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

[Harley]

3 hours ago, Cattle Prod said:

And won't that be much more pleasant? London is actually nice to walk around...at the weekend.

Or become some massive gated community for the elites like some dystopian movie!  Checkpoints where only barristas and nannies may pass! 

[Harley]

3 hours ago, JMD said:

....not to mention the psy-ops (one for Harley maybe?)....

Hypernormalisation!  Keep you confused, weak (individually and collectively), and off guard.  Point is, it doesn't have to be a deliberate conspiracy and the solution is the same.  And I say this in a macro financial sense, in respect to this thread.

[Harley]

3 hours ago, jamtomorrow said:

That's what *should* happen. But how do landlord types squeeze ever-increasing economic rent out of that kind of setup? My expectation is they won't go quietly.

My best hope, as a shareholder, is the remaining elites will want their space!  Less people but more space means same demand!

[Harley]

5 hours ago, Cattle Prod said:

I'll probably end up going into the office 2-3 days a week which is fine. But I'll be bringing my own lunch!

Just mentioned this to someone who is more in the know and thinks yours is the main model going forward (maybe those days per month though), lunch option included.  Also suggested more (medically managed) boot camps for the younger entrants to enable them to organisationally and cukturally align as well as career network.  Remember the old Arthur Andersen boot camps in the US for its new grads?

[JMD]

1 hour ago, DurhamBorn said:

The left were defeated so moved into all the institutions. They gained control outside of control. Take 1p off a single mother who has never worked the whole left machine goes into over drive.Cut a factory wage by £3 an hour due to Romania moving here,not a word said.Decent people have been taking it from all sides.Work doesnt pay,so why work?

DB, excuse me cherry picking your post, but yes i do agree... 'the long march through the institutions'. 

I suspect DB, widely read as you are, you are probably already aware of Yuri Bevmenov? But for anyone who isn't, the video below might be worth a watch. The lecture starting from 1.33 is probably the best bit - of course it is 'very dry' by today's standards, it is 40 years old, but when i first saw this many years ago it's what first awakened me into seeing the propaganda, and false narrative happening all around us, from the schools, to what's beamed into our homes, etc. Anyway worth the effort i think.  

 

 

[Harley]

3 hours ago, AWW said:

Either that, or incentivise one parent to stay at home. Many households have two full-time earners, which is a fairly recent development ostensibly to keep up with insane living costs, encouraged by governments that like the extra tax revenue. IMO, society would benefit massively from having kids brought up by their actual parents, rather than being chucked in the nursery for 10 hours a day from the age of 6 months. In my social circle, I'm the only one who's the sole breadwinner, and it's not because I'm the only one on decent money.

Perfect political economy stuff.  Doing what you say implies a reduction in the size and reach of the State and all the technocrats relying on it's scale.  There are political desires, opinions, and vested interests.  The Statists have been in the ascendency.  That is the underlying tension/war currently being, or about to be, played out.

[Harley]

4 hours ago, Majorpain said:

It all hinges on productivity IMO, if homeworking is as productive as office work then UK Plc saves a huge amount on oil/transport needs and the economy will in theory be able to grow far faster than previous.

Beware, we could end up with the cyber equivalent of turning up at the factory gate each morning looking for work.  You get this alleged freedom to allegedly work when you want and the owners of capital get the money.  Physical bums on seat limits this possibility.  Else imagine being a remote call centre worker logging on in the morning to bid for a days work, or being told today's rate if you want it.  Even an international race to the bottom.  And who will be the new gang masters and what will they demand from you for a ticket?

[Harley]

2 hours ago, reformed nice guy said:

I was reading "Dying of Money: Lessons of the great German and American inflations" by Jens Parsson and chapter 43 had some interesting insights:

"The stock market is the original home of inflationary madness in the early phases of any inflation. Later the stock market may fall into disrepute, but that is as misplaced as the original madness"

.....

Spot on.  The stock market worked in the era of Weimar inflation, until it didn't!  And something I learnt this week:  the Nazis, seeing the stock exchange as a symbol of national pride, only allowed stocks to trade on an up day.  Mentioned in the context of how close we came to closing markets in March (imagine a market wide Woodford fund!) and how this may yet happen.  How did it end?  The Allies, post war, realised a functioning capital market was necessary for German recovery so removed this rule.  The market fell 90%

PS:  RIP price discovery.

[Harley]

45 minutes ago, JMD said:

..... 'the long march through the institutions'.....

Someone here or at that other place detailed how he thought the Blair administration set this up throughout the regulatory bodies, etc, and in a way that it is now effectively impossible to change. We now see it every day in the courts, the regulators, the experts, the purveyors of information, the media......

[Harley]

1 hour ago, JMD said:

I suspect DB, widely read as you are, you are probably already aware of Yuri Bevmenov?

The Russians are good at this.  Per Wiki on Hypernormalisation:

'The word hypernormalization was coined by Alexei Yurchak, a professor of anthropology who was born in Leningrad and later went to teach in the United States".

......

'In Russia, Vladimir Putin and his cabinet of political technologists create mass confusion. Vladislav Surkov uses ideas from art to turn Russian politics into a bewildering piece of theatre".

And Surkov was no mere arty luvie.  From Wiki:

"Surkov is perceived by many to be a key figure with much power and influence in the administration of Vladimir Putin".

......

"He was First Deputy Chief of the Russian Presidential Administration from 1999 to 2011, during which time he was often viewed as the main ideologist of the Kremlin who proposed and implemented the concept of sovereign democracy in Russia. From December 2011 until May 2013, Surkov served as the Russian Federation's Deputy Prime Minister.  After his resignation, Surkov returned to the Presidential Executive Office and became a personal adviser of Vladimir Putin on relationships with Abkhazia, South Ossetia and Ukraine".

[sleepwello'nights]

1 hour ago, JMD said:

But is money an illusion?

I get where your coming from and I'm not trying to be argumentative. Its rather that Yuval Harari says many interesting things in his books 'Sapiens' and 'Homo Deaus' about human belief systems, institutions and trust. Isn't the money concept all about trust?

Sounds a silly thing to say, but the Pacific Islanders and their 'boulder money' taught me what money is, very humbling i think.   

https://www.npr.org/sections/money/2011/02/15/131934618/the-island-of-stone-money?t=1594994091489

We agree. How I see it is trust created credit and money is a way of recording credit. Additionally it allows the credit to be exchanged with others for a wider range of goods and services. That works fine on a small scale, I can't conceptualise it on a larger scale when it gets to trillions although the exchange mechanism works just the same.

[Sasquatch]

2 hours ago, Cattle Prod said:

I agree with your disagreement! I think you're right about employment patterns. I guess I'm thinking more about the small business owner: if you have the get up and go to start a high street business, or buy a franchise, such a persons energy is very valuable and could be used more productively IMHO.

2 hours ago I saw a neighbour cutting down a tree, so I went down and asked for the wood like the wood hoarder I am. I reckon I wheeled £200 of firewood up my drive in 15 mins before anyone else had the same idea...but no one else around me does this. I'm sat here thinking "I could make a small business out of this if I was so inclined". Sustainable, local, very profitable (in season). Maybe people do this as a business. I'm digressing now. But I'm very pleased with my free wood! Another benefit of working from home. 

And to Harley's point about linking back to the macro picture: I think people are going to turn local a lot more. Supply chains shrinking, made in the UK. Let's get on with it Boris, stop arsing around.

People are mental. Just before we sold our last house a very large dead ash tree fell across the bottom of the garden (long way from the house). Must have been £500 to £1000 worth of seasoned firewood. I asked the purchaser if he wanted it left so he could chop up and use for firewood (our old house had two wood stoves, one of them being a primary heat source for a large open plan living space). Nope he said (the guy was a grade A pillock but that's for another dosbods story). I put the word round the village and within 30 minutes two neighbours were at it with chainsaws. They looked like pair of cats that had got the cream.

[JMD]

1 hour ago, Harley said:

I love your (and others) last few posts and not just because you told me off and I'm going all doggy and rolling over in submission!  Although tbh, being remarkably thick over some things, I didn't quite understand, nor do I understand the above.  Not that it matters as call me old fashioned but if a good neighbor asks me to turn the music down, I just do!  So please, no explanation!

No, regardless whether we agree or not (I first need to think on), a bit of focus on the "soft" side of this (politics, psychology, behaviours) is fascinating as we are observing something as it unfolds, real time, around us. And it's these soft areas that I now pay more attention to after years following the hard stuff.  Focussed discussion is good as context is everything to stay on top of all this stuff and work out a way forward.

Conspiracy or not is now irrelevant as "they" have either front run this or have now used the opportunity it presents.  I was listening to Grant Williams and was caught by surprise after a long analytical podcast when he ended by saying he mentioned to his wife that this all sounds too much of a cock up to there being nothing more to it.  Chilling.

I've been saying it well before covid, optimising financial strategies, etc within the current financial/regulatory/political/social setup may prove to be suboptimal.

Indeed, great summary of my own current thinking about the last few months. This period has been/is going to be 'interesting', but as you say, investing into the future financial setup(stichup?) needs very careful re-evaluation i think. Something i am currently doing.

Am not sure, but I don't think i was critisising you. It was rather OCD and his shouty-sweary, or is it sweary-shouty, posts. Continuously howling at the moon (re central bankers) is not for this blog.

 

btw, not to leave you hanging, but my 'see what you did there' comment was relating to your reply to CP's mention to the Italian's pandemic response and your reply back about it being about the financial system along with saying 'all roads lead' - which I interpreted as a pun (Italy/Roman roads) reference to everything today government-corona related is/maybe linked to a political search for a solution out of our economic mire. However, on reflection I think i may have over-analysed this!

[Harley]

31 minutes ago, JMD said:

.....which I interpreted as a pun (Italy/Roman roads) reference to everything today government-corona related is/maybe linked to a political search for a solution out of our economic mire. However, on reflection I think i may have over-analysed this!

Not sure, you've got me thinking now!  Today has been a glorious day for this thread, or at least my feeding off it, as it explores a whole "new" area of such significance.  The "soft" side.  I felt a bit out there at the end of last year, talking about money, value, the social contract, the political economy, etc.  It's suddenly become very real and very complicated.

PS:  But we must return to our goldies at some time!  Maybe SP has a good hard post to get us back!

[geordie_lurch]

1 hour ago, JMD said:

But is money an illusion?

I get where your coming from and I'm not trying to be argumentative. Its rather that Yuval Harari says many interesting things in his books 'Sapiens' and 'Homo Deaus' about human belief systems, institutions and trust. Isn't the money concept all about trust?

Sounds a silly thing to say, but the Pacific Islanders and their 'boulder money' taught me what money is, very humbling i think.   

https://www.npr.org/sections/money/2011/02/15/131934618/the-island-of-stone-money?t=1594994091489

The best overview I have read about what most people consider our current 'money' system is on a rather obscure web site here and there are a lot of other interesting ideas on there but it's not been updated for a while. The crypto bit might put some off but I can see the authors point as the BoE are going to launch their own someday soon.

[Harley]

43 minutes ago, Sasquatch said:

They looked like pair of cats that had got the cream.

A good metaphor.  We had a tree down a fair bit down the road.  I was too slow off the mark.  Not the next time closer to home!  Dropped everything.  Chainsaw and cart in the pouring rain well ahead of the competition .  I've proposed to the opposition we split the area between us going forward.  Basic game theory in action!

[JMD]

1 hour ago, sleepwello'nights said:

We agree. How I see it is trust created credit and money is a way of recording credit. Additionally it allows the credit to be exchanged with others for a wider range of goods and services. That works fine on a small scale, I can't conceptualise it on a larger scale when it gets to trillions although the exchange mechanism works just the same.

Maybe this is where Bitcoin, or rather the blockchain tech comes in. Not only for money but for the future of trust in institutions, the social contract and democracy. Sounds overblown ,but this is what many are thinking or (last) hoping!

[JMD]

1 hour ago, Harley said:

The Russians are good at this.  Per Wiki on Hypernormalisation:

'The word hypernormalization was coined by Alexei Yurchak, a professor of anthropology who was born in Leningrad and later went to teach in the United States".

......

'In Russia, Vladimir Putin and his cabinet of political technologists create mass confusion. Vladislav Surkov uses ideas from art to turn Russian politics into a bewildering piece of theatre".

And Surkov was no mere arty luvie.  From Wiki:

"Surkov is perceived by many to be a key figure with much power and influence in the administration of Vladimir Putin".

......

"He was First Deputy Chief of the Russian Presidential Administration from 1999 to 2011, during which time he was often viewed as the main ideologist of the Kremlin who proposed and implemented the concept of sovereign democracy in Russia. From December 2011 until May 2013, Surkov served as the Russian Federation's Deputy Prime Minister.  After his resignation, Surkov returned to the Presidential Executive Office and became a personal adviser of Vladimir Putin on relationships with Abkhazia, South Ossetia and Ukraine".

I posted this doc. by Adam Curtis called Hypernormalisation some time back, perhaps youve already seen it but otherwise well worth watching, but its somewhat self-aware/contrived to maybe go along with all its claims.

 

[nirvana]

9 hours ago, sleepwello'nights said:

Just goes to prove my point; money is an illusion..

nope, money is as real as debt, it's wealth that's the illusion......eg the UK has bummed itself with deluded values of overpriced shitholes 

Look I get what the government is trying to do with magicked money created by commercial banks to 'boost GDP', then the percentage debt to GDP will go down....

They'll pat themselves on the back, con you by saying didn't we do well, GDP is higher than debt once more, way hey, we 'fixed it'!

They might be pulling the wool over YOUR eyes, but in absolute terms the debt levels are still going parabolic so they're not fooling me boyo! 

As you were....

[sancho panza]

14 hours ago, Cattle Prod said:

Thanks sancho, I need to read more Napier! I have his book here sitting looking at me. What do folks think about European inflation linked bonds - I take he he doesn't mean government bonds. So corporate bonds?!

I can't imagine which bonds he's referring to,although I can't imagine many I'd buy anyway.

I also think it's questiionable whether eqiuites od badly with running inflation in a scenario like today where there's a lot of debt around,DB has pointed out several times that the real lsoers bought vodafone 40 year debt at 1% a while back.WHislt they may lose some traction in pricing,the indebted will be getting some nice relief.

It would be interesing to know which bonds hes referring to.

 

[sancho panza]

 

https://oilprice.com/Energy/Energy-General/US-Oil-Rig-Count-Falls-For-Nineteenth-Straight-Week.html

U.S. Oil Rig Count Falls For Nineteenth Straight Week

Baker Hughes reported on Friday that the number of oil and gas rigs in the US fell again this week, by 5, to 253, marking the nineteenth straight loss in the number of active rigs, even as some analysts were predicting a rise in the number of active drilling rigs.

The total oil and gas rigs is now sitting at 701 fewer than this time last year.

The number of oil rigs decreased for the week by 1 rig, according to Baker Hughes data, bringing the total to 180—compared to 779 active rigs this time last year.

The total number of active gas rigs in the United States fell this week by 4 rigs, landing at 71 total rigs. This compares to 174 rigs a year ago.

 

https://wolfstreet.com/2020/07/17/pent-up-supply-floods-san-francisco-housing-market-most-since-housing-bust/

San Francisco County is now flooded with homes for sale. “Active listings” surged to 1,344 homes in the week ended July 5, up 65% from the same week last year, and the highest number since the housing bust, amid a 145% year-over-year surge in “new listings.”

There normally is a seasonal surge in active listings after Labor Day that peaks in late October. But this month, the surge of active listings (1,344) has already blown by those peaks in October, including the multi-year peak of 1,296 in October 2019. This is “pent-up supply” coming on the market at the wrong time of the year when supply normally declines (chart via Redfin):

[Eventually Right]

Anybody else holding silver Britannia's and worried that their exemption from CGT will be lost, after the review is done?

[wherebee]

34 minutes ago, Eventually Right said:

Anybody else holding silver Britannia's and worried that their exemption from CGT will be lost, after the review is done?

well, holding a non documented, non traceable hard asset that you can sell informally with no paper trail.

I can see why you would be worried.... 

[nirvana]

4 hours ago, Eventually Right said:

Anybody else holding silver Britannia's and worried that their exemption from CGT will be lost, after the review is done?

you can always melt them down and make yourself a hat 

Anybody picked up that the FED balance sheet has gone down? That'll explain why the only stonks going up now is all the shite the Robinhooders are buying....

What happened to @Yellow_Reduced_Sticker? I want to know if he's still buying anything so I can sell quickly....

Hope you've all learnt your lesson from the Cuntrica experience? 

[jamtomorrow]

Surprised it'll be as many as 3,500, and the solar farm part seems a bit bonkers - let's just start making batteries at scale in this country please, no need for the greenwash complications: https://news.sky.com/story/uks-first-battery-gigafactory-could-create-3-500-jobs-12030416

(DB, I'm guessing you'll enjoy the warning in bold - everyone's at it!!!!) 

The country's first so-called battery "gigafactory" has moved a step closer after a site in South Wales was identified as the preferred location.

Britishvolt said it had signed a memorandum of understanding with the Welsh government to develop its plans for the "green" factory, which would mainly produce electric car batteries under its own solar power, on the former RAF base at Bro Tathan in the Vale of Glamorgan.

It hoped that up to 3,500 jobs would be created following an initial investment of £1.2bn, but warned its deal was subject to financial backing from the UK government's Automotive Transformation Fund aimed at boosting the shift to electric vehicles.

<snip>