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


spunko

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geordie_lurch

This really detailed alternative thinking article from Zerohedge proposes a different future for us all based on even more QE and is certainly something to consider I think. I would be especially interested in your thoughts on this @DurhamBorn O.o

"Total US debt and underfunded liabilities are just shy of $160 trillion.

So what is going on, and why is it that virtually every topic these days has to do with climate change, "net zero", green energy and ESG?

The reason - as one would correctly suspect - is money. Some $150 trillion of it.

Earlier today, Bank of America published one of its massive "Thematic Research" tomes, this time covering the "Transwarming" World, and serves as a massive primer to today's Net Zero reality. .. none of which happen to mention China's role in the "global climate change" crisis of course (after all, can't offend Beijing and lose the biggest revenue stream now can we) and comes at a very precarious time for the green cause, just when soaring energy prices around the globe as a result of the escalating global energy crisis, threatens to crush any grass roots support to fight "global warming."

Responding rhetorically to the key question, "how much will it cost?", BofA cuts to the case and writes $150 trillion over 30 years - some $5 trillion in annual investments - amounting to twice current global GDP! 

  • Will it be inflationary? Yes, expect 1-3% pa shock. This is for the next 30 years... over and on top of any already present inflation!
  • What are the bottlenecks? Geopolitics, climate wars and EM.
  • Do we have the resources? Nickel and Lithium are just two that could be in deficit as soon as 2024.
  • Is green technology really green? Not really

BofA admits, it's all about greenlighting the biggest QE episode in history!

We just see a peak of <1% additional inflation a year over a three decade horizon. Under more aggressive scenarios where central banks opt to absorb either half or the full decarbonization bills through quantitative easing, the risks of an inflation shock grow. Still, we think our third case is the most likely scenario, as it would be politically difficult to justify a much more expansive monetary impulse. True, while central bankers have expressed a desire to help green the economy, their corporate bond purchases have historically been restricted to crisis time policies through quantitative easing and remain well below purchases of sovereign debt. As such, any purchases of corporate green bonds would likely be limited both by the size of future purchase programs and their proportion relative to the overall corporate bond market, with slightly higher allocations under more progressive purchase policies that highlight environmental concerns

And there you have it: just as covid was one giant smokescreen to "allow" central banks and Treasuries to merge and lead us to Helicopter Money and MMT, creating some $30 trillion in liquidity in the process, the "Net Zero" myth is what will perpetuate this endless printing for the next 30 years, a period during which the only benefits will be bestowed upon those who benefit from QE and money printing."

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HousePriceMania
1 hour ago, geordie_lurch said:

I don't want to scare monger and take the thread off topic but the biggest macro event of our lifetimes is probably taking place now and will probably only get worse this winter. Who knows who might even be around in 12 months time to keep the power stations going :ph34r:

https://www.rintrah.nl/too-many-people-are-dying-and-its-starting-to-worry-the-demographers/

(Credit @wherebee for the above in the pandemic thread here and @norfolkhorn for the following)

For those on Twitter their is some similar Scottish data...

 

I said a few weeks ago we should keep an eye on this.

This could be significant if 1000s start dying every day over the winter.

I guess we'll find out then, based on what Boris does, if this is a real pandemic or a scamdemic.

Dunno how real this is:

https://wallstreetonparade.com/2021/10/quietly-the-fed-releases-the-names-of-banks-that-got-billions-in-emergency-repo-loans-in-2019/

Quietly, the Fed Releases the Names of Banks that Got Billions in Emergency Repo Loans in 2019

But evens since Jan 2020 make a lot more sense if you view it from the point of the banking system having collapsed.

 

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1 hour ago, Noallegiance said:

What do you think drives DHs call for housing to be hit in a bust? Credit drying up and not coming back for housing because credit is directed to keep what's left of the real economy going?

Confidence and margin calls elsewhere etc i supect.

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2 hours ago, geordie_lurch said:

I don't want to scare monger and take the thread off topic but the biggest macro event of our lifetimes is probably taking place now and will probably only get worse this winter. Who knows who might even be around in 12 months time to keep the power stations going :ph34r:

https://www.rintrah.nl/too-many-people-are-dying-and-its-starting-to-worry-the-demographers/

(Credit @wherebee for the above in the pandemic thread here and @norfolkhorn for the following)

For those on Twitter their is some similar Scottish data...

 

Why?

The UKPOP is the highest its ever been.

With high population come high death rates.

Its really that simple.

 

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geordie_lurch
8 minutes ago, spygirl said:

Why?

The UKPOP is the highest its ever been.

With high population come high death rates.

Its really that simple.

If you had read the first article that was based on figures across the whole of Europe O.o Here's a snippet for you...

"You can see for yourself the excess mortality for much of the EU here. Few people realize that in 2021 we have had as much excess mortality, as we did in 2020. The difference is that the age profile has shifted: Whereas most of the excess mortality was in elderly people in 2020, in 2021 it’s increasingly showing up among younger people. The excess mortality has a peculiar characteristic, in that it starts showing up later in younger age groups, with the exception of children, in whom no excess mortality is observed.

For the 29 participating countries as a whole, we have 4000 excess deaths among people aged 15-44. These deaths are hard to explain, because young people normally don’t die from COVID-19. Just 0.9% of COVID-19 deaths in the Netherlands are people under the age of fifty. The curve of excess mortality in this age category also doesn’t fit COVID-19. This is a seasonal virus that disappear in the summer, but the excess deaths among young people mainly show up during the summer."

As someone wiser than me once said... coincidence, after coincidence, after coincidence may not be a coincidence. It may be a pattern.

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45 minutes ago, geordie_lurch said:

This really detailed alternative thinking article from Zerohedge proposes a different future for us all based on even more QE and is certainly something to consider I think. I would be especially interested in your thoughts on this @DurhamBorn O.o

"Total US debt and underfunded liabilities are just shy of $160 trillion.

So what is going on, and why is it that virtually every topic these days has to do with climate change, "net zero", green energy and ESG?

The reason - as one would correctly suspect - is money. Some $150 trillion of it.

Earlier today, Bank of America published one of its massive "Thematic Research" tomes, this time covering the "Transwarming" World, and serves as a massive primer to today's Net Zero reality. .. none of which happen to mention China's role in the "global climate change" crisis of course (after all, can't offend Beijing and lose the biggest revenue stream now can we) and comes at a very precarious time for the green cause, just when soaring energy prices around the globe as a result of the escalating global energy crisis, threatens to crush any grass roots support to fight "global warming."

Responding rhetorically to the key question, "how much will it cost?", BofA cuts to the case and writes $150 trillion over 30 years - some $5 trillion in annual investments - amounting to twice current global GDP! 

  • Will it be inflationary? Yes, expect 1-3% pa shock. This is for the next 30 years... over and on top of any already present inflation!
  • What are the bottlenecks? Geopolitics, climate wars and EM.
  • Do we have the resources? Nickel and Lithium are just two that could be in deficit as soon as 2024.
  • Is green technology really green? Not really

BofA admits, it's all about greenlighting the biggest QE episode in history!

We just see a peak of <1% additional inflation a year over a three decade horizon. Under more aggressive scenarios where central banks opt to absorb either half or the full decarbonization bills through quantitative easing, the risks of an inflation shock grow. Still, we think our third case is the most likely scenario, as it would be politically difficult to justify a much more expansive monetary impulse. True, while central bankers have expressed a desire to help green the economy, their corporate bond purchases have historically been restricted to crisis time policies through quantitative easing and remain well below purchases of sovereign debt. As such, any purchases of corporate green bonds would likely be limited both by the size of future purchase programs and their proportion relative to the overall corporate bond market, with slightly higher allocations under more progressive purchase policies that highlight environmental concerns

And there you have it: just as covid was one giant smokescreen to "allow" central banks and Treasuries to merge and lead us to Helicopter Money and MMT, creating some $30 trillion in liquidity in the process, the "Net Zero" myth is what will perpetuate this endless printing for the next 30 years, a period during which the only benefits will be bestowed upon those who benefit from QE and money printing."

I didnt know at the time how they would print the dis-inflation back,just that they would have to,and "green" investment looks like a big part of the way.However i dont think they will be able to purchase many green bonds themselves because they wont be able to print enough more due to inflation.I do think QE and interest rate increase might happen though and if they do i should be put forward for the Nobel prize because i doubt anyone sees that coming.Outlier still yet though.

Outside of finance i made the choice to close down my very successful import business and remove the large amount of capital in there due to the macro roadmap.At the time most people thought i was crazy to do that as the business was hugely scaleable and profitable.Most of the capital went into gold miners and then joined the rest laddering in mostly last March.Im hugely satisfied that i was right to do so.I can only imagine the nightmare importing is right now and the margin destruction going on will be epic.Costs will be passed on,but sales will fall and cashflow management will be killing loads of small companies.

https://www.bbc.co.uk/news/business-58904567

"Mr Simpson uses the example of a toy construction truck: In October 2020, it cost 70p to ship from the Far East to the UK. Today, it costs £7 to ship.

The truck currently sells for £15, but he says the price will need to rise soon, as almost half of the retail price is now taken up by shipping costs."

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5 minutes ago, geordie_lurch said:

If you had read the first article that was based on figures across the whole of Europe O.o Here's a snippet for you...

"You can see for yourself the excess mortality for much of the EU here. Few people realize that in 2021 we have had as much excess mortality, as we did in 2020. The difference is that the age profile has shifted: Whereas most of the excess mortality was in elderly people in 2020, in 2021 it’s increasingly showing up among younger people. The excess mortality has a peculiar characteristic, in that it starts showing up later in younger age groups, with the exception of children, in whom no excess mortality is observed.

For the 29 participating countries as a whole, we have 4000 excess deaths among people aged 15-44. These deaths are hard to explain, because young people normally don’t die from COVID-19. Just 0.9% of COVID-19 deaths in the Netherlands are people under the age of fifty. The curve of excess mortality in this age category also doesn’t fit COVID-19. This is a seasonal virus that disappear in the summer, but the excess deaths among young people mainly show up during the summer."

Ill have to look through it.

The Euro deaths rates are here -

https://www.euromomo.eu/graphs-and-maps/

Covid is still an old people death.

 

 

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4 minutes ago, geordie_lurch said:

If you had read the first article that was based on figures across the whole of Europe O.o Here's a snippet for you...

"You can see for yourself the excess mortality for much of the EU here. Few people realize that in 2021 we have had as much excess mortality, as we did in 2020. The difference is that the age profile has shifted: Whereas most of the excess mortality was in elderly people in 2020, in 2021 it’s increasingly showing up among younger people. The excess mortality has a peculiar characteristic, in that it starts showing up later in younger age groups, with the exception of children, in whom no excess mortality is observed.

For the 29 participating countries as a whole, we have 4000 excess deaths among people aged 15-44. These deaths are hard to explain, because young people normally don’t die from COVID-19. Just 0.9% of COVID-19 deaths in the Netherlands are people under the age of fifty. The curve of excess mortality in this age category also doesn’t fit COVID-19. This is a seasonal virus that disappear in the summer, but the excess deaths among young people mainly show up during the summer."

Suicides due to lockdown and the local Mcdonalds more likely than vaccines.I was out yesterday and the state of half the young lasses,hugely overweight and walk the speed of snails.

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geordie_lurch
3 minutes ago, spygirl said:

Ill have to look through it.

The Euro deaths rates are here -

https://www.euromomo.eu/graphs-and-maps/

Covid is still an old people death.

The direct link was in the page I linked to and above but here it is again for you: https://www.euromomo.eu/graphs-and-maps#excess-mortality

and the following graphs which back up the original article clearly showing excess deaths in 2021 are way above baseline and 2020 for younger age groups so far and we aren't at winter yet O.o

image.thumb.png.8f0d7dc444d337778055cf6c7ff85075.png

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sleepwello'nights
12 minutes ago, DurhamBorn said:

 

https://www.bbc.co.uk/news/business-58904567

"Mr Simpson uses the example of a toy construction truck: In October 2020, it cost 70p to ship from the Far East to the UK. Today, it costs £7 to ship.

The truck currently sells for £15, but he says the price will need to rise soon, as almost half of the retail price is now taken up by shipping costs."

How true is that? 

Has anyone got the numbers used to make that assertion. I've had a quick skim at Frontline (FRO) and its share price hasn't moved much.

What are the economics of shipping costs and where have the large price increases come from. Is it the loading and unloading and freight transport to or from the ports or have the actual sailing costs jumped? Or is it uisng air freight rather than shipping?

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7 minutes ago, geordie_lurch said:

The direct link was in the page I linked to and above but here it is again for you: https://www.euromomo.eu/graphs-and-maps#excess-mortality

and the following graphs which back up the original article clearly showing excess deaths in 2021 are way above baseline and 2020 for younger age groups so far and we aren't at winter yet O.o

image.thumb.png.8f0d7dc444d337778055cf6c7ff85075.png

I get the feeling you are heading towards blaming this on the vaccines.

That would be pretty low down my list.

I am still very angry that they didn't  look at non-covid factors when implementing the lockdown.

At the time I said there would be loads of unintended consequences and it was a mistake but the government were only concerned with the part they could be blamed for which was their Covid response.

Their actions affected the most vulnerable in society the most, the people with no voice, the people with their heads down when you pass them in the street, the unseen as they don't go out and don't have family and social support.

GP's have been in hiding for 18 months FFS, does anyone think these people will keep phoning the doctor and jumping through all the new tech hoops until they get through?

 

In my opinion we are seeing the result of people drinking, eating, not exercising, not getting the medical care they need to and generally have depression forced upon them.

 

I get that they saved some old and fat people by locking down and 'flattening the curve' but my emotions are swayed much more towards the vulnerable.

</rantover>

 

 

 

 

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Not sure what to make of this:

 

Cryptocurrency crash could spark the next market meltdown, warns Bank of England deputy

 

Bitcoin and other cryptocurrencies could cause the next financial crash, according to a top Bank of England official.

In a speech yesterday, deputy governor Sir Jon Cunliffe said a massive collapse in the price of cryptocurrencies to as low as zero is 'certainly a plausible scenario' and that there was 'a possibility of contagion' across the global financial sector.

Cunliffe said the hit to individual investors if cryptocurrencies collapse would be unlikely to cause a 'financial stability risk'. But he added: 'The picture is less clear for financial institutions.'

 

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geordie_lurch
Just now, planit said:

I get the feeling you are heading towards blaming this on the vaccines.

That would be pretty low down my list.

I am still very angry that they didn't  look at non-covid factors when implementing the lockdown.

At the time I said there would be loads of unintended consequences and it was a mistake but the government were only concerned with the part they could be blamed for which was their Covid response.

Their actions affected the most vulnerable in society the most, the people with no voice, the people with their heads down when you pass them in the street, the unseen as they don't go out and don't have family and social support.

GP's have been in hiding for 18 months FFS, does anyone think these people will keep phoning the doctor and jumping through all the new tech hoops until they get through?

 

In my opinion we are seeing the result of people drinking, eating, not exercising, not getting the medical care they need to and generally have depression forced upon them.

 

I get that they saved some old and fat people by locking down and 'flattening the curve' but my emotions are swayed much more towards the vulnerable.

</rantover>

Yep I'm definitely in the 'unintended' effects of the 'vaccines' being the most likely factor in those stats and really not sure how that data can be interpreted as being the most vulnerable suddenly showing up as excess deaths 12 months after a supposed once in a century deadly 'pandemic' O.o However I won't post more in this thread but for anyone interested there's loads more 'coincidences' being discussed in the Covid 1984 threads :Beer:

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geordie_lurch
Just now, invalid said:

Not sure what to make of this:

Cryptocurrency crash could spark the next market meltdown, warns Bank of England deputy

Bitcoin and other cryptocurrencies could cause the next financial crash, according to a top Bank of England official.

In a speech yesterday, deputy governor Sir Jon Cunliffe said a massive collapse in the price of cryptocurrencies to as low as zero is 'certainly a plausible scenario' and that there was 'a possibility of contagion' across the global financial sector.

Cunliffe said the hit to individual investors if cryptocurrencies collapse would be unlikely to cause a 'financial stability risk'. But he added: 'The picture is less clear for financial institutions.'

I would think the more likely scenario is that people will rush to decentralised crypto currencies as the markets meltdown and fiat currencies continue to be hyperinflated xD

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M S E Refugee
5 minutes ago, planit said:

I get the feeling you are heading towards blaming this on the vaccines.

That would be pretty low down my list.

I am still very angry that they didn't  look at non-covid factors when implementing the lockdown.

At the time I said there would be loads of unintended consequences and it was a mistake but the government were only concerned with the part they could be blamed for which was their Covid response.

Their actions affected the most vulnerable in society the most, the people with no voice, the people with their heads down when you pass them in the street, the unseen as they don't go out and don't have family and social support.

GP's have been in hiding for 18 months FFS, does anyone think these people will keep phoning the doctor and jumping through all the new tech hoops until they get through?

 

In my opinion we are seeing the result of people drinking, eating, not exercising, not getting the medical care they need to and generally have depression forced upon them.

 

I get that they saved some old and fat people by locking down and 'flattening the curve' but my emotions are swayed much more towards the vulnerable.

</rantover>

 

 

 

 

I agree with your analysis however there are too many bad actors promoting these Jabs and my scepticism of how safe and effective they are remains elevated.

I hope and pray the Jabs are safe because it really doesn't bare thinking about if they are not.

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7 minutes ago, planit said:

GP's have been in hiding for 18 months FFS, does anyone think these people will keep phoning the doctor and jumping through all the new tech hoops until they get through?

 

 

 

 

This is a planned systemic dismantling of the NHS as we all know it.

The GP app I used to book appointment has now removed that feature and replaced it with a plethora of other amazing options from booking chickenpox vaccines to musculoskeletal session, but at a nice tidy (private industry) price.

Eventually everyone will get used to it and many will adopt going private as the new normal (those who can't afford it will suffer and those who can will get by or suffer later in retirement). The GP's are definitely sitting on their high horses as they benefit from this private work, but what we should all know is that the root cause is far above their pay grade. 

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Just now, Sidd said:

This is a planned systemic dismantling of the NHS as we all know it.

The GP app I used to book appointment has now removed that feature and replaced it with a plethora of other amazing options from booking chickenpox vaccines to musculoskeletal session, but at a nice tidy (private industry) price.

Eventually everyone will get used to it and many will adopt going private as the new normal (those who can't afford it will suffer and those who can will get by or suffer later in retirement). The GP's are definitely sitting on their high horses as they benefit from this private work, but what we should all know is that the root cause is far above their pay grade. 

Just following the dentists then.

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37 minutes ago, sleepwello'nights said:

How true is that? 

Has anyone got the numbers used to make that assertion. I've had a quick skim at Frontline (FRO) and its share price hasn't moved much.

What are the economics of shipping costs and where have the large price increases come from. Is it the loading and unloading and freight transport to or from the ports or have the actual sailing costs jumped? Or is it uisng air freight rather than shipping?

Arent the higher shipping costs due mainly to combination of the West no longer sending its landfill out to China, so the containers are now typically empty on return run. Plus Covid restrictive work practices have increased costs and also workers are more off-sick when tested positive, etc; these effects cause delays/ efficiency costs all the way along the supply chain, with the ports being the most visible example. 

However on the macro side - the shipping companies could have begun changing their 'logistics' earlier, i.e. only now are they starting to use smaller containers/ships, etc... But probably just another good example of erstwhile  'global efficiency' having trumped anti-fragility. 

 

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18 minutes ago, invalid said:

Not sure what to make of this:

Could be BoE working their way through the 5 stages of grief as a way of psyching up for the inevitable BTC-based QE.

Maybe they've been watching George:

 

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1 hour ago, sleepwello&#x27;nights said:

How true is that? 

Has anyone got the numbers used to make that assertion. I've had a quick skim at Frontline (FRO) and its share price hasn't moved much.

What are the economics of shipping costs and where have the large price increases come from. Is it the loading and unloading and freight transport to or from the ports or have the actual sailing costs jumped? Or is it uisng air freight rather than shipping?

https://www.statista.com/statistics/1250636/global-container-freight-index/

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1 hour ago, spygirl said:

Why?

The UKPOP is the highest its ever been.

With high population come high death rates.

Its really that simple.

 

The death rate is ballooning, Spy.  Not from COVID.  From a combination of the lockdowns, overall shitty stress, and, most importantly, the vaccine side effect kills.  One example: the GB Olympic swimming team 31 year old that died this week.  Double jabbed.  No way would he have died unless he had got jabbed, in my view.

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2 hours ago, Sidd said:

This is a planned systemic dismantling of the NHS as we all know it.

The GP app I used to book appointment has now removed that feature and replaced it with a plethora of other amazing options from booking chickenpox vaccines to musculoskeletal session, but at a nice tidy (private industry) price.

Eventually everyone will get used to it and many will adopt going private as the new normal (those who can't afford it will suffer and those who can will get by or suffer later in retirement). The GP's are definitely sitting on their high horses as they benefit from this private work, but what we should all know is that the root cause is far above their pay grade. 

I agree. The NHS does indeed appear to be crumbling before our eyes. But i think it is worth pointing out that it was the whole medical profession that chose to 'fully embrace' Covid not just the GP's. 

Moreover, 'evil doctoring' ('Dr Evil'?!) has throughout history been a very scary/powerful phenomenon... the trusted becoming the embodiment of the treacherous(?), but i shan't hype this further. However, last April time i did post here that for me, Covid had a dark stench of political malfeasance about it, and that it would eventually have more impact than Climate Change policies... politically, socially, economically i think this is already coming true.   

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