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

[wherebee]

oooh I wonder if my selling of BP will prove well timed...

 

 

[SpectrumFX]

10 hours ago, Hancock said:

Comrade Sunak is coming for your pension .. if its a private sector one .. i know its just putting ideas out there, but its inevitable to "balance things up".

Triple lock still in place though. 

https://www.telegraph.co.uk/politics/2021/06/20/pensions-raid-pay-covid-pandemic/

Treasury officials are drawing up plans for a pensions tax raid this autumn to help pay for heightened public spending during the Covid pandemic, The Telegraph understands.

Three different reforms to the way pension contributions are taxed are being considered amid pressure on the public finances, according to well-placed Whitehall sources.

One idea being examined is reducing the pensions lifetime allowance from a little above £1 million to £800,000 or £900,000, lowering the point above which extra tax charges kick in.

Another would see individuals contributing to pensions getting the same rate of tax relief, meaning higher-rate taxpayers lose out, while a third is new taxation on employer contributions.

"Our job is to keep people out of poverty, not to enrich the middle classes," said a senior government source familiar with the proposals, which are still at the exploratory stage.

–– ADVERTISEMENT ––

Downing Street and the Treasury are locked in debate about how to pay for the public spending spike seen as the Government moved to prop up the economy during the pandemic. 

Rishi Sunak, the Chancellor, who sees himself as a low tax Tory, has vowed to try to rebalance the public finances and officials see pensions tax changes as one way to help achieve that. 

But Boris Johnson has said there will be no return to austerity and has made expensive policy promises at the last election and more recently on issues like tackling climate change. 

Well-placed figures believe pensions tax reform could be included in the Autumn Statement, due in November, when the new spending levels for Government departments are revealed. 

A Treasury source close to Mr Sunak last night played down the likelihood of an imminent overhaul, stressing he is opposed to raising taxes on families.

 

 

The Prime Minister vowed not to return to austerity during the December 2019 general election, drawing a line under previous Tory policies, and has made new spending promises since.

It has left Rishi Sunak, the Chancellor, who considers himself a fiscal conservative, trying to rebalance the public finances after a surge in spending to prop up the economy during the pandemic.

A Treasury source close to Mr Sunak played down the chance of an imminent policy change and stressed that he opposes tax rises on families.

On Sunday, Downing Street moved to dismiss the possibility of breaking its "triple lock" on pensions, noting that the policy remained the Government's position.

It promises that each year state pensions will rise by whichever is highest – average earnings, inflation or 2.5 per cent. But average earnings have jumped by around six per cent during the Covid crisis as lower-paid jobs were lost, triggering a similar rise in pensions.

There is concern in the Treasury about the cost implications of the rise, with the door still open to a change – such as a tweaked definition of average earnings or even a year-long delay – in the autumn. Government departments are being urged to put forward proposals for future spending as the Treasury plans the Autumn Statement, expected in November.

The Telegraph understands that figures in the Treasury are interested in major changes to the tax rules for pension contributions as a way of boosting revenues. The Tories promised in their manifesto not to raise the rates of income tax, national insurance or VAT – meaning the usual big revenue-raising levers are not available to Mr Sunak.

The senior government source said: "You can't increase income tax, you can't increase national insurance rate. I don't think the Chancellor wants to increase capital gains tax. Pensions tax reform would work politically because the short-term impact on an annual basis would be virtually imperceptible for most people."

One idea being looked at would see the pensions lifetime allowance lowered from around £1,073,000 to £800,000 or £900,000. Pensions savings above that amount incur a 55 per cent tax charge if they are withdrawn as a cash lump sum or 25 per cent if they are withdrawn as an income.

Lowering the allowance would mean more people paying tax to withdraw their pensions in the long term. Mr Sunak froze the allowance earlier this year, showing a willingness to change the threshold.

A second idea would be a single rate of tax relief for pension contributions. Currently, higher-rate taxpayers who put money towards their pension each year tax free get a tax relief rate of 40 per cent, but lower earners who do the same get just 20 per cent.

Critics argue this means higher earners getting more support from the Government, and the Treasury is understood to be looking at a single tax relief rate of around 30 per cent. A third change being considered is to employers who can contribute to their employees' pension pots each year tax free, with a tax increase of some form being mulled over.

Steve Webb, a former Tory pensions minister who is now a partner at consultants Lane Clark & Peacock, warned that the changes would hit Tory voters and be politically risky.

"If you want 200 more Chesham and Amershams, put together a package like this on pensions tax relief," he said.

"It's absolutely targeting your base. It is people who are working, earning a good wage and being frugal. Of all subjects, pensions should be a long-term business. People are planning for a generation. What they can't have is constant chopping and changing of the pension rules because the country is broke."

"Our job is to keep people out of poverty, not to enrich the middle classes," said a senior government source

That's pretty left wing for a Tory. I thought that it was the other way around.

[DurhamBorn]

48 minutes ago, SpectrumFX said:

"Our job is to keep people out of poverty, not to enrich the middle classes," said a senior government source

That's pretty left wing for a Tory. I thought that it was the other way around.

Government have a massive problem with renting expanding so much and no or low pensions for many.With the freedoms people with low pensions will simply withdraw and spend and then get housing benefit etc.The easy way to start to turn this is cut tax relief from 40% and increase to 25% for everyone and to then destroy BTL.BTL has been a huge cancer on our society,that and mass immigration is what has done most damage to our society.The worst part of BTL is that a very large part of it is council and government workers using their fat lump sums from taxpayer funded pensions to buy rentals.

Osborne would of sorted BTL and welfare and was on the right road,but the Tories lost their nerve.

[CVG]

I know that SP has already prepared an 87 page set of intructions for his partner in event of his demise. I'm on page 1 and discovered from the HM website that you can only tranfer the deceased ISA value to the surviving spouse's ISA if both ISA's are managed by the same company. That was news to me:

"Stocks and shares ISAs

Your ISA provider can be instructed to either:

• sell the investments and pay the proceeds to the administrator or beneficiary of your estate
• transfer the investments to your surviving spouse’s or civil partner’s ISA - this is only possible if they have the same ISA provider as you

Check the terms and conditions of your ISA for details."

https://www.gov.uk/individual-savings-accounts/if-you-die

[nirvana]

dunno if this has been mentioned BUT a tweak last week from the FED to the their overnight reverse repo facility

'The Fed said it was boosting the RRP rate to 0.05 per cent from zero to support “the smooth functioning of short-term funding markets”, one of two technical adjustments it made on Wednesday. It also raised the interest it pays on excess reserves, which are deposited at the Fed by banks, from 0.1 per cent to 0.15 per cent'

this will pull money from the real economy because banks will just park money in the repo facility overnight 

Talk is they're having to do this to try and prevent negative IRs again 

[nirvana]

On 20/06/2021 at 13:38, reformed nice guy said:

The Chongs are focussing on stability, education and growing wealth. The West is focussed on skin colour, genitals and where you want to stick your cock.

aye this......I'd go and live in China, despite all the talk of oppression and state control.......

stuff is dirt cheap out there.....you can keep buying different bikes to try em out, loads o tech, those electric uniwheels look hilarious too and suzi wong can do a taste test on my cock 

[AWW]

14 hours ago, Hancock said:

"Our job is to keep people out of poverty, not to enrich the middle classes," said a senior government source familiar with the proposals, which are still at the exploratory stage.

I'm tired of being painted as "middle class" just because I have an office job that allows me to save for a pension. I still have to work for a living. If anything, the only people who've actually become "middle class" in the last few decades are the BTL landlords who sit on their arses all day, paid for by people who actually have to work. That's the very definition of middle class.

And actually, the government's job is to get out of the fucking way of people who want to make a better life for themselves.

[Animal Spirits]

It’s Too Late To Avoid A Major Oil Supply Crisis

In an amazingly short period of time, the world has made an irreversible bet on green energy sources - solar, wind, and biofuels - being able to shoulder much of its energy burden. This is a transition without a track record and a very spotty roadmap of implementation. Time will tell if this bet will pay off. If my judgment is correct, we won’t have long to find out.

https://oilprice.com/Energy/Energy-General/Its-Too-Late-To-Avoid-A-Major-Oil-Supply-Crisis.html

Maybe the IEA et al are just telling people what they want to hear.

[planit]

California has the answer, just turn off the electricity periodically.

Most technologically advanced place on earth, the future for everyone.

 

* All DOSBODDERS should have a pile of coal, a generator and loads of Diesel

 

I managed to pick up some BP for 309p today, really chuffed and hope this is now the run up to 400p. Good luck everyone.

[geordie_lurch]

1 hour ago, Cattle Prod said:

Not a bad article. In response to the bolded bits, we've already found out that the bet has failed, I think. Advanced economies are now starting to burn more coal to keep up the baseload and avoid brownouts, rather than using lovely 2x as clean CO2 wise and much much cleaner particulate wise natural gas, or nuclear. The whole thing is utterly retarded.

Not if you know the world is about to lose a large number of people due to these Covid 'vaccines'

[Talking Monkey]

12 hours ago, DurhamBorn said:

Government have a massive problem with renting expanding so much and no or low pensions for many.With the freedoms people with low pensions will simply withdraw and spend and then get housing benefit etc.The easy way to start to turn this is cut tax relief from 40% and increase to 25% for everyone and to then destroy BTL.BTL has been a huge cancer on our society,that and mass immigration is what has done most damage to our society.The worst part of BTL is that a very large part of it is council and government workers using their fat lump sums from taxpayer funded pensions to buy rentals.

Osborne would of sorted BTL and welfare and was on the right road,but the Tories lost their nerve.

Isn't the destruction of BTL an inevitability DB, at some point it'll become too enticing a low hanging fruit in order to raise some cash to keep the status quo going a little longer.

Then on the more conspiracy vibe, smashing down the comfortable cohort of middle class folks with a few BTL would defo be a move the New World Order types would go for, as they want the vast majority to be poor. 

 

[DurhamBorn]

9 minutes ago, Talking Monkey said:

Isn't the destruction of BTL an inevitability DB, at some point it'll become too enticing a low hanging fruit in order to raise some cash to keep the status quo going a little longer.

Then on the more conspiracy vibe, smashing down the comfortable cohort of middle class folks with a few BTL would defo be a move the New World Order types would go for, as they want the vast majority to be poor. 

 

I think it will be hit hard yes.Its obvious big insurance companies etc will grow big in the sector.As rates increase so does insurers income and capital generation,just as Susan the Diversity manager sees her capital generation collapse.

The whole system is now set up against people who work and want to buy a home.From gold plated public pensions to welfare paying the rent.Two houses in my close have sold in a couple of years,both bought by retired council workers,both rented out to their nieces on benefits,one has a brand new BMW.I saw a few young couples looking at the houses whos tax is going to keep them down.My roadmap though is now getting very close to the point the BOE has to stop printing,at least until a BK,government then has an incredible structural deficit to contend with.Massive theft is certain.

[DurhamBorn]

On Telcos being in play here is another example 

https://finance.yahoo.com/news/axiata-telenor-ink-11-billion-015549615.html

I noticed Australian prices have been rising on plans as well since it became a 3 main player market after the Vodafone merger there.This is exactly the route the tobacco companies took,slowly turning each market into a 3 way,then pretending to compete,but all over time lifting prices higher.

 

[Talking Monkey]

5 minutes ago, DurhamBorn said:

I think it will be hit hard yes.Its obvious big insurance companies etc will grow big in the sector.As rates increase so does insurers income and capital generation,just as Susan the Diversity manager sees her capital generation collapse.

The whole system is now set up against people who work and want to buy a home.From gold plated public pensions to welfare paying the rent.Two houses in my close have sold in a couple of years,both bought by retired council workers,both rented out to their nieces on benefits,one has a brand new BMW.I saw a few young couples looking at the houses whos tax is going to keep them down.My roadmap though is now getting very close to the point the BOE has to stop printing,at least until a BK,government then has an incredible structural deficit to contend with.Massive theft is certain.

Its that theft that worries me as it could lead to all sorts of crazy moves by the government as things get more extreme, eg confiscation of private pensions

[DurhamBorn]

Hows that Coin with a dog doing today,a third off, 70% off from highs.Interesting to see how long it takes to go to down 99.9999%.Do those youngsters buy on margin?,if so i expect a lot will of been cleaned out by these movements down.

[ThoughtCriminal]

https://www.gbnews.uk/shows/andrew-neil-inflation-at-most-dangerous-point-in-decades/107446

 

Looks like MSM are noticing inflation. 

[Mapper]

https://news.sky.com/story/government-rules-out-changes-to-pensions-promise-12338187

They will cling on to the status quo until their nails are ripped bleeding from their finger tips.

And they'll hang on with their teeth.

Seriosuly though, I am not up with the ins and outs of the welfare state, and I know in-work benefits attract a lot of scroungers, but aren't pensions a huge underfunded overly promised benefit?

[Castlevania]

7 hours ago, Mapper said:

https://news.sky.com/story/government-rules-out-changes-to-pensions-promise-12338187

They will cling on to the status quo until their nails are ripped bleeding from their finger tips.

And they'll hang on with their teeth.

Seriosuly though, I am not up with the ins and outs of the welfare state, and I know in-work benefits attract a lot of scroungers, but aren't pensions a huge underfunded overly promised benefit?

The above article is relating to the state pension which was never funded. That’s arguably ok at the moment, due to significantly increasing the age that you qualify.

The bigger issue is government defined benefit pensions. Roughly half are funded with the other half simply coming out from general taxation. They completely messed up life expectancy and projected growth rates. They’ve managed to tweak them by changing indexation from RPI to CPI; for younger workers, watering down the pension payouts and increasing the amount current government workers must contribute, but for anyone who’s already drawing or is close to retiring the payouts relative to amount contributed whilst working are fantastic.

[DurhamBorn]

2 minutes ago, Castlevania said:

The above article is relating to the state pension which was never funded. That’s arguably ok at the moment, due to significantly increasing the age that you qualify.

The bigger issue is government defined benefit pensions. Roughly half are funded with the other half simply coming out from general taxation. They completely messed up life expectancy and projected growth rates. They’ve managed to tweak them by changing indexation from RPI to CPI; for younger workers, watering down the pension payouts and increasing the amount current government workers must contribute, but for anyone who’s already drawing or is close to retiring the payouts relative to amount contributed whilst working are fantastic.

Huge problem and as you say not a lot they can do once in payment.They have changed to career average that stops the old council trick of promoting your mates 3 years before retiring as the pension was based on the last three years.

The problem is,the government to pay for the above increase council tax,police precept hugely,so thats a double hit on those workers who dont have these lucrative pensions.A large amount of those 25% tax free lump sums seem to end up in BTL as well,then rented out to housing benefit,tax payers then funding even more money to them.

Of course its the main reason they keep pushing back state pension age,so those lower paid private sector workers pensions can sub the government worker retiring at 55 to 60.

 

[Castlevania]

11 minutes ago, DurhamBorn said:

Huge problem and as you say not a lot they can do once in payment.They have changed to career average that stops the old council trick of promoting your mates 3 years before retiring as the pension was based on the last three years.

The problem is,the government to pay for the above increase council tax,police precept hugely,so thats a double hit on those workers who dont have these lucrative pensions.A large amount of those 25% tax free lump sums seem to end up in BTL as well,then rented out to housing benefit,tax payers then funding even more money to them.

Of course its the main reason they keep pushing back state pension age,so those lower paid private sector workers pensions can sub the government worker retiring at 55 to 60.

 

The career average is actually pretty good for the less ambitious. It’s all index linked, and given the suppression of real wages since the financial crisis, many people are actually better off. My uncle (a solicitor in local government) was very happy with the reform as it meant his projected pension once retired actually increased.

[Bobthebuilder]

My mate has just had early retirement (health) from the civil service. £100K++ lump sum and £30k per year. Not bad for pushing a pen about, and tbh his health is pretty good as well.

[Bobthebuilder]

4 minutes ago, Cattle Prod said:

Nice if you can get it. What age is early retirement?

52...

[Don Coglione]

22 minutes ago, Bobthebuilder said:

52...

How many years of service and at approximately what salary level (if you know)?

[Bobthebuilder]

3 minutes ago, Don Coglione said:

How many years of service and at approximately what salary level (if you know)?

Approx 20+ years and salary above the pension amount. Another mate in the same department has more years and was telling me he will get a much higher amount when he stops.

They do know how lucky it is to be fair to them.

[Don Coglione]

1 minute ago, Bobthebuilder said:

Approx 20+ years and salary above the pension amount. Another mate in the same department has more years and was telling me he will get a much higher amount when he stops.

They do know how lucky it is to be fair to them.

Christ.

My ex has over 30 years of service and I reckon she is on £80k (for doing fuck-all). How much pension is she going to rake?