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

[Hancock]

1 hour ago, Cattle Prod said:

It comes from the Fed watching us all go nuts, adding velocity to the equatiom,inflation tick up and they start to taper without enough liquidity in the system.

If they need 10 Tn more on their balance sheet, they can't inject that once the crisis is over. But they can once makets crash again. (presume you mean can't)

So the BK signal for me will be Fed actions. Question is, will it be walking toward the punch bowl, picking it up,or taking it away that triggers it?

The counter argument to that is that because the Dems have control now, they just inject the required liquidity anyway, party or not. If they do this, perhaps we could bypass the BK do you think @DurhamBorn?

Thanks, thats pretty much what i thought, the BK is reliant on the FED stopping printing a little too early. And the Fed may stop printing too early should inflation hit sooner than they think.

But there may not be a BK should the Dems spray everyone with money.

Need to keep things simple for my old brain.

 

[Castlevania]

58 minutes ago, Democorruptcy said:

What's the ticker for those gilts and treasuries?

IBTL for long dated US-T’s

https://www.ishares.com/uk/individual/en/products/272124/ishares-usd-treasury-bond-20-yr-ucits-etf

[Harley]

25 minutes ago, DurhamBorn said:

.......It could be we see sector rotation though.David etc talks about 70% falls,but they are all looking at the US bubble stocks.BT already fell 75%.Vod fell 60%,BAT fell 57%,Bp 65%,Repsol 70% etc etc.

What David is seeing is massive financial dislocation.In other words key parts of the economy going under.Banks,insurers etc etc followed by derivatives blowing up catching out lots of other companies.Anyone can go bust if they cant re-finance debt and whatever happens its likely only the big boys will have access to capital.Vod yes,Talktalk no sort of thing.

I think massive damage will be done if the BK hits,but mostly outside of our sectors.We do need to remember though most companies go bust in the recovery,not the smackdown.

Ah the anatomy of a B(urger) K(ing)!

This is it.  Is it worth playing the nuances or is it a slap across everyone's faces?  And you've mentioned sectors and company attributes (size, debt exposure, derivative exposure).  What about markets like the US v UK v Europe v Russia v HK v Japan, etc?  I'm feeling any dislocation will result in another tectonic notch in a realignment between the West and East.  The question is will that be by some geos relatively avoiding a BK and/or recovering better from a common BK?  And if it's worth the bother rather than broadly liquidating and going into bonds, any other nuances (e.g. asset classes such as PMs, crypto, commodities, real estate)?

[NogintheNog]

1 hour ago, Green Devil said:

Max on top form, of spectacular interest is the graph he shows of bitcoin against m2 money supply.

Definatlely worth your 44mins coffee/lunch break watch.

 

Wondered when someone would post this. The most salient point is at 17 minutes....

[NogintheNog]

I have a Bitcoin strategy. During any period where I buy gold, I buy 5-10% of that trade in Bitcoin, before I buy the next tranche of Gold.

[Green Devil]

4 minutes ago, NogintheNog said:

Wondered when someone would post this. The most salient point is at 17 minutes....

My favourite bit is when she asked how much bitcoin do you own. And his response. 

[NogintheNog]

3 hours ago, Loki said:

Not really for this thread but the lack of rioting over mass removal of rights, criminalisation of normal activities, destroying of businesses and families over the casedemic tells me we are nowhere near rock bottom. People are too comfy mentally and physically. Doesn't sound rock bottom to me.

They might have a whinge but for the most part they all just do as they are told.

I agree but with a caveat. Imagine if our government, in fact all western governments hadn't come into the employment markets with 'Furlough', or whatever you want to call it for each country.

Would people have done what they were told then.....???

[NogintheNog]

1 hour ago, Cattle Prod said:

So the BK signal for me will be Fed actions. Question is, will it be walking toward the punch bowl, picking it up,or taking it away that triggers it?

I think it's the point where inflation starts throttling the economy, and with the amount of liquidity in the pipes as DB says we are a way from a BK in my mind. At 80-100 WTI I'll be watching what the fed does

[Democorruptcy]

54 minutes ago, DurhamBorn said:

IBTL for treasuries,gilts lots to choose from.Ishares UK gilts All stocks index,Vanguard also have a long duration gilt index fund.Legal and General etc also have cheap gilt funds,but id be avoiding the insurance companies in a BK.

IBTL is more speculative than what I meant. That's not to say you cannot make money if you time it right. Like this year if selling reflation stocks in Jan to buy it ready for the covid dip. Then selling IBTL on the day we announced our lockdown (and the governbankment cash help). It would have been bad news if you had bought it on the actual bad news lockdown day, for "safety".

 

 

[Don Coglione]

1 hour ago, Green Devil said:

Max on top form, of spectacular interest is the graph he shows of bitcoin against m2 money supply.

Definatlely worth your 44mins coffee/lunch break watch.

 

Why can't BTC, or all cryptos, be rendered illegal at the stroke of a legislator's pen?

Edit: I have only listened to the first half of this podcast so far.

[M S E Refugee]

1 hour ago, DurhamBorn said:

but id be avoiding the insurance companies in a BK.

Funnily enough I was wondering what to do with them, I have done really well with Unum, Legal&General and Met Life.

I have only a small position in some Insurance Companies so I may cash out of them and wait for the BK.

[Green Devil]

43 minutes ago, NogintheNog said:

I agree but with a caveat. Imagine if our government, in fact all western governments hadn't come into the employment markets with 'Furlough', or whatever you want to call it for each country.

Would people have done what they were told then.....???

Furlough fits in with the plan of great inflation. They arent going to end it until summer 2023 at the earliest.

Money printer goes Brrrrrrrrrrr.

[Green Devil]

19 minutes ago, Knickerless Turgid said:

Why can't BTC, or all cryptos, be rendered illegal at the stroke of a legislator's pen?

Edit: I have only listened to the first half of this podcast so far.

Quote from video 'BTC has reached escape velocity'. It cant be stopped'. Its too secure. Its network and cyptohraphy cant be broken. Watch what they are doing with Monero. They are trying to kill that by delisting it from exchanges, and hacking the nodes, yet failing to affect it. If they cant do Monero, then they dont have a hope with Bitcoin.

[Boon]

1 hour ago, supernaut said:

Pre March I was dipping into the market but on a low level as the majority of my free cash flow was tied up in arbitrage. When march hit I had a lot more time all of a sudden and a decent bank roll. 

In January last year I had a great month as I piled in one particular bet at 12/1 and it came in full underlay on the exchanges just to get my stake back. That one bet netted me 6.5k so I did feel confident keep buying the oils and others on the lower lows . 

Unfortunately for me the 3 month lockdown meant when june came around that particularly arbitrage angle was gone for me and I cant see it coming back on that scale 

Is this sports? Where are you betting to get that kind of exposure? Been heavily limited by most of the bookies. 

[Don Coglione]

25 minutes ago, Green Devil said:

Quote from video 'BTC has reached escape velocity'. It cant be stopped'. Its too secure. Its network and cyptohraphy cant be broken. Watch what they are doing with Monero. They are trying to kill that by delisting it from exchanges, and hacking the nodes, yet failing to affect it. If they cant do Monero, then they dont have a hope with Bitcoin.

I don't pretend to understand cryptocurrencies, nor the underlying technology.

At a far more simple level, what would happen if, say, the US legislature mandated that anyone buying, selling or trading in cryptocurrency would be sentenced to 100 years in jail? Doubtless, some would continue their dealings deep underground, but most people want a quiet life, in the real world.

I don't subscribe to the view that users of cryptocurrencies are sticking it to the man; I do subscribe to the view that the vast run-up in the price of BTC is a mania, largely social media-fuelled (ditto Tesla). Someone on hpc is predicting Tesla at $25k per share - that's about $24tn market cap...

BTC. Tesla. Same shit, different bucket.

[Green Devil]

3 minutes ago, Knickerless Turgid said:

I don't pretend to understand cryptocurrencies, nor the underlying technology.

At a far more simple level, what would happen if, say, the US legislature mandated that anyone buying, selling or trading in cryptocurrency would be sentenced to 100 years in jail? Doubtless, some would continue their dealings deep underground, but most people want a quiet life, in the real world.

I don't subscribe to the view that users of cryptocurrencies are sticking it to the man; I do subscribe to the view that the vast run-up in the price of BTC is a mania, largely social media-fuelled (ditto Tesla). Someone on hpc is predicting Tesla at $25k per share - that's about $24tn market cap...

BTC. Tesla. Same shit, different bucket.

What happens if the US outlaw BTC and it becomes the world standard and is owned by all of it competitors. IE China, Iran etc. The US has none. Petrodollar is now traded in BTC.

The US is toast. They are too late already. The country is in almost civil war. They should be getting onboard, not covering their eyes. Thats why they wont regulate BTC, apart from forcing KYC to all its wallets perhaps.

[Don Coglione]

2 minutes ago, Green Devil said:

What happens if the US outlaw BTC and it becomes the world standard and is owned by all of it competitors. IE China, Iran etc. The US has none. Petrodollar is now traded in BTC.

The US is toast. They are too late already. The country is in almost civil war. They should be getting onboard, not covering their eyes. Thats why they wont regulate BTC, apart from forcing KYC to all its wallets perhaps.

If BTC is owned by one of, or a series of, national powers, as you suggest, surely it loses its raison d'etre?

Your suggested scenario would almost certainly result in WW3 too...

[nirvana]

4 hours ago, Democorruptcy said:

Can you sing at all?

you should have seen my performance last night! There was me wearing socks and a beanie, a roaring fire, some shaking speakers and later some rather large youtube videos.....I really was on both a mental and physical high, epic!

I'm quite excited about later  

[supernaut]

1 hour ago, Boon said:

Is this sports? Where are you betting to get that kind of exposure? Been heavily limited by most of the bookies. 

Yes sports. Managed to stumble across an angle that I scarcely could believe myself having been in the game since 2006 as a low level bonus abuser, like I say has since been shut only in terms of bookie sharpened odds so not viable anymore. 

I will not be more specific just in case. 

[The Idiocrat]

4 hours ago, Green Devil said:

Max on top form, of spectacular interest is the graph he shows of bitcoin against m2 money supply.

Definatlely worth your 44mins coffee/lunch break watch.

 

Stunning chart in there. BTC front-running M2? I'm not sure if this is the original source. 

 

[JMD]

21 hours ago, DurhamBorn said:

@Cattle Prod i see a big risk at Brent  $58 to $60 for a pull back based on my dollar liquidity work.Interesting to see if that happens or not.However after that its a long run up ahead.Id actually be really pleased if the supply falls see oil through $60 and onward.Oil at $80 could be on and it would likely provide us with a big choice to make.Take then huge profits off the table and wait for the BK,it wont be far behind,or hold through it.Im torn at the moment as my road map is clear on gas being the best performing asset after silver in the cycle ahead and im very concerned to try to trade around the rise and end up out of the stocks.

One things for certain,its a bloody nice place to be worrying and doing work on that.If we get gaps filled on the stocks people who arent invested should use that chance to top up.

 

That's interesting because I certainly want to at least 'take profits' before any BK and then buy back at cheaper prices. Depending on the strength of evidence/and respected opinion here, I will also need to decide on how much deeper I sell. As you say DB it's a nice problem to have. But for me I'd like to participate in the anticipated BK - because I didn't have the cash to spend last March because I didn't receive the funds from selling my defined benefit pension until later last year. 

[JMD]

15 hours ago, DurhamBorn said:

@Yellow_Reduced_Sticker im really really pleased your portfolio has done so well,i know you were down quite a bit for a while,but never let that bother you,or adding more positions.Glad you never listened to Credit Suisse when they said sell Royal Mail at £1.50 they were worth 90p  . 

I bought a few pairs of shorts on Ebay,i always buy shorts there on the coldest days of the year and my winter coats in summer on the warmest days,thats when they are cheapest.Got a pair of nice M&S blue shorts with tags on for £4.70 including postage and they had two 10 euro notes in the pocket ,now thats what i call frugal  ,shame it wasnt a couple of silver Brits but you cant have everything.

Youl appreciate this one,it was my local club in the 90s, 

 

Knew you were big into your economic 'leads and lags' DB, but didn't know you extended this to your clothes fashion buying!

[DurhamBorn]

29 minutes ago, JMD said:

Knew you were big into your economic 'leads and lags' DB, but didn't know you extended this to your clothes fashion buying!

Of course i do.I also go shopping for reductions when the weathers bad.I noticed if it rained all day there was around 3 x as many reductions usually.This morning with the snow being so bad i went to Aldi and Iceland for opening and got lots of half price items,they reduce for opening.

 

[JMD]

6 hours ago, Loki said:

Not really for this thread but the lack of rioting over mass removal of rights, criminalisation of normal activities, destroying of businesses and families over the casedemic tells me we are nowhere near rock bottom. People are too comfy mentally and physically. Doesn't sound rock bottom to me.

They might have a whinge but for the most part they all just do as they are told.

'casedemic', I see what you did there! Along with the stats and graphs courtesy of tweedle-dee and tweedle-dum (whitty/valance) its all quiet 'm/alice in wonder/covidland' stuffi isnt it - except all the more scary because it's really happening. I note the mad-hatters in government are now advising people to curtail their behaviour and act as though they actually have the virus! I expect after the virus is eventually 'wished away', those same advisers will be telling us all to go spend spend spend and make out like millionaires, else Boris will threaten to hold his breath until he explodes!!!

[Loki]

2 minutes ago, JMD said:

'casedemic', I see what you did there! Along with the stats and graphs courtesy of tweedle-dee and tweedle-dum (whitty/valance) its all quiet 'm/alice in wonder/covidland' stuffi isnt it - except all the more scary because it's really happening. I note the mad-hatters in government are now advising people to curtail their behaviour and act as though they actually have the virus! I expect after the virus is eventually 'wished away', those same advisers will be telling us all to go spend spend spend and make out like millionaires, else Boris will hold his breath until he explodes!!!

Part of the reason I don't watch telly...reality requires enough suspension of belief just to get by