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

[CVG]

44 minutes ago, DurhamBorn said:

The problem is im struggling to find a way to invest in it because most of the people doing it so far are charities.

Forestry management equipment or is that just too specialised?

[spygirl]

1 minute ago, Castlevania said:

I believe you could have more than one child as long as you paid a fine.

Varied.

Rural, if you had a boy, if a kid died.

But it was pretty strict and expensive.

 

[working woman]

  Yes, it's going to get interesting in the housing market. I'm in my 50's and downsized to a flat. 

   We have some wooden panelling and wooden balcony on the block.

   Building regulations changed after the Grenfell fire.

   We now have to have all the walls, wood panels and window frames tested in order to get a EWS1 certificate.

   Two of my neighbours have been unable to sell as we don't yet have the certificate.

   Remortgaging can be a problem, my Building Society wants a EWS1 certificate if I want to move to a lower rate.

    (I'm keen to lock into a lower rate before interest rates move up as discussed on here).

The lenders are being ultra cautious and residents are unable to sell until we get this certificate and carry out            recommended work.  Some modern terraces where I live have wood panelling all across the top of the buildings and I think the Govt. is looking at these too.

There is a shortage of qualified people who can issue the EWS1 certificate, let alone tradesmaen to do the remedial work. We probably can't sell for 10 years due to the demand and backlock. It is affecting millions of people.

Can't move?- Estate Agents lose out, as do Solicitors, Surveyors, DIY and furniture shops etc.

Not got a EWS1 cerificate? You may not be able to lock in a low rate as rates rise.

Got noisy neighbours (like I have) - sorry you can't move to get away from them, so your mental health will suffer.

Need to sell up and move for your job? Sorry, not possible.

We have to get a EWS1 certificate every 5 years, so higher service charges and less disposable pocket money.

The Sunday Times has a campaign going to try to sort it out as it is affecting millions.

For me, this is "The Big Kahuna" that you all talk about and are waiting for, as like Coronavirus, it's consequences are far reaching.  

 

[Loki]

1 hour ago, 5min OCD speculator said:

Any solar experts here? I was wanting to use the 'coming ice age' as another pro for the 'oil bull' but instead I came across this that reckons the Sun is about to wake up again 

strangely another forbes article; must be something wrong with my duckduckgo

https://www.forbes.com/sites/jamiecartereurope/2020/09/15/the-sun-just-woke-up-space-weather-feared-after-weakest-cycle-in-100-years-ends-says-nasa/

The sun is coming out of it's normal ~11 year sunspot cycle minimum but the coming cycle is predicted to be weaker.  There is also the magnetic pole shift affecting jet streams and the increased volcanic activity due to the Earth's "magnetic shield" being lower and protecting us less from all sorts of radiation 

https://electroverse.net/ is a good resource

[Loki]

1 hour ago, DurhamBorn said:

I think a huge market about to open up is carbon offset through trees etc.Once companies and countries see renewables can only go so far for a long time offsetting will become an option.Offsetting with tree planting is about the cheapest way to do it and i think it will become huge.Not only taking carbon,but helping bio-diversity.Its already starting here in the UK,and there is huge potential in Africa etc.The problem is im struggling to find a way to invest in it because most of the people doing it so far are charities.

https://treesforlife.org.uk/support/for-businesses/carbon-offsetting/

These people are just up the road from me and doing really well.

http://www.forestcarbon.co.uk/

 

Rewilding as they call it is all very well but the land was UNwilded in order to grow food 

 

[DurhamBorn]

29 minutes ago, working woman said:

Hi, I regularly read Dosbods and this thread in particular and occassionally comment.

 

Several posters talk about laddering in and hoping  to invest at the bottom of the Oil shares before they start the long term (10 years) uptrend that you all think will happen.

I have been following the share prices of oil companies  RDSB and BP. I also look at their moving averages.  I don't think now is the time to buy if you want to buy the bottom in those two.

In March, like other shares, they dropped, rose rapidly and are now going down again - a "Dead Cat Bounce".

(Hats of to Durham Born - I believe he was buying at the bottom of that crash and then decided to sell at the top of the bounce? DB what made you sell, did you have/use sell signals?)

Using Moving Averages, both RDSB and BP are still on a short-term downward trend based on their 20 and 50 day moving averages and still on a longer term down trend based on their 200 day moving average. So I wouldn't buy yet if you are wanting to catch a long term bottom.  

I read a book by a famous UK Investor Bernice Cohen. For long term trading/investing she uses the 100 and 200 day Moving averages. She buys in ladders/tranches just after the share price starts to rise and it goes up through it's moving averages.

1st ladder- when the share price crosses it's 100 day moving average

2nd ladder - when the share price crosses it's 200 day moving average

3rd ladder- when a Golden Cross forms, this is when the 100 and 200 cross each other and a good indicator of a long uptrend to follow.

This is her belts and braces, cautious approach. I'm sure she sleeps well at night.

She didn't say when she sells, but I imagine she probably sells in ladders when the prices drops below their moving averages or uses a Stop Loss.

She kept a daily hand written record of the FTSE 100 share prices and calculated their 100 and 200 day moving averages every day, to find the buy signals. Nowadays, the internet can do it for you.

I'm waiting for a 20 and 50 day Golden Cross which is a short term indicator that the share price has hit a short-term bottom and is starting to rise, and then follow Bernice's 3 ladder plan above.

If DB is correct and there will be a long-term uptrend over the next 10 years, with lots of ups and downs within it, you could also make money doing short term trades using the 20, 50 and 100 day moving averages.

I'm looking forward to seeing how this develops.

 

 

                                                                                         

 

 

30 minutes ago, working woman said:

Hi, I regularly read Dosbods and this thread in particular and occassionally comment.

 

Several posters talk about laddering in and hoping  to invest at the bottom of the Oil shares before they start the long term (10 years) uptrend that you all think will happen.

I have been following the share prices of oil companies  RDSB and BP. I also look at their moving averages.  I don't think now is the time to buy if you want to buy the bottom in those two.

In March, like other shares, they dropped, rose rapidly and are now going down again - a "Dead Cat Bounce".

(Hats of to Durham Born - I believe he was buying at the bottom of that crash and then decided to sell at the top of the bounce? DB what made you sell, did you have/use sell signals?)

Using Moving Averages, both RDSB and BP are still on a short-term downward trend based on their 20 and 50 day moving averages and still on a longer term down trend based on their 200 day moving average. So I wouldn't buy yet if you are wanting to catch a long term bottom.  

I read a book by a famous UK Investor Bernice Cohen. For long term trading/investing she uses the 100 and 200 day Moving averages. She buys in ladders/tranches just after the share price starts to rise and it goes up through it's moving averages.

1st ladder- when the share price crosses it's 100 day moving average

2nd ladder - when the share price crosses it's 200 day moving average

3rd ladder- when a Golden Cross forms, this is when the 100 and 200 cross each other and a good indicator of a long uptrend to follow.

This is her belts and braces, cautious approach. I'm sure she sleeps well at night.

She didn't say when she sells, but I imagine she probably sells in ladders when the prices drops below their moving averages or uses a Stop Loss.

She kept a daily hand written record of the FTSE 100 share prices and calculated their 100 and 200 day moving averages every day, to find the buy signals. Nowadays, the internet can do it for you.

I'm waiting for a 20 and 50 day Golden Cross which is a short term indicator that the share price has hit a short-term bottom and is starting to rise, and then follow Bernice's 3 ladder plan above.

If DB is correct and there will be a long-term uptrend over the next 10 years, with lots of ups and downs within it, you could also make money doing short term trades using the 20, 50 and 100 day moving averages.

I'm looking forward to seeing how this develops.

 

 

                                                                                         

 

I did buy Shell Repsol and BP mostly at the bottom and sold some BP and Shell when they went back up.Main reason was id bought a lot and the increases made the holdings bigger than i wanted.However iv started buying them again,mainly BP,a few Shell,and a few Repsol.Im down on them all,but average of around 14% not counting profits taken.

I have no intention of selling any of them now until oil is well over $100,probably not until $180.The sector will shake out weak hands over and over.

Only real questions now are do i re-invest the divis back into the sector or not.I likely will as long as oil is below $45/$50

Its a contrarian dream when a sector becomes so hated,just before a cycle kicks in that will see energy use rise above trend.

[Castlevania]

7 minutes ago, Loki said:

Rewilding as they call it is all very well but the land was UNwilded in order to grow food 

 

Build ships for the navy

[Hardhat]

2 minutes ago, Castlevania said:

Build ships for the navy

Also quite a lot of it due to the fact that the Wool industry used to be the UK's major exporter ~400 years ago - if you keep sheep on land, they eat all the shoots of trees etc and the forests don't regrow once cleared.

Personally I am massively in favour of re-foresting the UK, and I think it will happen, but apart from holding woodland directly in a SIPP I can't see that many ways to invest in it atm.

Also - in a lot of areas it's possible to apply for grants to plant saplings on land. If you own land, this may be one way to look at it.

[Noallegiance]

11 minutes ago, DurhamBorn said:

 

I did buy Shell Repsol and BP mostly at the bottom and sold some BP and Shell when they went back up.Main reason was id bought a lot and the increases made the holdings bigger than i wanted.However iv started buying them again,mainly BP,a few Shell,and a few Repsol.Im down on them all,but average of around 14% not counting profits taken.

I have no intention of selling any of them now until oil is well over $100,probably not until $180.The sector will shake out weak hands over and over.

Only real questions now are do i re-invest the divis back into the sector or not.I likely will as long as oil is below $45/$50

Its a contrarian dream when a sector becomes so hated,just before a cycle kicks in that will see energy use rise above trend.

If the forecast global cooling is in effect for the next 30 years, energy use will have another rocket under it.

[Castlevania]

57 minutes ago, 5min OCD speculator said:

that's a new one on me, why?

 

Do I really have to explain this?

[Chewing Grass]

3 minutes ago, Hardhat said:

Personally I am massively in favour of re-foresting the UK, and I think it will happen

Its already happened, used to be able to see into bedroom windows where I used to work, now all you see are trees.

When I go out of town up the nearest small hill which is two miles and 200 feet above the centre of town all you can see now are a couple of chimneys, the big church with a spire and a few apartment blocks. All due to the sheer volume and size of trees that have been planted in the last 30 years, even Manchester is disappearing from view as well.

The down side is a lot of pavements have been encroached on and the only thing pruning the trees where there isn't one are Trucks and Buses.

[nirvana]

30 minutes ago, Castlevania said:

Do I really have to explain this?

 

  Reveal hidden contents

 

 

 

as long as you don't post pics of the 'one eyed trouser snake' 

edit: ooh that's cool I didn't know you could do 'hidden content'

yes I thought of snakes n ladders.....I like the analogy of you go up the escalator with stocks but they fall down the lift shaft!

I was reading that scalpers have a statistical advantage going short but not for here that one 

edit: my mouse playing up again, off to find another mouse lol

[kibuc]

More Q3 production numbers

 

New Gold reports 79koz gold and 18.2mlb copper (or 115koz "gold equivalent", because Adams can turn copper into gold), with traces of silver, on track to meet the revised guidance. Average realized gold price dissapointing as expected (gold hedge @1350/koz anyone? anyone?), standing at $1615/oz. Also, a lot of nonsense about their cash position which never, ever turns out to be what they say. Anyway, a boring quarter, nothing blew up, RR walls didn't collapse, grades didn't hit rock-bottom, well done New Gold.

 

First Majestic came up with 3.2moz silver and 26koz gold, not terrible but slightly disappointing for sure. Grades went down due to "limited contractor availability" not allowing them to mine higher grade ore as much as they'd like.  If that's COIVD-related then it's fair to expect similiar issues in Q4.

[Loki]

1 hour ago, Castlevania said:

Build ships for the navy

When did the Navy stop using wooden boats and how long do trees take to grow

Once we'd cut them down the land was put to pasture.  I would rather continue to eat pastured meat than glyphosate-saturated grains/soy or some lab grown hideousness

[Bricormortis]

1 hour ago, Cattle Prod said:

@sancho panza on China oil imports:

I saw a good comment earlier that IEA and EIA demand estimates are based on government plans (like all cars to be EV by 2030, or whatever), and those plans working.

When someone can show me a strategic government plan from the current crop of f**ckwits that actually works, I might start believing demand estimates.

 

On the news this morning was an item about Cardiff wanting to be carbon neutral by 2030.   Brief interview with some local zealot who mentioned "forcing" change.   I do see ICE engines being forced off the road soon in cities maybe like this.... "oh you wish to make a car journey, just go online and make an application for a permit and we promise to get it to you within in 2 weeks if you qualify. That'll be £25 admin fee please.

Just like how the GP service has been rationed, I have just been told to wait 2 weeks for a GP appointment. I am in a bit of pain. Gp practice has a combined pharmacy with signs up everywhere saying prescriptions take 48 hours. I paid tax for this ?

[geordie_lurch]

4 minutes ago, Cattle Prod said:

I was thinking about my China post above, and I noticed that Chinese consumption has been rising for 38 years, since 1982. In other words at exactly when disinflation in Western economies began. Its tempting to say China starting manufacturing and exporting was responsible, but this is seen in the USA consumption too, and we know Volcker was mainly responsible  That said, it's striking how China's consumption growth coincides exactly with the cycle of disinflation.

China looks like its been a mechanism for converting oil (and other commodities) into cheaper goods for the rest of us, as labour costs were negligible. China was also, astonishingly, self sufficient in oil till 1993 (China with trypical foresight, was already negotiating WTO entry at this point). Now we're at the point where labour costs are high, and China is dependent on the ROW for ~ 11m bpd of imports, which is a huge strategic weakness.

And at the point of running out of deflation to export (as we have no more disinflation headroom, so don't want any more deflated crap from China), what do we get? In rough order:

- Blue water Navy building and belligerence by China

- A trade war initiated by the USA once it had its fill of cheap Chinese goods

-The obstruction of Chinas attempt to move up the value chain (Huawei etc) by USA

- A global pandemic emanating from China, alongside the probable manipulation of our thicko politicans into lockdowns

- China buying oil hand over fist in the subequent carnage.

They are very, very weakened and exposed by an 11mbd oil import deficit IMO. When the USA had a similar import bill, they had alliances in the ME going back decades, and the guns to back it up.

Yesterday we heard Iran will only transact for oil in Yuan, which is clearly connected with the above points, I wonder what they get in return for such largesse. That would only cover ~ 10% of their oil needs. Russia won't sell them much and Canada is out of bounds UAE has just moved further toward the West. A collection of smaller exporters aside, that really only leaves Iraq, Saudi, Kuwait, Qatar. Each one crawling with US military bases.

They can buy it, they do so every day. But they need to 'secure' it, which is different. Like the US did with it's ME alliances. How is that going to happen? My guess is that once the US election is over, they will make their move, and if it's Biden, something big will happen in the ME in my view. No idea what, but if China doesn't secure its oil supplies (less likely under Trump) they have no option but to spray money at home to hide the lack of growth and keep people from rebelling.

I hope the 'something big' doesn't get nasty, and is some form of persuading the Saudis and friends to take yuan for oil (something Luke Gromen talks about). China won't have enough dollars to pay for all that oil, and they'd be only delighted to print paper for it like the yanks do. The Saudis are canny enough though, and my guess is they won't accept Yuan, but gold instead. Or maybe gold backed Yuan. Not so long ago the Chinese did the very same thing to the British, demanding payment in silver rather than trinkets. They won't be sailing gunboats up the Gulf, in response, I hope.

China is a large gold producer, and doesn't export any.

So oil would effectively be priced in gold, a hard, non fiat link: currently 48 barrels/oz.

The US would need to print ever more dollars to pay for it as the dollar continues its decades long fall against gold.

I'm really just thinking out loud here, so jump in....

Also, when the market wakes up, it will realise the Chinese have probably put a floor on the oil market in dollars around $40. Any excursion beliw will be short lived as China will buy the physical quickly.

All sounds very plausible and worryingly almost inevitable even to me but I'm just an amateur at all this 

[Democorruptcy]

3 hours ago, 5min OCD speculator said:

that's a new one on me, why?

Have you never played snakes and ladders? Don't you know what happens when you land a snake?

[Wheeler]

1 hour ago, Cattle Prod said:

They can buy it, they do so every day. But they need to 'secure' it, which is different. Like the US did with it's ME alliances. How is that going to happen? My guess is that once the US election is over, they will make their move, and if it's Biden, something big will happen in the ME in my view. No idea what, but if China doesn't secure its oil supplies (less likely under Trump) they have no option but to spray money at home to hide the lack of growth and keep people from rebelling.

Good post @Cattle Prod. Thinking about this, what about Africa? The Chinese have been moving in there over the past few years. I don't know much about the oil situation there apart from the fact that Nigeria has some. East coast oil would be more useful for the Chinese though.

Is there much available closer to home for them in Indonesia?

1 hour ago, Cattle Prod said:

The US would need to print ever more dollars to pay for it as the dollar continues its decades long fall against gold. When gold gets to, say $5000 and oz, oil in dollars would be $104 an ounce, today, without anything different about supply and demand. Just that China is paying for it in gold.

I'm not sure what you mean by "oil in dollars would be $104 an ounce". Are you talking about fluid ounces and how many of those to a barrel? 

[stoobs]

Imagine a barrel of gold. 

[leonardratso]

Just now, stoobs said:

Imagine a barrel of gold. 

black gold

 

[Bricks & Mortar]

4 hours ago, Noallegiance said:

If the forecast global cooling is in effect for the next 30 years, energy use will have another rocket under it.

Not so sure about that.
I'm thinking, the cold regions, N Europe, Canada, N. USA, NZ, Alaska... we're all big on ever-increasing insulation standards.
The part of the world where using energy to control indoor temperatures is a growth industry, it's all about aircon.

[janch]

1 hour ago, Cattle Prod said:

China is a large gold producer, and doesn't export any.

So oil would effectively be priced in gold, a hard, non fiat link: currently 48 barrels/oz.

What an amazing post @Cattle Prod.  Your insider knowledge of all things oil-related is invaluable.  I think you are probably right about oil backed by gold.  I believe China has also been buying gold as well as stockpiling other commodities.  The Chinese would appear to be streets ahead of the west in their strategic forward planning.

According to the BBC they tested 3 million for CV-19 yesterday in Qingdao because they had 12 cases and will test another 6 million over the next 2 days so testing all 9 million in the city.  It makes us look like the amateurs we are.

My daughter lived and worked in Beijing for a couple of years about 10 years ago in the alternative energy sector.  The Chinese were playing catch-up then with the west and she said how many of the Chinese she worked with were super-bright.  They've probably overtaken us now while we bumble along.

[geordie_lurch]

9 minutes ago, janch said:

The Chinese were playing catch-up then with the west and she said how many of the Chinese she worked with were super-bright.  They've probably overtaken us now while we bumble along.

I remember reading in terms of sheer numbers that their top 1% of students would be more than ALL of our UK students combined or something crazy. It might have even been their top 1% outnumber the whole of Europe's children but I aint got time to fact check this at the mo so DYOR etc 

[DurhamBorn]

Along with China and oil,we also have India and gas and oil.They fully itend to increase per capita energy use.The west is going to find itself competing for assets because its too busy worrying about renewables.Once US shale is shown to be down for a long time and they have to bid in the world market things will get interesting.

https://www.argusmedia.com/en/news/2149652-india-says-energy-investment-plans-on-track-correction

India has commitments of more than $60bn to transform it to a "gas-based economy," he said, through expansion of import terminals, pipelines, and distribution networks, while the government continues to tie up with major LNG suppliers.

"India is the number three energy consumer in the world, but our per capita is one third of the global average. We have an aggressive growth plan to change that," Pradhan said.

 

[Loki]

2 hours ago, Cattle Prod said:

The Saudis are canny enough though, and my guess is they won't accept Yuan, but gold instead.

The Freegold/Friend of Another/FOFOA links from the late 90s/early 2000s mentioned this too.  

I think @Heart's Ease and @JMD were chatting about it with me.  Apologies for anyone I forgotted