Jump to content
DOSBODS
  • Welcome to DOSBODS

     

    DOSBODS is free of any advertising.

    Ads are annoying, and - increasingly - advertising companies limit free speech online. DOSBODS Forums are completely free to use. Please create a free account to be able to access all the features of the DOSBODS community. It only takes 20 seconds!

     

IGNORED

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


spunko

Recommended Posts

On 12/06/2020 at 10:49, JMD said:

Just to (finally) add (promise!)... Genuinely hope i've not annoyed anyone with my 'perceived thread derailment' above, I do think its relevant but shan't post more about this as the financial topics here are equally fascinating for me... but did flag topic up because I am genuinely unsure if there is a shared correlation for those two apparent 'separate' topics. Anyway, I do hope (and pray!) they are both end-of-cycle effects and will both die a natural rhythmic death come end of cycle, because I definitely don't want to see (any more) social-justice-warriors in (...infecting?) our parliament. Because if that happens, we will all have lots to worry about - much more than the current crazy talk of banning Baden-Powel statues and Faulty Towers. Who could have predicted these thing happening just 10 years ago?

The great irony is that Neil Howe (Furth Turning) can't even comment on these issues in regard to his own theory. If he did discuss candidly 'social justice' movements, etc, he would be immediately de-platformed, dismissed from social media, etc. This should warn us how weird things have gotten already.

 

Anyway, signing-off with homage to our Great Government !!... Stay Home ('don't question'), Save Lives (not just black ones matter).

Tend to agree with you. I've seen some of Neil Howe's stuff and a lot of it makes sense although I do think he has a few blind spots.

Fixing the monetary system would go a long way to fixing things - as long as it's not fixed with something different but just as bad. I'd say watching how the Fed deal with the coming currency collapse is probably just about the most important thing for an investor - hence any talk on the Fed/monetary system is pretty relevant in my view. DB I'm sure is spot on with his reflation/industrial cycle ideas which at least gives us a good idea where to invest in the short/medium term. At some point though it all collapses with mathematical certainty, I think this is when we'll need to really be watching the Fed like hawks to see what direction things go at that point.

The increasing political correctness is indeed concerning. I'm not optimistic and you may be correct that it's a bigger problem than the Fed. History does seem to show that these things don't tend to reverse of their own accord, they get worse and worse until extreme measures are needed to restore normality again, i.e war. Still, a topic for another thread. 

Link to comment
Share on other sites

  • Replies 35.1k
  • Created
  • Last Reply
On 11/06/2020 at 11:37, TheCountOfNowhere said:

What did these f**king morons expect, self cert loans for anyone in business. Sunak is a disaster for the UK.

 

Anecdotal. I know a guy. Contractor. Key industry so lockdown had no affect, other than having to purchase a load of locally made hand sanitizer. Never been busier. Got 6k grant. Wife who is co owner wouldn’t claim because morally wrong. Then you’ve got the moron in my place heating the building (cash for ash) 24/7 to such a temperature that I wear shorts and all the doors are open even in January. Take everything you can get folks. It’s every man for himself. I hate the system but you can’t fight it.

Link to comment
Share on other sites

2 hours ago, Starsend said:

Tend to agree with you. I've seen some of Neil Howe's stuff and a lot of it makes sense although I do think he has a few blind spots.

Fixing the monetary system would go a long way to fixing things - as long as it's not fixed with something different but just as bad. I'd say watching how the Fed deal with the coming currency collapse is probably just about the most important thing for an investor - hence any talk on the Fed/monetary system is pretty relevant in my view. DB I'm sure is spot on with his reflation/industrial cycle ideas which at least gives us a good idea where to invest in the short/medium term. At some point though it all collapses with mathematical certainty, I think this is when we'll need to really be watching the Fed like hawks to see what direction things go at that point.

The increasing political correctness is indeed concerning. I'm not optimistic and you may be correct that it's a bigger problem than the Fed. History does seem to show that these things don't tend to reverse of their own accord, they get worse and worse until extreme measures are needed to restore normality again, i.e war. Still, a topic for another thread. 

Yes, I agree topic for another thread. The reason for me initially posting was that I had just wanted to 'round off' what I'd been posting recently about the government CV response, I was shocked both by their policy over reaction and also by the overwhelming public support it received. Also recently, were many posts from contributors about the economic manipulations happening (eg George gammon video). So, all these 'manipulations' sort of struck a chord with me - and Im now convinced that big government will get even bigger and bigger. So anyway for me this has led me to investment decision to go more 'decomplex' - oil, commods, PM's, plus some industries like telecoms, etc. This is a recent change of direction for me, driven by realisation of the risks of government interference, along with de-globalisation, new cold war, making the investment universe far too complicated to navigate. I'm investing for the next 10 year/medium term cycle, so just hope my portfolio allocations will be the right ones.                                                                                                                            (re Neil Howe, I used to be a big fan of his work, still interesting but now sorta suspicious why he hasn't done a new edition of his book, seems the time to and after all surely would be a best seller, so does he even really back his own theory any more?)

Link to comment
Share on other sites

7 minutes ago, Cattle Prod said:

Excellent post. I'm in the very same boat. This lockdown and acceptance of it has confirmed to me where I'm headed. I won't be working in ten years time whether I want to or not, so I need to accumulate and preserve as much as I can for my family now. Not a moment to be wasted, as I'm sure @Harley would agree.

A little anectotal, I'm in the market for an air rifle to shoot the rats my new compost heap will attract. Found a couple I like, went back to order, widely sold out. Make of that what you will!

Agreed!

I looked at air rifles in Feb-Mar (for the same reason, honest!) and same then!

You must have seen that video of the guy ratting with his rifle too!

Link to comment
Share on other sites

Agent ZigZag
1 hour ago, Bricks & Mortar said:

David Hunter has a major revision of his precious metal price predictions for a Big K event.
 

 

I am now leaning to any big sell off if any to be very short lived as Central Banks cannot afford a sharp economic decline to take hold Especially in light of current social unrest as the two running in parallel would be a disaster. Any whiff of markets correcting Central Banks will be in like a shot. As was mentioned earlier any hope of a meaninful industrial led  recovery in my opinion will not materialise instead it will be an unstructured spray and pray by Governments. Yes commodities will go up but so will social anger as many will not be a recipient of this money injection. I am very likely now to restructure my sip and isa to be leaning very heavy towards oil and gas, miners and telecommunications. I have been buying into the miners over the last week top pining up my existing holding and adding new.Very likely these will be buy and hold regardless.

I am leaning my portfolio to what society and people need require and desire.

on air rifles i am a weichrauch hw  80k .22. These air rifles whilst below 12lbs for the Uk mkt were designed for a much higher lbs and can be very easily tuned up to 30lb that would make it a powerful fire arm, not that I have attempted to do so. Al the same an excellent hunting rifle as whilst heavy built to last, powerful and accurate.

 

Link to comment
Share on other sites

2 hours ago, Bricks & Mortar said:

David Hunter has a major revision of his precious metal price predictions for a Big K event.
 

 

If that comes to pass then I will be minted. At the same time it also suggests that the world will be knee deep in the smelly stuff. I don't want that either for me or my family and friends. Quite terrifying really.

Link to comment
Share on other sites

ThoughtCriminal
45 minutes ago, Sasquatch said:

If that comes to pass then I will be minted. At the same time it also suggests that the world will be knee deep in the smelly stuff. I don't want that either for me or my family and friends. Quite terrifying really.

Yes, I sometimes wonder if we won’t end up lie the two youngsters in The Big Short as we beat the “experts” but then it sinks in what that actually means.

 

Especially in light of what DB has often alluded to May be coming at the end of this decade.

 

Still, nothing we can do about that.

Link to comment
Share on other sites

1 hour ago, Sasquatch said:

If that comes to pass then I will be minted. At the same time it also suggests that the world will be knee deep in the smelly stuff. I don't want that either for me or my family and friends. Quite terrifying really.

That feeling when all i wanted was a 'rebalanced' financial system and got the end of days too xD

Link to comment
Share on other sites

20 hours ago, Chewing Grass said:

Shovel ready projects are generally can-kicking and a lot will have a very poor long-term return in investment if any because if money was to be made they would be building them now.

I would go for repairing all roads, fixing sea defences, painting stuff that has been left to rust and cutting all those overgrown hedges encroaching on roads.

We don't need 18 months of mass concrete pouring we need 18 months of general maintenance.

Completely agree. The undergrounds stations near me are looking very run down. They are listed buildings but need painting and concrete repairs.

Lets get the place looking good. Trouble is i'm sure the  country won't agree on what good is.

Link to comment
Share on other sites

13 hours ago, Bricks & Mortar said:

David Hunter has a major revision of his precious metal price predictions for a Big K event.
 

 

chart.png

Central banks all got red pilled by 2008, if you have a giant vault nothing gives you peace of mind quite like 1000 tons of physical gold.  Paper promises are starting to go out of fashion for the big boys.

So i'm not copying what the central banks are saying, i'm copying what they are doing!

Link to comment
Share on other sites

NogintheNog
On 05/06/2020 at 21:45, Wheeler said:
On 05/06/2020 at 09:52, NogintheNog said:

Anyone see the interview on Channel 4 news last night with economic historian Niall Ferguson and professor of economics at Stony Brook, Stephanie Kelton. She's advised Democrat presidential candidate Bernie Sanders – as well as the progressive Congresswoman Alexandria Occasional-Cortex. She’s now advising Joe Biden’s campaign.

The interview is here;

https://www.channel4.com/news/economist-stephanie-kelton-on-us-unemployment-crisis-the-only-game-in-town-is-the-federal-government

Any thoughts???:Old:

I haven't watched the video, I admit, but Kelton is the current face of Modern Monetary Theory (MMT), which is ironically not modern. I prefer to call it Magic Money Tree.

It's popular with the "free money" crowd of socialists mainly because we are in the deflation phase that lets the government/central bank print money and spend. 

Conventional monetary policy requires the government to borrow the money on the open market. The main advantage to this is that the market can signal whether the spending is too much by requiring a higher interest rate on the bonds. This constrains the governments in their borrowing. It also restricts consumer price inflation in that higher interest rates tend to reduce the amount of discretionary spending available.

MMT doesn't use this mechanism. The main principles are that that the government prints (via the central bank) the money needed for spending. If/when inflation kicks in then the government raises taxes to remove the excess money. Note that taxes aren't used to fund government spending, this is done purely by printing the money. 

My issues with this are:

  • Inflation stats are lagging so this is like driving a car where the effect of the controls - steering, accelerating and braking - are delayed by 5 seconds. Imagine how hard it would be to make progress. For MMT they would spend and then see that inflation was above the target 6 months later and start to think about raising taxes to reduce it. 
  • When inflation kicks in, spending won't reduce. They will try and stop it by raising taxes to take the excess money out of the system. Can you imagine a politician trying to justify raising taxes when spending doesn't change?
  • If they can't reduce the money supply by taxation and destruction of the tax receipts then you head down the route of hyperinflation.
  • See Zimbabwe, Argentina and Venezuela for recent MMT attempts.

However, the key to investing is to work with what is happening/will happen and not with what you want to happen. Clearly the government and central banks have started down the road of print and spend so it is a case of trying to work out a way to protect yourself from the shit storm that will come. If they go conventional then expect interest rates to rise to fight the inflation (see Volcker in the 80s) or taxes to rise if they go MMT.

 

Bit behind on this thread but caught up now! Thanks for your excellent reply Wheeler, I think that is spot on as to the directions available. MMT certainly seems to be the preferred option, and the fact that the $US is the reserve currency is maybe why so far we've not seen Zimbabwe, Argentina and Venezuela happen, yet!

Regarding;
 

Quote

 

http://www.shadowstats.com/

PS:  The guy did a cracking job and shows a lot of smarts ("Ceveza Sickness"!).

 

I think this ties in with what George Gammon has been saying, the facts have been manipulated, inflation is far higher and has done more damage to wealth than is realised. Any economic growth has only been sustained by negative real world rates and much more debt. We have all the features of the 1930's but they are disguised. With COVID19 about to get a lot worse...

Link to comment
Share on other sites

4 hours ago, Majorpain said:

Central banks all got red pilled by 2008, if you have a giant vault nothing gives you peace of mind quite like 1000 tons of physical gold.  Paper promises are starting to go out of fashion for the big boys.

 

"Gold still represents the ultimate form of payment in the world. Fiat money, in extremis, is accepted by nobody. Gold is always accepted."

-  Remarks by Chairman Alan Greenspan Before the Economic Club of New York, New York City, December 19, 2002

Link to comment
Share on other sites

sancho panza

 

On 12/06/2020 at 10:25, Majorpain said:

Fab video, and it certainly supports the idea that the "West" has been consuming its own capital to sustain its standard of living, the government has been complicit in the cover up lest the great unwashed realize that things are not quite so rosy as the headline figures suggest.  What cant be hidden is the gradual slide in standards of living which were becoming very obvious to people pre-Wu Flu, side effect of the pound losing its purchasing power as its steadily debased and the wealth is transferred abroad.

It is mad that the Government thought that supporting the poor in the North East by paying them to sit at home with tax credits and benefits was a better idea and cheaper than subsidizing the likes of Alcan in Lynemouth and the subsequent transport of Jobs and pollution (because its really not on another planet) to China.

Super summary MP

I thought he explained the themes beautfiully and even talked about hedonic adjustments to auto vehicles which is one of my major issues with all ifnlation measures.The gaming of GDP/Inflation has been the sutff og legend.For many years in the UK and elsewhere they used two measures of rental equivalence,one ,that was used in GDP gamed it higher,the other used in CPI gamed it lower.

On 12/06/2020 at 11:22, Cattle Prod said:

Hargreaves aren't interested unfortunately, too much hassle for them. Putting it in cash today.

A sensible chocie when you look at their largest holdings imho CP.

I was reading my wife's final salary scheme-she made it by 6 months before it shut-and having learned on here that they only inflation link up to 5% or so and then knowing as we do,what they're mainly invested in,I'm of the opinion that she'll be taking a hair cut of sorts on the pay out when she retires in 25 years time.

All my retirement plans are based on our family work rather than relying on monies promised by a thrid party.ANything she gets will be a nice bonus.

Link to comment
Share on other sites

sancho panza
19 hours ago, Cattle Prod said:

Excellent post. I'm in the very same boat. This lockdown and acceptance of it has confirmed to me where I'm headed. I won't be working in ten years time whether I want to or not, so I need to accumulate and preserve as much as I can for my family now. Not a moment to be wasted, as I'm sure @Harley would agree.

A little anectotal, I'm in the market for an air rifle to shoot the rats my new compost heap will attract. Found a couple I like, went back to order, widely sold out. Make of that what you will!

AS an aside,I mentioned to Mrs P that I wanted to start clay pigeon shootin g(thanks to the psoter and his guidance on here who I can't name) and she was initally very against it.Particualry in terms of the safety/we don't need it/it's safe round here etc etc.I told ehre some stories of my interactions with the police and how outnumbered they are.She did her own research and is now going to start clay pigeon shooting with Junior P.

Gun sales have risen massively in teh USA.This is the worng thread for this comment really but I would suspect,each new gun licence is effectively another vote tfor Trump in Nov who's running at 2.5 on Betfair last time I checked that morally corrupt organistaions website.

We'll get into the polling in that thread nearer the time.But these are interesting times CP>

Link to comment
Share on other sites

sancho panza
18 hours ago, Bricks & Mortar said:

David Hunter has a major revision of his precious metal price predictions for a Big K event.
 

 

Roughly speaking he's lokoking at 2008 deja vu trades plus some for the even bigger mess we're in.

I'd go with those rhytyms but I don't have DB's cahunas and won't put mine in the vice with a price target.

Link to comment
Share on other sites

sancho panza
16 hours ago, Agent ZigZag said:

I am now leaning to any big sell off if any to be very short lived as Central Banks cannot afford a sharp economic decline to take hold Especially in light of current social unrest as the two running in parallel would be a disaster. Any whiff of markets correcting Central Banks will be in like a shot. As was mentioned earlier any hope of a meaninful industrial led  recovery in my opinion will not materialise instead it will be an unstructured spray and pray by Governments. Yes commodities will go up but so will social anger as many will not be a recipient of this money injection. I am very likely now to restructure my sip and isa to be leaning very heavy towards oil and gas, miners and telecommunications. I have been buying into the miners over the last week top pining up my existing holding and adding new.Very likely these will be buy and hold regardless.

I am leaning my portfolio to what society and people need require and desire.

on air rifles i am a weichrauch hw  80k .22. These air rifles whilst below 12lbs for the Uk mkt were designed for a much higher lbs and can be very easily tuned up to 30lb that would make it a powerful fire arm, not that I have attempted to do so. Al the same an excellent hunting rifle as whilst heavy built to last, powerful and accurate.

 

JUne 08 to Oct 08 was what 5 months???

March was a trial run

thanks for the bit in bold

Link to comment
Share on other sites

TheCountOfNowhere

I've had an interesting weekend...

Spoke to 1 (small, 30 staff ) business owner yesterday and they said, invoices all being paid on time, staff coming off furlough as they are too busy and need people back, everything looking rosy.

Spoke to 1 CEO type, same story, invoices being paid, plenty money about, sales are tough though as the cash rich are demand discounts...cash is king they said !!!

And 1 retired captain of industry, 100% convinced no real recession, V recovery is locked in, everything is fine though Airlines will struggle.

Interesting to hear, no one is talking about depression, just a false recession.

Anyone care to agree/disagree ?

Link to comment
Share on other sites

4 minutes ago, TheCountOfNowhere said:

I've had an interesting weekend...

Spoke to 1 (small, 30 staff ) business owner yesterday and they said, invoices all being paid on time, staff coming off furlough as they are too busy and need people back, everything looking rosy.

Spoke to 1 CEO type, same story, invoices being paid, plenty money about, sales are tough though as the cash rich are demand discounts...cash is king they said !!!

And 1 retired captain of industry, 100% convinced no real recession, V recovery is locked in, everything is fine though Airlines will struggle.

Interesting to hear, no one is talking about depression, just a false recession.

Anyone care to agree/disagree ?

My place seems busier than ever, selling crap. Think my furlough was just a way to save a few quid.

Link to comment
Share on other sites

7 minutes ago, TheCountOfNowhere said:

I've had an interesting weekend...

Spoke to 1 (small, 30 staff ) business owner yesterday and they said, invoices all being paid on time, staff coming off furlough as they are too busy and need people back, everything looking rosy.

Spoke to 1 CEO type, same story, invoices being paid, plenty money about, sales are tough though as the cash rich are demand discounts...cash is king they said !!!

And 1 retired captain of industry, 100% convinced no real recession, V recovery is locked in, everything is fine though Airlines will struggle.

Interesting to hear, no one is talking about depression, just a false recession.

Anyone care to agree/disagree ?

For a number of businesses they have just deferred their sales. It's when the redundancies hit that it'll all change.

Link to comment
Share on other sites

14 minutes ago, TheCountOfNowhere said:

I've had an interesting weekend...

Spoke to 1 (small, 30 staff ) business owner yesterday and they said, invoices all being paid on time, staff coming off furlough as they are too busy and need people back, everything looking rosy.

Spoke to 1 CEO type, same story, invoices being paid, plenty money about, sales are tough though as the cash rich are demand discounts...cash is king they said !!!

And 1 retired captain of industry, 100% convinced no real recession, V recovery is locked in, everything is fine though Airlines will struggle.

Interesting to hear, no one is talking about depression, just a false recession.

Anyone care to agree/disagree ?

Leads and lags

Without knowing what industries they are in it's hard to know if I should even care what they think let alone agree with it or not xD

Link to comment
Share on other sites

Bricks & Mortar
13 minutes ago, TheCountOfNowhere said:

I've had an interesting weekend...

Spoke to 1 (small, 30 staff ) business owner yesterday and they said, invoices all being paid on time, staff coming off furlough as they are too busy and need people back, everything looking rosy.

Spoke to 1 CEO type, same story, invoices being paid, plenty money about, sales are tough though as the cash rich are demand discounts...cash is king they said !!!

And 1 retired captain of industry, 100% convinced no real recession, V recovery is locked in, everything is fine though Airlines will struggle.

Interesting to hear, no one is talking about depression, just a false recession.

Anyone care to agree/disagree ?

Small building business here.  Am having to turn down work.  Booked up to end of year.  Lots of enquiries recently.
To be fair though, I've deliberately allowed staff levels to shrink recently, and still see no point hiring, as rates are so low the reward doesn't justify.

+1 for Option 5 point about deferred demand.  These old houses kept getting older during the lockdown.

Link to comment
Share on other sites

M S E Refugee
26 minutes ago, TheCountOfNowhere said:

I've had an interesting weekend...

Spoke to 1 (small, 30 staff ) business owner yesterday and they said, invoices all being paid on time, staff coming off furlough as they are too busy and need people back, everything looking rosy.

Spoke to 1 CEO type, same story, invoices being paid, plenty money about, sales are tough though as the cash rich are demand discounts...cash is king they said !!!

And 1 retired captain of industry, 100% convinced no real recession, V recovery is locked in, everything is fine though Airlines will struggle.

Interesting to hear, no one is talking about depression, just a false recession.

Anyone care to agree/disagree ?

Once the furlough ends we will see the carnage,my wife's company are making redundancies and are happy for their employees to receive the furlough money for the next few months then pay them off.

Link to comment
Share on other sites

51 minutes ago, M S E Refugee said:

Once the furlough ends we will see the carnage,my wife's company are making redundancies and are happy for their employees to receive the furlough money for the next few months then pay them off.

Yeah talks now underway for bigger firms in anticipation of having to fork out part of the wage bill as of August, some will likely see how the next few months go before perhaps making a decision. Seems this generous furlough scheme has boosted the savings accounts of many well, especially given greatly reduced outgoings. Mad.

Link to comment
Share on other sites

Archived

This topic is now archived and is closed to further replies.

  • Recently Browsing   0 members

    • No registered users viewing this page.

×
×
  • Create New...