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

[Bobthebuilder]

3 minutes ago, Chewing Grass said:

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

That's pretty much what I did with it, except sticking the rest in my SIPP for the extra 20%.

[DurhamBorn]

1 hour ago, Vendetta said:

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
 

 

So the benefits are slowly removed as unemploymentfalls.The question of course is why would unemployment fall if your getting $600 a week to do nothing.Id exect unemployment to keep going up,just as it has in the UK since tax credits were introduced,masked by around 4 million Eastern Europeans doing a lot of the full time jobs.

[DurhamBorn]

5 minutes ago, Bobthebuilder said:

That's pretty much what I did with it, except sticking the rest in my SIPP for the extra 20%.

I got around £7k self employed grant,im now PAYE so i stuck the lot into physical silver.Given i have lots of friends who have been getting £2k+ a month in benefits for 15+ years i feel no guilt taking it.I of course pay everything over £12.5k in wages into my Sipp .Il probably pack in this year,maybe March.Then i might do a couple of months a year after that until 55,maybe not.In April il also claim JSA none means tested for 6 months,then ESA none means tested for a year or until booted off.System is 100% corrupt,so pay as little in and take out anything you can.

[sancho panza]

25 minutes ago, UnconventionalWisdom said:

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.

 

 

 

It's worse than that according to Mish

https://www.thestreet.com/mishtalk/economics/credit-applications-are-down-and-rejection-rates-are-up

[leonardratso]

14 minutes ago, DurhamBorn said:

I got around £7k self employed grant,im now PAYE so i stuck the lot into physical silver.Given i have lots of friends who have been getting £2k+ a month in benefits for 15+ years i feel no guilt taking it.I of course pay everything over £12.5k in wages into my Sipp .Il probably pack in this year,maybe March.Then i might do a couple of months a year after that until 55,maybe not.In April il also claim JSA none means tested for 6 months,then ESA none means tested for a year or until booted off.System is 100% corrupt,so pay as little in and take out anything you can.

cant agree enough or more. Ill fill in a form to get 10 pence back from the govt if i have to.

[Barnsey]

1 hour ago, Chewing Grass said:

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.

 

[wherebee]

1 hour ago, Chewing Grass said:

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.

But is that a good call if you are expecting inflation to erode the real cost of that debt in the next 5 years? 

 

I paid down debt like a bastard from 2000-2020 due to low interest rates and me not having a solid view on how to invest without risk of loss (I didn't understand big tech and kept expecting a crash).  Now I do have a view (oil/commodities for the next cycle up 300% +divs) I have gone hard on those and hope to see 200k turn into near a million by the end of ten years.

If I got given 2k by the government, I would use it to buy more inflation stocks and continue to pay minimums on debt, if I expect to be earning more from the investment than I am paying in interest....

[Sugarlips]

3 hours ago, Barnsey said:

 

Tesla to the moon!

Oh hang on, he’s already done that hasn’t he, Mars..?

[Lightscribe]

On 27/12/2020 at 20:10, Noallegiance said:

For me BTC is the poster-child for the same mistakes being made again by the 'sure-thing', 'you can't lose', 'what's the word on the street, Johnny?' etc etc unsuspecting public who think they've realised something the smart folk haven't that, in their own minds, has them soon-to-be bathing in asses milk and driving a Lambo through Maccy Ds.

It's so blindingly obvious that it's another fad that's going to cause a fair few marriage break-ups and suicides.

IMO a flutter is sensible if one is so inclined. Thinking it's going to oust the establishment, piling savings and/or debt in and/or claiming it's a win for the populace is, at best, drunk talk. Like, 12 pints drunk talk. Minimum.

It’s one topic that’s never been popular on this thread, but I’ve always posted my crypto trading updates over the years on here and HPC regardless. My work is technology based around the sector so I have an interest by default. 

I don’t see crypto in general as a fad. Digital currency is here to stay which in use with blockchain goes hand in hand. Also with the implementation of smart contracts and with continued automation and ever increasing reliance on AI, speed of transactions I would go so far as to say the future is a certainty.

Whether that translates as XRP (for example) as the next new world currency is doubtful. XRP is currently facing a SEC lawsuit (reason for price drop the last week) which will be foretelling for similar cryptos. The elites and bankers will never let a few basement dwelling teenagers become the next 1%ers. I envisage that they will have their own currency in which they retain control eventually, with mixture of other crypto technologies again which they control. 

But as hedge funds, payment companies (i.e PayPal) start to raise their head above the parapet and invest in the likes BTC, people start to take it a bit more seriously. It is another investment vehicle in the hedge against inflation after all. When that starts in earnest I expect to to see the likes of BTC go parabolic.

The governments making sure they tie up any loose ends with registration at exchanges so that no one escapes taxation is also noteworthy. They will be happy to let crypto continue in its current form whilst that continues to be the case.

I, myself have been in and out since the beginning. Yes I would have been a multimillionaire by now if I had held, but I didn’t. Nor have most, as it was early days and taking profit is the most sane thing anyone would do. The multi-millionaire stories were the likes of those who bought as a gimmick or to buy a bit of weed on the Silk Road and forgot all about their BTC wallet.

I now store what I have on a hardware wallet, with a bit for trading on both on the main exchanges and decentralised. My mantra is ‘invest in anything thats a hedge against inflation when it’s at a low’ (Doesn’t quite roll of the tongue I know). This all includes physical PMs, ETFs, miners, oil/energy/infrastructure stocks in an ISA and pension, BTC and other crypto, antique/modern Rolex watches, classic cars and even bloody rare retired collector UCS Lego sets. None are for sale...yet.

Inflation is still to come. Currently I’m probably just about the richest poor man you’ll ever meet. 

 

 

[MrXxxx]

20 minutes ago, Lightscribe said:

envisage that they will have their own currency in which they retain control eventually

I think in the next 5-10 years we will have an International crypto currency, an electronic form of the SDR (eSDR) controlled by the IMF. This will initially be tied into regional currencies; think Euro, Dollar, Rinibimbi, that will transition from paper to electronic whilst everyone gets upto speed (I.e over 65s so non-computer age die) on personal tech before being replaced by eSDR worldwide. Together all of this will make personal cryptos obsolete.

[Barnsey]

Annual Times Business economist survey results (paywall)

https://www.thetimes.co.uk/edition/business/wounded-economists-predict-more-bumps-in-road-ahead-5hj6fp33j

[ThoughtCriminal]

 

Replacing ICE cars with EVs just in the UK would take: 

-- 200% of the of cobalt currently mined on a global basis
-- 75% of the lithium currently mined; and
-- 50% of the copper currently mined 

 

DB is going to make us all rich, but society is going to be a hellscape

 

The more I read about renewables the more I realise its all bullshit. 

 

Turbines are the same. 

 

The numbers simply don't stack up. 

 

[DurhamBorn]

1 hour ago, Barnsey said:

Annual Times Business economist survey results (paywall)

https://www.thetimes.co.uk/edition/business/wounded-economists-predict-more-bumps-in-road-ahead-5hj6fp33j

My road map says 3%+ for inflation by year end,but there are two things that could push it out a bit.First a BK that would see outright deflation for a short period.2nd if sterling over shoots my $1.41 target price by much.That would push inflation increases out by around 8 to 12 months.

Most turmoil happens at the start of a recovery,as wounded companies cant re-finance.Inflation holding 3%+ and refusing to fall back is where it gets interesting as people wake up to the fact half the worlds savings is about to take a 50% hair cut over the cycle inflation adjusted.

[Chewing Grass]

7 minutes ago, ThoughtCriminal said:

 

Replacing ICE cars with EVs just in the UK would take: 

-- 200% of the of cobalt currently mined on a global basis
-- 75% of the lithium currently mined; and
-- 50% of the copper currently mined 

 

DB is going to make us all rich, but society is going to be a hellscape

 

The more I read about renewables the more I realise its all bullshit. 

 

Turbines are the same. 

 

The numbers simply don't stack up. 

 

and now they intend forcing pension ponzi schemes to invest in 'green tech', that steady inflow of involuntary cash every month will do wonders for Teslaesque share prices.

They are robbing the poor to feed the rich.

[DurhamBorn]

9 minutes ago, Chewing Grass said:

and now they intend forcing pension ponzi schemes to invest in 'green tech', that steady inflow of involuntary cash every month will do wonders for Teslaesque share prices.

They are robbing the poor to feed the rich.

Do a pair trade,short Tesla,Long Magna International.Magna are who all the big car companies will use to kill Tesla  not trading advice etc etc.

[StrugglingMillennial]

I would love to short Tesla but knowing my luck it would go higher and stop me out 😂

I just had an interesting read about margin debt, apparently its soared 50% in around 8 months. The same thing happened around 2000 & 2007 before the markets crashed.

[Don Coglione]

2 minutes ago, StrugglingMillennial said:

I would love to short Tesla but knowing my luck it would go higher and stop me out 😂

Just forget the stop and be prepared repeatedly to throw money on the bonfire to cover the margin...

[BoSon]

2 hours ago, ThoughtCriminal said:

 

Replacing ICE cars with EVs just in the UK would take: 

-- 200% of the of cobalt currently mined on a global basis
-- 75% of the lithium currently mined; and
-- 50% of the copper currently mined 

 

DB is going to make us all rich, but society is going to be a hellscape

 

The more I read about renewables the more I realise its all bullshit. 

 

Turbines are the same. 

 

The numbers simply don't stack up. 

 

Aye, it's all smoke and mirrors to look like the government are doing something that will make a difference.*  In this case there isn't the raw materials available at a cost that makes it more efficient to 'go green' as it does to continue to use the already manufactured vehicles until they are uneconomical to maintain. They should force manufacturers to make cars that last 20 years minimum, under warranty, and no new car sales unless trading in a vehicle that has lasted that long.

* Like those nightingale hospitals they can't find the staff to make them viable.

 

Short sighted inept government only looking to the next election not a multi-generational real change. This is one reason why China are taking over the world, they plan for the long term even if those to reap the benefit won't be in power or even alive to see the full fruition of the plans.

Better learn mandarin. That or prepare for war as that is all the west can do to stop them, though when the EU are looking to get into bed with China even more than they are, it looks like mandarin as a second language is the path they have chosen.

[Craig]

57 minutes ago, StrugglingMillennial said:

I would love to short Tesla but knowing my luck it would go higher and stop me out 😂

I just had an interesting read about margin debt, apparently its soared 50% in around 8 months. The same thing happened around 2000 & 2007 before the markets crashed.

Can't see Tesla dropping in the short term. Lots more $2ks of stupid money incoming soon. 

[StrugglingMillennial]

I won't be touching it at any point, shorting isn't for me. I just know Tesla is over valued but i agree there are plenty of robin hood traders that are prepared to throw more money at it.

[Errol]

This won't matter until it matters.

There won't be time to react when the time comes.

 

[StrugglingMillennial]

Plenty of chat starting to come through now https://www.forexlive.com/news/!/the-case-for-commodities-20201207

Anyone know where you can still pick up VAT free silver for a decent price 

[Loki]

31 minutes ago, StrugglingMillennial said:

Anyone know where you can still pick up VAT free silver for a decent price 

Might be worth dropping coininvest a line, I don't know if it's actually been signed in law yet

 

Or open a Bullionvault account, no VAT on stored silver

[Starsend]

Anybody have any thoughts on Magellan Midstream Partners LP listed on the NYSE? Oil pipeline distribution/storage etc, similar to Enbridge I guess. Very tempted as they have a 9.61% divi at the moment. Some of the research I've read rates the divi safety as being 'very safe', safer than Enbridge. 

[leonardratso]

t212 finally got round to binning BTCE, i held out as long as i could, but its time to say aidios to that one, nice rise though;

https://helpcentre.trading212.com/hc/en-us/articles/360016720277-UPDATE-Bitcoin-ETP-BTCE-Close-Only-Mode-from-06-01-2021