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

[Craig]

Glad you lot are all getting such bargains on your council tax.

Our bog-ordinary three-bed semi on the edge of Edinburgh is costing £240 per month!

[Majorpain]

30 minutes ago, DurhamBorn said:

Our council is probably one of the worst in the country for wasting money though.

I don't know about that....

https://www.shieldsgazette.com/news/south-tyneside-council-borrowing-tops-ps630m-118904

South Shields used to be a good night out, now its pretty dead and the local economy has been reduced to Benefits, Drugs and what little industry is left.  Councillors are nice enough people, just completely useless at anything other than bashing Tories and spending money they don't have.  7.5% unemployment rate isn't great, and that's before corona virus hit.

But then i don't live there so its less of an issue for me!

[Nicolas Turgeon]

Hi All,

I don't post very often but I do keep checking in for all the latest deflationary chat. And pizza-making advice!!! Thought I might stick my head above the parapet as it seems I have a twin - paging @Knickerless Turgid LOL!!! Great username mate

ANyway back to investing....

On 29/04/2020 at 22:43, DurhamBorn said:

Harley what do you think about Bitcoin?.Im actually quite tempted to buy some.Iv been looking at it a bit like silver lately.Tiny amount compared to world liquidity.That means "if" people chose to it has the chance to be a Tulip bubble asset,as silver has.

DB have you looked into the bitcoin ETF available through Hargreaves Lansdown? Ticker is BIT-XBT

It's a Bitcoin tracker which I understand holds a 1:1 ratio of bitcoins proprtional to the money in the fund. Based in Sweden, priced in Kroner, low spread,2.5% fee. Seems to track the bitcoin price okay? The fee is a bit of a disadvnatge but compared to the hassle of using exchnages with bank transfers, wallets and the CAPITAL GAINS TAX when the ETF can be held in your SIPP.... Theres another BTC one priced in Euro (less volume I think) and ethereum ones too.

Anyone else looked into this? Pro's and cons? I know it got a mention on the old site.

As someone mentioned before, Plan B is on twitter and his stock to flow model is addictive and I read through his articel on medium. Amazing if the model continues to fit.

And I can't get over Bitcoin being a deflationary asset (or do I mean inflationary asset) i.e. the maximum supply is FIXED by maths. There will never be more then 21 million bitcoins! Fixed. Hard. No pritning more. And coins available for excahnge will only reduce after then as wallets get lost etc. Take that, fiat!

[Talking Monkey]

15 hours ago, DurhamBorn said:

Yep,thats exactly whats happened.Scroungers at the top and the bottom.I dont single out the "elite",high paid none job council workers do more damage to working people.My council tax is £140 a month.Its insane amounts.People just put up with it though.You cant even vote out the councillors because over half dont pay the council tax and dont care.The government will try to get money the same way.I expect they will try to raid pensions,merge NI and tax so pensioners pay it etc.At some point they will have to deal with welfare and state worker pensions,but it might be after the next cycle.

That is an interesting view DB that the government could put off tackling the welfare and state worker pension till after the next cycle so post 2028/29, would be quite something if they can  keep up that level of spend on these two items for that long

[JMD]

6 hours ago, MrXxxx said:

Is this not a bedrock belief of the Islamic faith as well?

Yes (though Sharia loans 'get round it' by adding any putative interest charges onto the loan at its term end, and calling it an admin charge!), ...but I was just highlighting how Jews in the West had come to  dominate finance, i.e. by Western Catholic orthodoxy effectively barring Christians from making money from loans. 

[JMD]

DurhamBorn, i've been fixating (festering?) on the Corona Virus lately (too much so probably), so thought i'd attempt a financial question! I guess you have thought about this, but I haven't seen the subject written about here. Would be very greatfull for your views about this potential risk/threat to the investor?

It was something you wrote the other day concerning shareholders becoming less and less valued by their companies, and by government, that got me thinking. Along with dividends being cut (the new normal?). And Harley also recently posted that he's concerned that the big oilies might even be taken back into being private.

I was aware that the trend over last 10-20 years is that fewer IPO's have been bought to market. With public offering now at record lows I believe, and only approx. 200 successful ones happening last year. Private equity capitalisation in total is growing year-on-year, compared to value of stock market.

I wonder, could something new and worrying be developing here concerning future 'mass privatisations'? Could this be a threat, or am I being paranoid? 

 

(OK, the following is 'a little bit' far fetched, but how about this nightmare scenario. By the way I don't expect this to be answered, just showing the effect government lock-downs can eventually have on the mind ...As we know the Japanese government has been buying its own stock market for years. Recently, the US Fed bought nearly $1trillion of junk bonds. So what if, instead of progressing to buying its stocks directly, the US instead created enough liquidity to buy, say half of all US listed companies across all their exchanges (I believe that would come to $16trillion, DB could this be your predicted required $20trillion stimulous, minus the $4trillion done so far?!)).

[HolyCow]

5 hours ago, Agent ZigZag said:

As a guide a number of years ago I used as a barometer the number of gold ounces required to buy a property. In 2012 I noticed it costing more ounces of gold to acquire Prime Central London property. It was also marking the peak in gold at that time. Dominic Frisby did a piece on this and there are some interesting historical charts that show this if you care to look it up

Was this a Moneyweek article?

[MrXxxx]

12 minutes ago, JMD said:

was aware that the trend over last 10-20 years is that fewer IPO's have been bought to market. With public offering now at record lows I believe, and only approx. 200 successful ones happening last year. Private equity capitalisation in total is growing year-on-year, compared to value of stock market.

I wonder, could something new and worrying be developing here concerning future 'mass privatisations'? Could this be a threat, or am I being paranoid? 

What, you mean like selling the nation's `golden` assets for silver prices, and then letting them buy back at gold prices?...`Rinse and repeat`?!

[AWW]

http://www.goldchartsrus.com/chartstemp/UKHousePrices01.php

Still more than double the 1979 bottom of UK house prices in gold.

Probably the most shocking conclusion you can come to from looking at those charts is just how much the currency was trashed to support house prices.

[janch]

4 hours ago, Talking Monkey said:

hat is an interesting view DB that the government could put off tackling the welfare and state worker pension till after the next cycle so post 2028/29, would be quite something if they can  keep up that level of spend on these two items for that long

Maybe they will just be allowed to "wither on the vine"  ie benefit rates aren't increased in line with inflation so they gradually become worth less as inflation takes off.

[JMD]

2 hours ago, JMD said:

Yes (though Sharia loans 'get round it' by adding any putative interest charges onto the loan at its term end, and calling it an admin charge!), ...but I was just highlighting how Jews in the West had come to  dominate finance, i.e. by Western Catholic orthodoxy effectively barring Christians from making money from loans. 

Have re-read this (my) post, and it looks/reads slightly dodgy!!

So to be clear my post was in response to an earlier post, the contents of which I considered to be trite, cliched, 'anti-Jewish' conspiracy type stuff, etc. Thankfully I should add, the views expressed in original post were totally out of character for this forum. Anyway, hope this makes sense.

[Castlevania]

37 minutes ago, JMD said:

Have re-read this (my) post, and it looks/reads slightly dodgy!!

So to be clear my post was in response to an earlier post, the contents of which I considered to be trite, cliched, 'anti-Jewish' conspiracy type stuff, etc. Thankfully I should add, the views expressed in original post were totally out of character for this forum. Anyway, hope this makes sense.

You must be a fully paid up member of the Labour Party

[PaulParanoia]

18 hours ago, Transistor Man said:

I didn’t know, as my wife takes care of that bill. £245 per month. Ouch, more than I thought. We’ve got an outdoor pool and new play Park, though.  

About the same as ours.  That's one expensive bin emptying service we are paying for.  And the fuckers have the cheek to complain if you over fill them.

[sleepwello'nights]

31 minutes ago, PaulParanoia said:

About the same as ours.  That's one expensive bin emptying service we are paying for.  And the fuckers have the cheek to complain if you over fill them.

or put the wrong rubbish in.

[Sasquatch]

8 hours ago, DurhamBorn said:

Exactly,and it gives my partner something to think about.My son has just bought/is buying a house and he has got a good 10 year fix at 2.64%.You can overpay 10% years 1-6,then from 6 to 10 ,its fixed,but no lock in at all.He has put a 15% deposit down on the house and will owe £106k.Hes also bought £27kish of silver between him and his partner.They are going to over pay 5% to 10% a year then after the 5 year lock in sell the silver if/when it equals whats left of the mortgage.If before that it ever gets to the mortgage amount they will sell it and keep the cash,over pay 10% a year then the full lot at year 6.So if silver trebled in 3 years they would sell etc.

Hes only 21 and his partner is 23,shes a teacher.He has been living with my dad for a few years learning the ropes 

Well if that strategy pays off (strong chance it will), your son and partner will be in a vanishingly small group of people at that age (30 ish) who have paid off a mortgage. What a strong position to be in and a fantastic target to aim for. Presumably they are doubling down on discretionary spend and avoiding the trappings of fancy cars, luxury holidays etc? My two children (20 and 22) not yet in a position to buy houses but we will be encouraging them in due course and will be helping with deposits. Going forward, owning a house outright at the earliest opportunity has to be a top priority so as to stave off high interest rates and more than likely high rents.

[Agent ZigZag]

3 hours ago, HolyCow said:

Was this a Moneyweek article?

Yes i think it was if I recall. I also had a chat with him about it at the time during a telephone conversation on a separate matter

[Shamone]

8 hours ago, DurhamBorn said:

Dont even go there,its 100% crazy.That part is called The Sands,its right next to the river and gets very wet in heavy rain,and used to flood.They are building on top of the best car park in Durham where all the coach's go bringing tourists.I usually park just around the corner from there where there are some free places on a sunday for "Freemen of Durham" nobody hardly knows about them as they are off the beaten track,but only 2 minute walk to that car park then over that little bridge.There is no other parking there once the council build over the car parks.

The council own old offices and land in poorer parts of the county like Spennymoor where they could build and help the economy but instead they choose to build on a flood area,destroy half of the parking in Durham etc.Obvious why,its so the officers and members can swan around Durham for "meetings".

During the week if i go i use the park and ride.Its only £2 all day and really good,but the drop of places are quite a way from The Sands.

Our council is probably one of the worst in the country for wasting money though.

 

 

Are you a cordwainer or a currier?

[Jesus Wept]

19 hours ago, DurhamBorn said:

Three things from a macro point made welfare shoot up.First rates being kept too high to try to stop southern house inflation made sterling too high (relative).That aided the loss of manufacturing.Then the government deciding to replace men with benefits.First argument Susan boots him out as she knows the nash is the same money.

One of my outside bets with my dad is that they will announce a new Arc furnace steel works for Teesside.That would be a huge signal of intent.

Will it be built by the Thais or the Chinese? 

[Jesus Wept]

7 hours ago, Nicolas Turgeon said:

Hi All,

I don't post very often but I do keep checking in for all the latest deflationary chat. And pizza-making advice!!! Thought I might stick my head above the parapet as it seems I have a twin - paging @Knickerless Turgid LOL!!! Great username mate

ANyway back to investing....

DB have you looked into the bitcoin ETF available through Hargreaves Lansdown? Ticker is BIT-XBT

It's a Bitcoin tracker which I understand holds a 1:1 ratio of bitcoins proprtional to the money in the fund. Based in Sweden, priced in Kroner, low spread,2.5% fee. Seems to track the bitcoin price okay? The fee is a bit of a disadvnatge but compared to the hassle of using exchnages with bank transfers, wallets and the CAPITAL GAINS TAX when the ETF can be held in your SIPP.... Theres another BTC one priced in Euro (less volume I think) and ethereum ones too.

Anyone else looked into this? Pro's and cons? I know it got a mention on the old site.

As someone mentioned before, Plan B is on twitter and his stock to flow model is addictive and I read through his articel on medium. Amazing if the model continues to fit.

And I can't get over Bitcoin being a deflationary asset (or do I mean inflationary asset) i.e. the maximum supply is FIXED by maths. There will never be more then 21 million bitcoins! Fixed. Hard. No pritning more. And coins available for excahnge will only reduce after then as wallets get lost etc. Take that, fiat!

 

[sancho panza]

anyone any idea how/why this would occur @spygirl @DurhamBorn or anyone else

Surely councils can't go bust without reaming the locals first? Pension pot would get hived off wouldn't it?

https://lockdownsceptics.org/2020/05/02/latest-news-18/#comments

Among those industries hit worst by the lockdown is the aviation industry, with the Mail reporting that in the town of Crawley near Gatwick up to 50% of jobs are at risk of being lost or furloughed. British Airways has already announced it plans to make 12,000 staff redundant and its parent company IAG has just secured a £900 million loan from the Spanish Government. Meanwhile, Rolls Royce is cutting up to 8,000 jobs. Crawley Borough Council is among several local authorities that may have to file for bankruptcy, along with Liverpool City Council and Windsor and Maidenhead Borough Council. Perhaps no surprise then that Simon Dolan, the businessmen who’s hoping to challenge the lockdown in the High Court, owns an aircraft charter business. The Mail has more details.

[DurhamBorn]

.

[Transistor Man]

9 hours ago, Nicolas Turgeon said:

DB have you looked into the bitcoin ETF available through Hargreaves Lansdown? Ticker is BIT-XBT

It's a Bitcoin tr.... Theres another BTC one priced in Euro (less volume I think) and ethereum ones too.

Anyone else looked into this? Pro's and cons? I know it got a mention on the old site.

Thanks. I’m interested, but I’m worried about the number of exchanges which seem to get hacked, and that happening here.

I believe the Winklevoss Twins (Facebook, rowing) have been refused permission to set up a Bitcoin ETF by the SEC, multiple times.  And they own a huge amount of btc. 

[DurhamBorn]

6 minutes ago, sancho panza said:

anyone any idea how/why this would occur @spygirl @DurhamBorn or anyone else

Surely councils can't go bust without reaming the locals first? Pension pot would get hived off wouldn't it?

https://lockdownsceptics.org/2020/05/02/latest-news-18/#comments

Among those industries hit worst by the lockdown is the aviation industry, with the Mail reporting that in the town of Crawley near Gatwick up to 50% of jobs are at risk of being lost or furloughed. British Airways has already announced it plans to make 12,000 staff redundant and its parent company IAG has just secured a £900 million loan from the Spanish Government. Meanwhile, Rolls Royce is cutting up to 8,000 jobs. Crawley Borough Council is among several local authorities that may have to file for bankruptcy, along with Liverpool City Council and Windsor and Maidenhead Borough Council. Perhaps no surprise then that Simon Dolan, the businessmen who’s hoping to challenge the lockdown in the High Court, owns an aircraft charter business. The Mail has more details.

I think the pensions are all funded and inside a big wrapper all local government is in.They are different to government ones.Most of the time councils borrow from the local government loans board.They also have massive amounts of assets,most own huge amounts of land etc.Id like to see a few go bust.

[nirvana]

8 minutes ago, Transistor Man said:

Thanks. I’m interested, but I’m worried about the number of exchanges which seem to get hacked, and that happening here.

I believe the Winklevoss Twins (Facebook, rowing) have been refused permission to set up a Bitcoin ETF by the SEC, multiple times.  And they own a huge amount of btc. 

This! Be afraid of them hackers! 

Heard of Mt. Gox? They were a bitcoin exchange who used to handle 70% of all bitcoin transactions. They suddenly 'closed' in 2014

Mt. Gox announced that approximately 850,000 bitcoins belonging to customers and the company were missing and likely stolen, an amount valued at more than $450 million at the time

Crypto is a really illiquid market compared to other 'investments'...

Try OIL, that's highly liquid (tada boom!) and moves plenty on a daily basis at the moment 

[sancho panza]

On 03/05/2020 at 08:28, MrXxxx said:

Is this from the Macrovoices site Loki?...listened to a couple of these and the Eric fella appears to have an agenda/book to promote, and uses every opportunity to garner support for this from his guests.

Judge him by the quality of his interviews and the interviewees which are top drawer.I've never for once felt he was trying to sell  a book to me.

On 03/05/2020 at 11:56, Loki said:

Just reposting this for reference as this morning's posts lost

 

I'd agree with that assessment whether that bubble is now or late 20's i the question.

One day a few friends of mine will start tipping Superior gold/COntact gold etc....that'll be my sell moment

On 03/05/2020 at 13:38, Vendetta said:

Could do @Loki

However there is the considerable risk that market meltdown occurs this week - starting Monday and (over a fairly long and protracted period with occasional bull traps) the DJ falls to 15,000 (or lower) accompanied by Ftse falling to 4,500 or lower - taking all the other indices and ‘The good value’ stocks and commodities -including gold with them.....

 

also consdierable risk that it won't