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

[Don Coglione]

Just now, Solzhenitsyn said:

Personally I’m waiting until COV19 really starts biting in the U.K. and USA, so likely a couple weeks yet.

Hanging on until the new tax year would be handy!

[Solzhenitsyn]

3 minutes ago, kibuc said:

I ended up buying a bit of New Gold. I haven't changed my mind about it too much, but I manged to get it at 0.63 CAD just five minutes ago.

 

...and I'm out of cash again, 100% invested, soon to be 0% married I guess

I hold NGD but on US exchange - average price $2 but it’s a tiny holding (<1%) , even a small top up would work wonders to my average (it’s current $0.46)

[TheCountOfNowhere]

4 minutes ago, Solzhenitsyn said:

Personally I’m waiting until COV19 really starts biting in the U.K. and USA, so likely a couple weeks yet.

Exactly 

[Loki]

5 minutes ago, Ponty Mython said:

Hanging on until the new tax year would be handy!

Oh how good would that be.  A nice fat rebate to invest.

[Solzhenitsyn]

Just now, TheCountOfNowhere said:

Exactly 

I just don’t see markets recovering until we are seeing declining new cases/deaths out the other side. I expect the CB’s will also time the bulk of their QE until they see signs of COV19 recovery. Money printing will just get lost in the panic if they shoot too soon.

[Yellow_Reduced_Sticker]

14 minutes ago, TheCountOfNowhere said:

STOP BUYING YOU MAD BASTARDS 

NO...cos we want to prop the markets UP... just to piss YOU & confused off

DOW ....right NOW has just SHOT UP 2,000 points!

[Loki]

5 minutes ago, Solzhenitsyn said:

I just don’t see markets recovering until we are seeing declining new cases/deaths out the other side. I expect the CB’s will also time the bulk of their QE until they see signs of COV19 recovery. Money printing will just get lost in the panic if they shoot too soon.

very good point.  Maximise bang for the bunk!

[TheCountOfNowhere]

1 minute ago, Yellow_Reduced_Sticker said:

NO...cos we want to prop the markets UP... just to piss YOU & confused off

DOW ....right NOW has just SHOT UP 2,000 points!

Mental. 

Best sit back 

Somone is bailing out the rich before the fun. 

2 minutes ago, Yellow_Reduced_Sticker said:

NO...cos we want to prop the markets UP... just to piss YOU & confused off

DOW ....right NOW has just SHOT UP 2,000 points!

That's a proper mad jump... Cause trumps gonna test people..... 

[Yellow_Reduced_Sticker]

4 hours ago, Cattle Prod said:

That index was at 1 yesterday, rising now. I read Buffet did buy something the other day, can't recall what

Say it wasn't new gold by any chance?

 

4 hours ago, confused said:

Could be worse some dafties were buying at 1800p just a few weeks ago! 

 

Yet that was me, however i paid MORE, it was £19.10 ...yep i'll send myself to the back of the class with my dunce hat on!

 

 

3 hours ago, Hardhat said:

I'm buying everything to hold for 7-8 years. The original thesis of this thread was that something like this would happen eventually, whether caused by a black swan or not. A period of financial dislocation would follow, and after that inflation caused in part by CBs printing money, and also commodity demands, perhaps topping out around 2027 - 28.

I don't see that anything has changed really, despite all the noise on here and elsewhere. This is a good time to buy certain stocks, esp cheap commods, if you believe in the general thesis of the reflation cycle ahead.

Personally I'm fully positioned in reflation stocks and will be adding more ladders as and when funds become available over the next few years, at least. I'm currently down quite a bit on certain stocks, but we expected this.

This is the time to keep a cool head and stick to the plan. The foundations of this thread, which we have all been discussing for the past few years, remain sound, and if anything are being proven right.

 

EXCELLENT POST!

 

SAME here looking at holding for at least a decade and collecting divis!

 

What i don't get is the folks here that are so CONVINCED that the markets are going to ZERO, Let me ask ya this:

 

WHY the heck ain't You SHORTING then?

 

EVEN with a small grub stack amount?

 

Surely You can still open an acc with someone like finspreads where you deposit £500 ...and bet 50p a point?

 

This question is to @confused @TheCountOfNowhere

 

[Sugarlips]

As is often said a little bit of knowledge is dangerous so best to ask the brains trust..

Hedgeye have a couple of times said the bond market is blowing up and the credit lines are frozen banks are in trouble ala '07/'08. Given CB's are injecting liquidity, is this just noise?

And if so, besides monster QE what does this mean to us near term given it rhymes with the GFC but times have supposedly changed, mass unemployment? 

[TheCountOfNowhere]

Persimmon, shite houses, down today to 2015 levels.... Considering what we've witnessed... Could it...can it be... 

[BearyBear]

1 hour ago, TheCountOfNowhere said:

STOP BUYING YOU MAD BASTARDS 

I'm heavily long on toilet paper

[DurhamBorn]

44 minutes ago, Sugarlips said:

As is often said a little bit of knowledge is dangerous so best to ask the brains trust..

Hedgeye have a couple of times said the bond market is blowing up and the credit lines are frozen banks are in trouble ala '07/'08. Given CB's are injecting liquidity, is this just noise?

And if so, besides monster QE what does this mean to us near term given it rhymes with the GFC but times have supposedly changed, mass unemployment? 

Fed was buying across the whole curve last night i think,right up to the 30 year.That says they dont want to alter the curve,but they want to inject liquidity into the system.I would expect we might also see direct QE next week.The $ was in demand,hence why it lifted up,but the Fed dont want the $ up,they want it down a bit and to ease the pressure on dollar debts.Given the amount of debt and derivatives some corporate bonds could blow up at any time.The Fed is going to print to stop 80% unemployment here.This virus has probably pushed the dial on a reflation response.They want and need inflation,but they are trying not to cause a mass run out of treasuries.We have the crash we were waiting for,many stocks are down 80%,even the worlds biggest energy companies down 65%.What happens now depends on amounts.$2 trillion is certain,it needs $10 trillion,but it will probably take $20 trillion due to the Fed being late.

The road map is now in play where falling demand meets rising liquidity.When that inflection point is reached it will kick in a long structural bull market in commods and real assets.Of course this virus could cause company after company to roll over before we get there.Russia and Saudi are trying to kill US energy independance as well,the best way to stop that is to get the $ down.

Oh and it should be said,the Fed isnt bailing out the rich,or bankers etc,they happen to gain,the Fed is trying to make sure the single mum in Detroit can keep her job in the local burger joint and her kid can get through college.

[TheCountOfNowhere]

23 minutes ago, BearyBear said:

I'm heavily long on toilet paper

Im caught short 

[sancho panza]

9 hours ago, kibuc said:

It is crazy, isn't it.

 

The last time you could buy Minera Alamos for 21c, gold was 1450, Santana production was one year away and funding was still up in the air.

We're now less than half a year away from production, gold knocks on 1600 and funding is fully secured without dilluting.

This is the very point I came on to make.Picked up some kinross today(I sold my top ladder ($5-20) at $5-90.Picked it back up this afternoon at the same price as when gold was $1330.

Thing is there's clearly selling in the air.Can see the PM miners rocketing back at some point but I''m unsure where the bottom is.Picked up some NewCrest at $12 same as gold at $1230

 

Irrational solvent etc.Incredible to see.And dare I even say that it's what fascinates me about markets.

[sancho panza]

8 hours ago, Democorruptcy said:

It hampered you then?

Not at all.It improved my focus.Also enabled me to ignore the noise/sifting complex trades and invest via a route that covers a lot of angles.

It also madfe me look at things completely differently.Why pick apart construction companies when you can jsut buy the raw materials they'll use.???

7 hours ago, Yellow_Reduced_Sticker said:

I just trebled my holding New Gold at .74 cents (my 1st purchase ORIGINAL HOLDING was DOWN -72% ...now i'm ONLY DOWN -49% in New Gold)

...so expect GDXJ to start FALLING

@sancho panza Maybe ya should hold of buying New Gold, now that i've just bought

without you even telling me,I did hold off this afternoon.Too much red on my goldies screen.next week tho....

7 hours ago, confused said:

there's some brave bastards around here buying on a friday afternoon......

Talking of brave I watched 1917 earlier in the week, good movie!

And after @sancho panzamentioned @Errolwas a genius, I've got Margin Call for the weekend! woohoo!!

Never called him a genius,jsut said he'd been right since 02.

[sancho panza]

4 hours ago, JMD said:

So it was you SP, re. <4.50 BP (so karma of the good variety I hope). Anyway well done sounds like you did fill your boots, then backed the truck up!

I note your earlier post mentioning your buying %'s in some of each of the oil majors. Will this and planned future buys over the next 2 months take you to your 30% portfolio target? Excuse me quoting figures back at you, but the reason I ask is that I have gone large (for me) into energy stocks, but for me it will represent 'only' 15%.

I consider the energy sector to represent the best risk/reward out there, both in terms of total-return (growth/divi) AND also next cycle 'power themes' (e.g. renewables, etc, and often discussed on here). But I wonder if there are other alternatives?    …i.e. the Commodities sector perhaps, if so would you SP or others have ideas on how to invest? Been thinking a lot about this recently but haven't come to any conclusions yet and its a big topic, especially when including the soft commodities like potash, forestry. So for hard commodities has anyone come up with say their own 'big 5 metals' for the next cycle and where best to get exposure in terms of the big conglomerates and the smaller/mid-cap players, e.g. maybe Horizonte Minerals for nickel, which has been discussed here a lot.   

We're headed for 50% in the oilies I think.Decomplex trade I can understand.There'll be a period of adjustment through this govt overreaction then it'll pikc up again.But I've taken some risks in my time and have run up some losses to our cost.

AS Ive asaid before you need to work out your own risk profile and be comfortable with it.

back in the noughties we were nearly 100% banks.Now we're 0% banks.We got out with decent profits but only after my northern rock lesson made me go and learn about fractional reserve lending.

As per @kibuc is pointing out these are irrational times in commodities.

 

Jsut to add we wouldn't be headed for 50% oilies if XOM wasn't below $40 or RDSB below £15.Those prices are game changing to me.

[UnconventionalWisdom]

1 hour ago, DurhamBorn said:

Oh and it should be said,the Fed isnt bailing out the rich,or bankers etc,they happen to gain,the Fed is trying to make sure the single mum in Detroit can keep her job in the local burger joint and her kid can get through college.

They know their previous QE harmed the real economy and are now shitting themselves that it will implode. They need to save main street at the expense of wall street.  This whole panic, lack of supplies produced domestically, just in time production and global reliance will all contribute to a greater focus on the real economy. Reflation is looking increasingly likely. 

[TNS]

1 hour ago, TheCountOfNowhere said:

Persimmon, shite houses, down today to 2015 levels.... Considering what we've witnessed... Could it...can it be... 

Put simply, no.

[DurhamBorn]

Trump said in his talk that they were going to buy up the oil while its cheap and fill up the strategic reserve.There you go,direct QE straight into the economy

https://www.cnbc.com/2020/03/13/oil-rebounds-5percent-as-trump-says-us-will-purchase-oil-for-strategic-reserve.html

Trump is pretty much saying to the Saudi's and Russians you pump to try to destroy our energy industry,we will print dollars and buy it all up for later thank you.

So government is buying crude,Fed is buying treasuries across the curve,government issues more treasuries to buy more crude.

 

[TheCountOfNowhere]

5 minutes ago, TheNickos said:

Put simply, no.

🤣😂🤣😂🤣😂😏😂

 

 

5 minutes ago, DurhamBorn said:

Trump said in his talk that they were going to buy up the oil while its cheap and fill up the strategic reserve.There you go,direct QE straight into the economy

https://www.cnbc.com/2020/03/13/oil-rebounds-5percent-as-trump-says-us-will-purchase-oil-for-strategic-reserve.html

Trump is pretty much saying to the Saudi's and Russians you pump to try to destroy our energy industry,we will print dollars and buy it all up for later thank you.

So government is buying crude,Fed is buying treasuries across the curve,government issues more treasuries to buy more crude.

 

Can he unilaterally decide that? 

[DurhamBorn]

30 minutes ago, TheCountOfNowhere said:

🤣😂🤣😂🤣😂😏😂

 

 

Can he unilaterally decide that? 

I would think the President can do that yes.What he didnt say,but what he meant was that he didnt intend to let the US oil industry go down the pan and them lose their energy independence.He knows the Russians and the Saudi's are trying to kill US shale.Amazing what you can do when you have the reserve currency.This is the sort of thing thats going to happen more and more in the next cycle.Governments injecting into the economy.Trump isnt stupid,he knows he is getting oil cheap for later,but it serves much more than that.

[TheCountOfNowhere]

7 minutes ago, DurhamBorn said:

I would think the President can do that yes.What he didnt say,but what he meant was that he didnt intend to let the US oil industry go down the pan and them lose their energy independence.He knows the Russians and the Saudi's are trying to kill US shale.Amazing what you can do when you have the reserve currency.This is the sort of thing thats going to happen more and more in the next cycle.Governments injecting into the economy.Trump isnt stupid,he knows he is getting oil cheap for later,but it serves much more than that.

Think? 

[Agent ZigZag]

1 hour ago, DurhamBorn said:

Trump said in his talk that they were going to buy up the oil while its cheap and fill up the strategic reserve.There you go,direct QE straight into the economy

https://www.cnbc.com/2020/03/13/oil-rebounds-5percent-as-trump-says-us-will-purchase-oil-for-strategic-reserve.html

Trump is pretty much saying to the Saudi's and Russians you pump to try to destroy our energy industry,we will print dollars and buy it all up for later thank you.

So government is buying crude,Fed is buying treasuries across the curve,government issues more treasuries to buy more crude.

 

That was the kind of talk about that gave me the conviction to buy my penultimate last tranche of oil today and went in heavy again. If it falls again I will buy and then sit back as I will be out of allocated funds for this sector. I have one last big tranche for the miners left and am undecided on individual miners or gdxj although I’m in no rush as the last week has been a tough ride. My SIPP now is very lob sided towards the energy sector and miners. So other thoughts on this are welcome rEgarding mining. I am very content to now let my SIPP mature for 6 years before I can access it. Until then I intend to enjoy the simple things in life like the seasons now that I am about to retire from paying tax but not life.

[DoINeedOne]

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