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

[janch]

19 hours ago, Cattle Prod said:

fiscal QE clearly is inflationary, so my (substantial) bet is that gold will snap back.

My first thought was that the gold price is known to be manipulated which could explain the tight correlation. 

My second thought was that maybe the TPTB are assuming BTC may be "filling the gap" so they haven't manipulated the gold price to what they would have done without crypto as it's considered to be a digital equivalent of gold ie store of value/inflation hedge/hedge against government etc

My third thought is that if they are allowing the YCC to collapse as has just happened in Oz maybe the yield will be allowed to rise rather than the gold price. 

This would be a shame as it looked as if the PM miners were about to move upwards and I'd just bought some more GDGB.

On the other hand I could be talking rubbish

[sancho panza]

16 hours ago, Lightscribe said:

Not sure if anyone posted this earlier, but she’s on the ball and my type of woman. Financially savvy and got great physical er..assets for the… erm inflation cycle. 

Fascinating interview.Junk bond yields below CPI inflation in the US.......wtf....I mean what could go wrong.

As DDMB says,this is unprecedented but it's been that way for a while.Foranyone looking for a possilbe spark for a deflationary BK wave,then this could be it.Once the disclocations start they won't be able to stop them.

Best quote along the lines of Gromen's 'two horses, one ass'

'Fed cannot tighten BUT the Fed has to tighten.....this is the bed that they made.'

 

Interesting as well at 20 minutes, when she gets into Presidential donations to Hillary Clinton by Lael Brainard and then all the stock deals Fed members/Members of Congress eg Powell's holdigns being inddex linked, have been doing.

[DurhamBorn]

1 hour ago, Cattle Prod said:

Great stuff. Shells debt down 12% too, cash flow starting to pour in even if unfavorably hedged. That's 48% annualized, or debt gone in two years if they keep up that pace. They don't need to of course, but it demonstrates the point what these companies earnings will be once they're done with that. And yet the MSM focusses on an earnings miss.

Debt down,divi up yet billions into renewables as well,where pure plays have to invest with debt.I sliced a few a couple of months ago,around 10%,but i wouldnt sell anymore,core holding for me.

[JMD]

Highly speculative selection of junior gold/silver miners by analyst Jeff Clark. Not posted as advise - but I found it interesting to see his 'deep dive' presentation. Obviously I'm not qualified to know if his picks make any investment sense, but apparently these are the types of miners he offers subscribers to his newsletter service.              https://wealthion.com/clark/

[sancho panza]

3 hours ago, moneyscam said:

Hmm, seems to me Australia is a test ground for more than authoritarian vaxx mandates / lockdowns. Could this be the opening move to ratchet up rates which then cause defaults in their overleveraged bubblicious housing markets so that Blackrock etc can come in and pick these assets up for pennies on the dollar? And then will they rent these properties back to them but only as long as they're quadrillion jabbed and signed up to digital ID / social credit score? Great reset incoming!

Or maybe I'm just being a conspiracy loon but it is very strange for a central bank to say it is employing YCC and then trash it soon after. Bears keeping an eye on.

The market moves at the margins first.Aus/NZ are the msot exposed to China.Ardern has made conciliatroy moves towards Beijing as I understand(and she has some form as a young marxist).I think Aus/NZ are the psoter boys for maybe what the Chinese were hoping for in terms of Govts locking down etc.

Where it's possibly going wrong is that international money is actually retreating from thsoe two markets.I have a set of forex markers that I monitor trying to predict a BK(part of the reason I'm still long),I'll have a look and see what they're throwing up ref Oz/NZ.

I was saying to someone the other day that those two countries reactions to covid have totally put me off ever visiting/retiring/setting up a business there.Must say Canada too.I can't imagine I'm the only capitalist feeling that way.

It does seem strange as you say,but there may be some things going on under the surface that we can't see that have focred their hand.

3 hours ago, Axeman123 said:

I think this is a deliberate signal of changing tides. Expect a roll out of similar globally. Inflation leaves no alternative to ending QE and raising rates, and governments are just going to have to tough out any taper tantrum type response. Really positive sign for the thesis of this thread.

It's beginnign to look like that isn't it?

[sancho panza]

3 hours ago, Axeman123 said:

The fed will probably want to "follow international consensus" when raising rates, so will welcome front-running. The fed mayeven be waiting for this to move. The difficulty of offshore dollar shortages would also abate with other currencies appreciating against the dollar. 

What I find fascinating is first Jack Dorsey and now Elon starting to discuss thread talking points! (obviously Elon is worried about paying taxes, but still normies will be seeing this stuff for the first time)

 

Don't mean to sound like Steve Keen but I dread to think what the private debt to GDP figures are.

 

But then it doesn't matter to the MMTers as their models don't factor it in .

[sancho panza]

Comms getting bashed today.

Starting to look at AT&T.....$25 looks ok for a first ladder? Anyone with any knowledge?Tesla esque P/E ratio

[moneyscam]

1 hour ago, sancho panza said:

Comms getting bashed today.

Starting to look at AT&T.....$25 looks ok for a first ladder? Anyone with any knowledge?Tesla esque P/E ratio

 

VOD, ugh, bought it for the divi and shouldn't care too much about share price and treat it like a bond paying a regular coupon but of all my investments it is far and away the worst performer and I've owned it for around 5 years. It's now priced at 2 x EBITDA so cheap on a long term basis but can bring myself to buy more as I'm now worrying market is pricing in a further cut in the divi.

[HousePriceMania]

Has this been posted ?
 

https://schiffgold.com/commentaries/twitter-ceo-jack-dorseys-hyperinflation-warning/

 

"Twitter CEO Jack Dorsey’s Hyperinflation Warning"
 

 

 

Maybe he's trying to pump bitcoin but when someone with this much media coverage comes out with something like that then it has the potential of turning into a self fulfilling prophesy.

 

 

Paul Volker had to push rates to 20% in order to tame the inflation of the 1970s. If we have an even bigger inflationary fire now, wouldn’t rates have to go even higher to put it out this time around?

And of course, higher rates would collapse this economy built on easy money and stimulus.

How is the Fed going to sit idly by and watch the entire house of cards that it spent the last couple of decades building completely implode?” Schiff asked. “It’s not going to do that. … The only way that the Fed can contain inflation is just to hope that it never really becomes a problem. And that’s basically what it’s doing. It’s pinning everything on hope.”

 

 

[HousePriceMania]

https://www.dailymail.co.uk/news/article-10130255/Twitter-founder-Jack-Dorsey-warns-hyperinflation-Australia-worried.html

 

Twitter founder Jack Dorsey warns 'hyperinflation' will strike in America soon and 'change everything' - here's why Australia should be worried

• Twitter CEO Jack Dorsey warned that US could soon be struck by 'hyperinflation'
• Hyperinflation associated with Weimar Republic Germany during the 1920s 
• Price rises in hyper percentages occurred in Zimbabwe, Venezuela and Cuba 
• When quizzed by a follower Dorsey replied that 'it will happen in the US soon'
• Covid supply shortages are threatening US inflation unseen since early 1980s

Quietly slipping off to buy a house.......

[DurhamBorn]

I suspect on the telcos the market is worried about interest rate increases because of the debt they carry.However that is actually the bull case because it makes it much harder for new players to enter markets.Its key of course that the debt is structured right so if they want to they can pay from tax flow and not roll over.Key they manage to stick to inflation + price increases though.

Verizon or T in the US look to be getting to a decent entry price.Sector might need a deal to kick it into life,or a few of the big  companies to announce growing free cash.

[Castlevania]

1 hour ago, sancho panza said:

Comms getting bashed today.

Starting to look at AT&T.....$25 looks ok for a first ladder? Anyone with any knowledge?Tesla esque P/E ratio

You missed Airtel Africa off your list. It was up 10%

 

[Shamone]

18 hours ago, Lightscribe said:

Not sure if anyone posted this earlier, but she’s on the ball and my type of woman. Financially savvy and got great physical er..assets for the… erm inflation cycle. 

Filth.

[HousePriceMania]

14 minutes ago, DurhamBorn said:

I suspect on the telcos the market is worried about interest rate increases because of the debt they carry.

In the great depression it was companies with debt that won out IIRC, because they were in a better position as their debt was wiped out, better infrastructure because of their spending etc.

[Barnsey]

Was back in SW London last weekend, very odd atmosphere, maybe as I've been away a while now, but coffee shops still empty, lots of slightly dazed posh twats that can't see what's coming. The foreigners have moved back or cheaper parts of the UK, and now mortgage rates are going up!

British homeowners face soaring mortgage interest payments https://www.dailymail.co.uk/news/article-10139853/British-homeowners-face-soaring-mortgage-payments.html?ito=native_share_channel-home-preview

Naturally had to look in a few EA windows, this one made me gasp...(3 bed for £650k if you're struggling to see the tiny print bottom left, wonder why that is).

[Bobthebuilder]

3 minutes ago, Barnsey said:

Was back in SW London last weekend, very odd atmosphere, maybe as I've been away a while now, but coffee shops still empty, lots of slightly dazed posh twats that can't see what's coming. The foreigners have moved back or cheaper parts of the UK, and now mortgage rates are going up!

British homeowners face soaring mortgage interest payments https://www.dailymail.co.uk/news/article-10139853/British-homeowners-face-soaring-mortgage-payments.html?ito=native_share_channel-home-preview

Naturally had to look in a few EA windows, this one made me gasp...

Every property listing I see, pretty much anywhere in the UK at the moment, would look over priced at 50% less than current asking.

[sancho panza]

Enjoying the DM articles.Most widely read news site in the world.

This p[rety much sums up my view of why I need to do less hours.

How the hell can he call himself a conservative and then tax the working instead of restraining spending?The political elite lost me 15+ years ago.He's one of them.

Anecdotally,already hearing that some of my Mum's old pals have been on the phone to her about enrgy price rises.This is going to be a brutal winter.

https://www.dailymail.co.uk/news/article-10139635/Rishi-Sunak-warned-Budget-not-going-feel-great-tax-burden-highest-70-years.html

Rishi squeezes the middle earners: Experts say families earning around £30,000 will bear the brunt of tax rises in Sunak's 'Boris Budget' - as Tories warn about Chancellor 'showing off' and ending up like Gordon Brown

 

They warned millions of people will be left worse off under plans unveiled by the Chancellor yesterday, with no realistic prospect of taxes falling in future, experts warned today.

The Chancellor faced a backlash over his big-spending economic plan as it was revealed all strata of society will end up paying more in the middle of a cost of living crisis.

Experts said the scale of the spending he announced yesterday would see the state expand to its biggest size since the late 1970s, before Margaret Thatcher conducted a decade of reform to bring it under control. 

He also faced criticism from within Tory ranks from MPs who accused him of being too interested in 'Brand Rishi' and warned he could end up like Gordon Brown - a chancellor who took the top job and lost power. 

The Institute for Fiscal Studies said middle-earners would lose an average of £180 per year, while inflation and a freeze in personal tax allowances meant that one in nine workers was now a higher-rate taxpayer. The rate was one in 30 in 1991.

[kibuc]

52 minutes ago, HousePriceMania said:

Has this been posted ?
 

https://schiffgold.com/commentaries/twitter-ceo-jack-dorseys-hyperinflation-warning/

 

"Twitter CEO Jack Dorsey’s Hyperinflation Warning"
 

I have a suspicion that all those guys think of any double-digit annual inflation as "hyperinflation" which is laughable. I remember when me and my brothers went for ice cream back in the early nineties carrying money in a fucking washtub.

[HousePriceMania]

3 minutes ago, kibuc said:

I have a suspicion that all those guys think of any double-digit annual inflation as "hyperinflation" which is laughable. I remember when me any my brother went for ice cream back in the early nineties carrying money in a fucking washtub.

My sister used to refuse to go to the shop for my parents with 10% extra in case prices had gone up.

4 minutes ago, kibuc said:

I have a suspicion that all those guys think of any double-digit annual inflation as "hyperinflation" which is laughable. I remember when me any my brother went for ice cream back in the early nineties carrying money in a fucking washtub.

Hyper inflation,  5% 

[HousePriceMania]

24 minutes ago, HousePriceMania said:

In the great depression it was companies with debt that won out IIRC, because they were in a better position as their debt was wiped out, better infrastructure because of their spending etc.

Hang on, that might have been the 1970s inflation Im thinking of, soz

[HousePriceMania]

Had to laugh at this one...

 

 

[M S E Refugee]

53 minutes ago, PrincessDrac said:

Alasdair Macleod. October 26, 2021: Big Problem For The Comex Shorts. The problem for the Swaps is that demand for physical is cleaning the market out on the dips. China’s deliveries into the public is greater this year than for all last year, and India’s imports have totalled 770 tonnes so far this year, substantially up on last year. Bear in mind that Comex is about one eighth of the total gold derivative market, excluding options. The short positions in London will be far larger. They need to be resolved in the eleven weeks remaining this year, before Basel 3 applies. My guess is that from now on holders of gold deposit accounts must expect letters from their banks closing their accounts. On the inflation side, we see escalating price pressures from higher energy prices still working through into production costs, backwardations in base metals, no end to the logistics disruption, and therefore the prospect of significantly higher consumer prices in the coming months. This is a very difficult situation for the shorts who continue to launch downside attacks in the paper gold market, but the problem is they keep running into aggressive physical buying on these dips.

My Wife and I have got a couple of 0% Credit Cards and I'm very tempted to buy some Sovereigns.

[reformed nice guy]

Another anecdote

Farmer friend went to sell some cows today. Price is down about 10-20%, especially young ones that other farmers would normally buy to fatten up (~2 years). Reason is price of feed is up so the cost of rearing them is seen as too risky. Fertiliser is also up at least 50%

[Loki]

5 minutes ago, reformed nice guy said:

Another anecdote

Farmer friend went to sell some cows today. Price is down about 10-20%, especially young ones that other farmers would normally buy to fatten up (~2 years). Reason is price of feed is up so the cost of rearing them is seen as too risky. Fertiliser is also up at least 50%

Here come the meat shortages after the glut

[MrXxxx]

3 hours ago, Shamone said:

Filth.

I thought they all looked like that, mine does!...does yours not then?!