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

[ThoughtCriminal]

Just now, Loki said:

I lean more towards that being end of the decade than this year's BK

Yeah, timing I have no idea on, but direction of travel I'm 100% certain of. 

 

I know we're all supposed to hate landlords (I'm an accidental one myself) but setting aside ideology, I keep pondering that 2.99% fix for 20 years and I think "why wouldn't I buy two 60k houses giving 10% a year rental return?". 

 

We're never going to be here again. 

 

ThoughtCriminal by name and nature 😂

 

 

[nomadic]

Let's talk about food. We know that inflation is going to rip at some point and our medium costa coffee will shrink and become more expensive, possibly at the same time.

There hasn't been too much focus on agriculture and food production as an area ripe for reflation over the cycle.

Is there an obvious reason why? Are we all going to be eating insects as the WEF expects? Mr Gates has been buying up huge tracts of arable land in the U.S. Maybe he'll leave the land fallow to starve all the anti-vaxxers? 

It's an area I'd love to explore more. I am a big fan of WisdomTree because I like their logo (and lowish fees).

Has anyone dabbled in ETCs like this? 

https://www.wisdomtree.eu/en-gb/products/ucits-etfs-unleveraged-etps/commodities/wisdomtree-coffee

 

[AWW]

The Potash stocks discussed at length previously are the food play. Right at the start of the supply chain.

[Talking Monkey]

3 minutes ago, nomadic said:

Let's talk about food. We know that inflation is going to rip at some point and our medium costa coffee will shrink and become more expensive, possibly at the same time.

There hasn't been too much focus on agriculture and food production as an area ripe for reflation over the cycle.

Is there an obvious reason why? Are we all going to be eating insects as the WEF expects? Mr Gates has been buying up huge tracts of arable land in the U.S. Maybe he'll leave the land fallow to starve all the anti-vaxxers? 

It's an area I'd love to explore more. I am a big fan of WisdomTree because I like their logo (and lowish fees).

Has anyone dabbled in ETCs like this? 

https://www.wisdomtree.eu/en-gb/products/ucits-etfs-unleveraged-etps/commodities/wisdomtree-coffee

 

I have been pondering that why Gates is buying up these huge tracts of land, he is one sinister guy especially him getting involved in the vaccine stuff. 

[Talking Monkey]

10 minutes ago, ThoughtCriminal said:

Yeah, timing I have no idea on, but direction of travel I'm 100% certain of. 

 

I know we're all supposed to hate landlords (I'm an accidental one myself) but setting aside ideology, I keep pondering that 2.99% fix for 20 years and I think "why wouldn't I buy two 60k houses giving 10% a year rental return?". 

 

We're never going to be here again. 

 

ThoughtCriminal by name and nature 😂

 

 

That direction of travel is 100% certain. On a couple of BTL, I thought about it but also think say end decade if it goes to total shiyte what if government confiscated BTLs to house the massive amounts of destitute people, sounds paranoid but was wondering if that sounds a plausible scenario. 

[M S E Refugee]

5 minutes ago, ThoughtCriminal said:

Yeah, timing I have no idea on, but direction of travel I'm 100% certain of. 

 

I know we're all supposed to hate landlords (I'm an accidental one myself) but setting aside ideology, I keep pondering that 2.99% fix for 20 years and I think "why wouldn't I buy two 60k houses giving 10% a year rental return?". 

 

We're never going to be here again. 

 

ThoughtCriminal by name and nature 😂

 

 

I'm a big fan of industrial REITS, I can't understand why anybody wants to invest in BTL when you can collect rent off large companies with no hassle, the potential yields might not as high but I am not going to get a phone call in the middle of the night from Jeff Bezos telling me one of my Warehouse's roof's are leaking.

[Castlevania]

Just now, M S E Refugee said:

I'm a big fan of industrial REITS, I can't understand why anybody wants to invest in BTL when you can collect rent off large companies with no hassle, the potential yields might not as high but I am not going to get a phone call in the middle of the night from Jeff Bezos telling me one of my Warehouse's roof's are leaking.

It’s the leverage people like with buy to let. Buy a house, put down a 20% deposit; get a 5% gross yield, pay 3% interest to the bank and house prices only ever go up. A 10% rise in the house feeds through as a 50% return on the money put down. If you actually paid cash for that house, a 5% gross yield before all the hassle of having to deal with the general public, is a poor return on your capital.

[Majorpain]

37 minutes ago, Mooping said:

Hi, I haven't been on here for a few months and then only browsed.  But very informative thread.

What's the best way of investing in Gold and Silver if you are in the UK?  Someone did mention Jupiter Gold whatever that is?  

In Least to highest risk order (IMO) with a "do your own research" warning:

You can buy physical from Royal Mint/Chards/Bullion by post and store it yourself (Vat on any silver) or buy and store it in a vault which many offer.

Then its gold/silver mining ETF's who buy a spread of companies so you dont have to worry if one runs into trouble.

Finally buying individual miners which give you the highest reward but at the risk that they suffer serious losses.  This is not really for beginners to be honest.

It all really depends on your experience and circumstances, there is really no rule but i keep some of my assets in physical for ultimate protection if things go wrong. I started with some Gold sovereigns as they are not too expensive, widely accepted and there is a good market for them.

[nomadic]

11 minutes ago, AWW said:

The Potash stocks discussed at length previously are the food play. Right at the start of the supply chain.

Of course! Brain not functioning this morning. I have been sitting on a chunk of Kore Potash which is finally back in the black for me after a stunning week! 

[dnb24]

Hattip Lynn Alden- demonstrating the FED increasing bonds and therefore drawing in in dollars during 2020 and now issuing less bonds releasing this accumulation of dollars into the private sector.

[DurhamBorn]

27 minutes ago, Option5 said:

Or people with real assets but large debt, especially as interest rates will probably rise prior to the crash. The lenders will want those assets if cash is worthless.

Exactly,and that is how it always works.Cash always becomes worthless and always has,the only thing that changes is the speed.The elite try to steal the assets over a couple of lifetimes so as to keep the serfs working and not understanding why their toil is chasing a moving target.However when they lose control that theft is pushed into a shorter period.

The Uk for instance is a rich modern society,yet there is no point working because its reached the point where a very large proportion of the population lives off the rest.That why they need to print,they cant tax more to pay for it,so they steal the workers labour,and saved labour by printing it away.Printed money given to that benefit scrounger,is as much theft as extra income tax,the only difference is some areas can leverage that inflation,and we can benefit from it.

[Castlevania]

5 minutes ago, Majorpain said:

In Least to highest risk order (IMO) with a "do your own research" warning:

You can buy physical from Royal Mint/Chards/Bullion by post and store it yourself (Vat on any silver) or buy and store it in a vault which many offer.

Then its gold/silver mining ETF's who buy a spread of companies so you dont have to worry if one runs into trouble.

Finally buying individual miners which give you the highest reward but at the risk that they suffer serious losses.  This is not really for beginners to be honest.

It all really depends on your experience and circumstances, there is really no rule but i keep some of my assets in physical for ultimate protection if things go wrong. I started with some Gold sovereigns as they are not too expensive, widely accepted and there is a good market for them.

I’d add if buying individual gold miners you really need to diversify. A lesson I learnt the hard way.

[Hardhat]

11 minutes ago, Castlevania said:

I’d add if buying individual gold miners you really need to diversify. A lesson I learnt the hard way.

Agreed.

I think it depends how much you have to invest to some extent.

If you have £10k and can split it £1k between 10 individual miners, or £500 between 20 individual miners, that's good diversification, but at that point I would argue that you might as well buy GDX / GDXJ.

If you have a higher appetite for risk you could split £2k between five miners, say a major and four small caps, with the proviso that one might lose everything, but you only need a ten-bag to make great money.

Personally I have investments in the ETFs - GDX, GDXJ, and Jupiter Gold & Silver for sector exposure, but I don't expect fireworks, and I also have a few speculative individual picks that might "rubber band". Partly chose this approach as I only have around £5k in the sector in total. 

CC @Mooping

[Loki]

35 minutes ago, nomadic said:

Let's talk about food. We know that inflation is going to rip at some point and our medium costa coffee will shrink and become more expensive, possibly at the same time.

There hasn't been too much focus on agriculture and food production as an area ripe for reflation over the cycle.

Is there an obvious reason why? Are we all going to be eating insects as the WEF expects? Mr Gates has been buying up huge tracts of arable land in the U.S. Maybe he'll leave the land fallow to starve all the anti-vaxxers? 

It's an area I'd love to explore more. I am a big fan of WisdomTree because I like their logo (and lowish fees).

Has anyone dabbled in ETCs like this? 

https://www.wisdomtree.eu/en-gb/products/ucits-etfs-unleveraged-etps/commodities/wisdomtree-coffee

 

The developments in ag/food are very sinister.  Potash doesn't help with food containing adequate nutrition either (quality vs quantity) but that's the way modern farming works. So be it. I hold K + S and intrepid

 

 

 

[Hardhat]

2 minutes ago, Loki said:

The developments in ag/food are very sinister.  Potash doesn't help with food containing adequate nutrition either (quality vs quantity) but that's the way modern farming works. So be it. I hold K + S and intrepid

 

 

 

The other sector we may want to look at is agri tech, I.e. hydroponics, lab grown meat, meat alternatives, and vertical farms. There is no potash required for some of those technologies.

Agronomics (LON:ANIC) has been mentioned on here before. I will be opening a position on ISA topup day.

 

[ThoughtCriminal]

31 minutes ago, Talking Monkey said:

That direction of travel is 100% certain. On a couple of BTL, I thought about it but also think say end decade if it goes to total shiyte what if government confiscated BTLs to house the massive amounts of destitute people, sounds paranoid but was wondering if that sounds a plausible scenario. 

Agree completely. 

 

I'm very cogniscent of the fact that confiscation is a strong possibility. 

 

That's another reason why I don't rate pensions. 

 

That's why these are such dangerous times: not only do you need to be right, you need to be able to avoid state theft of your reward for being right. 

 

That's why I appreciate this site so much. 

 

Wouldn't want to face the coming apocalypse with any other bunch of pizza baking, yellow sticker hunting freaks and misfits. 

 

No offence, I include myself in there😂😘

[Mooping]

21 minutes ago, Hardhat said:

Agreed.

I think it depends how much you have to invest to some extent.

If you have £10k and can split it £1k between 10 individual miners, or £500 between 20 individual miners, that's good diversification, but at that point I would argue that you might as well buy GDX / GDXJ.

If you have a higher appetite for risk you could split £2k between five miners, say a major and four small caps, with the proviso that one might lose everything, but you only need a ten-bag to make great money.

Personally I have investments in the ETFs - GDX, GDXJ, and Jupiter Gold & Silver for sector exposure, but I don't expect fireworks, and I also have a few speculative individual picks that might "rubber band". Partly chose this approach as I only have around £5k in the sector in total. 

CC @Mooping

Thank you very much for your reply.  I thought you couldn't buy the ETF's GDX and GDXJ in the UK?  

[Hancock]

10 minutes ago, Mooping said:

Thank you very much for your replies.  I thought you couldn't buy the ETF's GDX and GDXJ in the UK?  

GJGB and GDGB are the UK listed version.

[Harley]

1 hour ago, ThoughtCriminal said:

And anyone not holding something that's valued by people is going to be in a world of shit. 

Talking of which, my replacement log splitter arrived this week!  Should have bought the really big one in case it could be a sideline but this will do for me and (importantly) the community.  I'll buy the big one if I get the woodland, although I now have maybe 10 years supply.  UK made and the best design and build of them all so well done us.  Awesome.  I just love buying this stuff; the independence it gives and guessing its price in a few years time.

[Harley]

41 minutes ago, ThoughtCriminal said:

That's why these are such dangerous times: not only do you need to be right, you need to be able to avoid state theft of your reward for being right. 

Indeed.  And can take many forms.  Per Napier, I've included an additional analysis for my portfolio: regulated and unregulated. 

[ThoughtCriminal]

18 minutes ago, Harley said:

Talking of which, my replacement log splitter arrived this week!  Should have bought the really big one in case it could be a sideline but this will do for me and (importantly) the community.  I'll buy the big one if I get the woodland, although I now have maybe 10 years supply.  UK made and the best design and build of them all so well done us.  Awesome.  I just love buying this stuff; the independence it gives and guessing its price in a few years time.

Things Iike this are definitely a wise non "finance" move to make. 

 

Hope for the best but prepare for the worst 👍

[ThoughtCriminal]

8 minutes ago, Cattle Prod said:

Where'd you manage to get 10 years supply from?! I'm at about 2 years, and struggling to see where I'll get more from, unless I buy a woodland like you say.

Wood envy

 

God I Iove this site 😂

[Noallegiance]

1 hour ago, Mooping said:

Thank you very much for your reply.  I thought you couldn't buy the ETF's GDX and GDXJ in the UK?  

Got them in my Hargreaves SIPP

[AWW]

Low single digit inflation is really quite an amazing thing. Most don't realise what effect it has on them until far later than is ideal (I include myself in this). When I was doing A-levels, I scraped together enough money to buy a lovely Simon and Patrick cedar wood guitar. I paid full RRP of £250. The same guitar now costs £550. I remember looking at Gibson Les Pauls and thinking that a grand is a ludicrous amount of money for a guitar. Want one now? That'll be £2200 please, sir.

Most people don't buy items like these, which haven't been outsourced to China or benefited from Moore's law. They just see that a fifty inch telly is half the price it cost five years ago and feel richer.

[Bobthebuilder]

15 minutes ago, AWW said:

Low single digit inflation is really quite an amazing thing. Most don't realise what effect it has on them until far later than is ideal (I include myself in this). When I was doing A-levels, I scraped together enough money to buy a lovely Simon and Patrick cedar wood guitar. I paid full RRP of £250. The same guitar now costs £550. I remember looking at Gibson Les Pauls and thinking that a grand is a ludicrous amount of money for a guitar. Want one now? That'll be £2200 please, sir.

Most people don't buy items like these, which haven't been outsourced to China or benefited from Moore's law. They just see that a fifty inch telly is half the price it cost five years ago and feel richer.

I have a nice collection of Gibson guitars that I view as a non-yielding part of my pension, that I get to enjoy. I bought a few off older guys that had them for exactly the same reason.