Jump to content
DOSBODS
  • Welcome to DOSBODS

     

    DOSBODS is free of any advertising.

    Ads are annoying, and - increasingly - advertising companies limit free speech online. DOSBODS Forums are completely free to use. Please create a free account to be able to access all the features of the DOSBODS community. It only takes 20 seconds!

     

IGNORED

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


spunko

Recommended Posts

3 hours ago, sancho panza said:

Here they come...someone else who having served as BoE Governor for two terms pretending as if the current mess is nothing to do with his tenure.....

'Nothing to do with me........'....

 

These problems have been a long time coming

Bank of England has made 'serious mistakes', former Governor says (telegraph.co.uk)

'Bank of England has made 'serious mistakes', former Governor says

Lord King warns that Covid money-printing spree and low interest rates were major errors

I also find it hilarious that they're all experts when looking in the rear view mirror.

Where was he when this was all playing out.  Oh that's right he was in charge when interest rates were collapsed and we didn't hear a peep from him when Rishi was handing out cash to anybody with their hand out.

Link to comment
Share on other sites

  • Replies 30.1k
  • Created
  • Last Reply
4 hours ago, WICAO said:

I also find it hilarious that they're all experts when looking in the rear view mirror.

Where was he when this was all playing out.  Oh that's right he was in charge when interest rates were collapsed and we didn't hear a peep from him when Rishi was handing out cash to anybody with their hand out.

It was all intentional.

Massive amounts of cash was given freely with complete disregard, Example: £37 billion earmarked for Track n Trace - although probably 20 odd billion actually spent, £37 billion for a fucking phone app?

Thousands of eastern Europeans gone home with billions of never to repayed covid business loans and the like.

(Many more examples available)

Raging inflation is being used to reduce the Govs debt load, the longer it goes on the more effect it will have.

The bullshit from the CBs about we will reduce inflation using interest rates is damned lies.

To do that interest rates would need to be around 10% - no chance.

How these fuckers aint swinging I'll never know.

Edit:  The Sri Lankans are doing something about it - who are the third world countries now?

Link to comment
Share on other sites

13 hours ago, belfastchild said:

Thats of course if they have thought of the practicalities

:-)))))....you are funny?!.....of course they have, they always do!

Link to comment
Share on other sites

6 hours ago, AWW said:

I remember being so optimistic for the LD/CON coalition back in 2010. Liberal social policy with good economic stewardship. Look how that turned out. I can't see how I'll do anything other than spoil ballots now.

Biggest mistake they made by 'choking' for their little bit of power/kudos; the Cons would take the credit if things went well, the Libs would be 'the patsy' if they didn't....if they had held strong they may even have won the next election given how their support base was developing....but as they say 2The rest was history"

Link to comment
Share on other sites

5 hours ago, WICAO said:

Running a backtest of historic sequence of returns (using US data which has been one of the best performing markets historically so biases elsewhere will likely be worse) always reveals some interesting things including playing your story out.

To make the maths round/easy let's assume £1M pot, 60% equities : 35% bonds : 5% cash (so a crude 60:40 portfolio), 5% drawdown, 0.25% fees on equities/bonds (so not with a typical IFA which will make it all worse as you highlight), 30 year retirement and rebalanced annually.

It shows a 5% drawdown has sequence of return failures in a third of all sequences.  5% is just too high a drawdown.  Do you know of any IFA's actually getting the punters to do this?

In FIRE land the '4% Rule' is talked about often so let's change the drawdown to 3.75% which would be circa 4% with fees.  Now our failures are down to 'just 4%' but what's interesting are the start years - 1965, 1966, 1967, 1968 and 1969.  Weren't they start years where periods of high inflation occurred early in the sequence?  Wasn't the Great Inflation considered to have started in 1965...  The great depression was bad but the inflation years were worse from a sequence of returns perspective.

As you highlight inflation is a real risk for sequence of returns.

Now any prudent (IMHO) FIRE'ee is not even at these levels and/or has some sort of back up plans.  Personally, I've gone with a max 2.5% drawdown (and I'm now not even at that, if I was drawing down it would now be 1.8%).  Drawdown at 2.5% + those 0.25% fees and all of a sudden historic success is 100% and with the worst case sequence that £1M is now £620k inflation adjusted after 30 years.

30 years of retirement and worst case still 62% of my wealth inflation adjusted remaining.  I'd take that.

Given I intend to live for a while longer let's change that 30 years to 40 years.  This helps the story and now I have worst case 84% remaining.

This is why I worked a bit longer and have learnt to live very well on little.  Reduce drawdown % including fees and taxes and all of a sudden you don't have to be an investing genius.  The market will do.

For anyone interested in more here's a simple tool https://ficalc.app/

Of course lots of DYOR in there and what would I know...  After all I'm not an IFA...

Interesting, and what you say is supported by modelling/research evidence by two papers I posted on here about a year ago....one was a Morningstar paper I think.

Link to comment
Share on other sites

Jesus Wept
10 hours ago, DurhamBorn said:

We are.Look at Verizon and T on that chart and baccy ;)


AT&T unloaded its streaming business at the perfect time (WB discovery) and is up about 10% since then. However, despite encouraging signs emerging from AT&T’s turnaround, the telecom operator remains one of the most indebted entities in the US, with $169 billion in net debt by the end of the first quarter.

That heavy debt load will limit the company’s ability to grow its payouts, lowering its investment appeal”. 
 

@DurhamBorn How does their debt burden ($169bn)sit with you? Is it fixed rate debt that will be eroded away with inflation? Is that debt falling? On an average year they make about $20bn profit. 

Pay about 5.5% yield a year. 

Historical share price:


9C378E84-3558-4C0B-89CF-417A9AB9DEC2.thumb.jpeg.0cf2687ebf15fc3571a55a6675194185.jpeg

 

 

Link to comment
Share on other sites

5 hours ago, WICAO said:
  • I have the UK State Pension which might just get me out of the sh*t but it won't be 'triple locked' here in Australia so will be eroded by inflation; and
  • The Australia State Pension which is means tested

Provided of course they still exist

This is the 'Crux of the matter'...they will still exist but I think the UK will 'go the way' of the Aussie one i.e. means tested, and any 'locking' variables will be 'managed' so that in real terms their value will be eroded...to the Common man' they will look as though they are increasing, yet in reality [purchasing power] they will actually be reducing.

Link to comment
Share on other sites

Alifelessbinary
13 hours ago, Pip321 said:

Just seen agricultural farm land in Malton (North Yorkshire) to be used as solar panels. Objections by locals perhaps for all the wrong reasons….but why on earth would we want less productive wheat growing farm land at the moment. Its a wheat growing area on excellent agricultural land…I am sure there are letter places to stick panels ie factory roofs etc  

You couldn’t make this shite up.

As an aside….thoughts on buying farmland? I am having a look and wonder if it’s the best hedge of all? I wouldn’t farm it myself but let one of the massive tenant agricultural farmers use it. 

If you are interested in buying farmland I’d suggest that you have a look at the quarterly reports produced by the big surveying firms. Savills, Knight Frank and Carter Jonas are probably the most active in the area. 

Prices recently hit a four year high and smaller lot sizes (sub 15 acres) have gone bonkers, as everyone decided to grab a little slice of countryside after being locked in their Barratt boxes. I’m struggling to see value in smaller lot sizes as the competition has taken prices far above long term value and you are competing against people who are paying a huge premium for ‘recreational’ purposes.

It’s difficult to find a tenant for smaller lot sizes unless you want to rent the fields for equestrian purposes, which doesn’t pay much rent. Without a tenant farmer management can be a major headache, as fly tipping, squatting and trespass can be costly especially if you don’t live close enough to monitor it regularly. Farming is a specialist area and farmers in general are hardened negotiators. If you do buy a tenanted plot you want a good covenant strength which is hard to assess without specialist knowledge.

The big benefit with farmland is that it CGT free, so a lot of wealthy people use it for tax planning purposes.

There’s savings to be had the bigger the lot size due to quantum. If you are looking to purchase it might be worth making a group purchase to spread some of the risk and reduce the cost.

DYOR is key in this area, as I’ve heard a lot about farmers selling unproductive land to townies for a fortune due to the unprecedented demand.

https://www.carterjonas.co.uk/farm-consultants/rural-farmland-market-update-q4-2021

 

Link to comment
Share on other sites

7 minutes ago, Alifelessbinary said:

If you are interested in buying farmland I’d suggest that you have a look at the quarterly reports produced by the big surveying firms. Savills, Knight Frank and Carter Jonas are probably the most active in the area. 

Prices recently hit a four year high and smaller lot sizes (sub 15 acres) have gone bonkers, as everyone decided to grab a little slice of countryside after being locked in their Barratt boxes. I’m struggling to see value in smaller lot sizes as the competition has taken prices far above long term value and you are competing against people who are paying a huge premium for ‘recreational’ purposes.

It’s difficult to find a tenant for smaller lot sizes unless you want to rent the fields for equestrian purposes, which doesn’t pay much rent. Without a tenant farmer management can be a major headache, as fly tipping, squatting and trespass can be costly especially if you don’t live close enough to monitor it regularly. Farming is a specialist area and farmers in general are hardened negotiators. If you do buy a tenanted plot you want a good covenant strength which is hard to assess without specialist knowledge.

The big benefit with farmland is that it CGT free, so a lot of wealthy people use it for tax planning purposes.

There’s savings to be had the bigger the lot size due to quantum. If you are looking to purchase it might be worth making a group purchase to spread some of the risk and reduce the cost.

DYOR is key in this area, as I’ve heard a lot about farmers selling unproductive land to townies for a fortune due to the unprecedented demand.

https://www.carterjonas.co.uk/farm-consultants/rural-farmland-market-update-q4-2021

 

Many thanks. Most appreciated.  Exactly what I suspected might be the case ie buying 200 acres of land that is only useful for agriculture and not at risk from travellers might be cost effective but obviously in real terms that needs proper money. Buying smaller plots ‘for fun’ are just too expensive and unless adjoining a farm may well be impractical. 

I think I would treat this ‘idea’ the same way I used to buy properties. That was put the word out, keep in contact with local agricultural agents, enjoy studying the market and if I am lucky enough for an opportunity to arise (albeit very unlikely) then take it. However, don’t chase, don’t consider FOMO and don’t wait on the edge of my seat. 

Link to comment
Share on other sites

2 minutes ago, Pip321 said:

Many thanks. Most appreciated.  Exactly what I suspected might be the case ie buying 200 acres of land that is only useful for agriculture and not at risk from travellers might be cost effective but obviously in real terms that needs proper money. Buying smaller plots ‘for fun’ are just too expensive and unless adjoining a farm may well be impractical. 

I think I would treat this ‘idea’ the same way I used to buy properties. That was put the word out, keep in contact with local agricultural agents, enjoy studying the market and if I am lucky enough for an opportunity to arise (albeit very unlikely) then take it. However, don’t chase, don’t consider FOMO and don’t wait on the edge of my seat. 

I'm sure someone will be along to offer you a deal 30pc below current market price. As they always do 😆 

Link to comment
Share on other sites

31 minutes ago, RJT1979 said:

I'm sure someone will be along to offer you a deal 30pc below current market price. As they always do 😆 

Happens everyday with property (not every to me obviously, but it did happen every year/18 months😉). That’s what the BTL investors buying at daft retail prices and hoping for market increases never understood.

However I suspect (indeed I think we all know) Yorkshire farmers aren’t a soft touch when it comes to selling land 😆👍🏻. No harm in having your name on the list though.😉🤞

Link to comment
Share on other sites

Bricormortis
11 hours ago, Chewing Grass said:

The electricity supply system used to be dead simple, now they are turning it into an expensive, high tech, interlinked, cpu and internet driven mess.

All part of a greater plan.

Link to comment
Share on other sites

8 hours ago, JMD said:

Yes, I think Rick Rule (pretty certain it was him) said recently to invest in copper, plus the local-grid-battery (I don't know their technical name) manufacturers and the commods to make these type of batteries. He was dismissive of EV batteries because electric cars won't sell in huge numbers, but unfortunately didn't elaborate much on the local grid batteries. The problem you cite is apparently solved by using such a type of shared local battery system.                                                                                                                                                  Does anyone on the thread know about these batteries (they differ from an EV battery), the commods they require, and the likely manufacturers that will build them? If the entire EU population is mandated to use this tech it would be great to know more about it/how to invest in it.

Powerwall | Tesla United Kingdom

and 

Tesla batteries switched on at world’s largest solar farm in the Middle East (teslarati.com)

and

Tesla Powerpack battery steps in after coal plant explodes in Australia (teslarati.com)

/ducks

Link to comment
Share on other sites

ThoughtCriminal

I often get the crazy idea of buying farmland in North Yorkshire too.

 

When I find myself on Rightmove laughing hysterically at the prices, I find that the remedy is to look at the price of land on the continent. I soon realise I'm being a fucking idiot and punch myself in the face.

 

Here's a 27 acre farm, with 5 bed farmhouse, multiple outbuildings, 6 acres of forest, private lake in Skelleftea Sweden. Price? 78k of your English pounds.

https://www.4321property.com/sweden/ad921243/?Rental=Buy-Sell&Country=sweden&type=houses&beds=5&maxprice=200000&minprice=0&a1=Vaesterbotten&a2=Skelleftea Kommun&a3=&a4=&cn=Skelleftea&s8=

That'll get me around 3-4 acres in North Yorkshire. Complete with 50% clawback clause if planning achieved in next 50 years.

 

Each to their own, but I know which makes more sense.

Link to comment
Share on other sites

Bricormortis
11 hours ago, Chewing Grass said:

......., high tech, interlinked, cpu and internet driven mess.

Their grand design for humanity. xD

Link to comment
Share on other sites

Chewing Grass
3 minutes ago, ThoughtCriminal said:

I often get the crazy idea of buying farmland in North Yorkshire too.

 

When I find myself on Rightmove laughing hysterically at the prices, I find that the remedy is to look at the price of land on the continent. I soon realise I'm being a fucking idiot and punch myself in the face.

 

Here's a 27 acre farm, with 5 bed farmhouse, multiple outbuildings, 6 acres of forest, private lake in Skelleftea Sweden. Price? 78k of your English pounds.

https://www.4321property.com/sweden/ad921243/?Rental=Buy-Sell&Country=sweden&type=houses&beds=5&maxprice=200000&minprice=0&a1=Vaesterbotten&a2=Skelleftea Kommun&a3=&a4=&cn=Skelleftea&s8=

That'll get me around 3-4 acres in North Yorkshire. Complete with 50% clawback clause if planning achieved in next 50 years.

 

Each to their own, but I know which makes more sense.

Farming must be a shit business in Sweden if that is all they sell for, Sweden isn't generally cheap for anything.

Link to comment
Share on other sites

BadAlchemy
1 hour ago, Alifelessbinary said:

If you are interested in buying farmland I’d suggest that you have a look at the quarterly reports produced by the big surveying firms. Savills, Knight Frank and Carter Jonas are probably the most active in the area. 

Prices recently hit a four year high and smaller lot sizes (sub 15 acres) have gone bonkers, as everyone decided to grab a little slice of countryside after being locked in their Barratt boxes. I’m struggling to see value in smaller lot sizes as the competition has taken prices far above long term value and you are competing against people who are paying a huge premium for ‘recreational’ purposes.

It’s difficult to find a tenant for smaller lot sizes unless you want to rent the fields for equestrian purposes, which doesn’t pay much rent. Without a tenant farmer management can be a major headache, as fly tipping, squatting and trespass can be costly especially if you don’t live close enough to monitor it regularly. Farming is a specialist area and farmers in general are hardened negotiators. If you do buy a tenanted plot you want a good covenant strength which is hard to assess without specialist knowledge.

The big benefit with farmland is that it CGT free, so a lot of wealthy people use it for tax planning purposes.

There’s savings to be had the bigger the lot size due to quantum. If you are looking to purchase it might be worth making a group purchase to spread some of the risk and reduce the cost.

DYOR is key in this area, as I’ve heard a lot about farmers selling unproductive land to townies for a fortune due to the unprecedented demand.

https://www.carterjonas.co.uk/farm-consultants/rural-farmland-market-update-q4-2021

 

Small (5 acre) land ownership worked great for us for years... until suddenly it didn't! Beware an asset turning into a massive fucking liability, overnight. In south east England at least, with land being continually subdivided and sold off in smaller and smaller plots there is increased chance of conflicts of interest with neighbours activities etc.

If we ever do it again, will need to have a large buffer/DMZ, very high fence around it. The idea of shared ownership of larger land under Ltd company ownership would be sensible too.

Link to comment
Share on other sites

Bricormortis
11 hours ago, HousePriceMania said:

Just had a look at apple. 

Its BK in tech stocks

Get your shorts in while you can. 

 

Yesterdays rout was led by consumer stocks Wallmart, Target, others. Just saying.

Link to comment
Share on other sites

Democorruptcy

Tesco want a windfall tax on energy companies.

Quote

Tesco boss Ken Murphy was paid more than £4.74m last year, the supermarket chain said on Friday.
Murphy, who has been chief executive since October 2020, was also awarded a 2.25% pay rise for the current year.

According to the grocer's annual report, published on Friday, Murphy received performance-related pay of £3.21m on top of his £1.54m salary in the 2021-2022 financial year. The overall package was 224 times the total pay and benefits of the median member of staff at Tesco, which was £21,217.

Last month the country's biggest retailer reported annual pre-tax profits of £1.52bn, up 186% year-on-year, on sales of £53.4bn.

But it also warned that profits at its core retail business could fall by as much as £250m in the current year, hit by rising labour, energy and distribution costs while shoppers, faced with a growing cost of living crisis, switched to cheaper products.

Earlier this week, Tesco chair John Allan told the BBC's Today programme that some customers were already rationing food purchases, and called on the government to do more to help those hardest hit, to protect Tesco's profits so their executives can keep on troughing.

https://www.hl.co.uk/shares/shares-search-results/t/tesco-plc-ordinary-6.333p

 

Link to comment
Share on other sites

Democorruptcy
23 minutes ago, ThoughtCriminal said:

I often get the crazy idea of buying farmland in North Yorkshire too.

 

When I find myself on Rightmove laughing hysterically at the prices, I find that the remedy is to look at the price of land on the continent. I soon realise I'm being a fucking idiot and punch myself in the face.

 

Here's a 27 acre farm, with 5 bed farmhouse, multiple outbuildings, 6 acres of forest, private lake in Skelleftea Sweden. Price? 78k of your English pounds.

https://www.4321property.com/sweden/ad921243/?Rental=Buy-Sell&Country=sweden&type=houses&beds=5&maxprice=200000&minprice=0&a1=Vaesterbotten&a2=Skelleftea Kommun&a3=&a4=&cn=Skelleftea&s8=

That'll get me around 3-4 acres in North Yorkshire. Complete with 50% clawback clause if planning achieved in next 50 years.

 

Each to their own, but I know which makes more sense.

Yes but look what happened to Wallander. He lived in the city all that time and then when he bought a house in the Swedish countryside, there was a body buried in the garden.

Link to comment
Share on other sites

28 minutes ago, ThoughtCriminal said:

I often get the crazy idea of buying farmland in North Yorkshire too.

 

When I find myself on Rightmove laughing hysterically at the prices, I find that the remedy is to look at the price of land on the continent. I soon realise I'm being a fucking idiot and punch myself in the face.

 

Here's a 27 acre farm, with 5 bed farmhouse, multiple outbuildings, 6 acres of forest, private lake in Skelleftea Sweden. Price? 78k of your English pounds.

https://www.4321property.com/sweden/ad921243/?Rental=Buy-Sell&Country=sweden&type=houses&beds=5&maxprice=200000&minprice=0&a1=Vaesterbotten&a2=Skelleftea Kommun&a3=&a4=&cn=Skelleftea&s8=

That'll get me around 3-4 acres in North Yorkshire. Complete with 50% clawback clause if planning achieved in next 50 years.

 

Each to their own, but I know which makes more sense.

This is where [direction not necessarily location] I am thinking of 'going', rather than buying an unaffordable property in the UK, buying a smaller and cheaper 'bolt hole' overseas somewhere...anyone done this?...like to start a new thread to share your advice/experience in buying it etc?

Link to comment
Share on other sites

geordie_lurch

Don't think anyone has mentioned this yet... that is $1.9 trillion and a $140 billion jump in one day - yesterday :ph34r:

It's hard to get a handle on how big a trillion actually is but as someone else on Twitter helpfully explained: if each second counts as one:

  • One million is 11 days
  • One billion is 31 years
  • One trillion is 31 thousand years

:o

Link to comment
Share on other sites

30 minutes ago, ThoughtCriminal said:

I often get the crazy idea of buying farmland in North Yorkshire too.

 

When I find myself on Rightmove laughing hysterically at the prices, I find that the remedy is to look at the price of land on the continent. I soon realise I'm being a fucking idiot and punch myself in the face.

 

Here's a 27 acre farm, with 5 bed farmhouse, multiple outbuildings, 6 acres of forest, private lake in Skelleftea Sweden. Price? 78k of your English pounds.

https://www.4321property.com/sweden/ad921243/?Rental=Buy-Sell&Country=sweden&type=houses&beds=5&maxprice=200000&minprice=0&a1=Vaesterbotten&a2=Skelleftea Kommun&a3=&a4=&cn=Skelleftea&s8=

That'll get me around 3-4 acres in North Yorkshire. Complete with 50% clawback clause if planning achieved in next 50 years.

 

Each to their own, but I know which makes more sense.

does that price reflect the risk of becoming part of Russia in 18 months? 

Link to comment
Share on other sites

Archived

This topic is now archived and is closed to further replies.

  • Recently Browsing   0 members

    • No registered users viewing this page.

×
×
  • Create New...