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

[JMD]

2 hours ago, MrXxxx said:

But they do DB, educate themselves financially like the rest of us have done...they all seem able to understand their latest Smartphone purchase, and the government/s are hardly going to make it part of the National Curriculum.

Poor education/dumbing-down, or just cyclic social degeneration? Anyway, reminds me of the saying (cant recall author) about successful propaganda NOT being about instructing people what to believe - but instead, its about giving people other things to think/worry/amuse themselves with.

Ok, its as old as bread and circuses - or its modern equivalent - Pizza and Netflix!!

[JMD]

6 minutes ago, JMD said:

...its as old as bread and circuses - or its modern equivalent - Pizza and Netflix!!

...would it be too crass for me (on this forum) to explicitly contrast the bread/pizza (faux economy/failing business cost models) and the circus/netflix (feel good social theatre/distraction technique)?

...excuse my follow up and i know the original post allusion wasn't lost on you guys, but i couldn't resist!!

[Castlevania]

1 hour ago, Harley said:

If I was a politician I would be insisting we use NEST to promote a fairer and more sustainable society.  Just as with positive discrimination and the clear benefits that has brought to the workplace, this windfall should be used to the benefit of our society as a whole.  To empower people to feel they can contribute to a better future for themselves and their children.  To prevent inter-generational, housing and racial and gender inequality.  To tackle the tremendous damage caused by this Covid plague that has so brutally ravaged our society and economy.  Indeed I am so excited by this opportuniy gifted to us that we should encourage, by all possible means, everyone to abandon their current, and quite frankly dangerous schemes, and be opted into NEST.  After all, it's only right we should all be "entitled" to take stock, reset, and join this crusade to a new dawn.

PS:  Eight months ago you would also have laughed at lockdowns and Covid marshals.  Enjoy our new regulated world.

Agreed. They should be buying up gilts and failing shopping centres. Invest in the future.

[Castlevania]

43 minutes ago, sancho panza said:

wtf are they doing hedging Sing $ versus USD$?

especially as they're sat on a pile of stocks that sell globally....

The soy bean and corn futures seem highly inappropriate for a pension.

[sancho panza]

1 minute ago, Castlevania said:

The soy bean and corn futures seem highly inappropriate for a pension.

I clocked those as well......and they're hedging EUR/USD.These funds strike me as utterly directionless.To my uneducated mind you need a thesis you're working to.Buying stuff because it's gone up isn't a thesis.

Which harks back to @Harley arguments from 500 pages ago about the perils of passive investing-works until it doesn't and when it doesn't,it doesn't.Or something like that.

I always remember an Irish surveyor friend of mine who never holds back describing ethical investors as people who like to be 'an arm's length from the shit stick.'

[UnconventionalWisdom]

12 hours ago, UnconventionalWisdom said:

 

Been thinking more about this. Are we witnessing another late 90s/ early 2000s where tech stocks are considered unstoppable. There is so much confidence in them from the lay person. I work at an SME developing new tech. I'm sure all my colleagues think Tesla would be a good buy. They would prob buy if they knew how to buy stocks, and this is what's driving Tesla gains. Could hit a 95% loss in the FAANG stocks like tech stocks in 2002 and destroy people's pensions. 

[JMD]

17 hours ago, Tingles said:

I think the key word is 'versus'.  Both BTC and and gold are discussed individually as assets relevant to a balanced portfolio but BTC vs./versus gold discussion would probably drift into BTC maximalist versus Goldbug territory wasting precious time, discussion and input.

But I wasn't asking for that discussion.                                                  (My initial post may have been clumsily phrased. I wasn't asking for any particular asset to be compared to another asset, btw I have never seen that done on this forum, we are far too 'classy'? for that i think!) 

But for full disclosure then, my portfolio (not fully allocated yet, but plan is) 22% pm's (gold/silver, both physical and miners), and 3% BTC (btc and 'btc leveraged companies' -see below ). I view this in terms of having 25% holding in precious metals (yes i know, 'so-called' digital gold!?). 

The leveraged company part, is a play on companies beginning to transfer their cash balances to btc. They do this to protect from negative interest rates. The site below lists these. 

https://bitcointreasuries.org/

 

I have posted because others may be interested. Or equally valid, i'd also welcome criticism of approach as different views are very valuable to hear... For example, is btc moving from pure 'speculation' to 'store-of-value'? Is Raoul Pal just talking up his book now that he is so invested in btc himself? 

[reformed nice guy]

4 hours ago, Castlevania said:

You get to choose which of the six funds to put your money in. Bizarrely you have to invest in the Sharia fund if you want 100% equity exposure. Plus as a bonus you don’t get any exposure to bank stocks.

Its because Allah knows everything and he has seen the banks true liabilities and risk exposures! 

[Tingles]

On 20/10/2020 at 10:07, Erewhon888 said:

Seems there is a major push starting on Bitcoin with Raoul Pal and Mike Saylor leading the way. Who has the best counter arguments or what are the best counter arguments especially against Saylor's denunciation of gold.

Raoul Pal's push on Bitcoin

Michael Saylor's arguments against gold and in favour of Bitcoin specifically rather than any other crypto

 

On 20/10/2020 at 10:25, Noallegiance said:

Please let's not go gold v crypto here.

New thread if necessary.

@JMD  No offence meant or disrespect intended towards you.  I understand that you were not asking for that discussion, I was simply clarifying Noallegiance's response to Erewhon888's post as above. 

[Harley]

3 hours ago, Heart's Ease said:

@Harley (didn't mean to tag you can't delete it!)

What's a tag please?  I hadn't noticed anything other than feeling a bit dizzy at lunchtime! 

[JMD]

3 hours ago, jamtomorrow said:

Been thinking more about the BTC/XAU ratio.

I really do think it's the one to watch if you're interested in crypto, because the fixed "stock" on both sides of the ratio anchor the "meaning" very solidly indeed.

The big uncertainty is therefore global gold stocks. I've seen "above ground" estimates range from 150kt to 2000kt, so I'm tracking 3 BTC/XAU price points of interest corresponding to the lower, upper and geometric mean, and based on notional parity of valuation of overall stock.

Lower: 7.5kg per BTC

Middle: 28kg per BTC

Upper: 100kg per BTC

For perspective, ratio today is ~ 0.2kg per BTC.

NB: not saying BTC will ever get to parity with gold, but I *am* saying it's useful to have a metric to understand where we are on that scale.

JT, i agree that is an interesting barometer guide to use. What do you think of the Plan B 'stock to flow' model? I wonder for example, does the btc/xau price points you list relate in any way to PlanB's defined phases and associated market values? 

I notice the model now includes gold/silver to make - in Plan B's words - 'it a cross asset model'. I don't know enough about the technicalities of such models, does anyone care to comment on the model? 

https://medium.com/@100trillionUSD/bitcoin-stock-to-flow-cross-asset-model-50d260feed12

[JMD]

3 hours ago, Harley said:

If I was a politician I would be insisting we use NEST to promote a fairer and more sustainable society.  Just as with positive discrimination and the clear benefits that has brought to the workplace, this windfall should be used to the benefit of our society as a whole.  To empower people to feel they can contribute to a better future for themselves and their children.  To prevent inter-generational, housing and racial and gender inequality.  To tackle the tremendous damage caused by this Covid plague that has so brutally ravaged our society and economy.  Indeed I am so excited by this opportuniy gifted to us that we should encourage, by all possible means, everyone to abandon their current, and quite frankly dangerous schemes, and be opted into NEST.  After all, it's only right we should all be "entitled" to take stock, reset, and join this crusade to a new dawn.

PS:  Eight months ago you would also have laughed at lockdowns and Covid marshals.  Enjoy our new regulated world.

Harley, be careful what you 'wish for' (i know you were being ironic)...

https://www.professionalpensions.com/news/4017216/comic-relief-founder-launches-campaign-shift-gbp3trn-pension-assets-sustainable-investments

 

[wherebee]

after a bit more telstra I am now 40% oil, 30% gold miners (of which 60% is GDXJ), 20% telecoms, 5% Agri, 5% BAT

feel much more comfortable and set for long term wealth positioning, and thankyou to all those who have contributed to the thread.

I'm sitting on 15% cash for jumping in on any lows in long termers if a BK comes along.

roll on the election fireworks...

[jamtomorrow]

54 minutes ago, JMD said:

JT, i agree that is an interesting barometer guide to use. What do you think of the Plan B 'stock to flow' model? I wonder for example, does the btc/xau price points you list relate in any way to PlanB's defined phases and associated market values? 

I notice the model now includes gold/silver to make - in Plan B's words - 'it a cross asset model'. I don't know enough about the technicalities of such models, does anyone care to comment on the model? 

https://medium.com/@100trillionUSD/bitcoin-stock-to-flow-cross-asset-model-50d260feed12

Thanks for the link @JMD - I hadn't seen the new S2FX model, the behavioural economics perspective behind it is fascinating.

Good to see a proper concrete prediction come out of it:

This translates into a BTC price (given 19M BTC in 2020–2024) of $288K.

That corresponds to ~ 4.65kg on my scale - *really* interesting to see that ballpark being hit using a different method.

[MrXxxx]

5 hours ago, Chewing Grass said:

Would see the boundaries of the Snowdonia National Park redrawn, Parys Mountain on Anglesey dug up along with Wanlock Head and Camborne in Cornwall.

They don't need to redraw the boundaries, if the government want it to happen such a development is allowed in a NP boundary.

[JMD]

3 hours ago, Heart's Ease said:

“The World Health Organization says that finding a vaccine is not the goal; reordering society is the goal. Quote, ‘We will not, we cannot go back to the way things were.’ That’s a direct quote from the leader of the World Health Organization, Dr. Tedros, who by the way is not really a doctor.”

Good post, very frightening, i think it shows the stay safe/ (physical and mental) health agenda will absolutely not stop.

btw, holders of academic doctorates (PhD's) using the title of 'Dr', was mainly a German/north European thing, but now has spread globally, with even the UK now doing same (frowned upon until very recently). I believe it stems from the mass public university system which was pioneered by Germany in late 1800's, along with the awarding of all kinds of (engineering) accreditations (Germany wanted to 'advertise' to the world stage that it had 'arrived').

Excuse the above useless factoid. To bring things back on topic - Germany was also the first to introduce public pensions (under Bismark, to increase productivity on the railways, old workers were retired and replaced by young workers, 'efficiency' even back then) ...there is method to my madness... i.e. i think these type of innovative ideas show how dominant Germany was and still is - and crucially i note that those innovations are 'collective ideas', something Germany typically excels in both economically and socially (though politically not always with positive outcomes?!); however, i guess it means its European neighbors don't stand a chance!  

[MrXxxx]

7 hours ago, Castlevania said:

You get to choose which of the six funds to put your money in. Bizarrely you have to invest in the Sharia fund if you want 100% equity exposure. Plus as a bonus you don’t get any exposure to bank stocks.

"The Lord works in mysterious ways"...assuming you pick the right one of course!

[JMD]

2 hours ago, Tingles said:

 

@JMD  No offence meant or disrespect intended towards you.  I understand that you were not asking for that discussion, I was simply clarifying Noallegiance's response to Erewhon888's post as above. 

That's fine Tingles, absolutely no offence taken. 

I might have been triggered though by your mention of those discussion (are they?) posts that do appear on here. Where people seek to mention their stock price going up/down/...plus every which ADHD way direction possible! I wish they realised that most on here are either already monitoring (so not news), don't own in first place (so dont care), or most likely (like me) have absolutely no desire to know until say 2026+.  

[UnconventionalWisdom]

@BurntBread I started reading 'the intelligent investor' by Ben Graham. Interesting that he speaks about investments over different periods of time. Thanks for sharing- good find. 

What he writes this about the 1964-1970 period sounds like what we are expecting over the next decade. 

 

What Has Happened Since 1964 The major change since 1964 has been the rise in interest rates on first-grade bonds to record high levels, although there has since been a considerable recovery from the lowest prices of 1970. The obtainable return on good corporate issues is now about 7½% and even more against 4½% in 1964. In the meantime the dividend return on DJIA-type stocks had a fair advance also during the market decline of 1969–70, but as we write (with “the Dow” at 900) it is less than 3.5% against 3.2% at the end of 1964. The change in going interest rates produced a maximum decline of about 38% in the market price of medium-term (say 20-year) bonds during this period. There is a paradoxical aspect to these developments. In 1964 we discussed at length the possibility that the price of stocks might be too high and subject ultimately to a serious decline; but we did not consider specifically the possibility that the same might happen to the price of high-grade bonds. (Neither did anyone else that we know of.) We did warn (on p. 90) that “a long-term bond may vary widely in price in response to changes in interest rates.” In the light of what has since happened we think that this warning—with attendant examples—was insufficiently stressed. For the fact is that if the investor had a given sum in the DJIA at its closing price of 874 in 1964 he would have had a small profit thereon in late 1971; even at the lowest level (631) in 1970 his indicated loss would have been less than that shown on good long-term bonds. On the other hand, if he had confined his bond-type investments to U.S. savings bonds, short-term corporate issues, or savings accounts, he would have had no loss in market value of his principal during this period and he would have enjoyed a higher income return than was offered by good stocks. It turned out, therefore, that true “cash equivalents” proved to be better investments in 1964 than common stocks—in spite of the inflation experience that in theory should have favored stocks over cash. The decline in quoted principal value of good longer-term bonds was due to developments in the money market, an abstruse area which ordinarily does not have an important bearing on the investment policy of individuals. This is just another of an endless series of experiences over time that have demonstrated that the future of security prices is never predictable.* Almost always bonds have fluctuated much less than stock prices, and investors generally could buy good bonds of any maturity without having to worry about changes in their market value. There were a few exceptions to this rule, and the period after 1964 proved to be one of them.

[nirvana]

BP £2 - my pension is getting fecked 

I was reading about Toyota's hydrogen car, the Mirai, what a loadoshite that is!

It's nearly 5 meters long, weighs over 2 tonnes with a couple of people in it, does about 300 miles range if you're lucky....

AND costs about £60k...Jesus H Christ...wtf happened to the world??? 

PLUS the national grid was tweeting the other day that they want to get rid of gas, I was never a fan of gas but I think that's a bit far fetched too....

Anyway, carry on, just needed a bit of a whinge 

[nirvana]

I'm back for another one...

Max Keiser, he was good entertainment when he was on Russia Today bashing the banks but all the boring bastard does nowadays is tweet incessantly about Bitcoin.....

 

[nirvana]

ok then US crude data...

And what's this shit with BoJo bribing the Northern knob jockeys to 'shutdown their economies'

effing Covid is sending everyone barking mad? Bring on the Blue Moon....

[Loki]

DXY is heading the right way at last and the 10 year note is around .8% so things may be moving. Strangely my portfolio is a car crash today.

[nirvana]

2 minutes ago, Loki said:

Strangely my portfolio is a car crash today.

yeah me too but remember....

 

[DoINeedOne]

Under 2 crazy