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

[AWW]

Once you add finance to anything, the price gets ludicrous. Look at the price of a bloody Glastonbury ticket these days (not that I'd go now that it's a full on BBC/woke/Corbyn love in)

[Errol]

5 hours ago, jamtomorrow said:

Read or heard something just this last week along the lines of replacing sodium vapour lamps with LED is at least part of it - the reduced current draw frees up current carrying capacity in the street lighting network which is then repurposed to charging.

You won't be allowed to park on the street, obviously, so presumably they are contemplating having wires running back to the driveway?

[feed]

28 minutes ago, Chewing Grass said:

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.

The problem with that model is that the auto companies don't make any profit from it and there isn't anyone with any weight in the industry that wants to continue with it.  

And this. 

Long term, ICE cars are done.  Hence the 2030. They'll be replaced almost entirely by EV's, which will be mandated to be maintained via manufacturer.  Most people will not own, those that have ownership will be via a lease type contact.  But most will hire when needed or use lift share type services.  Many people will simply not drive. 

Short term ICE cars will be taxed off the road, to make way for the change.  

 

[Chewing Grass]

1 minute ago, feed said:

Many people will simply not drive.

Wrong, there will be the sort of car you hire to go on holiday, a day out or cart kids around in. Then there will be two seat runabouts with 60-80 mile range that are not carrying a big battery around. This will only need 1/4 - 1/6 the battery capacity of a current 300 mile EV.

This will be your everyday car, it wont need touch screens, self driving or any other fancy gizmos, it will be the 21st century equivalent of a Peugeot 106, will cost about 12K, have a 7 year warranty and will be made in China.

Yes your German SUV will be scrapped (if you had one) and its place on the drive (if you have one) will be taken by two little Chinese EVs with space to spare.

Baojun's E100 boasts a 29-kilowatt (39-horsepower) electric motor that propels the electric car to a top speed of 62 mph.

The E100 will go 155 kilometers (96 miles) on a single charge and the lithium-ion battery pack can be fully recharged in 7.5 hours.

https://www.greencarreports.com/news/1112088_baojun-e100-gms-tiny-two-seat-electric-car-for-china

[DurhamBorn]

52 minutes ago, Chewing Grass said:

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.

 

Yep cars were crap then.Rings worn within a few years and petrol creeping down into the oil making bearing wear and piston big end failure common.Of course fuel injection and common rail sorted most of the problems out of having a rich mix.My 15 year old PUG has pretty much zero engine wear,rings,shells,nothing.No smoke at all.I treat the fuel system every 6 months and also add treatment every 2nd fill,i use DAE fuel system conditioner.Have a good few bottles,independants might sell it.

[Loki]

13 minutes ago, Chewing Grass said:

Yes your German SUV will be scrapped

Banger racing those pieces of over-priced over-sized Teutonic shit is the one thing I'm genuinely looking forward to in the clusterfuck decade.

[DurhamBorn]

27 minutes ago, feed said:

The problem with that model is that the auto companies don't make any profit from it and there isn't anyone with any weight in the industry that wants to continue with it.  

And this. 

Long term, ICE cars are done.  Hence the 2030. They'll be replaced almost entirely by EV's, which will be mandated to be maintained via manufacturer.  Most people will not own, those that have ownership will be via a lease type contact.  But most will hire when needed or use lift share type services.  Many people will simply not drive. 

Short term ICE cars will be taxed off the road, to make way for the change.  

 

They wont be taxed off the road.The Tories will lose every red wall seat they won if they stick to the 2030 date.Boris is an idiot.He has zero understanding of how people on under £25k a year earn a living.They need 2nd hand cars at £5k,many need 2nd hand cars under £1k to be able to get to work.ICE cars will be on UK roads in 30 years,and in big numbers.There will be a huge market if they stick to it in 2030 in Calais where people buy ICE cars and drive them home.If not the EU somewhere else.I can buy a car anywhere and ship it in.

[geordie_lurch]

4 hours 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.

Musk demonstrated something like this years ago but it seems they never actually delivered this like a lot of things they demo

 

[feed]

24 minutes ago, Chewing Grass said:

Wrong

You're projecting the past and not taking the change in demographics into consideration.  
The average age for a new car owner in the US is 53.  The under 30's don't want to own.  

[feed]

9 minutes ago, DurhamBorn said:

They wont be taxed off the road.The Tories will lose every red wall seat they won if they stick to the 2030 date.Boris is an idiot.He has zero understanding of how people on under £25k a year earn a living.They need 2nd hand cars at £5k,many need 2nd hand cars under £1k to be able to get to work.ICE cars will be on UK roads in 30 years,and in big numbers.There will be a huge market if they stick to it in 2030 in Calais where people buy ICE cars and drive them home.If not the EU somewhere else.I can buy a car anywhere and ship it in.

The major EU auto manufactures are stopping producing them in region.  Importing them from outside the EU will be heavily tariffed.  Use of older models will be heavily taxed. If you want to run one in the EU, you'd better be wealthy. 

Tories or labour aren't going to have much to say about it.   

[sancho panza]

 

3 hours ago, DoINeedOne said:

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

 

 

 

He lost me at 'my ten point plan'.....the victory of experience over hope.

 

34 minutes ago, feed said:

You're projecting the past and not taking the change in demographics into consideration.  
The average age for a new car owner in the US is 53.  The under 30's don't want to own.  

I'm not sure it should be western demogrpahics we focus on.

https://www.macrotrends.net/countries/IND/india/population

Population of the UK in 1950 was 50million,currently 67mn

China 554mn to 1.4bn

USA 160mn to 330mn

India 376mn to 1.38bn

 

 

[sancho panza]

[feed]

Just now, sancho panza said:

 

He lost me at 'my ten point plan'.....the victory of experience over hope.

 

I'm not sure it should be western demogrpahics we focus on.

https://www.macrotrends.net/countries/IND/india/population

Population of the UK in 1950 was 50million,currently 67mn

China 554mn to 1.4bn

USA 160mn to 330mn

India 376mn to 1.38bn

 

 

oh sure, but it's the same as everything else that gets discussed here re energy etc... 

Policy in US/EU etc.. is about protecting the established corporations and businesses whilst Indian/China have the growth driven by population expansion and increase in standard of living.  

So we'll see EV's and a change in business model to protect the Western Auto manufacturers whilst in India/China companies (alone or in partnership) will drive ahead (no pun intended) with local ICE manufacture. 

 

[Craig]

I'd have thought there's some kind of solution somewhere in between private motoring and public transport involving self-driving vehicles and some clever software. Just book a lift and the nearest one will pass by your way and pick you up. 

Although given all those hire bikes ended up in canals in Manchester, I'm not convinced the British public has enough sense of civic responsibility to use such a system.. . 

[DurhamBorn]

35 minutes ago, feed said:

The major EU auto manufactures are stopping producing them in region.  Importing them from outside the EU will be heavily tariffed.  Use of older models will be heavily taxed. If you want to run one in the EU, you'd better be wealthy. 

Tories or labour aren't going to have much to say about it.   

The market will remove ICE cars in the end.The idea a government can remain in power telling poor people sorry you have to walk is bonkers.Boris has pretty much lost the red seats he won.

Inflation will cause massive amounts of problems and focus government minds later in the cycle.Gas will be the 2nd best performing assets class of the cycle after silver.Oil will be in the top 5.500%+ increase from todays levels by 2028/29.

 

[feed]

4 minutes ago, DurhamBorn said:

The market will remove ICE cars in the end.The idea a government can remain in power telling poor people sorry you have to walk is bonkers.Boris has pretty much lost the red seats he won.

Inflation will cause massive amounts of problems and focus government minds later in the cycle.Gas will be the 2nd best performing assets class of the cycle after silver.Oil will be in the top 5.500%+ increase from todays levels by 2028/29.

 

"Ford expects that electrified vehicles will account for more than 50% of its car sales in Europe by 2022, surpassing combined sales of conventional petrol and diesel models."

2023, 2024, whenever, but all of the major autos are on the same path here and the US.

By the time we get to 2030, none of the majors will be selling them and the stock of used is going to fall dramatically.  

This isn't the governments driving this, it's the Autos, the governments are just trying to claim some eco-cred as it plays well.   

In the West the major autos are terrified of 1 thing and concerned about another.

The change in demographics, millennials and gen Y, don't care about ownership and combine that with the rise of the ride sharing companies.  It's a huge disruptive influence that if they don't get ahead of they're done.    

And of course, China or India eating their market.  If it's an EV only market, no grey imports.  

EV's are straight forward western company protectionism, both against internal markets and other countries.  

 

And here in the UK, i think the governments play (red or blue) will be allow the ride sharing or protectionism of it's own and either mass investment in transportation or nationalisation of transport companies. 

So it's not going to walk to work it'll be get the EV bus.

 

 

 

[MrXxxx]

9 hours ago, sancho panza said:

I don't think I've ever seen a PM that U turns with as much speed as he does on issues

To U turn you have to assume that he is going in a clear direction.....rather than going around in circles!

[DurhamBorn]

1 minute ago, feed said:

"Ford expects that electrified vehicles will account for more than 50% of its car sales in Europe by 2022, surpassing combined sales of conventional petrol and diesel models."

2023, 2024, whenever, but all of the major autos are on the same path here and the US.

By the time we get to 2030, none of the majors will be selling them and the stock of used is going to fall dramatically.  

This isn't the governments driving this, it's the Autos, the governments are just trying to claim some eco-cred as it plays well.   

In the West the major autos are terrified of 1 thing and concerned about another.

The change in demographics, millennials and gen Y, don't care about ownership and combine that with the rise of the ride sharing companies.  It's a huge disruptive influence that if they don't get ahead of they're done.    

And of course, China or India eating their market.  If it's an EV only market, no grey imports.  

EV's are straight forward western company protectionism, both against internal markets and other countries.  

 

And here in the UK, i think the governments play (red or blue) will be allow the ride sharing or protectionism of it's own and either mass investment in transportation or nationalisation of transport companies. 

So it's not going to walk to work it'll be get the EV bus.

 

 

 

I work with 1000 people.300 of them start work at 6am from 300 different locations and zero public transport.I agree why auto makers want it.Falling demand for ride sharing and Asian imports.However that will only cover part of the market.Maybe 20% by 2035.I dont know mant young working people over 23 who dont own a car.Hundreds of them.All own a car who can drive.I dont believe younger people dont want to own outside of a few big cities.The younger ones at my factory (i make engines) own the most expensive cars,its the older workers who own older models.

Its going to be a very interesting sector,but im a contrarian and when there is almost universal nodding of certainty i smell lots of profit the other way.Whatever happens to EV, gas and oil will make massive amounts of profit for investors over the cycle.Your knowledge is very much welcomed on the thread though to challenge thinking,what this thread is about really.Fascinating cycle ahead.

[MrXxxx]

8 hours ago, JMD said:

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. 

This is what was stated in one of the podcast I posted a couple of pages ago too.

[MrXxxx]

6 hours ago, Popuplights said:

Everything is on the rise this afternoon. Maybe I can start looking at second hand Cessna's? 

Or even that Ferrari rather than the 'Hair dresser' model! :-)))

[MrXxxx]

4 hours ago, DoINeedOne said:

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

 

 

 

Look at the water turbine....it looks as though Boris knows as much about Green energy as he does about epidemiology!

[jamtomorrow]

2 hours ago, Chewing Grass said:

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.

I remember finding motorway journeys utterly utterly baffling around 2005 time - to see all those nearly-new mercs and audis, but with no obvious way for the general population to afford them (if you believed household income surveys).

It's not just low rates either, it's falling rates and people growing accustomed to each car being better than the last based on no particular change in discretionary income.

Middle classes in for quite the shock as this turn unfolds.

[MrXxxx]

4 hours ago, Loki said:

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

 

 

 

Not even your own arse!

[AWW]

4 minutes ago, jamtomorrow said:

I remember finding motorway journeys utterly utterly baffling around 2005 time - to see all those nearly-new mercs and audis, but with no obvious way for the general population to afford them (if you believed household income surveys).

It's not just low rates either, it's falling rates and people growing accustomed to each car being better than the last based on no particular change in discretionary income.

Middle classes in for quite the shock as this turn unfolds.

Going Greek.

[Yadda yadda yadda]

I'm in London and don't own a car because I wouldn't get the use out of it. I am a member of Zipcar and use them on the rare occasions I need to drive. Few people in my street drive to work. Lots do have cars and it is mainly to ferry kids about or to do a weekly shop.

Everybody I know outside London or in the outer suburbs has a car.

I've thought about leaving London and the cost of a car comes into the calculations.

If you need a car five days a week you will own or lease rather than pay as you go. It may be that fewer people need cars, in the West, but it won't be huge proportion. The people I know in their late teens and early 20s, outside London, have cars and need them. It is freedom.