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

[Chewing Grass]

1 minute ago, Yadda yadda yadda said:

Fantastic on hairpin bends.

You won't be going fast enough to notice them...

[Option5]

4 minutes ago, DoINeedOne said:

The Ami is already on sale in France, where its quadricycle classification means it can be driven by anyone over the age of 14, with leasing payments from just €19.99 per month with a €2,600 deposit

Actually, in a city that is more than adequate for most of the people for most of the time. All they have to do is make sure it's not fighting for road space with Chelsea tractors.

[Yadda yadda yadda]

7 minutes ago, DoINeedOne said:

The Ami is already on sale in France, where its quadricycle classification means it can be driven by anyone over the age of 14, with leasing payments from just €19.99 per month with a €2,600 deposit

Does that also meant that people who are banned for drink driving can use them? I'm sure it is France where they have low powered cars for precisely the purpose of driving whilst banned.

The standard euro power cable suggests it doesn't draw down more power than a kettle whilst charging.

If I was a French 14 year old I'd offer to do at least a week of washing up in order to get one. Mowing the lawn too.

[JMD]

10 minutes ago, AWW said:

They're only too heavy for people to change. I could foresee driving over a cradle that drops the battery out of the floor then driving forwards onto a machine that lifts a new battery into place.

Or, the machines we travel around in become smaller and lighter, more akin to a Renault Twizy or a BMW C1, with batteries that humans can lift and carry.

Point taken. But these practical points are not being discussed - ie the automation you mention would i think mean having a common standard for the battery, size, etc, which hasn't yet happened. I just find it very strange how the infrastructure can be planned, let alone begun to be built, without some (very basic) basics being agreed by the industry.

Actually, i have for some time begun to dought the speed of infrastructure roll-out.|Issues like this only reinforce that view. 

[Yadda yadda yadda]

7 minutes ago, Chewing Grass said:

You won't be going fast enough to notice them...

You don't need to go fast if it is unbalanced enough. Won't be as unstable as this.

 

[Option5]

12 minutes ago, Chewing Grass said:

I will have one of these for local use, however as they are homologated as tractors they are 'restricted' to 40kmh.

Polaris Ranger EV

https://www.polarisquad.co.uk/Polaris-Ranger-EV–Avalanche-Grey

And if electric vehicles aren't your thing the Riversimple hydrogen fuel cell/supercapacitor Rasa car should be available soon.

www.riversimple.com

[JMD]

18 minutes ago, feed said:

It is. It’s complete change in business model.  But I think it’s where we should be looking for the investment in infrastructure for EV’s.  Not central government or energy suppliers per se. and not household.  It'll be where vehicles congregate naturally.  I did here of one council thinking about it, to draw people into their park and ride. Obvious really, but I’d be surprised if they were nimble enough to do it.  

As per the supermarkets, I think they will invest, to either recharge their fleet or to draw in customers, and nationally the major players must be able to negotiate good energy costs.    
 

Yes i do find the subject interesting. Actually, going beyond the EV discussion, I woudn't mind supermarkets becoming a larger part of the economy. Maybe they can take over from the failing shopping centers/high streets. Not an ideal solution i know, but compromise is important and they are private innovative companies (and which i think was partly your point?). So if were making government policy i'd favor supermarkets over companies like Amazon... just need to implement a decent corporate tax policy to help things along.

[JMD]

31 minutes ago, DoINeedOne said:

The Ami is already on sale in France, where its quadricycle classification means it can be driven by anyone over the age of 14, with leasing payments from just €19.99 per month with a €2,600 deposit

DoiNeedoOne, forgive me, but.. 'So what your saying is' we all should become more French? 

But seriously, i think its mostly about the different form of ownership, re the lease mentioned in the advertising blurb. I believe most new cars sold in the UK are under a lease agreement. But at the prices quoted above how would that company make a profit?

 

[Starsend]

Commodities are looking pretty cheap looking at the chart below which goes back over a hundred years.

Good write up of some of the available funds/etfs below although these are all US based, need to see what's available in the UK. Five listed all having differing makeups. I quite like the iPath etf as it has a lower expense ratio than the others and a decent percentage exposure to base metals which I'm underweight in. Fairly hefty 23% in grains though which I'm not so sure about.

The iPath exchange traded product takes yet a different tack on commodity exposure. Gold and silver combine to make up 17% of its portfolio, and base metals add another 18%. Energy gets a relatively small 28% allocation, and grain exposure comes in at 23%. Livestock has a 7% exposure, and other soft commodities make up 6% of the portfolio.

https://www.fool.com/amp/investing/etf/2017/07/16/5-top-commodity-etfs.aspx

[DoINeedOne]

https://twitter.com/BorisJohnson/status/1328995962736570371

 

 

 

[DurhamBorn]

4 hours ago, JMD said:

I am a big investor in the oilies, so this is a genuine question.

What about the risk of governments across the world such as US/Biden one, of pumping lots/most of their MMT money into the renewable sector? Such policies will buy these governments votes, show them too be the 'good guys' and pacify people (whilst they become more authoritarian in other sectors/areas, which is my personal fear). Anyway, might the renewable sector then be in prime position to absorb the oilies - which is i guess the opposite of what you propose might happen - helped of course with new US/Biden type clean energy legislation which favors the renewables. 

Or are my fears 'Western centric', and China/India real-politik will override the silly notions of the West, and its arrogant climate morality (and ironically shortsighted, because if global warming is a real thing then the solution imho is the use of tech to achieve carbon sequestration).

 

You can bank on the fact they do.In fact if you go back to page one of this thread on HPC is was predicted then.It was obvious governments would push massive green investment as a way to get out of a big slump/dis-inflation.My road map on oil and gas has those as cross market drivers that add lubrication to the fiscal pulse the CBs are pumping.

Electric use will grow fast,but the grids needs base load and that will be gas.Asia will need massive amounts.The green sector will cause a bubble,and everyone knows it.The problem they have is the bubble it creates wont be in green energy,it will be in oil and gas companies,the very things everyone has sold.I dont think iv ever seen a better contrarian and macro set up.

[Google247]

4 hours ago, Democorruptcy said:

It wasn't tongue in cheek but admit I wasn't thinking they would weigh so much! Battery sizes seem to have reduced over time so I assumed the same would become true of car batteries.

Integrity is a good point. I took my car battery out to recharge it and haven't been able to use the Radio/CD player since! I don't know the security code and the youtube video of pulling the dashboard apart to get the serial number off the back didn't enthuse me.

 

Nio (chinese tesla) have a battery swap program apparantly.

No need to wait for the car to charge, drive up and have the battery swapped for a full one in 3 minutes

[Chewing Grass]

2 minutes ago, DoINeedOne said:

https://twitter.com/BorisJohnson/status/1328995962736570371

 

 

 

My arse, all the money has been spent this year, unless he prints us into oblivion and steals everyone’s retirement, it ain't going to happen like planned.

[feed]

54 minutes ago, JMD said:

Yes i do find the subject interesting. Actually, going beyond the EV discussion, I woudn't mind supermarkets becoming a larger part of the economy. Maybe they can take over from the failing shopping centers/high streets. Not an ideal solution i know, but compromise is important and they are private innovative companies (and which i think was partly your point?). So if were making government policy i'd favor supermarkets over companies like Amazon... just need to implement a decent corporate tax policy to help things along.

I do think they understand the need to draw in customers.  I look at a large Sainsburys and what they’ve added over the years in store, but I’m not sure if there is much hope for them taking old shopping centers. When Sainsburys bought argos, they dumped all of the high street real estate and brought it instore.  But who knows, the model for grocery is changing too.

But really my point on EV’s was about the business model.  I think many people see EV’s as a continuation.  It will be like ICE, but with EV’s.  That’s not whats happening.  The technology isn’t driving the change, the environmental noise isn't driving the change. The Autos want to change the business model.  If you force people to use a new product you can force a new business model on them with that product.  EV is just the product that does that.  

Today for the autos, the majority of the profit is from initial sale, some profit from parts and service in the early life that decreases as the vehicle ages. Nothing at EOL.  High marketing costs for sale of new vehicles.  Autos make a profit on the vehicle for maybe 5 of the 10 years it’s on the road but after those first 5 years, it becomes competition against new sales. 

The future with EV. Profit from leasing and maintenance of the vehicle for all of its life, with a refurbish or recycle and profit from secondary markets at the current regions EOL.   

Contract the EV for 5 years, pull it and replace it at a 10% contract increase. But most importantly EV’s remove the worse of the competition – old vehicles.   And you have to replace them every 5 years – because efficiency, or pollution or technology changes or something.  It's moving cars to tech and a service model.   

So for those people thinking they’ll just run old ICE in the new world.  They’ll not and that’s not because they're ICE v EV. It’s because they’re own vs lease.    

And all of this means that the infrastructure model needs to be thought of as different from todays. 
 

[AlfredTheLittle]

2 minutes ago, Chewing Grass said:

My arse, all the money has been spent this year, unless he prints us into oblivion and steals everyone’s retirement, it ain't going to happen like planned.

Funny how they allocate 4 billion for a green revolution, having just spent 40 billion on covid testing! 

[DurhamBorn]

4 hours ago, Cattle Prod said:

I heard Marin Katusa say this on a recent Macrovoices podcast, in the context of access to capital. In that the renewable companies will be able to access the capital, and the oilies won't. I think it's a fair challenge to the self reinforcement we are giving ourselves here and worth considering.

What I can't get past though is the world collapsing first due to unsustainably high oil prices. And if they no one will lend to the oilies, they can finance out of cash flow which will be huge. This theory is predicated on 2 assumptions: 1) permananet demand loss and 2) no coming supply problems. 

They are all looking the wrong way.You wont be able to borrow anything for less than 5%,more likely 7% minimum by later in the cycle.Green companies wont be able to re-finance.The MSM etc think the CBs can keep printing but they cant.They can print hard for around another 12-18 months,then not a cent or penny more as they chase inflation for the whole cycle.

My road map is clear on this.Rates are going up the whole cycle.

Another thing is that they will over build wind farms etc.The real money will be made by the companies making the hydrogen from the cheap nighttime electric.That will be big oil.BP will build a big plant on Teesside,Shell in Holland etc

[Democorruptcy]

7 minutes ago, Google247 said:

Nio (chinese tesla) have a battery swap program apparantly.

No need to wait for the car to charge, drive up and have the battery swapped for a full one in 3 minutes

Thank you, that must have silenced the doubters.

https://www.nio.com/news/nio-power-completes-500000-battery-swaps

NIO Power Milestones
December 16 , 2017	Power Swap debuts at NIO Day 2017
May 20, 2018	NIO opens its first battery swap station in Nanshan High Tech Industrial Park, Shenzhen
November 15, 2018	NIO launches 18 battery swap stations a long the G4 Beijing Hong Kong Macau Expressway
December 15, 2018	NIO launches 8 battery swap stations along the G2 Beijing Shanghai Expressway
April 15, 2019	NIO Power Swap receives Red Dot Award: Product Design 2019
August 24, 2019	NIO awards the first owners of its products a lifetime of free battery swap services
May 20, 2020	The 131st battery swap station opens, the first in Foshan
May 25, 2020	NIO Power completes the 500,000th battery swap at the power swap station in Shanghai Auto Expo Park

 

[Loki]

12 minutes ago, feed said:

own vs lease.    

"You'll own nothing, and you'll be happy"

 

 

 

[feed]

13 minutes ago, Loki said:

"You'll own nothing, and you'll be happy"

 

 

 

Exactly.  They're not joking.

[Chewing Grass]

Private rather than business leasing only became viable from 2008 onwards because of the graph below.

Cars are not houses and have about 10 years of real world value in them with maintenance, wear and tear.

Break even is interest rates at 5% as the car retains enough value, at 6% if you keep the car for 6 years you are better off buying.

If interest rates hit 8% (70s/80s to mid 90s) leasing is dead.

Covid money printing will tip us back to the 1970s and that was when we were going to get supersonic travel, shorter working week, mag-lev trains, high-speed rail, early retirement etc etc.

Politicians were promising everything (Jam tomorrow) back then but in reality most people got nothing out of it.

 

[Google247]

41 minutes ago, Democorruptcy said:

Thank you, that must have silenced the doubters.

https://www.nio.com/news/nio-power-completes-500000-battery-swaps

NIO Power Milestones
December 16 , 2017	Power Swap debuts at NIO Day 2017
May 20, 2018	NIO opens its first battery swap station in Nanshan High Tech Industrial Park, Shenzhen
November 15, 2018	NIO launches 18 battery swap stations a long the G4 Beijing Hong Kong Macau Expressway
December 15, 2018	NIO launches 8 battery swap stations along the G2 Beijing Shanghai Expressway
April 15, 2019	NIO Power Swap receives Red Dot Award: Product Design 2019
August 24, 2019	NIO awards the first owners of its products a lifetime of free battery swap services
May 20, 2020	The 131st battery swap station opens, the first in Foshan
May 25, 2020	NIO Power completes the 500,000th battery swap at the power swap station in Shanghai Auto Expo Park

 

Just watched the video of it... very impressive. 

I wonder if the other ev manufacturers will implement the same tech... or whether nio have a patent over it

[The Idiocrat]

54 minutes ago, Google247 said:

Nio (chinese tesla) have a battery swap program apparantly.

No need to wait for the car to charge, drive up and have the battery swapped for a full one in 3 minutes

There was an Israeli company that tried the battery swap thing and burnt through a huge amount of venture capital. Suspect they were too early to market. They could only get Renault to suppor their battery swap methid:

https://www.theguardian.com/environment/2013/mar/05/better-place-wrong-electric-car-startup

 

 

[feed]

24 minutes ago, Chewing Grass said:

Private rather than business leasing only became viable from 2008 onwards because of the graph below.

Cars are not houses and have about 10 years of real world value in them with maintenance, wear and tear.

Break even is interest rates at 5% as the car retains enough value, at 6% if you keep the car for 6 years you are better off buying.

If interest rates hit 8% (70s/80s to mid 90s) leasing is dead

How do people finance a purchase.  Borrowing money either way is borrowing money.  And a lost cost monthly price is easier to sell than a lump sum bank loan with a fat APR attached to it.   

[Chewing Grass]

16 minutes ago, feed said:

How do people finance a purchase.  Borrowing money either way is borrowing money.  And a lost cost monthly price is easier to sell than a lump sum bank loan with a fat APR attached to it.   

Many didn't, back in the day you bought a 5 year old car that was starting to rust, by 10 years old they were 10% the price of a new one, the engines were nearly worn out (bore wear from over-fuelling) and structurally rotten.

A 3 year old car retailed at 50% the new price, the sweet spot was buy at 3 sell at 5 if you weren't into maintenance.

Personal loans were generally cheaper than car finance which was expensive.

Anyone who started driving in the last 20 years has done it in a low interest rate environment which is why anyone can lease a Merc.

Most cars that are perceived as quality (German) are sold above their real worth and low interest rates are the only reason Europe still manufactures cars. French cars do not have perceived value even though they are just as good at doing their job reliably but demand has tanked.

In 10 years most people will be driving Chinese cars just like by the time the 1970s was out 90% of motorbikes in the UK were Japanese.

 

[AWW]

Exactly. New Audi RS6 is north of £100k once you've added some options. Yet you still see quite a few driving around. Nobody is paying £100k for them. Without cheap finance they'd be half that price.