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

[Green Devil]

13 hours ago, Rave said:

And so to answer your question: people live in homes built on land; factories, warehouses, shops and offices are built on land. Access to land on which to live, and create value through work, is completely central to the functioning of the economy. And the fact that usable land in the UK is so bloody expensive is a huge drag on our economy. Because people from the Duke of Westminster all the way down to BTL slumlords are able to simply own land and derive an oncome from it means that they can, essentially, parasite a living from people who actually create wealth; and it means that capital is diverted away from investment in productive endeavours towards useless land speculation.

In fact now is a particularly opportune time to try and get discussion of LVT into the mainstream, because it appears that governments are going to be investing heavily in infrastructure. If the government builds a major road, then land that is close enough to that road to be blighted by it loses a little value, but a large swathe of land just beyond that rises in value because with the improved access it's now far more useful as a site for development- and any existing properties on the land also rise in value. The same is true of railways, broadband infrastructure, power, the lot. If you don't have a land value tax then the government is essentially using taxpayers money, which comes from everyone, to benefit the lucky few who own the land surrounding the new infrastructure. If you taxed that value uplift with an LVT then new infrastructure would be essentially self funding. LVT would also end the farcical situation where landowners can essentially 'win the lottery' by getting planning permission for housing on their land- that value would be captured for everyone by the LVT.
 

Excellent argument in favour of LVT. Im converted.

[Harley]

2 hours ago, DurhamBorn said:

i have zero confidence,nor care if they go up or down in the short/short medium term.

I'm shocked.  Refusing to care about trading on a macro thread!

No, I think it deserves a !

[Yellow_Reduced_Sticker]

12 hours ago, Noallegiance said:

Force people to use digital = See! You chose digital! Here, have more of it.

Fucking criminals.

 

YES 100% Agree, and this piece of sh*t Lagarde has been found GUILTY of her/he criminal passed, I say her/he...cos it looks like a tranny!

 

Let's ask our expert LADIES Man @stokiescum to verify!

[leonardratso]

17 minutes ago, Yellow_Reduced_Sticker said:

 

YES 100% Agree, and this piece of sh*t Lagarde has been found GUILTY of her/he criminal passed, I say her/he...cos it looks like a tranny!

 

Let's ask our expert LADIES Man @stokiescum to verify!

s/he

how dare you sir thats no tranny, thats my valve short wave radio.

[Barnsey]

Great read (not too long)

 

[Liberty]

In the spirit of preparing for the reflation, does anyone invest in or have any ideas for investing in funds that are focussed on (or heavily weighted towards) large oil companies?

I’m very restricted on buying shares because my partner’s employer requires ongoing declaration of all financial relationships and investments. If say, their company started working with BP then I would not be able to invest in BP. If I was already invested in BP I would have to sell.

It may also be useful for those that hold individual shares to also invest in broader funds to spread their risk.

 

My novice ideas:

- FTSE tracker as it has a large exposure to oil through RDSB and BP

- Blackrock World Energy fund for global exposure to oil and energy companies

- ETFs - “Another ETF you could choose would be the Invesco STOXX Europe 600 Optimised Oil & Gas Ucits ETF in which you’d have over half your money invested in just the 3 European giants, Total, BP and Royal Dutch Shell,”

 

Similarly, for Gold and Silver:

- Merian Gold & Silver (I almost pulled the trigger in March but was paralysed by fear)

- Smith & Williamson Global Gold and Resources

- GDX and GDXJ - These have increased in price by over 40% since I looked at them... I suffer from fear of taking action on my instincts

[JMD]

12 hours ago, Rave said:

@JMDI agree that George would now concern himself with other types of rent seeking as well as land speculation.

I call myself a Geo-Libertarian, as I'm for small government, free markets and individual rights. I just think that everybody needs a place to live, and so nobody is truly free if they're forced to pay rent to someone else just to exist. Land is still the central issue, the foremost problem; and you need only look at the price of housing in this country to see ample evidence of that. The only way to resolve that problem fairly is for everybody to be asked to pay rent to everyone else for the land they occupy for their sole and exclusive use. That way everyone is equally very slightly unfree in that everyone is forced to pay a bit of LVT; in reality though, anyone happy to live in an undesirable area would pay very little, while people who want to live in central London would pay a lot. I don't see how crypto/smart contracts etc. solve the land problem (though I've hodled a couple of bitcoins for over 9 years and hope that sooner or later they will solve my own housing problems  ).

To me it's somewhat surprising that people who consider themselves left wing are in favour of a UBI. If you collect all the rental value of land as tax, the government would have a considerable sum of money. I would say that the left wing way of doing things would be to use that money to fund the existing functions of big government; schools, healthcare, welfare etc.; whereas the right wing way would be to distribute it as a UBI and let people sort themselves out. Clearly I favour the free market approach, but if Labour under Corbyn had followed through on their discussions and made implementing a LVT a manifesto commitment I absolutely would have voted for them, because I'm so convinced that the LVT itself is what solves most of the problems.

Rave, ...my last post about crypto i promise! (but has been bit quiet on here recently, my excuse anyway). You beat me too it, buying your 2btc's 10 years ago, and at low-low price!! Hope you still have them safe and sound? (unlike that IT engineer who discarded his h/disk containing 7,500btc that he had mined using his laptop, back when you could do such mining on cheap personal equipment; the h/disk now resides in a Welsh land-fill, but the council won't let him in to search).

You asked 'how can crypto help solve the land problem?' But that wasn't my real point. Please let me frame things by saying that for me, lvt was about distributing wealth fairly. I subsequently realised that all problematic areas of business/investment, not just land/housing, should be addressed - because people must earn an independent living, not just own a home. The blockchain (fundamental crypto architecture), despite what many people think, is not an anonymous system. If all business transactions were done in a transparent way using a crypto/blockchain, this would enable governments to extract all taxes. I think this offers a simple, comprehensive system for raising all kinds of taxes in order to distribute wealth fairly.

I accept there are big risks. However, the thing is that some form of blockchain/crypto will be adopted by government this decade (it will after all become fundamental in all the new tech being developed, IOTs, A.I. automation). It offers both benefits (i.e. transparency) and negatives (i.e. Chinese style control). But governments have been centralising power for decades. And monetary collapse this decade will give them their next golden opportunity to make all kinds of radical changes. So i go along with a cashless society, i go along with UBI. Not ideal, but they are going to happen soon in any case. You might say i'm being niave here, but I think i'm just being realistic. Plus recognising that these things will/might happen helps me personally in my macro investment focus. You see nothing is ever certain, no one can predict final destinations, but understanding at least the capabilities/risks allows us to actively challenge government into implementing what's best for us. 

For brevity, and so not to bore people, I have only mentioned the money side of things, but crucially blockchain/crypto is a libertarian concept, and so there are many social and democratic applications which can be embedded into the new system. Developers are actively doing the work on these type of things. I was ignorant of the blockchain universe until this year and i admit it has been a revelation to me. So i'd urge others to do some research. In fact I posted a Raul Pal video last week where he had an intelligent discussion with his guest about the actual tech/capabilities, and not the usual investment fluff(!?).   

In the meantime, in the immortal words of Hill Street Blue's Michael Conrad... 'let's be careful out there...'

 

[Castlevania]

12 hours ago, Panda said:

Any newbies watching this thread.

Your entry points on a silver plate this coming week. Enjoy you new wealth...

Shell and BP are up

[NogintheNog]

49 minutes ago, Barnsey said:

Great read (not too long)

 

Interesting article. However it only mentions the competition of Blockchain;

Quote

With the propagation of blockchain and cryptocurrency technologies, SWIFT faces fair and inevitable competition from new players in the private sector as well as older competitors in the business of the settlement of cross-border payment orders.

It does not mention Bitcoin or Crypto once, but does refer to Gold quite a lot;

Quote

In addition, in a reversal of norms in place since Bretton Woods, non-U.S. central banks might look to increase their holdings of gold relative to their dollar reserves.11Central banks might increase the portion of their reserves allocated to gold, whose finite supply could help reduce debasement fears with respect to infinitely creatable CBDCs.

And there's the rub!

Regarding Bitcoin and Crypto I am not going to side up on the Crypto v Gold debate, and I'm posting this here on this thread rather than on the Crypto thread because I want to make points regarding these assets in terms of deflation/inflation.
Firstly the Central bankers like that complete and utter c**t Lagarde can create as much Fiat currency as they desire. They can also create a Crypto government coin, but ultimately as they have control over that they will always debase it as it suits them. It will be nothing more than Fiat+.
Meanwhile, Crypto and in particular Bitcoin marches on, alongside the other real world 'mined' assets like Gold!

So they have a choice, carry on as you are, or does the market eventually force you to lock back to a fixed asset standard. Like Gold or Bitcoin.

Central banks already hold significant amounts of Gold. So I think that's where we might eventually go, back onto the Gold standard which we left in 1971. Bitcoin though will get likely carried along for the ride IMO.

[JMD]

28 minutes ago, Liberty said:

In the spirit of preparing for the reflation, does anyone invest in or have any ideas for investing in funds that are focussed on (or heavily weighted towards) large oil companies?

I’m very restricted on buying shares because my partner’s employer requires ongoing declaration of all financial relationships and investments. If say, their company started working with BP then I would not be able to invest in BP. If I was already invested in BP I would have to sell.

It may also be useful for those that hold individual shares to also invest in broader funds to spread their risk.

 

My novice ideas:

- FTSE tracker as it has a large exposure to oil through RDSB and BP

- Blackrock World Energy fund for global exposure to oil and energy companies

- ETFs - “Another ETF you could choose would be the Invesco STOXX Europe 600 Optimised Oil & Gas Ucits ETF in which you’d have over half your money invested in just the 3 European giants, Total, BP and Royal Dutch Shell,”

 

Similarly, for Gold and Silver:

- Merian Gold & Silver (I almost pulled the trigger in March but was paralysed by fear)

- Smith & Williamson Global Gold and Resources

- GDX and GDXJ - These have increased in price by over 40% since I looked at them... I suffer from fear of taking action on my instincts

I don't use funds, but if i had to for pension/employer reasons, etc, i would choose one that invests mainly in the big integrated oil companies, such as Shell, BP, Total, and the others mention on here. Do a search for the fund's annual report to get full fund portfolio breakdown, not just their top 10 holdings. I would do that so i knew i wasn't also investing in small risky oil companies, or pipeline companies, etc. 

I like the Merian gold/silver fund, as it is one of the few funds to also contain the silver miners.

[NogintheNog]

18 minutes ago, Castlevania said:

12 hours ago, Panda said:

Any newbies watching this thread.

Your entry points on a silver plate this coming week. Enjoy you new wealth...

Expand   Expand  

Shell and BP are up

Yes, WTI down, Shell/BP up. Not what you'd expect. Be interesting to see what happens to XOM/CVX later when the US markets open. On the futures they are both showing up

[JREWING]

6 hours ago, Democorruptcy said:

Send them a message and ask. Then if you follow their advice but don't get on in time, you have grounds to complain.

Cheers Bud.

Looking at the SP. Went completely the opposite way to what I imagined. 

Certainly won't be buying anymore BP.

Got enough to sail a fleet of U boats.

Love to see 2.34 cum Friday. Be blue first time ever.

Can't see it myself. Big ask.

[JREWING]

21 minutes ago, NogintheNog said:

Yes, WTI down, Shell/BP up. Not what you'd expect. Be interesting to see what happens to XOM/CVX later when the US markets open. On the futures they are both showing up

Aye. Very nice. 

See RDSB above £10. Be nice. Er in doors might take me back. Been bin bagged.

[Liberty]

49 minutes ago, JMD said:

I don't use funds, but if i had to for pension/employer reasons, etc, i would choose one that invests mainly in the big integrated oil companies, such as Shell, BP, Total, and the others mention on here. Do a search for the fund's annual report to get full fund portfolio breakdown, not just their top 10 holdings. I would do that so i knew i wasn't also investing in small risky oil companies, or pipeline companies, etc. 

I like the Merian gold/silver fund, as it is one of the few funds to also contain the silver miners.

Thank you very much, that is great info, especially with regards to checking the full set of investments to minimise exposure to riskier small oil energy companies.

Regarding Merian gold/silver fund, I wish I invested many months ago. I’m on the fence as to whether its best to sit tight waiting for a pull-back or start investing

[leonardratso]

some consolidation gold

 

[JREWING]

1 hour ago, Castlevania said:

Shell and BP are up

I'm wondering. Hoping this is the turn?

Considering all the bad news out there. I can only think it's on the back of the furlough extension or maybe just been oversold.

Guess well know more by Friday close.

Here's to five straight green candles....

[Barnsey]

Chief economist of the IMF clearly a fan of our discussion on here.

 

[janch]

20 hours ago, Barnsey said:

Here we go!

Translation: it's happening but we'll let you voice your inferior opinions anyway to make it look like we give a ***t

Shaun Richards blog today explains the real reason why they want to do this.  It means they can do -ve rates much more easily:

https://notayesmanseconomics.wordpress.com/

In a cashless world, there would be no lower bound on interest rates. A central bank could reduce the policy rate from, say, 2 percent to minus 4 percent to counter a severe recession....................

When cash is available, however, cutting rates significantly into negative territory becomes impossible. Cash has the same purchasing power as bank deposits, but at zero nominal interest. Moreover, it can be obtained in unlimited quantities in exchange for bank money. Therefore, instead of paying negative interest, one can simply hold cash at zero interest. Cash is a free option on zero interest, and acts as an interest rate floor........................

As so often what we are told is very different to what is the plan. A central bank digital coin is a way of imposing even deeper negative interest-rates..................

It fears that further interest-rate cuts could cause a bank run. I agree with that and have written before that somewhere around -1.5% to -2% seems likely to be the threshold. Thus any more cuts will bring them near that especially as the LTRO rate is already -1%. So in their view a new plan is required and some of you may already be mulling their existing plan to phase out the 500 Euro note which is their highest denomination....................

Putting this another way they are worried by two developments. One is Bitcoin which potentially challenges the monopoly power of central banks and also the demand for cash is rising not falling. In the Euro area it was 1.33 trillion Euros in September as opposed to 1.2 trillion a year before.

[janch]

2 hours ago, NogintheNog said:

Regarding Bitcoin and Crypto I am not going to side up on the Crypto v Gold debate, and I'm posting this here on this thread rather than on the Crypto thread because I want to make points regarding these assets in terms of deflation/inflation.
Firstly the Central bankers like that complete and utter c**t Lagarde can create as much Fiat currency as they desire. They can also create a Crypto government coin, but ultimately as they have control over that they will always debase it as it suits them. It will be nothing more than Fiat+.
Meanwhile, Crypto and in particular Bitcoin marches on, alongside the other real world 'mined' assets like Gold!

So they have a choice, carry on as you are, or does the market eventually force you to lock back to a fixed asset standard. Like Gold or Bitcoin.

Central banks already hold significant amounts of Gold. So I think that's where we might eventually go, back onto the Gold standard which we left in 1971. Bitcoin though will get likely carried along for the ride IMO.

Edited 2 hours ago by NogintheNog

Agree. 

From my previous post it looks as if the plan for the Great Reset is to ditch cash and make us all use digital currencies which they can have complete control over but somehow persuade us it's like BTC and so not subject to inflation!

This would happen alongside the reflation cycle presumably and then kick in completely when the system we have now is ready to collapse in around 2028.

Because they can control everything there won't be room for any dodgy dealings by the hoi poloi so no black market etc and no dodging tax.

[Chewing Grass]

1 minute ago, janch said:

From my previous post it looks as if the plan for the Great Reset is to ditch cash and make us all use digital currencies which they can have complete control over but somehow persuade us it's like BTC and so not subject to inflation!

Their currencies are already digital, any statement otherwise is banker bollocks.

OK they have bits of plastic paper floating around that are promissory notes for numbers in a bank account but the restrictions on cash are already there.

FIAT is digital currency and has been since the 1970s.

The big difference is they will be able to watch nearly every transaction.

I smell, Transaction Taxes.

[Green Devil]

3 hours ago, Castlevania said:

Shell and BP are up

Dead cat bounce

[Green Devil]

28 minutes ago, janch said:

Agree. 

From my previous post it looks as if the plan for the Great Reset is to ditch cash and make us all use digital currencies which they can have complete control over but somehow persuade us it's like BTC and so not subject to inflation!

This would happen alongside the reflation cycle presumably and then kick in completely when the system we have now is ready to collapse in around 2028.

Because they can control everything there won't be room for any dodgy dealings by the hoi poloi so no black market etc and no dodging tax.

I think there will always be cash. But most of the banks assets will be in some digital central banking currency.

[Craig]

So buy crypto, then?

[Popuplights]

51 minutes ago, Green Devil said:

Dead cat bounce

Killjoy.

[NogintheNog]

2 hours ago, Chewing Grass said:

Their currencies are already digital, any statement otherwise is banker bollocks.

I agree. I always say to my friends who really don't delve into this that there isn't a pile of cash stored in their bank that's theirs to come and collect. Cash is effectively just a token that represents that bank ledger.

However a Central Bank Digital Coin could effectively kill off the banks. Just recently the Goverbankment talked of being able to get cash from shops;

https://uk.reuters.com/article/uk-britain-economy-cash/uk-aims-to-make-it-easier-to-withdraw-cash-via-shop-tills-idUKKBN26Z39S

Maybe the banks as we know them are toast??