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

[Barnsey]

1 hour ago, jamtomorrow said:

Fascinating. I'd love to see a histogram of those deposits.

Also explains a little of that ongoing velocity droop - take USD2.5tn off the denominator and M2V is more like 1.27 (for reference, most recent print was 1.115)

Looking at the breakdown, quite a bit of that with the middle classes (mainly upper middle?), just compare with 2008 when considering the effects on inflation/deflation going forward, possible future money flows, investment etc. Heck of a buffer.

 

[sleepwello'nights]

https://thephilosophicalsalon.com/a-self-fulfilling-prophecy-systemic-collapse-and-pandemic-simulation/

This article was posted in the Australia thread by @Long time lurking. I can't recall whether it is in this thread as well.

I need to read it more slowly to fully digest it as I don't understand the mechanisms it describes and the full implications if the current financial system collapsed. 

Anyway it explains the reason why world wide governments have leapt on the covid crisis forced by weight of the leading economic nations. 

I'm particularly intrigued with the article reinforcing @DurhamBorn's prediction that central banks would helicopter money to the general public. I still don't understand how DB came to that prediction.  

 

[Barnsey]

44 minutes ago, Barnsey said:

Looking at the breakdown, quite a bit of that with the middle classes (mainly upper middle?), just compare with 2008 when considering the effects on inflation/deflation going forward, possible future money flows, investment etc. Heck of a buffer.

 

UK on the other hand...

(Pantheonmacro.com)

Conclusion, furlough has been fairer and systemically safer than firing out indiscriminate stimmy cheques?

[Long time lurking]

25 minutes ago, sleepwello'nights said:

https://thephilosophicalsalon.com/a-self-fulfilling-prophecy-systemic-collapse-and-pandemic-simulation/

This article was posted in the Australia thread by @Long time lurking. I can't recall whether it is in this thread as well.

I need to read it more slowly to fully digest it as I don't understand the mechanisms it describes and the full implications if the current financial system collapsed. 

Anyway it explains the reason why world wide governments have leapt on the covid crisis forced by weight of the leading economic nations. 

I'm particularly intrigued with the article reinforcing @DurhamBorn's prediction that central banks would helicopter money to the general public. I still don't understand how DB came to that prediction.  

 

Imo i don`t buy the digital identity/vax pass and digital central bank currency theory as the reason for covid and the fact that no one in power is dismissing it is one of the reasons i don`t buy it then add in the vast majority of fiat is digital already ,how would another set of "numbers" elevate /avoid the position we are in now in the future 

What i do believe though is ,bailing out the banks and financial institutions again to the tune that is required was not politically tenable for every developed nation on the planet so what we have is smoke and mirrors covering up what is actually going on

TPTB are more than happy for the digital vax pass /social credit score theory to gain traction as it`s another deflection away from whats really happing.

Then you have the other problem which is the reason for covid dragging on ,if they injected as much capital as is required in a short period of time they risk a "Waimea" event 

Just look at the feds balance sheet 40% of the current $ in circulation have been created in the last year the same is likely to be true of every central bank ,it was allegedly created in the name of covid ,,,,follow the money  #2008 mk2 on steroids ?  

 

[geordie_lurch]

4 minutes ago, Long time lurking said:

Imo i don`t buy the digital identity/vax pass and digital central bank currency theory as the reason for covid and the fact that no one in power is dismissing it is one of the reasons i don`t buy it then add in the vast majority of fiat is digital already ,how would another set of "numbers" elevate /avoid the position we are in now in the future

Well as per your signature... "it`s easier to fool people than it is to convince them that they have been fooled" ,,,Mark Twain 

You posted the following video in one of the Covid threads making a very good case for this very thing

 

[HousePriceMania]

Oilies taking a tumble again today 

[wherebee]

28 minutes ago, Long time lurking said:

Imo i don`t buy the digital identity/vax pass and digital central bank currency theory as the reason for covid and the fact that no one in power is dismissing it is one of the reasons i don`t buy it then add in the vast majority of fiat is digital already ,how would another set of "numbers" elevate /avoid the position we are in now in the future 

What i do believe though is ,bailing out the banks and financial institutions again to the tune that is required was not politically tenable for every developed nation on the planet so what we have is smoke and mirrors covering up what is actually going on

TPTB are more than happy for the digital vax pass /social credit score theory to gain traction as it`s another deflection away from whats really happing.

Then you have the other problem which is the reason for covid dragging on ,if they injected as much capital as is required in a short period of time they risk a "Waimea" event 

Just look at the feds balance sheet 40% of the current $ in circulation have been created in the last year the same is likely to be true of every central bank ,it was allegedly created in the name of covid ,,,,follow the money  #2008 mk2 on steroids ?  

 

a CBDC has one huge advantage that normal fiat does not.  You can turn off, or make valueless, whatever elements you want.  For example, you could give everyone in London 1000 quid for a boost to the economy, but have the money worthless after 6 months.  

Even better, you can make it only spendable on certain things - no exchange to foreign currencies, for example.

 

It's a ruling class wet dream.  Bit like the old 'company store' where you paid the workers in shit scrip.

[geordie_lurch]

24 minutes ago, HousePriceMania said:

Oilies taking a tumble again today 

I've just set up new stop losses for all my UK shares to try and hang on to some profits since March 2020 as there's no good news coming with this Omnicron crap and I can see most shares heading back down to those levels before Xmas or before March 2022

[planit]

48 minutes ago, Barnsey said:

UK on the other hand...

(Pantheonmacro.com)

Conclusion, furlough has been fairer and systemically safer than firing out indiscriminate stimmy cheques?

I think the UK are way ahead of most countries with the Covid journey. October was the second month of near complete normality so it is not a surprise that we were more confident in going out and spending money.

It is clear the antibodies you get from catching Covid are much better than the ones you get from the vaccines.

The area under the Covid case graphs represent the number of people in the country that have had Covid and it is much higher for the UK than other countries. On top of that the first wave in London was huge and nearly all of this did not go into the figures (it's the reason London has not been over-run in the subsequent waves even though it has the highest population density).

Because of this we are in a much better place with regards to Omicron than everyone else. Next best is all the developing world who we didn't help get vaccines and couldn't afford crazy lockdowns so it swept through the population already (they had less deaths as the populations need to be hardy because of worse healthcare/less fat unfit old people).

 

 

[Long time lurking]

9 minutes ago, wherebee said:

a CBDC has one huge advantage that normal fiat does not.  You can turn off, or make valueless, whatever elements you want.  For example, you could give everyone in London 1000 quid for a boost to the economy, but have the money worthless after 6 months.  

Even better, you can make it only spendable on certain things - no exchange to foreign currencies, for example.

 

It's a ruling class wet dream.  Bit like the old 'company store' where you paid the workers in shit scrip.

Fiat is almost at the point where it would be possible to do that with out the need for covid the vast majority of payments made now are digital ,what you have outlined could have been implemented over time via slight of hand with far less hassle 'also do you believe all the banks in the world would back the central banks making them obsolete ?

The fact you can openly talk about your theory without fear of being censored as the end game to covid but not criticize anything covid related is the telling part IMO it`s because one needs to be sustained and the other is just another distraction on top 

I think this is all a distraction from whats really happening they are simply bailing out every financial institution and we are paying for it ,that is an untenable position for every government in the world  

Then factor in why is it the most leveraged countries in the world are the ones with the greatest covid problem , and the inverse regarding the poorest hows property prices in Australia ? sustainable ?

[wherebee]

2 minutes ago, Long time lurking said:

 

Then factor in why is it the most leveraged countries in the world are the ones with the greatest covid problem , and the inverse regarding the poorest hows property prices in Australia ? sustainable ?

the papers have flipped here in the last two weeks to suddenly warning of a house price crash.....

[Long time lurking]

Just now, wherebee said:

the papers have flipped here in the last two weeks to suddenly warning of a house price crash.....

What would that do to the banks 

Follow the money ,,all of the money 100`s trillons like fuck is that all for jabbs PPE and furlough 

[Hunty]

46 minutes ago, HousePriceMania said:

Oilies taking a tumble again today 

Buying opportunity. Truck backed up busy loading BP, BATS, IMB, VOD, Petrofac.

Whoever's selling cheers fellas.

[Majorpain]

51 minutes ago, HousePriceMania said:

Oilies taking a tumble again today 

Pre-empting the work from home order this evening?  At least my commute is going to get quieter.

[jamtomorrow]

1 hour ago, Barnsey said:

UK on the other hand...

(Pantheonmacro.com)

Conclusion, furlough has been fairer and systemically safer than firing out indiscriminate stimmy cheques?

The overall averages per household are certainly different, but UK households are still sat on a good chunk:

UK - £187bn excess pandemic savings -> $9000 per household

US - call it $2.5tn excess savings -> $20,000 per household

[ThoughtCriminal]

This looks ominous.

[belfastchild]

11 hours ago, spygirl said:

The core of BTsnetwork is fibre. And has been since 21st century network changes.

The BT trunk has always been more complex geometric than point 2 point. Typically, theres a 2nd, 3rd, 4th route between A n B.

 

 

I used to design national fibre networks. Some of my friends still do.

Thats the reason (until @DurhamBorn s posts made me look at it again) I wouldnt invest in BT or any of the old legacy carriers. The new upstarts were just installing FTTC as part of the course whilst BT et al were still talking about ADSL.

The BT line to my house is an overhead line, the Virgin line is FTTC then coax to my house. With BT I would struggle to get 35Mb/s whereas Im typing this on 100 Mb/s for the same money (or less for the majority of my 20 odd years with cable suppliers). BT was always hampered with having to supply everyone with a phone line for a fixed price. New entrants were not.
The difference now is (as pointed out by DB) that the vast new fibre rollout is different to the sprawling legacy networks which were organic rather than designed from a top down national perspective. Also they have got the govt and with inflation the customers to pay for it.

You only have to look at Ireland as an example, the amount of fibre installed over the last decade or so has been phenomenal. Its not hyperbole to say its possibly more than ever is needed. I can build an entire telco network in Ireland in a short period of time leasing dark fibre. The main rings arent the problem, its the end connections but with newbuild estates etc thats all installed as a matter of course.

The working from home has put a lot of previous network design (from BTs perspective) into a cocked hat, although saying that the bandwidth requirements are changing as people move to smaller streaming devices needing smaller bandwidth (although multiplied by members of the family). That also carries income problems, companies wont be paying for large pipes to buildings people dont inhabit any more and you dont need the traffic managment concentrated in key cbd areas any more as its been dispersed (somewhat, still need server access) to residential areas (for no extra revenue, maybe less as companies downgrade and pass on the costs to their employees).

I remember a presentation in BT (who are massive landowners) about filling the old strowger exchange buildings with rows and rows of laserdisc players for movies, that you could dial up and play and pause and stop etc from your phone line. A lot of netflix etc are co-located in the nearest node to save bandwidth (why some suppliers supply it for free) on the main networks. Right idea, just wrong time and wrong technology. If it hadve been rolled out, it would have been obsolete by the time it went operational (or shortly after).
Just look at the eff up BT made of sport, I know some of the people involved and right from the start (as a nowtv sport user) I knew they were on a hiding to nothing. That could have killed them.

The US is worse (branding things 4g that were 3g elsewhere in the world etc because they couldnt/wouldnt upgrade). Other parts of the world with fibre networks were just installing latest end kit and telling people to go on and do what they want with it, in the US they try to milk as much as they can from the legacy stuff and patch things up/fob things off.
Thats why Id never invest in legacy US telcos, but as Ive mentioned before I worked with a lot of them too closely and am perhaps jaded by that. Lot of the '3rd world' carriers went straight to 3g/fibre etc so dont have the legacy hangups.

[HousePriceMania]

44 minutes ago, wherebee said:

the papers have flipped here in the last two weeks to suddenly warning of a house price crash.....

Have they ?  I dont read the papers. I only read dosbods.

[sleepwello'nights]

41 minutes ago, Hunty said:

Buying opportunity. Truck backed up busy loading BP, BATS, IMB, VOD, Petrofac.

Whoever's selling cheers fellas.

We're getting a fall in prices now as I started topping up my current year ISA a couple of weeks ago.

I did warn you.  

[HousePriceMania]

31 minutes ago, sleepwello'nights said:

We're getting a fall in prices now as I started topping up my current year ISA a couple of weeks ago.

I did warn you.  

I bought loads of oil shares when the US inflation figures came in.

I'm more worried about having 100% of nothing that 50% of something right now.

[ThoughtCriminal]

What's that saying? If they raise rates we're toast. If they don't it's because we're already toast.

 

Madness.

[JMD]

10 hours ago, sancho panza said:

The work of Armstrong that interests me is the really long term stuff.He's one of the few people I've read picking out themes from Roman and Greek times that have replicated over the centuries.

This differentitaties him from people like DH who have a more recent focus over the last one or two hundred years.

What always amazes me is how these patterns repreat with slight differences sometimes.

We have Fibonacci sequences in nature, so maybe there is also something to the economic cycle theories?                                                                                                                                                                                         If we had cycle theories published long back in the past, but that also forecast into our future, surely they would be a  powerful tool? Not only that, what if they also accurately predicted(?) recent market activity? The Brenner cycle, for example, did just this for the 1999 and 2019 market highs. It also seems to have done the same thing for other highs, etc, throughout the last century. Looking at its chart, is it maybe predicting the 'monetary collapse' in 2035!!                                                                                          What do others think? There are many cycle theories, but do other theories  predict things as accurately as the Brenner cycle theory appears to do? This is a genuine question from me, or am I being crazy? (please do read the link, you might be very surprised).                                                                                http://silvanfrank.com/prophets-of-wall-street/.                                                                                                  And some further analysis of Brenner cycle/Fibonacci sequence (bit creepy how the dates almost exactly correspond?)... https://iaminwallstreet.com/do-not-forget-the-benner-fibonacci-cycle/.                                                                                                                                                                  ....Of course none of this beats @DurhamBornexcellent cross cycle work, but even in our age of manipulated markets, cycle theory can still provide I think useful additional macro.

[DurhamBorn]

4 hours ago, BadAlchemy said:

Inflation is everywhere and hurting ordinary people on low income. My wife's folks in Serbia (on low pensions before all this) now seeing prices going up in the shops...

https://tradingeconomics.com/serbia/inflation-cpi

"The annual inflation rate in Serbia climbed to 6.6 percent in October of 2021 from 5.7 percent the previous month and above market expectations of 5.95 percent. "

Mindful that I am here to fight inflation both at home and abroad. Family is family!

Portfolio has done great thanks to this thread and allocating more as opportunities arise...

Lots are drawn to the thread to multiply capital,but the aim of starting it was to simply offer a roadmap to what the cycle would bring and try to help people protect their saved labour.My no 1 aim was to try to produce a return that matched inflation and that number was 65% over the cycle.More is a bonus.The other side is to cut costs.In the supermarket the price of most food is shooting up,but if you can cook its still very cheap,veg for instance is still cheap and i can get 4 nights meals from one chicken etc.

My whole family has 3 year fixed energy deals with big companies,iv even bought up 4 years worth of vitamins,toiletries etc.One vice i have is using quality skincare/haircare etc and iv bought 3 years worth on Blackfriday 30% reductions down to prices il not see again i doubt.

During an inflation buying a quality pair of ladders and fixing your own gutters etc can save a fortune.Iv several neighbours with tiles/pointing out after the storm,mine stood up because i re pointed over summer myself.

I even buy my lager from Tesco timing around xmas and big sporting events as thats  when they reduce,£10 this week for 18 so il buy 10 months worth.

[BadAlchemy]

 

Dont worry, it's only 'transitory' 

[Democorruptcy]

1 minute ago, BadAlchemy said:

 

Dont worry, it's only 'transitory' 

Got to get those energy prices down, omicron doing it's job nicely so far.

https://pbs.twimg.com/media/FFb1XPzXIAEbFp2?format=jpg&name=small