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

[Talking Monkey]

42 minutes ago, DurhamBorn said:

He lazed around all his life.If he took that crap job at 18 he might be a manager now.The problem with welfare is it is more than the entry level jobs,so people never start.Thats why at 50 once the kids are over 18 they are stuffed.This inflation will lift wages,but it will eat hard into welfare because it is in the goods and services they use more off.The amount they burn waiting in the Mcdonalds drive through alone.There is no political will to cut UC etc,but they might tighten the rules and start to make it much more of a chore claiming.

Rather than cut could they freeze the rates so inflation causes the screws to be turned year by year pushing people back to work or is the government required to increase it in line with inflation. 

[wherebee]

Off to sleep.  Top in oilies in?  All looks a bit red just now.

Let's see what it looks like in the morning...

[Sidd]

2 hours ago, DurhamBorn said:

Dollar hit the top of my bottom range so hit a target set in 2016,so i havent done a lot of work on currency lately as i positioned for other reasons in energy etc that the dollar affects the most.I still think a leg down in the dollar could hit yet ,but higher energy prices usually mean a shortage in dollars hence the squeeze at the moment.Energy price increases are running ahead of dollar printing at the moments,so they will have to print more,or energy prices must fall.

That makes sense and no one else could have explained the relation with the energy sector more succinctly than that. Thanks a lot.

[janch]

1 hour ago, Talking Monkey said:

Rather than cut could they freeze the rates so inflation causes the screws to be turned year by year pushing people back to work or is the government required to increase it in line with inflation. 

What has happened in the past is that benefits/pensions etc are raised with CPI but the CPI is nowhere near the real rate of inflation in the essentials ie food and energy so gradually over time the real value of bennies etc falls and sometimes they are even allowed to "wither on the vine". 

This is politically more acceptable than freezing them and less of a shock to recipients.  People will be forced to get off their ar*** and take whatever job they can find.

Seasonal work in agriculture etc used to be done by students.  There's going to have to be a complete change of mindset to get people doing the low level jobs.

[janch]

1 minute ago, Cattle Prod said:

Top in oilies in?

I did a bit of a top-slice as I like to keep profits as far as I can.  I will rebuy on any pull-back or BK.  I have a few shares lined up ready for a BK

[Harley]

5 minutes ago, janch said:

This is politically more acceptable than freezing them and less of a shock to recipients.  People will be forced to get off their ar*** and take whatever job they can find.

The alternative crossed my mind - raise benefits as a form of helicopter money to stoke inflation?

[Harley]

1 minute ago, janch said:

I did a bit of a top-slice as I like to keep profits as far as I can.  I will rebuy on any pull-back or BK.  I have a few shares lined up ready for a BK

Tempting but so is holding out as I'm only 9% down on my long held holding, and that's after adding some more after the relatively recent lows!  But then the 70% in Gazprom, etc maybe could do with a clipping!

[janch]

1 minute ago, Harley said:

The alternative crossed my mind - raise benefits as a form of helicopter money to stoke inflation?

I don't think they need to stoke inflation...........it's going well without them doing anything extra so far,  probably more than they intended in fact.  The UK for some reason has always had a tendency for inflation to take off and this time it's surpassing itself.

[HousePriceMania]

Mortgage tightening in Oz ?

https://www.theguardian.com/australia-news/2021/oct/06/apra-tells-banks-to-check-new-borrowers-can-pay-higher-interest-rates-on-mortgages

Banks given new borrowing rule as Australian house prices soar 

 

[Majorpain]

3 hours ago, DurhamBorn said:

Dollar hit the top of my bottom range so hit a target set in 2016,so i havent done a lot of work on currency lately as i positioned for other reasons in energy etc that the dollar affects the most.I still think a leg down in the dollar could hit yet ,but higher energy prices usually mean a shortage in dollars hence the squeeze at the moment.Energy price increases are running ahead of dollar printing at the moments,so they will have to print more,or energy prices must fall.

Which is interesting, because the Fed is looking increasingly like its in a stagflationary trap.  Print more dollars and inflation gets worse at home, don't print more dollars and the rest of the world gets hammered with high energy prices.  King Dollar about to be dethroned?  We are getting to the about the time that the world reserve currency cycles.

 

 

[Hancock]

4 hours ago, HousePriceMania said:

Should have listened to my mate and moved to France when the moving was good.

Every now and then I meet a nice French person, but then I feel bad for hating the cunt before I've even spoken to him.

[ThoughtCriminal]

Daily dose of "Javier tells us how fucked we are". 

[HousePriceMania]

are ETFs that short the market a real thing ? 

I'd like to short the UK property market

[ThoughtCriminal]

4 minutes ago, HousePriceMania said:

are ETFs that short the market a real thing ? 

I'd like to short the UK property market

Now you're talking! 

[Yadda yadda yadda]

12 minutes ago, ThoughtCriminal said:

Daily dose of "Javier tells us how fucked we are". 

Is this a bubble that is going to pop as suddenly as US timber or are we in a whole world of trouble? Potentially a new energy paradigm where a lot of people a little bit colder?

[Noallegiance]

13 minutes ago, HousePriceMania said:

are ETFs that short the market a real thing ? 

I'd like to short the UK property market

Steady on Michael

[ThoughtCriminal]

Just speaking to my friend the energy trader. 

 

Pretty fucking sobering really. 

[Yadda yadda yadda]

3 minutes ago, ThoughtCriminal said:

Just speaking to my friend the energy trader. 

 

Pretty fucking sobering really. 

UK must have had spare capacity the last week or so as it was windy. Gas use for electricity was way down. So they were able to speculate and store. Buy gas on windy days and sell when it is still. Must be able to make a fortune that way.

Looking out of the window there is only a light breeze today. Not cold though.

I can't see how this is a one off winter. It looks like demand outstrips supply.

Go long sheep as people buy wooly jumpers. Climate policy means less meat and fewer sheep. Wool might be worth more than the shearers' wages!

[Barnsey]

4 hours ago, DurhamBorn said:

He lazed around all his life.If he took that crap job at 18 he might be a manager now.The problem with welfare is it is more than the entry level jobs,so people never start.Thats why at 50 once the kids are over 18 they are stuffed.This inflation will lift wages,but it will eat hard into welfare because it is in the goods and services they use more off.The amount they burn waiting in the Mcdonalds drive through alone.There is no political will to cut UC etc,but they might tighten the rules and start to make it much more of a chore claiming.

I get things like mental health play their role, but it's the slightly pathetic nature of many who've been cosseted by the benefits system in a disinflationary/low inflation couple of decades that just gets on my tits. I had a bad period post GFC but worked my arse off and didn't claim a penny, doing all sorts of minimum wage jobs (sealing Sky TV marketing envelopes with depressed Poles 11 hours a day was a highlight).

[Lightscribe]

5 hours ago, Cattle Prod said:

You have to laugh, really. I ordered a second cylinder of butane this morning.

Edit to add: there are plenty of refills availabe, but the cylinders are widely sold out in the SE. There is a silent bottled gas run in progress. The government treat us like children (Boris saying "we're not responsible for energy market stuff") but the trust is gone, and people arent as stupid as they think. Be self reliant in as many ways as you can.

If I lived nearer I’d fill my boots, although you have to take them all. I’m sure a Dosbodder lurking on here will snap them up.

Now we can all identify each other not only with out of season M&S clothes and pizza ovens, but gas bottles loaded up in every possible space of our 10 year+ cars.

[Noallegiance]

32 minutes ago, Yadda yadda yadda said:

UK must have had spare capacity the last week or so as it was windy. Gas use for electricity was way down. So they were able to speculate and store. Buy gas on windy days and sell when it is still. Must be able to make a fortune that way.

Looking out of the window there is only a light breeze today. Not cold though.

I can't see how this is a one off winter. It looks like demand outstrips supply.

Go long sheep as people buy wooly jumpers. Climate policy means less meat and fewer sheep. Wool might be worth more than the shearers' wages!

Weather looks benign over the next 5-7 days, too.

[HousePriceMania]

Found a REIT inverse EFT, US based though.  Want a UK one :-)

 

 ProShares Short Real Estate

9.24 USD-40.62 (-81.47%)all time

6 Oct, 10:23 GMT-4 ·Disclaimer

NYSEARCA: REK

 

[Chewing Grass]

5 minutes ago, Noallegiance said:

Weather looks benign over the next 5-7 days, too.

 

If it wasn't for the 6MW of wind at 6:30 this evening they would be 2MW under and prices would be ^^^.

[DurhamBorn]

2 hours ago, Sidd said:

That makes sense and no one else could have explained the relation with the energy sector more succinctly than that. Thanks a lot.

Its something hardly anyone understands,but is one of the main drivers of liquidity flows.The amount of dollars,the amount of energy used and the price.Of course those dollars arent destroyed,they just move.The energy producer gets more dollars,but the energy consumer starts to run out of them.At this point you will start to see treasury yields going up,thats due to selling to raise dollars from foreign holders.That means the Fed has to fund the deficit more by printing etc.The energy countries will start to buy machinery etc and capital goods while the consumer nations consume less consumer goods.Its why you get a more industrial cycle when energy prices increase,the dollars are moved from consumers to producers with different buying wants and needs.

[Don Coglione]

4 minutes ago, DurhamBorn said:

Its something hardly anyone understands,but is one of the main drivers of liquidity flows.The amount of dollars,the amount of energy used and the price.Of course those dollars arent destroyed,they just move.The energy producer gets more dollars,but the energy consumer starts to run out of them.At this point you will start to see treasury yields going up,thats due to selling to raise dollars from foreign holders.That means the Fed has to fund the deficit more by printing etc.The energy countries will start to buy machinery etc and capital goods while the consumer nations consume less consumer goods.Its why you get a more industrial cycle when energy prices increase,the dollars are moved from consumers to producers with different buying wants and needs.

Cracking stuff, DB. I know that this thread has been suffering noise again of late, please don't be put off posting your gems.