whole finance market from gold to housing is manipulated by the big boys, its just as a retail punter your have to avoid following the herd as this is where they will make their money.

Yep, do not read the financial section  of newspapers. They promote conventional wisdom that everyone is doing. That way if all goes wrong, they can say it's not their fault as everyone was promoting it. If it continues, they can reference it.

[UnconventionalWisdom]

16 hours ago, DurhamBorn said:

made damn sure i ended up with a nurse

Just before lockdown I lost my mother to cancer. My aunty, her twin sister was a palliative care nurse at a hospice for 20 years and then a Macmillan nurse. She was amazing to have around and took good care of my mum. This allowed my mum to have her wish of leaving this world at home. My aunty's mate from the hospice also helped and for the last two weeks was visiting daily. They have been taught to react quickly, have compassion and not take things personally. I think you are onto something about getting with a nurse.

[sancho panza]

On 02/06/2020 at 00:15, DurhamBorn said:

@sancho panza its something we have avoided talking about,but it looks huge doesnt it this pensions problem.State workers have fantastic pensions compared to the private sector and it simply cant last.The problem is will they simply keep pushing back the pension age to try to deal with it.?If so then that also hits hard the private sector who for a growing percentage the state pension is hugely important.The way the government have handled every problem for 40 years is to tax the ones working hard to  hand to the rest.That is at breaking point.Councils could be ground zero,because council tax is already a hugely destructive tax for ordinary workers and more and more of it is simply going to council pensions.

There's been so much else to talk about but this pensions crisis is creeping up on us. as @M S E Refugee poiints out,the maths of ZIRP means higher employer contributions and quite simply the system can't cope either with the delveraging or the cure for the deleveraging.

That FT.com article(I'm don't subscribe) paints a stark reality looming for a lot of US cities and public sector unions where pensdion monies are held in trust for the beneficiriaes.Given how bad most teachers are at maths,they're not seeing this coming.Nor are huge chunks of the parliamentary elites in eitehr the UK or teh US>

The UK has similar problems especially in local councils where incompetence predominatesa tthe senior levels.Reading @Frank Hovis thread on councils buying car showrooms so they can invest the proceeds in social care costs is the sort of thing that makes the eyes weep.

Looking at our political elite,I see very few with a basic grasp of the problems let alone a decent idea for a solution.

On anotehr matter,I'm reading a decent paper on UK banks at the minute and it looks like a crisis is inbound.Debating whether to start a new thread or pin it in here.I'll PM you.

On 02/06/2020 at 10:33, jamtomorrow said:

This - the arse is about to drop out of labour's bargaining power, for good. The only velocity coming to the consumer side from there will be non-wage flows i.e. refinancialisation or Government-enforced recycling of wealth.

Effectively, the economy is about to split in two, irreversibly.

I think Labour/consumer is going to have a hard time here.Skilled workers will be at a premium but increasing automation has done a lot of harm as will high unemployment

23 hours ago, Frank Hovis said:

Surely holding the actual physical PM is the best way?

 

Depends how much you need to hold.

Martin Armstrong has some good advice against holding in a safe custody box.

Personally,I think if you're storing over 20% of the value in a house that could burn down/get robbed etc etc then you need to consider your options carefully.

21 hours ago, DurhamBorn said:

Buying that weekend when everything was collapsing was the hardest time iv ever bought.At one point £30k down on money i invested the day before  and repeat the day after.I had a few years of work done for it happening though,so i was able to remove almost all the emotional but i did feel slightly rattled with the wish id waited a day/2 days etc crap you always get.

This thread was full of people from nowhere those days saying everything was going to zero and to sell sell.The same time as the Fed were starting to right size the liquidity push.It always goes into the plumbing first,then the economy.Its a very tricky period now though.Im constantly tweaking things.Selling some more shaky stocks that have shot up and picking up more in areas like potash.

Iv made some mistakes as always over the last few years,some timing early,and some down right bad stock picking mistakes and some reds that should of been avoided that werent and the odd very amateur mistake thrown in to tut tut over..As always you try to learn from them.On the dollar calls though,id say my record is as good and anyone in the market.They have been 100% correct at every turn point.As a contrarian,its also been very pleasing that at almost every turn the market and the media have all been calling for the opposite direction. .My road map said the Fed would need to keep the dollar under 100 to right size and remove the systemic risk (and then rally the market) and that proved again 100% correct.Its about time i got offered a job with a big currency team somewhere.Id turn it down of course,i have to babysit.

This thread really helps me focus thoughts and learn from others.I think at the very least its been useful for people.

That's where this thread really came into it's own.Sensible people keeping their heads.I remember one poster saying they were the firmest goldbug out there and then telling us all to sell everything..............

which was telling in itself that a good buying opportunity was upon us when even readers of bear threads like this were screaming sell. Crucailly,msot of the old timers here were buying.

As for msitakes,I've made loads too.Such that I can only refer to the Scottish play as such ..............'Alas poor Yorrick...'

Your dollar calls have been good.Especially given how much cheaper and better they are than getting rinsed by Goldman Sachs.

[TheCountOfNowhere]

Is anyone back in profit ?

Currently now down 4%

[TheCountOfNowhere]

11 hours ago, DurhamBorn said:

Remember that this thread started about a coming debt deflation.

Well how about the biggest paying off of consumer debt in history.?.How many in the MSM or anywhere else would of expected that.People in lockdown being paid furlough money and paying down their debts.

Notice BearyBear has already posted it above,worth a read.

 

Ready for the next boom.  House prices are going up I tell ya

[Frank Hovis]

1 minute ago, sancho panza said:

There's been so much else to talk about but this pensions crisis is creeping up on us. as @M S E Refugee poiints out,the maths of ZIRP means higher employer contributions and quite simply the system can't cope either with the delveraging or the cure for the deleveraging.

That FT.com article(I'm don't subscribe) paints a stark reality looming for a lot of US cities and public sector unions where pensdion monies are held in trust for the beneficiriaes.Given how bad most teachers are at maths,they're not seeing this coming.Nor are huge chunks of the parliamentary elites in eitehr the UK or teh US>

The UK has similar problems especially in local councils where incompetence predominatesa tthe senior levels.Reading @Frank Hovis thread on councils buying car showrooms so they can invest the proceeds in social care costs is the sort of thing that makes the eyes weep.

Looking at our political elite,I see very few with a basic grasp of the problems let alone a decent idea for a solution.

On anotehr matter,I'm reading a decent paper on UK banks at the minute and it looks like a crisis is inbound.Debating whether to start a new thread or pin it in here.I'll PM you.

I think Labour/consumer is going to have a hard time here.Skilled workers will be at a premium but increasing automation has done a lot of harm as will high unemployment

Depends how much you need to hold.

Martin Armstrong has some good advice against holding in a safe custody box.

Personally,I think if you're storing over 20% of the value in a house that could burn down/get robbed etc etc then you need to consider your options carefully.

That's where this thread really came into it's own.Sensible people keeping their heads.I remember one poster saying they were the firmest goldbug out there and then telling us all to sell everything..............

which was telling in itself that a good buying opportunity was upon us when even readers of bear threads like this were screaming sell. Crucailly,msot of the old timers here were buying.

As for msitakes,I've made loads too.Such that I can only refer to the Scottish play as such ..............'Alas poor Yorrick...'

Your dollar calls have been good.Especially given how much cheaper and better they are than getting rinsed by Goldman Sachs.

 

Lots of good points there so I will cherry pick.

 

Defined benefits pensions: the reaction to liabilities continuing to outstrip assets within the funded public sector has been to reduce or close; either to new entrants or to existing.  Final salary goes to average goes to DC.

This has served to start capping the liabilities of the scheme so that whilst employer contributions will keep going up to fund those pre-change years the benefit reductions have alredy happened, and will continue to tighten, so that those contributions won't keep going up and after ?ten years will start reducing again.

I don't know what has happened to unfunded (MPs, Civil Service, Armed forces, police, fire, maybe NHS but not sure on that last) but suspect that they are generous as ever.

 

Physical gold storage.  Yes, I am not remotely cavalier about this and it has really curtailed my buying.  I don't have much for this precise reason.

However I think their offgrid status is very valuable and a sub £10k purchase once a year doesn't put me upon anybody's radar - the government, the supplier, or the delivery firm.

 

Physical gold buying - my window for buying is when suppliers have secondary market bulion sovereigns "available in stock"; this indicates more sellers than buyers across the board so I will buy some that year.  Currently that's just the case for 2020 Sovereigns.