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

[Castlevania]

40 minutes ago, Harley said:

I was a bit slow this morning.  I later saw he used options on the ETFs.  But I still wonder if he had hedged his positions just in case. 

I think it is the hedge. If he’s wrong he loses his option premium and his stock portfolio doesn’t get hosed.

Edit: Ignore me. Thought you were talking about Michael Burry.

[DurhamBorn]

Remember markets arent linear,day to day is noise.What matters is where things are going to in their own time.Im not a trader,my aim is to make 65% minimum over the cycle as thats how i see inflation.

DXY has gone under 90 at last and a struggle should now build.I still see 87 as likely.

[leonardratso]

4 minutes ago, DurhamBorn said:

Remember markets arent linear,day to day is noise.What matters is where things are going to in their own time.Im not a trader,my aim is to make 65% minimum over the cycle as thats how i see inflation.

DXY has gone under 90 at last and a struggle should now built.I still see 87 as likely.

uncle dave concurrs

 

[MvR]

4 hours ago, Harley said:

Ta.  As part of my research, this European guy's (based in Sweden?) approach to constructing the portfolio.  Probably a bit too much for me though.

https://driftwoodpalace.github.io/Dragon-Portfolio/

PS:  I really need to get into options given the previous need and now this and my recent look at writing options for income.  I have everything set up but need to swot up on the execution on the various platforms.  Maybe I can lean on you a bit on your options thread?

Absolutely... though my apologies if I reply a little slowly at the mo.. I'm have quite a busy time right now. Also maybe @ me if you post so I see a notification.

edit: interesting link BTW.. ta!

[planit]

2 hours ago, jamtomorrow said:

I like Bitcoin's energy use - it's what makes the network hard to attack, and that seems valuable to me as a user.

More generally, the idea we should start squabbling amongst ourselves over end-uses of energy because we've f***ed up supply-side policy is just plain daft - to my mind, that just represents civilizational retreat.

If anything, we could do with a good energy crisis to properly focus minds on supply-side. So I'm just nipping away to buy more Bitcoin, open some windows and turn the thermostat up.

I hope you are not making important decisions using rationalism or you are f**cked! 

 

We live in a  world where the most powerful person gets his ideas from gender studies lecturers and central banks use a manual posted direct from Noddy's Toyland.

The majority of university leavers think the sea level is going to rise 5 meters by the end of the century (this is a guess but the above is 100% accurate).

[planit]

57 minutes ago, Bobthebuilder said:

Yeah. They will stick it in the gas pipe network, no need to transport anywhere.

I, like many other heating engineers this morning, had a good laugh at this "no gas" by 2025 and took another bite of me bacon and egg sarnie. The sums just don't add up without gas. The smallest combi boiler you can buy is 24 kilowatts, that's 104 amps, we are going to need a nuclear reactor in every town in 3 years time to achieve that plus rebuild the entire countries electric net work and re plumb everybody's house.

I will be using a unicorn to travel to work on by then.

 

That is a great solution but won't happen. It will take too long to get all boilers able to run on hydrogen. They were talking 2050 and by then Hydrogen transported needs to already be sorted.

It would be a good infrastructure plan if the government managed to fast forward the transition and then managed to convert the grid by 2030.

But that would also require for gigantic amounts of blue Hydrogen to be made and the enviro people are stupid so they will fight that.

 

Again we come back to the same problem, our problems are fixable but it requires a strong and sensible government (willing to ignore ESG when needed for the long term) and a war-type mentality.

 

Imagine that we had a hydrogen grid by 2030, it would be awesome and could be used by industry too. Well worth throwing half of the Covid spend at.

[jamtomorrow]

6 minutes ago, planit said:

I hope you are not making important decisions using rationalism or you are f**cked! 

 

We live in a  world where the most powerful person gets his ideas from gender studies lecturers and central banks use a manual posted direct from Noddy's Toyland.

The majority of university leavers think the sea level is going to rise 5 meters by the end of the century (this is a guess but the above is 100% accurate).

Yeah, rationalism is a dangerous game - all very well me relying on a reversion to rational mean when we know a given situation (NB: not just "markets") can stay irrational for a *very* long time.

That said, itching to try 11 on this here Spinal Tap thermostat!

[planit]

Just now, jamtomorrow said:

Yeah, rationalism is a dangerous game - all very well me relying on a reversion to rational mean when we know a given situation (NB: not just "markets") can stay irrational for a *very* long time.

That said, itching to try 11 on this here Spinal Tap thermostat!

I don't think politics follows the mean reversion theory. For one thing it is an unstable system.

[JMD]

1 hour ago, Castlevania said:

Could you view Bitcoin as a store of energy?

I don't think its a energy 'store', because can't really extract/utilise that energy.                                                                             But the 'store of value' description works well enough for me. Of course the concept of human/economic value/s is itself a complex and rather deep thing (e.g. i'm reminded that early 'denominations'/unadulterated quantities of gold/currencies were originally termed denominations because of the religious connotation and the high organisational importance attached to these articles of transformative economic trade/faith?; i mention this merely because i find it historically interesting, cognizant that i risk providing ammunition to the various different sceptics (btc or otherwise?!) reading this, but enough said and of course this topic is not for this thread)

[DurhamBorn]

48 minutes ago, Cattle Prod said:

The rocks here are even worse, to start with. They need to be a bit more brittle, the ones here dont crack as easily as the US ones (less calcareous matter, for the nerds). That aside, it would never work for above ground reasons. It takes maybe 20 18 wheelers to move a rig and frac spread around, not going to work on English country lanes. West Texas, N Dakota, Wyoming, there is nothing there, and the people who are there are big supporters of the oil industy. It makes them rich. There is no incentive for the landowner in the UK, the Queen gets the royalty, being royal and all. In the US, the landowner is the king/queen, and so gets the royalty! 

Gas is easier to extract yes, because the molecules are smaller and so flow more easily. All of the above still applies though.

Short answer: not going to happen here.

Its funny how things change.Where i was born there were coal mines at the end of the street,and railways hauling the coal along the paths through the town from all different directions.The pit near me had the nickname Dabble Duck because it was that wet the miners were up to their wastes half the shift as they only pumped from the seam itself.Years later a factory on the site had a lot of lesbians working there and the locals called it Dabble Dyke in reference to the old pit.

The other colliery was called Black Boy,mainly as it was a really dusty seam and didnt have baths so the lads used to go home black.The old line hauling them is still a path now and goes past my dads back door.Lads used to jump on the back of the wagons for a lift around town.The coal coming along the oldest railway in the world stopped first as they built a tunnel instead straight under the town,hand dug.Irish mostly and at the far end of the tunnel was a row of houses called Paddys Row where a lot of them lived and stayed after the tunnel was built.

 

[Harley]

40 minutes ago, JMD said:

I don't think its a energy 'store', because can't really extract/utilise that energy.                                                                             But the 'store of value' description works well enough for me. Of course the concept of human/economic value/s is itself a complex and rather deep thing (e.g. i'm reminded that early 'denominations'/unadulterated quantities of gold/currencies were originally termed denominations because of the religious connotation and the high organisational importance attached to these articles of transformative economic trade/faith?; i mention this merely because i find it historically interesting, cognizant that i risk providing ammunition to the various different sceptics (btc or otherwise?!) reading this, but enough said and of course this topic is not for this thread)

This has been discussed on Real Vision, etc.  There is an argument.  Just like gold takes energy to mine and the leaves in "The Hitchhikers Guide to the Galaxy" don't, as it were!

[planit]

25 minutes ago, Harley said:

This has been discussed on Real Vision, etc.  There is an argument.  Just like gold takes energy to mine and the leaves in "The Hitchhikers Guide to the Galaxy" don't, as it were!

Yes, if gold mining stopped what happens to the price of gold?

What happens to price of Bitcoin if mining stops?

Not sure why people would use the gold mining takes energy argument.

[JMD]

47 minutes ago, Cattle Prod said:

The rocks here are even worse, to start with. They need to be a bit more brittle, the ones here dont crack as easily as the US ones (less calcareous matter, for the nerds). That aside, it would never work for above ground reasons. It takes maybe 20 18 wheelers to move a rig and frac spread around, not going to work on English country lanes. West Texas, N Dakota, Wyoming, there is nothing there, and the people who are there are big supporters of the oil industy. It makes them rich. There is no incentive for the landowner in the UK, the Queen gets the royalty, being royal and all. In the US, the landowner is the king/queen, and so gets the royalty! 

Gas is easier to extract yes, because the molecules are smaller and so flow more easily. All of the above still applies though.

Short answer: not going to happen here.

Thanks for that information CP. I was going to reply back that its 'great' to understand how mad things shale-energy-related are, even over here... then realised how insane that statement sounds and how hollow that sentiment is... Crikey, i think these slowly grinding, irratic financial markets might be getting to me... then again, perhaps better to blame any nasty symptoms on Long-Covid, at least then i can get a doctor's sick note and maybe even a government recovery loan! (always gotta have a plan-b!!)

[nirvana]

2 hours ago, DurhamBorn said:

DXY has gone under 90 at last and a struggle should now build.I still see 87 as likely.

it's tagging the Jan lows.....if they don't hold lorra lorra space below....

[nirvana]

1 hour ago, planit said:

What happens to price of Bitcoin if mining stops?

probs goes up 

You can trade Bitcoin futures now, the CME doesn't think it's going away 

[Loki]

2 hours ago, DurhamBorn said:

Remember markets arent linear,day to day is noise.What matters is where things are going to in their own time.Im not a trader,my aim is to make 65% minimum over the cycle as thats how i see inflation.

DXY has gone under 90 at last and a struggle should now build.I still see 87 as likely.

What are the implications of your 87 compared to David Hunter's 82 - 85?  

A less severe bust, or shorter? Or less rotation? 

[nirvana]

18 minutes ago, Loki said:

David Hunter's 82 - 85?  

 

methinks the ECB won't let that happen, yuro exports will be annihilated...the krauts will be getting restless 

more meat on the bone...since the euro weekened significantly in 2014 EU exports to the US have gone from 266 to 352 billion yuro poo currency 

imports are at the same level as 2015...

https://ec.europa.eu/eurostat/statistics-explained/index.php?title=USA-EU_-_international_trade_in_goods_statistics 

[planit]

28 minutes ago, nirvana said:

probs goes up 

You can trade Bitcoin futures now, the CME doesn't think it's going away 

No, I think mining is needed for the security and functioning of the network. If people weren't mining I assume there would need to be some kind of attrition of bitcoin to the people running the transactions (so it would be like the government inflating your money away LOL).

Therefore Bitcoin has a cost that someone has to pay. So the goldies can understand - Bitcoin would decompose if you didn't polish it every day 

[Bobthebuilder]

2 minutes ago, planit said:

Therefore Bitcoin has a cost that someone has to pay. So the goldies can understand - Bitcoin would decompose if you didn't polish it every day 

Spot on. If BTC was made under the intense pressure and heat of a dying sun using an unimaginable amount of nuclear fission energy, then I might be tempted to buy some.

[nirvana]

looks like Europe is moving to gas, Russian gas, how are the yankees gonna take it?

 

[nirvana]

24 minutes ago, Bobthebuilder said:

Spot on. If BTC was made under the intense pressure and heat of a dying sun using an unimaginable amount of nuclear fission energy, then I might be tempted to buy some.

supply is limited, it's inflation proof 

[nirvana]

48 minutes ago, planit said:

Therefore Bitcoin has a cost that someone has to pay. So the goldies can understand - Bitcoin would decompose if you didn't polish it every day 

In total there will only ever be 21 million Bitcoin. This means that Bitcoin’s scarcity is even greater than gold. Although gold is difficult to mine, there is a near “infinite” supply as new mines are always being prospected.

Although Bitcoin has a supply of 21 million, that doesn’t mean that all 21 million of those coins are available to purchase 

edit: i know you guys hate bitcoin so I won't comment anymore BUT

By Galaxy Digital's calculation, the annual electricity consumption of Bitcoin is estimated to be 113.89 TWh/yr. For some perspective, the energy consumption of always-on devices in the US is 1,375 TWh/yr — 12.1 times that of Bitcoin's consumption

 

the banking industry consumes 263.72 TWh per year

 

 

[Hardhat]

10 hours ago, Castlevania said:

It’s Tuesday. We all know what happens on a Tuesday.

 

They smacked it down but it's putting up a good fight...

[Green Devil]

18 minutes ago, nirvana said:

supply is limited, it's inflation proof 

Thats not actually strictly true... The current supply could be increased if the miners all vote on it(signal). One case where this is possible is when we get a a few halvenings on, the miners vote to increase the mining supply slightly to make it worthwhile to continue. If theres no btc being created every block, the only incentive to mine is fees. Monero has a similar emission schedule, with a tail when the coin is mature, to ensure there is a supply to keep the miniers mining. I think its quite likely that the miners could vote to increase the supply slightly in the future.

[nirvana]

15 minutes ago, Hardhat said:

They smacked it down but it's putting up a good fight...

they've taken everything down today, markets in danger of 'rolling over' again?