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

[jamtomorrow]

Adding this to SP's recent deep-dive and HSBC's escalating HK woes - it's almost as if you can look at banking sector from any perspective you like, the answer always comes back the same: accident waiting to happen.

https://www.theatlantic.com/magazine/archive/2020/07/coronavirus-banks-collapse/612247/

[Sasquatch]

1 hour ago, The Idiocrat said:

That’s what I’m doing. No interest to pay for a year. I hate debt with a passion, and have none, but it seems silly to avoid free money at no cost, even if it’s temporary. Might stick it in silver for a year and take the hit if it’s down.

I've already stuck half of it into silver 

[Majorpain]

53 minutes ago, Starsend said:

Stunningly stupid or evil? Not much difference if it wrecks so many lives. The Fed is a force for great harm in the world but we are all forced to go along with them. Our living standards have improved enormously over the last five decades or so (unless you want to live in a house) despite the Fed. If we'd had a more honest system in place then the increase in living standards would have have been truly incredible.

Would it though?  The vast majority of the population are living the good life with debt, which is simply consumption drawn from the future to be consumed in the present.  Remove that and i doubt that living standards would be anywhere near as high.

The only problem is its a treadmill, and you either keep jogging or get thrown off!

[ThoughtCriminal]

1 hour ago, The Idiocrat said:

That’s what I’m doing. No interest to pay for a year. I hate debt with a passion, and have none, but it seems silly to avoid free money at no cost, even if it’s temporary. Might stick it in silver for a year and take the hit if it’s down.

Now there’s an idea......😉

[Starsend]

3 hours ago, TheCountOfNowhere said:

What did these f**king morons expect, self cert loans for anyone in business. Sunak is a disaster for the UK.

 

The monkeys running the show have no limits to their stupidity. I remember when Brown was Chancellor. He introduced all this tax credits stuff where if you get a part time job paying £800 a month we'll give you another £1500 per month (as long as you've got kids of course). When it was first introduced over the course of - it was either one or two years - criminal European gangs made off with a couple of billions pounds in fraudulent applications. I recall reading this somewhere as I was stunned by the sheer scale of it, the incompetence of the Government and HMRC. Of course then there was half of Eastern Europe moving over here to take advantage as well. But free dentistry, free university education... can't afford those anymore.

[Starsend]

2 minutes ago, Majorpain said:

Would it though?  The vast majority of the population are living the good life with debt, which is simply consumption drawn from the future to be consumed in the present.  Remove that and i doubt that living standards would be anywhere near as high.

The only problem is its a treadmill, and you either keep jogging or get thrown off!

In my opinion, yes. Everybody would have to work. No free rides, including for the bankers. 

You have to ask why are so may people having to use debt to live. It's not a normal or a desirable thing. The answer is primarily the monetary system which is essentially the Fed.

[Starsend]

 

1 hour ago, The Idiocrat said:

That’s what I’m doing. No interest to pay for a year. I hate debt with a passion, and have none, but it seems silly to avoid free money at no cost, even if it’s temporary. Might stick it in silver for a year and take the hit if it’s down.

 

Have to say I'm tempted. To get the full 50k though you'd have to show a turnover of £200k if I understand correctly.

 

[geordie_lurch]

1 minute ago, Starsend said:

Have to say I'm tempted. To get the full 50k though you'd have to show a turnover of £200k if I understand correctly.

That's how I have read it too. I also think that there is zero chance them not coming after you personally if you default on it and are a UK citizen but I can see the temptation...

[The Idiocrat]

1 minute ago, Starsend said:

 

 

Have to say I'm tempted. To get the full 50k though you'd have to show a turnover of £200k if I understand correctly.

 

That's correct, it's supposed to be up to 25% of previous year's turnover, which is what I did so got less than £50k. But a lot of people are just asking for the full amount anyway and seem to get it. 

[ThoughtCriminal]

5 minutes ago, Starsend said:

 

 

Have to say I'm tempted. To get the full 50k though you'd have to show a turnover of £200k if I understand correctly.

 

Well my Romanian “friend” has only got around 20k turnover and he got the 50k. Although they’re all that dodgy I wouldn’t be at all surprised if he’s bastardised his numbers. 

[Starsend]

4 minutes ago, geordie_lurch said:

That's how I have read it too. I also think that there is zero chance them not coming after you personally if you default on it and are a UK citizen but I can see the temptation...

Yes, I suspect it will be another gigantic giveaway to the poorer nations of the EU. If I thought I could get way with borrowing it and then going bust without consequence then I would without a seconds thought.

[AWW]

6 minutes ago, The Idiocrat said:

That's correct, it's supposed to be up to 25% of previous year's turnover, which is what I did so got less than £50k. But a lot of people are just asking for the full amount anyway and seem to get it. 

My ltd co had a turnover just under £200k last year; I asked for the full £50k and haven't been told no - mind you, haven't got the money yet either.

[Chewing Grass]

2 minutes ago, ThoughtCriminal said:

Well my Romanian “friend” has only got around 20k turnover and he got the 50k. Although they’re all that dodgy I wouldn’t be at all surprised if he’s bastardised his numbers. 

Suppose it might be a government ploy to get them to fuck-off back to the motherland as they will never work again (legally) over here if they don't pay it back.

[Starsend]

3 minutes ago, ThoughtCriminal said:

Well my Romanian “friend” has only got around 20k turnover and he got the 50k. Although they’re all that dodgy I wouldn’t be at all surprised if he’s bastardised his numbers. 

He probably lied about his turnover. If I did the same and then defaulted at some point in the future they'd probably find a way to throw me in jail. If you're foreign though you'll most likely get away with it.

[DurhamBorn]

14 minutes ago, Starsend said:

The monkeys running the show have no limits to their stupidity. I remember when Brown was Chancellor. He introduced all this tax credits stuff where if you get a part time job paying £800 a month we'll give you another £1500 per month (as long as you've got kids of course). When it was first introduced over the course of - it was either one or two years - criminal European gangs made off with a couple of billions pounds in fraudulent applications. I recall reading this somewhere as I was stunned by the sheer scale of it, the incompetence of the Government and HMRC. Of course then there was half of Eastern Europe moving over here to take advantage as well. But free dentistry, free university education... can't afford those anymore.

Agree,but thats government not CBs.99% of the problems are political,not CB.Governments force them into a corner over and over again.Brown destroyed the UK and caused Brexit.Of course you would say,yes,but if CBs stopped printing governments would have to stop all the crazy stuff,and thats true,the problem is to get there you have to cause a crash that would destroy our way of live,maybe forever.Powell cant be expected to do that.As iv said its no good us wishing for a better system,my partner couldnt give a toss about that,nor my children,or grandchildren.My job is to protect them all from the crazy stuff as much as i can.I agree it stinks,and the losers are hard working ordinary people,but i see it as my duty to not be one of them.Thats all you can do.The end of the next cycle though might be the end of the Fiat system,but we have a reflation to get through first.

[The Idiocrat]

There's an interesting "anomaly" with Bounce Back Loans - any company can apply that started trading before 30/3. So you could have started on 29/3 with no revenues before then but can apply. I think you can apply if you think your forecast revenues were affected by Covid. Seems a bit odd though - almost like they want to give the money away!

[Starsend]

8 minutes ago, DurhamBorn said:

Agree,but thats government not CBs.99% of the problems are political,not CB.Governments force them into a corner over and over again.Brown destroyed the UK and caused Brexit.Of course you would say,yes,but if CBs stopped printing governments would have to stop all the crazy stuff,and thats true,the problem is to get there you have to cause a crash that would destroy our way of live,maybe forever.Powell cant be expected to do that.As iv said its no good us wishing for a better system,my partner couldnt give a toss about that,nor my children,or grandchildren.My job is to protect them all from the crazy stuff as much as i can.I agree it stinks,and the losers are hard working ordinary people,but i see it as my duty to not be one of them.Thats all you can do.The end of the next cycle though might be the end of the Fiat system,but we have a reflation to get through first.

Yes, agree completely in the case above. Not sure about 99% of the problems being political but that all comes down to who really controls who - Government controlling the central banks or the other way round. Personally I think the bankers control the Government mostly. This is why I take exception to the idea that the Fed isn't evil. In my view it is although these things aren't black and white. Many of the people working for the Fed are no doubt decent people doing their best with a truly fucked system. It's the system itself that has evolved into something evil.

I do wish for a better system, for the sake of my children, but I accept it can't happen without gigantic collapse - which I think would be worth it if we got something better come out of it. In the meantime, sure, we have to try and keep ahead of the bubble blowing and protect our families as best we can - and here we have much to thank you for 

 

[ThoughtCriminal]

3 minutes ago, The Idiocrat said:

That's correct, it's supposed to be up to 25% of previous year's turnover, which is what I did so got less than £50k. But a lot of people are just asking for the full amount anyway and seem to get it. 

That’s my experience too. I don’t think it’s being vetted very thoroughly. 

[leonardratso]

shoe shine moment? been watching dave this afternoon, loads of charity adverts 1 after the other, but plenty of vat free bullion direct adverts for coins and bars, i dont watch TV much at all, is this normal?

[Majorpain]

57 minutes ago, Chewing Grass said:

Suppose it might be a government ploy to get them to fuck-off back to the motherland as they will never work again (legally) over here if they don't pay it back.

That's a good point actually, might actually be much cheaper in the long run if their pension/NI contributions went up in smoke!  

[JMD]

2 hours ago, Starsend said:

The Fed have wrecked millions of people's lives with their stunning stupidity over the decades. They've devalued the dollar by well over 90%. Great if you're one of the very few people who have some idea how to stay ahead of their bubble blowing and are happy to spend a good amount of your life energy figuring it out when you could be doing something more productive. How many people have worked hard and honestly all their lives, saving for retirement, to find it mostly stolen by the actions of banks like the Fed? How many people in the UK alone have suffered enormously because they didn't own assets (like a house) when the Fed started blowing bubbles and the rest of the world's banks followed like lemmings? The mess they are trying to fix now is a mess of their own making.

Stunningly stupid or evil? Not much difference if it wrecks so many lives. The Fed is a force for great harm in the world but we are all forced to go along with them. Our living standards have improved enormously over the last five decades or so (unless you want to live in a house) despite the Fed. If we'd had a more honest system in place then the increase in living standards would have have been truly incredible.

Hmm... Starsend, It sounds as though you are here (this blog) for the very same reasons that I am, so not sure why you are directing those rhetorical questions at me?

But to attempt to answer one of your questions, I think it is the system that is deficient (or 'stupid' maybe). But all complex human institutions tend to fail eventually, whether they be state socialism, or state capitalism, etc. The trick I think is to keep things simple; have systems that can self-regulate, promote and serve their own self interest, but not at the expense of others. More 'butchers and brewers', and less limited liability companies, as Adam Smith sort of might have said. ...Of course how you scale things up for our modern world is the real question - that's why I recommended that book selection, from what I understand it will tell us warts and all what needs to happen, whether we like to hear it or not.  

[Green Devil]

Well i did say "look out below", my put options expire worthless, then a few days later, the markets crash n burn.

[Loki]

24 minutes ago, Cattle Prod said:

But what will this demand do the price of silver if it is even partially correct? I am flabbergasted that the IPCC just assumes that the raw materials will be available, they clearly wont. If silver is currently over 10% the cost of PVs, a silver price spike will kill solar. Conversely, even a hint of this implied demand will send the price like Palladium. Substitution of materials is generally a poor solution,.

So that's why Durhamborn has mentioned Dogger Bank on more than one occasion!

I still need to look up who makes arc furnace components... 

[MrXxxx]

6 hours ago, AWW said:

The money has to go somewhere. For everyone who loses their free money buying shares in bankrupt companies, there's a seller who made a profit (or a smaller loss!)

Of course, thanks AWW (& DB), having a bit of a `blond` mome there!...although something DB said below helped the `penny drop` further, so it wasn't in vain! :-)

[Starsend]

2 hours ago, JMD said:

Hmm... Starsend, It sounds as though you are here (this blog) for the very same reasons that I am, so not sure why you are directing those rhetorical questions at me?

But to attempt to answer one of your questions, I think it is the system that is deficient (or 'stupid' maybe). But all complex human institutions tend to fail eventually, whether they be state socialism, or state capitalism, etc. The trick I think is to keep things simple; have systems that can self-regulate, promote and serve their own self interest, but not at the expense of others. More 'butchers and brewers', and less limited liability companies, as Adam Smith sort of might have said. ...Of course how you scale things up for our modern world is the real question - that's why I recommended that book selection, from what I understand it will tell us warts and all what needs to happen, whether we like to hear it or not.  

Not directing the question specifically at you JMD, just responding to your belief that central banks aren't evil with my own thoughts.