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

[Harley]

I love this thread, especially at moments like this - where else can you get such a flurry of great thought/distillation of what's floating around out there?  It's like a well we have to keep coming back to to fill up on.  And now I must go to that other work.....and that mouse....!

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18 minutes ago, geordie_lurch said:

The other alternative, which only a few on here seem to be taking seriously is they write the old money system off in it's entirety either as a result of the BK or a coordinated debt jubilee. We are then all moved over to their Central Bank Digital Currencies (CBDCs) which is 100% trackable and 100% controllable by them in terms of supply, length of time you have to spend it and where

Eventually that is where it’s going. For some time on here I have been providing updates in regards to my crypto trading. I was early on BTC (approx 2013/14) unfortunately always sold too early, same with ETH. 

It’s still very early in the whole grand scheme of things. As I have said before only 2% of wallets contain 1BTC or more (I may or may not be included in this statistic ) What the media and boomer always focus on however is BTC, electric usage and mining rather than the technology itself. The integrated blockchain future will comprise of a number of different aspects in industry and everyday living.

https://www.weforum.org/whitepapers/bridging-the-governance-gap-dispute-resolution-for-blockchain-based-transactions

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22 minutes ago, Underwhelmed said:

Agree they are coming, only question is implementation date, will it be next year or year after or are we still a decade or so away from them?

They have to break the old fiat monetary system first. They can do that with a rapid rise in inflation and following with interest rates (so it looks like they’re attempting to save the global reserve currency at least). 

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I’ll give you all a clue to what you should be watching as part of the oracle side of things that link smart contracts in future.

https://www.crypto-news-flash.com/chainlink-and-world-economic-fund-propose-industry-oracle-standard/

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26 minutes ago, geordie_lurch said:

Well if we are going to be following or maybe implementing what China tells us (if we are already in their pocket ) then next year seems most likely to me. See this article about jd.com now taking them and their sub headline...

and which I corrected at the end

 

Or rather what the wef has already arranged with China...

 

[Loki]

1 hour ago, Underwhelmed said:

Agree they are coming, only question is implementation date, will it be next year or year after or are we still a decade or so away from them?

End of the decade I think, if we get it now then I don't see how the reflation plays out.  We 'need' the collapse at the end to get the bit in the middle.

So I agree with both concepts but not the timeline of CBDC happening now.

[Errol]

'The Process of formation of multipolarity is irrevocable. History cannot be stopped. However, we are witnessing attempts to slow down this process. Recently western colleagues have realized it was impossible to completely restore the unipolar world, craved by Americans and their allies'

Sergey Lavrov - Minister of Foreign Affairs of the Russian Federation

[DurhamBorn]

2 hours ago, Green Devil said:

We're already in asset inflation. Its just not showing in wages or food etc. There's always a crash due to some external events so a dip is certainly possible, but a year long bust? We had corona crash and that only lasted 2 months FFS! Can it get much worse? Anyone who talks about rates rising still thinks we're in the old monetary system. IMO we're not.

 

Its the crux i agree.I think we are in the old monetary system though,but the route to market of liquidity is changing and about to change in a huge way.The transfer mechanism of money really.Instead of CB/Bank/Consumer/Entity loans its CB/Government/Handout/Spending.

I think what i see really is that the modern money people dont undertsand that they are printing back PAST dis-inflation.Its not that the economy can take unlimited liquidity,its that dis-inflation has meant there is a large amount of production to swallow a lot of liquidity.However EVERYTHING needs inputs,and i think its those inputs that will cause the inflation.Cost push inflation as you will.

I think they are looking at the cost of the tin of beans on the shelf for now,but it doesnt matter how many shops,how many factories,how many lorries to deliver etc.Once the price of growing those beans goes up the whole chain gets an inflation pulse.I see that pulse now getting underway.

I think if invested in inflation areas,even a big hit will be short lived.I think the main risks are in derivatives ,mostly debt insurance etc.

I think rates will increase a lot,but always negative real rates.My chart on what governments need is rates around 2% below inflation for the whole cycle.Roughly.If CBs keep rates even lower than that it should fuel inflation even faster.

 

[Barnsey]

Read something recently from Saxobank suggesting if this was passed onto consumers we'd be seeing CPI in the range of about 5% if properly measured and accounted for (never gonna happen).

[dnb24]

https://www.telegraph.co.uk/property/house-prices/looming-threat-forced-sellers-could-hit-house-prices-despite/

 

anecdotal- family member works in Liverpool for council advising on benefits- in last 6 weeks she reports significant increase in forced sellers of property due to  savings been rinsed trying to keep afloat. 
 

[reformed nice guy]

Very interesting chat about inflation. 

Cost of animal feed (corn, wheat, hay etc) are all up at least 50% from last year by the tonne

[DurhamBorn]

2 minutes ago, reformed nice guy said:

Very interesting chat about inflation. 

Cost of animal feed (corn, wheat, hay etc) are all up at least 50% from last year by the tonne

Exactly,and that then makes farmers use more potash etc because they want higher yields to cash in.I dont think people understand cost push inflation at all.Its going to blind side them.

[Bricormortis]

Anyone know how safe Wisdom Tree physically allocated silver is ? Seems HSBC hold the silver, and have a reputation for being major silver stackers...but is there a concern that a chunk of PHAG Is all bits of promissory paper ?  I cant see any reference to audits on their website.

 

 

 

 

[DurhamBorn]

8 minutes ago, Bricormortis said:

Anyone know how safe Wisdom Tree physically allocated silver is ? Seems HSBC hold the silver, and have a reputation for being major silver stackers...but is there a concern that a chunk of PHAG Is all bits of promissory paper ?  I cant see any reference to audits on their website.$2 billion

 

 

 

 

Iv got some with them and think they should be ok.They dont lend out and hold the physical.$2 billion worth and its HSBC USA who hold the bullion.

[Barnsey]

Been seeing a lot of Hydrogen buzz lately, time to sit up and take it seriously?

 

[janch]

But there's always someone to rain on your parade.  My son who is completely "woke" (and does not want to be saved) sent me this:

https://unearthed.greenpeace.org/2020/12/08/unearthed-today-why-oil-companies-want-you-to-love-hydrogen

but it's always useful to know what the opposition are thinking

[Loki]

41 minutes ago, janch said:

But there's always someone to rain on your parade.  My son who is completely "woke" (and does not want to be saved) sent me this:

https://unearthed.greenpeace.org/2020/12/08/unearthed-today-why-oil-companies-want-you-to-love-hydrogen

but it's always useful to know what the opposition are thinking

Quote

 

Gas and electric heating already compete on price. Gas which has had the carbon dioxide removed, piped and then and buried and monitored indefinitely underground is always going to be way more expensive than just gas.  

Heating our homes this way could either divert billions of ‘climate funding’ into taxpayer subsidies to support the industry which produces it or drive fuel poverty and popular resentment against climate action or probably both; either way it would make it much harder to avoid catastrophic climate change. 

 

What exactly do these freaks want?! No shit the price of energy will go up.  What did you morons think would happen? 

This whole thing is just a massive 'shit test' and we have failed.  

[Barnsey]

Hmm...

 

[Democorruptcy]

8 hours ago, Harley said:

One thing I'm not clear on (maybe once explained but the brain has shrunk too much to retain) - what actually causes a BK (trigger and then ensuing process)?  And by BK I am assuming we mean a worldwide equity market fall in prices of say 65-80% of 3 to 4 months duration.  I can posit from some classic economics, including Austrian School, but I think the rationale is different.  Is it a solvency/liquidity crisis where the first grain of sand (a company) can no longer fund its debt and we have a cascade effect (an unwinding)?

I thought a technicals chap like you might be 61.8% next time?

The FTSE covid dip in March from the 2019 high was near enough a classic -38.2%

Fibonacci knew!

 

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The Fibonacci sequence of numbers is as follows: 0, 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, etc. Each term in this sequence is simply the sum of the two preceding terms, and the sequence continues infinitely. One of the remarkable characteristics of this numerical sequence is that each number is approximately 1.618 times greater than the preceding number. This common relationship between every number in the series is the foundation of the ratios used by technical traders to determine retracement levels.

The key Fibonacci ratio of 61.8% is found by dividing one number in the series by the number that follows it. For example, 21 divided by 34 equals 0.6176, and 55 divided by 89 equals about 0.61798.

The 38.2% ratio is discovered by dividing a number in the series by the number located two spots to the right. For instance, 55 divided by 144 equals approximately 0.38194.

https://www.investopedia.com/ask/answers/05/fibonacciretracement.asp

 

 

[DurhamBorn]

@Democorruptcy that was a massive drop wasnt it when considering the FTSE big caps are quite defensive in nature.The likes of Astrazeneca only went down 13% so shows how hard it many smaller caps in the index were hit.Of course oil hit a lot of the index.

[Bobthebuilder]

3 hours ago, Loki said:

What exactly do these freaks want?! No shit the price of energy will go up.  What did you morons think would happen? 

This whole thing is just a massive 'shit test' and we have failed.  

That's quite incredible, they have no idea at all, and even get the basic math wrong. I am not sure the earth has a solution for this lot.

[Loki]

2 minutes ago, Bobthebuilder said:

That's quite incredible, they have no idea at all, and even get the basic math wrong. I am not sure the earth has a solution for this lot.

The general gist seems to be they want us to stop heating our homes to find climate "Science"
(Quotes mine )

 

They can sod off.

[Bobthebuilder]

1 minute ago, Loki said:

The general gist seems to be they want us to stop heating our homes to find climate "Science"
(Quotes mine )

 

They can sod off.

Another poster on here always says, if his son starts banging on about this he gives him a cold shower. See how he likes that.

[Loki]

2 minutes ago, Bobthebuilder said:

Another poster on here always says, if his son starts banging on about this he gives him a cold shower. See how he likes that.

I think that was @Cattle Prod and I respect him for doing so.  That will be one less young person blindly supporting New Environmentalism. (I've said already else where I am as 'green' as they come, we should focus on restorative farming, reducing pesticides, habitat destruction, plastic waste, chemical pollution, etc, etc, etc)

You just know the fuckwits at the top pushing this nonsense won't up choosing between energy for hot water and energy in the form of food.

[Bobthebuilder]

1 minute ago, Loki said:

I think that was @Cattle Prod and I respect him for doing so.  

You just know the fuckwits at the top pushing this nonsense won't up choosing between energy for hot water and energy in the form of food.

I first noticed this trend with the hipsters in east London from about 2008. Too poor to buy a razor? Grow a beard, too poor to buy a car? Ride a push-bike, too poor to eat a decent meal? Serial killer etc, etc. They had sunk every penny into a £450,000 ex council flat in E8 and couldn't afford anything else.