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


spunko

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18 hours ago, Ma2 said:

I used to think this too but then realised they work on different timeframes to us in planning terms. Maybe they have built when commodity prices and labour are cheaper, something they know the population will definitely need at some point in the future when commodity prices and labour will be more expensive.

I have seen videos of the quality of those ghost towns though and I don't envy anyone being moved there!

re 'different time frames', i think there is something much more nefarious going on. I have just posted a video to SP, in which the guy talks about 70 year apartment leases then back to state, poor quality, blatant mortgage fraud, building/planning corruption.

The thing is has anyone on here ever seen this type of reporting on the MSM - the empty cities yes - but the other shocking factors, i.e. ponzi building schemes, corruption, etc. I guess up to know its all been a China good news story by MSM, but watch that change over coming years.

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sancho panza
17 minutes ago, JMD said:

SP, this guy provides on-the-ground example evidence of those shocking statistics. He was eventually hounded out of China two years ago, after living in China, marrying a Chinese national and making many of these type of videos over a twelve year period (his road trip videos are particularly good).  

Anyway, a couple of video diary type examples of the so called Chinese 'economic miracle'...

 

 

 

Super stuff JMD,thanks for psoting.Incredible viewing.Incredible stats.

I'll watch more of these.

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sancho panza
36 minutes ago, ThoughtCriminal said:

If ever a graphic illustrated the folly of renewables and why oil and gas are going nowhere then this is it. 

That needs preserving for posterity onthread TC imho.Super,super graphic.

image.thumb.png.24eda4b6f258b149e89d1a47009e0d6e.png

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2 minutes ago, sancho panza said:

Super stuff JMD,thanks for psoting.Incredible viewing.Incredible stats.

I'll watch more of these.

The guy has a You Tube channel and lots of content. He has a good story to tell (imho almost a modern day fable of China, or should be, but tragically China refuses to learn from 'outsiders', which i think will be big part of their downfall). Anyway, he has no biased agenda against China, in fact he kinda fell in love with the country (after leaving his native South Africa, perhaps you know him!!!), well he worked there for 14 years and also married a Chinese woman. They wanted to settle down there but his video reports eventually 'got noticed' by the state and their lives were made increasingly difficult beurocratically, etc. So they figured why take the risk in staying.

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@nirvana  I dabbled a bit today on the cryptos as is my duty with such vol!  Never appreciated how nice and easy the charts are!  That's a slightly more free market for you!  Grabbed some BTC with some more orders below the current price and some ETH at lower limit orders too.  Laddering in as I see a good chance of more downside.  Glad I sat on my hands until now/later.  Buy and holds not trades (well, until they aren't!) as too old for all that malarkey.  Nice to scratch the itch!  Back to work, sodden but relaxed.

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jamtomorrow
44 minutes ago, DurhamBorn said:

Coke,far too expensive ,i was more a Billy £3 a wrap guy xD 

Big oil know the above i think,they also know nuclear is the real threat.My dad has been steadily buying Rolls Royce since the collapse last year for the nuclear side, hes usually as crafty as a fox.Big oil can get into renewables,get the subsidy etc and lift the prices so the cost of capital goes up for everyone else.Uranium and nuclear are the real hedge to the oilies.

Did he manage to get in on the RR rights issue last year? Wasn't 100% convinced at the time but I went in anyway, now looking more and more like an absolute steal.

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1 hour ago, Heart's Ease said:

I'm keen to get some exposure so grateful for all thoughts. I know URA would have been the ideal to buy and hodl.  Did own a little bit of Yellow Cake in my Freetrade but it's only a premium buy now.

Can't remember whether it's on this thread of the WSB $25 one but there's a helpful PSLV to Oz calculator link somewhere.

My issue is all the uranium stocks are low cap (sub £1B).  U.TSX is about CAD500m.  But that might change with the Sprott move, hence my particular interest.  I've been meaning to look at a fund too (from a podcast interview, the name escapes me).

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Fully Detached
28 minutes ago, JMD said:

The guy has a You Tube channel and lots of content. He has a good story to tell (imho almost a modern day fable of China, or should be, but tragically China refuses to learn from 'outsiders', which i think will be big part of their downfall). Anyway, he has no biased agenda against China, in fact he kinda fell in love with the country (after leaving his native South Africa, perhaps you know him!!!), well he worked there for 14 years and also married a Chinese woman. They wanted to settle down there but his video reports eventually 'got noticed' by the state and their lives were made increasingly difficult beurocratically, etc. So they figured why take the risk in staying.

Thanks for posting the video - I'm left wondering on the apartment business who is left holding the baby when the apartment falls down or is presumably compulsary purchased by the govt - is it the world's most expensive game of chicken?

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1 hour ago, DurhamBorn said:

@Harley another one goes just like you have been saying for years.Companies being removed one after the other from where ordinary people can share in the growth etc.What will be left for them,government debt? 

https://www.dailymail.co.uk/money/markets/article-9597049/John-Laing-bought-private-equity-firm-KKR-2bn-deal.html

Edit to add you can see whats happening as the elite snap up reflation areas and remove from the market one by one.Mug punters will be left with 60/40 funds above 40 years old underperforming inflation and the under 40s owning pet digital rocks that are probably going down 99% at some point.

 

I need to look again at getting in on the action.  The last one I looked at was based in Cayman and was for mates only. 

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17 hours ago, ThoughtCriminal said:

Yup. 

 

Highest IQ in the world, no time for being hamstrung by wokism or the climate cult. 

 

 

Hmm... Please don't mention the Bell Curve, i mentioned it once but think i got away with it!!

(though no such luck for the double-helix genius genetics guy James Watson who has effectively been silenced; we certainly are living through 'interesting times', but the thing is we aren't allowed to talk about them...! -- however, all credit where its due of course, so all hail @Spunko for providing us with this 'temporary'(?!) shelter)

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leonardratso
21 minutes ago, Harley said:

My issue is all the uranium stocks are low cap (sub £1B).  U.TSX is about CAD500m.  But that might change with the Sprott move, hence my particular interest.  I've been meaning to look at a fund too (from a podcast interview, the name escapes me).

i did/am alright out of cameco as a uranium play.

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ThoughtCriminal
2 minutes ago, JMD said:

Hmm... Please don't mention the Bell Curve, i mentioned it once but think i got away with it!!

(though no such luck for the double-helix genius genetics guy James Watson who has effectively been silenced; we certainly are living through 'interesting times', but the thing is we aren't allowed to talk about them...! -- however, all credit where its due of course, so all hail @Spunko for providing us with this 'temporary'(?!) shelter)

Indeed. 

 

People object to IQ because the logical conclusion is that public policy can have very little effect. 

 

Throw in the prism of race to look through and everyone loses their shit. 

 

The Chinese weren't kidding when they they said may you live in interesting times. 🤦‍♂️

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18 hours ago, Option5 said:

Perfect description of Marvin the paranoid Android.

Talking of Science-'fiction'(is it?), i hear that the US Pentagon is releasing their awaited UFO report next month. Pressure's been mounting due in part from US pilots - who in recent years, have been increasingly coming forward to tell their weird close contact stories. Rumours abound that the report will contain controversial content. I just hope they won't be announcing that Fusion Tech has been solved, courtesy of our little green freinds!... The thing is the world might get its 'world peace', but our oilies would presumably go to zero?!... or am i just being selfish?

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DurhamBorn
19 minutes ago, JMD said:

Talking of Science-'fiction'(is it?), i hear that the US Pentagon is releasing their awaited UFO report next month. Pressure's been mounting due in part from US pilots - who in recent years, have been increasingly coming forward to tell their weird close contact stories. Rumours abound that the report will contain controversial content. I just hope they won't be announcing that Fusion Tech has been solved, courtesy of our little green freinds!... The thing is the world might get its 'world peace', but our oilies would presumably go to zero?!... or am i just being selfish?

They use an anti gravity energy force ,really interesting for anyone who has an interest and hasnt seen this.

 

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2 hours ago, ThoughtCriminal said:

If ever a graphic illustrated the folly of renewables and why oil and gas are going nowhere then this is it. 

Clint reacts...

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1 hour ago, sancho panza said:

Super stuff JMD,thanks for psoting.Incredible viewing.Incredible stats.

I'll watch more of these.

It's an interesting channel. He's originally South African I believe.

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28 minutes ago, JMD said:

Talking of Science-'fiction'(is it?), i hear that the US Pentagon is releasing their awaited UFO report next month. Pressure's been mounting due in part from US pilots - who in recent years, have been increasingly coming forward to tell their weird close contact stories. Rumours abound that the report will contain controversial content. I just hope they won't be announcing that Fusion Tech has been solved, courtesy of our little green freinds!... The thing is the world might get its 'world peace', but our oilies would presumably go to zero?!... or am i just being selfish?

Torchwood had two storylines that seem appropriate. 

"Miracle Day"

They find a pharmaceutical company that has been stockpiling the necessary drugs as they had prior notice of the impending problem.

"Children of Earth"

Aliens who's previous visits had been covered up come back and demand to take 10% of the earth's children.

Perhaps the Doctor told the writers about the future? :)

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2 hours ago, DurhamBorn said:

Coke,far too expensive ,i was more a Billy £3 a wrap guy xD 

Al the coke was, was the billy sold as cocaine for x20 the price!

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3 hours ago, Harley said:

Thanks for the heads up.  I was already planning on moving my PM ETFs to Sprott.   Thoughts on buying "U.TSX" to get in this Uranium venture early?

Interesting, I already own Yellow Cake. U.TSX looks good (plus its 'brand' Sprott) - but does it just do similar to Yellow Cake - ie stocks of uranium/oxides.

They both look similar to me. So for a long term hold for uranium sector exposure, is it worth owning some of each? Any 'uranium experts' care to comment? 

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3 hours ago, DurhamBorn said:

@Harley another one goes just like you have been saying for years.Companies being removed one after the other from where ordinary people can share in the growth etc.What will be left for them,government debt? 

https://www.dailymail.co.uk/money/markets/article-9597049/John-Laing-bought-private-equity-firm-KKR-2bn-deal.html

Edit to add you can see whats happening as the elite snap up reflation areas and remove from the market one by one.Mug punters will be left with 60/40 funds above 40 years old underperforming inflation and the under 40s owning pet digital rocks that are probably going down 99% at some point.

 

Yes, Private capitol and State control. Its the new (death grip!) normal.

 

And today in other news... the Government formally unveiled its new 'shell company'***, GreatBritishRailways which will own ALL railway infrastructure, set ALL prices, and license ALL train operators (who'll apparently run ALL their services 'under the new GBR banner', what ever that means). 

UK sets up Great British Railways but ‘without the terrible sandwiches’ | Reuters

***Grant Shapps jokes there is no going back to the days of BR and terrible sandwiches. Ok, its all good fun and laughs today, and perhaps large infrastructure is actually best put back into the hands of government, but what's the betting that GBR is floated within the next 5 years? 

 

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Castlevania
7 minutes ago, JMD said:

Yes, Private capitol and State control. Its the new (death grip!) normal.

 

And today in other news... the Government formally unveiled its new 'shell company'***, GreatBritishRailways which will own ALL railway infrastructure, set ALL prices, and license ALL train operators (who'll apparently run ALL their services 'under the new GBR banner', what ever that means). 

UK sets up Great British Railways but ‘without the terrible sandwiches’ | Reuters

***Grant Shapps jokes there is no going back to the days of BR and terrible sandwiches. Ok, its all good fun and laughs today, and perhaps large infrastructure is actually best put back into the hands of government, but what's the betting that GBR is floated within the next 5 years? 

 

None. Railtrack was a disaster.

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3 hours ago, ThoughtCriminal said:

If ever a graphic illustrated the folly of renewables and why oil and gas are going nowhere then this is it. 

That's brilliant. I wonder if there is any possible means to put info-graphic stuff like that onto a T-shirt? After all i'm so bored with seeing Che Guevara scowling back at me (triggers me actually, but i'm too polite to mention it?!).

Anyway in the meantime this slogan will have to suffice...     

‘I Only Kneel For...’ Unisex T Shirt

 

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2 hours ago, Fully Detached said:

Thanks for posting the video - I'm left wondering on the apartment business who is left holding the baby when the apartment falls down or is presumably compulsary purchased by the govt - is it the world's most expensive game of chicken?

His theory is that for the Chinese, apartments are not assets but consumables (the buildings will simply be re-built, forever).

Actually, I can see the awful logic in that actually happening - i've commented before that it is almost as if China had set out to design itself a system based on the worst extremes of both the USSR/Western-corporatism economic models.

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sancho panza
2 hours ago, Fully Detached said:

Thanks for posting the video - I'm left wondering on the apartment business who is left holding the baby when the apartment falls down or is presumably compulsary purchased by the govt - is it the world's most expensive game of chicken?

The Chinese unwind ie when the leverage in the system blows will be epic.A lot of people who thought they were rich will be poor and a lot of people who were poor,will be even worse off.There will be laons on these flats that are being marked at par that will default

So basically,they regulated the banks so harshly that the Shadow banks stepped in to provide loans-and take their cut-thereby guaranteeing that if the intended purpose was to restrict bad lending,then the CCP's only success was to get someone even more unrelgulated to do it.

I've highlighted a few key phrases below

 

https://en.wikipedia.org/wiki/Shadow_Banking_in_China

Shadow banking in China is identified to have first emerged in the late 1990s, however its rapid growth did not come until the period following the GFC in 2007.[3] It is documented that the growth in shadow banking activity was due to the inability of the traditional banking system to meet the spike in demand for funding, due to tight regulation on lending.[4][2] It is estimated that in the period of 2010-2012, non-financial intermediaries in China grew at a rate of 34% per year.[3]

Some of the key reasons individuals and companies engage in shadow banking include, but are not limited to:

  • an insufficient supply of credit from the four major banks;
  • regulatory limitations around risky loans and finally;
  • a failure from regulators to limit the capacity for regulatory arbitrage;
  • inter-bank interactions exclusion from credit management; and,
  • the Chinese government's control over interest rates.[5][2][3]

In the past, other reasons have been identified, including the reserve ratio requirement of 75% for banks loans to their deposits, and regulatory discouragement of lending to certain industries.

The Chinese shadow banking is distinct in that China has a bank-dominant financial system, and unique regulatory constraints on credit lending. This means there are more barriers to accessing lines of credit for Chinese businesses and individuals.[6] Banks are also responsible for issuing financial products and dealing with the funds and profit associated with these. As well, it is primarily driven by domestic institutions, rather than foreign investments and entities, as is usual in shadow banking activity in other countries.[5] In China, where banks are discouraged from lending to certain industries and are mandated to offer frustratingly low interest rates on deposits, non-banks fill the gap. About two-thirds of all lending in China by shadow banks are "bank loans in disguise".[7]  One of the controversies of this industry is that retail investors are largely unsure about what sorts of risks they are taking on when engaging in shadow banking.[8

 

Removal of the Reserve Ratio

The Reserve Ratio was a Chinese commercial banking law that stipulated banks could only lend a maximum of 75% of their capital deposits at any one time.[19] This policy was adopted in 1995 and was designed to prevent rapid growth of commercial bank's credit scale in order to control liquidity risks.[19] Reserve Ratio requirements are identified as one of the key reasons financial institutions engaged in shadow banking, in order to loan out money above the 75% cap, without these loans showing up on their balance sheets. The removal of the Reserve Ratio requirement by the National People's Congress took effect in October 2015.[19] This move was considered to be both an effort to stimulate economic growth and decrease shadow banking loans by freeing up banks to loan out the rest of their capital through conventional avenues.

 

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