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

[Yadda yadda yadda]

16 hours ago, Cattle Prod said:

Great reference. That's it exactly, just like Soviet Russia, everyone pretending it's normal.

The MSM won't tell the truth, but I still have some faith in this country's legal system and especially the greed of lawyers to do it.

We're not nearly as far down that road as Soviet Russia was. Lots of people are openly ignoring these rules. There is some dissent in the media, albeit not nearly enough. I'm hopeful that more and more will rebel to various extents as the death rate fails to grow above fairly normal levels this winter. We're less than a year into this repression so a lot of people still don't know what is going on and haven't had the time to think (yes, I know that doesn't give them much credit for their ability to think).

It does piss me off that all the money printed money is going to other people. They'll expect me to pay for it. I don't have enough money invested to be sanguine about it flowing back to inflation assets.

[Barnsey]

This guy must be an avid reader of this thread.

[jamtomorrow]

Came across a nice article "On riding freight trains ..." (which could just easily have been called "How to fill your boots" or "How to pig at the investing trough"). It happens to be about BTC, but seems equally applicable to the asset classes and sectors we discuss here (and in any case, the author isn't a BTC "believer" in any way, shape or form, quite the opposite in fact).

Long article so won't paste in full, but choice quote for flavour: "When I’m up this much, this fast, the emotions take over and I end up doing something awful dumb. Besides, the real money isn’t made guessing which way the next thousand-dollar move is. It’s by swinging hard at a fat pitch and then doing a whole lot of nothing."

https://adventuresincapitalism.com/2020/12/27/on-riding-freight-trains/

[JMD]

2 hours ago, Yadda yadda yadda said:

We're not nearly as far down that road as Soviet Russia was. Lots of people are openly ignoring these rules. There is some dissent in the media, albeit not nearly enough. I'm hopeful that more and more will rebel to various extents as the death rate fails to grow above fairly normal levels this winter. We're less than a year into this repression so a lot of people still don't know what is going on and haven't had the time to think (yes, I know that doesn't give them much credit for their ability to think).

It does piss me off that all the money printed money is going to other people. They'll expect me to pay for it. I don't have enough money invested to be sanguine about it flowing back to inflation assets.

Not yet maybe, but In the old Soviet Union the state WAS the economy. I'd say the West is already half way between a free market and a command economy, and unfortunately the trend is not our freind.

[Barnsey]

Just thinking, perhaps the GOP winning both Georgia seats could be the pin for this melt up. Certainly isn't going to be good news for any further stimulus. In the meantime, watch those checks fly into Robin Hood accounts in the New Year.

[JMD]

SP, apologies for delay in getting back to you. Whitehaven Coal (the Aussie one i mentioned) and Warrior Met Coal i thought looked the best financially, so i bought both. To clarify, the others discussed a few days back i have not bought yet, but they are on my watch list in case of BK.

[Loki]

https://oilprice.com/Energy/Energy-General/The-Great-Reset-BlackRock-Is-Fueling-A-120-Trillion-Transformation-On-Wall-St.html

Quote

 

From Climate Naysayers to COVID Believers: Money Talks

Today’s institutional investor is looking for the value that only high-tech sustainability, good governance and social impact can deliver. 

In 2020, these are the criteria that could make the difference between making money and losing money. Investors have had enough financial loss over scandal. And they’re banking on anyone who’s not paying attention to the climate risking a lot in the end. 

COVID has hastened that even more, with PwC noting that “public awareness of ESG-related risks has catapulted climate change and sustainability to the top of the global agenda” and that COVID has brought “the real-life impacts of overlooking ESG factors into the spotlight”. 

 

What does that even mean? Stop for two seconds and really read it.   It just looks like a load of rationalisation and buzzwords to me. 

[ThoughtCriminal]

Thought this was quite instructive in a "you're king of the world until you're not" kind of way.

 

Total Returns on $1000 invested at end of 1999 (inc. dividends etc). 

 

GE went from $12B in 81 to $410B in 2001

 

34X

 

MSFT: $2820
WMT: $1146
INTC: $1080
XOM: $1070
CSCO: $820
GE: $220
Nokia: $70

[Errol]

3 hours ago, Barnsey said:

This guy must be an avid reader of this thread.

You can't store oil easily. It's not something that be hoarded unless you have specific, purpose-built storage facilities.

[Barnsey]

Just in case you didn't previously believe me. Yeah, definitely not in a bubble 



[ThoughtCriminal]

5 minutes ago, Barnsey said:

Just in case you didn't previously believe me. Yeah, definitely not in a bubble 



13k to 21k in under a month 

 

Mad gainz innit

[jamtomorrow]

19 minutes ago, Barnsey said:

Just in case you didn't previously believe me. Yeah, definitely not in a bubble 



Londis might be onto something tho @Barnsey. Even if I had to traipse 10 miles through the snow and they took a kidney for the privilege of offloading my dirty fiat, it would still work out cheaper and less hassle than using Coinbase from the "comfort" of my own home.

[Errol]

So you can go into Londis with your 20 thousand in a briefcase and buy bitcoin? 

[leonardratso]

1 hour ago, jamtomorrow said:

Londis might be onto something tho @Barnsey. Even if I had to traipse 10 miles through the snow and they took a kidney for the privilege of offloading my dirty fiat, it would still work out cheaper and less hassle than using Coinbase from the "comfort" of my own home.

thats why you use coinbase pro (was gdax) and not the coinbase app/coinbase website. Get to spot.

[leonardratso]

11 minutes ago, Errol said:

So you can go into Londis with your 20 thousand in a briefcase and buy bitcoin? 

i doubt it, probably some OTC well above spot and some kinda 50 quid limit i reckons, might be one of those BTC machines.

[leonardratso]

bubble it might be, its still ridable on the wave, I dont really care where my money comes from as long as i have it.

Anyhoo cant be a bag holder got to go watch that dip.......

Been accumulating since 23rd dec, £7K went it, ready to run out  bit of profit now.....

£12,630.50

Holds on orders£0.00

Available balance£12,630.50

 

 

[DurhamBorn]

2 hours ago, Cattle Prod said:

It's very poor journalism, he totally misses the point. I have previously said here that Larry Fink and BlackRock is driving ESG agendas in oil and gas companies, there it is in black and white. Boards are terrified of losing institutional investment, and they all copy Larry. When the cash is pouring in once again, Larry will want some and you'll hear him extolling the virtues of how big oil is driving the change in energy etc etc.

Its the main reason they will prove such good investments.Everyone is pricing everything with dis-inflation and zero rates forever.The whole thing changes once we start to see that change.Mid year inflation should be around 3% and isnt going back down for around 8 years.Investors who buy and hold in these new companies in the green space will likely lose all their equity and the big oilies will buy up the space for almost free mid cycle.

I love the fact everyone is jumping on to the new mantra and selling out of the old,right at a key inflection point.They are going into a reflation cycle with zero inflation protection.

Like you say right at the time oilies are making massive profits people will say they are the main players in green energy.Likely going parabolic late in the cycle.

Nobody wanted BAT back in 2000,it was an all tech future and those companies wouldnt exist in a few years.£10k got me a quarter of a mill,and still rising.

I dont see big oil doing anywhere near that,but i do think 300% to 400% is very likely including dividends against a cycle inflation of around 60%.

[Democorruptcy]

Thinking ahead and with FSCS limits at trading accounts in mind. If you had sold out of some shares in an ISA or SIPP but didn't want to be holding the cash so it had to be invested. What's a safer thing to have it at HL temporarily, for return of capital, not so much bothered about return on capital.

[Noallegiance]

48 minutes ago, DurhamBorn said:

.Mid year inflation should be around 3% and isnt going back down for around 8 years.Investors who buy and hold in these new companies in the green space will likely lose all their equity and the big oilies will buy up the space for almost free mid cycle.

 

I'd been considering what I'd said a few pages back re holding AFC etc for a long time. I'm starting to consider that perhaps some staggered removal of initial+profits would be sensible given the 200%+ gains seen in 2020.

[DurhamBorn]

51 minutes ago, Democorruptcy said:

Thinking ahead and with FSCS limits at trading accounts in mind. If you had sold out of some shares in an ISA or SIPP but didn't want to be holding the cash so it had to be invested. What's a safer thing to have it at HL temporarily, for return of capital, not so much bothered about return on capital.

Tricky,but probably the shortest term bond fund you can find,ie gilts or treasuries.Royal London do a very short term gilt fund with very low fees,.The Vanguard Inflation linked is good,but the gilts are priced up already.

[Jesus Wept]

Automatic stimulus idea gaining ground.    Like having a sprinkler in the garden when it gets too dry.....

https://www.bloomberg.com/amp/news/articles/2020-10-29/a-big-idea-to-avoid-stimulus-standoffs-is-winning-new-support
 

[sancho panza]

On 27/12/2020 at 00:50, Thorn said:

Maybe check out Westwater, CIL, Arch Coal.

One I watching a few years back but didn'twant to pay £2.

https://www.anglopacificgroup.com/wp-content/uploads/2020/08/2020.08-HY2020-Presentation_FINAL2.pdf

On 27/12/2020 at 17:03, JMD said:

Re coal miners, Thorn has already suggested some good coal miners, and I own some of those, I'd add warrior met coal and inner mongolia coal, there is an Australian one which I also liked - I'll post later when I can remember it's name! Don't know if you are buying long term but I bought ones doing metallurgical as that type will be needed for steel making whatever the future green policies are implemented to inhibit mining coal.

here's a link to the sadly now defunct old minig feeds site.

Defo going to run some coma scores through these and any more

https://www.anglopacificgroup.com/wp-content/uploads/2020/08/2020.08-HY2020-Presentation_FINAL2.pdf

[Barnsey]

$600 now becomes $2000, this is going to be epic... 

 

[UnconventionalWisdom]

https://deflation.com/Articles/Credit-Card-Trends-Hint-at-Deflation

Credit Card Trends Hint at Deflation

MURRAY GUNN • DECEMBER 24, 2020

U.S. consumers are turning away from credit cards. Is it a shift in attitude?

The Federal Reserve released a survey this week showing that applications for consumer credit cards has collapsed during 2020. In October, the proportion of U.S. households applying for any form of credit over the past year was at 35%. That compares with 46% in February. Applications for new credit cards was at 16%, down from 26% in February, and the lowest level since data started being collected in 2013.

The dramatic decline in new applications for credit coincides with a drop in credit card balances this year. A drop in balances is consistent with the fall in economic activity during 2020 but the decline in new credit card applications might be hinting at a fresh attitude emerging in consumer behavior.

When social mood starts to trend negatively, people reevaluate their lifestyles. This year has undoubtedly been associated with people questioning how they live their lives and what changes could be made. The decline in new credit card applications could be a sign that people are becoming reluctant to extend their finances, perhaps due to uncertainty over their employment or because their new lifestyle involves a general slowing down in activity. It’s a retrenchment which would be consistent with a negative mood trend.

The necessary condition for debt deflation is an existence of excess credit. In 1945, U.S. consumer credit stood at $5 billion. It took 50 years for it to surpass $1 trillion in 1995. But it then took less than 25 years to balloon to over $4 trillion. In our book, that constitutes an excess credit situation, especially as most of it is non-self-liquidating.

This latest data is a sign that the air might be starting to go out of the debt bubble.

 

 

 

[Chewing Grass]

17 minutes ago, Barnsey said:

$600 now becomes $2000, this is going to be epic... 

 

If I got £2000 from Boris it would go straight on paying down what's left of my debt.

WTF  would you spend it on when all or most small businesses are shut other than more shite from the big retailers and Amazon.