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


spunko

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Green Devil
1 hour ago, Sasquatch said:

Just received this email from Bullionvault. Cash (just euros for now) no longer welcome! O.o

Dear BullionVault user,
 
Starting next month, we must apply a currency holding fee to Euros.
 
This is because, 6 years after the European Central Bank first imposed negative rates, our bank is now applying a negative interest rate to the Client Euro bank account.
 
To allow for this possibility, we emailed all customers and updated our Terms & Conditions in November 2019.
 
Now a fee of 0.75% per annum will apply to Euro currency balances from 1st August 2020.
 
That is the same rate being applied to the entire Euro currency Client Account by our bank. It is more than 6 times the annual cost of storing physical gold with BullionVault, insurance included (minimum US$4 per month).
 
Tariff: Currency Holding Fee
 
This fee will be calculated daily and billed monthly. It will reduce every €100 you hold on deposit by 7 cents each month.
 
To limit the impact on any Euro holdings you have, please withdraw larger sums back to your own bank account, or buy physical bullion.
 
Please note: This fee does NOT apply to US Dollars, British Pounds or Japanese Yen. If that changes, BullionVault will alert all users by email at least 5 working days in advance.
 
This Euro holding fee does not change any of BullionVault's existing charges or fees.

It's funny how even with the euro applying negatuve interest rates, the pound is sliding against the euro. You'd think it'd be rising.. Just shows what trash our currency is right now. 

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Bricks & Mortar
2 hours ago, Vendetta said:

I’ll be QQQs x 3 in a few weeks. 

How do you do these?  Are they strictly for day-trading, ( I say that because I understand there's a high fee and they're not suitable for long term investment), or is it ok to hold for a bit longer, say a week, month, or even several?

I assume you just buy them like a normal ETF, and you're not exposed for any more than your original purchase cost?

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Eventually Right
19 minutes ago, Bricks & Mortar said:

How do you do these?  Are they strictly for day-trading, ( I say that because I understand there's a high fee and they're not suitable for long term investment), or is it ok to hold for a bit longer, say a week, month, or even several?

I assume you just buy them like a normal ETF, and you're not exposed for any more than your original purchase cost?

https://www.investopedia.com/articles/exchangetradedfunds/07/leveraged-etf.asp

That article is worth reading to understand the rebalancing costs.  I think you could hold them for a month or two (especially if they moved in your favour!) but I believe the more volatile the markets, the greater the rebalancing costs are ie if QQQ goes up 1% a day for 15 days, you'd get a much better return on a 3X QQQ etf, than if QQQ goes up by the same amount over 15 days, but does it in a very volatile way (3/4/5% daily up/down moves)

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After two days of profit taking, AXU is roughly at the same level that it was with silver at $19.30/oz. Just saying.

Other names continue to rip, but I like the coiled energy on this one. 40% of my portfolio because fuck it,

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I don't sell any silver/gold (physical or shares). Only add when prices drop.

Just waiting for $5000+ before making some kind of decision.

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36 minutes ago, Errol said:

I don't sell any silver/gold (physical or shares). Only add when prices drop.

Just waiting for $5000+ before making some kind of decision.

Doing exactly the same. The only thing in the short term (2 years or so) that will get us the sell is if we need extra cash to move to the right house. Otherwise I was thinking of 5 or 6 years hence by which time I might have to bail out into property/land etc. 

I don't know about everyone else on dosbods but 5 years feels like a long time at the moment. We could have radically different politics, political unions (I'm looking at you EU), lots of sabre rattling between the US, China and Russia. 

Feeling like a very unusual time to be alive (but then I suppose the mid to late 1930's must have felt similar?)

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1 hour ago, Errol said:

I don't sell any silver/gold (physical or shares). Only add when prices drop.

Just waiting for $5000+ before making some kind of decision.

To be honest I think the ‘Errol’ strategy was the true winner so far. Ignore all else and stack for years knowing the big shitshow was coming. 

I think this time around, it’s different than what I’ve witnessed before (dot com, GFC etc) the infections are still rising the second leg down will be incoming.

The global passives are so overweighted in the FAANGs that the money will just keep throwing at them (a bit like house prices) and the reversal will be in almost slow motion until it isn’t. I think the rush to safe havens will mean there is no pullback. 

This time I’m riding it out until the bitter end. I’ll start taking profits when silver is $50+. 

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I've already got a healthy chunk of investment in PMs across physical, vaulted and stocks. I could add more but it is difficult to self discipline and avoid the potential trap of having all eggs in one basket. If you get it right you win big, wrong and it could be very painful. Based on current prices my additional bullionvault buying from a couple of weeks ago looks like the right choice. Might have gone the other way though (although I do believe strongly in the premise of a decade long reflation event)

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6 minutes ago, Sasquatch said:

I've already got a healthy chunk of investment in PMs across physical, vaulted and stocks. I could add more but it is difficult to self discipline and avoid the potential trap of having all eggs in one basket. If you get it right you win big, wrong and it could be very painful. Based on current prices my additional bullionvault buying from a couple of weeks ago looks like the right choice. Might have gone the other way though (although I do believe strongly in the premise of a decade long reflation event)

Yep I have a fair whack in BV. I'm still WAY down on reflation shares. Question is, do I sell those/cut my massive losses (CNA, TUI, SCG, GOG, NRR, and lots of others) and just buy even more PM's? :/

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1 minute ago, harp said:

Yep I have a fair whack in BV. I'm still WAY down on reflation shares. Question is, do I sell those/cut my massive losses (CNA, TUI, SCG, GOG, NRR, and lots of others) and just buy even more PM's? :/

If it makes you feel better I'm looking grim on Stagecoach, BT and the share that shall not be named.xD

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My no1 rubber band goldie is up 300% now,Harmony.

Silver is hitting my original $23 target now,really pleased,iv done zero work on the roadmap but a straight swap on the dollar call of 90 would say at least another 15% up in silver so $28 might be a mid range target.

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sancho panza
On 19/07/2020 at 17:19, jamtomorrow said:

Art? I mention this in almost complete ignorance of the art market (might be as bad a bubble as classic cars?), and more from the point of view of liking a nice bit of art anyway. Certainly *seems* like the well-orff like to load up on the stuff and do alright out of it, on intergenerational timescales.

Also The Monuments Men is a great film.

Mama Panza used to buy/trade antiques and it's been amazing to watch over the years.Interesingly,very few trends last.Sutff that was flying out of auction houses 20 years ago is now nothing speical.High end art much like @AWW was saying about cars is where the gains are at.

With paintings,you can try and pick the people who'll get taken up but it's a lottery

On 19/07/2020 at 22:42, Harley said:

Personally, I don't see why people would think pensions and ISAs would avoid a wealth tax just because they have some forms of tax advantages at present.  A wealth tax is a completely new dimension of tax.  The structure/shelter of the asset is technically irrelevant.  We need to look at other countries for an insight into such a wealth tax. 

I doubt CGT and IHT, plus a few other changes, will be enough.  They may however structure things to encourage spending to pump their favourite consumption led growth instead, at least in the first instance.  Depends whether they really believe that BS. 

They are currently facing a liquidity/solvency issue rather than a theoretical economic one.  Printy Printy is there but somewhat limited, unless Sterling is the chosen relief valve, again!  Maybe they can get by with a little bit of everything.

CGT and IHT raise relatively little tax wise and are expensive to collect.There are easier ways to screw taxpayers

On 20/07/2020 at 00:31, Cattle Prod said:

Alternative strategies?

Greece has just introduced a 7% flat tax across all income for ten years for *pensioners who move their tax domicile there. Might not be an inflation hedge, but it'd sure be easier if your money wasn't being directly stolen as well as indirectly.

Macro theme: the race to the bottom is on for assets/income to tax  This is a step beyond what Portugal offers, this is tax haven stuff in an affordable country. Accesible for any office based contractor. I assume the Germans will go nuts.

*I haven't managed to find out if this is defined by age or independent income

fair play to thev greeks.I remember goijng to France with Mrs P for  a pre baby trip once and being in the lovely little French village where virtually all the hosues were owned by people who lived elsehwere.Place was pretty but there were few lights on at night.Getting people to live somewhere is great for the economy especiually services eg caring,cleaning,garedning etc.

SUrprised someone hasnt done it sooner.

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sancho panza
On 21/07/2020 at 16:27, Castlevania said:

With regards to potash does anyone know what caused all the potash producers to spike so much in late 2007/early 2008? It’s a little before my time. Was that from inflation fears? 

There was also some weka dollar action at the time besides what @DurhamBorn was saying.Looking at the monthly charts,oil,gold,potash asll peaked around june 08.

19 hours ago, Harley said:

Regulation, regulation,  regulation or control, control, control.....

Treasury to bring cryptoassets under FCA regime

 

Was always on the cards.Noo govt wants people investing in stuff that can avoid tax.

16 hours ago, kibuc said:

Congrats mate, you succeeded where I failed. In all honesty, anyone who ever made money on WDO probably owes a pint to @EconomicAlpha on twatter, he's been championing them since early days. Nailed Kirkland Lake at CAD 2 (yes, TWO Canadian Dollars) as well.

I gave in to my inner gambler and left the train early, not making the same mistake now with my silver juniors :)

In a way,it's worth buying whatever Luis pushes becuase -my thinking anyway- is that the retail that's dumber than me ( I live in hope:)) will find him soon enough.

He tipped Integra the other week and it bounded up iirc

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sancho panza
8 hours ago, DurhamBorn said:

I really like that move of slicing silver miner profits into telcos and potash,iv pretty much doubled my holdings in Euro/Uk telcos out of the profits from the miners.Im actually trying to pick out a few industrials to add later but need to do more work.

Apple,Amazon,Microsoft,Alphabet,Facebook and Tesla now account for 50% of the NASDAQ 100 capitalisation and 41% of the entire 2700 companies in the full index.Not only that there are also many more hugely over-valued companies.

If Amazon falls to $800 billion market cap the index will likely be down 50%+.When is Amazon going to deliver $80 billion free cash  to justify $800 billion?

I'd read they were 20% of the S&P but that stat is amazing

ref the goldies,iirc this was on a Pmaplona tweet

image.png.a31b6e2ea2aa943939a4ac00fd1a1ce0.png

 

image.png.4e6d596c8adc7e072e7abf0d5dc201bb.png

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9 hours ago, harp said:

Yep I have a fair whack in BV. I'm still WAY down on reflation shares. Question is, do I sell those/cut my massive losses (CNA, TUI, SCG, GOG, NRR, and lots of others) and just buy even more PM's? :/

No, you are chasing at that point, investing in while PMs are up mean that you’ll lose heavily again if there’s a pullback (albeit temporarily).

This whole thread has been going for years as we all suspected what would happen that’s why we are here, but we just didn’t know the catalyst. Hats off to DB as he has pretty much nailed the timescale and USD movements. The reflation stocks will have their time once this shit is over (although I stayed out of retail, have my reservations about BT etc which I’ve aired on here). CNA is actually a buy from me now for a small allocation at these lows, where I wasn’t really interested before. SSE is the one I didn’t manage to get in the March correction, if the second leg comes I’ll be gunning for that.

My allocation of PMs has been done, I’m continuing in monthly allocations into the likes of Shell, BP, BAE, National Grid etc. Keep stacking the unloved dividend paying biggies while they are at these lows just as we did with PMs in 2018. The aim is to see these rebound out the other side in the reflation. 

The only differing strategy for me is that I’m happy to let my 20%ish PM stack ride the big kahuna. The only trading I will be doing is swapping profits between CEY and HOC both midcaps which seem to have spurts in differing times.

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Bricks & Mortar
10 hours ago, Errol said:

Deutsche Bank's Top Credit Strategist Makes Stunning Admission: "I Am A Gold Bug; Fiat Money Is A Passing Fad In The History Of Money"

https://www.zerohedge.com/markets/deutsche-banks-top-credit-strategist-makes-stunning-admission-i-am-gold-bug-fiat-money

This comes the day after Judy Shelton is confirmed to the Fed Board of Governors.

Luke Gromen has an interesting Twitter post on Judy Shelton.  worth reading the comments.  Freegold even gets a mention.
 

 

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M S E Refugee

I have bought a couple of Oil Tanker stocks today Euronav and Frontline LTD as a speculative play.

Some of the Oil Tanker Stock prices have dropped by 95%, hopefully when things turn round they will have a good run.

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NogintheNog
18 hours ago, Errol said:

I don't sell any silver/gold (physical or shares). Only add when prices drop.

Just waiting for $5000+ before making some kind of decision.

I'm with you on this Errol. Although my targets are slightly lower and at $3000 gold I will probably start slicing out and re-allocating to big industrials that are still standing.

Apparently long-time Fed chair Alan Greenspan once told Congress, “a central bank properly functioning will endeavour to, in many cases, replicate what a gold standard would itself generate.”xD

Unfortunately, bar Paul Volker briefly in the Reagan administration, Central Banks have just kept the party going....

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7 hours ago, Bricks & Mortar said:

This comes the day after Judy Shelton is confirmed to the Fed Board of Governors.

Luke Gromen has an interesting Twitter post on Judy Shelton.  worth reading the comments.  Freegold even gets a mention.
 

 

The only way to stop complete collapse at the end of the next cycle is to fix exchange rates and use fiscal transfers to balance allies.A stable dollar and China cut from world markets keeps China down.Is this maybe the play at the end of the cycle?.Lots of work for that yet,but interesting and one to watch.

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