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

[leonardratso]

1 minute ago, DurhamBorn said:

Yes transfer,no fees,HL will do it for you in a crack.

then do you in the crack.

[sancho panza]

23 hours ago, JMD said:

SP, I accept there are plenty of legitimate arguments for/against BTC. But what I found dispiriting when reading up on crypto last year was the bias, tin ear, or straw man arguments frequently wheeled out by the detractors of crypto. Btw I don't think you were doing this, but you did cite the power requirements of crypto mining, and this is something which usually ranks pretty high on the list when crypto detractors discuss their pet hates of the 'coin that should not be named'!                                                                                                                     Anyway I know SP that you place facts highly when it comes to investing so thought youd be interested in the following article which in my opinion answers the whole power debate by putting it into context. Not hard to find and 2 year old article, so I think you have got to wonder about those still wedded to repeatedly using the disingenuous counter narrative.                                                          https://www.energyforgrowth.org/blog/bitcoin-gaming-and-the-chasm-of-global-energy-inequality/

 

JMD,I do place facts highly when investing,hence I was specifically unspecific about the electricity usage issue.From your psot it was clealy an issue two years ago.

I'm all for getting out of fiat but sometimes you have to accept that you're getting channelled into an ambush.It's going up,it's getting more popular but the evidence of it's success reveals the roots of it's downfall.

From your article talking of 70 Terrawat hours,we go toa BBC(I know,I know) piece based on Cambridge Uni research saying currently it's :

'Cambridge researchers say it consumes around 121.36 terawatt-hours (TWh) a year - and is unlikely to fall unless the value of the currency slumps.'

So since 2019 the leccy usage has gone up 70%.......

In an era when energy is going to get expensvie,you're telling me that govts will jsut blindly ignore the social costs of having significant crypto mining pushing up the price of leccy for people wanting to cook dinner for their kids...? I just don't see it.I would presume that the leccy usage doesn't fall evenly across countries either

I'm sure there's big bucks to be made in crypto,it jsut won't be made by me or people like me.

 

https://www.bbc.co.uk/news/technology-56012952

[DurhamBorn]

I top sliced BP,Repsol and a lot of Shell on friday.I still see much bigger gains over the cycle,but the profit i sliced would pay half my  sons mortgage off that he bought last June.Its 7 years expenses for me,and the sector had got to 27% of my equity portfolio,far too high.Its now just below 20% .I also sold some Royal Mail that were up 150%,some more Drax up similar,some Playtech  up 170%.

I kept most in cash,but iv opened small positions in Asian value shares.Im starting to see on my roadmap a chance Asian currencies take over from Western in the cycle.Its very foggy at the moment,but im opening positions until i do more work on it.

I dont like how sentiment has changed to mega bullish and even the hopeless MSM is saying to the moon on commods when a a massive deflation could strike at any minute if the CBs disengage at all.Massive structural deficits are still at hand.

Im also going through some Brazilian stocks and thinking of opening positions.Hat tip to Steve Kaplan on highlighting the contrarian position opening up.

Very likely il keep my oilies now for the cycle,though if they put on another 20% quickly now id trim another 20% off them.

I think gas is about to enter a massive, decade long bull market ,but their recent huge outperformance means they needed a little trim,just like a privet hedge does.

 

[Hancock]

1 hour ago, sleepwello'nights said:

That is probably what they are thinking. And if they do who will buy the repossessed houses?

Rather than let prices crash they can keep them and generate an income.  

I just cant see Lloyds renting out average 50 year old houses scattered all over the country, cost to administrate this would be sky high.

[MrXxxx]

13 hours ago, Starsend said:

Quick pension question as I know pension related stuff has been discussed quite a lot in the past on this thread.

I've just managed to find an old pension from a company I was at 30 years ago. I was only there for two years and I think a couple of thousand got paid in. It's now worth just over eight thousand. Not a huge sum but better than a smack in the teeth.

I'm wondering what to do with it. It's currently invested with Aegon in some crappy lifestyle fund. Is it worth transferring such a small amount to my main SIPP with Hargreaves Lansdown or is the hassle/fees not worth it?  Would I be better off leaving it where it is and putting it in drawdown in two years when I'm 55 and taking the lot out in one year?

I have done some googling but didn't really find anything very helpful.

 

 

First question I would be asking is if kept it there can I get it out of the lifestyle fund into something more secure for the two year period? Second thing to bear in mind is that once/if you start drawing down you limit your pension contributions to £3600 ish pa (or thereabouts) from that point forward (check this to be sure).

[MrXxxx]

13 hours ago, planit said:

This next turn is important.

Everyone is expecting the inflation figures to start coming through. This means that focus will move from treasuries falling to real rates going negative again, there is no way the yield on treasuries to rise enough to stop this move.

Gold needs the real rates to be negative so the down trend in gold should be broken.

I am not sure whether this fits in with the Dollar strength reversing but perhaps DB can fill me in on where we are with that move.

I don't see how this more apparent inflation will be negative for oil unless it comes through much less strong than expected.

 

From the chart it looks like the data could be a way off yet, April figures are probably a step up and then May for the bigger jump. So we have a few weeks of uncertainty, gold could go lower, oil could pull back.

 

For me I am hoping we still have a bit of a run left in RDSB and BP,

I am willing to wait on the gold (stay invested with a recent increase in miners exposure) as it will be too hard trying to hit the bottom.

 

Or I could be talking shit and gold is in a 5 year bear market with oil about to hit -$20 again. Please let me know if you disagree.

Thanks and cheers

Have a listen to this weeks Macrovoices podcast, they cover this very subject.

[Yadda yadda yadda]

8 hours ago, DurhamBorn said:

I top sliced BP,Repsol and a lot of Shell on friday.I still see much bigger gains over the cycle,but the profit i sliced would pay half my  sons mortgage off that he bought last June.Its 7 years expenses for me,and the sector had got to 27% of my equity portfolio,far too high.Its now just below 20% .I also sold some Royal Mail that were up 150%,some more Drax up similar,some Playtech  up 170%.

I kept most in cash,but iv opened small positions in Asian value shares.Im starting to see on my roadmap a chance Asian currencies take over from Western in the cycle.Its very foggy at the moment,but im opening positions until i do more work on it.

I dont like how sentiment has changed to mega bullish and even the hopeless MSM is saying to the moon on commods when a a massive deflation could strike at any minute if the CBs disengage at all.Massive structural deficits are still at hand.

Im also going through some Brazilian stocks and thinking of opening positions.Hat tip to Steve Kaplan on highlighting the contrarian position opening up.

Very likely il keep my oilies now for the cycle,though if they put on another 20% quickly now id trim another 20% off them.

I think gas is about to enter a massive, decade long bull market ,but their recent huge outperformance means they needed a little trim,just like a privet hedge does.

 

Brazil is interesting. Has the recent Government intervention in Petrobras, changing the boss due to price rises affecting voters, weighed on your views? Could other listed businesses face similar action?

[planit]

Interesting that we have some people who took some money off the oilies a few weeks ago, the next tranche did some on Friday and you then have some still holding out.

I was looking for 340p for BP, I took the previous peak and adjusted up for the price of oil and it looked like a sensible place on the chart (nothing too technical, just a dart on a dartboard really), Sancho seems to be waiting out with me.

 

Hopefully all markets get a boost on Monday with the stimmy cheques, I think the Tesla investors want another excuse to make the EV shares run (does anyone else here like listening to Kevin and Cathy from Ark?). Only time will tell whether they manage to make another run.

One point I would like to make is that some people on here feel they are getting mixed signals but they need to realise that there has been a sector move in the markets, the tech shares have fallen, headline ones like Tesla by large margins.

But the oilies etc have risen so the S&P500 has gone nowhere over the last month. 

[Castlevania]

9 hours ago, sancho panza said:

For the avoidance of doubt I have reported the latest UK average earnings figures as not fit for purpose to the UK Statistics Authority.

This sentence caught my eye. Why does he regard the U.K. average earnings figures as being not fit for purpose?

[planit]

I thought I would update on the Covid deaths and where I think we are, hopefully people can use the information in some way.

The drop in deaths from the vaccinations took slightly longer to kick in than I thought but is very clear now and there have been surveys confirming this which everyone should be aware of.

 

What is important is that the rate of fall continues to increase meaning we are not seeing an exponential decay in the drop it is more linear (linear would mean we are heading straight for a zero death rate rate rather than it trailing off).

 

You can see the fall off on this graph. This time we have had 80% of the fall off in 4 weeks, last time it took 7 weeks.

 

 

This is the graph of the % fall from previous week and you can see the line is still moving down. The last data point is a 46% drop from last week.

 

 

So the reason I think this is important is I don't think Boris allowed for it in his opening plan. In April there might well be almost zero deaths (even on their crazy measuring criteria) but we will still be almost completely locked down. By then all vulnerable people would have been vaccinated.

Even positive cases would have fallen off a cliff as the vaccinations reduce transmission substantially.

 

 

[Castlevania]

8 hours ago, DurhamBorn said:

I top sliced BP,Repsol and a lot of Shell on friday.I still see much bigger gains over the cycle,but the profit i sliced would pay half my  sons mortgage off that he bought last June.Its 7 years expenses for me,and the sector had got to 27% of my equity portfolio,far too high.Its now just below 20% .I also sold some Royal Mail that were up 150%,some more Drax up similar,some Playtech  up 170%.

I kept most in cash,but iv opened small positions in Asian value shares.Im starting to see on my roadmap a chance Asian currencies take over from Western in the cycle.Its very foggy at the moment,but im opening positions until i do more work on it.

I dont like how sentiment has changed to mega bullish and even the hopeless MSM is saying to the moon on commods when a a massive deflation could strike at any minute if the CBs disengage at all.Massive structural deficits are still at hand.

Im also going through some Brazilian stocks and thinking of opening positions.Hat tip to Steve Kaplan on highlighting the contrarian position opening up.

Very likely il keep my oilies now for the cycle,though if they put on another 20% quickly now id trim another 20% off them.

I think gas is about to enter a massive, decade long bull market ,but their recent huge outperformance means they needed a little trim,just like a privet hedge does.

 

Which Brazilian stocks? I have my eye on Brasil Agro. They own farms. The problem seems to be that you can’t directly buy unless they have an ADR. Brasil Agro do by the way; and most of the big companies but not all.

By the way do you have a link to Steve Kaplan’s view on Brazil? 

If you want to be ultra contrarian and can stomach the volatility have a look at Argentina. It’s been a basket case for so long that I think most people have completely written the country off. There’s value there in my opinion. Although they could well default again. So definitely a high risk play.

[Harley]

8 hours ago, DurhamBorn said:

.....iv opened small positions in Asian value shares.Im starting to see on my roadmap a chance Asian currencies take over from Western....

  I'll just leave it there!

[Harley]

1 hour ago, MrXxxx said:

First question I would be asking is if kept it there can I get it out of the lifestyle fund into something more secure for the two year period? Second thing to bear in mind is that once/if you start drawing down you limit your pension contributions to £3600 ish pa (or thereabouts) from that point forward (check this to be sure).

I believe so but a potentially useful twist - apparently (to be tested), you can take out the 25% tax free and still contribute as normal as long as you don't drawdown the remaining balance as well.  Biggest concern for me was the impact on potential benefit eligibility.

[dnb24]

8 hours ago, DurhamBorn said:

I kept most in cash,but iv opened small positions in Asian value shares.Im starting to see on my roadmap a chance Asian currencies take over from Western in the cycle.Its very foggy at the moment

Interesting you should say this DB, Martin Armstrong has been saying this over the past year, so interesting that your roadmap also indicates something like this. David Hunter also suggests by mid decade that the dollar may be having its final day in the sun. Whereas historian and defence strategist Greg Copley see the dollar going nowhere at the moment and probably continuing its hegemony over the decade.  

[Harley]

How to invest in South America (e.g. Brazil) other than an ETF/fund?  Hard to access the exchanges direct except for Mexico and Turkey.  I don't view China as emerging!  Latin America can be a widow maker but then many commentators have been talking up Emerging Markets so maybe a fund is best, again due to market access.

[Harley]

I don't have enough oillies so will just buy more on a dip rather than try and play it.  There may be more upside here but things are warming up on the technicals.

[Noallegiance]

Seems appropriate.

[DurhamBorn]

2 hours ago, Cattle Prod said:

I'm interested in Brazilian agriculture. I think it could do very very well.

Me too,iv played that with Nutrien ,but would like some more direct exposure,as Kapland says,the political moves always hit the markets in Brazil,its happened over and over,then they recover.

[DurhamBorn]

1 hour ago, planit said:

Interesting that we have some people who took some money off the oilies a few weeks ago, the next tranche did some on Friday and you then have some still holding out.

I was looking for 340p for BP, I took the previous peak and adjusted up for the price of oil and it looked like a sensible place on the chart (nothing too technical, just a dart on a dartboard really), Sancho seems to be waiting out with me.

 

Hopefully all markets get a boost on Monday with the stimmy cheques, I think the Tesla investors want another excuse to make the EV shares run (does anyone else here like listening to Kevin and Cathy from Ark?). Only time will tell whether they manage to make another run.

One point I would like to make is that some people on here feel they are getting mixed signals but they need to realise that there has been a sector move in the markets, the tech shares have fallen, headline ones like Tesla by large margins.

But the oilies etc have risen so the S&P500 has gone nowhere over the last month. 

I still own a lot of oilies,they are still 20% of my portfolio,Repsol,my largest holding in the sector though had reached 8% of my net worth due to almost doubling and needed trimming down,thats far too much in one stock.I still think they will double from here,and maybe 3x or even 4x.

Luckily so far we have had a big rotation,without a BK.Though the areas we have been buying had already had huge falls and the worst sentiment iv ever seen.

 

 

 

[Onsamui]

1 hour ago, planit said:

I thought I would update on the Covid deaths and where I think we are, hopefully people can use the information in some way.

The drop in deaths from the vaccinations took slightly longer to kick in than I thought but is very clear now and there have been surveys confirming this which everyone should be aware of.

 

What is important is that the rate of fall continues to increase meaning we are not seeing an exponential decay in the drop it is more linear (linear would mean we are heading straight for a zero death rate rate rather than it trailing off).

 

You can see the fall off on this graph. This time we have had 80% of the fall off in 4 weeks, last time it took 7 weeks.

 

 

This is the graph of the % fall from previous week and you can see the line is still moving down. The last data point is a 46% drop from last week.

 

 

So the reason I think this is important is I don't think Boris allowed for it in his opening plan. In April there might well be almost zero deaths (even on their crazy measuring criteria) but we will still be almost completely locked down. By then all vulnerable people would have been vaccinated.

Even positive cases would have fallen off a cliff as the vaccinations reduce transmission substantially.

 

 

Bearing in mind that all deaths have been counted as COVID.  See info on International Lawsuit against the perpetrators of the virus scam. They have irrefutable evidence of the DAVOS clique - Schwab and co are bringing in food shortages so we bend the knee to their new financial criteria  - you will own nothing and you will be happy.  

[Hancock]

21 minutes ago, DurhamBorn said:

Me too,iv played that with Nutrien ,but would like some more direct exposure,as Kapland says,the political moves always hit the markets in Brazil,its happened over and over,then they recover.

Ive driven through a corner of Kazakhstan and the amount of potential farm land is surreal.

Wouldnt know if it is even possible to invest in it at present.
https://www.trade.gov/knowledge-product/kazakhstan-agricultural-sector
https://astanatimes.com/2020/06/kazakhstan-seeks-foreign-investors-to-develop-agro-industrial-complex/

 

[DurhamBorn]

 

1 hour ago, Harley said:

How to invest in South America (e.g. Brazil) other than an ETF/fund?  Hard to access the exchanges direct except for Mexico and Turkey.  I don't view China as emerging!  Latin America can be a widow maker but then many commentators have been talking up Emerging Markets so maybe a fund is best, again due to market access.

Lots of ADRs Harley,but i know you dont really like counterparty risk.I only want Brazil,as you say the other areas are the wild west.

[Bricormortis]

14 minutes ago, Hancock said:

Ive driven through a corner of Kazakhstan and the amount of potential farm land is surreal.

Wouldnt know if it is even possible to invest in it at present.
https://www.trade.gov/knowledge-product/kazakhstan-agricultural-sector
https://astanatimes.com/2020/06/kazakhstan-seeks-foreign-investors-to-develop-agro-industrial-complex/

 

I think Kazakhistan is the 9th largest country on the planet by sq miles.

I am Interested in Kazatoprom for uranium. I dont know at the mo what is an acceptable price, ditto with other uranium miners. 

 

 

[Noallegiance]

This morning I have been reading chapter 5 of Contrarian Investment Strategies. I now understand the need for liquidity and why it is THE thing that matters. And why CBs/BIS/IMF are so keen on pumping it more. It's not evil. It's required because we're way too far down the road to do anything else. The problem lays in developments in instruments placed within financial markets decades ago. We've just layered more complex instruments on top over time thus making the system massively unstable when liquidity isn't there.

I'm getting the impression that, once central banks are forced to withdraw or even pause liquidity, the negative impact on all assets could be horrific.

I won't be chasing pennies. The steamroller is looming, IMO.

[Loki]

@Noallegiance Got my copy of The Psychological Edge, 40 pages in so far.  I've already read The Next Generation (1998) and recommend it.  Good to see TPE seems to get into the flows of money as this is something I still have no ability to understand beyond a very basic level