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


spunko

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Lots of euphoria and celebration - rightly so on some excellent decisions the last couple of pages. I have learnt and profited from some great minds here - thank you!

The question I still have is:

Who thinks we are going to get a massive pullback before 2020 is finished (lasting 6-12 months or longer) and a massive deflationary bust - that will shake out all the ‘weak bulls’ before the major MPOTS (Miners, Potash, oils, telcos, silver ....)  bull market commences from 2021 for rest of decade?

Or is this the start of it? No collapse for a few years. 

 I still reckon the Nasdaq will collapse 50% by end of year and take the rest of the markets (including Au and Ag and other PMs) with it.

This will of course be followed by even more global monetisation and printing - only then will we see the start of the major ‘Bull run’ and ‘dash to assets’ - pronounced in MPOTS - as we head towards monetary collapse.
 

I am not going ‘ball’s deep’.......yet...... enjoying the ride and taking profits - ready for the inevitable collapse....

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Bandit Banzai
49 minutes ago, spygirl said:

https://www.cnbc.com/amp/2020/08/04/the-fed-is-expected-to-make-a-major-commitment-to-ramping-up-inflation-soon.html?__twitter_impression=true

So, I reckon inflation will be registerringwithin 12 months.

Fed will raise a bit.

UK has no choice but to follow.

"Kuroda-san was last seen to be maniacally laughing himself into a seizure"

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1 hour ago, Sideysid said:

I don’t think they’ll be a pullback (I think we’ve had it). Even in a production results downturn current rising silver price will put FRES ahead in profits and they have another mine opening next year. I believe there’s a major upside on this still to come, silver has suddenly come onto everybody’s radar, especially with green energy use. I’m going big or going home with my allocations. To the moon!

As you and christh said upthread, there is certainly potential for silver to go exponential here... if the "dumb money" and "FOMO money" enters the PM sector. People still remember what happened with Bitcoin in 2017/18, and how many people got rich quick - for me, that is the psychology that could drive this into "to the moon" territory. Silver also hasn't had half of the attention gold has had in the MSM so far (see Gold thread in Investing & Money for a roundup of articles from today), and I wouldn't be surprised if talking heads start to ramp it as a "cheap alternative" to gold for people who still want PM exposure.

It's very hard to tell, but it definitely isn't impossible that we're only at the beginning of the bull run here, and it may at least last until after the US election?

I've taken all the profits I will selling HOC - I mainly did this so I could hold FRES and GDX/J without worrying about taking profits from them, and see how far this bull runs. ( @Sideysid BP with the HOC profits is also my play! Although I'm a little older than 8...)

FRES is the only pure silver play on the LSE, and it looks strong, with good results. It doesn't have the beta to the silver price that some of the smaller AIM miners have, but my holding has still grown 80% over the last few weeks. If we get a real parabolic bull here, 2000p is the target.

Worth mentioning the list of smaller silver miners that was posted a while back by DB as having the greatest beta to silver price, are any of these still buys at $27 silver?

Endeavour Silver

American Silver Corp

Fortuna Silver

First Majestic

Avino Silver

Great Panther

Couer Mining

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Bricks & Mortar
1 hour ago, Vendetta said:

Lots of euphoria and celebration - rightly so on some excellent decisions the last couple of pages. I have learnt and profited from some great minds here - thank you!

The question I still have is:

Who thinks we are going to get a massive pullback before 2020 is finished (lasting 6-12 months or longer) and a massive deflationary bust - that will shake out all the ‘weak bulls’ before the major MPOTS (Miners, Potash, oils, telcos, silver ....)  bull market commences from 2021 for rest of decade?

Or is this the start of it? No collapse for a few years. 

 I still reckon the Nasdaq will collapse 50% by end of year and take the rest of the markets (including Au and Ag and other PMs) with it.

This will of course be followed by even more global monetisation and printing - only then will we see the start of the major ‘Bull run’ and ‘dash to assets’ - pronounced in MPOTS - as we head towards monetary collapse.
 

I am not going ‘ball’s deep’.......yet...... enjoying the ride and taking profits - ready for the inevitable collapse....

I'm still on board with that thesis.  I'm thinking it could go any time, but most likely for me is very late this year, (after US election, possibly with the result being trigger), or early next year for the crash.  I think the printing so far has taken some of the sting out of it, and it'll be done in less than 6 months.  Expect helicopter money here in UK as well as US while it runs.

I'm 80% in pm miners for now.  Hope to sell out near the top in late October.  Sit in cash for a while, or short Nasdaq (single times etf), or maybe just buy usd at post office, one eye on treasuries - but only gambling 25% of cash during period.  I recognise my thesis is for a later BK, and prepared to just hold miners if I screw up.

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3 hours ago, Hardhat said:

As you and christh said upthread, there is certainly potential for silver to go exponential here... if the "dumb money" and "FOMO money" enters the PM sector. People still remember what happened with Bitcoin in 2017/18, and how many people got rich quick - for me, that is the psychology that could drive this into "to the moon" territory. Silver also hasn't had half of the attention gold has had in the MSM so far (see Gold thread in Investing & Money for a roundup of articles from today), and I wouldn't be surprised if talking heads start to ramp it as a "cheap alternative" to gold for people who still want PM exposure.

It's very hard to tell, but it definitely isn't impossible that we're only at the beginning of the bull run here, and it may at least last until after the US election?

I've taken all the profits I will selling HOC - I mainly did this so I could hold FRES and GDX/J without worrying about taking profits from them, and see how far this bull runs. ( @Sideysid BP with the HOC profits is also my play! Although I'm a little older than 8...)

FRES is the only pure silver play on the LSE, and it looks strong, with good results. It doesn't have the beta to the silver price that some of the smaller AIM miners have, but my holding has still grown 80% over the last few weeks. If we get a real parabolic bull here, 2000p is the target.

Worth mentioning the list of smaller silver miners that was posted a while back by DB as having the greatest beta to silver price, are any of these still buys at $27 silver?

Endeavour Silver

American Silver Corp

Fortuna Silver

First Majestic

Avino Silver

Great Panther

Couer Mining

Yup, when you have the likes of the FT article (I linked above) showing graph like this (below) in a bullish silver article, you are definitely going to have some FOMOs. 

My total allocation is 20-25% however I’m not ‘balls deep’ as it were, so no brown pants at these levels, I’m happy to ride it out. Throughout trading crypto, I could have hit a million several times over the years by just holding (BTC early days, ETH and now LINK) but each time I’ve taken profit and it pumped beyond my ‘buy back in’ points. With that in mind I’m quite emotionless towards it, I see a graph, global circumstances and a movement of travel and the upside potential. If there is a pullback, I’ll add more.

My time to sell is In stages between $50-$100 an ounce, FRES at 1500-2000+. If gold/silver vending machines or investor portfolio seminars for boomers by ‘experts’ start coming on the TV adverts that is my other trigger.

I honestly can’t call the election this year (I did last time and won money). The media onslaught against Trump may of done its job, but Biden hasn’t got that weight behind him. All depends on who’s VP (someone like Michelle Obama) to change my mind. Then ‘dementia’ could hit old Joe early on in the presidency and she could then take over control as the global elite chosen puppet.

But overall the global economic reaction to this virus all seems a bit staged to me, like we’re being primed eventually for a global reset.

https://www.weforum.org/great-reset/

Whether or not the Dems win and a vaccine is ‘magically’ pulled out of big pharma’s arse who knows. Too many variables to call, so I’m only going by what I see before me investment wise. 

9FC812D1-D6A7-4E6C-9D07-D7B5B96B17F5.png

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I've always been a long term holder, due to the need to avoid any allegations of insider trading when working on projects and stuff.  No one can accuse you if you bought a share 10 years ago!

Now I am freer, I am finding it hard to resist the temptation to take profits.  GDXJ almost doubled (had it a long time), and a few others.  What's the general view on profit taking?  Do you take slices so your original investment value is still there (i.e. you bought 1000 dollars worth, doubles to 2000, you sell half so you still have 1000 which can go up or down?)

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6 hours ago, spygirl said:

https://www.cnbc.com/amp/2020/08/04/the-fed-is-expected-to-make-a-major-commitment-to-ramping-up-inflation-soon.html?__twitter_impression=true

So, I reckon inflation will be registerringwithin 12 months.

Fed will raise a bit.

UK has no choice but to follow.

Fed is flattening the curve to allow government and companies to re-finance cheap,fill the pipes with liquidity then say to the markets invest in growth or we will inflate it away and allow government to do it for you.Once the market wakes up to that velocity will start to increase,then inflation cycle will start and CBs will run rate policy behind inflation chasing for all the cycle.

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Castlevania
6 hours ago, Hardhat said:

As you and christh said upthread, there is certainly potential for silver to go exponential here... if the "dumb money" and "FOMO money" enters the PM sector. People still remember what happened with Bitcoin in 2017/18, and how many people got rich quick - for me, that is the psychology that could drive this into "to the moon" territory. Silver also hasn't had half of the attention gold has had in the MSM so far (see Gold thread in Investing & Money for a roundup of articles from today), and I wouldn't be surprised if talking heads start to ramp it as a "cheap alternative" to gold for people who still want PM exposure.

It's very hard to tell, but it definitely isn't impossible that we're only at the beginning of the bull run here, and it may at least last until after the US election?

I've taken all the profits I will selling HOC - I mainly did this so I could hold FRES and GDX/J without worrying about taking profits from them, and see how far this bull runs. ( @Sideysid BP with the HOC profits is also my play! Although I'm a little older than 8...)

FRES is the only pure silver play on the LSE, and it looks strong, with good results. It doesn't have the beta to the silver price that some of the smaller AIM miners have, but my holding has still grown 80% over the last few weeks. If we get a real parabolic bull here, 2000p is the target.

Worth mentioning the list of smaller silver miners that was posted a while back by DB as having the greatest beta to silver price, are any of these still buys at $27 silver?

Endeavour Silver

American Silver Corp

Fortuna Silver

First Majestic

Avino Silver

Great Panther

Couer Mining

Fresnillo must have very good connections high up in the Mexican government. I’m not sure how they managed to not be forced to close down any of their operations when pretty much everyone else operating in Mexico were forced to close.

2 hours ago, wherebee said:

I've always been a long term holder, due to the need to avoid any allegations of insider trading when working on projects and stuff.  No one can accuse you if you bought a share 10 years ago!

Now I am freer, I am finding it hard to resist the temptation to take profits.  GDXJ almost doubled (had it a long time), and a few others.  What's the general view on profit taking?  Do you take slices so your original investment value is still there (i.e. you bought 1000 dollars worth, doubles to 2000, you sell half so you still have 1000 which can go up or down?)

As Goldman Sachs tell their young hires, never ever be scared to take a profit.

I generally re-review a position if it has doubled and ask if the fundamentals are still in place. I also need something to invest that money in, that I think will be a better investment. I don’t really see the point of selling and sitting in cash (this is arguably a flawed argument but I’d rather hold and use something as a source of funds when required than dump and hope something else turns up).

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32 minutes ago, Castlevania said:

Fresnillo must have very good connections high up in the Mexican government. I’m not sure how they managed to not be forced to close down any of their operations when pretty much everyone else operating in Mexico were forced to close.

As Goldman Sachs tell their young hires, never ever be scared to take a profit.

I generally re-review a position if it has doubled and ask if the fundamentals are still in place. I also need something to invest that money in, that I think will be a better investment. I don’t really see the point of selling and sitting in cash (this is arguably a flawed argument but I’d rather hold and use something as a source of funds when required than dump and hope something else turns up).

So as I think oil and potash are indeed the long term play for dividends, it would seem sensible to sell half of GDXJ and other miners as they double each time, and put it into my oilys.  The small miners, I think, in general, give minimal dividends and that's what really interests me longer term...

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9 hours ago, Sideysid said:

Only because her ISA is very long term (shes 8) so wanted to reduce exposure. 

:-) :-) :-).......got this image of a cute 8yr old saying "PM miners Father?.....Nooooo, I think we should go `Balls deep` in Cindy outfits and spangly hairslides!"

 

 

 

 

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3 minutes ago, MrXxxx said:

:-) :-) :-).......got this image of a cute 8yr old saying "PM miners Father?.....Nooooo, I think we should go `Balls deep` in Cindy outfits and spangly hairslides!"

 

 

 

 

She likes her silver coins (unicorn Queens Beasts) and knows what a PM miner is, understands what I’m doing with her savings and what dividends are. She doesn’t really ask for plastic crap, and rather saves her money to go horse riding lessons.

She also is constantly telling off her mum for spending money on something that we don’t need or is overly expensive for what it is (I think she takes after me).

She will be financially aware, something I never was (which was never taught or understood by my family) until I got in my late twenties and learnt to manage money from my ex (senior BA accounts management) and my own research.

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4 hours ago, Sideysid said:

Yup, when you have the likes of the FT article (I linked above) showing graph like this (below) in a bullish silver article, you are definitely going to have some FOMOs. 

My total allocation is 20-25% however I’m not ‘balls deep’ as it were, so no brown pants at these levels, I’m happy to ride it out. Throughout trading crypto, I could have hit a million several times over the years by just holding (BTC early days, ETH and now LINK) but each time I’ve taken profit and it pumped beyond my ‘buy back in’ points. With that in mind I’m quite emotionless towards it, I see a graph, global circumstances and a movement of travel and the upside potential. If there is a pullback, I’ll add more.

My time to sell is In stages between $50-$100 an ounce, FRES at 1500-2000+. If gold/silver vending machines or investor portfolio seminars for boomers by ‘experts’ start coming on the TV adverts that is my other trigger.

I honestly can’t call the election this year (I did last time and won money). The media onslaught against Trump may of done its job, but Biden hasn’t got that weight behind him. All depends on who’s VP (someone like Michelle Obama) to change my mind. Then ‘dementia’ could hit old Joe early on in the presidency and she could then take over control as the global elite chosen puppet.

But overall the global economic reaction to this virus all seems a bit staged to me, like we’re being primed eventually for a global reset.

https://www.weforum.org/great-reset/

Whether or not the Dems win and a vaccine is ‘magically’ pulled out of big pharma’s arse who knows. Too many variables to call, so I’m only going by what I see before me investment wise. 

9FC812D1-D6A7-4E6C-9D07-D7B5B96B17F5.png

...... and it keeps on flying up.....

 

7566CA79-7F80-458E-AAE0-1E6AE3B11F55.jpeg

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5 minutes ago, Sideysid said:

She likes her silver coins (unicorn Queens Beasts) and knows what a PM miner is, understands what I’m doing with her savings and what dividends are. She doesn’t really ask for plastic crap, and rather saves her money to go horse riding lessons.

She also is constantly telling off her mum for spending money on something that we don’t need or is overly expensive for what it is (I think she takes after me).

She will be financially aware, something I never was (which was never taught or understood by my family) until I got in my late twenties and learnt to manage money from my ex (senior BA accounts management) and my own research.

Good on you!...this should be part of the National Curriculum in schools,  although then they wouldn't be able to exploit the Proles.

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1 hour ago, MrXxxx said:

Good on you!...this should be part of the National Curriculum in schools,  although then they wouldn't be able to exploit the Proles.

interestingly, seeing the 14 year old maths lessons here in Oz, it includes quite a bit on budgeting and credit cards, and interest.  

I never had that at school, cue much fuckwittery at Uni with my first ccard.

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Castlevania
32 minutes ago, wherebee said:

interestingly, seeing the 14 year old maths lessons here in Oz, it includes quite a bit on budgeting and credit cards, and interest.  

I never had that at school, cue much fuckwittery at Uni with my first ccard.

It’s an interesting one. I think I only learnt about compounding when doing my accountancy papers. Yet, even so it’s only in the past few years I’ve really appreciated the importance and benefits of compounding. 

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Picked up some more SDF (K&S AG pot ash) and also some BP (oil) after the initial 3% drop this morning. 

They are both still relatively near their 5 year lows so even though I think if/when the NASDAQ market collapses - they will definitely take a hit but wont fall too much and may be much higher than where they are now if this ‘crack/melt up continues’.
 

Plus BP not ex dividend until 13th Aug.
 

Also I am trying to get my head around and reconcile buying with my ISA allowances. On one hand I would like to use up ISA allowance by April 2021 but on the other hand I would like to build cash and wait for (the inevitable??) big fall....

Currently I am using yearly ISA allowances for myself , wife and 2 kids... £20k + £20k + £9k + £9k a year = £58k per year one can invest without capital gains on selling growth, or tax on any dividend income.

Is there a better ‘tax vehicle’ I should be using? Both my wife and I are higher rate tax payers significantly above threshold and are in (don’t shoot me for this!) : part final salary/average earning ‘inflation linked’ pensions which can be taken at 55 onwards. 

We do not have any Sipps. 

I would be interested to hear how you guys structure your ‘tax affairs’ around your investments? 
 

PS: I wouldn’t be surprised if TPTB ‘rip the arse’ out of the government backed inflation linked pensions within next 15 years. They already started back in 2007 changing the finish date and changing  the final salary link to average earnings.

Hence why I am am taking out an insurance with these investments.

 


 

 

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Prices from one of our local auction houses yesterday (incl commission):

Sovereigns:  £400 to £420 each

Half sovereigns: £200 to £220 each

Proof sovereign: £460

I'm no longer buying!

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2 minutes ago, Vendetta said:

Picked up some more SDF (K&S AG pot ash) and also some BP (oil) after the initial 3% drop this morning. 

They are both still relatively near their 5 year lows so even though I think if/when the NASDAQ market collapses - they will definitely take a hit but wont fall too much and may be much higher than where they are now if this ‘crack/melt up continues’.
 

Plus BP not ex dividend until 13th Aug.
 

Also I am trying to get my head around and reconcile buying with my ISA allowances. On one hand I would like to use up ISA allowance by April 2021 but on the other hand I would like to build cash and wait for (the inevitable??) big fall....

Currently I am using yearly ISA allowances for myself , wife and 2 kids... £20k + £20k + £9k + £9k a year = £58k per year one can invest without capital gains on selling growth, or tax on any dividend income.

Is there a better ‘tax vehicle’ I should be using? Both my wife and I are higher rate tax payers significantly above threshold and are in (don’t shoot me for this!) : part final salary/average earning ‘inflation linked’ pensions which can be taken at 55 onwards. 

We do not have any Sipps. 

I would be interested to hear how you guys structure your ‘tax affairs’ around your investments? 

We haven't used this year's isa allowances but may do.

My biggest current headache is my SIPP. I am only 18 months off 55 and I have a lot of unused allowance from the last 3 years of employer contributions (own business). I could load up the SIPP and save a lot of corporation tax but it's then semi locked away in a SIPP (albeit I can take 25% tax free in 2022.). I don't want to draw anything down from my SIPP after the initial 25% as it will incur personal income tax. 

We have a tax planning meeting with our accountant soon. Could be a heavy session!

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3 minutes ago, Sasquatch said:

We have a tax planning meeting with our accountant soon. Could be a heavy session!

I think I also need some ‘Professional’ advice - however whenever I have got a ‘free’ financial adviser around to get advice they just try to sell their life insurances and investment portfolios etc etc. Once I tell them ‘nope - not interested in any of that’ and resist the hard sell they leave pretty quickly. 

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M S E Refugee
10 minutes ago, Sasquatch said:

Prices from one of our local auction houses yesterday (incl commission):

Sovereigns:  £400 to £420 each

Half sovereigns: £200 to £220 each

Proof sovereign: £460

I'm no longer buying!

I used to get some decent deals 10 years ago at auction but now it is almost impossible with the internet bidding and silly old farts that watch too much David Dickinson's Real Deal and Antiques Roadshow.

You usually get outbid by some old duffer that pays over the odds for a Sovereign that he could buy much cheaper online.

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Reformed Nice Guy, re your earlier list... its a good selection of company stocks, and admit i have my eye on most of those ones also. But how did you calculate your buy prices? Are they based on 'fair value' (balance sheet fundamentals, etc), or just what you expect future market corrections to be? 

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