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


spunko

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1 minute ago, TheNickos said:

Tempted to double up on shell and bp :ph34r:

Dont forget Repsol B| ,im not buying anymore Shell,i actually sold some above £14,but still have a good holding.I want to see  that they intend to increase the divi back when cash improves and not waste it all.

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Talking Monkey
1 hour ago, DurhamBorn said:

Dont forget Repsol B| ,im not buying anymore Shell,i actually sold some above £14,but still have a good holding.I want to see  that they intend to increase the divi back when cash improves and not waste it all.

DB do you rate Total I spread the allocation into Total to diversify the allocation to oilies

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1 hour ago, Talking Monkey said:

DB do you rate Total I spread the allocation into Total to diversify the allocation to oilies

Yes i like them,i only got a very small holding in them though

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Chewing Grass

2018 a retrospective.

Top 100 UK Companies Ranked By Profit & Revenue Per Employee - July 26, 2018

The UK’s most profitable FTSE 100 company is little known 3i (private equity and venture capital) which generates a staggering £5,206,406 ($6,858,685 USD) of profit per employee.

However, Real Estate Investment Trusts are the UK’s most profitable industry, with companies averaging just over £686,000 ($903,705 USD) of profit per employee.

Oops.

https://merchantmachine.co.uk/profit-per-employee/

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So I picked up BHP and BP last week for the long long term dividend and inflation play as well as some smaller oil producers which were speculative punts.

Was looking at SIL ETF - didn't get organised in time two weeks ago to dip a toe and now it looks high to me.  Thoughts?

My long term GDXJ which I've had for over 5 years is doing very nicely.  It was always my one of my counter-cyclical bets against the world economy, and as physical gold has been always off the menu when it was cheap due to security (very hard to carry cross border when moving from job to job) next best thing.

apart from that, waiting for a big crash so I can invest some into the solids who should still be around after the bad times. Wouldn't touch any bank stocks with your cock right now.

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7 hours ago, Cattle Prod said:

On the oil front, rig count is still flatlining. Every week is another kick in the nuts for shale.

Are any of the big oil companies overweight in shale, and so to be avoided?

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1 hour ago, wherebee said:

physical gold has been always off the menu when it was cheap due to security (very hard to carry cross border when moving from job to job)

Is vaulted gold (and silver) any good for you?

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58 minutes ago, CVG said:

Is vaulted gold (and silver) any good for you?

don't trust them.  Pretty sure one or more will be seized by local governments or a special tax applied.  

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jamtomorrow
18 minutes ago, wherebee said:

don't trust them.  Pretty sure one or more will be seized by local governments or a special tax applied.  

That's the one I'm mulling over.

I really don't like the idea of sharing a vault with LBMA pools right now - like, if SHTF in LBMA, it's going to be very tempting to "borrow" whatever else is in the vaults to get through a crunch, property rights be damned.

I've been managing London allocation down to zero for this reason on Bullionvault. Now left with the question of estimating similar risks for Zurich and Singapore. The Swiss have a decent *reputation* for upholding property rights, but I'm also wary of falling prey to Inductivist Turkey thinking.

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17 minutes ago, wherebee said:

don't trust them.  Pretty sure one or more will be seized by local governments or a special tax applied.  

On the trust scale they probably don't rate much lower than mine owners!

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1 minute ago, jamtomorrow said:

That's the one I'm mulling over.

I really don't like the idea of sharing a vault with LBMA pools right now - like, if SHTF in LBMA, it's going to very tempting to "borrow" whatever else is in the vaults to get through a crunch, property rights be damned.

I've been managing London allocation down to zero for this reason on Bullionvault. Now left with the question of estimating similar risks for Zurich and Singapore. The Swiss have a decent *reputation* for upholding property rights, but I'm also wary of falling prey to Inductivist Turkey thinking.

I based mine in Zurich in order to mitigate some home country risk.

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4 minutes ago, CVG said:

I based mine in Zurich in order to mitigate some home country risk.

I also based my BV holdings in Zurich for the same reasons.

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9 minutes ago, Tingles said:

I also based my BV holdings in Zurich for the same reasons.

The danger is that you become too paranoid and make the cardinal sin of holding everything in one place. Best spread it a round with a bit everywhere - physical, vault, mines, ETF Physical, etc.

And spread within those, e.g. physical - some in the sock drawer, some with the underpants, etc.

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1 minute ago, CVG said:

The danger is that you become too paranoid and make the cardinal sin of holding everything in one place. Best spread it a round with a bit everywhere - physical, vault, mines, ETF Physical, etc

I completely agree, hence only Ag in BVZ.

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I'm half and half between London and Zurich on Bullionvault.

I have to place some trust in these organisations. Physical silver is just too bulky to store in quantities at home. 

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Chewing Grass
10 minutes ago, Sasquatch said:

I'm half and half between London and Zurich on Bullionvault.

I have to place some trust in these organisations. Physical silver is just too bulky to store in quantities at home. 

I've always fancied a big bar of tungsten simply because its so heavy and would be fun to watch people try and pick it up.

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Dollar well below 95 now and heading down,as @Cattle Prod put on earlier the long bond is now being pushed down,both were key inflection points flagged by my road map,both almost 99% not expected by the markets,MSM or anyone.

Silvers should of made everyone massive amounts of money as silver hit my $23 target from when it was $14.More to come i think,but nothing wrong with top slicing some of them big profits into other reflation areas.

I havent been doing much work on my road maps at the minute as im working for a while ,im helping build a manufacturing plant that will create maybe 200 high paid jobs from scratch,the first of many this country is about to see as the cycle unfolds.

On the long bond,nobody expected that to happen apart from on here,only a real macro strategist would understand the drivers of that.

The reason its happening is the Fed is forcing down across the curve so that the industrial companies needed to power the reflation cycle can roll over their debt at very low rates,they are following the macro inflation playbook.They are 100% going for an industrial recovery.

Take telcos,who i think will be big winners over the cycle.They can roll over their debts at very low coupons and then invest the saved cash flow in new fiber,5G etc.The Fed is doing what its there for.Its letting the market allocate the capital,but its oiling the pipes to allow the market to do it.For all the Fed knockers i know now they are 100% in tune with the cycle now.Its exactly whats needed.

Once the recovery takes hold the Fed will allow rates to increase,but they wont front run the inflation because that will cause systemic collapse,they will tail end the inflation and play chase it.They are going to cut liabilities with inflation over the cycle.

Right now people think low rates and no growth are superb for tech companies,but they couldnt be more wrong.They are looking backwards.As the Fed allows the long bond to rise starting probably in 18 months time or maybe into 2 years then tech companies will have to issue equity to grow rather than debt and the prices will fall.

Everything is now in place for the cycle ahead,the only question is the scale,and if the falls that are coming in over valued areas take the rest down as well,or if we get two markets.

 

The key takeaway,is that real assets will be hugely favoured by the cycle,and the expensive backbone of economy assets will be sought.

 

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Solzhenitsyn
32 minutes ago, DurhamBorn said:

Dollar well below 95 now and heading down,as @Cattle Prod put on earlier the long bond is now being pushed down,both were key inflection points flagged by my road map,both almost 99% not expected by the markets,MSM or anyone.

Silvers should of made everyone massive amounts of money as silver hit my $23 target from when it was $14.More to come i think,but nothing wrong with top slicing some of them big profits into other reflation areas.

I havent been doing much work on my road maps at the minute as im working for a while ,im helping build a manufacturing plant that will create maybe 200 high paid jobs from scratch,the first of many this country is about to see as the cycle unfolds.

On the long bond,nobody expected that to happen apart from on here,only a real macro strategist would understand the drivers of that.

The reason its happening is the Fed is forcing down across the curve so that the industrial companies needed to power the reflation cycle can roll over their debt at very low rates,they are following the macro inflation playbook.They are 100% going for an industrial recovery.

Take telcos,who i think will be big winners over the cycle.They can roll over their debts at very low coupons and then invest the saved cash flow in new fiber,5G etc.The Fed is doing what its there for.Its letting the market allocate the capital,but its oiling the pipes to allow the market to do it.For all the Fed knockers i know now they are 100% in tune with the cycle now.Its exactly whats needed.

Once the recovery takes hold the Fed will allow rates to increase,but they wont front run the inflation because that will cause systemic collapse,they will tail end the inflation and play chase it.They are going to cut liabilities with inflation over the cycle.

Right now people think low rates and no growth are superb for tech companies,but they couldnt be more wrong.They are looking backwards.As the Fed allows the long bond to rise starting probably in 18 months time or maybe into 2 years then tech companies will have to issue equity to grow rather than debt and the prices will fall.

Everything is now in place for the cycle ahead,the only question is the scale,and if the falls that are coming in over valued areas take the rest down as well,or if we get two markets.

 

The key takeaway,is that real assets will be hugely favoured by the cycle,and the expensive backbone of economy assets will be sought.

 

Hi DB, 

are you still seeing DXY hitting mid 80’s? David Hunter (who you’re roadmap seemed to share a lot of similarities with) still sees a massive bust end 2020 / early 2021 where everything gets whacked down hard, do you think the same or do you feel we already had it in March?

my PMs have done wonders to my ISA over the past few months, and still accumulating oil/potash/telecos etc in my SIIP.....still I want some cash to go buying if we get another whack down...so just starting to trim some of my PM holdings moving into later part of this year.

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19 minutes ago, Solzhenitsyn said:

Hi DB, 

are you still seeing DXY hitting mid 80’s? David Hunter (who you’re roadmap seemed to share a lot of similarities with) still sees a massive bust end 2020 / early 2021 where everything gets whacked down hard, do you think the same or do you feel we already had it in March?

my PMs have done wonders to my ISA over the past few months, and still accumulating oil/potash/telecos etc in my SIIP.....still I want some cash to go buying if we get another whack down...so just starting to trim some of my PM holdings moving into later part of this year.

My dollar road map is showing 89/90 area for now,David has very similar macro tools to me as he was part of the team at Fidelity back in the late 80s who worked on them,though only a few of the guys from then were macro strategists and continued evolving the tools,most retired,stopped or died.David is an expert of liquidity flows and central bank action though his job would never of been about timing or buy/sell calls.He would put the road map in front of other strategists to do cross market work on the leads and lags,and then that would pass to equity teams to pick how to play the calls.

Im not sure on the structure of the falls ahead,im leaning a bit more towards we might see sector rotation in that while we might see some areas take a whack,it will be very short term,where other area see big falls,never to be re-gained.

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3 hours ago, Cattle Prod said:

be aware you might easily get a 25% drop from here.

I cleared out my silver CFDs from my 'for fun' trading account at $22.3.  Hoping for a dip back as nothing goes up in a straight line, to buy back in ready for the prices David Hunter has talked about.

Amazing when an app on a phone earns more in a day than the person that owns the phone.

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4 hours ago, jamtomorrow said:

That's the one I'm mulling over.

I really don't like the idea of sharing a vault with LBMA pools right now - like, if SHTF in LBMA, it's going to be very tempting to "borrow" whatever else is in the vaults to get through a crunch, property rights be damned.

I've been managing London allocation down to zero for this reason on Bullionvault. Now left with the question of estimating similar risks for Zurich and Singapore. The Swiss have a decent *reputation* for upholding property rights, but I'm also wary of falling prey to Inductivist Turkey thinking.

HSBC had to go cap in hand to the BOE to borrow gold for the SPDR ETF earlier this year, rumour is BOE was not amused!

If an ETF and a government have a claim to the same bar of gold, my money is only going one way.

https://www.bullionstar.com/blogs/ronan-manly/amid-london-gold-turmoil-hsbc-taps-bank-of-england-for-gld-gold-bars/

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7 minutes ago, Majorpain said:

HSBC had to go cap in hand to the BOE to borrow gold for the SPDR ETF earlier this year, rumour is BOE was not amused!

If an ETF and a government have a claim to the same bar of gold, my money is only going one way.

https://www.bullionstar.com/blogs/ronan-manly/amid-london-gold-turmoil-hsbc-taps-bank-of-england-for-gld-gold-bars/

Fascinating article. My own small observation is the Perth Mint essentially stopped selling physical in late March til late May, I can only assume the product being produced was being redirected to help backfill the gaps..

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