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

[JMD]

4 hours ago, TheCountOfNowhere said:

There would be no mortgages required, I have much cash to lose hence why I am a worried man. I have thought about your points but and it's a fair point to think about.  We were thinking Italy/Spain and Ireland.  After this month I dont plan to live in the UK again.  We did think about a nice villa in Turkey at one point, even went to the bother of doing re reccy, they are giving them away and some of them are fantastic, but it was too risky for my liking.

Count, that make sense - to me - now you provide more detail. What I mean is I have recently posted something along similar lines - as I also have a 'cash problem', and don't want to go 'all-in', into the markets. I'm thinking mainly commodities, including oil/potash, are best for me, in terms of risk/reward and long term holds (unfortunately I don't have trader skills).

Anyway, I think property (in the right areas, and bought at right price) will do ok in next cycle (though on average, property investment will suffer as per this thread). I think your right to reject Turkey on regional security grounds. But agree Italy/Spain/Ireland are all safe and cheap, did you consider Greece? I assume you intend renting two houses out, whilst living in the third property?

[JREWING]

Many on here worth over £750k including property equity?

I think the Spanish equivilant was $700k Euro's? 

https://docs.cdn.yougov.com/p54plx0gh9/NEON_PostCovidPolicy_200508_w4.pdf

Excluding any personal pension savings and their main home..

[jamtomorrow]

20 minutes ago, Panda said:

Many on here worth over £750k including property equity?

I think the Spanish equivilant was $700k Euro's? 

https://docs.cdn.yougov.com/p54plx0gh9/NEON_PostCovidPolicy_200508_w4.pdf

Excluding any personal pension savings and their main home..

Waste of time though - there'll be a miraculous spate of boating accidents the moment this looks like a reality.

[sancho panza]

18 hours ago, DurhamBorn said:

Rates have been negative for a long time,against inflation,in macro terms,thats what counts.I doubt we will see outright negative base rates,or for long,this cycle turn is all about fiscal injections being monetized,market will wake up to that at some point.

Rates have been even more negative than the official rates of inflation would imply as many on here know.Some of the omissions from CPI/CPIH defy belief.

17 hours ago, 201p said:

https://www.bbc.co.uk/news/business-53084853

The UK's biggest building society has tripled the minimum deposit it will ask for from first-time buyers.

The Nationwide will lower its ceiling for mortgage lending to new customers in response to the coronavirus crisis.

It said the change, from Thursday, was due to "these unprecedented times and an uncertain mortgage market".

First-time buyers are likely to be the most significantly affected because they often have smaller amounts saved to get on the property ladder.

Nationwide has reduced the proportion of a home's value that is willing to lend from 95% to 85%.

So for example, if a property costs £100,000, a new buyer would now need a £15,000 deposit rather than a £5,000 deposit.

Bit of a warning sign that they're either in trouble or think the market's about to bomb in the Mids and South.

[TheCountOfNowhere]

56 minutes ago, JMD said:

Count, that make sense - to me - now you provide more detail. What I mean is I have recently posted something along similar lines - as I also have a 'cash problem', and don't want to go 'all-in', into the markets. I'm thinking mainly commodities, including oil/potash, are best for me, in terms of risk/reward and long term holds (unfortunately I don't have trader skills).

Anyway, I think property (in the right areas, and bought at right price) will do ok in next cycle (though on average, property investment will suffer as per this thread). I think your right to reject Turkey on regional security grounds. But agree Italy/Spain/Ireland are all safe and cheap, did you consider Greece? I assume you intend renting two houses out, whilst living in the third property?

Hey JMD, what bit makes no sense ?

I'm not saying Im right, I'm saying i'm worried and I have no real idea what to do for the best.  It makes no sense to go all in into any market ever.  property is tangible and servers a purpose, we'd still have enough from the other (hopefully) less vulnerable investments to see us ok for many a year.  

I'd buy more shares now but I do think we are going to see a big US collapse at some point this year.  

My SIPP provider says they wont accept an in-specie shares transfer so I have to sell up to move in.  When I sell up I am not buying back any time before Jan, but I will buy back.

We love Greece but it's less stable and from what I read a lot of angry people there.  I'll pass on that one.

[sancho panza]

15 hours ago, Harley said:

The current Hertz stock price madness, especially given the new stock issue approved by the judge, makes me wonder if this a good way for bond holders to cash out at 100 cents on the dollar.

Your post also reminded me of Keiser's warning about the privatisation of the stock market - who says new dilutive stock issues need to go to all stock holders?  Happened already, justified on the grounds of expediency.

Impoverishment and serfdom await?

You've got to wonder who's putting money in there?

14 hours ago, Popuplights said:

I have some RDSB I paid 23 for, but have got the average down to 14.80. Not brilliant, but I can live with it. Still underwater though, my worst holding by far. 

Our very very top entry point was a bloc at £23.Few more lines between £20-£23,average price probably circa yours but we've been taking scrip and I can't be bothered working it out.If I'd have been offred the size of holding we've got at that price a year back-sub £15- I'd have happily taken it.

Don't judge yourself by the top market timers,they're the top market timers for a reason.

My Grandad always said to me words to the effect of leave the top 10%-20% and the bottom 10%-20% to the specualtors.20% of £15 is £3.I'm happy with that.The ambitous and talented go for single figures.

[Talking Monkey]

4 minutes ago, sancho panza said:

Rates have been even more negative than the official rates of inflation would imply as many on here know.Some of the omissions from CPI/CPIH defy belief.

Bit of a warning sign that they're either in trouble or think the market's about to bomb in the Mids and South.

Probably both I reckon, South for sure has to bomb over the next 2-3 years. Are the midlands super inflated too, how do you reckon say Coventry and Birmingham will fare SP

[sancho panza]

5 hours ago, jamtomorrow said:

Get thee some crypto.

Assuming DB's roadmap comes to pass and we enter systemic collapse in 10 years, *now* is the time to think about insurance.

I'm thinking in terms of: what replaces fiat when the Really Big Kahuna hits? A new global fiat, with global governance? Unlikely, looks like we're entering a period of sustained deglobalisation, and I doubt the international community will be capable of the level of cooperation required to pull it off. Besides, the credibility of the CB model will have taken a death blow by then.

PMs? Quite possible - you've got some, good.

Crypto? Possibly. A lot could go wrong for BTC between now and then. What if it turns out China controls more than 50% of hash rate in some mad Wizard of Oz moment? What if the usual suspects figure out how to manipulate spot BTC prices via derivatives?

*If* BTC is still standing after those trials, it's a strong candidate to have a central role in the post RBK system, IMO as a settlement layer i.e. reserve bank function - transaction throughput isn't sufficient for everyone to use it to pay for a tank of hydrogen on their flying car.

DYOR, but me personally I'm hodling approx 10% in BTC as a not-so-small bet at long odds for a big stake in what comes after.

genuine question as I have a mate looking to buy BTC.How do you do it?Is it easy?What's the selling like?

[TheCountOfNowhere]

1 hour ago, Majorpain said:

Ouch, confirmation tide is going out and naked swimmers getting exposed?

Wirecard AG

ETR: WDI

36.76 EUR −67.74 (64.83%)

Buy now before someone misses out

Just now, sancho panza said:

genuine question as I have a mate looking to buy BTC.How do you do it?Is it easy?What's the selling like?

I remember when it was dirty magazine people were embarrassed to buy

[TheCountOfNowhere]

4 minutes ago, Talking Monkey said:

Probably both I reckon, South for sure has to bomb over the next 2-3 years. Are the midlands super inflated too, how do you reckon say Coventry and Birmingham will fare SP

Badly...they're poor shit holes.

[sancho panza]

2 hours ago, Cattle Prod said:

I like this reasoning. Liquidity injections are trumping all else, as DB has been smacking into our heads, much to the consternation of fintwit. People are marvelling aghast at the Robinhood traders bidding up US stocks, while failing to note that its just an expression of Fed lquidity, i.e. stimulus money to tens of millions of people looking to get rich quick. So the questions are (a) when will inflation start to show up, and (b) how much will cause the Fed to down tools? I'm thinking back to Carney and the like 'looking through' 5% inflation, and the Fed talking about inflation average over a number of years. Big K could be a while yet. Thoughts?

Funnily enough was having similar conversation this morning ref this,as I've seen a number of people,not least kaplan selling energy stocks apparently(I'm sure I saw that downthread).

What ahs the last 13 years taught us but don't fight the Fed until it's out of ammo.DB's been banging that into us for some time.

Energy sector typically peaks last jsut before drops.Correlation,causation etc...

Fed pumping has kept liquid in the plumbing to use DB's analogy.The solvency event occurs when the Fed can't pump.

Whilst I hear the bear case(I'm a bear ie I think markets will go 75% ++ off peak), the situation jsut isn't ready yet for a major sell off.The banks are f***** but they were f***** years ago.

Having said that I think a few things will lead to the solvency phase and the Big K-higher energy prices normally have a role,USD denominated FX laons,cascading defaults in banking system(I think we're starting to see them in sub prime car loans/corporate defaults).

Personally,I think Big K will likely be Q1 or end Q3 2021.

 

[sancho panza]

20 minutes ago, Talking Monkey said:

Probably both I reckon, South for sure has to bomb over the next 2-3 years. Are the midlands super inflated too, how do you reckon say Coventry and Birmingham will fare SP

They're in deep trouble in the urban areas which msotly have real potential for social dislocation.Primarily because hosue prices are hgue multiples of average salary.Leicester has average hosue prices of £200k,average salary £25.Long way to go to mean.

[jamtomorrow]

13 minutes ago, sancho panza said:

genuine question as I have a mate looking to buy BTC.How do you do it?Is it easy?What's the selling like?

I use Coinbase - I've done *some* experimental selling and checked I can move GBP back off the exchange - selling's a doddle and extracting GBP went without a hitch. But I'm a hodler, not a trader, so I've been mostly buying.

My #1 recommendation - don't leave coins on the exchange. Remember Mt. Gox ... or more generally remember they're only as secure as the exchange (security of which is mostly unverifiable).

I don't have *extensive* knowledge of wallet options, but I'm finding Trezor for coldish storage of large amounts and Electrum on the phone for spending money is working well for me. Particularly impressed with Trezor, especially the whole deniable passphrase possibilities.

Oh, and you'll want to back up the BIP39 master key for your Trezor wallet - I use a blockplate kit where you stamp dots in squares on a laser-etched plate of stainless. Also impressed with that - the supplied spring-loaded punch will come in handy for DIY and car maintenace

[Talking Monkey]

26 minutes ago, sancho panza said:

Funnily enough was having similar conversation this morning ref this,as I've seen a number of people,not least kaplan selling energy stocks apparently(I'm sure I saw that downthread).

What ahs the last 13 years taught us but don't fight the Fed until it's out of ammo.DB's been banging that into us for some time.

Energy sector typically peaks last jsut before drops.Correlation,causation etc...

Fed pumping has kept liquid in the plumbing to use DB's analogy.The solvency event occurs when the Fed can't pump.

Whilst I hear the bear case(I'm a bear ie I think markets will go 75% ++ off peak), the situation jsut isn't ready yet for a major sell off.The banks are f***** but they were f***** years ago.

Having said that I think a few things will lead to the solvency phase and the Big K-higher energy prices normally have a role,USD denominated FX laons,cascading defaults in banking system(I think we're starting to see them in sub prime car loans/corporate defaults).

Personally,I think Big K will likely be Q1 or end Q3 2021.

 

That is my understanding too SP whilst the Fed is pumping I can't see the Big K happening. I reckon first half of next year the Big K gets underway

[leonardratso]

use coinbase pro instead, its much closer to spot price, coinbase app and website really gouge you on price.

and fees.

https://pro.coinbase.com/trade/BTC-GBP

 

 

[MrXxxx]

6 hours ago, Harley said:

See, this is the "narrative" which does my head in!  You are deemed "fortunate", "lucky", or "privileged"

I think I am fortunate but I don't consider my pension a privilege, its part of my T&Cs...this is where a lot of employees go wrong, they think its an `extra`/bonus.

 

6 hours ago, Harley said:

You may or not be better off than me but life is a kaleidoscope of fortune and I'm undoubtedly much more handsome than you!

The only problem with that is as you age your looks fade, hopefully if I keep digesting the good advice here my `fortune` won`t! :-)

[MrXxxx]

7 hours ago, jamtomorrow said:

Would *love* to see that in action, rolling up at the auction with a set of scales and a clipboard!! Or does everyone do that already?

Just don't let the police catch you on the way there, as that sherbet dip in your pocket could be interpreted in a whole new way!

[jamtomorrow]

19 minutes ago, leonardratso said:

use coinbase pro instead, its much closer to spot price, coinbase app and website really gouge you on price.

and fees.

https://pro.coinbase.com/trade/BTC-GBP

 

 

Ah, so CB pro is the old GDAX?

[Harley]

1 hour ago, jamtomorrow said:

Waste of time though - there'll be a miraculous spate of boating accidents the moment this looks like a reality.

Don't think they care as long as there's a bit of GDP involved.  My pension adviser mentioned pension freedom was all about getting people to spend.

The problem with excluding pensions from such a tax is they've probably got some special ideas for those!   In that respect pensions are like property, easy to track and contain.

[Loki]

DXY heading back towards mid 97s...I mean how hard is it to just keep it going down consistently? 

 

[leonardratso]

1 hour ago, jamtomorrow said:

Ah, so CB pro is the old GDAX?

yers, i used to like the old gdax, coinbase-pro is ok, bitfinex i used to like as well since you could lend out your coins for margin and get a bit more back, very good in a bear market, mainly cant be arsed with it all now, might buy a grands worth of shit in bits and bobs and then set up limit sells for when it recovers then take out the profit, piss it away and rinse and repeat with the grand. It certainly aint the cash machine it used to be, and to be brutally honest i dont trust it as far as i can throw it, i reckon its mainly chinese people i take money off, or hunker down waiting with.

[DurhamBorn]

4 hours ago, sancho panza said:

Something's not being mentioned here.I read that the Indians got reinforcements from their base two miles away after their OC got whacked.There's no way they wouldn't have come back tooled up to the nines.Especially if the OC isn't there and it's looking like a survival fight.

I also doubt this whole patrolling without weapons.

I suspect there's a been a firefight and noone wants to admit it.

It's intriguing to wathc.I was chatting to a friend this morning and we were talking about when the printing will stop/when will the rally peter out.My view and I maintian it is that the Fed will do as reasoned through on here,print until it can't ie inflation is running.When the Fed can't print any more then I think the Big K will be inbound.The solvency event.

thought provoking omment in bold. so basically you're saying the amount of printing isn't causing the wekness but rather the fact that the Fed and US insto's are the main buyers?

Yes,because it shows the intent to monetize government spending.Monetary printing it to put the financial system on a stable footing.It tends to replace currency already deflated/defaulted.Printing to monetize fiscal is pure inflation.

[DurhamBorn]

4 hours ago, Cattle Prod said:

I like this reasoning. Liquidity injections are trumping all else, as DB has been smacking into our heads, much to the consternation of fintwit. People are marvelling aghast at the Robinhood traders bidding up US stocks, while failing to note that its just an expression of Fed lquidity, i.e. stimulus money to tens of millions of people looking to get rich quick. So the questions are (a) when will inflation start to show up, and (b) how much will cause the Fed to down tools? I'm thinking back to Carney and the like 'looking through' 5% inflation, and the Fed talking about inflation average over a number of years. Big K could be a while yet. Thoughts?

Iv several routes on the road map for amounts.UK i think we get £600 to £800 billion from the start of March,so maybe half way.Fed is probably 1/3 to 1/2 through now.They might add the odd bit to monetize for governments if rates creep up.Printing will mostly be over by xmas,or maybe late spring next year.Inflation will appear around the same time.I dont expect high inflation for around four to six years,its later in the cycle it really gets going.

In simple terms the Fed prints until the dollar hits 90 and it might follow through down to 85.

[TheCountOfNowhere]

46 minutes ago, DurhamBorn said:

Iv several routes on the road map for amounts.UK i think we get £600 to £800 billion from the start of March,so maybe half way.Fed is probably 1/3 to 1/2 through now.They might add the odd bit to monetize for governments if rates creep up.Printing will mostly be over by xmas,or maybe late spring next year.Inflation will appear around the same time.I dont expect high inflation for around four to six years,its later in the cycle it really gets going.

In simple terms the Fed prints until the dollar hits 90 and it might follow through down to 85.

It's mind boggling the figures involved.

I make it £50,000 for every working adult in the UK.

 

 

[Loki]

This seems like a vid everyone should watch.  I wonder if the $1.6t government "war chest" is what will be used AFTER the possible September crash we have spoken about on here.  Secure another term for Trump, and kick the next cycle off.  He makes it very clear that government QE goes directly into the economy.