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

[HousePriceMania]

It's an interest rate hold guaranteed.

They had their meeting last night, some people are more equal than others when it comes to meetings.

 

[WICAO]

Hi everyone

Some of you may remember me from TOS.  Given that I'm in the process of building a home HPC is no longer a relevant forum.  So in search of a new home I've been accepted here by the looks of it.  Came here for this great thread even though my investing style is a little different and currently working for me.

[Noallegiance]

49 minutes ago, DurhamBorn said:

Ignore the BOE watch US long bonds.Inflation will stay way higher than rates as they try to take private savings to fund government,but rates will go up.If long bonds rise and BOE doesnt increase inflation will go higher and higher.They are lagging the long bond now by extreme levels.Long bond yields fall or BOE increases rates.I think rates are a side show though in the UK,QE is the big one as its funding a £200 billion structural deficit.They are trying to increase everything 30% with government costs lagging,but structural problems in the economy are stopping it.

It was this that prompted me to post the article about not testing people for higher rates on mortgages.

Conditions are being created that, if they choose to buy, will decimate people as rates rise.

[Sugarlips]

1 hour ago, harp said:

can I just ask. IF cable does turn against the usd, would getting shares in companies that predominantly get their earnings in sterling be a better bet? 

 

 

From that same thread 

 

 

[HousePriceMania]

6 minutes ago, Noallegiance said:

It was this that prompted me to post the article about not testing people for higher rates on mortgages.

Conditions are being created that, if they choose to buy, will decimate people as rates rise.

That's the bit people still believe.

They'll only rise when people can afford the payments then they'll get the bottom of the pyramid people/borrowing even more.

It's a scam, a massive state sponsored scam to what end, power and money.

If you dont own a house it's time to get one, with as much debt as you dare. this is only going one way now.

[WICAO]

1 minute ago, HousePriceMania said:

That's the bit people still believe.

They'll only rise when people can afford the payments then they'll get the bottom of the pyramid people/borrowing even more.

It's a scam, a massive state sponsored scam to what end, power and money.

If you dont own a house it's time to get one, with as much debt as you dare. this is only going one way now.

I'm finally getting one.  I joined TOS in 2007 and have rented ever since.  I've now found my home and it's now time to put down roots and build a house and also turn that into a home.

Still no debt for me though.  Just a modest well thought out (hopefully) place and so I'll be paying in bits of paper, the buying power of which is fast being destroyed.

Given my life stage prices can go up, down or sideways for any length of time.  I no longer care.  This is going to be my home for hopefully a long time.

[HousePriceMania]

Couldnt make this up.

 

https://www.cnbc.com/2021/12/16/turkish-central-bank-cuts-rates-sending-lira-to-record-low.html

 

Turkish central bank cuts rates, sending lira to record low

[Sugarlips]

3 minutes ago, WICAO said:

I'm finally getting one.  I joined TOS in 2007 and have rented ever since.  I've now found my home and it's now time to put down roots and build a house and also turn that into a home.

Still no debt for me though.  Just a modest well thought out (hopefully) place and so I'll be paying in bits of paper, the buying power of which is fast being destroyed.

Given my life stage prices can go up, down or sideways for any length of time.  I no longer care.  This is going to be my home for hopefully a long time.

Congratulations! Can I ask are you an owner/builder or buying something off the plan? As is oft discussed here most areas are off the chart to buy now and build costs are rocketing too - how do you square that with giving up your hard earned cash? No wonder you had to depart HPC!

[DurhamBorn]

30 minutes ago, HousePriceMania said:

This you mean

 

I kind of get what you are saying but I am say here wondering if the system is so broken the old rules don't apply and or there is a conspiracy and "you will own nothing" etc is their aim. Look at the Omicron bollocks over the last week or so just as the BoE have no choice but to raise rates, this thing feels as corrupt as f**k to me. 

The uncertainty is the problem for me and the unfairness of the system they have created, this is proper totalitarian shit and it's been coming since Bliar took over, grabbing little bits of freedom and control with each passing year.  I thought Brexit might wake them up but it's full steam ahead with Banker Sunak in control.

Will they raise IRs, yes at some point, but as you say it'll be 5% below inflation so they can rob people and it'll only be when they think their asset bubbles can be supported by the wage rises.  They want a permanently high plateau, max debt in effect.

Is there any way to protect yourself from this, probably not, at least not that I can see.

Out best bet is a proper BK and fill your boots but when the people at the top are willing to rob 70 million people and inflation is immaterial to them then I think that's becoming more and more unlikely without some sort of once in a 200 years type collapse, which I am not ruling out, the US stock market looks bat shit crazy.

So basically, I have no idea what to do now to protect my family and children from the systematic onslaught on our freedoms and finances.

Old rules always apply,this last cycle though they have stretched them to levels you would never expect,but the outcomes are the same,inflation runs.If it was different then inflation wouldnt be tracking my roadmap almost to perfection.My model shows they need to lift everything 30% ie take 30% of private assets through inflation ans some tax increases.That is what they are trying.As @sancho panza fantastic post above they are spreading the pot thinner trying to hold on to a huge state.Even the Fed cant control the long bond forever.The rubber band is stretched to extreme levels and dislocation will be (and already is) the result.

Plenty of quality stocks around the world.Iv just bought a small tranche of Telenor for instance.Im not bothered about BK etc or big drawdowns.Im in areas that can hold their own with inflation,and be the last things given up in an income squeeze as the distribution cycle embeds its tentacles everywhere.

Iv been buying Wetherspoons as well this week and have ladders set on it.In Durham yesterday they were busy enough while others were quiet (and much much cheaper).

 

[ThoughtCriminal]

27 minutes ago, WICAO said:

Hi everyone

Some of you may remember me from TOS.  Given that I'm in the process of building a home HPC is no longer a relevant forum.  So in search of a new home I've been accepted here by the looks of it.  Came here for this great thread even though my investing style is a little different and currently working for me.

Bloody hell, the Ghost of Christmas past. We've mused about you from time to time on here.

 

Welcome to the madhouse   👍

[Majorpain]

 

BOE rate increase, can the economy withstand a whole 0.25% interest rate???!!

[DurhamBorn]

Ok,now lets see if my outlier thesis that they increase rates but try to keep some QE going happens.

 

[HousePriceMania]

3 minutes ago, ThoughtCriminal said:

Bloody hell, the Ghost of Christmas past. We've mused about you from time to time on here.

 

Welcome to the madhouse   👍

I thought this was the sane house 

Just now, Majorpain said:

 

BOE rate increase, can the economy withstand a whole 0.25% interest rate???!!

 

Is that a parody account ?

[WICAO]

Just now, ThoughtCriminal said:

Bloody hell, the Ghost of Christmas past. We've mused about you from time to time on here.

 

Welcome to the madhouse   👍

I hope they were good musings :-)  My ears haven't been burning so I'm guessing so...

It's been some journey with some real ups and downs but life right now (ignoring the elephant in the current world room which I really am just doing my best to stay away from) is really really good so it's been all worth it.  It can be really difficult to run against the herd for so long but when it's the right thing to do for oneself and ones family it makes it so worth it.

Thanks for the warm welcome.

[Axeman123]

2 minutes ago, DurhamBorn said:

Ok,now lets see if my outlier thesis that they increase rates but try to keep some QE going happens.

 

another waypoint ticked off, bravo sir!

[WICAO]

6 minutes ago, Sugarlips said:

Congratulations! Can I ask are you an owner/builder or buying something off the plan? As is oft discussed here most areas are off the chart to buy now and build costs are rocketing too - how do you square that with giving up your hard earned cash? No wonder you had to depart HPC!

Still learning all the lingo but what I've done is firstly bought some land in a location that gives us some real benefits and that also won't flood or burn.  I then found a 'volume builder' (had to work with a few to figure out who would get us there) who would allow us to heavily modify a 'standard design' so that it would do what we wanted.  They'll just deliver the house.  We'll then do everything around the house ourselves.  By doing that our price per m^2 is about as low as possible in the current mad prices world because we weren't starting from scratch and we get volume builder pricing.

[drosser]

 

20 minutes ago, ThoughtCriminal said:

Bloody hell, the Ghost of Christmas past. We've mused about you from time to time on here.

 

Welcome to the madhouse   👍

 

On 15/12/2021 at 10:05, Democorruptcy said:

I know a few on here were following WICAO's blog, he's done an update and still in Oz

https://www.retirementinvestingtoday.com/2021/12/transitioning-musings-on-2021.html#more

[WICAO]

1 minute ago, drosser said:

 

 

Oz is working well for us.  Really loving the outdoor life and hope we'll be here for a good while.

Don't post so much on the blog anymore.  It served a really useful purpose for a lot of years (started it in 2009) and a lot of people have told me it really helped them as well, some very significantly so given what they've shared, so really glad I did it.  Also owe a debt of gratitude to a lot of readers who contributed over the years to what I am today so the least I can do is post occasionally to let them know what's on the other side of FIRE given the majority of blogs are on their journey and not living it.

[Noallegiance]

24 minutes ago, DurhamBorn said:

Ok,now lets see if my outlier thesis that they increase rates but try to keep some QE going happens.

 

 

[Starsend]

55 minutes ago, WICAO said:

Hi everyone

Some of you may remember me from TOS.  Given that I'm in the process of building a home HPC is no longer a relevant forum.  So in search of a new home I've been accepted here by the looks of it.  Came here for this great thread even though my investing style is a little different and currently working for me.

Good to see you on this thread WICAO. I've followed your blog with great interest.

I believe you're in Australia now? I'll be heading that way myself to work for a year or two (soon as things get back to some sort of normality).

[WICAO]

Just now, Starsend said:

Good to see you on this thread WICAO. I've followed your blog with great interest.

I believe you're in Australia now? I'll be heading that way myself to work for a year or two (soon as things get back to some sort of normality).

Thanks for the welcome Starsend.  Glad you've found the blog interesting.

Yes, we're in Oz now.  Our journey was UK to Cyprus to UK to Oz so we took the long way here 

Good luck with the work.  I'm down to 4 days 100% Work From Home now and that balance is working well for me right at this point.

[HousePriceMania]

9 minutes ago, Noallegiance said:

 

Who was the 1.  

10 minutes ago, WICAO said:

Oz is working well for us.  Really loving the outdoor life and hope we'll be here for a good while.

Don't post so much on the blog anymore.  It served a really useful purpose for a lot of years (started it in 2009) and a lot of people have told me it really helped them as well, some very significantly so given what they've shared, so really glad I did it.  Also owe a debt of gratitude to a lot of readers who contributed over the years to what I am today so the least I can do is post occasionally to let them know what's on the other side of FIRE given the majority of blogs are on their journey and not living it.

IRs up.

You should join every day.

You're having the opposite effect of @Yellow_Reduced_Sticker

[Bricormortis]

7 minutes ago, WICAO said:

Thanks for the welcome Starsend.  Glad you've found the blog interesting.

Yes, we're in Oz now.  Our journey was UK to Cyprus to UK to Oz so we took the long way here 

Good luck with the work.  I'm down to 4 days 100% Work From Home now and that balance is working well for me right at this point.

Did you not like Cyprus ?

[WICAO]

2 minutes ago, HousePriceMania said:

Who was the 1.  

IRs up.

You should join every day.

You're having the opposite effect of @Yellow_Reduced_Sticker

When the last bear turns bullish it's...

[WICAO]

3 minutes ago, Bricormortis said:

Did you not like Cyprus ?

We look back on Cyprus incredibly fondly and understand why a lot of people choose to call it home. 

If I had my time again we probably should have given it a longer chance but no regrets given we're we now find ourselves.  Not sure of the etiquette regarding links here (please let me know if I should delete) but if you'd like the gore it starts here http://www.retirementinvestingtoday.com/2019/06/back-to-powerful-fi.html

That said for us as a family we're now in a much better position here in Australia than Cyprus but that's for our situation.  So it's been worth it for us.  I can think for others Cyprus would be very agreeable and if Australia was off the table I'd look at going back.  I'd go to Cyprus long before I returned to the UK but I'd probably give Portugal a go on the way.  

Australia has some real negatives.  For example the bureaucracy and cost to make it hear was certainly a toll.  We're also a very long way from anything, including the UK.