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

[HousePriceMania]

5 minutes ago, Sugarlips said:

Not sure about ever but if you want real data try shadowstats.com they reckon it’s running at 13% and climbing

While the fed artificially suppress rates.

Peoples savings devalued 13% in a year.

The poor 13% worse off.

Somethings gotta give.

[DurhamBorn]

58 minutes ago, HousePriceMania said:

While the fed artificially suppress rates.

Peoples savings devalued 13% in a year.

The poor 13% worse off.

Somethings gotta give.

Not my savings,they are up 55% in a year.Of course you are right for most of the population.I said on this thread inflation was going into double figures and we have it already.However my roadmap said later in the cycle not now and around 60% over the cycle. 

We will likely see a deflation yet though or at the least a slow down in inflation and that will make the market and the CBs think the threat is over,but it isnt.

The whole cycle is inflationary.The energy transition alone will see big inflation pressure.Carbon tax makes mining more and more expensive depending on how much material you get out per tonne.Coal etc is very very cheap to mine.Copper for instance will see the costs of mining go to over $200 a tonne.Energy transition materials are in very low grades in rock compared to fossil fuel needed ones and so will take a lot more energy to remove.There is also the fact that miners will have to mine lower grade deposits to get enough.

The governments think renewables will lead to deflation in costs,and they are right,in the much longer term.To get there though means large inflation,and there is no way to avoid it.Transition you get high inflation for maybe 20 years,dont transition you get very high inflation in 10 ears anyway and certain collapse as the energy runs out at some point.

That is why we want companies who can gain and leverage the inflation,and ones that can increase their prices with or close to it,but their costs lag.

[HousePriceMania]

42 minutes ago, DurhamBorn said:

Not my savings,they are up 55% in a year.Of course you are right for most of the population.I said on this thread inflation was going into double figures and we have it already.However my roadmap said later in the cycle not now and around 60% over the cycle. 

We will likely see a deflation yet though or at the least a slow down in inflation and that will make the market and the CBs think the threat is over,but it isnt.

The whole cycle is inflationary.The energy transition alone will see big inflation pressure.Carbon tax makes mining more and more expensive depending on how much material you get out per tonne.Coal etc is very very cheap to mine.Copper for instance will see the costs of mining go to over $200 a tonne.Energy transition materials are in very low grades in rock compared to fossil fuel needed ones and so will take a lot more energy to remove.There is also the fact that miners will have to mine lower grade deposits to get enough.

The governments think renewables will lead to deflation in costs,and they are right,in the much longer term.To get there though means large inflation,and there is no way to avoid it.Transition you get high inflation for maybe 20 years,dont transition you get very high inflation in 10 ears anyway and certain collapse as the energy runs out at some point.

That is why we want companies who can gain and leverage the inflation,and ones that can increase their prices with or close to it,but their costs lag.

Couldn't lose on the stock market if you bought anything after March 2020.  My best perform is he1, was up about 500% at one point.  The big problem's the UK ( world ) face will be avoided by many on here but for the general population you can't help but think there are massive issues coming, many of which might affect you indirectly.  

Looking at all the graphs, info, numbers, lies, truths that are out there I have to conclude that we could easily see the mother of all collapses.   If the FED are really prepared to not act in the face of 20% inflation then:

a) The banking system is f**ked beyond repair

b) There will be a lot of angry people

Imagine if something like an earthquake hit the US west coast, there are no end of events that could spark the mother of all crisis.

People might do well to read up on the great depression and how many decades it too for people to recover their losses.

"The stimulus package managed to restore confidence in the markets and 25 years later, in 1954 to be exact, the Dow Jones Industrial Average managed to recoup its losses."

 

Some of us will be dead before we recover our losses if we see a proper collapse and given what's been going on, we should.

[Gin]

Those who fear inflation could pose a threat to the United States economic recovery got another dose of ammunition on Wednesday with the latest government data showing producer prices kept galloping upward in June.

 

https://www.aljazeera.com/economy/2021/7/14/inflation-watch-us-producer-prices-see-biggest-surge-on-record

[Gin]

1 hour ago, HousePriceMania said:

Imagine if something like an earthquake hit the US west coast, there are no end of events that could spark the mother of all crisis.

 

Will the mother of all heatwaves do .? Well it is a start.

Look well if we are close to the climate tipping point already . Then we really are fucked .

[Barnsey]

3 hours ago, DurhamBorn said:

We will likely see a deflation yet though or at the least a slow down in inflation and that will make the market and the CBs think the threat is over,but it isnt.

100% agree. Either covid related slowdown or "thank God it was transitory after all" or taper tantrum in autumn. We're playing the long game here.

[Sugarlips]

3 hours ago, HousePriceMania said:

.

People might do well to read up on the great depression and how many decades it too for people to recover their losses.

.

I intend to start watching these today, I’m told there is a lot of forgotten truths in this little series

 

[Bricormortis]

 

 

NASDAQ By Year - Historical Annual Returns

 

https://www.macrotrends.net/2623/nasdaq-by-year-historical-annual-returns

[macca]

On 11/07/2021 at 21:03, ThoughtCriminal said:

Even more horrendous

That's chicken feed.. We know how to privatise profits.. 

The Danish government still holds around 75% of the Danish Oil and Natural Gas Group’s assets. All offshore pipelines connecting the North Sea to the Danish coast and natural gas storage facilities are still owned by former the Danish Oil and Natural Gas Group. Third parties can access the pipelines, but must negotiate the terms and tariffs for access with the company. 

Total state revenue for 2014 has been calculated at DKK 18.8 billion. 

 

 

[Talking Monkey]

7 hours ago, HousePriceMania said:

Couldn't lose on the stock market if you bought anything after March 2020.  My best perform is he1, was up about 500% at one point.  The big problem's the UK ( world ) face will be avoided by many on here but for the general population you can't help but think there are massive issues coming, many of which might affect you indirectly.  

Looking at all the graphs, info, numbers, lies, truths that are out there I have to conclude that we could easily see the mother of all collapses.   If the FED are really prepared to not act in the face of 20% inflation then:

a) The banking system is f**ked beyond repair

b) There will be a lot of angry people

Imagine if something like an earthquake hit the US west coast, there are no end of events that could spark the mother of all crisis.

People might do well to read up on the great depression and how many decades it too for people to recover their losses.

"The stimulus package managed to restore confidence in the markets and 25 years later, in 1954 to be exact, the Dow Jones Industrial Average managed to recoup its losses."

 

Some of us will be dead before we recover our losses if we see a proper collapse and given what's been going on, we should.

Joe average on the street is going to get smashed, the average portfolio is not going to be structured like we have they'll be full of glamour stocks. There's middle aged career folks who's pension pot will get smashed in a BK then get battered through the inflation cycle.

[BurntBread]

10 hours ago, Sugarlips said:

I intend to start watching these today, I’m told there is a lot of forgotten truths in this little series

 

@NTB mentioned on another thread that US farmers are being paid to destroy crops, which has a very depression-era ring to it. I wasn't expecting that outside of a real depression, though. I think in the 1930s it was a desperate attempt to keep agricultural prices up so farmers would be able to pay their debts (utter lunacy if you take even one small step back), but I'm guessing this time the perverse motivations are different. Searching turns up a few links, but I wonder if NTB has a good source, with background?

[Boon]

BP below 300... didn't think I'd see that.

Very tempted for a top up but I am 20% oilies now - what kind of exposures do other people have?

Also reading up last night about the troubles in South Africa, not exactly got much coverage in the news here but that seems pretty serious.

[Bricormortis]

https://www.bbc.co.uk/news/world-africa-57835756

Re Boons post.

[ThoughtCriminal]

19 minutes ago, Boon said:

BP below 300... didn't think I'd see that.

Very tempted for a top up but I am 20% oilies now - what kind of exposures do other people have?

Also reading up last night about the troubles in South Africa, not exactly got much coverage in the news here but that seems pretty serious.

Read some data last night that SA has seen the biggest societal decline of any country outside of a war zone. 

 

IQ will exert itself every single time, you can't fight it. 

[ThoughtCriminal]

3 minutes ago, Bricormortis said:

https://www.bbc.co.uk/news/world-africa-57835756

Re Boons post.

Some choice quotes in there. 

 

"In his suburb, the neighbourhood patrol operates only at night. He has joined it, along with about 25 other men.

"Some have guns, but most of us just carry sticks, pipes and torches. I never thought I'll ever do this, but we have no choice. There are no police; no soldiers," he said.

"We block all intersections with our cars. Some of us will stand there; others will do foot patrols." 

 

32% unemployment. 

 

 

[Talking Monkey]

12 hours ago, Sugarlips said:

I intend to start watching these today, I’m told there is a lot of forgotten truths in this little series

 

I watched all three parts fascinating stuff.

[NTB]

2 hours ago, BurntBread said:

@NTB mentioned on another thread that US farmers are being paid to destroy crops, which has a very depression-era ring to it. I wasn't expecting that outside of a real depression, though. I think in the 1930s it was a desperate attempt to keep agricultural prices up so farmers would be able to pay their debts (utter lunacy if you take even one small step back), but I'm guessing this time the perverse motivations are different. Searching turns up a few links, but I wonder if NTB has a good source, with background?

I don't think you're going to read about it in the MSM! I picked it up from the Anons a while back. It was info about farmers being paid 50% over the odds provided the crop was destroyed. I can't find that but Biden is playing the same game using climate bullshit.

https://www.westernjournal.com/world-faces-food-shortage-biden-pushes-american-farmers-take-fields-production/

[HousePriceMania]

Continuing my US Lumber price series, 13% down yesterday, if anyone is looking to justify transitory inflation and what we might see deflation wise then this chart is a winner.  It's going down much quicker than I expected and could be back at 1990s peak prices in a few days

[Barnsey]

13 hours ago, Barnsey said:

100% agree. Either covid related slowdown or "thank God it was transitory after all" or taper tantrum in autumn. We're playing the long game here.

 

[Lightscribe]

20 minutes ago, HousePriceMania said:

Continuing my US Lumber price series, 13% down yesterday, if anyone is looking to justify transitory inflation and what we might see deflation wise then this chart is a winner.  It's going down much quicker than I expected and could be back at 1990s peak prices in a few days

Looks like a silver chart, I wouldn’t be surprised if JP Morgan had started to keep all the lumber in their vaults and flood the market with fractional paper ETFs.

[Sugarlips]

35 minutes ago, HousePriceMania said:

Continuing my US Lumber price series, 13% down yesterday, if anyone is looking to justify transitory inflation and what we might see deflation wise then this chart is a winner.  It's going down much quicker than I expected and could be back at 1990s peak prices in a few days

At the retail level, until Home Depot etc clear their huge overhang there is no demand. The stores paid well over odds to secure supply during the panic and builders simply won’t pay even if it means delaying work. The bigger buyers will circumvent retail and go direct to buy at today’s prices.. 

I imagine if there were such a thing, the toilet paper index would’ve looked similar last year, the pull forward of demand only lasts a while.

[VeryMeanReversion]

1 hour ago, Boon said:

Very tempted for a top up but I am 20% oilies now - what kind of exposures do other people have?

SIPP is 25% cash, 25% oilies, 15% mining, 12% PMs, 12% utilities, 5% tobacco and the rest is finance/transport/retail/investment-trusts

The only ones I'm looking to sell is the last group if they recover.  I have no bonds.

No plans to buy anything until there is are some big price drops.  I'll take the inflation hit on the cash whilst waiting and pick up divis on everything else.

Non-SIPP savings is mostly cash with some investment trusts and extra tobacco as I can't resist the yield.

I call this my OAF strategy (Oil and Fags).  This will be the new money when everyone realises cash is just a promise to be broken.

 

 

 

 

 

[Starsend]

2 hours ago, Boon said:

BP below 300... didn't think I'd see that.

Very tempted for a top up but I am 20% oilies now - what kind of exposures do other people have?

Also reading up last night about the troubles in South Africa, not exactly got much coverage in the news here but that seems pretty serious.

I'm 40% oil & gas, 26% precious metals miners. Hilariously unbalanced but sometimes you got to have faith in your calls and go in big.

If I was 40% in FAANGS I'd be crapping myself because they're expensive. I'm happy with my exposure to energy because I think the whole sector is very cheap and cheap sectors never stay cheap forever.

I'm looking at diversifying more into emerging markets as recommended by Jeremy Grantham - he reckons they're cheapish and along with cash one of the better places to be in the event of the big mofo crash that's got to be coming.

I like the Henderson Far East fund which I believe some people on here own. Extra juicy dividend but it concerns me a bit that there seems to be a fair few Chinese companies and the sentiment against China is definitely becoming aggressive. Also Singapore (I like exposure to their currency), Australia, Hong Kong, South Korea, Taiwan and Indonesia. Might get me some of that along with IBZL.

 

 

[HousePriceMania]

14 hours ago, Sugarlips said:

I intend to start watching these today, I’m told there is a lot of forgotten truths in this little series

 

Thanks for that.  

The crazy bit is the...cant get your money out the bank while they let inflation rip.

You cant win.

[Starsend]

8 minutes ago, HousePriceMania said:

Thanks for that.  

The crazy bit is the...cant get your money out the bank while they let inflation rip.

You cant win.

Yep you've got to see these things coming ahead of the masses.

At some point they'll force savers into their crappy bonds while they keep inflation above the yield for year after year. It's fine knowing they're going to do this kind of stuff but it's how they implement it that is the big question. For example, what if they come out with a new law saying that all pensions (including SIPPS) and ISAs must hold 40% government bonds? Wouldn't surprise with the way things are going.