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

[Loki]

18 minutes ago, MrXxxx said:

Yes, assuming we don't have a BK and they all freeze their dividend payments...one thing I learnt from the last two years is that dividends are not guaranteed.

True but the leaving the money in the bank long-term means it just gets devalued...there isn't really much of a perfect safe haven beyond assets you know you will need/use.

[MrXxxx]

1 minute ago, Loki said:

True but the leaving the money in the bank long-term means it just gets devalued...there isn't really much of a perfect safe haven beyond assets you know you will need/use.

Agree, I just wish the BK would get a move on so that I can get out of cash! :-)

[Loki]

3 minutes ago, MrXxxx said:

Agree, I just wish the BK would get a move on so that I can get out of cash! :-)

Oh it's doing my bloody head in this slow torture!

 

[Hancock]

6 minutes ago, MrXxxx said:

Agree, I just wish the BK would get a move on so that I can get out of cash! :-)

what percentage in cash are you?

Including my SIPP im now 60% cash, 40% shares.

My theory is we don't get a BK until they've ended QE and raised rates, then waited a while ... i.e middle/end of next year!

Long time to wait.

[Phil]

Petrofac and RR nice for me today. Happy.

[Phil]

5 minutes ago, Phil said:

Petrofac and RR nice for me today. Happy.

Not masive amount. 1k but nice. Having a beer on the back of it. 👍

[ThoughtCriminal]

 

[Phil]

9 minutes ago, ThoughtCriminal said:

 

It’s gonna end really really bad. Ride the wave. 

[Lightscribe]

47 minutes ago, Hancock said:

what percentage in cash are you?

Including my SIPP im now 60% cash, 40% shares.

My theory is we don't get a BK until they've ended QE and raised rates, then waited a while ... i.e middle/end of next year!

Long time to wait.

You don’t have to wait until they actually do it, the roadmap and intention laid out is enough for confirmation that

a) inflation isn’t transitory

b) this is the end of a 40 year disinflation cycle going into an inflationary one.

Its up to the banks and financial economy now to price it in, then that’s enough for the catalyst to signal the snowball.

I nailed my colours to the mast some time back that the BK will be by the end of the year.

[Lightscribe]

On 08/03/2021 at 00:04, Lightscribe said:

I know the consensus on here sticks to the roadmap without nailing down to a timeline (after all market stays irrational longer than you can keep solvent etc) and everything could change on a whim through CB policy on a sudden turn of action. 

I will however nail my colours to the mast and give my own estimate/guesstimate. May be a bit dystopian with artistic licence but it’s where I think we are heading.

2021 Q2 - Melt up. Whether that includes FAANGs (i.e David Hunter) is another matter. But certainly tech stocks embroiled in the whiplash of Covid semi-conductor backlog. i.e TSMC, Nvidia (ARM), Texas Instruments. That alongside with Oil, gas, energy, industrial metals and materials and rare earth. 

2021 Q3-Q4 - BK. No not Burger King, but the actual big kahuna burger with extra pickles (opposite to nothing burger). Everything crashes including gold/silver and BTC.

2022 Q1 - more QE. Post pandemic reality  hits (we know this is just the end of the cycle into the new). Jobs lost, inflation hits, post government support, under pressure for UBI. This is the true run in oil/energy/PMs (and IMO BTC). Food shortages in developing countries, costs spiralling.

2022 Q2-4 - CB start to raise interest rates. Government gold/silver/crypto regulation. Executive Order 6102.

2023. UBI implemented. Increased automation and AI in all jobs. Retail, office space left decimated in city centres turned into residential for large scale government/bank owned rental. (Lloyds recently stating becoming biggest BTL owner). Skilled migration and HK money into the cities. Physical cash phased out.

2024 - mortgage defaults as people come out of 2-3 year fixed deals onto standard rates. Government support in exchange for assets. 

2025 - 2030. From here is where things could change massively. Government take overs, majority stakes in land, transport and infrastructure. Digital currency takes over. Tax, UBI, transactions are all processed in real time and verified on the government blockchain. Sharon tries to claim extra credits in addition to UBI, computer says no. Trevor has location confirmed at that  address for 359 days out of 365, his food, living purchases all been tracked to that address. 

2030 - onwards 

This is the ‘you will own nothing’ stage. There may or may not be a major war over commodities at this point, alongside a currency reset. Global government and currency. I hope this doesn’t happen. 

 

Am I near so far?

[DurhamBorn]

https://www.dailymail.co.uk/news/article-10025373/Britains-blue-collar-workers-earning-MEGA-BUCKS-jobs-crisis-seen-salaries-DOUBLE.html

As we have been saying a lot of the reason is over 50s leaving the workforce (im one) and not being replaced because mostly benefits are too high and so are house prices.

The Guardian meanwhile doesnt seem to think workers should be able to earn more,they should stay on bennies and let other people come over and pluck their turkeys.Maybe the turkey farmer needs to let the Range Rover go and pay more.

Its incredible how the left is now middle class and mostly government workers who only care about their own tiny problems.Workers voted for shortages etc in the short/medium term because the long dis-inflation made it the only way to have a chance in the earnings/housing stakes.Of course The Guardian wont face up to the problem each town hs thousands refusing to work because the bennies are so lucrative.Maybe they are really worried about interest rates goin up on their BTLs

https://www.theguardian.com/commentisfree/2021/sep/24/food-petrol-shortages-brexit-goods-johnson-botched-deal

 

[Phil]

13 minutes ago, Lightscribe said:

You don’t have to wait until they actually do it, the roadmap and intention laid out is enough for confirmation that

a) inflation isn’t transitory

b) this is the end of a 40 year disinflation cycle going into an inflationary one.

Its up to the banks and financial economy now to price it in, then that’s enough for the catalyst to signal the snowball.

I nailed my colours to the mast some time back that the BK will be by the end of the year.

And me. Let em fuckin burn. 

[Harley]

9 hours ago, Loki said:

I wonder if gold is still permitted

They've previously encouraged gold holding.  Problem with crypto is people can get it out of the country.  That, and the power impact on the industrial supply, are cited as reasons they stopped the crypto mining.  This latest move seems logical.

[Loki]

1 minute ago, Harley said:

the power impact on the industrial supply

It makes sense...

I can remember going on about the increasing 'transaction' cost of crypto ages ago... of course the government will give their financial infrastructure priority access to the electrons 

[Talking Monkey]

12 hours ago, DurhamBorn said:

Interesting Boris's words here .The macro on this was obvious for a long time,since around 98.High welfare meant workers not interested in doing more and companies to survive all having to pay the lowest wages and let government pick up the tab.They used low wages instead of investing and workers used bennies instead of working.However companies didnt have much choice.Pay more they would of been at a massive disadvantage to others and for little gain for employees who lost just as much benefits as they gained in wages.Brown destroyed the UK economy and the Tories bottled it when Osborne had very good starting plants to sort it out.Bennies need to fall hard against wages and cost of living.If you notice though the BOE said yesterday inflation would only remain if wages followed the increases and they didnt expect it,yet Boris above says it in black and white rising wages are part of their plan,and rightly so because without a 20% to 25% increases at the bottom the UK government finances will collapse.

https://www.dailymail.co.uk/news/article-10023065/Boris-Johnson-says-bosses-need-start-paying-staff-more.html

Mr Johnson said many firms had paid their staff too little for years – and suggested that rising wages seen in recent months could help plug the gap for some workers on low incomes. 

'If you look at the UK since 2008, you look at our companies, they've been paying very low wages and they've been not investing, and productivity has fallen.'

Absolutely agree DB bennies need to fall hard against wages and cost of living, bennies need to go back to the original concept of a basic safety net. 

I guess that won't happen across a couple of years rather it'll be done over a longer time frame. 

[23rdian]

2 hours ago, MrXxxx said:

Yes, assuming we don't have a BK and they all freeze their dividend payments...one thing I learnt from the last two years is that dividends are not guaranteed.

I think they paying out 105pc of income at the moment? 

It's hard to know whether to top up or just hold.

[working woman]

A few anecdotals..........

This week my husband, a Care Worker, has been told that any overtime will now be paid at time and a half - a 50% increase from £10 to £15 an hour.  Unheard of for years.

I said good, they kept paying agencies £15 / hr to fill places, about time the workers who actually do the work, rather than the paper shuffling agencies  get it. What took them so long to come up with it?????????????

His company are struggling to find and keep staff. UK workers don't stay in the job long (low pay) and all his EU colleagues have gone home for numerous reasons. 

Hopefully it will encourage his colleagues to stay, do overtime, and encourage new people into care work.

----------------------------

Spent the past week at my inlaws.  - MIL is at the end of her life, Cancer and Dementia.

 

 

 

 

[Phil]

I tend to agree. But. It’s like , as someone else posted, can’t remember where that why not raise worker’s salary, and leave bennies alone. My daughter has on many occasions been stopped from raising her income because the way bennies are termed. What’s a SIP thingy? Not being antagonic. 

Im just a 5 o’clock hero.

[Phil]

3 minutes ago, working woman said:

A few anecdotals..........

This week my husband, a Care Worker, has been told that any overtime will now be paid at time and a half - a 50% increase from £10 to £15 an hour.  Unheard of for years.

I said good, they kept paying agencies £15 / hr to fill places, about time the workers who actually do the work, rather than the paper shuffling agencies  get it. What took them so long to come up with it?????????????

His company are struggling to find and keep staff. UK workers don't stay in the job long (low pay) and all his EU colleagues have gone home for numerous reasons. 

Hopefully it will encourage his colleagues to stay, do overtime, and encourage new people into care work.

----------------------------

Spent the past week at my inlaws.  - MIL is at the end of her life, Cancer and Dementia.

 

 

 

 

Hope your well. Been there. 

[MrXxxx]

1 hour ago, Phil said:

Petrofac and RR nice for me today. Happy.

Yes, what happened to turn Petrofac?

[Transistor Man]

8 minutes ago, MrXxxx said:

Yes, what happened to turn Petrofac?

They are pleading guilty to the bribery case, they must have a decent deal. 

[DurhamBorn]

Although the government will allow some temporary VISAs its obvious they understand the situation on wages and welfare.If wages dont increase by 20% faster than welfare less and less will work in the private sector and the economy will implode.They are right to do so as the cycle will do it anyway,but its very good to see them saying it.We will leverage the returns from this inflation.Bond holders will end up paying for this with a roughly 25% to 30% real loss in the first half of the cycle with an outlier of 60% real loss.

On Friday night, a senior government source said: "We believe in British workers being paid properly and we will not give in to big businesses who want to change immigration rules to drive down wages."

[Starsend]

5 minutes ago, DurhamBorn said:

Although the government will ...(snip)

On Friday night, a senior government source said: "We believe in British workers being paid properly and we will not give in to big businesses who want to change immigration rules to drive down wages."

I'm ever hopeful but I read the above and find it highly amusing. They've gone out of their way to smash British workers into the ground for 20 years and they now suddenly care. I'll take a bit more convincing.

[DurhamBorn]

1 minute ago, Starsend said:

I'm ever hopeful but I read the above and find it highly amusing. They've gone out of their way to smash British workers into the ground for 20 years and they now suddenly care. I'll take a bit more convincing.

Its not that they care about the workers,its they care about systemic collapse and the economy will roll over without massive wage inflation.Remember they will be hedged themselves from the inflation.Its about lifting wages so they can tax them and also making the gap bigger with welfare.The interesting part is housing.I dont think the higher wages will be enough above inflation to stop a big correction.I dont do much on housing,but i think the housing market will top this month then enter a 2 year minimum bear market.

[Loki]

1 minute ago, DurhamBorn said:

i think the housing market will top this month then enter a 2 year minimum bear market.

 

 

 

Music to my eyes boss.  Cheers.