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

[DurhamBorn]

1 hour ago, Cattle Prod said:

I am so incredibly envious of the owner of that. It's not healthy 

I cant even imagine my metal detector near that lot ,silver is beautiful,the way it catches the light.Forged in the death of a star at it crashes in on itself and supernova's.The silver created in that incredible pressure then blasted across the cosmos.I think holding a Britannia and a £20 note together shows how cheap silver is at the minute.

[Harley]

2 hours ago, JMD said:

Ok Harley, tell Chards that we'll transport that '1 tonne' of silver anywhere they want for free... Don't want to be pedantic, but I count 78 (some obscured?) monster boxes ...therefore that would be: 78x500oz coins=39,000ounces. As 1tonne is 35,274oz, might we say split the difference (between us?!) and perhaps call the spare-coinage 'shrinkage' (retail industry term for goods that go 'missing' between the warehousman and the cashire). That's approx. £40,000 each at current prices, and as Del Boy might say - not a bad day's work Rodney!    

Attention to detail.  That's what we need.  Can I join your team please!

[Harley]

Just checked and that Chards delivery is only one of two!  And Britannias are still only orderable or out of stock.  That's a huge order backlog they must have!

To quote (27/05/20):

"The old saying ‘good things come to those who wait’ is a common phrase we are all familiar with. Today, Chards can confirm that this is indeed the case as we have taken delivery of our second batch of 2020 Silver Britannias during lockdown!

We have been expecting this day for a while now, with the goods in transit for over 2 weeks to finally reach us! This delivery weighed 1.09 tonnes and required secure freight and logistics to arrive in Blackpool - so by no means an easy journey to make given the circumstances. More good news is expected to come in the near future, with more orders booked or en route.

Earlier this month, we received part of this wholesale order and were able to allocate these silver coins to a substantial amount of orders. We are sure you’ll be just as excited as we are to hear that more orders can now be fulfilled as result of this large delivery!

Our brilliant warehousing team are now in the process of allocating the coins to orders. As is normal, we are doing this on a first come, first served basis. As the volume is so great, we will spread the despatch over a few days, so please be patient with us as we begin to clear the backlog of orders. We anticipate opening the showroom for collections in June if customers wish to take advantage of this. Once we know the details of how this will work we will publish them here.

The outlook continues to be positive. News is coming in daily that shutdown restrictions are beginning to ease worldwide, so we are hopeful of more deliveries coming in very soon. As always, we will inform you if more good news come in, and you can always check in on this page here for more information."

[JMD]

Don't watch all of video - it is a bit too chummy between these two. However, the part between 32:00 - 40:00 did make me laugh because it illustrated that, even though their world is so different from us 'ordinary folk' and they definitely don't need the money, the current banking environment is such that it is literally throwing money at people like ex-fund manager Hugh Hendry and his Bahamas luxury holiday let business. Not having a go at him, good luck to him, but it does show how crazy things have gotten. I didn't recognise Hugh Hendry at first, as had previously only seen him in his previous form with suit and tie. He is now semi-retired, living on his private island in the Bahamas.

 

[JMD]

56 minutes ago, Harley said:

Attention to detail.  That's what we need.  Can I join your team please!

I obviously have far too much time on my hands!, however, my excuse is this was silver related, so normal rules don't apply.

Actually Harley, the thought now occurs to me that (after our recent discussion about counterparty risk, etf's not holding what they purport to), you could/should? have chastised me for taking 'on trust' that the 'obscured' monster boxes do actually exist - after all, if they don't exist, and it is really just empty space behind those foreground boxes, then then we are not up £40,000 each, but instead we are down 12 boxes of silver each!!!  

...How's that for attention to (pure fantasy!) detail?

[Sasquatch]

1 hour ago, DurhamBorn said:

I cant even imagine my metal detector near that lot ,silver is beautiful,the way it catches the light.Forged in the death of a star at it crashes in on itself and supernova's.The silver created in that incredible pressure then blasted across the cosmos.I think holding a Britannia and a £20 note together shows how cheap silver is at the minute.

Nice one DB, that's poetry that is...

[Sasquatch]

I can 'reserve a bar' on bullionvault apparently. Anyone done this and why?

[Castlevania]

4 hours ago, JMD said:

Ok Harley, tell Chards that we'll transport that '1 tonne' of silver anywhere they want for free... Don't want to be pedantic, but I count 78 (some obscured?) monster boxes ...therefore that would be: 78x500oz coins=39,000ounces. As 1tonne is 35,274oz, might we say split the difference (between us?!) and perhaps call the spare-coinage 'shrinkage' (retail industry term for goods that go 'missing' between the warehousman and the cashire). That's approx. £40,000 each at current prices, and as Del Boy might say - not a bad day's work Rodney!    

You’ve mixed up regular with Troy ounce. A Troy ounce weighs more, so bigger potential profit

[nirvana]

gold has been 'stuck' at this level since mid April

it's just bouncing around 

[Eventually Right]

The latest Macrovoices podcast is an interview with the author of the “In gold we trust” report, in case people are interested.

[Craig]

20 hours ago, Harley said:

Want to know what a tonne of Silver Britannias looks like?  Ask Chards:

God damn it, I could fit my entire holding in those plastic boxes!

[TheCountOfNowhere]

The NW is f**ked when  house prices fall.

https://news.sky.com/story/nationwide-profits-tumble-by-40-with-163101m-coronavirus-hit-11996600

Be afraid.

[AWW]

6 minutes ago, TheCountOfNowhere said:

The NW is f**ked when  house prices fall.

https://news.sky.com/story/nationwide-profits-tumble-by-40-with-163101m-coronavirus-hit-11996600

Be afraid.

What many fail to realise is that payment holidays are actually a double benefit to the banks - they mean that the borrower ends up paying more interest, and by ensuring no forced selling, they support the value of the asset on which the loan is secured.

They're not doing this out of the goodness of their hearts.

[DurhamBorn]

12 minutes ago, Cattle Prod said:

Getting around to reading In Gold We Trust. This is a very compelling chart, and important for those of us that are concerned about another shoe to drop:

 

Buy gold when VIX is over 80. Or if you're just holding, don't worry about gold dropping when VIX is heading for 80. Makes complete sense to me.

This is mainly due to Fed action,the more the systemic risk,the more they engage,when the VIX hits those levels we have been at full pumping levels.Its a long way off but i suspect this might not work at the end of the next cycle during high inflation.When things start to collapse then the CBs cant engage in pumping and PMs will likely fall very hard and keep falling.I think inflection points are really key and really difficult.For instance,we are now at the inflection point from dis-inflation,that is clear from a macro point,but as these things are so rare,maybe 5 a century (in and out are two) its very difficult to  road map the lags,especially in financial markets.What i see though on cross market work is that very large parts of the market suffered capitulation selling during March,especially that weekend where BP hit £2.20 etc,cyclical stocks got destroyed with across the board drops from highs of 60% to 90%.

It could be the markets from here have seen the lows in many areas,but the hot sectors havent (and they have huge market caps).It could also be the case that falls/damage from here is companies going under,a quick derivative unwind,or debt for equity swaps.

 

[TheCountOfNowhere]

32 minutes ago, AWW said:

What many fail to realise is that payment holidays are actually a double benefit to the banks - they mean that the borrower ends up paying more interest, and by ensuring no forced selling, they support the value of the asset on which the loan is secured.

They're not doing this out of the goodness of their hearts.

Not many.

The masses will see it as the bankers being kind.

****ing criminals.

[Craig]

19 minutes ago, AWW said:

What many fail to realise is that payment holidays are actually a double benefit to the banks - they mean that the borrower ends up paying more interest, and by ensuring no forced selling, they support the value of the asset on which the loan is secured.

They're not doing this out of the goodness of their hearts.

Absolutely. It's a holiday from the current low rates for the banks!

[AWW]

We already have vast swathes of the population who are dependent upon near-zero interest rates to stay afloat. We are now in the process of creating a cohort of people who will end up being dependent on not having to pay their mortgage.

[MrXxxx]

1 hour ago, AWW said:

We already have vast swathes of the population who are dependent upon near-zero interest rates to stay afloat. We are now in the process of creating a cohort of people who will end up being dependent on not having to pay their mortgage.

Like a credit card bill on steroids?

[DurhamBorn]

1 hour ago, Cattle Prod said:

Thanks DB, I was more worried about Q4/Q1 2021 for PMs, as they will get sold off again in another liquidity crisis. But that's perhaps just fiddling around the edges at this stage, I'm almost decided to average in a % of savings to physical PMs till 2027 or so and just be done thinking about it. I now fully understand why gold sells off in a crash, and it doesn't bother me any more.

Your comments on post end of next cycle, I hadn't thought about what the lack of CB printing might do to my (hopefully!) main store of value by then. I suspect we will a big divergence between paper and physical, like in Argentina. Plenty of time to work that one out though.

You make important points on sector capitulation, hopefully we bought those, and debt for equity swaps/bankruptcy in particular. CBs are certainly heading that way, and I could see that happening for example in the shale patch. America doesn't want to go back to importing the majority of its oil again. 

I wonder what the S&P would have bottommed at in March, had the FAANGS and their ilk hit single digit PEs like our favourites did...if it is under 1500 I'd be feeling very comfortable. I might try and work it out.

Looking at the rise in iron ore prices and the falling inventories in lead metals like iron ore and copper back of a fag packet i expect china is easing by around $1.4 trillion,Japan is around $2.2 trillion so far,China is allowing local government to issue around a half trillion in bonds and that is almost certain nearly all for infrastructure.Trump is also looking at a $2 trillion infrastructure injection.India about a quarter of a trillion,Indonesia $100 billion mostly for infrastructure ,UK is at about £500 billion,Europe probably around $3 trillion.

Range of around 10% of GDP,im expecting around 18%-25% minimum before they start to tighten.

The MSM is all about how energy demand is collapsing/not coming back etc,they couldnt be more wrong.The cost is going to go up that much that the west should start to build new electric arc furnaces before too long.

 

[sancho panza]

On 26/05/2020 at 12:03, Cattle Prod said:

Goldman Sachs sent out a note the other day discussing shale decline curves, first time I've ever seen it outside oil circles. Preparing the ground no doubt, it's going to be very noticeable toward the end of the year, and likely to be THE story in oil/gas in 2021.

Here are some snippets:

 

Key point: there is no growth basin like there was in 2016, and the decline rate is 3x higher now. Maybe Goldman is reading this thread too 

Really stunning charts CP.

Effectively,it's looks like oil is getting set up for a huge short squeeze.

Remember June 08.WTI doubled in the 12 months before

Here's my thesis-weak dollar begets higher comodities,at similar time oil shortages squeeze oil higher

On 26/05/2020 at 15:43, janch said:

I this the turn we've been waiting for?

DXY 99.045

 

10 year US Treasury 0.695 (up 5.45%)

 

£/$ 1.234                                              

                                  just now

98.22 close last ngith.Where's teh moeny going?

[Bricormortis]

Question...how are Chards and the like for buying large amounts of coin? Say £30 grand hypothetically ?

[Talking Monkey]

29 minutes ago, DurhamBorn said:

Looking at the rise in iron ore prices and the falling inventories in lead metals like iron ore and copper back of a fag packet i expect china is easing by around $1.4 trillion,Japan is around $2.2 trillion so far,China is allowing local government to issue around a half trillion in bonds and that is almost certain nearly all for infrastructure.Trump is also looking at a $2 trillion infrastructure injection.India about a quarter of a trillion,Indonesia $100 billion mostly for infrastructure ,UK is at about £500 billion,Europe probably around $3 trillion.

Range of around 10% of GDP,im expecting around 18%-25% minimum before they start to tighten.

The MSM is all about how energy demand is collapsing/not coming back etc,they couldnt be more wrong.The cost is going to go up that much that the west should start to build new electric arc furnaces before too long.

 

DB with the major economies all doing the QE to infra thing how would you rate the UK to be able to maintain or improve its position relative to the competition. My view may be simplistic but I would expect that for India/Indonesia a lot of the infra money would be corrupted away. 

[AWW]

2 minutes ago, Bricormortis said:

Question...how are Chards and the like for buying large amounts of coin? Say £30 grand hypothetically ?

Gold or silver? I've used Atkinsons for reasonably large orders of gold coins before (although your hypothetical £30k will only get you two tubes of gold Brits at the moment!).

I don't see why silver would be a problem - but £30k is three monster boxes, or 40-odd kg of the stuff - make sure you don't put your back out ;-)

[sancho panza]

On 27/05/2020 at 00:49, JMD said:

SP, obviously I'm not commenting on your own family setup. But in terms of world views there is a disconnect between left and right. The left view the right as being morally deficient, and in debate seek to impune their motives. This has been a successful tactic in our modern day faux compassionate West. The right have been portrayed as dinosaurs for many decades and therefore an irrelevance. I think it interesting that the left today are continually arguing amongst themselves, it's almost as if the ultra relativistic universe of ideas they have constructed has no centre they can cling to at time of crises (excuse mixed metaphor).

The real irony is that people like my Dad consdier themselves liberals and yet struggle to allow people to have opinions that offend their myopic sense of right and wrong.

That's refelcted in their philosphy these days and possibly explains why they keep failing at election time due to the inherent structural contradictions in the way they think they're perceived and the way they are perceived by the public.

Imho there are large political vacuums ina lot western coutnries

[DurhamBorn]

5 minutes ago, Talking Monkey said:

DB with the major economies all doing the QE to infra thing how would you rate the UK to be able to maintain or improve its position relative to the competition. My view may be simplistic but I would expect that for India/Indonesia a lot of the infra money would be corrupted away. 

Very good actually.We are in a great position for hydrogen etc.Nissan staying here is a good indicator.UK is small and although planning etc and faffing about wastes a lot energy etc should get going fine.The key is all these countries are moving from the consumer consuming with the debt to industry consuming.Its subtle,but makes a massive difference.We could/should be looking at a cycle where commods outpace everything else,and the companies leveraged to commods do even better.