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


spunko

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1 hour ago, Hardhat said:

What to do with recent crypto profits?

I'm tempted to buy back into HOC. Already hold FRES.

Is there a UK listed equivalent of SILJ?

Don't think there is a direct equivalent in the UK.

The closest thing we have isMerian Gold and Silver. I like to put approx. allocation figures on these funds and when i looked early last year it was approx. 15%gold physical/15%silver physical and 35% gold miners/35% silver miners. Current allocations may have changed so please check before buying, etc.

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ThoughtCriminal
1 hour ago, Cattle Prod said:

Just be aware that there is no shortage of natural gas in the world, it;s much easier to find than oil (it's less dense so you can often 'see' the pool contrasted against the denser rock). The problem is as I've said here I think is that it's not easily transportable, so is not a true commodity. It will be priced at vastly different rates according to geography, and inelastic supply. It takes about 10 years to develop an LNG export hub, and is very expensive. Chevron spent about $50bn in Western Australia during the last boom about ten years ago. That's a chunk of change. Most of the supply will therefore be pre sold on long term contracts. Japan has clearly left itself short here and is scrabbling for spot cargoes. Shame there is much less US gas coming out of the oil patch to export - who could possibly have seen that coming?! Major screw up by Japan, smacks of the same linear don't-challenge-managment thinking responsible for the Fukushima disaster, but I digress.

You see that Total has just bagged itself a cargo of pure profit, as a shareholder, I have a tear in my eye at the level of price gouging on display. This is an example of "just buy a swath of the majors, because they will have a piece of every decent project going". You can have fun ferreting out geographies that will need to pay premium for gas: mostly ones not connected by pipeline to Russia or the ME, like Indonesia for example, but again, the big companies will already be there (Repsol, ENI, BP in Indonesia, Shell in Brunei).

Good stuff CP 👍

 

Now far be it from me to question your undoubted expertise in this area, but if you have vast quantities of something but can't move it, then isn't the effect just the same as not having any? Shortage of supply, in other words?? 

 

Or am I being a thicko? 

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Micky Roberts

I have had a PAYG telephone sim with 3 for many years. To date the rates have been

image.png.db281ec68670f2a66b0348b77d33ccbc.png

I received a text today to say that as from 16 Feb the new rates will be 

image.png.c4958ffa00021469eb437e5dd44d8f49.png

Some serious inflation in the pipeline.

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ThoughtCriminal
8 minutes ago, Micky Roberts said:

I have had a PAYG telephone sim with 3 for many years. To date the rates have been

image.png.db281ec68670f2a66b0348b77d33ccbc.png

I received a text today to say that as from 16 Feb the new rates will be 

image.png.c4958ffa00021469eb437e5dd44d8f49.png

Some serious inflation in the pipeline.

Only 400% or so, peanuts 😂

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Three bounced me on to a more expensive contract recently without me even noticing. I only found out when I visited my parents house and found a "Welcome" letter from them. I consider myself a tight git so it highlighted to me how easily these mobile firms will be able to pass on inflation (and then some) to customers.

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18 hours ago, Talking Monkey said:

Hasn't spread bet on crypto for retail been stopped

maybe I'm a privileged customer but I can do CFDs on bitcoin, ethereum, litecoin, ripple, bitcoin gold.....

But I won't cos the spreads will rip your ass apart xD

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ThoughtCriminal
14 minutes ago, Metalheadz said:

Three bounced me on to a more expensive contract recently without me even noticing. I only found out when I visited my parents house and found a "Welcome" letter from them. I consider myself a tight git so it highlighted to me how easily these mobile firms will be able to pass on inflation (and then some) to customers.

Yeah, it's all shits and giggles owning Vodafone shares until your new bill lands and you realised the price increase just wiped out ten years of dividends 😂

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51 minutes ago, Micky Roberts said:

I have had a PAYG telephone sim with 3 for many years. To date the rates have been

image.png.db281ec68670f2a66b0348b77d33ccbc.png

I received a text today to say that as from 16 Feb the new rates will be 

image.png.c4958ffa00021469eb437e5dd44d8f49.png

Some serious inflation in the pipeline.

That's what we call an FO rate. Do as they suggest.

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3 hours ago, Cattle Prod said:

Just be aware that there is no shortage of natural gas in the world, it;s much easier to find than oil (it's less dense so you can often 'see' the pool contrasted against the denser rock). The problem is as I've said here I think is that it's not easily transportable, so is not a true commodity. It will be priced at vastly different rates according to geography, and inelastic supply. It takes about 10 years to develop an LNG export hub, and is very expensive. Chevron spent about $50bn in Western Australia during the last boom about ten years ago. That's a chunk of change. Most of the supply will therefore be pre sold on long term contracts. Japan has clearly left itself short here and is scrabbling for spot cargoes. Shame there is much less US gas coming out of the oil patch to export - who could possibly have seen that coming?! Major screw up by Japan, smacks of the same linear don't-challenge-managment thinking responsible for the Fukushima disaster, but I digress.

You see that Total has just bagged itself a cargo of pure profit, as a shareholder, I have a tear in my eye at the level of price gouging on display. This is an example of "just buy a swath of the majors, because they will have a piece of every decent project going". You can have fun ferreting out geographies that will need to pay premium for gas: mostly ones not connected by pipeline to Russia or the ME, like Indonesia for example, but again, the big companies will already be there (Repsol, ENI, BP in Indonesia, Shell in Brunei).

Great post CP. However when you say you digress when writing: 'screw up by Japan, smacks of the same linear don't-challenge-management thinking responsible for the Fukushima disaster'... it got me thinking about Asia in general and China in particular... ---Ok, some may think this a thread derailment - but i think it helps crystalize investment thinking/macro environment. 

I agree with your above comment CP, however, in a generic sense, Japanese society is judged to be 'a success story'. What i'm attempting to say is many people, myself included, believe that the uniformity and control in China will hold that country back, stifle creativity and ultimately prevent progress. Compared to us Westerners, who enjoy a free environment to experiment, etc - the theory goes that the West's wealth/progress comes from having indulged its enlightenment values (my over simplification?!).

Here, lots of social theories are thrown around these days, mostly part of the West's obsession with its internal culture war. But not all hot air (Pinkers's blank slate, Haidts righteous mind, Murrays bell curve, etc) and ignoring those conversations entirely is a big mistake. Anyway, this leads me to my central point - what if Asian 'culture and psychology' is the determining factor here? i.e. the Asian countries seem to excel under strict regimes - e.g. Singapore/Malaysia. And if this is correct, does it then follow as near certainty that China will inherit the world this century?  

There are other moving parts* of course to the looming clash of East/West cultures. But i had personally 'priced in' the big(?) downside/negatives of China's obsession with authoritative control... but i'm now beginning to dought the significance of that.  

There is always hope of course, internal schisms, etc, and i note that Alibabas founder/boss has recently 'gone missing' after criticising the Chinese authorities.

Please excuse the rambling post, but China is so significant and of course it is the originator of the Wests current economic paralysis (though i accept the lockdown policy reactions are entirely the West's invention). 

(*eg not even to mention the West's failed experiment with debt based consumption, i.e. where would we be compared to the East if we hadn't supersized our balance sheets (would the West even have won the cold war without outspending the USSR?))

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Here i've created a separate bitcoin topic.

When discussing buying companies who own tangible "stuff" after almost 25 years of seeing an economy run on debt and never ending house price inflation, it seems rather ironic to cross this with buying a load of digital 0s and 1s, that someone or something using a pseudonym created.

 

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19 hours ago, geordie_lurch said:

Wow missed this story from over the weekend regarding HSBC stopping payments to and from Bitcoin exchanges and with Tesla taking a decent dive currently maybe it's going to be a 'busy' week :ph34r:

https://coinjournal.net/news/hsbc-blocks-incoming-funds-from-cryptocurrency-exchanges/

I have taken some time to investigate and clarify the above situation this morning:

1)  I spoke to HSBC directly and extensively.  Neither customer services, the global centre, the management team or the investment team have any knowledge (or internal documentation) of any restrictions regarding transfers between HSBC bank accounts and crypto exhanges as mentioned in the original Times article or the subsequent Coinjournal article.  The Premier Account adviser covered the recent FCA ban on crypto derivatives and current policies regarding credit/debit cards and crypto exchanges but categorically stated that there has been no change to policy regarding transfers between HSBC bank accounts and crypto exchanges. 

2)  This morning I have transferred five figure sums to and from my HSBC account using both Kraken and Coinbase Pro with absolutely no issue.  I might add that funds arrived on crypto exchange and in my account in under five minutes.

3)  The original Times article is poorly written and woolly.  The only mention of HSBC is "HSBC, one of the biggest banks in the country, does not process cryptocurrency payments or allow customers to bank money from digital wallets.".  Ambiguous to say the least.  The Coinjournal article interprets this statement as "The Times reported on Saturday that HSBC had blocked all transactions involving crypto exchanges. Crypto customers will now be unable to transfer their profits to their bank account.".  My findings today as documented in points 1) and 2) above clearly disprove this.  Interesting that the original Times article, the subsequent derivative articles in the crypto media sphere, and the FCA warning yesterday all occur in time for a moderate Bitcoin price correction!

In conclusion, I will continue with investing/trading crypto and the related interaction with my HSBC accounts.  Obviously policy could change in the future, but then anything could change in the future!  Pehaps Ben Franklin's "...except death and taxes." statement should be changed to "... except death, taxes, censorship, market manipulation, fake news, etc."  Should HSBC go down this path I would respond by withdrawing off crypto exchange to another nominated bank account (yes, unlike Bullionvault you can add funding accounts as long as the account is in your name.).  In the unlikely event that all banks stop account payments to and from exchanges I am highly confident that a solution would be provided by the market, hyrda heads and all that.

Thanks for posting this @geordie_lurch We all need to be aware of media manipulation and keep on our toes with policy changes regarding all our investments, not just crypto.

 

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43 minutes ago, Cattle Prod said:

Anyone else watching rates? 10 yr Treasuries looking sprightly and 30yr over 1.9%. With the amount of debt that the US government has to issue, this does not compute. The Fed is going to have a BK on it's hands very soon if they dont start buying and stop making signals about taper. Is this part of the liquidity risk you see, @DurhamBorn?

Decl: the 10yr is keeping pace with inflation, so is the main reason gold is holding back. And I dont want it to :-)

 

 On the Real Vision / Raul Pal video I posted on p 872 this is one of the markers that gets mentioned, Pal says if 10 year gets to 1.2 he believes it will take the equity market down.

 From 3 minutes to 9 minutes in. I would recommend folk to have a listen.

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Talking Monkey
56 minutes ago, 5min OCD speculator said:

maybe I'm a privileged customer but I can do CFDs on bitcoin, ethereum, litecoin, ripple, bitcoin gold.....

But I won't cos the spreads will rip your ass apart xD

You might have the account setting set to professional investor. 

Yup spreads are wide

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Talking Monkey
3 minutes ago, Cattle Prod said:

I fully agree, linear thinking and uncritical hierarchy are no way to progress. My view on China is that their expansion will stop once they are prevented from stealing Western tech. They come up with very little on their own. Their geoscientists in my experience are maddening, invariably bogged down in complex maths looking for the a+b=c equation the whole time. It doesn't work like that.

The Fukushima example is very annoying. Before it became common knowledge, the story about the diesel generators being on ground level (or below?!) was told to me by a UCL professor who has an interest in historical geology, that is studying the historical record for geological events to better understand earthquake recurrence intervals for example. He was raging, because he knew there was Japanese art depicting tidal waves from that exact area, just few hundred years old, going far inland, and so likely to breach the wall they'd built.. So it was folk knowledge, and if the engineers had built the wall a few m higher (or elevated the platforms) there would have been no Fukushima. And ironically, they wouldn't be paying crazy prices for gas today. 

If you can't think freely, this is the result.

On China CP, the way things look to me there is not much in place to stop the continued stealing of Western tech with a Biden presidency, so they could continue their predatory expansion for quite some time

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1 hour ago, Cattle Prod said:

I fully agree, linear thinking and uncritical hierarchy are no way to progress. My view on China is that their expansion will stop once they are prevented from stealing Western tech. They come up with very little on their own. Their geoscientists in my experience are maddening, invariably bogged down in complex maths looking for the a+b=c equation the whole time. It doesn't work like that.

The Fukushima example is very annoying. Before it became common knowledge, the story about the diesel generators being on ground level (or below?!) was told to me by a UCL professor who has an interest in historical geology, that is studying the historical record for geological events to better understand earthquake recurrence intervals for example. He was raging, because he knew there was Japanese art depicting tidal waves from that exact area, just few hundred years old, going far inland, and so likely to breach the wall they'd built.. So it was folk knowledge, and if the engineers had built the wall a few m higher (or elevated the platforms) there would have been no Fukushima. And ironically, they wouldn't be paying crazy prices for gas today. 

If you can't think freely, this is the result.

(final 'distracted thread' comment, promise) Yes, historic periods such as enlightenments/reformations, are long drawn out and painful for those societies which have to endure and live through them. I guess this should mean such events happen for good reason and for ultimate beneficial gain... then again to paraphrase DurhamBorm societies don't go up in a straight line! These thoughts eventually makes your head hurt!!... Maybe i'm just over thinking it?... instead let's say the West is Captain Kirk and the East is Mr Spock, and all we need is a Vulcan mind meld!?!      

Ref your above comment. I'm reminded that back in the 90's there were never ending media news stories about China breaking Western copyrights and faking cheap consumables. Then these stories stopped, i assume because China had become our 'deflation friend' - fast-forward to today and China is now the 'despotic fiend'!

I gather that Biden has always been a China Hawk, so presumably friction with China will continue? 

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On 11/01/2021 at 11:54, JMD said:

I agree. Its great to have the tech guys we have posting here.

I missed out completely on the hydrogen companies battery tech run up, my own fault for not committing 18 months ago. I see supercapacitor battery tech as potentially similar next big thing. However, for a more cautious long-term hold, agr/food tech (hydroponics/'artificial' lab meat, etc) is i think a better suited investment prospect. DurhamBorn commented on this sector yesterday, and i believe he views it as being a component part of the decomplex trade. Unfortunately i don't know enough about these areas so hope others will post more in future. 

The only way I've found to invest in this is Jim Mellon's Agronomics fund (ticker: ANIC). Think the guy behind Innocent smoothies is the chairman. 

It's invested in a lot of the lab meat start ups:

https://agronomics.im/portfolio/

Potential upside seems massive once the costs start to reach parity with standard meat products - how many vegetarians secretly miss a bacon sandwich and how many carnivores don't exactly feel great about the meat industry?

Ticks literally every ESG box going so the millenials and pension funds will be falling all over it, and it makes a nice change to all the oil and fags in the portfolio...

I stuck a couple of grand in as a punt a while back and it's started to get a bit perky since the Singapore approval:

https://www.theguardian.com/environment/2020/dec/02/no-kill-lab-grown-meat-to-go-on-sale-for-first-time

(Probably gone above NAV and due a pull back in the short term, though). 

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6 minutes ago, Presuming Ed said:

The only way I've found to invest in this is Jim Mellon's Agronomics fund (ticker: ANIC). Think the guy behind Innocent smoothies is the chairman. 

It's invested in a lot of the lab meat start ups:

https://agronomics.im/portfolio/

Potential upside seems massive once the costs start to reach parity with standard meat products - how many vegetarians secretly miss a bacon sandwich and how many carnivores don't exactly feel great about the meat industry?

Ticks literally every ESG box going so the millenials and pension funds will be falling all over it, and it makes a nice change to all the oil and fags in the portfolio...

I stuck a couple of grand in as a punt a while back and it's started to get a bit perky since the Singapore approval:

https://www.theguardian.com/environment/2020/dec/02/no-kill-lab-grown-meat-to-go-on-sale-for-first-time

(Probably gone above NAV and due a pull back in the short term, though). 

Are you Jim Mellon?

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Interesting article about what RR are up to with the government's our money. Didn't manage to dip in at the lows as I was looking elsewhere. Suspect whatever they develop will have many terrestrial applications..!

Rolls-Royce and UK Space Agency launch first ever study into nuclear-powered space exploration

The UK Space Agency and Rolls-Royce are joining forces for a unique study into how nuclear power and technologies could be used as part of space exploration

https://www.gov.uk/government/news/rolls-royce-and-uk-space-agency-launch-first-ever-study-into-nuclear-powered-space-exploration

 

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6 minutes ago, Presuming Ed said:

Ha, I wish. Fair comment though, my post was a bit "rampy".

Well it was mostly in jest. A helpful post but post #1 promoting a share made me giggle.

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Yes, it's quite badly worded. The Voyagers (and many other spacecraft) are powered by radioactive decay via the thermoelectric effect. RR are going to look at fission power.

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11 minutes ago, AWW said:

Yes, it's quite badly worded. The Voyagers (and many other spacecraft) are powered by radioactive decay via the thermoelectric effect. RR are going to look at fission power.

And also using it for propulsion, which would certainly be novel.

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21 minutes ago, AWW said:

Yes, it's quite badly worded. The Voyagers (and many other spacecraft) are powered by radioactive decay via the thermoelectric effect. RR are going to look at fission power.

make a nice change from the hamster in the wheel.

Charlemagne - The power of fish | Europe | The Economist

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