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

[Loki]

4 hours ago, DurhamBorn said:

I wouldnt base having kids on money,just have them anyway,i had 3 before 26 years old and best thing i ever did.

Then I won't have the money to set aside to prepare for the deflationary collapse! 

(He says, getting ready for work at 6am)

[Craig]

17 hours ago, leonardratso said:

if you want to get rich quick or get broke even faster i suggest bitcoin, its nowhere near as volatile as it once was, but its still kicks like a mule when it comes/goes.

Touch and go at the moment, I'd suggest. Either the financial world will successfully crush it, or it'll go stratospheric.

Place your bets now!

[DurhamBorn]

18 hours ago, Loki said:

Then I won't have the money to set aside to prepare for the deflationary collapse! 

(He says, getting ready for work at 6am)

Youl have more.Buy a house then rent it to your partner who claims housing benefit/local housing allowance,full tax credits etc.Iv got quite a few friends who did this and paid their houses off with the money.Once the house was paid/kids were over 18 they simply got back together in the eyes of the law.If married claim in her maiden name.

[Loki]

6 hours ago, DurhamBorn said:

Youl have more.Buy a house then rent it to your partner who claims housing benefit/local housing allowance,full tax credits etc.Iv got quite a few friends who did this and paid their houses off with the money.Once the house was paid/kids were over 18 they simply got back together in the eyes of the law.If married claim in her maiden name.

Buy a house? By the sounds of it I've already bought a couple!!

[Thorn]

8 minutes ago, Cattle Prod said:

I can't seem to find a list of holdings for this, have you seen one?

Check VanEck website the breakdown list is there on GDX factsheet Cattle Prod

[Thorn]

Culabula- had a wee look and HL app seems to list them under top 10s

 

[spygirl]

The dollar

Short tweet

https://mobile.twitter.com/michaelxpettis/status/1199899622287667200

Longer article

https://amp.ft.com/content/127c77a4-007d-11ea-be59-e49b2a136b8d?__twitter_impression=true

There are a few reasons why the dollar’s role has proven so durable. First, the market in dollar-denominated assets, especially government debt, is far deeper than any other. Foreign exchange reserve managers typically hold high-grade securities, not cash. As a result, they often have nowhere else to turn but dollar assets, especially ultra-liquid Treasuries.

Second, a consequence of the imperative of holding dollar assets is that many central banks have a lot of them. China and Japan each hold more than $1.1tn in US Treasuries, let alone other dollar assets.

A dramatic shift away from the dollar would imperil the value of these holdings, putting large holders in a Catch-22. Historically, this barrier has been overcome only when conditions are so dire — such as the shift from pound to dollar during the wars of the 20th century — that adding on the cost of a currency regime change will not make things much worse.

Third, the dollar’s outsized role in international trade, payments and banking means governments alone cannot decide its fate. Roughly half of world trade is invoiced and settled in dollars, and the proportion is especially high for crucial commodities such as oil. That dominance reflects, in part, the efficiency associated with using a single dominant currency. But it also reflects the centrality of American consumers in the global economy.

 

[spygirl]

Junker showing what a useless old drunk he is

https://www.reuters.com/article/us-eu-juncker-euro/eus-juncker-wants-bigger-global-role-for-euro-idUSKCN1LS0BK

“We must do more to allow our single currency to play its full role on the international scene,” Juncker told the European Parliament in Strasbourg as he presented his annual program.

“The euro must become the face and the instrument of a new, more sovereign Europe,” Juncker said, as he called for the bloc to become more of a global player and exert more influence internationally with a unified stance.

Eufope would need to run a global deficit, have its consumers consuming and be willing to throw the uncomoetive bottom 30% on the scrap heap, like US gas.

[Chewing Grass]

13 minutes ago, spygirl said:

Junker showing what a useless old drunk he is

https://www.reuters.com/article/us-eu-juncker-euro/eus-juncker-wants-bigger-global-role-for-euro-idUSKCN1LS0BK

“We must do more to allow our single currency to play its full role on the international scene,” Juncker told the European Parliament in Strasbourg as he presented his annual program.

“The euro must become the face and the instrument of a new, more sovereign Europe,” Juncker said, as he called for the bloc to become more of a global player and exert more influence internationally with a unified stance.

Eufope would need to run a global deficit, have its consumers consuming and be willing to throw the uncomoetive bottom 30% on the scrap heap, like US gas.

Romanian Bennies for the UK and a minimum wage adjustment to a more realistic £5.20/hr that will be the remainer price of the Euro for the UK.

Starting 1 January 2019, the gross monthly minimum wage is 2080 RON (€446.99) during a working schedule of 167.333 hours per month or £2.30/hr.

Graduates and experienced people are more highly valued and command a minimum wage of 2350 RON for people with a University Degree or minimum 15 working years which is £2.60/hr.

https://en.wikipedia.org/wiki/Minimum_wage_in_Romania

[spygirl]

And balance with this

https://www.bloomberg.com/amp/news/articles/2019-11-28/china-s-financial-warning-signs-are-flashing-almost-everywhere?__twitter_impression=true

Theres a good chance china will enter some unternsl revolution riot.

All the wage n price supression by by cheap chinese labour and BoC fincial fiddling goes.

 

[JMD]

4 hours ago, Cattle Prod said:

I can't seem to find a list of holdings for this, have you seen one?

CP, I could only find the Merian gold and silver fund top 10 holdings on HL. Fund is a bit concentrated, I would prefer smaller/more holdings, but then again what surprised me was the 1/3/5 year performance - only slightly less than gdx - but gives exposure to silver (and phys silver/gold), so if silver runs should mean a future outperformance/or at least match gdx.

dec. I already hold gdx but will also buy some Merion if/when PM prices fall to hold for the long term.         I will also hold individual silver stocks once I have worked out which ones to keep long term for the next cycle, I am not a trader with skills, but do want to get some good long term 'solid' silvies for ok performance/plus some 'undervalued' risky ones for potential big returns.    

[sancho panza]

On 28/11/2019 at 20:25, dgul said:

The option is at $4k.  So a phenomenal bet really.

[they'd get nothing if it doubled!]

They can always resell the options.So if it's doubled they might well....depending the delta.....get a phenomenal return.

Even at $3000 for gold,effectively deep out of the moeny still,theyd still return a handsome profit.

 

[sancho panza]

9 hours ago, Cattle Prod said:

I can't seem to find a list of holdings for this, have you seen one?

GDX?

https://etfdb.com/etf/GDX/

 

Separate issue here CP.

XOP 13 year lows-since inception

https://uk.investing.com/etfs/spdr-s-p-oil--gas-explor---product

XES jsut off 13 year lows-inception

https://uk.investing.com/etfs/spdr-s-p-oil---gas-eq---services

FCG aka nat gas-12 year lows since inception

https://uk.investing.com/etfs/firsttrust-ise-revere-natural-gas

XLE holding off 9 year lows,but nowhere near 2009 lows.

https://uk.investing.com/etfs/spdr-energy-select-sector-fund

 

Questions if you have the time or inclination

looks like more well funded operations with scale are faring better.Is this the most hated you've seen the sector?

secondly,are you hearing much talk of insdier buying?

thirdly,how much of a dampener is the Aramco float putting on things?

 

[sancho panza]

Whilst on the surface everything seems fine,underneath the water the feet are paddling quicker and quicker.

https://wolfstreet.com/2019/11/27/brick-mortar-rent-meltdown-manhattan-style/

These are major shopping corridors in Manhattan, and in nearly all of them, asking rents for ground-floor retail space have been dropping for years – and in some of them by half.

For example, the average asking rent on Madison Avenue between 57th Street and 72nd Street, plunged 22% in the second half of 2019, compared to the same period last year, to $906 per square foot per year, and is down 47% from the first half in 2015, according to the bi-annual Manhattan Retail Report released today by the Real Estate Board of New York:

 

[Errol]

A book some of you might be interested in for Christmas. Co-authored by the same man (Ronnie Stoeferle) who does the annual 'In Gold we Trust' reports (see - https://ingoldwetrust.report/igwt/?lang=en) :

 

https://www.amazon.co.uk/Zero-Interest-Trap-Ronald-Stoeferle/dp/3902639504/ref=sr_1_1?keywords=The+Zero+Interest+Trap&qid=1575207663&sr=8-1

[sancho panza]

Snyder-A doom monger's doom monger.Nice summation though.

Personally,I think we're a year or two away from recession being acknowledged.Possibly 6/12 months from being in recession.However,falling car sales are the sign for me.

http://theeconomiccollapseblog.com/archives/5-more-signs-that-the-global-economy-is-careening-toward-a-recession

The following are 5 more signs that the global economy is careening toward a recession…

#1 It is being projected that global auto sales will be down approximately 4 percent this year.  According to CNN, this will be the second consecutive year that global auto sales have fallen…

With only a month left in the year, global auto sales are on track for a 3.1 million drop, about 4%, for the year, according to Fitch. That would be the biggest decline since 2008, when the financial crisis hit, and the second year in a row that sales have fallen. Fitch expects worldwide car sales to total 77.5 million in 2019.

#2 Global trade just keeps falling.  According to Zero Hedge, total global trade has now declined on a year over year basis for four months in a row…

Global trade on a YoY basis contracted by 1.1% in September, marking the fourth consecutive YoY declines and the most extended period of subdued trade since the financial crisis in 2009.

The CPB said supply chain disruptions between the US and China, due mostly to the trade war, were the most significant drag on international trade volumes. US volumes fell 2.1% in September MoM. Though in China, imports plunged 6.9% MoM.

As you can see from those first two examples, we keep witnessing things happen that we haven’t seen since the last financial crisis.  Over the past few months, I have used phrases such as “since 2008” and “since 2009” over and over again.  We literally have not seen economic numbers this bad since the last recession, and we are still in the very early phases of this new downturn.

And in some cases, the numbers are actually even worse than anything that we saw during the last recession, and that brings us to our next sign…

#3 Chinese industrial profits just fell by the largest percentage ever recorded…

China Industrial Enterprises total profits collapsed in October to CNY427.5bn from CNY575.6bn in September – a 9.9% YoY plunge, the biggest drop on record.

In fact, China’s Industrial sector has seen annual declines in its profits for 4 of the last 6 months.

The trade war has hit the Chinese economy really hard, but it doesn’t look like a trade deal will happen any time soon.

#4 U.S. consumer confidence has now fallen for four months in a row…

Consumer confidence dipped for a fourth straight month in November as economic conditions weaken toward the end of 2019, data released Tuesday by The Conference Board shows.

The board’s consumer confidence index dipped to 125.5 this month. That’s down from 126.1 in October. Economists polled by Dow Jones expected the index to rise to 126.6.

This wasn’t supposed to happen, and if it keeps happening that is going to have important implications for the 2020 election.

#5 Even the wealthy are cutting back on their spending.  According to Yahoo Finance, this is a continuation of a trend that we have been seeing for the past three quarters…

Spending by the top 10% fell 1% in the second quarter from the same period last year, according to an analysis of Federal Reserve data by Moody’s Analytics. And a four-quarter average of outlays by the high earners has slipped on an annual basis the past three quarters, marking the first such declines since the Great Recession of 2007-09.

In recent years, global central banks have engaged in unprecedented intervention in an attempt to stave off another crisis, and for a while their efforts appeared to be successful.

But just because the coming crisis was delayed does not mean that it was canceled.

In fact, over the past few years our long-term financial problems have actually gotten a lot worse.  We are facing the biggest debt bubble in the history of the planet, global financial markets are more primed for a crash than they have ever been before, and civil unrest is breaking out all over the world.  The stage is certainly set for “the perfect storm” that I keep talking about, and most Americans have absolutely no idea what is coming

 

 

[sancho panza]

Am here in Zuid Afrika with Mrs P seeing the family.

Saffers love their property.You don't make yourself popular pointing out that their hosue hasn't risen in value but rather jsut devalued versus the USD$

 

Interesting to see the schizophrenia in the property market near Hermanus

Some priced to sit there for years.

At £1.1 million a place that might fetch that if it was in Surrey

https://www.property24.com/for-sale/voelklip/hermanus/western-cape/7857/107968912

For £950k a tiny plot(no house) by the sea.You can buy a bigger plot with a hosue on.

https://www.property24.com/for-sale/voelklip/hermanus/western-cape/7857/108099335

 

Some priced to sell but still can't sell.

 

For £490k one of the nicest hosues internally I've ever seen.30 mins from hermanus .Been on the market for 4/5 years.

https://www.property24.com/for-sale/kleinmond-central/kleinmond/western-cape/16691/103397517

For £680k, 180 Hectares of decent land plus lovely hosue

https://www.property24.com/for-sale/hermanus-rural/hermanus/western-cape/16570/107354011

 

 

 

[Loki]

29 minutes ago, sancho panza said:

Personally,I think we're a year or two away from recession being acknowledged.Possibly 6/12 months from being in recession.

I don't disagree, but I've felt that on and off since 2009!

[sancho panza]

1 hour ago, Loki said:

I don't disagree, but I've felt that on and off since 2009!

It's been a learning cruve over the last ten years.Not least in that you can lose a lot of money betting against the CB's/big stack.

They're increasingly running out of road though and as Wolf keeps oointing out,lot of economic indicators flashing red without a hint of unemployment.When this unfolds it will be an epic show.

worth quoting Gideon Gono.Govenor of the reserve bank of Zimbabwe 2003-2013

https://www.quotetab.com/quote/by-gideon-gono/i-found-myself-doing-extraordinary-things-that-arent-in-the-textbooks-then-the-i

I found myself doing extraordinary things that arent in the textbooks. Then the IMF asked the U.S. to please print money. The whole world is now practicing what they have been saying I should not. I decided that God had been on my side and had come to vindicate me.
 

 

Read more at https://www.quotetab.com/quote/by-gideon-gono/i-found-myself-doing-extraordinary-things-that-arent-in-the-textbooks-then-the-i#BpYC126wJiUsoqdZ.99

[Loki]

5 minutes ago, sancho panza said:

It's been a learning cruve over the last ten years.Not least in that you can lose a lot of money betting against the CB's/big stack.

That's the double sting - those pricks cost us enough if we do nothing 'financial' at all, like most people, never mind losing by doing the 'right' thing

[Thorn]

Might be too early to call it but for anybody closely following the pm miners we might have Lift-off...

DYOR etc but Wheaton, Silvercrest and the rest. 

 

[Majorpain]

41 minutes ago, Thorn said:

Might be too early to call it but for anybody closely following the pm miners we might have Lift-off...

DYOR etc but Wheaton, Silvercrest and the rest. 

 

US PM stocks are currently doing much better than UK/Canadian ones, Sibanye/Pan American in particular are steadily grinding higher.

[Lavalas]

Recent interview with David Hunter...

 

 

[Democorruptcy]

Amerman's latest:

Calculating Your Personal Cost If Stock, Bond & Home Prices Return To Average

[Majorpain]

November retail sales were dire, but is it going to a merry Christmas for the retailers in December I wonder?