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

[Harley]

10 minutes ago, Lightscribe said:

I didn’t say it was an edgy new thing, I’m simply implying that at this point in time with an increasingly bleak financial outlook inherited by the younger generation, they will look elsewhere, crypto provides the outlet for that until it’s regulated out of existence. The markets and hedge funds will follow the money regardless. Whether that consists of the older demographic inadvertently investing is passive hedge funds incorporating crypto is irrelevant.

Passive investment funds have worked verbatim in recent history. But will they work forever more and fund all those pension funds all the while pension ages increase and the carrot gets drawn further away?

Sorry, I don't buy any of that, at least in the characterisations.   But if the script works for you then that's fine.  Let's stop the dialogue please and move on. 

[Lightscribe]

3 minutes ago, Harley said:

Sorry, I don't buy any of that, at least in the characterisations.   But if the script works for you then that's fine.  Let's stop the dialogue please and move on. 

Agree to disagree  it’s what makes a discussion forum an actual place for discussion right? 

[Talking Monkey]

6 hours ago, Majorpain said:

We shall see, the paper price isn't wagging the physical dog any more, I was going to pick some of the nice 2021 Britannia's, but good luck getting them for anything less than a massive premium.

The premium on silver britannia are huge, add on the vat and its nuts, maybe the way to go is 1/10 ounce gold coins still a chunky premium but not as nuts as silver. I'm absolutely shocked at the premium over spot. 

[Loki]

9 minutes ago, Talking Monkey said:

The premium on silver britannia are huge, add on the vat and its nuts, maybe the way to go is 1/10 ounce gold coins still a chunky premium but not as nuts as silver. I'm absolutely shocked at the premium over spot. 

Yes, I've a reasonable stash of silver ordered when coininvest had the VAT loophole, but I won't be ordering any more now.

[Viceroy]

Might be worth a listen - Lynn’s take on silver

[Innkeeper]

35 minutes ago, Talking Monkey said:

The premium on silver britannia are huge, add on the vat and its nuts, maybe the way to go is 1/10 ounce gold coins still a chunky premium but not as nuts as silver. I'm absolutely shocked at the premium over spot. 

Isn’t this the much discussed problem with the paper and physical PM markets?  The ‘spot’ is the Comex price and the ‘premium’ for physical is actually the market price for physical because that’s what you have to pay. Bear in mind that coins (aside of VAT) will always have a premium compared with bars due to design/manufacturing/marketing costs - having nice looking silver costs a bit more 

[Lightscribe]

Just to add from yesterday in relation to the big funds moving in with regards to crypto, Grayscale is about the most diverse with 13 investment trusts currently as far as I’m aware.

https://www.bloomberg.com/news/articles/2021-03-17/biggest-bitcoin-fund-provider-to-offer-different-crypto-trusts

Most others will be limited to BTC and ETH as part crypto exposure to be used in a diverse portfolio. I can’t see these funds loading up and connecting their MetaMask defi wallets to uniswap to diversify into the likes of unicorns into sushi or pancakes anytime soon.

A bit ironic however, that these funds are investing in crypto exposure for growth/hedge against fiat devaluation when the whole point of some of these cryptos is to integrate into what replaces it.

[King Penda]

19 hours ago, Calcutta said:

How the hell did you find us without TOS? 

It means Tramriel Operating System. We all used to work for Atari but lost our jobs when Alan Sugar decided to cancel the project. 

Don’t meantion the emailer

[DurhamBorn]

Nice to see more and more of the roadmap playing out,and not the media is waking up to things.The macro position spotted all of this happening before anyone left a door open in a Chinese lab.

https://www.telegraph.co.uk/business/2021/04/04/ursula-dividend-shot-arm-uk-vaccine-industry/

 

[DoINeedOne]

So all this shit going on with silver and apparently the Perth Mint not have much silver etc....

Does anyone see the benefit in reserving bars within BullionVault if you had enough Silver, I trust and like BullionVault so I'm not suggesting that there's a issue there

 

Reserving takes the bar and allocates it to you and it won't be available for trading

0.1% - 0.2% fee to reserve the bar

0.72% storage fee per year an increase from the normal 0.48%

FREE to release the bar back to trading or sell 

[Loki]

New David Hunter vid

 

One of the most important things I took from this (if I have understood correctly) is that the economy will be doing fine when the BK hits, as the money leaving stocks will be needed for economic activity elsewhere.

Well worth a watch even if you've seen the others.

[geordie_lurch]

1 hour ago, Loki said:

New David Hunter vid

 

One of the most important things I took from this (if I have understood correctly) is that the economy will be doing fine when the BK hits, as the money leaving stocks will be needed for economic activity elsewhere.

Well worth a watch even if you've seen the others.

Cheers for that @Loki

I think that's a great short reminder video to not get caught up with the herd piling into stocks as things continue to rise for from here as the Big Kahuna (BK) is due very soon if you believe we are at the end of what David calls a super cycle 
 

[sancho panza]

On 03/04/2021 at 14:34, Bricormortis said:

David Hunter latest via Miles Franklin ....duration is 28 mins.

BM and @Loki.Thanks for posting.This was superb.This really does reemphasize what a decent run of macro calls DH has had.It's also a reiteration of his very stark warnings that you need to be careful out there.

I've done a written precy for a couple of family members,reprinted below,because I think this is an important vid raising a lot of key issues.Weaves in nicely with what @DurhamBorn has been predicting for a few years.

One of the best things I think David Hunter says in this vid is that he'll be happy if gets the top within a few months either side of it.Says a lot that that's his measure of success and a timely reminder that anyone taking daily calls from anyone too seriously is playing with fire.

 

from David Hunter video

sees 4600 S&P,Nasdaq 17,000,driven by covid recovery and FOMO

top in Q2 or Q3,but this top has been coming for 39 years since 1982 when disinflation process started,will be happy if he gets within a few months of it.

cyclical and secualr bulls will peak at same time then drop up to 80%.His 80% call is a guess based on hsitory.

lot of leverage particualrly with derivatives which may exacerabte the market's moves.

Fed will be caught between rock and a hard place.Inflation will force Fed to tightenSays infaltion measures are out but they're what we sue.Doesn't see US inflation beyond 3% this year but that will be enough due to the recent money pritning.Market will push up rates to 2.5% on ten year.

DH thinks bond market rally is starting right now.Marekts don't move in straight lines.UST's have run up to 1.75% from 0.6% in 6 months.We're due a rally in bonds.

Previously said next price points for PM's gold $2500 and silver $45-$50.Could come in Q3,admits his timing is best guess.Points out that if you use unoffical numbers tehn real rates then gold goes higher but using govt figures,algo's won't push it higher.

Long term forecasts gold $10,000,silver $300.All assets will get pummelled in BK except UST's and $,but PM's will only drop 30%.

Has seen a lot of stress on twitter from the recent moves down in gold/silver,says that if that hruts them,then a bust will be hard.

Gold will be a huge winner in the recovery cycle after the BK.

Makes these market calls becuase we're approaching the end of a super cycle.A super cycle is defined by DH as the cycle between two depressions.Sees next Dperession in 2030's.Volatility gets huge at the end of a super cycle.

Says people need to really reassess their risk profile approaching BK.

Sees bull market top followed by worst bear market in 80 years.Best professionals can't call it precisely.

Time wise we're at the high end of the risk scale.

Will enter period of very high downside volatility shortly.

We will see euphoria in next few months.

Fed is printing money because the economy is bad.

 

 

 

 

[MrXxxx]

21 minutes ago, sancho panza said:

DH thinks bond market rally is starting right now.Marekts don't move in straight lines.UST's have run up to 1.75% from 0.6% in 6 months.We're due a rally in bonds.

Didn't understand this, was he saying that bond prices would increase (and so lower yield), and why would this happen if inflation/interest rates increase, I would have thought this would be the opposite as we have now (0.6 to 1.7 yield)....or is it because the companies need the bond funds in a growing economy and so compete with each other for the capital?

[sancho panza]

1 hour ago, MrXxxx said:

Didn't understand this, was he saying that bond prices would increase (and so lower yield), and why would this happen if inflation/interest rates increase, I would have thought this would be the opposite as we have now (0.6 to 1.7 yield)....or is it because the companies need the bond funds in a growing economy and so compete with each other for the capital?

He's basically using a variation fo the old Wolf line about 'nothing goes to heck in a straight line' ie that we're due a pullback ahead of a further weakening.He mentioned 2.5% sometime this year iirc.I'd have to relsiten to it to find where.

I think @Cattle Prod has written recently about the oil price needing a pullback to confirm the bull is still on.

 

[DurhamBorn]

Id really advise people to listen hard to what David says about liquidity.We said on this thread last March that as the CBs print it first enters the financial pipes before entering the economy,and thats exactly what he is saying in the video.He is also saying that a big part of a BK could be people selling to do things in the real economy.Thats why markets move the opposite to what people expect because they dont understand leads and lags on liquidity.

[sancho panza]

3 hours ago, Cattle Prod said:

Hilarious bit of antics from India over the last few weeks. They've been crying about higher oil prices, imploring Saudi to increase production. They then got themselves on a narrative that they have an "oil weapon" with their growing demand, and they'd just look elsewhere. Halfway around the world like Guyana or the North Sea. Saudi released their May OSPs today. These are their prices, either above or below Brent. Different prices for different market. So Europe is getting about a $2.50 discount, recognising demand problems. Asia has been robust as discussed here, paying about a $1.40 premium. So what was Saudis response to the Indian oil weapon? Another 40c please. Thats what the Asian market is paying, so cough up or stop growing.

Indians are often very naiive in my experience. When the finally realise they have to get in and compete for ME oil, especially against China, it's gonna get spicy. As DB said they will have to cosy up to US, the D7 or whatever it is is the start of it. Which will be fine till the US needs to buy it too.

The pendulum has swung. It's been a buyers market for the last 6 years, but now the producers have the oil weapon, as India has just learned.

Increasing OSPs to Asia is bullish. OPEC+ increasing oil to the market is bullish: it means they think they can sell it. I'd have loved to have seen $54 WTI, but that might be it. I think there's another leg up in store, could be tasty. US production is due to start dropping any week now which the market has not priced in...

CP,Any chance you could give us your view on where we stand in terms of supply?WHat are your views on where US shale is ie how long before they have a price that makes it competitive to drill new wells and how long before that supply that was still being drilled in Feb last year runs dry and needs replacing.

iirc you said roughly you were expecting a 3mn to 4mn bpd shortfall in US shale alone and were expecting end Q1 for that to be apparent.

In terms of demand are we back up to pre covid levels.I remember you psoting that CHina/India were exceeding last year demand wise back in tail end Q1 iirc.

No pressure and dyodd for us all as ever

Decl:I'm about to begin mvoing some call otpiosn around.My very simple chart set up says we're near the tail end of the drop in the oilies we're trading.I'm going to have another run as I'm with DH and don't think this is the BK.I think we still need to see a fuller sector rotation into oils and away from Big Tech and with QQQ around $320 we're not there yet.

[sancho panza]

35 minutes ago, DurhamBorn said:

Id really advise people to listen hard to what David says about liquidity.We said on this thread last March that as the CBs print it first enters the financial pipes before entering the economy,and thats exactly what he is saying in the video.He is also saying that a big part of a BK could be people selling to do things in the real economy.Thats why markets move the opposite to what people expect because they dont understand leads and lags on liquidity.

DB,again no pressure but you quite correctly predicted a sub 90(possibility 87 iirc) on DXY last year sometime when DXY was higher ,do you think that's it for DXY weakness this side of teh Sept/Oct timeframe?or is there scope for some more?

dyodd natch.

[Harley]

A bit of the old money saving spirit today with better results - more for less.  Learnt how to temper chocolate and make our own chocolate assortment with marzipan, strawberry, banana, etc.  Cheap, fun, and better than shop bought (used sugar free real chocolate).  Healthier too.  Kids ought to like it too.  Must buy a neoprene mould.

[DurhamBorn]

48 minutes ago, sancho panza said:

DB,again no pressure but you quite correctly predicted a sub 90(possibility 87 iirc) on DXY last year sometime when DXY was higher ,do you think that's it for DXY weakness this side of teh Sept/Oct timeframe?or is there scope for some more?

dyodd natch.

I see dollar down sharp from here to 87 again,i know thats opposite to what almost everyone expects.It will send oil over $70 i think,roadmap cross market from the dollar is actually saying $73/74 Brent.It could be we get $70+ oil at the same time as 87 DXY bang on,if so its highly likely il sell a lot in that area.

Im trying to work out how to play this as running through my portfolio its reflation defensive and im not prepared to be out of equity BK or not,so im thinking maybe 40% cash and Treasuries if those dollar/oil targets hit.

One worry i have is derivative exposure from the debts of big blue chips.Massive interest rate and currency swings could hole a lot of balance sheets if counterparties fail.

Its the most difficult call i can remember on if its a BK or straight to inflation.Im trying to see through the fog.What if its both a BK and inflation etc.

[Harley]

7 hours ago, Loki said:

New David Hunter vid

 

One of the most important things I took from this (if I have understood correctly) is that the economy will be doing fine when the BK hits, as the money leaving stocks will be needed for economic activity elsewhere.

Well worth a watch even if you've seen the others.

In case people aren't aware, most of these video channels (e.g. this one) have podcasts too.  I find these great through Bluetooth headphones while working, etc.  I use thd free AntennaPod to be a great podcast app (others available!).

[Harley]

2 hours ago, DurhamBorn said:

...im thinking maybe 40% cash and Treasuries if those dollar/oil targets hit.

So your thinking moving to the old 60:40 portfolio when your Brent $70 and DXY $87 targets are hit! 

PS:  Would you not be buying bonds now given DH said this could be the start of a bond run?  Or are you waiting for a DXY fall first?  And when you do buy, just USTs, not Uk or others?

[Harley]

2 hours ago, DurhamBorn said:

One worry i have is derivative exposure from the debts of big blue chips.Massive interest rate and currency swings could hole a lot of balance sheets if counterparties fail.

A lot of blue chip balance sheets are basket cases.  Several have very little solid net equity and it's way way below their share price valuations.  Everyone has been looking exclusively at the E*'s (P&L) for too long.  The Titanic got hit below the water line while the band played on.

[wherebee]

2 hours ago, Harley said:

A lot of blue chip balance sheets are basket cases.  Several have very little solid net equity and it's way way below their share price valuations.  Everyone has been looking exclusively at the E*'s (P&L) for too long.  The Titanic got hit below the water line while the band played on.

That's one thing I have to remind myself of  - that I do not have the time, or ability, to analyse debt loads myself for such investments and thus this thread (and other online commentators) are golden for stopping bad decisions based on other positive factors.

 

[BurntBread]

8 hours ago, DurhamBorn said:

Id really advise people to listen hard to what David says about liquidity.We said on this thread last March that as the CBs print it first enters the financial pipes before entering the economy,and thats exactly what he is saying in the video.He is also saying that a big part of a BK could be people selling to do things in the real economy.Thats why markets move the opposite to what people expect because they dont understand leads and lags on liquidity.

His words reminded me very strongly of Jens Parsson (Ronald Marcks) "The dying of money", posted up-thread, and the idea you have to consider the financial markets and real markets as two different (but interlinked) things. So, on a short time-frame, when the overall money supply is constant, money can move back & forth, but that means price levels in the two markets move oppositely.

I am thinking that means that if the money which has recently bloated the equity markets starts moving into real goods, and pushing price inflation there, then the oil stocks could take a big hit on their prices. However, there is no reason to suppose it will negatively affect their profitability, or dividends. In that sense, holding through a BK would be a hit to portfolio value, and a missed opportunity to buy more at the new lows, but would not put you at risk of catastrophic loss. The capital losses should only be temporary, maybe for a year or two?

Has anyone engaged with DH on twitter to ask his views on the energy sector, since he seems happy to make calls about PMs?