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

[Cosmic]

10 hours ago, Vendetta said:

if I am buying GOLD, SILVER or COMMODITY ETFs or funds .....then am I right in thinking I should just buy outside my ISA - as these investments offer no yield - and the chances of generating capital gain profit in a single year and going above my/our annual CGT allowance is minimal?  Best to use ISA allowance for dividend generating stocks?

IIRC CGT doesn't work like that. If you put 5k in and sold it for 20k 10 years later you'd be liable for CGT on the 15k gain. You'd need to manage the gains each year to use your allowance, which afaik, means you'd need to sell the stock, and buy it back after 3months.

[Castlevania]

3 minutes ago, Cosmic Apple said:

IIRC CGT doesn't work like that. If you put 5k in and sold it for 20k 10 years later you'd be liable for CGT on the 15k gain. You'd need to manage the gains each year to use your allowance, which afaik, means you'd need to sell the stock, and buy it back after 3months.

It’s 1 month. You can rotate between an ISA or SIPP and a taxable account if needs be.

[Majorpain]

3 hours ago, Knickerless Turgid said:

I have just caved in (under much marital pressure) and bought some new garden furniture from the local, independent, centre. The price was at least double what I would have expected pre-Covid, maybe nearer triple. No negotiation on the price either, despite my best efforts - they have stock, bought and paid for, and will hold out for their desired margin against cheaper online outfits, who may or may not be able to supply sometime, maybe, never. I respect that. Cost of shipping from Vietnam was mentioned as a big driver of the price increases.

Peoples eye's are now well open IMO, for retailers if the price of goods is increasing and you cant pass it on your stuffed.  One of our suppliers at work has been having fun with all his European goods going up by 20% from Import VAT, its pretty much game over as he was struggling before Jan.  I have zero sympathy because he was a right c**t.

I did have a bit of lightbulb moment today, whilst de-complex is one way of leveraging the inflation, you can also do it with a value added route when that isn't possible.  It doesn't matter how much input inflation increases, as long as you add enough value into the product processing it then it will proportionally make the raw material increases less.  Just like running from a tiger, you don't need to be the fastest, just quicker than the slowest so you can survive long enough that prices start to rise ahead of input inflation again.

[Loki]

2 minutes ago, Majorpain said:

I did have a bit of lightbulb moment today, whilst de-complex is one way of leveraging the inflation, you can also do it with a value added route when that isn't possible.  It doesn't matter how much input inflation increases, as long as you add enough value into the product processing it then it will proportionally make the raw material increases less.  Just like running from a tiger, you don't need to be the fastest, just quicker than the slowest so you can survive long enough that prices start to rise ahead of input inflation again.

Excellent analogy!

[planit]

I was thinking about using a new charting site earlier so I looked up your suggestion

Stockchart pricing matrix:

 

[Mooping]

20 hours ago, Starsend said:

SILJ isn't available on HL cos of the KID issue.

Denison mines is. I hold it in my SIPP, think it was on the Toronto exchange though.

Kazatomprom not available on HL even though London listed as not settled via Crest. You can buy it through Interactive Brokers as I have or through degiro, not sure about others.

Thanks for that.  Shame you cannot open an ISA account through IB. :-(

[DurhamBorn]

1 hour ago, Majorpain said:

Peoples eye's are now well open IMO, for retailers if the price of goods is increasing and you cant pass it on your stuffed.  One of our suppliers at work has been having fun with all his European goods going up by 20% from Import VAT, its pretty much game over as he was struggling before Jan.  I have zero sympathy because he was a right c**t.

I did have a bit of lightbulb moment today, whilst de-complex is one way of leveraging the inflation, you can also do it with a value added route when that isn't possible.  It doesn't matter how much input inflation increases, as long as you add enough value into the product processing it then it will proportionally make the raw material increases less.  Just like running from a tiger, you don't need to be the fastest, just quicker than the slowest so you can survive long enough that prices start to rise ahead of input inflation again.

Its amazing really but i used my roadmap to decide to close my business.I was actually importing garden furniture when i finished.Too be honest,if id been 30 instead of 47 at the time i could probably of become one of the biggest garden furniture/fire pit etc suppliers in the country.I was already supplying house builders,products on TV,House Doctors etc,and even supplied some for a Playboy shoot  .I had superb people in China,and great relationships with the factories.Id built it up and yet looked at my roadmap and thought time to get the capital out and have it for the smackdown coming and following reflation.I was right to do it.Importing is a nightmare now,and the costs are just increasing in every part of the chain.The interesting thing to watch will be Amazons retail business after say June this year.Thats when they will lap the big uplift,see stock turning fully over and all other costs increasing.Margins are going to get hit hard.Their marketplace sellers will feel the pain as well.

[Innkeeper]

12 minutes ago, DurhamBorn said:

Its amazing really but i used my roadmap to decide to close my business.I was actually importing garden furniture when i finished.Too be honest,if id been 30 instead of 47 at the time i could probably of become one of the biggest garden furniture/fire pit etc suppliers in the country.I was already supplying house builders,products on TV,House Doctors etc,and even supplied some for a Playboy shoot  .I had superb people in China,and great relationships with the factories.Id built it up and yet looked at my roadmap and thought time to get the capital out and have it for the smackdown coming and following reflation.I was right to do it.Importing is a nightmare now,and the costs are just increasing in every part of the chain.The interesting thing to watch will be Amazons retail business after say June this year.Thats when they will lap the big uplift,see stock turning fully over and all other costs increasing.Margins are going to get hit hard.Their marketplace sellers will feel the pain as well.

The days of Amazon being cheap/ the cheapest seem to have quietly disappeared.  I’m trying not to use them as I would prefer to buy direct from a UK business anyway but that decision over the last few months has been an easy one as other vendors offer the same price or sometimes less.  Amazon sometimes have had the edge with availability but that’s going now as well.

There’s a whole bunch of the population that buy Amazon through laziness because they just search and click - job done.  Price isn’t an issue especially on small ticket stuff.  I never understood the mentality of ease of use over price until someone told me they only booked hotels through booking.com because they didn’t have to keep entering their credit card details each time they wanted to stay somewhere.  Didn’t matter to them if there was a cheaper or better hotel available and they weren’t interested in looking either.

[Hancock]

13 minutes ago, Innkeeper said:

The days of Amazon being cheap/ the cheapest seem to have quietly disappeared.

Ive never used Amazon up until recently.

But bought some pizza flour and tomato sauce for cheaper then i'd have got it anywhere else, all delivered the next day.

Recently i wanted some summer sandals, ive had 4 pairs sent and none seemed to fit properly, all posted to me free of charge and returned free of charge. With the refund paid when i drop it at the post office.

Ended up with these that cost me £11. Seems Amazon are OK with making a loss to put everyone else out of business.

[nirvana]

11 hours ago, leonardratso said:

prawns.

that's it prawns! No wonder I couldn't understand what the feck they were saying

In other news

A third of COVID survivors suffer neurological or mental disorders: study

so some of us might not be as mad as first thought 

cheers!

 

[Bricormortis]

https://www.lynalden.com/april-2021-newsletter/

[wherebee]

28 minutes ago, Cattle Prod said:

I see DH has finally aligned with our $80 Brent / $75 WTI call. I'm always a little uncomfortable when his call is different. Now both DBs and DHs macro roadmaps are aligned with what I see on the supply side, niiicee.

Only three outcomes are possible from understanding this graphic:

1. We will transition to renewables, and return to a 1950s standard of living.

2. Fossil fuel use will continue to grow along with renewables in a broad energy mix.

3. We discover or tame a new and effectively free source of energy like nuclear fusion.

Any of the three is possible, but I'd put the probabilities at 1. 15%, 2. 80%, 3. 5%. I've increased the probability of #1 happening since last year as world governments genuinely seem to be willing to destroy society and standards of living. However going back to a 1950s standard of living with the current world population does't mean a modest house and one car (the 1950s looked quite nice to me!), it means mass starvation and war. People are alseep.

I'm not so sure about 1 being unreachable.  Think about it.  If you cut holiday travel, food miles, personal cars, commuter miles, and waste out of the modern life, 1950's style living wouldn't be that impossible.  Energy efficiency has grown massively in terms of housing and electric items (if houses are built properly).  

The key challenges would be getting the british public used to no holidays and no eating out.

 

HANG ON!

[wherebee]

31 minutes ago, Cattle Prod said:

So is the hivemind now saying we bail out of the oilies when $80 reached?  I thought it was all 120+ and hold for five years for divvies/!  But the bloke about is saying down to 10?

[feed]

3 minutes ago, wherebee said:

I'm not so sure about 1 being unreachable.  Think about it.  If you cut holiday travel, food miles, personal cars, commuter miles, and waste out of the modern life, 1950's style living wouldn't be that impossible.  Energy efficiency has grown massively in terms of housing and electric items (if houses are built properly).  

The key challenges would be getting the british public used to no holidays and no eating out.

 

HANG ON!

In 1950 there were 2.5 billion people on the planet. 7.8 billion in 2020. 

[wherebee]

1 minute ago, feed said:

In 1950 there were 2.5 billion people on the planet. 7.8 billion in 2020. 

I was more thinking of Australia, where numbers haven't grown massively

[BurntBread]

9 minutes ago, wherebee said:

So is the hivemind now saying we bail out of the oilies when $80 reached?  I thought it was all 120+ and hold for five years for divvies/!  But the bloke about is saying down to 10?

I think DH is making a call oil, not oilies. I'm guessing that the big co's will happily weather a brief excursion down o $10 WTI, without their own prices getting pummelled. If oil stays at $10 for any length of time, and the BK is accompanied by a prolonged downturn in industry, then I'm sure it'll be a different story.

[Don Coglione]

10 minutes ago, wherebee said:

I was more thinking of Australia, where numbers haven't grown massively

Australia's population has trebled since 1950, in line with the global total.

[feed]

8 minutes ago, wherebee said:

I was more thinking of Australia, where numbers haven't grown massively

I think the problem is the standard of living differential between the west and the 1.4 Billion Indians and 1.4 Billion Chinese.
If we go back to the ‘50’s they go back to the stone age. And if that happens, I don’t fancy our chances much.  
 

[Don Coglione]

1 minute ago, feed said:

I think the problem is the standard of living differential between the west and the 1.4 Billion Indians and 1.4 Billion Chinese.
If we go back to the ‘50’s they go back to the stone age. And if that happens, I don’t fancy our chances much.  
 

Indeed. Imagine telling 3 billion Chindians that their recent taste of a first-world, middle-class lifestyle was no longer on the menu.

[feed]

2 minutes ago, Cattle Prod said:

The answer to that is that they're not going to stop using fossil fuels. I'm sure they'll be quite happy for the West to put themselves back in the 1950s mind you.

i imagine that's were we end up.  I don't see how the disparity in lifestyle and productivity is maintainable.   

Which kind of leads me to the overwhelming problem I'm having with the great reset at the moment, it may be the least bad option for a lot of people in the west.  

 

[janch]

28 minutes ago, Cattle Prod said:

The answer to that is that they're not going to stop using fossil fuels. I'm sure they'll be quite happy for the West to put themselves back in the 1950s mind you.

Perhaps we'll overcome our hatred of nuclear and that will be the game-changer in the west.  I don't think it'll work while "woke" is the western mindset unless it can be done behind the scenes without any fanfare.  Boris might have to ditch Carrie first

[Bobthebuilder]

1 hour ago, Cattle Prod said:

I see DH has finally aligned with our $80 Brent / $75 WTI call. I'm always a little uncomfortable when his call is different. Now both DBs and DHs macro roadmaps are aligned with what I see on the supply side, niiicee.

Also here is an excellent graph to show anyone banging on about the energy transition:

Only three outcomes are possible from understanding this graphic:

1. We will transition to renewables, and return to a 1950s standard of living.

2. Fossil fuel use will continue to grow along with renewables in a broad energy mix.

3. We discover or tame a new and effectively free source of energy like nuclear fusion.

Any of the three is possible, but I'd put the probabilities at 1. 15%, 2. 80%, 3. 5%. I've increased the probability of #1 happening since last year as world governments genuinely seem to be willing to destroy society and standards of living. However going back to a 1950s standard of living with the current world population does't mean a modest house and one car (the 1950s looked quite nice to me!), it means mass starvation and war. People are alseep.

The governments own estimate on natural gas usage to 2050 is the same level as current usage, with renewables taking up the extra demand going forward. Mainly electric and hydrogen for the extra demand. There was a nice graph in our industry magazine a few months ago showing this, but I have recycled the magazine so cannot post up a pic of it.

[jamtomorrow]

1 hour ago, Cattle Prod said:

Only three outcomes are possible from understanding this graphic:

CP I was surprised there wasn't a:

4. World realises it probably needs nuclear after all

Do you think that's a non-starter?

I realise there's still a huge lag (at least a decade) between wising up and building enough generating capacity to move the needle, so maybe we just make out like bandits during that decade or so?

Edit to add: effectively, it'll be mostly "2" while they try everything else before admitting they need "4"

[planit]

Completely agree that number 4 nuclear fission was missing. Fusion still produces nuclear waste in it's current experiments so it's no different in that respect.

I would have suggested adding fission and fusion together but Cattle Prod made a point in labelling 3 as "low cost" which Fission (and fusion) currently is not.

 

World might come to it's senses regarding Fission but too late (probably when we are actually at a real Climate Crisis!)

 

[SpectrumFX]

58 minutes ago, planit said:

Completely agrit'lthat number 4 nuclear fission was missing. Fusion still produces nuclear waste in it's current experiments so it's no different in that respect.

I would have suggested adding fission and fusion together but Cattle Prod made a point in labelling 3 as "low cost" which Fission (and fusion) currently is not.

 

World might come to it's senses regarding Fission but too late (probably when we are actually at a real Climate Crisis!)

 

I don't understand why we haven't gone the molten salt route.

On the face of it, it would seem to be nuclear power without all the risks and waste.

https://en.m.wikipedia.org/wiki/Molten_salt_reactor