Credit deflation and the reflation cycle to come (part 3)

[ThoughtCriminal]

Thanks for the input from everyone on my nephew's savings conundrum.

 

I'm very much aware of the fact that praise is tortoise slow and criticism arrives at light speed,so it'll be a case of on my head be it.

 

Big thanks to whoever it was that mentioned Junior SIPP as that's the route I'll go as it seems like a no brainer. A few premium bonds on top and Uncle ThoughtCriminal will the family hero. 🙄

[CVG]

7 minutes ago, ThoughtCriminal said:

Big thanks to whoever it was that mentioned Junior SIPP as that's the route I'll go as it seems like a no brainer.

Lest you curse me, remember that he'll not be able to access the money - probably until he's 60+!

[ThoughtCriminal]

9 minutes ago, CVG said:

Lest you curse me, remember that he'll not be able to access the money - probably until he's 60+!

Haha 

 

That's the plan. I'm trying to get him into the habit of not pissing money up the wall. 

 

Junior SIPP, Junior ISA and premium bonds I think. 👍

 

 

 

 

 

 

[Don Coglione]

12 minutes ago, CVG said:

Lest you curse me, remember that he'll not be able to access the money - probably until he's 60+!

Said in jest, but it's a very good point - what will be the retirement age in 50 years' time and what are the chances of successive governments not plundering pensions over that 50 years?

[wherebee]

4 minutes ago, Don Coglione said:

Said in jest, but it's a very good point - what will be the retirement age in 50 years' time and what are the chances of successive governments not plundering pensions over that 50 years?

There is a 100% chance that any person under 30 putting money in a pension will not see any of it back.  My expectation is that either having a private pension means you get no other state benefits (so in effect no, you are not getting your money back, you are being taxed 100%) or they will do what other countries have already done, take the whole pension pot of real investments and give you 'bonds' in return which will decay to zero value.  Oh, and I also expect within 10 years that all pension schemes MUST be carbon neutral, i.e. must invest in green shit, which mean no, you won't have a pension.

[Barnsey]

34 minutes ago, ThoughtCriminal said:

Thanks for the input from everyone on my nephew's savings conundrum.

 

I'm very much aware of the fact that praise is tortoise slow and criticism arrives at light speed,so it'll be a case of on my head be it.

 

Big thanks to whoever it was that mentioned Junior SIPP as that's the route I'll go as it seems like a no brainer. A few premium bonds on top and Uncle ThoughtCriminal will the family hero. 🙄

I was expecting on the other side of the pandemic (almost there) we'd be in full on infrastructure spending mode to recover from a deflationary bust, but here we are. I've got a small lump I wanted to deploy but frankly terrified as have no idea what happens next. Every time I look at inflationary factors, I then see things such as the baltic dry rolling over, here in the UK pace of recovery slowing down, in part inevitable but a little concerning nonetheless, and then of course we have the return of covid lockdowns elsewhere muddying the outlook.

Path now looks like cautious tapering, the rent component of US CPI is about to explode as mentioned a while back, this will possibly push the FED into the policy mistake much touted by Mr Hunter.

Interesting to note the second COP 26 draft agreement has watered down it's view on fossil fuels.

Will it take a bust next year / 2023 to spur on the scale of investment we were expecting in response to the pandemic?

[HousePriceMania]

12 hours ago, Noallegiance said:

Ahoy.

I've struggled on an off with this over the last few months. I have, however, had an unintended 'dry run' of sorts when I recently stuck some cash in a crypto.

I made £350 in a week but for that week I turned into an obsessive dick head.

How does this relate to my SIPP plans?

Once I saw my SIPP pot get to a certain level I thought I'd be pulling some profits out to begin getting a cash pile ready for stockmageddon. It got to that level and, following my ridiculous week of Binance addiction, I didn't take cash from SIPP profits. I left it in and transferred gains from some stocks to PM miners about 3 days before they started running. Huzzah.

In the year I've been actively managing my first ever stock portfolio it's up circa 40% without any momentum/fashionable stocks. Some I've lost on, most I haven't. It's all oil, gas, commodities, PMs and communications. The way I see it, I have more than 25 years until retirement. I'm going to catch the next decade with the stocks I have (and a few more on a watchlist that are too expensive for me at the moment). I'll be switching from 60/40 div/non div to mostly div payers at some point. If a speculative non-div commodity company can't be rising in a melt up that leads to a commodity cycle then I'm not keeping it. Getting rid of them won't cost me much as they're small plays on the off chance. Plus I don't like red. It detracts from the blue. I'll be looking to sell my non-div laggards when the hockey sticks become apparent. I think they're just starting. I'm eyeing early Q1 '22 or even late Q4 '21.

Except for shedding some turd and perhaps taking some winnings from GDX & GDXJ to put to div-payers perhaps late Q1 '22 I'm leaving my current portfolio pretty much as is. No 'awaiting a crash' for me. I'll be too concerned with timing and graph-watching. Return of the dick head.

If my portfolio goes down some then it goes down some. Like Peter Lynch says, if I'm in the right areas then 10-20% declines every so often are more than offset by the rises in the other years compounded and with dividends. And I have a central bank ready and willing to back me up and pump the monetary steroids into infrastructure. How kind of them.

In the event of a widespread stock drop I shall be sticking extra savings in my SIPP and stocks and shares ISA to ride the commodity wave for the decade. I'll probably fund some life stuff from my ISA and/or use it as a cash-grower to transfer into my SIPP to add to the bigger companies in there before mid-decade.

All the while not being a dick head and getting pissed off at my kids when they interrupt my busy schedule of graph-watching. 

Hopefully.

 

 

NB for further context:

Renting, entirely debt-free, decent job, neither ballsy nor well hung.

Good post Noallegiance. 

It sounds exactly where I am.  I did actually sell out my holdings in May time and took a healthy profit and luckily most of the stuff I was invested in feel back or didnt't go up.  I found it difficult being 100% back in cash though.

The longer the FED/BoE refuses to raise rates and the inflation looks more fully embedded the more nervous I get so I've spend the last 2 months buying back in, not at a bad time with the oillies and I've just got a nice rise in the miners. Got lucky with VOD and BT to some extent too and the scottish share is up around 25% ( though I have previously lost on it).

 It's got to the point now though the the sheer stress of watching the actions of the bankers/politicians and what the various worst case scenarios is , as I said the other day, that I am just going to hold, we will see a crash at some point but if we are holding real world stuff that people cannot live without we are in a good position for the next cycle.  If/When the BKK comes I'll start buying in when we see a 60-80%+ falls and/or the QE is restarted, at which point I will just go all in because the currency will be trashed.

There are no guarantees in life so it's always best to spread the risk but if the £2T QE-3 ( or is it 4 ) is launched we are in big trouble, they'd be admitting that the system is literally dead.

Im not hear to make massive sums of money just to protect a life time of earnings.  I am sat on a large pot of cash but it's fully liquid and maybe i'll take a 10-20% hit on it short term but at least I can move quickly if/when something breaks.

 

One tactic I am looking at it buying bonds at peak interest rates, if rates rise quickly 10%+ then when inflation falls back in theory you should claw back a lot of your losses.  As usual it's all in the timing.

If hyperinflation hits, we are all f**ked so might start investing in tins of beans again, they served me will during the pandemic.  Cant lose on tins of beans.

 

[AWW]

57 minutes ago, CVG said:

Lest you curse me, remember that he'll not be able to access the money - probably until he's 60+!

This is a very important point. The money is likely to be much more useful if it can be spent in mid-20s. I know what my thoughts would have been if my family decided to save into a pension for me, rather than putting the money into a vehicle that I could use earlier in life (not that they did either!)

How old are you?  I opened LISAs (in mine and my mrs' names) for the kids. You get a 25% top-up and you can put in £4k a year for a £5k total contribution, and - crucially - you can access it much earlier in the kids' lives - for us, in their early 20s.

[Hancock]

1 hour ago, Barnsey said:

I was expecting on the other side of the pandemic (almost there) we'd be in full on infrastructure spending mode to recover from a deflationary bust, but here we are. I've got a small lump I wanted to deploy but frankly terrified as have no idea what happens next. Every time I look at inflationary factors, I then see things such as the baltic dry rolling over, here in the UK pace of recovery slowing down, in part inevitable but a little concerning nonetheless, and then of course we have the return of covid lockdowns elsewhere muddying the outlook.

Path now looks like cautious tapering, the rent component of US CPI is about to explode as mentioned a while back, this will possibly push the FED into the policy mistake much touted by Mr Hunter.

Interesting to note the second COP 26 draft agreement has watered down it's view on fossil fuels.

Will it take a bust next year / 2023 to spur on the scale of investment we were expecting in response to the pandemic?

I do wonder if Britain is even capable of building infrastructure en-masse.

First off we have NIMBIES who will attempt to stop quite literally every project, from building a few houses to sticking a road somewhere, and can get things held up for years. (see Infrastrata).

For me we should be going on a huge motorway building scheme, by say extending the M11 to the Humber Bridge, and building towns alongside it ... build some east to west Motorways so all roads don't lead to London .... but such talk would get someone sectioned as it goes against the Tory Green policy.

Most the money for train infrastructure has gone on Crossrail and with HS2 to get from London to Brum 15 minutes faster.

Not allowed to build airports, or runways as Heathrow has shown, in its 2 decade fight.

Windmills are predominantly made in the Middle East with cheap Indian labour.

This govt will never build council houses en-masse which is needed ASAP.

Is there much left that could be built?

 

[AWW]

19 minutes ago, Hancock said:

For me we should be going on a huge motorway building scheme, by say extending the M11 to the Humber Bridge, and building towns alongside it

This seems a no-brainer to me. Of course the other thing that could be done to improve infrastructure is to take some load off it. Aim for net negative levels of immigration.

[Hancock]

1 minute ago, Cattle Prod said:

Took off from Dublin airport last weekend and looked down at the beautiful new second runway. Now Ireland has Nimbyism down to an art form, and it's not as built up around the airport as Heathrow is, but somehow they got it done. I know that the airport authority has been land banking around it for decades. The runways are not quite as long as Heathow, but the effectively Dublin now has the same aircraft capacity as Heathrow, which is absolutely bonkers. And since Boris sees fit to rule us by fiat like a mediavel king, he could order it at the stroke of a pen.

Dublin

Heathrow

Or they could build a high speed train line between Heathrow and Gatwick!

[ThoughtCriminal]

1 hour ago, wherebee said:

There is a 100% chance that any person under 30 putting money in a pension will not see any of it back.  My expectation is that either having a private pension means you get no other state benefits (so in effect no, you are not getting your money back, you are being taxed 100%) or they will do what other countries have already done, take the whole pension pot of real investments and give you 'bonds' in return which will decay to zero value.  Oh, and I also expect within 10 years that all pension schemes MUST be carbon neutral, i.e. must invest in green shit, which mean no, you won't have a pension.

Well that's my parade well and truly pissed on.🙄😂

 

You make a good point though. Is the tax advantage just short termism on my part? Does my nephew end up with 100% of fuck all and plenty of it?

 

Applies to all of us really.

 

Maybe we have to re-evaluate and change our criteria from being what we think the best investment is to one of minimising the government's capability to control our money and fuck us.

 

I'm glad you pissed on my parade. I think you're probably right.

[DurhamBorn]

Surely they read this thread?,they even use our term,disinflationary,should send them a flippin invoice.Of course they missed 300% in potash and 70% in oilies,uranium etc,you need to spot it before it happens.Someone should message Jeremy and get him to credit our work though.Maybe this thread should go into stealth,it was started to help the little man/woman and bring together people who could add experience,not the establishment,even if they are singing now from our roadmap.Of course they havent yet got to what it all means in reality,a distribution cycle.

https://www.telegraph.co.uk/business/2021/11/12/complacent-political-leaders-have-blindsided-surging-inflation/

We appear to be in the midst of a seminal change, marking the passage from a disinflationary to an inflationary age

At the same time, Western economies are trying to reduce their dependence on China and become more self-sufficient; in itself that will be inflationary. And finally there are the costs of going green, which will add to energy bills for decades to come.

[M S E Refugee]

Has anyone got a Freetrade account?

The past few days have been awful, taking ages to deposit money and ages to buy shares and also the App keeps crashing.

I'm very close to sacking them off.

[DurhamBorn]

On pensions for youngsters i wouldnt.Id use ISAs and then at say 45 when they have closer visability to access age they use the ISA to live on and divert 100% of taxable earnings to the SIPP.Gets you the same tax relief,but protects you from goal post moving.My partner is doing the same now,100% of taxable earnings into her SIPP.

[MrXxxx]

Anyone got a Barclays Smart investors S&S Isa/Stock trading account?...what do you think/how does it compare to others i.e. iweb/HL/AJ Bell etc; please comment only on the Barclays specifically rather than recommending the others, thanks :-)

[Castlevania]

1 hour ago, Hancock said:

Or they could build a high speed train line between Heathrow and Gatwick!

They really should expand Birmingham  International. There’s loads of land around there. Then use the High Speed line they’re building to shuttle people to London at a discounted price (£20 per head max). 

[belfastchild]

1 hour ago, M S E Refugee said:

Has anyone got a Freetrade account?

The past few days have been awful, taking ages to deposit money and ages to buy shares and also the App keeps crashing.

I'm very close to sacking them off.

I have one for just buying and selling the odd stuff I cant get in ajbell easily (nutrien, yamana) etc
Dont check it every day but waiting for yamana to go green (-6%) to sell as Ive already bought it (I think) in my ajbell sipp.

Sold my nutrien last night and cashed out the cash I had in them, so will wait for that to clear. I just got a bad feeling about it and if I needed to get money out quick I couldnt.  Sold hemo last week for a minute quid or two profit but the time it executed it was a 10 quid loss.... first loss Ive made on there (well other than yamana of course but bought lower in sipp)

Have always seen them like P2P etc, theres a time to use them and then a time to get out - Im probably always early and could be talking complete balls though ;-)

[MrXxxx]

1 hour ago, MrXxxx said:

Anyone got a Barclays Smart investors S&S Isa/Stock trading account?...what do you think/how does it compare to others i.e. iweb/HL/AJ Bell etc; please comment only on the Barclays specifically rather than recommending the others, thanks :-)

Just tried to edit this but it wouldn't let me, so what about the HSBC Invest Direct/Invest Direct plus account as well?...from what I can see the HSBC plus account a) offers US/European market trading as well at no extra cost [no even possible with Barclays, and b) ability to hold a Euro/US$ settlement account, so I assume saves on Forex fees?

[kibuc]

13 minutes ago, Cattle Prod said:

Thing is, if I have a choice of any airport for London I choose Heathrow. It's quickest to central London by far, and of course has all the connections. I avoid Stansted as it is as it's a pain to get to. Third runway at Heathrow for me, hand out free earplugs in west London.

Interesting, as I've always enjoyed the relative ease of getting to Stansted from North and Central London (lovely Stansted Express from Liverpool Street and Tottenham Hale, the latter accessible via fast and frequent Victoria Line), as opposed to spending more than an hour on Piccadily Line to get to Heathrow.

[AWW]

1 hour ago, DurhamBorn said:

On pensions for youngsters i wouldnt.Id use ISAs and then at say 45 when they have closer visability to access age they use the ISA to live on and divert 100% of taxable earnings to the SIPP.Gets you the same tax relief,but protects you from goal post moving.My partner is doing the same now,100% of taxable earnings into her SIPP.

I agree - give them the choice. When we can get at the cash in the LISAs we've opened for the kids, it'll be up to them what they use it for. If they wanted to, they could even put it in a SIPP at that point, so they'll have had a 25% top up on the way into the LISA and can then have another 20% (or 40, or 45, depending on their tax band) when it hits their SIPP.

[Hancock]

3 minutes ago, kibuc said:

Interesting, as I've always enjoyed the relative ease of getting to Stansted from North and Central London (lovely Stansted Express from Liverpool Street and Tottenham Hale, the latter accessible via fast and frequent Victoria Line), as opposed to spending more than an hour on Piccadily Line to get to Heathrow.

They should all have mainline trains going to them so there is no need to go into London.

As per Amsterdam, where the only problem is getting your bits grabbed by the Cloggy Securicor men.

[M S E Refugee]

14 minutes ago, belfastchild said:

I have one for just buying and selling the odd stuff I cant get in ajbell easily (nutrien, yamana) etc
Dont check it every day but waiting for yamana to go green (-6%) to sell as Ive already bought it (I think) in my ajbell sipp.

Sold my nutrien last night and cashed out the cash I had in them, so will wait for that to clear. I just got a bad feeling about it and if I needed to get money out quick I couldnt.  Sold hemo last week for a minute quid or two profit but the time it executed it was a 10 quid loss.... first loss Ive made on there (well other than yamana of course but bought lower in sipp)

Have always seen them like P2P etc, theres a time to use them and then a time to get out - Im probably always early and could be talking complete balls though ;-)

I withdrew my money from Trading 212 last year due to a couple of YouTubers putting doubt in my mind.

[DoINeedOne]

Seems Netherlands and Austria are going full retard hope other don’t start following

[AWW]

40 minutes ago, Hancock said:

They should all have mainline trains going to them so there is no need to go into London.

London needs a ring railway. Moving around London (which are going to be more commonplace if Covid work practises have any staying power) is far too difficult - everything is organised with the aim of getting people into and out of Central and the City.  For example, I live 10 miles due north of the City. I can get there in 30 minutes on a train, and a similar time on a bicycle.  But the 5 mile journey west to take the kids swimming would take almost an hour on public transport - twice as long for a journey half the length! It's literally quicker to walk.